Great Elm Capital Corp.

Previous wording

The following is a summary of our investment activity for the year ended December 31, 2024 and the three months ended March 31, 2025:

Current wording

The following is a summary of our investment activity for the year ended December 31, 2024 and the six months ended June 30, 2025:

Previous wording

The following is a reconciliation of the investment portfolio for the three months ended March 31, 2025 and the year ended December 31, 2024. Investments in short-term securities, including U.S. Treasury Bills and money market mutual funds, are excluded from the table below.

Current wording

The following is a reconciliation of the investment portfolio for the six months ended June 30, 2025 and the year ended December 31, 2024. Investments in short-term securities, including U.S. Treasury Bills and money market mutual funds, are excluded from the table below.

Previous wording

Interest income increased for the three months ended March 31, 2025 as compared to the corresponding period in the prior year primarily due to an increased debt investment portfolio size. As of March 31, 2025, the debt investment portfolio had an average coupon rate of 11.7% on approximately $256.2 million of principal as compared to 12.6% on approximately $218.0 million of principal as of March 31, 2024, excluding positions on non-accrual in each period.

Current wording

Interest income increased for the three and six months ended June 30, 2025 as compared to the corresponding period in the prior year primarily due to an increased debt investment portfolio size, offset to some extent by lower average coupon rate. As of June 30, 2025, the debt investment portfolio had an average coupon rate of 11.7% on approximately $232.6 million of principal as compared to 12.8% on approximately $216.8 million of principal as of June 30, 2024, excluding positions on non-accrual in each period.

Previous wording

The increase in dividend income for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 is primarily due to the investment in CLO JV which was formed in the current year and pays periodic dividends to its equity-holders.

Current wording

The increase in dividend income for the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024 is primarily attributable to the investments in Trouvaille Re Ltd. and in the CLO JV, which was formed in 2024 and pays periodic dividends to its equity-holders.

Previous wording

Other commitment fees and income increased for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 is primarily attributable to non-refundable carry and amendment fees on new and amended debt positions.

Current wording

Other commitment fees decreased for the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024 due to termination of revolver commitments and associated commitment fees. Other income fees increased for the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024 primarily due to non-refundable carry fees and amendment fees on new and amended debt positions.

Previous wording

Management fees increased for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 due to increases in the underlying management fee assets which primarily consists of the fair value of the portfolio of investments.

Current wording

Management fees increased for the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024 due to growth of the portfolio and increases in fair values.

Previous wording

Incentive fees increased for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 due to higher pre-incentive net investment income over the same period.

Current wording

Incentive fees increased for the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024 due to higher pre-incentive net investment income over the same period.

Previous wording

Professional services costs increased for the three months ended March 31, 2025 as compared to the corresponding periods in the prior year, primarily due to general rate increases for professional services including valuation and accounting costs.

Current wording

Professional services costs increased for the three and six months ended June 30, 2025 as compared to the corresponding periods in the prior year, primarily due to general rate increases for professional services including valuation, legal and accounting costs.

Previous wording

Interest expense increased for the three months ended March 31, 2025 as compared to the corresponding periods in the prior year primarily due to the issuance of $56.5 million in aggregate principal amount of the 8.50% Notes due 2029 (the “GECCI Notes”) in April and July 2024, and the issuance of $36.0 million in aggregate principal amount of the 8.125% Notes due 2029 (the “GECCH Notes”) in September 2024, offset with the redemption of $45.6 million in aggregate principal amount of the 6.75% Notes due in 2025 (the "GECCM Notes") in October 2024.

Current wording

Interest expense increased for the three and six months ended June 30, 2025 as compared to the corresponding periods in the prior year primarily due to the issuance of $56.5 million in aggregate principal amount of the 8.50% Notes due 2029 (the “GECCI Notes”) in April and July 2024, and the issuance of $36.0 million in aggregate principal amount of the 8.125% Notes due 2029 (the “GECCH Notes”) in September 2024, offset with the redemption of $45.6 million in aggregate principal amount of the 6.75% Notes due in 2025 (the "GECCM Notes") in October 2024.

Previous wording

Realized gain for the three months ended March 31, 2025 includes $0.2 million in gains from the realization of our investment in W&T Offshore Inc. secured bonds. Realized losses for the three months ended March 31, 2025 includes $0.1 million in loss from the realization of our investment in Dynata, LLC ("Dynata", formerly known as Research Now Group, Inc.) common equity.

Current wording

Net realized gain for the three and six months ended June 30, 2025 includes $0.2 million in gains from the realization of our investment in Lummus Technology Holdings unsecured bonds and $0.1 million in gains from the realization of our investment in Harvey Gulf term loan. Net realized gain for the six months ended June 30, 2025 also includes $0.2 million in gains from the realization of our investment in W&T Offshore Inc. secured bonds.

Previous wording

Realized gain for the three months ended March 31, 2024 includes $0.9 million in gains from the partial sale of our investment in Blackstone Secured Lending common equity and $0.8 million in gains from the partial sale of our investment in American Coastal Insurance Corp. Realized losses for the three months ended March 31, 2024 resulted from the partial sale of our investment in Eagle Point Credit Company common equity.

