8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 13, 2019

Great Elm Capital Group, Inc.

(Exact name of Registrant as Specified in Its Charter)

Delaware	001-16073	94-3219054
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
800 South Street, Suite 230, Waltham, MA		02453
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (617) 375-3006

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.001 per share	GEC	The Nasdaq Stock Market LLC (Nasdaq Global Select Market)
Preferred Stock Purchase Rights		Nasdaq Global Select Market
Units, par value, $0.001 per share		Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On September 13, 2019, the registrant issued the press release and published the presentation furnished as exhibits 99.1 and 99.2, respectively, to this report.

The foregoing information (including the exhibits hereto) is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

 Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

The following exhibits are furnished with this report but shall not be deemed filed:

Exhibit Number	Description
99.1	Press release, dated September 13, 2019.
99.2	Presentation, dated September 13, 2019.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	GREAT ELM CAPITAL GROUP, INC.
Date:  September 13, 2019	/s/  Brent J. Pearson ______________
	By: Brent J. Pearson
	Title: Chief Financial Officer

EX-99.1

Exhibit 99.1

GREAT ELM CAPITAL GROUP, INC. REPORTS FOURTH QUARTER AND FULL YEAR 2019 FINANCIAL RESULTS

▪ Significant quarter-over-quarter DME revenue growth in all major product categories

▪ New positive air pressure (“PAP”) patient setups increased by approximately 19.8%, quarter-over-quarter

▪ Investment Management reports year‑over‑year management fee growth of approximately 13.5% for the twelve months ended June 30, 2019

WALTHAM, MA, September 13, 2019 – Great Elm Capital Group, Inc. (NASDAQ: GEC, “Great Elm”) announced its financial results for the quarter and year ended June 30, 2019. Great Elm will host a conference call and webcast on Friday, September 13, 2019 at 8:00 a.m. Eastern Time to discuss its fourth quarter 2019 financial results. Please see below for details.

Select highlights from the fourth quarter and full fiscal year 2019 include:

▪ Operating Companies:

▪ For the three months ended June 30, 2019, $12.9 million of revenue, $1.0 million of net loss and $2.8 million of adjusted EBITDA

▪ For the approximately 10 months ended June 30, 2019, $41.9 million of revenue, $1.1 million of net loss and $10.4 million of adjusted EBITDA

▪ The acquisition of the respiratory assets of Midwest Respiratory Care, Inc.

▪ Invested heavily in people, processes and technology to enhance our scalable infrastructure, capable of supporting multiple acquisitions per year

▪ Successfully consolidated the billing platform and implemented financial management software

▪ Management team has identified a large number of potential acquisition targets with strong product fit and geographic adjacency

▪ Outlook for continued growth in fiscal year 2020 underpinned by key performance indicators

▪ Investment Management:

▪ For the three months ended June 30, 2019, year-over-year management fees approximately unchanged

▪ For the 12 months ended June 30, 2019, year-over-year management fee growth of approximately 13.5%

▪ For the three and 12 months ended June 30, 2019, net loss of approximately $0.1 million and $1.0 million, respectively

▪ For the three and 12 months ended June 30, 2019, adjusted EBITDA of approximately $0.8 million and $3.2 million, respectively

▪ Outlook for free cash flow growth in fiscal year 2020 based on an increase in management fee revenue and the termination of the Full Circle consulting agreement

“We will continue to invest in the DME business to support ongoing organic growth as well as to pursue the numerous identified acquisition opportunities that we believe offer a compelling strategic fit,” remarked Peter A. Reed, Great Elm’s Chief Executive Officer. “Furthermore, with a positive trend in management fee revenue, we believe our Investment Management business is poised for free cash flow growth in the coming year.”  

Alignment of Interest

The employees of Great Elm and Great Elm Capital Management, Inc. (“GECM”) collectively own approximately 2.0 million shares of GEC stock, representing approximately 8% of its outstanding shares.¹ Additionally, the directors of Great Elm collectively own or manage greater than 11% of Great Elm’s shares.¹ Altogether, insiders collectively own or manage approximately 19% of the company’s outstanding shares, which Great Elm believes fosters a strong alignment of interest between employees, directors and the company’s shareholders.

