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UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


____________________________


​


FORM 10-Q


____________________________


​


(Mark One)


x  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ​


FOR THE QUARTERLY PERIOD ENDED September 30, 2019


 ̈  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ​


COMMISSION FILE NUMBER: 814-00852


__________________________


​


Sutter Rock Capital Corp.


(Exact name of registrant as specified in its charter)


____________________________


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Maryland27-4443543(State of incorporation)(I.R.S. Employer Identification No.)One Sansome Street, Suite 730, San Francisco, CA94104(Address of principal executive offices)(Zip Code)(650) 235-4769(Registrant’s telephone number, including area code)


​





SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: Title of Each ClassTrading SymbolName of Each Exchange on Which RegisteredCommon Stock, par value $0.01 per shareSSSSNasdaq Capital Market





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods as the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES x NO  ̈





Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES  ̈  NO  ̈





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated fileroAccelerated filerxNon-accelerated filero(Do not check if a smaller reporting company)Smaller reporting companyoEmerging growth companyo​


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES  ̈ NO x





The issuer had 19,013,519 shares of common stock, $0.01 par value per share, outstanding as of November 7, 2019 .











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SUTTER ROCK CAPITAL CORP.





TABLE OF CONTENTS


PAGEPART I.FINANCIAL INFORMATIONItem 1.Condensed Consolidated Financial Statements1Condensed Consolidated Statements of Assets and Liabilities as of September 30, 2019 (Unaudited) and December 31, 20181Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2019 and 2018 (Unaudited)2Condensed Consolidated Statements of Changes in Net Assets for the Nine Months Ended September 30, 2019 and 2018 (Unaudited)3Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2019 and 2018 (Unaudited)4Condensed Consolidated Schedule of Investments as of September 30, 2019 (Unaudited)5Condensed Consolidated Schedule of Investments as of December 31, 20189Notes to Condensed Consolidated Financial Statements as of September 30, 2019 (Unaudited)14Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations57Item 3.Quantitative and Qualitative Disclosures About Market Risk70Item 4.Controls and Procedures71PART II.OTHER INFORMATIONItem 1.Legal Proceedings72Item 1A.Risk Factors72Item 2.Unregistered Sales of Equity Securities and Use of Proceeds74Item 3.Defaults Upon Senior Securities75Item 4.Mine Safety Disclosures75Item 5.Other Information75Item 6.Exhibits76Signatures77








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PART I








Item 1. Condensed Consolidated Financial Statements








SUTTER ROCK CAPITAL CORP. AND SUBSIDIARIES





CONDENSED CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)


​September 30, 2019December 31, 2018ASSETS​​Investments at fair value:​​Non-controlled/non-affiliate investments (cost of $94,863,935 and $105,869,607, respectively)$161,350,359$170,067,233Non-controlled/affiliate investments (cost of $47,576,383 and $42,333,854, respectively)30,241,4455,931,863Controlled investments (cost of $13,291,886 and $22,960,942, respectively)8,251,63422,816,733Total Portfolio Investments199,843,438198,815,829Investments in U.S. Treasury bills (cost of $49,993,250 and $99,982,067, respectively)49,995,50099,994,000Total Investments (cost of $205,725,454 and $271,146,470, respectively)249,838,938298,809,829Cash45,155,78428,184,163Escrow proceeds receivable2,086,1452,494,582Interest and dividends receivable125,348255,670Deferred financing costs5,502267,541Prepaid expenses and other assets(3)2,332,410207,769Total Assets299,544,127330,219,554LIABILITIES​​Accounts payable and accrued expenses(3)2,142,052490,687Accrued incentive fees, net of waiver of incentive fees(1)—4,660,472Accrued management fees, net of waiver of management fees(1)—415,056Accrued interest payable—475,000Payable for securities purchased44,742,44989,480,103Deferred tax liability—885,5664.75% Convertible Senior Notes due March 28, 2023(2)38,710,59638,434,511Total Liabilities85,595,097134,841,395Commitments and contingencies (Notes 7 and 10)​​Net Assets$213,949,030$195,378,159NET ASSETS​​Common stock, par value $0.01 per share (100,000,000 authorized; 19,041,519 and 19,762,647 issued and outstanding, respectively)$190,415$197,626Paid-in capital in excess of par189,155,021192,322,399Accumulated net investment loss(23,116,027)(16,228,294)Accumulated net realized gain/(loss) on investments3,606,136(7,691,365)Accumulated net unrealized appreciation of investments44,113,48526,777,793Net Assets$213,949,030$195,378,159Net Asset Value Per Share$11.24$9.89


See accompanying notes to condensed consolidated financial statements.


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|(1) | This balance references a related-party transaction. Refer to “Note 3—Related-Party Arrangements” for more detail.

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|(2) | As ofSeptember 30, 2019andDecember 31, 2018, the 4.75% Convertible Senior Notes due March 28, 2023 had a face value of$40,000,000. Refer to “Note 10—Debt Capital Activities” for a reconciliation of the carrying value to the face value.

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|(3) | This balance includes a right of use asset and corresponding operating lease liability, respectively. Refer to "Note 7—Commitments and Contingencies—Operating Leases and Related Deposits" for more detail.




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 SUTTER ROCK CAPITAL CORP. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)





​Three Months Ended September 30,Nine Months Ended September 30,2019201820192018INVESTMENT INCOME​​Non-controlled/non-affiliate investments:​​Interest income$298,515$164,310$635,187$174,922Non-controlled/affiliate investments:​​Interest income81,71165,790201,304521,685Controlled investments:​​Interest income—16,25258,93741,153Dividend income——200,000350,000Total Investment Income380,226246,3521,095,4281,087,760OPERATING EXPENSES​​Management fees(1)—1,345,090848,7233,954,732Incentive fees/(Reversal of incentive fee accrual)(1)—804,520(4,660,472)4,863,939Costs incurred under Administration Agreement(1)—355,599306,0841,176,857Directors’ fees99,62086,250272,120258,750Professional fees807,143552,1794,179,0931,218,875Compensation expense3,070,409—3,702,517—Interest expense591,5121,311,5341,795,8853,925,292Income tax expense954(6,235)34,666142,264Other expenses512,792107,6881,504,545756,994Total Operating Expenses5,082,4304,556,6257,983,16116,297,703Management fee waiver(1)—(402,074)—(892,421)Incentive fee waiver(1)———(5,000,000)Total operating expenses, net of waiver of management and incentive fees5,082,4304,154,5517,983,16110,405,282Net Investment Loss(4,702,204)(3,908,199)(6,887,733)(9,317,522)Realized Gains/(Losses) on Investments:​​​​Non-controlled/non-affiliated investments1,772,961(10,119,771)23,632,332(7,532,483)Non-controlled/affiliate investments——(12,334,831)—Controlled investments———(680)Net Realized Gain/(Loss) on Investments1,772,961(10,119,771)11,297,501(7,533,163)Realized loss on partial repurchase of 5.25% Convertible Senior Notes due 2018———(397,846)Change in Unrealized Appreciation/(Depreciation) of Investments:​Non-controlled/non-affiliated investments(7,998,030)16,245,4742,279,11736,655,159Non-controlled/affiliate investments11,264,416(2,350,413)19,067,052(10,979,378)Controlled investments4,924,309247,314(4,896,043)6,472,584Net Change in Unrealized Appreciation/(Depreciation) of Investments8,190,69514,142,37516,450,12632,148,365Benefit from taxes on unrealized depreciation of investments—214,404885,5661,225,275Net Change in Net Assets Resulting from Operations$5,261,452$328,810$21,745,460$16,125,108Net Change in Net Assets Resulting from Operations per Common Share:​Basic$0.27$0.02$1.11$0.77Diluted(2)$0.25$0.02$1.00$0.72Weighted-Average Common Shares Outstanding​​​​Basic19,472,78520,462,62619,650,65120,858,192Diluted(2)23,204,12920,462,62623,381,99527,728,434


See accompanying notes to condensed consolidated financial statements.


____________________________________________________________________________________________________________________________


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|(1) | This balance references a related-party transaction. Refer to “Note 3—Related-Party Arrangements” for more detail.

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|(2) | For the three months ended September 30, 2018, 7,173,218 potentially dilutive common shares were excluded from the weighted-average common shares outstanding for diluted net change in net assets resulting from operations per common share because the effect of these shares would have been anti-dilutive. For three and nine months ended September 30, 2019 and the nine months ended September 30, 2018, 0 potentially dilutive common shares were excluded from the weighted-average common shares outstanding for diluted net change in net assets resulting from operations per common share. Refer to “Note 6—Net Change in Net Assets Resulting from Operations per Common Share—Basic and Diluted” for further detail.













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SUTTER ROCK CAPITAL CORP. AND SUBSIDIARIES





CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)


​Nine Months Ended September 30,20192018Net Assets at Beginning of Year$195,378,159$204,762,866Change in Net Assets Resulting from Operations​​Net investment gain619,7027,473Net realized loss on investments(4,065,693)(776,725)Realized loss on partial repurchase of 5.25% Convertible Senior Notes due 2018—(397,846)Net change in unrealized appreciation of investments20,699,7518,133,394Provision for taxes on unrealized appreciation of investments(94,147)—Net Change in Net Assets Resulting from Operations17,159,6136,966,296Change in Net Assets Resulting from Capital Transactions​​Repurchases of common stock—(1,241,428)Net Change in Net Assets Resulting from Capital Transactions—(1,241,428)Total Change in Net Assets17,159,6135,724,868Net Assets at March 31$212,537,772$210,487,734Change in Net Assets Resulting from Operations​​Net investment loss$(2,805,231)$(5,416,796)Net realized gain on investments13,590,2333,363,333Net change in unrealized appreciation/(depreciation) of investments(12,440,320)9,872,595Benefit from taxes on unrealized depreciation of investments979,7131,010,871Net Change in Net Assets Resulting from Operations(675,605)8,830,003Change in Net Assets Resulting from Capital Transactions​​Repurchases of common stock(737,119)(2,169,124)Net Decrease in Net Assets Resulting from Capital Transactions(737,119)(2,169,124)Total Change in Net Assets(1,412,724)6,660,879Net Assets at June 30$211,125,048$217,148,613Change in Net Assets Resulting from Operations​​Net investment loss$(4,702,204)$(3,908,199)Net realized gain/(loss) on investments1,772,961(10,119,771)Net change in unrealized appreciation of investments8,190,69514,142,375Benefit from taxes on unrealized depreciation of investments—214,404Net Change in Net Assets Resulting from Operations5,261,452328,810Change in Net Assets Resulting from Capital Transactions​​Stock-based compensation1,449,121—Repurchases of common stock(3,886,591)(4,074,059)Net Decrease in Net Assets Resulting from Capital Transactions(2,437,470)(4,074,059)Total Change in Net Assets2,823,982(3,745,249)Net Assets at September 30$213,949,030$213,403,364Capital Share Activity​​Shares outstanding at beginning of year19,762,64721,246,345Shares issued——Shares repurchased(721,128)(1,071,390)Shares Outstanding at End of Period19,041,51920,174,955


​


See accompanying notes to condensed consolidated financial statements.





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 SUTTER ROCK CAPITAL CORP. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)





​Nine Months Ended September 30,20192018Cash Flows from Operating Activities​​Net change in net assets resulting from operations$21,745,460$16,125,108Adjustments to reconcile net change in net assets resulting from operations to net cash provided by operating activities:​​Net realized (gain)/loss on investments(11,297,501)7,533,163Net change in unrealized appreciation of investments(16,450,126)(32,148,365)Change in deferred tax liability(885,566)(1,568,789)Amortization of discount on 5.25% Convertible Senior Notes due 2018—492,170Amortization of discount on 4.75% Convertible Senior Notes due 2023276,084188,091Amortization of deferred financing costs—51,636Amortization of fixed income security premiums and discounts(3,729)(25,909)Write-off of deferred offering costs267,541325,248Stock-based compensation1,449,121—Paid-in-kind interest(383,980)(254,881)Adjustments to escrow proceeds receivable26,221—Purchases of investments in:​​Portfolio investments(25,309,145)(6,676,590)U.S. Treasury bills(249,933,583)(299,911,885)Proceeds from sales or maturity of investments in:​​Portfolio investments52,322,73534,892,791U.S. Treasury bills300,000,000300,000,000Change in operating assets and liabilities:​​Due from controlled investments—840Prepaid expenses and other assets(2,124,641)(189,201)Interest and dividends receivable130,322(275,542)Deferred financing costs(5,502)—Escrow proceeds receivable408,437(2,038,825)Due to GSV Asset Management(1)—(231,610)Payable for securities purchased(44,737,654)91,551Accounts payable and accrued expenses1,651,36593,040Accrued incentive fees(1)(4,660,472)(136,061)Accrued management fees(1)(415,056)(110,109)Accrued interest payable(475,000)(1,056,563)Net Cash Provided by Operating Activities21,595,33115,169,308Cash Flows from Financing Activities​​Proceeds from the issuance of 4.75% Convertible Senior Notes due 2023—40,000,000Deferred debt issuance costs—(1,846,620)Repurchases of common stock(4,623,710)(7,484,610)Repayment of 5.25% Convertible Senior Notes due 2018—(69,272,565)Realized loss on repurchase of 5.25% Convertible Senior Notes due 2018—397,846Deferred offering costs—(178,910)Net Cash Used in Financing Activities(4,623,710)(38,384,859)Total Increase/(Decrease) in Cash Balance16,971,621(23,215,550)Cash Balance at Beginning of Year28,184,16359,838,600Cash Balance at End of Period$45,155,784$36,623,050


​


See accompanying notes to condensed consolidated financial statements.





Nine Months Ended September 30,20192018Supplemental Information:​​Interest paid$2,007,872$4,080,817Taxes paid$34,666$492,303


See accompanying notes to condensed consolidated financial statements.


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|(1) | This balance references a related-party transaction. Refer to “Note 3—Related-Party Arrangements” for more detail.




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SUTTER ROCK CAPITAL CORP. AND SUBSIDIARIES


CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED)


September 30, 2019


Portfolio Investments*Headquarters/IndustryDate of Initial InvestmentShares/PrincipalCostFair Value% of NetAssetsNON-CONTROLLED/NON-AFFILIATECoursera, Inc.Mountain View, CAPreferred shares, Series BOnline Education6/9/20132,961,399$14,519,519$34,768,76916.25%Palantir Technologies, Inc.Palo Alto, CACommon shares, Class AData Analysis5/7/20125,773,69016,189,93530,369,60914.19%Course Hero, Inc.Redwood City, CAPreferred shares, Series AOnline Education9/18/20142,145,5095,000,00115,974,1047.47%Lyft, Inc.**San Francisco, CACommon shares, Class A(3)(7)On-Demand Transportation Services3/21/2014304,8294,296,89412,449,2165.82%Nextdoor.com, Inc.San Francisco, CACommon sharesSocial Networking9/27/2018580,36010,006,57811,124,1955.20%Neutron Holdings, Inc. (d/b/a/ Lime)San Francisco, CAPreferred Shares, Series DMicromobility1/25/201941,237,11310,006,80010,491,7834.90%Parchment, Inc.Scottsdale, AZPreferred shares, Series D 8%E-Transcript Exchange10/1/20123,200,5124,000,9829,249,6304.32%SharesPost, Inc.San Francisco, CAPreferred shares, Series BOnline Marketplace Finance7/19/20111,771,6532,259,7167,601,6683.55%Common shares7/20/2011770,934123,9871,093,9390.51%Total2,383,7038,695,6074.06%Enjoy Technology, Inc.Menlo Park, CAPreferred shares, Series BOn-Demand Commerce7/29/20151,681,5204,000,2805,785,2702.70%Preferred shares, Series A10/16/2014879,1981,002,4402,752,0221.29%Total5,002,7208,537,2923.99%Aspiration Partners, Inc.Marina Del Rey, CAPreferred shares, Series AFinancial Services8/11/2015540,2701,001,8157,525,7883.52%Convertible Promissory Note 5%, Due 1/31/20218/12/2019$280,000281,190570,1710.27%Total1,283,0058,095,9593.78%Treehouse Real Estate Investment Trust, Inc.Los Angeles, CACommon sharesCannabis REIT9/11/2019312,5007,500,0007,500,0003.51%Clever, Inc.San Francisco, CAPreferred shares, Series BEducation Software12/5/20141,799,0472,000,6012,000,0010.93%A Place for Rover Inc. (f/k/a DogVacay, Inc.)Seattle, WACommon sharesPeer-to-Peer Pet Services11/3/2014707,9912,506,1191,078,0610.50%Tynker (f/k/a Neuron Fuel, Inc.)Mountain View, CAPreferred shares, Series A 8%Computer Software8/8/2012534,162309,310789,4910.37%4C Insights (f/k/a The Echo Systems Corp.)Chicago, ILCommon sharesSocial Data Platform3/30/2012436,2191,436,404226,6420.11%Fullbridge, Inc.Cambridge, MACommon sharesBusiness Education5/13/2012517,9176,150,506——%Promissory note 1.47%, Due 11/9/2021(4)3/3/2016$2,270,4582,270,858——%Total8,421,364——%Total Non-controlled/Non-affiliate$94,863,935$161,350,35975.42%


See accompanying notes to condensed consolidated financial statements.





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SUTTER ROCK CAPITAL CORP. AND SUBSIDIARIES


CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED) - continued


September 30, 2019


Portfolio Investments*Headquarters/IndustryDate of Initial InvestmentShares/PrincipalCostFair Value% of NetAssetsNON-CONTROLLED/AFFILIATE(1)Ozy Media, Inc.Mountain View, CAPreferred shares, Series C-2 6%(8)Digital Media Platform9/11/2019683,4822,414,1783,156,1061.48%Common Warrants, Strike Price $0.01, Expiration Date 4/9/20284/9/2018295,56530,6471,362,5550.64%Preferred shares, Series B 6%10/3/2014922,5094,999,9995,001,4202.34%Preferred shares, Series A 6%12/11/20131,090,9093,000,2005,037,4762.35%Preferred shares, Series Seed 6%11/2/2012500,000500,0002,308,8431.08%Total10,945,02416,866,4007.88%GreenAcreage Real Estate Corp.New York, NYCommon sharesCannabis REIT8/12/2019375,0007,501,5307,500,0003.51%NestGSV, Inc. (d/b/a GSV Labs, Inc.)San Mateo, CADerivative Security, Expiration Date 8/23/2024(10)Global Innovation Platform8/23/201918,555,1243,772,2171.76%Convertible Promissory Note 8% Due 8/23/2024***(10)2/17/2016$1,010,1981,028,8381,010,1980.47%Preferred Warrants Series A-3, Strike Price $1.33, Expiration Date 4/4/20214/4/2014187,500—24,3750.01%Preferred Warrants Series A-4, Strike Price $1.33, Expiration Date 10/6/202110/6/2014500,000—145,0000.07%Preferred Warrants Series A-4, Strike Price $1.33, Expiration Date 7/18/20217/8/2016250,00074,38067,5000.03%Preferred Warrants Series B, Strike Price $2.31, Expiration Date 11/29/202111/29/2016100,00029,275——%Preferred Warrant Series B, Strike Price $2.31, Expiration Date 5/29/20225/29/2017125,00070,379——%Preferred Warrant Series B, Strike Price $2.31, Expiration Date 12/31/202312/31/2018250,0005,0805,0000.00%Total9,763,0765,024,2902.35%EdSurge, Inc.Burlingame, CAPreferred shares, Series A-1Education Media Platform11/12/2015378,788501,360248,5870.12%Preferred shares, Series A2/28/2014494,365500,801261,6760.12%Total1,002,161510,2630.24%CUX, Inc. (d/b/a CorpU)Philadelphia, PASenior Subordinated Convertible Promissory Note 10% Due 2/14/2020***(6)Corporate Education11/26/2014$1,360,4891,362,249340,4920.16%Convertible preferred shares, Series D 6%5/31/2013169,033778,607——%Convertible preferred shares, Series C 8%3/29/2012615,7632,006,077——%Preferred Warrants Series D, Strike Price $4.59, Expiration Date 2/14/20205/31/201316,903———%Total4,146,933340,4920.16%Maven Research, Inc.San Francisco, CAPreferred shares, Series CKnowledge Networks7/2/2012318,9792,000,447——%Preferred shares, Series B2/28/201249,505217,206——%Total2,217,653——%Curious.com, Inc.Menlo Park, CACommon sharesOnline Education11/22/20131,135,94412,000,006——%Total Non-controlled/Affiliate$47,576,383$30,241,44514.13%





See accompanying notes to condensed consolidated financial statements.





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SUTTER ROCK CAPITAL CORP. AND SUBSIDIARIES


CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED) - continued


September 30, 2019


Portfolio Investments*Headquarters/IndustryDate of Initial InvestmentShares/PrincipalCostFair Value% of NetAssetsCONTROLLED(2)StormWind, LLC(5)Scottsdale, AZPreferred shares, Series C 8%Interactive Learning1/7/20142,779,1344,000,7874,593,1882.15%Preferred shares, Series B 8%12/16/20113,279,6292,019,6872,699,9901.26%Preferred shares, Series A 8%2/25/2014366,666110,00078,2580.04%Total6,130,4747,371,4363.45%SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.)Cupertino, CAPreferred shares, Class A***(9)Clean Technology4/15/201414,300,0007,151,412880,1980.41%Common shares4/15/2014100,00010,000——%Total7,161,412880,1980.41%Total Controlled$13,291,886$8,251,6343.86%Total Portfolio Investments$155,732,204$199,843,43893.41%U.S. TreasuryU.S. Treasury bill, 0%, due 10/3/2019***(3)9/27/2019$50,000,00049,993,25049,995,50023.37%TOTAL INVESTMENTS$205,725,454$249,838,938116.77%





See accompanying notes to condensed consolidated financial statements.


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|* | All portfolio investments are non-control/non-affiliated and non-income-producing, unless otherwise identified. Equity investments are subject to lock-up restrictions upon their initial public offering (“IPO”). Preferred dividends are generally only payable when declared and paid by the portfolio company's board of directors. The Company’s directors, officers, employees and staff, as applicable, may serve on the board of directors of the Company’s portfolio investments. (Refer to “Note 3—Related-Party Arrangements”). All portfolio investments are considered Level 3 and valued using significant unobservable inputs, unless otherwise noted. (Refer to “Note 4—Investments at Fair Value”). All of the Company's portfolio investments are restricted as to resale, unless otherwise noted, and were valued at fair value as determined in good faith by the Company’s Board of Directors.  (Refer to "Note 2—Significant Accounting Policies—Investments at Fair Value").

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|** | Indicates assets that Sutter Rock Capital Corp. believes do not represent “qualifying assets” under Section 55(a) of the Investment Company Act of 1940, as amended (the “1940 Act”). Of the Company’s total investments as ofSeptember 30, 2019,4.98%of its total investments are non-qualifying assets.

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|*** | Investment is income-producing.




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|(1) | “Affiliate Investments” are investments in those companies that are “Affiliated Companies” of Sutter Rock Capital Corp., as defined in the 1940 Act. In general, a company is deemed to be an “Affiliate” of Sutter Rock Capital Corp. if Sutter Rock Capital Corp. owns 5% or more of the voting securities (i.e., securities with the right to elect directors) of such company. For the Schedule of Investments In, and Advances To, Affiliates, as required by SEC Regulation S-X, Rule 12-14, refer to “Note 4—Investments at Fair Value”.