Current wording

For the three months ended June 30, 2024, net realized losses were primarily driven by the realization of our investment in the Phillips Pet Food term loan of $0.6 million. During the six months ended June 30, 2024, net realized gains includes $0.9 million in gains from the partial sale of our investment in Blackstone Secured Lending common equity and $0.8 million in gains from the partial sale of our investment in American Coastal Insurance Corp.

Previous wording

For the three months ended March 31, 2025, unrealized appreciation was primarily driven by an increase in fair value of our investment in Trouvaille Re preference shares of approximately $0.8 million and in our investment in Dynata, LLC common equity of approximately $0.8 million. Unrealized depreciation for the three months ended March 31, 2025 was primarily driven by a decrease in fair value of our investment in CLO JV common equity of approximately $1.9 million and in our investment in CW Opportunity 2, LP of approximately $1.1 million.

Current wording

For the three months ended June 30, 2025, unrealized appreciation was primarily driven by an increase in fair value of our investment in CW Opportunity 2, LP of approximately $13.7 million. Unrealized depreciation for the three months ended June 30, 2025 was primarily driven by a decrease in fair value of approximately $2.2 million in the CLO JV common equity, $1.6 million in Trouvaille Re preference shares, and $1.5 million in Maverick Gaming, LLC term loans.

Previous wording

For the three months ended March 31, 2024, unrealized appreciation was primarily due to increases in fair value on our investments in NICE-PAK Products, Inc. warrants and Greenfire Resources Ltd. first lien secured bond of $0.8 million and $0.5 million respectively. Unrealized depreciation for the three months ended March 31, 2024 was primarily due to decreases in fair value on our investments in Dynata of $3.9 million, GESF common equity of $1.6 million, and PFS Holdings Corp. of $0.9 million.

Current wording

For the three months ended June 30, 2024, unrealized appreciation was due to an increase in fair value on our investment in NICE-PAK Products, Inc. warrants of $0.9 million and due to the reversal of approximately $0.8 million in previously recognized unrealized depreciation on our investment in Phillips Pet Food term loan which was reclassified to realized loss upon the sale of our position. Unrealized depreciation for the three months ended June 30, 2024 was primarily due to decreases in fair value on our investments in New Wilkie Energy Pty Limited (“New Wilkie Energy”) of $2.0 million, Dynata of $1.7 million, and GESF common equity of $0.8 million.

Previous wording

As of March 31, 2025, we had approximately $1.3 million of cash and cash equivalents. As of March 31, 2025, we had investments in 58 debt instruments across 48 companies, totaling approximately $242.9 million at fair value and 18 equity investments in 14 companies, with an aggregate fair value of approximately $99.0 million.

Current wording

As of June 30, 2025, we had approximately $1.0 million of cash and cash equivalents and approximately $3.4 million of money market fund investments at fair value. As of June 30, 2025, we had investments in 56 debt instruments across 44 companies, totaling approximately $221.2 million at fair value and 18 equity investments in 14 companies, with an aggregate fair value of approximately $113.8 million.

Previous wording

In the normal course of business, we may enter into investment agreements under which we commit to make an investment in a portfolio company at some future date or over a specified period of time. As of March 31, 2025, we had approximately $3.5 million in unfunded commitments to provide financing to certain of our portfolio companies. We had sufficient availability on our Revolver as well as cash and other liquid assets on our March 31, 2025 balance sheet to satisfy the unfunded commitments.

Current wording

In the normal course of business, we may enter into investment agreements under which we commit to make an investment in a portfolio company at some future date or over a specified period of time. As of June 30, 2025, we had approximately $1.8 million in unfunded commitments to provide financing to certain of our portfolio companies. We had sufficient availability on our Revolver as well as cash and other liquid assets on our June 30, 2025 balance sheet to satisfy the unfunded commitments.

Previous wording

For the three months ended March 31, 2025, net cash used for operating activities was approximately $5.9 million, reflecting the purchases and repayments of investments offset by net investment income, including non-cash income related to accretion of discount and PIK income and proceeds from sales of investments and principal payments received. Net cash provided by purchases and proceeds from sales of investments was approximately $18.2 million, reflecting payments for additional investments of $47.8 million, offset by proceeds from principal repayments and sales of $29.6 million.

Current wording

For the six months ended June 30, 2025, net cash used for operating activities was approximately $3.8 million, reflecting the purchases and repayments of investments offset by net investment income, including non-cash income related to accretion of discount and PIK income and proceeds from sales of investments and principal payments received. Net cash provided by purchases and proceeds from sales of investments was approximately $(53.9) million, reflecting payments for additional investments of $28.2 million, offset by proceeds from principal repayments and sales of $82.1 million.

Previous wording

For the three months ended March 31, 2025, net cash provided by financing activities was $7.1 million, consisting of $12.0 million in net borrowings on the revolving credit facility, less $4.8 million in distributions to stockholders.

