Great Elm Capital . 5.875% Notes Due 2026 Stock Earnings Reports

Key points for investors: Leadership & strategy: Jason Reese was appointed CEO (previously Executive Chairman) and has reprioritized the business to “protect and grow NAV” first, with income a secondary objective. Portfolio performance & drivers: Q1 NAV declined to $107.5M ($7.74/share) driven primarily by unrealized losses in select investments (notably a CLO JV and one idiosyncratic private position). Net investment income (NII) was $5.0M ($0.36/share), up ~13% QoQ largely due to the adviser’s incentive fee waiver. Fee alignment & actions: The investment adviser (GECM) waived all accrued and unpaid incentive fees through June 30, 2026 (≈ $2.8M benefit, ≈ $0.20/share), the third consecutive quarter of waivers. Balance sheet & liquidity: Management called and repurchased all $57.5M of GECCO notes due in 2026 (remaining short-term paper to be retired imminently), leaving no funded debt maturities until 2029; total debt outstanding was $174M at quarter end, asset coverage 161.8%, debt-to-equity improved to 1.62x, cash ~$10M and $50M revolver undrawn. Capital allocation: During the quarter the firm deployed ≈ $22M across 12 investments and increased first-lien exposure to ~75% of the corporate portfolio — the highest in recent history — reflecting a tilt toward senior secured downside protection. Share repurchases: Under a $10M repurchase program (authorized Oct 2025) the company bought back ~1% of shares at an average ~36% discount to March 31 NAV, with ≈ $9.5M capacity remaining. Specialty finance platform: Great Elm Specialty Finance (GESF) verticals (commercial finance, healthcare finance, invoice financing) are profitable and generating cash distributions, offering diversification of assets and income. Credit quality: Less than 1% of fair value on nonaccrual, framed as strong relative to peers. Dividend: Board approved a Q2 quarterly dividend of $0.25/share (implying an ~18% annualized yield based on the May 1, 2026 closing price). Outlook: Management emphasizes deleveraging, rebuilding NAV, disciplined underwriting, and opportunistic deployment of capital into private credit and proprietary sourced deals while maintaining liquidity and flexibility.