gecc-8k_20211105.htm

 

 

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 5, 2021

 

Great Elm Capital Corp.

(Exact name of Registrant as Specified in Its Charter)

 

 

Maryland

814-01211

81-2621577

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

 

 

 

800 South Street, Suite 230, Waltham, MA

 

02453

(Address of Principal Executive Offices)

 

(Zip Code)

Registrant’s Telephone Number, Including Area Code: (617) 375-3006

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, $0.01 par value

GECC

Nasdaq Global Market

6.75% Notes due 2025

GECCM

Nasdaq Global Market

6.50% Notes due 2024

GECCN

Nasdaq Global Market

5.875% Notes due 2026

GECCO

Nasdaq Global Market

 

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

 


 

 

Item 2.02 Results of Operations and Financial Condition.

On November 5, 2021, Great Elm Capital Corp. issued the press release and published a presentation furnished as exhibits 99.1 and 99.2, respectively, to this report.

The foregoing information (including the exhibits hereto) are being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

The following exhibits are furnished with this report but shall not be deemed filed:

  

 

 

 

Exhibit

Number

  

Description

99.1

 

Earnings Press Release, dated November 5, 2021.

99.2

  

Presentation, dated November 5, 2021.

 

 


 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

 

 

 

 

GREAT ELM CAPITAL CORP.

 

 

 

Date:  November 5, 2021

 

/s/  Keri A. Davis

 

 

By:

 

Keri A. Davis

 

 

Title:

 

Chief Financial Officer

 

 

 

 

 

gecc-ex991_6.htm

Exhibit 99.1

 

Great Elm Capital Corp. Announces THIRD Quarter 2021 Financial Results

 

Company to Host Quarterly Conference Call at 11:00 AM ET Today

 

WALTHAM, MA, November 5, 2021 – Great Elm Capital Corp. (“we,” “us,” “our,” or “GECC,”) (NASDAQ: GECC), a business development company, today announced its financial results for the third quarter and nine months ended September 30, 2021.

 

Financial and Operating Highlights

Net investment income (“NII”) for the quarter was $1.6 million, as compared to NII of $2.1 million for the quarter ended June 30, 2021, and $1.9 million for the quarter ended September 30, 2020.

NII per share was $0.07 based on weighted average shares outstanding of 23,914,447 for the quarter ended September 30, 2021, as compared to NII per share of $0.09, based on weighted average shares outstanding of 23,508,232 for the quarter ended June 30, 2021.

 

NII was impacted by certain one-time items primarily related to legal fees incurred in connection with a legacy Full Circle investment which resulted in a reduction to NII of approximately $0.02 per share in the quarter ended September 30, 2021.

Acquired a majority equity interest in Lenders Funding, LLC (“Lenders Funding”), a private funding and risk sharing source for factors and asset-based lenders, in a transaction that strategically enhances GECC’s specialty finance platform.

 

Issued $13.25 million of equity at NAV in connection with the Lenders Funding transaction to support its growth.

Net assets grew to approximately $99.4 million on September 30, 2021, as compared to $91.7 million on June 30, 2021, and $79.6 million on December 31, 2020.

NAV per share was $3.70 as of September 30, 2021, compared to $3.90 as of June 30, 2021, and $3.46 at December 31, 2020.  

As of September 30, 2021, GECC’s asset coverage ratio was approximately 163.8%, compared to 166.2% as of June 30, 2021, and 167.1% as of December 31, 2020.

Board of directors approved a quarterly dividend of $0.10 per share for the first quarter of 2022, consistent with the quarterly dividends declared in 2021.


 

 


 

 

Management Commentary

Peter A. Reed, GECC’s Chief Executive Officer, stated, “We continued to grow net assets during the quarter and further diversified our business with the acquisition of a majority ownership stake in Lenders Funding. This transaction furthers GECC’s vision of growing its specialty finance platform and we expect will provide GECC with additional access to proprietary overflow opportunities in addition to visibility into the specialty finance market. We continue to build upon our strategy of creating a portfolio of specialty finance solutions with the ability to service the lending needs of small businesses at varying stages of their development. We deployed $71.1 million into new investments during the quarter and grew total investments to $246.7 million at fair value as of September 30, 2021. We are encouraged by the portfolio’s outlook and our robust pipeline of new investments.”


