Today's conference call includes forward looking statements, and we ask that you refer to Great Elm Capital Corp's filings with the SEC for important factors that could cause actual results to differ materially from these statements. Great Elm Capital Corp. Does not undertake to update its forward looking statements unless required by law. To obtain copies of SEC filings, please visit Great Elm Capital Corp. Website under Financials, SEC filings, or visit the SEC's website. Hosting the call today is Matt Kaplan, Great Elm Capital Corp's Chief Executive Officer. Who will joined by Chief Financial Officer, Kerry Davis Chief Compliance Officer and General Counsel, Adam Kleinman and Mike Hauer, President of Great Elm Specialty Finance. We'll now turn the call over to GECC's CEO, Matt Kaplan.

Thanks, Peter.

And thank you all for joining us today. We are pleased to start 2025 with a record setting quarter. Achieving the highest total investment income in the company's history. At $12,500,000 Notably, the first quarter was also our highest ever cash income quarter. A testament to the strategic portfolio enhancements undertaken over the past few years. This 37% increase in TII from last quarter and more than 40% year over year growth was driven by the success of our CLO JV as well as from income generated by new investments in the quarter. NII per share doubled to $0.40 per share from $0.20 in the prior quarter. Largely attributable to the increase in total investment income and the ramping contributions from investments. Our NII more than covered the increased first quarter distribution of $0.37 per share. A 5.7% increase from the prior quarter's $0.35 per share distribution. This marks our commitment to delivering growing income to shareholders. Supported by solid underlying portfolio performance. As we move through the second quarter, we are well positioned to further execute on our long term growth strategy and navigate the dynamic macro environment. Based on current expectations, we anticipate that second quarter NII will exceed first quarter levels.

As we discussed on our last call, we anticipated an increase in cash distributions from the CLO JV this quarter. The CLO distribution patterns are typically uneven in their early stages. For example, we received $3,800,000 of cash distributions from the CLO JV in the first quarter of twenty twenty five as compared to half a million dollars in the fourth quarter of twenty twenty four which was a step down from the $3,200,000 in the third quarter of twenty twenty four. Additionally, in the second quarter to date, we have received $4,300,000 of cash distributions from the JV. We do expect these fluctuations will dampen over time as we fund additional CLO investments and continue to leverage our increased scale. For these reasons, and considering our ongoing capital raising and deployment initiatives, we'd like to reiterate that it is best to review GECC on a four quarter basis opposed to benchmarking the company quarter to quarter. Moving on to our portfolio's performance, while our NII generation was strong, we did see a modest step down in NAV per share as outlined on slide eight. Driven by unrealized losses on portfolio investments We began to see volatility in the markets pick up.

The middle of the quarter which led to markdowns on positions at quarter end. Specifically our CLO JV equity and our investments in CW opportunity to LP. A vehicle which was created to hold convertible preferred equity in core an AI hyperscaler, which went public at the March. We remain confident in these investments and our portfolio and expect these unrealized losses to reverse over time as market conditions stabilize. Additionally, recently filed a prospectus supplement for a $100,000,000 at the market equity program to issue shares at NAV or better. We believe this new tool will provide us with additional capital flexibility as we seek to continue scaling the ECC. We remain well positioned to cover our dividend over the course of 2025 and our portfolio is set up to weather the uncertain macro environment with our strength and foundation we remain confident in our ability to generate sustainable returns deliver increasing value to our shareholders in the years ahead. With that, I'd like to hand the call over to Carrie Davis to discuss our first quarter twenty twenty five performance. Thanks, Matt.

I'll go over our financial highlights now, but we invite all of you to review our press release, a accompanying presentation and SEC filings for greater detail. During the first quarter, GECC generated NII of $4,600,000 or $0.40 per share. As compared to $2,100,000 or $0.20 per share in the fourth quarter of twenty twenty four. The increase in NII was primarily driven by the receipt of distributions from the CLO JV as well as income from other new investments. Our net assets as of 03/31/2025 were $132,000,000 as compared to $136,000,000 as of December 31. Our NAV per share was $11.46 as of March 31, versus $11.79 as of December 31. Details for the quarter over quarter change in NAV can be found on slide eight of the investor presentation. As of March 31, GECC's asset coverage ratio was 163.8%, compared to 169.7% as of December 31. As of March 31, total debt outstanding was approximately $207,000,000 and we had $12,000,000 outstanding on our $25,000,000 revolver. Cash totaled approximately $1,300,000 Our Board of Directors authorized a $0.37 per share cash distribution for the second quarter, which will be payable on June 30, stockholders of record as of June 16.

The distribution equates to a 12.9% annualized dividend yield our March 31 net asset value. I'll turn the call back over to Matt.

