Greetings, and welcome to Great Elm Capital Corp.'s First Quarter 2026 Financial Results Conference Call. The operator provided instructions. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Adam Yates, Managing Director. Thank you. Mr. Yates, you may begin.

Hello, and thank you, everyone, for joining us for Great Elm Capital Corp.'s First Quarter 2026 Earnings Conference Call. If you would like to be added to our distribution list, you can e-mail [email protected] or you can sign up for alerts directly on our website, www.greatelmcap.com. The slide presentation accompanying today's conference call and webcast can be found on our website under Events and Presentations. On our website, you can also find our earnings release and SEC filings. I would like to call your attention to the customary safe harbor statement regarding forward-looking information. Also, please note that nothing in today's call constitutes an offer to sell or a solicitation of offers to purchase our securities. 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 our SEC filings, please visit Great Elm Capital Corp.'s website under Financials, SEC filings or visit the SEC's website. Hosting the call today is Jason Reese, Great Elm Capital Corp.'s Chairman of the Board and newly appointed CEO. He'll be joined by Matt Kaplan, Portfolio Manager; Chris Croteau, Head of Research; Chief Financial Officer, Keri Davis; Chief Compliance Officer and General Counsel, Adam Kleinman; and Mike Keller, President of Great Elm Specialty Finance. I will now turn the call over to GECC's Chairman and CEO, Jason Reese.

Thanks, Adam, and thank you, everyone, for joining us today. In March, I assumed the role of Executive Chairman of GECC at an important inflection point for the company. On May 4, I was appointed CEO. The company was established to create income and protect and grow NAV. In the near term, I am reprioritizing. We will protect and grow NAV first and secondarily create income. We will accomplish this by strengthening oversight, protecting shareholder value and reinforcing accountability across the platform. We are well underway, making progress on these fronts. I noted last quarter that as Chairman and CEO of Great Elm Group, the parent company of GECC's investment manager, I bring deep familiarity with both the team and our investment process. That familiarity enables a seamless transition into my role as both GECC Chairman and CEO, and I'm working closely with management to reinforce disciplined underwriting and thoughtful capital allocation. Before turning to the quarter, I would like to thank Matt Kaplan for his leadership during his tenure as CEO. Matt will continue in his role as Portfolio Manager. Turning to results. Recent quarters have been challenging for the broader BDC sector, and GECC was not immune to the macro environment. Our NAV declined this quarter, driven primarily by unrealized losses in select investments, most notably our CLO joint venture and one private investment with an idiosyncratic event. Our CLO investments can exhibit volatility given their inherent leverage. Additionally, in the first quarter, the broader CLO equity market declined. Despite the volatility of the quarterly mark, CLO exposure provides additional diversification to GECC's portfolio of secured investments. Our CLO investments continue to generate meaningful cash flow, diversify our income streams and support the sustainability of our net investment income. In light of these unrealized losses, Great Elm Capital Management, GECM, the investment adviser, has waived all accrued and unpaid incentive fees through June 30, 2026, marking the third consecutive quarter of fee waivers. As of March 31, 2026, that waiver amounted to approximately $2.8 million or $0.20 per share of direct benefit to our shareholders. This action is immediately accretive to NAV and underscores our alignment with shareholders. We have also taken decisive action to deleverage the balance sheet. Recently, we called and repurchased all $57.5 million of GECC notes due later this year. Once these notes are fully retired, GECC will have no funded debt maturities until 2029. This eliminates near-term refinancing risk and enables our flexibility to deploy capital strategically. In addition, we continue to improve portfolio credit quality through active investment rotation. During the quarter, we deployed approximately $22 million across 12 investments while exiting investments we viewed as higher risk. As a result, first lien investments now comprise nearly 75% of the corporate portfolio, the highest level in the company's recent history. This reflects a deliberate shift towards senior secured investments with stronger downside protection and is a direct outcome of the underwriting discipline we have instilled across the platform. At the same time, we're expanding our proprietary sourcing efforts. During the quarter, we closed 3 transactions sourced through institutional partnerships, committing approximately $15 million to new private investments. We closed on one additional proprietary private investment in April, and we expect to close additional investments in the near future, building on this momentum as our sourcing network continues to deepen and differentiate our platform. At Great Elm Specialty Finance, or GESF, we continue to execute on the strategic transformation aimed at streamlining the platform for enhanced growth and profitability. Great Elm Commercial Finance is building a robust pipeline of asset-based lending opportunities, while Great Elm Healthcare Finance has successfully repositioned the business and recently closed on another transaction. Prestige, our invoice financing business, generates durable returns, but can exhibit quarter-to-quarter variability due to the spot nature of its business. I'm pleased to say all 3 of our core verticals under GESF are profitable and generate cash distributions. Collectively, GESF is poised for continued growth and represents an increasingly important source of diversification across both assets and income. Today, GECC's high-quality portfolio is strong, composed primarily of performing cash-generative investments. We closed the quarter with less than 1% of fair value of all investments on nonaccrual, a stark contrast to our peers. In addition, in the last quarter, we opportunistically purchased shares at a discount to NAV under our stock repurchase program. Through May 1, 2026, under our $10 million stock repurchase program authorized in October 2025, we have repurchased approximately 1% of all shares outstanding at an average 36% discount to our March 31 NAV, leaving approximately $9.5 million of remaining capacity under the program for future repurchases. Stepping back, GECC is well capitalized and supported by a strong balance sheet. At quarter end, we held approximately $10 million in cash, $4 million of liquid exchange-traded assets and had full availability under our $50 million revolving credit facility. With no near-term debt maturities, ample liquidity and a higher quality portfolio, we are well positioned to act decisively when compelling opportunities arise. Now I'd like to turn the call over to Keri Davis to walk through the financial details.

