Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Sep. 30, 2022 | Nov. 07, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | Great Elm Group, Inc. | |
Entity Central Index Key | 0001831096 | |
Current Fiscal Year End Date | --06-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 30,022,424 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity File Number | 001-39832 | |
Entity Tax Identification Number | 85-3622015 | |
Entity Address, Address Line One | 800 South Street | |
Entity Address, Address Line Two | Suite 230 | |
Entity Address, City or Town | Waltham | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02453 | |
City Area Code | 617 | |
Local Phone Number | 375-3006 | |
Document Quarterly Report | true | |
Entity Incorporation, State or Country Code | DE | |
Entity Interactive Data Current | Yes | |
Document Transition Report | false | |
Common Stock | ||
Document Information [Line Items] | ||
Title of each class | Common Stock, par value $0.001 per share | |
Trading Symbol | GEG | |
Security Exchange Name | NASDAQ | |
7.25% Notes due 2027 | ||
Document Information [Line Items] | ||
Title of each class | 7.25% Notes due 2027 | |
Trading Symbol | GEGGL | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 23,265 | $ 23,595 |
Accounts receivable | 5,854 | 5,867 |
Related party receivables | 2,578 | 2,445 |
Investments, at fair value (cost $62,531 and $68,766, respectively) | 40,624 | 48,042 |
Inventories | 1,017 | 898 |
Prepaid and other current assets | 1,391 | 1,050 |
Assets of Consolidated Fund - Investments, at fair value | 1,797 | |
Assets of Consolidated Fund - Prepaid expenses | 746 | |
Total current assets | 74,729 | 84,440 |
Property and equipment, net | 503 | 538 |
Equipment held for rental, net | 7,923 | 7,504 |
Identifiable intangible assets, net | 18,592 | 19,171 |
Goodwill | 52,463 | 52,463 |
Right of use assets | 3,815 | 3,722 |
Other assets | 253 | 249 |
Total assets | 158,278 | 168,087 |
Current liabilities: | ||
Accounts payable | 6,340 | 6,038 |
Accrued expenses and other liabilities | 5,814 | 7,389 |
Deferred revenue | 1,250 | 1,218 |
Current portion of related party payables | 73 | 486 |
Current portion of lease liabilities | 1,684 | 1,559 |
Current portion of related party notes payable | 5,661 | |
Current portion of equipment financing debt | 3,909 | 2,993 |
Liabilities of Consolidated Fund - accrued expenses and other | 11 | |
Total current liabilities | 24,731 | 19,694 |
Lease liabilities, net of current portion | 2,342 | 2,375 |
Long term debt (face value $26,945) | 25,597 | 25,532 |
Related party payables | 1,050 | 1,120 |
Related party notes payable, net of current portion | 6,270 | |
Convertible notes (face value $36,085, including $14,653 and $15,133 held by related parties, respectively) | 35,216 | 35,187 |
Redeemable preferred stock of subsidiaries (held by related parties, face value $35,417 and $35,824, respectively) | 34,450 | 34,747 |
Other liabilities | 977 | 908 |
Total liabilities | 124,363 | 125,833 |
Commitments and Contingencies (Note 15) | ||
Contingently redeemable non-controlling interest | 2,887 | 2,225 |
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 30,046,829 shares issued and 28,774,320 outstanding at September 30, 2022; and 28,932,444 shares issued and 28,507,490 outstanding at June 30, 2022 | 29 | 29 |
Additional paid-in-capital | 3,313,597 | 3,312,763 |
Accumulated deficit | (3,287,587) | (3,279,296) |
Total Great Elm Group, Inc. stockholders' equity | 26,039 | 33,496 |
Non-controlling interests | 4,989 | 6,533 |
Total stockholders' equity | 31,028 | 40,029 |
Total liabilities, non-controlling interest and stockholders' equity | $ 158,278 | $ 168,087 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 |
Statement of Financial Position [Abstract] | ||
Investments, cost basis | $ 62,531 | $ 68,766 |
Investments, cost basis | 0 | 2,432 |
Long term debt, face value | 26,945 | |
Convertible notes, face value | 36,085 | 36,085 |
Convertible notes payable to related party non-current | 14,653 | 15,133 |
Redeemable preferred stock held by related parties | $ 35,417 | $ 35,824 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 350,000,000 | 350,000,000 |
Common stock, shares issued | 30,046,829 | 28,932,444 |
Common stock, shares outstanding | 28,774,320 | 28,507,490 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues: | ||
Rental income | $ 5,691 | $ 5,479 |
Revenues | 18,579 | 16,538 |
Operating costs and expenses: | ||
Durable medical equipment other operating expenses | 8,971 | 6,253 |
Depreciation and amortization | 681 | 562 |
Selling, general and administrative | 1,487 | 1,573 |
Expenses of Consolidated Fund | 46 | 52 |
Total operating costs and expenses | 19,564 | 15,537 |
Operating (loss) income | (985) | 1,001 |
Dividends and interest income | 1,473 | 653 |
Net realized and unrealized loss on investments | (6,797) | (14) |
Net realized and unrealized loss on investments of Consolidated Fund | (16) | (189) |
Interest expense | (1,996) | (1,362) |
Extinguishment of debt | (23) | |
Other income, net | 1 | 16 |
(Loss) income before income taxes | (8,343) | 105 |
Income tax (expense) benefit | (196) | 1 |
Net (loss) income | (8,539) | 106 |
Less: net (loss) income attributable to non-controlling interest | (248) | 306 |
Net loss attributable to Great Elm Group, Inc. | $ (8,291) | $ (200) |
Earnings Per Share [Abstract] | ||
Basic loss per share | $ (0.29) | $ (0.01) |
Diluted loss per share | $ (0.29) | $ (0.01) |
Weighted average shares outstanding, Basic | 28,543 | 25,982 |
Weighted average shares outstanding, Diluted | 28,543 | 25,982 |
Durable Medical Equipment Sales and Services Revenue | ||
Revenues: | ||
Revenue from contract with customer | $ 11,028 | $ 10,076 |
Operating costs and expenses: | ||
Total operating costs and expenses | 4,340 | 4,060 |
Durable Medical Equipment Rental Income | ||
Revenues: | ||
Rental income | 5,691 | 5,479 |
Operating costs and expenses: | ||
Total operating costs and expenses | 2,050 | 1,850 |
Investment Management Revenue | ||
Revenues: | ||
Revenue from contract with customer | 1,860 | 983 |
Operating costs and expenses: | ||
Total operating costs and expenses | $ 1,989 | $ 1,187 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Depreciation expense | $ 1,990 | $ 1,831 |
Net of CARES Act Stimulus | 2,321 | |
Net of CARES Act Stimulus | 84 | |
Durable Medical Equipment Rental Income | ||
Depreciation expense | $ 1,889 | $ 1,688 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity and Contingently Redeemable Non-controlling Interest (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Great Elm Group Inc. Stockholders' Equity | Non-controlling Interest |
Beginning balance at Jun. 30, 2021 | $ 52,785 | $ 26 | $ 3,307,613 | $ (3,264,403) | $ 43,236 | $ 9,549 |
Beginning balance (in shares) at Jun. 30, 2021 | 25,948,000 | |||||
Beginning balance, Contingently redeemable non-controlling interest at Jun. 30, 2021 | 2,639 | |||||
Net (loss) income | (99) | (200) | (200) | 101 | ||
Net (loss) income, Contingently redeemable non-controlling interest | 205 | |||||
Issuance of interests in Consolidated Funds, net | 527 | 527 | ||||
Issuance of common stock related to vesting of restricted stock (in shares) | 145,000 | |||||
Stock-based compensation | 581 | 581 | 581 | |||
Ending balance at Sep. 30, 2021 | 53,794 | $ 26 | 3,308,194 | (3,264,603) | 43,617 | 10,177 |
Ending balance (in shares) at Sep. 30, 2021 | 26,093,000 | |||||
Ending balance, Contingently redeemable non-controlling interest at Sep. 30, 2021 | 2,844 | |||||
Beginning balance at Jun. 30, 2022 | $ 40,029 | $ 29 | 3,312,763 | (3,279,296) | 33,496 | 6,533 |
Beginning balance (in shares) at Jun. 30, 2022 | 28,507,490 | 28,507,000 | ||||
Beginning balance, Contingently redeemable non-controlling interest at Jun. 30, 2022 | $ 2,225 | |||||
Net (loss) income | (9,201) | (8,291) | (8,291) | (910) | ||
Net (loss) income, Contingently redeemable non-controlling interest | 662 | |||||
Distributions to non-controlling interests in Consolidated Fund | (634) | (634) | ||||
Issuance of common stock related to vesting of restricted stock (in shares) | 267,000 | |||||
Stock-based compensation | 834 | 834 | 834 | |||
Ending balance at Sep. 30, 2022 | $ 31,028 | $ 29 | $ 3,313,597 | $ (3,287,587) | $ 26,039 | $ 4,989 |
Ending balance (in shares) at Sep. 30, 2022 | 28,774,320 | 28,774,000 | ||||
Ending balance, Contingently redeemable non-controlling interest at Sep. 30, 2022 | $ 2,887 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (8,539) | $ 106 |
Adjustments to reconcile net (loss) income to net cash from operating activities: | ||
Depreciation and amortization | 2,569 | 2,250 |
Stock-based compensation | 834 | 581 |
Sales of investments by Consolidated Fund | 1,558 | 2,620 |
Purchases of investments by Consolidated Fund | (3,276) | |
Unrealized loss on investments from Consolidated Fund | 90 | |
Realized loss on investments from Consolidated Fund | 16 | 99 |
Unrealized loss (gain) on investments | 1,182 | (639) |
Realized loss on investments | 5,615 | 653 |
Non-cash interest and amortization of capitalized issuance costs | 146 | 90 |
Loss on extinguishment of debt | 23 | |
Deferred tax expense (benefit) | 172 | (1) |
Other non-cash expense, net | 158 | 561 |
Gain on sale of equipment held for rental | (106) | (43) |
Change in fair value of contingent consideration | (58) | (163) |
Changes in operating assets and liabilities: | ||
Related party receivables | (133) | (326) |
Accounts receivable | 13 | 974 |
Inventories | (119) | (5) |
Prepaid assets, deposits, and other assets | 401 | (1,372) |
Operating leases | (1) | (568) |
Deferred revenue | 32 | (1,159) |
Accounts payable, accrued expenses and other liabilities | (1,739) | (1,506) |
Net cash provided by (used in) operating activities | 2,024 | (1,034) |
Cash flows from investing activities: | ||
Acquisition of businesses, net of cash acquired | (1,250) | |
Purchases of investments | (165) | |
Sales of investments | 187 | |
Purchases of equipment held for rental | (2,535) | (2,501) |
Proceeds from sale of equipment held for rental | 339 | 606 |
Purchases of property and equipment | (74) | (48) |
Net cash used in investing activities | (2,270) | (3,171) |
Cash flows from financing activities: | ||
Principal payments on equipment financing | (1,746) | (1,155) |
Proceeds from equipment financing | 2,662 | 2,083 |
Due to broker of Consolidated Fund | 186 | |
Redemption of redeemable preferred stock of subsidiary | (366) | |
Distributions to non-controlling interests in consolidated fund | (634) | |
Capital contributions from non-controlling interests in Consolidated Fund | 500 | |
Net cash (used in) provided by financing activities | (84) | 1,614 |
Net decrease in cash and cash equivalents | (330) | (2,591) |
Cash and cash equivalents at beginning of period | 23,595 | 24,382 |
Cash and cash equivalents at end of period | 23,265 | 21,791 |
Cash paid for interest | 1,353 | 831 |
Non-cash investing and financing activities | ||
Lease liabilities and right of use assets arising from operating leases | 552 | 504 |
Partial settlement of Seller Note in exchange for GECC stock | 609 | |
Non-cash distributions received from Consolidated Fund | $ 177 | |
Contingent consideration | $ 497 |
Organization
Organization | 3 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | 1. Organization Great Elm Group, Inc. (referred to as the Company or GEG ) is a holding company incorporated in Delaware. The Company currently has two business operating segments: durable medical equipment and investment management, with general corporate representing unallocated costs and activity to arrive at consolidated operations. The Company is pursuing business development opportunities in durable medical equipment, investment management and other industries. Investment Management On September 27, 2016, the Company’s wholly-owned SEC-registered investment advisor subsidiary Great Elm Capital Management, Inc. ( GECM ), a Delaware corporation, entered into an investment management agreement with Great Elm Capital Corp. ( GECC ), a publicly-traded business development company incorporated in Maryland. On May 4, 2022, GECM acquired the investment management agreement of Monomoy Properties UpREIT, LLC ( Monomoy UpREIT ), the operating subsidiary of Monomoy Properties REIT, LLC, from Imperial Capital Asset Management, LLC ( ICAM ). Formed in 2014, Monomoy Properties REIT, LLC is a private real estate investment trust founded by ICAM, with a 123-property portfolio of diversified net leased industrial assets. The Company earns revenue through the investment management agreements of these and other private investment vehicles which provide for management fees, property management fees, incentive fees, and administration and service fees. Durable Medical Equipment On September 7, 2018, the Company, through its wholly-owned subsidiary, Great Elm DME Holdings, Inc. ( DME Holdings ), acquired an 80.1 % equity interest in Great Elm DME, Inc. ( DME Inc. ) an entity formed to acquire and combine two companies, Valley Healthcare Holding, LLC and Northwest Medical, LLC., which both specialize in the distribution of respiratory care equipment, including primarily positive air pressure equipment and supplies, ventilators and oxygen equipment and operate in Arizona, Nebraska, Oregon, Washington and Alaska. The Company has subsequently expanded its durable medical equipment business to Kansas, Iowa, and Missouri through acquisitions in 2019 and 2021. On May 31, 2021, DME Holdings exchanged their 80.1 % interests in DME Inc. for an identical 80.1 % direct interest in DME Inc.’s subsidiary Great Elm Healthcare, LLC ( HC LLC ), which is the sole owner of the durable medical equipment operating subsidiaries. Following the consummation of the taxable reorganization, the Company no longer has an interest in DME Inc. General Corporate On December 29, 2020, the Company completed a reorganization of the Company's corporate structure, where Great Elm Capital Group, Inc. changed its name to Forest Investments, Inc. ( Forest ) and became a wholly owned subsidiary of a new holding company, Great Elm Group, Inc. Outstanding shares of Forest under the ticker symbol “GEC” were automatically converted into shares of common stock of Great Elm Group, Inc., ticker symbol “GEG”. Forest common stock was then delisted from the NASDAQ Global Select Market and subsequently deregistered under Section 12(b) of the Securities Exchange Act of 1934, as amended. The reorganization was a tax-free transaction for U.S. federal income tax purposes for the Company’s shareholders. The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. Wholly-owned subsidiaries include GECM, Great Elm Opportunities GP, Inc. ( GEO GP ), Great Elm Capital GP, LLC ( GEC GP ), Great Elm FM Acquisition, Inc., DME Holdings, and Great Elm DME Manager, LLC ( DME Manager ). Majority-owned subsidiaries include Forest, HC LLC and its wholly-owned subsidiaries. In addition, we have determined that the Company is 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 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 which are normally included in the Company’s Form 10-K. These financial statements reflect all adjustments (consisting of normal 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. The condensed consolidated balance sheet as of June 30, 2022, presented herein, has been derived from the Company’s audited consolidated financial statements as of and for the year ended June 30, 2022. 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 in the financial statements and disclosures of contingent assets and liabilities. On an on-going basis, the Company evaluates all of these estimates and assumptions. Included in these estimates and assumptions are items that relate to revenue recognition, recognition of rental income, the valuation of excess and obsolete inventories, depreciable lives of equipment, impairment of long lived tangible and intangible assets, valuation allowance for deferred tax assets, fair value measurements including stock-based compensation and contingent consideration, estimates associated with the application of acquisition accounting, and the value of lease liabilities and corresponding right of use assets. 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 we are either obligated to absorb the losses that could potentially be significant to the VIE or we hold the right to receive benefits from the VIE that could potentially be significant to the VIE. All intercompany accounts and transactions have been eliminated in consolidation. Non-controlling interests in the Company’s subsidiaries are reported as a component of liabilities for mandatorily redeemable interests, temporary equity for contingently redeemable interests or permanent equity, separate from the Company’s equity. See Note 12 – Non-Controlling Interests and Preferred Stock of Subsidiaries. Results of operations attributable to the non-controlling interests are included in the Company’s condensed consolidated statements of operations. Segments The Company has two business operating segments: durable medical equipment and investment management, with general corporate representing unallocated costs and activity to arrive at consolidated operations. The Company regularly reviews each segment for purposes of allocating resources and assessing performance. Cash and Cash Equivalents Cash and cash equivalents are comprised of cash and highly liquid investments with original maturities of 90 days or less at the date of purchase. Cash equivalents consist primarily of exchange-traded money market funds. The Company is exposed to credit risk in the event of default by the financial institutions or the issuers of these investments to the extent the amounts on deposit or invested are in excess of amounts that are insured. Accounts Receivable Substantially all of the accounts receivable balance relates to the durable medical equipment business. Accounts receivable are customer obligations due under normal sales and rental terms and represent the amount estimated to be collected from the customers and, if applicable, the third-party private insurance provider or government program (collectively, Payors ), based on the contractual agreements. The Company does not require collateral in connection with its customer transactions and aside from verifying insurance coverage, does not perform credit checks on patient customers. Revenue and accounts receivable have been constrained to the extent that billed amounts exceed the amounts estimated to be collected. The constrained transaction price relates primarily to expected billing adjustments with the Payors and patient customers. Management’s evaluation of variable consideration takes into account such factors as past experience, information about specific receivables, Payors and patient customers. The revenue reserves related to constraints on variable consideration were $ 1.5 million and $ 1.9 million as of September 30, 2022 and June 30, 2022, respectively. During the three months ended September 30, 2022 and 2021, the Company recognized reductions to revenue of $ 0.5 million and $ 1.0 million , respectively, related to such constraints. See Note 3 – Revenue. The assessment of variable consideration to be constrained is based on estimates, and ultimate losses may vary from current estimates. As adjustments to these estimates become necessary, they are reported in earnings in the periods in which they become known. There were no material adjustments to revenues made in the three months ended September 30, 2022 relating to prior periods. Changes in constraints on variable consideration are recorded as a component of net revenues. The Company generally does not allow returns from customers for reasons not covered under the manufacturer’s standard warranty. Therefore, there is no provision for sales return reserves. The Company does not have significant bad debt experience with Payors, and therefore the allowance for doubtful accounts is immaterial. As of September 30, 2022 and June 30, 2022, the Company had unbilled receivables of approximately $ 0.3 million and $ 0.4 million , respectively, that relate to transactions where the Company has the ultimate right to invoice a Payor under the terms of the arrangement but are not currently billed. These unbilled amounts are included in accounts receivable in the condensed consolidated balance sheets. Loss per Share The following table presents the calculation of basic and diluted loss per share: For the three months ended September 30, (in thousands except per share amounts) 2022 2021 Net (loss) income $ ( 8,539 ) $ 106 Less: net (loss) income attributable to non-controlling interest ( 248 ) 306 Net loss attributable to Great Elm Group, Inc. $ ( 8,291 ) $ ( 200 ) Weighted average shares basic and diluted: Weighted average shares of common stock outstanding 28,543 25,982 Weighted average shares used in computing loss per share 28,543 25,982 Basic and diluted loss per share $ ( 0.29 ) $ ( 0.01 ) When calculating earnings (loss) per share, we are required to adjust for the dilutive effect of common stock equivalents. As of September 30, 2022, the Company had 13,249,948 potential shares of common stock, including 10,392,545 potential shares of Company common stock issuable upon conversion of Convertible Notes (as defined below) and 2,857,403 potential shares issuable upon the exercise of stock options and vesting of restricted stock units and restricted stock awards, that are not included in the diluted loss per share calculation because to do so would be anti-dilutive. As of September 30, 2021, the Company had 13,429,986 potential shares of common stock, including 9,891,734 shares of common stock issuable upon the conversion of Convertible Notes and 3,538,252 potential shares issuable upon the exercise of stock options and vesting of restricted stock units and restricted stock awards, that are not included in the diluted loss per share calculation because to do so would be anti-dilutive. As of September 30, 2022 and 2021, the Company had an aggregate of 1,303,386 and 811,360 issued shares, respectively, that are subject to forfeiture by the employee at a nominal price if service and/or performance milestones are not met. The Company does not account for such shares as being outstanding for accounting purposes since they are unvested and subject to forfeiture. Restrictions on Subsidiary Dividends The ability of HC LLC to pay dividends is subject to compliance with the restricted payment covenants under the DME Revolver (as defined below). Concentration of Risk The Company’s net investment revenue and receivables for the periods presented were primarily attributable to the management of two investment vehicles, GECC and Monomoy UpREIT. See Note 4 – Related Party Transactions. The Company’s durable medical equipment revenue and related accounts receivable are concentrated with third-party Payors. The following table summarizes customer concentrations as a percentage of revenues: For the three months ended September 30, 2022 2021 Government Payor 39 % 37 % Third-party Payor 13 % 13 % The following table summarizes customer concentrations as a percentage of accounts receivable: As of September 30, 2022 June 30, 2022 Government Payor 29 % 29 % Third-party Payor 13 % 14 % Recently Issued Accounting Standards Supplier Finance Programs. In September 2022, the Financial Accounting Standards Board ( FASB ) issued Accounting Standards Update ( ASU ) 2022-04, Liabilities — Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations , which requires disclosures intended to enhance the transparency of supplier finance programs. The amendments in this ASU require the buyer in a supplier finance program to disclose information about the key terms of the program, outstanding confirmed amounts as of the end of the period, a rollforward of such amounts during each annual period, and a description of where in the financial statements outstanding amounts are presented. The amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the disclosure of rollforward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. As of September 30, 2022, the Company had $ 3.9 million in equipment financing debt through supplier finance programs at our durable medical equipment business. The Company is evaluating the potential impact that the adoption of this ASU will have on its consolidated financial statements. Current Expected Credit Losses. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) , which changes the impairment model for financial instruments, including trade receivables from an incurred loss method to a new forward looking approach, based on expected losses. The estimate of expected credit losses will require entities to incorporate considerations of historical experience, current information and reasonable and supportable forecasts. The amendments in this ASU are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is evaluating the potential impact that the adoption of this ASU will have on its consolidated financial statements. Reference Rate Reform. In March 2020, the FASB issued ASU 2020-04 , Reference Rate Reform (Topic 848): facilitation of the Effects of Reference Rate Reform on Financial Reporting, in response to the United Kingdom Financial Conduct Authority which announced the desire to phase out the use of the London Interbank Offered Rate ( LIBOR ) by the end of 2021. The provisions provide optional expedients and exceptions for applying US GAAP to contracts, hedging relationships and other transactions affected by reference rate reform on financial reporting due to the cessation of LIBOR if certain criteria are met. If LIBOR ceases to exist, we may need to renegotiate outstanding notes payable outstanding which extend beyond 2021 with the respective counterparties. Adoption of the provisions in ASU 2020-04 are optional and effective from March 12, 2020 through December 31, 2022. The Company is evaluating the potential impact that the adoption of this ASU will have on its consolidated financial statements. |
Revenue
Revenue | 3 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 3. Revenue The revenues from each major source are summarized in the following table: For the three months ended September 30, (in thousands) 2022 2021 Product and services revenue Investment Management Management fees $ 1,302 $ 876 Property management fees 274 - Administration and service fees 284 107 1,860 983 Durable Medical Equipment Equipment sales 9,634 8,730 Service revenue 1,394 1,346 11,028 10,076 Total product and services revenue $ 12,888 $ 11,059 Rental revenue Durable Medical Equipment Medical equipment rental income 5,691 5,479 Total rental revenue 5,691 5,479 Total $ 18,579 $ 16,538 Revenue Accounting Under Topic 606 In determining the appropriate amount of revenue to be recognized under FASB Accounting Standards Codification Topic 606, Revenues , the Company performed the following steps: (i) identified the promised goods or services in the contract; (ii) determined whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measured the transaction price, including the constraint on variable consideration; (iv) allocated the transaction price to the performance obligations; and (v) recognized revenue when (or as) the Company satisfied each performance obligation. Durable Medical Equipment Revenue Equipment Sales and Services Revenues The Company sells durable medical equipment, replacement parts and supplies to customers and recognizes revenue at the point control is transferred through delivery to the customer. Each piece of equipment, part or supply is distinct and separately priced thus they each represent a single performance obligation. The revenue is allocated amongst the performance obligations based upon the relative standalone selling price method, however, items are typically all delivered or supplied together. The customer and, if applicable, the Payors are generally charged at the time that the product is sold, although separate layers of insurance coverage may need to be invoiced before final billings may occur. The Company also provides sleep study services to customers and recognizes revenue when the results of the sleep study are complete as that is when the performance obligation is met. The transaction price on both equipment sales and sleep studies is the amount that the Company expects to receive in exchange for the goods and services provided. Due to the nature of the durable medical equipment business, billing adjustments customarily occur during the collections process when explanations of benefits are received by Payors, and as amounts are deferred to secondary Payors or to patient responsibility. As such, we constrain the transaction price for the difference between the gross charge and what we believe we will collect from Payors and from patients. The transaction price therefore is predominantly based on contractual payment rates determined by the Payors. The Company does not generally contract with uninsured customers. We determine our estimates of billing adjustments based upon contractual agreements, our policies and historical experience. While the rates are fixed for the product or service with the customer and the Payors, such amounts typically include co-payments, co-insurance and deductibles, which vary in amounts, from the patient customer. The Company includes in the transaction price only the amount that the Company expects to be entitled, which is substantially all of the Payor billings at contractual rates. The transaction price is initially constrained by the amount of customer co-payments we estimate will not be collected. Due to the nature of the industry and the reimbursement environment in which the Company operates, certain estimates are required to record net revenue and accounts receivable. Inherent in these estimates is the risk that they will have to be revised or updated as additional information becomes available. Specifically, the complexity of many third-party billing arrangements and the uncertainty of reimbursement amounts for certain services from certain Payors may result in adjustments to amounts originally recorded. Such adjustments are typically identified and recorded at the point of cash application or claim denial. The Company constrains revenue for these estimated adjustments. There were no material changes in estimates during the three months ended September 30, 2022, relating to prior periods. The payment terms and conditions of customer contracts vary by customer type and the products and services offered. The Company may provide shipping services prior to the point of delivery and has concluded that the services represent a fulfilment activity and not a performance obligation. Returns and refunds are not accepted on either equipment sales or sleep study services. The Company does not offer warranties to customers in excess of the manufacturer’s warranty. Any taxes due upon sale of the products or services are not recognized as revenue. The Company does not incur contract acquisition costs. The Company generally does not have any partially or unfilled performance obligations related to contracts with customers. However, during the quarter ended June 30, 2020, the Company applied for and received $ 4.4 million in advanced payments from the Centers for Medicare and Medicaid Services ( CMS ) under their Accelerated and Advance Payment Program, which was expanded to increase cash flow to providers of services and suppliers impacted by the COVID-19 pandemic. CMS began recoupments during our fiscal year 2021, leaving a remaining balance of $ 0.3 million as of June 30, 2022. During the three months ended September 30, 2022 , we issued nominal recoupments leaving a remaining balance of $ 0.3 million as of September 30, 2022 . These remaining balances were subsequently repaid to CMS. These amounts are included within deferred revenue on the condensed consolidated balance sheets. The Company has no other contract liabilities as of September 30, 2022 or June 30, 2022. Included in equipment sales and services revenue are unbilled amounts for which the revenue recognition criteria had been met as of period end but were not yet billed to the Payor. The estimate of net unbilled equipment sales and services revenue recognized is based on historical trends and estimates of future collectability. As of September 30, 2022 and June 30, 2022, net unbilled equipment sales and services revenue is approximately $ 0.2 million and $ 0.3 million, respectively, and is included in accounts receivable. Investment Management Revenue The Company recognizes revenue from its investment management business at amounts that reflect the consideration to which it expects to be entitled in exchange for providing services to its customer. Investment management revenue primarily consists of fees based on a percentage of assets under management, fees based on the performance of managed assets, and administration and service fees. Fees are based on agreements with each investment product and 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 GECM has with GECC, Monomoy UpREIT and other private funds managed by GECM (collectively, the Funds ). The performance obligation is satisfied over time as the services are rendered, since the Funds simultaneously receive and consume the benefits provided as GECM performs 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. Management fee revenue is recognized over time as the services are provided. Property Management Fees Under the Monomoy UpREIT agreement, GECM is also 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. Incentive Fees The Company earns incentive fees based on the investment management agreements GECM has with GECC and Monomoy Properties II, LLC (a feeder fund of Monomoy UpREIT). 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. 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. As of September 30, 2022 , there are no incentive fees which have been earned per the terms of the investment management agreements. Administration and Service Fees The Company earns administration fees based on the administration agreement GECM has with GECC whereby the investment vehicles reimburse GECM for costs incurred in performing certain administrative functions. 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 also earns service fees based on a shared services agreement with certain portfolio companies of GECC. 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 reflect 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. Revenue Accounting Under Topic 842 Durable Medical Equipment Revenue Equipment Rental Income Under FASB Accounting Standards Codification Topic 842, Leases ( Topic 842 ), rental income from operating leases is recognized on a straight-line basis, based on contractual lease terms with fixed and determinable increases over the non-cancellable term of the related lease when collectability is reasonably assured. The Company leases durable medical equipment to customers for a fixed monthly amount on a month-to-month basis. The contractual length of the lease term varies based on the type of equipment that is rented to the customer, but generally is from 10 to 36 months . In the case of capped rental agreements, title to the equipment transfers to the customer at the end of the contractual rental period. The customer has the right to cancel the lease at any time during the rental period for a subsequent month’s rental and payments are generally billed in advance on a month-to-month basis. Under Topic 842, rental income from operating leases is recognized on a month-to-month basis, based on contractual lease terms when collectability is reasonably assured. Certain customer co-payments are included in revenue to the extent they are considered probable of payment. The lease term begins on the date products are delivered to patients and are recorded at amounts estimated to be received under reimbursement arrangements with third-party payors, including Medicare, private payors, and Medicaid. Due to the nature of the industry and the reimbursement environment in which the Company operates, certain estimates are required to record net revenue and accounts receivable at their net realizable values. Inherent in these estimates is the risk that they will have to be revised or updated as additional information becomes available. Specifically, the complexity of many third-party billing arrangements and the uncertainty of reimbursement amounts for certain services from certain Payors may result in adjustments to amounts originally recorded. Such adjustments are typically identified and recorded at the point of cash application or claim denial. There were no material changes in estimates recorded in the three months ended September 30, 2022, relating to prior periods. Although invoicing typically occurs at the beginning of the monthly rental period, we recognize revenue from rentals on a daily basis. Since rental agreements can commence at any time during a given month, we defer revenue related to the remaining monthly rental period as of period end. Deferred revenue related to rentals was $ 1.0 million and $ 0.9 million as of September 30, 2022 and June 30, 2022, respectively. Included in rental revenue are unbilled amounts for which the revenue recognition criteria had been met as of period end but were not yet billed to the Payor. Net unbilled rental revenue is recognized to the extent payment is probable. As of September 30, 2022 and June 30, 2022, net unbilled rental revenue is approximately $ 0.1 million and $ 0.1 million, respectively, and is included in accounts receivable. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 4. 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. Durable Medical Equipment In connection with the acquisition of the durable medical equipment businesses, the Company issued non-controlling interests in DME Inc. to the former owners, including Corbel Capital Partners SBIC, L.P. ( Corbel ). Jeffrey S. Serota, a member of the Company’s Board of Directors, serves as Chief Investment Officer at Corbel. These non-controlling interests in DME Inc. became non-controlling interests in HC LLC in May 2021. See Note 12 – Non-Controlling Interests and Preferred Stock of Subsidiaries. Investment Management The Company’s wholly-owned subsidiary, GECM, has agreements to provide administrative services and manage the investment portfolio for GECC, Monomoy UpREIT and other investment products. Under these agreements, GECM receives administration fees, management fees based on the managed assets (other than cash and cash equivalents) and rent collected, and incentive fees based on the performance of those assets. Additionally, GECM has agreements with portfolio companies of GECC in which it receives service fees for such services. See Note 3 – Revenue for additional discussions of the fee arrangements. The Company’s wholly-owned subsidiary, GEO GP, serves as the general partner of Great Elm Opportunities Fund I, LP ( GEOF ), a Delaware multi-series limited partnership. GECM serves as the investment manager of GEOF. As the general partner, GEO GP provides administrative services and oversees GECM’s management of the investment portfolio of GEOF. GECM also served as the managing member of Great Elm SPAC Opportunity Fund, LLC ( GESOF or the Consolidated Fund ), a Delaware limited liability company, and provided administrative services and managed the investment portfolio of GESOF. The Company has determined that GEOF, each series of GEOF and GESOF are VIEs and that the criteria for consolidation were met for GESOF during the three months ended September 30, 2022 and 2021 . The operations of the Consolidated Fund are included in our consolidated financial statements. In July 2022, GESOF liquidated and the Company received a distribution of cash and equity investments, pending final dissolution of the Consolidated Fund. There are no consolidated funds as of September 30, 2022. See Note 2 – Summary of Significant Accounting Policies for additional details. The Company retained the specialized investment company accounting guidance under US GAAP with respect to the Consolidated Fund during the periods it was consolidated. As such, investments of the Consolidated Fund were included in the condensed consolidated balance sheets at fair value and the net unrealized gain (loss) on those investments was included as a component of other income on the condensed consolidated statements of operations. Non-controlling interests in the Consolidated Fund were included in net (loss) income attributable to non-controlling interest. Additionally, the Company receives dividends from its investment in GECC and Monomoy UpREIT (as defined below) and earns unrealized profits and losses based on the mark-to-market performance of those investments. See Note 5 – Fair Value Measurements. The following tables summarize activity and outstanding balances between the managed investment products and the Company: For the three months ended September 30, (in thousands) 2022 2021 Net realized and unrealized loss on investments $ ( 6,797 ) $ ( 116 ) Net realized and unrealized loss on investments of Consolidated Fund ( 16 ) ( 189 ) Dividend income 1,380 554 As of (in thousands) September 30, 2022 June 30, 2022 Dividends receivable $ 586 $ 612 Investment management revenues receivable 1,173 1,241 Receivable for reimbursable expenses paid 819 592 Outstanding receivables are included in related party receivables in the condensed consolidated balance sheets. The Company owns 1,744,048 shares of GECC (approximately 22.9 % 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 and also the Chairman of GECC's Board of Directors, and Adam M. Kleinman is our President, as well as the Chief Compliance Officer of GECC. In October 2020, GECM entered into a shared personnel and reimbursement agreement with ICAM. Jason W. Reese, the Executive Chairman of the Company’s Board of Directors, is the Chief Executive Officer of ICAM. Costs incurred under this agreement relate to human resources, investment management, and other administrative services provided by ICAM employees, for the benefit of the Company, and are included in investment management expenses in the condensed consolidated statements of operations. For the three months ended September 30, 2022 and 2021, such costs were $ 0.4 million and $ 0.1 million, respectively. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 5. Fair Value Measurements Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. US GAAP provides a framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value: ▪ Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. ▪ Level 2: Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. ▪ Level 3: Unobservable inputs reflecting the 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 no n-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 assets and liabilities measured at fair value on a recurring and no n-recurring basis are summarized in the tables below: Fair Value as of September 30, 2022 (in thousands) Level 1 Level 2 Level 3 Total Assets: Equity investments $ 20,075 $ - $ - $ 20,075 Total assets within the fair value hierarchy $ 20,075 $ - $ - $ 20,075 Investments valued at net asset value $ 20,549 Total assets $ 40,624 Liabilities: Participation feature of Series A-2 Preferred Stock $ - $ - * * Contingent consideration liability - - 1,709 1,709 Total liabilities $ - $ - $ 1,709 $ 1,709 Fair Value as of June 30, 2022 (in thousands) Level 1 Level 2 Level 3 Total Assets: Equity investments $ 27,678 $ - $ - $ 27,678 Equity investments of Consolidated Fund 1,797 - - 1,797 Total assets within the fair value hierarchy $ 29,475 $ - $ - $ 29,475 Investments valued at net asset value $ 20,363 Total assets $ 49,838 Liabilities: Participation feature of Series A-2 Preferred Stock $ - $ - * * Contingent consideration liability - - 1,767 1,767 Total liabilities $ - $ - $ 1,767 $ 1,767 *Balance eliminates in consolidation. There were no transfers between levels of the fair value hierarchy during the three months ended September 30, 2022 and 2021. The following is a reconciliation of changes in contingent consideration, a Level 3 liability: For the three months ended September 30, (in thousands) 2022 2021 Beginning balance $ 1,767 $ 271 Additions - 497 Change in fair value ( 58 ) ( 163 ) Ending balance $ 1,709 $ 605 The valuation techniques applied to investments held by the Company and by the Consolidated Fund varied depending on the nature of the investment. 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 no t applied, they are classified as Level 1. Investments in private funds The Company values investments in private funds using net asset value ( NAV ) as reported by each fund’s investment manager. The private funds calculate NAV in a manner consistent with the measurement principles of FASB Accounting Standards Codification 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 September 30, 2022 and June 30, 2022, investments in private funds primarily consisted of our investment in Monomoy Properties UpREIT, LLC, the operating partnership of Monomoy Properties REIT, LLC ( Monomoy UpREIT ). Monomoy UpREIT allows redemptions annually with 90 days’ notice subject to a one-year lockup from the date of initial investment. As of September 30, 2022, there were no unfunded commitments. Contingent consideration In conjunction with the acquisition of Advanced Medical DME, LLC and PM Sleep Lab, LLC on March 1, 2021, the Company entered into a contingent consideration agreement that requires the Company to pay up to $ 2.1 million if certain revenue thresholds of the acquired business are achieved for the 12 months ending September 1, 2022. As these revenue thresholds were not expected to be achieved, the fair value of the contingent consideration was zero as of June 30, 2022. As of September 30, 2022, the Company made a preliminary determination that the target was not met, subject to agreement with the seller. In conjunction with the acquisition of MedOne Healthcare, LLC on August 31, 2021, the Company entered into a separate contingent consideration agreement that requires the Company to pay up to $ 1.0 million if certain revenue thresholds of the acquired business are achieved for the 12 months ending September 1, 2022 and September 1, 2023. As of September 30, 2022 , the Company made a preliminary determination that, based on the performance to date, the amount of contingent consideration earned under the agreement was $ 0.7 million (included within the accrued expenses and other liabilities), subject to agreement with the seller. In conjunction with the acquisition of the Monomoy UpREIT investment management agreement, the Company entered into a contingent consideration agreement that requires the Company to pay up to $ 2.0 million if certain fee revenue thresholds are achieved during fiscal years ending June 30, 2023 and 2024. The Company estimated the fair value of the contingent consideration using a Monte Carlo simulation model. The key assumptions in applying the Monte Carlo simulation model as of September 30, 2022 include revenue forecasts, volatility of 19.2 % and a discount rate of 8.75 %. The contingent consideration of $ 1.1 million is included within the related party payables in the condensed consolidated balance sheets as of September 30, 2022 and June 30, 2022. Participation feature of Series A-2 Preferred Stock On December 29, 2020, HC LLC issued Series A-2 Preferred Stock to our consolidated subsidiary, Forest. See Note 12 – Non-Controlling Interests and Preferred Stock of Subsidiaries. An embedded derivative was identified in the instrument requiring bifurcation from the host instrument as a derivative to be carried at fair value. The value of the derivative related to a participation feature upon the sale of the durable medical equipment business. As of period end, the fair value of this derivative is determined using an option pricing model based on the estimated value of HC LLC derived from a discounted cash flow income approach and a guideline public company market approach. The key assumptions in applying the valuation approach as of September 30, 2022 include financial forecasts of the durable medical equipment business and a volatility rate of 63.5 % (level 3 inputs in accordance with the US GAAP fair value hierarchy). The key assumptions in applying the valuation approach as of June 30, 2022 include financial forecasts of the durable medical equipment business and a volatility rate of 59.1 %. The fair value of the embedded derivative as of September 30, 2022 and June 30, 2022 , was $ 0.9 million and $ 7.9 million, respectively. Since Series A-2 Preferred Stock was issued to Forest, a consolidated subsidiary, the instruments and their effects on our operations have been eliminated in consolidation and therefore the valuation of the participation feature is reflected as zero within the table above. However, this valuation does impact our segment results and non-controlling interest accounts. See Note 10 - Borrowings for additional discussion related to the fair value of our notes payable and other long-term debt. T he carrying value of all other financial assets and liabilities approximate their fair values. |
Fixed Assets
Fixed Assets | 3 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets | 6. Fixed Assets Property and equipment and equipment held for rental consist of the following as of September 30, 2022 and June 30, 2022: (in thousands) September 30, 2022 June 30, 2022 Property and Equipment Leasehold improvements $ 981 $ 970 Vehicles 162 162 Computer equipment and software 716 642 Furniture and fixtures 570 590 Sleep study equipment 594 594 3,023 2,958 Accumulated depreciation ( 2,520 ) ( 2,420 ) Net carrying amount $ 503 $ 538 Equipment Held for Rental Medical equipment held for rental $ 17,544 $ 16,593 Accumulated depreciation ( 9,621 ) ( 9,089 ) Net carrying amount $ 7,923 $ 7,504 The following table reconciles total depreciation expense for each period presented: For the three months ended September 30, (in thousands) 2022 2021 Depreciation and amortization $ 101 $ 143 Cost of durable medical equipment rentals 1,889 1,688 Total depreciation expense $ 1,990 $ 1,831 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | 7. Goodwill and Other Intangible Assets The Company’s durable medical equipment and investment management segments include identifiable intangible assets obtained through acquisitions in prior years. Goodwill presented on the condensed consolidated balance sheets is attributed to the acquisitions of the durable medical equipment businesses. The Company’s annual impairment assessment date for goodwill is April 1. The changes in the carrying value of goodwill are as follows: For the three months ended September 30, (in thousands) 2022 2021 Beginning balance $ 52,463 $ 50,536 Acquisition of businesses - 1,927 Ending balance $ 52,463 $ 52,463 The following tables provide additional details related to the Company’s acquired identifiable intangible assets: As of September 30, 2022 As of June 30, 2022 (in thousands) Gross Carrying Accumulated Net Carrying Gross Carrying Accumulated Net Carrying Durable Medical Equipment Tradename $ 9,060 $ ( 3,676 ) $ 5,384 $ 9,060 $ ( 3,443 ) $ 5,617 Hospital contracts 90 ( 55 ) 35 90 ( 49 ) 41 Non-compete agreements 1,370 ( 1,156 ) 214 1,370 ( 1,107 ) 263 10,520 ( 4,887 ) 5,633 10,520 ( 4,599 ) 5,921 Investment Management Investment management agreements 15,264 ( 3,019 ) 12,245 15,264 ( 2,753 ) 12,511 Assembled workforce 1,103 ( 389 ) 714 1,103 ( 364 ) 739 16,367 ( 3,408 ) 12,959 16,367 ( 3,117 ) 13,250 Total $ 26,887 $ ( 8,295 ) $ 18,592 $ 26,887 $ ( 7,716 ) $ 19,171 Aggregate Amortization Expense (in thousands) 2022 2021 For the three months ended September 30, 579 419 Estimated Future Amortization Expense (in thousands) : For the nine months ending June 30, 2023 $ 1,703 For the year ending June 30, 2024 $ 2,084 For the year ending June 30, 2025 $ 1,974 For the year ending June 30, 2026 $ 1,912 For the year ending June 30, 2027 $ 1,838 Thereafter $ 9,081 Total $ 18,592 |
Lessor Operating Leases
Lessor Operating Leases | 3 Months Ended |
Sep. 30, 2022 | |
Lessor Disclosure [Abstract] | |
Lessor Operating Leases | 8. Lessor Operating Leases Medical Equipment Leases Through its majority-owned subsidiary HC LLC, and the subsidiaries of HC LLC, the Company owns medical equipment which is leased to customers. The Company’s customers consist primarily of patients through their clinical providers including medical centers, clinics and hospices and the Company has lease arrangements with these patients. In addition, the arrangements between the Company and its customers are impacted by arrangements between the Company and Payors. The Payors may cover a portion or all of the rental payments under the agreements between the Company and its customers. The patient is responsible for any residual co-payments. The lease terms may be for a pre-determined time period, generally 10 months to 36 months; however, the customer may cancel the lease at any time and for any reason without penalty and therefore, the Company treats all leases as month-to-month leases. Upon termination of the lease, the equipment, if not aged beyond its useful life, may be refurbished and subsequently sold or leased to another customer. As the leases are month-to-month, there are no future lease receivables under the terms of the current leases. |
Lessee Operating Leases
Lessee Operating Leases | 3 Months Ended |
Sep. 30, 2022 | |
Lessee Disclosure [Abstract] | |
Lessee Operating Leases | 9. Lessee Operating Leases All of the Company’s leases are classified as operating leases. Certain of the leases have both lease and non-lease components. The Company has elected to account for the lease component and the non-lease components as a single combined lease component for all classes of underlying assets. Supplemental balance sheet information related to leases as of September 30, 2022 and June 30, 2022 is as follows: (in thousands, except remaining life and discount rate) September 30, 2022 June 30, 2022 Facilities Right of use assets $ 3,382 $ 3,400 Current portion of lease liabilities 1,561 1,475 Lease liabilities, net of current portion 2,032 2,137 Total liabilities $ 3,593 $ 3,612 Weighted-average remaining life 2.9 years 3.1 years Weighted-average discount rate 10.8 % 10.8 % Vehicles Right of use assets $ 429 $ 315 Current portion of lease liabilities 119 77 Lease liabilities, net of current portion 310 238 Total liabilities $ 429 $ 315 Weighted-average remaining life 4.1 years 4.2 years Weighted-average discount rate 5.8 % 6.3 % Equipment Right of use assets $ 4 $ 7 Current portion of lease liabilities 4 7 Total liabilities $ 4 $ 7 Weighted-average remaining life 0.6 years 0.8 years Weighted-average discount rate 12.5 % 12.5 % Operating lease costs are included in the operating expense associated with the business segment leasing the asset on the condensed consolidated statements of operations and are included in cash flows from operating activities on the condensed consolidated statements of cash flows. Certain operating leases include variable lease costs which are not material and are included in operating lease costs. Additional details are presented in the following table: For the three months ended September 30, (in thousands) 2022 2021 Facilities Operating lease cost $ 583 $ 554 Cash paid for operating leases 482 552 Vehicles Operating lease cost $ 26 $ 13 Cash paid for operating leases 24 13 Equipment Operating lease cost $ 23 $ 9 Cash paid for operating leases 23 9 The following table summarizes the maturity of operating lease liabilities as of September 30, 2022 : (in thousands) September 30, 2022 For the nine months ending June 30, 2023 $ 1,410 For the year ending June 30, 2024 1,641 For the year ending June 30, 2025 786 For the year ending June 30, 2026 646 For the year ending June 30, 2027 152 Thereafter 21 Total lease payments $ 4,656 Imputed interest ( 630 ) Total lease liabilities $ 4,026 Durable Medical Equipment The facility leases include offices, retail and warehouse space and sleep labs. The leases have original or amended terms ranging from 12 to 96 months , some of which include an additional option to extend the lease for up to 120 months. Certain of these leases have variable rental payments tied to a consumer price index or include additional rental payments for maintenance costs, taxes and insurance, which are accounted for as variable rent. The vehicles leases have original lease terms of 60 months from the commencement date of each lease with no option to extend. Each lease may be terminated by the lessee with 30-days’ notice after the first 13 months of the lease subject to certain early termination costs, including residual value guarantees. The lease costs include variable payments for taxes and other fees. Equipment leases consist of office equipment with original lease terms ranging from 36 to 48 months from the commencement date of each lease and may include an option to extend or purchase at the end of the lease term. Certain of these leases include additional rental costs for taxes, insurance and additional fees in addition to the base rental costs. Investment Management A lease for office space located in Charleston, South Carolina was assumed as part of the acquisition of the Monomoy UpREIT investment management agreement in May 2022. The non-cancellable lease term expires on October 1, 2024 . General Corporate The Company has a lease for office space located in Waltham, Massachusetts. This office space is allocated between the investment management and general corporate segments. On the commencement date of the lease, the non-cancellable term was for eighty-eight months from the occupancy date of June 1, 2017 and contains an option to extend for an additional sixty-month period. |
Borrowings
Borrowings | 3 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Borrowings | 10. Borrowings Related party borrowings of the Company's subsidiaries are summarized in the following table: (in thousands) Borrower September 30, 2022 June 30, 2022 Seller Note GECM $ 5,661 $ 6,270 GP Corp. Note GEC GP * * Total principal $ 5,661 $ 6,270 Unamortized debt issuance cost - - Total long-term related party notes payable 5,661 6,270 Less current portion of related party notes payable ( 5,661 ) - Related party notes payable, net of current portion $ - $ 6,270 *Balance eliminates in consolidation. The Company’s and subsidiaries’ other outstanding borrowings are summarized in the following table: (in thousands) Borrower September 30, 2022 June 30, 2022 GEGGL Notes GEG $ 26,945 $ 26,945 DME Revolver HC LLC and subsidiaries - - Equipment Financing HC LLC and subsidiaries 3,909 2,993 Total principal $ 30,854 $ 29,938 Unamortized debt discounts and issuance costs ( 1,348 ) ( 1,413 ) Total other outstanding borrowings 29,506 28,525 Less current portion of other outstanding borrowings ( 3,909 ) ( 2,993 ) Other outstanding borrowings, net of current portion $ 25,597 $ 25,532 The Company incurred interest expense of $ 0.7 million and $ 0.01 million for the three months ended September 30, 2022 and 2021, respectively, on related-party and other borrowings. See Note 11 – Convertible Notes for interest expense on Convertible Notes and Note 12 – Non-Controlling Interests and Preferred Stock of Subsidiaries for interest expense on the preferred stock of subsidiaries. The Company’s aggregate future required principal debt repayments are summarized in the following table: (in thousands) Principal Due For the nine months ending June 30, 2023 $ 3,909 For the year ending June 30, 2024 5,661 For the year ending June 30, 2025 - For the year ending June 30, 2026 - For the year ending June 30, 2027 26,945 Thereafter - Total $ 36,515 Additional details of each borrowing by operating segment are discussed below. Durable Medical Equipment The Company has a revolving line of credit with Banc of California (formerly Pacific Mercantile Bank) ( DME Revolver ). The DME Revolver allows for borrowings up to $ 10 million, subject to a fixed percentage of qualifying accounts receivable and inventories related to the durable medical equipment business operations. Borrowings under the line of credit are due on November 29, 2022 and accrue interest at a variable rate of the prime rate plus 0.4 % per annum . At September 30, 2022 the interest rate was 6.7 % . Interest is payable monthly in arrears. The Company has the option to prepay the borrowings without any penalty. As of September 30, 2022 , there were no borrowings outstanding under the DME Revolver. The borrowings under the DME Revolver are collateralized by the assets of the durable medical equipment business and the Company is required to meet certain financial covenants. The DME Revolver includes covenants that restrict HC LLC’s and its subsidiaries’ business operations to the current business, limit additional indebtedness, liens, asset dispositions and investments, require compliance and maintenance of licenses and government approvals and other customary conditions. Events of default include the failure to pay amounts when due, bankruptcy, or violation of covenants, including a change in control of HC LLC. HC LLC must also comply with a fixed-charge coverage and leverage ratio financial covenants, which are based in part on the levels of HC LLC's earnings before interest, taxes, depreciation and amortization. The Company was in compliance with all material covenants and restrictions at September 30, 2022. HC LLC’s operating subsidiaries also utilize equipment financing debt to fund certain inventory and equipment purchases from suppliers. These equipment financing debt agreements are entered into with third party banks and are generally payable in equal installments over terms of one to three years , depending on the nature of the underlying purchases being financed. The debt is secured by the inventory and equipment, as applicable, of the operating subsidiaries entering into the agreements, and the long-term agreements have implicit interest rates between 7 – 8 %. During the three months ended September 30, 2022 and 2021, the Company financed $ 2.7 million and $ 2.1 million , respectively, in inventory and equipment through such financing agreements. Investment Management On May 4, 2022 as part of the consideration paid to acquire the Monomoy UpREIT investment management agreement, GECM issued ICAM a $ 6.3 million promissory note (the Seller Note ). The Seller Note is due on August 4, 2023 and is payable at GECM’s option with either cash or newly issued GEG shares (subject to shareholder approval). There are no prepayment penalties. The Seller Note bears interest at 6.5 %, which is paid quarterly. The balance of the Seller Note as of September 30, 2022 was $ 5.7 million. During the three months ended September 30, 2022, the Company settled the princip al amount of $ 0.6 million by transferring 50,000 shares of GECC stock. General Corporate On June 9, 2022, we issued $ 26.9 million in aggregate principal amount of 7.25 % Notes due 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 aggregate principal balance of the GEGGL Notes outstanding as of September 30, 2022 is $ 26.9 million . The GEGGL Notes are unsecured obligations and rank equal with all of our outstanding and future unsecured unsubordinated indebtedness. The unsecured notes are effectively subordinated, or junior in right of payment, to indebtedness under our Convertible Notes and any other future secured indebtedness that we may incur and structurally subordinated to all future indebtedness and other obligations of our subsidiaries. We pay interest on the GEGGL Notes on March 31, June 30, September 30 and December 31 of each year. The GEGGL Notes will mature on June 30, 2027 . The GEGGL Notes can be called on, or after, June 30, 2024. Holders of the Notes do not have the option to have the GEGGL 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 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 September 30, 2022 our consolidated debt to equity ratio is 1.59 :1.00. |
Convertible Notes
Convertible Notes | 3 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Convertible Notes | 11. Convertible Notes As of September 30, 2022 and June 30, 2022 , the total outstanding principal balance of convertible notes due on February 26, 2030 (the Convertible Notes ) was $ 36.1 million , including cumulative interest paid in-kind. The Convertible Notes are held by a consortium of investors, including $ 14.7 million issued to certain related parties. Such Convertible Notes issued to related parties include: ▪ $ 6.7 million issued to entities associated with Matthew A. Drapkin, including funds managed by Northern Right Capital Management, L.P. ( Northern Right ), a significant shareholder. Mr. Drapkin, a member of the Company’s Board of Directors, is the Chief Executive Officer of Northern Right. ▪ $ 7.2 million issued to entities associated with Jason W. Reese, including funds managed by ICAM, a significant shareholder. ▪ $ 0.7 million issued to entities associated with Eric J. Scheyer, a member of the Company’s Board of Directors. 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. 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 Accounting Standards Codification 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 September 30, 2022 and June 30, 2022 , the remaining balance of unamortized debt issuance costs was $ 0.9 million. During the three months ended September 30, 2022 and 2021, the Company incurred interest expense of $ 0.5 million and $ 0.5 million, respectively, related to the Convertible Notes, inclusive of non-cash interest related to amortization of debt issuance costs. |