Thanks, Carrie. In the quarter, we continued to enhance our portfolio strength by steadily increasing our secured debt positions. Our CLO joint venture remains a significant contributor to the strategy and we expect it to remain an important source of income for GECC as we continue to expand the vertical. Targeting high teens to 20% returns over time. We have grown our corporate portfolio to nearly $250,000,000 of investments and first lien loans comprised 71% of the corporate portfolio as of March 31. This demonstrates our commitment to enhancing portfolio quality while maintaining a focus on secured income generating assets. Alongside new investments, our CLO JV helped drive us to record total investment income this quarter. This joint venture expands our exposure to a diverse portfolio of broadly syndicated first lien loans and continues to be a key contributor to our early success. With approximately $48,000,000 deployed through March 31. As a reminder, we hold the majority of our CLO exposure a bit differently than other BDCs or closed end funds that many may be familiar with. These other entities typically hold their investments directly which allows the income to be recognized utilizing the effective yield methodology while GECC only recognized income when the CLO JV makes distributions.

This leads to a more uneven nature to our income reporting. While we may hold some minority CLO positions directly on our balance sheet, the JV affords us the ability to have exposure to majority interest in CLOs, which we believe can provide enhanced economics. We are comfortable with this quarter to quarter income oscillation which we expect will dampen over time. Further, outside of some markdowns we discussed, our investment portfolio is performing well. And as of March 31, we have zero positions on non accrual. Notably, the single issuer that we had on non accrual at year end was restructured in February into three debt instruments, which will begin generating income in 2026. Demonstrating our hands on approach to working with our portfolio companies. While it's still too early to assess the overall impact of tariffs on our portfolio, our initial analysis suggests limited direct exposure. Our portfolio maintains broad diversification with a predominantly domestic focus and minimal exposure to China. With our defensive portfolio structure, we believe we are well positioned to navigate the ongoing tariff uncertainty. In this volatile environment, we continue to take a measured approach capital deployment. As always, we prioritize credit quality and seek investments with minimal risk of permanent capital loss.

Directing capital toward opportunities that are primed to perform across various economic cycles, This balanced approach combined with our strengthened platform and diversified portfolio positions us well to continue growing Great Elm Capital Corp and delivering attractive risk adjusted returns for our shareholders. We remain excited for the future of GECC And with that, I would like to turn the call over to Mike Keller to provide an update on specialty finance. Thanks, Matt. The start of 02/2025 has been transformative for Great Elm Specialty Finance. In January, we combined the corporate and healthcare ABL portfolios and replaced our existing asset backed lender with a new facility led by CIBC. Which is now in active syndication to increase the facility commitment as our business ramps. In March, after repositioning the legacy Great Elm Healthcare Finance business, to focus solely on healthcare real estate financing opportunities, we closed on a leverage facility to support the real estate assets held within that platform. In April, we completed the rebranding of Sterling as Great Elm Commercial Finance. Which today offers traditional ABL products to a wide range of industries, including health care. Also, GESF, exited its last equipment lease holding at a gain.

Further simplifying the business. These actions have streamlined our operations and better aligned our platform with growth objectives. While income from GESF was similar to the prior quarter, we are confident that these changes will translate increasing returns over the remainder of the year. Thanks, Mike. In closing, we are pleased with our first quarter results and remain well positioned to grow NII in the second quarter and cover our dividend in 2025. With that, I'll turn the call over to the operator for questions. Operator?

Thank you. We will now be conducting a question and answer session. One moment please while we poll for questions. The first question is from Mikey Schleien from Ladenburg Thalmann. Please go ahead. Yes. Good morning, everyone. Matt, how do you see the portfolio and the funds NAV performing with both the broadly syndicated loan market and private private credit spreads widening. In April. So that's a great question, Mickey. Thanks. So, I think overall, you can see in the first quarter, we saw some modest markdowns in our portfolio. You can see we had $0.38 of net unrealized gain loss of which about 30¢ of that actually attributable to to two positions that we noted, the CLO JV, and also [indiscernible] investment in core we've away from that the rest of the portfolio was performed pretty hopefully. And we actually started to see some mark, the volatility pick up in call it, late February, early March and April, really, if you look at kind of the CLO market, by the end of last week, we're kind of getting close to being back to where we ended March. Interestingly enough and spread. So, you know, kind of depends on where we remain to be seen.

