Great Elm Capital (NASDAQ: GECC) boosts NII, names Jason Reese CEO
Rhea-AI Filing Summary
Great Elm Capital Corp. reported first quarter 2026 results and announced a leadership change. Net investment income was $5.0 million, or $0.36 per share, up from $0.31 in the prior quarter, helped by a $2.8 million incentive fee waiver. Net asset value per share declined to $7.74 from $8.07 as unrealized losses outweighed realized gains.
The board appointed Jason Reese as Chief Executive Officer, effective after the Q1 10-Q filing, succeeding Matt Kaplan, who remains a portfolio manager at the external adviser. GECC called or repurchased all $57.5 million of 2026 notes, leaving no funded debt maturities until 2029, and maintained strong liquidity with about $10 million in cash, $50 million of revolver availability, and $4 million of liquid exchange-traded assets as of March 31, 2026.
The board declared a $0.25 per share cash distribution for the second quarter of 2026, equating to an 18% annualized yield on the May 1, 2026, closing price and 12.9% on NAV. The company repurchased roughly 1% of outstanding shares at an average 36% discount to March 31, 2026 NAV, and its adviser waived all accrued incentive fees through June 30, 2026.
Positive
- None.
Negative
- None.
Insights
Q1 shows stronger core income, fee support, and balance-sheet de-risking, offset by NAV pressure from unrealized losses.
GECC increased net investment income to $5.0M or $0.36 per share in Q1 2026 versus $0.31 in Q4 2025, despite total investment income falling to $9.5M from $12.6M. The key swing factor was the adviser’s $2.81M incentive fee waiver, which lowered net expenses meaningfully.
Net asset value per share declined to $7.74 from $8.07, driven by $8.36M of unrealized depreciation on investments, partially offset by realized gains and fee waivers. That indicates valuation volatility in the portfolio even as cash earnings improved, and the quarter’s EPS was a small loss of $(0.05) per share.
On the balance sheet, calling or repurchasing all $57.5M of notes due June 2026 removes near-term refinancing risk and leaves no funded debt maturities until 2029. Liquidity of roughly $10M in cash, $50M of revolver capacity, and $4M in liquid assets, alongside an asset coverage ratio of 161.8%, provides flexibility to support the high quarterly dividend and selective share repurchases.
CEO transition consolidates leadership at the adviser level, while fees, dividends and buybacks emphasize shareholder alignment.
The board appointed Jason Reese, already Executive Chairman and CEO of Great Elm Group, as CEO of GECC, with no direct compensation from the company. Former CEO Matt Kaplan remains a portfolio manager at the external adviser, preserving investment continuity, and the company states his departure was not due to any disagreement on operations or policies.
The adviser’s waiver of all accrued incentive fees through June 30, 2026 (including $2.8M or $0.20 per share through March 31, 2026) supports near-term earnings and signals alignment with shareholders. The board approved a $0.25 per share Q2 2026 distribution, implying an 18% annualized yield on the May 1, 2026 price and 12.9% on NAV, and a repurchase program up to $10M, with $0.5M already deployed at a roughly 36% discount to NAV.
8-K Event Classification
Key Figures
Key Terms
Net investment income financial
Net asset value financial
Incentive fee waiver financial
Asset coverage ratio financial
Business development company regulatory
Unrealized depreciation financial
Earnings Snapshot
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On May 4, 2026, Great Elm Capital Corp. ("we," "us," "our" or the "Company") issued the press release furnished as exhibit 99.1 to this report.
The foregoing information (including the exhibit hereto) is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
On May 1, 2026, the Company's board of directors appointed Jason W. Reese to serve as the Company’s Chief Executive Officer effective immediately following the filing of the Company’s Form 10-Q for the period ended March 31, 2026. Upon Mr. Reese's assumption of this role, Matt Kaplan, who was appointed President and Chief Executive Officer of the Company effective March 4, 2022, concluded his service as the Company's President and Chief Executive Officer. This decision was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or procedures. Mr. Kaplan will remain with the Company’s external investment adviser, Great Elm Capital Management, LLC (“GECM”), as a portfolio manager.