BUSINESS OVERVIEW

Great Elm is a diversified, publicly-traded holding company that seeks to build long-term shareholder value across three verticals: Operating Companies, Investment Management and Real Estate.

¹  This includes restricted shares that are subject to both performance and service vesting and is based on the share count pro forma for the vesting of such restricted shares.

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Operating Companies

In the three and approximately 10 months ended June 30, 2019, DME generated $2.8 million and $10.4 million, respectively, of adjusted EBITDA. During the fourth quarter, DME experienced approximately 19.8% growth in PAP patient setups and meaningful revenue growth in major product categories. Management anticipates growth in both revenue and adjusted EBITDA in fiscal year 2020, supported by encouraging key performance indicators.

In June 2019, a subsidiary of Great Elm DME, Inc. acquired the respiratory assets of Midwest Respiratory Care, Inc. (“MRC”) for approximately $6.3 million or 4.6x MRC’s EBITDA less capital expenditures for the twelve months ended April 30, 2019.  The team continues to pursue M&A opportunities with complementary product profiles that increase market penetration and extend existing geographic markets.  

In addition to the DME business, the Great Elm team continues to evaluate acquisition opportunities across multiple industries in partnership with industry experts and/or operating executives.

Investment Management

Great Elm’s management team believes the Investment Management business is scalable, offers attractive margins and, when coupled with growth in assets under management, provides for the potential to generate incremental EBITDA.

Great Elm intends to grow assets under management through capital raises and M&A. Growth in assets under management is expected to result in increased management fee revenue for GECM. This increase in management fee revenue should drive future free cash flow generation, aided by the termination of the Full Circle consulting agreement in November 2019.  

Alongside Great Elm Capital Corp., Great Elm Opportunities Fund I, LP and existing separately managed accounts, Great Elm continues to seek avenues for growth, potentially launching additional private funds and pursuing opportunistic acquisitions in the business development company space.

Real Estate

Great Elm continues to focus on credit tenant lease financings and ground lease structures across a variety of commercial, government and other properties. Great Elm’s substantial tax assets can make it a value-added partner or lessor.

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FINANCIAL REVIEW: SEGMENT FINANCIALS

As of June 30, 2019, Great Elm had four operating segments: Durable Medical Equipment, Investment Management, Real Estate and General Corporate.

Durable Medical Equipment

Three and Approximately 10 Months Ended June 30, 2019:

Revenue:

▪ During the three and approximately 10 months ended June 30, 2019, Great Elm recognized $12.9 million and $41.9 million, respectively, in total revenue.

Net Income (Loss):

▪ During the three and approximately 10 months ended June 30, 2019, Great Elm recognized net loss of $1.0 million and $1.1 million, respectively.

Adjusted EBITDA:

▪ During the three and approximately 10 months ended June 30, 2019, Great Elm recognized $2.8 million and $10.4 million, respectively, in adjusted EBITDA.

Investment Management

Three and 12 Months Ended June 30, 2019:

Revenue:

▪ During the three and 12 months ended June 30, 2019, Great Elm recognized management fee revenue of $0.74 million and $3.0 million, respectively, vs. $0.75 million and $2.6 million, respectively, during the same periods in the prior year.

▪ During the three and 12 months ended June 30, 2019, Great Elm recognized total investment management revenue of $0.9 million and $3.8 million, respectively, vs. $0.6 million and $4.1 million, respectively, during the same periods in the prior year.

Net Income (Loss):

▪ During the three and 12 months ended June 30, 2019, Great Elm recognized a net loss of $0.1 million and $1.0 million, respectively, vs. a net loss of $1.4 million and $4.9 million, respectively, during the same periods in the prior year.

Adjusted EBITDA:

▪ During the three and 12 months ended June 30, 2019, Great Elm recognizedadjusted EBITDA of $0.8 million and $3.2 million, respectively, vs. $0.5 million and $0.8 million, respectively, during the same periods in the prior year.

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Real Estate

Three and 12 Months Ended June 30, 2019:

Revenue:

▪ During the three and 12 months ended June 30, 2019, Great Elm recognized $1.3 million and $5.5 million, respectively, in rental revenue vs. $1.5 million and $1.9 million, respectively, during the same periods in the prior year².

Net Income (Loss):

▪ During the three and 12 months ended June 30, 2019, Great Elm recognized $64,000 and $191,000, respectively, in net income vs. $60,000 and $83,000, respectively, in net income during the same periods in the prior year².

