Great Elm Capital Corp.

Previous wording

Our Board approves in good faith the valuation of our portfolio as of the end of each quarter. Due to the inherent uncertainty and subjectivity of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may differ significantly from the values that would have been used had a readily available market value existed for such investments and may differ materially from the values that we may ultimately realize. In addition, changes in the market environment and other events may impact the market quotations used to value some of our investments.

Current wording

GECM, as the Board's valuation designee approves in good faith the valuation of our portfolio as of the end of each quarter. Due to the inherent uncertainty and subjectivity of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may differ significantly from the values that would have been used had a readily available market value existed for such investments and may differ materially from the values that we may ultimately realize. In addition, changes in the market environment and other events may impact the market quotations used to value some of our investments.

Previous 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:

Current wording

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

Previous 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.

Current wording

The following is a reconciliation of the investment portfolio for the nine months ended September 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 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.

Current wording

Interest income decreased for the three months ended September 30, 2025 as compared to the corresponding periods in the prior year primarily due to a lower average coupon rate across the portfolio in combination with decreased debt investment portfolio size. As of September 30, 2025, the debt investment portfolio had an average coupon rate of 10.8% on approximately $224.1 million of principal as compared to 12.3% on approximately $241.2 million of principal as of September 30, 2024, excluding positions on non-accrual in each period. Interest income for the nine months ended September 30, 2025 was consistent with the interest income for the nine months ended September 30, 2024. Interest income includes PIK interest which is reported in the statements of operations. The total PIK interest earned remained consistent for the three and nine months ended September 30, 2025 as compared to the corresponding periods in the prior year.

Previous 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.

Current wording

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

Previous 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.

Current wording

Management fees increased for the three and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024 due to increased management fee assets from growth of the portfolio in the current year periods as compared to the corresponding prior year periods.

Previous 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.

Current wording

Professional services costs increased for the three and nine months ended September 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 along with additional services related to growth in the portfolio and certain one-time costs.

Previous 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.

Current wording

Interest expense increased for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 due to the issuance of $50.0 million in aggregate principal amount of 7.75% notes due 2030 (the "GECCG Notes") in early September 2025 and the redemption of the $40.0 million in aggregate principal amount of 8.75% notes due 2028 (the “GECCZ Notes”) on September 30, 2025 which resulted in double the amount of accrued interest payable for the month of September along with approximately $0.9 million in deferred offering costs on the GECCZ Notes which was fully expensed upon redemption. For the nine months ended September 30, 2025, interest expense increased as compared to the nine months ended September 30, 2024 due to the current quarter activity along with increased average debt outstanding in connection with 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

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.

Current wording

Realized gain for the three months ended September 30, 2024 includes $0.3 million in gains from the realization of our investment in Florida Marine, LLC term loan. Realized losses for three months ended September 30, 2024 includes $0.2 million in loss from the realization of our investment in Eagle Point Credit Company common equity.

Previous 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.

Current wording

Realized gain for the nine months ended September 30, 2024 includes $0.8 million in gains from the partial sale of our investment in American Coastal Insurance Corp unsecured bond and $0.8 million in gains from the partial sale of our investment in Blackstone Secured Lending Fund common equity. Realized losses for the nine months ended September 30, 2024 includes $0.6 million on the realization of our investment in PFS Holdings Corp. term loan and $0.3 million in loss from the realization of our investment in Eagle Point Credit Company common equity.

Previous 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.

Current wording

For the three months ended September 30, 2024, unrealized appreciation was primarily driven by an increase in fair value of our investment in CW Opportunity 2 LP of approximately $1.1 million and in our investment in Nice-Pak warrants of approximately $0.5 million. Unrealized depreciation for the three months ended September 30, 2024 was primarily driven by a decrease in fair value of our investment in GESF common stock of approximately $1.1 million and in our investment in Blue Ribbon, LLC term loan of approximately $0.4 million.

Previous 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.

Current wording

As of September 30, 2025, we had approximately $88.7 million of short term investments including money market fund investments and treasury bills. As of September 30, 2025, we had investments in 66 debt instruments across 49 companies, totaling approximately $220.7 million at fair value and 19 equity investments in 15 companies, with an aggregate fair value of approximately $104.4 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 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.

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 September 30, 2025, we had approximately $46,000 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 September 30, 2025 balance sheet to satisfy the unfunded commitments.

Previous 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.

Current wording

For the nine months ended September 30, 2025, net cash used for operating activities was approximately $21.4 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 $13.8 million, reflecting proceeds from principal repayments and sales of $132.5 million, offset payments for additional investments of $146.3 million.

