Great Elm Group, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

December 31, 2025

1. Organization

Great Elm Group, Inc. (referred to as the Companyor 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 condensed 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) and Monomoy BTS Corporation (MBTS). 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 14 - 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:

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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

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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

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions for Form 10-Q and, therefore, do not include all information and footnotes that are normally included in the Company’s Form 10-K and should be read in conjunction with the audited consolidated financial statements and notes thereto, which are included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2025. The Company’s significant accounting policies, which have been consistently applied, are summarized in those financial statements. These financial statements reflect all adjustments (consisting of normal and recurring items or items discussed herein) that management believes are necessary to fairly state results for the interim periods presented. Results of operations for interim periods are not necessarily indicative of annual results of operations.

Certain prior period comparative amounts have been reclassified to conform to the 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.

Use of Estimates

The preparation of these financial statements in accordance with accounting principles generally accepted in the United States of America (US 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 asset acquisitions, and fair value measurements, including stock-based compensation. Although these and other estimates and assumptions are based on the best available information, actual results could be different from these estimates.

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. In most cases, a controlling financial interest reflects ownership of a majority of the voting interests. We consolidate a variable interest entity (VIE) when we possess both the power to direct the activities of the VIE that most significantly impact its economic performance and the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the VIE.

All intercompany accounts and transactions have been eliminated in consolidation.

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 14 - 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 condensed consolidated financial statements. Results of operations attributable to the non-controlling interests are included in the Company’s condensed consolidated statements of operations.

Recently Issued Accounting Standards

Income Taxes. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, 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 does not expect the additional disclosure requirements under ASU 2023-09 to have a material impact on the condensed consolidated financial statements.

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 Expensesto 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 condensed 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 condensed consolidated financial statements.

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 condensed 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 unaudited condensed 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 condensed consolidated financial statements and related disclosures.

3. Acquisition

Greenfield 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 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 allocated the purchase price of Greenfield to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair value as follows:

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.

4. Revenue

The Company's revenues are summarized in the following table:

The Company recognizes revenue at amounts that reflect the consideration to which it expects to be entitled in exchange for providing services to its customers under agreements with each investment product, which may be terminated at any time by either party subject to the specific terms of each respective agreement.

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 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. As such, these fees are considered constrained until the end of the contractual measurement period (monthly or quarterly), 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 Monomoy Properties II, LLC (MP II), a feeder fund of Monomoy Properties REIT, LLC (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.

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 condensed 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.

The following tables summarize activity and outstanding balances between the managed investment products and the Company:

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 December 31, 2025, the Company owns 1,356,125 shares of GECC (approximately 9.7% of the outstanding shares). Certain officers and directors of GECC are also officers and directors of GEG. Matthew A. Drapkin is a director of our Board of Directors and also the Chairman of GECC's Board of Directors, Adam M. Kleinman is our President, as well as the Chief Compliance Officer of GECC, Matt Kaplan is the President of GECM, as well as the President and Chief Executive Officer of GECC, and Keri A. Davis is our Chief Financial Officer, as well as the Chief Financial Officer of GECC.

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 in $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 condensed consolidated balance sheets. GESP owns 1,558,260 shares of GECC as of December 31, 2025.

In June 2024, the Company invested in $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 condensed consolidated balance sheets. PPH owns 872,506 shares of GECC as of December 31, 2025.

In December 2024, the Company invested in $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 condensed consolidated balance sheets. SGP owns 969,527 shares of GECC as of December 31, 2025.

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, and Matt Kaplan, the President of GECM, is also a Managing Director 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 condensed consolidated statements of operations. For the three and six months ended December 31, 2025, such costs were$0.2 million and$0.3 million, respectively. For the three and six months ended December 31, 2024, such costs were$0.1 million and$0.3 million, respectively. 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 condensed consolidated balance sheets. As of June 30, 2025, $15 thousand of expenses related to the shared services agreements were included in receivables from managed funds.

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 three months ended December 31, 2025 GECM didnot contribute to these sales. During thesix months ended December 31, 2025, GECM contributed approximately$0.1 million to these sales.

See Note 12 - 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 thesix months ended December 31, 2025,$0.1 million of interest income was recognized related to the Monomoy Note.