Adjusted EBITDA:

▪ During the three and 12 months ended June 30, 2019, Great Elm recognized $1.2 million and $4.6 million, respectively, in adjusted EBITDA vs. $1.2 million and $1.5 million, respectively, during the same periods in the prior year².

General Corporate

Three and 12 Months Ended June 30, 2019:

Revenue:

▪ During the three and 12 months ended June 30, 2019, Great Elm recognized $58,000 and $123,000, respectively, in revenue vs. no revenue during the same periods the prior year.

Net Income (Loss):

▪ During the three and 12 months ended June 30, 2019, Great Elm recognized $41,000 in net income and $1.2 million in net loss, respectively, vs. net loss of $1.2 million and $6.7 million, respectively, during the same periods the prior year.

Adjusted EBITDA:

▪ During the three and 12 months ended June 30, 2019, Great Elm recognized $(1.6) million and $(6.1) million, respectively, in adjusted EBITDA vs. $(1.2) million and $(4.3) million, respectively, during the same periods the prior year.

²  Our Real Estate business began in March 2018 and there was no related activity prior to that date.

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Conference Call & Webcast

Great Elm will host a conference call and webcast on Friday, September 13, 2019 at 8:00 a.m. Eastern Time to discuss its fourth quarter 2019 financial results.

All interested parties are invited to participate in the conference call by dialing +1 (844) 559-0750; international callers should dial +1 (647) 689-5386. Participants should enter the Conference ID 6973727 when asked. For a copy of the slide presentation that will be referenced during the course of our conference call, please visit: https://www.greatelmcap.com/events-and-presentations/default.aspx.

The conference call will be webcast simultaneously at: https://event.on24.com/wcc/r/2021163/6EE1FE643E7E50686C8FA475B2B776A7.

About Great Elm Capital Group, Inc.

Great Elm is a publicly-traded holding company that seeks to build a business across three operating verticals: Operating Companies, Investment Management and Real Estate. Great Elm’s website can be found at www.greatelmcap.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

Statements in this press release that are “forward-looking” statements, including statements regarding expected growth, profitability, free cash flow and outlook involve risks and uncertainties that may individually or collectively impact the matters described herein. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made and represent Great Elm’s assumptions and expectations in light of currently available information.  These statements involve risks, variables and uncertainties, and Great Elm’s actual performance results may differ from those projected, and any such differences may be material. For information on certain factors that could cause actual events or results to differ materially from Great Elm’s expectations, please see Great Elm’s filings with the SEC, including its most recent annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K. Additional information relating to Great Elm’s financial position and results of operations is also contained in Great Elm’s annual and quarterly reports filed with the SEC and available for download at its website www.greatelmcap.com or at the SEC website www.sec.gov.

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Non-GAAP Financial Measures

The SEC has adopted rules to regulate the use in filings with the SEC, and in public disclosures, of financial measures that are not in accordance with US GAAP, such as adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). Adjusted EBITDA is derived from methodologies other than in accordance with US GAAP. Great Elm believes that Adjusted EBITDA is an important measure for investors to use in evaluating Great Elm’s businesses. In addition, Great Elm’s management reviews Adjusted EBITDA as they evaluate acquisition opportunities.

Adjusted EBITDA has limitations as an analytical tool, and you should not consider it either in isolation from, or as a substitute for, analyzing Great Elm’s results as reported under US GAAP. Non-GAAP financial measures reported by Great Elm may not be comparable to similarly titled amounts reported by other companies.

Set forth below is a reconciliation of Adjusted EBITDA to the most directly comparable US GAAP financial measure, net income. The information in the table below includes forecasts, projections and other predictive statements that represent Great Elm’s assumptions and expectations in light of currently available information. These forecasts, projections and other predictive statements involve risks, variables and uncertainties. Great Elm’s actual performance results may differ from those projected in in the table below, and any such differences may be material.

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(1) Our durable medical equipment business began in September 2018 and there was no related activity prior to that date.

(2) General Corporate net loss includes net loss attributable to discontinued operations.

(3) Unrecognized incentive fees earned include amounts earned under investment management agreements which are not recognized under US GAAP.

