Great Elm Group, Inc. 10-K

Item 9A. Controls and Procedures. Disclosure Controls and Procedures 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. 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, 2026. 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. Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13(a)-15(f) under the Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting is supported by written policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 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, 2026 as required by the Exchange Act. 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. Based on management’s evaluation under the framework, management concluded that our internal control over financial reporting was effective as of June 30, 2026. Changes in Internal Control Over Financial Reporting T here have been no changes in our internal control over financial reporting during the fiscal year ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information. None . Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not applicable. 20 PART III Item 10 . Directors, Executive Officers and Corporate Governance. The information required by this item will be contained in our definitive proxy statement ( Proxy Statement ) and is hereby incorporated by reference thereto. Our board of directors has adopted a Code of Business Conduct applicable to all officers, directors, and employees, which is available on our website (https://www.greatelmgroup.com/investors/) under "Governance." We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendment to, or waiver from, a provision of our Code of Business Conduct by posting such information on the website address and location specified above. Item 11. Executive Compensation. The information required by this item will be contained in our Proxy Statement and is hereby incorporated by reference thereto. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The information required by this item will be contained in our Proxy Statement and is hereby incorporated by reference thereto. Item 13. Certain Relationships and Related Transactions, and Director Independence. The information required by this item will be contained in our Proxy Statement and is hereby incorporated by reference thereto. Item 14. Principal Accountant Fees and Services. The information required by this item will be contained in our Proxy Statement and is hereby incorporated by reference thereto. PART IV Item 15. Exhibits, Financ ial Statement Schedules. Financial Statements The information required by this Item appears beginning on page F-1 of this Annual Report on Form 10-K and is incorporated in this Item 15 by reference. Financial Statement Schedules Schedules are omitted because they are not required or are not applicable or the required information is shown in the consolidated financial statements or notes thereto. Exhibits The exhibit index attached hereto is incorporated by reference. EXH IBIT INDEX Unless otherwise indicated, all references are to filings by Great Elm Group, Inc. (the Registrant ) with the Securities and Exchange Commission under File No. 001-39832 Exhibit No. Description 3.1 Certificate of Incorporation of the Registrant, dated October 23, 2020 (incorporated by reference to the Exhibit 3.1 to the Form 8-K filed on December 29, 2020) 3.2 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) 4.1 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) 21 4.2 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) 4.3 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) 4.4 Form of 5.0% Convertible Senior PIK Notes due 2030 (incorporated by reference to the Exhibit 4.4 to the Form 8-K filed on December 29, 2020) 4.5 Form of Amendment to 5.0% Convertible Senior PIK Notes due 2030 (incorporated by reference to the Exhibit 4.1 to the Form 10-Q filed on May 14, 2021) 4.6 Registration Rights Agreement, dated as of February 26, 2020, by and between Great Elm Capital Group, Inc. and certain accredited investors party thereto (incorporated by reference to the Exhibit 4.5 to the Form 8-K filed on December 29, 2020) 4.7 Description of Securities (incorporated by reference to the Exhibit 4.7 to the Form 10-K filed on September 12, 2022) 4.8 Base Indenture, dated as of June 9, 2022, by and between the Registrant and American Stock and Transfer & Trust Company, LLC, as Trustee (incorporated by reference to the Exhibit 4.1 to the Form 8-K filed on June 9, 2022) 4.9 First Supplemental Indenture, dated as of June 9, 2022, by and between the Registrant and American Stock and Transfer & Trust Company, LLC, as Trustee (incorporated by reference to the Exhibit 4.2 to the Form 8-K filed on June 9, 2022) 4.10 Form of 7.25% Note Due 2027 (incorporated by reference to the Exhibit 4.3 to the Form 8-K filed on June 9, 2022) 4.11 Amended and Restated Stockholders Agreement of Forest Investments, Inc., dated December 30, 2022, among Forest Investments, Inc., the Registrant and J.P. Morgan Broker-Dealer Holdings, Inc. (incorporated by reference to the Exhibit 4.2 to the Form 8-K filed on January 3, 2023) 10.1+ Offer Letter, dated May 4, 2023, by and between the Registrant and Jason W. Reese (incorporated by reference to the Exhibit 10.3 to the Form 8-K filed on May 5, 2023) 10.2+ Offer Letter, dated December 29, 2020 between Adam Kleinman and the Registrant (incorporated by reference to the Exhibit 10.2 to the Form 8-K filed on December 29, 2020) 10.3+ Offer Letter, dated May 15, 2023, by and between the Registrant and Keri A. Davis (incorporated by reference to the Exhibit 10.2 to the Form 8-K filed on May 15, 2023) 10.4+ Employment Letter, dated August 30, 2022, between Great Elm Capital Management, Inc. and Nichole Milz (incorporated by reference to the Exhibit 10.1 to the Form 8-K filed on September 6, 2022) 10.5+ Compensation Plan Agreement, dated December 29, 2020, by and between Great Elm Capital Group, Inc. and the Registrant (incorporated by reference to the Exhibit 10.4 to the Form 8-K filed on December 29, 2020) 10.6+ Form of Director and Officer Indemnification Agreement (incorporated by reference to the Exhibit 10.5 to the Form 8-K filed on December 29, 2020) 10.7+ The Registrant's Amended and Restated 2016 Long-Term Incentive Compensation Plan (As Amended, Effective October 9, 2024) 10.8+ 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. (File No. 001-16073)) 10.9+ 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) 10.10+ 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) 10.11+ 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) 10.12+ 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, 2023) 22 10.13+ 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, 2023) 10.14+ Amended and Restated Great Elm Capital Management Performance Bonus Plan, dated February 6, 2019, (incorporated by reference to the Exhibit 10.1 to the Form 8-K filed on February 8, 2019 by Great Elm Capital Group, Inc. (File No. 001-16073)) 10.15 2025 Long-Term Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on December 5, 2025) 10.16 Amended and Restated Investment Management Agreement (As Amended, Effective August 1, 2022), by and between Great Elm Capital Corp. and Great Elm Capital Management, Inc. (incorporated by reference to the Exhibit g to the Form N-2 filed on June 16, 2023 by Great Elm Capital Corp. (File No. 333-272790)) 10.17 Administration Agreement, dated as of September 27, 2016, by and between Great Elm Capital Corp. and Great Elm Capital Management, Inc. (incorporated by reference to the Exhibit 10.2 to the Form 8-K filed on November 7, 2016 by Great Elm Capital Corp. (File No. 814-01211)) 10.18 Voting Waiver Agreement, dated October 29, 2024, by and between Jason W. Reese and the Registrant (incorporated by reference to the Exhibit 10.1 to the Form 8-K filed on October 29, 2024) 10.19 Stock Purchase Agreement, dated July 31, 2025, by and among the Registrant and the purchasers named therein 10.20 Profits Interest Agreement, dated July 31, 2025, by and among Great Elm Real Estate Ventures, LLC, the Registrant and the entities named therein 10.21 Securities Purchase Agreement, dated August 27, 2025, between the Registrant and Woodstead Value Fund, L.P. 10.22 Series A Warrant Agreement, dated August 27, 2025, between the Registrant and Woodstead Value Fund, L.P. 10.23 Series B Warrant Agreement, dated August 27, 2025, between the Registrant and Woodstead Value Fund, L.P. 10.24 Amended Profits Interest Agreement, dated May 12, 2026, by and among Great Elm Real Estate Ventures, LLC, the Registrant and the entities named therein 10.25 Third Amendment and Assignment to Lease Agreement, dated March 2, 2026, between the Registrant and REEP-OFC Financial Center FL 14.1 Code of Conduct of the Registrant (incorporated by reference to the Exhibit 14.1 to the Form 8-K filed on September 20, 2023) 19.1 The Registrant's Insider Trading Policy (incorporated by reference to the Exhibit 19.1 to the Form 10-K filed on September 2, 2025). 21.1 Subsidiaries of the Registrant. 23.1 Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm 31.1 Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1 Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 97.1 Clawback Policy ( incorporated by reference to Exhibit 97.1 to the Form 10-K filed on February 29, 2024) 101 Materials from the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 30, 2026, formatted in inline Extensible Business Reporting Language (XBRL): (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). 104 The cover page from the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 30, 2026, formatted in inline XBRL (included as Exhibit 101). + Indicates a management contract or compensatory plan or arrangement. 23 Item 16. Form 10-K Summary. We have elected not to provide a Form 10-K summary. 24 SIGNAT URES 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 26, 2026. GREAT ELM GROUP, INC. By: /s/ Jason W. Reese Name: Jason W. Reese Title: Chief Executive Officer & Chairman 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 26, 2026. Signature Title /s/ Jason W. Reese Chief Executive Officer & Chairman Jason W. Reese (Principal Executive Officer) /s/ Keri A. Davis Chief Financial Officer & Chief Accounting Officer Keri A. Davis (Principal Financial and Accounting Officer) /s/ Matthew A. Drapkin Director Matthew A. Drapkin /s/ David Matter Director David Matter /s/ Lloyd Nathan Director Lloyd Nathan /s/ James P. Parmelee Director James P. Parmelee /s/ Eric J. Scheyer Director Eric J. Scheyer /s/ David Schwartz Director David Schwartz /s/ Booker Smith Director Booker Smith 25 INDEX TO FINANC IAL STATEMENTS Report of Independent Registered Public Accounting Firm (PCAOB ID: 34 ) F- 2 Consolidated Balance Sheets at June 30, 2026 and 2025 F- 4 Consolidated Statements of Operations for the years ended June 30, 2026 and 2025 F- 5 Consolidated Statements of Stockholders’ Equity for the years ended June 30, 2026 and 2025 F- 6 Consolidated Statements of Cash Flows for the years ended June 30, 2026 and 2025 F- 7 Notes to the Consolidated Financial Statements F- 9 F- 1 Report of Independent Regist ered PUBLIC Accounting Firm To the shareholders and the Board of Directors of Great Elm Group, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Great Elm Group, Inc. and subsidiaries (the "Company") as of June 30, 2026 and 2025, the related consolidated statements of operations, stockholders’ equity, and cash flows, for the years ended June 30, 2026 and 2025, 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, 2026 and 2025, and the results of its operations and its cash flows for the years ended June 30, 2026 and 2025, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. 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. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. 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. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter 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 (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. 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. Investments at fair value - Fair Value Measurements — Refer to Note 6 Critical Audit Matter Description Included within investments at fair value held by the Company are equity investments in three special purpose vehicles that do not have readily-available market prices. The valuations of such equity investments are based on discounted cash flow models which are complex valuation techniques that utilize unobservable inputs. Under accounting principles generally accepted in the United States of America, these investments are classified as Level 3 assets and are inherently subjective. As of June 30, 2026, the fair value of these Level 3 equity investments was $797,000. The Company recognized a $12,577,000 change in unrealized depreciation related to these investments in earnings during the year ended June 30, 2026. F- 2 Given management uses complex valuation techniques and unobservable inputs to estimate the fair value of these Level 3 equity investments, performing audit procedures to evaluate the appropriateness of these models and inputs required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists who possess significant quantitative and modeling expertise. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the discounted cash flow models and unobservable inputs used by management to estimate the fair value of these Level 3 equity investments included the following, among others: • With the assistance of our fair value specialists, we evaluated the appropriateness of the valuation techniques and assumptions used by the Company, including the reasonableness of significant changes in valuation techniques and assumptions. • We evaluated the reasonableness of significant business assumptions related to future cash flows utilized in the valuation models and obtained audit evidence to substantiate the assumptions. • With the assistance of our fair value specialists, we developed independent fair value estimates and compared our estimates to the Company’s estimates. /s/ Deloitte & Touche LLP Boston, Massachusetts August 26, 2026 We have served as the Company's auditor since 2024. F- 3 GREAT ELM GROUP, INC. CONSOLIDATED B ALANCE SHEETS Dollar amounts in thousands, except per share amounts ASSETS June 30, 2026 June 30, 2025 Current assets Cash and cash equivalents $ 53,474 $ 30,603 Receivables from managed funds 3,954 8,331 Investments, at fair value 32,612 60,614 Prepaid and other current assets 1,671 2,803 Real estate assets, net 2,403 9,085 Related party loan receivable - 8,000 Assets of Consolidated Funds: Cash and cash equivalents 113 3,907 Investments, at fair value 5,346 14,327 Other assets 61 227 Total current assets 99,634 137,897 Identifiable intangible assets, net 10,879 12,009 Goodwill 440 440 Right-of-use assets 1,238 1,603 Other assets 1,493 1,988 Total assets $ 113,684 $ 153,937 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 1,215 $ 1,026 Accrued expenses and other current liabilities 5,932 7,707 Current portion of related party payables 234 258 Current portion of lease liabilities 337 355 Liabilities of Consolidated Funds: Payable for securities purchased - 96 Accrued expenses and other liabilities 11 172 Total current liabilities 7,729 9,614 Lease liabilities, net of current portion 923 1,260 Long-term debt (face value $ 26,945 ) 26,658 26,373 Convertible notes (face value $ 36,838 and $ 35,063 , including $ 17,853 and $ 16,993 held by related parties, respectively) 36,474 34,602 Other liabilities 1,091 1,422 Total liabilities 72,875 73,271 Commitments and contingencies (Note 19) Stockholders' equity Preferred stock, $ 0.001 par value; 5,000,000 authorized and zero outstanding - - Common stock, $ 0.001 par value; 350,000,000 shares authorized and 31,139,625 shares issued and 29,778,239 outstanding at June 30, 2026; and 27,630,305 shares issued and 26,552,948 outstanding at June 30, 2025 27 25 Additional paid-in-capital 3,316,289 3,310,356 Accumulated deficit ( 3,275,507 ) ( 3,240,063 ) Total Great Elm Group, Inc. stockholders' equity 40,809 70,318 Redeemable non-controlling interest in Consolidated Funds - 10,348 Total stockholders' equity 40,809 80,666 Total liabilities and stockholders' equity $ 113,684 $ 153,937 The accompanying notes are an integral part of these consolidated financial statements. F- 4 GREAT ELM GROUP, INC. CONSOLIDATED STATEM ENTS OF OPERATIONS Amounts in thousands, except per share data For the twelve months ended June 30, 2026 2025 Revenues $ 27,776 $ 16,316 Cost of revenues 13,248 1,082 Operating costs and expenses: Compensation and benefits 19,582 15,478 Selling, general and administrative 7,433 6,451 Depreciation and amortization 1,299 1,249 Expenses of Consolidated Funds 224 59 Total operating costs and expenses 28,538 23,237 Operating loss ( 14,010 ) ( 8,003 ) Dividends and interest income 4,777 6,057 Interest expense ( 4,106 ) ( 4,157 ) Net realized and unrealized (loss) gain ( 22,244 ) 16,854 Net realized and unrealized (loss) gain on investments of Consolidated Funds ( 2,659 ) 3,322 Interest and other income of Consolidated Funds 958 1,563 (Loss) income before income taxes ( 37,284 ) 15,636 Income tax benefit (expense) 376 ( 86 ) Net (loss) income $ ( 36,908 ) $ 15,550 Less: net (loss) income attributable to non-controlling interest in Consolidated Funds ( 1,464 ) 2,659 Net (loss) income attributable to Great Elm Group, Inc. stockholders $ ( 35,444 ) $ 12,891 Net (loss) income attributable to stockholders per share Basic $ ( 1.17 ) $ 0.47 Diluted ( 1.17 ) 0.38 Weighted average shares outstanding Basic 30,289 27,642 Diluted 30,289 38,817 The accompanying notes are an integral part of these consolidated financial statements. F- 5 GREAT ELM GROUP, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Common Stock Additional Paid-in Accumulated Total Great Elm Group, Inc. Stockholders' Redeemable non-controlling interest in Total Stockholders' Shares Amount Capital Deficit Equity Consolidated Funds Equity BALANCE, June 30, 2024 30,494 $ 30 $ 3,315,638 $ ( 3,252,954 ) $ 62,714 $ 7,481 $ 70,195 Net income - - - 12,891 12,891 2,659 15,550 Issuance of common stock related to vesting of restricted stock 1,116 - - - - - - Contributions to Consolidated Funds - - - - - 750 750 Distributions from Consolidated Funds - - - - - ( 542 ) ( 542 ) Stock repurchases ( 5,057 ) ( 5 ) ( 7,234 ) - ( 7,239 ) - ( 7,239 ) Stock-based compensation - - 1,952 - 1,952 - 1,952 BALANCE, June 30, 2025 26,553 $ 25 $ 3,310,356 $ ( 3,240,063 ) $ 70,318 $ 10,348 $ 80,666 Net (loss) income - - - ( 35,444 ) ( 35,444 ) ( 1,464 ) ( 36,908 ) Issuance of common stock related to vesting of restricted stock 820 - - - - - - Withholding tax payments related to restricted stock - - ( 154 ) - ( 154 ) - ( 154 ) Issuance of common stock related to equity transactions, net 5,354 5 9,874 - 9,879 - 9,879 Issuance of warrants - - 726 - 726 - 726 Distributions from Consolidated Funds - - - - - ( 4,752 ) ( 4,752 ) Redemptions of non-controlling interests in Consolidated Funds - - - - - ( 4,132 ) ( 4,132 ) Stock repurchases ( 2,949 ) ( 3 ) ( 6,797 ) - ( 6,800 ) - ( 6,800 ) Stock-based compensation 2,284 - 2,284 - 2,284 BALANCE, June 30, 2026 29,778 $ 27 $ 3,316,289 $ ( 3,275,507 ) $ 40,809 $ - $ 40,809 The accompanying notes are an integral part of these consolidated financial statements. F- 6 GREAT ELM GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Dollar amounts in thousands For the twelve months ended June 30, 2026 2025 Cash flows from operating activities: Net (loss) income $ ( 36,908 ) $ 15,550 Adjustments to reconcile net (loss) income to net cash flows from operating activities: Proceeds from sale of real estate 14,317 - Gain on sale of real estate ( 1,494 ) ( 109 ) Depreciation and amortization 1,299 1,249 Stock-based compensation 2,284 1,952 Unrealized loss (gain) on investments 27,344 ( 15,991 ) Realized gain on investments ( 5,100 ) ( 396 ) Realized gain on Convertible notes - ( 467 ) Non-cash interest and amortization of debt issuance costs 2,152 2,204 Deferred tax (benefit) expense ( 64 ) 216 Change in fair value of contingent consideration - ( 6 ) Other non-cash expense, net 1,080 1,332 Adjustments to reconcile net (loss) income to net cash flows from operating activities of Consolidated Funds: Purchase of investments ( 3,339 ) ( 4,680 ) Sales of investments 9,626 5,234 Amortization of premium and accretion of discount, net ( 61 ) ( 93 ) Net realized and unrealized loss (gain) on investments 2,659 ( 3,321 ) Changes in operating assets and liabilities: Receivables from managed funds 4,377 ( 6,072 ) Prepaid and other assets 1,786 ( 1,551 ) Real estate under development ( 6,203 ) ( 3,406 ) Lease liabilities 10 43 Related party payables ( 24 ) ( 370 ) Accounts payable, accrued expenses and other liabilities ( 2,004 ) 1,191 Changes in operating assets and liabilities of Consolidated Funds: Cash and cash equivalents 3,794 ( 1,536 ) Other assets 166 26 Accrued expenses and other liabilities ( 22 ) ( 5 ) Net cash flows from operating activities 15,675 ( 9,006 ) Cash flows from investing activities: Purchases of investments in held-to-maturity securities - ( 7,402 ) Proceeds from settlement of held-to-maturity investments - 17,500 Proceeds from settlement of trading securities - 29 Sales of investments 7,681 - Purchases of investments ( 3,113 ) - Investments in portfolio funds - ( 4,473 ) Acquisition of business - ( 2,500 ) Related party loan receivable 8,000 ( 8,000 ) Redemption of investments 85 3,886 Other ( 85 ) ( 376 ) Net cash flows from investing activities 12,568 ( 1,336 ) F- 7 GREAT ELM GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) Dollar amounts in thousands For the twelve months ended June 30, 2026 2025 Cash flows from financing activities: Proceeds from issuance of common stock 11,862 - Equity issuance costs ( 1,257 ) - Redemption of Convertible notes - ( 1,757 ) Stock repurchases ( 6,800 ) ( 7,239 ) Withholding tax payments related to restricted stock ( 154 ) - Redemptions of non-controlling interests in Consolidated Funds ( 4,132 ) - Contributions to non-controlling interests in Consolidated Funds - 223 Distributions from non-controlling interests in Consolidated Funds ( 4,891 ) - Net cash flows from financing activities ( 5,372 ) ( 8,773 ) Net increase (decrease) in cash and cash equivalents 22,871 ( 19,115 ) Cash, cash equivalents and restricted cash at beginning of period 30,603 49,718 Cash, cash equivalents and restricted cash at end of period $ 53,474 $ 30,603 Supplemental disclosure of cash flow information: Cash paid for interest 1,954 1,954 Cash paid for taxes 11 139 Supplemental non-cash financing transactions: Fair value of warrants issued 726 - Lease liabilities and right of use assets arising from operating leases - 1,681 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: June 30, 2026 June 30, 2025 Cash and cash equivalents $ 53,474 $ 30,603 Restricted cash - - Cash, cash equivalents and restricted cash $ 53,474 $ 30,603 The accompanying notes are an integral part of these consolidated financial statements. F- 8 GREAT ELM GROUP, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. Organization Great Elm Group, Inc. (referred to as the Company or GEG ) is an alternative asset management company incorporated in Delaware. The Company focuses on growing a scalable and diversified portfolio of long-duration and permanent capital vehicles across credit, real estate, specialty finance, and other alternative strategies. The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, including Great Elm Capital Management, LLC ( GECM ), Great Elm Opportunities GP, Inc. ( 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. ( DME Holdings ), Great Elm Real Estate Ventures, LLC ( REV ), Monomoy CRE, LLC ( MCRE ), Monomoy BTS Construction Management, LLC ( MCM ), Monomoy Construction Services, LLC ( MCS ), Monomoy BTS Corporation ( MBTS ) and Monomoy BTS Holdings, LLC ( BTS ). In addition, we have determined that the Company was the primary beneficiary of certain variable interest entities, and therefore the operations of those entities have been included in our consolidated results for the relevant periods. Change in Segments The Company continually monitors and reviews its segment reporting structure in accordance with authoritative guidance to determine whether any changes have occurred that would impact its reportable segments. During the first quarter of fiscal 2026, in conjunction with an equity transaction entered into with Kennedy Lewis Investment Management LLC ( KLIM ) and the formation of REV (see Note 20 - Equity Transactions), the Company realigned the business and reportable segment information that the Chief Operating Decision Maker ( CODM ) regularly reviews to evaluate performance for operating decision-making purposes, including performance assessment and allocation of resources. As a result, the Company’s segment reporting structure is based on the Company’s various investment strategies. As a result of the change in segments, effective during the quarter ended September 30, 2025, the Company has the following reportable segments: • Alternative Credit - focused on income generation and capital preservation through investment in debt and income-generating securities, direct lending, CLOs, and specialty finance businesses including Factoring, Asset Based Lending and Healthcare • Real Estate - full service, end-to-end real estate platform combining investment expertise and turnkey execution capabilities for industrial outdoor storage ( IOS ) sector 2. Summary of Significant Accounting Policies Basis of Presentation and Use of Estimates The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ( GAAP ). The preparation of financial statements in accordance with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. On an on-going basis, the Company evaluates all of these estimates and assumptions. The most important of these estimates and assumptions relate to revenue recognition, valuation allowance for deferred tax assets, estimates associated with accounting for business combinations, and fair value measurements, including stock-based compensation and investments in private entities. Although these and other estimates and assumptions are based on the best available information, actual results could be different from these estimates. Certain prior period amounts have been reclassified to conform to current period presentation, including reclassifications made in the presentation of operating costs and expenses. Such reclassifications were not material and did not affect the reported net income (loss) for the periods presented. F- 9 Principles of Consolidation The Company consolidates the assets, liabilities, and operating results of its wholly-owned subsidiaries, majority-owned subsidiaries, and subsidiaries in which we hold a controlling financial interest as of the financial statement date. All intercompany accounts and transactions have been eliminated in consolidation. The Company evaluates entities it is involved with to determine whether it has a controlling financial interest in them and is required to consolidate. The Company consolidates those entities in which it has a direct or indirect controlling financial interest based on either a variable interest entity ("VIE") model or voting interest entity (“VOE”) model. As such, the Company consolidates (i) entities that the Company concludes are VIEs in which the Company has more than insignificant economic interest and power to direct the activities that most significantly impact the entities, and for which the Company is deemed to be the primary beneficiary and (ii) entities in which it holds a majority voting interest or has majority ownership and control over the operational, financial and investing decisions of that entity. The Company determines whether an entity should be consolidated by first evaluating whether it holds a variable interest in the entity. Fees that are customary and commensurate with the level of services provided by the Company, and where the Company does not hold other economic interests in the