Non-Controlling Interests and P
Non-Controlling Interests and Preferred Stock of Subsidiaries | 3 Months Ended |
Sep. 30, 2022 | |
Noncontrolling Interest [Abstract] | |
Non-Controlling Interests and Preferred Stock of Subsidiaries | 12. Non-Controlling Interests and Preferred Stock of Subsidiaries Non-Controlling Interests Holders of non-controlling interests in a subsidiary of the Company hold certain rights, which result in the classification of the securities as either liability, temporary equity, or permanent equity. The following table summarizes the non-controlling interest balances on the condensed consolidated balance sheets: (in thousands) September 30, 2022 June 30, 2022 HC LLC Temporary equity $ 2,887 $ 2,225 Permanent equity 2,887 2,225 Total HC LLC 5,774 4,450 Consolidated Fund Permanent equity - 642 Forest Permanent equity 2,102 3,666 Total non-controlling interests $ 7,876 $ 8,758 The following table summarizes the net (loss) income attributable to the non-controlling interests on the condensed consolidated statements of operations: For the three months ended September 30, (in thousands) 2022 2021 HC LLC Temporary equity 662 205 Permanent equity 662 205 Total HC LLC 1,324 410 GEC GP Permanent equity - ( 2 ) Consolidated Fund Permanent equity ( 8 ) ( 85 ) Forest Permanent equity ( 1,564 ) ( 17 ) Total net (loss) income attributable to non-controlling interest $ ( 248 ) $ 306 HC LLC – Non-controlling interest classified as temporary equity Corbel holds a 9.95 % indirect common stock equity interest in HC LLC. The interest includes board observer rights for the HC LLC board of directors, but no voting rights. HC LLC has the right of first offer if the holder desires to sell the security and in the event of a sale of HC LLC, the holder must sell their securities (drag along rights) and has the right to participate in sales of HC LLC securities (tag along rights). In addition, upon the seventh anniversary of issuance date, if (i) the holder owns at least 50% of the common shares issued to it at the closing of the transaction, (ii) an initial public offering of HC LLC has not commenced and (iii) the holder has not had an earlier opportunity to sell its shares at their fair market value, the holder has the right to request a marketing process for a sale of HC LLC and has the right to put its common shares to HC LLC at the price for such shares implied by such marketing process. The Company also has the right to call the holder’s common shares at such price. The holder of the non-controlling interest is entitled to participate in earnings of HC LLC and is not required to fund losses. As the redemption is contingent upon future events outside of the Company’s control which are not probable, the Company has classified the non-controlling interest as temporary equity and its fair value on the date of issuance, adjusted for any earnings in HC LLC. HC LLC – Non-controlling interest classified as permanent equity Valley Healthcare Group, LLC ( VHG ) holds a 9.95 % indirect common stock equity interest in HC LLC. The rights are consistent with the non-controlling interest classified as temporary equity, other than the holder not having a contingent put right. Accordingly, the Company has classified the non-controlling interest as permanent equity at its fair value on the date of issuance, adjusted for any earnings in HC LLC. GEC GP – Non-controlling interest classified as permanent equity GEC GP owned the rights to the profit sharing agreement with GECM as well as an intercompany obligation under a senior secured note payable issued by Great Elm GECC GP Corp (the GP Corp. Note ) in consideration for the assets acquired from MAST Capital Management, LLC. During the three months ended March 31, 2022, the Company purchased the remaining shares of GEC GP. As of September 30, 2022 , no non-controlling interest was outstanding. Forest – Non-controlling interest classified as permanent equity The Company sold J.P. Morgan Broker-Dealer Holdings Inc. ( JPM ) a 20.0 % common stock interest in Forest in exchange for $ 2.7 million. JPM has the right to designate a number of directors commensurate with their common stock ownership interest. Forest has the right of first offer if the holder desires to sell the security and in the event of a sale of Forest, the holder must sell their securities (drag along rights) and has the right to participate in sales of Forest securities (tag along rights). The holder of the non-controlling interest is entitled to participate in earnings of Forest and is not required to fund losses. The holder of this non-controlling interest, JPM, is also the holder of Forest Preferred Stock discussed below. Consolidated Fund – Non-controlling interest classified as permanent equity As of June 30, 2022, the Company held 73.4 % of the capital in the Consolidated Fund. The remaining capital in the Consolidated Fund was recorded as a non-controlling interest that included affiliated individuals and entities. In July 2022, the Consolidated Fund ceased operations and distributed its remaining assets to non-controlling interests in the total amount of $ 0.6 million. Redeemable Preferred Stock of Subsidiaries The following table summarizes the share activity for the preferred stock of subsidiaries: Balance, as of June 30, 2022 Redemption of Preferred Stock Balance, as of September 30, 2022 HC LLC Series A-1 Preferred Stock 4,090 ( 407 ) 3,683 Series A-2 Preferred Stock 34,010 - 34,010 Total HC LLC 38,100 ( 407 ) 37,693 Forest Forest Preferred Stock 35,010 - 35,010 Total 73,110 ( 407 ) 72,703 HC LLC - Series A-1 Preferred Stock classified as a liability On December 29, 2020, the Company issued 10,090 shares of Series A-1 Preferred Stock with a face value of $ 1,000 per share at issuance ( Series A-1 Preferred Stock ). The shares were issued pro-rata to the stockholders of DME Inc. in the form of a distribution and no consideration was provided in exchange for such instruments. The shares provide for a 9 % annual dividend, which is payable quarterly. The shares are mandatorily redeemable by the Company at their face value of $ 1,000 per share on the earlier of certain redemption events or December 29, 2027 . The redemption events include a bankruptcy, change in control or sale of the durable medical equipment business. The shares are redeemable at any time at the option of Company at a redemption price equal to face value. The shares rank senior and have preference to the common shares of HC LLC. The shares are non-voting, do not participate in the earnings of HC LLC and contain standard protective rights. During the three months ended September 30, 2022, the Company optionally redeemed 407 shares of Series A-1 Preferred Stock held by Corbel . As the shares of Series A-1 Preferred Stock are mandatorily redeemable at a specified date, the security has been classified as a liability in the condensed consolidated balance sheets. The dividends on the shares are included in interest expense in the condensed consolidated statements of operations. The fair value of each share of Series A-1 Preferred Stock on the issuance date was determined to be $ 801 per share. The difference between the fair value and the redemption value of $ 1,000 per share as well as debt issuance costs of $ 0.2 million was accounted for as a debt discount, and accretion of the discount is charged to interest expense over the 7 -year period to redemption using the effective interest method. The holders of Series A-1 Preferred Stock include our majority-owned consolidated subsidiary Forest ( 3,276 shares). Such shares of Series A-1 Preferred Stock issued to consolidated subsidiaries and their effects on our operations have been eliminated in consolidation. Additionally, 407 shares are held by VHG, who is also the holder of non-controlling interests in HC LLC discussed above. HC LLC - Series A-2 Preferred Stock classified as a liability On December 29, 2020, the Company issued 34,010 shares of Series A-2 Preferred Stock with a face value of $ 1,000 per share at issuance ( Series A-2 Preferred Stock ). The shares were issued to Forest in exchange for cash equal to the face value of such shares. The shares provide for a 9 % annual dividend, which is payable quarterly. The shares are mandatorily redeemable by the Company at their face value of $ 1,000 per share on December 29, 2027 , or at a 0 - 3 % premium decreasing over time based upon the occurrence of certain redemption events prior to December 29, 2027. The redemption events include a bankruptcy, change in control or sale of the durable medical equipment business. The shares are redeemable at any time at the option of Company at a redemption price at face value plus the 0 - 3 % premium then in place. The shares rank senior and have preference to the common shares of HC LCC. The shares are non-voting and contain standard protective rights. In addition, upon a sale of the durable medical equipment business, the holders of Series A-2 Preferred Stock are entitled to the greater of their liquidation preference or 33 % of proceeds arising from such sale. As the shares of Series A-2 Preferred Stock are mandatorily redeemable at a specified date, the security has been classified as a liability in the condensed consolidated balance sheets. The dividends on the shares are included in interest expense in the condensed consolidated statements of operations. We have identified the feature allowing holders of Series A-2 Preferred Stock to participate in up to 33% of proceeds arising from a sale of the durable medical equipment business as an embedded derivative. We have bifurcated this embedded derivative from the mandatorily redeemable preferred stock host and have recorded the derivative liability at fair value. The fair value of the derivative liability on the issuance date was $ 6.5 million, and is marked to fair value at each reporting date. The fair value of each share of Series A-2 Preferred Stock on the issuance date was determined to be $ 810 per share. The difference between the fair value and the redemption value of $ 1,000 per share, as well as debt issuance costs of $ 1.1 million, was accounted for as a debt discount, and accretion of the discount is charged to interest expense over the 7 -year period to redemption using the effective interest method. The holder of the Series A-2 Preferred Stock is our majority-owned consolidated subsidiary Forest. Such shares and related embedded derivatives issued to consolidated subsidiaries and their effects on our operations have been eliminated in consolidation. Forest Preferred Stock classified as a liability On December 29, 2020, Forest issued 35,010 shares of preferred stock in Forest with a face value of $ 1,000 per share at issuance ( Forest Preferred Stock ). The preferred shares were sold to JPM in exchange for cash equal to the face value of such shares. The preferred shares provide for a 9 % annual dividend, which is payable quarterly. The preferred shares are mandatorily redeemable by the Company at their face value of $ 1,000 per share on December 29, 2027 , or at a 0 - 3 % premium decreasing over time based upon the occurrence of certain redemption events prior to December 29, 2027. The redemption events include the occurrence of an ownership change that triggers an IRC §382 limitation which reduces Forest's net operating loss carryforwards to less than $ 300 million. The preferred shares are redeemable at any time at the option of the Company at a redemption price at face value plus the 0 - 3 % premium then in place. The preferred shares rank senior and have preference to the common shares of Forest. The shares are non-voting, do not participate in the earnings of Forest and contain standard protective rights. As the preferred shares are mandatorily redeemable at a specified date, the security has been classified as a liability in the condensed consolidated balance sheets. The dividends on the preferred stock are included in interest expense in the condensed consolidated statements of operations. The fair value of each share of Forest Preferred Stock on the issuance date was determined to equal its face value based on the transaction price. Debt issuance costs of $ 1.2 million was accounted for as a debt discount, and accretion of the discount is charged to interest expense over the 7 -year period to redemption using the effective interest method. After eliminating the impact of all intercompany transactions, the Company recorded interest expense, inclusive of non-cash interest related to amortization of discounts and debt issuance costs, of $ 0.8 million and $ 0.9 million , respectively, related to the preferred stock of subsidiaries during the three months ended September 30, 2022 and 2021 . |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | 13. Stockholders’ Equity Restricted Stock Awards and Restricted Stock Units During the three months ended September 30, 2022, the Company granted 397,545 restricted stock awards, which have various vesting terms between 1 - 3 years subject to service requirements. Restricted stock units are subject to service requirements. During the three months ended September 30, 2022 the Company did no t grant any shares of restricted stock units. The Company accounts for forfeitures of the restricted stock awards and restricted stock units in the period incurred. The activity of the Company’s restricted stock awards and restricted stock units for the three months ended September 30, 2022 was as follows: Restricted Stock Awards and Restricted Stock Units Restricted Stock (in thousands) Weighted Average Grant Date Fair Value Outstanding at June 30, 2022 1,312 $ 1.79 Granted 398 2.19 Vested ( 238 ) 2.16 Forfeited ( 3 ) 2.50 Outstanding at September 30, 2022 1,469 $ 1.84 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 September 30, 2022, there were 138,973 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), including 28,965 restricted stock awards, for which the service condition was met during the three months ended September 30, 2022. Stock Options The following table summarizes the Company’s option award activity as of and during the three months ended September 30, 2022: Options Shares (in thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (in thousands) Outstanding at June 30, 2022 2,134 $ 3.68 3.34 $ - Options granted 125 3.60 - - Forfeited, cancelled or expired ( 732 ) 3.59 - - Outstanding at September 30, 2022 1,527 $ 3.72 4.63 $ - Exercisable at September 30, 2022 1,436 $ 3.70 4.67 $ - Vested and expected to vest as of September 30, 2022 1,527 $ 3.72 4.63 $ - During the three months ended September 30, 2022 and 2021, the Company recognized total stock-based compensation expense associated with all restricted stock and stock options of $ 0.8 million and $ 0.6 million , respectively. As of September 30, 2022, the Company had unrecognized compensation costs related to all unvested share awards and options totaling $ 2.4 million . During the three months ended September 30, 2022, 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 three months ended September 30, 2022 was $ 0.4 million, of which $ 0.1 million vested immediately, and the balance will vest annually pro-rata over a three year period. Related compensation expense was $ 0.1 million for the three months ended September 30, 2022 . |
Income Taxes
Income Taxes | 3 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 14. Income Taxes As of June 30, 2022, the Company had net operating loss ( NOL ) carryforwards for federal and state income tax purposes of approximately $ 821 million and $ 211 million, respectively. The federal NOL carryforwards generated prior to fiscal year 2018 will expire from 2023 through 2037 . The federal NOL carryforwards generated in fiscal year 2018 or later can be carried forward indefinitely. State NOL carryforwards primarily relate to California and Massachusetts. The California NOL carryforwards will expire from 2029 through 2037 . The Massachusetts NOL carryforwards will expire from 2031 to 2038 . In light of the Company’s history of cumulative operating losses, the Company recorded a valuation allowance for all of its federal and state deferred tax assets, as it is presently unable to conclude that it is more likely than not that the federal and state deferred tax assets in excess of deferred tax liabilities will be realized. The Inflation Reduction Act ( IRA ) was enacted into law on August 16, 2022. Included in the IRA was a provision to implement a 15 % corporate alternative minimum tax on "adjusted financial statement income" for applicable corporations and a 1 % excise tax on repurchases of stock. These provisions are effective for tax years beginning after December 31, 2022. We are in the process of evaluating the provisions of the IRA, but we do not currently believe the IRA will have a material impact on our reported results, cash flows or financial position when it becomes effective. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 15. 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. |
Segment Information
Segment Information | 3 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | 16. Segment Information The Company allocates resources based on two business operating segments: durable medical equipment and investment management, with general corporate representing unallocated costs and activity to arrive at consolidated operations. Activity not allocated to the segments include, but are not limited to, certain investment and financing activities, professional fees, costs associated with being a public company, acquisition costs and costs associated with executive and corporate management departments, including compensation, benefits, rent and insurance. All operations and assets are based in the United States. The following tables summarize results of operations by segment: For the three months ended September 30, 2022 (in thousands) Durable Medical Equipment Investment Management General Corporate Intercompany Eliminations (1) Consolidated Total Revenue: Total revenue $ 16,719 $ 1,860 $ 203 $ ( 203 ) $ 18,579 Operating costs and expenses: Cost of durable medical equipment sold and services ( 4,340 ) - - - ( 4,340 ) Cost of durable medical equipment rentals ( 2,050 ) - - - ( 2,050 ) Depreciation and amortization ( 387 ) ( 294 ) - - ( 681 ) Non-cash compensation (2) - ( 477 ) ( 464 ) - ( 941 ) Other selling, general and administrative ( 9,062 ) ( 1,557 ) ( 1,136 ) 203 ( 11,552 ) Total operating expenses ( 15,839 ) ( 2,328 ) ( 1,600 ) 203 ( 19,564 ) Other income (expense): Interest expense ( 1,106 ) ( 136 ) ( 1,839 ) 1,085 ( 1,996 ) Other income (expense) 6,984 ( 5,427 ) ( 5,834 ) ( 1,085 ) ( 5,362 ) Total other income (expense), net 5,878 ( 5,563 ) ( 7,673 ) - ( 7,358 ) Total income (loss) before income taxes $ 6,758 $ ( 6,031 ) $ ( 9,070 ) $ - $ ( 8,343 ) For the three months ended September 30, 2021 (in thousands) Durable Medical Equipment Investment Management General Corporate Intercompany Eliminations (1) Consolidated Total Revenue: Total revenue $ 15,555 $ 983 $ 243 $ ( 243 ) $ 16,538 Operating costs and expenses: Cost of durable medical equipment sold and services ( 4,060 ) - - - ( 4,060 ) Cost of durable medical equipment rentals ( 1,850 ) - - - ( 1,850 ) Depreciation and amortization ( 453 ) ( 109 ) - - ( 562 ) Non-cash compensation (2) - ( 396 ) ( 372 ) - ( 768 ) Transaction costs (3) ( 97 ) - ( 184 ) - ( 281 ) Other selling, general and administrative ( 6,286 ) ( 843 ) ( 1,130 ) 243 ( 8,016 ) Total operating expenses ( 12,746 ) ( 1,348 ) ( 1,686 ) 243 ( 15,537 ) Other income (expense): Interest expense ( 1,287 ) ( 24 ) ( 1,269 ) 1,218 ( 1,362 ) Other income (expense) 560 249 875 ( 1,218 ) 466 Total other income (expense), net ( 727 ) 225 ( 394 ) - ( 896 ) Total income (loss) before income taxes $ 2,082 $ ( 140 ) $ ( 1,837 ) $ - $ 105 (1) The Company’s wholly-owned subsidiary, DME Manager, provides advisory services to HC LLC (formerly to DME Inc.) and receives consulting fees for those services. DME Manager is considered part of the general corporate operations while HC LLC is part of the durable medical equipment segment. The corresponding expense to HC LLC and revenue to DME Manager are eliminated in consolidation. Beginning December 29, 2020, DME Manager also provides advisory services to Forest and receives a consulting fee from Forest for those services. Both DME Manager and Forest are part of general corporate operations, and the corresponding revenue and expense are eliminated in consolidation. Additionally, Forest owns Series A-1 Preferred Stock (excluding shares held by VHG) and Series A-2 Preferred Stock of HC LLC. Forest is part of general corporate operations while HC LLC is part of the durable medical equipment segment. The corresponding interest expense to HC LLC and interest income to Forest are eliminated in consolidation. (2) Non-cash compensation includes stock-based compensation and compensation in the form of stock in portfolio companies held by the Company. Non-cash compensation attributable to the investment management segment is included in investment management expenses in the condensed consolidated statements of operations. Non-cash compensation attributable to the general corporate segment is included in selling, general and administrative expense in the condensed consolidated statements of operations. (3) Transaction costs, which consist of legal and other professional services, are included in selling, general and administrative expense in the condensed consolidated statements of operations. The following tables summarize assets by segment: As of September 30, 2022 (in thousands) Durable Medical Equipment Investment Management General Corporate Total Fixed assets, net $ 8,397 $ 29 $ - $ 8,426 Identifiable intangible assets, net 5,633 12,959 - 18,592 Goodwill 52,463 - - 52,463 Other assets 11,226 44,824 22,747 78,797 Total $ 77,719 $ 57,812 $ 22,747 $ 158,278 As of June 30, 2022 (in thousands) Durable Medical Equipment Investment Management General Corporate Total Fixed assets, net $ 8,025 $ 17 $ - $ 8,042 Identifiable intangible assets, net 5,921 13,250 - 19,171 Goodwill 52,463 - - 52,463 Other assets 11,616 54,520 22,275 88,411 Total $ 78,025 $ 67,787 $ 22,275 $ 168,087 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 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 which are normally included in the Company’s Form 10-K. These financial statements reflect all adjustments (consisting of normal 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. The condensed consolidated balance sheet as of June 30, 2022, presented herein, has been derived from the Company’s audited consolidated financial statements as of and for the year ended June 30, 2022. |