-2-


 

 

Financial Highlights – Per Share Data(1)

 

Q3/20201

Q4/20201

Q1/20211

Q2/20211

Q3/20211

Earnings Per Share (“EPS”)

$0.72

($0.43)

$0.53

$0.11

($0.13)

Net Investment Income (“NII”) Per Share

$0.18

$0.07

$0.06

$0.09

$0.07

Net Realized Gains / (Losses) Per Share

($0.02)

$0.03

($0.14)

$0.02

$0.07

Net Unrealized Gains / (Losses) Per Share

$0.56

($0.54)

$0.61

$0.12

($0.27)

Net Asset Value Per Share at Period End

$5.53

$3.46

$3.89

$3.90

$3.70

Distributions Paid / Declared Per Share

$0.249

$0.249

$0.10

$0.10

$0.10

 

Portfolio and Investment Activity

As of September 30, 2021, GECC held total investments of $246.7 million at fair value, as follows:

 

46 debt investments, totaling approximately $185.7 million and representing 75.3% of the fair market value of our total investments. Secured debt investments comprised a substantial majority of the fair market value of our debt investments.

 

5 income generating equity investments, totaling approximately $35.3 million, representing 14.3% of the fair market value of our total investments.

 

8 other equity investments, totaling approximately $16.5 million and representing 6.7% of the fair market value of our total investments.

 

Special Purpose Acquisition Company (SPAC) instruments totaling approximately $9.3 million, which consist of SPAC common stock and warrants, representing approximately 3.8% of the fair market value of our total investments.

 

As of September 30, 2021, the weighted average current yield on our debt portfolio was 11.3%. Floating rate instruments comprised approximately 38.5% of the fair market value of debt investments.

 

During the quarter ended September 30, 2021, we deployed approximately $71.1 million into 25 investments(2) excluding SPACs, at a weighted average current yield of 10.0%. The weighted average price of our new debt investments was 99% of par.

 

During the quarter ended September 30, 2021, we monetized, in part or in full, 21 investments for approximately $30.0 million(3) excluding SPACs, at a weighted average current yield of 9.4%. The weighted average realized price was 100% of par. We also monetized $0.4 million of SPAC securities during the period.

 

-3-


 

 

Financial Review

Total investment income for the quarter ended September 30, 2021 was approximately $7.4 million, or $0.31 per share. Total expenses for the quarter ended September 30, 2021 were approximately $5.8 million, or $0.24 per share.

 

Net realized gains for the quarter ended September 30, 2021 were approximately $1.7 million, or $0.07 per share. Net unrealized depreciation from investments for the quarter ended September 30, 2021 was approximately $6.4 million, or $0.27 per share.

 

Liquidity and Capital Resources

As of September 30, 2021, our unrestricted cash balance was approximately $20.6 million, exclusive of holdings of United States Treasury Bills.

 

Total debt outstanding (par value) as of September 30, 2021 was $151.7 million, comprised of $10.0 million outstanding on our $25.0 million revolving credit facility due May 2024, our 6.50% senior notes due June 2024 (NASDAQ: GECCN), our 6.75% senior notes due January 2025 (NASDAQ: GECCM), and our 5.875% senior notes due June 2026 (NASDAQ: GECCO).

 

Distributions

GECC’s board of directors has approved a $0.10 per share cash distribution for the quarter ending March 31, 2022. The record and payment dates for the distribution are expected to be set by GECC in the fourth quarter pursuant to authority granted by its board of directors.

 

Conference Call and Webcast

GECC will discuss these results in a conference call later this morning (Friday, November 5, 2021) at 11:00 a.m. ET.

