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Core Viewpoint - Great Elm Capital Corp. ("GECC") has provided an update regarding its investments in First Brands Group, LLC, which recently filed for bankruptcy, detailing the financial implications and exposure related to this investment [2][3]. Investment Exposure - GECC has investments in both First Lien Term Loan and Second Lien Term Loan of First Brands, which were placed on non-accrual due to the bankruptcy filing [2]. - The direct exposure to First Brands includes approximately 0.9% across all CLOs in which GECC is invested as of June 30, 2025 [3]. First Lien Loan Details - As of June 30, 2025, GECC held a principal amount of $9.3 million in the First Lien Loan, with a fair market value of $8.8 million, representing 94.3% of the principal amount [3]. - In Q3 2025, GECC sold $4.5 million of its First Lien Loan for $4.4 million, equating to 97.9% of the principal amount [3]. - The remaining $4.8 million principal amount of the First Lien Loan is estimated to have a fair market value of approximately $1.7 million as of September 30, 2025, or 35.2% of the principal amount, leading to an expected adverse impact of about $2.8 million on net asset value [3]. Second Lien Loan Details - GECC held a principal amount of $16.2 million in the Second Lien Loan, with a fair market value of $14.5 million, or 89.5% of the principal amount, as of June 30, 2025 [3]. - The fair market value of the Second Lien Loan is expected to drop to approximately $0.9 million, or 5.5% of the principal value, resulting in an anticipated adverse impact of about $13.6 million on net asset value [3]. Net Asset Value Impact - The total direct net asset value impact from First Brands is estimated to be approximately $16.5 million for the quarter ended September 30, 2025 [3]. - GECC anticipates that the change in values of its directly held First Brands investments will adversely affect its net asset value by approximately $1.15-$1.25 per share [3]. Capital Activity Update - In August 2025, GECC issued approximately 1.3 million shares for net proceeds of $14 million and utilized its ATM program to issue an additional 1.1 million shares for approximately $13 million, totaling about $27 million in net proceeds for Q3 2025 [6]. - GECC issued $50 million principal amount of 7.75% Notes due December 31, 2030, and redeemed $40 million principal amount of 8.75% Notes, saving approximately $0.4 million in cash interest expense annually [7]. Financial Position - As of September 30, 2025, GECC estimates its debt-to-equity ratio to be approximately 1.5x, consistent with recent operating history [8]. - The company retains over $20 million of deployable cash for future investments and has $50 million available under its revolving line of credit [8].

Financial Performance - Total Investment Income (TII) increased by 367% from $91 million in 4Q 2024 to a record $125 million in 1Q 2025 [6, 12] - Net Investment Income (NII) increased from $21 million or $020 per share in 4Q 2024 to $46 million or $040 per share in 1Q 2025 [6, 14] - Net assets decreased from $1361 million or $1179 per share in 4Q 2024 to $1323 million or $1146 per share in 1Q 2025 [6, 17] Portfolio Composition - The fair value of the total investment portfolio was $3419 million as of March 31, 2025 [11, 29] - Debt investments comprised 710% of the portfolio with a fair value of $2429 million and a weighted average current yield of 123% [23] - CLO investments accounted for 153% of the portfolio with a fair value of $522 million [23, 30] Distribution - The Board approved a quarterly distribution of $037 per share for the quarter ending June 30, 2025 [6, 7] - This equates to a 147% annualized yield on the May 2, 2025 closing market price of $1009 and a 129% annualized yield on the March 31, 2025 NAV of $1146 per share [6, 7] CLO Joint Venture - GECC deployed approximately $48 million into the CLO JV and holds a 7125% interest [47] - The CLO JV generated a 29% IRR since inception in April 2024 [50] - The CLOs and Warehouse have exposure to approximately $11 billion of underlying assets [50]