1 unchanged sentence
Disclosure Controls and Procedures
−Removed: The Company’s management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report.
−Removed: Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports filed or submitted under the Securities Exchange Act of 1934 (the Exchange Act ) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
+Added: The Company’s management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report.
+Added: Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective as of June 30, 2024.
−Removed: Management’s Report on Internal Control Over Financial Reporting
+Added: Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for preparation of the accompanying consolidated financial statements in accordance with US GAAP.
7 unchanged sentences
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of June 30, 2024 as required by the Exchange Act.
−Removed: In making this assessment, we used the criteria set forth in the framework in Internal Control –
−Removed: Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
−Removed: Based on management’s evaluation under the framework, management concluded that our internal control over financial reporting was effective as of June 30, 2023.
+Added: In making this assessment, we used the criteria set forth in the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
+Added: Based on management’s evaluation under the framework, management concluded that our internal control over financial reporting was effective as of June 30, 2024.
Changes in Internal Control Over Financial Reporting
24 unchanged sentences
Amended and Restated Bylaws of the Registrant, dated November 14, 2022 (incorporated by reference to the Exhibit 3.1 to the Form 8-K filed on November 14, 2022)
−Removed: Form of the Registrant’s Common Stock Certificate (incorporated by reference to the Exhibit 4.1 to the Form 8-K filed on December 29, 2020)
+Added: Form of the Registrant’s Common Stock Certificate (incorporated by reference to the Exhibit 4.1 to the Form 8-K filed on December 29, 2020)
Certificate of Designation of Series A Junior Participating Cumulative Preferred Stock of the Registrant, dated December 23, 2020 (incorporated by reference to the Exhibit 4.2 to the Form 8-K filed on December 29, 2020)
−Removed: Stockholders’
−Removed: Rights Agreement, dated December 29, 2020, by and between the Registrant and Computershare Trust Company, N.A.
+Added: Stockholders’ Rights Agreement, dated December 29, 2020, by and between the Registrant and Computershare Trust Company, N.A.
(incorporated by reference to the Exhibit 4.3 to the Form 8-K filed on December 29, 2020)
32 unchanged sentences
2016 Employee Stock Purchase Plan (incorporated by reference to Annex E to the Proxy Statement filed on May 25, 2016 by Great Elm Capital Group, Inc.
−Removed: Form of Stock Option Award under the Registrant’s Amended and Restated 2016 Long-Term Incentive Compensation Plan
−Removed: Form of Restricted Stock Unit Award (Directors) under the Registrant’s Amended and Restated 2016 Long-Term Incentive Compensation Plan
−Removed: Form of Restricted Stock Unit Award (Employees) under the Registrant’s Amended and Restated 2016 Long-Term Incentive Compensation Plan
−Removed: Form of Restricted Stock Award (Directors) under the Registrant’s Amended and Restated 2016 Long-Term Incentive Compensation Plan
−Removed: Form of Restricted Stock Award (Employees) under the Registrant’s Amended and Restated 2016 Long-Term Incentive Compensation Plan
+Added: Form of Stock Option Award under the Registrant’s Amended and Restated 2016 Long-Term Incentive Compensation Plan (incorporated by reference to the Exhibit 10.12 to the Form 10-K filed on September 20, 2023)
+Added: Form of Restricted Stock Unit Award (Directors) under the Registrant’s Amended and Restated 2016 Long-Term Incentive Compensation Plan (incorporated by reference to the Exhibit 10.13 to the Form 10-K filed on September 20, 202 3)
+Added: Form of Restricted Stock Unit Award (Employees) under the Registrant’s Amended and Restated 2016 Long-Term Incentive Compensation Plan (incorporated by reference to the Exhibit 10.14 to the Form 10-K filed on September 20, 202 3)
+Added: Form of Restricted Stock Award (Directors) under the Registrant’s Amended and Restated 2016 Long-Term Incentive Compensation Plan (incorporated by reference to the Exhibit 10.15 to the Form 10-K filed on September 20, 202 3)
+Added: Form of Restricted Stock Award (Employees) under the Registrant’s Amended and Restated 2016 Long-Term Incentive Compensation Plan (incorporated by reference to the Exhibit 10.16 to the Form 10-K filed on September 20, 202 3)
Amended and Restated Great Elm Capital Management Performance Bonus Plan, dated February 6, 2019, (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on February 8, 2019 by Great Elm Capital Group, Inc.
12 unchanged sentences
Consent of Grant Thornton LLP, Independent Registered Public Accounting Firm
−Removed: Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm
Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
2 unchanged sentences
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
−Removed: Audited financial statements of Great Elm Capital Corp.
−Removed: (incorporated by reference to the annual report on Form 10-K filed on March 2, 2023 by Great Elm Capital Corp.
−Removed: Materials from the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023, formatted in inline Extensible Business Reporting Language (XBRL):
−Removed: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Stockholders’
−Removed: Equity and Contingently Redeemable Non-Controlling Interest, (iv) Consolidated Statements of Cash Flows, and (v) related Notes to the Consolidated Financial Statements, tagged in detail (furnished herewith).
−Removed: The cover page from the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023, formatted in inline XBRL (included as Exhibit 101).
−Removed: * Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K.
−Removed: GEG hereby undertakes to furnish supplementally a copy of any omitted schedule or exhibit upon request by the Securities and Exchange Commission.
+Added: Materials from the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024, formatted in inline Extensible Business Reporting Language (XBRL):
+Added: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Stockholders’ Equity and Contingently Redeemable Non-Controlling Interest, (iv) Consolidated Statements of Cash Flows, and (v) related Notes to the Consolidated Financial Statements, tagged in detail (furnished herewith).
+Added: The cover page from the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024, formatted in inline XBRL (included as Exhibit 101).
+ Indicates a management contract or compensatory plan or arrangement.
1 unchanged sentence
We have elected not to provide a Form 10-K summary.
−Removed: Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized as of September 20, 2023.
+Added: Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized as of August 29, 2024.
GREAT ELM GROUP, INC.
Chief Executive Officer & Chairman
−Removed: Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated as of September 20, 2023.
+Added: Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated as of August 29, 2024.
Chief Executive Officer & Chairman
8 unchanged sentences
Consolidated Statements of Operations for the years ended June 30, 2024 and 2023
−Removed: Consolidated Statements of Stockholders’
−Removed: Equity and Contingently Redeemable Non-Controlling Interest for the years ended June 30, 2023 and 2022
+Added: Consolidated Statements of Stockholders’ Equity and Contingently Redeemable Non-Controlling Interest for the years ended June 30, 2024 and 2023
Consolidated Statements of Cash Flows for the years ended June 30, 2024 and 2023
5 unchanged sentences
We have audited the accompanying consolidated balance sheets of Great Elm Group, Inc.
−Removed: (a Delaware corporation) and subsidiaries (the “Company”) as of June 30, 2023 and 2022, the related consolidated statements of operations, stockholders’
−Removed: equity and contingently redeemable non-controlling interest, and cash flows for each of the two years in the period ended June 30, 2023, and the related notes (collectively referred to as the “financial statements”).
+Added: (a Delaware corporation) and subsidiaries (the “Company”) as of June 30, 2024 and 2023, the related consolidated statements of operations, stockholders’ equity and contingently redeemable non-controlling interest, and cash flows for each of the two years in the period ended June 30, 2024, and the related notes (collectively referred to as the “financial statements”).
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended June 30, 2024, in conformity with accounting principles generally accepted in the United States of America.
Basis for opinion
−Removed: These financial statements are the responsibility of the Company’s management.
−Removed: Our responsibility is to express an opinion on the Company’s financial statements based on our audits.
−Removed: We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.
+Added: These financial statements are the responsibility of the Company’s management.
+Added: Our responsibility is to express an opinion on the Company’s financial statements based on our audits.
+Added: We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
2 unchanged sentences
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
−Removed: As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
+Added: As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion.
3 unchanged sentences
We believe that our audits provide a reasonable basis for our opinion.
−Removed: Critical audit matter
−Removed: The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:
−Removed: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
−Removed: The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
−Removed: Taxable Gain on Certain Divestitures
−Removed: As discussed in Note 2 to the consolidated financial statements, the Company recognizes in its financial statements the impact of a tax position if that position is more likely than not of being sustained upon examination based on the technical merits of the position.
−Removed: Certain divestitures involve complex tax matters in determining the taxable gain that require the evaluation of the recognition and measurement of the tax position taken.
−Removed: The accounting for the recognition and measurement of such tax position requires management to make significant judgments and interpretations to determine whether available information supports the assertion that the more-likely-than-not recognition threshold is met.
−Removed: As a result, we have determined that the evaluation of the more-likely-than-not threshold for the tax position related to the determination of the taxable gain on certain divestitures is a critical audit matter.
−Removed: The principal consideration for our determination that this is a critical audit matter is management’s significant judgments about and complex considerations of the Internal Revenue Code (Code), related Treasury regulations, and Internal Revenue Service (IRS) rulings.
−Removed: The complexity and subjective nature of management’s conclusions required a high degree of auditor judgment.
−Removed: Our audit procedures related to the Company’s evaluation of the tax positions related to the determination of the taxable gain on certain divestitures included the following, among others:
−Removed: We obtained and inspected the support for the more-likely-than-not tax conclusion provided to the Company by its external tax experts, and we discussed the conclusion with said experts;
−Removed: We evaluated the reasonableness of the conclusions reached in the aforementioned support based on the facts and circumstances of the transaction, the Code, Treasury regulations, and IRS rulings considered by management and their external tax experts as well as our independent research of the Code, Treasury regulations, and IRS rulings;
−Removed: We utilized firm tax professionals with specialized skill and knowledge to assist in the performance of these audit procedures.
+Added: Critical Audit Matters
+Added: Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:
+Added: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
+Added: We determined that there are no critical audit matters.
/s/ Grant Thornton LLP
−Removed: We have served as the Company’s auditor since 2019.
+Added: We have served as the Company’s auditor since 2019.
Boston, Massachusetts
−Removed: September 20, 2023
+Added: August 29, 2024
GREAT ELM GROUP, INC.
5 unchanged sentences
Cash and cash equivalents
+Added: Restricted cash
Receivables from managed funds
2 unchanged sentences
Prepaid and other current assets
−Removed: Assets of Consolidated Fund:
−Removed: Investments, at fair value (cost $ 2,432 )
−Removed: Prepaid expenses
Real estate under development
−Removed: Current assets held for sale
+Added: Assets of Consolidated Funds:
+Added: Cash and cash equivalents
+Added: Investments, at fair value (cost $ 11,338 )
Total current assets
1 unchanged sentence
Right-of-use assets
−Removed: Non-current assets held for sale
−Removed: LIABILITIES, NON-CONTROLLING INTEREST AND STOCKHOLDERS' EQUITY
+Added: LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
3 unchanged sentences
Current portion of lease liabilities
−Removed: Liabilities of Consolidated Fund - accrued expenses and other
−Removed: Current liabilities held for sale
+Added: Liabilities of Consolidated Funds:
+Added: Payable for securities purchased
+Added: Accrued expenses and other liabilities
Total current liabilities
2 unchanged sentences
Related party payables, net of current portion
−Removed: Related party notes payable, net of current portion
Convertible notes (face value $ 35,494 and $ 37,912 , including $ 16,174 and $ 15,395 held by related parties, respectively)
−Removed: Redeemable preferred stock of subsidiaries (held by related parties, face value $ 35,010 )
Other liabilities
−Removed: Non-current liabilities held for sale
Total liabilities
Commitments and contingencies (Note 15)
−Removed: Contingently redeemable non-controlling interest
Stockholders' equity
8 unchanged sentences
stockholders' equity
−Removed: Non-controlling interest
+Added: Non-controlling interests
Total stockholders' equity
−Removed: Total liabilities, non-controlling interest and stockholders' equity
+Added: Total liabilities and stockholders' equity
The accompanying notes are an integral part of these consolidated financial statements.
