GEG 10-K & 10-Q changes, risk factors and insider trading

Additionally, disruptions in the financial markets in recent years as a result of a variety of factors, including regional bank instability, high inflation and interest rates and tariffs and trade tensions, have increased the spread between the yields realized on risk-free and higher risk securities, resulting in illiquidity in parts of the financial markets, and led to general volatility in the financial markets, including with respect to market prices of publicly traded investments and asset valuations.valuations, higher construction costs, availability of construction financing, declining property values and weakened rental demand. These and future market disruptions and/or illiquidity would be expected to have an adverse effect on our business, financial condition, results of operations and cash flows. Unfavorable economic conditions also would be expected to increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us. These events have limited and could continue to limit our investment originations, limit our ability to grow and have a material negative impact on our operating results and the fair values of our debt and equity investments. As a result, we may experience additional losses on our investments. Decreases in the market values of investments held within the underlying portfolios of managed funds could also lead to decreases in asset-based fee revenues.

We may be required to expend significant additional resources to modify our protective measures or to investigate and remediate vulnerabilities or other exposures, and we may be subject to litigation and financial losses that are either not insured against or not fully covered through any insurance maintained by us. The increased use of smartphones, tablets and other mobile devices as well as cloud computing may also heighten these and other operational risks. We and our third-party providers are or may be the subject of attempted unauthorized access, computer viruses and malware, and cyberattacks designed to disrupt or degrade service or cause other damage and denial of service. Cyberattacks and other cyber incidents are occurring more frequently, are constantly evolving in nature, are becoming more sophisticated and are being carried out by groups and individuals (including criminal hackers, hacktivists, state-sponsored actors, criminal and terrorist organizations, individuals or groups participating in organized crime and insiders), as well as agents powered by artificial intelligence, with a wide range of expertise and motives (including monetization of corporate, payment or other internal or personal data, theft of computing resources, financial fraud, operational disruption, theft of trade secrets and intellectual property for competitive advantage and leverage for political, social, economic and environmental reasons). Such cyberattacks and cyber incidents can take many forms including cyber extortion, denial of service, social engineering, such as impersonation attempts to fraudulently induce employees or others to disclose information or unwittingly provide access to systems or data, introduction of viruses or malware, such as ransomware through phishing emails, website defacement or theft of passwords and other credentials, unauthorized use of computing resources for digital currency mining and business email compromises. There can be no assurance that such unauthorized access or cyber incidents will not occur in the future, and they could occur more frequently and on a larger scale. Legal liability arising from such risks could be significant and may harm our business. Many aspects of our business involve substantial risks of liability. Any failure of our systems, including from cyberattacks, cyber incidents or other reasons, could have a material adverse effect on our business, results of operations, cash flows and financial condition.

Moreover, the revenue we earn from management, incentive and/or administration fees under the IMAs is driven in part by the value of the assets under management at our pooled investment vehicles. If the value of assets under management at any of our pooled investment vehicles declines,declines for any reason, the amount of fees we earn would also decline, which would have an adverse impact on our business, results of operations, cash flows and financial condition. In addition, the pooled investment vehicles we manage may, at their direction, alter their investment strategies, asset allocations, or risk profiles, any of which could result in changes that consequently reduce the management fees, incentive fees, or other revenues we earn from those vehicles. The historical performance of our pooled investment vehicles should not be considered indicative of future results.

We have only recently entered the construction management business. In February,February 2025, we acquired certain assets of Greenfield CRE (Greenfield), a construction management company, which is a new business line for us. Although the Greenfield team became employees of our indirect wholly owned subsidiary, Monomoy Construction Services, LLC (MCS), in connection with the transaction, we do not have prior experience in the construction management industry and as a result, we may not be able to operate the business effectively.

GEG is a publicly-traded alternative asset management company 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. GEG and its subsidiaries currently manage GECC, a publicly-traded BDC, and Monomoy UpREIT, an Industrial Outdoor Storage (ISOIOS) focused real estate investment trust, in addition to other investment vehicles. The combined assets under management of these entities at June 30, 20252026 was approximately $758.5$770.6 million.