entity that would absorb more than an insignificant amount of the expected losses or returns of the entity, would not be considered a variable interest. The Company factors in all economic interests, including proportionate interests through related parties, to determine if fees are considered a variable interest. Entities that are not VIEs are further evaluated for consolidation under the VOE model. Variable Interest Entities The Company considers an entity to be a VIE if any of the following conditions exist: (i) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support; (ii) the holders of equity investment at risk, as a group, lack either the direct or indirect ability through voting rights or similar rights to make decisions that have a significant effect on the success of the entity or the obligation to absorb the expected losses or right to receive the expected residual returns; or (iii) the voting rights of some equity investors are disproportionate to their obligation to absorb losses of the entity, their rights to receive returns from an entity, or both and substantially all of the entity’s activities either involve or are conducted on behalf of an investor with disproportionately few voting rights. The Company consolidates VIEs for which it is the primary beneficiary. The Company determines it is the primary beneficiary when it has both the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. The Company determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a VIE and continuously reconsiders the conclusion. In evaluating whether the Company is the primary beneficiary, the Company evaluates its direct and indirect economic interests in the entity. The consolidation analysis is generally performed qualitatively, however, if the primary beneficiary is not readily determinable, a quantitative analysis may also be performed. This analysis requires judgment. These judgments include: (i) determining whether the equity investment at risk is sufficient to permit the entity to finance its activities without additional subordinated financial support; (ii) evaluating whether the equity holders, as a group, can make decisions that have a significant effect on the success of the entity; (iii) determining whether two or more parties’ equity interests should be aggregated; (iv) determining whether the equity investors have proportionate voting rights to their obligations to absorb losses or rights to receive returns from an entity; and (v) evaluating the nature of relationships and activities of the parties involved in determining which party within a related-party group is most closely associated with a VIE and hence would be deemed the primary beneficiary. VIEs are subject to specific disclosure requirements. See Note 7 - Variable Interest Entities f or additional disclosures pertaining to the Company’s involvement with VIEs. F- 10 Voting Interest Entities The Company has a controlling financial interest in a VOE when it owns a majority of the voting interests through which it can exert control over significant operating, financial, and investing decisions of the entity and no noncontrolling interest holder has stated rights that would overcome the presumption of consolidation by the majority voting interest. Non-controlling interests Redeemable 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. Non-redeemable non-controlling interests consist of profits interest issued to KLIM in REV, see Note 20 - Equity Transactions. These profits interest are classified as non-redeemable non-controlling interests as a component of permanent equity as they are not subject to holder put rights. There was no activity to report related to the non-redeemable non-controlling interests within the consolidated financial statements. See Note 16 - Non-Controlling Interests . Results of operations attributable to the non-controlling interests are included in the Company’s consolidated statements of operations. Cash and Cash Equivalents and Restricted Cash Cash and cash equivalents are comprised of cash and highly liquid investments with original maturities of 90 days or less at the date of purchase. Cash equivalents consist primarily of exchange-traded money market funds and the U.S. treasury bills. The Company is exposed to credit risk in the event of default by the financial institutions or the issuers of these investments to the extent the amounts on deposit or invested are in excess of amounts that are insured. The Company’s restricted cash consists of escrow accounts funded in connection with the sale of real estate assets. The escrows were part of the Company's performance obligation to the seller for construction completion. Investments in Marketable Securities Investments in marketable securities consist of debt securities, such as the U.S. treasury bills with original maturity exceeding 90 days. The Company classifies investments in debt securities as either trading, held-to-maturity, or available-for-sale. Securities are classified as trading if they are purchased and held principally for the purpose of selling in the near term and as held-to-maturity when the Company has both the positive intent and ability to hold the security to maturity. Held-to-maturity securities are measured at amortized cost. Investments in debt securities not classified as either trading or held-to-maturity are classified as available-for-sale securities. Trading securities are measured at fair value with unrealized gains and losses reported within net realized and unrealized gain (loss) on investments. Available-for-sale securities are measured at fair value with unrealized gains and losses reported in accumulated other comprehensive income (loss). As of June 30, 2026 and June 30, 2025 , GEG had no investments in marketable securities. Investments, at Fair Value 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. 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. Dividends received are recorded within dividends and interest income on the consolidated statements of operations. F- 11 Real Estate Assets, net Real estate assets are classified as follows: (i) real estate assets (current), which includes real estate development projects that are finished or in the process of being developed and expected to be completed and disposed of within one year of the balance sheet date; (ii) real estate assets (non-current), which includes real estate development projects that are finished or in the process of being developed and expected to be completed and disposed of more than one year from the balance sheet date; and (iii) real estate held for sale, which includes land and completed improvements thereon that meet all of the “held for sale” criteria. As of June 30, 2026 and 2025, there are no real estate assets which are non-current in nature. Real estate under development is carried at cost less impairment, if applicable. We capitalize costs that are directly identifiable with the specific real estate projects, including pre-acquisition and pre-construction costs, development and construction costs, taxes, and insurance. We do not capitalize any general and administrative or overhead costs, regardless of whether the costs are internal or paid to third parties. Capitalization begins when the activities related to development have begun and ceases when activities are substantially complete and the asset is available for occupancy. Real estate held for sale is recorded at the lower of cost or fair value less cost to sell. 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. Goodwill and Identifiable Intangible Assets Goodwill represents the excess of fair value over identifiable tangible and intangible net assets acquired in business combinations. Goodwill is not amortized for US GAAP purposes. Instead goodwill is reviewed for impairment at least annually as of the first business day of the fourth quarter or more frequently, or on an interim basis between annual tests when events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying value. If, after assessing qualitative factors, the Company believes that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the Company will evaluate impairment quantitatively and record the amount of goodwill impairment as the excess of the carrying amount of the reporting unit over its fair value. Inherent in such fair value determinations are certain judgments and estimates relating to future cash flows, including the Company’s interpretation of current economic indicators and assumptions about the Company’s strategic plans with regard to its operations. The Company performs annual impairment test on the first day of the fiscal fourth quarter, or as required when impairment triggering events are identified. The Company's indefinite-lived intangible assets consist of investment management agreements, assembled workforce, customer-related intangibles and licenses. These intangible assets arise primarily from the determination of their respective fair market values at the date of acquisition. Amounts assigned to identifiable intangible assets, and their related useful lives, are derived from established valuation techniques and management estimates. Indefinite-lived intangible assets are tested for impairment annually as of the first business day of the fourth quarter or more frequently if events or changes in circumstances indicate that the asset might be impaired. If, after assessing qualitative factors, the Company believes that it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount, the Company will evaluate impairment quantitatively to determine and record the amount of impairment as the excess of the carrying amount of the indefinite-lived intangible asset over its fair value. Inherent in such fair value determinations are certain judgments and estimates relating to future cash flows, including the Company’s strategic plans with regard to the indefinite-lived intangible assets. 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 . F- 12 Impairment of Long-Lived Assets Long-lived assets include real estate assets, property and equipment, definite-lived intangible assets, and lease right-of-use assets. 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. Impairment losses are recorded when undiscounted cash flows estimated to be generated by an asset are less than the asset’s carrying amount. 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. Revenue Recognition The Company recognizes revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company’s revenue is based on contracts with a determinable transaction price and distinct performance obligations with probable collectability. Revenues are not recognized until the performance obligation(s) are satisfied. Leases The Company determines 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. 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. As the interest rate implicit in the Company's leases is generally not readily determinable, the Company utilizes the incremental borrowing rate, determined by class of underlying asset, to discount the lease payments. The operating lease right-of-use assets also include lease payments made before commencement and are reduced by lease incentives. Certain of the Company’s office leases contain options that permit extensions for additional periods. If the Company is 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. Right-of-use operating lease assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When the terms of a lease agreement are changed, management assesses the contract for a lease modification. Modifications of a lease generally result in remeasurement of the lease liability and the right-of-use asset. 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. See Note 11 - Lessee Operating Leases for additional information about the Company’s leases. Stock-Based Compensation The Company issues equity awards to eligible employees and directors, generally in the form of stock options, restricted stock awards and restricted stock units. The compensation cost for all equity awards is measured at their grant-date fair value. 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. For the awards that contain both market and service conditions, the Company recognizes compensation expense over the requisite service period using the accelerated vesting attribution method. F- 13 The grant-date fair value of stock options that do not contain market conditions is estimated using the Black-Scholes-Merton option pricing model, which requires management to make the following assumptions: • Risk-free interest rate is based on the U.S. Treasury instruments, the terms of which are consistent with the expected term of the Company’s stock options. • 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. • 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. 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. The stock-based compensation expense is presented within compensation and benefits in the consolidated statements of operations. The Company records deferred tax assets or liabilities for equity awards based on deductions for income tax purposes of stock-based compensation recognized at the statutory tax rate in the jurisdiction in which the Company is expected to receive a tax deduction. In addition, differences between the deferred tax assets recognized in accordance with GAAP and the actual tax deduction reported in the Company’s income tax returns are presented within income tax expense within the consolidated statements of operations. Other Non-Cash Compensation The Company issues compensation to certain employees in the form of Great Elm Capital Corp. ( GECC ) common shares, restricted membership interest rights in Monomoy REIT and Monomoy Properties II, LLC ( MP II ) to be settled with GECC common shares, Monomoy REIT and MP II restricted membership interest rights currently held by the Company, respectively. These awards generally have a three to five years vesting period from the grant date. These awards are accounted for as other non-cash compensation expense in a systematic and rational manner; and are presented within compensation and benefits in the consolidated statements of operations. The accrued compensation liabilities for these awards are re-measured at each reporting date with movements recognized within compensation and benefits in the consolidated statements of operations. Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity and ASC 815, Derivatives and Hedging . The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of liability pursuant to ASC 480, and whether the warrants meet all the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company's own common stock, among other conditions for equity classification. The warrants issued as part of Securities Purchase Agreement with Woodstead Value Fund LP are classified as equity under these conditions. The Company estimated the fair value of the Warrants using the Black-Scholes option pricing model on the grant date. See Note 20 - Equity transactions for further information. Net Realized and Unrealized Gains/(Losses) on Investments Realized gains (losses) may occur when the Company redeems all or a portion of its investment, when the Company receives dividends or distributions, or at the end of an investment’s life. Unrealized appreciation (depreciation) results from changes in the fair value of the underlying investment as well as from the reversal of previously recognized unrealized appreciation (depreciation) at the time an investment is realized. Realized and unrealized gains (losses) are presented together as net realized and unrealized gains on investments within the consolidated statements of operations. F- 14 Interest and Dividend Income Interest and dividends are included within interest and dividend income. Interest income is recognized on an accrual basis to the extent that such amounts are expected to be collected. Dividends are recorded when the right to receive payment is established. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amount of existing assets and liabilities and their respective tax basis and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary, in order to reduce deferred tax assets to the amounts more likely than not to be recovered. 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. 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. These reviews include inquiries regarding the timing and amount of deductions and the allocation of income among various tax jurisdictions. GAAP provides guidance on the accounting for and disclosure of uncertainty in tax positions and requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company's tax returns to determine whether the tax positions are "more likely than not" of being sustained by the applicable taxing authority. The Company recognizes in its consolidated 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. In making these assessments, the Company determines the accounting recognition based on the technical merits of the position and consults with external tax experts as appropriate. The Company does not recognize income tax benefits for positions that it takes on its income tax returns that do not meet the more likely than not standard on its technical merits. The Company’s accounting policy is to classify interest and related charges as a component of income tax expense. Business Combinations Business combinations are accounted for at fair value. Acquisition costs incurred in connection with a business combination are expensed as incurred. Measurement period adjustments are made in the period in which the amounts are determined up to one year after the acquisition date and the current period income effect of such adjustments will be calculated as if the adjustments had been completed as of the acquisition date. All changes that do not qualify as measurement period adjustments are also included in current period earnings. The accounting for business combinations requires estimates and judgment as to expectations for future cash flows of the acquired business, and the allocation of those cash flows to identifiable intangible assets, in determining the estimated fair value for assets acquired and liabilities assumed. The fair values assigned to tangible and intangible assets acquired and liabilities assumed, including contingent consideration if applicable, 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. If the actual results differ from the estimates and judgments used in these estimates, the amounts recorded in the financial statements could result in a possible impairment of the intangible assets and goodwill, require acceleration of the amortization expense of definite-lived intangible assets, or the recognition of additional consideration which would be expensed. F- 15 Earnings (loss) per share The Company calculates basic and diluted earnings (loss) per share by dividing net income (loss) by its shares outstanding as outlined below. Basic earnings (loss) per share attributable to the Company’s stockholders is calculated by dividing “Net income (loss) attributable to controlling interests” by the weighted-average number of shares outstanding. Options, warrants, unvested share-based payment awards and convertible notes are excluded from the basic earnings (loss) per share calculation. Contingently issuable shares are included in the basic earnings (loss) per share only if all necessary conditions for issuance of such shares have been satisfied by the end of the period. Diluted earnings (loss) per share is similar to basic earnings (loss) per share, adjusted for the effect of potential shares of common stock unless they are antidilutive. For periods with a net loss, potential shares of common stock are considered antidilutive. The Company considers two ways to measure dilution to earnings (loss) per share: (a) calculate the net number of shares that would be issued assuming any related proceeds are used to buy back outstanding shares (the treasury stock method), or (b) assume the gross number of shares are issued and calculate any related effects on net income (loss) available for stockholders (the if-converted or two-class method). As appropriate, the Company’s policy is to apply the more dilutive methodology upon issuance of such instruments. Segment Reporting The Company currently operates as two reportable segments, Alternative Credit and Real Estate. See Note 8 - Segment Reporting for further information regarding the Company's reportable segments. Concentration of Risk The Company’s revenues are primarily attributable to the management of GECC and Monomoy UpREIT, LLC ( Monomoy UpREIT ) investment vehicles. See Note 5 - Related Party Transactions . Recently Adopted Accounting Standards Income Taxes. In December 2023, the FASB issued ASU 2023-09 , Income Taxes (Topic 740): 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. The amendments in this ASU are effective for fiscal years beginning after December 15, 2024, and early adoption and retrospective application are permitted. The Company adopted the updated guidance for the annual reporting period beginning July 1, 2025 , which did not result in a material impact to our consolidated financial statements and related disclosures. Recently Issued Accounting Standards Income Statement. In November 2024, the FASB issued ASU 2024-03 , Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses to expand the disclosure requirements for certain costs and expenses. In January 2025, FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, which clarified the effective date of ASU 2024-03 as periods beginning after December 15, 2026 for annual reporting, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the potential impact that the adoption of these ASUs will have on its consolidated financial statements. Debt. In November 2024, the FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments to improve the relevance and consistency in application of the induced conversion guidance in Subtopic 470-20, Debt - Debt with Conversion and Other Options . The amendments in this ASU are effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of the annual reporting period for all entities that have adopted the amendments in Update 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The Company is evaluating the potential impact that the adoption of this ASU will have on its consolidated financial statements. F- 16 Interim Reporting. In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) to improve the navigability of the guidance in ASC 270 and clarify when it applies. The amendments in this ASU are effective for public business entities for interim reporting periods within annual reporting periods beginning after December 31, 2027. Early adoption is permitted. The Company is evaluating the potential impact that the adoption of this ASU will have on its consolidated financial statements and related disclosures. The Company has considered all other newly issued accounting guidance that is applicable to the Company’s operations and the preparation of the consolidated financial statements, including those that have not yet been adopted. The Company does not believe that any such guidance has or will have a material effect on its consolidated financial statements and related disclosures. 3. Acquisition On February 4, 2025 , the Company acquired certain assets of Greenfield CRE ( Greenfield ), a construction management company and previous partner of MCRE (the Greenfield Acquisition ). In connection with the acquisition, the Company formed MCS, a wholly owned subsidiary of GEG, and combined Greenfield's assets with the assets of MCM to launch an integrated, full-service construction business. MCS will be dedicated to serving the Company's various real estate businesses, as well as expanding its existing third-party consulting business. The acquisition was considered a business combination under ASC 805, Business Combinations , and accounted for using the acquisition method of accounting. The financial results of MCS are included in the Company's consolidated results for the period beginning on February 4, 2025. The aggregate cash purchase price was approximately $ 2.5 million, inclusive of certain purchase price adjustments. The Company has made a preliminary estimate of the allocation of the purchase price of Greenfield to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair value as follows: (in thousands) June 30, 2026 Goodwill $ 440 Intangible assets: Customer related 1,610 Licenses 450 $ 2,500 The excess of the purchase price over the estimated fair values of the net assets acquired, including identifiable intangible assets, is recorded as goodwill. Goodwill is primarily attributable to the assembled workforce and expected synergies from combining operations and is expected to be tax deductible. The intangible assets acquired include customer-related intangibles and general contractor licenses, each with a weighted average estimated useful life of 15 years. The customer-related intangible was valued using a multi-period excess earnings method, an income approach, which values the intangible asset by discounting the direct cash flow expected to be generated by the customers, net of returns on contributory assets such as working capital, fixed assets, assembled workforce, etc. The licenses intangible asset was valued using a cost approach that reflects both the direct costs required to obtain the licenses and the lost profits the business would incur during the time it would take to acquire them if they were not already in place. F- 17 4. Revenue The Company's revenues are summarized in the following table: For the twelve months ended June 30, (in thousands) 2026 2025 Alternative Credit: Management fees $ 4,545 $ 4,993 Incentive fees - 4,069 Administration and service fees 1,525 1,261 Total Alternative Credit revenues $ 6,070 $ 10,323 Real Estate: Management fees $ 2,608 $ 2,045 Property management fees 1,318 1,245 Administration and service fees 665 253 Real estate property sales 14,743 1,192 Project management fees 2,191 941 Real estate rental income 181 317 Total Real Estate revenues $ 21,706 $ 5,993 Total revenues $ 27,776 $ 16,316 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 investment management agreement. Management Fees The Company earns management fees based on the investment management agreements between MCRE and Monomoy UpREIT as well as between GECM and GECC, and other private funds (collectively, the Funds ). The performance obligation is satisfied and management fee revenue is recognized over time as the services are rendered, since the Funds simultaneously receive and consume the benefits provided as GECM and MCRE perform services. 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. The assets under management from which the fees are calculated are variable in nature and subject to factors outside of the Company's control, such as additional investments, withdrawals and market performance. Because of this, these fees are considered constrained until the end of the contractual measurement period (monthly or quarterly), which is when management fee asset values are generally determinable. Incentive Fees The Company earns incentive fees based on the investment management agreements GECM has with GECC and other private funds managed by GECM, and MCRE has with MP II, a feeder fund Monomoy REIT. 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. Incentive fees are variable consideration associated with the investment management agreements recognized when the contractual performance criteria have been met and when it is determined that they are no longer probable of significant reversal. Each of the contracts with customers are evaluated on an individual basis to determine the timing of revenue recognition. Incentive fees typically arise from investment management services that began in prior reporting periods. 