GECCI

As a BDC, the necessity of raising additional capital may expose us to risks, including the typical risks associated with leverage. ▪ We will be subject to corporate level U.S. federal income tax if we are unable to qualify as a RIC under the Code. ▪ Technological developments in artificial intelligence could disrupt the markets in which we operate and subject us to increased competition, legal and regulatory risks and compliance costs. ▪ We may incur additional debt, which could increase the risk in investing in our Company. ▪ The failure in cyber security systems, as well as the occurrence of events unanticipated in our disaster recovery systems and management continuity planning, could impair our ability to conduct business effectively. ▪ There are significant potential conflicts of interest that could impact our investment returns.
We seek to generate both current income and capital appreciation through debt and income-generating equity investments, including investments in specialty finance businesses.
In addition, we invest in collateralized loan obligations (“CLOs”) and related warehouse facilities through our joint venture, CLO Formation JV, LLC (the “CLO JV”).
Our Portfolio as of December 31, 2025 A list of the industries in which we have invested as of December 31, 2025 may be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Set forth below is a brief description of each company representing greater than 5% of the fair market value of our portfolio, excluding short-term investments, at December 31, 2025.
CLO Formation JV, LLC CLO JV is a joint venture owned 71.25% by the Company and 28.75% by strategic partners, to make investments in collateralized loan obligation entities and related warehouse facilities.
Vivos Holdings, LLC Vivos Holdings, LLC is a consumer packaged goods holding company with businesses focused on providing a range of household and personal care products and services to retail and industrial customers throughout North America.
Its personal care product categories include nail, hand hygiene, first-aid, baby care, body care, oral care, hair care, skin care, bath, household, institutional cleaning, and healthcare.
We have expanded our investment allocation in specialty finance companies as well as in participation opportunities generated by both unrelated and related specialty finance companies.
Pre‑incentive fee net investment income includes any accretion of original issue discount, market discount, payment‑in‑kind (“PIK”) interest, PIK dividends or other types of deferred or accrued income, including in connection with zero coupon securities, that we and our subsidiaries have recognized in accordance with GAAP, but have not yet received in cash (collectively, “Accrued Unpaid Income”).
Any Income Incentive Fee otherwise payable with respect to Accrued Unpaid Income (collectively, the “Accrued Unpaid Income Incentive Fees”) will be deferred, on a security by security basis, and will become payable only if, as, when and to the extent cash is received by us or our subsidiaries in respect thereof.
Capital Gains Incentive Fee The Capital Gains Incentive Fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Management Agreement, as of the termination date), commencing with the partial calendar year from April 1, 2022 to December 31, 2022, and is calculated at the end of each applicable year by subtracting (a) the sum of our and our subsidiaries’ cumulative aggregate realized capital losses (excluding, for the avoidance of doubt, any realized capital losses arising from unrealized capital depreciation occurring prior to April 1, 2022) and aggregate unrealized capital depreciation from (b) our and our subsidiaries’ cumulative aggregate realized capital gains, in each case calculated from and after April 1, 2022 (the “Capital Gains Commencement Date”).
Assumption 1 Assumption 2 Assumption 3 Investment income (1) 6.35 % 7.50 % 8.35 % Hurdle rate (7% annualized) 1.75 % 1.75 % 1.75 % "Catch up" provision (8.75% annualized) 2.19 % 2.19 % 2.19 % Pre-incentive fee net investment income (2) 1.00 % 2.15 % 3.00 % Incentive fee - % (3) 0.40 % (4) 0.60 % (5) (1) Investment income includes interest income, dividends and other fee income.
In these examples, management fees are 0.38% (1.50% annualized) of net assets and other expenses are assumed to be 4.98% of net assets.
For the year ended December 31, 2025, we incurred $5.0 million in base management fees and $3.7 million in income-based fees accrued during the period.
There were no capital gains incentive fees earned by GECM as calculated under the Investment Management Agreement for the year ended December 31, 2025.
Duration and Termination Our Board initially approved the Investment Management Agreement on August 8, 2016, and most recently approved the Investment Management Agreement on July 22, 2025.
