PALM BEACH GARDENS, Fla., Feb. 26, 2024 (GLOBE NEWSWIRE) --  Great Elm Capital Corp. (the "Company" or "GECC"), (NASDAQ:GECC), a business development company, today announced it will release its financial results for the fourth quarter and full year ended December 31, 2023 prior to the opening of the stock market on Thursday, February 29, 2024, and discuss these results in a conference call at 8:30 a.m. ET. Date/Time:Thursday, February 29, 2024 – 8:30 a.m. ET   Participant Dial-In Numbers: (United States):( ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 814-01211 Great Elm Capital Corp. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) (I.R.S. Emp ...

Financial Data and Key Metrics Changes - In Q2 2023, the company generated net investment income (NII) of $3.4 million, a 19% increase from $2.8 million in Q1 2023, and nearly tripled from $1.2 million year-over-year [20][16] - The net asset value (NAV) per share increased by 3% to $12.21 as of June 30, 2023, compared to $11.88 at the end of Q1 2023 [10][21] - The company reported total debt outstanding of approximately $151 million as of June 30, 2023 [23] Business Line Data and Key Metrics Changes - The company focused on cash generation and portfolio construction, deploying approximately $23 million into new investments at average yields of approximately 15% [26] - The proportion of floating rate debt in the investment portfolio increased to 63% from 58% in the previous quarter and nearly doubled from 33% a year ago [27] - The overall yield of the portfolio improved to 13.5%, up 40 basis points from the prior quarter [28] Market Data and Key Metrics Changes - The company noted a favorable environment in healthcare lending, with expectations for Great Elm Healthcare Finance to become a major contributor to the specialty finance business [35] - There is observed dislocation and lender pullback in the asset-based lending (ABL) market due to economic uncertainty, which is creating new investment opportunities [36] Company Strategy and Development Direction - The company is focused on repositioning its portfolio to generate cash income, which has operationally paid off, as evidenced by record cash income generation [9][8] - The strategy includes increasing exposure to higher-yielding investments while maintaining a disciplined approach to capital deployment [31] - The company is exploring the launch of its own lender finance platform under Great Elm Specialty Finance [38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current macro environment and believes there will be opportunities for selective investments in the latter half of the year [32] - The company anticipates expenses to increase in Q3 2023 due to strategic initiatives, but remains well-positioned to cover its quarterly distribution [19] Other Important Information - The company has an asset coverage ratio of approximately 161.5% as of June 30, 2023, compared to 159.8% at the end of Q1 2023 [45] - The Board of Directors authorized a cash distribution of $0.35 per share for the quarter ending September 30, 2023, equating to an 11.5% annualized dividend yield [24] Q&A Session Summary - The call concluded without a formal Q&A session, as the operator indicated the end of the conference [42]

Portfolio Investment Type Mix1 August 3, 2023 ©2023 Great Elm Capital Corp. 14 0% 5% 10% 15% 20% 25% GECC's Specialty Finance Platform is led by Michael Keller as it continues to expand across the "Continuum of Lending" By adding one-stop shop / complementary loan products, we enhance our ability to hold onto profitable relationships longer, across the lending continuum 1 Excludes three non-accrual debt investments with a fair value of zero and two equity investments with a fair value of zero. 2 Weighted av ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 814-01211 Great Elm Capital Corp. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) (I.R.S. Employer ...

