GECCO — Great Elm Capital Corp. 5.875% Notes due 2026

Summary of Great Elm Capital Corp. Q3 2025 Earnings Call

1. Key Financial Results and Metrics:

• Net Investment Income (NII): Reported at $2.4 million or $0.20 per share, a significant decrease from $5.9 million or $0.51 per share in Q2 2025.
• Net Asset Value (NAV): Declined to $10.01 per share from $12.10 in the previous quarter, primarily due to losses from First Brands.
• Total Debt: Approximately $205 million, with no outstanding balance on the $50 million revolver.
• Cash Position: Approximately $25 million in cash and money market securities, with $50 million available under the revolver.
• Dividend: A cash distribution of $0.37 per share for Q4 2025 was approved, equating to a 14.8% annualized yield on NAV.

2. Strategic Updates and Business Highlights:

• Successfully raised significant equity at NAV and doubled the size of the revolver while reducing its interest rate by 50 basis points.
• Notable success with Nice-Pak, generating a 38% IRR over a three-year holding period.
• Focus on increasing allocation to first lien senior secured investments to enhance portfolio quality.
• Great Elm Specialty Finance (GESF) reported a strong quarter, increasing its distribution to GECC to approximately $450,000 from $120,000 in the previous quarter.

3. Forward Guidance and Outlook:

• Anticipated rebound in NII in Q4 2025 due to increased CLO distributions and normalized interest expenses.
• Plans to harvest over $20 million from non-yielding assets to reinvest into cash-generating opportunities.
• Management remains optimistic about the future, emphasizing a strong capital position and focus on risk management and portfolio diversification.

4. Bad News, Challenges, or Points of Concern:

• Significant negative impact on NAV due to First Brands’ bankruptcy, which adversely affected NAV by approximately $16.5 million.
• NII decline attributed to reduced distributions from CLO JV and a lack of dividends from an insurance-related investment.
• Increased share count from capital-raising efforts has led to short-term cash drag impacts, modestly offsetting NII growth.

5. Notable Q&A Insights:

• Management indicated that the $20 million expected to be harvested includes distributions from CoreWeave and other non-yielding assets.
• The investment pipeline remains robust, with a focus on secured income-generating opportunities, despite tight spreads in public markets.
• The $4.3 million received from CLO distributions in Q4 is expected to be close to the total for the quarter.

Overall, while GECC faced challenges in Q3 2025 primarily due to the First Brands situation, the company is well-capitalized and positioned to capitalize on future investment opportunities. The management remains focused on rebuilding NAV and generating sustainable returns for shareholders.