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. Incentive fees are typically 20 % of the performance-based metric specified within each agreement. Incentive fees are recognized when it is determined that they are no longer probable of significant reversal. Effective February 2026, GECM has waived all accrued and unpaid incentive fees for GECC through March 31, 2026. Additionally, effective April 2026, GECM has waived all accrued and unpaid incentive fees for GECC through June 30, 2026. F- 18 Administration and Service Fees The Company earns administration fees based on the administration agreement GECM has with GECC whereby GECC reimburses GECM for costs incurred in performing certain administrative functions. In addition, the Company earns service fees based on the management agreement MCRE has with Monomoy UpREIT. This revenue is recognized over time as the services are performed. Administration fees are billed quarterly in arrears, which is consistent with the timing of the delivery of services and reflect agreed upon rates for the services provided. 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. The Company presents administration and services fees and related costs incurred in performing these functions on a gross basis. The Company also earns services fees based on a shared services agreement with Imperial Capital Asset Management, LLC ( ICAM ). This revenue is recognized over time as the services are performed. 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. 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. Property Management Fees Under the Monomoy UpREIT property management agreement, MCRE is entitled to 4.0 % of rent collected. These fees are collected monthly in arrears. Property management fee revenue is recognized over time as the services are provided. Real estate property sales Real estate property sales occur periodically when development projects are completed and there is a sales contract with a customer for the real estate property. The performance obligation is real estate development activities that are performed together and deliver a real estate property to a customer. Sales revenue and cost of revenues are recognized when or as control of the asset is transferred to the buyer and the performance obligation is satisfied. The control of the asset may transfer over time or at a point in time depending on when the transfer of control of the real estate property occurs and the completion status of the real estate development activities on that date. See Note 10 - Real Estate for additional information regarding real estate under development. Project Management Fees MCM, a wholly owned subsidiary of MCRE, has entered into an owner’s representative agreement with respect to certain third party construction projects and earns project management fees for its services. MCS, a wholly-owned subsidiary of GEG, earns fees and is reimbursed certain expenses for providing construction management services. The performance obligation is satisfied, and project management fee revenue is recognized over time as the services are rendered. Given the project management fees are delivered during the construction period, recognition over time is determined using the percentage of completion method, which is based on construction costs incurred of the project relative to the total contractual costs. The Company presents the project management fees and associated costs related to such construction projects on a net basis as it is deemed to be the agent in the arrangement. Real Estate Rental Income The Company recognizes rental revenue in accordance with ASC 842, Leases , on a straight-line basis over the non-cancelable term of the lease. Under the terms of the lease, the Company may recover from the tenant certain expenses, including real estate taxes and other operating expenses. The recovery of these expenses is recognized in rental income in the accompanying consolidated statements of operations, in the same periods as the expenses are incurred. These expenses recognized in both revenue and expense may fluctuate from period to period based on actual expense amounts. 5. Related Party Transactions Related party transactions are measured in part by the amount of consideration paid or received as established and agreed by the parties. Consideration paid for such services in each case is the negotiated value. F- 19 The following tables summarize activity and outstanding balances between the managed investment products and the Company: For the twelve months ended June 30, (in thousands) 2026 2025 Net realized and unrealized (loss) gain on investments $ ( 18,596 ) $ 4,692 Net realized and unrealized (loss) gain on investments of Consolidated Funds ( 2,659 ) 3,322 Dividend income 3,096 3,448 Interest income 53 252 See Note 4 - Revenue for additional discussion of fees earned from managed investment products. (in thousands) June 30, 2026 June 30, 2025 Dividends receivable $ 313 $ 310 Investment management revenues receivable 1,451 4,193 Administration and service fee receivable 423 300 Receivable for reimbursable expenses paid 187 1,642 Receivable for real estate property development 1,580 1,886 Receivables from managed funds $ 3,954 $ 8,331 Investment Management GECM has agreements to manage the investment portfolios for GECC and other investment products, as well as to provide administrative services. MCRE has agreements with Monomoy UpREIT to receive management fees based on the managed assets (other than cash and cash equivalents) and rent collected, incentive fees based on the performance of those assets, and administration and service fees. See Note 4 - Revenue for additional discussions of the fee arrangements. Investments As of June 30, 2026, the Company owns 1,356,125 shares of GECC (approximately 9.8 % of the outstanding shares). Certain officers and directors of GECC are also officers and directors of GEG. Jason W. Reese is our Chief Executive Officer and Chairman of our Board of Directors and also the Chief Executive Officer and Executive Chairman of GECC's Board of Directors, Adam M. Kleinman is our President, as well as the Chief Compliance Officer of GECC and Keri A. Davis is our Chief Financial Officer, as well as the Chief Financial Officer of GECC. The Company receives dividends from its investments in GECC, MP II, Monomoy REIT and Monomoy UpREIT and earns unrealized gains and losses based on the mark-to-market performance of those investments. See Note 6 - Fair Value Measurements. In February 2024, the Company invested $ 6.0 million for a 25 % interest in Great Elm Strategic Partnership I, LLC ( GESP ). 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. GESP owns 1,378,260 shares of GECC as of June 30, 2026. In June 2024, the Company invested $ 3.0 million for a 25 % interest in Prosper Peak Holdings, LLC ( PPH ). 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. PPH owns 972,506 shares of GECC as of June 30, 2026. In December 2024, the Company invested $ 3.3 million for a 25 % interest in Summit Grove Partners, LLC ( SGP ). The Company's investment in SGP is accounted for using the fair value option and it is included in Investments, at fair value on the consolidated balance sheets. SGP owns 1,049,527 shares of GECC as of June 30, 2026. The investments in GESP, PPH and SGP are classified as Level 3 assets, as discussed in Note 6 - Fair Value Measurements. F- 20 Other Transactions GECM has shared personnel and reimbursement agreements for back-office personnel with ICAM. Jason W. Reese, the Chief Executive Officer and Chairman of the Company’s Board of Directors, is the Chief Executive Officer of ICAM. 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 compensation and benefits and selling, general and administrative expenses in the consolidated statements of operations. For the years ended June 30, 2026 and 2025 such costs were $ 0.7 million and $ 0.5 million , respectively. As of June 30, 2026 and 2025 costs of $ 0.2 million and $ 0.2 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, 2026 and 2025, costs of $ 11 thousand and $ 15 thousand, respectively, related to the shared services agreements were included in receivables from managed funds, respectively. On October 29, 2024, the Company and Mr. Reese entered into a voting waiver agreement ( the Voting Waiver Agreement ), pursuant to which Mr. Reese waived all voting rights associated with all outstanding shares (whether vested or unvested) of the Company’s common stock for voting purposes that have been granted or awarded, and all future shares of the Company’s common stock that may be granted or awarded, directly to Mr. Reese in his individual capacity by the Company in connection with his services as an officer, director or employee of the Company or its subsidiaries during the term of the Voting Waiver Agreement. In May 2025, GECC and GECM entered into an equity distribution agreement with an investment bank (the Agent ), under which the GECC may issue and sell through the Agent, from time to time, shares of its common stock. Such sales are made by any method that is deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended. The sales price per share of the common stock sold in the offering, less the Agent’s commission, will not be less than the NAV per share of the common stock at the time of such sale. Consistent with the terms of the equity distribution agreement, GECM or an affiliate of GECM may, from time to time and in their sole discretion, contribute proceeds necessary to ensure that no sales are made at a price below the then-current NAV per share. During the year ended June 30, 2026, GECM contributed approximately $ 0.1 million to these sales. During the year ended June 30, 2025 , GECM contributed approximately $ 22 thousand to these sales. See Note 14 - Convertible Notes for details on the Convertible Notes issued to related parties. In January 2025, the Company issued a promissory note to Monomoy REIT for up to $ 10.0 million (the Monomoy Note ) of which $ 8.0 million was drawn as of June 30, 2025. The note was fully paid down in July 2025. The Monomoy Note accrued interest at 8.0 % per annum payable semi-annually in arrears . For the year ended June 30, 2026, $ 0.1 million of interest income was recognized related to the Monomoy Note. For the year ended June 30, 2025 , $ 0.3 million of interest income was recognized related to the Monomoy Note. The note was fully paid down in July 2025. The Company’s subsidiaries may from time to time make payments to vendors that are related parties, including payments to procure construction supplies. The total purchases from vendors that are related parties were $ 1.0 million and $ 0.6 million for the years ended June 30, 2026 and 2025 , respectively. These payments were made subsequent to the Greenfield Acquisition on February 5, 2025. 6. Fair Value Measurements Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. F- 21 GAAP provides a framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value: ▪ Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. ▪ Level 2: Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. ▪ Level 3: 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. All financial assets or liabilities that are measured at fair value on a recurring and non-recurring basis have been segregated into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date. The valuation techniques applied to investments held by the Company and by the Consolidated Fund (as defined below) vary depending on the nature of the investment. The financial assets and liabilities of the Consolidated Funds are presented in Note 7 - Variable Interest Entities. Equity and equity-related securities Securities traded on a national securities exchange are stated at the close price on the valuation date. To the extent these securities are actively traded and valuation adjustments are not applied, they are classified as Level 1. Equity investments that do not have readily-available market prices utilize valuation models or recent transactions to determine fair value and are classified as Level 3. As of June 30, 2026, the Company had equity investments in three special purpose vehicles that were valued using a discounted cash flows model with discount rates ranging from 10.0 % - 11.4 % (weighted average 11.2 % ) and an equity investment in one private company that was valued using a recent transaction. As of June 30, 2025, the Company had equity investments in three special purpose vehicles that were valued using a discounted cash flows model with discount rates ranging from 9.8 % - 11.3 % (weighted average 10.4 %). Debt securities 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. Debt investments that are not actively traded are generally based on discounted cash flows and classified as Level 3. See Note 7 - Variable Interest Entities. Investments in private funds The Company values investments in private funds using NAV as reported by each fund’s investment manager. 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. As of June 30, 2026 and June 30, 2025, investments in private funds include investments in Monomoy UpREIT, Monomoy REIT and MP II , each of which are managed by wholly-owned subsidiaries of the Company, in addition to private funds managed by third-party investment managers. During the three months ended December 31, 2024, $ 4.0 million of our investment in Monomoy UpREIT was transferred to Monomoy REIT via an in-kind contribution which represents a non-cash transaction. The private funds generally allow redemptions annually with 60 - 90 days’ notice. There is no set duration for the private funds. F- 22 Contingent consideration 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 required 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. 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. 