Board Approval of the Investment Management Agreement On July 22, 2025, our Board approved the renewal of the Investment Management Agreement through September 26, 2026.
We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendment to, or waiver from, a provision of the code by posting such information within four business days following the date of such amendment or waiver on our website at www.greatelmcc.com .
If we directly or indirectly hold 10% or more of the shares (by vote or value) in a foreign corporation that is treated as a controlled foreign corporation (“CFC”), we may be required to include in our gross income our pro rata share of such CFC’s “subpart F income” and “Net CFC Tested Income,” whether or not the corporation makes an actual distribution during such year.
If we are required to include our pro rata share of “subpart F income” or “Net CFC Tested Income” in our gross income for a taxable year, we will be required to include such income in our investment company taxable income regardless of whether we receive any actual distributions from such CFC, and we must distribute an amount equal to such income to satisfy the Annual Distribution Requirement and the Excise Tax Exemption Requirement.
Although the Code generally provides that income inclusions from QEFs and inclusions of subpart F income and Net CFC Tested Income from CFCs will be qualifying income for purposes of the 90% gross income requirement to the extent such income is distributed to a RIC in the year it is included in the RIC’s income, the Code does not specifically provide whether income inclusions from a QEF or inclusions of subpart F income and Net CFC Tested Income during the RIC’s taxable year with respect to which no distribution is received would be qualifying income for the 90% gross income requirement.
The aggregate amount of brokerage commissions paid by us during the three most recent fiscal years is approximately $113.
Such commissions include approximately $113 in brokerage commissions paid to Imperial Capital, LLC, an affiliated person of ICAM, beginning when ICAM became an affiliated person of the Company during the quarter ended December 31, 2021 through December 31, 2025.
Our portfolio companies have experienced in the past and may in the future experience financial distress from time to time.
Our portfolio holds a limited number of portfolio companies.
Our portfolio is concentrated in a limited number of industries.
For example, our investments in issuers that are part of the structured finance industry and the specialty finance industry represented approximately 16.0% and 12.9%, respectively, of our total investments at fair value as of December 31, 2025.
Beginning in late 2024, the Federal Reserve Board began to lower interest rates from the elevated levels earlier in the year and continued lowering rates during 2025.
The Federal Reserve Board has maintained interest rates during the first few months of 2026, and may raise, maintain or lower the federal funds rate in the future.
See also "Our investments may be risky, and we could lose all or part of our investments." If we invest in companies that experience significant financial or business difficulties, we may be exposed to certain distressed lending risks.
See also "Our investments may be risky, and we could lose all or part of our investments." Investing in middle-market companies involves a high degree of risk and our financial results may be affected adversely if one or more of our portfolio investments defaults on its loans or notes or fails to perform as we expect.
Our portfolio may include common stock, warrants or other equity securities from time to time.
These events and the disruptions they cause, alone or in combination, could also lead to increased costs of insurance for us and/or our portfolio companies.
The current economy is subject to periodic downturns that, from time to time, result in recessions or more serious adverse macroeconomic events.
For example, many countries and industries around the globe experienced downturns and contractions as they grappled with the short- and long-term economic impacts of the COVID-19 pandemic, elevated inflation, supply chain challenges, labor market shortages and disputes, changes in interest rates, uncertainty related to evolving tariff and trade policies, geopolitical tensions, inflationary pressures, foreign currency fluctuations, and periods of volatility in global capital markets.
See also "Defaults by our portfolio companies may harm our operating results" and "There may be circumstances where our debt investments could be subordinated to claims of other creditors or we could be subject to lender liability claims." Global economic, political and market conditions may adversely affect our business, results of operations and financial condition, including our revenue growth and profitability.
For example, the United States enacted significant new tariffs beginning in the first quarter of 2025, which led to significant volatility in global markets during the year.
Presidential administration has continued to propose additional significant tariffs as well as evaluate key aspects of U.S. trade policy, treaties and tariffs.