Thanks, Jason. I'll go over our financial highlights now, but we invite all of you to review our press release, accompanying presentation and SEC filings for greater detail. Net investment income for the first quarter of 2026 was $5 million or $0.36 per share compared to $4.4 million or $0.31 per share in the fourth quarter of 2025. The approximate 13% growth quarter-over-quarter in net investment income was driven primarily by the benefit of the incentive fee waiver, accounting for approximately $0.20 per share. Net assets were $107.5 million or $7.74 per share as of March 31, 2026, compared to $112.9 million or $8.07 per share as of December 31, 2025. Details for the quarter-over-quarter change in NAV can be found on Slide 11 of the investor presentation. Our balance sheet remains strong and liquid. GECC's asset coverage ratio was 161.8% as of March 31, 2026, compared to 158.1% as of December 31, 2025. Our debt-to-equity ratio also improved to 1.62x from 1.72x in the prior quarter, reflecting the continued deleveraging Jason noted. As of March 31, 2026, total debt outstanding was $174 million, and we had no borrowings on our $50 million revolver. Cash and money market fund investments totaled approximately $10 million. Importantly, our Board of Directors approved a quarterly dividend of $0.25 per share for the second quarter of 2026, equating to an 18% annualized yield on GECC's May 1, 2026, closing price of $5.56. I'll now hand it over to the operator for questions.

The operator provided instructions. The first question comes from the line of Erik Zwick with Lucid Capital Markets LLC.

Jason, if I could start with a question for you. You mentioned in your prepared comments some efforts to deleverage the balance sheet. I know there's no additional maturities until 2029. I guess at this point, have you kind of completed those deleveraging opportunities or efforts? Or are there still more you could do through, I guess, maybe deleveraging?

At the end of the quarter, there was still $18 million of our 2026 paper outstanding. Approximately, we called that paper. It hasn't been paid off yet, but it will be in the next few weeks. At that point, we've probably completed our deleveraging for the moment, although our 8.5% notes do become callable at the end of this month.

