What changed in this filing

/stocks — the workspaceLOADING

Item 5. Other Information

2021-08-03 compared with 2021-05-07 · 186 added, 124 removed, 1044 unchanged (23% of the section changed)

7 unchanged sentences

333-212817) filed on August 1, 2016)

Fourth Supplemental Indenture, dated as of June 23, 2021, between Great Elm Capital Corp.

and American Stock Transfer & Trust Company, LLC, as Trustee (incorporated by reference to Exhibit 4.1 to the 8-K filed on June 23, 2021)

Global Note (5.875% Note Due 2026) (incorporated by reference to Exhibit 4.2 to the 8-K filed on June 23, 2021)

Loan, Guarantee and Security Agreement, dated May 5, 2021, by and between Great Elm Capital Corp.

and City National Bank (incorporated by reference to Exhibit 10.1 of the 8-K filed on May 6, 2021)

Certification of the Registrant’s Chief Executive Officer (“CEO”)

4 unchanged sentences

GREAT ELM CAPITAL CORP.

August 3, 2021

Chief Executive Officer

August 3, 2021

Chief Financial Officer

1 unchanged sentence

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Assets and Liabilities as of March 31, 2021 and December 31, 2020 (unaudited)

Consolidated Statements of Operations for the three months ended March 31, 2021 and 2020 (unaudited)

Consolidated Statements of Changes in Net Assets for the three months ended March 31, 2021 and 2020 (unaudited)

Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020 (unaudited)

Consolidated Schedule of Investments as of March 31, 2021 and December 31, 2020 (unaudited)

Consolidated Statements of Assets and Liabilities as of June 30, 2021 and December 31, 2020 (unaudited)

Consolidated Statements of Operations for the three and six months ended June 30, 2021 and 2020 (unaudited)

Consolidated Statements of Changes in Net Assets for the three and six months ended June 30, 2021 and 2020 (unaudited)

Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020 (unaudited)

Consolidated Schedule of Investments as of June 30, 2021 and December 31, 2020 (unaudited)

Notes to the Unaudited Consolidated Financial Statements

2 unchanged sentences

Dollar amounts in thousands (except per share amounts)

March 31, 2021

June 30, 2021

December 31, 2020

8 unchanged sentences

Interest receivable

Dividends receivable

Due from portfolio company

Deferred financing costs

Prepaid expenses and other assets

5 unchanged sentences

of $1,312 and $1,529, respectively)

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

Payable for investments purchased

18 unchanged sentences

Dollar amounts in thousands (except per share amounts)

For the Three Months Ended March 31,

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Investment Income:

28 unchanged sentences

Non-affiliated, non-controlled investments

Affiliated investments

Controlled investments

15 unchanged sentences

Dollar amounts in thousands

For the Three Months Ended March 31,

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Increase (decrease) in net assets resulting from operations:

14 unchanged sentences

Shares outstanding at the beginning of the period

Shares purchased

Common stock distributed

5 unchanged sentences

Dollar amounts in thousands

For the Three Months Ended March 31,

For the Six Months Ended June 30,

Cash flows from operating activities

22 unchanged sentences

Purchase of debt

Issuance of Notes payable

Payments of deferred financing costs

Distributions paid

10 unchanged sentences

The following tables provide a reconciliation of cash and cash equivalents and restricted cash reported on the Consolidated Statements of Assets and Liabilities that sum to the total of the same such amounts on the Consolidated Statements of Cash Flows:

March 31, 2021

June 30, 2021

December 31, 2020

2 unchanged sentences

Total cash and cash equivalents and restricted cash shown on the Consolidated Statements of Cash Flows

March 31, 2020

June 30, 2020

December 31, 2019

5 unchanged sentences

CONSOLIDATED SCHEDULE OF INVESTMENTS (unaudited)

March 31, 2021

June 30, 2021

Dollar amounts in thousands

Portfolio Company

Security ( 1)

Interest Rate ( 2)

40 unchanged sentences

Common Equity

Cleaver-Brooks, Inc.

Crestwood Equity Partners LP

21 unchanged sentences

Consumer Services

Unsecured Bond

Greenway Health, LLC

3 unchanged sentences

1st Lien, Revolver - Unfunded

Lenders' Funding, LLC

Specialty Finance

Lenders' Funding, LLC

Specialty Finance

Receivable - Unfunded

Lenders' Funding, LLC

Specialty Finance

Lenders' Funding, LLC

Specialty Finance

Receivable - Unfunded

Specialty Finance

Loan - Unfunded

Mad Engine Global, LLC

1M L + 7.00%, 8.00% Floor (8.00%)

Martin Midstream Partners LP

4 unchanged sentences

1M L + 7.25%, 7.25% Floor (7.35%)

Monitronics International, Inc.