InAs Januarypart 2023,of its build-to-suit development initiatives, MBTS completed the purchase ofpurchases certain land parcels in Mississippi and Florida. MBTS completed its third purchase, a land parcel in Florida, in March 2025.parcels. Contemporaneously with the land purchases, MBTS enteredenters 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 developmentsdevelopments. andThe MBTSCompany looksintends to sell the land and improvements with the attached leases at, or subsequent to, the respective lease commencement date. In June 2024, MBTS sold one of its developments and in December 2024, the lease for another development commenced. During the year ended June 30, 2025,2026, GEG capitalized development costs of $3.4$6.5 million attributed to the cost of land and development and construction costs directly identifiable with the real estate projects.

On February 4, 2025, GEG 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 Monomoy Construction Services, LLC (MCS), a wholly owned subsidiary of GEG, and combined Greenfield's assets with the assets of Monomoy BTS Construction Management, LLC (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 financial results of MCS are included in the Company's consolidated results for the period beginning on February 4, 2025.

Critical Accounting Policies and Estimates

GEG is a publicly-traded alternative asset management company 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. GEG and its subsidiaries currently manage GECC, a publicly-traded BDC, and Monomoy UpREIT, an Industrial Outdoor Storage (IOS) focused real estate investment trust, in addition to other investment vehicles. The combined assets under management of these entities at DecemberMarch 31, 20252026 was approximately $740$744 million.

Revenues for the three months ended DecemberMarch 31, 20252026 decreased $0.5$0.2 million as compared to the three months ended DecemberMarch 31, 2024,2025, driven by a decrease in Incentive Fees from the corresponding prior year period. Cost of revenues decreased $0.4 million compared to the three months ended December 31, 2024 due to a decrease in Real Estate cost of revenues as the prior year period had activity related to a property sale, with similar activity not occurring in the current year.

Revenues and cost of revenues for the sixnine months ended DecemberMarch 31, 20252026 increased $6.3$6.5 million and $5.7 million, respectively, as compared to the sixnine months ended DecemberMarch 31, 2024,2025, primarily due to an increase in Real Estate property sales revenues and related cost of revenues due to a September 2025 property sale. The increase in revenues were partially offset by a reduction in Incentive fees of $1.4$1.6 million and an increase in Project management fees of $1.0$1.3 million compared to the prior year period.

Compensation and benefits expenses for the three months ended DecemberMarch 31, 20252026 increased $1.5$1.3 million as compared to the corresponding prior year period primarily driven by increased personnel due to the Greenfield acquisition. Selling, general and administrative expenses for the three months ended DecemberMarch 31, 20252026 increased $0.7$0.2 million as compared to the corresponding prior year period, which was mainly attributable to an increase in expensesstate duefranchise totax theexpense acquisitionand ofother Greenfield.miscellaneous selling, general and administrative expenses.

Compensation and benefits expenses for the sixnine months ended DecemberMarch 31, 20252026 increased $3.2$4.5 million as compared to the corresponding prior year period primarily driven by increased personnel due to the Greenfield acquisition. Selling, general and administrative expenses for the sixnine months ended DecemberMarch 31, 20252026 increased $1.3$1.5 million as compared to the corresponding prior year period, which was mainly attributable to an increase in accounting and tax consulting fees, along with an increase in selling, general and administrative expenses due to the acquisition of Greenfield. Depreciation and amortization increased $0.1 million as compared to the prior year period, primarily due to an increase in depreciation and amortization related to the Greenfield Acquisition.