(4) Represents $0.5 million of aggregate adjustments which negatively impact adjusted EBITDA by the same amount for the period beginning with the acquisition of DME on September 7, 2018 and ending March 31, 2019.  There is no material impact on the GAAP numbers reported for this period.

(5) Acquisition and integration related costs include transaction costs, costs to integrate acquired businesses and changes in the fair value of the contingent consideration liability since the initial valuation at the acquisition date.

(6) Broken deal expenses include non-recurring expenses incurred in relation to transactions that were not consummated.

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(7) Our real estate business began in March 2018 and there was no related activity prior to that date.

Media & Investor Contact:

Investor Relations

+1 (617) 375-3006

investorrelations@greatelmcap.com

EX-99.2

Great Elm Capital Group, Inc. Investor Presentation – Quarter and Year Ended June 30, 2019 September 13, 2019 © 2019 Great Elm Capital Group, Inc. Exhibit 99.2

© 2019 Great Elm Capital Group, Inc. Disclaimer Statements in this presentation that are “forward-looking” statements, including statements regarding expected growth, profitability, free cash flow and outlook involve risks and uncertainties that may individually or collectively impact the matters described herein. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made and represent Great Elm Capital Group, Inc.’s (“Great Elm” or “GEC”) assumptions and expectations in light of currently available information.  Great Elm assumes no obligation to, and expressly disclaims any duty to, update any forward-looking statements contained in this presentation or to conform prior statements to actual results or revised expectations, except as required by law. These statements involve risks, variables and uncertainties, and Great Elm’s actual performance results may differ from those projected, and any such differences may be material. For information on certain factors that could cause actual events or results to differ materially from Great Elm’s expectations, please see Great Elm’s filings with the Securities and Exchange Commission (the “SEC”), including its most recent annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K. Additional information relating to Great Elm’s financial position and results of operations is also contained in Great Elm’s annual and quarterly reports filed with the SEC, which are available for download at its website www.greatelmcap.com or at the SEC website www.sec.gov. Non-GAAP Financial Measures The SEC has adopted rules to regulate the use in filings with the SEC, and in public disclosures, of financial measures that are not in accordance with US GAAP, such as adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). See the Appendix for important information regarding the use of non-GAAP financial measures and reconciliations of non-GAAP measures to their most directly comparable GAAP measures. This presentation does not constitute an offer of any securities for sale.

© 2019 Great Elm Capital Group, Inc. SlideSection 4Performance Overview 7 Organizational Overview 10Operating Companies: Great Elm DME 14Investment Management 18Real Estate 22General Corporate 24Financial Review 27Summary 29Q&A 30Appendix Table of Contents

Performance Overview © 2019 Great Elm Capital Group, Inc.

Performance Overview: Fourth Quarter 2019 For the quarter ended June 30, 2019, Great Elm reported: Consolidated Revenue of $15.1 million vs. $2.1 million during the same period the prior year DME: $12.9 million Investment Management: $0.9 million Real Estate: $1.3 million General Corporate: $0.1 million Consolidated adjusted EBITDA1 of $3.2 million vs. $(0.04) million of adjusted EBITDA during the same period the prior year DME: $2.8 million Investment Management: $0.8 million Real Estate: $1.2 million General Corporate: $(1.6) million © 2019 Great Elm Capital Group, Inc. (1) Please refer to the disclaimers on slide 2 and the Adjusted EBITDA reconciliation tables in the Appendix

Performance Overview: Full Year 2019 For the full year ended June 30, 2019, Great Elm reported: Consolidated Revenue of $51.2 million vs. $5.9 million during the same period the prior year DME: $41.9 million Investment Management: $3.8 million Real Estate: $5.5 million General Corporate: $0.1 million Consolidated adjusted EBITDA1 of $12.0 million vs. $(2.0) million during the same period the prior year DME: $10.4 million2 Investment Management: $3.2 million Real Estate: $4.6 million General Corporate: $(6.1) million © 2019 Great Elm Capital Group, Inc. Please refer to the disclaimers on slide 2 and the Adjusted EBITDA reconciliation tables in the Appendix Partial period of approximately 10 months

Organizational Overview © 2019 Great Elm Capital Group, Inc.

