Good day, ladies and gentlemen. And welcome to Great Elm Capital Corp. Fourth Quarter 2017 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct the question-and-answer session and instructions will follow at that time [Operator Instructions]. As reminder, this conference is being recorded. I would now like to hand the floor over to Meaghan Mahoney, Head of Investor Relations. Please go ahead.

Thank you, Karen. And good morning, everyone. Thank you all for joining us for Great Elm Capital Corp’s fourth quarter 2017 earnings conference call. As a reminder, this webcast is being recorded on Monday, March 12, 2018. If you’d like to be added to our distribution list, you can e-mail investorrelations@greatelmcap.com or you can sign-up for alerts directly on our Web site. The slide presentation accompanying this morning’s conference call and webcast can be found on Great Elm Capital Corp’s Web site under Financial Information, Quarterly Results at www.greatelmcc.com as can a copy of our earnings release and Form 10-K. A link to the webcast is also available on the Great Elm Capital Corp.’s Web site. I’d like to call your attention to the customary Safe Harbor statement regarding forward-looking information. Also please note that nothing in today’s call constitutes an offer to sell or a solicitation of offers to purchase our securities. Today’s conference call includes forward-looking statements and projections, and we ask that you refer to Great Elm Capital Corp’s filings with the SEC for important factors that could cause actual results to differ materially from these projections. Great Elm Capital Corp. does not undertake to update its forward-looking statements unless required by law. To obtain copies of the SEC filings, please visit Great Elm Capital Corp’s Web site under Financial Information, SEC Filings or by visiting the SEC’s Web site. Hosting the call this morning is Peter Reed, Great Elm Capital Corp.’s President and Chief Executive Officer. I will now turn the call over to Peter.

Thank you, Meaghan. Good morning and thank you everyone for joining us today. I am joined this morning by our investment committee comprised of me, John Ehlinger; Adam Yates; and Adam Kleinman; as well as by Michael Sell, our Chief Financial Officer; and Meaghan Mahoney, our Head of Investor Relations. Where relevant in our prepared remarks, we will point you to the corresponding slide number in the deck that Meaghan referenced, which is available on our Web site as well as throughout the webcast. I would like to start this quarter’s call with a reflection on some key highlights and accomplishments from 2017, our first full year managing Great Elm Capital Corp. Please turn to slide 4. First, I’d like to discuss distributions. During each quarter of 2017, we out-earned our $0.25 per share quarterly distribution that is comprised of three monthly $0.083 per share of distributions. Each quarter, we generated net investment income that range from $0.29 per quarter on the low end to $0.60 per share on the high-end. For the year, we generated in total $1.52 per share in NII and paid out approximately one dollar per share in base distributions, a 1.52 times base distribution coverage. Furthermore, we supplemented our base distribution yield with a special distribution of $0.20 per share. In aggregate, we distributed approximately 9.63% of December 31st NAV, a strong distribution level at NAV and an even more compelling one at the current trading levels. Next, let's discuss highlights from our portfolio activity. We have been diligently working on deploying capital into attractive risk-adjusted opportunities as we have been rotating out of the legacy Full Circle portfolio, as well as contributed position in post-merger investments. On the capital deployment front, during 2017, we deployed $186.6 million into 20 investments across 17 issuers, including…

Thanks, Peter. Please turn to slide 12 for a snapshot of the financial highlights from the quarter. For the quarter ending December 31, 2017, we generated $0.60 of NII per share as compared to approximately $0.25 per share in base distributions and $0.45 per share in total distributions paid declared when including our $0.20 per share special distribution. Turning to slide 13, as of December 31st, our net asset value was $132.3 million versus net assets of $132.8 million at the end of Q3. On a per share basis, this equates to $12.42 of NAV versus $12.38 NAV at the end of Q3. This increase in NAV per share was primarily due to earnings in excess of declared distributions and accretion from our share repurchase activity. As of the end of the fourth quarter, the fair value of our investments was $164.9 million versus $153.1 million at the end of Q3. We also had $18.9 million in cash and cash equivalents, predominantly held in money market mutual fund investments. Now please turn to slide 14 to walk through the quarterly financial review. Total investment income for the quarter ended December 31st was $9.7 million against net expenses of $3.3 million, resulting in net investment income of $6.4 million or $0.60 per share. This compares to total investment income of $6.5 million for Q3 against net expenses of $2.9 million, which resulted in net investment income of $3.6 million and NII per share $0.32 for the third quarter. Our Q4 distribution coverage was approximately 240% as we earned $0.60 per share of net investment income and paid $0.25 in the form of three monthly 8.3% distributions. Including our special distribution of $0.20 per share, our distribution coverage was approximately 133%. Driving this coverage were a large uptick in interest income from Avanti's PIK toggle election, a one-time reduction in interest expense from our prepayment of the Full Circle baby bonds that were previously held at a premium, and a solid base of core NII generated from the balance of the portfolio. Net realized gains in the portfolio were approximately $213,000, which equated to approximately $0.02 cents per share versus $0.01 per share in Q3 on gains of approximately $59,000. Net unrealized depreciation on investments during the quarter was $1.6 million, which equated to $0.16 per share versus unrealized depreciation of $1.16 per share in Q3 on net unrealized depreciation of $12.4 million. This was primarily driven by mark to market depreciation on our investment in Commercial Barge Line Company and the reversal previously unrealized gains on our holding at Sonifi. Offsetting these declines was an improvement in the valuation of PR wireless term loan subsequent to the successful transaction with Sprint. Now let me turn the call back to Peter to discuss portfolio highlights and activity.