Other income (expense), net includes dividend and interest income and net realized and unrealized gains and losses. For the sixthree months ended DecemberMarch 31, 2025,2026, net realized and unrealized loss increased $7.4 million as compared to the corresponding prior year period primarily driven by notable unrealized losses being recognized on our three special purpose vehicles in the current year period, along with a significant reduction in stock price for another of our investments during the current year period. For the three months ended March 31, 2026, dividend income decreased $0.2 million as compared to the corresponding prior year period, primarily driven by a decrease in the dividend rate per share held on one of our investments in the current period compared to the dividend rate per share held on one of our investments in the prior year period. For the three months ended March 31, 2026, interest income decreased $0.1 million as compared to the corresponding prior year period, as interest income was earned in the prior year on a loan which was fully paid down in the current year, Other income (expense), net includes dividend and interest income and net realized and unrealized gains and losses. For the nine months ended March 31, 2026, net realized and unrealized gains decreased $20.4$27.9 million to a net realized and unrealized loss as compared to the corresponding prior year period due to a notable unrealized losslosses being recognized on one of our investmentsthree inspecial apurpose private fundvehicles in the current year periodperiod, as opposed to unrealized gains on these special purpose vehicles in the prior year period, along with a significant reduction in stock price for another one of our investments during the current year period, as opposed to an increase in stock price for this investment in the prior year period. Further, a notable unrealized loss was recognized on one of our investments in a private fund in the current year period as opposed to an unrealized gain on this investment in the prior year period. For the sixnine months ended DecemberMarch 31, 2025,2026, interest income decreased $0.4$0.5 million as compared to the corresponding prior year period, due to changes in the investment portfolio shifting away from interest earning marketable securities into other strategic private investments. For the sixnine months ended DecemberMarch 31, 2025,2026, dividend income remaineddecreased flat$0.4 million as compared to the corresponding prior year period, primarily driven by a decrease in the dividend rate per share held on one of our investments in the current period compared to the dividend rate per share held on one of our investments in the prior year period.

Alternative Credit Revenues for the three months ended DecemberMarch 31, 20252026 decreased $0.5$0.2 million as compared to the three months ended DecemberMarch 31, 20242025 due to a $0.4 million reduction in Management Fee and Incentive Fee revenue compared to the prior year period. This reduction was partially offset by a $0.2 million increase in Administration Fee revenue in the current year period compared to the corresponding prior year period.

Alternative Credit Revenues for the sixnine months ended DecemberMarch 31, 20252026 decreased $1.4$1.6 million as compared to the sixnine months ended DecemberMarch 31, 20242025 primarily due to a reduction in Incentive Fee revenue compared to the prior year period.

Alternative Credit compensation and benefits expense decreasedincreased $0.3$47 millionthousand for the three months ended DecemberMarch 31, 20252026 as compared to the corresponding prior year period primarily driven by an increase in personnel which was offset by a decrease in non-cash compensation expense due to a decline in the price of GECC common shares during the current period compared to the prior year period. Alternative Credit segment selling, general and administrative expenses increased $0.1 million as compared to the three months ended DecemberMarch 31, 20242025 primarily driven by an increase in miscellaneous general and administrative expenses.

Alternative Credit compensation and benefits expense decreasedremained $0.1 millionflat for the sixnine months ended DecemberMarch 31, 20252026 as compared to the corresponding prior year period primarily driven by a decrease in non-cash compensation due to a decline in the price of GECC common shares during the current period compared to the prior year period. Alternative Credit segment selling, general and administrative expenses increased $0.2$0.3 million as compared to the sixnine months ended DecemberMarch 31, 20242025 primarily driven by an increase in software expense and other miscellaneous general and administrative expenses.

Real Estate revenues for the sixnine months ended DecemberMarch 31, 20252026 increased $7.7$8.1 million as compared to the sixnine months ended DecemberMarch 31, 20242025 primarily due to a property sale occurring in September 2025 which did not occur in the prior year period.2025. Related costs of revenues for the sixnine months ended DecemberMarch 31, 20252026 increased by $5.7 million compared to the sixnine months ended DecemberMarch 31, 20242025 due to this sale. Further, $1.1$1.8 million of revenue was recognized in the sixnine months ended DecemberMarch 31, 20252026 related to our construction businessbusiness, whichcompared wasto not$0.3 incurredmillion in the corresponding prior year period.period due to the growth in construction business from Greenfield acquisition that occurred in February 2025.

