Greetings, and welcome to the Great Elm Capital Second Quarter 202 Financial Results. [Operator Instructions]. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Peter Sceusa, a representative of the company. Please go ahead.

Hello, and thank you, everyone, for joining us for Great Elm Capital Corp.'s Second Quarter 2025 Earnings Conference Call. If you'd like to be added to our distribution list, you can e-mail investorrelations@gatelmcap.com where you can sign up for alerts directly on our website, www.greatelmcc.com. I'd like to note the slide presentation posted on our website accompanying today's call. The slide presentation can be found on our website under Events and Presentations. On our website, you can also find our earnings release and SEC filings. I would like to call your attention to the customary safe harbor statement regarding forward-looking information. Also, please note that nothing in today's call constitutes an offer to sell or solicitation of offers to purchase our securities. Today's conference call includes forward-looking statements, and we ask that you refer to Great Elm Capital Corp.'s filings with the SEC for important factors that could cause actual results to differ materially from these statements. Great Elm Capital Corp. does not undertake to update its forward-looking statements unless required by law. To obtain copies of SEC filings, please visit Great Elm Capital Corp.'s website under Financials, SEC filings or visit the SEC's website. Hosting the call today is Matt Kaplan, Great Elm Capital Corp.'s Chief Executive Officer, who will be joined by Chief Financial Officer, Keri Davis; Chief Compliance Officer and General Counsel, Adam Kleinman; and Mike Keller, President of Great Elm Specialty Finance. I'll now turn the call over to GECC's CEO, Matt Kaplan.

Thanks, Peter, and thank you all for joining us today. We had a tremendous quarter, delivering the highest total investment income in the company's history at $14.3 million and NAV growing over $0.60 per share from the prior quarter to $12.10 per share as of June 30. The second quarter of 2025 was GECC's highest ever cash generative quarter with cash TII comprising approximately 90% of our total investment income. The 14% increase in TII from last quarter as well as TII growth of nearly 50% year-over-year was primarily driven by the success of our growing CLO platform as well as income from other cash-generating investments in the quarter. All of this is a continued testament to the strategic portfolio enhancements we've undertaken over the past few years to upgrade portfolio quality and focus on cash income generation. In addition, net investment income once again exceeded our quarterly distribution and was up approximately 29% sequentially. NII per share was $0.51 compared to $0.40 in the prior quarter. NII growth was largely attributable to a timely cash distribution on preference shares of an insurance-related investment as well as $4.3 million of cash distributions from our CLO JV, up from $3.8 million last quarter. We remain committed to delivering growing income to shareholders over the long term, supported by solid underlying portfolio performance. Moving through the second half of the year, we anticipate third quarter NII per share to step down similarly to what we experienced in the fourth quarter of 2024. This is driven by the uneven cadence of cash flows from our growing CLO platform at these still early stages, as we have touched on before. Nevertheless, we anticipate fourth quarter NII will rebound significantly from the third quarter, and we remain confident that we are well positioned to cover…

Thanks, Matt. I'll go over our financial highlights now, but we invite all of you to review our press release, accompanying presentation and SEC filings for greater detail. During the second quarter, GECC generated NII of $5.9 million or $0.51 per share as compared to $4.6 million or $0.40 per share in the first quarter of 2025. The increase in NII was primarily driven by the receipt of distributions from an insurance-related investment and higher income from our CLO JV. Our net assets as of June 30, 2025, were $140 million as compared to $132 million as of March 31. Our NAV per share was $12.10 as of June 30 versus $11.46 as of March 31. The increase in net asset value was primarily driven by unrealized gains on our investment in our CoreWeave-related investment in CW Opportunity 2 as well as from our NII exceeding the quarterly distribution. Details for the quarter-over-quarter change in NAV can be found on Slide 8 of the investor presentation. As of June 30, GECC's asset coverage ratio was 169.5% as compared to 163.8% as of March 31. As of June 30, total debt outstanding was approximately $201 million, and we had $6 million outstanding on our $25 million revolver. Cash and money market securities totaled approximately $4 million and we had $19 million of availability under our revolver. Our Board of Directors authorized a $0.37 per share cash distribution for the third quarter, which will be payable on September 30 to our stockholders of record as of September 15. The distribution equates to a 12.2% annualized dividend yield on our June 30 net asset value. I'll turn the call back over to Matt.

Thanks, Keri. We continue to enhance our portfolio strength by maintaining a focus on secured debt positions. Our growing CLO platform remains a significant contributor to this strategy as we continue to prudently expand the vertical, targeting high teens to 20% returns over time. We have grown our corporate portfolio to nearly $240 million of investments and first lien loans comprised 2/3 of the corporate portfolio as of June 30. This demonstrates our commitment to enhancing portfolio quality while maintaining a focus on secured income-generating assets. Before moving on to more portfolio detail, I think it's important to highlight why our non-yielding other equity mix, as outlined on Slide 11, increased in the quarter. This is almost entirely attributable to the IPO of CoreWeave I mentioned earlier. The underlying preferred equity investment held by CW Opportunity 2 LP converted into common equity in connection with the IPO and there will be no more income from the coupon on the preferred to distribute going forward. While this optically reduces our gross portfolio yield, it is meaningfully positive for our shareholders as GECC's IRR from the May 2024 funding through June 30 on CW Opportunity 2 is nearly 200%. I would also like to take a few minutes to address some potential uncertainties around our exposure in CoreWeave through our investment in CW Opportunity 2. Our investment is in a private fund and as disclosed in our filings since the inception of our investment, it has been carried on our balance sheet at net asset value as reported to us by the general partner. While the private fund does not charge a management fee to GECC, there are various other expenses and fees typical with these types of vehicles. And post-IPO, the valuations have not been one-to-one with the move in CoreWeave…