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. See Note 13 - 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. Investments at Fair Value, held by the Company As of June 30, 2026 and 2025 the Company's cost of investments was $ 53.6 million and $ 54.2 million . The assets and liabilities measured at fair value on a recurring basis which are held by the Company are summarized in the tables below: Fair Value as of June 3 0 , 2026 (in thousands) Level 1 Level 2 Level 3 Total Assets: Equity investments $ 7,395 $ - $ 1,797 $ 9,192 Total assets within the fair value hierarchy $ 7,395 $ - $ 1,797 $ 9,192 Investments valued at net asset value $ 23,420 Total assets $ 32,612 Fair Value as of June 30, 2025 (in thousands) Level 1 Level 2 Level 3 Total Assets: Equity investments $ 15,427 $ - $ 13,374 $ 28,801 Total assets within the fair value hierarchy $ 15,427 $ - $ 13,374 $ 28,801 Investments valued at net asset value $ 31,813 Total assets $ 60,614 There were no transfers between levels of the fair value hierarchy during the years ended June 3 0 , 2026 and 2 0 25 . The following is a reconciliation of changes in Level 3 assets: For the twelve months ended June 30, (in thousands) 2026 2025 Beginning balance $ 13,374 $ 5,265 Purchases 1,000 3,300 Payments - 146 Change in fair value ( 12,577 ) 4,663 Ending balance $ 1,797 $ 13,374 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ ( 12,577 ) $ 4,663 F- 23 The following is a reconciliation of changes in Level 3 liabilities: For the twelve months ended June 30, (in thousands) 2026 2025 Beginning balance $ - $ 428 Payments - ( 422 ) Change in fair value - ( 6 ) Ending balance $ - $ - The carrying amount of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities equal or approximate fair value based on the short-term nature of these instruments. 7. Variable Interest Entities 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. 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. The Company monitors such funds and related criteria for consolidation on an ongoing basis. Funds that have historically been consolidated will be deconsolidated when the Company is no longer deemed to be the primary beneficiary and will then be treated as equity method investments. The Company retains the specialized investment company accounting guidance under US GAAP with respect to the consolidated funds (collectively, the Consolidated Funds ). As such, investments of the Consolidated Funds are included in the consolidated balance sheets at fair value and the net realized and unrealized gains or losses on those investments are included as a component of non-operating income on the consolidated statements of operations. Redeemable non-controlling interest in the Consolidated Funds is included in net (loss) income attributable to non-controlling interest in Consolidated Funds. The Company's risk with respect to the Consolidated Funds is limited to its beneficial interests in these funds. The assets of Consolidated Funds are not available to creditors of the Company. The creditors of Consolidated Funds do not have recourse to the Company other than to the assets of the respective Consolidated Funds. The Company holds investments in certain funds that are VIEs but the Company is not deemed to be the primary beneficiary. 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 (loss) on investments on the consolidated statements of operations. The Company's maximum exposure to loss related to the VIEs that the Company is not deemed to be the primary beneficiary is limited to the fair value of its investments in these entities. See Note 2 - Summary of Significant Accounting Policies for additional details. Investments at Fair Value, Consolidated Funds The assets of the Consolidated Funds measured at fair value on a recurring basis are summarized in the tables below: Fair Value as of June 30, 2026 (in thousands) Level 1 Level 2 Level 3 Total Assets of Consolidated Funds: Equity investments $ - $ 54 $ 239 $ 293 Debt securities - - 3,517 3,517 Total assets within the fair value hierarchy $ - $ 54 $ 3,756 $ 3,810 Investments valued at net asset value $ 1,536 Total assets $ 5,346 F- 24 Fair Value as of June 30, 2025 (in thousands) Level 1 Level 2 Level 3 Total Assets of Consolidated Funds: Equity investments $ - $ - $ 231 $ 231 Debt securities - 3,891 5,208 9,099 Total assets within the fair value hierarchy $ - $ 3,891 $ 5,439 $ 9,330 Investments valued at net asset value $ 4,997 Total assets $ 14,327 The following is a reconciliation of changes in fair value of Level 3 assets of Consolidated Funds: For the twelve months ended June 30, (in thousands) 2026 2025 Beginning balance $ 5,439 $ 7,781 Transfers In (1) 359 822 Transfers Out (1) ( 54 ) ( 1,775 ) Purchases 1,444 1,788 Sales and Paydowns ( 3,350 ) ( 3,224 ) Net Accretion 32 40 Change in fair value ( 114 ) 7 Ending balance $ 3,756 $ 5,439 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ ( 178 ) $ 68 (1) Transfers in and out include changes in the observability of inputs used in valuations and pricing transparency. The following table below presents the ranges of significant unobservable inputs used to value Level 3 assets as of June 30, 2026 and June 30, 2025. As of June 30, 2026 Investment Type Fair value Valuation Technique Unobservable Input Range (Weighted Average) Debt $ 3,517 Income Approach Discount Rate 10.13 % - 30.84 % ( 14.31 %) Total Debt $ 3,517 Equity/Other 239 Market Approach Earnings Multiple 8.25 - 14.57 ( 8.89 ) Total Equity/Other $ 239 As of June 30, 2025 Investment Type Fair value Valuation Technique Unobservable Input Range (Weighted Average) Debt $ 5,064 Income Approach Discount Rate 9.44 % - 25.71 % ( 14.14 %) 144 Recent Transaction Total Debt $ 5,208 Equity/Other 231 Recent Transaction Total Equity/Other $ 231 F- 25 8. Segment Reporting During the first quarter of fiscal 2026, in conjunction with the equity transaction entered into with KLIM and the formation of REV (see Note 20 - Equity Transactions), the Company realigned the information that the CODM regularly reviews to evaluate performance for operating decision-making purposes, including performance assessment and allocation of resources. As a result of this change in segment reporting (see Note 1 - Organization ), the Company retrospectively recast prior period results, by segment, to conform to the current period presentation. This structure includes two reportable segments: Alternative Credit and Real Estate. The structure is based on the Company’s various investment strategies. As a result of the change noted above, effective for the quarter ended September 30, 2025, the Company began reporting the following business segments: • Alternative Credit - focused on income generation and capital preservation through investment in debt and income-generating securities, direct lending, CLOs, and specialty finance businesses including Factoring, Asset Based Lending and Healthcare • Real Estate - full service, end-to-end real estate platform combining investment expertise and turnkey execution capabilities for IOS sector The Company has a corporate office that is included in “Corporate & Other”. The corporate office supports the segments by providing infrastructure and administrative support in the areas of accounting/finance, operations, information technology, legal, compliance and human resources. Our CODM is our Chief Executive Officer and Chairman of the Company’s Board of Directors , Jason W. Reese. The primary measure used by CODM in measuring performance and allocating resources to the segments is net income, as reported on our consolidated statements of operations, predominantly in the annual budget and forecasting process. The CODM considers budget-to-actual variances on a quarterly basis when making decisions about internal operations, such as staffing and related compensation, and planning for future investments. The Company does not disclose total asset information for its reportable segments as the information is not reviewed by the CODM. The following table provides the operating financial results of our operating segments for the year ended June 30, 2026: For the twelve months ended June 30, 2026 (in thousands) Alternative Credit Real Estate Total Segments Corporate & Other Total Revenues $ 6,071 $ 21,705 $ 27,776 $ - $ 27,776 Cost of revenues - 13,248 13,248 - 13,248 Operating expenses: Compensation and benefits 5,316 11,109 16,425 3,157 19,582 Depreciation and amortization 177 1,039 1,216 83 1,299 Selling, general and administrative 1,542 2,513 4,055 3,602 7,657 Non-operating income/(expenses): Dividends and interest income - 53 53 4,724 4,777 Interest expense - - - ( 4,106 ) ( 4,106 ) Net realized and unrealized loss - - - ( 22,244 ) ( 22,244 ) Net realized and unrealized loss on investments of Consolidated Funds - - - ( 2,659 ) ( 2,659 ) Interest and other income of Consolidated Funds - - - 958 958 Loss before income taxes ( 964 ) ( 6,151 ) ( 7,115 ) ( 30,169 ) ( 37,284 ) Income tax (expense) benefit - ( 212 ) ( 212 ) 588 376 Net loss $ ( 964 ) $ ( 6,363 ) $ ( 7,327 ) $ ( 29,581 ) $ ( 36,908 ) F- 26 For the twelve months ended June 30, 2025 (in thousands) Alternative Credit Real Estate Total Segments Corporate & Other Total Revenues $ 10,323 $ 5,993 $ 16,316 $ - $ 16,316 Cost of revenues - 1,082 1,082 - 1,082 Operating expenses: Compensation and benefits 6,383 5,959 12,342 3,136 15,478 Depreciation and amortization 273 976 1,249 - 1,249 Selling, general and administrative 1,317 1,744 3,061 3,449 6,510 Non-operating income/(expenses): - - - Dividends and interest income 1 - 1 6,056 6,057 Interest expense - - - ( 4,157 ) ( 4,157 ) Net realized and unrealized gain - - - 16,854 16,854 Net realized and unrealized gain on investments of Consolidated Funds - - - 3,322 3,322 Interest and other income of Consolidated Funds - - - 1,563 1,563 Income (loss) before income taxes 2,351 ( 3,768 ) ( 1,417 ) 17,053 15,636 Income tax expense - - - ( 86 ) ( 86 ) Net income (loss) $ 2,351 $ ( 3,768 ) $ ( 1,417 ) $ 16,967 $ 15,550 Selling, general and administrative includes expenses such as insurance, rent, professional fees and other expenses, along with expenses of the Consolidated Funds. 9. Identifiable Intangible Assets, Net The following table is a summary of the Company’s intangible assets as of June 30, 2026 and 2025: As of June 30, 2026 As of June 30, 2025 (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Investment management agreements $ 15,264 $ ( 6,645 ) $ 8,619 $ 15,264 $ ( 5,731 ) $ 9,533 Assembled workforce 1,103 ( 711 ) 392 1,103 ( 632 ) 471 Customer related 1,610 ( 150 ) 1,460 1,610 ( 43 ) 1,567 Licenses 450 ( 42 ) 408 450 ( 12 ) 438 Identifiable intangible assets, net $ 18,427 $ ( 7,548 ) $ 10,879 $ 18,427 $ ( 6,418 ) $ 12,009 During the years ended June 30, 2026 and 2025, the Company recorded amortization expense of $ 1.1 million and $ 1.1 million , respectively, within depreciation and amortization on the consolidated statements of operations. The following table provides the estimated aggregate amortization expense for each of the five succeeding fiscal years and thereafter: (in thousands) Estimated Future Amortization Expense For the year ending June 30, 2027 1,096 For the year ending June 30, 2028 1,068 For the year ending June 30, 2029 1,045 For the year ending June 30, 2030 1,027 For the year ending June 30, 2031 986 Thereafter 5,657 Total $ 10,879 F- 27 10. Real Estate As part of its build-to-suit development initiatives, MBTS purchases certain land parcels. Contemporaneously with the land purchases, MBTS enters into commercial lease agreements, as a lessor, in respect to the land parcels and build-to-suit improvements to be constructed thereon. The leases commence upon substantial completion of the build-to-suit developments. The Company intends to sell the land and improvements with the attached leases at, or subsequent to, the respective lease commencement date. On June 18, 2024, MBTS sold one of its developments for consideration totaling $ 7.8 million. At closing in 2024, real estate development was not complete for this project. There were two performance obligations identified for this transaction. The first performance obligation related to real estate development activities completed at the closing of the property sale where the transfer of title occurred for which the Company recognized $ 6.6 million of revenue in 2024. The second performance obligation related to the remaining construction activities to be completed over time after title transferred. At closing, MBTS funded two escrow accounts for construction completion. During the year-ended June 30, 2025, the performance obligation was satisfied, the related escrow accounts were released, and the remaining revenue associated with this sale of $ 1.2 million was recognized. In December 2024, a development was completed and the lease commenced. In September 2025, the Company completed the sale of this property for consideration totaling $ 7.0 million. In March 2026, another development was completed and the lease commenced. In June 2026, the Company completed the sale of this property for consideration totaling $ 7.3 million. This property sale was to Monomoy Properties REIT, LLC a related party. Upon completion of each of the developments, the Company began to depreciate the assets over the expected useful life of 39 years . During the years ended June 30, 2026 and 2025, the Company recognized depreciation expense totaling approximately $ 0.1 million and $ 0.1 million, respectively, in connection with the assets. There was $ 0.2 million of lease income relating to lease payments on the assets for the year ended June 30, 2026 . There was $ 0.3 million of lease income relating to lease payments for the year ended June 30, 2025. During the years ended June 30, 2026 and 2025, the Company capitalized costs of $ 6.5 million and $ 3.4 million, respectively, within real estate assets, net on its consolidated balance sheet, representing the development and construction costs directly identifiable with the real estate projects. 