Home Security

1M L + 6.50%, 7.75 Floor (7.75%)

National CineMedia, Inc.

17 unchanged sentences

1st Lien, Secured Revolver - Unfunded

PetroChoice Holdings Inc.

Motor Vehicle Parts and Accessories

1st Lien, Secured Loan

3M L + 5.00%, 6.00% Floor (6.00%)

PFS Holdings Corp.

9 unchanged sentences

Specialty Finance

Receivable - Unfunded

Prestige Capital Finance, LLC

18 unchanged sentences

Ruby Tuesday Operations LLC

Telecommunications Services

1st Lien, Secured Revolver

3M L + 5.00%, 5.00% Floor (5.19%)

Telecommunications Services

1st Lien, Secured Revolver - Unfunded

Summit Midstream Holdings, LLC

Unsecured Bond

Summit Midstream Partners LP

Preferred Equity

Target Hospitality Corp.

Corporate Bond

Tensar Corporation

6 unchanged sentences

Common Equity

Vantage Specialty Chemicals, Inc.

3M L + 8.25%, 9.25% Floor (9.25%)

Specialty Finance

W&T Offshore, Inc.

Corporate Bond

Investments in Special Purpose Acquisition Companies

9 unchanged sentences

Special Purpose Acquisition Company

Investment Units

Common Equity

Austerlitz Acquisition Corporation I

Special Purpose Acquisition Company

Austerlitz Acquisition Corporation II

Special Purpose Acquisition Company

Investment Units

Common Equity

Austerlitz Acquisition Corporation II

Special Purpose Acquisition Company

GigCapital4, Inc.

Special Purpose Acquisition Company

Investment Units

Common Equity

GigCapital4, Inc.

Special Purpose Acquisition Company

Jaws Mustang Acquisition Corporation

1 unchanged sentence

Common Equity

Jaws Mustang Acquisition Corporation

Special Purpose Acquisition Company

Oyster Enterprises Acquisition Corp.

1 unchanged sentence

Common Equity

Oyster Enterprises Acquisition Corp.

Special Purpose Acquisition Company

Soaring Eagle Acquisition Corp.

Special Purpose Acquisition Company

Investment Units

Common Equity

Soaring Eagle Acquisition Corp.

Special Purpose Acquisition Company

Spartan Acquisition Corp.

Special Purpose Acquisition Company

Investment Units

Common Equity

Spartan Acquisition Corp.

Special Purpose Acquisition Company

Virgin Group Acquisition Corp.

3 unchanged sentences

Special Purpose Acquisition Company

Investment Units

Common Equity

VPC Impact Acquisition Holdings II

Special Purpose Acquisition Company

VPC Impact Acquisition Holdings III

Special Purpose Acquisition Company

Investment Units

Common Equity

VPC Impact Acquisition Holdings III

Special Purpose Acquisition Company

Miscellaneous

8 unchanged sentences

Other Liabilities in Excess of Assets (259.36% of Net Assets)

Great Elm Capital Corp.’s (the “Company”) investments are generally acquired in private transactions exempt from registration under the Securities Act of 1933 and, therefore, are generally subject to limitations on resale, and may be deemed to be “restricted securities’’ under the Securities Act of 1933.

Great Elm Capital Corp.’s (the “Company”) investments are generally acquired in private transactions exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”) and, therefore, are generally subject to limitations on resale, and may be deemed to be “restricted securities’’ under the Securities Act.

A majority of the Company’s variable rate debt investments bear interest at a rate that is determined by reference to London Interbank Offered Rate (‘‘LIBOR” or “L”) and which is reset daily, monthly, quarterly or semiannually.

9 unchanged sentences

A company is deemed to be a ‘‘Controlled Investment’’ of the Company if the Company owns more than 25% of the voting securities of such company.

‘‘Affiliate Investments’’ are investments in those companies that are ‘‘Affiliated Companies’’ of the Company, a s defined in the Investment Company Act, which are not ‘‘Controlled Investments.’’ A company is deemed to be an ‘‘Affiliate’’ of the Company if the Company owns 5% or more, but less than 25%, of the voting securities of such company.