 

Conference Call Details

Date/Time:Friday, November 5, 2021 – 11:00 a.m. ET

 

Participant Dial-In Numbers:

(United States):844-820-8297

(International):661-378-9758

 

To access the call, please dial-in approximately five minutes before the start time and, when asked, provide the operator with passcode "GECC." An accompanying slide presentation will be available in .pdf format via the “Investor Relations” section of Great Elm Capital Corp.’s website at http://www.investor.greatelmcc.com/events-and-presentations/presentations after the issuance of the earnings release.

 

Webcast

The call and presentation will also be simultaneously webcast over the Internet via the Investor Relations section of GECC’s website or by clicking on the conference call link: Great Elm Capital Corp (GECC) Q3 2021 Conference Call Webcast.

 

-4-


 

 

About Great Elm Capital Corp.

Great Elm Capital Corp. is an externally managed, specialty finance company that seeks to generate current income and capital appreciation by investing in debt and income generating equity securities, including investments in specialty finance businesses. GECC elected to be regulated as a business development company under the Investment Company Act of 1940, as amended.

Cautionary Statement Regarding Forward-Looking Statements

Statements in this communication that are not historical facts are “forward-looking” statements within the meaning of the federal securities laws. These statements are often, but not always, made through the use of words or phrases such as “expect,” “anticipate,” “should,” “will,” “estimate,” “designed,” “seek,” “continue,” “upside,” “potential” and similar expressions. All such forward-looking statements involve estimates and assumptions that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the results expressed in the statements. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking statements are: conditions in the credit markets, the price of GECC common stock, the performance of GECC’s portfolio and investment manager and risks associated with the economic impact of the COVID-19 pandemic on GECC and its portfolio companies. Information concerning these and other factors can be found in GECC’s Annual Report on Form 10-K and other reports filed with the SEC. GECC assumes no obligation to, and expressly disclaims any duty to, update any forward-looking statements contained in this communication or to conform prior statements to actual results or revised expectations except as required by law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.

 

This press release does not constitute an offer of any securities for sale.

 

Endnotes:

(1) The per share figures are based on a weighted average outstanding share count for the respective period.

(2) This includes new deals, additional fundings (inclusive of those on revolving credit facilities), refinancings and capitalized PIK income. Amounts included herein do not include investments in short-term securities, including United States Treasury Bills.

(3) This includes scheduled principal payments, prepayments, sales and repayments (inclusive of those on revolving credit facilities). Amounts included herein do not include investments in short-term securities, including United States Treasury Bills.

 

Media & Investor Contact:

Investor Relations

investorrelations@greatelmcap.com

 

Adam Prior

The Equity Group Inc.

+1 (212) 836-9606

aprior@equityny.com


-5-


 

 

GREAT ELM CAPITAL CORP.

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (unaudited)

Dollar amounts in thousands (except per share amounts)

 

 

 

September 30, 2021

 

 

December 31, 2020

Assets

 

 

 

 

 

 

 

Investments

 

 

 

 

 

 

 

Non-affiliated, non-controlled investments, at fair value (amortized cost of $187,299 and $147,494, respectively)

 

$

170,681

 

 

$

112,116

Non-affiliated, non-controlled short-term investments, at fair value (amortized cost of $139,991 and $74,997, respectively)

 

 

139,986

 

 

 

74,998

Affiliated investments, at fair value (amortized cost of $127,254 and $109,840, respectively)

 

 

36,881

 

 

 

29,289

Controlled investments, at fair value (amortized cost of $34,786 and $7,630, respectively)

 

 

39,173

 

 

 

10,243

Total investments

 

 

386,721

 

 

 

226,646

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

20,609

 

 

 

52,582

Restricted cash

 

 

5

 

 

 

600

Receivable for investments sold

 

 

1,820

 

 

 

-

Interest receivable

 

 

4,412

 

 

 

2,423

Dividends receivable

 

 

880

 

 

 

-

Due from portfolio company

 

 

3

 

 

 

837

Due from affiliates

 

 

11

 

 

 

-

Deferred financing costs

 

 

432

 

 

 

-

Prepaid expenses and other assets

 

 

336

 

 

 

240

Total assets

 

$

415,229

 

 

$

283,328

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

Notes payable 6.50% due September 18, 2022 (including unamortized discount

   of $0 and $494, respectively)

 