Mr. Reese will not receive compensation from the Company for his service as Chief Executive Officer.
Mr. Reese, 60, is the Co-Founder, Chairman and CEO of Imperial Capital Asset Management, LLC (“ICAM”) and the Co-Founder of Imperial Capital, LLC (“Imperial Capital”), both founded in 1997. ICAM has managed various hedge funds, investment partnerships, a private REIT and a private equity fund. Imperial Capital is a registered broker-dealer. During his time at Imperial Capital, Mr. Reese formed Monomoy Properties REIT, LLC in 2014, focusing on the Industrial Outdoor Storage sector and continues to serve on the Board of Directors. Mr. Reese is also a founding member of City Ventures, LLC, a California-based private home builder, and has served on the Board of Directors since its inception in 2009. Prior to Imperial Capital, Mr. Reese was a principal with Gordon Investment Corporation (“Gordon”), a merchant banking firm in New York and Dallas, where he focused on investing in distressed real estate transactions, high yield securities and leveraged buyouts. Prior to his time with Gordon, Mr. Reese worked in the Corporate Finance Group at PaineWebber in New York. Mr. Reese graduated with honors from Yale University with a B.S. in Electrical Engineering.
Mr. Reese also serves a member of the investment committee of GECM, and as CEO and Chairman of the board of directors Great Elm Group, Inc. (“GEG”), the parent company of GECM. GEG owns approximately 9.7% of our common stock as of the date hereof.
We have entered into various agreements with GEG and GECM, including a license agreement with GEG and our Investment Management Agreement and our Administration Agreement with GECM, each as disclosed in our Annual Reports on Form 10-K filed with the Securities and Exchange Commission.
GECM has also entered into the Shared Services Agreement, pursuant to which ICAM makes available to GECM certain back-office employees of ICAM to provide services to GECM in exchange for reimbursement by GECM of the allocated portion of such employees’ time.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are furnished with this report but shall not be deemed filed:
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Exhibit Number |
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Description |
99.1 |
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Earnings Press Release, dated May 4, 2026. |
104 |
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The cover page of this Current Report on Form 8-K, formatted as inline XBRL. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Great Elm Capital Corp. |
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Date: |
May 4, 2026 |
By: |
/s/ Keri Davis |
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Keri Davis |
Exhibit 99.1
Great Elm Capital Corp. Announces
First Quarter 2026 Financial Results
Company to Host Conference Call and Webcast at 8:30 AM ET on May 5, 2026
Jason Reese, Executive Chairman of the Board of Directors, Appointed as CEO of the Company
GECC’s Investment Adviser Waives 2Q26 Incentive Fees, Following the Waiver of $2.8 Million, or $0.20 Per Share, of Accrued Incentive Fees through March 31, 2026
Net Investment Income (“NII”) of $0.36 Per Share in 1Q26 Grew Approximately 13% Quarter-over-Quarter
NAV of $7.74 Per Share as of March 31, 2026
Called or Repurchased All $57.5 Million of GECCO Notes due June 2026, Leaving No Funded Debt Maturity Until 2029
Strong Liquidity Position with Approximately $10 Million of Cash and Equivalents, $50 Million of Revolving Credit Facility Availability, and Ample Liquid Assets as of March 31, 2026
Repurchased Approximately 1% of GECC's Outstanding Shares at an Average 36% Discount to March 31, 2026, NAV
Board Declares $0.25 Per Share Distribution for 2Q26, Resulting in an Annualized Dividend Yield of 18% on GECC’s Closing Price as of May 1, 2026
PALM BEACH GARDENS, Florida, May 4, 2026 – Great Elm Capital Corp. (“we,” “our,” the “Company” or “GECC”) (NASDAQ: GECC), a business development company, today announced its financial results for the first quarter ended March 31, 2026.
