Great Elm Capital Corp.

Thank you for standing by and welcome to the Great Elm Capital 4th Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 on your telephone. As a reminder, today's program may be recorded. I would now like to introduce your host for today's program, Adam Yates, Managing Director. Please go ahead.

Thank you and good morning everyone. Thank you for joining us for Great Elm Capital Corp's fourth quarter earnings conference call. If you would like to be added to our distribution list, you can email investorrelations at greatelmcap.com or you can sign up for alerts directly on our website, www.greatelmcc.com. I'd like to note the slide presentation posted on our website accompanying today's call. We will not be directly referring to slides in the presentation. but our comments will generally follow its form and structure. The slide presentation can be found on our website under Financial Information, Quarterly Results. 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 projections, 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 projections. 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's website under Financial Information, SEC Filings, or visit the SEC's website. As a reminder, this webcast is being recorded on Friday, March 4, 2022. Hosting the call this morning is Matt Kaplan, Great Elm Capital Corp's new Chief Executive Officer. I will now turn the call over to Matt.

Thank you, Adam. Good morning, and thank you for joining us today. I would like to start by thanking Peter Reed, Mike Speller, and Rebel Horsey for the years of dedicated service at GECC. I am excited to be speaking as GCC's newly appointed CEO and look forward to the opportunities ahead. On today's call, we have our Chief Compliance Officer, Adam Kleinman, CFO, Carrie Davis, and Mike Keller, the President of Great Elm Specialty Finance. There is quite a bit to unpack, so I will begin by highlighting some of the key factors that define GCC's fourth quarter as well as our path forward today. First, I would like to address the impact Avanti and other legacy non-cash generating assets had on our portfolio, which were the main contributors to an approximately 25% decline in net asset value in the fourth quarter, leading us to report a NAV of $16.63 per share this morning. This is certainly unfortunate and has led to sweeping changes within the organization, along with the opportunity to reboot GECC. To that end, in addition to announcing the CEO transition, this morning we also announced new board leadership and a proposed $50 million rights offering in which Great Elm Group and other large shareholders have indicated their intent to fully exercise their subscription rights and oversubscribe. New leadership and fresh capital are instrumental in our plan to reset GECC. In connection with this GECC reboot, Great Elm Capital Management, GECC's manager, has indicated it currently intends to waive all accrued incentive fees as of March 31, 2022, provided that GECC's shareholders approve a reset of the incentive fee total return hurdle under GECC's investment management agreement at the next annual shareholder meeting. As of December 31, 2021, there is approximately $4.9 million of accrued incentive fees held on GECC's balance sheet. If the waiver were obtained and new incentive hurdles were approved by GECC stockholders, the waiver would reverse these $4.9 million of previously recorded expenses, which we expect will be reflected in the quarter ending March 31, 2022, resulting in a corresponding amount of additional income and increase in the net asset value of $1.08 per share in the first quarter of 2022, subject to any offsetting additional expenses or losses. Taking a step back, as portfolio manager of GECC since October 2020, I've been focused on reducing position concentrations, upgrading portfolio quality, and increasing the allocation to cash income generating investments. In 2020, we also began to focus on growing our specialty finance platform and related investments. Our goal is to increase the allocation to these types of investments so that they comprise approximately half of our portfolio over time. We believe investments in specialty finance companies and related participation opportunities can generate attractive returns with less risk than leveraged credit markets. As a permanent capital vehicle, GECC is able to prudently allocate a portion of its assets into these types of investments. In addition to the isolated benefits of individual specialty finance investments, which are proprietary to GECC, We believe there are significant origination and operational synergies to be gained from owning majority interest in multiple specialty finance companies. I am excited to have industry veteran Mike Keller as a partner leading our effort here. In the last six months, we have acquired majority equity interest in a specialty finance participant capital provider and an ABL platform, as well as entered into an agreement for a joint venture to co-invest with an established equipment finance business. I will let Mike speak more on our strategy and why we believe specialty finance is an attractive investment class. But suffice it to say, additional capital will be required to accomplish our objectives in this space. I believe these changes and access to capital will allow GECC to reboot on strong footing with a clear strategy and a strong support from our board and large shareholders. Before turning it over to Mike to provide an overview of our specialty finance strategy, I would like to summarize our key strategic objectives as, one, increase GECC's allocation to specialty finance to constitute half of the portfolio through direct investments in specialty finance companies as well as in participations. Two, maintain a high-quality, diversified portfolio focused on performing and cash-yielding investments. And three, increase our scale by raising equity and debt capital with a target asset coverage ratio of approximately 165%. With that, I'd like to hand the call over to Mike to review our specialty finance strategy and also provide his background in the industry.