3 unchanged sentences
For the twelve months ended June 30,
+Added: Cost of revenues
Operating costs and expenses:
2 unchanged sentences
Selling, general and administrative
−Removed: Expenses of Consolidated Fund
+Added: Expenses of Consolidated Funds
Total operating costs and expenses
1 unchanged sentence
Dividends and interest income
−Removed: Net realized and unrealized gain (loss) on investments
−Removed: Net realized and unrealized loss on investments of Consolidated Fund
+Added: Net realized and unrealized gain (loss)
+Added: Net realized and unrealized gain (loss) on investments of Consolidated Funds
+Added: Interest and other income of Consolidated Funds
Gain on sale of controlling interest in subsidiary
1 unchanged sentence
Income (loss) before income taxes from continuing operations
−Removed: Income tax expense
+Added: Income tax benefit (expense)
Net income (loss) from continuing operations
2 unchanged sentences
Net income (loss)
−Removed: net (loss) income attributable to non-controlling interest, continuing operations
−Removed: net income (loss) attributable to non-controlling interest, discontinued operations
+Added: net income (loss) attributable to non-controlling interest, continuing operations
+Added: net income attributable to non-controlling interest, discontinued operations
Net income (loss) attributable to Great Elm Group, Inc.
10 unchanged sentences
GREAT ELM GROUP, INC.
−Removed: CONSOLIDATED STATEMENTS OF STOCKHOLDERS’
−Removed: EQUITY AND CONTINGENTLY REDEEMABLE NON-CONTROLLING INTEREST
+Added: CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND CONTINGENTLY REDEEMABLE NON-CONTROLLING INTEREST
Total Great Elm Group, Inc.
3 unchanged sentences
BALANCE, June 30, 2022
−Removed: Net loss (income)
+Added: Net income (loss)
+Added: Distributions to non-controlling interests in Consolidated Fund
+Added: Redemption of non-controlling interests upon sale of subsidiaries
Issuance of common stock related to vesting of restricted stock
−Removed: Repurchase of interests in subsidiary
−Removed: Issuance of common stock related to asset purchase
−Removed: Issuance of interests in Consolidated Fund
−Removed: Distributions of interests in Consolidated Fund
Stock-based compensation
1 unchanged sentence
Net income (loss)
−Removed: Distributions to non-controlling interests in Consolidated Fund
−Removed: Redemption of non-controlling interests upon sale of subsidiaries
Issuance of common stock related to vesting of restricted stock
+Added: Issuance of interests in Consolidated Funds
+Added: Distributions from Consolidated Funds
+Added: Stock repurchases
Stock-based compensation
7 unchanged sentences
Net income (loss) from continuing operations
−Removed: Adjustments to reconcile net income (loss) to net cash from operating activities:
+Added: Adjustments to reconcile net income to net cash used in operating activities:
+Added: Net proceeds from sale of real estate
+Added: Gain on sale of real estate
Depreciation and amortization
Stock-based compensation
−Removed: Sales of investments by Consolidated Fund
−Removed: Purchases of investments by Consolidated Fund
−Removed: Stock dividends received
−Removed: Unrealized loss on investments from Consolidated Fund
−Removed: Realized loss on investments from Consolidated Fund
−Removed: Unrealized gain on investments
+Added: Unrealized (gain) loss on investments
Realized (gain) loss on investments
+Added: Realized (gain) loss on Convertible Notes
Gain on sale of controlling interest in subsidiary
1 unchanged sentence
Change in fair value of contingent consideration
−Removed: Other non-cash expense, net
+Added: Other non-cash (income) expense, net
+Added: Adjustments to reconcile net income to net cash used in operating activities of Consolidated Funds:
+Added: Purchase of investments by Consolidated Funds
+Added: Proceeds from principal payments of Consolidated Funds
+Added: Amortization of premium and accretion of discount, net
+Added: Net realized and unrealized (gains) losses on investments
Changes in operating assets and liabilities:
Receivables from managed funds
−Removed: Prepaid assets, deposits, and other assets
+Added: Prepaid and other assets
Real estate under development
2 unchanged sentences
Accounts payable, accrued expenses and other liabilities
−Removed: Net cash (used in) provided by operating activities - continuing operations
−Removed: Net cash provided by operating activities - discontinued operations
−Removed: Net cash (used in) provided by operating activities
+Added: Changes in operating assets and liabilities of Consolidated Funds:
+Added: Cash and cash equivalents
+Added: Accrued expenses and other liabilities
+Added: Net cash provided by (used in) operating activities - continuing operations
+Added: Net cash provided by (used in) operating activities - discontinued operations
+Added: Net cash provided by (used in) operating activities
Cash flows from investing activities:
−Removed: Acquisition of assets
−Removed: Proceeds from sale of controlling interest in subsidiary, net of cash sold
−Removed: Purchases of investments
+Added: Purchases of investments in held-to-maturity securities
Purchases of investments in marketable securities
+Added: Proceeds from settlement of held-to-maturity securities
+Added: Purchases of investments
Sales of investments
−Removed: Participation in related party rights offering
−Removed: Purchases of property and equipment
+Added: Proceeds from sale of controlling interest in subsidiary, net of cash sold
Net cash provided by (used in) investing activities - continuing operations
6 unchanged sentences
Cash flows from financing activities:
−Removed: Proceeds from issuance of debt
−Removed: Capitalized issuance costs
−Removed: Principal payments on related party notes payable
−Removed: Repurchases of interests in subsidiary
−Removed: Distributions to non-controlling interests in Consolidated Fund
−Removed: Due to broker of Consolidated Fund
−Removed: Capital contributions from non-controlling interests in Consolidated Fund
−Removed: Net cash (used in) provided by financing activities - continuing operations
−Removed: Net cash used in financing activities - discontinued operations
−Removed: Net cash (used in) provided by financing activities
+Added: Principal payments on long term debt
+Added: Contributions of non-controlling interests in Consolidated Funds
+Added: Redemption of Convertible Notes
+Added: Share repurchases
+Added: Distributions to non-controlling interests in Consolidated Funds
+Added: Net cash provided by (used in) financing activities - continuing operations
+Added: Net cash provided by (used in) financing activities - discontinued operations
+Added: Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents, including cash and cash equivalents classified within current assets held for sale
1 unchanged sentence
cash received from discontinued operations
−Removed: Net increase in cash and cash equivalents
+Added: Net change in cash and cash equivalents
Cash and cash equivalents at beginning of period
2 unchanged sentences
Non-cash investing and financing activities
+Added: Non-cash contribution to Consolidated Funds
Lease liabilities and right-of-use assets arising from operating leases
Partial settlement of Seller Note in exchange for GECC stock
−Removed: Non-cash distributions received from Consolidated Fund
+Added: Non-cash distributions received from Consolidated Funds
Equity consideration upon Sale of HC LLC
+Added: The following table provides a reconciliation of cash and cash equivalents and restricted cash reported on the Consolidated Balance Sheets to the total cash and cash equivalents and restricted cash on the Consolidated Statements of Cash Flows:
+Added: June 30, 2024
+Added: June 30, 2023
+Added: Cash and cash equivalents
+Added: Restricted cash
+Added: Cash, cash equivalents and restricted cash
The accompanying notes are an integral part of these consolidated financial statements.
6 unchanged sentences
( GECM ), Great Elm Opportunities GP, Inc.
−Removed: ( GEO GP ), Great Elm Capital GP, LLC ( GEC GP ), Great Elm FM Acquisition, Inc.
+Added: ( GEO GP ), Great Elm Capital GP, LLC ( GEC GP ), Great Elm Investments, LLC ( GEI ), Great Elm FM Acquisition, Inc.
( FM Acquisition ), Great Elm DME Holdings, Inc.
−Removed: ( DME Holdings ), Great Elm DME Manager, LLC ( DME Manager ), and Monomoy BTS Corporation ( MBTS ), as well as its majority-owned subsidiaries Forest Investments, Inc.
+Added: ( DME Holdings ), Great Elm DME Manager, LLC ( DME Manager ), Monomoy CRE, LLC ( MCRE ), Monomoy BTS Construction Management, LLC ( MCM ) and Monomoy BTS Corporation ( MBTS ), as well as its majority-owned subsidiaries Forest Investments, Inc.
( Forest ) (through December 30, 2022), and Great Elm Healthcare, LLC ( HC LLC ) and its wholly-owned subsidiaries (through January 3, 2023).
7 unchanged sentences
Although these and other estimates and assumptions are based on the best available information, actual results could be different from these estimates.
−Removed: Previously reported assets and liabilities related to our Durable Medical Equipment ( DME ) business, primarily consisting of HC LLC and its subsidiaries, have been reclassified as assets and liabilities held for sale on the Company's consolidated balance sheet as of June 30, 2022.
−Removed: In addition, the historical results of the DME business and related activity have been presented in the accompanying consolidated statements of operations and cash flows for the years ended June 30, 2023 and 2022 as discontinued operations.
−Removed: Further, the historical segment information was recast to reflect our ongoing business as a single reportable segment and to remove the activity of discontinued operations.
−Removed: See Note 4 - Assets and Liabilities Held for Sale and Discontinued Operations.
+Added: The historical results of our Durable Medical Equipment ( DME ) business, primarily consisting of HC LLC and its subsidiaries, and related activity have been presented in the accompanying consolidated statements of operations and cash flows for the years ended June 30, 2024 and 2023 as discontinued operations.
+Added: See Note 16 - Discontinued Operations.
Unless otherwise specified, disclosures in these consolidated financial statements reflect continuing operations only.
5 unchanged sentences
All intercompany accounts and transactions have been eliminated in consolidation.
−Removed: Non-controlling interests in the Company’s subsidiaries are reported as a component of equity, separate from the parent company’s equity or outside of permanent equity for non-controlling interests that are contingently redeemable.
+Added: Non-controlling interests in the Company’s subsidiaries are reported as a component of equity, separate from the parent company’s equity or outside of permanent equity for non-controlling interests that are contingently redeemable.
See Note 12 - Non-Controlling Interests and Redeemable Preferred Stock of Subsidiaries .
−Removed: Results of operations attributable to the non-controlling interests are included in the Company’s consolidated statements of operations.
+Added: Results of operations attributable to the non-controlling interests are included in the Company’s consolidated statements of operations.
Cash and Cash Equivalents
15 unchanged sentences
Investments, at Fair Value
−Removed: Investments, at fair value, consist of equity and equity-related securities carried at fair value, as well as investments in private funds measured using the net asset value ( NAV ) as reported by each fund’s investment manager.
−Removed: The private funds calculate NAV in a manner consistent with the measurement principles of the Financial Accounting Standards Board ( FASB ) Accounting Standards Codification ( ASC ) Topic 946, Financial Services –
−Removed: Investment Companies , as of the valuation date.
+Added: Investments, at fair value, consist of equity and equity-related securities carried at fair value, as well as investments in private funds measured using the net asset value ( NAV ) as reported by each fund’s investment manager.
+Added: The private funds calculate NAV in a manner consistent with the measurement principles of the Financial Accounting Standards Board ( FASB ) Accounting Standards Codification ( ASC ) Topic 946, Financial Services – Investment Companies , as of the valuation date.
Changes in the fair value and NAV are recorded within net realized and unrealized gain (loss) on investments.
4 unchanged sentences
(ii) real estate under development (non-current), which includes real estate projects that are in the process of being developed and expected to be completed and disposed of more than one year from the balance sheet date;
−Removed: and (iii) real estate held for sale, which includes land and completed improvements thereon that meet all of the “held for sale”
+Added: and (iii) real estate held for sale, which includes land and completed improvements thereon that meet all of the “held for sale” criteria.
Real estate under development is carried at cost less impairment, if applicable.
3 unchanged sentences
Real estate held for sale is recorded at the lower of cost or fair value less cost to sell.
−Removed: If an asset’s fair value less cost to sell, based on discounted future cash flows, management estimates or market comparisons, is less than its carrying amount, an allowance is recorded against the asset.
+Added: If an asset’s fair value less cost to sell, based on discounted future cash flows, management estimates or market comparisons, is less than its carrying amount, an allowance is recorded against the asset.
