Filed Pursuant to Rule 424(b)(3)
Registration No. 333-263282
GREAT ELM CAPITAL CORP.
Up to 4,601,391 Shares of Common Stock
Issuable Upon Exercise of Rights
To Subscribe for Such Shares
We are an externally managed non-diversified closed-end management investment company that elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “Investment Company Act”). We seek to generate current income and capital appreciation through debt and income generating equity investments, including investments in specialty finance businesses. Our external investment manager, Great Elm Capital Management, Inc. (“GECM”), provides the administrative services necessary for us to operate.
We are issuing non-transferable subscription rights (“rights”) to our stockholders of record as of 5:00 p.m., New York City time, on May 23, 2022, entitling the holders thereof to subscribe for up to an aggregate of 4,601,391 shares of our common stock. Record date stockholders will receive one right for each outstanding share of common stock owned on the record date. No fractional rights or cash in lieu thereof will be issued or paid. The rights entitle the holders to purchase one new share of common stock for every right held (the “primary subscription right”). In addition, record date stockholders who fully exercise their rights will be entitled to subscribe, subject to the limitations described in this prospectus and subject to allotment, for additional shares that remain unsubscribed as a result of any unexercised rights. Rights holders who exercise their rights will have no right to rescind their subscriptions after receipt of their completed subscription certificates together with payment for shares by the subscription agent.
The subscription price per share will be $12.50 (the “Subscription Price”).
Rights holders will be required initially to pay for both the shares of common stock subscribed for pursuant to the primary subscription right and, if eligible, any additional shares of common stock subscribed for pursuant to the over-subscription privilege at the Subscription Price.
Great Elm Group, Inc. (“GEG”) intends to subscribe for at least $12.5 million in the rights offering, and certain other affiliates of GEG (together with GEG, the “Participating Shareholders”) have indicated that they intend to subscribe. Any over-subscription by the Participating Shareholders would be effected only after pro rata allocation of over-subscription shares to record date holders (other than the Participating Shareholders) who fully exercise their rights. See “The Offering—Over-Subscription Privilege.”
This offering may substantially dilute the aggregate NAV of the shares owned by stockholders who do not fully exercise their rights. Stockholders who do not fully subscribe should expect to own a smaller proportional interest in us following the completion of this offering. This offering may also cause dilution in the distributions per share we are able to make subsequent to completion of the offering. Such dilution is not currently determinable because it is not known how many shares will be subscribed for or what the NAV or market price of our common stock will be on the Expiration Date (as defined below) of the offering. If the NAV per share at the Expiration Date is substantially more than the Subscription Price, such dilution could be substantial. Any such dilution will disproportionately affect non-exercising stockholders. Because the Subscription Price is expected to be less than our NAV per share at the Expiration Date, all stockholders will experience a decrease in the NAV per share held by them, irrespective of whether they exercise all or any portion of their rights. See “Risk Factors—Risks Relating to this Offering—Stockholders who do not participate in this rights offering will experience immediate dilution in an amount that may be material” and “Dilution” in this prospectus for more information.
After giving effect to the sale of shares of our common stock in this offering at the Subscription Price and our receipt of the estimated net proceeds from that sale, as of March 31, 2022, our “as adjusted” NAV would be approximately $125.0 million, or approximately $13.58 per share, representing immediate NAV dilution of approximately $1.48 per share to our existing stockholders. These numbers do not include activity subsequent to March 31, 2022.
Our common stock is traded on the Nasdaq Global Market under the symbol “GECC.” The last reported closing price for our common stock on May 16, 2022 was $12.74 per share. The NAV of our common stock as of March 31, 2022 (the last date prior to the date of this prospectus on which we determined NAV) was $15.06 per share. The rights are non-transferable and will not be listed for trading on the Nasdaq Global Market or any other stock exchange. The rights may not be purchased or sold, and there will not be any market for trading the rights. The shares of our common stock to be issued pursuant to this offering will be listed for trading on the Nasdaq Global Market under the symbol “GECC.” See “The Offering” for a complete discussion of the terms of this offering.
The offering will expire at 5:00 p.m., New York City time, on June 10, 2022 (the “Expiration Date”), unless extended as described in this prospectus. We, in our sole discretion, may extend the period for exercising the rights. You may exercise the rights at any time during the subscription period.
This prospectus sets forth concisely important information you should know before investing in our common stock. Please read it and the documents we refer you to carefully in their entirety before you invest and keep this prospectus for future reference. We file annual, quarterly and current reports, proxy statements and other information about us with the Securities and Exchange Commission (the “SEC”). You may also obtain free copies of our annual and quarterly reports and make stockholder inquiries by contacting us at Great Elm Capital Corp., 800 South Street, Suite 230, Waltham, Massachusetts 02453 or by calling us collect at (617) 375-3006. We maintain a website at http://www.greatelmcc.com and we make all of our annual, quarterly and current reports, proxy statements and other publicly filed information available, free of charge, on or through such website. Information on our website is not incorporated into or a part of this prospectus. The SEC also maintains a website at http://www.sec.gov where such information is available without charge.
Shares of closed-end investment companies, including BDCs, that are listed on an exchange frequently trade at a discount to their NAV per share. If our shares trade at a discount to our NAV, it may increase the risk of loss for purchasers in this offering.
Investing in our common stock involves a high degree of risk. See “Risk Factors” beginning on page 14
of this prospectus to read about factors you should consider, including the risk of leverage, before investing in our common stock. The securities in which we invest will generally not be rated by any rating agency, and if they were rated, they would be below investment grade. These securities, which may be referred to as “junk,” have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal.
Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
Estimated sales load(1)
Proceeds to us, before expenses(2)
Oppenheimer & Co. Inc. and Imperial Capital, LLC, the dealer managers for this offering, will receive a fee for their marketing and soliciting services equal to 1.75% of the Subscription Price for each share issued in this offering, other than for shares issued to the Participating Shareholders, for which the dealer managers will receive 1.0%. The estimated sales load assumes no shares are purchased by the Participating Shareholders. See “The Offering—Dealer Managers Arrangements.” All costs of this rights offering will be borne by our stockholders whether or not they exercise their rights.
We estimate that our offering expenses (other than sales load) will be approximately $682,332 in connection with this offering. We estimate that net proceeds to us after sales load and our expenses will be approximately $55,828,501. In addition, we have agreed to pay certain fees and expenses of the dealer managers, including legal fees, in connection with the offering, subject to a cap of $150,000.
Oppenheimer & Co.
This prospectus is dated May 17, 2022.