Use of Estimates | 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 in the financial statements and disclosures of contingent assets and liabilities. On an on-going basis, the Company evaluates all of these estimates and assumptions. Included in these estimates and assumptions are items that relate to revenue recognition, recognition of rental income, the valuation of excess and obsolete inventories, depreciable lives of equipment, impairment of long lived tangible and intangible assets, valuation allowance for deferred tax assets, fair value measurements including stock-based compensation and contingent consideration, estimates associated with the application of acquisition accounting, and the value of lease liabilities and corresponding right of use assets. 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 | 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 we are either obligated to absorb the losses that could potentially be significant to the VIE or we hold the right to receive benefits from the VIE that could potentially be significant to the VIE. All intercompany accounts and transactions have been eliminated in consolidation. Non-controlling interests in the Company’s subsidiaries are reported as a component of liabilities for mandatorily redeemable interests, temporary equity for contingently redeemable interests or permanent equity, separate from the Company’s equity. See Note 12 – Non-Controlling Interests and Preferred Stock of Subsidiaries. Results of operations attributable to the non-controlling interests are included in the Company’s condensed consolidated statements of operations. |
Segments | Segments The Company has two business operating segments: durable medical equipment and investment management, with general corporate representing unallocated costs and activity to arrive at consolidated operations. The Company regularly reviews each segment for purposes of allocating resources and assessing performance. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents are comprised of cash and highly liquid investments with original maturities of 90 days or less at the date of purchase. Cash equivalents consist primarily of exchange-traded money market funds. The Company is exposed to credit risk in the event of default by the financial institutions or the issuers of these investments to the extent the amounts on deposit or invested are in excess of amounts that are insured. |
Accounts Receivable | Accounts Receivable Substantially all of the accounts receivable balance relates to the durable medical equipment business. Accounts receivable are customer obligations due under normal sales and rental terms and represent the amount estimated to be collected from the customers and, if applicable, the third-party private insurance provider or government program (collectively, Payors ), based on the contractual agreements. The Company does not require collateral in connection with its customer transactions and aside from verifying insurance coverage, does not perform credit checks on patient customers. Revenue and accounts receivable have been constrained to the extent that billed amounts exceed the amounts estimated to be collected. The constrained transaction price relates primarily to expected billing adjustments with the Payors and patient customers. Management’s evaluation of variable consideration takes into account such factors as past experience, information about specific receivables, Payors and patient customers. The revenue reserves related to constraints on variable consideration were $ 1.5 million and $ 1.9 million as of September 30, 2022 and June 30, 2022, respectively. During the three months ended September 30, 2022 and 2021, the Company recognized reductions to revenue of $ 0.5 million and $ 1.0 million , respectively, related to such constraints. See Note 3 – Revenue. The assessment of variable consideration to be constrained is based on estimates, and ultimate losses may vary from current estimates. As adjustments to these estimates become necessary, they are reported in earnings in the periods in which they become known. There were no material adjustments to revenues made in the three months ended September 30, 2022 relating to prior periods. Changes in constraints on variable consideration are recorded as a component of net revenues. The Company generally does not allow returns from customers for reasons not covered under the manufacturer’s standard warranty. Therefore, there is no provision for sales return reserves. The Company does not have significant bad debt experience with Payors, and therefore the allowance for doubtful accounts is immaterial. As of September 30, 2022 and June 30, 2022, the Company had unbilled receivables of approximately $ 0.3 million and $ 0.4 million , respectively, that relate to transactions where the Company has the ultimate right to invoice a Payor under the terms of the arrangement but are not currently billed. These unbilled amounts are included in accounts receivable in the condensed consolidated balance sheets. |
Loss per Share | Loss per Share The following table presents the calculation of basic and diluted loss per share: For the three months ended September 30, (in thousands except per share amounts) 2022 2021 Net (loss) income $ ( 8,539 ) $ 106 Less: net (loss) income attributable to non-controlling interest ( 248 ) 306 Net loss attributable to Great Elm Group, Inc. $ ( 8,291 ) $ ( 200 ) Weighted average shares basic and diluted: Weighted average shares of common stock outstanding 28,543 25,982 Weighted average shares used in computing loss per share 28,543 25,982 Basic and diluted loss per share $ ( 0.29 ) $ ( 0.01 ) When calculating earnings (loss) per share, we are required to adjust for the dilutive effect of common stock equivalents. As of September 30, 2022, the Company had 13,249,948 potential shares of common stock, including 10,392,545 potential shares of Company common stock issuable upon conversion of Convertible Notes (as defined below) and 2,857,403 potential shares issuable upon the exercise of stock options and vesting of restricted stock units and restricted stock awards, that are not included in the diluted loss per share calculation because to do so would be anti-dilutive. As of September 30, 2021, the Company had 13,429,986 potential shares of common stock, including 9,891,734 shares of common stock issuable upon the conversion of Convertible Notes and 3,538,252 potential shares issuable upon the exercise of stock options and vesting of restricted stock units and restricted stock awards, that are not included in the diluted loss per share calculation because to do so would be anti-dilutive. As of September 30, 2022 and 2021, the Company had an aggregate of 1,303,386 and 811,360 issued shares, respectively, that are subject to forfeiture by the employee at a nominal price if service and/or performance milestones are not met. The Company does not account for such shares as being outstanding for accounting purposes since they are unvested and subject to forfeiture. |
Restrictions on Subsidiary Dividends | Restrictions on Subsidiary Dividends The ability of HC LLC to pay dividends is subject to compliance with the restricted payment covenants under the DME Revolver (as defined below). |
Concentration of Risk | Concentration of Risk The Company’s net investment revenue and receivables for the periods presented were primarily attributable to the management of two investment vehicles, GECC and Monomoy UpREIT. See Note 4 – Related Party Transactions. The Company’s durable medical equipment revenue and related accounts receivable are concentrated with third-party Payors. The following table summarizes customer concentrations as a percentage of revenues: For the three months ended September 30, 2022 2021 Government Payor 39 % 37 % Third-party Payor 13 % 13 % The following table summarizes customer concentrations as a percentage of accounts receivable: As of September 30, 2022 June 30, 2022 Government Payor 29 % 29 % Third-party Payor 13 % 14 % |
Recently Adopted and Issued Accounting Standards | Recently Issued Accounting Standards Supplier Finance Programs. In September 2022, the Financial Accounting Standards Board ( FASB ) issued Accounting Standards Update ( ASU ) 2022-04, Liabilities — Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations , which requires disclosures intended to enhance the transparency of supplier finance programs. The amendments in this ASU require the buyer in a supplier finance program to disclose information about the key terms of the program, outstanding confirmed amounts as of the end of the period, a rollforward of such amounts during each annual period, and a description of where in the financial statements outstanding amounts are presented. The amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the disclosure of rollforward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. As of September 30, 2022, the Company had $ 3.9 million in equipment financing debt through supplier finance programs at our durable medical equipment business. The Company is evaluating the potential impact that the adoption of this ASU will have on its consolidated financial statements. Current Expected Credit Losses. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) , which changes the impairment model for financial instruments, including trade receivables from an incurred loss method to a new forward looking approach, based on expected losses. The estimate of expected credit losses will require entities to incorporate considerations of historical experience, current information and reasonable and supportable forecasts. The amendments in this ASU are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is evaluating the potential impact that the adoption of this ASU will have on its consolidated financial statements. Reference Rate Reform. In March 2020, the FASB issued ASU 2020-04 , Reference Rate Reform (Topic 848): facilitation of the Effects of Reference Rate Reform on Financial Reporting, in response to the United Kingdom Financial Conduct Authority which announced the desire to phase out the use of the London Interbank Offered Rate ( LIBOR ) by the end of 2021. The provisions provide optional expedients and exceptions for applying US GAAP to contracts, hedging relationships and other transactions affected by reference rate reform on financial reporting due to the cessation of LIBOR if certain criteria are met. If LIBOR ceases to exist, we may need to renegotiate outstanding notes payable outstanding which extend beyond 2021 with the respective counterparties. Adoption of the provisions in ASU 2020-04 are optional and effective from March 12, 2020 through December 31, 2022. The Company is evaluating the potential impact that the adoption of this ASU will have on its consolidated financial statements. |
Revenue | Revenue The revenues from each major source are summarized in the following table: For the three months ended September 30, (in thousands) 2022 2021 Product and services revenue Investment Management Management fees $ 1,302 $ 876 Property management fees 274 - Administration and service fees 284 107 1,860 983 Durable Medical Equipment Equipment sales 9,634 8,730 Service revenue 1,394 1,346 11,028 10,076 Total product and services revenue $ 12,888 $ 11,059 Rental revenue Durable Medical Equipment Medical equipment rental income 5,691 5,479 Total rental revenue 5,691 5,479 Total $ 18,579 $ 16,538 Revenue Accounting Under Topic 606 In determining the appropriate amount of revenue to be recognized under FASB Accounting Standards Codification Topic 606, Revenues , the Company performed the following steps: (i) identified the promised goods or services in the contract; (ii) determined whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measured the transaction price, including the constraint on variable consideration; (iv) allocated the transaction price to the performance obligations; and (v) recognized revenue when (or as) the Company satisfied each performance obligation. Durable Medical Equipment Revenue Equipment Sales and Services Revenues The Company sells durable medical equipment, replacement parts and supplies to customers and recognizes revenue at the point control is transferred through delivery to the customer. Each piece of equipment, part or supply is distinct and separately priced thus they each represent a single performance obligation. The revenue is allocated amongst the performance obligations based upon the relative standalone selling price method, however, items are typically all delivered or supplied together. The customer and, if applicable, the Payors are generally charged at the time that the product is sold, although separate layers of insurance coverage may need to be invoiced before final billings may occur. The Company also provides sleep study services to customers and recognizes revenue when the results of the sleep study are complete as that is when the performance obligation is met. The transaction price on both equipment sales and sleep studies is the amount that the Company expects to receive in exchange for the goods and services provided. Due to the nature of the durable medical equipment business, billing adjustments customarily occur during the collections process when explanations of benefits are received by Payors, and as amounts are deferred to secondary Payors or to patient responsibility. As such, we constrain the transaction price for the difference between the gross charge and what we believe we will collect from Payors and from patients. The transaction price therefore is predominantly based on contractual payment rates determined by the Payors. The Company does not generally contract with uninsured customers. We determine our estimates of billing adjustments based upon contractual agreements, our policies and historical experience. While the rates are fixed for the product or service with the customer and the Payors, such amounts typically include co-payments, co-insurance and deductibles, which vary in amounts, from the patient customer. The Company includes in the transaction price only the amount that the Company expects to be entitled, which is substantially all of the Payor billings at contractual rates. The transaction price is initially constrained by the amount of customer co-payments we estimate will not be collected. Due to the nature of the industry and the reimbursement environment in which the Company operates, certain estimates are required to record net revenue and accounts receivable. Inherent in these estimates is the risk that they will have to be revised or updated as additional information becomes available. Specifically, the complexity of many third-party billing arrangements and the uncertainty of reimbursement amounts for certain services from certain Payors may result in adjustments to amounts originally recorded. Such adjustments are typically identified and recorded at the point of cash application or claim denial. The Company constrains revenue for these estimated adjustments. There were no material changes in estimates during the three months ended September 30, 2022, relating to prior periods. The payment terms and conditions of customer contracts vary by customer type and the products and services offered. The Company may provide shipping services prior to the point of delivery and has concluded that the services represent a fulfilment activity and not a performance obligation. Returns and refunds are not accepted on either equipment sales or sleep study services. The Company does not offer warranties to customers in excess of the manufacturer’s warranty. Any taxes due upon sale of the products or services are not recognized as revenue. The Company does not incur contract acquisition costs. The Company generally does not have any partially or unfilled performance obligations related to contracts with customers. However, during the quarter ended June 30, 2020, the Company applied for and received $ 4.4 million in advanced payments from the Centers for Medicare and Medicaid Services ( CMS ) under their Accelerated and Advance Payment Program, which was expanded to increase cash flow to providers of services and suppliers impacted by the COVID-19 pandemic. CMS began recoupments during our fiscal year 2021, leaving a remaining balance of $ 0.3 million as of June 30, 2022. During the three months ended September 30, 2022 , we issued nominal recoupments leaving a remaining balance of $ 0.3 million as of September 30, 2022 . These remaining balances were subsequently repaid to CMS. These amounts are included within deferred revenue on the condensed consolidated balance sheets. The Company has no other contract liabilities as of September 30, 2022 or June 30, 2022. Included in equipment sales and services revenue are unbilled amounts for which the revenue recognition criteria had been met as of period end but were not yet billed to the Payor. The estimate of net unbilled equipment sales and services revenue recognized is based on historical trends and estimates of future collectability. As of September 30, 2022 and June 30, 2022, net unbilled equipment sales and services revenue is approximately $ 0.2 million and $ 0.3 million, respectively, and is included in accounts receivable. Investment Management Revenue The Company recognizes revenue from its investment management business at amounts that reflect the consideration to which it expects to be entitled in exchange for providing services to its customer. Investment management revenue primarily consists of fees based on a percentage of assets under management, fees based on the performance of managed assets, and administration and service fees. Fees are based on agreements with each investment product and 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 GECM has with GECC, Monomoy UpREIT and other private funds managed by GECM (collectively, the Funds ). The performance obligation is satisfied over time as the services are rendered, since the Funds simultaneously receive and consume the benefits provided as GECM performs 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. Management fee revenue is recognized over time as the services are provided. Property Management Fees Under the Monomoy UpREIT agreement, GECM is also 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. Incentive Fees The Company earns incentive fees based on the investment management agreements GECM has with GECC and Monomoy Properties II, LLC (a feeder fund of Monomoy UpREIT). 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. 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. As of September 30, 2022 , there are no incentive fees which have been earned per the terms of the investment management agreements. Administration and Service Fees The Company earns administration fees based on the administration agreement GECM has with GECC whereby the investment vehicles reimburse GECM for costs incurred in performing certain administrative functions. 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 also earns service fees based on a shared services agreement with certain portfolio companies of GECC. 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 reflect 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. Revenue Accounting Under Topic 842 Durable Medical Equipment Revenue Equipment Rental Income Under FASB Accounting Standards Codification Topic 842, Leases ( Topic 842 ), rental income from operating leases is recognized on a straight-line basis, based on contractual lease terms with fixed and determinable increases over the non-cancellable term of the related lease when collectability is reasonably assured. The Company leases durable medical equipment to customers for a fixed monthly amount on a month-to-month basis. The contractual length of the lease term varies based on the type of equipment that is rented to the customer, but generally is from 10 to 36 months . In the case of capped rental agreements, title to the equipment transfers to the customer at the end of the contractual rental period. The customer has the right to cancel the lease at any time during the rental period for a subsequent month’s rental and payments are generally billed in advance on a month-to-month basis. Under Topic 842, rental income from operating leases is recognized on a month-to-month basis, based on contractual lease terms when collectability is reasonably assured. Certain customer co-payments are included in revenue to the extent they are considered probable of payment. The lease term begins on the date products are delivered to patients and are recorded at amounts estimated to be received under reimbursement arrangements with third-party payors, including Medicare, private payors, and Medicaid. Due to the nature of the industry and the reimbursement environment in which the Company operates, certain estimates are required to record net revenue and accounts receivable at their net realizable values. Inherent in these estimates is the risk that they will have to be revised or updated as additional information becomes available. Specifically, the complexity of many third-party billing arrangements and the uncertainty of reimbursement amounts for certain services from certain Payors may result in adjustments to amounts originally recorded. Such adjustments are typically identified and recorded at the point of cash application or claim denial. There were no material changes in estimates recorded in the three months ended September 30, 2022, relating to prior periods. Although invoicing typically occurs at the beginning of the monthly rental period, we recognize revenue from rentals on a daily basis. Since rental agreements can commence at any time during a given month, we defer revenue related to the remaining monthly rental period as of period end. Deferred revenue related to rentals was $ 1.0 million and $ 0.9 million as of September 30, 2022 and June 30, 2022, respectively. Included in rental revenue are unbilled amounts for which the revenue recognition criteria had been met as of period end but were not yet billed to the Payor. Net unbilled rental revenue is recognized to the extent payment is probable. As of September 30, 2022 and June 30, 2022, net unbilled rental revenue is approximately $ 0.1 million and $ 0.1 million, respectively, and is included in accounts receivable. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Earnings Per Share, Basic and Diluted | The following table presents the calculation of basic and diluted loss per share: For the three months ended September 30, (in thousands except per share amounts) 2022 2021 Net (loss) income $ ( 8,539 ) $ 106 Less: net (loss) income attributable to non-controlling interest ( 248 ) 306 Net loss attributable to Great Elm Group, Inc. $ ( 8,291 ) $ ( 200 ) Weighted average shares basic and diluted: Weighted average shares of common stock outstanding 28,543 25,982 Weighted average shares used in computing loss per share 28,543 25,982 Basic and diluted loss per share $ ( 0.29 ) $ ( 0.01 ) |