© 2019 Great Elm Capital Group, Inc. Organizational Overview: Drivers of Shareholder Value Operating Companies Real Estate Investment Management Target undercapitalized small and mid-sized companies where we can partner with management to accelerate earnings and cash flow growth Focus on companies that offer a platform for follow-on acquisitions and investment Grow Great Elm Capital Corp. (“GECC”) through capital raises and potential BDC acquisitions Increase assets under management (“AUM”) via new fund launches, SMAs and co-investments Seek opportunities, such as the Fort Myers transaction, that utilize modest equity capital and monetize significant net operating loss carryforwards (“NOLs”)

© 2019 Great Elm Capital Group, Inc. Organizational Overview: Alignment of Interest When combined, insider ownership totals approximately 19% of the outstanding shares We believe this level of insider ownership results in a significant and long-term alignment of interest between the shareholders and the insiders of GEC Director Share Ownership Employees of GEC/Great Elm Capital Management, Inc. (“GECM”) collectively own approximately 2.0 million shares of GEC, representing approximately 8% of GEC’s outstanding shares1 The directors of GEC collectively own greater than 11% of GEC’s outstanding shares1 Significant Alignment of Interest Employee Share Ownership (1) This includes restricted shares that are subject to both performance and service vesting and is based on the share count pro forma for the vesting of said restricted shares.

Operating Companies: Great Elm DME © 2019 Great Elm Capital Group, Inc.

Operating Companies: Rapid Growth at DME In FY 4Q19, Great Elm DME, Inc. (“DME”) generated $12.9 million of revenue and $2.8 million of adjusted EBITDA1 Meaningful revenue growth in major product categories Management is investing heavily in people, processes and technology to enhance DME’s scalable infrastructure, capable of supporting multiple acquisitions per year DME has continued to generate rapid year-over-year patient growth in its PAP product category New patient set-ups grew by 19.8% quarter-over-quarter We expect continued organic growth from DME Fundamental demand for respiratory products and services, combined with the company’s focus on patient service and business expansion, should lead to revenue, adjusted EBITDA and free cash flow growth in fiscal year 2020 © 2019 Great Elm Capital Group, Inc. (1) Please refer to the disclaimers on slide 2 and the Adjusted EBITDA reconciliation tables in the Appendix

Operating Companies: M&A In addition to driving organic revenue, EBITDA and volume growth, DME will seek to acquire complementary, patient-focused businesses DME is pursuing an expansion strategy that targets businesses in tangential or overlapping markets These acquisition opportunities can help to further diversify DME’s payor and product mix The respiratory-focused, durable medical equipment industry is characterized by a fragmented landscape that we believe offers a significant opportunity for additional consolidation DME’s patient-centric service model differentiates it from the competition In June 2019, a subsidiary of DME acquired the respiratory assets of Midwest Respiratory Care, Inc. (“MRC”) for approximately $6.3 million or 4.6x MRC’s EBITDA less capital expenditures for the twelve months ended April 30, 2019 The acquired assets represent approximately $3.5 million of TTM revenue and $1.4 million of TTM unleveraged free cash flow DME also seeks to explore complementary product lines and services that can leverage the company’s valuable contracts, referral sources, customer bases and infrastructure © 2019 Great Elm Capital Group, Inc.

Operating Companies: DME Segment Financial Detail © 2019 Great Elm Capital Group, Inc. 1 Please refer to the disclaimers on slide 2 and the Adjusted EBITDA reconciliation tables in the Appendix

Investment Management © 2019 Great Elm Capital Group, Inc.

© 2019 Great Elm Capital Group, Inc. Investment Management: A Scalable, High Margin Business AUM Growth High Margins Scalable Model Significant Free Cash Flow AUM GROWTH Grow GECC’s AUM through the issuance of additional debt and equity, complemented with accretive acquisitions of other BDCs, resulting in an increase in fee revenue Grow the Investment Management business by leveraging the existing team to launch additional vehicles HIGH MARGINS Given the largely fixed cost nature of the Investment Management business, we expect adjusted EBITDA margins to increase as our AUM increases and the business scales SCALABLE MODEL Investment team and infrastructure in place to support substantial growth in AUM and new investment vehicles SIGNIFICANT FREE CASH FLOW Growth in AUM in the Investment Management business coupled with its high margins and scalable business model could result in significant operating leverage and, thus, the potential for growth in adjusted EBITDA and free cash flow