Great Elm Capital Corporation (NASDAQ:GECC) Q1 2023 Earnings Conference Call May 4, 2023 8:30 AM ET Company Participants Garrett Edson - Investor Relations ICR Matt Kaplan - President and Chief Executive Officer Keri Davis - Chief Financial Officer and Treasurer Michael Keller - President, Great Elm Specialty Finance Adam Kleinman - Chief Compliance Officer Operator Greetings and welcome to the Great Elm Capital Corp. First Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this c ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's unaudited consolidated financial statements are incorporated by reference and begin on page F-17 - The unaudited consolidated financial statements for the period ended March 31, 2023, are incorporated by reference, **beginning on page F-17**[8](index=8&type=chunk)[13](index=13&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=4&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The company details its Q1 2023 performance, highlighting investment income growth and portfolio expansion [Overview](index=4&type=section&id=Overview) GECC operates as a BDC investing in middle-market companies and specialty finance to generate income and appreciation - GECC's investment objective is to generate both **current income and capital appreciation** through debt and income-generating equity investments[14](index=14&type=chunk) - The company focuses on middle-market companies with enterprise values between **$100 million and $2 billion**[14](index=14&type=chunk) - A wholly-owned subsidiary, Great Elm Specialty Finance, LLC (GESF), oversees specialty finance investments[15](index=15&type=chunk) - The company is a Regulated Investment Company (RIC), requiring distribution of at least **90% of its taxable income** to stockholders[17](index=17&type-chunk) [Portfolio and Investment Activity](index=6&type=section&id=Portfolio%20and%20Investment%20Activity) The company's investment portfolio reached $226.9 million with a debt portfolio yield of 13.06% in Q1 2023 Investment Activity for Q1 2023 | Metric | Value (in thousands) | | :--- | :--- | | Acquisitions | $53,293 | | Dispositions | ($57,175) | | Weighted Average Yield (End of Period) | 13.06% | Portfolio Reconciliation for Q1 2023 | Metric | Value (in thousands) | | :--- | :--- | | Beginning Investment Portfolio, at fair value | $224,957 | | Net change in unrealized appreciation | $3,473 | | Net realized gain | $1,850 | | Ending Investment Portfolio, at fair value | $226,939 | Top 3 Portfolio Industries by Fair Value (March 31, 2023) | Industry | Fair Value (in thousands) | Percentage of Fair Value | | :--- | :--- | :--- | | Specialty Finance | $56,589 | 24.94% | | Chemicals | $26,204 | 11.55% | | Insurance | $14,591 | 6.43% | [Results of Operations](index=8&type=section&id=Results%20of%20Operations) Total investment income rose to $8.4 million in Q1 2023, driven by portfolio growth and higher interest rates Investment Income Comparison (Q1 2023 vs Q1 2022) | Income Category | Q1 2023 (in thousands) | Q1 2022 (in thousands) | | :--- | :--- | :--- | | Interest income | $6,630 | $4,041 | | Dividend income | $934 | $1,267 | | Other income | $846 | $250 | | **Total Investment Income** | **$8,410** | **$5,558** | - The increase in interest income was driven by portfolio growth and rising rates, with the average debt coupon reaching **11.8%**[38](index=38&type=chunk) Key Expense and Gain/Loss Comparison (Q1 2023 vs Q1 2022) | Metric | Q1 2023 (in thousands) | Q1 2022 (in thousands) | | :--- | :--- | :--- | | Total Expenses | $5,543 | ($497) | | Incentive fees | $710 | $0 | | Incentive fee waiver | $0 | ($4,854) | | Net Realized Gain (Loss) | $1,845 | ($19,933) | | Net change in unrealized appreciation | $3,476 | $8,870 | [Liquidity and Capital Resources](index=11&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains sufficient liquidity with $12.4 million in cash and money market funds and a 159.8% asset coverage ratio - As of March 31, 2023, the company had approximately **$1.6 million in cash** and **$10.8 million in money market fund investments**[52](index=52&type=chunk) - The company had approximately **$21.0 million in unfunded loan commitments** as of March 31, 2023[53](index=53&type=chunk) Outstanding Debt as of March 31, 2023 | Debt Instrument | Principal Outstanding (in millions) | Maturity Date | | :--- | :--- | :--- | | Revolving Credit Facility | $5.0 | May 5, 2024 | | 6.75% Notes (GECCM) | $45.6 | January 31, 2025 | | 6.50% Notes (GECCN) | $42.8 | June 30, 2024 | | 5.875% Notes (GECCO) | $57.5 | June 30, 2026 | - The company's asset coverage ratio was **159.8%**, exceeding the required minimum of 