‘‘Affiliate Investments’’ are investments in those companies that are ‘‘Affiliated Companies’’ of the Company, as defined in the Investment Company Act, which are not ‘‘Controlled Investments.’’ A company is deemed to be an ‘‘Affiliate’’ of the Company if the Company owns 5% or more, but less than 25%, of the voting securities of such company.

Investments classified as Level 3 whereby fair value was determined by the Company's board of directors (the “Board”).

Security pays, or has the option to pay, some or all of its interest in kind.

As of March 31, 2021, each of the Avanti Communications Group, plc secured debt pay in kind ("PIK") and the rates above reflect the PIK interest rates.

As of March 31, 2021, the Ruby Tuesday Operations, LLC secured loan pays a portion of its interest in kind as described above.

As of June 30, 2021, each of the Avanti Communications Group, plc secured debt pay in kind ("PIK") and the rates above reflect the PIK interest rates.

As of June 30, 2021, the Ruby Tuesday Operations, LLC secured loan pays a portion of its interest in kind as described above.

Non-income producing security.

4 unchanged sentences

Of the Company’s total assets, 22.2% were non-qualifying assets as of period end.

Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933.

Security exempt from registration pursuant to Rule 144A under the Securities Act.

Such security may be sold in certain transactions (normally to qualified institutional buyers) and remain exempt from registration.

1 unchanged sentence

As of period end, the aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost was $14,690 ;

the aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value was $119,058;

the net unrealized depreciation was $(106,709);

the aggregate gross unrealized de preciatio n for all securities in which there was an excess of tax cost over value was $111,970 ;

the net unrealized de preciation was $ (97,280) ;

the aggregate cost of securities for Federal income tax purposes was $426,697 .

Represents previously undisclosed unrestricted securities, which the Company has held for less than one year.

As of March 31, 2021, the Company’s investments consisted of the following:

As of June 30, 2021, the Company’s investments consisted of the following:

Investment Type

2 unchanged sentences

Short-Term Investments

As of March 31, 2021, the industry composition of the Company’s portfolio at fair value was as follows:

As of June 30, 2021, the industry composition of the Company’s portfolio at fair value was as follows:

Investments at

1 unchanged sentence

Wireless Telecommunications Services

Internet Media

Specialty Finance

Special Purpose Acquisition Company

Internet Media

Construction Materials Manufacturing

Metals & Mining

Food & Staples

Special Purpose Acquisition Company

Media & Entertainment

Metals & Mining

Transportation Equipment Manufacturing

1 unchanged sentence

Casinos & Gaming

Food & Staples

Radio Broadcasting

Motor Vehicle Parts and Accessories

Home Security

Wholesale-Apparel, Piece Goods & Notions

2 unchanged sentences

Maritime Security Services

Telecommunications Services

Short-Term Investments

As of March 31, 2021, the geographic composition of the Company’s portfolio at fair value was as follows:

As of June 30, 2021, the geographic composition of the Company’s portfolio at fair value was as follows:

Investments at

7 unchanged sentences

Portfolio Company

Security ( 1)

Interest Rate ( 2)

223 unchanged sentences

The Company is structured as an externally managed, non-diversified closed-end management investment company.

The Company elected to be regulated as a business development company (a “BDC”) under the Investment Company Act.

The Company elected to be regulated as a business development company (a “BDC”) under the Investment Company Act of 1940, as amended (the “Investment Company Act”).

The Company is managed by Great Elm Capital Management, Inc., a Delaware corporation (“GECM”), a subsidiary of Great Elm Group, Inc., a Delaware corporation (“GEG”).

84 unchanged sentences

The annual effective excise tax rate is determined by dividing the estimated annual excise tax by the estimated annual taxable income.

The Company has not accrued any excise tax expense for the three months ended March 31, 2021.

The Company has not accrued any excise tax expense for the three and six months ended June 30, 2021.

The Company accrued $17 of excise tax expense for the year ended December 31, 2020.

23 unchanged sentences

Base management fees for any partial quarter are prorated.

For the three months ended March 31, 2021 management fees amounted to $660.

For the three months ended March 31, 2020 management fees amounted to $698.

As of March 31, 2021 and December 31, 2020, $660 and $613 remained payable, respectively.

For the three and six months ended June 30, 2021 management fees amounted to $765 and $1,425.

For the three and six months ended June 30, 2020 management fees amounted to $591 and $1,289.

As of June 30, 2021 and December 31, 2020, $766 and $613 remained payable, respectively.

Incentive Fee The incentive fee consists of two components that are independent of each other with the result that one component may be payable even if the other is not.

