Great Elm Capital Corp.

Previous wording

The following is a summary of our investment activity for the year ended December 31, 2025 and the six months ended June 30, 2026:

Current wording

The following is a summary of our investment activity for the year ended December 31, 2025 and the nine months ended September 30, 2026:

Previous wording

The following is a reconciliation of the investment portfolio for the six months ended June 30, 2026 and 2025. 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, 2026 and 2025. Investments in short-term securities, including U.S. Treasury Bills and money market mutual funds, are excluded from the table below.

Previous wording

The following table shows the fair value of our portfolio of investments by industry as of June 30, 2026 and December 31, 2025 (in thousands):

Current wording

The following table shows the fair value of our portfolio of investments by industry as of September 30, 2026 and December 31, 2025 (in thousands). 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 decreased for the three and six months ended June 30, 2026 as compared to the corresponding periods in the prior year primarily due to a lower average coupon rate across the portfolio combined with a decrease in the debt investment portfolio size. As of June 30, 2026, the debt investment portfolio had an average coupon rate of 10.6% on approximately $199.6 million of principal as compared to 11.7% on approximately $232.6 million of principal as of June 30, 2025, excluding positions on non-accrual in each period. Interest income includes PIK interest which is reported in the Statements of Operations. The total PIK interest earned remained consistent for the three and six months ended June 30, 2026 as compared to the corresponding periods in the prior year.

Current wording

Interest income decreased for the three and nine months ended September 30, 2026 as compared to the corresponding periods in the prior year primarily due to a decrease in the debt investment portfolio size. As of September 30, 2026, the debt investment portfolio had an average coupon rate of 11.2% on approximately $175.4 million of principal as compared to 10.8% on approximately $224.1 million of principal as of September 30, 2025, excluding positions on non-accrual in each period. Interest income includes PIK interest which is reported in the Statements of Operations. The total PIK interest income and PIK other income earned remained consistent for the three and nine months ended September 30, 2026 as compared to the corresponding periods in the prior year.

Previous wording

Dividend income decreased for the three and six months ended June 30, 2026 as compared to the three and six months ended June 30, 2025 due to fewer holdings in dividend-paying equity investments and reductions in distributions from the investment in the CLO JV which distributed $5.1 million and $7.1 million for the six months ended June 30, 2026 and 2025, respectively.

Current wording

Dividend income increased for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025 primarily driven by an increase in distributions received from the CLO JV, which totaled $2.2 million during the current period compared to $1.5 million in the prior period. Dividend income decreased for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025 due to fewer holdings in dividend-paying equity investments and reductions in distributions from the investment in the CLO JV which distributed $7.3 million and $8.6 million for the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

Other income is comprised of non-refundable carry fees, early repayment fees, and amendment fees on new and amended debt positions. There were no significant changes in other income for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. The six months ended June 30, 2025 includes one-time fees on multiple new and amended investments made in the first quarter of 2025, resulting in a decrease in other income for the six months ended June 30, 2026 as compared to the prior year period.

Current wording

Other income is comprised of non-refundable carry fees, early repayment fees, and amendment fees on new and amended debt positions. The decrease in other income for the three and nine months ended September 30, 2026, as compared to the prior year periods, was primarily due to one-time fees earned on multiple new and amended investments during the three and nine months ended September 30, 2025 that did not recur in the current periods.

Previous wording

Management fees decreased for the three and six months ended June 30, 2026 as compared to the three and six months ended June 30, 2025 due to a decrease in the underlying management fee assets, primarily due to a decline in the fair value of the portfolio of investments, in the current year periods as compared to the corresponding prior year periods.

Current wording

Management fees decreased for the three and nine months ended September 30, 2026 as compared to the three and nine months ended September 30, 2025 due to a decrease in the underlying management fee assets, primarily due to a decline in the fair value of the portfolio of investments, in the current year periods as compared to the corresponding prior year periods.

Previous wording

Effective February 2026, GECM waived all accrued and unpaid incentive fees through March 31, 2026. Effective April 2026, GECM waived all accrued and unpaid incentive fees through June 30, 2026. As of December 31, 2025, there were approximately $2.3 million of accrued and unpaid incentive fees on our balance sheet. For the six months ended June 30, 2026, an additional $1.4 million of incentive fees were accrued, resulting in $3.7 million of accrued and unpaid incentive fees. In connection with the incentive fee waiver, we recognized the reversal of these accrued and unpaid incentive fees during the six months ended June 30, 2026, resulting in a corresponding increase in net income and increase in net asset value in the period (subject to any offsetting additional expenses or losses). The incentive fee waiver is not subject to recapture.