This indicated loan market, you can pull up as, you know, move down a little bit from threethirty one to fourthirty one. So, obviously, on a whole lot of diversified portfolio, You know, I can read between the lines there, but, you know, I think overall, the portfolio is pretty healthy, and we had minimal NAV impact that was, you know, part all unrealized Over time, as market conditions stabilize, we would expect a lot of that to fee reverse. One of the positives of our CLO positions is they're relatively young. So actually, when you look at CLOs in choppy markets like this, kind of this best CLO vintages, the ones that were issued just prior to significant bouts of market volatility due to the long term financing structure of them. You look at the 2,000 and seven-eight vintages of CLOs, or you look to the 2019 vintages, COVID all very, very strong performance over over the life cycle. I think we're well set up there. And then, know, on core, we've you can just look at that, it's a publicly traded stock now. And we are invested in a vehicle that has a convertible preferred. You can kind of think about it 03/31 you know, if the stock had closed around $48 a share, we would have had a roughly flat mark quarter on quarter.

You can see that at $3.31, the stock did close at 37 or 38 level. And around the March there. So you know, it's we took a hit on that. But, you know, look at the it's been a volatile name. We have a lot of faith in the company over time and stock I think was over as of yesterday's close. Thanks for that, Matt. You just mentioned that the CLO market has sort of stabilized. The JV holds a warehouse facility with Apex credit. What is the JV earning on that warehouse? Warehouse? And now that the market's stabilized, when do you expect that CLO to price? So that CLO actually closed in at the end of last month already. And we were able to get the execution on that done with commitments that were made in kind of early March. So it was a very successful outcome. To be able to get that one taken care of. I'm sorry. When did you say it priced? It closed April. And so it usually takes a quarter or two for CLOs to provide their initial distribution Would that be the case for this investment? For that specific one, yes.

I think we would expect our first distribution on the underlying investment in the underlying CLO JV to come in October of twenty twenty five. Okay. So relative to So as I So as I kind of laid out, you know, on the CLO CLOs and to our whole business, we have kind of we'll have a little bit of fluctuation in the way our earnings are done because the CLO JV will be distributing dividends. Right? That's how we record our income from that. So, you know, in the first quarter, we got about 3,800,000.0 from the CLO JV. This far quarter to date, dollars 4,300,000.0. So I think we're well positioned to grow and cover the 37¢ dividend next quarter. And I mentioned, we kind of have to look and evaluate our business over a twelve month period rather than quarter to quarter. And I expect our full year NII will improve and cover [indiscernible] it looks to relatively 24 to be higher and we'll cover the dividend. I understand. And then one more question, if I might.

You borrowed on your credit facility And I'm curious whether that facility requires mark to market accounting, just thinking in terms of all the volatility we're seeing. The markets? Sure. So the the facility has a borrowing base, which is feeds in the fair value of investments. That are comprised of the borrowing base. But there, we have significant borrowing capacity multiples of what the actual commitment is more than three x that commitment. Level using recent marks. So I have no concerns there. And then the covenants are laid out in the queue. It's minimum net asset value of 65,000,000. We have 135 ish million of NAV. And then 150% ACR. So kind of just the standard BDC ACR covenant there. I think we drew on the revolver. If you look, we raised equity at the very end of the fourth quarter, which led to an increase in share count. And we rolled over the quarter with, you know, at year end to the with 8 and a half ish million of cash. So that was just, you know, as we deployed and, you know, we raised $12,000,000. Or sorry, we raised $13,300,000 in the fourth quarter. Modestly drawing on our revolver optimize our portfolio and yield, help also, as I said, our income this quarter was driven by new deployments as well as the CLO JV.

So we are looking to continue to grow, diversify and scale GECC.

I appreciate that. That's it for me this morning. Thank you for taking my questions. Thank you, Mickey.

The next question is from Eric Zwick from Lucid Capital Markets. Please go ahead.

Thanks. Good morning all. I wanted to start first with a question in if you could provide a little maybe color into the timing of the new deployments and the you had in the quarter based on the incoming yields being significantly higher than the outgoing yields seems like there should be some benefit to the overall portfolio. So curious how much of that was actually reflected in the first quarter? And if there may be some benefit in 2Q as well?

I think it was we had a good question. I think it was a little barbelled. We had excess cash and some commitments that we had close on in the January time frame, but then kind of February was more of a woah. And then in March, I would say we were able to take advantage of a little bit of the the market volatility that started to pick up with some deployments. And we hope to see some additional flow through effect into Q. As I said, I think we're looking to see 2Q NII increase sequentially from 1Q.

Got it. Thanks for the commentary there, Matt. And maybe just kind of continuing along that thought process in terms of forward yield. You maybe just quantify what the pipeline looks like today in terms of magnitude of size as well as what you're seeing for yields in the pipeline today?