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$0.1 million and$0.8 million for the three and six months ended December 31, 2025, respectively. There wereno purchases from related party vendors during the three andsix months ended December 31, 2024.

6. Fair Value Measurements

GAAP provides a framework for measuring fair value on either a recurring or non-recurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value:

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Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

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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.

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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 Funds varied 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 to determine fair value and are classified as Level 3. As of December 31, 2025, the Company had equity investments in three private companies that were valued using a discounted cash flows model with discount rates ranging from 9.9% -11.4% (weighted average 10.6%). As of June 30, 2025, the Company had equity investments in three private companies 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 December 31, 2025 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.

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.

Investments at Fair Value, held by the Company

The assets and liabilities measured at fair value on a recurring andnon-recurring basis are summarized in the tables below:

There wereno transfers between levels of the fair value hierarchy during the three andsix months ended December 31, 2025 and 2024.

The following is a reconciliation of changes in Level 3 assets:

The following is a reconciliation of changes in Level 3 liabilities:

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 condensed 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 condensed 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 condensed 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:

The following is a reconciliation of changes in fair value of Level 3 assets of Consolidated Funds:

(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 December 31, 2025 and June 30, 2025.

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 14 - 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 includestwo 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:

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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

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Real Estate - full service, end-to-end real estate platform combining investment expertise and turnkey execution capabilities for industrial outdoor storage (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 condensed 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 tables provide the operating financial results of our operating segments for the three andsix months ended December 31, 2025 and December 31, 2024:

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 December 31, 2025 and June 30, 2025:

During the three and six months ended December 31, 2025, the Company recorded amortization expense of$0.3 million and$0.6 million, respectively within depreciation and amortization on the condensed consolidated statements of operations. During the three and six months ended December 31, 2024 the Company recorded amortization expense of$0.3 million and$0.5 million, respectively, within depreciation and amortization on the condensed consolidated statements of operations.

The following table provides the estimated aggregate amortization expense for each of the five succeeding fiscal years and thereafter:

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.

In December 2024, a development was completed and the lease commenced. Upon completion, the Company began to depreciate the asset over its expected useful life of 39 years. In September 2025, the Company completed the sale of this property for consideration totaling $7.0 million. During thesix months ended December 31, 2025, the Company recognized depreciation expense totaling approximately$28 thousand in connection with the asset. There wasno lease income relating to lease payments for thethree months ended December 31, 2025. There was$0.1 million of lease income relating to lease payments for the six months ended December 31, 2025.

During the three and six months ended December 31, 2025, the Company capitalized costs of$1.6 million and$3.5 million, respectively, within real estate assets, net on its condensed consolidated balance sheet, representing the development and construction costs directly identifiable with the real estate projects. During the three and six months ended December 31, 2024, the Company capitalized costs of$1.2 million and$1.3 million, respectively.

11. 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:

Deferred financing costs are amortized to interest expense on a straight-line basis over thefive-year term of the loan. During the three andsix months ended December 31, 2025, the Company incurred interest expense of$0.6 million and$1.1 million, respectively. During the three and six months ended December 31, 2024, the Company incurred interest expense of$0.6 million and$1.1 million, respectively. See Note 5 - Related Party Transactions for interest expense on the Monomoy Note. See Note 12 - Convertible Notes for interest expense on Convertible Notes.

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 December 31, 2025, our net consolidated debt to equity ratio is 0.2:1.0. The fair value of the GEGGL Notes as of December 31, 2025 and 2024 were$26.5 million and$26.1 million, respectively.

12. Convertible Notes

As of December 31, 2025 and June 30, 2025, the total outstanding principal balance of convertible notes due on February 26, 2030 (the Convertible Notes) was$35.9 million and$35.1 million, including cumulative interest paid in-kind. The Convertible Notes are held by a consortium of investors, including$17.4 million issued to certain related parties as of December 31, 2025.

