Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Dec. 31, 2020 | Feb. 09, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2020 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
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 Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 26,473,099 | |
Entity Interactive Data Current | Yes | |
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 | |
Document Transition Report | false | |
Entity Incorporation, State or Country Code | DE | |
Title of each class | Common Stock, par value $0.001 per share | |
Trading Symbol | GEG | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Dec. 31, 2020 | Jun. 30, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 32,894 | $ 40,519 |
Restricted cash | 934 | 846 |
Accounts receivable | 7,597 | 7,991 |
Related party receivables | 1,379 | 1,059 |
Investments, at fair value | 19,532 | 8,705 |
Inventories | 967 | 1,470 |
Prepaid and other current assets | 1,134 | 738 |
Total current assets | 67,865 | 61,328 |
Real estate assets, net | 52,576 | 53,188 |
Property and equipment, net | 1,132 | 1,410 |
Equipment held for rental, net | 7,020 | 7,483 |
Identifiable intangible assets, net | 14,031 | 15,129 |
Goodwill | 50,010 | 50,010 |
Right of use assets | 5,015 | 5,392 |
Other assets | 1,730 | 1,505 |
Total assets | 199,379 | 195,445 |
Current liabilities: | ||
Accounts payable | 5,159 | 5,007 |
Accrued expenses and other liabilities | 4,040 | 3,565 |
Deferred revenue | 5,372 | 5,652 |
Current portion of lease liabilities | 1,518 | 1,617 |
Current portion of long term debt | 2,413 | 6,221 |
Current portion of related party notes payable | 76 | 1,418 |
Current portion of equipment financing debt | 1,755 | 2,034 |
Total current liabilities | 20,690 | 25,514 |
Lease liabilities, net of current portion | 3,767 | 4,060 |
Long term debt, net of current portion | 51,948 | 52,781 |
Related party notes payable, net of current portion | 2,996 | 26,485 |
Convertible notes (face value $31,280 and $30,521, respectively, including $13,607 and $13,277, respectively, held by related parties) | 18,584 | 17,444 |
Equipment financing debt, net of current portion | 122 | 196 |
Redeemable preferred stock of subsidiaries (held by related parties, face value $37,018) | 35,412 | |
Other liabilities | 655 | 395 |
Total liabilities | 134,174 | 126,875 |
Commitments and Contingencies (Note 16) | ||
Contingently redeemable non-controlling interest | 2,567 | 3,890 |
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 26,423,677 shares issued and 25,690,768 outstanding at December 31, 2020; and 26,217,380 shares issued and 25,529,534 outstanding at June 30, 2020 | 26 | 26 |
Additional paid-in-capital | 3,318,831 | 3,318,117 |
Accumulated deficit | (3,261,454) | (3,257,349) |
Total Great Elm Group, Inc. stockholders' equity | 57,403 | 60,794 |
Non-controlling interests | 5,235 | 3,886 |
Total stockholders' equity | 62,638 | 64,680 |
Total liabilities, non-controlling interest and stockholders' equity | 199,379 | $ 195,445 |
Great Elm Opportunities Fund I, LP (GEOF) | ||
Current assets: | ||
Investments, at fair value | 3,417 | |
Prepaid expenses | 11 | |
Current liabilities: | ||
Accrued expenses and other liabilities | $ 357 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Jun. 30, 2020 |
Investments, cost basis | $ 40,448 | $ 30,279 |
Convertible notes payable to related party non-current | 13,607 | 13,277 |
Convertible notes, face value | 31,280 | $ 30,521 |
Redeemable preferred stock held by related parties | $ 37,018 | |
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 | 26,423,677 | 26,217,380 |
Common stock, shares outstanding | 25,690,768 | 25,529,534 |
Great Elm Opportunities Fund I, LP (GEOF) | ||
Investments, cost basis | $ 3,351 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues: | ||||
Rental income | $ 6,275 | $ 6,615 | $ 12,944 | $ 13,374 |
Revenue | 16,579 | 16,551 | 33,234 | 31,922 |
Operating costs and expenses: | ||||
Durable medical equipment other operating expenses | 8,070 | 7,679 | 15,750 | 14,528 |
Depreciation and amortization | 1,021 | 1,130 | 2,042 | 2,197 |
Selling, general and administrative | 1,315 | 1,348 | 2,728 | 3,134 |
Total operating costs and expenses | 17,781 | 16,821 | 34,868 | 33,066 |
Operating loss | (1,202) | (270) | (1,634) | (1,144) |
Dividends and interest income | 1,325 | 603 | 1,854 | 1,117 |
Unrealized gain (loss) on investment | 2,560 | (826) | 658 | (1,809) |
Interest expense | (1,911) | (1,633) | (3,868) | (3,329) |
Loss on extinguishment of debt | (1,866) | (1,866) | ||
Other income, net | 32 | 30 | 3 | |
Loss, before income taxes | (996) | (2,126) | (4,760) | (5,162) |
Income tax benefit (expense) | 50 | 99 | (49) | (143) |
Net loss | (946) | (2,027) | (4,809) | (5,305) |
Less: net loss attributable to non-controlling interest | (597) | (186) | (704) | (375) |
Net loss attributable to Great Elm Group, Inc. | $ (349) | $ (1,841) | $ (4,105) | $ (4,930) |
Net loss attributable to shareholders per share | ||||
Basic | $ (0.01) | $ (0.07) | $ (0.16) | $ (0.19) |
Diluted | $ (0.01) | $ (0.07) | $ (0.16) | $ (0.19) |
Weighted average shares outstanding | ||||
Basic | 25,678 | 25,402 | 25,626 | 25,387 |
Diluted | 25,678 | 25,402 | 25,626 | 25,387 |
Great Elm Opportunities Fund I, LP (GEOF) | ||||
Operating costs and expenses: | ||||
Expenses of consolidated fund | $ 8 | $ 8 | ||
Unrealized gain (loss) on investment | 66 | 66 | ||
Durable Medical Equipment | Sales and Services | ||||
Revenues: | ||||
Revenue from contract with customer | 9,544 | $ 9,047 | 18,757 | $ 16,792 |
Operating costs and expenses: | ||||
Total operating costs and expenses | 4,703 | 3,689 | 8,910 | 7,152 |
Durable Medical Equipment | Rental | ||||
Revenues: | ||||
Rental income | 4,999 | 5,344 | 10,396 | 10,830 |
Operating costs and expenses: | ||||
Total operating costs and expenses | 1,621 | 2,185 | 3,536 | 4,450 |
Investment Management | ||||
Revenues: | ||||
Revenue from contract with customer | 760 | 889 | 1,533 | 1,756 |
Operating costs and expenses: | ||||
Total operating costs and expenses | 916 | 664 | 1,642 | 1,355 |
Real Estate | ||||
Operating costs and expenses: | ||||
Total operating costs and expenses | 127 | 126 | 252 | 250 |
Real Estate | Rental | ||||
Revenues: | ||||
Rental income | $ 1,276 | $ 1,271 | $ 2,548 | $ 2,544 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Depreciation expense | $ 1,931 | $ 2,489 | $ 4,149 | $ 4,968 |
Durable Medical Equipment | Rental | ||||
Depreciation expense | $ 1,457 | $ 1,962 | $ 3,205 | $ 4,013 |
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, 2019 | $ 65,082 | $ 25 | $ 3,305,415 | $ (3,244,374) | $ 61,066 | $ 4,016 |
Beginning balance (in shares) at Jun. 30, 2019 | 25,353,000 | |||||
Beginning balance, Contingently redeemable non-controlling interest at Jun. 30, 2019 | 3,912 | |||||
Net loss | (3,198) | (3,089) | (3,089) | (109) | ||
Net loss, Contingently redeemable non-controlling interest | (80) | |||||
Issuance of common stock related to vesting of restricted stock | 0 | $ 0 | 0 | 0 | ||
Issuance of common stock related to vesting of restricted stock (in shares) | 30,000 | |||||
Stock-based compensation | 293 | 293 | 293 | |||
Ending balance at Sep. 30, 2019 | 62,177 | $ 25 | 3,305,708 | (3,247,463) | 58,270 | 3,907 |
Ending balance (in shares) at Sep. 30, 2019 | 25,383,000 | |||||
Ending balance, Contingently redeemable non-controlling interest at Sep. 30, 2019 | 3,832 | |||||
Net loss | (1,949) | (1,841) | (1,841) | (108) | ||
Net loss, Contingently redeemable non-controlling interest | (78) | |||||
Issuance of common stock related to vesting of restricted stock | 0 | $ 0 | 0 | 0 | ||
Issuance of common stock related to vesting of restricted stock (in shares) | 29,000 | |||||
Stock-based compensation | 208 | 208 | 208 | |||
Ending balance at Dec. 31, 2019 | 60,436 | $ 25 | 3,305,916 | (3,249,304) | 56,637 | 3,799 |
Ending balance (in shares) at Dec. 31, 2019 | 25,411,000 | |||||
Ending balance, Contingently redeemable non-controlling interest at Dec. 31, 2019 | 3,754 | |||||
Beginning balance at Jun. 30, 2020 | $ 64,680 | $ 26 | 3,318,117 | (3,257,349) | 60,794 | 3,886 |
Beginning balance (in shares) at Jun. 30, 2020 | 25,529,534 | 25,530,000 | ||||
Beginning balance, Contingently redeemable non-controlling interest at Jun. 30, 2020 | $ 3,890 | |||||
Net loss | (3,817) | (3,756) | (3,756) | (61) | ||
Net loss, Contingently redeemable non-controlling interest | (46) | |||||
Issuance of common stock related to vesting of restricted stock | $ 0 | |||||
Issuance of common stock related to vesting of restricted stock (in shares) | 116,000 | |||||
Stock-based compensation | 429 | 429 | 429 | |||
Ending balance at Sep. 30, 2020 | 61,292 | $ 26 | 3,318,546 | (3,261,105) | 57,467 | 3,825 |
Ending balance (in shares) at Sep. 30, 2020 | 25,646,000 | |||||
Ending balance, Contingently redeemable non-controlling interest at Sep. 30, 2020 | 3,844 | |||||
Net loss | (654) | (349) | (349) | (305) | ||
Net loss, Contingently redeemable non-controlling interest | (292) | |||||
Issuance of common stock related to vesting of restricted stock | $ 0 | |||||
Issuance of common stock related to vesting of restricted stock (in shares) | 45,000 | |||||
Distributions to non-controlling interest holders of DME Inc. | (985) | (985) | ||||
Distributions to non-controlling interest holders of DME Inc., Contingently redeemable non-controlling interest | (985) | |||||
Issuance of Forest common stock | 2,700 | 2,700 | ||||
Stock-based compensation | 285 | 285 | 285 | |||
Ending balance at Dec. 31, 2020 | $ 62,638 | $ 26 | $ 3,318,831 | $ (3,261,454) | $ 57,403 | $ 5,235 |
Ending balance (in shares) at Dec. 31, 2020 | 25,690,768 | 25,691,000 | ||||
Ending balance, Contingently redeemable non-controlling interest at Dec. 31, 2020 | $ 2,567 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | ||
Cash flows from operating activities: | |||
Net loss | $ (4,809) | $ (5,305) | |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||
Depreciation and amortization | 5,247 | 6,210 | |
Stock-based compensation | [1] | 714 | 501 |
Purchases of investments by consolidated fund | (3,320) | ||
Stock dividends received from GECC | (1,418) | ||
Unrealized (gain) loss on investments | (724) | 1,809 | |
Non-cash interest and amortization of debt issuance costs | 1,858 | 471 | |
Deferred tax benefit | 28 | 54 | |
Other non-cash expense, net | 803 | 679 | |
Gain on sale of equipment held for rental | (146) | (385) | |
Change in fair value of contingent consideration | (1,135) | ||
Changes in operating assets and liabilities: | |||
Related party receivable | (320) | 49 | |
Accounts receivable | 394 | 668 | |
Inventories | 503 | (417) | |
Prepaid assets, deposits, and other assets | (557) | (412) | |
Operating leases | (818) | (689) | |
Related party payable | (805) | ||
Deferred revenues | (280) | 35 | |
Accounts payable, accrued liabilities and other liabilities | 1,157 | 1,818 | |
Net cash (used in) provided by operating activities | (1,688) | 3,146 | |
Cash flows from investing activities: | |||
Purchases of investments | (75) | ||
Participation in related party rights offering | (8,751) | ||
Purchases of equipment held for rental | (3,060) | (3,547) | |
Proceeds from sale of equipment held for rental | 495 | 1,044 | |
Purchases of property and equipment | (57) | (526) | |
Proceeds from sale of property and equipment | 37 | ||
Net cash used in investing activities | (11,448) | (2,992) | |
Cash flows from financing activities: | |||
Proceeds on revolving line of credit | 800 | ||
Principal payments on revolving line of credit | (3,900) | (2,050) | |
Principal payments on long term debt | (1,135) | (1,053) | |
Principal payments on related party notes payable | (25,105) | (1,315) | |
Principal payments on equipment financing debt | (1,983) | (1,246) | |
Proceeds from equipment financing debt | 1,630 | 1,264 | |
Capitalized issuance costs | (1,250) | ||
Net cash provided by (used in) financing activities | 5,599 | (3,600) | |
Net decrease in cash, cash equivalents and restricted cash | (7,537) | (3,446) | |
Cash, cash equivalents and restricted cash at beginning of period | 41,365 | 12,830 | |
Cash, cash equivalents and restricted cash at end of period | 33,828 | 9,384 | |
Cash paid for interest | 2,231 | 3,643 | |
Non-cash investing and financing activities | |||
Lease liabilities and right of use assets arising from operating leases | 426 | $ 260 | |
Distribution of HC LLC preferred stock to non-controlling interest holders of DME Inc. | 1,602 | ||
DME, Inc. | |||
Cash flows from financing activities: | |||
Dividends paid to non-controlling interest holders of DME Inc. | (368) | ||
Forest Investments, Inc. (Forest) | |||
Cash flows from financing activities: | |||
Issuance of Forest preferred stock | 35,010 | ||
Proceeds from sale of Forest common stock, gross | $ 2,700 | ||
[1] | Stock-based compensation attributable to the investment management segment is included in investment management expenses in the condensed consolidated statements of operations. Stock-based compensation attributable to the general corporate segment is included in selling, general and administrative expense in the condensed consolidated statements of operations. |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Parenthetical) (Unaudited) - USD ($) $ in Thousands | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 |
Statement Of Cash Flows [Abstract] | ||||
Cash and cash equivalents | $ 32,894 | $ 40,519 | ||
Restricted cash | 934 | 846 | ||
Cash, cash equivalents and restricted cash | $ 33,828 | $ 41,365 | $ 9,384 | $ 12,830 |
Organization
Organization | 6 Months Ended |
Dec. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization | 1. Organization Great Elm Group, Inc. (the Company On December 29, 2020, the Company completed a reorganization of the Company's corporate structure, where Great Elm Capital Group, Inc. ( GEC Forest The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. Wholly-owned subsidiaries include Great Elm Capital Management, Inc. ( GECM CRIC IT DME Inc. HC LLC |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Dec. 31, 2020 | |
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, 2020, presented herein, has been derived from the Company’s audited consolidated financial statements as of and for the year-ended June 30, 2020. Use of Estimates The preparation of these financial statements in accordance with accounting principles generally accepted in the United States of America ( GAAP 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 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 14 – 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 three business operating segments: durable medical equipment, investment management and real estate, 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. 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 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 six months ended December 31, 2020 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 December 31, 2020 and June 30, 2020, the Company had unbilled receivables of approximately $1.3 million and $1.9 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. Previously disclosed unbilled amounts have been updated to reflect current presentation. These unbilled amounts are included in accounts receivable in the condensed consolidated balance sheets. Net Income (Loss) per Share The following table presents the calculation of basic and diluted earnings (loss) per share: For the three months ended December 31, For the six months ended December 31, (in thousands except per share amounts) 2020 2019 2020 2019 Net loss $ (946 ) $ (2,027 ) $ (4,809 ) $ (5,305 ) Less: net loss attributable to non-controlling interest (597 ) (186 ) (704 ) (375 ) Net loss attributable to Great Elm Group, Inc. $ (349 ) $ (1,841 ) $ (4,105 ) $ (4,930 ) Net loss attributable to shareholders per share Basic $ (0.01 ) $ (0.07 ) $ (0.16 ) $ (0.19 ) Diluted $ (0.01 ) $ (0.07 ) $ (0.16 ) $ (0.19 ) Weighted average shares outstanding Basic 25,678 25,402 25,626 25,387 Diluted 25,678 25,402 25,626 25,387 When calculating earnings per share, we are required to adjust for the dilutive effect of common stock equivalents. As of December 31, 2020, the Company had 12,307,863 potential shares of common stock, including 9,008,612 potential shares of Company common stock issuable upon conversion of Convertible Notes (as defined in Note 12 – Convertible Notes) and 3,299,251 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 net loss per share calculations because to do so would be antidilutive. As of December 31, 2019, the Company had 3,402,602 potential shares of Company common stock issuable upon exercise of the stock options and vesting of restricted stock units and restricted stock awards that are not included in the diluted net loss per share calculations because to do so would be antidilutive. As of December 31, 2020 and 2019, the Company had an aggregate of 732,909 issued shares Restrictions on Subsidiary Dividends Under the GP Corp. Note Agreement, GECC GP Corp. agreed not to declare any dividends until the GP Corp. Note is satisfied. Under the Senior Note and Subordinated Note, CRIC IT Fort Myers, LLC is restricted from paying any dividends until the Notes are satisfied. The ability of DME Inc. to pay dividends is subject to compliance with the restricted payment covenants under the DME Revolver. Concentration of Risk The Company’s net investment revenue and receivables for the periods presented were attributable to the management of one investment vehicle, GECC, which is also a related party. See Note 5 – Related Party Transactions. The Company’s real estate rental revenue is derived from one tenant. 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 December 31, For the six months ended December 31, 2020 2019 2020 2019 Government Payor A 32% 30% 33% 29% Government Payor B * 10% * * Third-party Payor C 12% 13% 11% 10% * Not a significant concentration. The following table summarizes customer concentrations as a percentage of accounts receivable: As of December 31, 2020 June 30, 2020 Government Payor A 21% 20% Government Payor B * 11% Third-party Payor C 15% 11% * Not a significant concentration Recently Adopted Accounting Standards Fair Value Measurements In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement , resulting in various disclosures related to fair value measurements being eliminated, modified or supplemented. ASU 2018-13 is effective for interim and annual periods beginning after December 15, 2019, with an option to early adopt any eliminated or modified disclosures, and to delay adoption of the additional disclosures, until the effective date. The Company early adopted the eliminated and modified disclosures of ASU 2018-13 during the three months ended September 30, 2018 and, as a result, updated its financial statement disclosures accordingly. A modified narrative description of measurement uncertainty for level 3 fair value measurements was applied prospectively, with all other amendments applied retrospectively. The Company has adopted the supplemental disclosures as of July 1, 2020. Recently Issued Accounting Standards Current Expected Credit Losses In June 2016, the FASB issued Accounting Standards Update ( 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 London Interbank Offered Rate ( LIBOR ) by the end of 2021. The provisions provide optional expedients and exceptions for applying 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. We are currently evaluating the impact of this ASU on our financial statements. Accounting for Convertible Instruments In August 2020, the FASB issued ASU 2020-06 , Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , which simplifies the accounting for convertible instruments by eliminating certain separation models. Under ASU 2020-06, a convertible debt instrument will generally be reported as a single liability at its amortized cost with no separate accounting for embedded conversion features. Consequently, the interest rate of convertible debt instruments will be closer to the coupon interest rate. In addition, ASU 2020-06 eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments and requires the use of the if-converted method. The guidance in this ASU are effective for fiscal years beginning after December 31, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. |
