Great Elm Capital Corp.

Greetings. Welcome to the Great Elm Capital Corp. Third Quarter 2022 Financial Results. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Gary Edson, a representative of the company. You may begin.

Good morning, and thank you, everyone, for joining us for Great Elm Capital Corp.'s third 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'd 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, who will be joined by Keri Davis, GECC's CFO, Adam Kleinman, President of Great Elm Capital Management, and Mike Keller, President of Great Elm Specialty Finance. I will now turn the call over to GECC's CEO, Matt Kaplan.

Thank you, Garrett. Good morning and thank you for joining us today. Our third quarter results are a testament to the revamped portfolio strategy the team has been executing on throughout the year. On the asset side, fair value across the portfolio slightly increased in the quarter, which we believe was better than many of our peers. Our strategy to diversify the portfolio and, when rates were low, spread tight, positioned ourselves in a higher coupon, short duration, fixed rate securities, benefited GECC as it enabled us to better withstand the rapid rise in interest rates. In the third quarter, we advantageously deployed approximately $40 million into new investments at average yields in excess of 12%, with 60% of those deployments in floating rate investments. Approximately $30 million of assets were monetized in the quarter at average yields below 10%, with 90% of those assets comprised of fixed rate investments. As a result, nearly half of our debt investment portfolio at quarter end consisted of floating rate debt up from one-third just one quarter ago. Average yield on our credit portfolio also increased to 11.6% from 10.3% at June 30th. Going forward, you should expect us to focus more time and capital on investments that benefit from rising rates as opposed to fixed rate investments. At the same time, NII of $1.1 million, or 14 cents per share, was below our expectations, largely due to costs and expenses related to certain legacy investments and the formation of great Elm healthcare finance, which collectively impacted NII by approximately 9 cents. In addition, we estimate NII was impacted by approximately 3 cents from the continued cash drag resulting from our measured deployment of capital noted on our prior call. Lastly, our specialty finance platforms did not perform as anticipated given a lull in originations over the summer and some temporary disruption from management changes. We expect the elevated expenses to abate in the fourth quarter and along with an increase in deployments should result in a corresponding increase in NII. As I alluded to earlier, Great Elm is adding to its specialty finance business by launching a healthcare finance platform that provides capital solutions to healthcare businesses across the country. In the quarter, we identified a senior management team led by industry veteran Mike Gervais to lead this specialized secured lending vertical with support from our existing ABL platform, Sterling Commercial Credit. Mike has built two healthcare lending platforms over the past two decades and I am extremely excited to welcome him into the great Elm family. We are in the process of identifying assets and potential finance partners as well as building out the operations for the healthcare initiative supported by our experienced team at Sterling. We remain measured with respect to deploying capital in the current market environment and are very focused on finding investments with limited risk of permanent capital impairment and durable returns. In the near term, our goal is to grow our portfolio and our investment income to cover our quarterly distribution on a regular basis, and we believe you'll begin to see progress toward that NII goal in the fourth quarter. As we continue to navigate through the current environment, we remain excited for our future prospects and the opportunities that the market volatility has started to provide in both the secondary credit and private ABL markets. I remain very confident in the team and we are making steady progress building on the foundation we put in place. With that, I'd like to hand the call over to Keri to discuss our third quarter 2022 performance.