Okay. So that could potentially be something that you would look at. Okay. That's helpful. And maybe switching gears a little bit just in terms of the pipeline, and maybe this is kind of a two-part question. One is, as you look at what's in your pipeline today, the opportunities there that you're seeing as you look at through kind of a risk-adjusted lens, but then also looking at the opportunity to continue using the share repurchase authorization kind of given where the shares are trading today, how do you weigh those two opportunities and choose where to deploy capital at this point?

So, we're obviously going to balance and look at all opportunities and look where we think the best risk-adjusted returns are. As far as our opportunities, we are much more focused on more traditional private credit deals than broadly syndicated loans right now. We think that there's better yields, actually, with less risk there right now, and we've closed a number of those transactions already this year, and we're working on a number more. As for looking at share repurchases or debt paydown versus investments, I mean, we're constantly looking at what the return is. Obviously, paying down debt is riskless for us, and so that's important. But we're very serious about rebuilding NAV, as I've tried to say. And as you've seen with us waiving for three quarters our incentive fee, and by actually buying back shares, which a lot of BDCs don't do, we're looking to rebuild that NAV piece. Did that address your question?

Yes. No, it does. And maybe just a follow-up on that as I try to kind of look at the future run rate of earnings and think about that incentive fee waiver. And you mentioned that the priority number one now is protecting and growing NAV. So, is it safe to assume that you would potentially continue considering waiving the incentive fee if the run rate of earnings without the incentive fee waiver is less than the current level of the dividend, the new $0.25 per share level?

We will continue looking at what's in the best interest of the shareholders for sure. And yes, we definitely want to be covering our dividend. So, I'm just changing emphasis. We've done a pretty good job of generating income and covering our dividends. We haven't done as good a job as protecting our NAV. And so, we're going to really focus on that. I think there's times when you take more risks and there's times when you take less risk in your investments. And the last couple of quarters have shown to be a time to take less risk.

Got it. And then just in terms of trying to get kind of a better understanding of the CLO cash flow timing. I know that depending on when you made those and the scheduled payments that can be a little bit bumpy quarter-to-quarter. To the extent that you have some visibility over the next few quarters, anything you can communicate there in terms of expected timing of cash flows?

We will receive cash flows every quarter now. When you first make CLO investments there is a lag, which has caused much of the variability, and future cash flows will also depend on how those CLOs perform. We are confident in the cash flows expected over the life of those equity investments. In the first quarter the broadly syndicated loan market weakened, but we have already received $2.5 million this quarter, roughly the same pace as the first quarter. That is a reasonable number to use going forward, although quarterly amounts will vary.

Okay. And so if you — correct me if I'm wrong — I don't think you made any new CLO investments in the last quarter or two. So some of that initial variability as it goes through the warehouse period and then makes its first distribution, most of that should be in the past, barring any new investments you might make?

Correct. There should be less volatility going forward than there has been in the past unless we decide to make new investments, which we, at the current moment, are not looking at making any new CLO equity investments. We're pretty happy with where our position is.

The operator provided instructions. Ladies and gentlemen, we have reached the end of the question-and-answer session. I would now like to turn the floor over to Jason Reese for closing comments.

Thank you again for joining us today. Our priorities remain clear: Protect capital, methodically rebuild NAV and generate sustainable net investment income. During the quarter, we advanced each of these objectives. GECM again waived incentive fees to the direct benefit of GECC shareholders. We took action to retire all near-term funded debt, and we increased first lien exposure to its highest level in recent periods. We have instilled greater rigor, transparency and accountability across the platform, and I am encouraged by both the trajectory of the portfolio and the strength of the team executing on our strategy. As we move through the second quarter, GECC's solid foundation and strong liquidity positions us to deliver more consistent and durable returns over time. We remain focused on disciplined execution and long-term value creation. We appreciate your continued support and look forward to updating you next quarter. Thank you.

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