Revenue
Revenue | 6 Months Ended |
Dec. 31, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Revenue | 3. Revenue The revenues from each major source of revenue are summarized in the following table: For the three months ended December 31, For the six months ended December 31, (in thousands) 2020 2019 2020 2019 Product and Services Revenue Investment Management Management Fees $ 609 $ 760 $ 1,210 $ 1,518 Administration Fees 151 129 323 238 760 889 1,533 1,756 Durable Medical Equipment Equipment Sales 8,411 7,587 16,419 13,948 Service Revenues 1,133 1,460 2,338 2,844 9,544 9,047 18,757 16,792 Total product and services revenue $ 10,304 $ 9,936 $ 20,290 $ 18,548 Rental Revenues Real Estate Rental Income 1,276 1,271 2,548 2,544 Durable Medical Equipment Medical Equipment Rental Income 4,999 5,344 10,396 10,830 Total rental revenue 6,275 6,615 12,944 13,374 Total $ 16,579 $ 16,551 $ 33,234 $ 31,922 Revenue Accounting Under Topic 606 In determining the appropriate amount of revenue to be recognized under FASB Accounting Standards Codification Topic 606, Revenues, Topic 606 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 recorded in the six months ended December 31, 2020, 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 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 Included in 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 rental revenue recognized is based on historical trends and estimates of future collectability. As of December 31, 2020 and June 30, 2020, net unbilled sales and services revenue is approximately $0.8 million and $1.2 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 administrative 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 agreement GECM has with GECC. The performance obligation is satisfied over time as the services are rendered, since GECC simultaneously receives and consumes the benefits provided as GECM performs services. Under GECC’s investment management agreement with GECM, the base management fee from GECC is calculated at an annual rate of 1.50% of GECC’s average adjusted gross assets. The base management fee is calculated based on the average value of GECC’s gross assets, excluding cash and cash equivalents, at the end of the two most recently completed calendar quarters, and is recognized over time as the services are provided. Management fees are billed quarterly in arrears. Incentive Fees The Company earns incentive fees based on the investment management agreements GECM has with GECC and separately managed accounts. 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 GECC investment management agreement. Incentive fees are recognized 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 range from 5.0% to 20.0% of the performance-based metric specified within each agreement. Because of the uncertainty of when incentive fees will be collected due to market conditions and investment performance, incentive fees are fully constrained and not recorded until received and the probability of significant reversal of the fees is eliminated Administration Fees The Company earns administration fees based on the administration agreement GECM has with GECC whereby GECC reimburses GECM for costs incurred in performing administrative functions for GECC. This revenue is recognized over time as the services are performed. Administrative 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 Revenue Under FASB Accounting Standards Codification Topic 842, Leases, Topic 842 Certain customer co-payments are included in revenue when 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 six months ended December 31, 2020, 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 $1.3 million as of December 31, 2020 and June 30, 2020, 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 December 31, 2020 and June 30, 2020, net unbilled rental revenue is approximately $0.5 million and $0.7 million, respectively, and is included in accounts receivable. Real Estate Revenue Rental Revenue Consistent with the leases of durable medical equipment, the Company recognizes rental revenue on a straight-line basis over the non-cancelable term of the lease. Under the terms of the lease, the Company may recover from the tenant certain expenses, including: real estate taxes, insurance and other operating expenses. The recovery of these expenses is recognized in rental income in the accompanying condensed consolidated statements of operations, in the same periods as the expenses are incurred. These expenses recognized in both revenue and expense may fluctuate from period to period based on actual expense amounts. |
Holding Company Reorganization
Holding Company Reorganization and Financing Transaction | 6 Months Ended |
Dec. 31, 2020 | |
Reorganizations [Abstract] | |
Holding Company Reorganization and Financing Transaction | 4. Holding Company Reorganization and Financing Transaction Holding Company Reorganization On December 21, 2020, GEC Company Holding Company Reorganization On December 29, 2020, pursuant to the terms of the Agreement and Plan of Merger, dated as of December 21, 2020, among Forest, the Company and Forest Merger Sub, Inc., a newly created entity for the purpose of facilitating the Merger, (as it may be amended from time to time, the Merger Agreement Transactions Financing Transaction Following the consummation of the Holding Company Reorganization , JPM In connection with such financing, among other things: • Forest issued to JPM 35,010 newly issued shares of 9.0% preferred stock (the Forest Preferred Stock ) with a maturity date of December 29, 2027 for $1,000.00 per share; • HC LLC issued 10,090 newly issued shares of 9.0% Series A-1 preferred stock (the Series A-1 Preferred Stock ) with a maturity date of December 29, 2027 and face value of $1,000.00 per share to the owners of DME Inc. in the form of a distribution. Ultimately, 80.1% of such preferred stock is held by Forest, 9.95% is held by Corbel Capital Partners SBIC, L.P. ( Corbel ), and 9.95% is held by Valley Healthcare Group, LLC ( VHG ). Upon a sale of the durable medical equipment business, such holders of Series A-1 Preferred Stock are only entitled to their liquidation preference; • HC LLC, a wholly-owned subsidiary of DME Inc., and sole owner of the durable medical equipment operating subsidiaries, issued to Forest 34,010 newly issued shares of 9.0% Series A-2 preferred stock (the Series A-2 Preferred Stock ) with a maturity date of December 29, 2027 for $1,000.00 per share. Upon a sale of the durable medical equipment business, such holders of Series A-2 Preferred Stock are entitled to the greater of their liquidation preference or 33% of proceeds arising from such sale; • HC LLC distributed to the owners of DME Inc. cash of $1.9 million and reimbursed GEG $1.3 million to cover deal costs; • Forest distributed to the Company, its sole stockholder, all of the assets and liabilities of Forest other than certain excluded assets and related liabilities, including Forest’s real estate business, and a preferred investment in the Company’s durable medical equipment business; and • JPM acquired 20% of Forest’s common stock for a purchase price of $2.7 million. (each collectively noted above, the JPM Transactions Using proceeds from the JPM Transactions, DME Inc. paid off the term loan with Corbel (the Corbel Facility |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 5. Related Party Transactions Related party transactions are measured in part by the amount of consideration paid or received as established and agreed by the parties. Consideration paid for such services in each case is the negotiated value. Durable Medical Equipment In connection with the acquisition of the durable medical equipment businesses in September 2018, DME Inc. and its subsidiaries entered into a term loan agreement with Corbel (the Corbel Facility 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 discussed above. Investment Management The Company’s wholly-owned subsidiary, GECM, has agreements to provide administrative services and manage the investment portfolio for GECC. Under these agreements, GECM receives administrative fees, management fees based on GECC’s assets (other than cash and cash equivalents) and incentive fees if GECC has net capital gains or if its net investment income exceeds a specified hurdle rate. Fees under the agreements began to accrue on November 4, 2016. See Note 3 – Revenue for additional discussions of the fee arrangements. All of the Company’s investment management revenue recognized for the periods presented was generated from the management and administration of GECC. The Company’s wholly-owned subsidiary, Great Elm Opportunities GP, Inc. ( GEO GP GEOF In October 2020, GECM entered into a shared personnel and reimbursement agreement with Imperial Capital Asset Management, LLC ( ICAM GEOF is a Delaware multi-series limited partnership. The Company has determined that each series of GEOF is a VIE and that the criteria for consolidation are met for one of the series (the Consolidated Fund The Company has retained the specialized investment company accounting guidance under GAAP with respect to the Consolidated Fund. As such, investments of the Consolidated Fund are included in the condensed consolidated balance sheets at fair value and the net unrealized gain (loss) on those investments is included as a component of other income on the condensed consolidated income statement. As of December 31, 2020 no single issuer or investment of the Consolidated Fund had a fair value greater than 5% of the Company’s total consolidated assets. Additionally, the Company receives dividends from its investment in GECC and earns unrealized profits and losses based on the mark-to-market performance of its investment in GECC and the investments held in the Consolidated Fund. See Note 6 – Fair Value Measurements. The following tables summarize activity and outstanding balances between the managed investment products and the Company. For the three months ended December 31, For the six months ended December 31, (in thousands) 2020 2019 2020 2019 Change in unrealized gain (loss) on investment in GECC $ 2,560 $ (826 ) $ 658 $ (1,809 ) Dividend income from GECC 1,322 588 1,846 1,078 As of (in thousands) December 31, 2020 June 30, 2020 Dividends receivable from GECC $ 450 $ 170 Investment management revenues receivable 751 746 Receivable for reimbursable expenses paid 185 158 Outstanding receivables are included in related party receivables in the condensed consolidated balance sheets. Outstanding receivables from the Consolidated Fund are eliminated in consolidation. As of December 31, 2020, the Company had $0.01 million in receivable for reimbursable expenses paid on behalf of the Consolidated Fund. The Company is the owner of approximately 23.6% of the outstanding shares of GECC, and the Company’s Chief Executive Officer is also the Chief Executive Officer of GECC and Chief Investment Officer of GECM, in addition to being a member of the board of directors of the Company and chairman of the board of GECC. The Company’s President and Chief Operating Officer is also the Chief Operating Officer, Chief Compliance Officer and General Counsel of GECM and the Chief Compliance Officer of GECC. On October 1, 2020, GECC completed a non-transferable rights offering in which the Company received 2,966,531 shares at a price of $2.95 per share for an aggregate total of $8.8 million. GECM has a profit sharing agreement with the Company’s majority-owned subsidiary GECC GP Corp. ( Profit Sharing Agreement MAST Capital Management, LLC ( MAST Capital Real Estate In connection with the acquisition of the real estate business in March 2018, the Company issued the former owner a 19.9% interest in Great Elm FM Holdings, Inc. ( GE FM Holdings General Corporate In conjunction with the JPM Transactions, on December 29, 2020 Forest sold Forest Preferred Stock and the Company sold common stock in Forest to JPM for cash consideration of $35.0 million and $2.7 million, respectively. As a result of these transactions, JPM holds a non-controlling interest in Forest. See Note 14 – Non-Controlling Interests and Preferred Stock of Subsidiaries. On December 18, 2020, the Company purchased from JPM a 21% common stock interest in Ligado Networks, LLC ( Ligado |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 6. 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. 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 non-recurring basis have been segregated into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date. The assets and liabilities measured at fair value on a recurring and non-recurring basis are summarized in the tables below: Fair Value as of December 31, 2020 Level 1 Level 2 Level 3 Total Assets: Investment in GECC $ 19,532 $ - $ - $ 19,532 Equity investments of Consolidated Fund $ 3,417 $ - $ - $ 3,417 Total assets $ 22,949 $ - $ - $ 22,949 Liabilities: Participation feature of HC LLC Series A-2 Preferred Stock $ - $ - $ - $ - Total liabilities $ - $ - $ - $ - Fair Value as of June 30, 2020 (in thousands) Level 1 Level 2 Level 3 Total Assets: Investment in GECC $ 8,705 $ - $ - $ 8,705 Total assets $ 8,705 $ - $ - $ 8,705 Liabilities: Contingent consideration liability $ - $ - $ - $ - Total liabilities $ - $ - $ - $ - The following is a reconciliation of changes in contingent consideration, a Level 3 liability, for the three and six months ended December 31, 2020: For the six months ended December 31, (in thousands) 2020 2019 Beginning balance $ - $ 1,135 Additions - - Payments - - Change in fair value - (1,135 ) Ending balance $ - $ - There were no transfers between levels of the fair value hierarchy during the six months ended December 31, 2020 and 2019. The contingent consideration arrangement required the Company to pay up to $2.1 million of additional consideration to the former shareholders of the durable medical equipment businesses if certain earnings before interest, taxes, depreciation and amortization ( EBITDA On December 29, 2020, in conjunction with the JPM Transactions, the Company issued HC LLC Series A-2 Preferred Stock to our consolidated subsidiary, Forest. See Note 14 – 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 the issuance date, the fair value was determined using an option pricing model based on the transaction price. The key assumption used in the option pricing model is a volatility rate of 72.7% and an option term of 3 years. Subsequent to the issuance date, fair value of this derivative is determined using a discounted cash flow income approach and a guideline public company market approach. The key assumptions in applying the valuation approach as of December 31, 2020 include financial forecasts of the durable medical equipment business, a discount rate of 17% and a discount for lack of marketability of 33% (level 3 inputs in accordance with the GAAP fair value hierarchy). The fair value of the embedded derivative as of both the issuance date and December 31, 2020 was $6.5 million. However, as the HC LLC Series A-2 Preferred Stock are 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. The Company is the owner of approximately 23.6% (or 5,425,644 shares) of the outstanding shares of GECC and values its ownership based on the NASDAQ-listed market price of GECC common stock (a Level 1 input in accordance with the GAAP fair value hierarchy). |
Fixed Assets
Fixed Assets | 6 Months Ended |
Dec. 31, 2020 | |
Property Plant And Equipment [Abstract] | |
Fixed Assets | 7. Fixed Assets The Company’s fixed assets consist of its leased real estate assets, medical equipment held for rental, furniture and fixtures, and leasehold improvements used in its operations. The following tables detail the Company’s fixed assets: (in thousands) December 31, 2020 June 30, 2020 Real Estate Assets Buildings $ 43,355 $ 43,355 Land and site improvements 9,170 9,170 Tenant improvements 3,500 3,500 56,025 56,025 Accumulated depreciation (3,449 ) (2,837 ) Net carrying amount $ 52,576 $ 53,188 Property and Equipment Leasehold improvements $ 858 $ 858 Vehicles 232 237 Computer equipment and software 356 277 Furniture and fixtures 394 417 Sleep study equipment 589 589 2,429 2,378 Accumulated depreciation (1,297 ) (968 ) Net carrying amount $ 1,132 $ 1,410 Medical Equipment Held for Rental Medical equipment held for rental $ 14,054 $ 13,828 Accumulated depreciation (7,034 ) (6,345 ) Net carrying amount $ 7,020 $ 7,483 The following table reconciles depreciation expense included in the following lines of the condensed consolidated statements of operations to total depreciation expense for each period presented. For the three months ended December 31, For the six months ended December 31, (in thousands) 2020 2019 2020 2019 Depreciation and amortization $ 474 $ 527 $ 944 $ 955 Cost of durable medical equipment rentals 1,457 1,962 3,205 4,013 Total depreciation expense $ 1,931 $ 2,489 $ 4,149 $ 4,968 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 6 Months Ended |