Management Commentary
Jason Reese, Chairman of the Board of Directors and Chief Executive Officer of the Company stated, “I am honored to step into the role of CEO of GECC. In my first few months as Executive Chairman, I have focused on executing a clear mandate: Strengthening oversight, protecting shareholder value, and reinforcing accountability across the platform. The progress we have made this quarter reflects that commitment. We have brought greater rigor, transparency, and accountability to the platform, and I am encouraged by the direction of the portfolio and the quality of the team executing on our strategy. I would like to thank Matt Kaplan for his leadership during his tenure as CEO. Matt will continue in his role as Portfolio Manager.
The Manager's decision to waive all accrued and unpaid incentive fees through the second quarter of 2026 demonstrates alignment with GECC shareholders. We remain focused on increasing net asset value, improving earnings quality, and positioning GECC for sustainable performance. With a strong foundation in place and continued discipline across credit underwriting and portfolio oversight, I am confident we are well-positioned to navigate the current market environment and deliver attractive, risk-adjusted returns to our investors. Our first quarter results exhibit meaningful progress in building a portfolio positioned for durable, long-term performance. At quarter end, GECC had less than 1% of investments on nonaccrual, a stark contrast to our peers.
While capital deployment remained measured during the quarter given the historically tight spread environment, we expanded our private credit pipeline and further diversified the portfolio. We ended the period with ample liquidity, including meaningful cash on hand, full availability under our revolving credit facility, and a healthy base of liquid assets.”
Recent Board Actions and Shareholder Returns
First Quarter and Recent Operating Highlights
Financial Highlights – Per Share Data
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Q1/2025 |
Q2/2025 |
Q3/2025 |
Q4/2025 |
Q1/2026 |
Earnings Per Share (“EPS”) |
$0.04 |
$1.02 |
($1.79) |
($1.57) |
$(0.05) |
Net Investment Income (“NII”) Per Share |
$0.40 |
$0.51 |
$0.20 |
$0.31 |
$0.36 |
Net Realized and Unrealized Gains / (Losses) Per Share |
($0.36) |
$0.51 |
($1.98) |
($1.88) |
($0.41) |
Net Asset Value Per Share at Period End |
$11.46 |
$12.10 |
$10.01 |
$8.07 |
$7.74 |
Distributions Paid / Declared Per Share |
$0.37 |
$0.37 |
$0.37 |
$0.37 |
$0.30 |
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Financial Review
Total investment income for the quarter ended March 31, 2026, was $9.5 million, or $0.68 per share. Total expenses for the quarter ended March 31, 2026, were $7.4 million, or $0.53 per share, inclusive of excise tax expense.
Net realized and unrealized losses for the quarter ended March 31, 2026, were approximately $5.7 million, or $0.41 per share, driven by unrealized depreciation in investments, primarily resulting from mark-to-market volatility, partially offset by net realized gains.
Liquidity and Capital Resources
As of March 31, 2026, cash and money market fund investments totaled approximately $10 million. In addition, GECC had $50 million of availability on its revolving line of credit (the “Revolver”) and approximately $4 million of liquid, exchange-traded assets as of March 31, 2026.
As of March 31, 2026, total debt outstanding (par value) was $174.0 million, comprised of $18.6 million 5.875% senior notes due June 2026 (NASDAQ: GECCO), $56.5 million 8.50% senior notes due April 2029 (NASDAQ: GECCI), $41.4 million 8.125% senior notes due December 2029 (NASDAQ: GECCH), and $57.5 million 7.75% senior notes due December 2030 (NASDAQ: GECCG).
Distributions
The Company’s Board of Directors has approved a quarterly cash distribution of $0.25 per share for the quarter ending June 30, 2026, to be paid from distributable earnings. The second quarter distribution will be payable on June 30, 2026, to stockholders of record as of June 15, 2026.
The distribution equates to an 18.0% annualized dividend yield on the Company’s closing market price of $5.56 on May 1, 2026, and a 12.9% annualized dividend yield on the Company’s March 31, 2026, NAV of $7.74 per share.