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September 30, 2019





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|(2) | “Control Investments” are investments in those companies that are “Controlled Companies” of Sutter Rock Capital Corp., as defined in the 1940 Act. In general, under the 1940 Act, the Company would “Control” a portfolio company if the Company owned more than 25% of its outstanding voting securities (i.e., securities with the right to elect directors) and/or had the power to exercise control over the management or policies of such portfolio company. For the Schedule of Investments In, and Advances To, Affiliates, as required by SEC Regulation S-X, Rule 12-14, refer to “Note 4—Investments at Fair Value”.




|    |                                                                                        
|--- | ---------------------------------------------------------------------------------------
|(3) | Denotes an investment considered Level 1 or Level 2 and valued using observable inputs.




|    |                                                                                      
|--- | -------------------------------------------------------------------------------------
|(4) | As ofSeptember 30, 2019, the investments noted had been placed on non-accrual status.




|    |                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------
|(5) | Sutter Rock Capital Corp.’s investments in StormWind, LLC are held through Sutter Rock Capital Corp.'s wholly owned subsidiary, GSVC SW Holdings, Inc.




|    |                                                                                                                                                                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(6) | Interest will accrue daily on the unpaid principal balance of the note. Interest began compounding annually on November 26, 2015. Accrued interest is not payable until the earlier of (a) the closing of a subsequent equity offering by CUX, Inc. (d/b/a CorpU), or (b) the maturity of the note.




|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(7) | On March 29, 2019, Lyft, Inc. priced its initial public offering for 32,500,000 Class A common shares at a price of $72.00 per share. Sutter Rock Capital Corp.'s 176,266 Series D preferred shares and 128,563 Series E preferred shares of Lyft, Inc. automatically converted to Class A common shares immediately prior to the close of the offering. As of August 19, 2019 Sutter Rock Capital Corp.'s shares of common stock in Lyft, Inc. were no longer restricted. AtSeptember 30, 2019, Sutter Rock Capital Corp. valued is common shares of Lyft, Inc. based on itsSeptember 30, 2019closing price.




|    |                                                                                                                                                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(8) | On September 11, 2019, Sutter Rock Capital Corp. agreed to convert its 5% Convertible Promissory Note due 12/31/2018 to Ozy Media, Inc. and all related accrued interest, into 683,482 shares of Ozy Media, Inc.'s Series C-2 preferred shares.




|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(9) | The SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.) preferred shares held by Sutter Rock Capital Corp. do not entitle Sutter Rock Capital Corp. to a preferred dividend rate. During thethree months ended September 30, 2019, SPBRX, INC. declared, and Sutter Rock Capital Corp. received, an aggregate of$0in cash distributions. Sutter Rock Capital Corp. does not anticipate that SPBRX, INC. will pay distributions on a quarterly or regular basis or become a predictable distributor of distributions.




|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | On August 23, 2019, Sutter Rock Capital Corp. amended the structure of its investment in NestGSV, Inc. (d/b/a GSV Labs, Inc.). As part of the agreement, Sutter Rock’s equity holdings (warrants notwithstanding) were restructured into a derivative security. NestGSV, Inc. (d/b/a GSV Labs,Inc.) has the right to call the position at any time over a five year period, while Sutter Rock Capital Corp. can put the shares to NestGSV, Inc. (d/b/a GSV Labs, Inc.) at the end of the five year period. As part of the agreement, previously accrued interest under Sutter Rock Capital Corp.’s 12% Convertible Promissory Note due 12/31/2019  will be capitalized into the principal of the extended note, and the interest on the note is reduced from 12% to 8%. The Convertible Promissory Note’s maturity was extended to August 23, 2024. Under the amended structure, Sutter Rock Capital Corp.’s fully diluted ownership in the company decreased from 50.0% to 8.5%. As such, Sutter Rock Capital Corp.'s investments in NestGSV, Inc. (d/b/a GSV Labs, Inc.) have been recategorized from controlled investments to non-controlled/affiliated investments.
















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SUTTER ROCK CAPITAL CORP. AND SUBSIDIARIES





CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS


December 31, 2018 Portfolio Investments*Headquarters/IndustryDate of Initial InvestmentShares/PrincipalCostFair Value% of NetAssetsNON-CONTROLLED/NON-AFFILIATEPalantir Technologies, Inc.Palo Alto, CACommon shares, Class AData Analysis5/7/20125,773,690$16,189,935$34,053,39417.43%Spotify Technology S.A.**Stockholm, SwedenCommon shares(3)(7)On-Demand Music Streaming8/6/2012235,36010,002,08426,713,36013.67%Coursera, Inc.Mountain View, CAPreferred shares, Series BOnline Education6/9/20132,961,39914,519,51923,111,88911.83%Dropbox, Inc.**San Francisco, CACommon shares(3)(8)Cloud Computing Services11/15/2011874,99013,656,92617,876,0469.15%Lyft, Inc.San Francisco, CAPreferred shares, Series EOn-Demand Transportation3/11/2015128,5632,503,5856,583,4833.37%Preferred shares, Series D3/21/2014176,2661,792,7499,026,2694.62%Total4,296,33415,609,7527.99%Course Hero, Inc.Redwood City, CAPreferred shares, Series AOnline Education9/18/20142,145,5095,000,00114,106,6257.22%Nextdoor.com, Inc.San Francisco, CACommon sharesSocial Networking9/27/2018580,36010,006,57810,097,4425.17%SharesPost, Inc.San Francisco, CAPreferred shares, Series BOnline Marketplace Finance7/19/20111,771,6532,259,7165,943,5773.04%Common shares(13)7/20/2011770,934123,987855,3270.44%Total2,383,7036,798,9043.48%Parchment, Inc.Scottsdale, AZPreferred shares, Series D 8%E-Transcript Exchange10/1/20123,200,5124,000,9826,151,1613.15%Enjoy Technology, Inc.Menlo Park, CAPreferred shares, Series BOn-Demand Commerce7/29/20151,681,5204,000,2804,000,0002.05%Preferred shares, Series A10/16/2014879,1981,002,4402,091,4361.07%Total5,002,7206,091,4363.12%A Place for Rover Inc. (f/k/a DogVacay, Inc.)Seattle, WACommon sharesPeer-to-Peer Pet Services11/3/2014707,9912,506,1193,511,6611.80%Knewton, Inc.New York, NYPreferred shares, Series EOnline Education12/16/2013375,9854,999,9992,021,6901.03%Convertible Promissory Note 8% Due 12/31/2019(12)7/23/2018$134,405135,213134,4050.07%Total5,135,2122,156,0951.10%Clever, Inc.San Francisco, CAPreferred shares, Series BEducation Software12/5/20141,799,0472,000,6012,000,0011.02%Aspiration Partners, Inc.Marina Del Rey, CAPreferred shares, Series AFinancial Services8/11/2015540,2701,001,815999,9750.51%Tynker (f/k/a Neuron Fuel, Inc.)Mountain View, CAPreferred shares, Series A 8%Computer Software8/8/2012534,162309,310789,4920.41%4C Insights (f/k/a The Echo Systems Corp.)Chicago, ILCommon sharesSocial Data Platform3/30/2012436,2191,436,404——%Fullbridge, Inc.Cambridge, MACommon sharesBusiness Education5/13/2012517,9176,150,506——%Promissory Note 1.49% Due 11/9/2021(4)3/3/2016$2,270,4582,270,858——%Total8,421,364——%Total Non-controlled/Non-affiliate$105,869,607$170,067,23387.05%


See accompanying notes to condensed consolidated financial statements.





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SUTTER ROCK CAPITAL CORP. AND SUBSIDIARIES





CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS –continued


December 31, 2018


Portfolio Investments*Headquarters/IndustryDate of Initial InvestmentShares/PrincipalCostFair Value% of NetAssetsNON-CONTROLLED/AFFILIATE(1)Ozy Media, Inc.Mountain View, CAConvertible Promissory Note 5% Due 12/31/2018(11)Digital Media Platform8/31/2016$2,102,384$2,102,384$3,153,5751.61%Preferred shares, Series B 6%10/3/2014922,5094,999,999——%Preferred shares, Series A 6%12/11/20131,090,9093,000,200——%Preferred shares, Series Seed 6%11/2/2012500,000500,000——%Common Warrants, Strike Price $0.01, Expiration Date 4/9/2028(11)4/9/2018295,56530,647——%Total10,633,2303,153,5751.61%CUX, Inc. (d/b/a CorpU)Philadelphia, PASenior Subordinated Convertible Promissory Note 10% Due 2/14/2020***(6)Corporate Education11/26/2014$1,360,4891,361,9691,360,4890.70%Convertible preferred shares, Series D 6%5/31/2013169,033778,607878,0050.45%Convertible preferred shares, Series C 8%3/29/2012615,7632,006,077——%Preferred Warrants Series D, Strike Price $4.59, Expiration Date 2/14/2020(9)5/31/201316,903—19,9460.01%Total4,146,6532,258,4401.16%EdSurge, Inc.Burlingame, CAPreferred shares, Series A-1Education Media Platform11/12/2015378,788501,360250,0000.13%Preferred shares, Series A2/28/2014494,365500,801269,8480.14%Total1,002,161519,8480.27%Maven Research, Inc.San Francisco, CAPreferred shares, Series CKnowledge Networks7/2/2012318,9792,000,447——%Preferred shares, Series B2/28/201249,505217,206——%Total2,217,653——%Curious.com, Inc.Menlo Park, CACommon shares(15)Online Education11/22/20131,135,94412,000,006——%Declara, Inc.Palo Alto, CAConvertible Promissory Note 12% Due 4/30/2018(4)(10)Social Cognitive Learning12/30/2015$2,327,7272,334,152——%Preferred shares, Series A 8%4/17/201410,716,3909,999,999——%Total12,334,151——%Total Non-controlled/Affiliate$42,333,854$5,931,8633.04%CONTROLLED(2)StormWind, LLC(5)Scottsdale, AZPreferred shares, Series C 8%Interactive Learning1/7/20142,779,1344,000,7877,194,9713.68%Preferred shares, Series B 8%12/16/20113,279,6292,019,6875,770,3282.95%Preferred shares, Series A 8%2/25/2014366,666110,000421,5250.22%Total6,130,47413,386,8246.85%





See accompanying notes to condensed consolidated financial statements.























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CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS –continued


December 31, 2018


Portfolio Investments*Headquarters/IndustryDate of Initial InvestmentShares/PrincipalCostFair Value% of NetAssetsNestGSV, Inc. (d/b/a GSV Labs, Inc.)San Mateo, CAConvertible Promissory Note 12% Due 12/31/2019***(14)Global Innovation Platform2/17/2016$936,525951,436936,5250.48%Preferred shares, Series A-410/6/20143,720,4244,904,4984,960,5532.54%Preferred shares, Series A-34/4/20141,561,6252,005,7301,735,1340.89%Preferred shares, Series A-27/15/2013450,001605,500300,0000.15%Preferred shares, Series A-15/25/20121,000,0001,021,778499,9990.26%Common shares7/1/2014200,0001,000——%Preferred Warrants Series A-3, Strike Price $1.33, Expiration Date 4/4/2021(14)4/4/2014187,500—26,2500.01%Preferred Warrants Series A-4, Strike Price $1.33, Expiration Date 10/6/2021(14)10/6/2014500,000—145,0000.07%Preferred Warrants Series A-4, Strike Price $1.33, Expiration Date 7/18/20217/8/2016250,00074,38070,0000.04%Preferred Warrants Series B, Strike Price $2.31, Expiration Date 11/29/202111/29/2016100,00029,2755560.00%Preferred Warrant Series B, Strike Price $2.31, Expiration Date 5/29/20225/29/2017125,00070,3796940.00%Preferred Warrant Series B–Strike Price $2.31, Expiration Date 12/31/2023(14)12/31/2018250,0005,0805,0000.00%Total9,669,0568,679,7114.44%SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.)Woodside, CAPreferred shares, Class A***(16)Clean Technology4/15/201414,300,0007,151,412750,1980.38%Common shares4/15/2014100,00010,000——%Total7,161,412750,1980.38%Total Controlled$22,960,942$22,816,73311.68%Total Portfolio Investments$171,164,403$198,815,829101.76%U.S. TreasuryU.S. Treasury bills, 0%, due 1/3/2019***(3)12/27/2018$100,000,00099,982,06799,994,00051.18%TOTAL INVESTMENTS$271,146,470$298,809,829152.94%





See accompanying notes to condensed consolidated financial statements.





_________________


|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | All portfolio investments are non-control/non-affiliated and non-income-producing, unless otherwise identified. Equity investments are subject to lock-up restrictions upon their initial public offering (“IPO”). Preferred dividends are generally only payable when declared and paid by the portfolio company's board of directors. The Company’s and GSV Asset Management’s officers and staff, as applicable, may serve on the board of directors of the Company’s portfolio investments. (Refer to “Note 3—Related-Party Arrangements”). All portfolio investments are considered Level 3 and valued using significant unobservable inputs, unless otherwise noted. (Refer to “Note 4—Investments at Fair Value”). All of the Company's portfolio investments are restricted as to resale, unless otherwise noted, and were valued at fair value as determined in good faith by the Company’s Board of Directors.  (Refer to "Note 2—Significant Accounting Policies—Investments at Fair Value").

|   |                                                                                                                                                                                                                                                                                                           
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|** | Indicates assets that GSV Capital Corp. believes do not represent “qualifying assets” under Section 55(a) of the Investment Company Act of 1940, as amended (the “1940 Act”). Of GSV Capital Corp.’s total investments as of December 31, 2018, 14.92% of its total investments are non-qualifying assets.

|    |                                
|--- | -------------------------------
|*** | Investment is income-producing.







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CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS –continued


December 31, 2018





|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | “Affiliate Investments” are investments in those companies that are “Affiliated Companies” of GSV Capital Corp., as defined in the 1940 Act. In general, a company is deemed to be an “Affiliate” of GSV Capital Corp. if GSV Capital Corp. owns 5% or more of the voting securities (i.e., securities with the right to elect directors) of such company. For the Schedule of Investments In, and Advances To, Affiliates, as required by SEC Regulation S-X, Rule 12-14, refer to “Note 4—Investments at Fair Value”.




|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | “Control Investments” are investments in those companies that are “Controlled Companies” of GSV Capital Corp., as defined in the 1940 Act. In general, under the 1940 Act, the Company would “Control” a portfolio company if the Company owned more than 25% of its outstanding voting securities (i.e., securities with the right to elect directors) and/or had the power to exercise control over the management or policies of such portfolio company. For the Schedule of Investments In, and Advances To, Affiliates, as required by SEC Regulation S-X, Rule 12-14, refer to “Note 4—Investments at Fair Value”.




|    |                                                                                        
|--- | ---------------------------------------------------------------------------------------
|(3) | Denotes an investment considered Level 1 or Level 2 and valued using observable inputs.




|    |                                                                                      
|--- | -------------------------------------------------------------------------------------
|(4) | As of December 31, 2018, the investments noted had been placed on non-accrual status.




|    |                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------
|(5) | GSV Capital Corp.’s investments in StormWind, LLC are held through GSV Capital Corp.'s wholly owned subsidiary, GSVC SW Holdings, Inc.




|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(6) | Interest will accrue daily on the unpaid principal balance of the note. Interest began compounding annually on November 26, 2015. Accrued interest is not payable until the earlier of (a) the closing of a subsequent equity offering by CUX, Inc. (d/b/a CorpU), or (b) the maturity of the note. On October 31, 2018, GSV Capital Corp. agreed to extend the maturity of the Senior Subordinated Convertible Promissory Note to CUX, Inc. (d/b/a CorpU) until February 14, 2020, with a new interest rate of 10%.  Accrued interest will continue to be compounded annually on November 26 of the current and each subsequent year until repaid.




|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(7) | On March 14, 2018, as disclosed in its Amendment No. 1 to its Form F-1 Registration Statement filed in connection with its direct listing, Spotify Technology S.A. effectuated a 40:1 stock split of its ordinary shares, beneficiary certificates and any other of its outstanding securities. On April 3, 2018, Spotify Technology S.A., registered for resale up to 55,731,480 ordinary shares by the registered shareholders in a direct listing. GSV Capital Corp.'s common shares of Spotify Technology S.A. are considered unrestricted as they are not subject to restriction upon sale.  At December 31, 2018, GSV Capital Corp. valued its common shares of Spotify Technology S.A. based on its December 31, 2018 closing price.




|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(8) | On March 7, 2018, as disclosed in its Amendment No. 1 to its Form S-1 Registration Statement filed in connection with its initial public offering, Dropbox, Inc. effectuated a 1:1.5 reverse stock split of its capital stock. On March 23, 2018, Dropbox, Inc. priced its initial public offering for 26,822,409 Class A common shares at a price of $21.00 per share. Dropbox, Inc., also registered for resale up to 9,177,591 Class A common shares by the registered shareholders.  As of August 23, 2018 GSV Capital Corp.'s shares of common stock in Dropbox, Inc. were no longer restricted.  At December 31, 2018, GSV Capital Corp. valued its common shares of Dropbox, Inc. based on its December 31, 2018 closing price.




|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(9) | On February 23, 2018, CUX, Inc. (d/b/a CorpU) agreed to extend the maturity of the GSV Capital Corp.'s Series D warrants until August 1, 2018. On July 31, 2018, CUX, Inc. (d/b/a CorpU) agreed to further extend the maturity of GSV Capital Corp.'s Series D warrants until November 26, 2018. On October 31, 2018and in connection with the extension of the maturity date on the related debt investment, CUX, Inc. (d/b/a CorpU) agreed to further extend the maturity of GSV Capital Corp's Series D warrants until February 14, 2020.




|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | On January 31, 2018, the maturity date of the convertible promissory note to Declara, Inc. was extended an additional three months to April 30, 2018 and the interest rate on the convertible promissory note increased to 12% per annum (including 365 days for the purposes of accrual).  On January 31, 2018 the convertible promissory note to Declara Inc. was placed on non-accrual status.  On April 30, 2018, the Company deemed this investment to be in default based on Declara Inc.'s financial position.




|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(11) | Effective April 9, 2018, the term of Ozy Media Inc.'s notes were extended through the issuance of a new convertible promissory note, which extended the maturity date of the existing notes to October 31, 2018 and then to December 31, 2018 once certain conditions were satisfied.  Effective August 17, 2018, Ozy Media Inc. executed an additional debt amendment, which expanded its borrowing limit.  In consideration for amending and restating the existing notes, the Company was issued warrants exercisable for 295,565 shares of Ozy Media Inc.'s common stock.  Subsequent to December 31, 2018, Ozy Media Inc.'s obligations under its financing arrangements with the Company became past due.




|     |                                                                                                                                                                                       
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(12) | On July 23, 2018, Knewton, Inc. issued an 8% unsecured convertible promissory amount with a principal amount of $134,405 and a maturity date of December 31, 2019 to GSV Capital Corp.




|     |                                                                                                                                                    
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------
|(13) | On June 15, 2018 GSV Capital Corp. exercised its 770,934 warrants to purchase shares of SharesPost, Inc.'s common stock, with a $0.13 strike price.













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CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS –continued


December 31, 2018





|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(14) | Effective July 31, 2018, GSV Capital Corp agreed to extend the Convertible Promissory Note to NestGSV, Inc. (d/b/a GSV Labs, Inc.) until December 31, 2018, with a new interest rate of 12%.  Previously accrued interest will be capitalized into the principal of the extended note. On December 31, 2018, GSV Capital Corp extended the maturity of the Convertible Promissory Note to December 31, 2019, compounded the previously accrued and then-outstanding interest and invested an additional $300,000. The Convertible Promissory Note continues to accrue interest at 12%. In consideration for the extension and additional investment, the 500,000 Series A-3 Preferred Warrants due April 4, 2019 and the 187,500 Series A-4 Preferred Warrants due October 6, 2019, were extended to April 4, 2021 and October 6, 2021, respectively. The Company also received an additional 250,000 Series B Preferred Warrants due December 31, 2023.




|     |                                                                                                                                                                                                                                                                                                                     
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(15) | On June 8, 2018, Curious.com, Inc. completed a recapitalization and issued new Series C preferred shares. In connection with the offering, GSV Capital Corp.'s 3,407,834 Series B preferred shares were converted into common shares. Additionally, a 1:3 reverse stock split was declared on the now common shares.




|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(16) | The SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.) preferred shares held by GSV Capital Corp. do not entitle GSV Capital Corp. to a preferred dividend rate. During the year ended December 31, 2018, SPBRX, INC. declared, and GSV Capital Corp. received, an aggregate of $625,000 in cash distributions. GSV Capital Corp. does not anticipate that SPBRX, INC. will pay distributions on a quarterly or regular basis or become a predictable distributor of distributions.










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TABLE OF CONTENTS
 
 
 SUTTER ROCK CAPITAL CORP. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 September 30, 2019











NOTE 1—NATURE OF OPERATIONS





Sutter Rock Capital Corp. (the “Company” or “Sutter Rock Capital”), formerly known as GSV Capital Corp. and formed in September 2010 as a Maryland corporation, is an internally-managed, non-diversified closed-end management investment company. The Company has elected to be regulated as a business development company (or "BDC") under the Investment Company Act of 1940, as amended (the “1940 Act”).





On and effective March 12, 2019, our Board of Directors approved internalizing our operating structure (the "Internalization") and we began operating as an internally-managed non-diversified closed-end management investment company that has elected to be regulated as a BDC under the 1940 Act. Prior to March 12, 2019, we were externally managed by our former investment adviser, GSV Asset Management, LLC (“GSV Asset Management”), pursuant to an investment advisory agreement (the “Investment Advisory Agreement”), and our former administrator, GSV Capital Service Company, LLC (“GSV Capital Service Company”), provided the administrative services necessary for our operations pursuant to an administration agreement (the “Administration Agreement”). Refer to "Note 3 — Related-Party Arrangements" for further detail.





The Company’s date of inception was January 6, 2011, which is the date it commenced its development stage activities. The Company’s common stock is currently listed on the Nasdaq Capital Market under the symbol “SSSS” (formerly "GSVC"). The Company began its investment operations during the second quarter of 2011.





The table below displays the Company’s subsidiaries as of September 30, 2019 , which, other than GSV Capital Lending, LLC (“GCL”), are collectively referred to as the “GSVC Holdings.” The GSVC Holdings were formed to hold portfolio investments. The GSVC Holdings, including their associated portfolio investments, are consolidated with the Company for accounting purposes, but have elected to be treated as separate entities for U.S. federal income tax purposes. GCL was formed to originate portfolio loan investments within the state of California and is consolidated with the Company for accounting purposes. Refer to “Note 2—Significant Accounting Policies— Basis of Consolidation ” below for further detail.





SubsidiaryJurisdiction ofIncorporationFormationDatePercentageOwnedGCLDelawareApril 13, 2012100%Subsidiaries below are referred to collectively, as the “GSVC Holdings”GSVC AE Holdings, Inc. (“GAE”)DelawareNovember 28, 2012100%GSVC AV Holdings, Inc. (“GAV”)DelawareNovember 28, 2012100%GSVC NG Holdings, Inc. (“GNG”)DelawareNovember 28, 2012100%GSVC SW Holdings, Inc. (“GSW”)DelawareNovember 28, 2012100%GSVC WS Holdings, Inc. (“GWS”)DelawareNovember 28, 2012100%GSVC SVDS Holdings, Inc. (“SVDS”)DelawareAugust 13, 2013100%





The Company’s investment objective is to maximize its portfolio’s total return, principally by seeking capital gains on its equity and equity-related investments. The Company invests principally in the equity securities of what it believes to be rapidly growing venture-capital-backed emerging companies. The Company may acquire its investments in these portfolio companies through: offerings of the prospective portfolio companies, transactions on secondary marketplaces for private companies, or negotiations with selling stockholders. The Company may also invest on an opportunistic basis in select publicly traded equity securities or certain non-U.S. companies that otherwise meet its investment criteria, subject to any applicable limitations under the 1940 Act.











