Great Elm Capital . 8.50% Notes Due 2029 Stock Earnings Reports

Great Elm Capital (GECC) reported Q1 2026 results marked by a decline in NAV driven primarily by unrealized losses in select investments (notably their CLO JV and one idiosyncratic private investment). Management is reprioritizing to protect and grow NAV ahead of income, instituting stronger oversight and underwriting discipline. The adviser has waived all accrued and unpaid incentive fees through June 30, 2026 (approx. $2.8M or $0.20 per share), the third consecutive quarter of fee waivers. Management has aggressively delevered: called and repurchased $57.5M of near-term notes (leaving no funded debt maturities until 2029 once completed) and reduced total debt to $174M with full availability on a $50M revolver. Portfolio actions included $22M deployed across 12 investments and exits of higher-risk positions, increasing first-lien exposure to ~75% of the corporate portfolio. GECC opportunistically repurchased ~1% of shares at an average 36% discount to March 31 NAV under a $10M buyback program (about $9.5M remaining). GESF subsidiaries (Commercial, Healthcare, Prestige) are profitable and generating cash distributions, providing diversification. Financial highlights: NII was $5.0M ($0.36/share), aided ~13% Q/Q by the incentive-fee waiver; NAV was $107.5M ($7.74/share) at 3/31/26; asset coverage improved to 161.8%; debt/equity improved to 1.62x. Nonaccruals remain very low (<1% of fair value). The Board approved a $0.25 quarterly dividend (an 18% annualized yield vs. the May 1 close). Management emphasized capital preservation, rebuilding NAV, disciplined underwriting, and readiness to deploy capital from a stronger liquidity position.