$

-

 

 

$

29,799

Notes payable 6.75% due January 31, 2025 (including unamortized discount

   of $852 and $1,042, respectively)

 

 

44,758

 

 

 

44,568

Notes payable 6.50% due June 30, 2024 (including unamortized discount

   of $1,202 and $1,529, respectively)

 

 

41,621

 

 

 

41,294

Notes payable 5.875% due June 30, 2026 (including unamortized discount

   of $2,137)

 

 

55,363

 

 

 

-

Revolving credit facility

 

 

10,000

 

 

 

-

Payable for investments purchased

 

 

152,624

 

 

 

75,511

Interest payable

 

 

56

 

 

 

328

Distributions payable

 

 

-

 

 

 

1,911

Accrued incentive fees payable

 

 

10,064

 

 

 

9,176

Due to affiliates

 

 

1,022

 

 

 

764

Accrued expenses and other liabilities

 

 

296

 

 

 

362

Total liabilities

 

$

315,804

 

 

$

203,713

 

 

 

 

 

 

 

 

Commitments and contingencies

 

$

-

 

 

$

-

 

 

 

 

 

 

 

 

Net Assets

 

 

 

 

 

 

 

Common stock, par value $0.01 per share (100,000,000 shares authorized,

26,905,668 shares issued and outstanding and 23,029,453 shares issued and

   outstanding, respectively)

 

$

269

 

 

$

230

Additional paid-in capital

 

 

245,424

 

 

 

230,504

Accumulated losses

 

 

(146,268

)

 

 

(151,119

Total net assets

 

$

99,425

 

 

$

79,615

Total liabilities and net assets

 

$

415,229

 

 

$

283,328

Net asset value per share

 

$

3.70

 

 

$

3.46

 

 

 


-6-


 

GREAT ELM CAPITAL CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

Dollar amounts in thousands (except per share amounts)

 

 

 

For the Three Months Ended September 30,

 

 

For the Nine Months Ended September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Investment Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-affiliated, non-controlled investments

 

$

3,765

 

 

$

2,718

 

 

$

9,337

 

 

$

9,800

 

Non-affiliated, non-controlled investments (PIK)

 

 

63

 

 

 

-

 

 

 

161

 

 

 

-

 

Affiliated investments

 

 

305

 

 

 

246

 

 

 

889

 

 

 

716

 

Affiliated investments (PIK)

 

 

1,588

 

 

 

1,321

 

 

 

4,595

 

 

 

3,842

 

Controlled investments

 

 

151

 

 

 

90

 

 

 

161

 

 

 

188

 

Total interest income

 

 

5,872

 

 

 

4,375

 

 

 

15,143

 

 

 

14,546

 

Dividend income from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-affiliated, non-controlled investments

 

 

435

 

 

 

401

 

 

 

1,369

 

 

 

404

 

Controlled investments

 

 

480

 

 

 

880

 

 

 

1,440

 

 

 

1,760

 

Total dividend income

 

 

915

 

 

 

1,281

 

 

 

2,809

 

 

 

2,164

 

Other income from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-affiliated, non-controlled investments

 

 

561

 

 

 

295

 

 

 

642

 

 

 

351

 

Affiliated investments (PIK)

 

 

-

 

 

 

-

 

 

 

282

 

 

 

75

 

Controlled investments

 

 

25

 

 

 

-

 

 

 

25

 

 

 

12

 

Total other income

 

 

586

 

 

 

295

 

 

 

949

 

 

 

438

 

Total investment income

 

$

7,373

 

 

$

5,951

 

 

$

18,901

 

 

$

17,148

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Management fees

 

$

876

 

 

$

609

 

 

$

2,301

 

 

$

1,898

 

Incentive fees

 

 

382

 

 

 

482

 

 

 

888

 

 

 

810

 

Administration fees

 

 

175

 

 

 

152

 

 

 

511

 

 

 

547

 

Custody fees

 

 

13

 

 

 

20

 

 

 

39

 

 

 

59

 

Directors’ fees

 

 

61

 

 

 

49

 

 

 

172

 

 

 

151

 