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 SUTTER ROCK CAPITAL CORP. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 September 30, 2019





NOTE 2—SIGNIFICANT ACCOUNTING POLICIES





Basis of Presentation





The interim unaudited condensed consolidated financial statements of the Company are prepared on the accrual basis of accounting in conformity with U.S. generally accepted accounting principles (“GAAP”) and pursuant to the requirements for reporting on Form 10-Q and Regulation S-X under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company is an investment company following the specialized accounting and reporting guidance specified in the Financial Accounting Standards Board’s (“FASB”)  Accounting Standards Codification (“ASC”) Topic 946, Financial Services—Investment Companies. In the opinion of management, all adjustments, all of which were of a normal recurring nature, considered necessary for the fair presentation of consolidated financial statements for the interim period have been included.





The results of operations for the current interim period are not necessarily indicative of results that ultimately may be achieved for any other interim period or for the year ending December 31, 2019. The interim unaudited condensed consolidated financial statements and notes hereto should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s annual report on Form 10-K for the year ended December 31, 2018.





Basis of Consolidation





Under Article 6 of Regulation S-X and the American Institute of Certified Public Accountants’ (“AICPA”) Audit and Accounting Guide for Investment Companies, the Company is precluded from consolidating any entity other than another investment company, a controlled operating company that provides substantially all of its services and benefits to the Company, and certain entities established for tax purposes where the Company holds a 100% interest. Accordingly, the Company’s consolidated financial statements include its accounts and the accounts of the GSVC Holdings and GCL, its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.





Use of Estimates





The preparation of condensed consolidated financial statements in accordance with GAAP requires the Company’s management to make a number of significant estimates. These include estimates of the fair value of certain assets and liabilities and other estimates that affect the reported amounts of certain assets and liabilities as of the date of the consolidated financial statements and the reported amounts of certain revenues and expenses during the reporting period. It is likely that changes in these estimates will occur in the near term. The Company’s estimates are inherently subjective in nature and actual results could differ materially from such estimates.





Uncertainties and Risk Factors





The Company is subject to a number of risks and uncertainties in the nature of its operations, as well as vulnerability due to certain concentrations. Refer to "Risk Factors” in Part II, Item 1A of this Form 10-Q for a detailed discussion of the risks and uncertainties inherent in the nature of the Company’s operations. Refer to “Note 4—Investments at Fair Value” for an overview of the Company’s industry and geographic concentrations.





Investments at Fair Value





The Company applies fair value accounting in accordance with GAAP and the AICPA’s Audit and Accounting Guide for Investment Companies. The Company values its assets on a quarterly basis, or more frequently if required under the 1940 Act.





Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. GAAP establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows:





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Level 1 —Valuations based on unadjusted quoted prices for identical assets or liabilities in an active market that the Company has the ability to access at the measurement date.





Level 2 —Valuations based on observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data at the measurement date for substantially the full term of the assets or liabilities.





Level 3 —Valuations based on unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. The majority of the Company’s investments are Level 3 investments and are subject to a high degree of judgment and uncertainty in determining fair value.





When the inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety. For example, a Level 3 fair value measurement may include inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Therefore, gains and losses for such assets and liabilities categorized within the Level 3 table set forth in “Note 4—Investments at Fair Value” may include changes in fair value that are attributable to both observable inputs (Levels 1 and 2) and unobservable inputs (Level 3).





A review of fair value hierarchy classifications is conducted on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification for certain financial assets or liabilities. Reclassifications impacting Level 3 of the fair value hierarchy are reported as transfers in/out of the Level 3 category as of the beginning of the measurement period in which the reclassifications occur. Refer to “Levelling Policy” below for a detailed discussion of the levelling of the Company’s financial assets or liabilities and events that may cause a reclassification within the fair value hierarchy.





Securities for which market quotations are readily available on an exchange are valued at the most recently available closing price of such security as of the valuation date, unless there are legal or contractual restrictions on the sale or use of such security that under ASC 820-10-35 should be incorporated into the security’s fair value measurement as a characteristic of the security that would transfer to market participants who would buy the security. The Company may also obtain quotes with respect to certain of its investments from pricing services, brokers or dealers in order to value assets. When doing so, the Company determines whether the quote obtained is sufficient according to GAAP to determine the fair value of the security. If determined to be adequate, the Company uses the quote obtained.





Securities for which reliable market quotations are not readily available or for which the pricing source does not provide a valuation or methodology, or provides a valuation or methodology that, in the judgment of management, our Board of Directors or the valuation committee of the Company’s Board of Directors (the “Valuation Committee”), does not reliably represent fair value, shall each be valued as follows:





|   |                                                                                                                                                                                  
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | The quarterly valuation process begins with each portfolio company or investment being initially valued by the investment professionals responsible for the portfolio investment;

​


|   |                                                                                            
|-- | -------------------------------------------------------------------------------------------
|2. | Preliminary valuation conclusions are then documented and discussed with senior management;

​


|   |                                                                                                                                                                                                                                                                                          
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3. | An independent third-party valuation firm is engaged by the Valuation Committee to conduct independent appraisals and review management’s preliminary valuations and make its own independent assessment, for all investments for which there are no readily available market quotations;

​


|   |                                                                                                                                                                                                                                           
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4. | The Valuation Committee discusses the valuations and recommends to the Company’s Board of Directors a fair value for each investment in the portfolio based on the input of management and the independent third-party valuation firm; and

​





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|   |                                                                                                                                                                                       
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5. | The Company’s Board of Directors then discusses the valuations recommended by the Valuation Committee and determines in good faith the fair value of each investment in the portfolio.

​


In making a good faith determination of the fair value of investments, the Company considers valuation methodologies consistent with industry practice. Valuation methods utilized include, but are not limited to the following: comparisons to prices from secondary market transactions; venture capital financings; public offerings; purchase or sales transactions; as well as analysis of financial ratios and valuation metrics of the portfolio companies that issued such private equity securities to peer companies that are public, analysis of the portfolio companies’ most recent financial statements and forecasts, and the markets in which the portfolio company does business, and other relevant factors. The Company assigns a weighting based upon the relevance of each method to determine the fair value of each investment.





For investments that are not publicly traded or that do not have readily available market quotations, the Valuation Committee generally engages an independent valuation firm to provide an independent valuation, which the Company’s Board of Directors considers, among other factors, in making its fair value determinations for these investments. For the current and prior fiscal year, the Valuation Committee engaged an independent valuation firm to perform valuations of 100% of the Company’s investments for which there were no readily available market quotations.





Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the investments existed, and it is reasonably possible that the difference could be material.





In addition, changes in the market environment and other events that may occur over the life of the investments may cause the realized gains or losses on investments to be different from the net change in unrealized appreciation or depreciation currently reflected in the consolidated financial statements.





Equity Investments





Equity investments for which market quotations are readily available in an active market are generally valued at the most recently available closing market prices and are classified as Level 1 assets. Equity investments with readily available market quotations that are subject to sales restrictions due to an initial public offering (“IPO”) by the portfolio company will be classified as Level 1. Any other equity investments with readily available market quotations that are subject to sales restrictions that would transfer to market participants who would buy the security may be valued at a discount for a lack of marketability (“DLOM”), to the most recently available closing market prices depending upon the nature of the sales restriction. These investments are generally classified as Level 2 assets. The DLOM used is generally based upon the market value of publicly traded put options with similar terms.





The fair values of the Company’s equity investments for which market quotations are not readily available are determined based on various factors and are classified as Level 3 assets. To determine the fair value of a portfolio company for which market quotations are not readily available, the Company may analyze the relevant portfolio company’s most recently available historical and projected financial results, public market comparables, and other factors. The Company may also consider other events, including the transaction in which the Company acquired its securities, subsequent equity sales by the portfolio company, and mergers or acquisitions affecting the portfolio company. In addition, the Company may consider the trends of the portfolio company’s basic financial metrics from the time of its original investment until the measurement date, with material improvement of these metrics indicating a possible increase in fair value, while material deterioration of these metrics may indicate a possible reduction in fair value.





In determining the value of equity or equity-linked securities (including warrants to purchase common or preferred stock) in a portfolio company, the Company considers the rights, preferences and limitations of such securities. In cases where a portfolio company’s capital structure includes multiple classes of preferred and common stock and equity-linked securities with different rights and preferences, the Company may use an option pricing model to allocate value to each equity-linked security, unless it believes a liquidity event such as an acquisition or a dissolution is imminent, or the portfolio company is unlikely to continue as a going concern. When equity-linked securities expire worthless, any cost associated with these positions is recognized as a realized





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loss on investments in the Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows. In the event these securities are exercised into common or preferred stock, the cost associated with these securities is reassigned to the cost basis of the new common or preferred stock. These conversions are noted as non-cash operating items on the Condensed Consolidated Statements of Cash Flows.





Debt Investments





Given the nature of the Company’s current debt investments (excluding U.S. Treasuries), principally convertible and promissory notes issued by venture-capital-backed portfolio companies, these investments are classified as Level 3 assets because there is no known or accessible market or market indexes for these investment securities to be traded or exchanged. The Company’s debt investments are valued at estimated fair value as determined by the Company’s Board of Directors.





Options





The Company’s Board of Directors will ascribe value to options based on fair value analyses that can include discounted cash flow analyses, option pricing models, comparable analyses and other techniques as deemed appropriate. These investments are classified as Level 3 assets because there is no known or accessible market or market indexes for these investment securities to be traded or exchanged. The Company’s options are valued at estimated fair value as determined by the Company’s Board of Directors.





Portfolio Company Investment Classification





The Company is a non-diversified company within the meaning of the 1940 Act. The Company classifies its investments by level of control. As defined in the 1940 Act, control investments are those where there is the power to exercise a controlling influence over the management or policies of a company. Control is generally deemed to exist when a company or individual directly or indirectly owns beneficially more than 25% of the voting securities of an investee company. Affiliated investments and affiliated companies are defined by a lesser degree of influence and are deemed to exist when a company or individual directly or indirectly owns, controls or holds the power to vote 5% or more of the outstanding voting securities of a portfolio company. Refer to the Condensed Consolidated Schedules of Investments as of September 30, 2019 and December 31, 2018 , for details regarding the nature and composition of the Company’s investment portfolio.





Levelling Policy





The portfolio companies in which the Company invests may offer their shares in IPOs. The Company’s shares in such portfolio companies are typically subject to lock-up agreements for 180 days following the IPO. Upon the IPO date, the Company transfers its investment from Level 3 to Level 1 due to the presence of an active market, or Level 2 if limited by the lock-up agreement. The Company prices the investment at the closing price on a public exchange as of the measurement date. In situations where there are lock-up restrictions, as well as legal or contractual restrictions on the sale or use of such security that under ASC 820-10-35 should be incorporated into the security’s fair value measurement as a characteristic of the security that would transfer to market participants who would buy the security, the Company will classify the investment as Level 2 subject to an appropriate DLOM to reflect the restrictions upon sale. The Company transfers investments between levels based on the fair value at the beginning of the measurement period in accordance with FASB ASC 820. For investments transferred out of Level 3 due to an IPO, the Company transfers these investments based on their fair value at the IPO date.





Securities Transactions





Securities transactions are accounted for on the date the transaction for the purchase or sale of the securities is entered into by the Company ( i.e. , trade date). Securities transactions outside conventional channels, such as private transactions, are recorded as of the date the Company obtains the right to demand the securities purchased or to collect the proceeds from a sale and incurs an obligation to pay for securities purchased or to deliver securities sold, respectively.








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Valuation of Other Financial Instruments





The carrying amounts of the Company’s other, non-investment financial instruments, consisting of cash, receivables, accounts payable, and accrued expenses, approximate fair value due to their short-term nature.





Cash





The Company places its cash with U.S. Bank, N.A., Bridge Bank (a subsidiary of Western Alliance Bank), and Silicon Valley Bank, and at times, cash held in these accounts may exceed the Federal Deposit Insurance Corporation insured limit. The Company believes that U.S. Bank, N.A., Western Alliance Bank, and Silicon Valley Bank are high-quality financial institutions and that the risk of loss associated with any uninsured balance is remote.





Escrow Proceeds Receivable





During the year ended December 31, 2018, the Company completed the sale of its investments in General Assembly Space, Inc., Lytro, Inc., SugarCRM, Inc., and DreamBox Learning, Inc. During the nine months ended September 30, 2019 , the Company completed the sale of its investment in Knewton, Inc. A portion of the proceeds from the sale of these portfolio investments and those sold in prior years are held in escrow as a recourse for indemnity claims that may arise under the sale agreement. Amounts held in escrow are held at estimated realizable value and included in net realized gains (losses) on investments in the Condensed Consolidated Statements of Operations for the period in which they occurred. Any remaining escrow proceeds balances from these transactions reasonably expected to be received are reflected on the Condensed Consolidated Statement of Assets and Liabilities as escrow proceeds receivable. At September 30, 2019 and December 31, 2018 , the Company had $2,086,145 and $2,494,582 , respectively, in escrow proceeds receivable. During the nine months ended September 30, 2019 , the Company received escrow proceeds from the sales of SugarCRM, Inc., DreamBox Learning, Inc., Gilt Groupe Holdings, Inc., Lytro, Inc., and JAMF Holdings, Inc.





Deferred Financing Costs





The Company records origination costs related to lines of credit as deferred financing costs. These costs are deferred and amortized as part of interest expense using the straight-line method over the respective life of the line of credit. For modifications to a line of credit, any unamortized origination costs are expensed. Included within deferred financing costs are offering costs incurred relating to the Company’s shelf registration statement on Form N-2. The Company defers these offering costs until capital is raised pursuant to the shelf registration statement or until the shelf registration statement expires. For equity capital raised, the offering costs reduce paid-in capital resulting from the offering. For debt capital raised, the associated offering costs are amortized over the life of the debt instrument. As of September 30, 2019 and December 31, 2018 , the Company had deferred financing costs of $5,502 and $267,541 , respectively, on the Condensed Consolidated Statements of Assets and Liabilities.





​September 30, 2019December 31, 2018Deferred credit facility costs$5,502$—Deferred offering costs—267,541Deferred Financing Costs$5,502$267,541





Operating Leases & Related Deposits





The Company accounts for its operating leases as prescribed by ASC 842, Leases , which requires lessees to recognize a right of use asset on the balance sheet, representing its right to use the underlying asset for the lease term, and a corresponding lease liability for all leases with terms greater than 12 months. The lease expense is presented as a single lease cost that is amortized on a straight-line basis over the life of the lease. Non-lease components (maintenance, property tax, insurance and parking) are not included in the lease cost. On June 3, 2019, the Company entered a 5-year operating lease for primary office space for which the Company has recorded a right-of-use asset and a corresponding lease liability for the operating lease obligation. These amounts





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have been discounted using the rate implicit in the lease. Refer to “Note 7—Commitments and Contingencies— Operating Leases and Related Deposits ” for further detail.





Stock-based Compensation





Using the fair value recognition provisions as prescribed by ASC 718, Stock Compensation , stock-based compensation cost is measured at the grant date based on the estimated fair value of the award and is recognized as expense over the appropriate service period. Determining the fair value of stock-based awards requires considerable judgment, including estimating the expected term of stock options and the expected volatility of our stock price. Differences between actual results and these estimates could have a material effect on our financial results. Forfeitures are accounted for as they occur. Refer to “Note 11—Stock-Based Compensation” for further detail.





Revenue Recognition





The Company recognizes gains or losses on the sale of investments using the specific identification method. The Company recognizes interest income, adjusted for amortization of premium and accretion of discount, on an accrual basis. The Company recognizes dividend income on the ex-dividend date.





Investment Transaction Costs and Escrow Deposits





Commissions and other costs associated with an investment transaction, including legal expenses not reimbursed by the portfolio company, are included in the cost basis of purchases and deducted from the proceeds of sales. The Company makes certain acquisitions on secondary markets, which may involve making deposits to escrow accounts until certain conditions are met, including the underlying private company’s right of first refusal. If the underlying private company does not exercise or assign its right of first refusal and all other conditions are met, then the funds in the escrow account are delivered to the seller and the account is closed. Such transactions would be reflected on the Condensed Consolidated Statement of Assets and Liabilities as escrow deposits. At September 30, 2019 and December 31, 2018 , the Company had no escrow deposits.





Unrealized Appreciation or Depreciation of Investments





Unrealized appreciation or depreciation is calculated as the difference between the fair value of the investment and the cost basis of such investment.





U.S. Federal and State Income Taxes





The Company elected to be treated as a regulated investment company (a “RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), beginning with its taxable year ended December 31, 2014, has qualified to be treated as a RIC for subsequent taxable years and intends to continue to operate in a manner so as to qualify for the tax treatment applicable to RICs. To qualify for tax treatment as a RIC, among other things, the Company is required to meet certain source of income and asset diversification requirements and timely distribute to its stockholders at least 90% of the sum of investment company taxable income (“ICTI”) including payment-in-kind interest income, as defined by the Code, and net tax-exempt interest income (which is the excess of its gross tax-exempt interest income over certain disallowed deductions) for each taxable year (the "Annual Distribution Requirement"). Depending on the level of ICTI earned in a tax year, the Company may choose to carry forward into the next tax year ICTI in excess of current year dividend distributions. Any such carryforward ICTI must be distributed on or before December 31 of the subsequent tax year to which it was carried forward.





If the Company meets the Annual Distribution Requirement, but does not distribute (or is not deemed to have distributed) each calendar year a sum of (1) 98% of its net ordinary income for each calendar year, (2) 98.2% of its capital gain net income for the one-year period ending October 31 in that calendar year and (3) any income recognized, but not distributed, in preceding years (the “Excise Tax Avoidance Requirement”), it generally will be required to pay an excise tax equal to 4% of the amount by which the Excise Tax Avoidance Requirement exceeds the distributions for the year. To the extent that the Company determines that its estimated current year annual taxable income will exceed estimated current year dividend distributions from such taxable income, the Company will accrue excise taxes, if any, on estimated excess taxable income as taxable income is earned using an annual





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effective excise tax rate. The annual effective excise tax rate is determined by dividing the estimated annual excise tax by the estimated annual taxable income.





So long as the Company qualifies and maintains its tax treatment as a RIC, it generally will not pay corporate-level U.S. federal and state income taxes on any ordinary income or capital gains that it distributes at least annually to its stockholders as dividends. Rather, any tax liability related to income earned by the RIC will represent obligations of the Company’s investors and will not be reflected in the consolidated financial statements of the Company. Included in the Company’s consolidated financial statements, the GSVC Holdings are taxable subsidiaries, regardless of whether the Company is a RIC. These taxable subsidiaries are not consolidated for income tax purposes and may generate income tax expenses as a result of their ownership of the portfolio companies. Such income tax expenses and deferred taxes, if any, will be reflected in the Company’s consolidated financial statements.





If it is not treated as a RIC, the Company will be taxed as a regular corporation (a “C corporation”) under Subchapter C of the Code for such taxable year. If the Company has previously qualified as a RIC but is subsequently unable to qualify for treatment as a RIC, and certain amelioration provisions are not applicable, the Company would be subject to tax on all of its taxable income (including its net capital gains) at regular corporate rates. The Company would not be able to deduct distributions to stockholders, nor would it be required to make distributions. Distributions, including distributions of net long-term capital gain, would generally be taxable to its stockholders as ordinary dividend income to the extent of the Company’s current and accumulated earnings and profits. Subject to certain limitations under the Code, corporate stockholders would be eligible to claim a dividend received deduction with respect to such dividend; non-corporate stockholders would generally be able to treat such dividends as “qualified dividend income,” which is subject to reduced rates of U.S. federal income tax. Distributions in excess of the Company’s current and accumulated earnings and profits would be treated first as a return of capital to the extent of the stockholder’s tax basis, and any remaining distributions would be treated as a capital gain. In order to requalify as a RIC, in addition to the other requirements discussed above, the Company would be required to distribute all of its previously undistributed earnings attributable to the period it failed to qualify as a RIC by the end of the first year that it intends to requalify for tax treatment as a RIC. If the Company fails to requalify for tax treatment as a RIC for a period greater than two taxable years, it may be subject to regular corporate tax on any net built-in gains with respect to certain of its assets (i.e., the excess of the aggregate gains, including items of income, over aggregate losses that would have been realized with respect to such assets if the Company had been liquidated) that it elects to recognize on requalification or when recognized over the next five years. The Company was taxed as a C Corporation for its 2012 and 2013 taxable years. Refer to “Note 9—Income Taxes” for further details.





The Company elected to be treated as a RIC for the taxable year ended December 31, 2014 in connection with the filing of its 2014 tax return. As a result, the Company was required to pay a corporate-level U.S. federal income tax on the amount of the net built-in gains in its assets (the amount by which the net fair market value of the Company’s assets exceeds the net adjusted basis in its assets) either (1) as of the date it converted to a RIC (i.e., the beginning of the first taxable year that the Company qualifies as a RIC, which would be January 1, 2014), or (2) to the extent that the Company recognized such net built-in gains during the five-year recognition period beginning on the date of conversion.  As of January 1, 2014, the Company had net unrealized built-in gains, but did not incur a built-in-gains tax for the 2014 tax year due to the fact that there were sufficient net capital loss carryforwards to completely offset recognized built-in gains as well as available net operating losses. The five-year recognition period ended on December 31, 2018.





Per Share Information





Net change in net assets resulting from operations per basic common share is computed using the weighted-average number of shares outstanding for the period presented. Diluted net change in net assets resulting from operations per common share is computed by dividing net increase/​(decrease) in net assets resulting from operations for the period adjusted to include the pre-tax effects of interest incurred on potentially dilutive securities, by the weighted-average number of common shares outstanding plus any potentially dilutive shares outstanding during the period. The Company used the if-converted method in accordance with FASB ASC 260, Earnings Per Share (“ASC 260”) to determine the number of potentially dilutive shares outstanding. Refer to “Note 6—Net Increase in Net Assets Resulting from Operations per Common Share—Basic and Diluted” for further detail.








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Recently Adopted Accounting Standards





In February 2019, the FASB issued ASU 2019-07, Codification Updates to SEC Sections , which amends various SEC paragraphs pursuant to the issuance of recent SEC Final Rule Releases. The guidance requires interim financial statements to provide the information required by SEC for the current and comparative year-to-date periods, with subtotals for each interim period. The guidance in ASU 2019-07, and the related amendments, are effective upon issuance. The Company adopted ASU 2019-07 and amended the presentation of the Condensed Consolidated Statements of Changes in Net Assets beginning June 30, 2019.





In July 2017, the FASB issued ASU 2017-13 which addressed the application of ASU 2014-9, Revenue from Contracts with Customers (Topic 606) as it relates to adoption period for entities not otherwise required to adopt the new revenue recognition standard, but whose financial statements or financial information are included in another entity’s filing with the Securities and Exchange Commission (the "SEC"). ASU 2014-9, issued by FASB in May 2014, and related amendments, provide comprehensive guidance for recognizing revenue from contracts with customers. Entities will be able to recognize revenue when the entity transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The guidance in ASU 2014-9, and the related amendments, is effective for the Company on January 1, 2018. The Company adopted ASU 2017-13, which did not have a material impact on the Company's condensed consolidated financial statements.





In February 2016, the FASB issued ASU 2016-02, Leases , which requires lessees to recognize on the balance sheet a right-of-use asset, representing its right to use the underlying asset for the lease term, and a lease liability for all leases with terms greater than 12 months. The guidance is effective for annual periods beginning after December 15, 2018, and interim periods therein. The Company adopted ASU 2016-02 in connection with its operating lease beginning June 3, 2019.





Recently Issued Accounting Standards





In August 2018, the FASB issued ASU 2018-13, which changes the fair value measurement disclosure requirements of FASB ASC 820, Fair Value Measurement . The guidance is effective for all entities for interim and annual periods beginning after December 15, 2019. Early adoption is permitted for any eliminated or modified disclosure requirements upon issuance of the guidance. The Company did not early adopt the eliminated and modified disclosure requirements during the three and nine months ended September 30, 2019 , but plans to adopt the guidance upon its effective date.








