Great Elm Capital Corp. 8.50% Notes DUE 2029

Great Elm Capital Corp. filed a preliminary proxy for a special meeting (record date August 17, 2026; 13,889,750 shares outstanding) asking stockholders to approve a sweeping transformation: Proposal 1 would pivot the BDC away from middle-market secured lending, specialty finance and CLO investments toward a venture capital strategy focused on equity in private, venture-backed technology companies, with deal flow sourced through sub-adviser AE's venture network and proprietary AI research platform.

The proxy is explicit about the cost of the pivot: as the portfolio transitions, GECC will generate less investment income and pay lower dividends, and returns would depend on capital appreciation and liquidity events that cannot be assured. Newly disclosed risks include illiquid private investments, SAFEs that may never convert into equity ownership, and steep competition facing AI-related businesses.

Proposal 2 rewrites adviser economics with GECM by eliminating the mandatory deferral of income incentive fees, excluding Venture Investments from the income hurdle (1.75% per quarter, 7% annualized), and bifurcating the capital gains fee. Proposal 3 appoints venture firm AE as sub-adviser for 25% of GECM's management and incentive fees, stepping up to 50% once GECC deploys $75 million into AE-sourced deals; AE managed more than $700 million as of June 30, 2026.

The board unanimously recommends FOR all three proposals, which are interdependent — if any one fails, the others are withdrawn. If approved, AE co-CEO Nick Grouf joins the board as an interested director, while GECM's previously waived $3.7 million of accrued unpaid income incentive fees remain waived regardless of the vote.