Professional services

 

 

937

 

 

 

287

 

 

 

1,613

 

 

 

794

 

Interest expense

 

 

3,147

 

 

 

2,225

 

 

 

7,636

 

 

 

6,920

 

Other expenses

 

 

209

 

 

 

194

 

 

 

561

 

 

 

468

 

Total expenses

 

$

5,800

 

 

$

4,018

 

 

$

13,721

 

 

$

11,647

 

Net investment income

 

$

1,573

 

 

$

1,933

 

 

$

5,180

 

 

$

5,501

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net realized and unrealized gains (losses):

 

 

 

 

 

 

 

 

 

Net realized gain (loss) on investment transactions from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-affiliated, non-controlled investments

 

$

1,770

 

 

$

(262

)

 

$

38

 

 

$

(11,760

)

Affiliated investments

 

 

(110

)

 

 

-

 

 

 

(4,162

)

 

 

-

 

Controlled investments

 

 

-

 

 

 

-

 

 

 

140

 

 

 

-

 

Realized gain on repurchase of debt

 

 

-

 

 

 

120

 

 

 

-

 

 

 

1,237

 

Total net realized gain (loss)

 

 

1,660

 

 

 

(142

)

 

 

(3,984

)

 

 

(10,523

)

Net change in unrealized appreciation (depreciation) on investment transactions from:

 

 

 

 

 

Non-affiliated, non-controlled investments

 

 

(3,202

)

 

 

3,544

 

 

 

13,994

 

 

 

(13,699

)

Affiliated investments

 

 

(3,568

)

 

 

319

 

 

 

(5,062

)

 

 

(5,796

)

Controlled investments

 

 

406

 

 

 

2,050

 

 

 

1,774

 

 

 

2,194

 

Total net change in unrealized appreciation (depreciation)

 

 

(6,364

)

 

 

5,913

 

 

 

10,706

 

 

 

(17,301

)

Net realized and unrealized gains (losses)

 

$

(4,704

)

 

$

5,771

 

 

$

6,722

 

 

$

(27,824

)

Net increase (decrease) in net assets resulting from operations

 

$

(3,131

)

 

$

7,704

 

 

$

11,902

 

 

$

(22,323

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income per share (basic and diluted):

 

$

0.07

 

 

$

0.18

 

 

$

0.22

 

 

$

0.53

 

Earnings per share (basic and diluted):

 

$

(0.13

)

 

$

0.72

 

 

$

0.50

 

 

$

(2.17

)

Weighted average shares outstanding (basic and diluted):

 

 

23,914,447

 

 

 

10,660,894

 

 

 

23,610,050

 

 

 

10,307,771

 

 

-7-

Slide 1

Exhibit 99.2

Slide 2

Statements in this communication that are not historical facts are “forward-looking” statements within the meaning of the federal securities laws. These statements are often, but not always, made through the use of words or phrases such as “expect,” “anticipate,” “should,” “will,” “estimate,” “designed,” “seek,” “continue,” “upside,” “potential,” “preliminary” and similar expressions. All such forward-looking statements involve estimates and assumptions that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the results expressed in the statements. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking statements are: conditions in the credit markets, the price of GECC common stock, the performance of GECC’s portfolio and investment manager and risks associated with the economic impact of the COVID-19 pandemic on GECC and its portfolio companies. Information concerning these and other factors can be found in GECC’s Annual Report on Form 10-K and other reports filed with the SEC. GECC assumes no obligation to, and expressly disclaims any duty to, update any forward-looking statements contained in this communication or to conform prior statements to actual results or revised expectations except as required by law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. You should consider the investment objective, risks, charges and expenses of GECC carefully before investing. GECC’s filings with the SEC contain this and other information about GECC and are available by contacting GECC at the phone number and address at the end of this presentation. The SEC also maintains a website that contains the aforementioned documents. The address of the SEC’s website is http://www.sec.gov. These documents should be read and considered carefully before investing.   The performance, distributions and financial data contained herein represent past performance, distributions and results and neither guarantees nor is indicative of future performance, distributions or results. Investment return and principal value of an investment will fluctuate so that an investor’s shares may be worth more or less than the original cost. GECC’s market price and net asset value will fluctuate with market conditions. Current performance may be lower or higher than the performance data quoted. All information and data, including portfolio holdings and performance characteristics, is as of September 30, 2021, unless otherwise noted, and is subject to change. This presentation does not constitute an offer of any securities for sale. Forward Looking Statement

Slide 3

About GECC (1) Weighted average current yield is based upon the stated coupon rate and fair value of outstanding debt securities at the measurement date.