Summarizes Customer Concentrations as Percentage of Revenues and Accounts Receivable | The Company’s durable medical equipment revenue and related accounts receivable are concentrated with third-party Payors. The following table summarizes customer concentrations as a percentage of revenues: For the three months ended September 30, 2022 2021 Government Payor 39 % 37 % Third-party Payor 13 % 13 % The following table summarizes customer concentrations as a percentage of accounts receivable: As of September 30, 2022 June 30, 2022 Government Payor 29 % 29 % Third-party Payor 13 % 14 % |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Major Source of Revenue | The revenues from each major source are summarized in the following table: For the three months ended September 30, (in thousands) 2022 2021 Product and services revenue Investment Management Management fees $ 1,302 $ 876 Property management fees 274 - Administration and service fees 284 107 1,860 983 Durable Medical Equipment Equipment sales 9,634 8,730 Service revenue 1,394 1,346 11,028 10,076 Total product and services revenue $ 12,888 $ 11,059 Rental revenue Durable Medical Equipment Medical equipment rental income 5,691 5,479 Total rental revenue 5,691 5,479 Total $ 18,579 $ 16,538 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Managed Investment Products | |
Schedule of Activity and Outstanding Balances Related Party and Company | The following tables summarize activity and outstanding balances between the managed investment products and the Company: For the three months ended September 30, (in thousands) 2022 2021 Net realized and unrealized loss on investments $ ( 6,797 ) $ ( 116 ) Net realized and unrealized loss on investments of Consolidated Fund ( 16 ) ( 189 ) Dividend income 1,380 554 As of (in thousands) September 30, 2022 June 30, 2022 Dividends receivable $ 586 $ 612 Investment management revenues receivable 1,173 1,241 Receivable for reimbursable expenses paid 819 592 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Summary of Assets and Liabilities Measured at Fair Value on Recurring and Non-recurring Basis | The assets and liabilities measured at fair value on a recurring and no n-recurring basis are summarized in the tables below: Fair Value as of September 30, 2022 (in thousands) Level 1 Level 2 Level 3 Total Assets: Equity investments $ 20,075 $ - $ - $ 20,075 Total assets within the fair value hierarchy $ 20,075 $ - $ - $ 20,075 Investments valued at net asset value $ 20,549 Total assets $ 40,624 Liabilities: Participation feature of Series A-2 Preferred Stock $ - $ - * * Contingent consideration liability - - 1,709 1,709 Total liabilities $ - $ - $ 1,709 $ 1,709 Fair Value as of June 30, 2022 (in thousands) Level 1 Level 2 Level 3 Total Assets: Equity investments $ 27,678 $ - $ - $ 27,678 Equity investments of Consolidated Fund 1,797 - - 1,797 Total assets within the fair value hierarchy $ 29,475 $ - $ - $ 29,475 Investments valued at net asset value $ 20,363 Total assets $ 49,838 Liabilities: Participation feature of Series A-2 Preferred Stock $ - $ - * * Contingent consideration liability - - 1,767 1,767 Total liabilities $ - $ - $ 1,767 $ 1,767 *Balance eliminates in consolidation. |
Reconciliation of Changes in Contingent Consideration, Level 3 Liability | The following is a reconciliation of changes in contingent consideration, a Level 3 liability: For the three months ended September 30, (in thousands) 2022 2021 Beginning balance $ 1,767 $ 271 Additions - 497 Change in fair value ( 58 ) ( 163 ) Ending balance $ 1,709 $ 605 |
Fixed Assets (Tables)
Fixed Assets (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment and Equipment Held for Rental | Property and equipment and equipment held for rental consist of the following as of September 30, 2022 and June 30, 2022: (in thousands) September 30, 2022 June 30, 2022 Property and Equipment Leasehold improvements $ 981 $ 970 Vehicles 162 162 Computer equipment and software 716 642 Furniture and fixtures 570 590 Sleep study equipment 594 594 3,023 2,958 Accumulated depreciation ( 2,520 ) ( 2,420 ) Net carrying amount $ 503 $ 538 Equipment Held for Rental Medical equipment held for rental $ 17,544 $ 16,593 Accumulated depreciation ( 9,621 ) ( 9,089 ) Net carrying amount $ 7,923 $ 7,504 |
Summary of Reconciles Total Depreciation Expense | The following table reconciles total depreciation expense for each period presented: For the three months ended September 30, (in thousands) 2022 2021 Depreciation and amortization $ 101 $ 143 Cost of durable medical equipment rentals 1,889 1,688 Total depreciation expense $ 1,990 $ 1,831 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Carrying Value of Goodwill | The changes in the carrying value of goodwill are as follows: For the three months ended September 30, (in thousands) 2022 2021 Beginning balance $ 52,463 $ 50,536 Acquisition of businesses - 1,927 Ending balance $ 52,463 $ 52,463 |
Summary of Acquired Identifiable Intangible Assets | The following tables provide additional details related to the Company’s acquired identifiable intangible assets: As of September 30, 2022 As of June 30, 2022 (in thousands) Gross Carrying Accumulated Net Carrying Gross Carrying Accumulated Net Carrying Durable Medical Equipment Tradename $ 9,060 $ ( 3,676 ) $ 5,384 $ 9,060 $ ( 3,443 ) $ 5,617 Hospital contracts 90 ( 55 ) 35 90 ( 49 ) 41 Non-compete agreements 1,370 ( 1,156 ) 214 1,370 ( 1,107 ) 263 10,520 ( 4,887 ) 5,633 10,520 ( 4,599 ) 5,921 Investment Management Investment management agreements 15,264 ( 3,019 ) 12,245 15,264 ( 2,753 ) 12,511 Assembled workforce 1,103 ( 389 ) 714 1,103 ( 364 ) 739 16,367 ( 3,408 ) 12,959 16,367 ( 3,117 ) 13,250 Total $ 26,887 $ ( 8,295 ) $ 18,592 $ 26,887 $ ( 7,716 ) $ 19,171 |
Summary of Amortization Expense of Identifiable Intangible Assets | Aggregate Amortization Expense (in thousands) 2022 2021 For the three months ended September 30, 579 419 Estimated Future Amortization Expense (in thousands) : For the nine months ending June 30, 2023 $ 1,703 For the year ending June 30, 2024 $ 2,084 For the year ending June 30, 2025 $ 1,974 For the year ending June 30, 2026 $ 1,912 For the year ending June 30, 2027 $ 1,838 Thereafter $ 9,081 Total $ 18,592 |
Lessee Operating Leases (Tables
Lessee Operating Leases (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Lessee Disclosure [Abstract] | |
Schedule of supplemental balance sheet information related to leases | Supplemental balance sheet information related to leases as of September 30, 2022 and June 30, 2022 is as follows: (in thousands, except remaining life and discount rate) September 30, 2022 June 30, 2022 Facilities Right of use assets $ 3,382 $ 3,400 Current portion of lease liabilities 1,561 1,475 Lease liabilities, net of current portion 2,032 2,137 Total liabilities $ 3,593 $ 3,612 Weighted-average remaining life 2.9 years 3.1 years Weighted-average discount rate 10.8 % 10.8 % Vehicles Right of use assets $ 429 $ 315 Current portion of lease liabilities 119 77 Lease liabilities, net of current portion 310 238 Total liabilities $ 429 $ 315 Weighted-average remaining life 4.1 years 4.2 years Weighted-average discount rate 5.8 % 6.3 % Equipment Right of use assets $ 4 $ 7 Current portion of lease liabilities 4 7 Total liabilities $ 4 $ 7 Weighted-average remaining life 0.6 years 0.8 years Weighted-average discount rate 12.5 % 12.5 % |
Schedule of Operating Lease Cost | Operating lease costs are included in the operating expense associated with the business segment leasing the asset on the condensed consolidated statements of operations and are included in cash flows from operating activities on the condensed consolidated statements of cash flows. Certain operating leases include variable lease costs which are not material and are included in operating lease costs. Additional details are presented in the following table: For the three months ended September 30, (in thousands) 2022 2021 Facilities Operating lease cost $ 583 $ 554 Cash paid for operating leases 482 552 Vehicles Operating lease cost $ 26 $ 13 Cash paid for operating leases 24 13 Equipment Operating lease cost $ 23 $ 9 Cash paid for operating leases 23 9 |
Schedule of Company's Undiscounted Cash Payment Obligations for Operating Lease | : (in thousands) September 30, 2022 For the nine months ending June 30, 2023 $ 1,410 For the year ending June 30, 2024 1,641 For the year ending June 30, 2025 786 For the year ending June 30, 2026 646 For the year ending June 30, 2027 152 Thereafter 21 Total lease payments $ 4,656 Imputed interest ( 630 ) Total lease liabilities $ 4,026 |
Borrowings (Tables)
Borrowings (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Debt Instrument [Line Items] | |
Schedule of Related Party Borrowings of Subsidiaries | Related party borrowings of the Company's subsidiaries are summarized in the following table: (in thousands) Borrower September 30, 2022 June 30, 2022 Seller Note GECM $ 5,661 $ 6,270 GP Corp. Note GEC GP * * Total principal $ 5,661 $ 6,270 Unamortized debt issuance cost - - Total long-term related party notes payable 5,661 6,270 Less current portion of related party notes payable ( 5,661 ) - Related party notes payable, net of current portion $ - $ 6,270 *Balance eliminates in consolidation. |
Schedule of Subsidiaries' Other Outstanding Borrowings | The Company’s and subsidiaries’ other outstanding borrowings are summarized in the following table: (in thousands) Borrower September 30, 2022 June 30, 2022 GEGGL Notes GEG $ 26,945 $ 26,945 DME Revolver HC LLC and subsidiaries - - Equipment Financing HC LLC and subsidiaries 3,909 2,993 Total principal $ 30,854 $ 29,938 Unamortized debt discounts and issuance costs ( 1,348 ) ( 1,413 ) Total other outstanding borrowings 29,506 28,525 Less current portion of other outstanding borrowings ( 3,909 ) ( 2,993 ) Other outstanding borrowings, net of current portion $ 25,597 $ 25,532 |
Schedule of Aggregate Future Required Principal Debt Repayments | The Company’s aggregate future required principal debt repayments are summarized in the following table: (in thousands) Principal Due For the nine months ending June 30, 2023 $ 3,909 For the year ending June 30, 2024 5,661 For the year ending June 30, 2025 - For the year ending June 30, 2026 - For the year ending June 30, 2027 26,945 Thereafter - Total $ 36,515 |
Non-Controlling Interests and_2
Non-Controlling Interests and Preferred Stock of Subsidiaries (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Noncontrolling Interest [Abstract] | |
Summary of Non-controlling Interests Balance on Condensed Consolidated Balance Sheet | The following table summarizes the non-controlling interest balances on the condensed consolidated balance sheets: (in thousands) September 30, 2022 June 30, 2022 HC LLC Temporary equity $ 2,887 $ 2,225 Permanent equity 2,887 2,225 Total HC LLC 5,774 4,450 Consolidated Fund Permanent equity - 642 Forest Permanent equity 2,102 3,666 Total non-controlling interests $ 7,876 $ 8,758 |
Summary of Non-controlling Interests Balance on Condensed Consolidated Statements of Operations | The following table summarizes the net (loss) income attributable to the non-controlling interests on the condensed consolidated statements of operations: For the three months ended September 30, (in thousands) 2022 2021 HC LLC Temporary equity 662 205 Permanent equity 662 205 Total HC LLC 1,324 410 GEC GP Permanent equity - ( 2 ) Consolidated Fund Permanent equity ( 8 ) ( 85 ) Forest Permanent equity ( 1,564 ) ( 17 ) Total net (loss) income attributable to non-controlling interest $ ( 248 ) $ 306 |
Summary of Preferred Stock of Subsidiary Balances on Condensed Consolidated Balance Sheets | The following table summarizes the share activity for the preferred stock of subsidiaries: Balance, as of June 30, 2022 Redemption of Preferred Stock Balance, as of September 30, 2022 HC LLC Series A-1 Preferred Stock 4,090 ( 407 ) 3,683 Series A-2 Preferred Stock 34,010 - 34,010 Total HC LLC 38,100 ( 407 ) 37,693 Forest Forest Preferred Stock 35,010 - 35,010 Total 73,110 ( 407 ) 72,703 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Activity of Restricted Stock Awards and Restricted Stock Units | The activity of the Company’s restricted stock awards and restricted stock units for the three months ended September 30, 2022 was as follows: Restricted Stock Awards and Restricted Stock Units Restricted Stock (in thousands) Weighted Average Grant Date Fair Value Outstanding at June 30, 2022 1,312 $ 1.79 Granted 398 2.19 Vested ( 238 ) 2.16 Forfeited ( 3 ) 2.50 Outstanding at September 30, 2022 1,469 $ 1.84 |
Summary of Option Activity | The following table summarizes the Company’s option award activity as of and during the three months ended September 30, 2022: Options Shares (in thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (in thousands) Outstanding at June 30, 2022 2,134 $ 3.68 3.34 $ - Options granted 125 3.60 - - Forfeited, cancelled or expired ( 732 ) 3.59 - - Outstanding at September 30, 2022 1,527 $ 3.72 4.63 $ - Exercisable at September 30, 2022 1,436 $ 3.70 4.67 $ - Vested and expected to vest as of September 30, 2022 1,527 $ 3.72 4.63 $ - |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Results of Operations by Segment | The following tables summarize results of operations by segment: For the three months ended September 30, 2022 (in thousands) Durable Medical Equipment Investment Management General Corporate Intercompany Eliminations (1) Consolidated Total Revenue: Total revenue $ 16,719 $ 1,860 $ 203 $ ( 203 ) $ 18,579 Operating costs and expenses: Cost of durable medical equipment sold and services ( 4,340 ) - - - ( 4,340 ) Cost of durable medical equipment rentals ( 2,050 ) - - - ( 2,050 ) Depreciation and amortization ( 387 ) ( 294 ) - - ( 681 ) Non-cash compensation (2) - ( 477 ) ( 464 ) - ( 941 ) Other selling, general and administrative ( 9,062 ) ( 1,557 ) ( 1,136 ) 203 ( 11,552 ) Total operating expenses ( 15,839 ) ( 2,328 ) ( 1,600 ) 203 ( 19,564 ) Other income (expense): Interest expense ( 1,106 ) ( 136 ) ( 1,839 ) 1,085 ( 1,996 ) Other income (expense) 6,984 ( 5,427 ) ( 5,834 ) ( 1,085 ) ( 5,362 ) Total other income (expense), net 5,878 ( 5,563 ) ( 7,673 ) - ( 7,358 ) Total income (loss) before income taxes $ 6,758 $ ( 6,031 ) $ ( 9,070 ) $ - $ ( 8,343 ) For the three months ended September 30, 2021 (in thousands) Durable Medical Equipment Investment Management General Corporate Intercompany Eliminations (1) Consolidated Total Revenue: Total revenue $ 15,555 $ 983 $ 243 $ ( 243 ) $ 16,538 Operating costs and expenses: Cost of durable medical equipment sold and services ( 4,060 ) - - - ( 4,060 ) Cost of durable medical equipment rentals ( 1,850 ) - - - ( 1,850 ) Depreciation and amortization ( 453 ) ( 109 ) - - ( 562 ) Non-cash compensation (2) - ( 396 ) ( 372 ) - ( 768 ) Transaction costs (3) ( 97 ) - ( 184 ) - ( 281 ) Other selling, general and administrative ( 6,286 ) ( 843 ) ( 1,130 ) 243 ( 8,016 ) Total operating expenses ( 12,746 ) ( 1,348 ) ( 1,686 ) 243 ( 15,537 ) Other income (expense): Interest expense ( 1,287 ) ( 24 ) ( 1,269 ) 1,218 ( 1,362 ) Other income (expense) 560 249 875 ( 1,218 ) 466 Total other income (expense), net ( 727 ) 225 ( 394 ) - ( 896 ) Total income (loss) before income taxes $ 2,082 $ ( 140 ) $ ( 1,837 ) $ - $ 105 (1) The Company’s wholly-owned subsidiary, DME Manager, provides advisory services to HC LLC (formerly to DME Inc.) and receives consulting fees for those services. DME Manager is considered part of the general corporate operations while HC LLC is part of the durable medical equipment segment. The corresponding expense to HC LLC and revenue to DME Manager are eliminated in consolidation. Beginning December 29, 2020, DME Manager also provides advisory services to Forest and receives a consulting fee from Forest for those services. Both DME Manager and Forest are part of general corporate operations, and the corresponding revenue and expense are eliminated in consolidation. Additionally, Forest owns Series A-1 Preferred Stock (excluding shares held by VHG) and Series A-2 Preferred Stock of HC LLC. Forest is part of general corporate operations while HC LLC is part of the durable medical equipment segment. The corresponding interest expense to HC LLC and interest income to Forest are eliminated in consolidation. (2) Non-cash compensation includes stock-based compensation and compensation in the form of stock in portfolio companies held by the Company. Non-cash compensation attributable to the investment management segment is included in investment management expenses in the condensed consolidated statements of operations. Non-cash compensation attributable to the general corporate segment is included in selling, general and administrative expense in the condensed consolidated statements of operations. (3) Transaction costs, which consist of legal and other professional services, are included in selling, general and administrative expense in the condensed consolidated statements of operations. |
Schedule of Assets by Segment | The following tables summarize assets by segment: As of September 30, 2022 (in thousands) Durable Medical Equipment Investment Management General Corporate Total Fixed assets, net $ 8,397 $ 29 $ - $ 8,426 Identifiable intangible assets, net 5,633 12,959 - 18,592 Goodwill 52,463 - - 52,463 Other assets 11,226 44,824 22,747 78,797 Total $ 77,719 $ 57,812 $ 22,747 $ 158,278 As of June 30, 2022 (in thousands) Durable Medical Equipment Investment Management General Corporate Total Fixed assets, net $ 8,025 $ 17 $ - $ 8,042 Identifiable intangible assets, net 5,921 13,250 - 19,171 Goodwill 52,463 - - 52,463 Other assets 11,616 54,520 22,275 88,411 Total $ 78,025 $ 67,787 $ 22,275 $ 168,087 |
Organization (Details)
Organization (Details) - Segment | 3 Months Ended | ||
Sep. 30, 2022 | May 31, 2021 | Sep. 07, 2018 | |
Number of business operating segments | 2 | ||
Great Elm DME, Inc. | |||
Percentage of equity interest acquired (as a percent) | 80.10% | ||
Great Elm DME, Inc. | |||
Ownership percentage | 80.10% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) $ in Millions | 3 Months Ended | ||
Sep. 30, 2022 USD ($) Segment shares | Sep. 30, 2021 USD ($) shares | Jun. 30, 2022 USD ($) | |
Significant Accounting Policies [Line Items] | |||
Number of business operating segments | Segment | 2 | ||
Revenue reserve constraints on variable consideration | $ | $ 1.5 | $ 1.9 | |
Reduction in revenue | $ | 0.5 | $ 1 | |
Unbilled receivables | $ | $ 0.3 | $ 0.4 | |
