GEG

• Alternative Credit & GECC: CEO Jason Reese assumed leadership roles at GECC (Executive Chairman and CEO) to protect and grow NAV. GECC’s net assets increased ~3% sequentially in Q4, with less than 1% of investments in non-accrual status. GECC retired all $18.6 million of 2026 maturing notes, extended its revolving credit facility maturity to 2029, and called an additional $6.5 million of high-cost debt post-quarter. Approximately $39 million remains available under the revolving credit facility.
• Real Estate Platform: Great Elm built an integrated platform via the Kendi Lewis partnership (Monomoy REIT, CRA, BTS, Construction Services). Monomoy REIT completed six acquisitions in Q4 (~$34 million committed capital) and drew the remaining $50 million from a $150 million strategic financing line. Monomoy CRE fees grew 29% YoY in Q4 ($1.1 million). Monomoy BTS sold its third development property for a ~$0.9 million gain and commenced/fourth and fifth projects. Monomoy Construction Services generated ~$0.4 million in Q4 revenue, with a developing pipeline.
• Investments & Capital Allocation: The core related investment returned ~$3 million in distributions in Q4, bringing cumulative distributions to ~$8.6 million against a $5 million original investment, with a ~$2.1 million net gain recognized in Q4. Great Elm repurchased ~265,000 shares in Q4 at an average price of $2.18. Since inception of the program in 2023, ~8.1 million shares have been repurchased for $16.1 million. The board authorized up to $40 million total, leaving ~$24 million capacity.
• Financial Position: Ended FY26 with ~$53.5 million in cash and equivalents, providing flexibility for growth and share repurchases.

• FY27 Priorities: Management stated priorities for fiscal 2027 are to continue growing Assets Under Management (AUM) and fee-related earnings.
• Operational Focus: Emphasis on converting operational progress into stronger, more consistent financial performance and long-term value.
• No Specific Financial Targets: No specific numerical guidance for FY27 revenue, earnings, or AUM growth rates was provided in the transcript. Management highlighted 'improving momentum' across real estate and alternative credit but did not offer quantitative forward-looking estimates beyond the general strategic direction.

The provided transcript does not break down financial performance by specific product segments (e.g., Real Estate vs. Alternative Credit) in absolute dollar terms or revenue contribution percentages. The CFO reports consolidated figures: Q4 revenue was $10.6 million (up 88% YoY), net income was approximately $1.1 million, and adjusted EBITDA was approximately $0.3 million. Fee-paying AUM stood at approximately $590 million (+7% YoY), while total AUM was approximately $771 million (+2% YoY). Management notes that real estate businesses contributed to growth, with Monomoy CRE generating approximately $1.1 million in fees in Q4, but no further segment-specific financial splits are provided.

• Mark-to-Market Volatility: Significant mark-to-market losses occurred due to investments in GECC, where the stock price declined nearly 50% (from $10.67 to $5.45) and the discount to NAV widened from ~12% to ~31%. These losses drove the reported fiscal year loss.
• GECC Performance Dependency: Great Elm’s results are materially impacted by the performance of GECC, requiring active management to protect NAV and generate sustainable income.
• Execution Risk in New Ventures: Monomoy Construction Services ramped slower than anticipated. There is execution risk in scaling the integrated real estate platform and deploying capital effectively.
• Debt Maturity/Liquidity: While GECC improved its liquidity profile, reliance on credit facilities and debt markets presents refinancing risks, though mitigated by extending maturities to 2029.

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