NOTE 3—RELATED-PARTY ARRANGEMENTS





Internalization of Company’s Operating Structure





On and effective March 12, 2019 (the "Effective Date"), our Board of Directors approved internalizing our operating structure and we began operating as an internally managed non-diversified closed-end management investment company that has elected to be regulated as a BDC under the 1940 Act. Prior to the Effective Date, we were externally managed by our former investment adviser, GSV Asset Management, pursuant to the Investment Advisory Agreement, and our former administrator, GSV Capital Service Company, provided the administrative services necessary for our operations pursuant to the Administration Agreement.





The accounting implications and related controls associated with the Internalization continue to be analyzed and updated for fiscal year 2019.








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Termination of Investment Advisory Agreement





On and effective March 12, 2019, the Investment Advisory Agreement was terminated by mutual agreement of GSV Asset Management and us in connection with our Internalization.





Prior to our Internalization, GSV Asset Management served as our external investment adviser pursuant to the Investment Advisory Agreement. Pursuant to the terms of the Investment Advisory Agreement, we paid GSV Asset Management a fee for its services consisting of two components - a base management fee and an incentive fee. The base management fee was calculated at an annual rate of 2.00% of our gross assets (our total assets as reflected on our balance sheet with no deduction for liabilities). The incentive fee was determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, as of the termination date), and equaled the lesser of (i) 20% of our realized capital gains during such calendar year, if any, calculated on an investment-by-investment basis, subject to a non-compounded preferred return, or “hurdle” of 8.00% per year, and a “catch-up” feature, and (ii) 20% of our realized capital gains, if any, on a cumulative basis from inception through the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid incentive fees. See “—Investment Advisory Agreement” below.





As the Investment Advisory Agreement has been terminated, there will be no base management fees or incentives fees payable to GSV Asset Management going forward.





Termination of Administration Agreement





On and effective March 12, 2019, the Administration Agreement was terminated by mutual agreement of GSV Capital Service Company and us in connection with our Internalization.





Prior to our Internalization, GSV Capital Service Company served as our external administrator and provided administrative services necessary for our operations, including but not limited to, furnishing us with office facilities, equipment and clerical, bookkeeping and record keeping services at such facilities, as well as providing us with certain other administrative services, including, but not limited to, assisting us with determining and publishing our net asset value, overseeing the preparation and filing of our tax returns and the printing and dissemination of reports to our stockholders.





Under the Administration Agreement, we did not pay any fees to GSV Capital Service Company but reimbursed GSV Capital Service Company for our allocable portion of overhead and other expenses incurred by GSV Capital Service Company in performing its services under the Administration Agreement, including, but not limited to, fees and expenses associated with performing compliance functions and our allocable portion of rent and compensation of our President, Chief Financial Officer, Chief Compliance Officer and other staff providing administrative services. See “—Administration Agreement” below.





As the Administration Agreement has been terminated, there will be no costs incurred by GSV Capital Service Company going forward.





Departure of Director and Reduction of Number of Directors





On and effective March 12, 2019, Michael T. Moe resigned from our Board of Directors in connection with our Internalization. As a result of Mr. Moe’s resignation, our Board of Directors reduced the number of directors that constitute our full Board of Directors to five directors from six directors in accordance with our bylaws. Mr. Moe will continue to provide services to us pursuant to the Consulting Agreement (as defined below). See “—Consulting Agreement.”








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 September 30, 2019





Consulting Agreement





On and effective March 12, 2019, we entered into a Consulting Agreement (the “Consulting Agreement”) with Michael T. Moe, the former Chairman of our Board of Directors and the Chief Executive Officer and Chief Investment Officer of GSV Asset Management, for the purpose of assisting us with certain transition services following the termination of the Investment Advisory Agreement and our Internalization.  Pursuant to the Consulting Agreement, Mr. Moe will provide certain transition services to us related to our existing portfolio investments for which Mr. Moe previously had oversight in his role as the Chief Executive Officer and Chief Investment Officer of GSV Asset Management. Such transition services will include providing information to us regarding such portfolio companies, including as a member of a portfolio company’s board of directors, assisting with the transition of portfolio company board seats as requested by us, making appropriate introductions to representatives of portfolio companies, and providing other similar types of services that we may reasonably request.





The term of the Consulting Agreement commenced on March 12, 2019 and will continue for eighteen months, unless the parties thereto mutually agree to extend the Consulting Agreement for an additional period.  Pursuant to the Consulting Agreement, we will pay Mr. Moe a total amount equal to $1,250,000.





For the three and nine months ended September 30, 2019 , the Company incurred $ 208,333 and $ 459,229 , respectively, of consulting expense related to the Consulting Agreement, as reflected on the Condensed Consolidated Statements of Operations. As of September 30, 2019 , the Company recorded $ 540,771 of prepaid expense related to the Consulting Agreement on the Condensed Consolidated Statements of Assets and Liabilities.





Amended and Restated Trademark License Agreement





On and effective March 12, 2019, we entered into an Amended and Restated Trademark License Agreement (the “Amended and Restated License Agreement”) with GSV Asset Management in connection with termination of the Investment Advisory Agreement.  See “—Termination of Investment Advisory Agreement.”





GSV Asset Management is the owner of the trade name “GSV”, and other state or unregistered “GSV” marks, including the trading symbol “GSVC” (collectively, the “Licensed Marks”). Pursuant to the Amended and Restated License Agreement, GSV Asset Management granted us a non-transferable, non-sublicensable, and non-exclusive right and license to use the Licensed Marks, solely in connection with the operation of our existing business.





The term of the Amended and Restated License Agreement commenced on March 12, 2019 and will continue for eighteen months, unless the parties thereto mutually agree to extend the Amended and Restated License Agreement for an additional period.  Pursuant to the Amended and Restated License Agreement, we will pay GSV Asset Management a total amount equal to $1,250,000.





For the three and nine months ended September 30, 2019 , the Company incurred $ 208,333 and $ 459,229 , respectively, of licensing expense, as included in other expenses on the Condensed Consolidated Statements of Operations. As of September 30, 2019 , the Company recorded $ 540,771 of prepaid expense related to the Amended and Restated Trademark License Agreement on the Condensed Consolidated Statements of Assets and Liabilities.





Investment Advisory Agreement





On March 12, 2019, in connection with the Company's Internalization, the Investment Advisory Agreement was terminated in accordance with its terms.





Prior to our Internalization on March 12, 2019, the Company had entered into the Investment Advisory Agreement with GSV Asset Management. Under the terms of the Investment Advisory Agreement, GSV Asset Management was paid a quarterly management fee and an annual incentive fee. GSV Asset Management is controlled by Michael T. Moe, the former Chairman of the Company’s Board of Directors. Mr. Moe, through his ownership interest in GSV Asset Management, was entitled to a portion of any profits earned by GSV Asset Management in performing its services under the Investment Advisory Agreement. Mr. Moe serves as the principal of GSV Asset Management and manages the business and internal affairs of GSV Asset Management. Mark Klein, the Company’s Chief Executive Officer, President, and a member of the Company’s Board of Directors, or entities with





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which he is affiliated, received consulting fees from GSV Asset Management equal to a percentage of each of the base management fee and the incentive fee paid by the Company to GSV Asset Management pursuant to a consulting agreement with GSV Asset Management. As the Investment Advisory Agreement has been terminated, Mr. Klein no longer has a consulting agreement or any other affiliation with GSV Asset Management.





Under the Investment Advisory Agreement, there were no restrictions on the right of any manager, partner, officer or employee of GSV Asset Management to engage in any other business or to devote his or her time and attention in part to any other business, whether of a similar or dissimilar nature, or to receive any fees or compensation in connection therewith (including fees for serving as a director of, or providing consulting services to, one or more of the Company’s portfolio companies). GSV Asset Management had, however, adopted an internal policy whereby any fees or compensation received by a manager, partner, officer or employee of GSV Asset Management in exchange for serving as a director of, or providing consulting services to, any of the Company’s portfolio companies would be transferred to the Company, net of any personal taxes incurred, upon such receipt for the benefit of the Company and its stockholders.





Management Fees





Under the terms of the Investment Advisory Agreement, GSV Asset Management was paid a base management fee of 2.00% of gross assets, which is the Company’s total assets reflected on its Condensed Consolidated Statements of Assets and Liabilities (with no deduction for liabilities) reduced by any non-portfolio investments. During the month of January 2018, pursuant to a voluntary waiver by GSV Asset Management, the Company paid GSV Asset Management a base management fee of 1.75% , a 0.25% reduction from the 2.00% base management fee payable under the Investment Advisory Agreement. On February 2, 2018 GSV Asset Management voluntarily agreed to reduce fees payable under the Investment Advisory Agreement (the “Waiver Agreement”). Pursuant to the Waiver Agreement, effective February 1, 2018, the base management fee is reduced to 1.75% of the Company’s gross assets, as further described below. The waiver of a portion of the base management fee is not subject to recourse against or reimbursement by the Company.





GSV Asset Management earned $0 and $ 1,345,090 in management fees for the three months ended September 30, 2019 and 2018 , respectively, and waived $0 and $402,074 in management fees for the three months ended September 30, 2019 and 2018 , respectively. For the nine months ended September 30, 2019 and 2018 , GSV Asset Management earned $848,723 and $ 3,954,732 in management fees, respectively, and waived $0 and $892,421 in management fees





As the Investment Advisory Agreement has been terminated, there will be no base management fee payable to GSV Asset Management going forward.





Incentive Fees





Under the terms of the Investment Advisory Agreement, GSV Asset Management was paid an annual incentive fee equal to the lesser of (i) 20% of the Company’s realized capital gains during each calendar year, if any, calculated on an investment-by-investment basis, subject to a non-compounded preferred return, or “hurdle,” and a “catch-up” feature, and (ii) 20% of the Company’s realized capital gains, if any, on a cumulative basis from inception through the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid incentive fees.  Effective February 1, 2018, the incentive fee paid by the Company to GSV Asset Management under the Investment Advisory Agreement was modified pursuant to the terms of the Waiver Agreement, as further described below.





The Company was required to accrue incentive fees for all periods as if the Company had fully liquidated its entire investment portfolio at the fair value stated on the Condensed Consolidated Statements of Assets and Liabilities as of September 30, 2019 and December 31, 2018 or prior to the termination of the Investment Advisory Agreement. The accrual considered both the hypothetical liquidation of the Company’s portfolio described previously, as well as the Company’s actual cumulative realized gains and losses since inception, as well any previously paid incentive fees.





For the three and nine months ended September 30, 2019 , the Company reversed previously accrued incentive fees of $0 and $4,660,472 due to the termination of the Investment Advisory Agreement. For the three and nine months ended September 30, 2018 , the Company accrued incentive fees of $804,520 and $4,863,939 , respectively. Pursuant to the Waiver Agreement, on





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February 2, 2018, GSV Asset Management forfeited $5.0 million of the accrued incentive fees. As the Investment Advisory Agreement has been terminated, there will be no incentive fee payable to GSV Asset Management going forward.





Management and Incentive Fee Waiver Agreement





On February 2, 2018, GSV Asset Management voluntarily agreed to reduce the fees payable under the Investment Advisory Agreement pursuant to the Waiver Agreement. The Waiver Agreement was effective beginning February 1, 2018 and changed the fee structure set forth in the Investment Advisory Agreement by: (i) reducing the Company’s base management fee from 2.00% to 1.75%; and (ii) creating certain high-water marks that must be reached before any incentive fee is paid to GSV Asset Management. In addition to the changes to the fee structure, GSV Asset Management also agreed to a one-time forfeiture of $5.0 million of previously accrued but unpaid incentive fees.





Pursuant to the Waiver Agreement, effective February 1, 2018, the base management fee was reduced to 1.75% of the Company’s gross assets. The base management fee was calculated based on the average value of the Company’s gross assets at the end of the two most recently completed calendar quarters, and appropriately adjusted for any equity or debt capital raises, repurchases or redemptions during the current calendar quarter. The base management fee for any partial month or quarter will be appropriately prorated. In addition, because the Company's 5.25% Convertible Senior Notes matured on September 15, 2018 (the " 5.25% Convertible Senior Notes due 2018 "), the Company was previously carrying a larger cash balance than it would in the ordinary course of its business. As a result, under the Waiver Agreement, GSV Asset Management agreed to waive its base management fee on any cash balances effective February 1, 2018 until the 5.25% Convertible Senior Notes due 2018 matured on September 15, 2018, at which time the Company repaid the remaining outstanding aggregate principal amount of the 5.25% Convertible Senior Notes due 2018, including accrued but unpaid interest. As a result, as of and after September 15, 2018, the Company paid GSV Asset Management a 1.75% base management fee on its cash balances.





Pursuant to the Waiver Agreement, in addition to the “hurdle” feature in the incentive fee, GSV Asset Management had agreed to additional conditions on its ability to receive an incentive fee. Specifically, the Waiver Agreement provided that an incentive fee earned by GSV Asset Management under the Investment Advisory Agreement would be payable to GSV Asset Management only if, at the time that such incentive fee becomes payable under the Investment Advisory Agreement, both the Company’s stock price and its last reported net asset value per share were equal to, or greater than, $12.55 (the “High-Water Mark”). The High-Water Mark was based upon the volume weighted average price (VWAP) of all the Company’s equity offerings since its initial public offering, less the dollar amount of all dividends paid by the Company since inception. Upon such time that the High-Water Mark was achieved, and GSV Asset Management was paid an incentive fee, a new High-Water Mark would have been established. Each new High-Water Mark would have been equal to the most recent High-Water Mark, plus 10%. Any High-Water Mark then in effect would have been adjusted to reflect any dividends paid by the Company or any stock split effected by the Company.





For the avoidance of doubt, after the effective date of the Waiver Agreement, under no circumstances would the aggregate fees earned by GSV Asset Management in any quarterly period have been higher than those aggregate fees that would have been earned prior to the effectiveness of the Waiver Agreement.





As of each of September 30, 2019 and December 31, 2018 , there were no receivables owed to the Company by GSV Asset Management. As the Investment Advisory Agreement has been terminated, there will be no receivables owed to the Company by GSV Asset Management going forward.





Administration Agreement





On March 12, 2019, in connection with the Company's Internalization, the Administration Agreement was terminated in accordance with its terms.





Prior to the Internalization, the Company had entered into the Administration Agreement with GSV Capital Service Company to provide administrative services, including furnishing the Company with office facilities, equipment, clerical, bookkeeping, record keeping services, and other administrative services. The Company reimbursed GSV Capital Service Company an allocable portion of overhead and other expenses in performing its obligations under the Administration Agreement, including a portion of the rent and the compensation of the Company’s President, Chief Financial Officer, Chief Compliance Officer and other staff





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providing administrative services. While there was no limit on the total amount of expenses the Company may have been required to reimburse to GSV Capital Service Company, GSV Capital Service Company would only charge the Company for the actual expenses GSV Capital Service Company incurred on the Company’s behalf, or the Company’s allocable portion thereof, without any profit to GSV Capital Service Company. There were $0 and $ 306,084 in such costs incurred under the Administration Agreement for the three and nine months ended September 30, 2019 , respectively. For the three and nine months ended September 30, 2018 , the Company accrued incentive fees of $ 355,599 and $ 1,176,857 , respectively. As the Administration Agreement has been terminated, there will be no costs incurred by GSV Capital Service Company going forward.





License Agreement





On March 12, 2019, in connection with the Company's Internalization, as of the Effective Date, the Company entered into the Amended and Restated Trademark License Agreement to use the trade name “GSV”, and other state or unregistered “GSV” marks, including the trading symbol “GSVC.” for a period of up to eighteen months and a predetermined fee of $1,250,000. Other than with respect to this limited license, the Company has no legal right to the “GSV” name.





Prior to the Internalization on March 12, 2019, the Company entered into a license agreement with GSV Asset Management pursuant to which GSV Asset Management had agreed to grant the Company a non-exclusive, royalty-free license to use the name “GSV.” Under this agreement, the Company had the right to use the GSV name for so long as the Investment Advisory Agreement with GSV Asset Management is in effect.





Other Arrangements





Mark Moe, who is the brother of Michael Moe, the former Chairman of the Company’s Board of Directors, serves as Vice President of Business Development, Global Expansion for NestGSV, Inc. (d/b/a GSV Labs, Inc.), one of the Company’s portfolio companies. Ron Johnson, the Chief Executive Officer of Enjoy Technology, Inc., one of the Company’s portfolio companies, is the brother-in-law of the Company’s former President, Mark Flynn. As of September 30, 2019 , the fair values of the Company’s investments in NestGSV, Inc. and Enjoy Technology, Inc. were $5,024,290 and $8,537,292 , respectively.





In addition, the Company’s executive officers and directors, and the principals of the Company’s former investment adviser, GSV Asset Management, serve or may serve as officers, directors, or managers of entities that operate in a line of business similar to the Company’s, including new entities that may be formed in the future. Accordingly, they may have obligations to investors in those entities, the fulfillment of which might not be in the best interests of the Company or the Company’s stockholders.





The 1940 Act prohibits the Company from participating in certain negotiated co-investments with certain affiliates unless it receives an order from the SEC permitting it to do so. As a BDC, the Company is prohibited under the 1940 Act from participating in certain transactions with certain of its affiliates without the prior approval of the Board of Directors, including its independent directors, and, in some cases, the SEC. The affiliates with which the Company may be prohibited from transacting include its officers, directors, and employees and any person controlling or under common control with the Company, subject to certain exceptions.





In the ordinary course of business, the Company may enter into transactions with portfolio companies that may be considered related-party transactions. To ensure that the Company does not engage in any prohibited transactions with any persons affiliated with the Company, the Company has implemented certain written policies and procedures whereby the Company’s executive officers screen each of the Company’s transactions for any possible affiliations between the proposed portfolio investment, the Company, companies controlled by the Company, and the Company’s executive officers and directors.








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NOTE 4—INVESTMENTS AT FAIR VALUE





Investment Portfolio Composition





The Company’s investments in portfolio companies consist primarily of equity securities (such as common stock, preferred stock and options to purchase common and preferred stock) and to a lesser extent, debt securities, issued by private and publicly traded companies. The Company may also, from time to time, invest in U.S. Treasury securities. Non-portfolio investments represent investments in U.S. Treasury securities. At September 30, 2019 , the Company had 48 positions in 25 portfolio companies. As of December 31, 2018 , the Company had 55 positions in 26 portfolio companies.





The following tables summarize the composition of the Company’s investment portfolio by security type at cost and fair value as of September 30, 2019 and December 31, 2018 :


​September 30, 2019December 31, 2018​CostFair ValuePercentage ofNet AssetsCostFair ValuePercentage ofNet AssetsPrivate Portfolio Companies​​​​​​Common Stock$63,425,065$58,892,44627.5%$48,424,535$48,517,82424.9%Preferred Stock74,302,225121,204,26856.7%89,715,08599,856,15951.1%Debt Investments4,943,1351,920,8610.9%9,156,0125,584,9942.9%Options8,764,8855,376,6472.5%209,761267,4460.1%Private Portfolio Companies151,435,310187,394,22287.6%147,505,393154,226,42379.0%Publicly Traded Portfolio CompaniesCommon Stock4,296,89412,449,2165.8%23,659,01044,589,40622.8%Total Portfolio Investments155,732,204199,843,43893.4%171,164,403198,815,829101.8%Non-Portfolio InvestmentsU.S. Treasury bill49,993,25049,995,50023.4%99,982,06799,994,00051.1%Total Investments$205,725,454$249,838,938116.8%$271,146,470$298,809,829152.9%





The geographic and industrial compositions of the Company’s portfolio at fair value as of September 30, 2019 and December 31, 2018 were as follows: ​As of September 30, 2019As of December 31, 2018​Fair ValuePercentage ofPortfolioPercentage ofNet AssetsFair ValuePercentage ofPortfolioPercentage ofNet AssetsGeographic Region​​​​​​West$191,776,30496.0%89.6%$167,687,93384.4%85.8%Mid-west226,6420.1%0.1%——%—%Northeast7,840,4923.9%3.7%4,414,5362.2%2.3%International——%—%26,713,36013.4%13.7%Total$199,843,438100.0%93.4%$198,815,829100.0%101.8%





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​As of September 30, 2019As of December 31, 2018​Fair ValuePercentage ofPortfolioPercentage ofNet AssetsFair ValuePercentage ofPortfolioPercentage ofNet AssetsIndustry​​​​​​Education Technology$71,004,18735.5%33.2%$64,480,37532.4%33.0%Marketplaces(1)37,580,64318.8%17.6%33,892,56117.1%17.3%Financial Technology(1)31,791,56515.9%14.8%7,798,8783.9%4.0%Big Data/Cloud30,369,60915.2%14.2%51,929,44026.1%26.6%Social/Mobile28,217,23614.1%13.2%39,964,37720.1%20.5%Sustainability880,1980.5%0.4%750,1980.4%0.4%Total$199,843,438100.0%93.4%$198,815,829100.0%101.8%





The table below details the composition of the Company’s industrial themes presented above:


Industry ThemeIndustryEducation TechnologyBusiness EducationComputer SoftwareCorporate EducationEducation Media PlatformEducation SoftwareEducation TechnologyE-Transcript ExchangeInteractive LearningOnline EducationBig Data/CloudCloud Computing ServicesData AnalysisSocial Cognitive LearningMarketplaces(1)Global Innovation PlatformKnowledge NetworksOn-Demand CommerceOn-Demand TransportationMicromobilityPeer-to-Peer Pet ServicesFinancial TechnologyOnline Marketplace Finance(1)Financial Services(1)Cannabis REITSocial/MobileDigital Media Platform​Social Networking​On-Demand Music Streaming​Social Data PlatformSustainabilityClean Technology














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________________________


|    |                                                                                                                                                                                                                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | During the quarter ended June 30, 2019, the Company reclassified the industry theme for "Online Marketplace Finance" and "Financial Services" industries from "Marketplaces" to "Financial Technology". The industrial classifications as of December 31, 2018 were also updated to reflect this change.




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Investment Valuation Inputs





The fair values of the Company’s investments disaggregated into the three levels of the fair value hierarchy based upon the lowest level of significant input used in the valuation as of September 30, 2019 and December 31, 2018 are as follows:





​As of September 30, 2019​Quoted Prices inActive Markets forIdentical Securities(Level 1)Significant OtherObservableInputs(Level 2)SignificantUnobservableInputs(Level 3)TotalInvestments at Fair Value​​​Private Portfolio Companies​​​Common Stock$—$—$58,892,446$58,892,446Preferred Stock——121,204,268121,204,268Debt Investments——1,920,8611,920,861Options——5,376,6475,376,647Private Portfolio Companies——187,394,222187,394,222Publicly Traded Portfolio CompaniesCommon Stock12,449,216——12,449,216Total Portfolio Investments12,449,216—187,394,222199,843,438Non-Portfolio InvestmentsU.S. Treasury bills49,995,500——49,995,500Total Investments at Fair Value$62,444,716$—$187,394,222$249,838,938








​As of December 31, 2018​Quoted Prices inActive Markets forIdentical Securities(Level 1)Significant OtherObservableInputs(Level 2)SignificantUnobservableInputs(Level 3)TotalInvestments at Fair Value​​​​Private Portfolio Companies​​​​Common Stock$—$—$48,517,824$48,517,824Preferred Stock——99,856,15999,856,159Debt Investments——5,584,9945,584,994Options——267,446267,446Private Portfolio Companies——154,226,423154,226,423Publicly Traded Portfolio Companies​​​​Common Stock44,589,406——44,589,406Total Portfolio Investments44,589,406—154,226,423198,815,829Non-Portfolio Investments​​​​U.S. Treasury bills99,994,000——99,994,000Total Investments at Fair Value$144,583,406$—$154,226,423$298,809,829





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Significant Unobservable Inputs for Level 3 Assets and Liabilities





In accordance with FASB ASC 820, the tables below provide quantitative information about the Company’s fair value measurements of its Level 3 assets as of September 30, 2019 and December 31, 2018 . In addition to the techniques and inputs noted in the tables below, according to the Company’s valuation policy, the Company may also use other valuation techniques and methodologies when determining the Company’s fair value measurements. The tables below are not intended to be all-inclusive, but rather provide information on the significant Level 3 inputs as they relate to the Company’s fair value measurements. To the extent an unobservable input is not reflected in the tables below, such input is deemed insignificant with respect to the Company’s Level 3 fair value measurements as of September 30, 2019 and December 31, 2018 . Significant changes in the inputs in isolation would result in a significant change in the fair value measurement, depending on the input and the materiality of the investment. Refer to “Note 2—Significant Accounting Policies— Investments at Fair Value ” for more detail.





