Great Elm Capital Corp. (NASDAQ:FULLL) Files An 8-K Completion of Acquisition or Disposition of Assets

Item2.01Results of Operations and Financial Condition.

On December27, 2016, Great Elm Capital Corp. (the “Company”)
issued a press release announcing its opening net asset value and
initial distributions. The press release is furnished as
Exhibit99.1.

The Company is providing a consolidated statement of assets and
liabilities as of November3, 2016 at page11.

Item9.01Financial Statements and Exhibits.

(a)

Pro Forma Financial Information

On June23, 2016, the Company entered into an agreement and plan
of merger (the “Merger Agreement”) with Full Circle Capital
Corporation, a Maryland corporation (“Full Circle”), providing
for the merger of Full Circle with and into the Company (the
“Merger”). The Merger closed on November3, 2016.

As required by Article11 of RegulationS-X, the pro forma combined
consolidated statement of assets and liabilities and schedule of
investments of the Company as of June30, 2016 giving effect to
the Merger on pages3 to 9 are incorporated herein by reference.

(d)

Exhibits. The exhibit index following this report is
incorporated herein by reference.

UNAUDITED COMBINING CONSOLIDATED PRO FORMA FINANCIAL
INFORMATION

On June23, 2016, Great Elm Capital Corp. (“GECC”) entered into
an agreement and plan of merger (the “Merger Agreement”) with
Full Circle Capital Corporation (“Full Circle”). After
completion of the merger of Full Circle with and into GECC (the
“Merger”), GECC succeeded to all of Full Circle’s assets and
liabilities.

On June23, 2016, GECC entered into a subscription agreement (the
“Subscription Agreement”) with Great Elm Capital Group,Inc.
(“Great Elm Capital Group”) and funds (the “MAST Funds”)
managed by MAST Capital Management,LLC (“MAST”). After the
completion of the transactions contemplated by the Subscription
Agreement (the “Formation Transactions”), GECC had $30million
of cash and owned a portfolio of debt instruments that MAST
valued at approximately $90million (the “Initial GECC
Portfolio”) as of June30, 2016.

The following unaudited combining consolidated pro forma
statement of assets and liabilities and schedule of investments
gives pro forma effect to the Merger and the Formation
Transactions. Specifically, GECC presents the unaudited combining
consolidated pro forma statement of assets and liabilities as if
on June30, 2016:

In order to make the unaudited combining consolidated pro forma
statement of assets and liabilities easier to read, we refer
throughout to unaudited combining consolidated pro forma
financial statements, associated adjustments and related
information as the “pro forma financial statements” throughout
this document. All such statements and information are
consolidated and unaudited, as well as combining to give effect
to the foregoing transactions.

The pro forma financial statements are based on, and should be
read in conjunction with, the following separate historical
consolidated financial statements and accompanying notes of Full
Circle, GECC and the special purpose statement of investments of
the MAST Funds that were included in GECC’s prospectus related
to the Merger.

GREAT ELM CAPITAL CORP. AND SUBSIDIARIES UNAUDITED
COMBINING CONSOLIDATED PRO FORMA FINANCIAL INFORMATION AS OF
JUNE30, 2016

The accompanying notes are an integral part of these pro forma
financial statements.

GREAT ELM CAPITAL CORP. UNAUDITED COMBINING PRO FORMA
SCHEDULE OF INVESTMENTS AS OF JUNE30, 2016

The accompanying notes are an integral part of this schedule.

GREAT ELM CAPITAL CORP. UNAUDITED COMBINING PRO FORMA
SCHEDULE OF INVESTMENTS(continued) AS OF JUNE30, 2016

The accompanying notes are an integral part of this schedule.

GREAT ELM CAPITAL CORP. UNAUDITED COMBINING PRO FORMA
SCHEDULE OF INVESTMENTS(continued) AS OF JUNE30, 2016

The accompanying notes are an integral part of this schedule.

GREAT ELM CAPITAL CORP. AND SUBSIDIARIES NOTES TO THE
UNAUDITED COMBINING CONSOLIDATED PRO FORMA FINANCIAL INFORMATION
AS OF JUNE30, 2016 DOLLAR AMOUNTS IN THOUSANDS

1. Basis of Presentation

General.The accompanying unaudited combining consolidated
pro forma statement of assets and liabilities and schedule of
investments reflects the impact of the Formation Transactions and
the Merger on GECC’s statement of assets and liabilities.