Current wording

Effective February 2026, GECM waived all accrued and unpaid incentive fees through March 31, 2026. Effective April 2026, GECM waived all accrued and unpaid incentive fees through June 30, 2026. As of December 31, 2025, there were approximately $2.3 million of accrued and unpaid incentive fees on our balance sheet. For the six months ended June 30, 2026, an additional $1.4 million of incentive fees were accrued, resulting in $3.7 million of accrued and unpaid incentive fees. In connection with the incentive fee waiver, we recognized the reversal of these accrued and unpaid incentive fees during the six months ended June 30, 2026, resulting in a corresponding increase in net income and increase in net asset value in the period (subject to any offsetting additional expenses or losses). The incentive fee waiver is not subject to recapture. Incentive fees increased for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025, during which no incentive fees were earned due to lower investment income and capital raises during the prior year period that increased the incentive fee hurdle.

Previous wording

Professional services costs increased for the three and six months ended June 30, 2026 as compared to the corresponding periods in the prior year, primarily due to general rate increases for professional services, including legal and accounting fees, along with certain one-time fees.

Current wording

Professional services costs increased for the three and nine months ended September 30, 2026 as compared to the corresponding periods in the prior year, primarily due to general rate increases for professional services, including legal and accounting fees, along with certain one-time fees.

Previous wording

Administration fees increased for the three and six months ended June 30, 2026 as compared to the corresponding periods in the prior year primarily due to higher allocable overhead and other expenses incurred by GECM under the Administration Agreement.

Current wording

Administration fees decreased for the three months ended September 30, 2026 as compared to the corresponding period in the prior year primarily due to a one-time adjustment to allocable overhead and other expenses incurred by GECM under the Administration Agreement, reflecting the finalization of certain expense allocations.

Previous wording

Interest expense decreased for the three and six months ended June 30, 2026 as compared to the corresponding periods in the prior year primarily due to lower average principal balances outstanding on the Notes during the period.

Current wording

Interest expense decreased for the three and nine months ended September 30, 2026 as compared to the corresponding periods in the prior year primarily due to lower average principal balances outstanding on the Notes during the period.

Previous wording

Realized gain for the three and six months ended June 30, 2026 includes approximately $2.7 million from the realization of our investment in Stone Ridge Opportunities Fund, LP (“Stone Ridge”), $1.9 million from distributions from our investment in CW Opportunity 2 LP, and $1.3 million from the partial realization of our investment in the unsecured bond of American Coastal Insurance Corp (“American Coastal”). Realized losses for the three and six months ended June 30, 2026 were primarily driven by a $0.2 million loss on the sale of our equity investment in the State Street Blackstone Senior Loan ETF, $0.2 million from the partial realization of our investment in the first lien term loan of Auction.com, and $0.2 million from the realization of our investment in Invesco Senior Loan Fund. The remaining realized losses were attributable to smaller positions, none of which were individually material, and reflected routine portfolio activity.

Current wording

Realized gain for the nine months ended September 30, 2026 includes approximately $2.7 million from the realization of our investment in Stone Ridge Opportunities Fund, LP (“Stone Ridge”), $2.5 million from the realization of our investment in the unsecured bond of American Coastal, and $2.4 million from distributions from our investment in CW Opportunity. Realized losses for the nine months ended September 30, 2026 were primarily driven by a $4.1 million loss on the sale of our investment in Flexsys, $0.2 million loss on the sale of our equity investment in the State Street Blackstone Senior Loan ETF, $0.2 million from the partial realization of our investment in the first lien term loan of Auction.com, and $0.2 million from the realization of our investment in Invesco Senior Loan Fund.

Previous wording

For the three months ended June 30, 2026, net unrealized depreciation was primarily attributable to (i) approximately $1.7 million of unrealized depreciation attributable to the reversal of previously recognized unrealized appreciation on our investment in Trouvaille Re Ltd. in connection with a distribution received during the period and (ii) approximately $0.8 million of unrealized depreciation related to our equity investment in Great Elm Specialty Finance. These unrealized losses were partially offset by unrealized appreciation of approximately $0.6 million related to our investment in CW Opportunity LP.