Potentially dilutive shares excluded from diluted loss per share | shares | 13,249,948 | 13,429,986 | |
Number of shares subject to forfeiture | shares | 1,303,386 | 811,360 | |
ASU 2022-04 | Durable Medical Equipment | |||
Significant Accounting Policies [Line Items] | |||
Equipment financing debt | $ | $ 3.9 | ||
Common Stock Issuable upon Conversion of Convertible Notes | |||
Significant Accounting Policies [Line Items] | |||
Potentially dilutive shares excluded from diluted loss per share | shares | 10,392,545 | 9,891,734 | |
Common Stock Issuable upon Exercise of Stock Options and Vesting of Restricted Stock Units and Restricted Stock Awards | |||
Significant Accounting Policies [Line Items] | |||
Potentially dilutive shares excluded from diluted loss per share | shares | 2,857,403 | 3,538,252 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Accounting Policies [Abstract] | ||
Net (loss) income | $ (8,539) | $ 106 |
Less: net (loss) income attributable to non-controlling interest | (248) | 306 |
Net loss attributable to Great Elm Group, Inc. | $ (8,291) | $ (200) |
Weighted average shares basic and diluted: | ||
Weighted average shares of common stock outstanding | 28,543 | 25,982 |
Weighted average shares used in computing loss per share | 28,543 | 25,982 |
Basic loss per share | $ (0.29) | $ (0.01) |
Diluted loss per share | $ (0.29) | $ (0.01) |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Summarizes Customer Concentrations as Percentage of Revenues (Details) - Revenues - Customer Concentrations | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Government Payor | ||
Significant Accounting Policies [Line Items] | ||
Concentration risk, percentage | 39% | 37% |
Third-party Payor | ||
Significant Accounting Policies [Line Items] | ||
Concentration risk, percentage | 13% | 13% |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Summarizes Customer Concentrations as Percentage of Accounts Receivable (Details) - Accounts Receivable - Customer Concentrations | 3 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Jun. 30, 2022 | |
Government Payor | ||
Significant Accounting Policies [Line Items] | ||
Concentration risk, percentage | 29% | 29% |
Third-party Payor | ||
Significant Accounting Policies [Line Items] | ||
Concentration risk, percentage | 13% | 14% |
Revenue - Summary of Major Sour
Revenue - Summary of Major Source of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation Of Revenue [Line Items] | ||
Rental income | $ 5,691 | $ 5,479 |
Revenues | 18,579 | 16,538 |
Investment Management | ||
Disaggregation Of Revenue [Line Items] | ||
Total product and services revenue | 1,860 | 983 |
Investment Management | Management Fees | ||
Disaggregation Of Revenue [Line Items] | ||
Total product and services revenue | 1,302 | 876 |
Investment Management | Property Management Fees | ||
Disaggregation Of Revenue [Line Items] | ||
Total product and services revenue | 274 | |
Investment Management | Administration and Service Fees | ||
Disaggregation Of Revenue [Line Items] | ||
Total product and services revenue | 284 | 107 |
Durable Medical Equipment | Equipment Sales | ||
Disaggregation Of Revenue [Line Items] | ||
Total product and services revenue | 9,634 | 8,730 |
Durable Medical Equipment | Service Revenues | ||
Disaggregation Of Revenue [Line Items] | ||
Total product and services revenue | 1,394 | 1,346 |
Durable Medical Equipment | Sales and Services | ||
Disaggregation Of Revenue [Line Items] | ||
Total product and services revenue | 11,028 | 10,076 |
Durable Medical Equipment | Medical Equipment | ||
Disaggregation Of Revenue [Line Items] | ||
Rental income | 5,691 | 5,479 |
Investment Management and Durable Medical Equipment | ||
Disaggregation Of Revenue [Line Items] | ||
Total product and services revenue | $ 12,888 | $ 11,059 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Jun. 30, 2020 | Jun. 30, 2022 | |
Disaggregation Of Revenue [Line Items] | |||
Contract with customer liability | $ 0 | $ 0 | |
Incentive fee earned as percentage on investment performance | 20% | ||
Accrued incentive fees as per the terms of investment management agreements | $ 0 | ||
Minimum | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of management fee rates | 1% | ||
Equipment Lease Term | 10 months | ||
Maximum | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of management fee rates | 1.50% | ||
Equipment Lease Term | 36 months | ||
Funds | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage entitled of rent collected | 4% | ||
Equipment Sales and Service | Accounts Receivable | |||
Disaggregation Of Revenue [Line Items] | |||
Unbilled revenue | $ 200,000 | 300,000 | |
Equipment Rental | |||
Disaggregation Of Revenue [Line Items] | |||
Contract with customer liability | 1,000,000 | 900,000 | |
Equipment Rental | Accounts Receivable | |||
Disaggregation Of Revenue [Line Items] | |||
Unbilled revenue | 100,000 | 100,000 | |
Centers for Medicare and Medicaid Services | |||
Disaggregation Of Revenue [Line Items] | |||
Proceeds from federal agency | $ 4,400,000 | ||
Remaining balance in advance payments from federal agency | $ 300,000 | $ 300,000 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Related Party Transaction [Line Items] | ||
Consolidated funds | $ 0 | |
GECC | ||
Related Party Transaction [Line Items] | ||
Percentage of ownership interest (as a percent) | 22.90% | |
Number of sharers held in subsidiary | 1,744,048 | |
Shared Personnel and Reimbursement Agreement | Jason W. Reese | Investment Management Expenses | ||
Related Party Transaction [Line Items] | ||
Costs incurred under agreement | $ 400,000 | $ 100,000 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Activity and Outstanding Balances Between Managed Investment Products and Company (Details) - Managed Investment Products - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | |
Related Party Transaction [Line Items] | |||
Net realized and unrealized loss on investments | $ (6,797) | $ (116) | |
Net realized and unrealized loss on investments of Consolidated Fund | (16) | (189) | |
Dividend income | 1,380 | $ 554 | |
Dividends receivable | 586 | $ 612 | |
Investment management revenues receivable | 1,173 | 1,241 | |
Receivable for reimbursable expenses paid | $ 819 | $ 592 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Assets and Liabilities Measured at Fair Value on Recurring and Non-recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 |
Assets: | ||
Total assets | $ 40,624 | $ 49,838 |
Liabilities: | ||
Contingent consideration liability | 1,709 | 1,767 |
Total liabilities | 1,709 | 1,767 |
Fair Value, Inputs, Level 1 | ||
Assets: | ||
Equity investments | 20,075 | 27,678 |
Total assets | 20,075 | 29,475 |
Liabilities: | ||
Participation feature of Series A-2 Preferred Stock | 0 | 0 |
Contingent consideration liability | 0 | 0 |
Total liabilities | 0 | 0 |
Fair Value, Inputs, Level 1 | Consolidated Fund | ||
Assets: | ||
Equity investments | 1,797 | |
Fair Value, Inputs, Level 2 | ||
Assets: | ||
Equity investments | 0 | 0 |
Total assets | 0 | 0 |
Liabilities: | ||
Participation feature of Series A-2 Preferred Stock | 0 | 0 |
Contingent consideration liability | 0 | 0 |
Total liabilities | 0 | 0 |
Fair Value, Inputs, Level 2 | Consolidated Fund | ||
Assets: | ||
Equity investments | 0 | |
Fair Value, Inputs, Level 3 | ||
Assets: | ||
Equity investments | 0 | 0 |
Total assets | 0 | 0 |
Liabilities: | ||
Contingent consideration liability | 1,709 | 1,767 |
Total liabilities | 1,709 | 1,767 |
Fair Value, Inputs, Level 3 | Consolidated Fund | ||
Assets: | ||
Equity investments | 0 | |
Fair Value, Inputs, Level 1, 2 and 3 | ||
Assets: | ||
Equity investments | 20,075 | 27,678 |
Total assets | 20,075 | 29,475 |
Fair Value, Inputs, Level 1, 2 and 3 | Consolidated Fund | ||
Assets: | ||
Equity investments | 1,797 | |
Fair Value Measured at Net Asset Value Per Share | ||
Assets: | ||
Investments valued at net asset value | $ 20,549 | $ 20,363 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of Changes in Contingent Consideration, Level 3 Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | ||
Beginning balance | $ 1,767 | $ 271 |
Additions | 0 | 497 |
Change in fair value | (58) | (163) |
Ending balance | $ 1,709 | $ 605 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) | 3 Months Ended | |||||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) | May 04, 2022 USD ($) | Aug. 31, 2021 USD ($) | Mar. 01, 2021 USD ($) | |
Fair value assets level 1 to level 2 transfers | $ 0 | $ 0 | ||||
Fair value assets level 2 to level 1 transfers | 0 | 0 | ||||
Fair value asset transfers into level 3 | 0 | 0 | ||||
Fair value asset transfers out of level 3 | 0 | 0 | ||||
Fair value liabilities level 1 to level 2 transfers | 0 | 0 | ||||
Fair value liabilities level 2 to level 1 transfers | 0 | 0 | ||||
Fair value liability transfers into level 3 | 0 | 0 | ||||
Fair value liability transfers out of level 3 | $ 0 | $ 0 | ||||
Notice period for annually allowable redemptions | 90 days | |||||
Lockup period from date of investment | 1 year | |||||
Valuation of participation feature | $ 0 | |||||
Forest Investments, Inc. (Forest) | ||||||
Fair value of embedded derivative liability | $ 900,000 | $ 7,900,000 | ||||
Volatility Rate | Great Elm Healthcare, LLC (HC LLC) | ||||||
Contingent consideration, fair value estimation | 0.635 | 0.591 | ||||
AMPM | ||||||
Maximum additional consideration payable | $ 2,100,000 | |||||
Contingent consideration, fair value estimation | 0 | |||||
MedOne | ||||||
Maximum additional consideration payable | $ 1,000,000 | |||||
Contingent consideration liability | $ 700,000 | |||||
Monomoy Properties REIT, LLC | ||||||
Maximum additional consideration payable | $ 2,000,000 | |||||
Contingent consideration liability | $ 1,100,000 | $ 1,100,000 | ||||
Monomoy Properties REIT, LLC | Volatility Rate | ||||||
Contingent consideration, fair value estimation | 0.192 | |||||
Monomoy Properties REIT, LLC | Discount Rate | ||||||
Contingent consideration, fair value estimation | 0.0875 |
Fixed Assets - Summary of Prope
Fixed Assets - Summary of Property and Equipment and Equipment Held for Rental (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 |
Property Plant And Equipment [Line Items] | ||
Property and Equipment, Gross Carrying Amount | $ 3,023 | $ 2,958 |
Accumulated depreciation | (2,520) | (2,420) |
Net carrying amount | 503 | 538 |
Medical equipment held for rental | 17,544 | 16,593 |
Accumulated depreciation | (9,621) | (9,089) |
Net carrying amount | 7,923 | 7,504 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and Equipment, Gross Carrying Amount | 981 | 970 |
Vehicles | ||
Property Plant And Equipment [Line Items] | ||
Property and Equipment, Gross Carrying Amount | 162 | 162 |
Computer Equipment And Software | ||
Property Plant And Equipment [Line Items] | ||
Property and Equipment, Gross Carrying Amount | 716 | 642 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Property and Equipment, Gross Carrying Amount | 570 | 590 |
Sleep Study Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and Equipment, Gross Carrying Amount | $ 594 | $ 594 |
Fixed Assets - Summary of Recon
Fixed Assets - Summary of Reconciles Total Depreciation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Property Plant And Equipment [Line Items] | ||
Total depreciation expense | $ 1,990 | $ 1,831 |
Durable Medical Equipment | Rentals | ||
Property Plant And Equipment [Line Items] | ||
Total depreciation expense | 1,889 | 1,688 |
Depreciation and Amortization | ||
Property Plant And Equipment [Line Items] | ||
Total depreciation expense | $ 101 | $ 143 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Schedule of Changes in Carrying Value of Goodwill (Details) $ in Thousands | 3 Months Ended |
Sep. 30, 2021 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Beginning balance | $ 50,536 |
Acquisition of businesses | 1,927 |
Ending balance | $ 52,463 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Summary of Acquired Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 26,887 | $ 26,887 |
Accumulated Amortization | (8,295) | (7,716) |
Net Carrying Amount | 18,592 | 19,171 |
Durable Medical Equipment Assets | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 10,520 | 10,520 |
Accumulated Amortization | (4,887) | (4,599) |
Net Carrying Amount | 5,633 | 5,921 |
Durable Medical Equipment Assets | Tradename | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 9,060 | 9,060 |
Accumulated Amortization | (3,676) | (3,443) |
Net Carrying Amount | 5,384 | 5,617 |
Durable Medical Equipment Assets | Hospital Contracts | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 90 | 90 |
Accumulated Amortization | (55) | (49) |
Net Carrying Amount | 35 | 41 |
Durable Medical Equipment Assets | Non-compete Agreements | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,370 | 1,370 |
Accumulated Amortization | (1,156) | (1,107) |
Net Carrying Amount | 214 | 263 |
Investment Management Assets | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 16,367 | 16,367 |
Accumulated Amortization | (3,408) | (3,117) |
Net Carrying Amount | 12,959 | 13,250 |
Investment Management Assets | Investment Management Agreements | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 15,264 | 15,264 |
Accumulated Amortization | (3,019) | (2,753) |
Net Carrying Amount | 12,245 | 12,511 |
Investment Management Assets | Assembled Workforce | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,103 | 1,103 |
Accumulated Amortization | (389) | (364) |
Net Carrying Amount | $ 714 | $ 739 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Summary of Amortization Expense of Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |||
Aggregate Amortization Expense | $ 579 | $ 419 | |
Estimated Future Amortization Expense, For the nine months ending June 30, 2023 | 1,703 | ||
Estimated Future Amortization Expense, For the year ending June 30, 2024 | 2,084 | ||
Estimated Future Amortization Expense, For the year ending June 30, 2025 | 1,974 | ||
Estimated Future Amortization Expense, For the year ending June 30, 2026 | 1,912 | ||
Estimated Future Amortization Expense, For the year ending June 30, 2027 | 1,838 | ||
Estimated Future Amortization Expense, Thereafter | 9,081 | ||
Net Carrying Amount | $ 18,592 | $ 19,171 |
Lessor Operating Leases - Addit
Lessor Operating Leases - Additional Information (Details) | Sep. 30, 2022 |
Minimum | |
Lessor Lease Description [Line Items] | |
Lessor, lease terms | 10 months |
Maximum | |
Lessor Lease Description [Line Items] | |
Lessor, lease terms | 36 months |
Lessee Operating Leases - Sched
Lessee Operating Leases - Schedule of Additional Details of Leases Presented in Balance Sheets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 |
Operating Leased Assets [Line Items] | ||
Right of use assets | $ 3,815 | $ 3,722 |
Current portion of lease liabilities | 1,684 | 1,559 |
Lease liabilities, net of current portion | 2,342 | 2,375 |
Total liabilities | 4,026 | |
Facilities | ||
Operating Leased Assets [Line Items] | ||
Right of use assets | 3,382 | 3,400 |
Current portion of lease liabilities | 1,561 | 1,475 |
Lease liabilities, net of current portion | 2,032 | 2,137 |
Total liabilities | $ 3,593 | $ 3,612 |
Weighted-average remaining life | 2 years 10 months 24 days | 3 years 1 month 6 days |
Weighted-average discount rate | 10.80% | 10.80% |
Vehicles | ||
Operating Leased Assets [Line Items] | ||
Right of use assets | $ 429 | $ 315 |
Current portion of lease liabilities | 119 | 77 |
Lease liabilities, net of current portion | 310 | 238 |
Total liabilities | $ 429 | $ 315 |
Weighted-average remaining life | 4 years 1 month 6 days | 4 years 2 months 12 days |
Weighted-average discount rate | 5.80% | 6.30% |
Equipment | ||
Operating Leased Assets [Line Items] | ||
Right of use assets | $ 4 | $ 7 |
Current portion of lease liabilities | 4 | 7 |
Total liabilities | $ 4 | $ 7 |
Weighted-average remaining life | 7 months 6 days | 9 months 18 days |
Weighted-average discount rate | 12.50% | 12.50% |
Lessee Operating Leases - Addit
Lessee Operating Leases - Additional Information (Details) | 3 Months Ended |
Sep. 30, 2022 | |
Lessee Lease Description [Line Items] | |
Lessee, operating lease term | 88 months |
Lessee, operating leases optional lease extension period | 60 months |
Existence of option to extend operating lease | true |
Lessee, operating lease term expired | Oct. 01, 2024 |
Facilities | |
Lessee Lease Description [Line Items] | |
Existence of option to extend operating lease | true |
Vehicles | DME, Inc. | |
Lessee Lease Description [Line Items] | |
Lessee, operating lease term | 60 months |
Lessee, termination description | Each lease may be terminated by the lessee with 30-days’ notice after the first 13 months of the lease subject to certain early termination costs, including residual value guarantees. |
Existence of option to terminate operating lease | true |
Minimum | Facilities | |
Lessee Lease Description [Line Items] | |
Lessee, operating lease term | 12 months |
Minimum | Equipment | |
Lessee Lease Description [Line Items] | |
Lessee, operating lease term | 36 months |
Maximum | Facilities | |
Lessee Lease Description [Line Items] | |
Lessee, operating lease term | 96 months |
Lessee, operating leases optional lease extension period | 120 months |
Maximum | Equipment | |
Lessee Lease Description [Line Items] | |
Lessee, operating lease term | 48 months |
Lessee Operating Leases - Sch_2
Lessee Operating Leases - Schedule of Operating Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Facilities | ||
Operating Leased Assets [Line Items] | ||
Operating lease cost | $ 583 | $ 554 |
Cash paid for operating leases | 482 | 552 |
Vehicles | ||
Operating Leased Assets [Line Items] | ||
Operating lease cost | 26 | 13 |
Cash paid for operating leases | 24 | 13 |
Equipment | ||
Operating Leased Assets [Line Items] | ||
Operating lease cost | 23 | 9 |
Cash paid for operating leases | $ 23 | $ 9 |
Lessee Operating Leases - Sch_3
Lessee Operating Leases - Schedule of Company's Undiscounted Cash Payment Obligations for Operating Lease (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Lessee Disclosure [Abstract] | |
For the nine months ending June 30, 2023 | $ 1,410 |
For the year ending June 30, 2024 | 1,641 |
For the year ending June 30, 2025 | 786 |
For the year ending June 30, 2026 | 152 |
For the year ending June 30, 2027 | 646 |
Thereafter | 21 |
Total lease payments | 4,656 |
Imputed interest | (630) |
Lease liabilities | $ 4,026 |
Borrowings - Schedule of Relate
Borrowings - Schedule of Related Party Borrowings of Subsidiaries (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 |
Debt Instrument [Line Items] | ||
Less current portion of related party notes payable | $ (5,661) | |
Related party notes payable, net of current portion | $ 6,270 | |
Related Party Borrowings Subsidiaries | ||
Debt Instrument [Line Items] | ||
Total principal | 5,661 | 6,270 |
Total long-term related party notes payable | 5,661 | 6,270 |
Less current portion of related party notes payable | (5,661) | |
Related party notes payable, net of current portion | 6,270 | |
Seller Note | GECM | Related Party Borrowings Subsidiaries | ||
Debt Instrument [Line Items] | ||
Total principal | $ 5,661 | $ 6,270 |
Borrowings - Schedule of Subsid
Borrowings - Schedule of Subsidiaries' Other Outstanding Borrowings (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 |
Subsidiaries Other Outstanding Borrowings | ||
Debt Instrument [Line Items] | ||
Total principal | $ 30,854 | $ 29,938 |
Unamortized debt discounts and issuance costs | (1,348) | (1,413) |
Total other outstanding borrowings | 29,506 | 28,525 |
Less current portion of other outstanding borrowings | (3,909) | (2,993) |
Other outstanding borrowings, net of current portion | 25,597 | 25,532 |
GEGGL Notes | ||
Debt Instrument [Line Items] | ||
Total principal | 26,900 | |
GEGGL Notes | GEG | Subsidiaries Other Outstanding Borrowings | ||
Debt Instrument [Line Items] | ||
Total principal | 26,945 | 26,945 |
Equipment Financing | HC LLC and Subsidiaries | Subsidiaries Other Outstanding Borrowings | ||
Debt Instrument [Line Items] | ||
Total principal | $ 3,909 | $ 2,993 |
Borrowings - Additional Informa
Borrowings - Additional Information (Details) | 3 Months Ended | ||||
Jun. 09, 2022 USD ($) | May 04, 2022 USD ($) | Sep. 30, 2022 USD ($) shares | Sep. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) | |
Debt Instrument [Line Items] | |||||
Interest expense other borrowings | $ 700,000 | $ 10,000 | |||
Debt Instrument, Face Amount | 36,085,000 | $ 36,085,000 | |||
Realized loss on investments | (5,615,000) | (653,000) | |||
Additional paid-in-capital | $ 3,313,597,000 | $ 3,312,763,000 | |||
GECC | |||||
Debt Instrument [Line Items] | |||||
Debt instrument shares transferred upon settlement | shares | 50,000 | ||||
Principal settled amount | $ 600,000 | ||||
Equipment Financing Debt Agreements | Operating Subsidiaries of DME Inc | |||||
Debt Instrument [Line Items] | |||||
Inventory and equipment financing | $ 2,700,000 | $ 2,100,000 | |||
Equipment Financing Debt Agreements | Minimum | Operating Subsidiaries of DME Inc | |||||
Debt Instrument [Line Items] | |||||
Term of debt | 1 year | ||||
Implicit interest rate | 7% | ||||
Equipment Financing Debt Agreements | Maximum | Operating Subsidiaries of DME Inc | |||||
Debt Instrument [Line Items] | |||||
Term of debt | 3 years | ||||
Implicit interest rate | 8% | ||||
DME Revolver | |||||
Debt Instrument [Line Items] | |||||
Borrowings outstanding | $ 0 | ||||
Credit facility maximum borrowing capacity | $ 10,000,000 | ||||
Credit facility expiration date | Nov. 29, 2022 | ||||
Debt Instrument, Basis Spread on Variable Rate | 0.40% | ||||