Thanks Mike. Let's now turn to slide 16 to discuss some of the portfolio highlights and what we view as reflective of our investment philosophy, applying the key principles of value investing to capital structures of middle market companies. To-date, we have constructed a portfolio comprised almost entirely of senior secured credit instruments with a weighted average yield of 15.3%. That compares to a weighted average current yield of 13.4% as of the end of Q3. As of December 31st, 99.8% of our invested capital was invested at the top of the capital structure in positions that are classified as first lien and/or senior secured credit instruments. Our overall credit portfolio had a weighted average valuation of approximately $0.71 on the dollar, highlighting the potential for significant price appreciation in addition to the high current income that was in line with the average price of the debt investments in the portfolio as of the end of Q3. Lastly, in a slight uptick versus the end of last quarter, approximately 77% of the portfolio was comprised of positions that are representative of the way in which we intend to invest going forward as we continue to monetize legacy positions and redeploy capital into new opportunities. Turning to slide 17. As of December 31st, we had 24 debt investments across 19 companies that represented $164.5 million in fair market value in four equity investments, representing $349,000 or 0.2% of invested capital. Turning to slide 18, to walk through our quarterly portfolio activity. On the investment front, during the fourth quarter of 2017, we made four new investments and seven add-on investments deploying $46.1 million at a weighted average price of $0.97 on the dollar and a weighted average current yield of 11.4%. All of these investments were first-lien and/or senior secured instruments.…

Thanks Peter. We've a couple of updates that we would like to discuss with respect to capital activity. First, with respect to our distribution policy, let's turn to slide 28. In November, our Board of Directors declared our distributions for Q1 of $0.083 per share per month. In our earnings release, we reported that we generated $0.60 per share in NII, which covered our declared base distribution by approximately 2.4 times. Including the special distribution we announced in December of $0.20 per share, NII covered the total quarterly distribution by approximately 1.3 times. Today, we announced our distribution schedule amount for Q2 2018 with a plan to continue to distribute at the level in 2017 and Q1 2018 of $0.083 per share per month or approximately 8% of December 31st NAV. Also during Q4 we prepaid the Full Circle legacy baby bonds that we assumed in the merger, resulting in approximately $0.05 per share in NII accretion as these were previously held at a premium. Next, with respect to our stock buyback program, let's turn to slide 29. During Q4, we purchased approximately 77,000 shares of our stock through our 10b5-1 program at an average discount through December 31st NAV of 18%, utilizing $790,000 of our $15 million 10b5-1 program. From the commencement of the 10b5-1 stock buyback program in November 2016 through today, we have purchased in aggregate of over 1.3 million shares at weighted average price of $10.97 per share, resulting in approximately $15 million of cumulative cash paid to purchase shares at approximately 88% of December 31st NAV. Including the tender offer, we purchased an aggregate of over 2.2 million shares to-date spending approximately $25 million on share buybacks and tender offer activity. For 2017, our stock buyback and tender offer activity added approximately $0.40 in per share accretion to our NAV. Lastly, turning to slide 31. In January 2018, we completed the baby bond offering of $44.9 million under the ticker GECCM. Including the over-allotment option, the total issue size was $46.4 million. The notes mature in January 2025 and are callable after January 31, 2021 and bear interest at a rate of 6.75% per annum. With that capital activity update, let me turn the call back over to Peter for closing remarks and then Q&A.