Dec. 31, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | 8. Goodwill and Other Intangible Assets The Company’s investment management and real estate segments include identifiable intangible assets acquired through acquisitions in prior years. In connection with the acquisition of the durable medical equipment businesses, the Company has also recognized goodwill and identifiable intangible assets associated with the tradenames and non-compete agreements. The Company’s annual impairment assessment date for goodwill and other intangible assets is April 1. Goodwill of $50.0 million presented on the condensed consolidated balance sheet consists only of the goodwill acquired as part of the acquisitions of the durable medical equipment businesses in September 2018 and June 2019. The changes in the carrying value of goodwill are as follows: For the six months ended December 31, 2020 2019 (in thousands) Beginning balance $ 50,010 $ 50,397 Purchase accounting adjustment - 36 Ending balance $ 50,010 $ 50,433 The following tables provide details associated with the Company’s identifiable intangible assets subject to amortization (dollar amounts in thousands): As of December 31, 2020 As of June 30, 2020 (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Durable Medical Equipment Tradename $ 8,800 $ (2,053 ) $ 6,747 $ 8,800 $ (1,613 ) $ 7,187 Non-compete agreements 1,360 (733 ) 627 1,360 (573 ) 787 10,160 (2,786 ) 7,374 10,160 (2,186 ) 7,974 Investment Management Investment management agreement 3,900 (2,107 ) 1,793 3,900 (1,887 ) 2,013 Assembled workforce 526 (284 ) 242 526 (255 ) 271 4,426 (2,391 ) 2,035 4,426 (2,142 ) 2,284 Real Estate In-place lease 6,028 (1,406 ) 4,622 6,028 (1,157 ) 4,871 Total $ 20,614 $ (6,583 ) $ 14,031 $ 20,614 $ (5,485 ) $ 15,129 Aggregate Amortization Expense (in thousands) 2020 2019 For the three months ended December 31, $ 547 $ 603 For the six months ended December 31, 1,098 1,242 Estimated Future Amortization Expense (in thousands) For the six months ending June 30, 2021 $ 1,058 For the year ending June 30, 2022 1,981 For the year ending June 30, 2023 1,894 For the year ending June 30, 2024 1,702 For the year ending June 30, 2025 1,597 Thereafter $ 5,799 |
Lessor Operating Leases
Lessor Operating Leases | 6 Months Ended |
Dec. 31, 2020 | |
Lessor Disclosure [Abstract] | |
Lessor Operating Leases | 9. Lessor Operating Leases Medical Equipment Leases Through its majority-owned subsidiary DME Inc., and the subsidiaries of DME Inc., 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. Real Estate Leases The Company’s majority-owned subsidiary CRIC IT Fort Myers LLC ( Property Owner Property Gartner Leases The Property is subject to mortgage, security agreement and assignment of leases and rents with the senior and subordinated lenders, which is further described in Note 10 - Borrowings. The Property Owner has assigned all rights, title and interest in and to the Property and the Leases to the senior and subordinated lenders and all amounts received are paid to a trust which funds the operating costs associated with the Property. The Company does not have rights to these rent payments while the borrowings remain outstanding. The Company expects to derive value from the residual value at the end of the existing lease term by further leasing the assets or through a sale transaction. Rental income from real estate leases is summarized in the following table: For the three months ended December 31, For the six months ended December 31, (in thousands) 2020 2019 2020 2019 Revenues from base rents $ 1,151 $ 1,152 $ 2,302 $ 2,303 Revenues from additional rental payments 124 119 246 241 Total rental revenues $ 1,275 $ 1,271 $ 2,548 $ 2,544 The following table summarizes the base rents for the remaining lease term: (in thousands) Base Rent Payments For the six months ending June 30, 2021 $ 2,124 For the year ending June 30, 2022 4,312 For the year ending June 30, 2023 4,419 For the year ending June 30, 2024 4,529 For the year ending June 30, 2025 4,648 Thereafter 24,025 Total base rent $ 44,057 |
Lessee Operating Leases
Lessee Operating Leases | 6 Months Ended |
Dec. 31, 2020 | |
Lessee Disclosure [Abstract] | |
Lessee Operating Leases | 10. Lessee Operating Leases All of the Company’s leases are operating leases. Certain of the leases have both lease and non-lease components. The Company has elected to account for each separate lease component and the non-lease components associated with that lease component as a single lease component for all classes of underlying assets. The following table provides additional details of the leases presented in the balance sheets: (in thousands) December 31, 2020 June 30, 2020 Facilities Right of use assets $ 4,916 $ 5,265 Current portion of lease liabilities 1,467 1,560 Lease liabilities, net of current portion 3,719 3,990 Total liabilities $ 5,186 $ 5,550 Weighted-average remaining life 3.8 years 3.9 years Weighted-average discount rate 11.7 % 11.7 % Vehicles Right of use assets $ 52 $ 61 Current portion of lease liabilities 20 20 Lease liabilities, net of current portion 32 41 Total liabilities $ 52 $ 61 Weighted-average remaining life 2.2 years 2.8 years Weighted-average discount rate 12.3 % 12.3 % Equipment Right of use assets $ 47 $ 66 Current portion of lease liabilities 31 37 Lease liabilities, net of current portion 16 29 Total liabilities $ 47 $ 66 Weighted-average remaining life 1.5 years 2.0 years Weighted-average discount rate 12.5 % 12.5 % As of December 31, 2020, the Company had remaining right of use assets of $5.0 million and lease liabilities of $5.3 million (consisting of $1.5 million in current portion of lease liabilities and $3.8 million in lease liabilities, net of current portion on the condensed consolidated balance sheet) related to the leases discussed herein. Operating lease costs are included in the operating expense associated with the business segment leasing the asset on the statements of operations and are included in cash flows from operating activities on the 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 December 31, For the six months ended December 31, (in thousands) 2020 2019 2020 2019 Facilities Operating lease cost $ 549 $ 519 $ 1,079 $ 1,047 Cash paid for operating leases 541 513 1,089 1,011 Vehicles Operating lease cost $ 7 $ 7 $ 14 $ 14 Cash paid for operating leases 7 7 14 14 Equipment Operating lease cost $ 11 $ 11 $ 22 $ 22 Cash paid for operating leases 11 11 22 22 The following table summarizes the Company’s undiscounted cash payment obligations for its operating leases: (in thousands) For the six months ending June 30, 2021 $ 1,127 For the year ending June 30, 2022 2,035 For the year ending June 30, 2023 1,386 For the year ending June 30, 2024 1,014 For the year ending June 30, 2025 531 Thereafter 424 Total lease payments $ 6,517 Imputed interest (1,232 ) Total lease liabilities $ 5,285 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 and General Corporate The Company has a lease for office space located in Waltham, MA. 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 The lease payments commenced on October 1, 2017, four months after the Company began to occupy the space. On an annual basis, the lease payments increase at an average rate of approximately 2.4% from $28 to $32 thousand per month. |
Borrowings
Borrowings | 6 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Borrowings | 11. Borrowings Related party borrowings of the Company’s subsidiaries are summarized in the following table: (in thousands) Subsidiaries December 31, 2020 June 30, 2020 Corbel Facility DME Inc. and subsidiaries $ - $ 25,106 GP Corp. Note GP Corp. 3,072 3,072 Total principal $ 3,072 $ 28,178 Unamortized debt issuance cost - (275 ) Total long-term related party notes payable 3,072 27,903 Less current portion of related party notes payable (76 ) (1,418 ) Related party notes payable, net of current portion $ 2,996 $ 26,485 The Company’s subsidiaries’ other outstanding borrowings are summarized in the following table: (in thousands) Subsidiaries December 31, 2020 June 30, 2020 DME Revolver DME Inc. and subsidiaries $ - $ 3,900 Equipment Financing DME Inc. and subsidiaries 1,877 2,230 Senior Note CRIC IT 48,868 50,004 Subordinated Note CRIC IT 4,098 3,803 Total principal $ 54,843 $ 59,937 Unamortized debt premiums 3,262 3,251 Unamortized debt discounts and issuance costs (1,867 ) (1,956 ) Total other outstanding borrowings 56,238 61,232 Less current portion of other outstanding borrowings (4,168 ) (8,255 ) Other outstanding borrowings, net of current portion $ 52,070 $ 52,977 The Company incurred interest expense of $1.3 million and $1.6 million for the three months ended December 31, 2020 and 2019, respectively. The Company incurred interest expenses of $2.7 million and $3.3 million for the six months ended December 31, 2020 and 2019, respectively. The Company’s aggregate future required principal debt repayments are summarized in the following table: (in thousands) Principal Due For the six months ending June 30, 2021 $ 2,486 For the year ending June 30, 2022 3,107 For the year ending June 30, 2023 2,835 For the year ending June 30, 2024 2,982 For the year ending June 30, 2025 3,202 Thereafter 55,476 Total $ 70,088 Outstanding principal on related party borrowings $ 3,072 Outstanding principal on other borrowings 54,843 Future interest to be paid-in-kind 12,173 Total future required principal payments $ 70,088 Additional details of each borrowing by operating segment are discussed below. Durable Medical Equipment In connection with the acquisition of 80.1% of DME Inc., the Company assumed a secured note ( Corbel Facility DME Revolver The Company amended and borrowed an additional $3.4 million under the Corbel Facility in June 2019. The remaining outstanding principal balance of $24.8 million was repaid on December 29, 2020. The repayment included deferred structuring fees of $0.6 million, prepayment premiums and settlement fees of $1.0 million, and lender legal fees of $0.1 million. In addition, upon repayment, the Company wrote off the remaining unamortized debt issuance costs of $0.2 million, resulting in an aggregate $1.9 million loss on extinguishment of debt. The Corbel Facility was held by Corbel, a related party, which also holds a non-controlling interest in DME Inc. and HC LLC Series A-1 Preferred Stock. See Note 5 – Related Party Transactions and Note 14 – Non-Controlling Interests and Preferred Stock of Subsidiaries. Principal payments and interest expense incurred on the Corbel Facility are summarized in the following table: For the three months ended December 31, For the six months ended December 31, (in thousands) 2020 2019 2020 2019 Principal payments $ 24,752 $ 355 $ 25,106 $ 1,316 Interest expense 635 1,603 1,296 2,458 The DME Revolver had a balance of $0.0 million at December 31, 2020 and allows for borrowings up to $10 million, subject to a fixed percentage of qualifying accounts receivables 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 December 31, 2020 the interest rate was 3.7%. Interest is payable monthly in arrears. The Company has the option to prepay the borrowings without any penalty. The Company has classified all borrowings under the DME Revolver as long-term in the condensed consolidated balance sheets as of December 31, 2020 based on the maturity date of the facility. The borrowings under the DME Revolver are collateralized by the assets of the durable medical equipment business and DME Inc. is required to meet certain financial covenants. The DME Revolver includes covenants that restrict DME Inc. business operations to its 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 DME Inc. DME Inc. must also comply with a fixed-charge coverage and leverage ratio financial covenants, which are based in part on the DME Inc. EBITDA levels. T he DME Revolver are non-recourse to the Company. DME Inc’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 3rd 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 six months ended December 31, 2020 and 2019, the Company financed $1.6 million and $1.3 million, respectively, in inventory and equipment through such financing agreements. Investment Management The GP Corp. Note matures in November 2026, accrues interest at a variable rate of three-month LIBOR plus 3.0% per annum and is secured by a profit sharing agreement related to GECM’s management of GECC. At December 31, 2020 the interest rate was 3.2%. The GP Corp. Note requires quarterly interest only payments and annual principal payments of $0.08 million each June 30. The GP Corp. Note is non-recourse to any of the Company’s operations or net assets not related to GECM’s management services to GECC. The GP Corp. Note may be prepaid at par value at any time with prior written notice to the holders of the GP Corp. Note. Additionally, GECC GP Corp. is required to prepay the GP Corp. Note upon certain material liquidation transactions including any termination of the Profit Sharing Agreement. The GP Corp. Note is held by MAST Capital, a related party. Payments and interest expense incurred on the GP Corp. Note are summarized in the following table: For the three months ended December 31, For the six months ended December 31, (in thousands) 2020 2019 2020 2019 Principal payments $ - $ - $ - $ - Interest expense 25 44 51 88 Real Estate In connection with the acquisition of the real estate business, the Company’s majority-owned subsidiary, CRIC IT, assumed a senior secured note ( Senior Note Subordinated Note The Senior Note matures on March 15, 2030, accrues interest at a rate of 3.49% per annum and is secured by a first lien mortgage on the Property and an Assignment of Leases and Rents. The Senior Note requires monthly principal and interest payments through the maturity date, with the last payment of $18.4 million on March 15, 2030. The principal and interest due on the Senior Note may be prepaid at the option of the borrower, based on an amount determined by discounting the remaining principal and interest payments at a rate equal to an applicable premium in excess of a rate corresponding to the specified U.S. Treasury security over the remaining average life of the Senior Note. The Subordinated Note matures on March 15, 2030, accrues interest at a rate of 15.0% per annum, and is secured by a second lien mortgage on the Property and an Assignment of Leases and Rents. The Subordinated Note is a capital appreciation note, whereby the monthly interest is capitalized to the principal balance and due at maturity. Accordingly, a $16.3 million payment is due on March 15, 2030. The principal and interest due on the Subordinate Note may be prepaid at the option of the borrower, based on an amount determined by discounting the remaining principal and interest payments at a rate equal to an applicable premium in excess of a rate corresponding to the specified U.S. Treasury security over the remaining average life of the Subordinated Note. The note agreements include negative covenants that restrict the Property Owner’s business operations to ownership and lease of the Property, limit additional indebtedness, require maintenance of insurance and other customary requirements related to the Property. Events of default include non-payment of amounts when due, inability to pay indebtedness or material change in the business operations or financial condition of the Property Owner or the lease tenant that in the Lender’s reasonable determination would reasonably be expected to materially impair the value of the Property, prevent timely repayment of the notes or performance of any material obligations under the note and related agreements. The payments under the notes are also guaranteed on a full and several basis by the non-controlling interest holder of the Property Owner. Both the Senior Note and Subordinated Note are non-recourse to the Company, but are secured by the Property, the rights associated with the Leases and the stock owned by the Company in the Property Owner. See Note 9 – Lessor Operating Leases. |
Convertible Notes
Convertible Notes | 6 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Convertible Notes | 12. Convertible Notes On February 26, 2020, the Company issued Convertible Notes at par with an aggregate principal balance of $30 million due February 26, 2030 (the Convertible Notes ▪ $6.3 million ▪ $6.7 million ▪ $0.7 million 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 ASC Topic 815, Derivatives and Hedging, The Company incurred interest expense of $0.6 million and $1.1 million related to the convertible notes for the three and six months ended December 31, 2020 . |
CARES Act
CARES Act | 6 Months Ended |
Dec. 31, 2020 | |
Extraordinary And Unusual Items [Abstract] | |
CARES Act | 13. CARES Act On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act ( CARES Act PPP Loan SBA Additionally, pursuant to the CARES Act, Congress appropriated $100 billion in relief funds for hospitals and healthcare providers through grants administered by the U.S. Department of Health and Human Services ( HHS We have accounted for such proceeds as in-substance government grants by analogizing to International Accounting Standard 20, Accounting for Government Grants and Disclosure of Government Assistance |
Non-Controlling Interests and P
Non-Controlling Interests and Preferred Stock of Subsidiaries | 6 Months Ended |
Dec. 31, 2020 | |
Noncontrolling Interest [Abstract] | |