Slide 4

Third Quarter 2021 Overview: Capital Deployment and Monetization GECCN 6.50% Notes due June 2024 GECCM 6.75% Notes due January 2025 $25.0 Million Credit Facility with a 3 Year Term at LIBOR rate plus 3.50% GECCO 5.875% Notes due June 2026 Attractive Funding Sources

Slide 5

Third Quarter 2021: Net Investment Income (“NII”) Analysis NII for the quarter ended September 30, 2021 was approximately $1.6 million, or $0.07 per share(1), as compared to NII of $2.1 million or $0.09 per share for the quarter ended June 30, 2021 NII was impacted by certain one-time items primarily related to legal fees incurred in connection with a legacy Full Circle investment which resulted in a reduction to NII of approximately $0.02 per share in the quarter ended September 30, 2021. $ in $000s (1) Based on weighted average shares outstanding of 23,914,447 for the quarter ended September 30, 2021 and 23,508,232 for the quarter ended June 30, 2021

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Net Asset Value Change from June 30, 2021 to September 30, 2021 $ in $000s

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Investment Activity: New Investments (July 1 – October 29, 2021) Throughout Q3 2021 and subsequent to quarter end, we actively deployed approximately $55.4 million of available cash into new investments at a weighted average current yield of 10.0% $ in $000s (1) Investment Activity includes activity in Q3 2021 and the subsequent period through and including October 29, 2021. Investment activity does not include revolver draws, capitalized PIK interest, or incremental funding to existing investments. (2) Weighted average current yield is based upon the stated coupon rate and fair value of outstanding investments is as of the most recent measurement date or date of purchase, as applicable. These figures do not include Viasat, Inc. ..

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Prestige is a leading provider of “spot factoring” services, providing clients with an opportunity to sell individual accounts receivable for an upfront payment Specialty Finance Investments: Prestige Capital Finance, LLC Over 30 years in business and through $6+ billion of transactions factored, Prestige has a track record of strong credit underwriting with minimal losses

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Acquisition of Lenders Funding, LLC Private funding and risk sharing source for factors and asset-based lenders Purchases participations in factoring and asset-based lending transactions as well as provides working capital to customers under a variety of lending programs Founded by CEO Robert Zadek in 2000, who will continue to manage the business Long-term track record of profitably growing the business GECC purchased a majority ownership position in Lenders Funding for $7.25 million, consisting of: $4 million in cash, and $3.25 million in GECC shares issued at GECC’s net asset value (NAV) In connection with the transaction, GECC issued to Lenders Funding $10 million of additional GECC shares at NAV in exchange for a subordinated note in an equal principal amount. The proceeds from the transaction will be retained by Lenders Funding to help support the growth of the business. Transaction Details

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Building a Specialty Finance Lending Ecosystem “Overflow” opportunities allow GECC to participate in certain larger transactions directly Significant Mutual Benefits Greater access to capital allows Prestige to increase the size of the transactions it can pursue, which may further enhance its growth Increases visibility into the broader specialty finance market through relationships developed over 20+ years as a provider of participant capital Rates of return may be higher than traditional cash flow credit investments Proprietary and unique to GECC

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Meaningful Growth in Specialty Finance GECC has increased its Specialty Finance allocation over the past 18 months and continues to build on the strategy of creating a portfolio of specialty finance solutions across the continuum of lending. Specialty Finance as a % of Portfolio Fair Value