As of September 30, 2019AssetFair ValueValuationApproach/​Technique(1)Unobservable Inputs(2)Range(Weighted Average)Common stock inprivate companies$58,892,446Market approachRevenue multiples1.34x - 2.74x (2.42x)Liquidation valueN/ADiscounted cash flowDiscount rate12.0% (12.0%)Preferred stock inprivate companies$121,204,268Market approachRevenue multiples2.73x - 3.89x (3.06x)PrecedenttransactionsN/ADiscounted cash flowDiscount rate12.0% (12.0%)PWERMRevenue multiples1.00x - 1.99x (1.72x)Precedent transactions6.45x (6.45x)Debt investments$1,920,861Market approachRevenue multiples1.34x - 1.58x (1.46x)PWERMRevenue multiplesN/ALiquidation valueN/AOptions$5,376,647Option pricing modelTerm to expiration (Years)0.38 - 8.55 (5.7)Volatility30.0%-48.0% (36.0%)Discounted cash flowDiscount Rate12.0% (12.0%)


​


________________________


|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | As ofSeptember 30, 2019, the Company used a hybrid market and income approach to value certain common and preferred stock investments as the Company felt this approach better reflected the fair value of these investments. By considering multiple valuation approaches (and consequently, multiple valuation techniques), the valuation approaches and techniques are not likely to change from one period of measurement to the next; however, the weighting of each in determining the final fair value of a Level 3 investment may change based on recent events or transactions. Refer to “Note 2—Significant Accounting Policies—Investments at Fair Value” for more detail.




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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | The Company considers all relevant information that can reasonably be obtained when determining the fair value of Level 3 investments. Due to any given portfolio company’s information rights, changes in capital structure, recent events, transactions, or liquidity events, the type and availability of unobservable inputs may change. Increases/(decreases) in revenue multiples, earnings before interest and taxes (“EBIT”) multiples, time to expiration, and stock price/strike price would result in higher (lower) fair values all else equal. Decreases (increases) in discount rates, volatility, and annual risk rates, would result in higher (lower) fair values all else equal. The market approach utilizes market value (revenue and EBIT) multiples of publicly traded comparable companies and available precedent sales transactions of comparable companies. The Company carefully considers numerous factors when selecting the appropriate companies whose multiples are used to value its portfolio companies. These factors include, but are not limited to, the type of organization, similarity to the business being valued, relevant risk factors, as well as size, profitability and growth expectations. In general, precedent transactions include recent rounds of financing, recent purchases made by the Company, and tender offers. Refer to “Note 2—Significant Accounting Policies—Investments at Fair Value” for more detail.




As of December 31, 2018AssetFair ValueValuationApproach/​Technique(1)Unobservable Inputs(2)Range(Weighted Average)Common stock inprivate companies$48,517,824Market approachRevenue multiples1.26x - 4.95x(4.04x)Liquidation valueN/ADiscountedCash Flow(2)Discount rate12.0% (12.0)%Preferred stock inprivate companies$99,856,159Market approachPrecedent transactions2.60x - 3.07x(2.69x)Revenue multiples2.20x - 4.15x(3.39x)DiscountedCash Flow(2)Discount rate12.0% (12.0)%PWERMRevenue multiples1.09x - 5.40x(3.18x)Liquidation valueN/ADebt investments$5,584,994Market approachRevenue multiples1.26x - 2.40x(2.30x)PWERMRevenue multiples1.31x - 5.40x(1.91x)Liquidation valueN/AOptions$267,446Option pricing modelTerm to expiration (Years)1.1-9.3 (2.6)Volatility28.1%-37.1%(29.0%)


​


________________________


|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | As of December 31, 2018, the Company used a hybrid market and income approach to value certain common and preferred stock investments as the Company felt this approach better reflected the fair value of these investments. By considering multiple valuation approaches (and consequently, multiple valuation techniques), the valuation approaches and techniques are not likely to change from one period of measurement to the next; however, the weighting of each in determining the final fair value of a Level 3 investment may change based on recent events or transactions. Refer to “Note 2—Significant Accounting Policies—Investments at Fair Value” for more detail.​

|    |                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | The Company considers all relevant information that can reasonably be obtained when determining the fair value of Level 3 investments. Due to any given portfolio company’s information rights, changes in capital structure, recent events, transactions, or liquidity events, the type and availability of unobservable inputs may change. Increases/(decreases) in revenue multiples, earnings before interest and




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taxes (“EBIT”) multiples, time to expiration, and stock price/strike price would result in higher (lower) fair values all else equal. Decreases (increases) in discount rates, volatility, and annual risk rates, would result in higher (lower) fair values all else equal. The market approach utilizes market value (revenue and EBIT) multiples of publicly traded comparable companies and available precedent sales transactions of comparable companies. The Company carefully considers numerous factors when selecting the appropriate companies whose multiples are used to value its portfolio companies. These factors include, but are not limited to, the type of organization, similarity to the business being valued, relevant risk factors, as well as size, profitability and growth expectations. In general, precedent transactions include recent rounds of financing, recent purchases made by the Company, and tender offers. Refer to “Note 2—Significant Accounting Policies— Investments at Fair Value ” for more detail.





​


The aggregate values of Level 3 assets and liabilities changed during the nine months ended September 30, 2019 as follows:


​Nine Months Ended September 30, 2019​CommonStockPreferredStockDebtInvestmentsOptionsTotalAssets:​​​​​Fair Value as of December 31, 2018$48,517,824$99,856,159$5,584,994$267,446$154,226,423Transfers out of Level 3(1)—(21,947,688)——(21,947,688)Purchases, capitalized fees and interest15,001,53010,319,154355,82216,61825,693,124Sales/Maturity of investments——(51,511)—(51,511)Exercises and conversions(1)(1,000)(6,435,123)(2,102,384)8,538,507—Amortization of fixed income security premiums and discounts——3,728—3,728Realized losses—(14,999,998)(2,418,534)—(17,418,532)Net change in unrealized appreciation/​(depreciation) included in earnings(4,625,908)54,411,764548,746(3,445,924)46,888,678Fair Value as of September 30, 2019$58,892,446$121,204,268$1,920,861$5,376,647$187,394,222Net change in unrealized appreciation/ (depreciation) of Level 3 investments still held as of September 30, 2019$(4,626,908)$34,054,259$(735,025)$(3,445,924)$25,246,402


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|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | During thenine months ended September 30, 2019, the Company’s portfolio investments had the following corporate actions which are reflected above:​

Portfolio CompanyConversion fromConversion toLyft, Inc.Preferred shares, Series DPreferred shares, Series EPublic Common Shares (Level 2)Ozy Media, Inc.Convertible Promissory NotePreferred shares, Series C-2NestGSV, Inc (d/b/a GSV Labs, Inc.)Common sharesPreferred shares, Series A-1Preferred shares, Series A-2Preferred shares, Series A-3Preferred shares, Series A-4Derivative Security











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The aggregate values of Level 3 assets and liabilities changed during the year ended December 31, 2018 as follows:


​For the Year Ended December 31, 2018​CommonStockPreferredStockDebtInvestmentsWarrantsTotalAssets:​​​​​Fair Value as of December 31, 2017$86,824,096$120,253,822$4,916,578$433,997$212,428,493Transfers out of Level 3(1)(41,707,506)(7,734,804)——(49,442,310)Purchases, capitalized fees and interest10,108,4342,1771,044,53130,64711,185,789Sales/Maturity of investments(2)(6,910,798)(16,958,428)(722,776)—(24,592,002)Realized losses(1,567,122)(10,458,567)(680)—(12,026,369)Exercises and conversions(1)5,537,205(5,514,077)(5,080)(18,048)—Amortization of fixed income security premiums and discounts——30,660—30,660Net change in unrealized depreciation included in earnings(3,766,485)20,266,036321,761(179,150)16,642,162Fair Value as of December 31, 2018$48,517,824$99,856,159$5,584,994$267,446$154,226,423Net change in unrealized appreciation/ (depreciation) of Level 3 investments still held as of December 31, 2018$(12,412,555)$10,061,576$317,201$(156,021)$(2,189,799)


​


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|    |                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------
|(1) | During year endedDecember 31, 2018, the Company’s portfolio investments had the following corporate actions which are reflected above:

Portfolio CompanyTransfer fromTransfer toDropbox, Inc.Preferred shares, Series A-1 & Common sharesPublic Common Shares (Level 2)Spotify Technology S.A.Common sharesPublic Common Shares (Level 1)Curious.com, Inc.Preferred shares, Series BCommon sharesSharesPost, Inc.Common warrantsCommon shares


|    |                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------
|(2) | Sales of investments includes escrow proceeds receivable of approximately $2.5 million from the sale of the Company’s investments in

General Assembly Space, Inc., Lytro, Inc., SugarCRM, Inc., and DreamBox Learning, Inc.








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Schedule of Investments In, and Advances to, Affiliates





Transactions during the nine months ended September 30, 2019 involving the Company’s controlled investments and non-controlled/affiliate investments were as follows:


Schedule of Investments In, and Advances to, AffiliateType/Industry/Portfolio Company/InvestmentPrincipal/QuantityInterest, Fees, orDividends Creditedin IncomeFair Value atDecember 31, 2018Corporate ActionPurchases,Capitalized Fees,Interest andAmortizationRealizedGains/(Losses)UnrealizedGains/(Losses)Fair Value at September 30, 2019Percentageof NetAssetsCONTROLLED INVESTMENTS*(2)Preferred StockClean TechnologySPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.)–Preferred shares, Class A***(3)14,300,000$200,000$750,198$—$—$—$130,000$880,1980.41%Global Innovation PlatformNestGSV, Inc. (d/b/a GSV Labs, Inc.)–Preferred stock Series A-4(7)——4,960,553(4,904,500)——(56,055)——%NestGSV, Inc. (d/b/a GSV Labs, Inc.)–Preferred stock Series A-3(7)——1,735,134(2,005,730)——270,596——%NestGSV, Inc. (d/b/a GSV Labs, Inc.)–Preferred stock Series A-2(7)——300,000(605,500)——305,500——%NestGSV, Inc. (d/b/a GSV Labs, Inc.)–Preferred stock Series A-1(7)——499,999(1,021,780)——521,779——%Total Global Innovation Platform—7,495,686(8,537,506)——1,041,820——%Interactive LearningStormWind, LLC–Preferred shares, Series C 8%(4)2,779,134—7,194,971———(2,601,783)4,593,1882.15%StormWind, LLC–Preferred shares, Series B 8%(4)3,279,629—5,770,328———(3,070,338)2,699,9901.26%StormWind, LLC–Preferred shares, Series A 8%(4)366,666—421,525———(343,267)78,2580.04%Total Interactive Learning—13,386,824———(6,015,388)7,371,4363.45%Total Preferred Stock$200,000$21,632,708$(8,537,510)$—$—$(4,843,568)$8,251,6343.86%Common StockClean TechnologySPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.)–Common shares100,000$—$—$—$—$—$—$——%





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Schedule of Investments In, and Advances to, AffiliateType/Industry/Portfolio Company/InvestmentPrincipal/QuantityInterest, Fees, orDividends Creditedin IncomeFair Value atDecember 31, 2018Corporate ActionPurchases,Capitalized Fees,Interest andAmortizationRealizedGains/(Losses)UnrealizedGains/(Losses)Fair Value at September 30, 2019Percentageof NetAssetsGlobal Innovation PlatformNestGSV, Inc. (d/b/a GSV Labs, Inc.)–Common shares(7)———(1,000)——1,000——%Total Common Stock$—$—$(1,000)$—$—$1,000$——%TOTAL CONTROLLED INVESTMENTS*(2)$200,000$21,632,708$(8,538,506)$—$—$(4,842,568)$8,251,6343.86%NON-CONTROLLED/AFFILIATE INVESTMENTS*(1)Debt InvestmentsCorporate EducationCUX, Inc. (d/b/a CorpU)–Senior Subordinated Convertible Promissory Note 10% Due 2/14/2020***(5)$1,360,489$101,757$1,360,489$—$280$—$(1,020,277)$340,4920.16%Digital Media PlatformOzy Media, Inc.–Convertible Promissory Note 5% Due 12/31/2018***(6)$—72,8643,153,575(2,102,384)——(1,051,191)——%Social Cognitive LearningDeclara, Inc.–Convertible Promissory Note 12% Due 4/30/2018$————680(2,334,832)2,334,152——%Global Innovation PlatformNestGSV, Inc. (d/b/a GSV Labs, Inc.) –Convertible Promissory Note 8% Due 8/23/2024(7)$1,010,19885,621936,525—77,402—(3,729)1,010,1980.47%Total Global Innovation Platform85,621936,525—77,402—(3,729)1,010,1980.47%Total Debt Investments$260,242$5,450,589$(2,102,384)$78,362$(2,334,832)$258,955$1,350,6900.63%Preferred StockCorporate EducationCUX, Inc. (d/b/a CorpU)–Convertible preferred shares, Series D 6%169,033$—$878,005$—$—$—$(878,005)$——%





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Schedule of Investments In, and Advances to, AffiliateType/Industry/Portfolio Company/InvestmentPrincipal/QuantityInterest, Fees, orDividends Creditedin IncomeFair Value atDecember 31, 2018Corporate ActionPurchases,Capitalized Fees,Interest andAmortizationRealizedGains/(Losses)UnrealizedGains/(Losses)Fair Value at September 30, 2019Percentageof NetAssetsCUX, Inc. (d/b/a CorpU) -Convertible preferred shares, Series C 8%615,763————————%Total Corporate Education—878,005———(878,005)——%Social Cognitive LearningDeclara, Inc.–Preferred shares, Series A 8%—————(9,999,999)9,999,999——%Education Media PlatformEdSurge, Inc.–Preferred shares, Series A-1378,788—250,000———(1,413)248,5870.12%EdSurge, Inc.–Preferred shares, Series A494,365—269,848———(8,172)261,6760.12%Total Education Media Platform—519,848———(9,585)510,2630.24%Knowledge NetworksMaven Research, Inc.–Preferred shares, Series C318,979————————%Maven Research, Inc.–Preferred shares, Series B49,505————————%Total Knowledge Networks————————%Digital Media PlatformOzyMedia, Inc.–Preferred shares, Series C 6%(6)683,482——2,102,384311,794—741,9283,156,1061.48%OzyMedia, Inc.–Preferred shares, Series B 6%922,509—————5,001,4205,001,4202.34%OzyMedia, Inc.–Preferred shares, Series A 6%1,090,909—————5,037,4765,037,4762.35%OzyMedia, Inc.–Preferred shares, Series Seed 6%500,000—————2,308,8432,308,8431.08%Total Digital Media Platform——2,102,384311,794—13,089,66715,503,8457.25%Total Preferred Stock$—$1,397,853$2,102,384$311,794$(9,999,999)$22,202,076$16,014,1087.49%OptionsCorporate EducationCUX, Inc. (d/b/a CorpU) –Preferred warrants, Series D, Strike Price $4.59, Expiration Date 2/14/202016,903$—$19,946$—$—$—$(19,946)$——%





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Schedule of Investments In, and Advances to, AffiliateType/Industry/Portfolio Company/InvestmentPrincipal/QuantityInterest, Fees, orDividends Creditedin IncomeFair Value atDecember 31, 2018Corporate ActionPurchases,Capitalized Fees,Interest andAmortizationRealizedGains/(Losses)UnrealizedGains/(Losses)Fair Value at September 30, 2019Percentageof NetAssetsDigital Media PlatformOzyMedia, Inc.–Common Warrants, Strike Price $0.01, Expiration Date 4/9/2028295,565—————1,362,5551,362,5550.64%Global Innovation PlatformNestGSV, Inc. (d/b/a GSV Labs, Inc.)–Preferred Warrant Series A-3, Strike Price $1.33, Expiration Date 4/4/2021(7)187,500—26,250———(1,875)24,3750.01%NestGSV, Inc. (d/b/a GSV Labs, Inc.)–Preferred Warrant Series A-4, Strike Price $1.33, Expiration Date 10/6/2021(7)500,000—145,000————145,0000.07%NestGSV, Inc. (d/b/a GSV Labs, Inc.)–Preferred Warrant Series A-4, Strike Price $1.33, Expiration Date 7/18/2021(7)250,000—70,000———(2,500)67,5000.03%NestGSV, Inc. (d/b/a GSV Labs, Inc.)–Preferred Warrant Series B, Strike Price $2.31, Expiration Date 11/29/2021(7)100,000—556———(556)——%NestGSV, Inc. (d/b/a GSV Labs, Inc.)–Preferred Warrant Series B, Strike Price $2.31, Expiration Date 5/29/2022(7)125,000—694———(694)——%NestGSV, Inc. (d/b/a GSV Labs, Inc.)–Preferred Warrant Series B, Strike Price $2.31, Expiration Date 12/31/2023(7)250,000—5,000————5,0000.00%Derivative Security, Expiration Date 8/23/2024(7)1——8,538,50616,618—(4,782,907)3,772,2171.76%Total Global Innovation Platform—247,5008,538,50616,618—(4,788,532)4,014,0921.88%Total Options​$—$267,446$8,538,506$16,618$—$(3,445,923)$5,376,6472.51%Common StockOnline Education





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Schedule of Investments In, and Advances to, AffiliateType/Industry/Portfolio Company/InvestmentPrincipal/QuantityInterest, Fees, orDividends Creditedin IncomeFair Value atDecember 31, 2018Corporate ActionPurchases,Capitalized Fees,Interest andAmortizationRealizedGains/(Losses)UnrealizedGains/(Losses)Fair Value at September 30, 2019Percentageof NetAssetsCurious.com, Inc.–Common shares1,135,944$—$—$—$—$—$—$——%Cannabis REITGreenAcreage Real Estate Corp. -Common shares375,000———7,501,530—(1,530)7,500,0003.51%Total Common Stock$—$—$—$7,501,530$—$(1,530)$7,500,0003.51%TOTAL NON-CONTROLLED/AFFILIATE INVESTMENTS*(1)​$260,242$7,115,888$8,538,506$7,908,304$(12,334,831)$19,013,578$30,241,44514.14%





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|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | All portfolio investments are non-income-producing, unless otherwise identified. Equity investments are subject to lock-up restrictions upon their IPO. Preferred dividends are generally only payable when declared and paid by the portfolio company's board of directors.  Unless otherwise noted, all investments were pledged as collateral under the Credit Facility. The Company’s directors, officers, employees and staff, as applicable, may serve on the board of directors of the Company’s portfolio investments. (Refer to “Note 3—Related-Party Arrangements”). All portfolio investments are considered Level 3 and valued using significant unobservable inputs, unless otherwise noted. (Refer to “Note 4—Investments at Fair Value”). All portfolio investments are considered Level 3 and valued using unobservable inputs, unless otherwise noted. All of the Company's portfolio investments are restricted as to resale, unless otherwise noted, and were valued at fair value as determined in good faith by the Company’s Board of Directors. (Refer to "Note 2—Significant Accounting Policies—Investments at Fair Value").

​


|    |                                
|--- | -------------------------------
|*** | Investment is income-producing.

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|    |                                                                                                                                                                                                                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | “Affiliate Investments” are investments in those companies that are “Affiliated Companies” of Sutter Rock Capital Corp., as defined in the 1940 Act. In general, a company is deemed to be an “Affiliate” of Sutter Rock Capital Corp. if Sutter Rock Capital Corp. owns 5% or more of the voting securities (i.e., securities with the right to elect directors) of such company.

​


|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | “Control Investments” are investments in those companies that are “Controlled Companies” of Sutter Rock Capital Corp., as defined in the 1940 Act. In general, under the 1940 Act, the Company would “Control” a portfolio company if the Company owned more than 25% of its outstanding voting securities (i.e., securities with the right to elect directors) and/or had the power to exercise control over the management or policies of such portfolio company.




|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | The SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.) preferred shares held by Sutter Rock Capital Corp. do not entitle Sutter Rock Capital Corp. to a preferred dividend rate. During thethree months ended September 30, 2019, SPBRX, INC. declared, and Sutter Rock Capital Corp. received, an aggregate of$0in cash distributions. Sutter Rock Capital Corp. does not anticipate that SPBRX, INC. will pay distributions on a quarterly or regular basis or become a predictable distributor of distributions.




|    |                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------
|(4) | Sutter Rock Capital Corp.’s investments in StormWind, LLC are held through Sutter Rock Capital Corp.'s wholly owned subsidiary, GSVC SW Holdings, Inc.




|    |                                                                                                                                                                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(5) | Interest will accrue daily on the unpaid principal balance of the note. Interest began compounding annually on November 26, 2015. Accrued interest is not payable until the earlier of (a) the closing of a subsequent equity offering by CUX, Inc. (d/b/a CorpU), or (b) the maturity of the note.







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|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(6) | On September 11, 2019, Sutter Rock Capital Corp. agreed to convert its 5% Convertible Promissory Note due 12/31/2018 to Ozy Media, Inc. and all related accrued interest, into 683,482 shares of Ozy Media, Inc.'s Series C-2 preferred shares.




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|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(7) | On August 23, 2019, Sutter Rock Capital Corp. amended the structure of its investment in NestGSV, Inc. (d/b/a GSV Labs, Inc.). As part of the agreement, Sutter Rock’s equity holdings (warrants notwithstanding) were restructured into a derivative security. NestGSV, Inc. (d/b/a GSV Labs,Inc.) has the right to call the position at any time over a five year period, while Sutter Rock Capital Corp. can put the shares to NestGSV, Inc. (d/b/a GSV Labs, Inc.) at the end of the five year period. As part of the agreement, previously accrued interest under Sutter Rock Capital Corp.’s 12% Convertible Promissory Note due 12/31/2019  will be capitalized into the principal of the extended note, and the interest on the note is reduced from 12% to 8%. The Convertible Promissory Note’s maturity was extended to August 23, 2024. Under the amended structure, Sutter Rock Capital Corp.’s fully diluted ownership in the company decreased from 50.0% to 8.5%. As such, Sutter Rock Capital Corp.'s investments in NestGSV, Inc. (d/b/a GSV Labs, Inc.) have been recategorized from controlled investments to non-controlled/affiliated investments.



