Non-Controlling Interests and Preferred Stock of Subsidiaries | 14. Non-Controlling Interests and Preferred Stock of Subsidiaries Non-Controlling Interests of Subsidiaries Holders of non-controlling interests ( NCI (in thousands) December 31, 2020 June 30, 2020 DME Inc. Temporary equity 2,567 3,890 Permanent equity 2,567 3,890 Total DME Inc. 5,134 7,780 GP Corp. Permanent equity (840 ) (782 ) GE FM Holdings Permanent equity 808 778 Forest Permanent equity 2,700 - Total Non-controlling interests $ 7,802 $ 7,776 The following table summarizes the net income (loss) attributable to the non-controlling interests on the condensed consolidated statements of operations: For the three months ended December 31, For the six months ended December 31, (in thousands) 2020 2019 2020 2019 DME Inc. Temporary equity (292 ) (78 ) (337 ) (158 ) Permanent equity (292 ) (78 ) (337 ) (158 ) Total DME Inc. (584 ) (156 ) (674 ) (316 ) GP Corp. Permanent equity (30 ) (43 ) (60 ) (85 ) GE FM Holdings Permanent equity 17 13 30 26 Forest Permanent equity 0 - 0 - Total $ (597 ) $ (186 ) $ (704 ) $ (375 ) Non-controlling interest in DME Inc. classified as temporary equity In connection with the acquisition of the durable medical equipment businesses in September 2018, the Company issued a 9.95% common stock equity ownership in DME Inc. The holder of the interest has a board observer rights for the DME Inc. board of directors, but no voting rights. DME Inc. has the right of first offer if the holder desires to sell the security and in the event of a sale of DME Inc., the holder must sell their securities (drag along rights) and has the right to participate in sales of DME Inc. securities (tag along rights). In addition, upon the seventh anniversary of issuance date, if (i) the holder owns 50% of the common shares issued to it at the closing of the transaction, (ii) an initial public offering of DME Inc. 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 DME Inc. and has the right to put its common shares to DME Inc. 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 DME Inc. 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 DME Inc. The holder of this non-controlling interest, Corbel, is also the holder of the Series A-1 Preferred Stock and previously was the holder of the Corbel Facility Non-controlling interest in DME Inc. classified as permanent equity In connection with the acquisition of the durable medical equipment businesses in September 2018, the Company issued one of the former owners, a 9.95% common stock equity ownership in DME Inc. The rights are consistent with the non-controlling interest classified as temporary equity, other than the holder does not have a contingent put right. Accordingly, Company has classified the non-controlling interest as permanent equity at its fair value on the date of issuance, adjusted for any earnings in DME Inc. GECC GP Corp. – Non-controlling interest classified as permanent equity In connection with the acquisition of the investment management business in November 2016, the Company issued certain affiliates and employees of the Company a 19.9% interest in GP Corp. GE FM Holdings – Non-controlling interest classified as permanent equity In connection with the acquisition of the real estate business in March 2018, the Company issued the former owner a 19.9% interest in GE FM Holdings. Forest – Non-controlling interest classified as permanent equity In connection with the JPM Transactions on December 29, 2020, the Company sold JPM a 20.0% common stock interest in Forest in exchange for $2.7 million. JPM has a representative on the Forest board of directors and 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. See Note 5 – Related Party Transactions. Redeemable Preferred Stock of Subsidiaries The following table summarizes the preferred stock of subsidiary balances on the condensed consolidated balance sheets: (in thousands) December 31, 2020 June 30, 2020 HC LLC Series A-1 Preferred Stock 1,556 - Series A-2 Preferred Stock - - Total HC LLC 1,556 - Forest Forest Preferred Stock 33,856 - Total preferred stock classified as liability $ 35,412 $ - HC LLC - Series A-1 Preferred Stock classified as a liability In connection with the JPM Transactions, the Company issued 10,090 shares of Series A-1 Preferred Stock with a face value of $1,000 per share at issuance. 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. 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 consolidated balance sheet. The dividends on the shares are included in interest expense in the consolidated statement 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 is accounted for as a debt discount and accretion of the discount will be charged to interest expense over the 7-year period to redemption using the effective interest method. The holders of the Series A-1 Preferred Stock include our majority-owned consolidated subsidiary Forest (8,082 shares), as well as Corbel and VHG (each 1,004 shares), who are also the holders of non-controlling interests in DME Inc. discussed above. See Note 5 – Related Party Transactions. Such shares of Series A-1 Preferred Stock issued to consolidated subsidiaries and their effects on our operations have been eliminated in consolidation. HC LLC Series A-2 Preferred Stock classified as a liability In connection with the JPM Transactions, the Company issued 34,010 shares of Series A-2 Preferred Stock with a face value of $1,000 per share at issuance. 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 HC LLC 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 consolidated balance sheet. The dividends on the shares are included in interest expense in the consolidated statement of operations. We have identified the feature allowing holders of the HC LLC 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 will be marked to fair value at each reporting date going forward. 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 is accounted for as a debt discount and accretion of the discount will be 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 In connection with the JPM Transactions, Forest issued 35,010 shares of preferred stock in Forest with a face value of $1,000 per share at issuance. 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 net operating loss carryforwards to less than $300 million. The preferred 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 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 consolidated balance sheet. The dividends on the preferred stock are included in interest expense in the consolidated statement 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 is accounted for as a debt discount and accretion of the discount will be charged to interest expense over the 7-year period to redemption using the effective interest method. The holder of the Forest Preferred Stock is JPM, who is also the holder of the non-controlling interests in Forest discussed above. See Note 5 – Related Party Transactions. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | 15. Stockholders’ Equity Restricted Stock Awards (Performance Shares) and Restricted Stock Units During the six months ended December 31, 2020, there were no awards or forfeitures of restricted stock awards included in the below table and 732,909 remain outstanding as of December 31, 2020. Restricted stock awards granted have both performance and service requirements in connection with the formation of the investment management business. The vesting of these awards is subject to a five-year five-year Restricted stock units are subject to service requirements. The Company accounts for forfeitures of the restricted stock units in the period incurred. During the three and six months ended December 31, 2020 the Company granted 0 and 44,490 shares of restricted stock units, respectively, to employees and directors. The activity of the Company’s restricted stock awards and units for the six months ended December 31, 2020 was as follows: Restricted Stock Awards and Restricted Stock Units Restricted Stock (in thousands) Weighted Average Grant Date Fair Value Outstanding at June 30, 2020 941 $ 3.71 Granted 44 2.36 Vested (161 ) 2.66 Forfeited - - Outstanding at December 31, 2020 824 $ 3.84 Stock Options The following table summarizes the Company’s option award activity as of and through December 31, 2020: Options Shares (in thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (in thousands) Outstanding at June 30, 2020 2,475 $ 3.69 5.51 $ - Options granted - - Exercised - - Forfeited, cancelled or expired - - Outstanding at December 31, 2020 2,475 $ 3.69 5.01 $ - Exercisable at December 31, 2020 1,798 $ 3.64 4.53 $ - Vested and expected to vest as of December 31, 2020 2,475 $ 3.69 5.01 $ - During the three months ended December 31, 2020 and 2019, the Company recognized total stock-based compensation associated with all restricted stock and stock options of $0.3 million and $0.2 million, respectively. During the six months ended December 31, 2020 and 2019, the Company recognized total stock-based compensation associated with all restricted stock and stock options of $0.7 million and $0.3 million, respectively. As of December 31, 2020, unrecognized compensation costs associated with outstanding stock and stock-linked awards totaled approximately $1.7 million. |
Income Tax
Income Tax | 6 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Tax | 16. Income Tax As of June 30, 2020, the Company had net operating loss ( NOL 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. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Dec. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 17. Commitments and Contingencies From time to time, the Company is involved in lawsuits, claims, investigations and proceedings that arise in the ordinary course of business. The Company maintains insurance to mitigate losses related to certain risks. The Company is not a named party in any other pending or threatened litigation that we expect to have a material adverse impact on our business, results of operations, financial condition or cash flows. |
Segment Information
Segment Information | 6 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | 18. Segment Information The Company allocates resources based on three business operating segments: durable medical equipment, investment management and real estate 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. The following tables illustrate results of operations by segment: For the three months ended December 31, 2020 (in thousands) Durable Medical Equipment Investment Management Real Estate General Corporate Intercompany Eliminations (1) Consolidated Total Revenue: Total revenue $ 14,543 $ 760 $ 1,276 $ 45 $ (45 ) $ 16,579 Operating costs and expenses: Cost of durable medical equipment sold and services (4,703 ) - - - - (4,703 ) Cost of durable medical equipment rentals (1,621 ) - - - - (1,621 ) Depreciation and amortization (462 ) (127 ) (431 ) (1 ) - (1,021 ) Stock-based compensation (2) - (197 ) - (88 ) - (285 ) Transaction costs (3) (87 ) - - (229 ) - (316 ) Other selling, general and administrative (8,028 ) (719 ) (127 ) (1,006 ) 45 (9,835 ) Total operating expenses (14,901 ) (1,043 ) (558 ) (1,324 ) 45 (17,781 ) Other income (expense): Interest expense (687 ) (25 ) (647 ) (552 ) - (1,911 ) Other income (expense) (1,833 ) - - 3,950 - 2,117 Total other expense, net (2,520 ) (25 ) (647 ) 3,398 - 206 Total pre-tax income (loss) $ (2,878 ) $ (308 ) $ 71 $ 2,119 $ - $ (996 ) For the three months ended December 31, 2019 (in thousands) Durable Medical Equipment Investment Management Real Estate General Corporate Intercompany Eliminations (1) Consolidated Total Revenue: Total revenue $ 14,391 $ 889 $ 1,271 $ 57 $ (57 ) $ 16,551 Operating costs and expenses: Cost of durable medical equipment sold and services (3,689 ) - - - - (3,689 ) Cost of durable medical equipment rentals (2,185 ) - - - - (2,185 ) Depreciation and amortization (520 ) (179 ) (430 ) (1 ) - (1,130 ) Stock-based compensation (2) - (98 ) - (110 ) - (208 ) Transaction costs (3) - - - (486 ) - (486 ) Other general and administrative (7,736 ) (566 ) (126 ) (752 ) 57 (9,123 ) Total operating expenses (14,130 ) (843 ) (556 ) (1,349 ) 57 (16,821 ) Other income (expense): Interest expense (937 ) (41 ) (655 ) - - (1,633 ) Other income (expense) - - - (223 ) - (223 ) Total other expense, net (937 ) (41 ) (655 ) (223 ) - (1,856 ) Total pre-tax income (loss) $ (676 ) $ 5 $ 60 $ (1,515 ) $ - $ (2,126 ) For the six months ended December 31, 2020 (in thousands) Durable Medical Equipment Investment Management Real Estate General Corporate Intercompany Eliminations (1) Consolidated Total Revenue: Total revenue $ 29,153 $ 1,533 $ 2,548 $ 136 $ (136 ) $ 33,234 Operating costs and expenses: Cost of durable medical equipment sold and services (8,910 ) - - - - (8,910 ) Cost of durable medical equipment rentals (3,536 ) - - - - (3,536 ) Depreciation and amortization (925 ) (255 ) (861 ) (1 ) - (2,042 ) Stock-based compensation (2) - (391 ) - (323 ) - (714 ) Transaction costs (3) (87 ) - - (261 ) - (348 ) Other selling, general and administrative (15,799 ) (1,251 ) (252 ) (2,152 ) 136 (19,318 ) Total operating expenses (29,257 ) (1,897 ) (1,113 ) (2,737 ) 136 (34,868 ) Other income (expense): Interest expense (1,396 ) (51 ) (1,297 ) (1,124 ) - (3,868 ) Other income (expense) (1,836 ) - - 2,578 - 742 Total other income (expense), net (3,232 ) (51 ) (1,297 ) 1,454 - (3,126 ) Total pre-tax income (loss) $ (3,336 ) $ (415 ) $ 138 $ (1,147 ) $ - $ (4,760 ) For the six months ended December 31, 2019 (in thousands) Durable Medical Equipment Investment Management Real Estate General Corporate Intercompany Eliminations (1) Consolidated Total Revenue: Total revenue $ 27,622 $ 1,756 $ 2,544 $ 80 $ (80 ) $ 31,922 Operating costs and expenses: Cost of durable medical equipment sold and services (7,152 ) - - - - (7,152 ) Cost of durable medical equipment rentals (4,450 ) - - - - (4,450 ) Depreciation and amortization (977 ) (358 ) (861 ) (1 ) - (2,197 ) Stock-based compensation (2) - (273 ) - (228 ) - (501 ) Transaction costs (3) - - - (577 ) - (577 ) Other selling, general and administrative (14,608 ) (1,082 ) (250 ) (2,329 ) 80 (18,189 ) Total operating expenses (27,187 ) (1,713 ) (1,111 ) (3,135 ) 80 (33,066 ) Other income (expense): Interest expense (1,933 ) (83 ) (1,313 ) - - (3,329 ) Other income (expense) 3 - - (692 ) - (689 ) Total other income (expense), net (1,930 ) (83 ) (1,313 ) (692 ) - (4,018 ) Total pre-tax income (loss) $ (1,495 ) $ (40 ) $ 120 $ (3,747 ) $ - $ (5,162 ) (1) The Company’s wholly-owned subsidiary, Great Elm DME Manager, LLC ( DME Manager (2) Stock-based compensation attributable to the investment management segment is included in investment management expenses in the condensed consolidated statements of operations. Stock-based 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 incurred in connection with consummated and unconsummated transactions, are included in selling, general and administrative expense in the condensed consolidated statements of operations. The following tables illustrate assets by segment: As of December 31, 2020 (in thousands) Durable Medical Equipment Investment Management Real Estate General Corporate Total Fixed assets, net $ 8,121 $ 27 $ 52,576 $ 4 $ 60,728 Identifiable intangible assets, net 7,374 2,035 4,622 - 14,031 Goodwill 50,010 - - - 50,010 Other assets 19,310 2,978 2,782 49,540 74,610 Total $ 84,815 $ 5,040 $ 59,980 $ 49,544 $ 199,379 As of June 30, 2020 (in thousands) Durable Medical Equipment Investment Management Real Estate General Corporate Total Fixed assets, net $ 8,854 $ 35 $ 53,188 $ 4 $ 62,081 Identifiable intangible assets, net 7,974 2,284 4,871 - 15,129 Goodwill 50,010 - - - 50,010 Other assets 19,055 2,654 2,171 44,345 68,225 Total $ 85,893 $ 4,973 $ 60,230 $ 44,349 $ 195,445 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Dec. 31, 2020 | |
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, 2020, presented herein, has been derived from the Company’s audited consolidated financial statements as of and for the year-ended June 30, 2020. |
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 ( GAAP |
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 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 14 – 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 three business operating segments: durable medical equipment, investment management and real estate, 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. |
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 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 six months ended December 31, 2020 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 December 31, 2020 and June 30, 2020, the Company had unbilled receivables of approximately $1.3 million and $1.9 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. Previously disclosed unbilled amounts have been updated to reflect current presentation. These unbilled amounts are included in accounts receivable in the condensed consolidated balance sheets. |
Net Income (Loss) Per Share | Net Income (Loss) per Share The following table presents the calculation of basic and diluted earnings (loss) per share: For the three months ended December 31, For the six months ended December 31, (in thousands except per share amounts) 2020 2019 2020 2019 Net loss $ (946 ) $ (2,027 ) $ (4,809 ) $ (5,305 ) Less: net loss attributable to non-controlling interest (597 ) (186 ) (704 ) (375 ) Net loss attributable to Great Elm Group, Inc. $ (349 ) $ (1,841 ) $ (4,105 ) $ (4,930 ) Net loss attributable to shareholders per share Basic $ (0.01 ) $ (0.07 ) $ (0.16 ) $ (0.19 ) Diluted $ (0.01 ) $ (0.07 ) $ (0.16 ) $ (0.19 ) Weighted average shares outstanding Basic 25,678 25,402 25,626 25,387 Diluted 25,678 25,402 25,626 25,387 When calculating earnings per share, we are required to adjust for the dilutive effect of common stock equivalents. As of December 31, 2020, the Company had 12,307,863 potential shares of common stock, including 9,008,612 potential shares of Company common stock issuable upon conversion of Convertible Notes (as defined in Note 12 – Convertible Notes) and 3,299,251 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 net loss per share calculations because to do so would be antidilutive. As of December 31, 2019, the Company had 3,402,602 potential shares of Company common stock issuable upon exercise of the stock options and vesting of restricted stock units and restricted stock awards that are not included in the diluted net loss per share calculations because to do so would be antidilutive. As of December 31, 2020 and 2019, the Company had an aggregate of 732,909 issued shares |
Restrictions on Subsidiary Dividends | Restrictions on Subsidiary Dividends Under the GP Corp. Note Agreement, GECC GP Corp. agreed not to declare any dividends until the GP Corp. Note is satisfied. Under the Senior Note and Subordinated Note, CRIC IT Fort Myers, LLC is restricted from paying any dividends until the Notes are satisfied. The ability of DME Inc. to pay dividends is subject to compliance with the restricted payment covenants under the DME Revolver. |
Concentration of Risk | Concentration of Risk The Company’s net investment revenue and receivables for the periods presented were attributable to the management of one investment vehicle, GECC, which is also a related party. See Note 5 – Related Party Transactions. The Company’s real estate rental revenue is derived from one tenant. 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 December 31, For the six months ended December 31, 2020 2019 2020 2019 Government Payor A 32% 30% 33% 29% Government Payor B * 10% * * Third-party Payor C 12% 13% 11% 10% * Not a significant concentration. The following table summarizes customer concentrations as a percentage of accounts receivable: As of December 31, 2020 June 30, 2020 Government Payor A 21% 20% Government Payor B * 11% Third-party Payor C 15% 11% * Not a significant concentration |
Recently Adopted and Issued Accounting Standards | Recently Adopted Accounting Standards Fair Value Measurements In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement , resulting in various disclosures related to fair value measurements being eliminated, modified or supplemented. ASU 2018-13 is effective for interim and annual periods beginning after December 15, 2019, with an option to early adopt any eliminated or modified disclosures, and to delay adoption of the additional disclosures, until the effective date. The Company early adopted the eliminated and modified disclosures of ASU 2018-13 during the three months ended September 30, 2018 and, as a result, updated its financial statement disclosures accordingly. A modified narrative description of measurement uncertainty for level 3 fair value measurements was applied prospectively, with all other amendments applied retrospectively. The Company has adopted the supplemental disclosures as of July 1, 2020. Recently Issued Accounting Standards Current Expected Credit Losses In June 2016, the FASB issued Accounting Standards Update ( 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 London Interbank Offered Rate ( LIBOR ) by the end of 2021. The provisions provide optional expedients and exceptions for applying 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. We are currently evaluating the impact of this ASU on our financial statements. Accounting for Convertible Instruments In August 2020, the FASB issued ASU 2020-06 , Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , which simplifies the accounting for convertible instruments by eliminating certain separation models. Under ASU 2020-06, a convertible debt instrument will generally be reported as a single liability at its amortized cost with no separate accounting for embedded conversion features. Consequently, the interest rate of convertible debt instruments will be closer to the coupon interest rate. In addition, ASU 2020-06 eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments and requires the use of the if-converted method. The guidance in this ASU are effective for fiscal years beginning after December 31, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. |