Current wording

For the three months ended September 30, 2026, net unrealized depreciation was primarily attributable to (i) approximately $3.3 million of unrealized depreciation on our investment in the CLO JV, (ii) approximately $1.3 million of unrealized depreciation related to our equity investment in Great Elm Specialty Finance, (iii) approximately $1.3 million related to the reversal of previously recognized unrealized appreciation on our investment in American Coastal in connection with the realization during the period, (iv) approximately $1.1 million of unrealized depreciation on our investment in CW Opportunity, and (v) approximately $0.8 million of net unrealized depreciation related to our investment in Universal Fiber Systems, LLC (“Universal Fiber”). These unrealized losses were partially offset by the reversal of approximately $4.6 million of previously recognized unrealized depreciation in Flexsys in connection with the sale during the period and $0.6 million of unrealized appreciation on our investment in Trouvaille Re Ltd.

Previous wording

For the six months ended June 30, 2026, net unrealized depreciation was primarily attributable to (i) approximately $3.8 million of unrealized depreciation related to our investment in CLO JV, driven by decreases in the fair value of the underlying CLO investments, (ii) approximately $2.2 million of net unrealized depreciation related to our investment in Universal Fiber Systems, LLC (“Universal Fibers”), and (iii) approximately $1.5 million related to our equity investment in Great Elm Specialty Finance. In addition, unrealized depreciation included approximately $2.6 million attributable to the reversal of previously recognized unrealized appreciation on our investment in Stone Ridge and approximately $1.6 million attributable to the reversal of previously recognized unrealized appreciation on our investment in American Coastal, in each case in connection with the realization activity discussed above.

Current wording

For the nine months ended September 30, 2026, net unrealized depreciation was primarily attributable to (i) approximately $7.1 million of unrealized depreciation related to our investment in CLO JV, driven by decreases in the fair value of the underlying CLO investments, (ii) approximately $2.9 million of net unrealized depreciation related to our investment in Universal Fiber, and (iii) approximately $2.8 million of net unrealized depreciation related to our equity investment in Great Elm Specialty Finance. In addition, unrealized depreciation included approximately $2.6 million attributable to the reversal of previously recognized unrealized appreciation on our investment in Stone Ridge and approximately $3.0 million attributable to the reversal of previously recognized unrealized appreciation on our investment in American Coastal, in each case in connection with the realization activity discussed above.

Previous wording

These unrealized losses were partially offset by unrealized appreciation attributable to the increase in fair value of approximately $1.1 million related to our investment in CW Opportunity 2 LP. In addition, unrealized appreciation included approximately $1.1 million attributable to the reversal of previously recognized unrealized depreciation on our investment in Del Monte Food Corp II, Inc., primarily in connection with a $1.6 million partial paydown of our junior debtor-in-possession loan, and $0.4 million attributable to the reversal of previously recognized unrealized depreciation on our investment in Mad Engine Global, LLC in connection with the full repayment of the loan during the period.

Current wording

These unrealized losses were partially offset by unrealized appreciation of approximately $4.8 million attributable to the reversal of previously recognized unrealized depreciation on our investment in Flexsys in connection with the sale during the period and $1.1 million on our investment in Del Monte Food Corp II, Inc., primarily in connection with a $1.6 million partial paydown of our junior debtor-in-possession loan.

Previous wording

As of June 30, 2026, we had approximately $4.0 million of short term investments in money market fund investments. As of June 30, 2026, we had investments in 68 debt instruments across 53 companies, totaling approximately $192.6 million at fair value and 20 equity investments in 15 companies, with an aggregate fair value of approximately $75.7 million.

Current wording

As of September 30, 2026, we had approximately $5.6 million of short-term investments in money market fund investments. As of September 30, 2026, we had investments in 60 debt instruments across 46 companies, totaling approximately $172.5 million at fair value and 21 equity investments in 16 companies, with an aggregate fair value of approximately $72.9 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, 2026, we had approximately $6.1 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, 2026 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, 2026, we had approximately $1.3 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 September 30, 2026 balance sheet to satisfy the unfunded commitments.

Previous wording

For the six months ended June 30, 2026, net cash provided by operating activities was approximately $36.6 million, reflecting $92.1 million provided by the sales of investments and principal payments offset by $60.4 million used for the purchase of investments and $0.9 million from the change in short-term investments.