5 unchanged sentences

Pre-Incentive Fee Net Investment Income does not include any realized capital gains or losses or unrealized capital appreciation or depreciation.

Accrued Unpaid Income as of March 31, 2021 was $32,076.

Accrued Unpaid Income includes capitalized PIK income of $18,012 on investments still held at March 31, 2021.

Accrued Unpaid Income as of June 30, 2021 was $34,216.

Accrued Unpaid Income includes capitalized PIK income of $20,634 on investments still held at June 30, 2021.

Accrued Unpaid Income as of December 31, 2020 was $29,989, which included capitalized PIK income of $17,680 on investments still held at December 31, 2020.

4 unchanged sentences

Under the Capital Gains Incentive Fee, the Company is obligated to pay GECM at the end of each calendar year 20% of the aggregate cumulative realized capital gains from November 4, 2016 through the end of that year, computed net of aggregate cumulative realized capital losses and aggregate cumulative unrealized depreciation through the end of such year, less the aggregate amount of any previously paid capital gains incentive fees.

For the three months ended March 31, 2021 and 2020, the Company incurred Income Incentive Fees of $108 and $100, respectively.

As of March 31, 2021 and December 31, 2020, $9,284 and $9,176 of Income Incentive Fees, respectively, remained payable and none was immediately payable after calculating the total return requirement.

For the six months ended June 30, 2021 and 2020, the Company incurred Income Incentive Fees of $506 and $328, respectively.

As of June 30, 2021 and December 31, 2020, $9,682 and $9,176 of Income Incentive Fees, respectively, remained payable and none was immediately payable after calculating the total return requirement.

These payable amounts may include both Accrued Unpaid Income Incentive Fees and amounts deferred under the total return requirement and will become due upon meeting the criteria described above.

For the three months ended March 31, 2021 and the year ended December 31, 2020, the Company did not have any Capital Gains Incentive Fees accrual.

For the six months ended June 30, 2021 and the year ended December 31, 2020, the Company did not have any Capital Gains Incentive Fees accrual.

The Investment Management Agreement provides that, absent willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of the reckless disregard of its duties and obligations, GECM and its officers, managers, agents, employees, controlling persons, members and any other person or entity affiliated with it are entitled to indemnification from the Company for any damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) arising from the rendering of GECM’s services under the Investment Management Agreement or otherwise as an investment adviser of the Company.

4 unchanged sentences

The Administration Agreement provides that, absent willful misfeasance, bad faith or negligence in the performance of its duties or by reason of the reckless disregard of its duties and obligations, GECM and its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with it are entitled to indemnification from the Company for any damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) arising from the rendering of GECM’s services under the Administration Agreement or otherwise as administrator for the Company.

For the three months ended March 31, 2021 and 2020, the Company incurred expenses under the Administration Agreement of $156 and $204, respectively.

As of March 31, 2021 and December 31, 2020, $116 and $151 remained payable, respectively.

For the six months ended June 30, 2021 and 2020, the Company incurred expenses under the Administration Agreement of $336 and $395, respectively.

As of June 30, 2021 and December 31, 2020, $139 and $151 remained payable, respectively.

FAIR VALUE MEASUREMENT

32 unchanged sentences

▪ Market yields implied by transactions of similar or related assets.

As noted above, the income and market approaches were used in the determination of fair value of certain Level 3 assets as of March 31, 2021 and December 31, 2020.

As noted above, the income and market approaches were used in the determination of fair value of certain Level 3 assets as of June 30, 2021 and December 31, 2020.

The significant unobservable inputs used in the income approach are the discount rate or market yield used to discount the estimated future cash flows expected to be received from the underlying investment, which include both future principal and interest payments.

3 unchanged sentences

Increases or decreases in market multiples would result in an increase or decrease, respectively, in the fair value.

The following summarizes the Company’s investment assets categorized within the fair value hierarchy as of March 31, 2021:

The following summarizes the Company’s investment assets categorized within the fair value hierarchy as of June 30, 2021:

Short Term Investments

3 unchanged sentences

Total investment assets

The following is a reconciliation of Level 3 assets for the three months ended March 31, 2021:

The following is a reconciliation of Level 3 assets for the six months ended June 30, 2021:

Beginning Balance as of January 1, 2021

6 unchanged sentences

Net Amortization of Premium/ Discount

Ending Balance as of March 31, 2021

Ending Balance as of June 30, 2021

Total investment assets

2 unchanged sentences

Net Transfers In/Out

Purchases (1)

Net Realized Gain (Loss)

7 unchanged sentences

Sales and Settlements may include scheduled principal payments, prepayments, sales and repayments (inclusive of those on revolving credit facilities), and securities delivered in corporate actions and restructuring of investments.