Revenue | Revenue The revenues from each major source of revenue are summarized in the following table: For the three months ended December 31, For the six months ended December 31, (in thousands) 2020 2019 2020 2019 Product and Services Revenue Investment Management Management Fees $ 609 $ 760 $ 1,210 $ 1,518 Administration Fees 151 129 323 238 760 889 1,533 1,756 Durable Medical Equipment Equipment Sales 8,411 7,587 16,419 13,948 Service Revenues 1,133 1,460 2,338 2,844 9,544 9,047 18,757 16,792 Total product and services revenue $ 10,304 $ 9,936 $ 20,290 $ 18,548 Rental Revenues Real Estate Rental Income 1,276 1,271 2,548 2,544 Durable Medical Equipment Medical Equipment Rental Income 4,999 5,344 10,396 10,830 Total rental revenue 6,275 6,615 12,944 13,374 Total $ 16,579 $ 16,551 $ 33,234 $ 31,922 Revenue Accounting Under Topic 606 In determining the appropriate amount of revenue to be recognized under FASB Accounting Standards Codification Topic 606, Revenues, Topic 606 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 recorded in the six months ended December 31, 2020, 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 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 Included in 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 rental revenue recognized is based on historical trends and estimates of future collectability. As of December 31, 2020 and June 30, 2020, net unbilled sales and services revenue is approximately $0.8 million and $1.2 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 administrative 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 agreement GECM has with GECC. The performance obligation is satisfied over time as the services are rendered, since GECC simultaneously receives and consumes the benefits provided as GECM performs services. Under GECC’s investment management agreement with GECM, the base management fee from GECC is calculated at an annual rate of 1.50% of GECC’s average adjusted gross assets. The base management fee is calculated based on the average value of GECC’s gross assets, excluding cash and cash equivalents, at the end of the two most recently completed calendar quarters, and is recognized over time as the services are provided. Management fees are billed quarterly in arrears. Incentive Fees The Company earns incentive fees based on the investment management agreements GECM has with GECC and separately managed accounts. 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 GECC investment management agreement. Incentive fees are recognized 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 range from 5.0% to 20.0% of the performance-based metric specified within each agreement. Because of the uncertainty of when incentive fees will be collected due to market conditions and investment performance, incentive fees are fully constrained and not recorded until received and the probability of significant reversal of the fees is eliminated Administration Fees The Company earns administration fees based on the administration agreement GECM has with GECC whereby GECC reimburses GECM for costs incurred in performing administrative functions for GECC. This revenue is recognized over time as the services are performed. Administrative 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 Revenue Under FASB Accounting Standards Codification Topic 842, Leases, Topic 842 Certain customer co-payments are included in revenue when 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 six months ended December 31, 2020, 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 $1.3 million as of December 31, 2020 and June 30, 2020, 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 December 31, 2020 and June 30, 2020, net unbilled rental revenue is approximately $0.5 million and $0.7 million, respectively, and is included in accounts receivable. Real Estate Revenue Rental Revenue Consistent with the leases of durable medical equipment, the Company recognizes rental revenue on a straight-line basis over the non-cancelable term of the lease. Under the terms of the lease, the Company may recover from the tenant certain expenses, including: real estate taxes, insurance and other operating expenses. The recovery of these expenses is recognized in rental income in the accompanying condensed consolidated statements of operations, in the same periods as the expenses are incurred. These expenses recognized in both revenue and expense may fluctuate from period to period based on actual expense amounts. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Earnings Per Share, Basic and Diluted | The following table presents the calculation of basic and diluted earnings (loss) per share: For the three months ended December 31, For the six months ended December 31, (in thousands except per share amounts) 2020 2019 2020 2019 Net loss $ (946 ) $ (2,027 ) $ (4,809 ) $ (5,305 ) Less: net loss attributable to non-controlling interest (597 ) (186 ) (704 ) (375 ) Net loss attributable to Great Elm Group, Inc. $ (349 ) $ (1,841 ) $ (4,105 ) $ (4,930 ) Net loss attributable to shareholders per share Basic $ (0.01 ) $ (0.07 ) $ (0.16 ) $ (0.19 ) Diluted $ (0.01 ) $ (0.07 ) $ (0.16 ) $ (0.19 ) Weighted average shares outstanding Basic 25,678 25,402 25,626 25,387 Diluted 25,678 25,402 25,626 25,387 |
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 December 31, For the six months ended December 31, 2020 2019 2020 2019 Government Payor A 32% 30% 33% 29% Government Payor B * 10% * * Third-party Payor C 12% 13% 11% 10% * Not a significant concentration. The following table summarizes customer concentrations as a percentage of accounts receivable: As of December 31, 2020 June 30, 2020 Government Payor A 21% 20% Government Payor B * 11% Third-party Payor C 15% 11% * Not a significant concentration |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Major Source of Revenue | The revenues from each major source of revenue are summarized in the following table: For the three months ended December 31, For the six months ended December 31, (in thousands) 2020 2019 2020 2019 Product and Services Revenue Investment Management Management Fees $ 609 $ 760 $ 1,210 $ 1,518 Administration Fees 151 129 323 238 760 889 1,533 1,756 Durable Medical Equipment Equipment Sales 8,411 7,587 16,419 13,948 Service Revenues 1,133 1,460 2,338 2,844 9,544 9,047 18,757 16,792 Total product and services revenue $ 10,304 $ 9,936 $ 20,290 $ 18,548 Rental Revenues Real Estate Rental Income 1,276 1,271 2,548 2,544 Durable Medical Equipment Medical Equipment Rental Income 4,999 5,344 10,396 10,830 Total rental revenue 6,275 6,615 12,944 13,374 Total $ 16,579 $ 16,551 $ 33,234 $ 31,922 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Activity and Outstanding Balances Between Managed Investment Products and Company | The following tables summarize activity and outstanding balances between the managed investment products and the Company. For the three months ended December 31, For the six months ended December 31, (in thousands) 2020 2019 2020 2019 Change in unrealized gain (loss) on investment in GECC $ 2,560 $ (826 ) $ 658 $ (1,809 ) Dividend income from GECC 1,322 588 1,846 1,078 As of (in thousands) December 31, 2020 June 30, 2020 Dividends receivable from GECC $ 450 $ 170 Investment management revenues receivable 751 746 Receivable for reimbursable expenses paid 185 158 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
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 non-recurring basis are summarized in the tables below: Fair Value as of December 31, 2020 Level 1 Level 2 Level 3 Total Assets: Investment in GECC $ 19,532 $ - $ - $ 19,532 Equity investments of Consolidated Fund $ 3,417 $ - $ - $ 3,417 Total assets $ 22,949 $ - $ - $ 22,949 Liabilities: Participation feature of HC LLC Series A-2 Preferred Stock $ - $ - $ - $ - Total liabilities $ - $ - $ - $ - Fair Value as of June 30, 2020 (in thousands) Level 1 Level 2 Level 3 Total Assets: Investment in GECC $ 8,705 $ - $ - $ 8,705 Total assets $ 8,705 $ - $ - $ 8,705 Liabilities: Contingent consideration liability $ - $ - $ - $ - Total liabilities $ - $ - $ - $ - |
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 and six months ended December 31, 2020: For the six months ended December 31, (in thousands) 2020 2019 Beginning balance $ - $ 1,135 Additions - - Payments - - Change in fair value - (1,135 ) Ending balance $ - $ - |
Fixed Assets (Tables)
Fixed Assets (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Property Plant And Equipment [Abstract] | |
Summary of Fixed Assets | The following tables detail the Company’s fixed assets (in thousands) December 31, 2020 June 30, 2020 Real Estate Assets Buildings $ 43,355 $ 43,355 Land and site improvements 9,170 9,170 Tenant improvements 3,500 3,500 56,025 56,025 Accumulated depreciation (3,449 ) (2,837 ) Net carrying amount $ 52,576 $ 53,188 Property and Equipment Leasehold improvements $ 858 $ 858 Vehicles 232 237 Computer equipment and software 356 277 Furniture and fixtures 394 417 Sleep study equipment 589 589 2,429 2,378 Accumulated depreciation (1,297 ) (968 ) Net carrying amount $ 1,132 $ 1,410 Medical Equipment Held for Rental Medical equipment held for rental $ 14,054 $ 13,828 Accumulated depreciation (7,034 ) (6,345 ) Net carrying amount $ 7,020 $ 7,483 |
Summary of Reconciles Depreciation Expense | The following table reconciles depreciation expense included in the following lines of the condensed consolidated statements of operations to total depreciation expense for each period presented. For the three months ended December 31, For the six months ended December 31, (in thousands) 2020 2019 2020 2019 Depreciation and amortization $ 474 $ 527 $ 944 $ 955 Cost of durable medical equipment rentals 1,457 1,962 3,205 4,013 Total depreciation expense $ 1,931 $ 2,489 $ 4,149 $ 4,968 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
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 six months ended December 31, 2020 2019 (in thousands) Beginning balance $ 50,010 $ 50,397 Purchase accounting adjustment - 36 Ending balance $ 50,010 $ 50,433 |
Summary of Identifiable Intangible Assets | The following tables provide details associated with the Company’s identifiable intangible assets subject to amortization (dollar amounts in thousands): As of December 31, 2020 As of June 30, 2020 (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Durable Medical Equipment Tradename $ 8,800 $ (2,053 ) $ 6,747 $ 8,800 $ (1,613 ) $ 7,187 Non-compete agreements 1,360 (733 ) 627 1,360 (573 ) 787 10,160 (2,786 ) 7,374 10,160 (2,186 ) 7,974 Investment Management Investment management agreement 3,900 (2,107 ) 1,793 3,900 (1,887 ) 2,013 Assembled workforce 526 (284 ) 242 526 (255 ) 271 4,426 (2,391 ) 2,035 4,426 (2,142 ) 2,284 Real Estate In-place lease 6,028 (1,406 ) 4,622 6,028 (1,157 ) 4,871 Total $ 20,614 $ (6,583 ) $ 14,031 $ 20,614 $ (5,485 ) $ 15,129 |
Summary of Amortization Expense of Identifiable Intangible Assets | Aggregate Amortization Expense (in thousands) 2020 2019 For the three months ended December 31, $ 547 $ 603 For the six months ended December 31, 1,098 1,242 Estimated Future Amortization Expense (in thousands) For the six months ending June 30, 2021 $ 1,058 For the year ending June 30, 2022 1,981 For the year ending June 30, 2023 1,894 For the year ending June 30, 2024 1,702 For the year ending June 30, 2025 1,597 Thereafter $ 5,799 |
Lessor Operating Leases (Tables
Lessor Operating Leases (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Lessor Disclosure [Abstract] | |
Summary of Rental Income from Real Estate Leases | Rental income from real estate leases is summarized in the following table: For the three months ended December 31, For the six months ended December 31, (in thousands) 2020 2019 2020 2019 Revenues from base rents $ 1,151 $ 1,152 $ 2,302 $ 2,303 Revenues from additional rental payments 124 119 246 241 Total rental revenues $ 1,275 $ 1,271 $ 2,548 $ 2,544 |
Summary of Base Rents for Remaining Lease Term | The following table summarizes the base rents for the remaining lease term: (in thousands) Base Rent Payments For the six months ending June 30, 2021 $ 2,124 For the year ending June 30, 2022 4,312 For the year ending June 30, 2023 4,419 For the year ending June 30, 2024 4,529 For the year ending June 30, 2025 4,648 Thereafter 24,025 Total base rent $ 44,057 |
Lessee Operating Leases (Tables
Lessee Operating Leases (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Lessee Disclosure [Abstract] | |
Schedule of Additional Details of Lease Presented in Balance Sheet | The following table provides additional details of the leases presented in the balance sheets: (in thousands) December 31, 2020 June 30, 2020 Facilities Right of use assets $ 4,916 $ 5,265 Current portion of lease liabilities 1,467 1,560 Lease liabilities, net of current portion 3,719 3,990 Total liabilities $ 5,186 $ 5,550 Weighted-average remaining life 3.8 years 3.9 years Weighted-average discount rate 11.7 % 11.7 % Vehicles Right of use assets $ 52 $ 61 Current portion of lease liabilities 20 20 Lease liabilities, net of current portion 32 41 Total liabilities $ 52 $ 61 Weighted-average remaining life 2.2 years 2.8 years Weighted-average discount rate 12.3 % 12.3 % Equipment Right of use assets $ 47 $ 66 Current portion of lease liabilities 31 37 Lease liabilities, net of current portion 16 29 Total liabilities $ 47 $ 66 Weighted-average remaining life 1.5 years 2.0 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 statements of operations and are included in cash flows from operating activities on the 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 December 31, For the six months ended December 31, (in thousands) 2020 2019 2020 2019 Facilities Operating lease cost $ 549 $ 519 $ 1,079 $ 1,047 Cash paid for operating leases 541 513 1,089 1,011 Vehicles Operating lease cost $ 7 $ 7 $ 14 $ 14 Cash paid for operating leases 7 7 14 14 Equipment Operating lease cost $ 11 $ 11 $ 22 $ 22 Cash paid for operating leases 11 11 22 22 |
Schedule of Company's Undiscounted Cash Payment Obligations for Operating Lease | The following table summarizes the Company’s undiscounted cash payment obligations for its operating leases: (in thousands) For the six months ending June 30, 2021 $ 1,127 For the year ending June 30, 2022 2,035 For the year ending June 30, 2023 1,386 For the year ending June 30, 2024 1,014 For the year ending June 30, 2025 531 Thereafter 424 Total lease payments $ 6,517 Imputed interest (1,232 ) Total lease liabilities $ 5,285 |
Borrowings (Tables)
Borrowings (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
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) Subsidiaries December 31, 2020 June 30, 2020 Corbel Facility DME Inc. and subsidiaries $ - $ 25,106 GP Corp. Note GP Corp. 3,072 3,072 Total principal $ 3,072 $ 28,178 Unamortized debt issuance cost - (275 ) Total long-term related party notes payable 3,072 27,903 Less current portion of related party notes payable (76 ) (1,418 ) Related party notes payable, net of current portion $ 2,996 $ 26,485 |
Schedule of Subsidiaries' Other Outstanding Borrowings | The Company’s subsidiaries’ other outstanding borrowings are summarized in the following table: (in thousands) Subsidiaries December 31, 2020 June 30, 2020 DME Revolver DME Inc. and subsidiaries $ - $ 3,900 Equipment Financing DME Inc. and subsidiaries 1,877 2,230 Senior Note CRIC IT 48,868 50,004 Subordinated Note CRIC IT 4,098 3,803 Total principal $ 54,843 $ 59,937 Unamortized debt premiums 3,262 3,251 Unamortized debt discounts and issuance costs (1,867 ) (1,956 ) Total other outstanding borrowings 56,238 61,232 Less current portion of other outstanding borrowings (4,168 ) (8,255 ) Other outstanding borrowings, net of current portion $ 52,070 $ 52,977 |
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 six months ending June 30, 2021 $ 2,486 For the year ending June 30, 2022 3,107 For the year ending June 30, 2023 2,835 For the year ending June 30, 2024 2,982 For the year ending June 30, 2025 3,202 Thereafter 55,476 Total $ 70,088 Outstanding principal on related party borrowings $ 3,072 Outstanding principal on other borrowings 54,843 Future interest to be paid-in-kind 12,173 Total future required principal payments $ 70,088 |
Corbel Facility | |
Debt Instrument [Line Items] | |
Schedule of Payments and Interest Expense Incurred | Principal payments and interest expense incurred on the Corbel Facility are summarized in the following table: For the three months ended December 31, For the six months ended December 31, (in thousands) 2020 2019 2020 2019 Principal payments $ 24,752 $ 355 $ 25,106 $ 1,316 Interest expense 635 1,603 1,296 2,458 |
GP Corp. Note | |
Debt Instrument [Line Items] | |
Schedule of Payments and Interest Expense Incurred | The GP Corp. Note is held by MAST Capital, a related party. Payments and interest expense incurred on the GP Corp. Note are summarized in the following table: For the three months ended December 31, For the six months ended December 31, (in thousands) 2020 2019 2020 2019 Principal payments $ - $ - $ - $ - Interest expense 25 44 51 88 |
Non-Controlling Interests and_2
Non-Controlling Interests and Preferred Stock of Subsidiaries (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Noncontrolling Interest [Abstract] | |
Summary of Non-controlling Interests Balance on Condensed Consolidated Balance Sheet | The following table summarizes the non-controlling interests of subsidiary balances on the condensed consolidated balance sheets: (in thousands) December 31, 2020 June 30, 2020 DME Inc. Temporary equity 2,567 3,890 Permanent equity 2,567 3,890 Total DME Inc. 5,134 7,780 GP Corp. Permanent equity (840 ) (782 ) GE FM Holdings Permanent equity 808 778 Forest Permanent equity 2,700 - Total Non-controlling interests $ 7,802 $ 7,776 |
Summary of Non-controlling Interests Balance on Condensed Consolidated Statements of Operations | The following table summarizes the net income (loss) attributable to the non-controlling interests on the condensed consolidated statements of operations: For the three months ended December 31, For the six months ended December 31, (in thousands) 2020 2019 2020 2019 DME Inc. Temporary equity (292 ) (78 ) (337 ) (158 ) Permanent equity (292 ) (78 ) (337 ) (158 ) Total DME Inc. (584 ) (156 ) (674 ) (316 ) GP Corp. Permanent equity (30 ) (43 ) (60 ) (85 ) GE FM Holdings Permanent equity 17 13 30 26 Forest Permanent equity 0 - 0 - Total $ (597 ) $ (186 ) $ (704 ) $ (375 ) |
