Financial Analysis

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, 2025 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 …

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17. 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.

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12. 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 Companys long-term debt is summarized in the following table: (in thousands) June 30, 2025 June 30, 2024 GEGGL Notes $ 26,945 $ 26,945 Total principal $ 26,945 $ 26,945 Unamortized debt discounts and issuance costs ( 572 ) ( 855 ) Long-term debt 26,373 26,090 Deferred financing costs are amortized to interest expense on a straight-line basis …

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The Company's revenues are summarized in the following table: For the twelve months ended June 30, (in thousands) 2025 2024 Investment management revenue: Management fees $ 7,038 $ 5,906 Incentive fees 4,069 2,676 Administration and service fees 1,514 1,405 Property management fees 1,245 1,186 Real estate property sales 1,192 6,586 Project management fees 941 75 Real estate rental income 317 - Total revenues $ 16,316 $ 17,834

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15. 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 Companys 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 Companys 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 $ 0.00 …

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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. 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 Companys 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 i …

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8. Identifiable Intangible Assets, Net The following table is a summary of the Companys intangible assets as of June 30, 2025 and 2024: As of June 30, 2025 As of June 30, 2024 (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Investment management agreements $ 15,264 $ ( 5,731 ) $ 9,533 $ 15,264 $ ( 4,781 ) $ 10,483 Assembled workforce 1,103 ( 632 ) 471 1,103 ( 549 ) 554 Customer related 1,610 ( 43 ) 1,567 - - - Licenses 450 ( 12 ) 438 - - - Identifiable intangible assets, net $ 18,427 $ ( 6,418 ) $ 12,009 $ 16,367 $ ( 5,330 ) $ 11,037 During the years ended June 30, 2025 and 2024, 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, 2026 $ 1,130 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 Thereafter 6,643 Total $ 12,009 …

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"16. Income Taxes The Company had income (loss) before income taxes from continuing operations of $ 15.6 million and $( 0.8 ) million , respectively, for the years ended June 30, 2025 and 2024. There was no foreign activity during these years. The provision for income taxes includes the following: For the years ended June 30, (in thousands) 2025 2024 Current $ ( 130 ) $ 101 Deferred 216 - Income tax expense $ 86 $ 101 The Company recognized an income tax expense from continuing operations of $ 0.1 million and $ 0.1 million for the years ended June 30, 2025 and 2024, respectively. 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. The expense for the year ended June 30, 2024 consisted of federal and state and local taxes. 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. For the years ended June 30, (in thousands) 2025 2024 Federal tax expense (benefit) at statutory rate $ 2,777 $ ( 194 ) State taxes net of federal impact 552 702 Change in valuation allowance ( 3,848 ) ( 1,932 ) Provision to return and other deferred tax ( 145 ) ( 157 ) Net ope …

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10. 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, 2025 and 2024: For the twelve months ended June 30, (in thousands) 2025 2024 Operating lease cost $ 492 $ 399 Variable lease cost 59 66 Cash paid for operating leases 493 436 The following table provides details on the leases presented in the consolidated balance sheets as of June 30, 2025 and 2024: June 30, 2025 June 30, 2024 Weighted-average remaining life 4.3 years 1.9 years Weighted-average discount rate 8.1 % 8.9 % The following table provides a maturity analysis of the Company's operating lease liabilities as of June 30, 2025: (in thousands) June 30, 2025 For the year ending June 30, 2026 $ 474 For the year ending June 30, 2027 421 For the year ending June 30, 2028 417 Thereafter 569 Total lease payments $ 1,881 Imputed interest ( 266 ) Total lease liabilities $ 1,615 The Companys 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 …

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Recently Adopted Accounting Standards Segment Reporting Disclosures. In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures . The standard expands reportable segment disclosure requirements for public business entities primarily through enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit (referred to as the significant expense principle). The Company has adopted this standard for our fiscal year 2025 annual financial statements and interim financial statements thereafter and have applied this standard retrospectively for all prior periods presented in the financial statements. See Note 7 - Segment Reporting for further information. Recently Issued 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 is evaluating the potential impact that the adoption of this ASU will have on its consolidate …

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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. 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) 2025 2024 Net realized and unrealized gain on investments $ 4,692 $ 71 Net realized and unrealized gain on investments of Consolidated Funds 3,322 233 Dividend income 3,448 4,412 See Note 4 - Revenue for additional discussion of fees earned from managed investment products. (in thousands) June 30, 2025 June 30, 2024 Dividends receivable $ 310 $ 301 Investment management revenues receivable 4,493 1,684 Receivable for reimbursable expenses paid 1,642 274 Receivable for real estate property development 1,886 - Receivables from managed funds $ 8,331 $ 2,259 Investment Management GECM has agreements to manage the investment portfolios for GECC and other investment products, as well as to provide administrative services. Through June 30, 2024, GECM had agreements with Monomoy UpREIT. The agreements with Monomoy UpREIT were transferred to MCRE on June 30, 2024. Under these agreements, GECM and MCRE 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 admini …

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4. Revenue The Company's revenues are summarized in the following table: For the twelve months ended June 30, (in thousands) 2025 2024 Investment management revenue: Management fees $ 7,038 $ 5,906 Incentive fees 4,069 2,676 Administration and service fees 1,514 1,405 Property management fees 1,245 1,186 Real estate property sales 1,192 6,586 Project management fees 941 75 Real estate rental income 317 - Total revenues $ 16,316 $ 17,834 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, LLC ( Monomoy UpREIT ) as well as between GECM and Great Elm Capital Corp. ( 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 fr …

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7. Segment Reporting We manage our business activities on a consolidated basis and operate as a single operating segment. We primarily derive our revenue from our asset management business which is focused 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 accounting policies of the segment are the same as those described in Note 2 - Summary of Significant Accounting Policies. Our chief operating decision maker ( CODM ) is our Chief Executive Officer and Chairman of the Companys Board of Directors , Jason W. Reese. The CODM uses 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. T otal assets for the segment are as reported on the Consolidated Balance Sheet. The following table provides the operating financial results of our operating segment: For the twelve months ended June 30, (in thousands) 2025 2024 Revenues $ 16,316 $ 17,834 Cost of revenues 1,082 5,526 Interest income 3,602 4,600 Other income 4,018 4,302 Less: Significant segment expenses Employee expenses 14,474 12,522 Operating expenses 6,506 6,340 Interest expense 4,157 4,334 Depreciation and amortization 1,249 1,108 L …

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19. Subsequent Events On July 31, 2025, the Company entered into a Stock Purchase Agreement (the Stock Purchase Agreement ) with certain funds affiliated with Kennedy Lewis Investment Management LLC ( 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 Companys 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. Pursuant to the registration rights covenant under the Stock Purchase Agreement, the Company has agreed to file a registration statement to register the resale from time to time of the Registrable Securities (as defined in the Stock Purchase Agreement) held by the Purchasers within one hundred and twenty days following the date of the Stock Purchase Agreement. The Company has also agreed to include the Registrable Securities in certain registration statements filed by the Company. The registration rights granted pursuant to the Stock Purchase Agreement will terminate upon the first to occur of (A) a registration statement with respect to the sale of such securities being declared effective by the Secu …

SubsequentEventsTextBlock · excerpt; the full note is in the filing