150%[67](index=67&type=chunk) [Distributions and Share Price](index=13&type=section&id=Distributions%20and%20Share%20Price) The company declared a $0.35 per share distribution for Q1 2023, with its stock trading at a discount to NAV Q1 2023 Share Price and NAV Data | Metric | Value per Share | | :--- | :--- | | NAV (as of March 31, 2023) | $11.88 | | Closing Sales Price - High | $9.75 | | Closing Sales Price - Low | $8.50 | | Discount to NAV (High Price) | (17.9)% | | Discount to NAV (Low Price) | (28.5)% | - A distribution of **$0.35 per share** was declared for the first quarter ended March 31, 2023[71](index=71&type=chunk) - The board set the Q2 2023 distribution at **$0.35 per share**, payable in cash from distributable earnings[73](index=73&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=14&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to interest rate risk, with a 100 basis point rate change impacting net income by ~$1.2 million - As of March 31, 2023, the company held debt investments with a principal of **$117.3 million at variable rates** and **$112.8 million at fixed rates**[75](index=75&type=chunk) Interest Rate Sensitivity Analysis (as of March 31, 2023) | Reference Rate Change | Annual Increase (Decrease) in Net Investment Income (in thousands) | | :--- | :--- | | +3.00% | $3,670 | | +2.00% | $2,447 | | +1.00% | $1,223 | | -1.00% | ($1,224) | | -2.00% | ($2,448) | | -3.00% | ($3,664) | [Controls and Procedures](index=15&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - Management concluded that as of March 31, 2023, the company's **disclosure controls and procedures were effective**[81](index=81&type=chunk) - **No material changes** in internal control over financial reporting occurred during the quarter[82](index=82&type=chunk) [PART II. OTHER INFORMATION](index=15&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=15&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings, including two specific lawsuits detailed in the notes - The company is a defendant in a lawsuit, *Intrepid Investments, LLC v. London Bay Capital*, related to its Speedwell Holdings investment[206](index=206&type=chunk) - The company is involved in legal proceedings with Willis Pumphrey related to a loan from its predecessor[207](index=207&type=chunk) [Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors disclosed in the company's 2022 Annual Report on Form 10-K were reported - **No material changes** in risk factors were reported for the period covered by this report[85](index=85&type=chunk) [Exhibits](index=16&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including CEO/CFO certifications and financial statements in inline XBRL format - The exhibits include **CEO and CFO certifications** (Exhibits 31.1, 31.2, 32.1) and financial data in XBRL format (Exhibit 101)[87](index=87&type=chunk) [Consolidated Financial Statements](index=18&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statements of Assets and Liabilities](index=19&type=section&id=Consolidated%20Statements%20of%20Assets%20and%20Liabilities) Total net assets were $90.3 million as of March 31, 2023, with a Net Asset Value (NAV) per share of $11.88 Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Total investments | $307,499 | $301,084 | | Total assets | $314,065 | $310,112 | | Total liabilities | $223,757 | $225,303 | | **Total net assets** | **$90,308** | **$84,809** | | **Net asset value per share** | **$11.88** | **$11.16** | [Consolidated Statements of Operations](index=20&type=section&id=Consolidated%20Statements%20of%20Operations) The company reported a net increase in net assets from operations of $8.2 million, or $1.07 per share, for Q1 2023 Statement of Operations Summary (For the three months ended March 31, 2023, in thousands) | Line Item | Amount | | :--- | :--- | | Total investment income | $8,410 | | Net expenses | $5,543 | | **Net investment income** | **$2,839** | | Net realized and unrealized gains | $5,321 | | **Net increase in net assets from operations** | **$8,160** | | **Earnings per share (basic and diluted)** | **$1.07** | [Consolidated Schedule of Investments](index=25&type=section&id=Consolidated%20Schedule%20of%20Investments) The investment portfolio's fair value was $307.5 million, primarily concentrated in U.S. specialty finance and chemicals Investment Composition as of March 31, 2023 | Investment Type | Fair Value (in thousands) | Percentage of Net Assets | | :--- | :--- | :--- | | Debt | $184,050 | 203.80% | | Equity/Other | $42,889 | 47.49% | | Short-Term Investments | $80,560 | 89.21% | | **Total** | **$307,499** | **340.50%** | - As of March 31, 2023, **24.91% of total assets