GEGGL Great Elm Group Inc

 

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 5, 2025

Great Elm Group, Inc.

(Exact name of Registrant as Specified in Its Charter)

Delaware	001-39832	85-3622015
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
3801 PGA Boulevard, Suite 603 Palm Beach Gardens, FL		33410
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (617) 375-3006

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.001 per share	GEG	The Nasdaq Stock Market LLC (Nasdaq Global Select Market)
7.25% Notes due 2027	GEGGL	The Nasdaq Stock Market LLC (Nasdaq Global Select Market)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

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Item 2.02 Results of Operations and Financial Condition.

On February 5, 2025, Great Elm Group, Inc. issued the press release furnished as Exhibit 99.1 to this report.

The foregoing information (including the Exhibit 99.1 hereto) is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number		Description
99.1		Press Release, dated February 5, 2025
104		The cover page from this Current Report on Form 8-K, formatted as inline XBRL

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		GREAT ELM GROUP, INC.
Date: February 5, 2025		/s/ Keri A. Davis
		By: Keri A. Davis
		Title: Chief Financial Officer

 

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Great Elm Group Reports FISCAL 2025 SECOND QUARTER

financial resulTs

 

Company to Host Conference Call at 8:30 a.m. ET on February 6, 2025

 

PALM BEACH GARDENS, Fla., February 5, 2025 – Great Elm Group, Inc. (“we,” “our,” “GEG,” “Great Elm,” or “the Company”), (NASDAQ: GEG), an alternative asset manager, today announced financial results for its fiscal second quarter ended December 31, 2024.

 

Fiscal Second Quarter 2025 and Recent Highlights

 

Management Commentary

Jason Reese, Chief Executive Officer of the Company, stated, “We delivered a solid fiscal second quarter 2025, continuing our positive momentum by expanding our assets under management, growing revenue across our credit and real estate businesses and generating strong returns on our investments. Our BDC closed another successful capital raise at NAV, increased its first quarter dividend to 37 cents per share and announced a special dividend in December of 5 cents per share. Additionally, the Great Elm Credit Income Fund (“GECIF”) continued to perform very well, closing December with net inception-to-date returns of approximately 13.9%.1 GECIF’s established track record leaves us well-positioned to attract further capital to scale our investment management platform.”

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“In Real Estate, we were thrilled to announce the acquisition of Greenfield CRE into our newly formed Monomoy Construction Services business. We expect this transaction to enhance our construction management expertise, expand our scope of services, and fortify our overall real estate value proposition to our investors and tenants. Our long-standing relationship with Greenfield will allow us to quickly benefit from the launch of our fully integrated, full-service real estate platform. Importantly, we maintained our commitment to the GEG share repurchase program, continuing to buy back shares at an attractive discount to book value. Looking ahead, we remain focused on executing on our strategic priorities: growing our core credit and real estate businesses, pursuing compelling investment opportunities across our platform and leveraging our strong balance sheet to maximize shareholder value.”

 

GEG Managed Vehicle Highlights

 

 

Discussion of Financial Results for the Fiscal Second Quarter Ended December 31, 2024

 

GEG reported total revenue of $3.5 million, up 24% from $2.8 million in the prior-year period.

 

GEG recorded net income from continuing operations of $1.4 million, compared to a net loss from continuing operations of ($0.2) million in the prior-year period.

 

GEG recorded Adjusted EBITDA of $1.0 million, compared to $0.6 million in the prior-year period.

 

Monomoy CRE, LLC Acquisition

 

On February 4, 2025, Great Elm acquired the assets of Greenfield, a leading construction management company and longstanding partner of MCRE, our real estate investment manager. In connection with the acquisition, Great Elm formed Monomoy Construction Services, LLC and combined the assets of Greenfield with the assets of Monomoy BTS Construction Management to launch an integrated, full-service construction business. With MCS, Monomoy will offer a full-service, in-house suite of project management, procurement, construction management, asset management, market analysis and feasibility services for its industrial real estate tenants.

 

Stock Repurchase Program

 

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In the fiscal first quarter 2025, GEG’s Board of Directors approved an incremental stock repurchase program under which GEG is authorized to repurchase up to $20 million in the aggregate of its outstanding common stock in the open market. As of February 4, 2025, the Company has repurchased approximately 4.1 million shares for $7.4 million under this program.