The Convertible Notes 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. Each $1,000 principal amount of the Convertible Notes are 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. As of December 31, 2025, funds managed by ICAM owned approximately$8.5 million aggregate principal amount of the Convertible Notes, which were convertible into approximately 2,460,115 shares of the Company’s common stock as of such date. Such funds managed by ICAM have agreed to not convert their Convertible Notes into shares of the Company’s common stock prior to November 2026. As of December 31, 2025, Mr. Drapkin and funds managed by Northern Right Capital Management, L.P. (Northern Right) owned approximately$8.0 million aggregate principal amount of the Convertible Notes, which were convertible into approximately 2,306,367 shares of the Company's common stock as of such date. 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 2026. In addition, a third party noteholder, PC Elfun, LLC (PC Elfun), was issued$11.7 million of Convertible Notes which were convertible into approximately 3,085,237 shares of the Company’s common stock as of December 31, 2025, as PC Elfun has agreed not to convert its notes into shares of the Company's common stock if such conversion would cause them to beneficially own in excess of 9.9% of the number of Common shares outstanding immediately after giving effect to such conversion.

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. The debt issuance costs are being amortized over the 10-year term and are netted with the principal balance on our condensed consolidated balance sheets. As of December 31, 2025 and June 30, 2025, the remaining balance of unamortized debt issuance costs was$0.4 million and$0.5 million, respectively.

During the three and six months ended December 31, 2025, the Company incurred interest expense of$0.5 million and$0.9 million, respectively, related to the Convertible Notes, inclusive of non-cash interest related to amortization of debt issuance costs. During the three and six months ended December 31, 2024, the Company incurred interest expense of$0.5 million and$0.9 million, respectively, related to the Convertible Notes.

13. Earnings per Share

The following table presents the calculation of basic and diluted net income (loss) per share:

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.

14. Equity Transactions

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 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, Great Elm Real Estate Ventures, LLC, a Delaware limited liability company (REV). 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 a Profits Interest Agreement (the Profits Interest Agreement), dated July 31, 2025, 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 1.0% for each $10.0 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 20%. 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.

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 aten-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 aten-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 theone-year anniversary of the original issuance date and the Series B Warrants are exercisable at any time on or after thethree-year anniversary of the original issuance date. Each of the Series A Warrants and Series B Warrants have aten-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.

15. Share-Based and Other Non-Cash Compensation

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 thesix months ended December 31, 2025:

Restricted stock awards and restricted stock units have vesting terms between 1-4 years and are subject to service requirements. During thesix months ended December 31, 2025, the Company granted 672,236 restricted stock awards and didnot grant any shares of restricted stock units.

Stock Options

The following table presents activity related to the Company’s stock options for thesix months ended December 31, 2025:

Stock-Based Compensation Expense

Stock-based compensation expense related to all restricted stock awards, restricted stock units, and stock options totaled$0.6 million and$1.2 million for the three and six months ended December 31, 2025, respectively. Stock-based compensation expense related to all restricted stock awards, restricted stock units, and stock options totaled$0.4 million and$1.0 million for the three and six months ended December 31, 2024, respectively. As of December 31, 2025, the Company had unrecognized compensation costs related to all unvested restricted stock awards and stock options totaling$2.4 million.

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 December 31, 2025, 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, 2025, 2024 and 2023 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 six months ended December 31, 2025 was $1.1 million, of which $0.3 million vested immediately, and the balance will vest annually pro-rata overtwo andthree-year periods. Related compensation expense was$0.5 million for the six months ended December 31, 2025. The total value of GECC shares awarded for thesix months ended December 31, 2024 was $1.3 million, of which $0.3 million vested immediately, and the balance will vest annually pro-rata overtwo- andthree-year periods. Related compensation expense was$0.4 million and$0.8 million for the three and six months ended December 31, 2024.

During the years ended June 30, 2025, 2024 and 2023, 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 years ended June 30, 2025, 2024 and 2023 was$0.8 million, which vest on the third anniversary of the grant date. Related compensation expense was$0.1 million and$0.2 million, respectively, for the three and six months ended December 31, 2025. Related compensation expense was$0.1 million and$0.1 million, respectively, for the three and six months ended December 31, 2024.

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$41 thousand and$0.1 million for the three and six months ended December 31, 2025.

16. Income Taxes

As of June 30, 2025, the Company had net operating loss (NOL) carryforwards for federal income tax purposes of approximately $8.6 million, of which approximately $1.5 million will expire in fiscal year 2038 if unutilized and $7.1 million can be carried forward indefinitely. As of June 30, 2025, the Company also had $7.5 million of state NOL carryforwards, principally in Massachusetts, that will expire from 2037 to 2045.

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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