© 2019 Great Elm Capital Group, Inc. Investment Management: Management Fee Growth

Investment Management: Segment Financial Detail © 2019 Great Elm Capital Group, Inc. 1 Please refer to the disclaimers on slide 2 and the Adjusted EBITDA reconciliation tables in the Appendix Near-Term Drivers of Incremental Free Cash Flow: We believe GECC will continue to grow its investment portfolio, including via incremental capital raises, which will drive incremental management fee revenue The Full Circle consulting agreement terminates on November 3, 2019. The FY19 expense associated with this agreement was $763 thousand

Real Estate © 2019 Great Elm Capital Group, Inc.

© 2019 Great Elm Capital Group, Inc. Real Estate: Overview We believe we are uniquely positioned to be a preferred partner to a sub-set of real estate investors because of our ability to absorb phantom income We view Credit Tenant Lease financings to high quality tenants as an attractive business for GEC for the following reasons: Limited Equity Capital Deployed High Level of Non-Recourse Leverage Monetization of Significant NOLs

Real Estate: Fort Myers – Organic Equity Growth © 2019 Great Elm Capital Group, Inc. Debt and Equity Values ($ in Millions) Multiple of Invested Capital Assuming a constant property value of $61.2 million, the chart at the right depicts the growth in GEC’s equity value as cash flows from the rental stream are utilized to amortize debt over the lease term As you can see, GEC builds significant equity value1 over time without any additional capital deployment 1 Equity value is equal to the property value at acquisition minus the face value of the debt on a given date.

Real Estate: Segment Financial Detail © 2019 Great Elm Capital Group, Inc. 1 Please refer to the disclaimers on slide 2 and the Adjusted EBITDA reconciliation tables in the Appendix.

General Corporate © 2019 Great Elm Capital Group, Inc.

General Corporate: Segment Financial Detail © 2019 Great Elm Capital Group, Inc. 1 Please refer to the disclaimers on slide 2 and the Adjusted EBITDA reconciliation tables in the Appendix

© 2019 Great Elm Capital Group, Inc. Financial Review

Financial Review: 4Q19 Consolidating Balance Sheets (Unaudited) © 2019 Great Elm Capital Group, Inc. Durable Medical Equipment Investment Management Real Estate General Corporate Eliminations Consolidated ASSETS Cash and cash equivalents, including restricted cash $1,435 $288 $719 $10,388 $0 $12,830 10K Inventories 1,336 0 0 0 0 1,336 10K Accounts receivable 8,876 1,214 0 163 0 10,253 10K Investments at fair value 0 0 0 17,110 0 17,110 10K Other current assets 593 143 43 92 0 871 10K Intercompany Receivable / Investment in Subsidiary 0 0 0 40,780 ,-40,780 0 Real estate assets, net 0 0 54,411 0 0 54,411 10K Property and equipment, net 10,463 42 0 2 0 10,507 10K Identifiable intangible assets, net 9,296 2,910 5,370 0 0 17,576 10K Goodwill 50,398 0 0 0 0 50,398 10K Right of use asset, net 4,902 1,337 0 0 0 6,239 10K Other assets, net 160 83 771 182 0 1,196 10K Total assets $87,459 $6,017 $61,314 $68,717 $,-40,780 $,182,727 10K LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Accounts payable & accrued expenses $6,893 $894 $497 $825 $0 $9,109 10K Lease liabilities 5,073 1,460 0 0 0 6,533 10K Related party payables 1,940 0 0 0 0 1,940 10K Long term debt 7,364 0 56,430 0 0 63,794 10K ΣB= 0 10Q Related party notes payable 27,220 3,148 0 0 0 30,368 10K Equipment financing 1,475 0 0 0 0 1,475 10K Intercompany Payable 29,552 8,264 2,964 ,-40,780 0 Other liabilities 0 0 478 35 0 513 10K Total liabilities 79,517 13,766 60,369 860 ,-40,780 ,113,732 10K Total stockholders' equity and contingently redeemable NCI 7,942 -7,749 945 67,857 68,995 10K Total liabilities and stockholders' equity $87,459 $6,017 $61,314 $68,717 $,-40,780 $,182,727 $0 $0 $0 $0 $0 $0