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Investment Takeaways A diversified portfolio, primarily comprised of secured loans, secured bonds, preferred equity and investments in specialty finance businesses uncorrelated to the corporate credit portfolio Actively pursuing investments in specialty finance businesses Debt investments carry a weighted average current yield of 11.3%1 Weighted average current yield of income generating equity investments carry a weighted average current yield of 13.0%1,2 Credit facility provides ample capital at favorable terms New debt issuance provides additional capital at lower cost Distributions to Shareholders Cash distribution of $0.10 per share authorized for first quarter of 2022 Since the Company’s initial distribution in December 2016, $5.14 in total distributions paid, declared or authorized (in cash or stock) (1) Weighted average current yield is based upon the anticipated distribution rate and fair value of outstanding investments at the measurement date. Amounts in the above tables do not include investments in short-term securities, including United States Treasury Bills. (2) Five of the 13 equity investments, totaling approximately $35.3 million of fair value as of September 30, 2021, are income-generating equity investments: Prestige Capital Finance, LLC, Blueknight Energy Partners L.P, Crestwood Equity Partners, LP., Equitrans, and Lenders Funding Portfolio Repositioning Moving in Right Direction Ample Liquidity

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Portfolio Review (Quarter Ended 9/30/2021)

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5 Income Generating Equity Investments Portfolio Review: Quarter End Portfolio Detail 46 Debt Investments $185.7 million Fair Value of Debt Investments 92.1% Weighted Average Dollar Price of Debt Investments 11.3%1 Weighted Average Current Yield of Debt Investments 75.3% Of Invested Capital in Debt Investments 13 Equity Investments, excl. SPACs Debt Investments: Equity Investments: 14.3% Of Invested Capital in Equity Investments (1) Weighted average current yield is based upon the anticipated distribution rate and fair value of outstanding investments at the measurement date. Amounts in the above tables do not include investments in short-term securities, including United States Treasury Bills. Weighted Average Current Yield of Income-Generating Equity Investments 8 Other Equity Investments $35.3 million Fair value of Equity Investments $16.5 million 6.7% 13.0%1

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Portfolio by Asset Type ($MM) Portfolio by Interest Rate Type ($MM) Weighted average fixed rate yield of 12.68%1 Weighted average floating rate yield of 9.05%1 (1) Weighted average fixed and floating rate current yield is based upon the stated coupon rate and fair value of outstanding debt instruments at the measurement date. Amounts in the above tables do not include investments in short-term securities, including United States Treasury Bills. Portfolio Review: Quarter End Asset Type and Interest Rate Type

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Portfolio Review: Quarter End Industry Breakdown Amounts in the above tables do not include investments in short-term securities, including United States Treasury Bills. $ in Millions Industry by % of Fair Value at September 30, 2021

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Portfolio Review: Quarterly Investment Activity (1) This includes new deals, additional fundings (inclusive of those on revolving credit facilities), refinancings and PIK interest. Amounts included herein are exclusive of investments in short-term securities, including United States Treasury Bills. Weighted average dollar price is based upon the stated par value and fair value of outstanding debt securities at the measurement date. Weighted average current yield is based upon the stated coupon rate and fair value of outstanding debt securities at the measurement date. (2) Weighted average current yield metrics specifically refer to the applicable investment activity in the respective period. (3) This includes scheduled principal payments, prepayments, sales and repayments (inclusive of those on revolving credit facilities). Amounts included herein are exclusive of investments in short-term securities, including United States Treasury Bills. Weighted average dollar price is based upon the stated par value and fair value of outstanding debt securities at the measurement date. Weighted average current yield is based upon the stated coupon rate and fair value of outstanding debt securities at the measurement date. New Investments vs. Monetized Investments

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GECC SPAC Holdings Identify Pre-IPO Opportunities Utilize Relationships to Receive Allocations Exit prior to bearing equity risk Opportunity to generate a more favorable return on cash balances for the Company in a low-interest rate environment with minimal permanent capital impairment risk

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Financial Review (Quarter Ended 9/30/2021)

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Financial Review: Per Share Data (1) The per share figures are based on a weighted average outstanding share count for the respective period. Financial Highlights – Per Share Data

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Financial Review: Quarterly Operating Results (1) The per share figures are based on a weighted average of the shares outstanding for the preceding quarter, except where such amounts need to be adjusted to be consistent with the financial highlights of our consolidated financial statements. (2) Total investment income includes PIK income and net accretion of OID and market discount. (3) Incentive fees include the reversal of certain accrued incentive fees.