were non-qualifying**, which is below the 30% regulatory limit[107](index=107&type=chunk) [Notes to the Unaudited Consolidated Financial Statements](index=47&type=section&id=Notes%20to%20the%20Unaudited%20Consolidated%20Financial%20Statements) The notes detail accounting policies, fair value measures, debt terms, and a 9.59% total return on NAV for the quarter - In March 2022, the investment manager waived **$4.9 million in accrued incentive fees**, which is not subject to recapture[164](index=164&type=chunk) Fair Value Hierarchy of Investments (March 31, 2023, in thousands) | Level | Fair Value | | :--- | :--- | | Level 1 | $87,109 | | Level 2 | $98,025 | | Level 3 | $119,149 | | Measured at NAV | $3,216 | | **Total Investments** | **$307,499** | - The company effected a **6-for-1 reverse stock split** on February 28, 2022, with all per-share data retroactively adjusted[202](index=202&type=chunk)[128](index=128&type=chunk) - As of March 31, 2023, the company had approximately **$21.0 million in unfunded loan commitments**[204](index=204&type=chunk)

Financial Data and Key Metrics Changes - In Q4 2022, the net investment income (NII) was $2.3 million or $0.30 per share, more than doubling from $1.1 million or $0.14 per share in Q3 2022 [10][15][24] - The net asset value (NAV) per share decreased to $11.16 as of December 31, 2022, down from $12.56 at the end of Q3 2022 [8][19] - The asset coverage ratio was approximately 154.5% as of December 31, 2022, compared to 165.5% as of September 30, 2022 [10] Business Line Data and Key Metrics Changes - The company deployed approximately $38 million into new investments at average yields of about 12% in Q4 2022, while monetizing about $20 million of assets at yields below 10% [7] - The average yield on the credit portfolio increased to 12.4% at year-end from 11.6% at September 30, 2022 [7] Market Data and Key Metrics Changes - The company noted a market difference in floating rate debt, which increased to 50% of the debt investment portfolio at year-end, up from 48% at the prior quarter-end [7] Company Strategy and Development Direction - The company aims to construct a high-quality diversified portfolio focused on cash-yielding investments, with a significant shift towards senior secured floating rate investments [5][15] - A strategic initiative includes scaling the specialty finance platform, with the formation of a healthcare finance platform in partnership with Berkadia [17][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about covering the new distribution level of $0.35 per share for Q1 2023, citing momentum and a growing portfolio [6][30] - The management highlighted a focus on finding investments with limited risk of permanent capital impairment and durable returns in the current market environment [23] Other Important Information - The Board of Directors authorized a cash distribution of $0.35 per share for the quarter ending March 31, 2023, equating to a 12.5% annualized dividend yield based on the December 31 NAV [25] Q&A Session Summary Question: What is the outlook for the dividend? - Management is optimistic about covering the $0.35 dividend in the upcoming quarter, indicating solid progress in transforming the company [30] Question: How is the specialty finance platform performing? - The specialty finance platform is making significant progress, with a robust pipeline of potential investments and ongoing negotiations with financing partners [21][29]

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Investment Portfolio - As of December 31, 2022, the portfolio includes significant investments in various industries, with companies representing over 5% of the fair market value[19] - Prestige Capital Finance has factored over $6 billion in transactions over its 30 years of operation, indicating strong market presence[22] - Lenders Funding has supplied several hundred million dollars in funding since its inception, showcasing its role in the asset-based lending market[21] - Great Elm Capital Management has expanded its investment allocation in specialty finance companies, aiming for attractive risk-adjusted returns[27] Management Fees - The base management fee for GECM is set at an annual rate of 1.50% of the average adjusted gross assets, payable quarterly[47] - The Income Incentive Fee is based on pre-incentive fee net investment income, which includes interest and dividend income, minus operating expenses[49] - The fixed hurdle rate for pre-incentive fee net investment income is 1.75% per quarter, equating to 7.00% annualized[51] - For the year ended December 31, 2022, the company incurred $3.2 million in base management