 

Fiscal 2025 Second Quarter Conference Call & Webcast Information

 

When: Thursday, February 6, 2025, 8:30 a.m. Eastern Time (ET)

 

Call: All interested parties are invited to participate in the conference call by dialing +1 (877) 407-0752; international callers should dial +1 (201) 389-0912. Participants should enter the Conference ID 13746970 if asked.

 

Webcast: The conference call will be webcast simultaneously and can be accessed here. A copy of the slide presentation accompanying the conference call, can be found here.

 

About Great Elm Group, Inc.

 

Great Elm Group, Inc. (NASDAQ: GEG) is a publicly-traded, alternative asset manager 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. Great Elm Group, Inc. and its subsidiaries currently manage Great Elm Capital Corp., a publicly-traded business development company, and Monomoy Properties REIT, LLC, an industrial-focused real estate investment trust, in addition to other investments. Great Elm Group, Inc.’s website can be found at www.greatelmgroup.com.

 

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

 

Statements in this press release that are “forward-looking” statements, including statements regarding expected growth, profitability, acquisition opportunities and outlook involve risks and uncertainties that may individually or collectively impact the matters described herein. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made and represent Great Elm’s assumptions and expectations in light of currently available information. These statements involve risks, variables and uncertainties, and Great Elm’s actual performance results may differ from those projected, and any such differences may be material. For information on certain factors that could cause actual events or results to differ materially from Great Elm’s expectations, please see Great Elm’s filings with the Securities and Exchange Commission (“SEC”), including its most recent annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K. Additional information relating to Great Elm’s financial position and results of operations is also contained in Great Elm’s annual and quarterly reports filed with the SEC and available for download at its website www.greatelmgroup.com or at the SEC website www.sec.gov.

 

Non-GAAP Financial Measures

 

The SEC has adopted rules to regulate the use in filings with the SEC, and in public disclosures, of financial measures that are not in accordance with US GAAP, such as adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). Adjusted EBITDA is derived from methodologies other than in accordance with US GAAP. Great Elm believes that Adjusted EBITDA is an important measure for investors to use in evaluating Great Elm’s businesses. In addition, Great Elm’s management reviews Adjusted EBITDA as they evaluate acquisition opportunities.

 

Adjusted EBITDA has limitations as an analytical tool, and you should not consider it either in isolation from, or as a substitute for, analyzing Great Elm’s results as reported under US GAAP. Non-GAAP financial measures reported by Great Elm may not be comparable to similarly titled amounts reported by other companies.

 

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Included in the financial tables below is a reconciliation of Adjusted EBITDA to the most directly comparable US GAAP financial measure, net income from continuing operations.

 

Endnotes

1 Assumes invested at inception on November 1, 2023, and remained invested throughout the succeeding fourteen months ended December 31, 2024, with distributions reinvested, net of founder’s class fees and expenses. Performance results should not be regarded as final until audited financial statements are issued covering the period shown. Past performance is no guarantee of future results. This press release does not constitute an offer to sell or a solicitation of an offer to buy interests in any investment vehicle managed by Great Elm or its affiliates. Any such offer or solicitation will only be made pursuant to the applicable offering documents for such investment vehicle.

 

 

Media & Investor Contact:

Investor Relations

geginvestorrelations@greatelmcap.com

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Great Elm Group, Inc.

Condensed Consolidated Balance Sheets (unaudited)

Dollar amounts in thousands (except per share data)

ASSETS		December 31, 2024				June 30, 2024
Current assets
Cash and cash equivalents		$	44,288			$	48,147
Restricted cash			-				1,571
Receivables from managed funds			3,725				2,259
Investments in marketable securities			-				9,929
Investments, at fair value			49,918				44,585
Prepaid and other current assets			5,275				1,215
Real estate assets, net			6,524				5,769
Assets of Consolidated Funds:
Cash and cash equivalents			2,568				2,371
Investments, at fair value			11,902				11,471
Other assets			223				253
Total current assets			124,423				127,570
Identifiable intangible assets, net			10,510				11,037
Right-of-use assets			1,784				225
Other assets			1,770				1,614
Total assets		$	138,487			$	140,446
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable		$	185			$	317
Payable for securities purchased			19				-
Accrued expenses and other current liabilities			2,817				7,009
Current portion of related party payables			254				634
Current portion of lease liabilities			335				137
Liabilities of Consolidated Funds:
Payable for securities purchased			340				100
Accrued expenses and other liabilities			151				162
Total current liabilities			4,101				8,359
Lease liabilities, net of current portion			1,442				57
Long-term debt (face value $26,945)			26,231				26,090
Related party payables, net of current portion			-				-
Convertible notes (face value $36,380 and $35,494, including $16,578 and $16,174 held by related parties, respectively)			35,838				34,900
Other liabilities			817				845
Total liabilities			68,429				70,251
Commitments and contingencies
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 29,519,825 shares issued and 27,150,036 outstanding at December 31, 2024; and 31,875,285 shares issued and 30,494,448 outstanding at June 30, 2024			26				30
Additional paid-in-capital			3,311,447				3,315,638
Accumulated deficit			(3,249,139	)			(3,252,954	)
Total Great Elm Group, Inc. stockholders' equity			62,334				62,714
Non-controlling interests			7,724				7,481
Total stockholders' equity			70,058				70,195
Total liabilities and stockholders' equity		$	138,487			$	140,446