Identifiable Intangible Assets, Net
2 unchanged sentences
Amounts assigned to identifiable intangible assets, and their related useful lives, are derived from established valuation techniques and management estimates.
−Removed: The Company’s definite-lived intangible assets are amortized over their estimated useful lives based upon the pattern of future cash flows attributable to the asset or using the straight-line method as determined for each asset.
+Added: The Company’s definite-lived intangible assets are amortized over their estimated useful lives based upon the pattern of future cash flows attributable to the asset or using the straight-line method as determined for each asset.
The Company amortizes its definite-lived intangible assets over periods ranging from ten to fifteen years .
1 unchanged sentence
Long-lived assets include real estate under development, property and equipment, definite-lived intangible assets, and lease right-of-use assets.
−Removed: The Company evaluates the recoverability of long-lived asset assets whenever events or changes in circumstances indicate that their carrying value may not be recoverable based on undiscounted cash flows.
−Removed: Impairment losses are recorded when undiscounted cash flows estimated to be generated by an asset are less than the asset’s carrying amount.
−Removed: The amount of the impairment loss, if any, is calculated as the excess of the asset’s carrying value over its fair value, which is determined using a discounted cash flow analysis, management estimates or market comparisons.
+Added: The Company evaluates the recoverability of long-lived assets whenever events or changes in circumstances indicate that their carrying value may not be recoverable based on undiscounted cash flows.
+Added: Impairment losses are recorded when undiscounted cash flows estimated to be generated by an asset are less than the asset’s carrying amount.
+Added: The amount of the impairment loss, if any, is calculated as the excess of the asset’s carrying value over its fair value, which is determined using a discounted cash flow analysis, management estimates or market comparisons.
We determine if an arrangement contains a lease at the inception of a contract considering all relevant facts and circumstances, which normally does not require significant judgment.
−Removed: Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease.
+Added: Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease.
Right-of-use assets and lease liabilities are recognized at the commencement date of the lease based on the present value of the remaining future minimum lease payments.
1 unchanged sentence
The operating lease right-of-use assets also include lease payments made before commencement and are reduced by lease incentives.
−Removed: Certain of the Company’s office leases contain options that permit extensions for additional periods.
+Added: Certain of the Company’s office leases contain options that permit extensions for additional periods.
If we are not reasonably certain to exercise the option to extend at lease commencement, the respective extension period is not included within the lease term and the associated payments are not included in the measurement of the right-of-use asset and lease liability.
Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet, and lease expense is recognized on a straight-line basis over the term of the short-term lease.
−Removed: The Company’s office leases typically require reimbursements to the lessor for real estate taxes, common area maintenance and other operating costs, which are expensed as incurred as variable lease costs.
+Added: The Company’s office leases typically require reimbursements to the lessor for real estate taxes, common area maintenance and other operating costs, which are expensed as incurred as variable lease costs.
The Company accounts for lease and nonlease components as a single lease component.
−Removed: See Note 11 - Leases for additional information about the Company’s leases.
+Added: In March 2024, the Company signed a new office lease which is expected to commence in December 2024.
+Added: As none of the criteria for recognition have been met as of June 30, 2024 , there is no corresponding lease liability or right-of-use asset associated with this lease included in the condensed consolidated balance sheets.
+Added: See Note 8 - Leases for additional information about the Company’s leases.
Investment Management Expenses
5 unchanged sentences
The compensation cost for all equity awards is measured at their grant-date fair value.
−Removed: For the awards that do not contain performance or market conditions, the related compensation expense is recognized on a straight-line basis over the employee’s requisite service period, which is generally the vesting period, or the non-employee’s vesting period.
+Added: For the awards that do not contain performance or market conditions, the related compensation expense is recognized on a straight-line basis over the employee’s requisite service period, which is generally the vesting period, or the non-employee’s vesting period.
For the awards that contain both performance and service conditions, the Company recognizes compensation expense over the requisite service period using the accelerated vesting attribution method when achievement of the performance condition is probable.
2 unchanged sentences
• Risk-free interest rate is based on the U.S.
−Removed: Treasury instruments, the terms of which are consistent with the expected term of the Company’s stock options.
−Removed: Expected dividend is based on the Company’s history and expectation of dividend payouts.
+Added: Treasury instruments, the terms of which are consistent with the expected term of the Company’s stock options.
+Added: • Expected dividend is based on the Company’s history and expectation of dividend payouts.
• Expected term represents the number of years the options are expected to be outstanding from grant date based on historical option exercise experience.
−Removed: Expected volatility is estimated based on the historical volatility of the Company’s stock price over a period equal to the expected life of each option grant.
+Added: • Expected volatility is estimated based on the historical volatility of the Company’s stock price over a period equal to the expected life of each option grant.
The Company estimates the grant-date fair value and requisite service period of stock options with market conditions using a combination of the Monte Carlo simulation and Black-Scholes-Merton option pricing models, applying the assumptions discussed above.
−Removed: The Company measures the grant-date fair value of restricted stock awards and restricted stock units using the Company’s stock price on the date of grant.
+Added: The Company measures the grant-date fair value of restricted stock awards and restricted stock units using the Company’s stock price on the date of grant.
The Company accounts for forfeitures when they occur.
−Removed: The stock-based compensation expense is classified in the consolidated statements of operations in the same manner in which the award recipient’s salary and related costs are classified or in which the award recipient’s service payments are classified.
+Added: The stock-based compensation expense is classified in the consolidated statements of operations in the same manner in which the award recipient’s salary and related costs are classified or in which the award recipient’s service payments are classified.
Income taxes are accounted for under the asset and liability method.
4 unchanged sentences
The Company has established a valuation allowance for its deferred tax assets that are not recoverable from taxable temporary differences because the Company is unable to conclude that future utilization of a portion of its net operating loss carryforwards and other deferred tax assets is more likely than not.
−Removed: The calculation of the Company’s tax positions involves dealing with uncertainties in the application of complex tax regulations for federal and several different state tax jurisdictions.
+Added: The calculation of the Company’s tax positions involves dealing with uncertainties in the application of complex tax regulations for federal and several different state tax jurisdictions.
The Company is periodically reviewed by tax authorities regarding the amount of taxes due.
9 unchanged sentences
The accounting for asset acquisitions requires estimates and judgment to allocate the incurred costs among the assets acquired using their relative fair value.
−Removed: As such, the values assigned to tangible and intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques.
+Added: As such, the values assigned to tangible and intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques.
Net Income (Loss) Per Share
3 unchanged sentences
Net income (loss) from continuing operations
−Removed: net (loss) income attributable to non-controlling interest, continuing operations
+Added: net income (loss) attributable to non-controlling interest, continuing operations
Numerator for basic EPS - Net income (loss) from continuing operations attributable to Great Elm Group, Inc.
Net income from discontinued operations
−Removed: net income (loss) attributable to non-controlling interest, discontinued operations
−Removed: Numerator for basic EPS - Net income from discontinued operations, attributable to Great Elm Group, Inc.
+Added: net income attributable to non-controlling interest, discontinued operations
+Added: Numerator for basic EPS - Net income (loss) from discontinued operations, attributable to Great Elm Group, Inc.
Effect of dilutive securities:
1 unchanged sentence
Numerator for diluted EPS - Net income (loss) from continuing operations attributable to Great Elm Group, Inc., after the effect of dilutive securities
−Removed: Numerator for diluted EPS - Net income from discontinued operations, attributable to Great Elm Group, Inc.
+Added: Numerator for diluted EPS - Net income (loss) from discontinued operations, attributable to Great Elm Group, Inc.
Denominator for basic EPS - Weighted average shares of common stock outstanding
12 unchanged sentences
As of June 30, 2024, the Company had 3,264,424 potential shares of common stock issuable upon the exercise of stock options that are not included in the diluted net income (loss) per share calculation because to do so would be anti-dilutive for the twelve months ended June 30, 2024.
−Removed: As of June 30, 2022, the Company had 13,839,273 potential shares of common stock, including 10,392,545 shares of common stock issuable upon the conversion of Convertible Notes (as defined below), 1,312,436 potential shares issuable upon vesting of restricted stock units and restricted stock awards, and 2,134,292 potential shares of common stock issuable upon the exercise of stock options that are not included in the diluted net income (loss) per share calculation for the twelve months ended June 30, 2022 because to do so would be anti-dilutive.
+Added: As of June 30, 2023, the Company had 3,264,424 potential shares of common stock issuable upon the exercise of stock options that are not included in the diluted net income (loss) per share calculation for the twelve months ended June 30, 2023 because to do so would be anti-dilutive.
As of June 30, 2024 and 2023, the Company had an aggregate of 1,425,245 and 1,151,430 issued shares, respectively, that are not considered outstanding for accounting purposes since they are unvested and subject to forfeiture by the employees at a nominal price if service milestones are not met.
Concentration of Risk
−Removed: The Company’s revenues from continuing operations and related receivables are primarily attributable to the management of Great Elm Capital Corp.
+Added: The Company’s revenues from continuing operations and related receivables are primarily attributable to the management of Great Elm Capital Corp.
( GECC ) and Monomoy UpREIT, LLC ( Monomoy UpREIT ) investment vehicles.
See Note 4 - Related Party Transactions .
−Removed: Recently Issued Accounting Standards
+Added: Recently Adopted Accounting Standards
Current Expected Credit Losses.
−Removed: In June 2016, the FASB issued Accounting Standards Update ( ASU ) 2016-13, Financial Instruments –
−Removed: Credit Losses (Topic 326) , which changes the impairment model for financial instruments, including trade receivables from an incurred loss method to a new forward looking approach, based on expected losses.
+Added: In June 2016, the FASB issued Accounting Standards Update ( ASU ) 2016-13, Financial Instruments – Credit Losses (Topic 326), which changes the impairment model for financial instruments, including trade receivables from an incurred loss method to a new forward looking approach, based on expected losses.
The estimate of expected credit losses will require entities to incorporate considerations of historical experience, current information and reasonable and supportable forecasts.
The amendments in this ASU are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.
+Added: The Company adopted this ASU as of July 1, 2023 , which did not have a material impact on its consolidated financial statements.
+Added: Recently Issued Accounting Standards
+Added: Income Taxes.
+Added: In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):
+Added: Improvements to Income Tax Disclosures, to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid disaggregated by jurisdiction.
+Added: The amendments in this ASU are effective for fiscal years beginning after December 15, 2025, and early adoption and retrospective application are permitted.
The Company is evaluating the potential impact that the adoption of this ASU will have on its consolidated financial statements.
−Removed: Reference Rate Reform.
−Removed: In March 2020 and January 2021, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):
−Removed: Facilitation of the Effects of Reference Rate Reform on Financial Reporting , and ASU 2021-01, Reference Rate Reform (Topic 848):
−Removed: Scope , which provide optional expedients and exceptions for applying US GAAP to contracts, hedging relationships and other transactions affected by reference rate reform on financial reporting due to the cessation of the London Interbank Offered Rate ( LIBOR ) if certain criteria are met.
−Removed: In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848):
−Removed: Deferral of the Sunset Date of Topic 848 , extending the sunset date under Topic 848 from December 31, 2022 to December 31, 2024 to align the temporary accounting relief guidance with the expected LIBOR cessation date of June 30, 2023.
−Removed: The Company adopted these ASUs as of July 1, 2023 , which did no t have any impact on its consolidated financial statements.
−Removed: Forest Note and Transactions with JPM
−Removed: On December 29, 2022, in connection with the Stock Purchase Agreement and Stockholders Agreement, each defined below, GEG and FM Acquisition issued a promissory note in favor of Forest in an aggregate principal amount equal to $ 38.1 million (the Forest Note ), in exchange for the transfer to FM Acquisition of $ 3.3 million of Series A-1 preferred interests and $ 34.0 million of S eries A-2 preferred interests held by Forest in HC LLC plus, in each case, accrued dividends thereon to the date of transfer.