Real Estate segment compensation and benefits expenses for the three months ended DecemberMarch 31, 20252026 increased $1.6$1.3 million as compared to the corresponding prior year period driven by increased personnel expense due to the Greenfield acquisition. Real Estate segment selling, general and administrative expenses increased $0.3 million for the three months ended December 31, 2025 compared to the three months ended December 31, 2024 primarily due to an increase in expenses related to the Greenfield Acquisition.

Real Estate segment compensation and benefits expenses for the sixnine months ended DecemberMarch 31, 20252026 increased $3.2$4.4 million as compared to the corresponding prior year period driven by increased personnel expense due to the Greenfield acquisition. Real Estate segment selling, general and administrative expenses increased $0.9$0.8 million for the sixnine months ended DecemberMarch 31, 20252026 compared to the sixnine months ended DecemberMarch 31, 20242025 primarily due to increased legal, accounting, insurance, software and other expenses due to increased activity at these entities and the Greenfield acquisition. Depreciation and amortization increased $0.1$53 millionthousand for the sixnine months ended DecemberMarch 31, 2025,2026, as compared to the corresponding prior year period due to amortization of intangible assets related to the Greenfield acquisition, along with depreciation related to a building owned which was not complete in the prior year period.acquisition.

Compensation and benefits expenses related to Corporate & Other for the three months ended DecemberMarch 31, 20252026 remained flat as compared to the corresponding prior year period. Selling, general and administrative expenses increased $0.2 million as compared to the corresponding prior year period duewhich was mainly attributable to an increase in personnelstate atfranchise thetax Corporate office.expense.

Compensation and benefits expenses related to Corporate & Other for the sixnine months ended DecemberMarch 31, 20252026 increased $0.1 million as compared to the corresponding prior year period due to an increase in personnelstock atbased compensation expense due to increase in stock price compared to the Corporateprior office.year period.

Corporate & Other Expenses - Other Income and Expenses

For the three months ended DecemberMarch 31, 2025, net realized and unrealized gains decreased $13.8 million to a2026, net realized and unrealized loss asincreased $7.4 million compared to the corresponding prior year period dueprimarily todriven aby significantnotable unrealized losslosses being recognized on one of our investmentsthree special purpose vehicles in athe privatecurrent fund,year period, along with a significant reduction in stock price for another of our investments during the current year period,period. For the three months ended March 31, 2026, dividend income decreased $0.2 million as opposedcompared to anthe increasecorresponding prior year period, primarily driven by a decrease in stockthe pricedividend forrate thisper investmentshare held in the current period compared to the dividend rate per share held in the prior year period. Additionally, in the corresponding prior year period $1.0 million of unrealized gains were recorded for our special purpose vehicles, whereas in current year period unrealized losses of $3.0 million were recorded on these entities. For the three months ended DecemberMarch 31, 2025,2026, interest income decreased $0.1 million as compared to the corresponding prior year period, dueas tointerest changesincome was earned in the investmentprior portfolioyear shiftingon awaya fromloan interestwhich earningwas marketablefully securitiespaid intodown otherin strategicthe privatecurrent investments.year.

For the sixnine months ended DecemberMarch 31, 2025,2026, net realized and unrealized gains decreased $20.4$27.9 million to a net realized and unrealized loss as compared to the corresponding prior year period due to notable unrealized losses being recognized on our three special purpose vehicles in the current year period, as opposed to unrealized gains on these special purpose vehicles in the prior year period, along with a significant reduction in stock price for another one of our investments during the current year period, as opposed to an increase in stock price for this investment in the prior year period. Further, a notable unrealized loss was recognized on one of our investments in a private fund, along with a decreasefund in stock price for another of our investments during the current year period,period whereasas theopposed stockto pricean increasedunrealized forgain on this investment in the prior year period. Additionally, inFor the corresponding prior year period $4.5 million of unrealized gains were recorded for our special purpose vehicles due to a change in valuation technique for these entities during the threenine months ended September 30, 2024, whereas in the current year period unrealized losses of $3.4 million were recorded on these entities. For the six months ended DecemberMarch 31, 2025,2026, interest income decreased $0.4$0.5 million as compared to the corresponding prior year period, due to changes in the investment portfolio shifting away from interest earning marketable securities into other strategic private investments. For the nine months ended March 31, 2026, dividend income decreased $0.4 million as compared to the corresponding prior year period, primarily driven by a decrease in the dividend rate per share held on one of our investments in the current period compared to the dividend rate per share held on one of our investments in the prior year period.