The net change in unrealized appreciation relating to Level 3 assets still held at March 31, 2021 totaled $6,764 consisting of the following:

The net change in unrealized appreciation relating to Level 3 assets still held at June 30, 2021 totaled $10,016 consisting of the following:

$1,491 related to debt investments and $8,525 related to equity investments.

1 unchanged sentence

$(24,452) related to debt investments and $(21,427) relating to equity/other.

There were no transfers into or out of Level 3 during the three months ended March 31, 2021.

There were no transfers into or out of Level 3 during the six months ended June 30, 2021.

One investment with a fair value of $(11,801) was transferred from Level 3 to Level 2 as a result of increased pricing transparency during the year ended December 31, 2020.

Two investments with an aggregate fair value of $8,066 were transferred from Level 2 to Level 3 as a result of decreased pricing transparency during the year ended December 31, 2020.

The following tables below present the ranges of significant unobservable inputs used to value the Company’s Level 3 assets as of March 31, 2021 and December 31, 2020, respectively.

The following tables below present the ranges of significant unobservable inputs used to value the Company’s Level 3 assets as of June 30, 2021 and December 31, 2020, respectively.

These ranges represent the significant unobservable inputs that were used in the valuation of each type of instrument, but they do not represent a range of values for any one instrument.

1 unchanged sentence

Accordingly, the ranges of inputs presented below do not represent uncertainty in, or possible ranges of, fair value measurements of the Company’s Level 3 assets.

As of March 31, 2021

As of June 30, 2021

Investment Type

10 unchanged sentences

Discount Rate

Income Approach

Discount Rate

2.31% - 16.54% (11.29%)

12 unchanged sentences

Earnings Multiple

0.18 - 6.00 (2.92)

Asset Recovery / Liquidation (4)

36 unchanged sentences

Investments valued using the asset recovery or liquidation technique include investments for which valuation is based on current financial data without a discount rate applied.

On May 5, 2021, the Company entered into a Loan, Guarantee and Security Agreement (the “Loan Agreement”) with City National Bank (“CNB”).

The Loan Agreement provides for a senior secured revolving line of credit of up to $25 million (subject to a borrowing base as defined in the Loan Agreement).

The Company may request to increase the revolving line in an aggregate amount not to exceed $25 million, which increase is subject to the sole discretion of CNB.

The maturity date of the revolving line is the earlier of (i) May 5, 2024 and (ii) May 15, 2022 if the Company’s 6.50% notes due 2022 are not refinanced on or prior to such date.

Borrowings under the revolving line bear interest at a rate equal to (i) the London Inter-bank Offered Rate plus 3.50%, (ii) a base rate plus 2.00% or (iii) a combination thereof, as determined by the Company.

As of June 30, 2021, there were no borrowings outstanding under the revolving line.

Borrowings under the revolving line are secured by a first priority security interest in substantially all of the Company’s assets, subject to certain specified exceptions.

The Company has made customary representations and warranties and is required to comply with various affirmative and negative covenants, reporting requirements and other customary requirements for similar loan agreements.

In addition, the Loan Agreement contains financial covenants requiring (i) net assets of not less than $65 million, (ii) asset coverage equal to or greater than 160% and (iii) bank asset coverage equal to or greater than 300%, in each case tested as of the last day of each fiscal quarter of the Company.

Borrowings are also subject to the leverage restrictions contained in the Investment Company Act of 1940, as amended.

Unsecured Notes

On September 13, 2017, the Company offered $28,375 in aggregate principal amount of 6.50% notes due 2022 (the "GECCL Notes").

On September 29, 2017, the Company sold to several underwriters an additional $4,256 of the GECCL Notes upon full exercise of the underwriters’ over-allotment option.

The GECCL Notes are our unsecured obligations and rank equal with all of our outstanding and future unsecured unsubordinated indebtedness.

The GECCL Notes are effectively subordinated, or junior in right of payment, to any future secured indebtedness that the Company may incur and structurally subordinated to all future indebtedness and other obligations of our subsidiaries.

The Company pays interest on the GECCL Notes on January 31, April 30, July 31 and October 31 of each year.

The GECCL Notes will mature on September 18, 2022 and can be called on, or after, September 18, 2019.