Credit facility interest rate | 6.70% | ||||
Debt instrument description | the prime rate plus 0.4% per annum | ||||
Seller Note | GECM | Investment Management Agreement and Certain Other Assets for Monomoy Properties REIT L.L.C. | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, prepayment penalties | $ 0 | ||||
Aggregate principal amount | $ 5,700,000 | ||||
Debt Instrument, Face Amount | $ 6,300,000 | ||||
Interest rate | 6.50% | ||||
Debt instrument maturity date | Aug. 04, 2023 | ||||
GEGGL Notes | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 26,900,000 | ||||
Debt Instrument, Face Amount | $ 26,900,000 | ||||
Interest rate | 7.25% | ||||
Debt instrument maturity date | Jun. 30, 2027 | ||||
Notes issued in minimum denominations | $ 25 | ||||
Net consolidated debt to equity ratio | 2 | 1.59 | |||
GEGGL Notes | Underwriters' Over-allotment Option | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 1,900,000 | ||||
GEGGL Notes | Minimum | |||||
Debt Instrument [Line Items] | |||||
Notes issued in integral multiples | $ 25 |
Borrowings - Schedule of Aggreg
Borrowings - Schedule of Aggregate Future Required Principal Debt Repayments (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Debt Disclosure [Abstract] | |
For the nine months ending June 30, 2023 | $ 3,909 |
For the year ending June 30, 2024 | 5,661 |
For the year ending June 30, 2027 | 26,945 |
Total | $ 36,515 |
Convertible Notes - Additional
Convertible Notes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | |
Debt Instrument [Line Items] | |||
Total outstanding principal balance of Convertible Notes | $ 36,085 | $ 36,085 | |
Interest expense | 1,996 | $ 1,362 | |
Convertible Notes | |||
Debt Instrument [Line Items] | |||
Total outstanding principal balance of Convertible Notes | $ 36,100 | $ 36,100 | |
Debt instrument maturity date | Feb. 26, 2030 | Feb. 26, 2030 | |
Issuance of notes to related parties. | $ 14,700 | ||
Accrued interest rate on notes payable | 5% | ||
Notes payable, interest rate description | 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. | ||
Number of common stock shares issuable upon conversion of each $1000 principal debt amount | 288.0018 | ||
Debt issuance costs | $ 1,200 | ||
Amortization period of convertible notes debt discount and debt issuance costs | 10 years | ||
Unamortized debt issuance costs | $ 900 | $ 900 | |
Interest expense | 500 | $ 500 | |
Matthew A. Drapkin | Convertible Notes | |||
Debt Instrument [Line Items] | |||
Issuance of notes to related parties. | 6,700 | ||
Jason W. Reese | Convertible Notes | |||
Debt Instrument [Line Items] | |||
Issuance of notes to related parties. | 7,200 | ||
Eric J Scheyer | Convertible Notes | |||
Debt Instrument [Line Items] | |||
Issuance of notes to related parties. | $ 700 |
Non-Controlling Interests and_3
Non-Controlling Interests and Preferred Stock of Subsidiaries - Summary of Non-controlling Interests Balance on Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2021 |
Balance as of | ||||
Temporary equity | $ 2,887 | $ 2,225 | $ 2,844 | $ 2,639 |
Total Non-controlling interests | 7,876 | 8,758 | ||
Great Elm Healthcare, LLC (HC LLC) | ||||
Balance as of | ||||
Temporary equity | 2,887 | 2,225 | ||
Permanent equity | 2,887 | 2,225 | ||
Total | 5,774 | 4,450 | ||
Consolidated Fund | ||||
Balance as of | ||||
Permanent equity | 642 | |||
Forest | ||||
Balance as of | ||||
Permanent equity | $ 2,102 | $ 3,666 |
Non-Controlling Interests and_4
Non-Controlling Interests and Preferred Stock of Subsidiaries - Summary of Non-controlling Interests Balance on Condensed Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Net income (loss) | ||
Total net (loss) income attributable to non-controlling interest | $ (248) | $ 306 |
Great Elm Healthcare, LLC (HC LLC) | ||
Net income (loss) | ||
Temporary equity | 662 | 205 |
Permanent equity | 662 | 205 |
Total net (loss) income attributable to non-controlling interest | 1,324 | 410 |
GEC GP | ||
Net income (loss) | ||
Permanent equity | (2) | |
Consolidated Fund | ||
Net income (loss) | ||
Permanent equity | (8) | (85) |
Forest | ||
Net income (loss) | ||
Permanent equity | $ (1,564) | $ (17) |
Non-Controlling Interests and_5
Non-Controlling Interests and Preferred Stock of Subsidiaries - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Dec. 29, 2020 | Jul. 31, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | |
Minority Interest [Line Items] | |||||
Interest expense of non-cash interest related to amortization of discounts and debt issuance costs | $ 1,996,000 | $ 1,362,000 | |||
GP Corp. | |||||
Minority Interest [Line Items] | |||||
Percentage of ownership interest issued to former owner/certain affiliates and employees | 0% | ||||
GESOF | |||||
Minority Interest [Line Items] | |||||
Remaining assets to non-controlling interests | $ 600,000 | ||||
Ownership percentage | 73.40% | ||||
HC LLC | |||||
Minority Interest [Line Items] | |||||
Description of non-controlling interest in subsidiaries upon seventh anniversary of issuance date | In addition, upon the seventh anniversary of issuance date, if (i) the holder owns at least 50% of the common shares issued to it at the closing of the transaction, (ii) an initial public offering of HC LLC has not commenced and (iii) the holder has not had an earlier opportunity to sell its shares at their fair market value, the holder has the right to request a marketing process for a sale of HC LLC and has the right to put its common shares to HC LLC at the price for such shares implied by such marketing process. | ||||
HC LLC | Series A-1 Preferred Stock Classified as Liability | |||||
Minority Interest [Line Items] | |||||
Preferred stock issued during period | 407 | ||||
Redeemable preferred stock, shares | 10,090 | ||||
Redeemable preferred stock, face value per share | $ 1,000 | ||||
Consideration in exchange for instrument | $ 0 | ||||
Redeemable preferred stock, annual dividend rate | 9% | ||||
Redeemable Preferred stock, redemption price per share | $ 1,000 | ||||
Redeemable Preferred stock, redemption date | Dec. 29, 2027 | ||||
Redeemable preferred stock fair value per share | $ 801 | ||||
Debt issuance costs | $ 200,000 | ||||
Debt issuance costs amortization period | 7 years | ||||
Preferred stock optionally redeemed pro rata basis | 407 | ||||
HC LLC | Series A-2 Preferred Stock Classified as Liability | |||||
Minority Interest [Line Items] | |||||
Redeemable preferred stock, shares | 34,010 | ||||
Redeemable preferred stock, face value per share | $ 1,000 | ||||
Redeemable preferred stock, annual dividend rate | 9% | ||||
Redeemable Preferred stock, redemption price per share | $ 1,000 | ||||
Redeemable Preferred stock, redemption date | Dec. 29, 2027 | ||||
Redeemable preferred stock fair value per share | $ 810 | ||||
Debt issuance costs | $ 1,100,000 | ||||
Debt issuance costs amortization period | 7 years | ||||
Redeemable preferred stock redemption premium percentage minimum | 0% | ||||
Redeemable preferred stock redemption premium percentage maximum | 3% | ||||
Percentage of proceeds arising from sale of durable medical equipment business | 33% | ||||
Fair value of derivative liability | $ 6,500,000 | ||||
HC LLC | Corbel | |||||
Minority Interest [Line Items] | |||||
Percentage of indirect common stock equity interest issued | 9.95% | ||||
HC LLC | Valley Healthcare Group, LLC (VHG) | |||||
Minority Interest [Line Items] | |||||
Percentage of indirect common stock equity interest issued | 9.95% | ||||
Forest | |||||
Minority Interest [Line Items] | |||||
Percentage of common stock interest sold classified as permanent equity | 20% | ||||
Exchange of common stock for noncontrolling interests | $ 2,700,000 | ||||
Forest | Series A-1 Preferred Stock Classified as Liability | |||||
Minority Interest [Line Items] | |||||
Redeemable preferred stock, shares | 3,276 | ||||
Forest | Forest Preferred Stock Classified as Liability | |||||
Minority Interest [Line Items] | |||||
Redeemable preferred stock, shares | 35,010 | ||||
Redeemable preferred stock, face value per share | $ 1,000 | ||||
Redeemable preferred stock, annual dividend rate | 9% | ||||
Redeemable Preferred stock, redemption price per share | $ 1,000 | ||||
Redeemable Preferred stock, redemption date | Dec. 29, 2027 | ||||
Debt issuance costs | $ 1,200,000 | ||||
Debt issuance costs amortization period | 7 years | ||||
Redeemable preferred stock redemption premium percentage minimum | 0% | ||||
Redeemable preferred stock redemption premium percentage maximum | 3% | ||||
Net operating loss carryforwards | $ 300,000,000 | ||||
Interest expense of non-cash interest related to amortization of discounts and debt issuance costs | $ 800,000 | $ 900,000 |
Non-Controlling Interests and_6
Non-Controlling Interests and Preferred Stock of Subsidiaries - Summary of Share Activity for Preferred Stock of Subsidiaries (Details) shares in Thousands | 3 Months Ended |
Sep. 30, 2022 shares | |
Minority Interest [Line Items] | |
Balance, as of June 30, 2022 | 73,110 |
Redemption of Preferred Stock | (407) |
Balance, as of September 30, 2022 | 72,703 |
Great Elm Healthcare, LLC (HC LLC) | |
Minority Interest [Line Items] | |
Balance, as of June 30, 2022 | 38,100 |
Redemption of Preferred Stock | (407) |
Balance, as of September 30, 2022 | 37,693 |
Series A-1 Preferred Stock | Great Elm Healthcare, LLC (HC LLC) | |
Minority Interest [Line Items] | |
Balance, as of June 30, 2022 | 4,090 |
Redemption of Preferred Stock | (407) |
Balance, as of September 30, 2022 | 3,683 |
Series A-2 Preferred Stock | Great Elm Healthcare, LLC (HC LLC) | |
Minority Interest [Line Items] | |
Balance, as of June 30, 2022 | 34,010 |
Balance, as of September 30, 2022 | 34,010 |
Forest Preferred Stock | Forest Investments, Inc. (Forest) | |
Minority Interest [Line Items] | |
Balance, as of June 30, 2022 | 35,010 |
Balance, as of September 30, 2022 | 35,010 |
Stockholders' Equity - Restrict
Stockholders' Equity - Restricted Stock Awards and Restricted Stock Units - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | ||
Stockholders Equity Note [Line Items] | |||
Stock-based compensation | [1] | $ 941 | $ 768 |
Restricted Stock Awards | |||
Stockholders Equity Note [Line Items] | |||
Granted, shares | 397,545 | ||
Restricted Stock Awards | Maximum | |||
Stockholders Equity Note [Line Items] | |||
Vesting period | 3 years | ||
Restricted Stock Awards | Minimum | |||
Stockholders Equity Note [Line Items] | |||
Vesting period | 1 year | ||
Restricted Stock Units | |||
Stockholders Equity Note [Line Items] | |||
Granted, shares | 0 | ||
[1] Non-cash compensation includes stock-based compensation and compensation in the form of stock in portfolio companies held by the Company. Non-cash compensation attributable to the investment management segment is included in investment management expenses in the condensed consolidated statements of operations. Non-cash compensation attributable to the general corporate segment is included in selling, general and administrative expense in the condensed consolidated statements of operations. |
Stockholders' Equity - Activity
Stockholders' Equity - Activity of Restricted Stock Award (Details) - Restricted Stock | 3 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Shares | |
Beginning Balance | shares | 1,312,000 |
Granted | shares | 397,545 |
Vested | shares | (238,000) |
Forfeited | shares | (3,000) |
Ending Balance | shares | 1,469,000 |
Weighted average grant date fair value | |
Beginning Balance | $ / shares | $ 1.79 |
Granted | $ / shares | 2.19 |
Vested | $ / shares | 2.16 |
Forfeited | $ / shares | 2.50 |
Ending Balance | $ / shares | $ 1.84 |
Stockholders' Equity - Non-Empl
Stockholders' Equity - Non-Employee Director Deferred Compensation Plan - Additional Information (Details) - shares | 1 Months Ended | 3 Months Ended |
Dec. 31, 2020 | Sep. 30, 2022 | |
Service-Based Restricted Stock Awards | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Restricted stock awards, service conditions met | 28,965 | |
Deferred Compensation Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Deferred compensation, service period | 3 years | |
Restricted stock units and restricted stock awards, deferred | 138,973 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Option Activity (Details) - $ / shares shares in Thousands | 3 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Jun. 30, 2022 | |
Shares | ||
Beginning Balance | 2,134 | |
Options granted | 125 | |
Forfeited, cancelled or expired | (732) | |
Ending Balance | 1,527 | 2,134 |
Exercisable | 1,436 | |
Vested and expected to vest | 1,527 | |
Weighted average exercise price | ||
Beginning Balance | $ 3.68 | |
Options granted | 3.60 | |
Forfeited, cancelled or expired | 3.59 | |
Ending Balance | 3.72 | $ 3.68 |
Exercisable | 3.70 | |
Vested and expected to vest | $ 3.72 | |
Weighted average remaining contractual term | ||
Outstanding | 4 years 7 months 17 days | 3 years 4 months 2 days |
Exercisable | 4 years 8 months 1 day | |
Vested and expected to vest | 4 years 7 months 17 days |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Options - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | ||
Stockholders Equity Note [Line Items] | |||
Stock-based compensation expense | [1] | $ 941 | $ 768 |
Employee Stock Option | |||
Stockholders Equity Note [Line Items] | |||
Stock-based compensation expense | 800 | $ 600 | |
Restricted Stock Awards and Stock Options | |||
Stockholders Equity Note [Line Items] | |||
Total unrecognized compensation cost | 2,400 | ||
GECC Common Shares | |||
Stockholders Equity Note [Line Items] | |||
Stock issued during period, value | 400 | ||
Stock issued during period value vested immediately | $ 100 | ||
Number of years issued shares vest annually on pro-rata basis | 3 years | ||
GECC Common Shares | Employees | |||
Stockholders Equity Note [Line Items] | |||
Stock-based compensation expense | $ 100 | ||
[1] Non-cash compensation includes stock-based compensation and compensation in the form of stock in portfolio companies held by the Company. Non-cash compensation attributable to the investment management segment is included in investment management expenses in the condensed consolidated statements of operations. Non-cash compensation attributable to the general corporate segment is included in selling, general and administrative expense in the condensed consolidated statements of operations. |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Aug. 16, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | |
Income Tax [Line Items] | |||
Federal net operating loss carryforwards | $ 821 | ||
Operating loss carryforward for state income tax | $ 211 | ||
Inflation Reduction Act | |||
Income Tax [Line Items] | |||
Corporate alternative minimum tax | 15% | ||
Excise tax on repurchases of stock | 1% | ||
Minimum | California | |||
Income Tax [Line Items] | |||
Operating loss carryforwards expiration period | 2029 | ||
Minimum | Massachusetts | |||
Income Tax [Line Items] | |||
Operating loss carryforwards expiration period | 2031 | ||
Minimum | Federal | |||
Income Tax [Line Items] | |||
Operating loss carryforwards expiration period | 2023 | ||
Maximum | California | |||
Income Tax [Line Items] | |||
Operating loss carryforwards expiration period | 2037 | ||
Maximum | Massachusetts | |||
Income Tax [Line Items] | |||
Operating loss carryforwards expiration period | 2038 | ||
Maximum | Federal | |||
Income Tax [Line Items] | |||
Operating loss carryforwards expiration period | 2037 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 3 Months Ended |
Sep. 30, 2022 Segment | |
Segment Reporting [Abstract] | |
Number of business operating segments | 2 |
Segment Information - Schedule
Segment Information - Schedule of Results of Operations by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | ||
Revenue: | |||
Total revenue | $ 18,579 | $ 16,538 | |
Operating costs and expenses: | |||
Depreciation and amortization | (681) | (562) | |
Non-cash compensation | [1] | (941) | (768) |
Transaction costs | [2] | (281) | |
Other selling, general and administrative | (11,552) | (8,016) | |
Total operating expenses | (19,564) | (15,537) | |
Other income (expense): | |||
Interest expense | (1,996) | (1,362) | |
Other income (expense) | (5,362) | 466 | |
Total other income (expense), net | (7,358) | (896) | |
(Loss) income before income taxes | (8,343) | 105 | |
Intercompany Eliminations | |||
Revenue: | |||
Total revenue | [3] | (203) | (243) |
Operating costs and expenses: | |||
Other selling, general and administrative | [3] | 203 | 243 |
Total operating expenses | [3] | 203 | 243 |
Other income (expense): | |||
Interest expense | [3] | 1,085 | 1,218 |
Other income (expense) | [3] | (1,085) | (1,218) |
Durable Medical Equipment | Operating Segments | |||
Revenue: | |||
Total revenue | 16,719 | 15,555 | |
Operating costs and expenses: | |||
Depreciation and amortization | (387) | (453) | |
Transaction costs | [2] | (97) | |
Other selling, general and administrative | (9,062) | (6,286) | |
Total operating expenses | (15,839) | (12,746) | |
Other income (expense): | |||
Interest expense | (1,106) | (1,287) | |
Other income (expense) | 6,984 | 560 | |
Total other income (expense), net | 5,878 | (727) | |
(Loss) income before income taxes | 6,758 | 2,082 | |
Investment Management | Operating Segments | |||
Revenue: | |||
Total revenue | 1,860 | 983 | |
Operating costs and expenses: | |||
Depreciation and amortization | (294) | (109) | |
Non-cash compensation | [1] | (477) | (396) |
Other selling, general and administrative | (1,557) | (843) | |
Total operating expenses | (2,328) | (1,348) | |
Other income (expense): | |||
Interest expense | (136) | (24) | |
Other income (expense) | (5,427) | 249 | |
Total other income (expense), net | (5,563) | 225 | |
(Loss) income before income taxes | (6,031) | (140) | |
General Corporate | Operating Segments | |||
Revenue: | |||
Total revenue | 203 | 243 | |
Operating costs and expenses: | |||
Non-cash compensation | [1] | (464) | (372) |
Transaction costs | [2] | (184) | |
Other selling, general and administrative | (1,136) | (1,130) | |
Total operating expenses | (1,600) | (1,686) | |
Other income (expense): | |||
Interest expense | (1,839) | (1,269) | |
Other income (expense) | (5,834) | 875 | |
Total other income (expense), net | (7,673) | (394) | |
(Loss) income before income taxes | (9,070) | (1,837) | |
Sales and Services | |||
Operating costs and expenses: | |||
Total operating costs and expenses | (4,340) | (4,060) | |
Sales and Services | Durable Medical Equipment | Operating Segments | |||
Operating costs and expenses: | |||
Total operating costs and expenses | (4,340) | (4,060) | |
Rental | |||
Operating costs and expenses: | |||
Total operating costs and expenses | (2,050) | (1,850) | |
Rental | Durable Medical Equipment | Operating Segments | |||
Operating costs and expenses: | |||
Total operating costs and expenses | $ (2,050) | $ (1,850) | |
[1] Non-cash compensation includes stock-based compensation and compensation in the form of stock in portfolio companies held by the Company. Non-cash compensation attributable to the investment management segment is included in investment management expenses in the condensed consolidated statements of operations. Non-cash compensation attributable to the general corporate segment is included in selling, general and administrative expense in the condensed consolidated statements of operations. Transaction costs, which consist of legal and other professional services, are included in selling, general and administrative expense in the condensed consolidated statements of operations. The Company’s wholly-owned subsidiary, DME Manager, provides advisory services to HC LLC (formerly to DME Inc.) and receives consulting fees for those services. DME Manager is considered part of the general corporate operations while HC LLC is part of the durable medical equipment segment. The corresponding expense to HC LLC and revenue to DME Manager are eliminated in consolidation. Beginning December 29, 2020, DME Manager also provides advisory services to Forest and receives a consulting fee from Forest for those services. Both DME Manager and Forest are part of general corporate operations, and the corresponding revenue and expense are eliminated in consolidation. Additionally, Forest owns Series A-1 Preferred Stock (excluding shares held by VHG) and Series A-2 Preferred Stock of HC LLC. Forest is part of general corporate operations while HC LLC is part of the durable medical equipment segment. The corresponding interest expense to HC LLC and interest income to Forest are eliminated in consolidation. |
Segment Information - Schedul_2
Segment Information - Schedule of Assets by Segment (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2021 |
Segment Reporting Information [Line Items] | ||||
Fixed assets, net | $ 8,426 | $ 8,042 | ||
Identifiable intangible assets, net | 18,592 | 19,171 | ||
Goodwill | 52,463 | 52,463 | $ 52,463 | $ 50,536 |
Other assets | 78,797 | 88,411 | ||
Total assets | 158,278 | 168,087 | ||
Durable Medical Equipment | ||||
Segment Reporting Information [Line Items] | ||||
Fixed assets, net | 8,397 | 8,025 | ||
Identifiable intangible assets, net | 5,633 | 5,921 | ||
Goodwill | 52,463 | 52,463 | ||
Other assets | 11,226 | 11,616 | ||
Total assets | 77,719 | 78,025 | ||
Investment Management | ||||
Segment Reporting Information [Line Items] | ||||
Fixed assets, net | 29 | 17 | ||
Identifiable intangible assets, net | 12,959 | 13,250 | ||
Other assets | 44,824 | 54,520 | ||
Total assets | 57,812 | 67,787 | ||
General Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Other assets | 22,747 | 22,275 | ||
Total assets | $ 22,747 | $ 22,275 |