Financial Review: FY19 Consolidating Income Statement (Unaudited) © 2019 Great Elm Capital Group, Inc. 1 Please refer to the Appendix for the Adjusted EBITDA reconciliation tables and disclaimers on slide 2. Durable Medical Equipment Investment Management Real Estate General Corporate Eliminations Consolidated Total revenue $41,880 $3,841 $5,459 $123 $-,123 $51,180 10K Operating costs and expenses: Cost of revenue ,-17,261 0 0 0 0 ,-17,261 10K Depreciation and amortization -1,323 -,631 -1,729 0 0 -3,683 10K Selling, general and administrative ,-20,811 -4,025 -,884 -8,943 123 ,-34,540 10K ΣA= 0 10Q Total operating costs and expenses ,-39,395 -4,656 -2,613 -8,943 123 ,-55,484 10K Operating income (loss) 2,485 -,815 2,846 -8,820 0 -4,304 10K Dividends and interest income 717 0 0 1,714 0 2,431 10K Unrealized gain (loss) on investment in GECC -,894 0 0 -,168 0 -1,062 10K Interest expense, net -3,415 -,180 -2,655 0 0 -6,250 10K Other income (expense), net 0 0 0 136 0 136 10K Income (loss) from continuing operations, before income taxes -1,107 -,995 191 -7,138 0 -9,049 10K Benefit from income taxes - - - 2,182 0 2,182 10K Income / (loss) from continuing operations -1,107 -,995 191 -4,956 0 -6,867 10K Discontinued operations: Income (loss) from discontinued operations, net of tax 0 0 0 3,736 0 3,736 10K Net income (loss) from discontinued operations, net of tax 0 0 0 3,736 0 3,736 10K Net income (loss), net of tax $-1,107 $-,995 $191 $-1,220 $0 -3,131 10K Adjusted EBITDA1 $10,370 $3,176 $4,575 $-6,102 $0 $12,019 Levered free cash flow $6,174 $127 $0 $-4,605 $0 $1,696

Summary © 2019 Great Elm Capital Group, Inc.

© 2019 Great Elm Capital Group, Inc. Summary: Drivers of Shareholder Value Seek to enhance the value of our existing property through property improvement and lease modification Operating Companies Real Estate Investment Management Focus on growing Great Elm DME, Inc. both organically and via an expansion strategy that targets existing and adjacent markets Continue to strengthen Great Elm DME, Inc.’s scalable infrastructure, investing in people, processes and technology to support multiple acquisitions per year Focus on driving asset growth in GECC and raising capital for SMAs / other investment vehicles Leverage the existing team and infrastructure to generate incremental free cash flow

Q&A © 2019 Great Elm Capital Group, Inc.

Appendix © 2019 Great Elm Capital Group, Inc.

Appendix: Non-GAAP Reconciliation © 2019 Great Elm Capital Group, Inc.

Appendix: Non-GAAP Reconciliation © 2019 Great Elm Capital Group, Inc.

Appendix: Non-GAAP Reconciliation © 2019 Great Elm Capital Group, Inc.

Appendix: Non-GAAP Reconciliation © 2019 Great Elm Capital Group, Inc.

Appendix: Non-GAAP Reconciliation © 2019 Great Elm Capital Group, Inc. (1)Our durable medical equipment business began in September 2018 and there was no related activity prior to that date. (2)General Corporate includes net income (loss) attributable to discontinued operations. (3)Unrecognized incentive fees earned include amounts earned under investment management agreements which are not recognized under US GAAP. Represents approximately $0.5 million of aggregate adjustments which negatively impact adjusted EBITDA by the same amount for the period beginning with the acquisition of DME on September 7, 2018 and ending March 31, 2019. There is no material impact on the US GAAP numbers reported for this period. Acquisition and integration related costs include transaction costs, costs to integrate acquired businesses and changes in the fair value of the contingent consideration liability since the initial valuation at the acquisition date. Broken deal expenses include non-recurring expenses incurred in relation to transactions that were not consummated. Our real estate business began in March 2018 and there was no related activity prior to that date.

Appendix: Contact Information Investor Relations 800 South Street, Suite 230 Waltham, MA 02453 Phone: +1 (617) 375-3006 investorrelations@greatelmcap.com © 2019 Great Elm Capital Group, Inc.