Current wording

For the six months ended June 30, 2025, net cash used by financing activities was $2.9 million, consisting of $6.0 million in net borrowings on the revolving credit facility, less $9.1 million in distributions to stockholders.

Previous wording

We have certain contracts under which we have material future commitments. Under the Investment Management Agreement, GECM provides investment advisory services to us. For providing these services, we pay GECM a fee, consisting of two components: (1) a base management fee based on the average value of our total assets and (2) an incentive fee based on our performance. On August 1, 2022, our stockholders approved an amendment to the Investment Management Agreement to eliminate $163.2 million of realized and unrealized losses incurred prior to April 1, 2022 from the calculation of future capital gains incentive fees and reset the capital gain incentive fee and mandatory deferral periods in Sections 4.4 and 4.5, respectively, of the Investment Management Agreement to begin on April 1, 2022.

Current wording

We have certain contracts under which we have material future commitments. Under the Investment Management Agreement, GECM provides investment advisory services to us. For providing these services, we pay GECM a fee, consisting of two components: (1) a base management fee based on the average value of our total assets and (2) an incentive fee based on our performance.

Previous wording

On May 5, 2021, we entered into a Loan, Guarantee and Security Agreement (the “Loan Agreement”) with City National Bank (“CNB”). The Loan Agreement provides for a senior secured revolving line of credit (the “Revolver”) of up to $25 million (subject to a borrowing base as defined in the Loan Agreement). We may request to increase the revolving line in an aggregate amount not to exceed $25 million, which increase is subject to the sole discretion of CNB. In November 2023, the Company entered into an amendment to the Loan Agreement extending the maturity date of the revolving line to May 5, 2027. Borrowings under the revolving line currently bear interest at a rate equal to (i) the Secured Overnight Financing Rate (“SOFR”) plus 3.00% (reduced from SOFR plus 3.50% prior to the November 2023 amendment), (ii) a base rate plus 2.00% or (iii) a combination thereof, as determined by us. Additionally, we are required to pay a commitment fee of 0.50% per annum on any unused portion of the revolving line of credit. As of March 31, 2025, there were $12 million in borrowings outstanding under the revolving line.

Current wording

On May 5, 2021, we entered into a Loan, Guarantee and Security Agreement (the “Loan Agreement”) with City National Bank (“CNB”). The Loan Agreement provides for a senior secured revolving line of credit (the “Revolver”) of up to $25 million (subject to a borrowing base as defined in the Loan Agreement). We may request to increase the revolving line in an aggregate amount not to exceed $25 million, which increase is subject to the sole discretion of CNB. In November 2023, the Company entered into an amendment to the Loan Agreement extending the maturity date of the revolving line to May 5, 2027. Borrowings under the revolving line currently bear interest at a rate equal to (i) the Secured Overnight Financing Rate (“SOFR”) plus 3.00% (reduced from SOFR plus 3.50% prior to the November 2023 amendment), (ii) a base rate plus 2.00% or (iii) a combination thereof, as determined by us. Additionally, we are required to pay a commitment fee of 0.50% per annum on any unused portion of the revolving line of credit. As of June 30, 2025, there were $6 million in borrowings outstanding under the revolving line.

Previous wording

As of March 31, 2025, our asset coverage ratio was approximately 163.8%. Under the Investment Company Act, we are subject to a minimum asset coverage ratio of 150%.

Current wording

As of June 30, 2025, our asset coverage ratio was approximately 169.5%. Under the Investment Company Act, we are subject to a minimum asset coverage ratio of 150%.

Previous wording

The last reported closing price for our common stock on April 30, 2025 was$10.13 per share. As of April 30, 2025, we had 10 record holders of our common stock.

Current wording

The last reported closing price for our common stock on July 31, 2025 was$10.99 per share. As of July 31, 2025, we had 10 record holders of our common stock.

Previous wording

We are also subject to financial risks, including changes in market interest rates. As of March 31, 2025, approximately $186.1 million in principal amount of our debt investments bore interest at variable rates, which are generally based on SOFR or US prime rate, and many of which are subject to certain floors. Recently, interest rates have risen and a prolonged increase in interest rates will increase our gross investment income and could result in an increase in our net investment income if such increases in interest rates are not offset by a corresponding decrease in the spread over variable rates that we earn on any portfolio investments or an increase in our operating expenses. See “Item 3. Quantitative and Qualitative Disclosures About Market Risk” for an analysis of the impact of hypothetical base rate changes in interest rates.

Current wording

We are also subject to financial risks, including changes in market interest rates. As of June 30, 2025, approximately $166.4 million in principal amount of our debt investments bore interest at variable rates, which are generally based on SOFR or US prime rate, and many of which are subject to certain floors. Recently, interest rates have risen and a prolonged increase in interest rates will increase our gross investment income and could result in an increase in our net investment income if such increases in interest rates are not offset by a corresponding decrease in the spread over variable rates that we earn on any portfolio investments or an increase in our operating expenses. See “Item 3. Quantitative and Qualitative Disclosures About Market Risk” for an analysis of the impact of hypothetical base rate changes in interest rates.