Summary of Preferred Stock of Subsidiary Balances on Condensed Consolidated Balance Sheets | The following table summarizes the preferred stock of subsidiary balances on the condensed consolidated balance sheets: (in thousands) December 31, 2020 June 30, 2020 HC LLC Series A-1 Preferred Stock 1,556 - Series A-2 Preferred Stock - - Total HC LLC 1,556 - Forest Forest Preferred Stock 33,856 - Total preferred stock classified as liability $ 35,412 $ - |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Activity of Restricted Stock Award | The activity of the Company’s restricted stock awards and units for the six months ended December 31, 2020 was as follows: Restricted Stock Awards and Restricted Stock Units Restricted Stock (in thousands) Weighted Average Grant Date Fair Value Outstanding at June 30, 2020 941 $ 3.71 Granted 44 2.36 Vested (161 ) 2.66 Forfeited - - Outstanding at December 31, 2020 824 $ 3.84 |
Summary of Option Activity | The following table summarizes the Company’s option award activity as of and through December 31, 2020: Options Shares (in thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (in thousands) Outstanding at June 30, 2020 2,475 $ 3.69 5.51 $ - Options granted - - Exercised - - Forfeited, cancelled or expired - - Outstanding at December 31, 2020 2,475 $ 3.69 5.01 $ - Exercisable at December 31, 2020 1,798 $ 3.64 4.53 $ - Vested and expected to vest as of December 31, 2020 2,475 $ 3.69 5.01 $ - |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Results of Operations by Segment | The following tables illustrate results of operations by segment: For the three months ended December 31, 2020 (in thousands) Durable Medical Equipment Investment Management Real Estate General Corporate Intercompany Eliminations (1) Consolidated Total Revenue: Total revenue $ 14,543 $ 760 $ 1,276 $ 45 $ (45 ) $ 16,579 Operating costs and expenses: Cost of durable medical equipment sold and services (4,703 ) - - - - (4,703 ) Cost of durable medical equipment rentals (1,621 ) - - - - (1,621 ) Depreciation and amortization (462 ) (127 ) (431 ) (1 ) - (1,021 ) Stock-based compensation (2) - (197 ) - (88 ) - (285 ) Transaction costs (3) (87 ) - - (229 ) - (316 ) Other selling, general and administrative (8,028 ) (719 ) (127 ) (1,006 ) 45 (9,835 ) Total operating expenses (14,901 ) (1,043 ) (558 ) (1,324 ) 45 (17,781 ) Other income (expense): Interest expense (687 ) (25 ) (647 ) (552 ) - (1,911 ) Other income (expense) (1,833 ) - - 3,950 - 2,117 Total other expense, net (2,520 ) (25 ) (647 ) 3,398 - 206 Total pre-tax income (loss) $ (2,878 ) $ (308 ) $ 71 $ 2,119 $ - $ (996 ) For the three months ended December 31, 2019 (in thousands) Durable Medical Equipment Investment Management Real Estate General Corporate Intercompany Eliminations (1) Consolidated Total Revenue: Total revenue $ 14,391 $ 889 $ 1,271 $ 57 $ (57 ) $ 16,551 Operating costs and expenses: Cost of durable medical equipment sold and services (3,689 ) - - - - (3,689 ) Cost of durable medical equipment rentals (2,185 ) - - - - (2,185 ) Depreciation and amortization (520 ) (179 ) (430 ) (1 ) - (1,130 ) Stock-based compensation (2) - (98 ) - (110 ) - (208 ) Transaction costs (3) - - - (486 ) - (486 ) Other general and administrative (7,736 ) (566 ) (126 ) (752 ) 57 (9,123 ) Total operating expenses (14,130 ) (843 ) (556 ) (1,349 ) 57 (16,821 ) Other income (expense): Interest expense (937 ) (41 ) (655 ) - - (1,633 ) Other income (expense) - - - (223 ) - (223 ) Total other expense, net (937 ) (41 ) (655 ) (223 ) - (1,856 ) Total pre-tax income (loss) $ (676 ) $ 5 $ 60 $ (1,515 ) $ - $ (2,126 ) For the six months ended December 31, 2020 (in thousands) Durable Medical Equipment Investment Management Real Estate General Corporate Intercompany Eliminations (1) Consolidated Total Revenue: Total revenue $ 29,153 $ 1,533 $ 2,548 $ 136 $ (136 ) $ 33,234 Operating costs and expenses: Cost of durable medical equipment sold and services (8,910 ) - - - - (8,910 ) Cost of durable medical equipment rentals (3,536 ) - - - - (3,536 ) Depreciation and amortization (925 ) (255 ) (861 ) (1 ) - (2,042 ) Stock-based compensation (2) - (391 ) - (323 ) - (714 ) Transaction costs (3) (87 ) - - (261 ) - (348 ) Other selling, general and administrative (15,799 ) (1,251 ) (252 ) (2,152 ) 136 (19,318 ) Total operating expenses (29,257 ) (1,897 ) (1,113 ) (2,737 ) 136 (34,868 ) Other income (expense): Interest expense (1,396 ) (51 ) (1,297 ) (1,124 ) - (3,868 ) Other income (expense) (1,836 ) - - 2,578 - 742 Total other income (expense), net (3,232 ) (51 ) (1,297 ) 1,454 - (3,126 ) Total pre-tax income (loss) $ (3,336 ) $ (415 ) $ 138 $ (1,147 ) $ - $ (4,760 ) For the six months ended December 31, 2019 (in thousands) Durable Medical Equipment Investment Management Real Estate General Corporate Intercompany Eliminations (1) Consolidated Total Revenue: Total revenue $ 27,622 $ 1,756 $ 2,544 $ 80 $ (80 ) $ 31,922 Operating costs and expenses: Cost of durable medical equipment sold and services (7,152 ) - - - - (7,152 ) Cost of durable medical equipment rentals (4,450 ) - - - - (4,450 ) Depreciation and amortization (977 ) (358 ) (861 ) (1 ) - (2,197 ) Stock-based compensation (2) - (273 ) - (228 ) - (501 ) Transaction costs (3) - - - (577 ) - (577 ) Other selling, general and administrative (14,608 ) (1,082 ) (250 ) (2,329 ) 80 (18,189 ) Total operating expenses (27,187 ) (1,713 ) (1,111 ) (3,135 ) 80 (33,066 ) Other income (expense): Interest expense (1,933 ) (83 ) (1,313 ) - - (3,329 ) Other income (expense) 3 - - (692 ) - (689 ) Total other income (expense), net (1,930 ) (83 ) (1,313 ) (692 ) - (4,018 ) Total pre-tax income (loss) $ (1,495 ) $ (40 ) $ 120 $ (3,747 ) $ - $ (5,162 ) (1) The Company’s wholly-owned subsidiary, Great Elm DME Manager, LLC ( DME Manager (2) Stock-based compensation attributable to the investment management segment is included in investment management expenses in the condensed consolidated statements of operations. Stock-based 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 incurred in connection with consummated and unconsummated transactions, are included in selling, general and administrative expense in the condensed consolidated statements of operations. |
Schedule of Assets by Segment | The following tables illustrate assets by segment: As of December 31, 2020 (in thousands) Durable Medical Equipment Investment Management Real Estate General Corporate Total Fixed assets, net $ 8,121 $ 27 $ 52,576 $ 4 $ 60,728 Identifiable intangible assets, net 7,374 2,035 4,622 - 14,031 Goodwill 50,010 - - - 50,010 Other assets 19,310 2,978 2,782 49,540 74,610 Total $ 84,815 $ 5,040 $ 59,980 $ 49,544 $ 199,379 As of June 30, 2020 (in thousands) Durable Medical Equipment Investment Management Real Estate General Corporate Total Fixed assets, net $ 8,854 $ 35 $ 53,188 $ 4 $ 62,081 Identifiable intangible assets, net 7,974 2,284 4,871 - 15,129 Goodwill 50,010 - - - 50,010 Other assets 19,055 2,654 2,171 44,345 68,225 Total $ 85,893 $ 4,973 $ 60,230 $ 44,349 $ 195,445 |
Organization (Details)
Organization (Details) | 6 Months Ended |
Dec. 31, 2020Segment | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Number of business operating segments | 3 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2020USD ($)Segmentshares | Dec. 31, 2019USD ($)shares | Jun. 30, 2020USD ($) | |
Significant Accounting Policies [Line Items] | |||||
Number of business operating segments | Segment | 3 | ||||
Revenue reserve constraints on variable consideration | $ | $ 4.1 | $ 4.1 | $ 4.8 | ||
Reduction in revenue | $ | 1.5 | $ 0.5 | 2.6 | $ 1.4 | |
Unbilled receivables | $ | $ 1.3 | $ 1.3 | $ 1.9 | ||
Potentially dilutive shares excluded from diluted net loss per share | 12,307,863 | ||||
Number of shares subject to forfeiture | 732,909 | 732,909 | |||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201813Member | ||||
Change in accounting principle, accounting standards update, adopted [true false] | true | true | |||
Change in accounting principle, accounting standards update, adoption date | Jul. 1, 2020 | Jul. 1, 2020 | |||
Common Stock Issuable upon Conversion of Convertible Notes | |||||
Significant Accounting Policies [Line Items] | |||||
Potentially dilutive shares excluded from diluted net loss per share | 9,008,612 | ||||
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 net loss per share | 3,299,251 | 3,402,602 |
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 | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||||
Net loss | $ (946) | $ (2,027) | $ (4,809) | $ (5,305) |
Less: net loss attributable to non-controlling interest | (597) | (186) | (704) | (375) |
Net loss attributable to Great Elm Group, Inc. | $ (349) | $ (1,841) | $ (4,105) | $ (4,930) |
Net loss attributable to shareholders per share | ||||
Basic | $ (0.01) | $ (0.07) | $ (0.16) | $ (0.19) |
Diluted | $ (0.01) | $ (0.07) | $ (0.16) | $ (0.19) |
Weighted average shares outstanding | ||||
Basic | 25,678 | 25,402 | 25,626 | 25,387 |
Diluted | 25,678 | 25,402 | 25,626 | 25,387 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Summarizes Customer Concentrations as Percentage of Revenues (Details) - Revenues - Customer Concentrations | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Government Payor A | ||||
Significant Accounting Policies [Line Items] | ||||
Concentration risk, percentage | 32.00% | 30.00% | 33.00% | 29.00% |
Government Payor B | ||||
Significant Accounting Policies [Line Items] | ||||
Concentration risk, percentage | 10.00% | |||
Third-party Payor C | ||||
Significant Accounting Policies [Line Items] | ||||
Concentration risk, percentage | 12.00% | 13.00% | 11.00% | 10.00% |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Summarizes Customer Concentrations as Percentage of Accounts Receivable (Details) - Accounts Receivable - Customer Concentrations | 6 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Jun. 30, 2020 | |
Government Payor A | ||
Significant Accounting Policies [Line Items] | ||
Concentration risk, percentage | 21.00% | 20.00% |
Government Payor B | ||
Significant Accounting Policies [Line Items] | ||
Concentration risk, percentage | 11.00% | |
Third-party Payor C | ||
Significant Accounting Policies [Line Items] | ||
Concentration risk, percentage | 15.00% | 11.00% |
Revenue - Summary of Major Sour
Revenue - Summary of Major Source of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation Of Revenue [Line Items] | ||||
Total rental revenue | $ 6,275 | $ 6,615 | $ 12,944 | $ 13,374 |
Total revenues | 16,579 | 16,551 | 33,234 | 31,922 |
Investment Management | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total product and services revenue | 760 | 889 | 1,533 | 1,756 |
Investment Management | Management Fees | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total product and services revenue | 609 | 760 | 1,210 | 1,518 |
Investment Management | Administration Fees | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total product and services revenue | 151 | 129 | 323 | 238 |
Durable Medical Equipment | Equipment Sales | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total product and services revenue | 8,411 | 7,587 | 16,419 | 13,948 |
Durable Medical Equipment | Service Revenues | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total product and services revenue | 1,133 | 1,460 | 2,338 | 2,844 |
Durable Medical Equipment | Sales and Services | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total product and services revenue | 9,544 | 9,047 | 18,757 | 16,792 |
Durable Medical Equipment | Rental | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total rental revenue | 4,999 | 5,344 | 10,396 | 10,830 |
Durable Medical Equipment | Medical Equipment | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total rental revenue | 4,999 | 5,344 | 10,396 | 10,830 |
Investment Management and Durable Medical Equipment | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total product and services revenue | 10,304 | 9,936 | 20,290 | 18,548 |
Real Estate | Rental | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total rental revenue | $ 1,276 | $ 1,271 | $ 2,548 | $ 2,544 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2020 | Sep. 30, 2020 | |
Disaggregation Of Revenue [Line Items] | |||
Contract with customer liability | $ 0 | $ 0 | |
Accrued incentive fees as per the terms of investment management agreements | $ 9,200,000 | ||
Minimum | |||
Disaggregation Of Revenue [Line Items] | |||
Incentive fee earned as percentage on investment performance | 5.00% | ||
Equipment Lease Term | 10 months | ||
Maximum | |||
Disaggregation Of Revenue [Line Items] | |||
Incentive fee earned as percentage on investment performance | 20.00% | ||
Equipment Lease Term | 36 months | ||
GECC | |||
Disaggregation Of Revenue [Line Items] | |||
Annual rate of base management fee earned as percentage of average adjusted gross assets | 1.50% | ||
Equipment Sales | Accounts Receivable | |||
Disaggregation Of Revenue [Line Items] | |||
Unbilled revenue | $ 1,200,000 | $ 800,000 | |
Equipment Rental | |||
Disaggregation Of Revenue [Line Items] | |||
Contract with customer liability | 1,300,000 | 1,000,000 | |
Equipment Rental | Accounts Receivable | |||
Disaggregation Of Revenue [Line Items] | |||
Unbilled revenue | 700,000 | $ 500,000 | |
Centers For Medicare And Medicaid Services | |||
Disaggregation Of Revenue [Line Items] | |||
Proceeds from federal agency | $ 4,400,000 |
Holding Company Reorganizatio_2
Holding Company Reorganization and Financing Transaction - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | Dec. 29, 2020 | Dec. 31, 2020 |
Reorganizations [Line Items] | ||
Reorganization date | Dec. 21, 2020 | |
Plan of reorganization, description of equity securities issued or to be issued | On December 29, 2020, pursuant to the terms of the Agreement and Plan of Merger, dated as of December 21, 2020, among Forest, the Company and Forest Merger Sub, Inc., a newly created entity for the purpose of facilitating the Merger, (as it may be amended from time to time, the Merger Agreement), the transactions contemplated by the Merger Agreement (the Transactions) were consummated. As a result of the Transactions, and subject to the same terms and conditions as applied immediately prior to the Transactions, each share of Forest's outstanding common stock, common stock options, restricted stock units and restricted shares were exchanged for identical instruments of the Company | |
Great Elm Healthcare, LLC (HC LLC) | ||
Reorganizations [Line Items] | ||
Reimbursement amount received to cover deal costs | $ 1.3 | |
Forest Merger Sub Inc | J.P. Morgan Broker-Dealer Holdings Inc. (JPM) | ||
Reorganizations [Line Items] | ||
JPM financing arrangement aggregate amount | $ 37.7 | |
Forest Investments, Inc. (Forest) | J.P. Morgan Broker-Dealer Holdings Inc. (JPM) | ||
Reorganizations [Line Items] | ||
JPM acquired percentage | 20.00% | |
Business acquisition, common stock purchase price | $ 2.7 | |
Forest Investments, Inc. (Forest) | Forest Preferred Stock Classified as Liability | ||
Reorganizations [Line Items] | ||
Redeemable preferred stock, shares | 35,010 | |
Redeemable preferred stock, annual dividend rate | 9.00% | |
Redeemable Preferred stock, redemption date | Dec. 29, 2027 | |
Redeemable Preferred stock, redemption price per share | $ 1,000 | |
Redeemable preferred stock, face value per share | $ 1,000 | |
Forest Investments, Inc. (Forest) | Series A-1 Preferred Stock Classified as Liability | ||
Reorganizations [Line Items] | ||
Redeemable preferred stock, shares | 8,082 | |
Great Elm Healthcare, LLC (HC LLC) | Series A-2 Preferred Stock Classified as Liability | ||
Reorganizations [Line Items] | ||
Redeemable preferred stock, shares | 34,010 | |
Redeemable preferred stock, annual dividend rate | 9.00% | |
Redeemable Preferred stock, redemption date | Dec. 29, 2027 | |
Redeemable Preferred stock, redemption price per share | $ 1,000 | |
Percentage of proceeds arising from sale of durable medical equipment business | 33.00% | |
Great Elm Healthcare, LLC (HC LLC) | Series A-1 Preferred Stock Classified as Liability | ||
Reorganizations [Line Items] | ||
Redeemable preferred stock, shares | 10,090 | |
Redeemable preferred stock, annual dividend rate | 9.00% | |
Redeemable Preferred stock, redemption date | Dec. 29, 2027 | |
Redeemable Preferred stock, redemption price per share | $ 1,000 | |
Redeemable preferred stock, face value per share | $ 1,000 | |
Great Elm Healthcare, LLC (HC LLC) | Series A-1 Preferred Stock Classified as Liability | Forest Investments, Inc. (Forest) | ||
Reorganizations [Line Items] | ||
Preferred stock holding percentage | 80.10% | |
Great Elm Healthcare, LLC (HC LLC) | Series A-1 Preferred Stock Classified as Liability | Corbel Capital Partners SBIC, L.P. (Corbel) | ||
Reorganizations [Line Items] | ||
Preferred stock holding percentage | 9.95% | |
Great Elm Healthcare, LLC (HC LLC) | Series A-1 Preferred Stock Classified as Liability | Valley Healthcare Holdings, LLC (VHH) | ||
Reorganizations [Line Items] | ||
Preferred stock holding percentage | 9.95% | |
DME, Inc. | Great Elm Healthcare, LLC (HC LLC) | ||
Reorganizations [Line Items] | ||
Cash | $ 1.9 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 29, 2020 | Oct. 01, 2020 | Dec. 31, 2020 | Dec. 18, 2020 | Mar. 31, 2018 |
MAST Capital Management, LLC | |||||
Related Party Transaction [Line Items] | |||||
Percentage of ownership interest issued to former owner/holder | 7.60% | ||||
GE FM Holdings | |||||
Related Party Transaction [Line Items] | |||||
Percentage of ownership interest issued to former owner/holder | 19.90% | ||||
GECC | |||||
Related Party Transaction [Line Items] | |||||
Percentage of ownership interest (as a percent) | 23.60% | ||||
Equity method investment aggregate shares received | 2,966,531 | ||||
Equity method investment, share price | $ 2.95 | ||||
Equity method investment, aggregate value | $ 8,800 | ||||
J.P. Morgan Broker-Dealer Holdings Inc. and JPMorgan Chase & Co | Ligado Networks, LLC | |||||
Related Party Transaction [Line Items] | |||||
Business combination, common stock interest, percentage | 21.00% | ||||
J.P. Morgan Broker-Dealer Holdings Inc. and JPMorgan Chase & Co | Forest Merger Sub Inc | |||||
Related Party Transaction [Line Items] | |||||
Proceeds from issuance of common stock | $ 35,000 | ||||
Issuance of Forest preferred stock | $ 2,700 | ||||
Shared Personnel and Reimbursement Agreement | Jason W. Reese | Investment Management Expenses | |||||
Related Party Transaction [Line Items] | |||||
Costs incurred under agreement | $ 100 | ||||
Consolidated Fund | |||||
Related Party Transaction [Line Items] | |||||
Percentage of investment in consolidated fund had fair value of greater than of consolidated assets | 5.00% | ||||
Receivable for reimbursable expenses paid | $ 10 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Activity and Outstanding Balances Between Managed Investment Products and Company (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2020 | |
Related Party Transaction [Line Items] | |||||
Unrealized gain (loss) on investment | $ 2,560 | $ (826) | $ 658 | $ (1,809) | |
Managed Investment Products | |||||
Related Party Transaction [Line Items] | |||||
Investment management revenues receivable | 751 | 751 | $ 746 | ||
Receivable for reimbursable expenses paid | 185 | 185 | 158 | ||
GECC | Managed Investment Products | |||||
Related Party Transaction [Line Items] | |||||