fees and $0.6 million in income-based fees accrued during the period, excluding a waiver of $4.9 million in incentive fees earned in previous periods[62] Capital Gains Incentive Fee - The Capital Gains Incentive Fee is calculated at 20% of the positive difference between cumulative realized capital gains and cumulative realized capital losses, with no fees earned if the amount is negative[55] - The company reset the Capital Gains Incentive Fee to begin on April 1, 2022, eliminating $163.2 million of historical realized and unrealized losses from prior calculations[65] - Aggregate realized capital gains for the company are reported at $30.0 million, with no aggregate realized capital losses or unrealized capital depreciation, leading to a Capital Gains Incentive Fee of $6.0 million for the year[66] - There were no capital gains incentive fees earned by the company for the years ended December 31, 2020 and 2021, indicating a lack of realized gains during those periods[64][63] Investment Management Agreement - The Investment Management Agreement allows for termination by either party with 60 days' written notice, ensuring flexibility in management arrangements[70] - Conflicts of interest may arise if changes to the Investment Management Agreement are sought, requiring stockholder approval for material changes[71] - The Board approved the renewal of the Investment Management Agreement through September 26, 2023, considering various factors but did not identify any single factor as controlling[75] - GECM waived $4.9 million of accrued incentive fees due to poor performance under prior leadership, which was a consideration in the Board's decision[76] Financial Compliance and Requirements - The company is required to maintain a coverage ratio of total assets to total senior securities of at least 150%[80] - The company must derive at least 90% of its gross income from specified sources to qualify as a RIC under the Internal Revenue Code[92] - The company must diversify its holdings, ensuring that no more than 25% of total assets are invested in securities of any single issuer[92] - The company is permitted to issue multiple classes of indebtedness if asset coverage is at least 150% immediately after issuance[89] Taxation and Distributions - The company intends to distribute annually all or substantially all of its taxable income to avoid U.S. federal income tax on investment company taxable income and net capital gains[94] - To avoid a nondeductible 4% federal excise tax, the company must distribute at least 98% of its ordinary income and its investment company taxable income during each calendar year[96] - If the company fails to meet the Annual Distribution Requirement, all taxable income will be subject to tax at regular corporate rates, and distributions will be taxable to stockholders as ordinary dividends[98] - The company may choose to retain net capital gains for investment, which would subject it to U.S. federal income tax at regular corporate rates[95] Foreign Investments and Risks - If the company invests in foreign securities, it may be subject to withholding and other foreign taxes, which stockholders generally cannot claim as a U.S. foreign tax credit[107] - The company is required to recognize income from foreign corporations classified as controlled foreign corporations (CFCs) regardless of actual distributions received[109] - The company may face limitations on declaring and paying dividends due to loan covenants, which could jeopardize its qualification as a RIC[112] Administrative and Operational Aspects - The company has policies in place for calculating reimbursement of administrative expenses related to investment advisory and management services[68] - The Administration Agreement with GECM includes provisions for the provision of office facilities and administrative services, with costs based on the allocable portion of GECM's overhead[118] - The aggregate amount of brokerage commissions paid by the company during the three most recent fiscal years is approximately $220, with $134 paid to Imperial Capital, LLC, representing 100% of the aggregate brokerage commissions during the most recent fiscal year[124] - As of December 31, 2022, approximately $100.8 million in principal amount of the company's debt investments bore interest at variable rates, which are generally based on LIBOR, SOFR, or US Prime Rate[351] - A prolonged increase in interest rates could increase the company's gross investment income and potentially its net investment income, provided that such increases are not offset by a decrease in the spread over variable rates earned on portfolio investments[351]