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Schedule of Investments In, and Advances to, Affiliates





Transactions during the year ended December 31, 2018 involving the Company’s controlled investments and non-controlled/affiliate investments were as follows:


Type/Industry/Portfolio Company/InvestmentPrincipal/QuantityInterest, Fees, orDividends Creditedin IncomeFair Value atDecember 31, 2017Purchases,Capitalized Fees,Interest andAmortizationSalesRealizedGains/(Losses)UnrealizedGains/(Losses)Fair Value atDecember 31, 2018Percentageof NetAssetsCONTROLLED INVESTMENTS*(2)Debt InvestmentsGlobal Innovation PlatformNestGSV, Inc. (d/b/a GSV Labs, Inc.)–Convertible Promissory Note 12% Due 12/31/2019***(10)$936,525$57,466$560,199$392,437$—$—$(16,111)$936,5250.48%NestGSV, Inc. (d/b/a GSV Labs, Inc.)–Unsecured Promissory Note 12% Due 1/15/2018***(8)$—2,369592,129—(592,129)(680)680——%Total Global Innovation Platform59,8351,152,328392,437(592,129)(680)(15,431)936,5250.48%Total Debt Investments$59,835$1,152,328$392,437$(592,129)$(680)$(15,431)$936,5250.48%Preferred StockClean TechnologySPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.)–Preferred shares, Class A***(12)14,300,000$625,000$1,069,862$—$—$—$(319,664)$750,1980.38%Global Innovation PlatformNestGSV, Inc. (d/b/a GSV Labs, Inc.)–Preferred stock Series A-43,720,424—5,390,842———(430,289)4,960,5532.54%NestGSV, Inc. (d/b/a GSV Labs, Inc.)–Preferred stock Series A-31,561,625—1,885,644———(150,510)1,735,1340.89%NestGSV, Inc. (d/b/a GSV Labs, Inc.)–Preferred stock Series A-2450,001—326,022———(26,022)300,0000.15%NestGSV, Inc. (d/b/a GSV Labs, Inc.)–Preferred stock Series A-11,000,000—543,370———(43,371)499,9990.26%Total Global Innovation Platform—8,145,878———(650,192)7,495,6863.84%Interactive LearningStormWind, LLC–Preferred shares, Series C 8%(3)2,779,134—7,223,904———(28,933)7,194,9713.68%StormWind, LLC–Preferred shares, Series B 8%(3)3,279,629—5,804,472———(34,144)5,770,3282.95%StormWind, LLC–Preferred shares, Series A 8%(3)366,666—425,342———(3,817)421,5250.22%Total Interactive Learning—13,453,718———(66,894)13,386,8246.85%Total Preferred Stock625,00022,669,458———(1,036,750)21,632,70811.07%





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Type/Industry/Portfolio Company/InvestmentPrincipal/QuantityInterest, Fees, orDividends Creditedin IncomeFair Value atDecember 31, 2017Purchases,Capitalized Fees,Interest andAmortizationSalesRealizedGains/(Losses)UnrealizedGains/(Losses)Fair Value atDecember 31, 2018Percentageof NetAssetsWarrantsGlobal Innovation PlatformNestGSV, Inc. (d/b/a GSV Labs, Inc.)–Preferred Warrant Series A-3, Strike Price $1.33, Expiration Date 4/4/2021(10)187,500$—$1,875$—$—$—$24,375$26,2500.01%NestGSV, Inc. (d/b/a GSV Labs, Inc.)–Preferred Warrant Series A-4, Strike Price $1.33, Expiration Date 10/6/2021(10)500,000—160,000———(15,000)145,0000.07%NestGSV, Inc. (d/b/a GSV Labs, Inc.)–Preferred Warrant Series A-4, Strike Price $1.33, Expiration Date 7/18/2021250,000—102,500———(32,500)70,0000.04%NestGSV, Inc. (d/b/a GSV Labs, Inc.)–Preferred Warrant Series B, Strike Price $2.31, Expiration Date 11/29/2021100,000—41,000———(40,444)5560.00%NestGSV, Inc. (d/b/a GSV Labs, Inc.)–Preferred Warrant Series B, Strike Price $2.31, Expiration Date 5/29/2022125,000—80,000———(79,306)6940.00%NestGSV, Inc. (d/b/a GSV Labs, Inc.)–Preferred Warrant Series B, Strike Price $2.31, Expiration Date 12/31/2023(10)250,000——5,080——(80)5,0000.00%Total Global Innovation Platform—385,3755,080——(142,955)247,5000.12%Total Warrants$—$385,375$5,080$—$—$(142,955)$247,5000.12%Common StockClean TechnologySPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.)–Common shares100,000$—$—$—$—$—$—$——%Global Innovation PlatformNestGSV, Inc. (d/b/a GSV Labs, Inc.)–Common shares200,000————————%Total Common Stock$—$—$—$—$—$—$——%TOTAL CONTROLLED INVESTMENTS*(2)$684,835$24,207,161$397,517$(592,129)$(680)$(1,195,135)$22,816,73311.68%NON-CONTROLLED/AFFILIATE INVESTMENTS*(1)Debt InvestmentsCorporate EducationCUX, Inc. (d/b/a CorpU)–Senior Subordinated Convertible Promissory Note 10% Due 2/14/2020***(4)$1,360,489$104,256$1,259,712$102,257$—$—$(1,480)$1,360,4890.70%





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 September 30, 2019





Type/Industry/Portfolio Company/InvestmentPrincipal/QuantityInterest, Fees, orDividends Creditedin IncomeFair Value atDecember 31, 2017Purchases,Capitalized Fees,Interest andAmortizationSalesRealizedGains/(Losses)UnrealizedGains/(Losses)Fair Value atDecember 31, 2018Percentageof NetAssetsDigital Media PlatformOzy Media, Inc.–Convertible Promissory Note 5% Due 12/31/2018(7)$2,102,384268,1041,067,639133,031(30,647)—1,983,5523,153,5751.61%Ozy Media, Inc.–Promissory Note 10% Due 2/12/2018***(7)$—2,384—100,000(100,000)————%Total Digital Media Platform270,4881,067,639233,031(130,647)—1,983,5523,153,5751.61%Social Cognitive LearningDeclara, Inc.–Convertible Promissory Note 12% Due 4/30/2018(6)(9)$2,327,727207,0691,120,329212,254——(1,332,583)——%Total Debt Investments$581,813$3,447,680$547,542$(130,647)$—$649,489$4,514,0642.31%Preferred StockCorporate EducationCUX, Inc. (d/b/a CorpU)–Convertible preferred shares, Series D 6%169,033$—$989,489$—$—$—$(111,484)$878,0050.45%CUX, Inc. (d/b/a CorpU) -Convertible preferred shares, Series C 8%615,763—480,184———(480,184)——%Total Corporate Education—1,469,673———(591,668)878,0050.45%Social Cognitive LearningDeclara, Inc.–Preferred shares, Series A 8%10,716,390—382,678———(382,678)——%Education Media PlatformEdSurge, Inc.–Preferred shares, Series A-1378,788—500,000———(250,000)250,0000.13%EdSurge, Inc.–Preferred shares, Series A494,365—581,917———(312,069)269,8480.14%Total Education Media Platform—1,081,917———(562,069)519,8480.27%Knowledge NetworksMaven Research, Inc.–Preferred shares, Series C318,979—501,240———(501,240)——%Maven Research, Inc.–Preferred shares, Series B49,505—50,000———(50,000)——%Total Knowledge Networks—551,240———(551,240)——%Digital Media PlatformOzyMedia, Inc.–Preferred shares, Series B 6%922,509—2,367,022———(2,367,022)——%OzyMedia, Inc.–Preferred shares, Series A 6%1,090,909—1,419,810———(1,419,810)——%OzyMedia, Inc.–Preferred shares, Series Seed 6%500,000—236,635———(236,635)——%Total Digital Media Platform—4,023,467———(4,023,467)——%Total Preferred Stock$—$7,508,975$—$—$—$(6,111,122)$1,397,8540.72%





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 September 30, 2019





Type/Industry/Portfolio Company/InvestmentPrincipal/QuantityInterest, Fees, orDividends Creditedin IncomeFair Value atDecember 31, 2017Purchases,Capitalized Fees,Interest andAmortizationSalesRealizedGains/(Losses)UnrealizedGains/(Losses)Fair Value atDecember 31, 2018Percentageof NetAssetsWarrantsCorporate EducationCUX, Inc. (d/b/a CorpU) –Preferred warrants, Series D, Strike Price $4.59, Expiration Date 2/14/2020(5)16,903$—$2,366$—$—$—$17,580$19,9460.01%Digital Media PlatformOzyMedia, Inc.–Common Warrants, Strike Price $0.01, Expiration Date 4/9/2028(7)295,565——30,647——(30,647)——%Total Warrants​$—$2,366$30,647$—$—$(13,067)$19,9460.01%Common StockOnline EducationCurious.com, Inc.–Common shares(11)1,135,944$—$5,514,077$—$—$—$(5,514,077)$——%Total Common Stock$—$5,514,077$—$—$—$(5,514,077)$——%TOTAL NON-CONTROLLED/AFFILIATE INVESTMENTS*(1)​$581,813$16,473,098$578,189$(130,647)$—$(10,988,777)$5,931,8633.04%


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|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | All portfolio investments are non-income-producing, unless otherwise identified. Equity investments are subject to lock-up restrictions upon their IPO. Preferred dividends are generally only payable when declared and paid by the portfolio company's board of directors.  Unless otherwise noted, all investments were pledged as collateral under the Credit Facility. The Company’s and GSV Asset Management’s officers and staff, as applicable, may serve on the board of directors of the Company’s portfolio investments. (Refer to “Note 3—Related-Party Arrangements”). All portfolio investments are considered Level 3 and valued using significant unobservable inputs, unless otherwise noted. (Refer to “Note 4—Investments at Fair Value”). All portfolio investments are considered Level 3 and valued using unobservable inputs, unless otherwise noted. All of the Company's portfolio investments are restricted as to resale, unless otherwise noted, and were valued at fair value as determined in good faith by the Company’s Board of Directors. (Refer to "Note 2—Significant Accounting Policies—Investments at Fair Value").

​


|   |                                                                                                                           
|-- | --------------------------------------------------------------------------------------------------------------------------
|** | Indicates assets that GSV Capital Corp. believes do not represent “qualifying assets” under Section 55(a) of the 1940 Act.

​


|    |                                
|--- | -------------------------------
|*** | Investment is income-producing.

​


|    |                                                                                                                                                                                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | “Affiliate Investments” are investments in those companies that are “Affiliated Companies” of GSV Capital Corp., as defined in the 1940 Act. In general, a company is deemed to be an “Affiliate” of GSV Capital Corp. if GSV Capital Corp. owns 5% or more of the voting securities (i.e., securities with the right to elect directors) of such company.

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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | “Control Investments” are investments in those companies that are “Controlled Companies” of GSV Capital Corp., as defined in the 1940 Act. In general, under the 1940 Act, the Company would “Control” a portfolio company if the Company owned more than 25% of its outstanding voting securities (i.e., securities with the right to elect directors) and/or had the power to exercise control over the management or policies of such portfolio company.




|    |                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------
|(3) | GSV Capital Corp.’s investments in StormWind, LLC are held through GSV Capital Corp.'s wholly owned subsidiary, GSVC SW Holdings, Inc.

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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(4) | Interest will accrue daily on the unpaid principal balance of the note. Interest began compounding annually on November 26, 2015. Accrued interest is not payable until the earlier of (a) the closing of a subsequent equity offering by CUX, Inc. (d/b/a CorpU), or (b) the maturity of the note. On October 31, 2018, GSV Capital Corp. agreed to extend the maturity of the Senior Subordinated Convertible Promissory Note to CUX, Inc. (d/b/a CorpU) until February 14, 2020, with a new interest rate of 10%.  Accrued interest will continue to be compounded annually on November 26 of the current and each subsequent year until repaid.




|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(5) | On February 23, 2018, CUX, Inc. (d/b/a CorpU) agreed to extend the maturity of the GSV Capital Corp.'s Series D warrants until August 1, 2018. On July 31, 2018, CUX, Inc. (d/b/a CorpU) agreed to further extend the maturity of GSV Capital Corp.'s Series D warrants until November 26, 2018.  On October 31, 2018, and in connection with the extension of the maturity date on the related debt investment, CUX, Inc. (d/b/a CorpU) agreed to further extend the maturity of GSV Capital Corp's Series D warrants until February 14, 2020.

​


|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(6) | On January 31, 2018, the maturity date of the convertible promissory note to Declara, Inc. was extended an additional three months to April 30, 2018 and the interest rate on the convertible promissory note increased to 12% per annum (including 365 days for the purposes of accrual).  On January 31, 2018 the convertible promissory note to Declara Inc. was placed on non-accrual status.  On April 30, 2018, the Company deemed this investment to be in default based on Declara Inc.'s financial position.

​


|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(7) | Effective April 9, 2018, the term of Ozy Media Inc.'s notes were extended through the issuance of a new convertible promissory note, which extended the maturity date of the existing notes to October 31, 2018 and then to December 31, 2018 once certain conditions were satisfied.  Effective August 17, 2018, Ozy Media Inc. executed an additional debt amendment, which expanded its borrowing limit.  In consideration for amending and restating the existing notes, the Company was issued warrants exercisable for 295,565 shares of Ozy Media Inc.'s common stock.  Subsequent to the year-ended December 31, 2018, Ozy Media Inc.'s obligations under its financing arrangements with the Company became past due.




|    |                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------
|(8) | On January 12, 2018, the unsecured promissory note to NestGSV, Inc. (d/b/a GSV Labs, Inc.) was repaid, with interest.




|    |                                                                                      
|--- | -------------------------------------------------------------------------------------
|(9) | As of December 31, 2018, the investments noted had been placed on non-accrual status.




|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Effective July 31, 2018, GSV Capital Corp agreed to extend the Convertible Promissory Note to NestGSV, Inc. (d/b/a GSV Labs, Inc.) until December 31, 2018, with a new interest rate of 12%.  Previously accrued interest will be capitalized into the principal of the extended note. On December 31, 2018, GSV Capital Corp extended the maturity of the Convertible Promissory Note to December 31, 2019, compounded the previously accrued and then-outstanding interest and invested an additional $300,000. The Convertible Promissory Note continues to accrue interest at 12%. In consideration for the extension and additional investment, the 500,000 Series A-3 Preferred Warrants due April 4, 2019 and the 187,500 Series A-4 Preferred Warrants due October 6, 2019, were extended to April 4, 2021 and October 6, 2021, respectively. The Company also received an additional 250,000 Series B Preferred Warrants due December 31, 2023.




|     |                                                                                                                                                                                                                                                                                                                     
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(11) | On June 8, 2018, Curious.com, Inc. completed a recapitalization and issued new Series C preferred shares. In connection with the offering, GSV Capital Corp.'s 3,407,834 Series B preferred shares were converted into common shares. Additionally, a 1:3 reverse stock split was declared on the now common shares.




|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(12) | The SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.) preferred shares held by GSV Capital Corp. do not entitle GSV Capital Corp. to a preferred dividend rate. During the year ended December 31, 2018, SPBRX, INC. declared, and GSV Capital Corp. received, an aggregate of $625,000 in cash distributions. GSV Capital Corp. does not anticipate that SPBRX, INC. will pay distributions on a quarterly or regular basis or become a predictable distributor of distributions.







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NOTE 5—SHARE REPURCHASE PROGRAM, EQUITY OFFERINGS AND RELATED EXPENSES





On August 8, 2017, the Company announced a $5.0 million discretionary open-market share repurchase program of shares of the Company’s common stock, $0.01 par value per share, of up to $5.0 million until the earlier of (i) August 6, 2018 or (ii) the repurchase of $5.0 million in aggregate amount of the Company’s common stock (the “Share Repurchase Program”). On November 7, 2017, the Company’s Board of Directors authorized an extension of, and an increase in the amount of shares of the Company’s common stock that may be repurchased under the discretionary Share Repurchase Program until the earlier of (i) November 6, 2018 or (ii) the repurchase of $10.0 million in aggregate amount of the Company’s common stock. On May 3, 2018, the Company’s Board of Directors authorized a $5.0 million increase in the amount of shares of the Company’s common stock that may be repurchased under the discretionary Share Repurchase Program until the earlier of (i) November 6, 2018 or (ii) the repurchase of $15.0 million in aggregate amount of the Company’s common stock. On November 1, 2018, our Board of Directors authorized a $5.0 million increase in the amount of shares of our common stock that may be repurchased under the discretionary Share Repurchase Program until the earlier of (i) October 31, 2019 or (ii) the repurchase of $20.0 million in aggregate amount of our common stock. On August 5, 2019, our Board of Directors authorized a $5.0 million increase in the amount of shares of our common stock that may be repurchased under the discretionary Share Repurchase Program until the earlier of (i) August 4, 2020 or (ii) the repurchase of $25.0 million in aggregate amount of our common stock.





The timing and number of shares to be repurchased will depend on a number of factors, including market conditions and alternative investment opportunities. The Share Repurchase Program may be suspended, terminated or modified at any time for any reason and does not obligate the Company to acquire any specific number of shares of its common stock. Under the Share Repurchase Program, we may repurchase our outstanding common stock in the open market provided that we comply with the prohibitions under our insider trading policies and procedures and the applicable provisions of the 1940 Act and the Securities Exchange Act of 1934, as amended.





During the three and nine months ended September 30, 2019 , the Company repurchased 605,327 and 721,128 , respectively, of shares of the Company’s common stock pursuant to the Share Repurchase Program.  As of September 30, 2019 , the dollar value of shares that remained available to be purchased by the Company under the Share Repurchase Program was approximately $5.2 million.





No new shares of the Company’s common stock were issued during the three and nine months ended September 30, 2019 .








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NOTE 6—NET CHANGE IN NET ASSETS RESULTING FROM OPERATIONS PER COMMON SHARE—BASIC AND DILUTED





The following information sets forth the computation of basic and diluted net increase in net assets resulting from operations per common share, pursuant to ASC 260, for the three and nine months ended September 30, 2019 and 2018 .


​Three Months Ended September 30,Nine Months Ended September 30,​2019201820192018Earnings per common share–basic:Net change in net assets resulting from operations$5,261,452$328,810$21,745,460$16,125,108Weighted-average common shares–basic19,472,78520,462,62619,650,65120,858,192Earnings per common share–basic$0.27$0.02$1.11$0.77Earnings per common share–diluted:Net change in net assets resulting from operations$5,261,452$328,810$21,745,460$16,125,108Adjustment for interest and amortization on 5.25% Convertible Senior Notes due 2018(1)———2,559,682Adjustment for interest and amortization on 4.75% Convertible Senior Notes due 2023(1)568,040—1,701,0841,148,646Net change in net assets resulting from operations, as adjusted$5,829,492$328,810$23,446,544$19,833,436Adjustment for dilutive effect of 5.25% Convertible Senior Notes due 2018(1)———4,314,340Adjustment for dilutive effect of 4.75% Convertible Senior Notes due 2023(1)3,731,344—3,731,3442,555,902Weighted-average common shares outstanding–diluted23,204,12920,462,62623,381,99527,728,434Earnings per common share–diluted$0.25$0.02$1.00$0.72
 ______________________


|    |                                                                                                                                                                                                                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | For the three months ended September 30, 2018, 7,173,218 potentially dilutive common shares were excluded from the weighted-average common shares outstanding for diluted net increase in net assets resulting from operations per common share because the effect of these shares would have been anti-dilutive.

​





NOTE 7—COMMITMENTS AND CONTINGENCIES





In the normal course of business, the Company may enter into investment agreements under which it commits to make an investment in a portfolio company at some future date or over a specified period of time. At September 30, 2019 and December 31, 2018 , the Company had not entered into any investment agreements that required it to make a future investment in a portfolio company.





From time to time, the Company may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of its rights under contracts with its portfolio companies. While the outcome of these legal proceedings cannot be predicted with certainty, the Company does not expect that these proceedings will have a material effect upon its business, financial condition or results of operations.





Operating Leases & Related Deposits





The Company currently has one operating lease for office space for which the Company has recorded a right-of-use asset and lease liability for the operating lease obligation. The lease commenced June 3, 2019 and expires July 31, 2024. The lease expense is presented as a single lease cost that is amortized on a straight-line basis over the life of the lease.





As of September 30, 2019 , the Company has booked a right of use asset and operating lease liability of $ 823,941 and $ 823,941 , respectively, on the Condensed Consolidated Statements of Assets and Liabilities. As of September 30, 2019 and December 31, 2018, the Company recorded a security deposit of $ 16,574 and $0, respectively, of rental deposit on the Condensed Consolidated





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Statements of Assets and Liabilities. For the three and nine months ended September 30, 2019 , the Company incurred $ 22,211 and $ 29,359 , respectively, of operating lease expense. The amounts reflected on the Condensed Consolidated Statements of Assets and Liabilities have been discounted using the rate implicit in the lease. As of September 30, 2019 , the remaining lease term was 4.8 years and the discount rate was 3.00% .





The following table shows future minimum payments under the Company's operating lease as of September 30, 2019 :





For the Years Ended December 31,Amount2019$42,8902020174,5632021179,8002022185,1942023190,7502024113,604$886,801








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NOTE 8—FINANCIAL HIGHLIGHTS (UNAUDITED)


​Three Months Ended September 30,Nine Months Ended September 30,2019201820192018Per Basic Share DataNet asset value at beginning of the period$10.75$10.46$9.89$9.64Net investment loss(1)(0.24)(0.19)(0.35)(0.45)Net realized gain/(loss) on investments(1)0.09(0.49)0.57(0.36)Realized loss on partial repurchase of 5.25% Convertible Senior Notes due 2018(1)———(0.02)Net change in unrealized appreciation of investments(1)0.420.690.841.54Benefits from taxes on unrealized depreciation of investments(1)—0.010.050.06Repurchase of common stock0.140.100.170.17Stock-based compensation0.08—0.07—Net asset value at end of period$11.24$10.58$11.24$10.58Per share market value at end of period$6.24$6.91$6.24$6.91Total return based on market value(2)(2.50)%0.73%19.54%26.79%Total return based on net asset value(2)4.56%1.15%13.65%9.75%Shares outstanding at end of period19,041,51920,174,95519,041,51920,174,955Ratios/Supplemental Data:​​​Net assets at end of period$213,949,030$213,403,364$213,949,030$213,403,364Average net assets$215,020,159$214,704,044$207,111,511$210,108,076Ratio of gross operating expenses to average net assets(3)7.45%8.51%6.08%10.18%Ratio of incentive fee waiver to average net assets—%—%—%(2.38)%Ratio of management fee waiver to average net assets—%(0.19)%—%(0.42)%Ratio of income tax provision to average net assets—%—%(0.43)%—%Ratio of net operating expenses to average net assets(3)7.45%8.32%5.65%7.38%Ratio of net investment loss to average net assets(3)(8.77)%(7.30)%(4.46)%(5.95)%Portfolio Turnover Ratio4.80%2.98%12.72%3.08%


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|    |                                                                                
|--- | -------------------------------------------------------------------------------
|(1) | Based on weighted-average number of shares outstanding for the relevant period.

|    |                                                                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Total return based on market value is based on the change in market price per share between the opening and ending market values per share in the year. Total return based on net asset value is based upon the change in net asset value per share between the opening and ending net asset values per share.

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | Financial Highlights for periods of less than one year are annualized and the ratios of operating expenses to average net assets and net investment loss to average net assets are adjusted accordingly. Non-recurring expenses, including the $5.0 million accrued incentive fee forfeiture pursuant to the Waiver Agreement, are not annualized. For thethree and nine months ended September 30, 2019, the Company excluded $0and$(1,769,820)of non-recurring expenses and did not annualize the income tax provision.  Forthree and nine months ended September 30, 2018, the Company excluded $0and $352,667of non-recurring expenses and did not annualize the incentive fee waiver. Because the ratios are calculated for the Company’s common stock taken as a whole, an individual investor’s ratios may vary from these ratios.










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NOTE 9—INCOME TAXES





The Company elected to be treated as a RIC under Subchapter M of the Code beginning with its taxable year ended December 31, 2014, has qualified to be treated as a RIC for subsequent taxable years and expects to continue to operate in a manner so as to qualify for the tax treatment applicable to RICs.





Due to the Company’s election to be treated as RIC, the associated previously accrued benefits from, and provisions for, taxes from prior periods were reversed for the year ended December 31, 2015. Typically for a taxable entity, a net investment loss would generate a benefit from taxes; however, as a result of our election to be treated as a RIC, we reversed the previously accrued benefits from taxes on net investment loss from prior periods. Typically for a taxable entity, net realized capital gains would generate a provision for taxes; however, as a result of our election to be treated as a RIC, we reversed the previously accrued provisions for taxes on net realized capital gains from prior periods. As a result of our election to be treated as a RIC, we reversed the previously accrued provisions for taxes on unrealized appreciation of investments from prior periods. This reversal resulted in a larger benefit for taxes on unrealized depreciation of investments than would have been accrued solely based on the unrealized depreciation of investments for the year ended December 31, 2015.