Unrealized gain (loss) on investment | 2,560 | (826) | 658 | (1,809) | |
Dividend income from GECC | 1,322 | $ 588 | 1,846 | $ 1,078 | |
Dividends receivable from GECC | $ 450 | $ 450 | $ 170 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Assets and Liabilities Measured at Fair Value on Recurring and Non-recurring Basis (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Assets: | ||
Investment in GECC | $ 19,532,000 | $ 8,705,000 |
Equity investments of Consolidated Fund | 3,417,000 | |
Total assets | 22,949,000 | 8,705,000 |
Liabilities: | ||
Participation feature of HC LLC Series A-2 Preferred Stock | 0 | |
Contingent consideration liability | 0 | |
Total liabilities | 0 | 0 |
Fair Value, Inputs, Level 1 | ||
Assets: | ||
Investment in GECC | 19,532,000 | 8,705,000 |
Equity investments of Consolidated Fund | 3,417,000 | |
Total assets | 22,949,000 | 8,705,000 |
Liabilities: | ||
Participation feature of HC LLC Series A-2 Preferred Stock | 0 | |
Contingent consideration liability | 0 | |
Total liabilities | 0 | 0 |
Fair Value, Inputs, Level 2 | ||
Assets: | ||
Investment in GECC | 0 | 0 |
Equity investments of Consolidated Fund | 0 | |
Total assets | 0 | 0 |
Liabilities: | ||
Participation feature of HC LLC Series A-2 Preferred Stock | 0 | |
Contingent consideration liability | 0 | |
Total liabilities | 0 | 0 |
Fair Value, Inputs, Level 3 | ||
Assets: | ||
Investment in GECC | 0 | 0 |
Equity investments of Consolidated Fund | 0 | |
Total assets | 0 | 0 |
Liabilities: | ||
Participation feature of HC LLC Series A-2 Preferred Stock | 0 | |
Contingent consideration liability | 0 | |
Total liabilities | $ 0 | $ 0 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of Changes in Contingent Consideration, Level 3 Liability (Details) $ in Thousands | 6 Months Ended |
Dec. 31, 2019USD ($) | |
Fair Value Disclosures [Abstract] | |
Beginning balance | $ 1,135 |
Change in fair value | $ (1,135) |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) | Dec. 29, 2020 | Dec. 31, 2020USD ($)shares | Dec. 31, 2019USD ($) | Jun. 30, 2020USD ($) |
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 | ||
Maximum additional consideration payable | 2,100,000 | |||
Contingent consideration fair value | $ 0 | |||
Valuation of participation feature | $ 0 | |||
GECC | ||||
Percentage of ownership interest (as a percent) | 23.60% | |||
Number of sharers held in subsidiary | shares | 5,425,644 | |||
Forest Investments, Inc. (Forest) | ||||
Fair value of embedded derivative liability | $ 6,500,000 | |||
Forest Investments, Inc. (Forest) | Volatility | ||||
Contingent consideration, fair value estimation | 72.7 | |||
Contingent consideration, fair value option term | 3 years | |||
Forest Investments, Inc. (Forest) | Discount rate | ||||
Contingent consideration, fair value estimation | 17 | |||
Forest Investments, Inc. (Forest) | Discount for lack of marketability | ||||
Contingent consideration, fair value estimation | 33 |
Fixed Assets - Summary of Fixed
Fixed Assets - Summary of Fixed Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Jun. 30, 2020 |
Property Plant And Equipment [Line Items] | ||
Real Estate Assets, Gross Carrying Amount | $ 56,025 | $ 56,025 |
Accumulated depreciation | (3,449) | (2,837) |
Net carrying amount | 52,576 | 53,188 |
Property and Equipment, Gross Carrying Amount | 2,429 | 2,378 |
Accumulated depreciation | (1,297) | (968) |
Net carrying amount | 1,132 | 1,410 |
Medical Equipment Held for Rental | ||
Medical equipment held for rental | 14,054 | 13,828 |
Accumulated depreciation | (7,034) | (6,345) |
Net carrying amount | 7,020 | 7,483 |
Buildings | ||
Property Plant And Equipment [Line Items] | ||
Real Estate Assets, Gross Carrying Amount | 43,355 | 43,355 |
Land and Site Improvements | ||
Property Plant And Equipment [Line Items] | ||
Real Estate Assets, Gross Carrying Amount | 9,170 | 9,170 |
Tenant Improvements | ||
Property Plant And Equipment [Line Items] | ||
Real Estate Assets, Gross Carrying Amount | 3,500 | 3,500 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and Equipment, Gross Carrying Amount | 858 | 858 |
Vehicles | ||
Property Plant And Equipment [Line Items] | ||
Property and Equipment, Gross Carrying Amount | 232 | 237 |
Computer Equipment And Software | ||
Property Plant And Equipment [Line Items] | ||
Property and Equipment, Gross Carrying Amount | 356 | 277 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Property and Equipment, Gross Carrying Amount | 394 | 417 |
Sleep Study Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and Equipment, Gross Carrying Amount | $ 589 | $ 589 |
Fixed Assets - Summary of Recon
Fixed Assets - Summary of Reconciles Depreciation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property Plant And Equipment [Line Items] | ||||
Total depreciation expense | $ 1,931 | $ 2,489 | $ 4,149 | $ 4,968 |
Durable Medical Equipment | Rental | ||||
Property Plant And Equipment [Line Items] | ||||
Total depreciation expense | 1,457 | 1,962 | 3,205 | 4,013 |
Depreciation and Amortization | ||||
Property Plant And Equipment [Line Items] | ||||
Total depreciation expense | $ 474 | $ 527 | $ 944 | $ 955 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Additional Information (Details) $ in Millions | 12 Months Ended |
Jun. 30, 2019USD ($) | |
DME, Inc. | |
Finite Lived Intangible Assets [Line Items] | |
Goodwill acquired | $ 50 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Schedule of Changes in Carrying Value of Goodwill (Details) $ in Thousands | 6 Months Ended |
Dec. 31, 2019USD ($) | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Beginning balance | $ 50,397 |
Purchase accounting adjustment | 36 |
Ending balance | $ 50,433 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Summary of Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Jun. 30, 2020 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 20,614 | $ 20,614 |
Accumulated Amortization | (6,583) | (5,485) |
Net Carrying Amount | 14,031 | 15,129 |
Durable Medical Equipment Assets | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 10,160 | 10,160 |
Accumulated Amortization | (2,786) | (2,186) |
Net Carrying Amount | 7,374 | 7,974 |
Durable Medical Equipment Assets | Tradename | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 8,800 | 8,800 |
Accumulated Amortization | (2,053) | (1,613) |
Net Carrying Amount | 6,747 | 7,187 |
Durable Medical Equipment Assets | Non-compete Agreements | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,360 | 1,360 |
Accumulated Amortization | (733) | (573) |
Net Carrying Amount | 627 | 787 |
Investment Management Assets | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 4,426 | 4,426 |
Accumulated Amortization | (2,391) | (2,142) |
Net Carrying Amount | 2,035 | 2,284 |
Investment Management Assets | Investment Management Agreement | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 3,900 | 3,900 |
Accumulated Amortization | (2,107) | (1,887) |
Net Carrying Amount | 1,793 | 2,013 |
Investment Management Assets | Assembled Workforce | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 526 | 526 |
Accumulated Amortization | (284) | (255) |
Net Carrying Amount | 242 | 271 |
Real Estate Assets | In-place Lease | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 6,028 | 6,028 |
Accumulated Amortization | (1,406) | (1,157) |
Net Carrying Amount | $ 4,622 | $ 4,871 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Summary of Amortization Expense of Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Finite Lived Intangible Assets Future Amortization Expense Current And Five Succeeding Fiscal Years [Abstract] | ||||
Aggregate Amortization Expense | $ 547 | $ 603 | $ 1,098 | $ 1,242 |
Estimated Future Amortization Expense, For the six months ending June 30, 2021 | 1,058 | 1,058 | ||
Estimated Future Amortization Expense, For the year ending June 30, 2022 | 1,981 | 1,981 | ||
Estimated Future Amortization Expense, For the year ending June 30, 2023 | 1,894 | 1,894 | ||
Estimated Future Amortization Expense, For the year ending June 30, 2024 | 1,702 | 1,702 | ||
Estimated Future Amortization Expense, For the year ending June 30, 2025 | 1,597 | 1,597 | ||
Estimated Future Amortization Expense, Thereafter | $ 5,799 | $ 5,799 |
Lessor Operating Leases - Addit
Lessor Operating Leases - Additional Information (Details) $ in Millions | 6 Months Ended |
Dec. 31, 2020USD ($)Property | |
Gartner I and Gartner II | |
Lessor Lease Description [Line Items] | |
Number of office buildings | Property | 2 |
Lessor, lease option to extend | The Gartner I lease contains two five-year extensions and the Gartner II lease contains three five-year extensions |
Existence of option to extend operating lease | true |
Lessor, lease renewal rate | 95.00% |
Monthly base lease payments | $ | $ 0.4 |
Minimum | |
Lessor Lease Description [Line Items] | |
Lessor, lease terms | 10 months |
Maximum | |
Lessor Lease Description [Line Items] | |
Lessor, lease terms | 36 months |
Lessor Operating Leases - Summa
Lessor Operating Leases - Summary of Rental Income from Real Estate Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Leases Operating [Abstract] | ||||
Revenues from base rents | $ 1,151 | $ 1,152 | $ 2,302 | $ 2,303 |
Revenues from additional rental payments | 124 | 119 | 246 | 241 |
Total rental revenues | $ 1,275 | $ 1,271 | $ 2,548 | $ 2,544 |
Lessor Operating Leases - Sum_2
Lessor Operating Leases - Summary of Base Rents for Remaining Lease Term (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Lessor Disclosure [Abstract] | |
For the six months ending June 30, 2021 | $ 2,124 |
For the year ending June 30, 2022 | 4,312 |
For the year ending June 30, 2023 | 4,419 |
For the year ending June 30, 2024 | 4,529 |
For the year ending June 30, 2025 | 4,648 |
Thereafter | 24,025 |
Total base rent | $ 44,057 |
Lessee Operating Leases - Sched
Lessee Operating Leases - Schedule of Additional Details of Leases Presented in Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Jun. 30, 2020 |
Operating Leased Assets [Line Items] | ||
Right of use assets | $ 5,015 | $ 5,392 |
Current portion of lease liabilities | 1,518 | 1,617 |
Lease liabilities, net of current portion | 3,767 | 4,060 |
Total liabilities | 5,285 | |
Facilities | ||
Operating Leased Assets [Line Items] | ||
Right of use assets | 4,916 | 5,265 |
Current portion of lease liabilities | 1,467 | 1,560 |
Lease liabilities, net of current portion | 3,719 | 3,990 |
Total liabilities | $ 5,186 | $ 5,550 |
Weighted-average remaining life | 3 years 9 months 18 days | 3 years 10 months 24 days |
Weighted-average discount rate | 11.70% | 11.70% |
Vehicles | ||
Operating Leased Assets [Line Items] | ||
Right of use assets | $ 52 | $ 61 |
Current portion of lease liabilities | 20 | 20 |
Lease liabilities, net of current portion | 32 | 41 |
Total liabilities | $ 52 | $ 61 |
Weighted-average remaining life | 2 years 2 months 12 days | 2 years 9 months 18 days |
Weighted-average discount rate | 12.30% | 12.30% |
Equipment | ||
Operating Leased Assets [Line Items] | ||
Right of use assets | $ 47 | $ 66 |
Current portion of lease liabilities | 31 | 37 |
Lease liabilities, net of current portion | 16 | 29 |
Total liabilities | $ 47 | $ 66 |
Weighted-average remaining life | 1 year 6 months | 2 years |
Weighted-average discount rate | 12.50% | 12.50% |
Lessee Operating Leases - Addit
Lessee Operating Leases - Additional Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2020 | Jun. 30, 2020 | |
Lessee Lease Description [Line Items] | ||
Remaining right of use assets | $ 5,015 | $ 5,392 |
Lease liabilities | 5,285 | |
Current portion of lease liabilities | 1,518 | 1,617 |
Lease liabilities, net of current portion | $ 3,767 | 4,060 |
Lessee, operating lease term | 88 months | |
Lessee, operating leases optional lease extension period | 60 months | |
Existence of option to extend operating lease | true | |
Increase in average rate of lease payment | 2.40% | |
Facilities | ||
Lessee Lease Description [Line Items] | ||
Remaining right of use assets | $ 4,916 | 5,265 |
Lease liabilities | 5,186 | 5,550 |
Current portion of lease liabilities | 1,467 | 1,560 |
Lease liabilities, net of current portion | $ 3,719 | 3,990 |
Existence of option to extend operating lease | true | |
Vehicles | ||
Lessee Lease Description [Line Items] | ||
Remaining right of use assets | $ 52 | 61 |
Lease liabilities | 52 | 61 |
Current portion of lease liabilities | 20 | 20 |
Lease liabilities, net of current portion | $ 32 | 41 |
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 | false | |
Equipment | ||
Lessee Lease Description [Line Items] | ||
Remaining right of use assets | $ 47 | 66 |
Lease liabilities | 47 | 66 |
Current portion of lease liabilities | 31 | 37 |
Lease liabilities, net of current portion | 16 | $ 29 |
Minimum | ||
Lessee Lease Description [Line Items] | ||
Increase in average rate of lease payment, value | $ 28 | |
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 | ||
Lessee Lease Description [Line Items] | ||
Increase in average rate of lease payment, value | $ 32 | |
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 | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Facilities | ||||
Operating Leased Assets [Line Items] | ||||
Operating lease cost | $ 549 | $ 519 | $ 1,079 | $ 1,047 |
Cash paid for operating leases | 541 | 513 | 1,089 | 1,011 |
Vehicles | ||||
Operating Leased Assets [Line Items] | ||||
Operating lease cost | 7 | 7 | 14 | 14 |
Cash paid for operating leases | 7 | 7 | 14 | 14 |
Equipment | ||||
Operating Leased Assets [Line Items] | ||||
Operating lease cost | 11 | 11 | 22 | 22 |
Cash paid for operating leases | $ 11 | $ 11 | $ 22 | $ 22 |
Lessee Operating Leases - Sch_3
Lessee Operating Leases - Schedule of Company's Undiscounted Cash Payment Obligations for Operating Lease (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Lessee Disclosure [Abstract] | |
For the six months ending June 30, 2021 | $ 1,127 |
For the year ending June 30, 2022 | 2,035 |
For the year ending June 30, 2023 | 1,386 |
For the year ending June 30, 2024 | 1,014 |
For the year ending June 30, 2025 | 531 |
Thereafter | 424 |
Total lease payments | 6,517 |
Imputed interest | (1,232) |
Lease liabilities | $ 5,285 |
Borrowings - Schedule of Relate
Borrowings - Schedule of Related Party Borrowings of Subsidiaries (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Jun. 30, 2020 |
Debt Instrument [Line Items] | ||
Total long-term related party notes payable | $ 3,072 | $ 27,903 |
Less current portion of related party notes payable | (76) | (1,418) |
Related party notes payable, net of current portion | 2,996 | 26,485 |
Related Party Borrowings Subsidiaries | ||
Debt Instrument [Line Items] | ||
Total principal | 3,072 | 28,178 |
Unamortized debt issuance cost | (275) | |
Corbel Facility | DME, Inc. | Related Party Borrowings Subsidiaries | ||
Debt Instrument [Line Items] | ||
Total principal | 25,106 | |
GP Corp. Note | GP Corp. | Related Party Borrowings Subsidiaries | ||
Debt Instrument [Line Items] | ||
Total principal | $ 3,072 | $ 3,072 |
Borrowings - Schedule of Subsid
Borrowings - Schedule of Subsidiaries' Other Outstanding Borrowings (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Jun. 30, 2020 | Mar. 31, 2018 |
Debt Instrument [Line Items] | |||
Less current portion of other outstanding borrowings | $ (2,413) | $ (6,221) | |
Subsidiaries Other Outstanding Borrowings | |||
Debt Instrument [Line Items] | |||
Total principal | 54,843 | 59,937 | |
Unamortized debt premiums | 3,262 | 3,251 | |
Unamortized debt discounts and issuance costs | (1,867) | (1,956) | |
Total other outstanding borrowings | 56,238 | 61,232 | |
Less current portion of other outstanding borrowings | (4,168) | (8,255) | |
Other outstanding borrowings, net of current portion | 52,070 | 52,977 | |
DME Revolver | DME, Inc. | Subsidiaries Other Outstanding Borrowings | |||
Debt Instrument [Line Items] | |||
Total principal | 3,900 | ||
Equipment Financing | DME, Inc. | Subsidiaries Other Outstanding Borrowings | |||
Debt Instrument [Line Items] | |||
Total principal | 1,877 | 2,230 | |
Senior Notes | CRIC IT | Subsidiaries Other Outstanding Borrowings | |||
Debt Instrument [Line Items] | |||
Total principal | 48,868 | 50,004 | |
Subordinated Notes | CRIC IT | |||
Debt Instrument [Line Items] | |||
Unamortized debt premiums | $ 3,100 | ||
Subordinated Notes | CRIC IT | Subsidiaries Other Outstanding Borrowings | |||
Debt Instrument [Line Items] | |||
Total principal | $ 4,098 | $ 3,803 |
Borrowings - Additional Informa
Borrowings - Additional Information (Details) - USD ($) | Dec. 29, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Sep. 07, 2018 | Mar. 31, 2018 |
Debt Instrument [Line Items] | ||||||||
Interest expense other borrowings | $ 1,300,000 | $ 1,600,000 | $ 2,700,000 | $ 3,300,000 | ||||
Loss on extinguishment of debt | (1,866,000) | (1,866,000) | ||||||
Equipment Financing Debt Agreements | Operating Subsidiaries of DME Inc | ||||||||
Debt Instrument [Line Items] | ||||||||
Inventory and equipment financing | $ 1,600,000 | $ 1,300,000 | ||||||
Equipment Financing Debt Agreements | Minimum | Operating Subsidiaries of DME Inc | ||||||||
Debt Instrument [Line Items] | ||||||||
Term of debt | 1 year | |||||||
Implicit interest rate | 7.00% | |||||||
Equipment Financing Debt Agreements | Maximum | Operating Subsidiaries of DME Inc | ||||||||
Debt Instrument [Line Items] | ||||||||
Term of debt | 3 years | |||||||
Implicit interest rate | 8.00% | |||||||
DME Revolver | ||||||||
Debt Instrument [Line Items] | ||||||||
Credit facility balance | 0 | $ 0 | ||||||
Credit facility maximum borrowing capacity | $ 10,000,000 | $ 10,000,000 | ||||||
Credit facility expiration date | Nov. 29, 2022 | |||||||
Debt Instrument, Basis Spread on Variable Rate | 0.40% | |||||||
Credit facility interest rate | 3.70% | 3.70% | ||||||
Debt instrument description | the prime rate plus 0.4% per annum | |||||||
DME, Inc. | ||||||||
Debt Instrument [Line Items] | ||||||||
Percentage of voting interests acquired | 80.10% | |||||||
DME, Inc. | DME Revolver | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt acquired principal amount | $ 6,300,000 | $ 6,300,000 | $ 800,000 | |||||
Corbel Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Additional borrowings | $ 3,400,000 | |||||||
Remaining outstanding principal amount | $ 24,800,000 | |||||||
Deferred structuring fees | 600,000 | |||||||
Prepayment premiums and settlement fees | 1,000,000 | |||||||
Lender legal fees | 100,000 | |||||||
Unamortized debt issuance costs | 200,000 | |||||||
Loss on extinguishment of debt | $ 1,900,000 | |||||||
Corbel Facility | DME, Inc. | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt acquired principal amount | $ 25,000,000 | $ 25,000,000 | $ 8,500,000 | |||||
GP Corp. Note | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Basis Spread on Variable Rate | 3.00% | |||||||
Debt instrument description | three-month LIBOR plus 3.0% per annum | |||||||
Secured notes, maturity month and year | 2026-11 | |||||||
Debt instrument effective interest rate | 3.20% | 3.20% | ||||||
Mandatory annual payments on debt | $ 80,000 | |||||||
Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt acquired principal amount | $ 54,800,000 | |||||||