The pro forma combining consolidated statement of assets and
liabilities and schedule of investments are presented as if the
Merger and the Formation Transactions had occurred on June30,
2016.

The historical financial statements of Full Circle, the statement
of assets and liabilities of GECC and the unaudited combining
consolidated pro forma schedule of investments give effect to pro
forma events that are (1)directly attributable to the Merger or
the Formation Transactions and (2)factually supportable.

Purchase Accounting.The pro forma combining consolidated
statement of assets and liabilities was prepared using the
acquisition method of accounting under Topic 805 of the
Accounting Standards Codification, Business
Combinations, with GECC as the acquirer in the Merger for
accounting purposes. Under the acquisition method of accounting,
GECC will measure the total estimated purchase price
(consideration transferred) as described in Note4, “Estimate of
Consideration Expected to be Transferred,” as of the effective
time of the Merger using the market price of GECC common stock
and number of outstanding shares of Full Circle common stock at
that time. Therefore, this may result in a per share equity value
that is different from that assumed for the purposes of preparing
this pro forma combining consolidated statement of assets and
liabilities. GECC has assumed that Full Circle’s assessment of
the fair market value of its assets is correct and will revise
the valuation of Full Circle’s assets and liabilities as of the
effective time of the Merger as additional information becomes
available and as GECC performs additional valuation work.

Differences between these preliminary estimates and the final
acquisition accounting will occur and these differences could
have a material impact on the pro forma combined consolidated
statement of assets and liabilities and the schedule of
investments and GECC’s future results of operation and financial
position.

Transaction Costs.Acquisition related transaction costs
(e.g.,investment banker, advisory, legal, valuation, and other
professional fees) have not been included as a component of
consideration transferred, but instead must be expensed as
incurred. The pro forma statement of assets and liabilities
reflects the anticipated transaction costs of both companies as
accrued expenses with a corresponding decrease in stockholders’
equity and net asset value in the pro forma combined consolidated
statement of assets and liabilities. The costs that Full Circle,
MAST, Great Elm Capital Group and GECC may ultimately incur could
differ materially from this amount.

Accounting Policies.In order to prepare the pro forma
financial statements, GECC performed a preliminary review of Full
Circle’s accounting policies to identify significant
differences. GECC will continue to conduct additional reviews of
GECC’s accounting policies to determine if differences in
accounting policies require further adjustment or
reclassification of Full Circle’s results of operations, assets
or liabilities to conform to GECC’s accounting policies and
classifications. As a result of that review, GECC may identify
additional differences between the accounting policies of the two
companies that, when conformed, could have a material impact on
the pro forma financial statements.

Limitations.The pro forma combining consolidated statement
of assets and liabilities is presented for informational purposes
only and the pro forma combining consolidated statement of assets
and liabilities is not necessarily indicative of what GECC’s
financial position would actually have been had the Formation
Transactions been completed or the Merger had been completed on
the date indicated. In addition, the pro forma combining
consolidated statement of assets and liabilities does not purport
to project the future financial position of GECC. There were no
material transactions among Full Circle, the MAST Funds, or Great
Elm Capital Group, on the one hand, and GECC, on the other hand,
that would need to be eliminated.

2. The Merger

Upon completion of the Merger, Full Circle stockholders received
0.2219 shares of GECC common stock for each share of Full Circle
common stock. The exchange ratio was fixed and was not adjusted
for changes in the market value of shares of Full Circle common
stock or net asset value.

Full Circle declared a special dividend of $5,409 payable to
holders of record of Full Circle common stock immediately before
the effective time of the Merger, which was paid on November3,
2016.

The exchange ratio was determined based on Full Circle’s and
GECC’s net asset value of August31, 2016. GECC’s net asset
value is to be determined after giving effect to the transactions
contemplated by the Subscription Agreement as if such
transactions had been completed as of August31, 2016.