Concerns over future increases in inflation, economic recession, as well as interest rate volatility and fluctuations in oil and gas prices resulting from global production and demand levels, as well as geopolitical tension, have exacerbated market volatility.
Market volatility has been further exacerbated by social unrest, changes regarding immigration and work permit policies and other political and security concerns both in the United States and across various international regions.

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Gone since FY2024

As a BDC, the necessity of raising additional capital may expose us to risks, including the typical risks associated with leverage. ▪ We will be subject to corporate level U.S. federal income tax if we are unable to qualify as a RIC under the Code. ▪ We may incur additional debt, which could increase the risk in investing in our Company. ▪ The failure in cyber security systems, as well as the occurrence of events unanticipated in our disaster recovery systems and management continuity planning, could impair our ability to conduct business effectively. ▪ There are significant potential conflicts of interest that could impact our investment returns.
We seek to generate both income and capital appreciation through debt and income-generating equity investments, including investments in specialty finance businesses.
In addition, we invest in collateralized loan obligations ("CLOs") and related warehouse facilities through our joint venture, CLO Formation JV, LLC.
Our Portfolio as of December 31, 2024 A list of the industries in which we have invested as of December 31, 2024 may be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Set forth below is a brief description of each company representing greater than 5% of the fair market value of our portfolio, excluding short-term investments, at December 31, 2024.
CLO Formation JV, LLC CLO Formation JV, LLC (the "CLO JV") is a joint venture owned 71.25% by the Company and 28.75% by strategic partners, to make investments in collateralized loan obligation entities and related warehouse facilities.
(“First Brands”) is a global automotive parts company that develops, markets and sells premium products through a portfolio of market-leading brands, offering best-in-class technology, industry-leading engineering capabilities and superior customer service.
First Brands manufactures automotive and industrial components for the automotive aftermarket, original equipment and industrial markets and has built long standing relationships with key aftermarket customers including multiple national retail chains and automotive and industrial equipment makers.
First Brands stands as a market leader in the expansive and stable automotive aftermarket industry.
First Brands' Brake Component segment leads the market with its Centric, Raybestos, Specialty and private label offerings, capturing around 26% of the aftermarket brake components market.
First Brands' Filter Products segment also holds a leading market position, thanks to its FRAM and Champion Laboratory and private label brands, which together hold a 30% market share.
First Brands' Wiper Segment is the top supplier of aftermarket wiper blades, boasting a commanding 37% market share through its Trico, ANCO, Michelin and private label products.
We have recently expanded our investment allocation in specialty finance companies as well as in participation opportunities generated by both unrelated and related specialty finance companies.
Pre‑incentive fee net investment income includes any accretion of original issue discount, market discount, payment‑in‑kind (“PIK”) interest, PIK dividends or other types of deferred or accrued income, including in connection with zero coupon securities, that we and our consolidated subsidiaries have recognized in accordance with GAAP, but have not yet received in cash (collectively, “Accrued Unpaid Income”).
Any Income Incentive Fee otherwise payable with respect to Accrued Unpaid Income (collectively, the “Accrued Unpaid Income Incentive Fees”) will be deferred, on a security by security basis, and will become payable only if, as, when and to the extent cash is received by us or our consolidated subsidiaries in respect thereof.
Capital Gains Incentive Fee The Capital Gains Incentive Fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Management Agreement, as of the termination date), commencing with the partial calendar year from April 1, 2022 to December 31, 2022, and is calculated at the end of each applicable year by subtracting (a) the sum of our and our consolidated subsidiaries’ cumulative aggregate realized capital losses (excluding, for the avoidance of doubt, any realized capital losses arising from unrealized capital depreciation occurring prior to April 1, 2022) and aggregate unrealized capital depreciation from (b) our and our consolidated subsidiaries’ cumulative aggregate realized capital gains, in each case calculated from and after April 1, 2022 (the “Capital Gains Commencement Date”).