As a result of the Company electing to be treated as a RIC for the taxable year ended December 31, 2014 in connection with the filing of its 2014 tax return, it may be required to pay a corporate-level U.S. federal income tax on the amount of the net built-in gains, if any, in its assets (the amount by which the net fair market value of the Company’s assets exceeds the net adjusted basis in its assets) as of the date of conversion to a RIC ( i.e. , the beginning of the first taxable year that the Company qualifies as a RIC, which would be January 1, 2014) to the extent that such gains are recognized by the Company during the applicable recognition period, which is the five -year period beginning on the date of conversion.





Any corporate-level built-in-gains tax is payable at the time the built-in gains are recognized (which generally will be the years in which the assets with the built-in-gains are sold in a taxable transaction). The amount of this tax will vary depending on the assets that are actually sold by the Company in this five -year period, the actual amount of net built-in gain or loss present in those assets as of the date of conversion, and the effective tax rates at such times. The payment of any such corporate-level U.S. federal income tax on built-in gains will be a Company expense that will reduce the amount available for distribution to stockholders. The built-in-gains tax is calculated by determining the RIC’s net unrealized built-in gains, if any, by which the fair market value of the assets of the RIC at the beginning of its first RIC year exceeds the aggregate adjusted basis of such assets at that time. As of January 1, 2014, the Company had net unrealized built-in gains. It did not incur a built-in-gains tax for the 2014 tax year due to the fact that there were sufficient net capital loss carryforwards to completely offset recognized built-in gains as well as available net operating losses.





The Company elected to be treated as a RIC for the taxable year ended December 31, 2014 in connection with the filing of its 2014 tax return. As a result, the Company was required to pay a corporate-level U.S. federal income tax on the amount of the net built-in gains in its assets (the amount by which the net fair market value of the Company’s assets exceeds the net adjusted basis in its assets) either (1) as of the date it converted to a RIC (i.e., the beginning of the first taxable year that the Company qualifies as a RIC, which would be January 1, 2014), or (2) to the extent that the Company recognized such net built-in gains during the five-year recognition period beginning on the date of conversion. As of January 1, 2014, the Company had net unrealized built-in gains, but did not incur a built-in-gains tax for the 2014 tax year due to the fact that there were sufficient net capital loss carryforwards to completely offset recognized built-in gains as well as available net operating losses. The five-year recognition period ended on December 31, 2018.





As of September 30, 2019 and December 31, 2018 , the Company recorded a deferred tax liability of approximately $0.0 million and $0.9 million , respectively, of which approximately $0.0 million and $0.9 million relate to the difference in the book and tax basis of certain equity investments and net tax operating losses held by the GSVC Holdings.





For U.S. federal and state income tax purposes, a portion of the GSVC Holdings’ net operating loss carryforwards and basis differences may be subject to limitations on annual utilization in case of a change in ownership, as defined by federal and state law. The amount of such limitations, if any, has not been determined. Accordingly, the amount of such tax attributes available to offset future profits may be significantly less than the actual amounts of the tax attributes.








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 September 30, 2019





The Company and the GSVC Holdings identified their major tax jurisdictions as U.S. federal and California and may be subject to the taxing authorities’ examination for the tax years 2015–2018 and 2014–2018, respectively. Further, the Company and the GSVC Holdings accrue all interest and penalties related to uncertain tax positions as incurred. As of September 30, 2019 , there were no material interest or penalties incurred related to uncertain tax positions.








NOTE 10—DEBT CAPITAL ACTIVITIES





5.25% Convertible Senior Notes due 2018





On September 17, 2013, the Company issued $69.0 million aggregate principal amount of convertible senior notes, which bear interest at a fixed rate of 5.25% per year, payable semi-annually in arrears on March 15 and September 15 of each year. The 5.25% Convertible Senior Notes matured on September 15, 2018 (the " 5.25% Convertible Senior Notes due 2018 "), unless previously repurchased or converted in accordance with their terms. The Company does not have the right to redeem the 5.25% Convertible Senior Notes due 2018 prior to maturity. The 5.25% Convertible Senior Notes due 2018 are convertible into shares of the Company’s common stock based on a conversion rate of 83.3596 shares of the Company’s common stock per $1,000 of principal amount of the 5.25% Convertible Senior Notes due 2018 , which is equivalent to a conversion price of approximately $12.00 per share of common stock.





On December 15, 2017, the Company announced the commencement of a cash tender offer (the “Tender Offer”) to purchase any and all of its $69.0 million aggregate principal amount of outstanding 5.25% Convertible Senior Notes due 2018 .  As of the expiration of the Tender Offer on January 17, 2018, approximately $4.8 million aggregate principal amount of the 5.25% Convertible Senior Notes due 2018 were validly tendered and not validly withdrawn pursuant to the Tender Offer. On March 27, 2018, the Company repurchased an additional $14.2 million aggregate principal amount of the outstanding 5.25% Convertible Senior Notes due 2018 . On September 15, 2018, we repaid the remaining outstanding aggregate principal amount of the 5.25% Convertible Senior Notes due 2018, including accrued but unpaid interest, and the 5.25% Convertible Senior Notes were no longer outstanding as of such date.





4.75% Convertible Senior Notes due 2023





On March 28, 2018, the Company issued $40.0 million aggregate principal amount of convertible senior notes, which bear interest at a fixed rate of 4.75% per year, payable semi-annually in arrears on March 31 and September 30 of each year, commencing on September 30, 2018. The 4.75% Convertible Senior Notes mature on March 28, 2023 (the " 4.75% Convertible Senior Notes due 2023 "), unless previously repurchased or converted in accordance with their terms. The Company does not have the right to redeem the 4.75% Convertible Senior Notes due 2023 prior to March 27, 2021. On or after March 27, 2021, the Company may redeem the 4.75% Convertible Senior Notes due 2023 for cash, in whole or from time to time in part, at the Company’s option if (i) the closing sale price of the Company’s common stock for at least 15 trading days (whether or not consecutive) during the period of any 20 consecutive trading days is greater than or equal to 150% of the conversion price on each applicable trading day, (ii) no public announcement of a pending, proposed or intended fundamental change has occurred which has not been abandoned, terminated or consummated, and (iii) no event of default under the indenture governing the 4.75% Convertible Senior Notes due 2023 , and no event that with the passage of time or giving of notice would constitute an event of default under such indenture, has occurred or exists.





The initial conversion rate for the 4.75% Convertible Senior Notes due 2023 is 93.2836 shares of the Company’s common stock for each $1,000 principal amount of 4.75% Convertible Senior Notes due 2023 , which represents an initial conversion price of approximately $10.72 per share. Following certain corporate transactions that occur on or prior to the stated maturity date, the Company will, in certain circumstances, increase the conversion rate for a holder that elects to convert its 4.75% Convertible Senior Notes due 2023 in connection with such a corporate transaction. If a fundamental change, as defined in the indenture governing the 4.75% Convertible Senior Notes due 2023 , occurs prior to the stated maturity date, holders may require the Company to purchase for cash all or any portion of their 4.75% Convertible Senior Notes due 2023 at a fundamental change purchase price equal to 100% of the principal amount of the Notes to be purchased, plus accrued and unpaid interest to, but excluding, the fundamental change purchase date








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The indenture governing the 4.75% Convertible Senior Notes due 2023 contains customary financial reporting requirements and contains certain restrictions on mergers, consolidations, and asset sales. The indenture also contains certain events of default, the occurrence of which may lead to the 4.75% Convertible Senior Notes due 2023 being due and payable before their maturity or immediately.





The table below shows a reconciliation from the aggregate principal amount of 4.75% Convertible Senior Notes due 2023 to the balance shown on the Condensed Consolidated Statements of Assets and Liabilities.


​September 30, 2019December 31, 2018Aggregate principal amount of 4.75% Convertible Senior Notes due 2023$40,000,000$40,000,000Direct deduction of deferred debt issuance costs$(1,289,404)$(1,565,489)4.75% Convertible Senior Notes due 2023 Payable$38,710,596$38,434,511





As of September 30, 2019 the principal amount of the 4.75% Convertible Senior Notes due 2023 exceeded the value of the underlying shares multiplied by the per share closing price of the Company’s common stock.





The 4.75% Convertible Senior Notes due 2023 are the Company’s general, unsecured, senior obligations and rank senior in right of payment to any future indebtedness that is expressly subordinated in right of payment to the 4.75% Convertible Senior Notes due 2023 , equal in right of payment to any existing and future unsecured indebtedness that is not so subordinated to the 4.75% Convertible Senior Notes due 2023 , including, without limitation, the 5.25% Convertible Senior Notes due 2018 , effectively junior to any future secured indebtedness to the extent of the value of the assets securing such indebtedness, including, without limitation, any borrowings under the Credit Facility (defined below), and structurally junior to all future indebtedness (including trade payables) incurred by the Company’s subsidiaries. For the period from the initial issuance of the 4.75% Convertible Senior Notes due 2023 to, and including, March 27, 2019, in accordance to the agreement, the Company did not to incur any indebtedness other than certain permitted debt, including, without limitation, up to $12.0 million in borrowings under the then current Credit Facility.





In connection with the issuance of the 4.75% Convertible Senior Notes due 2023 , the Company was required under the terms of the Credit Facility to deposit any proceeds from the 4.75% Convertible Senior Notes due 2023 offering into an account at Western Alliance Bank and was required to maintain at least $65.0 million (or such lesser amount to the extent such funds are used to repay or repurchase a portion of the outstanding 5.25% Convertible Senior Notes due 2018 prior to their maturity and repayment in full) in an account at Western Alliance Bank until such time as the 5.25% Convertible Senior Notes due 2018 were repaid in full. The 5.25% Convertible Senior Notes due 2018 matured on September 15, 2018, at which time the Company repaid the remaining outstanding aggregate principal amount of the 5.25% Convertible Senior Notes due 2018, including accrued but unpaid interest.





Western Alliance Bank Credit Facility





The Company entered into a Loan and Security Agreement, effective May 31, 2017 and amended on March 22, 2018 (the “Loan Agreement”), with Western Alliance Bank, pursuant to which Western Alliance Bank agreed to provide the Company with a $12.0 million senior secured revolving credit facility (the “Credit Facility”).





The Credit Facility, among other things, matured on May 31, 2019 and bore interest at a per annum rate equal to the prime rate plus 3.50% . In addition, a facility fee of $60,000 was charged upon closing of the Credit Facility, and the Loan Agreement required payment of a fee for unused amounts during the revolving period in an amount equal to 0.50% per annum of the average unused portion of the Credit Facility payable quarterly in arrears .





Under the Loan Agreement, the Company made certain customary representations and warranties and was required to comply with various affirmative and negative covenants, reporting requirements, and other customary requirements for similar credit facilities, including, without limitation, restrictions on incurring additional indebtedness (with unsecured longer-term indebtedness limited to $ 111.0 million in the aggregate through maturity of the 5.25% Convertible Senior Notes due 2018 on September 15,





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2018, and $70.0 million in the aggregate thereafter), compliance with the asset coverage requirements under the 1940 Act, a minimum net asset value requirement of at least the greater of $60.0 million or five times the amount of the Credit Facility, a limitation on the Company’s net asset value being reduced by more than 15% of its net asset value at December 31, 2016, and maintenance of RIC and BDC status. The Loan Agreement included usual and customary events of default for credit facilities of this nature, including, without limitation, nonpayment, misrepresentation of representations and warranties in a material respect, breach of covenant, cross-default to certain other indebtedness, bankruptcy, the cessation of the Investment Advisory Agreement, and the occurrence of a material adverse effect.





The Credit Facility was secured by substantially all of the Company’s property and assets. As of September 30, 2019 , the Company had no borrowings outstanding under the Credit Facility, as the Credit Facility matured on May 31, 2019.





For the three and nine months ended September 30, 2019 , the Company had average borrowings outstanding under the Credit Facility of $0 . For the year ended December 31, 2018 , the Company had average borrowings outstanding of $0 .








NOTE 11—STOCK-BASED COMPENSATION


On June 5, 2019, our Board of Directors adopted, and our stockholders approved, an equity-based incentive plan (“the 2019 Plan”), which authorizes equity awards to be granted for up to 1,976,264 shares of our common stock. Under the 2019 Plan, the exercise price of awards is set on the grant date and may not be less than the fair market value per share on such date, however, that in the case of an incentive stock option granted to an employee who, at the time of the grant of such option, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or the Company’s present or future parent or subsidiary corporations, as defined in Section 424(e) or (f) of the Code, or other Affiliates the employees of which are eligible to receive incentive stock options under the Code (the “10% Shareholders”), the exercise price per share shall be no less than one hundred ten percent (110%) of the fair market value per share on the date of grant. The fair market value shall be the closing price of the shares on the Nasdaq Capital Market on the date of grant.


On July 17, 2019, stock options providing the right to purchase up to 1,125,000 shares were granted under the 2019 Plan with an exercise price equal to the market price of our common stock at the grant date. These stock options have a vesting period of 3 years with 1/3 vesting immediately on the grant date, 1/3 vesting on July 17, 2020, and the remaining 1/3 vesting on July 17, 2021.


Number of SharesWeighted-Average Exercise PriceWeighted-Average Grant Date Fair ValueBalance as of December 31, 2018—$—$—Granted1,125,0006.573.86Vested375,0006.573.86Exercised———Forfeited———Expired———Exercisable as of September 30, 2019375,0006.573.86


The time-based options granted on July 17, 2019, have a fair value of $3.86 per share. For the time-based options valued using the Black-Scholes option-pricing model, we used the following assumption inputs:


Assumption InputsAmount as of July 17, 2019Term to exercise (years)10Volatility46.90%Risk-free interest rate2.06%Dividend yield—%





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For the three and nine months ended September 30, 2019, we recognized the stock-based compensation expense of $1,449,121 and $1,449,121 , and amount of cash received from the exercise of stock options was $0. As of September 30, 2019, there was $2,898,242 of total unrecognized compensation cost related to non-vested stock options granted under the 2019 Plan. The remaining cost is expected to be recognized over the remaining weighted-average vesting period of 1.30 years.








NOTE 12—SUBSEQUENT EVENTS





Portfolio Activity





From October 1, 2019 through November 7, 2019 , the Company sold investments of $ 13,280,517 , net of transaction costs, as shown in the following table:


Portfolio CompanyTransaction DateShares SoldAverage Net Share Price(1)Net ProceedsRealized GainLyft, Inc.Various304,829$43.5713,280,5178,994,623


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|(1) | The average net share price is the net share price realized after deducting all commissions and fees on the sale(s), if applicable.​

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|(2) | As ofNovember 7, 2019, we held0remaining shares of Lyft, Inc.




From October 1, 2019 through November 7, 2019 , the Company did not purchase any investments.





The Company is frequently in negotiations with various private companies with respect to investments in such companies. Investments in private companies are generally subject to satisfaction of applicable closing conditions. In the case of secondary market transactions, such closing conditions may include approval of the issuer, waiver or failure to exercise rights of first refusal by the issuer and/or its stockholders and termination rights by the seller or the Company. Equity investments made through the secondary market may involve making deposits in escrow accounts until the applicable closing conditions are satisfied, at which time the escrow accounts will close and such equity investments will be effectuated.





Dividends





On November 5, 2019, the Company’s Board of Directors declared a dividend of $0.20 per share payable on December 12, 2019 to stockholders of record as of the close of business on December 2, 2019. The dividend will be paid in cash.





Modified Dutch Auction Tender Offer





On October 21, 2019, the Company commenced a modified “Dutch Auction” tender offer (the “Modified Dutch Auction Tender Offer”) to purchase for cash up to $10.0 million in shares of its common stock from its stockholders.  In accordance with the terms of the Modified Dutch Auction Tender Offer, the Company intends to select the lowest price per share, not less than $6.00 per share and not greater than $8.00 per share, less any applicable withholding taxes and without interest, that will allow the Company to purchase that number of shares having an aggregate purchase price of $10.0 million. Upon the terms and subject to the conditions of the Modified Dutch Auction Tender Offer, if shares having an aggregate purchase price of less than $10.0 million are properly tendered and not properly withdrawn, the Company will purchase all shares properly tendered and not properly withdrawn. The Company expects to use available cash to fund any purchases of its shares of common stock in the Modified Dutch Auction Tender Offer and to pay for all related fees and expenses. The Modified Dutch Auction Tender Offer will expire at 5:00 P.M. ET, on November 20, 2019, unless extended by the Company.





Share Repurchase Program





Under the Share Repurchase Program, we may repurchase our outstanding common stock in the open market provided that we comply with the prohibitions under our insider trading policies and procedures and the applicable provisions of the 1940 Act and the Securities Exchange Act of 1934, as amended. Please refer to "Note 5—Share Repurchase Program, Equity Offerings and Related Expenses” for additional information on the Share Repurchase Program.





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 September 30, 2019








From October 1, 2019 through November 7, 2019 , the Company repurchased an additional 28,000 shares under the Share Repurchase Program for an aggregate purchase price of $168,655 .











NOTE 13—SUPPLEMENTAL FINANCIAL DATA





Summarized Financial Information of Unconsolidated Subsidiaries





In accordance with the SEC’s Regulation S-X and GAAP, the Company is not permitted to consolidate any subsidiary or other entity that is not an investment company, including those in which the Company has a controlling interest; however, the Company must disclose certain financial information related to any subsidiaries or other entities that are considered to be “significant subsidiaries” under the applicable rules of Regulation S-X. As of September 30, 2019 , the Company had investments in at least one portfolio company considered to be a significant subsidiary under SEC Regulation S-X Rule 10-01(b)(1) and Regulation S-X Rule 4-08(g). Below is summarized, unaudited, comparative financial information for the Company’s unconsolidated significant subsidiaries.


Income Statement Data for the Three Months Ended:(1)September 30, 2019September 30, 2018Revenue$4,975,864$4,765,321Gross profit4,452,2403,062,327Loss from operations510,785(3,089,840)Total net loss including net loss attributable to non-controlling interest510,785(3,089,840)Net loss attributable to non-controlling interest——





Income Statement Data for the Nine Months Ended:September 30, 2019September 30, 2018Revenue$16,528,849$10,525,124Gross profit11,733,0428,185,315Loss from operations(2,912,396)(3,055,708)Total net loss including net loss attributable to non-controlling interest(2,912,396)(3,055,708)Net loss attributable to non-controlling interest——





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|(1) | On August 23, 2019, Sutter Rock Capital Corp. amended the structure of its investment in NestGSV, Inc. (d/b/a GSV Labs, Inc.). Under the amended structure, Sutter Rock Capital Corp.’s fully diluted ownership in the company decreased from 50.0% to 8.5%. As such, Sutter Rock Capital Corp.'s investments in NestGSV, Inc. (d/b/a GSV Labs, Inc.) have been recategorized from controlled investments to non-controlled/affiliated investments and NestGSV, Inc. (d/b/a GSV Labs, Inc.) is no longer considered a significant subsidiary.




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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations


​





Forward-Looking statements





This quarterly report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about us, our current and prospective portfolio investments, our industry, our beliefs, and our assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “will,” “may,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “targets,” “projects,” and variations of these words and similar expressions are intended to identify forward-looking statements.





The forward-looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties, including, without limitation, statements as to:





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|• | our future operating results;

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|• | our business prospects and the prospects of our portfolio companies;

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|• | the impact of investments that we expect to make;

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|• | our contractual arrangements and relationships with third parties;

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|• | the dependence of our future success on the general economy and its impact on the industries in which we invest;

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|• | the ability of our portfolio companies to achieve their objectives;

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|• | our expected financings and investments;

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|• | the adequacy of our cash resources and working capital; and

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|• | the timing of cash flows, if any, from the operations of our portfolio companies.

​


These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including without limitation:





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|• | an economic downturn could impair our portfolio companies’ ability to continue to operate, which could lead to the loss of some or all of our investments in such portfolio companies;

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|• | an economic downturn could disproportionately impact the market sectors in which a significant portion of our portfolio is concentrated, causing us to suffer losses in our portfolio;

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|• | a contraction of available credit and/or an inability to access the equity markets could impair our investment activities;

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|• | interest rate volatility could adversely affect our results, particularly because we use leverage as part of our investment strategy; and

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|• | the risks, uncertainties and other factors we identify in the sections entitled “Risk Factors” in our quarterly reports on Form 10-Q, our annual report on Form 10-K, and in our other filings with the SEC.

​


Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be inaccurate. Important assumptions include our ability to originate new investments, certain margins and levels of profitability and the availability of additional capital. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this quarterly report on Form 10-Q should not be regarded as a representation by us that our plans and objectives will be achieved. These risks and uncertainties include those described or identified in our quarterly reports on Form 10-Q and our





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annual report on Form 10-K, in the “Risk Factors” sections. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this quarterly report on Form 10-Q . The following analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes thereto contained elsewhere in this quarterly report on Form 10-Q .








Overview





We are an internally-managed, non-diversified closed-end management investment company that has elected to be regulated as a business development company (or "BDC") under the 1940 Act. Our investment objective is to maximize our portfolio’s total return, principally by seeking capital gains on our equity and equity-related investments. We invest principally in the equity securities of what we believe to be rapidly growing venture-capital-backed emerging companies. We have also invested, on an opportunistic basis, in select publicly traded equity securities of rapidly growing companies that otherwise meet our investment criteria and may continue to do so in the future. In addition, while we invest primarily in U.S. companies, we may invest on an opportunistic basis in certain non-U.S. companies that otherwise meet our investment criteria. In regard to the regulatory requirements for BDCs under the 1940 Act, some of these investments may not qualify as investments in “eligible portfolio companies,” and thus may not be considered “qualifying assets.” “Eligible portfolio companies” generally include U.S. companies that are not investment companies and that do not have securities listed on a national exchange. If at any time less than 70% of our gross assets are comprised of qualifying assets, including as a result of an increase in the value of any on-qualifying assets or decrease in the value of any qualifying assets, we would generally not be permitted to acquire any additional non-qualifying assets until such time as 70% of our then-current gross assets were comprised of qualifying assets. We would not be required, however, to dispose of any non-qualifying assets in such circumstances.





We acquire our investments in portfolio companies through offerings of the prospective portfolio companies, transactions on secondary marketplaces for private companies and negotiations with selling stockholders.





Our investment philosophy is premised on a disciplined approach of identifying high-growth emerging companies across several key industry themes that may include, among others, social mobile, cloud computing and big data, internet commerce, sustainability and education technology. Our investment decisions are based on a disciplined analysis of available information regarding each potential portfolio company’s business operations, focusing on the company’s growth potential, the quality of recurring revenues and cash flow and cost structures, as well as an understanding of key market fundamentals. Many of the companies that we evaluate have financial backing from top-tier venture capital funds or other financial or strategic sponsors.





We seek to deploy capital primarily in the form of non-controlling equity and equity-related investments, including common stock, preferred stock and similar forms of senior equity, which may or may not be convertible into a portfolio company’s common equity, and convertible debt securities with a significant equity component. Typically, our preferred stock investments are non-income-producing, have different voting rights than common stock and are generally convertible into common stock at our discretion. Our investments generally do not produce current income and, therefore, we may be dependent on future capital raising to meet our operating needs if no other source of liquidity is available.





Starting in 2017, we began to focus our investment strategy to increase the size of our investments in individual portfolio companies. While this will likely have the effect of reducing the number of companies in which we hold investments, we believe that the shift towards larger positions will better allow us to focus our investments in companies and industries that are more likely to result in beneficial returns to our stockholders.





Internalization of Operating Structure





On and effective March 12, 2019 (the "Effective Date"), our Board of Directors approved internalizing our operating structure and we began operating as an internally managed non-diversified closed-end management investment company that has elected to be regulated as a BDC under the 1940 Act. Prior to the Effective Date, we were externally managed by our former investment adviser, GSV Asset Management, LLC (“GSV Asset Management”), pursuant to an investment advisory agreement (the “Investment Advisory Agreement”), and our former administrator, GSV Capital Service Company, LLC (“GSV Capital Service Company”), provided the administrative services necessary for our operations pursuant to an administration agreement (the “Administration Agreement”).