Net cash from operating activities increased $11.8$18.9 million, from net cash used of $9.8$11.2 million for the sixnine months ended DecemberMarch 31, 20242025 to net cash provided of $1.9$7.8 million for the sixnine months ended DecemberMarch 31, 2025,2026, driven by proceeds from sale of real estate in September 2025 and changes in operating assets and liabilities period-over-period.

Net cash from investing activities increased $2.0$12.8 million, from net cash providedused of $9.9$0.8 million for the sixnine months ended DecemberMarch 31, 20242025 to net cash provided of $11.9$12.0 million for the sixnine months ended DecemberMarch 31, 2025,2026, driven by settlement of related party loan receivable and net sales of investments for the sixnine months ended DecemberMarch 31, 2025.2026.

Net cash from financing activities increased $12.3$1.4 million, from net cash used of $5.5$6.2 million for the sixnine months ended DecemberMarch 31, 20242025 to net cash providedused of $6.8$4.8 million for the sixnine months ended DecemberMarch 31, 2025,2026, driven by distributions and redemptions of non-controlling interests in Consolidated Funds during the nine months ended March 31, 2026. These were partially offset by proceeds from issuance of common stock and lower stock repurchases during the sixnine months ended DecemberMarch 31, 2025.2026.

As of DecemberMarch 31, 2025,2026, we had an unrestricted cash balance of $51.2$45.5 million, as compared to an unrestricted cash balance of $30.6 million as of June 30, 2025. We also held 1,356,125 shares of GECC common stock with an estimated fair value of $9.6$6.8 million as of DecemberMarch 31, 2025,2026, as compared to 1,438,079 shares of GECC common stock with an estimated fair value of $15.3 million as of June 30, 2025. We believe we have sufficient liquidity available to meet our short-term and long-term obligations.

As of DecemberMarch 31, 2025,2026, the Company had $26.9 million in outstanding aggregate principal amount of the GEGGL Notes. The GEGGL Notes are due on June 30, 2027, and interest is paid quarterly. The GEGGL Notes include covenants that limit additional indebtedness or the payment of dividends in the event that our net consolidated debt to equity ratio is, or would be on a pro forma basis, greater than 2 to 1. In addition, if our net consolidated debt to equity ratio is greater than 2 to 1 at the end of any calendar quarter, we must retain no less than 10% of our excess cash flow as cash and cash equivalents until such time as our net consolidated debt to equity ratio is less than 2 to 1 at the end of a calendar quarter.

As of DecemberMarch 31, 2025,2026, the Company had $35.9 million principal balance in outstanding Convertible Notes (including cumulative interest paid in-kind) held by a consortium of investors, including related parties, that accrue interest at 5.0% per annum, payable semiannually in arrears on June 30 and December 31, in cash or in-kind at the option of the Company. The Convertible Notes are due on February 26, 2030, but are convertible at the option of the holders, subject to the terms therein, prior to maturity into shares of our common stock. Upon conversion of any note, the Company will pay or deliver, as the case may be, to the noteholder, in respect of each $1,000 principal amount of notes being converted, shares of common stock equal to the conversion rate in effect on the conversion date, together with cash, if applicable, in lieu of delivering any fractional share of common stock. To date, all interest on these instruments has been paid in-kind.

During the sixnine months ended DecemberMarch 31, 20252026 we did not make material changes in our critical accounting policies or underlying assumptions as disclosed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025 as it relates to normal and recurring transactions. Critical accounting policies and estimates are those that require management’s most difficult, subjective or complex judgments and would therefore be deemed the most critical to an understanding of our results of operations and financial condition.