Item 2.01. Completion of Acquisition or Disposition of Assets.
On June 9, 2021, Portman Ridge Finance Corporation, a Delaware corporation (the Company), completed its previously announced
acquisition of Harvest Capital Credit Corporation, a Delaware corporation (HCAP), pursuant to that certain Agreement and Plan of Merger (the Merger Agreement), dated as of December 23, 2020, by and among the Company,
HCAP, Rye Acquisition Sub Inc., a Delaware corporation and a direct wholly owned subsidiary of the Company (Acquisition Sub), and Sierra Crest Investment Management LLC, a Delaware limited liability company and the external investment
adviser to the Company (Sierra Crest). Pursuant to the Merger Agreement, Acquisition Sub was merged with and into HCAP, with HCAP continuing as the surviving corporation and a direct wholly owned subsidiary of the Company (the
First Merger). Immediately following the First Merger, HCAP was merged with and into the Company, with the Company continuing as the surviving corporation (the Second Merger and, together with the First Merger, the
Mergers). As a result of, and as of the effective time of, the Second Merger, HCAPs separate corporate existence ceased.
In accordance with the terms of the Merger Agreement, at the effective time of the First Merger (the Effective Time), holders of
shares of HCAPs common stock, par value $0.001 per share (the HCAP Common Stock), issued and outstanding immediately prior to the Effective Time (other than shares held by a subsidiary of HCAP or held, directly or indirectly, by
the Company or Acquisition Sub and all treasury shares (collectively, Cancelled Shares)) had their shares of HCAP Common Stock converted to the right to receive, in the aggregate, (1) $18,537,512.65 in cash payable by Company (the
Company Cash Consideration), (2) 15,252,453 validly issued, fully paid and non-assessable shares of the Companys common stock, par value $0.01 per share (the Company Stock
Consideration and, together with the Company Cash Consideration, the Company Consideration) and (3) $2.15 million in cash payable by Sierra Crest.
With respect to the Company Consideration, record holders of shares of HCAP Common Stock were entitled, with respect to all or any portion of
the shares of HCAP Common Stock held as of the Effective Time, to make an election to receive payment for their shares of HCAP Common Stock in cash (an Election), subject to the conditions of and certain adjustment mechanisms set forth
in the Merger Agreement. Any record holder of shares of HCAP Common Stock who did not validly make an Election was deemed to have elected to receive shares of the Companys common stock with respect to the Company Consideration as payment for
their shares of HCAP Common Stock. Each share of HCAP Common Stock (other than a Cancelled Share) with respect to which an Election was made was treated as an Electing Share and each share of HCAP Common Stock (other than a Cancelled
Share) with respect to which an Election was not made or that was transferred after the election deadline on June 2, 2021 was treated as a Non-Electing Share.
Pursuant to the conditions of and adjustment mechanisms in the Merger Agreement, 475,806 Electing Shares were converted to Non-Electing Shares for purposes of calculating the total mix of consideration to be paid to each Electing Share in order to ensure that the value of the aggregate Company Cash Consideration paid to holders of the
Electing Shares equaled the aggregate cash consideration that HCAP received from the Company under the terms of the Merger Agreement. Applying such adjustment among all stockholders who hold Electing Shares, pro rata based on the aggregate number of
Electing Shares held by each such stockholder, each Electing Share was converted into the right to receive $7.43 in cash and 0.74 shares of the Companys common stock (with cash payable in lieu of fractional shares). Each Non-Electing Share was
converted into the right to receive 3.86 shares of the Companys common stock.
The foregoing description of the Mergers and the
Merger Agreement is a summary only and is qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which was filed by the Company as Exhibit 2.1 to its Current Report on
Form 8-K filed on December 28, 2020, and is incorporated herein by reference.