−Removed: The Forest Note had a maturity date of March 1, 2023 and bore interest at a fixed rate of 9 % per annum.
−Removed: On December 30, 2022, in connection with the Transactions with JPM, as defined below, t he Company partially repaid the Forest Note in the amount of $ 18.4 million.
−Removed: The remaining balance, inclusive of accrued interest, due to
−Removed: Forest under the Forest Note of $ 19.7 million was subsequently paid in full on January 3, 2023 using the proceeds from the Sale of HC LLC (see Note 4 - Assets and Liabilities Held for Sale and Discontinued Operations).
−Removed: During the year ended June 30, 2023 , the Company recorded interest expense of $ 19 thousand with respect to the Forest Note.
−Removed: Sale of Controlling Interest in Forest
−Removed: On December 30, 2022, GEG and FM Acquisition, entered into a stock purchase agreement (the Stock Purchase Agreement ) with J.P.
−Removed: Morgan Broker-Dealer Holdings Inc.
−Removed: ( JPM ) to sell 61 shares of the common stock, $ 0.001 par value per share, of Forest owned by FM Acquisition and GEG, which constituted 61 % of the issued and outstanding shares of Forest’s common stock, to JPM for approximately $ 18.4 million in cash (the Sale of Controlling Interest in Forest ).
−Removed: Upon execution of the Stock Purchase Agreement, the Company deconsolidated Forest and recognized an investment in respect to its retained 19 % non-controlling interest in Forest (the Investment in Forest ) in the amount of $ 2.1 million .
−Removed: The following table shows calculation of the recorded gain on sale of controlling interest in subsidiary of $ 10.5 million on the Company's consolidated statement of operations for the year ended June 30, 2023:
−Removed: (in thousands)
−Removed: December 30, 2022
−Removed: Cash proceeds
−Removed: Fair value of retained 19 % non-controlling interest in Forest
−Removed: Carrying value of non-controlling interest prior to sale
−Removed: Carrying value of net assets disposed
−Removed: Gain on Sale of Controlling Interest in Forest
−Removed: The Investment in Forest was determined to be an equity security measured at fair value within Level 3 of the fair value hierarchy.
−Removed: As a result of Forest joining the JPM consolidated group, we recognized a gain on our Investment in Forest of $ 24.4 million during the year ended June 30, 2023 (prior to exercise of the Put Option as defined below) within net realized and unrealized gain (loss) on investments on the consolidated statement of operations.
−Removed: The Sale of Controlling Interest in Forest did not meet the criteria for presentation as discontinued operations.
−Removed: The following table shows loss before income taxes of Forest, as well as loss before income taxes of Forest attributable to the Company:
−Removed: For the twelve months ended June 30,
−Removed: (in thousands)
−Removed: Loss before income taxes
−Removed: Loss before income taxes attributable to Great Elm Group, Inc.
−Removed: In connection with the Stock Purchase Agreement, GEG, JPM and Forest entered into an amended and restated stockholders’
−Removed: agreement (the Stockholders Agreement ).
−Removed: Pursuant to the Stockholders Agreement, from January 17, 2023 until February 17, 2023, GEG had the right (the Put Option , together with the Sale of Controlling Interest in Forest referred to as the Transactions with JPM ) to sell the Investment in Forest for the then fair market value.
−Removed: On January 17, 2023, the Company exercised the Put Option and sold the Investment in Forest for $ 26.5 million in cash, resulting in an additional gain on our Investment in Forest for the year ended June 30, 2023 of $ 25 thousand recorded within net realized and unrealized gain (loss) on investments on the consolidated statement of operations.
−Removed: Assets and Liabilities Held for Sale and Discontinued Operations
−Removed: On January 3, 2023, DME Holdings along with the minority owners of HC LLC, entered into a purchase agreement with QHM Holdings, Inc., a subsidiary of Quipt Home Medical Corp.
−Removed: ( Quipt ), to sell 100 % of the outstanding membership interests in HC LLC to Quipt ( Sale of HC LLC ) for $ 80.0 million, consisting of approximately $ 72.8 million in cash, $ 5.2 million of indebtedness assumed by Quipt and $ 2.0 million in shares of Quipt common stock based on the 20-day volume-weighted average price of Quipt’s common stock for the period ending on and including the second business day prior to the closing of the transaction.
−Removed: After transaction costs of $ 2.5 million , distributions to non-controlling interests of $ 5.9 million , and indemnity escrow payment of $ 0.4 million , cash proceeds to GEG and subsidiaries were $ 64.1 million , pending finalization of working capital adjustments.
−Removed: The following table shows calculation of the initial gain on Sale of HC LLC of $ 13.6 million :
−Removed: (in thousands)
−Removed: January 3, 2023
−Removed: Net cash proceeds, after transaction costs and distributions to non-controlling interests
−Removed: Fair value of shares of Quipt stock
−Removed: Indemnity escrow receivable attributable to GEG and subsidiaries
−Removed: Carrying value of non-controlling interest prior to sale (permanent equity)
−Removed: Carrying value of non-controlling interest prior to sale (temporary equity)
−Removed: Estimated future distributions of proceeds to non-controlling interests
−Removed: Carrying value of net assets disposed
−Removed: Gain on Sale of HC LLC
−Removed: The Company concluded that the disposal group satisfied the criteria for presentation as held for sale and discontinued operations.
−Removed: In the fourth quarter of fiscal 2023, we recorded a loss of $ 0.3 million following finalization of working capital adjustments to the initial sales price for HC LLC, with the respective payment to Quipt made in September 2023.
−Removed: The following table provides a reconciliation of the Company’s net income from discontinued operations presented in the consolidated statements of operations:
−Removed: For the twelve months ended June 30,
−Removed: (in thousands)
−Removed: Discontinued operations:
−Removed: Durable medical equipment sales and services revenue
−Removed: Durable medical equipment rental income
−Removed: Cost of durable medical equipment sold and services
−Removed: Cost of durable medical equipment rentals
−Removed: Durable medical equipment other operating expenses
−Removed: Depreciation and amortization
−Removed: Transaction costs
−Removed: Interest expense
−Removed: Loss on extinguishment of debt
−Removed: Other (expense) income, net
−Removed: Gain on disposal of discontinued operations
−Removed: Income before income taxes from discontinued operations
−Removed: Income tax benefit
−Removed: Net income from discontinued operations
−Removed: The following table provides a reconciliation of the assets and liabilities held for sale presented in the consolidated balance sheet as of June 30, 2022:
−Removed: (in thousands)
−Removed: June 30, 2022
−Removed: Cash and cash equivalents
−Removed: Accounts receivable
−Removed: Prepaid and other current assets
−Removed: Current assets held for sale
−Removed: Property and equipment, net
−Removed: Equipment held for rental, net
−Removed: Identifiable intangible assets, net
−Removed: Right-of-use assets
−Removed: Non-current assets held for sale
−Removed: Accounts payable
−Removed: Accrued expenses and other current liabilities
−Removed: Deferred revenue
−Removed: Current portion of lease liabilities
−Removed: Current portion of equipment financing debt
−Removed: Current liabilities held for sale
−Removed: Lease liabilities, net of current portion
−Removed: Redeemable preferred stock of subsidiaries
−Removed: Non-current liabilities held for sale
−Removed: Acquisition of Monomoy UpREIT Investment Management Agreement
−Removed: On May 4, 2022 , the Company, through GECM, acquired the investment management agreement for Monomoy UpREIT and certain other related assets from Imperial Capital Asset Management, LLC ( ICAM ).
−Removed: Monomoy UpREIT is the operating partnership of Monomoy Properties REIT, LLC, a private real estate investment trust founded by ICAM, with a portfolio of diversified net leased industrial assets.
−Removed: The acquisition significantly increased and diversified GECM’s assets under management.
−Removed: In addition to the investment management agreement, GECM acquired the assembled workforce including eleven ICAM personnel involved in the operations of Monomoy UpREIT, as well as the lease for office space in Charleston, South Carolina, where these employees are based.
−Removed: In conjunction with the acquisition, the Company made an investment of $ 15.0 million into Monomoy UpREIT.
−Removed: The purchase consideration included an upfront purchase price of $ 10 million financed with a combination of:
−Removed: (i) $ 2.5 million in newly issued shares of GEG common stock, which equals 1,369,984 shares issued at $ 1.81 per share, which is the 30 -calendar day volume-weighted average of the closing sales price ending on April 14, 2022;
−Removed: (ii) $ 1.25 million in shares of GECC common stock owned by GEG and valued at the subscription price of the next GECC rights offering;
−Removed: and (iii) the Seller Note (as defined in Note 13 - Related Party Notes Payable and Long-Term Debt ) issued by GECM in an aggregate principal amount of approximately $ 6.3 million.
−Removed: The Company also incurred $ 0.8 million in direct transaction costs consisting primarily of professional fees.
−Removed: The transaction was accounted for as an asset acquisition because substantially all of the fair value of the gross assets acquired was concentrated in a single identifiable intangible asset related to the investment management agreement.
−Removed: The value of the investment management agreement was estimated under the income approach using a multi-period excess earnings method.
−Removed: The key inputs in the valuation included forecasted assets under management, revenue and expenses, and a discount rate of 19.5 %.
−Removed: The $ 11.9 million cost of the acquisition was allocated to assets acquired on the basis of their relative fair values.
−Removed: Specifically, the Company recognized $ 11.3 million and $ 0.6 million of intangible assets representing the acquired investment management agreement and assembled workforce with estimated useful lives of 15 years and 10 years, respectively.
−Removed: See Note 9 - Identifiable Intangible Assets, Net for additional details on the Company's intangible assets.
−Removed: In conjunction with the acquisition of the Monomoy UpREIT investment management agreement, the Company entered into a contingent consideration agreement that requires the Company to pay up to $ 2.0 million to ICAM if certain fee revenue thresholds are achieved during fiscal years ending June 30, 2023 and 2024.
−Removed: As of June 30, 2023, the Company determined that the fee revenue threshold for the year ending June 30, 2023 was achieved and the amount payable to ICAM was approximately $ 1.0 million, which was paid in July 2023.
−Removed: Further, the Company determined that the fee revenue threshold for the year ending June 30, 2024 was expected to be achieved as well, and the related amount payable to ICAM was recorded at present value of approximately $ 0.9 million, using a discount rate of 8.0 %.
−Removed: Consequently, as of June 30, 2023 , the contingent consideration of $ 1.9 million was included within the current portion of related party payables and related party payables, net of current portion, in the consolidated balance sheet.
−Removed: As of June 30, 2022, the contingent consideration of $ 1.1 million was included within the related party payables, net of current portion, in the consolidated balance sheet.
The Company's revenues are summarized in the following table:
1 unchanged sentence
(in thousands)
+Added: Real estate property sales
Management fees
1 unchanged sentence
Property management fees
+Added: Project management fees
Administration and service fees
1 unchanged sentence
The Company recognizes revenue at amounts that reflect the consideration to which it expects to be entitled in exchange for providing services to its customers under agreements with each investment product, which may be terminated at any time by either party subject to the specific terms of each respective agreement.
+Added: Real estate property sales
+Added: Real estate property sales will occur periodically when development projects are completed.
+Added: Revenue is generally recognized as control of the asset is transferred to the buyer and performance obligations are satisfied.
+Added: Please see Note 7 - Real Estate Under Development for additional information regarding real estate under development.
Management Fees
2 unchanged sentences
Management fee rates range from 1.0 % to 1.5 % of the management fee assets specified within each agreement and are calculated and billed in arrears of the period, either monthly or quarterly.
−Removed: Property Management Fees
−Removed: Under the Monomoy UpREIT property management agreement, GECM is entitled to 4.0 % of monthly rent collected.
−Removed: These fees are collected monthly in arrears.
−Removed: Property management fee revenue is recognized over time as the services are provided.
Incentive Fees
−Removed: The Company earns incentive fees based on the investment management agreements GECM has with GECC and Monomoy Properties II, LLC ( MP II ), a feeder fund of Monomoy Properties REIT, LLC.