Holders of the GECCL Notes do not have the option to have the GECCL Notes repaid prior to the stated maturity date.

The GECCL Notes were issued in minimum denominations of $25 and integral multiples of $25 in excess thereof.

On June 23, 2021, the Company caused redemption notices to be issued to the holders of the GECCL Notes regarding the Company’s exercise of its option to redeem, in whole, the issued and outstanding GECCL Notes.

The Company redeemed all of the issued and outstanding GECCL Notes on July 23, 2021 at 100% of the principal amount plus accrued and unpaid interest thereon from April 30, 2021 through, but excluding, the redemption date, July 23, 2021.

On January 11, 2018, the Company offered $43,000 in aggregate principal amount of 6.75% notes due 2025 (the "GECCM Notes").

8 unchanged sentences

On July 5, 2019, the Company sold an additional $2,500 of the GECCN Notes upon another partial exercise of the underwriters’ over-allotment option.

The GECCN Notes are our unsecured obligations and rank equal with all of our outstanding and future unsecured unsubordinated indebtedness.

The GECCN Notes are effectively subordinated, or junior in right of payment, to any future secured indebtedness that the Company may incur and structurally subordinated to all future indebtedness and other obligations of our subsidiaries.

The Company pays interest on the GECCN Notes on March 31, June 30, September 30 and December 31 of each year beginning September 30, 2019.

The GECCN Notes will mature on June 30, 2024 and can be called on, or after, June 30, 2021.

Holders of the GECCN Notes do not have the option to have the GECCN Notes repaid prior to the stated maturity date.

The GECCN Notes were issued in minimum denominations of $25 and integral multiples of $25 in excess thereof.

The GECC N Notes are our unsecured obligations and rank equal with all of our outstanding and future unsecured unsubordinated indebtedness.

The GECC N Notes are effectively subordinated, or junior in right of payment, to any future secured indebtedness that the Company may incur and structurally subordinated to all future indebtedness and other obligations of our subsidiaries.

The Company pay s interest on the GECC N Notes on March 31, June 30, September 30 and December 31 of each year beginning September 30 , 2019 .

The GECC N Notes will mature on June 30, 2024 and can be called on, or after, June 3 0 , 2021.

Holders of the GECC N Notes do not have the option to have the GECC N Notes repaid prior to the stated maturity date.

The GECC N Notes were issued in minimum denominations of $25 and integral multiples of $25 in excess thereof.

On June 23, 2021, the Company issued $50,000 in aggregate principal amount of 5.875% notes due 2026 (the "GECCO Notes").

On July 9, 2021, the Company issued an additional $7,500 of the GECCO Notes upon full exercise of the underwriters’ over-allotment option.

The GECCO Notes are our unsecured obligations and rank equal with all of our outstanding and future unsecured unsubordinated indebtedness.

The GECCO Notes are effectively subordinated, or junior in right of payment, to any future secured indebtedness that the Company may incur and structurally subordinated to all future indebtedness and other obligations of our subsidiaries.

The Company pays interest on the GECCO Notes on March 31, June 30, September 30 and December 31 of each year beginning September 30, 2021.

The GECCO Notes will mature on June 30, 2026 and can be called on, or after, June 30, 2023.

Holders of the GECCO Notes do not have the option to have the GECCO Notes repaid prior to the stated maturity date.

The GECCO Notes were issued in minimum denominations of $25 and integral multiples of $25 in excess thereof.

As part of the offerings, the Company incurred fees and costs, which are treated as a reduction of the carrying amount of the debt on the Company Statements of Assets and Liabilities.

14 unchanged sentences

December 31, 2020

March 31, 2021

June 30, 2021

Total amount of each class of senior securities outstanding at the end of the period presented.

3 unchanged sentences

The average market value per unit for the Notes, as applicable, is based on the average daily prices of such Notes and is expressed per $1 of indebtedness.

The terms of the GECCL Notes, GECCM Notes and GECCN Notes are governed by a base indenture, dated as of September 18, 2017, by and between the Company and American Stock Transfer & Trust Company, LLC, as trustee (as supplemented with respect to each series of notes, the “Indenture”).

The terms of the GECCL Notes, GECCM Notes, GECCN Notes, and GECCO Notes are governed by a base indenture, dated as of September 18, 2017, by and between the Company and American Stock Transfer & Trust Company, LLC, as trustee (as supplemented with respect to each series of notes, the “Indenture”).