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Financial Review: Portfolio Total Fair Value of Investments does not include investments in short-term securities, including United States Treasury Bills. Total debt outstanding excludes the Company’s 6.50% senior notes due 2022 (NASDAQ: GECCL), which were called prior to quarter end and subsequently redeemed at 100% of their principal amount, plus accrued and unpaid interest through the redemption date on July 23, 2021. Cash does not include our holdings in United States Treasury Bills or Restricted Cash. Comprised of $59.8 million of gross cash less $30.7 million reserved for the July 23rd redemption of our unsecured notes due 2022 Financial Highlights - Portfolio

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Summary

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Capital Activity: Declared Quarterly Cash Distribution Distributions GECC’s Board authorized the distribution for the quarter ending March 31, 2022 at $0.10 per share, with the record and payment dates to be set by the officers of GECC pursuant to authority granted by the Board On an annualized basis, this currently represents an indicated yield of 10.8%* on NAV and a 11.4% yield on the November 1, 2021 closing price of $3.50. (* Based on an annualized $0.10 per share total / Net Asset Value of $3.70 at September 30, 2021)

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General Risks Debt instruments are subject to credit and interest rate risks.   Credit risk refers to the likelihood that an obligor will default in the payment of principal or interest on an instrument. Financial strength and solvency of an obligor are the primary factors influencing credit risk. In addition, lack or inadequacy of collateral or credit enhancement for a debt instrument may affect its credit risk. Credit risk may change over the life of an instrument, and debt instruments that are rated by rating agencies are often reviewed and may be subject to downgrade. Our debt investments either are, or if rated would be, rated below investment grade by independent rating agencies. These “junk bonds” and “leveraged loans” are regarded as having predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal. They may be illiquid and difficult to value and typically do not require repayment of principal before maturity, which potentially heightens the risk that we may lose all or part of our investment.   Interest rate risk refers to the risks associated with market changes in interest rates. Interest rate changes may affect the value of a debt instrument indirectly (especially in the case of fixed rate obligations) or directly (especially in the case of an instrument whose rates are adjustable). In general, rising interest rates will negatively impact the price of a fixed rate debt instrument and falling interest rates will have a positive effect on price. Adjustable rate instruments also react to interest rate changes in a similar manner although generally to a lesser degree (depending, however, on the characteristics of the reset terms, including the index chosen, frequency of reset and reset caps or floors, among other factors).   GECC utilizes leverage to seek to enhance the yield and net asset value of its common stock. These objectives will not necessarily be achieved in all interest rate environments. The use of leverage involves risk, including the potential for higher volatility and greater declines of GECC’s net asset value, fluctuations of dividends and other distributions paid by GECC and the market price of GECC’s common stock, among others. The amount of leverage that GECC may employ at any particular time will depend on, among other things, our Board’s and our adviser’s assessment of market and other factors at the time of any proposed borrowing.   As part of our lending activities, we may purchase notes or make loans to companies that are experiencing significant financial or business difficulties, including companies involved in bankruptcy or other reorganization and liquidation proceedings. Although the terms of such financings may result in significant financial returns to us, they involve a substantial degree of risk. The level of analytical sophistication, both financial and legal, necessary for successful financing to companies experiencing significant business and financial difficulties is unusually high. We cannot assure you that we will correctly evaluate the value of the assets collateralizing our investments or the prospects for a successful reorganization or similar action. In any reorganization or liquidation proceeding relating to a portfolio company, we may lose all or part of the amounts advanced to the borrower or may be required to accept collateral with a value less than the amount of the investment advanced by us to the borrower.

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Investor Relations 800 South Street, Suite 230 Waltham, MA 02453 investorrelations@greatelmcap.com Adam Prior The Equity Group Inc. +1 (212) 836-9606 aprior@equityny.com Contact Information