+Added: The Company earns incentive fees based on the investment management agreements GECM has with GECC and Monomoy Properties II, LLC ( MP II ), a feeder fund of Monomoy Properties REIT, LLC and other private funds managed by GECM .
Where an investment management agreement includes both management fees and incentive fees, the performance obligation is considered to be a single obligation for both fees.
−Removed: Incentive fees are variable consideration associated with the investment management agreements.
+Added: Incentive fees are variable consideration associated with the investment management agreements and therefore the recognition of such fees is deferred until the end of each fund's measurement period when the performance based incentive fee becomes fixed and determinable.
Incentive fees are earned based on investment performance during the period, subject to the achievement of minimum return levels or high-water marks, in accordance with the terms of the respective investment management agreements.
2 unchanged sentences
During the year ended June 30, 2024, the Company recorded revenue in respect to the incentive fees due from GECC of $ 2.7 million .
+Added: Property Management Fees
+Added: Under the Monomoy UpREIT property management agreement, GECM is entitled to 4.0 % of monthly rent collected.
+Added: These fees are collected monthly in arrears.
+Added: Property management fee revenue is recognized over time as the services are provided.
Administration and Service Fees
3 unchanged sentences
The services are accounted for as a single performance obligation for each investment vehicle that is a series of distinct services with substantially the same pattern of transfer as the services are provided on a daily basis.
+Added: The Company also earns services fees based on a shared services agreement with Imperial Capital Asset Management, LLC ( ICAM ).
+Added: This revenue is recognized over time as the services are performed.
+Added: Service fees are billed quarterly in arrears, which is consistent with the timing of the delivery of services and reflects agreed-upon rates for the services provided.
+Added: The services are accounted for as a single performance obligation that is a series of distinct services with substantially the same pattern of transfer as the services are provided on a daily basis.
+Added: Project Management Fees
+Added: MCM, a wholly owned subsidiary of MCRE, has entered into an owner’s representative agreement with respect to certain third party construction projects and will earn project management fees for its services.
Related Party Transactions
4 unchanged sentences
(in thousands)
−Removed: Net realized and unrealized loss on investments
−Removed: Net realized and unrealized loss on investments of Consolidated Fund
+Added: Net realized and unrealized gain (loss) on investments
+Added: Net realized and unrealized gain (loss) on investments of Consolidated Funds
Dividend income
+Added: See Note 3 - Revenues for additional discussion of fees earned from managed investment products.
(in thousands)
10 unchanged sentences
Consolidated Funds
−Removed: GEO GP serves as the general partner of Great Elm Opportunities Fund I, LP ( GEOF ), a Delaware multi-series limited partnership.
−Removed: GECM serves as the investment manager of GEOF.
−Removed: As the general partner, GEO GP provides administrative services and oversees GECM’s management of the investment portfolio of GEOF.
−Removed: The Company determined that GEOF and Series A, Series B and Series C of GEOF are VIEs, and that the criteria for consolidation were only met for GEOF Series C, which was launched in November 2020 and subsequently merged into GESOF (as defined below).
−Removed: GEOF Series D was launched on January 1, 2023 and the Company determined that it was not a VIE.
−Removed: The contribution in the amount of $ 3.0 million made by GEG into GEOF Series D, representing 43 % ownership of the partnership interests in the fund, was determined to be an equity method investment and the Company elected the fair value option using the net asset value ( NAV ) practical expedient for this instrument with all changes in NAV reported in net realized and unrealized gain (loss) on investments on the consolidated statements of operations.
−Removed: GECM also served as the managing member of Great Elm SPAC Opportunity Fund, LLC ( GESOF or the Consolidated Fund ), a Delaware limited liability company, which was launched in February 2021, and managed the investment portfolio of GESOF.
−Removed: The Company determined that GESOF was a VIE and that the criteria for consolidation were met during the years ended June 30, 2023 and 2022.
−Removed: The operations of the Consolidated Fund were included in our consolidated financial statements.
−Removed: In July 2022, GESOF began to wind down and the Company received final distributions of cash and equity investments (in-kind) during the year ended June 30, 2023.
−Removed: The Company retained the specialized investment company accounting guidance under GAAP with respect to the Consolidated Fund during the periods it was consolidated.
−Removed: As such, investments of the Consolidated Fund were included in the consolidated balance sheets at fair value and the net realized and unrealized gain or loss on those investments was included as a component of other income on the consolidated statements of operations.
−Removed: Non-controlling interests in the Consolidated Fund were included in net (loss) income attributable to non-controlling interest, continuing operations.
−Removed: There are no consolidated funds as of June 30, 2023.
+Added: Through its wholly-owned subsidiaries GECM, MCRE and GEO GP, the Company serves as the investment manager, general partner, or managing member of certain private funds, in which it may also have a direct investment.
+Added: For funds which are determined to be VIEs and where it is determined that the Company is the primary beneficiary, the criteria for consolidation are met.
+Added: The Company monitors such funds and related criteria for consolidation on an ongoing basis.
+Added: Funds that have historically been consolidated will be deconsolidated at such time as the Company is no longer deemed to be the primary beneficiary and will then be treated as equity method investments.
+Added: The Company retains the specialized investment company accounting guidance under US GAAP with respect to the Consolidated Funds.
+Added: As such, investments of the Consolidated Funds are included in the consolidated balance sheets at fair value and the net realized and unrealized gain or loss on those investments was included as a component of other income on the consolidated statements of operations.
+Added: Non-controlling interests of the Consolidated Funds are included in net income (loss) attributable to non-controlling interest, continuing operations.
+Added: The creditors of Consolidated Funds do not have recourse to the Company other than to the assets of the respective Consolidated Funds.
+Added: The Company holds investments in certain funds that are VIEs but the Company is not deemed to be the primary beneficiary.
+Added: Such investments are treated as equity method investments and the Company has elected the fair value option using NAV as a practical expedient with all changes in fair value reported in net realized and unrealized gain on investments on the consolidated statements of operations.
See Note 2 - Summary of Significant Accounting Policies for additional details.
−Removed: The Company owns 1,532,519 shares of GECC (approximately 20.2 % of the outstanding shares).
+Added: As of June 30, 2024, the Company owns 1,518,162 shares of GECC (approximately 14.5 % of the outstanding shares).
Certain officers and directors of GECC are also officers and directors of GEG.
Drapkin is a director of our Board of Directors and also the Chairman of GECC's Board of Directors, Adam M.
−Removed: Kleinman is our President, as well as the Chief Compliance Officer of GECC, and Keri A.
+Added: Kleinman is our President, as well as the Chief Compliance Officer of GECC, Matt Kaplan is the President of GECM, as well as the President and Chief Executive Officer of GECC and Keri A.
Davis is our Chief Financial Officer, as well as the Chief Financial Officer of GECC.
1 unchanged sentence
See Note 5 - Fair Value Measurements.
+Added: In February 2024, the Company invested in $ 6.0 million for a 25 % interest in Great Elm Strategic Partnership I, LLC ( GESP ).
+Added: The Company's investment in GESP is accounted for using the fair value option and it is included in Investments, at fair value on the consolidated balance sheets.
+Added: GESP owns 1,850,424 shares of GECC.
+Added: In June 2024, the Company invested in $ 3.0 million for a 25 % interest in Prosper Peak Holdings, LLC ( PPH ).
+Added: The Company's investment in PPH is accounted for using the fair value option and it is included in Investments, at fair value on the consolidated balance sheets.
+Added: PPH owns 997,506 shares of GECC.
Other Transactions
−Removed: GECM has shared personnel and reimbursement agreements with ICAM.
−Removed: Reese, the Chief Executive Officer and Chairman of the Company’s Board of Directors, is the Chief Executive Officer of ICAM.
−Removed: Certain costs incurred under these agreements relate to human resources, investment management, and other administrative services provided by ICAM employees, for the benefit of the Company and its subsidiaries, and are included in investment management expenses in the consolidated statements of operations.
+Added: GECM has shared personnel and reimbursement agreements for back-office personnel with ICAM.
+Added: Reese, the Chief Executive Officer and Chairman of the Company’s Board of Directors, is the Chief Executive Officer of ICAM, and Matt Kaplan, the President of GECM, is also a Managing Director of ICAM.
+Added: Certain costs incurred under these agreements relate to human resources and other administrative services provided by ICAM employees, for the benefit of the Company and its subsidiaries, and are included in investment management expenses in the consolidated statements of operations.
For the years ended June 30, 2024 and 2023 such costs were $ 0.6 million and $ 1.5 million, respectively.
+Added: As of June 30, 2024 and 2023 costs of $ 0.1 million and $ 0.4 million, respectively, related to the shared service agreement are included in current portion of related party payables.
Other costs include operational or administrative services performed on behalf of the funds managed by GECM and are included in receivables from managed funds in the consolidated balance sheets.
As of June 30, 2024 and 2023 , costs of $ 0.1 million and $ 0.1 million related to the shared services agreements were included in receivables from managed funds, respectively.
+Added: As of January 1, 2024, GECM also has a shared personnel and reimbursement agreement with ICAM whereby ICAM reimburses certain costs incurred by GECM related to administrative services provided by GECM employees for the benefit of ICAM.
On August 31, 2021, the Company entered into a financial advisory agreement with Imperial Capital, LLC.
3 unchanged sentences
Reese is the Co-Founder of Imperial Capital, LLC.
−Removed: Additionally, the Company received dividends of $ 0.4 million and realized gain of $ 0.3 million on its investment in Monomoy Properties, LLC, which it held for a portion of the year ended June 30, 2022.
−Removed: Monomoy Properties, LLC is managed by ICAM.
−Removed: See Note 3 - Forest Note and Transactions with JPM for details on the Forest Note and Investment in Forest, Note 5 - Acquisitions for details on the contingent consideration payable to ICAM following the acquisition of the Monomoy UpREIT investment management agreement, and Note 14 - Convertible Notes for details on the Convertible Notes issued to related parties.
+Added: See Note 5 - Fair Value Measurements for details on the contingent consideration payable to ICAM following the acquisition of the Monomoy UpREIT management agreements, and Note 11 - Convertible Notes for details on the Convertible Notes issued to related parties.
Fair Value Measurements
7 unchanged sentences
or inputs that are derived principally from or corroborated by observable market data by correlation or other means.
−Removed: Unobservable inputs reflecting the Company’s own assumptions incorporated in valuation techniques used to determine fair value.
+Added: Unobservable inputs reflecting the Company’s own assumptions incorporated in valuation techniques used to determine fair value.
These assumptions are required to be consistent with market participant assumptions that are reasonably available.
11 unchanged sentences
Equity investments
−Removed: Equity investments of Consolidated Fund
Total assets within the fair value hierarchy
3 unchanged sentences
There were no transfers between levels of the fair value hierarchy during the years ended June 3 0 , 2024 and 2 0 23 .
−Removed: The following is a reconciliation of changes in contingent consideration, a Level 3 liability:
+Added: The following is a reconciliation of changes in Level 3 assets:
For the twelve months ended June 30,
3 unchanged sentences
Ending balance
+Added: The following is a reconciliation of changes in Level 3 liabilities:
+Added: For the twelve months ended June 30,
+Added: (in thousands)
+Added: Beginning balance
+Added: Change in fair value
+Added: Ending balance
+Added: The assets of the Consolidated Funds measured at fair value on a recurring basis are summarized in the table below:
+Added: Fair Value as of June 30, 2024
+Added: (in thousands)
+Added: Assets of Consolidated Funds:
+Added: Equity investments
+Added: Debt securities
+Added: Total assets within the fair value hierarchy
+Added: Investments valued at net asset value
+Added: There were no assets or liabilities of the Consolidated Funds measured at fair value as of June 30, 2023.
+Added: The net change in unrealized appreciation relating to Level 3 assets still held as of June 30, 2024 totaled $ 9 .