3. The Formation Transactions

Per the Subscription Agreement, on June23, 2016, Great Elm
Capital Group contributed $30,000 to GECC in exchange for 30
shares of GECC. On November1, 2016, GECC issued additional shares
of its common stock to Great Elm Capital Group so that the total
number of shares held by Great Elm Capital Group immediately
before the Merger equaled (a)$30,000 minus 25% of GECC’s then
estimated costs associated with the Merger and the Formation
Transactions divided by (b)15. The total shares issued to Great
Elm Capital Group were 1,966,667.

Per the Subscription Agreement, the MAST Funds contributed a
portfolio of debt investments to GECC. GECC issued shares of its
common stock equal to (a)the fair market value of the securities
contributed by the MAST Funds as of August31, 2016 minus 75% of
GECC’s then estimated costs associated with the Merger and the
Formation Transactions divided by (b)15. The total shares issued
to the MAST Funds were 5,935,800.

GECC agreed to reimburse MAST’s and Great Elm Capital Group’s,
transaction costs if the transactions were completed. GECC
currently estimates its, MAST’s and Great Elm Capital Group’s
aggregate transaction costs through the effective time were
approximately $2,900.

4. Estimate of Consideration Expected to be Transferred

In estimating the fair value of the merger consideration, or
purchase price, GECC had assumed a price per share of GECC common
stock of $15.00.

The following is the preliminary estimate of the purchase price
as of June30, 2016:

These estimates were subject to change, and did in fact change,
between the estimates and the final Exchange Ratio (which was
calculated as of August31, 2016) and the final amounts used in
GECC’s purchase accounting.

5. Pro Forma Adjustments

(a)

To record GECC’s estimated transaction costs (including
reimbursement of costs incurred by Great Elm Capital Group and
MAST in connection with the Formation Transactions and the
Merger).

(b)

To record estimated Full Circle transaction costs in excess of
those which were accrued on or before June30, 2016.

(c)

Amount of the Special Distribution declared by Full Circle
immediately before the Effective Time and payable after the
Effective Time.

(d)

To adjust the carrying value of Full Circle’s debt to market
value as of June30, 2016.

(e)

To eliminate historical Full Circle accounts and otherwise
record purchase accounting adjustments.

6. Exchange Ratio

Historical net asset value per share for Full Circle is
calculated based on 22,427,243 shares of Full Circle common stock
outstanding on August31, 2016. For purposes of calculating pro
forma net asset value per share, pro forma shares outstanding
were determined as follows:

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GREAT ELM CAPITAL CORP. AND SUBSIDIARIES CONSOLIDATED
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) AS OF NOVEMBER3,
2016 DOLLAR AMOUNTS IN THOUSANDS (EXCEPT PER SHARE
AMOUNTS)

to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.

EXHIBIT INDEX

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UNAUDITED COMBINING CONSOLIDATED PRO FORMA FINANCIAL INFORMATION
GREAT ELM CAPITAL CORP. AND SUBSIDIARIES
UNAUDITED COMBINING CONSOLIDATED PRO FORMA FINANCIAL INFORMATION
AS OF JUNE 30, 2016 GREAT ELM CAPITAL CORP.
UNAUDITED COMBINING PRO FORMA SCHEDULE OF INVESTMENTS AS OF JUNE
30, 2016 GREAT ELM CAPITAL CORP. UNAUDITED COMBINING PRO FORMA
SCHEDULE OF INVESTMENTS(continued) AS OF JUNE 30, 2016 GREAT ELM
CAPITAL CORP. UNAUDITED COMBINING PRO FORMA SCHEDULE OF
INVESTMENTS(continued) AS OF JUNE 30, 2016
GREAT ELM CAPITAL CORP. AND SUBSIDIARIES NOTES TO THE UNAUDITED
COMBINING CONSOLIDATED PRO FORMA FINANCIAL INFORMATION AS OF JUNE
30, 2016 DOLLAR AMOUNTS IN THOUSANDS GREAT ELM
CAPITAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF ASSETS
AND LIABILITIES (UNAUDITED) AS OF NOVEMBER 3, 2016 DOLLAR AMOUNTS
IN THOUSANDS (EXCEPT PER SHARE AMOUNTS)

About Great Elm Capital Corp. (NASDAQ:FULLL)