Stock Repurchase Program
The Company’s Board of Directors authorized a stock repurchase program in October 2025, whereby the Company may opportunistically repurchase up to an aggregate of $10 million of its outstanding common shares. The authorization represents approximately 12% of the Company’s market capitalization as of May 1, 2026. Through May 1, 2026, the Company has repurchased approximately 0.1 million shares for $0.5 million, at an average price of $4.98 per share or a 36% discount to the Company’s NAV on March 31, 2026, leaving approximately $9.5 million of remaining capacity under the program for future repurchases.
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Conference Call and Webcast
GECC will discuss these results in a conference call at 8:30 a.m. ET on May 5, 2026.
Conference Call Details
Date/Time: Tuesday, May 5, 2026 – 8:30 a.m. ET
Participant Dial-In Numbers:
(United States): 877-407-0789
(International): 201-689-8562
To access the call, please dial-in approximately five minutes before the start time and, when asked, provide the operator with passcode “GECC”. An accompanying slide presentation will be available in pdf format via the “Events and Presentations” section of Great Elm Capital Corp.’s website here after the issuance of the earnings release.
Webcast
The call and presentation will also be simultaneously webcast over the internet via the “Events and Presentations” section of GECC’s website or by clicking on the webcast link here.
About Great Elm Capital Corp.
GECC is an externally managed business development company that seeks to generate current income and capital appreciation by investing in debt and income generating equity securities, including investments in specialty finance businesses and CLOs. For additional information, please visit http://www.greatelmcc.com.
Cautionary Statement Regarding Forward-Looking Statements
Statements in this communication that are not historical facts are “forward-looking” statements within the meaning of the federal securities laws. These statements include statements regarding our future business plans and expectations. These statements are often, but not always, made through the use of words or phrases such as “expect,” “anticipate,” “should,” “will,” “estimate,” “designed,” “seek,” “continue,” “upside,” “potential” and similar expressions. All such forward-looking statements involve estimates and assumptions that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the results expressed in the statements. The key factors that could cause actual results to differ materially from those projected in the forward-looking statements include, without limitation: conditions in the credit markets, our expected financings and investments, including interest rate volatility, inflationary pressure, the price of GECC common stock and the performance of GECC’s portfolio and investment manager. Information concerning these and other factors can be found in GECC’s Annual Report on Form 10-K and other reports filed with the Securities and Exchange Commission. GECC assumes no obligation to, and expressly disclaims any duty to, update any forward-looking statements contained in this communication or to conform prior statements to actual results or revised expectations except as required by law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.
Media & Investor Contact:
Investor Relations
investorrelations@greatelmcap.com
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GREAT ELM CAPITAL CORP.
STATEMENTS OF ASSETS AND LIABILITIES (unaudited)
Dollar amounts in thousands (except per share amounts)
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March 31, 2026 |
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December 31, 2025 |
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Assets |
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Investments |
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Non-affiliated, non-controlled investments, at fair value (amortized cost of $231,569 and $254,313, respectively) |
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$ |
191,783 |
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$ |
218,381 |
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Non-affiliated, non-controlled short-term investments, at fair value (amortized cost of $9,600 and $32,803, respectively) |
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9,600 |
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32,803 |
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Affiliated investments, at fair value (amortized cost of $12,379 and $12,379, respectively) |
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- |
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- |
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Controlled investments, at fair value (amortized cost of $94,683 and $94,683, respectively) |
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75,380 |
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79,887 |
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Total investments |
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276,763 |
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331,071 |
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Cash and cash equivalents |
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- |
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1,834 |
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Receivable for investments sold |
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1,442 |
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3,215 |
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Interest receivable |
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2,385 |
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2,182 |
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Dividends receivable |
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782 |
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1,046 |
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Due from affiliates |
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178 |
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218 |
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Deferred financing costs |
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211 |
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256 |
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Prepaid expenses and other assets |
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1,003 |
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953 |
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Total assets |
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$ |
282,764 |
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$ |
340,775 |
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Liabilities |
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Notes payable (including unamortized discount of $4,884 and $5,064, respectively) |
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$ |
169,143 |
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$ |
189,319 |
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Payable for investments purchased |
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3,859 |
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33,652 |
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Interest payable |
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73 |
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64 |
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Accrued incentive fees payable |
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- |
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2,267 |
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Due to affiliates |
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1,492 |
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1,475 |
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Accrued expenses and other liabilities |
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720 |
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1,052 |
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Total liabilities |
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$ |
175,287 |
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$ |
227,829 |
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Commitments and contingencies (Note 7) |
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Net Assets |
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Common stock, par value $0.01 per share (100,000,000 shares authorized, 13,892,045 shares issued and outstanding and 13,998,168 shares issued and outstanding, respectively) |
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$ |
139 |
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$ |
140 |
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Additional paid-in capital |
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358,251 |
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358,778 |
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Accumulated losses |
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(250,913 |
) |
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(245,972 |
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Total net assets |
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$ |
107,477 |
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$ |
112,946 |
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Total liabilities and net assets |
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$ |
282,764 |
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$ |
340,775 |
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Net asset value per share |
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$ |
7.74 |
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$ |
8.07 |
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GREAT ELM CAPITAL CORP.