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 June 30, 2025, there were $6 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. On August 13, 2025, the Company amended the Loan Agreement to increase the commitment of the revolving line of credit to up to $50 million (subject to a borrowing base as defined in the Loan Agreement). The amendment also allows the Company to request an increase of the Revolving Facility in an aggregate amount not to exceed $40 million (up to a revolving line of $90 million), which increase is subject to the sole discretion of CNB and updates the maturity date of the revolving line to the earlier of (i) May 5, 2027 and (ii) May 31, 2026 if the Company’s 5.875% notes due 2026 have not been refinanced prior to such date. In addition, the Amendment provides that borrowings under the Revolving Facility shall bear interest at a rate equal to (a) SOFR plus 2.50% or (b) a base rate plus 1.50%. The Amendment also amended the financial covenant of minimum net assets requirement to be of not less than $80 million. As of September 30, 2025, there were no borrowings outstanding under the revolving line.

Previous wording

Borrowings under the revolving line are secured by a first priority security interest in substantially all of our assets, subject to certain specified exceptions. We have made customary representations and warranties and are required to comply with various affirmative and negative covenants, reporting requirements and other customary requirements for similar loan agreements. In addition, the Loan Agreement contains financial covenants requiring (i) net assets of not less than $65 million, (ii) asset coverage equal to or greater than 150% and (iii) bank asset coverage equal to or greater than 300%, in each case tested as of the last day of each fiscal quarter of the Company. Borrowings are also subject to the leverage restrictions contained in the Investment Company Act of 1940, as amended (the “Investment Company Act”).

Current wording

Borrowings under the revolving line are secured by a first priority security interest in substantially all of our assets, subject to certain specified exceptions. We have made customary representations and warranties and are required to comply with various affirmative and negative covenants, reporting requirements and other customary requirements for similar loan agreements. In addition, the Loan Agreement contains financial covenants requiring (i) net assets of not less than $80 million, (ii) asset coverage equal to or greater than 150% and (iii) bank asset coverage equal to or greater than 300%, in each case tested as of the last day of each fiscal quarter of the Company. Borrowings are also subject to the leverage restrictions contained in the Investment Company Act of 1940, as amended (the “Investment Company Act”).

Previous wording

On June 23, 2021, we issued $50.0 million in aggregate principal amount of 5.875% notes due 2026 (the “GECCO Notes”). On July 9, 2021, we issued an additional $7.5 million of the GECCO Notes upon full exercise of the underwriters’ over-allotment option. The aggregate principal balance of the GECCO Notes outstanding as of June 30, 2025 is$57.5 million.

Current wording

On June 23, 2021, we issued $50.0 million in aggregate principal amount of 5.875% notes due 2026 (the “GECCO Notes”). On July 9, 2021, we issued an additional $7.5 million of the GECCO Notes upon full exercise of the underwriters’ over-allotment option. The aggregate principal balance of the GECCO Notes outstanding as of September 30, 2025 was$57.5 million.

Previous wording

On April 17, 2024, we issued $30.0 million in aggregate principal amount of 8.50% notes due 2029 (the “GECCI Notes”). On April 25, 2024, we issued an additional $4.5 million of the GECCI Notes upon full exercise of the underwriters’ over-allotment option. On July 9, 2024, we issued an additional $22.0 million in aggregate principal amount of the GECCI Notes in a direct placement. The aggregate principal balance of the GECCI Notes outstanding as of June 30, 2025 is$56.5 million.

Current wording

On April 17, 2024, we issued $30.0 million in aggregate principal amount of 8.50% notes due 2029 (the “GECCI Notes”). On April 25, 2024, we issued an additional $4.5 million of the GECCI Notes upon full exercise of the underwriters’ over-allotment option. On July 9, 2024, we issued an additional $22.0 million in aggregate principal amount of the GECCI Notes in a direct placement. The aggregate principal balance of the GECCI Notes outstanding as of September 30, 2025 was$56.5 million.

Previous wording

On September 19, 2024, the Company issued $36.0 million in aggregate principal amount of 8.125% notes due 2029 (the "GECCH Notes" and, together with the GECCO Notes, GECCZ Notes and GECCI Notes, the "Notes"). On October 3, 2024, the Company issued an additional $5.4 million of the GECCH Notes upon full exercise of the underwriters' over-allotment option. The aggregate principal balance of the GECCH Notes outstanding as of June 30, 2025 is$41.4 million.