Thank you all for joining us this morning. We continue to be excited about the current portfolio, the investments we have made to-date and the progress we have made in rotating out-of-the-legacy portfolio and into new total return investments. We believe that we have created a significant alignment of interest with you and hope to have displayed this. Thank you again for the support and confidence that you have placed in us. With that, we will turn it over to the operator to open the call for questions.

Thank you [Operator Instructions]. Our first question comes from the line of Barry Bergman with Alba Investments.

I would like to ask about the sattelite company whose name [indiscernible] right now and excuse me I came on the call a little bit late. Can you just give us an update on what the company is up to if anything and I know some of their management turned over and I think at some point you would have been excited about that. If you can give us an update on that? Avanti.

I think there are a number of things that we can share with you about Avanti today. One of the things that you’ve alluded to is management. So last summer, David Williams, Avanti’s Founder and CEO, stepped down and a non-Executive Director named Alan Harper stepped up into the CEO role on an interim basis. The company ran a very fulsome replacement process, culminating with the announcement of the hiring of Kyle Whitehill. Kyle has deep experience in the telecom space in emerging markets and in particularly in Africa. We’re excited about all of that and Kyle starts in April. So the company and we as investors are very excited about that. Alan Harper will resume his role as a Non-Executive Director once Kyle starts. Second thing that we should discuss on the call is that Avanti’s restructuring process is well underway with a number of dates coming up and we are hopeful that that will be concluded in the second quarter of this year. But in December, it announced it was seeking a restructuring out of court. In February, it announced that consent solicitations necessary for that to happen and since February, it’s been crossing procedural milestones for that to happen. So we believe that that will occur probably in April of this year. And then the third thing we're talking about is Hylis 4, which is the satellite that investors have funded and are anxiously awaiting its launch and that is scheduled to launch later this month. So there's the collection of pieces of good news about Avanti and those are what we're able to share this morning.

Could you talk about the underlying business and how pricing is in the marketplace or for the satellite markets that these guys participate in?

As a result of our board seat, there's not a lot of that information that I can share. But we continue to believe that the company has a high quality service offering that's very competitively priced. And as a result of this restructuring, arguably the company can be even more aggressive on pricing than it was before. So we think that the future for revenue and cash flow generation in Avanti is very bright.

Can I just ask when you guys talk about your interest coverage and things like that. Do you include the cash as well as the pick interest from Avanti or is it -- just trying to understand that. I think you guys…

Do you mean our NII coverage of dividend?

Yes exactly, exactly.

Yes, we do. We include all of the interest income in there.

[Operator Instructions] Our next question comes from the line of Chris Kotowski with Oppenheimer.

Just as a follow-up on Avanti, I am wondering what it on full tick in the fourth quarter and can you just flush out for us roughly how much in investment income it generated in the fourth quarter. And then going forward, I assume that would step down to just 35 million times 9% and when does that happen? Does that happen in 2Q or in 1Q?

So I'll take sort of the back story about what drove that high amount of income in the quarter, as well as going forward and Mike will give you the specific number in Q4. So in Q4, one of the things that we benefited from is Avanti's third lien bonds is a PIK toggle instrument and the way that our accounting works is at the lower of those two rates is the base level on which we approve over the year. And then in the two coupon dates where we actually receive pick interest should Avanti elect that option, then we catch up for all of the higher rate of interest that we've not been accruing for. That coupon date occurred in the fourth quarter. So as a result of that, we had a catch up from the lower of the two PIK toggle rates to the higher when we received a PIK election from Avanti. And Mike that number in the fourth quarter was?

In the fourth quarter, that toggle election brought in an incremental about $2.5 million of interest income or net of these approximately $0.19 per share.

And for your last question on what happens going forward. Neither we nor Avanti are in control of the timing. But we would guess that in about April of this year, the entirety of our third lien positions would be converted into common equity presuming that this schedule hold. So our 54 and change million dollars principal amount of notes would receive an incremental a little bit shy of 200 million incremental shares of Avanti Communications Group. And in case you are looking to Avanti’s publicly listed equity price, there is a pretty significant disparity presently between the fair value of that position as implied by the third-lien trading price and the common equity trading price.

Thank you. And that concludes our question-and-answer session. I would like to turn the conference back over to Meaghan Mahoney for any closing comments.

Thank you. Thank you again all for joining us this morning. We look forward to our continued dialogue and appreciate your support. And please do let us know if we can be helpful with anything in follow-up. Have a great day.

Ladies and gentlemen, thank you for your participation in today’s conference. This does conclude the program and you may now disconnect. Everyone, have a great day.