STATEMENTS OF OPERATIONS (unaudited)
Dollar amounts in thousands (except per share amounts)
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For the Three Months Ended March 31, |
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2026 |
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2025 |
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Investment Income: |
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Interest income from: |
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Non-affiliated, non-controlled investments |
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$ |
5,089 |
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$ |
6,402 |
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Non-affiliated, non-controlled investments (PIK) |
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819 |
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611 |
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Controlled investments |
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812 |
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953 |
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Total interest income |
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6,720 |
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7,966 |
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Dividend income from: |
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Non-affiliated, non-controlled investments |
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159 |
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236 |
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Controlled investments |
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2,546 |
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3,376 |
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Total dividend income |
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2,705 |
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3,612 |
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Other income from: |
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Non-affiliated, non-controlled investments |
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119 |
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743 |
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Non-affiliated, non-controlled investments (PIK) |
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- |
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174 |
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Total other income |
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119 |
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917 |
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Total investment income |
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$ |
9,544 |
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$ |
12,495 |
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Expenses: |
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Management fees |
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$ |
1,072 |
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$ |
1,272 |
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Incentive fees |
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543 |
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1,150 |
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Administration fees |
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510 |
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355 |
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Custody fees |
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35 |
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38 |
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Directors’ fees |
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54 |
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53 |
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Professional services |
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514 |
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424 |
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Interest expense |
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4,256 |
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4,251 |
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Other expenses |
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296 |
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308 |
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Total expenses |
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$ |
7,280 |
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$ |
7,851 |
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Incentive fee waiver |
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(2,810 |
) |
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- |
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Net expenses |
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$ |
4,470 |
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$ |
7,851 |
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Net investment income before taxes |
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$ |
5,074 |
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$ |
4,644 |
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Excise tax |
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$ |
91 |
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$ |
68 |
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Net investment income |
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$ |
4,983 |
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$ |
4,576 |
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Net realized and unrealized gains (losses): |
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Net realized gain (loss) on investment transactions from: |
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Non-affiliated, non-controlled investments |
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$ |
2,632 |
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$ |
264 |
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Realized loss on repurchase of debt |
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(2 |
) |
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- |
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Total net realized gain (loss) |
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2,630 |
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264 |
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Net change in unrealized appreciation (depreciation) on investment transactions from: |
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Non-affiliated, non-controlled investments |
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(3,851 |
) |
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(2,066 |
) |
Controlled investments |
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(4,507 |
) |
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(2,321 |
) |
Total net change in unrealized appreciation (depreciation) |
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(8,358 |
) |
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(4,387 |
) |
Net realized and unrealized gains (losses) |
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$ |
(5,728 |
) |
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$ |
(4,123 |
) |
Net increase (decrease) in net assets resulting from operations |
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$ |
(745 |
) |
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$ |
453 |
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Earnings per share (basic and diluted): |
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$ |
(0.05 |
) |
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$ |
0.04 |
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Weighted average shares outstanding (basic and diluted): |
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13,984,828 |
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11,544,415 |
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