Great Elm Capital Corp.

Greetings and welcome to the Great Elm Capital Corp Second Quarter 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Our question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference call, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Garrett Edson, a representative of the company. Thank you. You may begin, sir.

Good morning, and thank you, everyone, for joining us for Great Elm Capital Corp's second quarter 2022 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. 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 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 SEC filings, please visit Great Elm Capital Corp.' 's website under Financial Information, SEC Filings, or visit the SEC's website. Hosting the call this morning is Matt Kaplan, Great Elm Capital Corp.' 's Chief Executive Officer. I will now turn the call over to Matt. Thank you, Garrett.

Good morning, and thank you for joining us today. On today's call, I'll walk through some second quarter highlights and our CFO, Carrie Davis, will take us through some of our financials for the quarter. We'll then open up for Q&A, and Adam Kleinman, our Chief Compliance Officer, and Mike Keller, President of Grey Elm Specialty Finance, will join us to answer questions. Overall, we continue to make progress on the priorities we laid out after the March quarter, supporting our revamped strategy to improve our NII and NAV over time and maximize shareholder value. In June, We completed a rights offering that strengthened our balance sheet, enhanced our asset coverage ratio, and provided us with increased liquidity. We were pleased to complete the rights offering in a very challenging environment. While the rights offering led to some per share NAV dilution, we are taking a measured approach to navigating through market volatility while maintaining our strategy to grow our specialty finance platforms. We are being disciplined with respect to deploying capital and have taken advantage of some dislocation we are seeing in the secondary markets to opportunistically invest in securities that meet our cash yield and total return thresholds. We began to see signs of reduced liquidity in credit markets through June and July, and have been prudently utilizing our rights offering proceeds to deploy capital in the market. Widening spreads in June impacted portfolio marks, and while spreads have since rebounded in July and further into the start of August, we are still poised to take advantage of continued market volatility. From the closing of the rice offering on June 13th through the end of July, we deployed approximately $25 million in 15 debt investments at a weighted average price below 90, current yield over 10%, and yield to maturity over 12.5%, excluding $5 million invested in cash surrogates. We benefit from a flexible strategy which allows GECC to take advantage of dislocations in different segments of the investment landscape and have been leaning into the secondary market as a provider of liquidity. To that end, our specialty finance mix as a percentage of the portfolio dipped a bit in the quarter. As we raise capital, our deployments will initially flow into corporate credit and our specialty finance mix should be expected to dip temporarily. Over the long term, we still see tremendous opportunity in expanding our platform and expect to build a balanced portfolio of corporate and specialty finance investments over time. For the June 2022 quarter, our NII of $1.2 million was slightly above NII in the March quarter, excluding the reversal of previously accrued incentive fees in the prior quarter. While our NII increased slightly from the March quarter, it was impacted by higher average cash balances held over the quarter as we decided to maintain excess liquidity. Furthermore, our deployment timing was skewed, with over 75% of our secondary debt purchases weighted into the back half of the second quarter. We are taking a patient approach to deploying our cash and expect further short-term market dislocations will present GECC with attractive investment opportunities. Considering this strategy, we do look for the cash drag experienced in the second quarter to continue through the third quarter, as we focus on thoughtfully deploying capital into opportunities with the best income generation and long-term value creation potential for our shareholders. I would also like to note that entering the third quarter, cash-generating investments comprised 98% of our portfolio, as we made progress in diversifying and reshaping our holdings. As of June 30, 2022, 29% of our cash-generating assets are specialty finance-related investments down modestly from 34% at the end of March, but still up from 22% at year end 2021. Our goal in the quarters ahead is to grow our portfolio and our investment income to cover our quarterly distribution on a regular basis. As of June 30th, our rights offering helped push our asset coverage ratio up to 166.9% versus 147.5% for the March quarter. As we continue to prudently navigate through the current volatility, we remain excited by the opportunities in front of us. I feel very confident in the team and believe we can continue to build on the foundation we put in place during the first half of 2022. With that, I'd like to hand the call over to Carrie to discuss our second quarter 2022 performance.