The Indenture’s covenants, include restrictions on certain activities in the event the Company falls below the minimum asset coverage requirements set forth in Section 18(a)(1)(A) as modified by Section 61(a)(1) of the Investment Company Act, as well as covenants requiring the Company to provide financial information to the holders of the Notes and the Trustee if the Company ceases to be subject to the reporting requirements of the Securities Exchange Act of 1934.

1 unchanged sentence

The Investment Company Act limits, with certain exceptions, the Company’s borrowing such that its asset coverage ratio, as defined in the Investment Company Act, is at least 1.5 to 1 after such borrowing.

As of March 31, 2021, the Company’s asset coverage ratio was approximately 177.1%.

As of March 31, 2021 and December 31, 2020 , the Company was in compliance with all covenants under the I ndenture.

For the three months ended March 31, 2021 and 2020, the components of interest expense were as follows:

For the Three Months Ended March 31,

As of June 30, 2021, the Company’s asset coverage ratio was approximately 166.2%.

As of June 30, 2021 and December 31, 2020 , the Company was in compliance with all covenants under the I ndenture.

For the three and six months ended June 30, 2021 and 2020, the components of interest expense were as follows:

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Borrowing interest expense

4 unchanged sentences

The fair value of the Company’s Notes is determined by utilizing market quotations at the measurement date as they are Level 1 securities.

March 31, 2021

June 30, 2021

Unsecured Debt - GECCL Notes

1 unchanged sentence

Unsecured Debt - GECCN Notes

Unsecured Debt - GECCO Notes

December 31, 2020

4 unchanged sentences

In the normal course of business, the Company may enter into investment agreements under which it commits to make an investment in a portfolio company at some future date or over a specified period of time.

As of March 31, 2021, the Company had approximately $31,352 in unfunded loan commitments, subject to the Company’s approval in certain instances, to provide debt financing to certain of its portfolio companies.

To the degree applicable, unrealized gains or losses on these commitments as of March 31, 2021 are included in the Company’s Statements of Assets and Liabilities and the corresponding Schedule of Investments.

As of June 30, 2021, the Company had approximately $24,600 in unfunded loan commitments, subject to the Company’s approval in certain instances, to provide debt financing to certain of its portfolio companies.

To the degree applicable, unrealized gains or losses on these commitments as of June 30, 2021 are included in the Company’s Statements of Assets and Liabilities and the corresponding Schedule of Investments.

The Company believes that it had sufficient cash and other liquid assets on its balance sheet to satisfy the unfunded commitments.

In addition, the Company has the ability to draw on its $25 million revolving line of credit to manage cash flows.

The Company has considered the net increases in net assets and negative cash flows from operations and has concluded that it has the ability to meet its obligations in the ordinary course of business based upon an evaluation of its cash position and sources of liquidity.

10 unchanged sentences

In July 2016, Full Circle filed suit in the District Court of Caldwell County, Texas against, among others, Willis Pumphrey for breach of a guaranty agreement arising from a loan transaction with Full Circle.

Pumphrey, a personal guarantor of the loan made by Full Circle, the Company’s predecessor in interest, brought counterclaims in (i) the District Court of Caldwell County, Texas and (ii) the District Court of Harris County, Texas (the “District Court”) against, among others, Justin Bonner, an employee of GECM, in each case, alleging breach of a confidentiality agreement and tortious interference with Dr.

Pumphrey, a personal guarantor of the loan made by Full Circle, the Company’s predecessor in interest, brought counterclaims in (i) the District Court of Caldwell County, Texas and (ii) the District Court of Harris County, Texas against, among others, Justin Bonner, an employee of GECM, in each case, alleging breach of a confidentiality agreement and tortious interference with Dr.

Pumphrey’s attempted sale of a business in which he owned an interest.

23 unchanged sentences

Below is the schedule of financial highlights of the Company:

For the Three Months Ended March 31,

For the Six Months Ended June 30,

Per Share Data:

23 unchanged sentences

Average net assets used in ratio calculations is calculated using monthly ending net assets for the period presented.

For the three months ended March 31, 2021 and 2020 average net assets were $80,206 and $72,446, respectively.

For the six months ended June 30, 2021 and 2020 average net assets were $85,250 and $61,093, respectively.

Annualized for periods less than one year.

1 unchanged sentence

Affiliated investments are defined by the Investment Company Act, whereby the Company owns between 5% and 25% of the portfolio company's outstanding voting securities and the investments are not classified as controlled investments.

The aggregate fair value of non-controlled, affiliated investments at March 31, 2021 represented 42% of the Company's net assets.