Long term debt, fair value | 52,200,000 | |||||||
Debt instrument unamortized discount | 2,600,000 | |||||||
Debt instrument accrues interest rate | 3.49% | 3.49% | ||||||
Debt instrument last required payment | $ 18,400,000 | $ 18,400,000 | ||||||
Secured notes, maturity date | Mar. 15, 2030 | |||||||
Debt instrument last installment payment date | Mar. 15, 2030 | |||||||
Subordinated Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt acquired principal amount | 2,700,000 | |||||||
Long term debt, fair value | 5,800,000 | |||||||
Debt instrument accrues interest rate | 15.00% | 15.00% | ||||||
Debt instrument last required payment | $ 16,300,000 | $ 16,300,000 | ||||||
Secured notes, maturity date | Mar. 15, 2030 | |||||||
Debt instrument last installment payment date | Mar. 15, 2030 | |||||||
Subordinated Notes | CRIC IT | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument unamortized premium | $ 3,100,000 |
Borrowings - Schedule of Aggreg
Borrowings - Schedule of Aggregate Future Required Principal Debt Repayments (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Jun. 30, 2020 |
Debt Instrument [Line Items] | ||
For the six months ending June 30, 2021 | $ 2,486 | |
For the year ending June 30, 2022 | 3,107 | |
For the year ending June 30, 2023 | 2,835 | |
For the year ending June 30, 2024 | 2,982 | |
For the year ending June 30, 2025 | 3,202 | |
Thereafter | 55,476 | |
Total | 70,088 | |
Future interest to be paid-in-kind | 12,173 | |
Related Party Borrowings Subsidiaries | ||
Debt Instrument [Line Items] | ||
Outstanding principal | 3,072 | $ 28,178 |
Subsidiaries Other Outstanding Borrowings | ||
Debt Instrument [Line Items] | ||
Outstanding principal | $ 54,843 | $ 59,937 |
Borrowings - Schedule of Paymen
Borrowings - Schedule of Payments and Interest Expense Incurred (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Corbel Facility | ||||
Debt Instrument [Line Items] | ||||
Principal payments | $ 24,752 | $ 355 | $ 25,106 | $ 1,316 |
Interest expense | 635 | 1,603 | 1,296 | 2,458 |
GP Corp. Note | Acquisition Agreement with MAST Capital | ||||
Debt Instrument [Line Items] | ||||
Interest expense | $ 25 | $ 44 | $ 51 | $ 88 |
Convertible Notes - Additional
Convertible Notes - Additional Information (Details) - USD ($) $ in Thousands | Feb. 26, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2020 |
Debt Instrument [Line Items] | ||||||
Total principal balance of Convertible Notes outstanding | $ 31,280 | $ 31,280 | $ 30,521 | |||
Debt issuance costs | 1,250 | |||||
Interest expense | 1,911 | $ 1,633 | 3,868 | $ 3,329 | ||
Convertible Notes | ||||||
Debt Instrument [Line Items] | ||||||
Issuance of notes payable | $ 30,000 | |||||
Debt instrument maturity date | Feb. 26, 2030 | |||||
Total principal balance of Convertible Notes outstanding | 31,300 | 31,300 | ||||
Issuance of notes to related parties. | $ 13,600 | |||||
Debt instrument interest rate | 5.00% | |||||
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 | |||||
Yield Percentage on identical non-convertible instrument | 12.50% | |||||
Debt instrument unamortized discount | $ 12,600 | |||||
Debt issuance costs | $ 1,200 | |||||
Amortization period of convertible notes debt discount and debt issuance costs | 10 years | |||||
Interest expense | $ 600 | $ 1,100 | ||||
Matthew A. Drapkin | Convertible Notes | ||||||
Debt Instrument [Line Items] | ||||||
Issuance of notes to related parties. | $ 6,300 | |||||
Jason W. Reese | Convertible Notes | ||||||
Debt Instrument [Line Items] | ||||||
Issuance of notes to related parties. | 6,700 | |||||
Eric J Scheyer | Convertible Notes | ||||||
Debt Instrument [Line Items] | ||||||
Issuance of notes to related parties. | $ 700 |
CARES Act - Additional Informat
CARES Act - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | |
Apr. 30, 2020 | Mar. 27, 2020 | |
U.S. Department of Health and Human Services (HHS) | ||
Unusual Or Infrequent Item [Line Items] | ||
CARES Act Of 2020 Aid | $ 100,000 | |
DME, Inc. | Paycheck Protection Program Loan | ||
Unusual Or Infrequent Item [Line Items] | ||
Loan amount received to use specified covered purpose including payroll, rent and utilities | $ 3.6 | |
Debt instrument interest rate | 1.00% | |
Loan term | 2 years | |
DME, Inc. | U.S. Department of Health and Human Services (HHS) | ||
Unusual Or Infrequent Item [Line Items] | ||
Amount received from HHS grants | $ 1.4 |
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 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 |
Balance as of | ||||||
Temporary equity | $ 2,567 | $ 3,844 | $ 3,890 | $ 3,754 | $ 3,832 | $ 3,912 |
Total Non-controlling interests | 7,802 | 7,776 | ||||
DME, Inc. | ||||||
Balance as of | ||||||
Temporary equity | 2,567 | 3,890 | ||||
Permanent equity | 2,567 | 3,890 | ||||
Total DME Inc. | 5,134 | 7,780 | ||||
GP Corp. | ||||||
Balance as of | ||||||
Permanent equity | (840) | (782) | ||||
GE FM Holdings | ||||||
Balance as of | ||||||
Permanent equity | 808 | $ 778 | ||||
Forest | ||||||
Balance as of | ||||||
Permanent equity | $ 2,700 |
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 | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Net income (loss) | ||||
Total DME Inc. | $ (597) | $ (186) | $ (704) | $ (375) |
DME, Inc. | ||||
Net income (loss) | ||||
Temporary equity | (292) | (78) | (337) | (158) |
Permanent equity | (292) | (78) | (337) | (158) |
Total DME Inc. | (584) | (156) | (674) | (316) |
GP Corp. | ||||
Net income (loss) | ||||
Permanent equity | (30) | (43) | (60) | (85) |
GE FM Holdings | ||||
Net income (loss) | ||||
Permanent equity | 17 | $ 13 | 30 | $ 26 |
Forest | ||||
Net income (loss) | ||||
Permanent equity | $ 0 | $ 0 |
Non-Controlling Interests and_5
Non-Controlling Interests and Preferred Stock of Subsidiaries - Additional Information (Details) - USD ($) | Dec. 29, 2020 | Dec. 31, 2020 | Sep. 07, 2018 | Mar. 31, 2018 | Nov. 30, 2016 |
GP Corp. | |||||
Minority Interest [Line Items] | |||||
Percentage of ownership interest issued to former owner/certain affiliates and employees | 19.90% | ||||
GE FM Holdings | |||||
Minority Interest [Line Items] | |||||
Percentage of ownership interest issued to former owner/certain affiliates and employees | 19.90% | ||||
DME, Inc. | |||||
Minority Interest [Line Items] | |||||
Percentage of common stock equity ownership issued | 9.95% | ||||
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 50% of the common shares issued to it at the closing of the transaction, (ii) an initial public offering of DME Inc. 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 DME Inc. and has the right to put its common shares to DME Inc. at the price for such shares implied by such marketing process. | ||||
Percentage of common stock equity ownership issued | 9.95% | ||||
Forest | |||||
Minority Interest [Line Items] | |||||
Percentage of common stock interest sold classified as permanent equity | 20.00% | ||||
Exchange of common stock for noncontrolling interests | $ 2,700,000 | ||||
HC LLC | Series A-1 Preferred Stock Classified as Liability | |||||
Minority Interest [Line Items] | |||||
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 | 9.00% | ||||
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 | ||||
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 | 9.00% | ||||
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 | 0.00% | ||||
Redeemable preferred stock redemption premium percentage maximum | 3.00% | ||||
Percentage of proceeds arising from sale of durable medical equipment business | 33.00% | ||||
Fair value of derivative liability | $ 6,500,000 | ||||
Forest | Series A-1 Preferred Stock Classified as Liability | |||||
Minority Interest [Line Items] | |||||
Redeemable preferred stock, shares | 8,082 | ||||
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 | 9.00% | ||||
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 | 0.00% | ||||
Redeemable preferred stock redemption premium percentage maximum | 3.00% | ||||
Net operating loss carryforwards | $ 300,000,000 | ||||
Corbel Capital Partners SBIC, L.P. (Corbel) | Series A-1 Preferred Stock Classified as Liability | |||||
Minority Interest [Line Items] | |||||
Redeemable preferred stock, shares | 1,004 | ||||
Valley Healthcare Holdings, LLC (VHH) | Series A-1 Preferred Stock Classified as Liability | |||||
Minority Interest [Line Items] | |||||
Redeemable preferred stock, shares | 1,004 |
Non-Controlling Interests and_6
Non-Controlling Interests and Preferred Stock of Subsidiaries - Summary of Preferred Stock of Subsidiary Balances on Condensed Consolidated Balance Sheets (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Minority Interest [Line Items] | |
Total redeemable preferred stock of subsidiaries classified as liability | $ 35,412 |
HC LLC | |
Minority Interest [Line Items] | |
Total redeemable preferred stock of subsidiaries classified as liability | 1,556 |
HC LLC | Series A-1 Preferred Stock | |
Minority Interest [Line Items] | |
Total redeemable preferred stock of subsidiaries classified as liability | 1,556 |
Forest | Forest Preferred Stock | |
Minority Interest [Line Items] | |
Total redeemable preferred stock of subsidiaries classified as liability | $ 33,856 |
Stockholders' Equity - Restrict
Stockholders' Equity - Restricted Stock Awards (Performance Shares) and Restricted Stock Units - Additional Information (Details) - Restricted Stock $ in Millions | 3 Months Ended | 6 Months Ended |
Dec. 31, 2020shares | Dec. 31, 2020USD ($)shares | |
Stockholders' Equity | ||
Restricted stock awards forfeited | 0 | |
Outstanding shares | 732,909 | |
Vesting period | 5 years | |
Investment management cumulative revenue collection target | $ | $ 40 | |
Maximum term of Investment management agreement fees earned | 5 years | |
Awards probable of vesting under performance condition | 243,322 | 243,322 |
Employees and Directors | ||
Stockholders' Equity | ||
Granted, shares | 0 | 44,490 |
Stockholders' Equity - Activity
Stockholders' Equity - Activity of Restricted Stock Award (Details) - Restricted Stock shares in Thousands | 6 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Shares | |
Beginning Balance | shares | 941 |
Granted | shares | 44 |
Vested | shares | (161) |
Ending Balance | shares | 824 |
Weighted average grant date fair value | |
Beginning Balance | $ / shares | $ 3.71 |
Granted | $ / shares | 2.36 |
Vested | $ / shares | 2.66 |
Ending Balance | $ / shares | $ 3.84 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Option Activity (Details) - $ / shares shares in Thousands | 6 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Jun. 30, 2020 | |
Shares | ||
Beginning Balance | 2,475 | |
Ending Balance | 2,475 | 2,475 |
Exercisable | 1,798 | |
Vested and expected to vest | 2,475 | |
Weighted average exercise price | ||
Beginning Balance | $ 3.69 | |
Ending Balance | 3.69 | $ 3.69 |
Exercisable | 3.64 | |
Vested and expected to vest | $ 3.69 | |
Weighted average remaining contractual term | ||
Outstanding | 5 years 3 days | 5 years 6 months 3 days |
Exercisable | 4 years 6 months 10 days | |
Vested and expected to vest | 5 years 3 days |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Options (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Stockholders' Equity | ||||
Total unrecognized compensation cost | $ 1.7 | $ 1.7 | ||
Restricted Stock Awards and Stock Options | ||||
Stockholders' Equity | ||||
Stock-based compensation | $ 0.3 | $ 0.2 | $ 0.7 | $ 0.3 |
Income Tax - Additional Informa
Income Tax - Additional Information (Details) - USD ($) $ in Millions | 6 Months Ended | |
Dec. 31, 2020 | Jun. 30, 2020 | |
Income Tax [Line Items] | ||
Federal net operating loss carryforwards | $ 1,500 | |
Operating loss carryforward for state income tax | $ 203 | |
Minimum | Federal | ||
Income Tax [Line Items] | ||
Operating loss carryforwards expiration period | 2021 | |
Minimum | State | ||
Income Tax [Line Items] | ||
Operating loss carryforwards expiration period | 2029 | |
Maximum | Federal | ||
Income Tax [Line Items] | ||
Operating loss carryforwards expiration period | 2037 | |
Maximum | State | ||
Income Tax [Line Items] | ||
Operating loss carryforwards expiration period | 2038 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 6 Months Ended |
Dec. 31, 2020Segment | |
Segment Reporting [Abstract] | |
Number of business operating segments | 3 |
Segment Information - Schedule
Segment Information - Schedule of Results of Operations by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Revenue: | |||||
Total revenue | $ 16,579 | $ 16,551 | $ 33,234 | $ 31,922 | |
Operating costs and expenses: | |||||
Depreciation and amortization | (1,021) | (1,130) | (2,042) | (2,197) | |
Stock-based compensation | [1] | (285) | (208) | (714) | (501) |
Transaction costs | [2] | (316) | (486) | (348) | (577) |
Other selling, general and administrative | (9,835) | (9,123) | (19,318) | (18,189) | |
Total operating expenses | (17,781) | (16,821) | (34,868) | (33,066) | |
Other income (expense): | |||||
Interest expense | (1,911) | (1,633) | (3,868) | (3,329) | |
Other income (expense) | 2,117 | (223) | 742 | (689) | |
Total other expense, net | 206 | (1,856) | (3,126) | (4,018) | |
Loss, before income taxes | (996) | (2,126) | (4,760) | (5,162) | |
Intercompany Eliminations | |||||
Revenue: | |||||
Total revenue | [3] | (45) | (57) | (136) | (80) |
Operating costs and expenses: | |||||
Other selling, general and administrative | [3] | 45 | 57 | 136 | 80 |
Total operating expenses | [3] | 45 | 57 | 136 | 80 |
Durable Medical Equipment | Operating Segments | |||||
Revenue: | |||||
Total revenue | 14,543 | 14,391 | 29,153 | 27,622 | |
Operating costs and expenses: | |||||
Depreciation and amortization | (462) | (520) | (925) | (977) | |
Transaction costs | [2] | (87) | (87) | ||
Other selling, general and administrative | (8,028) | (7,736) | (15,799) | (14,608) | |
Total operating expenses | (14,901) | (14,130) | (29,257) | (27,187) | |
Other income (expense): | |||||
Interest expense | (687) | (937) | (1,396) | (1,933) | |
Other income (expense) | (1,833) | (1,836) | 3 | ||
Total other expense, net | (2,520) | (937) | (3,232) | (1,930) | |
Loss, before income taxes | (2,878) | (676) | (3,336) | (1,495) | |
Investment Management | |||||
Operating costs and expenses: | |||||
Total operating costs and expenses | (916) | (664) | (1,642) | (1,355) | |
Investment Management | Operating Segments | |||||
Revenue: | |||||
Total revenue | 760 | 889 | 1,533 | 1,756 | |
Operating costs and expenses: | |||||
Depreciation and amortization | (127) | (179) | (255) | (358) | |
Stock-based compensation | [1] | (197) | (98) | (391) | (273) |
Other selling, general and administrative | (719) | (566) | (1,251) | (1,082) | |
Total operating expenses | (1,043) | (843) | (1,897) | (1,713) | |
Other income (expense): | |||||
Interest expense | (25) | (41) | (51) | (83) | |
Total other expense, net | (25) | (41) | (51) | (83) | |
Loss, before income taxes | (308) | 5 | (415) | (40) | |
Real Estate | |||||
Operating costs and expenses: | |||||
Total operating costs and expenses | (127) | (126) | (252) | (250) | |
Real Estate | Operating Segments | |||||
Revenue: | |||||
Total revenue | 1,276 | 1,271 | 2,548 | 2,544 | |
Operating costs and expenses: | |||||
Depreciation and amortization | (431) | (430) | (861) | (861) | |
Other selling, general and administrative | (127) | (126) | (252) | (250) | |
Total operating expenses | (558) | (556) | (1,113) | (1,111) | |
Other income (expense): | |||||
Interest expense | (647) | (655) | (1,297) | (1,313) | |
Total other expense, net | (647) | (655) | (1,297) | (1,313) | |
Loss, before income taxes | 71 | 60 | 138 | 120 | |
General Corporate | Operating Segments | |||||
Revenue: | |||||
Total revenue | 45 | 57 | 136 | 80 | |
Operating costs and expenses: | |||||
Depreciation and amortization | (1) | (1) | (1) | (1) | |
Stock-based compensation | [1] | (88) | (110) | (323) | (228) |
Transaction costs | [2] | (229) | (486) | (261) | (577) |
Other selling, general and administrative | (1,006) | (752) | (2,152) | (2,329) | |
Total operating expenses | (1,324) | (1,349) | (2,737) | (3,135) | |
Other income (expense): | |||||
Interest expense | (552) | (1,124) | |||
Other income (expense) | 3,950 | (223) | 2,578 | (692) | |
Total other expense, net | 3,398 | (223) | 1,454 | (692) | |
Loss, before income taxes | 2,119 | (1,515) | (1,147) | (3,747) | |
Sales and Services | Durable Medical Equipment | |||||
Operating costs and expenses: | |||||
Total operating costs and expenses | (4,703) | (3,689) | (8,910) | (7,152) | |
Sales and Services | Durable Medical Equipment | Operating Segments | |||||
Operating costs and expenses: | |||||
Total operating costs and expenses | (4,703) | (3,689) | (8,910) | (7,152) | |
Rental | Durable Medical Equipment | |||||
Operating costs and expenses: | |||||
Total operating costs and expenses | (1,621) | (2,185) | (3,536) | (4,450) | |
Rental | Durable Medical Equipment | Operating Segments | |||||
Operating costs and expenses: | |||||
Total operating costs and expenses | $ (1,621) | $ (2,185) | $ (3,536) | $ (4,450) | |
[1] | Stock-based compensation attributable to the investment management segment is included in investment management expenses in the condensed consolidated statements of operations. Stock-based compensation attributable to the general corporate segment is included in selling, general and administrative expense in the condensed consolidated statements of operations. | ||||
[2] | Transaction costs, which consist of legal and other professional services incurred in connection with consummated and unconsummated transactions, are included in selling, general and administrative expense in the condensed consolidated statements of operations. | ||||
[3] | The Company’s wholly-owned subsidiary, Great Elm DME Manager, LLC ( DME Manager |
Segment Information - Schedul_2
Segment Information - Schedule of Assets by Segment (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 |
Segment Reporting Information [Line Items] | ||||
Fixed assets, net | $ 60,728 | $ 62,081 | ||
Identifiable intangible assets, net | 14,031 | 15,129 | ||
Goodwill | 50,010 | 50,010 | $ 50,433 | $ 50,397 |
Other assets | 74,610 | 68,225 | ||
Total assets | 199,379 | 195,445 | ||
Durable Medical Equipment | ||||
Segment Reporting Information [Line Items] | ||||
Fixed assets, net | 8,121 | 8,854 | ||
Identifiable intangible assets, net | 7,374 | 7,974 | ||
Goodwill | 50,010 | 50,010 | ||
Other assets | 19,310 | 19,055 | ||
Total assets | 84,815 | 85,893 | ||
Investment Management | ||||
Segment Reporting Information [Line Items] | ||||
Fixed assets, net | 27 | 35 | ||
Identifiable intangible assets, net | 2,035 | 2,284 | ||
Other assets | 2,978 | 2,654 | ||
Total assets | 5,040 | 4,973 | ||
Real Estate | ||||
Segment Reporting Information [Line Items] | ||||
Fixed assets, net | 52,576 | 53,188 | ||
Identifiable intangible assets, net | 4,622 | 4,871 | ||
Other assets | 2,782 | 2,171 | ||
Total assets | 59,980 | 60,230 | ||
General Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Fixed assets, net | 4 | 4 | ||
Other assets | 49,540 | 44,345 | ||
Total assets | $ 49,544 | $ 44,349 |