 

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Great Elm Group, Inc.

Condensed Consolidated Statements of Operations (unaudited)

Amounts in thousands (except per share data)

 

		For the three months ended December 31,								For the six months ended December 31,
		2024				2023				2024				2023
Revenues		$	3,507			$	2,819			$	7,499			$	6,129
Cost of revenues			458				-				1,093				-
Operating costs and expenses:
Investment management expenses			3,431				2,839				6,489				5,601
Depreciation and amortization			284				283				557				566
Selling, general and administrative			1,306				2,393				3,312				4,108
Expenses of Consolidated Funds			5				-				21				-
Total operating costs and expenses			5,026				5,515				10,379				10,275
Operating loss			(1,977	)			(2,696	)			(3,973	)			(4,146	)
Dividends and interest income			1,567				2,072				3,125				4,058
Net realized and unrealized gain			2,428				1,204				6,206				4,488
Net realized and unrealized gain (loss) on investments of Consolidated Funds			(29	)			114				249				114
Interest and other income of Consolidated Funds			395				128				779				128
Interest expense			(1,030	)			(1,061	)			(2,058	)			(2,123	)
(Loss) income before income taxes from continuing operations			1,354				(239	)			4,328				2,519
Income tax benefit (expense)			-				-				-				-
Net (loss) income from continuing operations			1,354				(239	)			4,328				2,519
Discontinued operations:
Net income from discontinued operations			-				-				-				16
Net (loss) income		$	1,354			$	(239	)		$	4,328			$	2,535
Less: net income attributable to non-controlling interest, continuing operations			178				111				513				111
Net (loss) income attributable to Great Elm Group, Inc.		$	1,176			$	(350	)		$	3,815			$	2,424
Net (loss) income attributable to shareholders per share
Basic		$	0.04			$	(0.01	)		$	0.13			$	0.08
Diluted		$	0.04			$	(0.01	)			0.12				0.08
Weighted average shares outstanding
Basic			27,983				29,889				28,531				29,734
Diluted			28,767				29,889				39,793				30,916

 

 

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Great Elm Group, Inc.

Reconciliation from Net Income (loss) from Continuing Operations to Adjusted EBITDA

Dollar amounts in thousands

 

		Three months ended December 31,								Six months ended December 31,
(in thousands)		2024				2023				2024				2023
Net income (loss) from continuing operations - GAAP		$	1,354			$	(239	)		$	4,328			$	2,519
Interest expense			1,030				1,061				2,058				2,123
Income tax expense (benefit)			-				-				-				-
Depreciation and amortization			284				283				557				566
Non-cash compensation			755				839				1,872				1,726
(Gain) loss on investments			(2,399)				(1,318)				(6,455	)			(4,602)
Change in contingent consideration			-				18				(6	)			36
Adjusted EBITDA		$	1,024			$	644			$	2,354			$	2,368

 

 

 

 

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v3.25.0.1

Document and Entity Information	Feb. 05, 2025
Entity Listings [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Feb. 05, 2025
Entity File Number	001-39832
Entity Registrant Name	Great Elm Group, Inc.
Entity Central Index Key	0001831096
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	85-3622015
Entity Address, Address Line One	3801 PGA Boulevard, Suite 603
Entity Address, City or Town	Palm Beach Gardens
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33410
City Area Code	617
Local Phone Number	375-3006
Entity Emerging Growth Company	false
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Common Stock [Member]
Entity Listings [Line Items]
Title of 12(b) Security	Common stock, par value $0.001 per share
Trading Symbol	GEG
Security Exchange Name	NASDAQ
7.25% Notes due 2027 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	7.25% Notes due 2027
Trading Symbol	GEGGL
Security Exchange Name	NASDAQ

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