Sure. I think, we are looking at a few private credit kind of direct lending opportunities as always. We had a couple that have been put on pause. Until we figure out the tariff situation as tariffs are kind of leading to some uncertainty out there. However, there is other activity going on in the space in lending. We're starting, we have seen some M and A or refinancing opportunities companies looking for capital. So the pipeline actually remains a little stronger, I'd say, than it was, probably three to four months ago on the on the direct lending side. And then, you know, we are the broadly syndicated tradable loan space is providing certain pockets opportunity here and there. There are some babies that get thrown out with a bath water due to industry sometimes. And our team continues to to look at underwriting those. We maintain relationships with many management teams and sponsors. That allow us to, you know, work to create a pipeline of names in the syndicated market that maybe aren't interesting when they come as a new issue, but we follow them and track them. And that pipeline is looking interesting. We need to maintain a cautious approach to that.

And we have certain assets in our portfolio that are in the broadly syndicated loan space that are very, very high quality kind of, I would call it a cash surrogate bucket that when we walked to take advantage of certain opportunistic trading levels and names that we know are companies that we know, coming to harvest some of our very, you know, cash surrogate low yielding investments to to rotate into that. But it's opportunistic and not a large percentage of what we do. But helps generate some coming alpha over time.

And then I appreciate the other comments you gave in the prepared remarks regarding kind of limited exposure, direct exposure to tariffs. I'm curious if you've looked at your portfolio in terms of exposure to government contracts just given some of the Doge cuts and cutbacks and federal spending and things of that nature?

We have. We were looking at an investment that, we saw that we had historically been involved in the situation. It was refinanced and then [indiscernible] those are not in our portfolio anymore, but due to the government contract nature of it, we've traded off. We've decided not to take [indiscernible] [indiscernible] on the tariff side, the question is, you know, that a lot of people are asking, what's the direct exposure I think we're working to think through the second and third order effects of the dynamic of tariffs and also the government initiatives. I think the bigger question that everyone's trying to understand is, what's the duration of this uncertainty and how will that lead to economic changes? And to that end, we've been re underwriting our existing investments and focusing on thinking through that lens on new investments on if there is a recession, how severe could it be? What's the [indiscernible] company's defensive position? So we are considering that in all of our current portfolio investments as we do our routine portfolio reviews as well as new underwriting.

Great. And one last one for me, and I'll step aside. So just looking at the kind of industry breakdown of the corporate portfolio about 10% is categorized as consumer. You could maybe say another 2% if you include casinos and gaming. There are concerns in the market regarding that the lower end consumer and especially if we get another inflation from the tariffs. Just curious if you could kind characterize your portfolio in terms of what segment of consumers they're targeting and what potential impacts or mitigations might need to be made there.

Our largest exposure in the consumer space would be in companies that have exposure to private label products and manufacturing. So you know, to the extent there is weakness in the consumer, that's kind of they should benefit from any trade down effect from the premium brands into the private label. So I think our consumer another one of our consumer services businesses are larger exposure is, you can look on the schedule investments is CSC service works, which is laundromats.

So, you know, generally very recession resilient businesses. So I think our consumer is actually more defensive than just if you think about regular white label brand and like what what is the consumer product? Now it's it's more tied to the benefit from any trade down effects.

That's helpful. Thanks for taking all my questions today. [indiscernible] Next question is from Mitchell Penn from Oppenheimer and Company.

Please go ahead.

Thanks. Hey Matt. Quick question on the CLO [indiscernible] your expected ROE on that investment? We are targeting, call it high teens to 20% returns over IRRs on our [indiscernible] is that before fees Do you take any fees out at the joint venture level?

There's no like GECC I think that that's just a income that GECC, the TII, you know, return that we expect to receive from the JV. There's no the JV does not charge a management fee or anything like that specifically.

And if we just look at Q1, [indiscernible] $3,800,000 in dividends. And then what was the loss relative to the CLO? Yeah, I think it was approximately $2,000,000 It was Two million. I wanna say less than a five percent hit to NAV. So if you kinda look at the other publicly traded CLO closed end funds, I think they kind of some of them have provided ranges, I guess, for their first quarter, but you can look at their NAVs are down anywhere from call it I wanna say, it's a big range from like 6 to 14%. I think our our CLOs are [indiscernible] [indiscernible] [indiscernible] also be cleaner portfolios, etcetera.

Yeah, we did, we actually tracked those and [indiscernible] first quarter ROEs were negative for everyone. So when you took the cash flow minus the marks, they were all down. So they charge they have a fee structure on their side. I think when we look at the JV, the JV is just if we look at it actually on the quarter, Got it.

Even with the markdown, the income we generated, it was positive to Got it.

Got it.

Okay.

Thanks.

That's all for me. Yeah. You got it. Thanks, Mitchell.

There are no further questions at this time. I would like to turn the floor back over to Matt Kaplan for closing comments.

Thank you again for joining us today.

We're pleased with another quarter of solid performance as we continue to execute on our long term growth strategy. Look forward to continued investor dialogue let us know if we can help with any follow-up questions that you may have.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.