11. Lessee Operating Leases The Company leases office spaces in Boston, Massachusetts and Charleston, South Carolina under operating leases. Through December 2024, the Company also leased office space in Waltham, Massachusetts. The following table summarizes operating and variable lease cost and cash paid for amounts included in the measurement of lease liabilities for the years ended June 30, 2026 and 2025: For the twelve months ended June 30, (in thousands) 2026 2025 Operating lease cost $ 484 $ 492 Variable lease cost 39 59 Cash paid for operating leases 474 493 The following table provides details on the leases presented in the consolidated balance sheets as of June 30, 2026 and 2025: June 30, 2026 June 30, 2025 Weighted-average remaining life 3.4 years 4.3 years Weighted-average discount rate 8.1 % 8.1 % F- 28 The following table provides a maturity analysis of the Company's operating lease liabilities as of June 30, 2026: (in thousands) June 30, 2026 For the year ending June 30, 2027 421 For the year ending June 30, 2028 417 For the year ending June 30, 2029 426 Thereafter 143 Total lease payments $ 1,407 Imputed interest ( 147 ) Total lease liabilities $ 1,260 The Company’s office leases in Boston, 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. In March 2026, the Company signed a new office lease which commenced in August 2026 . As none of the criteria for recognition have been met as of June 30, 2026, there is no corresponding lease liability or right-of-use asset associated with this lease included in the consolidated balance sheet. 12. Accrued Expenses and Other Current Liabilities As of June 30, 2026 and 2025, accrued expenses and other current liabilities consisted of the following: (in thousands) June 30, 2026 June 30, 2025 Payroll and other employee-related costs $ 3,912 $ 4,616 Construction business expenses 619 2,591 Other 1,401 500 Accrued expenses and other current liabilities $ 5,932 $ 7,707 13. Long-Term Debt 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: (i) pari passu, or equal, with the Convertible Notes (as defined below) and any future outstanding unsecured unsubordinated indebtedness; (ii) senior to any of our indebtedness that expressly provides it is subordinated to the GEGGL Notes; (iii) effectively subordinated to any future secured indebtedness; and (iv) structurally subordinated to any future indebtedness and other obligations of any of our current and future subsidiaries. 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. Holders of the GEGGL Notes do not have the option to have the notes repaid prior to the stated maturity date. The GEGGL Notes were issued in minimum denominations of $ 25 and integral multiples of $ 25 in excess thereof. The Company’s long-term debt is summarized in the following table: (in thousands) June 30, 2026 June 30, 2025 GEGGL Notes $ 26,945 $ 26,945 Total principal $ 26,945 $ 26,945 Unamortized debt discounts and issuance costs ( 287 ) ( 572 ) Long-term debt 26,658 26,373 Deferred financing costs are amortized to interest expense on a straight-line basis over the five-year term of the loan. During the years ended June 30, 2026 and 2025, the Company incurred interest expense of $ 2.2 million and $ 2.2 million , respectively, attributed to its long-term debt. See Note 14 - Convertible Notes for interest expense on Convertible Notes. F- 29 The GEGGL Notes include covenants that limit additional indebtedness or the payment of dividends subject to compliance with a net consolidated debt to equity ratio of 2 :1. As of June 30, 2026, our net consolidated debt to equity ratio is 0.25 :1.00. The fair value of the GEGGL Notes as of June 30, 2026 and June 30, 2025 was $ 26.7 million and $ 25.3 million . 14. Convertible Notes 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. In June 2024, the Company repurchased $ 4.2 million of principal for $ 2.1 million resulting in a realized gain of $ 2.3 million. In June 2025, the Company repurchased $ 2.2 million of principal for $ 1.8 million resulting in a realized gain of $ 0.5 million. As of June 30, 2026, the total principal balance of Convertible Notes outstanding was $ 36.8 million , including cumulative interest paid in-kind. The Convertible Notes are held by a consortium of investors, including $ 17.9 million issued to certain related parties. As of June 30, 2026, such Convertible Notes issued to related parties include: ▪ $ 8.2 million issued to entities associated with Matthew A. Drapkin, including funds managed by Northern Right Capital Management, L.P. ( Northern Right ), a significant shareholder, which are currently convertible into approximately 2,364,027 shares of the Company's common stock. Mr. Drapkin, a member of the Company’s Board of Directors, is the Chief Executive Officer of Northern Right. Mr. Drapkin and certain funds managed by Northern Right have agreed not to convert its notes into shares of the Company's common stock prior to July 15, 2027. ▪ $ 8.8 million issued to entities associated with Jason W. Reese, the Chief Executive Officer and Chairman of the Company’s Board of Directors, including funds managed by ICAM, a significant shareholder, which are currently convertible into approximately 2,521,618 shares of the Company’s common stock. ICAM has agreed to not convert its Convertible Notes into shares of the Company’s common stock prior to November 2026. ▪ $ 0.9 million issued to entities associated with Eric J. Scheyer, a member of the Company’s Board of Directors. In addition, a third party noteholder, PC Elfun, LLC ( PC Elfun ), was issued $ 12.0 million of Convertible Notes which are currently convertible into approximately 2,948,046 shares of the Company’s common stock. PC Elfun has agreed not to convert its notes into shares of the Company's common stock indefinitely. 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. 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. Convertible Notes recorded on the Company's consolidated balance sheets as of June 30, 2026 and 2025 are summarized in the following table: (in thousands) June 30, 2026 June 30, 2025 Convertible Notes principal $ 36,838 $ 35,063 Unamortized debt issuance costs ( 364 ) ( 461 ) Convertible Notes 36,474 34,602 F- 30 The Company incurred interest expense of $ 1.9 million and $ 1.9 million related to the Convertible Notes for the years ended June 30, 2026 and 2025, respectively, inclusive of non-cash interest related to amortization of debt issuance costs. Interest was paid in-kind by issuing $ 1.8 million and $ 1.8 million of additional Convertible Notes to holders for the years ended June 30, 2026 and 2025 , respectively. 15. Earnings per Share The following table presents the calculation of basic and diluted net income (loss) per share: For the twelve months ended June 30, (in thousands except per share amounts) 2026 2025 Numerator: Net (loss) income attributable to Great Elm Group, Inc. stockholders $ ( 35,444 ) $ 12,891 Effect of dilutive securities: Interest expense associated with Convertible Notes - 1,926 Numerator for diluted EPS - Net (loss) income attributable to Great Elm Group, Inc. stockholders after the effect of dilutive securities $ ( 35,444 ) $ 14,817 Denominator: Denominator for basic EPS - Weighted average shares of common stock outstanding 30,289 27,642 Effect of dilutive securities: Restricted stock - 1,077 Convertible Notes - 10,098 Denominator for diluted EPS - Weighted average shares of common stock outstanding after the effect of dilutive securities 30,289 38,817 Net (loss) income attributable to stockholders per share Basic $ ( 1.17 ) $ 0.47 Diluted ( 1.17 ) 0.38 The following table details the securities that have been excluded from the above computation of weighted-average number of shares for diluted EPS, because the effect would be anti-dilutive. For the twelve months ended June 30, (in thousands) 2026 2025 Restricted stock 256 - Convertible Notes 10,352 - Total Anti-Dilutive Securities 10,608 - 16. Non-Controlling Interests Non-Controlling Interests Holders of non-controlling interests in a subsidiary of the Company hold certain rights, which result in the classification of the securities as either liability, temporary equity, or permanent equity. The following table summarizes the non-controlling interest balances on the consolidated balance sheets: (in thousands) June 30, 2026 June 30, 2025 Consolidated Funds Permanent equity - 10,348 Total non-controlling interests $ - $ 10,348 F- 31 The following table summarizes the net income (loss) attributable to the non-controlling interests on the consolidated statements of operations: For the twelve months ended June 30, (in thousands) 2026 2025 Consolidated Funds Permanent equity ( 1,464 ) 2,659 Net loss attributable to non-controlling interest $ ( 1,464 ) $ 2,659 Consolidated Fund – Non-controlling interest classified as permanent equity As of June 30, 2026 , the Company held 100 % of capital in the Consolidated Fund. As of June 30, 2025, the Company held approximately 42 % of the capital in the Consolidated Fund and the remaining capital was recorded as a non-controlling interest that included affiliated individuals and entities. 17. Share-Based and Other Non-Cash Compensation Tax Benefits Preservation Agreement 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 ). 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. 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). Each Tax Right entitles the registered holder thereof to purchase from the Company a unit consisting of one ten -thousandth of a share (a Unit ) of Series A Junior Participating Cumulative Preferred Stock, par value $ 0.001 per share, of the Company at a cash exercise price of $ 15.00 per Unit (the Exercise Price ), subject to adjustment, under the conditions specified in the Rights Plan. The Tax Rights are not exercisable until the Distribution Date and will expire at the earlier of (a) January 29, 2028; (b) the time when the Tax Rights are redeemed as provided therein; (c) the time when the Rights are exchanged as provided therein; (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); (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. Stock Plans 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 ). 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 and 2025 Long-Term Incentive Plan's are administered by the Compensation Committee of the Board of Directors (the Compensation Committee ) and provide 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. As of June 30, 2026, the Company had a total of 3,994,332 shares outstanding under the 2016 and 2025 Long-Term Incentive Plan's and no shares were outstanding under the 2016 Employee Stock Purchase Plan. F- 32 The following table summarizes the number of common shares available for future issuance under the plans discussed above as of June 30, 2026: Shares of Common Stock Available for Future Issuance Shares 2016 Long-Term Incentive Plan 978,952 2016 Employee Stock Purchase Plan 944,000 2025 Long-Term Incentive Plan 4,617,203 Total 6,540,155 Restricted Stock Awards and Restricted Stock Units The following table presents activity related to the Company’s restricted stock awards and restricted stock units for the year ended June 30, 2026: Restricted Stock Awards and Restricted Stock Units Shares (in thousands) Weighted Average Grant Date Fair Value Outstanding at June 30, 2025 1,077 $ 1.93 Granted 1,173 2.59 Vested ( 876 ) 2.17 Forfeited ( 13 ) 2.34 Outstanding at June 30, 2026 1,361 $ 2.34 Restricted stock awards and restricted stock units have vesting terms between 1 - 4 years and are subject to service requirements. During the year ended June 30, 2026, the Company granted 1,172,954 restricted stock awards and did no t grant any restricted stock units. The aggregate grant date fair value of restricted stock awards and restricted stock units granted during the years ended June 30, 2026 and 2025 was $ 3.0 million and $ 1.8 million, respectively. For the years ended June 30, 2026 and 2025, the total intrinsic value of restricted stock vested was $ 2.1 million and $ 2.1 million, respectively. Stock Options The following table presents activity related to the Company’s stock options for the year ended June 30, 2026: Stock Options Shares (in thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (in thousands) Outstanding at June 30, 2025 3,006 $ 2.57 6.00 $ - Forfeited, cancelled or expired ( 176 ) 3.60 - - Outstanding at June 30, 2026 2,830 $ 2.50 5.23 $ - Exercisable at June 30, 2026 830 $ 3.60 1.29 $ - There were no options granted during the years ended June 30, 2026 and 2025 . Stock-Based Compensation Expense Stock-based compensation expense related to all restricted stock awards, restricted stock units, and stock options totaled $ 2.3 million and $ 2.0 million for the years ended June 30, 2026 and 2025, respectively. As of June 30, 2026 and 2025, the Company had unrecognized compensation cost related to all unvested restricted stock awards, restricted stock units, and stock options totaling $ 2.4 million and $ 1.7 million, respectively, expected to be recognized as the awards and options vest over the next 1.7 years. F- 33 Non-Employee Director Deferred Compensation Plan In December 2020, the Company established the Great Elm Group, Inc. Non-Employee Directors Deferred Compensation Plan allowing non-employee directors to defer their cash and/or equity compensation under a non-revocable election for each calendar year. 