Current wording

For the nine months ended September 30, 2026, net cash provided by operating activities was approximately $49.9 million, reflecting $133.8 million provided by the sales of investments and principal payments offset by $88.4 million used for the purchase of investments and $2.5 million from the change in short-term investments.

Previous wording

For the six months ended June 30, 2026, net cash used for financing activities was $36.8 million. Cash outflows included $39.0 million to repurchase and redeem the 5.875% notes due 2026 (the “GECCO Notes”), $0.5 million from the repurchases of common stock, and $7.7 million in distributions to stockholders, partially offset by cash inflows of $11.0 million of net borrowings on the Revolver.

Current wording

For the nine months ended September 30, 2026, net cash used for financing activities was $51.8 million. Cash outflows primarily consisted of $45.5 million related to the repurchase and redemption of the 5.875% notes due 2026 (the “GECCO Notes”) and the partial repayment of the 8.50% notes due 2029 (the “GECCI Notes”), $0.5 million from the repurchases of common stock, and $11.1 million in distributions to stockholders. These outflows were partially offset by cash inflows of $6.0 million in net borrowings on the Revolver.

Previous wording

As of June 30, 2026, there were $11.0 million in borrowings outstanding under the revolving line.

Current wording

As of September 30, 2026, there were $6.0 million in borrowings outstanding under the revolving line.

Previous wording

On June 23, 2021, we issued $50.0 million in aggregate principal amount of 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. In December 2025, we repurchased $18.5 million of the outstanding principal on the GECCO Notes. During thethree months ended March 31, 2026, we repurchased $0.4 million of the outstanding principal on the GECCO Notes. On March 31, 2026, we redeemed $20.0 million of outstanding GECCO Notes at 100% of the principal amount. On May 27, 2026, we redeemed the remaining $18.6 million of outstanding GECCO Notes in full.

Current wording

On June 23, 2021, we issued $50.0 million in aggregate principal amount of 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. In December 2025, we repurchased $18.5 million of the outstanding principal on the GECCO Notes. During the three months ended March 31, 2026, we repurchased $0.4 million of the outstanding principal on the GECCO Notes. On March 31, 2026, we redeemed $20.0 million of outstanding GECCO Notes at 100% of the principal amount. On May 27, 2026, we redeemed the remaining $18.6 million of outstanding GECCO Notes in full.

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, 2026 was$56.5 million. On July 20, 2026, the Company caused a notice to be issued to the holders of the GECCI Notes regarding the Company’s exercise of its option to redeem $6.5 million aggregate principal amount of the issued and outstanding GECCI Notes on August 19, 2026.

Current wording

On April 17, 2024, we issued $30.0 million in aggregate principal amount of 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. On August 19, 2026, we redeemed $6.5 million of outstanding GECCI Notes at 100% of the principal amount. The aggregate principal balance of the GECCI Notes outstanding as of September 30, 2026 was$50.0 million.

Previous wording

On May 3, 2018, a majority of our stockholders approved the application of the modified minimum asset coverage requirement pursuant to Section 61(a)(2) under the Investment Company Act. As a result of such approval, and subject to satisfying certain ongoing disclosure requirements, effective May 4, 2018 the asset coverage ratio test applicable to the Company was decreased from 200% to 150%. As of June 30, 2026, our asset coverage ratio was approximately 166.4%. Under the Investment Company Act, we are subject to a minimum asset coverage ratio of 150%.

Current wording

On May 3, 2018, a majority of our stockholders approved the application of the modified minimum asset coverage requirement pursuant to Section 61(a)(2) under the Investment Company Act. As a result of such approval, and subject to satisfying certain ongoing disclosure requirements, effective May 4, 2018, the asset coverage ratio test applicable to the Company was decreased from 200% to 150%. As of September 30, 2026, our asset coverage ratio was approximately 166.3%. 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 July 29, 2026 was$5.11 per share. As of July 29, 2026, we had 12 record holders of our common stock.

Current wording

The last reported closing price for our common stock on October 26, 2026 was$4.70 per share. As of October 26, 2026, we had 12 record holders of our common stock.

Previous wording

We are also subject to financial risks, including changes in market interest rates. As of June 30, 2026, approximately $136.0 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, 2026, approximately $121.1 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. As of September 30, 2026, $6.0 million of borrowings were outstanding under our revolving credit facility, which bears interest at a variable rate generally based on SOFR or the US prime rate. 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.