+Added: The following is a reconciliation of changes in fair value of Level 3 assets of Consolidated Funds:
+Added: For the twelve months ended June 30,
+Added: (in thousands)
+Added: Beginning balance
+Added: Sales and Paydowns
+Added: Net Accretion
+Added: Transfers Out
+Added: Change in fair value
+Added: Ending balance
The valuation techniques applied to investments held by the Company and by the Consolidated Fund vary depending on the nature of the investment.
2 unchanged sentences
To the extent these securities are actively traded and valuation adjustments are not applied, they are classified as Level 1.
+Added: Equity investments that do not have readily-available market prices utilize valuation models to determine fair value and are classified as Level 3.
+Added: As of June 30, 2024 , the Company had equity investments in two private companies that were valued using an options pricing model with a volatility ranging from 39.1 % - 39.7 % (weighted average 39.5 %) and risk-free rates of 4.24 % - 4.38 % (weighted average 4.29 %).
+Added: Debt securities
+Added: Bank loans, corporate debt and other debt obligations traded on a national exchange are valued based on quoted market prices and classified as Level 2.
+Added: Debt investments that are not actively traded are generally based on discounted cash flows and classified as Level 3.
+Added: The following table below presents the ranges of significant unobservable inputs used to value Level 3 assets as of June 30, 2024.
+Added: As of June 30, 2024
+Added: Investment Type
+Added: Valuation Technique (1)
+Added: Unobservable Input (1)
+Added: Range (Weighted Average) (2)
+Added: Income Approach
+Added: Discount Rate
+Added: 9.09 % - 25.03 % ( 13.81 %)
+Added: Recent Transaction
+Added: Market Approach
+Added: Earnings Multiple
+Added: Total Equity/Other
Investments in private funds
−Removed: The Company values investments in private funds using NAV as reported by each fund’s investment manager.
+Added: The Company values investments in private funds using NAV as reported by each fund’s investment manager.
+Added: The private funds calculate NAV in a manner consistent with the measurement principles of FASB ASC Topic 946, Financial Services – Investment Companies , as of the valuation date.
Investments valued using NAV as a practical expedient are not categorized within the fair value hierarchy.
−Removed: As of June 30, 2023, investments in private funds primarily consisted of our investment in Monomoy UpREIT and GEOF Series D.
−Removed: As of June 30, 2022 , investments in private funds primarily consisted of our investment in Monomoy UpREIT.
−Removed: Monomoy UpREIT allows redemptions annually with 90 days’
−Removed: notice, subject to a one-year lockup from the date of initial investment, which are capped at 5 % of its NAV.
+Added: As of June 30, 2024 and 2023, investments in private funds primarily consisted of our investments in Monomoy UpREIT and Great Elm Opportunities Fund I, LP Series D ( GEOF Series D ).
+Added: Monomoy UpREIT allows redemptions annually with 90 days’ notice, subject to a one-year lockup from the date of initial investment, which are capped at 5 % of its NAV.
GEOF Series D allows withdrawals annually and there is no set duration for the private fund.
−Removed: As of June 30, 2023, there were no unfunded commitments.
−Removed: See Note 5 - Acquisitions for additional discussion related to the fair value of the contingent consideration payable in conjunction with the acquisition of the Monomoy UpREIT investment management agreement and Note 13 - Related Party Notes Payable and Long-Term Debt for additional discussion related to the fair value of our notes payable and other long-term debt.
+Added: Contingent consideration
+Added: In conjunction with the acquisition of the Monomoy UpREIT investment and property management agreements in May 2022, the Company entered into a contingent consideration agreement that requires the Company to pay up to $ 2.0 million to ICAM if certain fee revenue thresholds were achieved during fiscal years ending June 30, 2023 and 2024.
+Added: As of June 30, 2023, the Company determined that the fee revenue threshold for the year ending June 30, 2023 was achieved and the amount payable to ICAM was approximately $ 1.0 million, which was paid in July 2023.
+Added: As of June 30, 2024, it was determined that the full target revenue threshold for the year ended June 30, 2024 was not met in full and the contingent consideration was updated to $ 0.4 million , which was paid in July 2024.
+Added: See Note 10 - Long-Term Debt for additional discussion related to the fair value of our notes payable and other long-term debt.
The carrying value of all other financial assets and liabilities approximate their fair values.
Identifiable Intangible Assets, Net
−Removed: The following table is a summary of the Company’s intangible assets as of June 30, 2023 and 2022:
+Added: The following table is a summary of the Company’s intangible assets as of June 30, 2024 and 2023:
As of June 30, 2024
16 unchanged sentences
Real Estate Under Development
−Removed: In January 2023, MBTS completed purchases of certain land parcels.
+Added: In January 2023, MBTS completed purchases of certain land parcels located in Mississippi and Florida.
Contemporaneously with the land purchases, MBTS entered into commercial lease agreements, as a lessor, in respect to the land parcels and build-to-suit improvements to be constructed thereon.
−Removed: The leases will commence upon substantial completion of the build-to-suit development, which is expected not later than the first calendar quarter of 2024.
+Added: The leases will commence upon substantial completion of the build-to-suit development.
The Company intends to sell the land and improvements with the attached leases at or close to the respective lease commencement date.
−Removed: During the year ended June 30, 2023 , the Company capitalized costs of $ 1.7 million within real estate under development (current) on its balance sheet, representing the cost of land and development and construction costs directly identifiable with the two real estate projects.
+Added: During the years ended June 30, 2024 and 2023 , the Company capitalized development costs totaling $ 8.5 million and $ 1.7 million, respectively.
+Added: On June 18, 2024, MBTS sold one of its assets for consideration totaling $ 7.8 million.
+Added: At closing, MBTS funded two escrow accounts as part of its performance obligation to seller for construction completion.
+Added: As of June 30, 2024 , the Company estimates that construction is approximately 85 % complete and has recognized revenue proportionately.
+Added: The Company expects the performance obligation will be satisfied over the subsequent calendar quarter and the remaining sales revenue will be recognized at that time.
The Company leases office spaces in Waltham, Massachusetts and Charleston, South Carolina under operating leases.
19 unchanged sentences
Total lease liabilities
−Removed: The Company’s office leases in Waltham, Massachusetts, and Charleston, South Carolina, provide a five-year and a three-year optional extension periods, respectively.
+Added: The Company’s office leases in Waltham, Massachusetts, and Charleston, South Carolina, provide a five-year and a three-year optional extension periods, respectively.
As the Company is not reasonably certain to exercise the options, the periods covered by the options are not included in the respective lease terms or the measurement of the respective lease liabilities.
8 unchanged sentences
Estimated working capital adjustment
+Added: Post Sale Construction Expenses
Accrued expenses and other current liabilities
−Removed: See Note 4 - Assets and Liabilities Held for Sale and Discontinued Operations for additional information on the estimated future distributions of proceeds to non-controlling interests in HC LLC, as well as the estimated working capital adjustment.
−Removed: Related Party Notes Payable and Long-Term Debt
−Removed: As of June 30, 2023 , the Company did no t have any outstanding related party notes payable.
−Removed: As of June 30, 2022 , related party notes payable consisted of the Seller Note (as defined below) with a total principal and outstanding amount of $ 6.3 million recorded within related party notes payable, net of current portion, on the consolidated balance sheet.
−Removed: The Company’s long-term debt is summarized in the following table:
+Added: See Note 16 - Discontinued Operations for additional information on the estimated future distributions of proceeds to non-controlling interests in HC LLC, as well as the estimated working capital adjustment.
+Added: Long-Term Debt
+Added: The Company’s long-term debt is summarized in the following table:
(in thousands)
4 unchanged sentences
Long-term debt
−Removed: During the years ended June 30, 2023 and 2022, the Company incurred interest expense of $ 2.5 million and $ 0.2 million , respectively, on related-party notes payable and long-term debt.
−Removed: See Note 14 - Convertible Notes for interest expense on the Convertible Notes and Note 15 - Non-Controlling Interests and Redeemable Preferred Stock of Subsidiaries for interest expense on the preferred stock of subsidiaries.
−Removed: Additional details of each borrowing are discussed below.
−Removed: On May 4, 2022 as part of the consideration paid to acquire the Monomoy UpREIT investment management agreement, GECM issued ICAM a $ 6.3 million promissory note (the Seller Note ).
−Removed: The Seller Note was due on August 4, 2023 and had no prepayment penalties.
−Removed: The Seller Note bore interest of 6.5 % per annum, which was paid quarterly.
−Removed: In August and December 2022, the Company settled the principal amount of $ 0.6 million and $ 2.0 million by transferring 50,000 and 200,000 shares of GECC stock, respectively.
−Removed: In February 2023, the Company repaid the remaining principal of $ 3.7 million in full.
−Removed: On June 9, 2022, the Company issued $ 26.9 million in aggregate principal amount of 7.25 % notes due on June 30, 2027 (the GEGGL Notes ), which included $ 1.9 million of GEGGL Notes issued in connection with the partial exercise of the underwriters’
−Removed: over-allotment option.
+Added: During the years ended June 30, 2024 and 2023, the Company incurred interest expense of $ 2.2 million and $ 2.5 million , respectively, attributed to its long-term debt as well as certain related-party notes payable fully repaid during the year ended June 30, 2023.
+Added: See Note 11 - Convertible Notes for interest expense on Convertible Notes.
+Added: Additional details of the Company's long-term debt are discussed below.
+Added: On June 9, 2022, we issued $ 26.9 million in aggregate principal amount of 7.25 % notes due on June 30, 2027 (the GEGGL Notes ), which included $ 1.9 million of GEGGL Notes issued in connection with the partial exercise of the underwriters’ over-allotment option.
The GEGGL Notes are unsecured obligations and rank:
−Removed: (i) pari passu, or equal, with the Convertible Notes and any future outstanding unsecured unsubordinated indebtedness of the Company;
−Removed: (ii) senior to any of the Company's indebtedness that expressly provides it is subordinated to the GEGGL Notes;
−Removed: (iii) effectively subordinated to any future secured indebtedness of the Company;
−Removed: and (iv) structurally subordinated to any future indebtedness and other obligations of any of the Company's current and future subsidiaries.
−Removed: The Company pays interest on the GEGGL Notes on March 31, June 30, September 30 and December 31 of each year.
+Added: (i) pari passu, or equal, with the Convertible Notes and any future outstanding unsecured unsubordinated indebtedness;
+Added: (ii) senior to any of our indebtedness that expressly provides it is subordinated to the GEGGL Notes;
+Added: (iii) effectively subordinated to any future secured indebtedness;
+Added: and (iv) structurally subordinated to any future indebtedness and other obligations of any of our current and future subsidiaries.
+Added: We pay interest on the GEGGL Notes on March 31, June 30, September 30 and December 31 of each year.
The GEGGL Notes can be called on, or after, June 30, 2024.
4 unchanged sentences
Convertible Notes
−Removed: On February 26, 2020, the Company issued notes at par with an aggregate principal balance of $ 30 million due on February 26, 2030 that accrue interest at 5.0 % per annum, payable semiannually in arrears on June 30 and December 31, commencing June 30, 2020, in cash or in-kind at the option of the Company , with each $1,000 principal amount convertible into 288.0018 shares of the Company’s common stock, subject to the terms therein, prior to maturity at the option of the holder (the Convertible Notes ).
+Added: On February 26, 2020, the Company issued notes at par with an aggregate principal balance of $ 30 million due on February 26, 2030 that accrue interest at 5.0 % per annum, payable semiannually in arrears on June 30 and December 31, commencing June 30, 2020, in cash or in-kind at the option of the Company , with each $1,000 principal amount convertible into 288.0018 shares of the Company’s common stock, subject to the terms therein, prior to maturity at the option of the holder (the Convertible Notes ).
In addition, on March 10, 2021, the Company issued additional Convertible Notes in an aggregate principal amount of $ 2.3 million.
+Added: In June 2024, the company repurchased $ 4.2 million of principal for $ 2.1 million resulting in a realized gain of $ 2.3 million.
As of June 30, 2024, the total principal balance of Convertible Notes outstanding was $ 35.5 million , including cumulative interest paid in-kind.