Thanks, Matt. Great Elm Specialty Finance continued to execute on its strategic transformation this quarter. By simplifying our business model and securing favorable financing arrangements, we've successfully repositioned the platform for future growth and improved profitability. In April, we completed the rebranding of Sterling as Great Elm Commercial Finance, which now offers traditional asset-based lending solutions to a broad range of industries, including health care. In addition, GESF exited its final equipment leaseholding at a gain, further streamlining the business and enhancing focus. We have also completed several transactions and secured additional financing, which enabled us to pay down over $5 million in GESF subordinated debt in the second quarter. As part of our strategic changes made earlier this year, we are pleased to report that Great Elm Healthcare Finance is now better positioned for profitability and is expected to grow its income and distributions to Great Elm Specialty Finance as we move through 2025. For Great Elm Commercial Finance, growth this quarter was temporarily constrained due to a delay in the upsizing of our back leverage facility. The syndication process was impacted by industry-wide caution following the April tariff announcements. However, syndication activity resumed in July, resulting in a more than 20% increase in GECF's borrowing capacity. In summary, these initiatives have streamlined our operations and better aligned our platform with long-term growth objectives. We're seeing the benefits of our strategic repositioning take hold, and we remain confident in our ability to generate improved sustainable returns going forward.

Thanks, Mike. In closing, we had a phenomenal second quarter, growing NII and net asset value. We are excited for the second half of the year as we look to execute on our growth and optimization initiatives. We believe we remain well positioned to cover our dividend in 2025, continuing to deliver attractive risk-adjusted returns for our shareholders. With that, I'll turn the call over to the operator for questions. Operator?

[Operator Instructions]. First question that we have comes from Erik Zwick of Lucid Capital Markets.

I wanted to start just to make sure I kind of understood the impact with the -- you referenced the dividend on the preference shares and the insurance-related investment. Are you able to quantify the amount of that dividend in the most recent quarter? And is it right to think about that? It sounds like potentially that was a onetime event in that magnitude? Or is that something that's going to be ongoing?

So good question. The event will be an annual event. So it will be ongoing, but we just will receive it about once per year. I believe the benefit to NII is approximately $1.6 million net after all things are said and done, $1.7 million.

Okay. Great. That's helpful, Matt. And then I appreciate all of the detail on the CoreWeave investment. And just curious in terms of to the degree that you kind of have some insight and where you're able to share from the managing partner for that investment perspective, what is their intention in terms of holding it versus potentially realizing some gain? Is there an expected time frame on that LP? Just curious if you can shed any light there, that would be helpful.

So it is up to the GP to decide when and how to provide liquidity. I would note that currently, the underlying shares are subject to a lockup, which should expire this quarter. We have a good relationship and dialogue with the GP on many other matters as well. As of this point in time, I can't really provide any color. It's kind of up to them. The options today are limited. So all things being equal, this has been a fantastic investment for GECC, and we'll provide an update to you all and the rest of the investing community when we have something more concrete to say.

Excellent., Matt. I appreciate the color there. And you're right, it's been a great investment. So you guys are -- do congratulations for spotting that investment and moving forward. So that's great. Just as I think about your kind of your closing comments, Matt, you mentioned being fairly positive about growth opportunities going forward. So as you assess the market, and I guess I'm curious about if you could just weigh maybe from your perspective, the relative attractiveness of investing in additional corporate debt kind of middle market portfolio versus CLO equity opportunities and maybe anything else that's on your radar today, where we could see growth in the portfolio going forward?

Great question. So over the course of the quarter, the corporate debt secondary market has definitely strengthened significantly. We're seeing some repricings begin to creep back into the market. So we have shifted some focus more to some of the more private side transactions that we partner with some blue chips on. We actually closed on a transaction last week, private transaction, and we hope to close on another one next week as well. So these are not huge, but every little bit helps here. And I think we're finding that with some of the uncertainty, there are lots of businesses out there that are good businesses that are on the -- not in the syndicated market and on a little smaller side that we can still get yield premium on relative to the syndicated market that's coming back. So that is where we have shifted our focus today.

With regard to the investment in Maverick Gaming, I know that had been marked down in previous quarters, but now moved to nonaccrual in the most recent quarter. Anything kind of different that changed in your thinking around that investment or what prompted the move to nonaccrual?

I mean we have an active dialogue with many of our -- almost all of our portfolio companies and management teams, right? So the -- we've been having active dialogue with the company, and it became clear to us that, that situation was not improving in the quarter, and they actually have filed for bankruptcy. So in connection with the preparation for the bankruptcy filing, we believed it was prudent to put the position on nonaccrual.

Makes sense. And then I just want to make sure I interpreted or heard one of your comments right. I think you're talking about both Maverick and Del Monte on nonaccrual now, but said you expect maybe a portion to return to accrual in second half '25. And was that related to just one of those or potentially positive developments in both? But I just wanted to make sure I interpreted that correctly.

That is largely tied to the DIP funding and the fact that when we fund the DIP, a portion of our pre-petition debt gets rolled up into the DIP as well, and then that starts to accrue interest during the pendency of the bankruptcy case.

[Operator Instructions]. At this stage, there are no further questions on the conference call. I would now like to hand the call back to Matt Kaplan for any closing remarks. Please go ahead, sir.

Thank you again for joining us today. We are pleased with another quarter of solid performance as we continue to execute on our long-term growth strategy, and we look forward to continued investor dialogue. Please let us know if we can help with any follow-up questions that you may have. Thank you.

Thank you. Ladies and gentlemen, that then concludes today's conference. Thank you for joining us. You may now disconnect your lines.