The aggregate fair value of non-controlled, affiliated investments at June 30, 2021 represented 43% of the Company's net assets.

Controlled investments are defined by the Investment Company Act, whereby the Company owns more than 25% of the portfolio company's outstanding voting securities or maintains the ability to nominate greater than 50% of the board representation.

The aggregate fair value of controlled investments at March 31, 2021 represented 13% of the Company's net assets.

Fair value as of March 31, 2021 along with transactions during the three months ended March 31, 2021 in these affiliated investments and controlled investments was as follows:

March 31, 2021

The aggregate fair value of controlled investments at June 30, 2021 represented 17% of the Company's net assets.

Fair value as of June 30, 2021 along with transactions during the six months ended June 30, 2021 in these affiliated investments and controlled investments was as follows:

For the Six Months Ended June 30, 2021

Fair value at December 31, 2020

3 unchanged sentences

Appreciation (Depreciation)

Fair value at March 31, 2021

Fair value at June 30, 2021

Non-Controlled, Affiliated Investments

4 unchanged sentences

2nd Lien, Secured Bond

Equity (9% of class)

Common Equity (9% of class)

OPS Acquisitions Limited and Ocean Protection Services Limited

1st Lien, Secured Loan

Equity (19% of class)

Common Equity (19% of class)

PFS Holdings Corp.

1st Lien, Secured Loan

Common Equity (5% of class)

Controlled Investments

1 unchanged sentence

1st Lien, Secured Term Loan B

Equity (87% of class)

Common Equity (87% of class)

Prestige Capital Finance, LLC

5 unchanged sentences

SUBSEQUENT EVENTS

The Board authorized the distribution for the quarter ending September 30, 2021 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 May 5, 2021, the Company entered into a Loan, Guarantee and Security Agreement (the “Loan Agreement”) with City National Bank (“CNB”).

The Loan Agreement provides for a senior secured revolving line of credit of up to $25 million (subject to a borrowing base as defined in the Loan Agreement).

The Company may request to increase the revolving line in an aggregate amount not to exceed $25 million, which increase is subject to the sole discretion of CNB.

The maturity date of the revolving line is the earlier of (i) May 5, 2024 and (ii) May 15, 2022 if the Company’s 6.50% notes due 2022 are not refinanced on or prior to such date.

Borrowings under the revolving line are secured by a first priority security interest in substantially all of the Company’s assets, subject to certain specified exceptions.

Borrowings are also subject to the leverage restrictions contained in the Investment Company Act of 1940, as amended.

In April 2021:

The Board authorized the distribution for the quarter ending December 31, 2021 at $0.10 per share, with the record and payment dates to be set by the officers of GE CC pursuant to authority granted by the Board.

On July 9, the Company sold an additional $7,500 of the GECCO Notes upon full exercise of the underwriters’ over-allotment option.

On July 23, the Company redeemed all of the issued and outstanding GECCL Notes at 100% of the principal amount plus accrued and unpaid interest thereon from April 30, 2021 through, but excluding, the redemption date.

In July 2021:

the Company purchased 250,000 shares of Equitrans Midstream Corp.

preferred stock for approximately $5,275.

the Company purchased $3,000 in par value of Michael Baker International, LLC second lien notes at approximately 101% of par value.

the Company purchased $4,000 in par value of CURO Group Holdings Corp.

first lien notes at approximately 100% of par value.

the Company sold $1,000 in par value of CURO Group Holdings Corp.

first lien notes at approximately 101% of par value.

the Company purchased $1,500 in par value of Viasat, inc.

receivable at 82% of par value.

the Company $2,992 in par value of PetroChoice Holdings, Inc.

first lien secured loan at approximately 97% of par value.

the Company sold 99,506 shares of Crestwood Equity Partners, LP class A preferred equity units for approximately $894.

the Company sold 100,000 shares of TRU (UK) Asia Limited common equity for approximately $988.

the Company sold 25,716 share of California Pizza Kitchen, Inc.

common equity for approximately $836.

the Company’s $10,000 Subcom, LLC 1 st lien secured revolver commitment was retired.

the Company sold approximately $289 of SPAC positions across 20 companies.

the Company purchased $3,000 in par value of W&T Offshore, Inc.

second lien secured bonds at approximately 89% of par value.

the Company purchased $1,000 in par value of Cleaver-Brooks, Inc.

secured bond at 100% of par value.

the Company sold approximately $46 of SPAC positions across five companies.

the Company sold approximately $160 of SPAC positions across eight companies.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 5. Other Information