4 unchanged sentences
( Northern Right ), a significant shareholder.
−Removed: Drapkin, a member of the Company’s Board of Directors, is the Chief Executive Officer of Northern Right.
+Added: Drapkin, a member of the Company’s Board of Directors, is the Chief Executive Officer of Northern Right.
▪ $ 7.9 million issued to entities associated with Jason W.
−Removed: Reese, including funds managed by ICAM, a significant shareholder.
+Added: Reese, the Chief Executive Officer and Chairman of the Company’s Board of Directors, including funds managed by ICAM, a significant shareholder.
▪ $ 0.8 million issued to entities associated with Eric J.
−Removed: Scheyer, a member of the Company’s Board of Directors.
+Added: Scheyer, a member of the Company’s Board of Directors.
The Company may, subject to compliance with the terms of the Convertible Notes, effect the conversion of some or all of the Convertible Notes into shares of common stock, subject to certain liquidity and pricing requirements, as specified in the Convertible Notes.
−Removed: The embedded conversion feature in the Convertible Notes qualifies for the scope exception to derivative accounting in FASB ASC Topic 815, Derivatives and Hedging , for certain contracts involving a reporting entity’s own equity.
+Added: The embedded conversion feature in the Convertible Notes qualifies for the scope exception to derivative accounting in FASB ASC Topic 815, Derivatives and Hedging , for certain contracts involving a reporting entity’s own equity.
The Company incurred $ 1.2 million in issuance costs on the original issuance that are amortized over the 10-year term.
15 unchanged sentences
June 30, 2023
−Removed: Temporary equity
−Removed: Permanent equity
−Removed: Consolidated Fund
−Removed: Permanent equity
+Added: Consolidated Funds
Permanent equity
5 unchanged sentences
Permanent equity
−Removed: Permanent equity
−Removed: Consolidated Fund
+Added: Consolidated Funds
Permanent equity
1 unchanged sentence
Net loss attributable to non-controlling interest
−Removed: HC LLC –
−Removed: Non-controlling interest classified as temporary equity
+Added: HC LLC – Non-controlling interest classified as temporary equity
The Company issued a 9.95 % common stock equity ownership in HC LLC.
2 unchanged sentences
In addition, upon the seventh anniversary of issuance date, if (i) the holder owned at least 50% of the common shares issued to it at the closing of the transaction, (ii) an initial public offering of HC LLC had not commenced and (iii) the holder had not had an earlier opportunity to sell its shares at their fair market value, the holder had the right to request a marketing process for a sale of HC LLC and had the right to put its common shares to HC LLC at the price for such shares implied by such marketing process.
−Removed: The Company also had the right to call the holder’s common shares at such price.
+Added: The Company also had the right to call the holder’s common shares at such price.
The holder of the non-controlling interest was entitled to participate in earnings of HC LLC and was not required to fund losses.
−Removed: As the redemption was contingent upon future events outside of the Company’s control which were not probable, the Company classified the non-controlling interest as temporary equity at its fair value on the date of issuance, adjusted for any earnings in HC LLC.
+Added: As the redemption was contingent upon future events outside of the Company’s control which were not probable, the Company classified the non-controlling interest as temporary equity at its fair value on the date of issuance, adjusted for any earnings in HC LLC.
As of June 30, 2023, no non-controlling interest was outstanding following the Sale of HC LLC on January 3, 2023.
−Removed: Refer to Note 4 - Assets and Liabilities Held for Sale and Discontinued Operations for details on the Sale of HC LLC to Quipt.
−Removed: HC LLC –
−Removed: Non-controlling interest classified as permanent equity
+Added: Refer to Note 16 - Discontinued Operations for details on the Sale of HC LLC to Quipt.
+Added: HC LLC – Non-controlling interest classified as permanent equity
The Company issued a 9.95 % common stock equity ownership in HC LLC.
2 unchanged sentences
As of June 30, 2023, no non-controlling interest was outstanding following the Sale of HC LLC on January 3, 2023.
−Removed: Refer to Note 4 - Assets and Liabilities Held for Sale and Discontinued Operations for details on the Sale of HC LLC to Quipt.
−Removed: GEC GP –
−Removed: Non-controlling interest classified as permanent equity
−Removed: GEC GP owned the rights to the profit sharing agreement with GECM as well as an intercompany obligation under a senior secured note payable issued by Great Elm GECC GP Corp in consideration for the assets acquired from MAST Capital Management, LLC.
−Removed: During the year ended June 30, 2022, the Company purchased the remaining shares of GEC GP.
−Removed: As of June 30, 2023 , no non-controlling interest was outstanding.
−Removed: Consolidated Fund –
−Removed: Non-controlling interest classified as permanent equity
+Added: Refer to Note 16 - Discontinued Operations for details on the Sale of HC LLC to Quipt.
+Added: Consolidated Fund – Non-controlling interest classified as permanent equity
As of June 30, 2024, the Company held 45 % of the capital in the Consolidated Fund and the remaining capital was recorded as a non-controlling interest that included affiliated individuals and entities.
−Removed: In July 2022, the Consolidated Fund began to wind down and distributed its remaining assets to non-controlling interests in the total amount of $ 0.6 million.
−Removed: Forest –
−Removed: Non-controlling interest classified as permanent equity
+Added: Forest – Non-controlling interest classified as permanent equity
In December 2020, the Company sold to JPM a 20.0 % common stock interest in Forest in exchange for $ 2.7 million.
9 unchanged sentences
The dividends on Forest Preferred Stock were included in interest expense in the consolidated statements of operations.
−Removed: During the years ended June 30, 2023 and 2022, the Company recorded interest expense, inclusive of non-cash interest related to amortization of discounts and debt issuance costs, of $ 1.7 million and $ 3.5 million , respectively, related to Forest Preferred Stock.
+Added: During the year ended June 30, 2023, the Company recorded interest expense, inclusive of non-cash interest related to amortization of discounts and debt issuance costs of $ 1.7 million related to Forest Preferred Stock.
Share-Based and Other Non-Cash Compensation
1 unchanged sentence
On December 29, 2020, the Board of Directors of the Company adopted a Tax Benefits Preservation Agreement, between the Company and Computershare Trust Company, N.A., as Rights Agent (the Rights Plan ).
−Removed: The Rights Plan is designed to reduce the possibility that certain changes in ownership could result in limitations on the use of the tax attributes, by restricting the ability of a person or entity from acquiring ownership (including through attribution under the tax law) of 4.99 % or more of the Company’s common stock and the ability of persons or entities now owning 5 % or more of the outstanding common shares from acquiring additional common shares.
−Removed: Pursuant to the terms of the Rights Plan, the Company’s Board of Directors declared a dividend distribution of one Preferred Stock Purchase Right (a Tax Right ) for each outstanding share of common stock, par value $ 0.001 per share of the Company (the Common Stock ), to stockholders of record as of the close of business on January 29, 2018 (the Record Date ).
+Added: The Rights Plan is designed to reduce the possibility that certain changes in ownership could result in limitations on the use of the tax attributes, by restricting the ability of a person or entity from acquiring ownership (including through attribution under the tax law) of 4.99 % or more of the Company’s common stock and the ability of persons or entities now owning 5 % or more of the outstanding common shares from acquiring additional common shares.
+Added: Pursuant to the terms of the Rights Plan, the Company’s Board of Directors declared a dividend distribution of one Preferred Stock Purchase Right (a Tax Right ) for each outstanding share of common stock, par value $ 0.001 per share of the Company (the Common Stock ), to stockholders of record as of the close of business on January 29, 2018 (the Record Date ).
In addition, one Tax Right will automatically attach to each share of Common Stock issued between the Record Date and the Distribution Date (as defined in the Rights Plan).
4 unchanged sentences
(d) the repeal of Section 382 of the Code if the Independent Directors (as defined in the Rights Plan) determine that the Rights Plan is no longer necessary for the preservation of Tax Benefits (as defined in the Rights Planet);
−Removed: (e) the beginning of the taxable year of the Company to which the Company’s Board of Directors determines that no Tax Benefits may be carried forward, unless previously redeemed or exchanged by the Company.
−Removed: In November 2013, the Company’s stockholders approved the Amended and Restated 1999 Directors’
−Removed: Equity Compensation Plan (the Directors’
−Removed: Options and awards granted to new or existing Outside Directors (as defined in the Directors’
−Removed: Plan) under the Directors’
−Removed: Plan vest ratably over a period of one to three years .
−Removed: The Directors’
−Removed: Plan also provides for the acceleration of options upon the dismissal of an Outside Director from the Board of Directors of the Company upon or within 24 months following a change in control of the Company.
−Removed: The exercise price of options granted under the Directors’
−Removed: Plan is equal to the fair market value of the Company’s common stock on the date of grant.
−Removed: Under the Directors’
−Removed: Plan, stock option grants have a term of ten years .
−Removed: As of June 30, 2023 , the Company had no shares outstanding under the Directors’
−Removed: In June 2016, the Company’s stockholders approved the Great Elm Group, Inc.
+Added: (e) the beginning of the taxable year of the Company to which the Company’s Board of Directors determines that no Tax Benefits may be carried forward, unless previously redeemed or exchanged by the Company.
+Added: In June 2016, the Company’s stockholders approved the Great Elm Group, Inc.
2016 Long-Term Incentive Plan (the 2016 Long-Term Incentive Plan ), as subsequently amended, and the Great Elm Group, Inc.
2016 Employee Stock Purchase Plan (the 2016 Employee Stock Purchase Plan ).
−Removed: In November 2022, the Company’s stockholders approved an increase to the number of shares available for issuance under the 2016 Long-Term Incentive Plan by 2,900,000 shares.
+Added: In November 2022, the Company’s stockholders approved an increase to the number of shares available for issuance under the 2016 Long-Term Incentive Plan by 2,900,000 shares.
The 2016 Long-Term Incentive Plan is administered by the Compensation Committee of the Board of Directors (the Compensation Committee ) and provides for the issuance of stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, performance shares, cash-based awards and other stock-based awards.
2 unchanged sentences
Shares of Common Stock Available for Future Issuance
−Removed: Directors' Plan
2016 Long-Term Incentive Plan
1 unchanged sentence
Restricted Stock Awards and Restricted Stock Units
−Removed: The following table presents activity related to the Company’s restricted stock awards and restricted stock units for the year ended June 30, 2023:
+Added: The following table presents activity related to the Company’s restricted stock awards and restricted stock units for the year ended June 30, 2024:
Restricted Stock Awards and Restricted Stock Units
8 unchanged sentences
Stock Options
−Removed: The following table presents activity related to the Company’s stock options for the year ended June 30, 2023:
+Added: The following table presents activity related to the Company’s stock options for the year ended June 30, 2024:
Stock Options
9 unchanged sentences
Exercisable at June 30, 2024
−Removed: The weighted average grant date fair value of options, per share, granted during the years ended June 30, 2023 and 2022 was $ 0.23 and $ 1.02 , respectively.
+Added: There were no options granted, forfeited, cancelled or expired during the year ended June 30, 2024 .
+Added: The weighted average grant date fair value of options, per share, granted during the year ended June 30, 2023 was $ 0.23 .
The ranges of assumptions used to value options granted were as follows:
−Removed: As of June 30,
+Added: June 30, 2023
Expected volatility
7 unchanged sentences
As of June 30, 2024 and 2023, the Company had unrecognized compensation cost related to all unvested restricted stock awards, restricted stock units, and stock options totaling $ 2.3 million and $ 2.3 million, respectively, expected to be recognized as the awards and options vest over the next 0.5 years.
−Removed: In November 2021, the Compensation Committee in its discretion determined that an aggregate of 580,023 performance shares previously awarded to certain employees had vested.
−Removed: These restricted stock awards granted had both performance and service requirements in connection with the formation of the investment management business.
−Removed: The vesting of these awards was subject to a five-year service requirement and an investment management cumulative revenue collection target of $ 40 million for the five-year period ended November 3, 2021.