Current wording

On September 19, 2024, the Company issued $36.0 million in aggregate principal amount of 8.125% notes due 2029 (the "GECCH Notes"). On October 3, 2024, the Company issued an additional $5.4 million of the GECCH Notes upon full exercise of the underwriters' over-allotment option. The aggregate principal balance of the GECCH Notes outstanding as of September 30, 2025 was$41.4 million.

Previous wording

On August 16, 2023, we issued $40.0 million in aggregate principal amount of 8.75% notes due 2028 (the “GECCZ Notes” and, together with the GECCM Notes and GECCO Notes, the “Notes”). The aggregate principal balance of the GECCZ Notes outstanding as of June 30, 2025 is$40.0 million.

Current wording

On September 11, 2025, the Company issued $50.0 million in aggregate principal amount of 7.75% notes due 2030 (the "GECCG Notes") and together with the GECCO Notes, GECCI Notes and GECCH Notes, the "Notes"). The aggregate principal balance of the GECCG Notes outstanding as of September 30, 2025 was$50.0 million. On October 2, 2025, we issued an additional $7.5 million of the GECCG Notes upon full exercise of the underwriters' over-allotment option.

Previous wording

The Notes are our unsecured obligations and rank equal with all of our outstanding and future unsecured unsubordinated indebtedness. The unsecured notes are effectively subordinated, or junior in right of payment, to indebtedness under our Loan Agreement and any other future secured indebtedness that we may incur to the extent of the value of the assets securing such indebtedness and structurally subordinated to all future indebtedness and other obligations of our subsidiaries. We pay interest on the Notes on March 31, June 30, September 30 and December 31 of each year. The GECCO Notes, GECCZ Notes, GECCI Notes and GECCH Notes will mature on June 30, 2026, September 30, 2028, April 30, 2029, and December 31, 2029 respectively. The GECCO Notes are currently callable at the Company’s option and the GECCZ Notes, GECCI Notes and GECCH Notes can be called on, or after, September 30, 2025, April 30, 2026, and December 31, 2026, respectively. Holders of the Notes do not have the option to have the Notes repaid prior to the stated maturity date. The Notes were issued in minimum denominations of $25 and integral multiples of $25 in excess thereof.

Current wording

The Notes are our unsecured obligations and rank equal with all of our outstanding and future unsecured unsubordinated indebtedness. The unsecured notes are effectively subordinated, or junior in right of payment, to indebtedness under our Loan Agreement and any other future secured indebtedness that we may incur to the extent of the value of the assets securing such indebtedness and structurally subordinated to all future indebtedness and other obligations of our subsidiaries. We pay interest on the Notes on March 31, June 30, September 30 and December 31 of each year. The GECCO Notes, GECCI Notes, GECCH Notes and GECCG Notes will mature on June 30, 2026, April 30, 2029, December 31, 2029 and December 31, 2030, respectively. The GECCO Notes are currently callable at the Company’s option and the GECCI Notes, GECCH Notes and GECCG Notes can be called on, or after, April 30, 2026, December 31, 2026, and December 31, 2027, respectively. Holders of the Notes do not have the option to have the Notes repaid prior to the stated maturity date. The Notes were issued in minimum denominations of $25 and integral multiples of $25 in excess thereof.

Previous 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%.

Current wording

As of September 30, 2025, our asset coverage ratio was approximately 168.2%. Under the Investment Company Act, we are subject to a minimum asset coverage ratio of 150%.

Previous wording

During the last two fiscal years, using the high and low sales prices within each fiscal quarter compared to the NAV at such quarter end, our common stock has traded as high as a 1.0% discount to NAV and as low as a 40.4% discount to NAV.

Current wording

During the last two fiscal years, using the high and low sales prices within each fiscal quarter compared to the NAV at such quarter end, our common stock has traded as high as a 14.4% premium to NAV and as low as a 40.4% discount to NAV.

Previous 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.

Current wording

The last reported closing price for our common stock on October 30, 2025 was$7.64 per share. As of October 29, 2025, we had 11 record holders of our common stock.

Previous wording

Our board set the distribution for the quarter ending September 30, 2025 at a rate of $0.37 per share. The full amount of each distribution will be from distributable earnings. The schedule of distribution payments will be established by GECC pursuant to authority granted by our Board. The distribution will be paid in cash.

Current wording

Our board set the distribution for the quarter ending December 31, 2025 at a rate of $0.37 per share. The full amount of each distribution will be from distributable earnings. The fourth quarter distribution will be payable on December 31, 2025 to stockholders of record as of December 15, 2025. The distribution will be paid in cash.

Previous 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.

Current wording

We are also subject to financial risks, including changes in market interest rates. As of September 30, 2025, approximately $153.9 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.