Assumption 1 Assumption 2 Assumption 3 Investment income (1) 6.00 % 7.15 % 8.00 % Hurdle rate (7% annualized) 1.75 % 1.75 % 1.75 % "Catch up" provision (8.75% annualized) 2.19 % 2.19 % 2.19 % Pre-incentive fee net investment income (2) 1.00 % 2.15 % 3.00 % Incentive fee - % (3) 0.40 % (4) 0.60 % (5) (1) Investment income includes interest income, dividends and other fee income.
In these examples, management fees are 0.38% (1.50% annualized) of net assets and other expenses are assumed to be 4.62% of net assets.
For the year ended December 31, 2022, we incurred $3.2 million in base management fees and $0.6 million in income-based fees accrued during the period.
There were no capital gains incentive fees earned by GECM as calculated under the Investment Management Agreement for the year ended December 31, 2022.
Duration and Termination Our Board initially approved the Investment Management Agreement on August 8, 2016, and most recently approved the Investment Management Agreement on July 23, 2024.
Board Approval of the Investment Management Agreement On July 23, 2024, our Board approved the renewal of the Investment Management Agreement through September 26, 2025.
We intend to disclose any amendments to or waivers of required provisions of the code by filing reports on Form 8-K.
If we directly or indirectly hold 10% or more of the shares (by vote or value) in a foreign corporation that is treated as a controlled foreign corporation (“CFC”), we may be required to include in our gross income our pro rata share of such CFC’s “subpart F income” and “global intangible low-taxed income,” whether or not the corporation makes an actual distribution during such year.
If we are required to include our pro rata share of "subpart F income" or "global intangible low-taxed income" in our gross income for a taxable year, we will be required to include such income in our investment company taxable income regardless of whether we receive any actual distributions from such CFC, and we must distribute an amount equal to such income to satisfy the Annual Distribution Requirement and the Excise Tax Exemption Requirement.
Although the Code generally provides that income inclusions from QEFs and inclusions of subpart F income and global intangible low-taxed income from CFCs will be qualifying income for purposes of the 90% gross income requirement to the extent such income is distributed to a RIC in the year it is included in the RIC’s income, the Code does not specifically provide whether income inclusions from a QEF or inclusions of subpart F income and global intangible low-taxed income during the RIC’s taxable year with respect to which no distribution is received would be qualifying income for the 90% gross income requirement.
The aggregate amount of brokerage commissions paid by us during the three most recent fiscal years is approximately $129.
Such commissions include approximately $129 in brokerage commissions paid to Imperial Capital, LLC, an affiliated person of ICAM, beginning when ICAM became an affiliated person of the Company during the quarter ended December 31, 2021 through December 31, 2024.
Our portfolio companies may experience financial distress from time to time.
Our portfolio is likely to hold a limited number of portfolio companies.
Our portfolio is likely to be concentrated in a limited number of industries.
We may concentrate our investments in issuers that are part of the specialty finance industry, which represents approximately 13.3% of our total investments at fair value as of December 31, 2024.
The Federal Reserve Board has since raised the federal funds rate and may raise, maintain or lower the federal funds rate in the future.
If we invest in companies that experience significant financial or business difficulties, we may be exposed to certain distressed lending risks.
Investing in middle-market companies involves a high degree of risk and our financial results may be affected adversely if one or more of our portfolio investments defaults on its loans or notes or fails to perform as we expect.
Our portfolio may include common stock, warrants or other equity securities.
The economy is subject to periodic downturns that, from time to time, result in recessions or more serious adverse macroeconomic events.
For example, many countries and industries around the globe experienced downturns and contractions as they grappled with the short- and long-term economic impacts of the COVID-19 pandemic, elevated inflation, supply chain challenges, labor shortages, high interest rates, foreign currency exchange volatility, and volatility in global capital markets.
Global economic, political and market conditions may adversely affect our business, results of operations and financial condition, including our revenue growth and profitability.
Additionally, the United States has recently enacted and proposed to enact significant new tariffs.
Presidential administration has directed various federal agencies to further evaluate key aspects of U.S. trade policy and there has been ongoing discussion and commentary regarding potential significant changes to U.S. trade policies, treaties and tariffs.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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