−Removed: The discretionary vesting of shares, as determined by the Compensation Committee resulted in a charge to stock-based compensation expense of $ 0.6 million during the year ended June 30, 2022.
Non-Employee Director Deferred Compensation Plan
2 unchanged sentences
Such compensation is deferred until the earlier of 3 years from the original grant date of such compensation, termination of service, or death, and is payable in common stock shares.
−Removed: As of June 30, 2023, there were 167,939 restricted stock awards and restricted stock units that were deferred under this plan (and thus included in the number of restricted stock awards and restricted stock units outstanding as of that date), including 57,931 restricted stock awards, for which the service condition was met during the twelve months ended June 30, 2023.
+Added: As of June 30, 2024, there were 167,939 restricted stock awards and restricted stock units that were deferred under this plan (and thus included in the number of restricted stock awards and restricted stock units outstanding as of that date).
Other Non-Cash Compensation
4 unchanged sentences
The total value of the MP II restricted membership interests awarded for the year ended June 30, 2023 was $ 0.1 million, which will vest on the third anniversary of the grant date.
−Removed: Related compensation expense was $ 22 thousand for the year ended June 30, 2023 .
+Added: Related compensation expense was $ 45 thousand and $ 22 thousand for the years ended June 30, 2024 and 2023 .
The Company had income (loss) before income taxes from continuing operations of $( 0.8 ) million and $ 14.7 million , respectively, for the years ended June 30, 2024 and 2023.
3 unchanged sentences
(in thousands)
−Removed: Income tax expense
+Added: Income tax benefit (expense)
The Company recognized an income tax expense from continuing operations of $ 0.1 million and $ 0.2 million for the years ended June 30, 2024 and 2023, respectively.
−Removed: This expense consisted solely of state and local taxes.
−Removed: No federal income taxes were incurred for the years ended June 30, 2023 and 2022.
+Added: This expense consisted of federal and state and local taxes for the year ended June 30, 2024 and solely of state and local taxes for the year ended June 30, 2023.
The following table reconciles the expected corporate federal income tax expense, computed by multiplying the Company's income (loss) before income taxes by the statutory tax rate of 21 %, to the total tax expense.
8 unchanged sentences
Net operating loss and credit expirations
−Removed: Income tax expense
+Added: Income tax benefit (expense)
The tax effect of temporary differences that give rise to significant portions of the Company's deferred tax assets and liabilities are as follows:
14 unchanged sentences
In light of the history of cumulative operating losses, the Company recorded a valuation allowance for all of its federal and state deferred tax assets, as it is presently unable to conclude that it is more likely than not that the federal and state deferred tax assets in excess of deferred tax liabilities will be realized.
−Removed: The decrease of $ 195.0 million in the overall valuation allowance relates primarily to the expiration of federal tax attributes, as well as the Sale of Controlling Interest in Forest and Sale of HC LLC.
+Added: The decrease of $ 1.9 million in the overall valuation allowance relates primarily to the expiration of federal tax and state attributes.
As of June 30, 2024, the Company had net operating loss ( NOL ) carryforwards for federal income tax purposes of approximately $ 8.9 million , of which approximately $ 3.4 million will expire in fiscal years 2025 through 2037 and $ 5.5 million can be carried forward indefinitely.
−Removed: As of June 30, 2023, the Company also had $ 25.5 million of state NOL carryforwards, principally in Massachusetts, Arizona, and Nebraska, that will expire from 2031 to 2043 .
+Added: As of June 30, 2024, the Company also had $ 5.9 million of state NOL carryforwards, principally in Massachusetts, that will expire from 2031 to 2044 .
The utilization of a corporation's NOL carryforwards is limited following a change in ownership (as defined by Internal Revenue Code section 382) of greater than 50 % within a rolling three-year period.
4 unchanged sentences
Balance as of June 30, 2022
−Removed: Addition for tax positions of prior years
Reductions for tax positions of prior years
5 unchanged sentences
As of June 30, 2024 and 2023, the Company had approximately $ 0.5 million and $ 0.5 million , respectively, of unrecognized tax benefits.
−Removed: The reduction for tax positions of prior years of $ 27.7 million was attributable to unrecognized tax benefits of Forest that was sold during the year ended June 30, 2023, as discussed in Note 3 - Forest Note and Transactions with JPM.
These unrecognized tax benefits, if recognized, would ordinarily impact the effective tax rate by a corresponding amount.
−Removed: However, because of the Company’s history of cumulative operating losses, any recognized tax benefits would be fully offset by a valuation allowance without any impact on our consolidated results.
−Removed: The Company’s policy is to include interest and penalties related to unrecognized tax benefits in tax expense on the Company’s consolidated statements of operations.
+Added: However, because of the Company’s history of cumulative operating losses, any recognized tax benefits would be fully offset by a valuation allowance without any impact on our consolidated results.
+Added: The Company’s policy is to include interest and penalties related to unrecognized tax benefits in tax expense on the Company’s consolidated statements of operations.
As of June 30, 2024 and 2023, the accrual for interest and penalties associated with tax liabilities was immaterial.
4 unchanged sentences
Tax years remain open to examination to the extent that NOLs generated in those years are utilized in a later year.
−Removed: Accordingly, the Company's fiscal years 2004, 2005, 2018 , and 2020 through 2023 remain open to examination by federal tax authorities.
+Added: Accordingly, the Company's fiscal years 2004 through 2024 remain open to examination by federal tax authorities, with the exception of the 2009 and 2010 fiscal years for which IRS examinations have been completed.
State tax returns generally remain open to examination for fiscal years 2004 through 2024 .
3 unchanged sentences
The Company is not a named party in any pending or threatened litigation that we expect to have a material adverse impact on our business, results of operations, financial condition or cash flows.
+Added: Discontinued Operations
+Added: On January 3, 2023, DME Holdings along with the minority owners of HC LLC, entered into a purchase agreement with QHM Holdings, Inc., a subsidiary of Quipt Home Medical Corp.
+Added: ( Quipt ), to sell 100 % of the outstanding membership interests in HC LLC to Quipt ( Sale of HC LLC ) for $ 80.0 million, consisting of approximately $ 72.8 million in cash, $ 5.2 million of indebtedness assumed by Quipt and $ 2.0 million in shares of Quipt common stock based on the 20-day volume-weighted average price of Quipt’s common stock for the period ending on and including the second business day prior to the closing of the transaction.
+Added: After transaction costs of $ 2.5 million , distributions to non-controlling interests of $ 5.9 million , and indemnity escrow payment of $ 0.4 million , cash proceeds to GEG and subsidiaries were $ 64.1 million , pending finalization of working capital adjustments.
+Added: The following table shows calculation of the initial gain on Sale of HC LLC of $ 13.6 million :
+Added: (in thousands)
+Added: January 3, 2023
+Added: Net cash proceeds, after transaction costs and distributions to non-controlling interests
+Added: Fair value of shares of Quipt stock
+Added: Indemnity escrow receivable attributable to GEG and subsidiaries
+Added: Carrying value of non-controlling interest prior to sale (permanent equity)
+Added: Carrying value of non-controlling interest prior to sale (temporary equity)
+Added: Estimated future distributions of proceeds to non-controlling interests
+Added: Carrying value of net assets disposed
+Added: Gain on Sale of HC LLC
+Added: The Company concluded that the disposal group satisfied the criteria for presentation as held for sale and discontinued operations.
+Added: In the fourth quarter of fiscal year 2023, we recorded a loss of $ 0.3 million following finalization of working capital adjustments to the initial sales price for HC LLC, with the respective payment to Quipt made in September 2023.
+Added: The following table provides a reconciliation of the Company’s net income from discontinued operations presented in the consolidated statements of operations:
+Added: For the twelve months ended June 30,
+Added: (in thousands)
+Added: Discontinued operations:
+Added: Durable medical equipment sales and services revenue
+Added: Durable medical equipment rental income
+Added: Cost of durable medical equipment sold and services
+Added: Cost of durable medical equipment rentals
+Added: Durable medical equipment other operating expenses
+Added: Depreciation and amortization
+Added: Transaction costs
+Added: Interest expense
+Added: Loss on extinguishment of debt
+Added: Other (expense) income, net
+Added: Gain on disposal of discontinued operations
+Added: Income before income taxes from discontinued operations
+Added: Income tax benefit
+Added: Net income from discontinued operations
+Added: Forest Note and Transactions with JPM
+Added: On December 29, 2022, in connection with the Stock Purchase Agreement and Stockholders Agreement, each defined below, GEG and FM Acquisition issued a promissory note in favor of Forest in an aggregate principal amount equal to $ 38.1 million (the Forest Note ), in exchange for the transfer to FM Acquisition of $ 3.3 million of Series A-1 preferred interests and $ 34.0 million of S eries A-2 preferred interests held by Forest in HC LLC plus, in each case, accrued dividends thereon to the date of transfer.
+Added: The Forest Note had a maturity date of March 1, 2023 and bore interest at a fixed rate of 9 % per annum.
+Added: On December 30, 2022, in connection with the Transactions with JPM, as defined below, t he Company partially repaid the Forest Note in the amount of $ 18.4 million.
+Added: The remaining balance, inclusive of accrued interest, due to Forest under the Forest Note of $ 19.7 million was subsequently paid in full on January 3, 2023 using the proceeds from the Sale of HC LLC (see Note 16 - Discontinued Operations).
+Added: Sale of Controlling Interest in Forest
+Added: On December 30, 2022, GEG and FM Acquisition, entered into a stock purchase agreement (the Stock Purchase Agreement ) with J.P.
+Added: Morgan Broker-Dealer Holdings Inc.
+Added: ( JPM ) to sell 61 shares of the common stock, $ 0.001 par value per share, of Forest owned by FM Acquisition and GEG, which constituted 61 % of the issued and outstanding shares of Forest’s common stock, to JPM for approximately $ 18.4 million in cash (the Sale of Controlling Interest in Forest ).
+Added: Upon execution of the Stock Purchase Agreement, the Company deconsolidated Forest and recognized an investment in respect to its retained 19 % non-controlling interest in Forest (the Investment in Forest ) in the amount of $ 2.1 million .
+Added: The following table shows calculation of the recorded gain on sale of controlling interest in subsidiary of $ 10.5 million on the Company's consolidated statement of operations for the year ended June 30, 2023:
+Added: (in thousands)
+Added: December 30, 2022
+Added: Cash proceeds
+Added: Fair value of retained 19 % non-controlling interest in Forest
+Added: Carrying value of non-controlling interest prior to sale
+Added: Carrying value of net assets disposed
+Added: Gain on Sale of Controlling Interest in Forest
+Added: The Investment in Forest was determined to be an equity security measured at fair value within Level 3 of the fair value hierarchy.
+Added: As a result of Forest joining the JPM consolidated group, we recognized a gain on our Investment in Forest of $ 24.4 million during the year ended June 30, 2023 (prior to exercise of the Put Option as defined below) within net realized and unrealized gain (loss) on investments on the consolidated statement of operations.
+Added: The Sale of Controlling Interest in Forest did not meet the criteria for presentation as discontinued operations.
+Added: The following table shows loss before income taxes of Forest, as well as loss before income taxes of Forest attributable to the Company:
+Added: For the twelve months ended June 30,
+Added: (in thousands)
+Added: Loss before income taxes
+Added: Loss before income taxes attributable to Great Elm Group, Inc.
+Added: In connection with the Stock Purchase Agreement, GEG, JPM and Forest entered into an amended and restated stockholders’ agreement (the Stockholders Agreement ).
+Added: Pursuant to the Stockholders Agreement, from January 17, 2023 until February 17, 2023, GEG had the right (the Put Option , together with the Sale of Controlling Interest in Forest referred to as the Transactions with JPM ) to sell the Investment in Forest for the then fair market value.
+Added: On January 17, 2023, the Company exercised the Put Option and sold the Investment in Forest for $ 26.5 million in cash, resulting in an additional gain on our Investment in Forest for the year ended June 30, 2023 of $ 25 thousand recorded within net realized and unrealized gain (loss) on investments on the consolidated statement of operations.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.