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. As of June 30, 2026 , there were no 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 During the years ended June 30, 2026 and June 30, 2025, the Company issued compensation to certain employees in the form of GECC common shares to be settled with GECC shares currently held by the Company. The total value of GECC shares awarded for the year ended June 30, 2026 was $ 1.0 million , of which $ 0.2 million vested immediately, and the balance will vest annually pro-rata over a three year period. Related compensation expense was $ 0.6 million for the year ended June 30, 2026. The total value of GECC shares awarded for the year ended June 30, 2025 was $ 1.3 million, of which $ 0.3 million vested immediately, and the balance will vest annually pro-rata over a three year period. Related compensation expense was $ 1.2 million for the year ended June 30, 2025. During the years ended June 30, 2026 and June 30, 2025, the Company issued compensation to certain employees in the form of restricted membership interest rights in MP II to be settled with the membership interest currently held by the Company. The total value of the MP II restricted membership interests awarded for the year ended June 30, 2026 was $ 0.5 million , which vest on the third anniversary of the grant date. Related compensation expense was $ 0.6 million for the year ended June 30, 2026. The total value of the MP II restricted membership interests awarded for the year ended June 30, 2025 was $ 0.4 million , which vest on the third anniversary of the grant date. Related compensation expense was $ 0.3 million for the year ended June 30, 2025. During the year ended June 30, 2025, the Company issued compensation to certain employees in the form of restricted membership interest rights in Monomoy REIT to be settled with the membership interest currently held by the Company. The total value of the Monomoy REIT restricted membership interests awarded for the year ended June 30, 2025 was $ 0.5 million , which will vest on the fifth anniversary of the grant date. Related compensation expense was $ 0.2 million for the year ended June 30, 2026. Related compensation expense was $ 0.1 million for the year ended June 30, 2025 . 18. Income Taxes The Company had income (loss) before income taxes of $( 37.3 ) million and $ 15.6 million , respectively, for the years ended June 30, 2026 and 2025. There was no foreign activity during these years. The provision for income taxes includes the following: For the years ended June 30, (in thousands) 2026 2025 Current $ ( 312 ) $ ( 130 ) Deferred ( 64 ) 216 Income tax (benefit) expense $ ( 376 ) $ 86 The Company recognized an income tax benefit of $ 0.4 million for the year ended June 30, 2026 and an income tax expense of $ 0.1 million for the year ended June 30, 2025. The benefit for the year ended June 30, 2026 consists primarily of the release of uncertain tax positions related to a lapse of the statute of limitations and the reduction of the naked credit deferred tax liability. The expense for the year ended June 30, 2025 consists of the recognition of income tax expense related to the deferred tax liability with an indefinite reversal period. This is offset by the income tax benefit recognized from the reversal of the prior year's income tax expense, resulting from provision-to-return adjustments. F- 34 The following table reconciles the expected corporate federal income tax benefit, computed by multiplying the Company's income (loss) before income taxes by the statutory tax rate of 21 %, to the total tax expense, after the adoption of ASU 2-23-09. For the year ended June 30, (in thousands) 2026 US federal statutory income tax benefit $ ( 7,830 ) 21.0 % Nontaxable or nondeductible items Compensation 150 - 0.4 % Other 13 0.0 % Cross-border tax effects 56 - 0.1 % Other reconciling items Investment in partnerships ( 107 ) 0.3 % Passthrough investment in REV 1,348 - 3.6 % Other ( 103 ) 0.3 % Change in valuation allowance 6,461 - 17.3 % State taxes net of federal impact 28 - 0.1 % Changes in uncertain tax benefits ( 392 ) 1.1 % Income tax benefit $ ( 376 ) 1.2 % 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 , prior to the adoption of ASU 2023-09. For the year ended June 30, (in thousands) 2025 Federal tax expense (benefit) at statutory rate $ 2,777 Change in valuation allowance ( 3,848 ) State taxes net of federal impact 552 Provision to return and other deferred tax ( 145 ) Net operating loss and credit expirations 713 Other 37 Income tax expense $ 86 The tax effect of temporary differences that give rise to significant portions of the Company's deferred tax assets and liabilities are as follows: As of June 30, (in thousands) 2026 2025 Deferred Tax Assets: Net operating loss carryforwards $ 3,679 $ 2,099 Accruals and allowances not deductible for tax purposes 19 230 Identifiable intangible assets 312 445 Stock based and accrued compensation 1,054 1,665 Unrealized loss on investments 5,646 - Investment in partnerships 2,887 3,076 Interest expense carryforward 1,106 873 Other 347 450 Total deferred tax assets, gross $ 15,050 $ 8,838 Less: valuation allowance $ ( 14,821 ) $ ( 6,278 ) Total deferred tax assets, net $ 229 $ 2,560 Deferred Tax Liabilities: Unrealized gain on investment - ( 2,250 ) Other ( 380 ) ( 526 ) Total deferred tax liabilities, gross $ ( 380 ) $ ( 2,776 ) Total deferred tax liabilities, net $ ( 151 ) $ ( 216 ) F- 35 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. For the year ended June 30, 2026 the Company reflects a deferred tax liability in the amount of $ 0.2 million due to the future tax liability from an asset with an indefinite life. The future tax liability from this indefinite lived asset can be offset by up to 30 % of business interest carryforward and 80 % of net operating loss carryforwards created after 2017. The remaining portion of the future tax liability from indefinite lived assets cannot be used to offset definite lived deferred tax assets. The increase of $ 8.5 million in the overall valuation allowance relates primarily to the unrealized loss recognized on the Company's investments recorded to fair value and the expiration of federal tax attributes. The state deferred amounts reflected in the above table were calculated using the enacted tax rates. As of June 30, 2026, the Company had net operating loss ( NOL ) carryforwards for federal income tax purposes of approximately $ 13.4 million , of which approximately $ 1.5 million will expire in fiscal years 2027 through 2038 and $ 11.9 million can be carried forward indefinitely. As of June 30, 2026, the Company also had $ 14.0 million of state NOL carryforwards, principally in Massachusetts, that will expire from 2037 to 2046 . The utilization of a corporation's NOL carryforwards could be limited following a change in ownership (as defined by Internal Revenue Code section 382) of greater than 50 % within a rolling three-year period. If it is determined that prior equity transactions limit the Company's NOL carryforwards, the annual limitation will be determined by multiplying the market value of the Company on the date of the ownership change by the federal long-term tax-exempt rate. Any amount exceeding the annual limitation may be carried forward to future years for the balance of the NOL carryforward period. The Company has not, as of yet, conducted a study to determine if any such changes have occurred that could limit its ability to utilize the net operating loss carryforward. Given the full valuation allowance, any ownership change and potential Section 382 limitation would not have a material impact on the financial statements. During the years ended June 30, 2026 and 2025, the total amount of gross unrecognized tax benefit activity was as follows: (in thousands) Balance as of June 30, 2024 $ 508 Lapse of statute of limitations ( 176 ) Balance as of June 30, 2025 $ 332 Lapse of statute of limitations ( 332 ) Balance as of June 30, 2026 $ - 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, 2026 , the Company had no unrecognized tax benefits. As of June 30, 2025, the Company had approximately $ 0.3 million of unrecognized tax benefits, including interest and penalties, recognized on our balance sheet. These liabilities are primarily recorded as non-current as of the balance sheet date. As of June 30, 2026 , there was no accrual for interest and penalties associated with tax liabilities. As of June 30, 2025, the accrual for interest and penalties associated with tax liabilities was $ 0.2 million. These unrecognized tax benefits, if recognized, would decrease the effective tax rate in the year of resolution. The Company files income tax returns in accordance with the tax laws of the jurisdictions in which it operates. Federal and state income tax returns are generally subject to examination for tax years ended June 30, 2022 through the present. To the extent the Company has tax attribute carryforwards, the tax years in which those attributes were generated may remain subject to adjustment upon examination by the Internal Revenue Service ( IRS ), with the exception of fiscal years 2009 and 2010, for which IRS examinations have been completed, or by state tax authorities, to the extent such attributes are utilized in a future period. The Company is not currently under examination by any tax authorities. F- 36 The Company has performed an evaluation of the impact of the OBBBA on the Company's effective tax rate and deferred tax assets in year ended June 30, 2026 and future periods. Based on this evaluation, the tax reform provisions do not have a material impact on the Company's consolidated financial statements and related disclosures for the year ended June 30, 2026. We will continue to assess the implications of the OBBBA, and our tax provision may be further impacted as additional guidance from the U.S department of the Treasury is released. 19. Commitments and Contingencies From time to time, the Company is involved in lawsuits, claims, investigations and proceedings that arise in the ordinary course of business. The Company maintains insurance to mitigate losses related to certain risks. The Company is not a named party in any other pending or threatened litigation that we expect to have a material adverse impact on our business, results of operations, financial condition or cash flows. 20. Equity Transactions On July 31, 2025, the Company entered into a Stock Purchase Agreement (the Stock Purchase Agreement ) with certain funds affiliated with KLIM, a Delaware limited liability company (such funds, the Purchasers ), pursuant to which the Purchasers purchased, and the Company issued, 1,353,885 shares (the Shares ) of the Company’s common stock (the Common Stock ), at a 20-day volume-weighted average price calculated at market close the business day prior to the date of the Stock Purchase Agreement of $ 2.1144 per share, or an aggregate purchase price of $ 2.9 million. The Shares were issued in a private placement exempt from registration under Section 4(a)(2) and Rule 506(b) of Regulation D of the Securities Act of 1933. Profits Interest Agreement In connection with the transaction described above, the Company formed a new holding company for its real estate business, REV, a Delaware limited liability company. The Company is the sole member of REV and owns all of its equity interests, including its preferred equity pursuant to which it is entitled to a cumulative preferred distribution of 12.5 % per annum and priority in distributions relating to the proceeds of certain specified transactions, subject to the right of the certain funds affiliated with KLIM set forth therein (the Investors ) to purchase a pro rata participation interest in such preferred equity in an amount equal to the Profits Interest Percentage. Pursuant to an Amended Profits Interest Agreement (the Amended Profits Interest Agreement ), dated May 12, 2026, by and among the Company, REV and the Investors, each Investor will be entitled to receive, concurrently with any distribution of income made by REV to the holders of its common equity interests, its pro rata portion of an amount equal to 15 % of the aggregate amount of such distribution (the Profit Interest Percentage ), which percentage will increase by 2.0 % upon the funding of $ 50.0 million of borrowings drawn under the Loan Agreement, dated July 31, 2025, between Monomoy Properties REIT, LLC, as borrower, entities managed by KLIM, as lenders, and Alter Domus (US) LLC, as agent for the lenders, up to a maximum of 17 %. Each Investor will have certain tag-along rights in the event that the Company or its affiliates decides to transfer its common or preferred equity in REV above a certain threshold. These profits interest are classified as non-redeemable non-controlling interests as a component of permanent equity as they are not subject to holder put rights. Securities Purchase Agreement On August 27, 2025, the Company entered into a Securities Purchase Agreement (the Securities Purchase Agreement ) with Woodstead Value Fund LP, a Texas limited partnership ( Woodstead ), pursuant to which the Woodstead purchased, and the Company issued, 4,000,000 shares of the Company’s common stock, par value $ 0.001 per share, at a 20-day volume-weighted average price calculated at market close the business day prior to the date of the Securities Purchase Agreement of $ 2.25 per share, for an aggregate purchase price of $ 9 million. The shares were issued in a private placement exempt from registration under Section 4(a)(2) and Rule 506(b) of Regulation D of the Securities Act of 1933. F- 37 Warrants Pursuant to the Securities Purchase Agreement, the Company also issued to Woodstead (i) a warrant to buy 1,000,000 shares of Common Stock at an exercise price of $ 3.50 per share with a ten-year term (the Series A Warrant ) and (ii) a warrant to buy 1,000,000 shares of Common Stock at an exercise price of $ 5.00 per share with a ten-year term (the Series B Warrant , together with Series A Warrant, the Warrants ). The Warrants were issued in a private placement exempt from registration under Section 4(a)(2) and Rule 506(b) of Regulation D of the Securities Act of 1933. The Series A Warrants are exercisable at any time on or after the one-year anniversary of the original issuance date and the Series B Warrants are exercisable at any time on or after the three-year anniversary of the original issuance date. Each of the Series A Warrants and Series B Warrants have a ten-year term from the original issuance date. The Warrants include certain limited anti-dilution adjustments. The Company determined the Warrants met the conditions for equity classification in accordance with U.S. GAAP and were included as a component of stockholders’ equity (deficit). The Company estimated the fair value of the Warrants using the Black-Scholes option pricing model on the grant date. The Warrants were valued at $ 0.7 million and are recorded in additional paid-in capital. 21. Subsequent Events In July 2026, MBTS closed on a $ 3.0 million purchase of a property for a build-to-suit location. F- 38