In connection with our Internalization, the Investment Advisory Agreement and the Administration Agreement were terminated as of the Effective Date, and as a result no fees or expenses will be due or payable under the Investment Advisory Agreement and the Administration Agreement going forward. As of such date, we entered into a Consulting Agreement with Michael T. Moe (the former Chairman of our Board of Directors and the Chief Executive Officer and Chief Investment Officer of GSV Asset Management), pursuant to which Mr. Moe provides certain services to us in connection with our transition to an internally managed





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operating structure.  We also entered into an Amended and Restated Trademark License Agreement (the "Amended and Restated Trademark License Agreement") with GSV Asset Management to continue to use the trade name “GSV”, and other state or unregistered “GSV” marks, including the trading symbol “GSVC.”





Mr. Moe also resigned from our Board of Directors, and our Board of Directors reduced the number of directors that constitute our full Board of Directors to five directors from six directors in accordance with our bylaws.





Except as otherwise disclosed herein, this Form 10-Q discusses our business and operations as an internally-managed BDC during the period covered by this Form 10-Q.





Rebranding to Sutter Rock Capital Corp.





Articles of Amendment





On and effective July 30, 2019, the Company changed its name to “Sutter Rock Capital Corp.” from “GSV Capital Corp” (the “Name Change”) by filing Articles of Amendment (the “Articles of Amendment”) to its Articles of Amendment and Restatement, as amended (the “Charter”), with the Department of Assessments and Taxation of the State of Maryland to effectuate the Name Change. In accordance with the Maryland General Corporation Law and the Charter, the Company’s Board of Directors approved the Name Change and the Articles of Amendment. Stockholder approval was not required.





Trading Symbol





In connection with the Name Change, the trading symbol for the Company’s shares of common stock on the Nasdaq Capital Market changed to “SSSS” from “GSVC” effective August 1, 2019.





Amended and Restated Bylaws





In connection with the Name Change, the Company’s Board of Directors also approved an amendment and restatement of the Company’s Bylaws (the “Amended and Restated Bylaws”) to reflect the Name Change. The Amended and Restated Bylaws became effective on July 30, 2019 and did not require stockholder approval.





For more information regarding the foregoing events, please refer to the Company’s current report on Form 8-K filed with the SEC on August 1, 2019.





Board of Directors





Election of New Director





On and effective July 17, 2019, the Company’s Board of Directors elected Lisa Westley as a director of the Company. Ms. Westley is not an “interested person” (as defined in Section 2(a)(19) of the 1940 Act) of the Company and will serve as one of the Company’s independent directors. She will serve as a director for a term expiring in 2020 and until her successor is duly elected and qualified.





Ms. Westley will be entitled to the applicable annual fee and other compensation pursuant to the Company’s director compensation arrangements, under terms consistent with those previously disclosed by the Company. There are no arrangements or understandings between Ms. Westley and any other persons pursuant to which Ms. Westley was elected as a director of the Company.





Increased Number of Directors





In connection with Ms. Westley’s election as a director, the Board of Directors increased the number of directors that constitutes the full Board of Directors to five directors from four directors, effective July 17, 2019, in accordance with the Company’s bylaws. The Company had previously reduced the number of directors that constitutes the full Board of Directors to four directors from five directors, effective July 1, 2019, in connection with David S. Pottruck’s departure from the Board of Directors. For more information regarding Mr. Pottruck’s departure and such reduction in the number of directors, please refer to the Company’s current report on Form 8-K filed with the SEC on June 10, 2019.








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Changes to Committee Composition





On and effective July 31, 2019, the Company’s Board of Directors appointed Ms. Westley as Chair of the Board of Director’s Compensation Committee and as a member of the Audit Committee, the Nominating and Corporate Governance Committee, and the Valuation Committee. In connection with Ms. Westley’s appointment as Chair of the Compensation Committee, Ronald M. Lott, the former Chair of the Compensation Committee, was appointed as Chair of the Nominating and Corporate Governance Committee, effective July 31, 2019. As a result of the foregoing, the Board of Director’s committees are composed of the following individuals, each of whom is considered independent under the rules of the Nasdaq Capital Market and is not an “interested person” of the Company as that term is defined in Section 2(a)(19) of the 1940 Act.





The Audit Committee is comprised of Marc Mazur, Leonard A. Potter, Ronald M. Lott, and Lisa Westley. Mr. Mazur serves as Chair of the Audit Committee.





The Nominating and Corporate Governance Committee is comprised of Marc Mazur, Leonard A. Potter, Ronald M. Lott, and Lisa Westley. Mr. Lott was appointed Chair of the Nominating and Corporate Governance Committee on July 31, 2019.





The Valuation Committee is comprised of Marc Mazur, Leonard A. Potter, Ronald M. Lott, and Lisa Westley. Mr. Potter serves as Chair of the Valuation Committee.





The Compensation Committee is comprised of Marc Mazur, Leonard A. Potter, Ronald M. Lott, and Lisa Westley. Ms. Westley serves as Chair of the Compensation Committee.





Changes to Compensation





On and effective July 31, 2019, the Company’s Board of Directors approved the following changes to director compensation: (i) the annual fee paid to independent directors increased to $100,000 from $80,000, (ii) the annual fee paid to the Chair of the Audit Committee increased to $15,000 from $10,000, and (iii) the annual fee paid to the chairs of the other committees of the Board of Directors increased to $10,000 from $5,000.








Portfolio and Investment Activity





The value of our investment portfolio will change over time due to changes in the fair value of our underlying investments, as well as changes in the composition of our portfolio resulting from purchases of new and follow-on investments and the sales of existing investments. The fair value, as of September 30, 2019 , of all of our portfolio investments, excluding U.S. Treasury bills, was $199,843,438 .





During nine months ended September 30, 2019 , we funded investments in an aggregate amount of $25,280,000 (not including capitalized transaction costs) as shown in the following table:


Portfolio CompanyInvestmentTransaction DateGross PaymentsNeutron Holdings, Inc. (d/b/a/ Lime)Preferred shares, Series D1/25/2019$10,000,000Aspiration Partners, Inc.Convertible Promissory Note 5% 1/31/20218/12/2019$280,000GreenAcreage Real Estate Corp.Common shares8/12/2019$7,500,000Treehouse Real Estate Investment Trust, Inc.Common shares9/11/2019$7,500,000Total$25,280,000


​





During the nine months ended September 30, 2019 , we capitalized fees of $29,145 .





During the nine months ended September 30, 2019 , we sold investments in an amount of $ 52,322,735 , net of transaction costs, and realized a net gain on investments of approximately $11,297,501 (including U.S. Treasury investments) as shown in following table:





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Portfolio InvestmentTransactionDateShares SoldAverage Net Share Price(1)Net ProceedsRealized Gain/(Loss)(2)Declara, Inc.(3)3/11/2019—$—$—$(12,334,151)Spotify Technology S.A.(4)Various235,360138.2932,547,63322,545,550Dropbox, Inc.(5)Various874,99022.54$19,723,591$6,066,664Knewton, Inc.(6)5/31/2019——$51,511$(5,083,701)Total$52,322,735$11,194,362


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|    |                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------
|(1) | The average net share price is the net share price realized after deducting all commissions and fees on the sale(s), if applicable.​

|    |                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Realized gain/(loss) does not include amounts held in escrow or any realized gain/(loss) incurred on the maturity of our U.S. Treasury investments.

|    |                                                                                                                                                                                                                                                                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | On March 11, 2019, Declara, Inc. entered into a definitive agreement to be acquired by Declara Holdings, Inc., a subsidiary of Futuryng, Inc. Despite the existence of an earn-out provision, as a result of the transaction, the Company does not expect to receive any proceeds. The exit of Declara, Inc. included a 12% Convertible Promissory Note with a principal value of $2,334,152.

|    |                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------
|(4) | As of September 30, 2019, all remaining shares of Spotify Technology S.A. held by us had been sold.

|    |                                                                                          
|--- | -----------------------------------------------------------------------------------------
|(5) | As of September 30, 2019, all remaining shares of Dropbox, Inc. held by us had been sold.

|    |                                                                                                                                                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(6) | On May 31, 2019, a sale of substantially all of the assets of Knewton, Inc. to Wiley Education was completed. As a result of the transaction, the Company expects to receive $51,511 with approximately $26,000 currently being held in escrow.




During the nine months ended September 30, 2019 , we did not write-off any investments.





During the nine months ended September 30, 2018, we funded investments in an aggregate amount of $6,661,416 (not including capitalized transaction costs) as shown in the following table:


Portfolio CompanyInvestmentTransaction DateGross PaymentsOzy Media, Inc.(1)Promissory Note 10% Due 2/12/20181/12/2018$100,000SharesPost, Inc.(2)Common shares6/15/2018$100,221Knewton, Inc.Unsecured Convertible Promissory Note 8% due 12/31/20197/23/2018$134,405Nextdoor.com, Inc.Common shares9/27/2018$6,326,790Total$6,661,416


​


__________________


|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | During the period, Ozy Media, Inc.’s obligations under its financing arrangements with us became past due. Effective April 9, 2018, the term of Ozy Media Inc.'s notes were extended through the issuance of a new convertible promissory note, which extended the maturity date of the existing notes to October 31, 2018, or December 31, 2018 if certain conditions are satisfied.  Effective August 17, 2018, Ozy Media Inc. executed an additional debt amendment, which expanded its borrowing limit.  In consideration for amending and restating the existing notes, we were issued warrants exercisable for295,565shares of Ozy Media Inc.'s common stock.

|    |                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------
|(2) | On June 15, 2018 we exercised our 770,934 warrants to purchase shares of SharesPost, Inc.'s common stock, with a $0.13 strike price.




During the nine months ended September 30, 2018, we capitalized fees of $15,174.





During the nine months ended September 30, 2018, we sold investments or received repayments from portfolio companies in an amount of $32,395,839, net of transaction costs, and realized a net loss on investments of approximately $7,533,163 (including U.S. Treasury investments) as shown in following table:





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Portfolio InvestmentTransactionDateShares SoldAverage Net Share Price(1)Net ProceedsRealized Gain/(Loss)(4)Chegg, Inc.1/3/20181,897$16.78$31,831$9,018Chegg, Inc.1/4/20189,10316.79152,79943,327Chegg, Inc.1/5/201836,21216.78607,623172,139Chegg, Inc.1/8/201815,88816.86267,90576,837Chegg, Inc.1/9/201836,90016.78619,356175,598Chegg, Inc.2/13/2018200,00019.313,861,2711,457,883Chegg, Inc.(2)2/20/2018200,00019.533,905,5301,503,045​500,00018.899,446,3153,437,847NestGSV, Inc. (d/b/a GSV Labs, Inc.)(3)1/12/2018N/AN/A592,129(680)Avenues Global Holdings, LLC1/22/201810,014,2700.595,923,795(4,228,059)General Assembly Space, Inc.(5)6/12/2018259,76535.937,820,1913,331,890Lytro, Inc.(6)8/1/20183,537,5390.22791,596(9,711,762)SugarCRM, Inc.(7)8/30/20181,897,9331.392,645,183(4,332,777)DreamBox Learning, Inc.(8)9/5/201810,738,8310.485,176,6302,916,251Total$32,395,839$(8,587,290)


​


__________________


|    |                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------
|(1) | The average net share price is the net share price realized after deducting all commissions and fees on the sale(s), if applicable.​

|    |                                                                                       
|--- | --------------------------------------------------------------------------------------
|(2) | As of February 22, 2018, all remaining shares of Chegg, Inc. held by us had been sold.

|    |                                                                        
|--- | -----------------------------------------------------------------------
|(3) | Represents repayment of the 12% Unsecured Promissory Note Due 1/15/2018

|    |                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------
|(4) | Realized gain/(loss) does not include amounts held in escrow or any realized gain/(loss) incurred on the maturity of our U.S. Treasury investments.

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(5) | On April 16, 2018, Adecco Group, a Swiss staffing company, announced that it was acquiring technology education provider General Assembly Space, Inc. for $412.5 million, including debt financing. We have received approximately $7.8 million in net proceeds as a result of the transaction, with approximately $1.5 million of additional proceeds currently being held in escrow. We expect to receive the escrow in 2019.

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(6) | On March 27, 2018, Lytro, Inc. announced that it was preparing to wind down the company over an unspecified period of time. Google LLC acquired Lytro, Inc.’s intellectual property and certain other assets. As a result of the transaction, we have received $0.8 million in net proceeds and expects to receive approximately $0.4 million in additional proceeds currently held in escrow. We expect to receive the proceeds held in escrow in 2019.

|    |                                                                                                                                                                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(7) | On June 14, 2018, SugarCRM, Inc. entered into an agreement to be purchased by AKKR Candy Holdings, Inc. As a result of the transaction, we have received $2.6 million in net proceeds and expects to receive approximately $0.3 million in additional proceeds currently held in escrow. We expect to receive the proceeds held in escrow in 2019.

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(8) | On July 18, 2018, DreamBox Learning, Inc. entered into a definitive agreement to be acquired by a wholly owned subsidiary of DreamBox Learning Holding, LLC, an entity owned by The Rise Fund Deneb, LP. As a result of the transaction, we have received $5.2 million in proceeds and expects to receive approximately $0.3 million in additional proceeds currently held in escrow. We expect to receive the proceeds held in escrow in 2019.




During the nine months ended September 30, 2018 we did not write-off any investments.








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Results of Operations - Comparison of the three and nine months ended September 30, 2019  and 2018





Operating results for the three and nine months ended September 30, 2019 and 2018 are as follows:


Three Months Ended September 30,Nine Months Ended September 30,​2019201820192018Total Investment Income$380,226$246,352$1,095,428$1,087,760Interest income380,226246,352895,428737,760Dividend income——200,000350,000Net Operating Expenses$5,082,430$4,154,551$7,983,161$10,405,282Incentive fee waiver———(5,000,000)Management fee waiver—(402,074)—(892,421)Gross Operating Expenses$5,082,430$4,556,625$7,983,161$16,297,703Management fees—1,345,090848,7233,954,732Incentive fees/(Reversal of incentive fee accrual)—804,520(4,660,472)4,863,939Costs incurred under Administration Agreement—355,599306,0841,176,857Directors’ fees99,62086,250272,120258,750Professional fees807,143552,1794,179,0931,218,875Compensation expense3,070,409—3,702,517—Interest expense591,5121,311,5341,795,8853,925,292Income tax expense954(6,235)34,666142,264Other expenses512,792107,6881,504,545756,994Net Investment Loss$(4,702,204)$(3,908,199)$(6,887,733)$(9,317,522)Net realized gain/(loss) on investments1,772,961(10,119,771)11,297,501(7,533,163)Realized loss on partial repurchase of 5.25% Convertible Senior Notes due 2018———(397,846)Net change in unrealized appreciation of investments8,190,69514,142,37516,450,12632,148,365Benefit from taxes on unrealized depreciation of investments—214,404885,5661,225,275Net Increase in Net Assets Resulting from Operations$5,261,452$328,810$21,745,460$16,125,108


​





Investment Income





Investment income increased to $380,226 for the three months ended September 30, 2019 from $246,352 for the three months ended September 30, 2018 . The increase was due to increased interest income. The increase in interest income resulted from a higher cash balance during the three months ended September 30, 2019 , relative to the three months ended September 30, 2018 .





Investment income increased to $1,095,428 for the nine months ended September 30, 2019 from $1,087,760 for the nine months ended September 30, 2018 .The increase was due to increased interest income. The increase in interest income resulted from a higher cash balance during the nine months ended September 30, 2019 , relative to the nine months ended September 30, 2018 .





Operating Expenses





Total operating expenses, net of waiver of management and incentive fees, increased to $5,082,430 for the three months ended September 30, 2019 , from $4,154,551 for the three months ended September 30, 2018 . The increase was primarily due to compensation expense incurred in the three months ended September 30, 2019 , as compared to the three months ended September 30, 2018 . This increase was primarily offset by the removal of management fees net of waiver of management fees, incentive fee accrual and costs incurred under Administration Agreement due to the Internalization, and partially offset by a decrease in interest and credit facility expense for the three months ended September 30, 2019 due to the extinguishment of the Convertible Senior Notes due September 15, 2018 in the three months ended September 30, 2018 .





Total operating expenses, net of waiver of management and incentive fees, decreased to $7,983,161 for the nine months ended September 30, 2019 , from $10,405,282 for the nine months ended September 30, 2018 . The decrease was primarily due to the





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removal of management fees net of waiver of management fees, incentive fee accrual, and costs incurred under Administration Agreement in relation to Internalization and the termination of the Investment Advisory Agreement in the nine months ended September 30, 2019 , and partially due to a decrease in interest and credit facility expense due to the extinguishment of the Convertible Senior Notes due September 15, 2018, as compared to the nine months ended September 30, 2018 . The decrease was offset by compensation expense incurred in the nine months ended September 30, 2019 .





Net Investment Loss





For the three months ended September 30, 2019 , we recognized net investment loss of $4,702,204 , compared to net investment loss of $3,908,199 for the three months ended September 30, 2018 . The change between periods resulted from the increase in operating expenses, net of waiver of management fees, as discussed above, and an increase in total investment income between periods.





For the nine months ended September 30, 2019 , we recognized net investment loss of $6,887,733 , compared to net investment loss of $9,317,522 for the nine months ended September 30, 2018 . The change between periods resulted from the decrease in operating expenses, net of waiver of management and incentive fees, as discussed above, and an increase in total investment income between periods.





Net Realized Gain on Investments





For the three months ended September 30, 2019 , we recognized net realized gain on our investments of $1,772,961 , compared to net realized loss of $10,119,771 for the three months ended September 30, 2018 . The components of our net realized gains/losses on portfolio investments for the three months ended September 30, 2019 and 2018 , excluding U.S. Treasury investments, are reflected in the tables above, under “—Portfolio and Investment Activity.”





For the nine months ended September 30, 2019 , we recognized net realized gain on our investments of $11,297,501 , compared to net realized loss of $7,533,163 for the nine months ended September 30, 2018 . The components of our net realized gains/losses on portfolio investments for the nine months ended September 30, 2019 and 2018 , excluding U.S. Treasury investments, are reflected in the tables above, under “—Portfolio and Investment Activity.”





Net Change in Unrealized Appreciation/(Depreciation) of Investments





For the three months ended September 30, 2019 , we had a net change in unrealized depreciation of $8,190,695 . For the three months ended September 30, 2018 , we had a net change in unrealized appreciation of $ 14,142,375 . The following tables summarize, by portfolio company, the significant changes in unrealized appreciation and/or depreciation of our investment portfolio for the three months ended September 30, 2019 and 2018 .


Portfolio CompanyNet Change in Unrealized Appreciation/(Depreciation) For the Three Months Ended September 30, 2019Portfolio CompanyNet Change in Unrealized Appreciation/(Depreciation) For the Three Months Ended September 30, 2018Ozy Media, Inc.$15,923,894Lytro, Inc.(1)$9,528,386Coursera, Inc.4,134,653SugarCRM, Inc.(1)3,899,110Aspiration Partners, Inc.1,781,970Spotify Technology S.A.2,963,182Enjoy, Inc.(1,179,097)Coursera, Inc.2,280,277A Place for Rover Inc. (f/k/a DogVacay, Inc.)(1,395,434)Enjoy, Inc.1,617,887Course Hero, Inc.(2,795,495)Lyft, Inc.1,192,014Dropbox, Inc.(1)(3,497,620)Course Hero, Inc.1,112,032Lyft, Inc.(6,579,582)Dropbox, Inc.(2,054,477)Ozy Media, Inc.(2,205,441)DreamBox Learning, Inc.(1)(3,424,488)Other(2)1,797,406Other(2)(766,107)Total$8,190,695Total$14,142,375


​​_______________________


|    |                                                                                                                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The change in unrealized appreciation/(depreciation) reflected for these investments resulted from the full or partial sale of the relevant investment, which resulted in the reversal of previously accrued unrealized appreciation/(depreciation), as applicable.




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|    |                                                                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | “Other” represents investments (including U.S. Treasury bills) for which individual change in unrealized appreciation/(depreciation) was less than $1.0 million for thethree months ended September 30, 2019and 2018.




For the nine months ended September 30, 2019 , we had a net change in unrealized appreciation of $16,450,126 . For the nine months ended September 30, 2018 , we had a net change in unrealized appreciation of $32,148,365 . The following tables summarize, by portfolio company, the significant changes in unrealized appreciation and/or depreciation of our investment portfolio for the nine months ended September 30, 2019 and 2018 .





Portfolio CompanyNet Change in Unrealized Appreciation/(Depreciation) For the Nine Months Ended September 30, 2019Portfolio CompanyNet Change in Unrealized Appreciation/(Depreciation) For the Nine Months Ended September 30, 2018Ozy Media, Inc.$13,401,030Spotify Technology S.A.$11,831,081Declara Inc.(1)12,334,151Lytro, Inc.(1)8,387,816Coursera, Inc.11,656,879NestGSV, Inc. (d.b.a. GSV Labs, Inc.)5,053,374Aspiration Partners, Inc.6,814,794Dropbox, Inc.5,600,285Parchment, Inc.3,098,469Lyft, Inc.4,571,494Knewton, Inc.(1)2,979,116Avenues Global Holdings, LLC(1)4,243,435Enjoy, Inc.2,445,855SugarCRM, Inc.(1)3,753,157SharesPost, Inc.1,896,703Course Hero, Inc.2,369,460Course Hero, Inc.1,867,480Coursera, Inc.2,280,277Nextdoor.com, Inc.1,026,754StormWind, LLC1,529,880CUX, Inc. (d/b/a CorpU)(1,918,228)A Place for Rover Inc. (f/k/a DogVacay, Inc.)1,091,195A Place for Rover Inc. (f/k/a DogVacay, Inc.)(2,433,599)Aspiration Partners, Inc.(1,360,049)Lyft, Inc.(3,161,096)Declara Inc.(1,715,261)Palantir Technologies, Inc.(3,683,785)Ozy Media, Inc.(2,065,822)NestGSV, Inc. (d.b.a. GSV Labs, Inc.)(3,749,441)Chegg, Inc.(1)(2,151,532)Dropbox, Inc.(1)(4,219,119)General Assembly Space, Inc.(1)(4,840,905)StormWind, LLC(6,015,388)Curious.com Inc.(5,514,077)Spotify Technology S.A.(1)(16,711,276)Other(2)820,827Other(2)(915,444)Total$16,450,126Total$32,148,364





|    |                                                                                                                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The change in unrealized appreciation/(depreciation) reflected for these investments resulted from the full or partial sale of the relevant investment, which resulted in the reversal of previously accrued unrealized appreciation/(depreciation), as applicable.

|    |                                                                                                                                                                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | “Other” represents investments (including U.S. Treasury bills) for which individual change in unrealized appreciation/(depreciation) was less than $1.0 million for thenine months ended September 30, 2019and 2018.







Recent Developments





Portfolio Activity





Please refer to “Note 12—Subsequent Events” to our condensed consolidated financial statements as of September 30, 2019 for details regarding activity in our investment portfolio from October 1, 2019 through November 7, 2019 .





We are frequently in negotiations with various private companies with respect to investments in such companies. Investments in private companies are generally subject to satisfaction of applicable closing conditions. In the case of secondary market transactions, such closing conditions may include approval of the issuer, waiver or failure to exercise rights of first refusal by the issuer and/or its stockholders and termination rights by the seller or us. Equity investments made through the secondary market may involve making deposits in escrow accounts until the applicable closing conditions are satisfied, at which time the escrow accounts will close and such equity investments will be effectuated.








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Dividends





On November 5, 2019, the Company’s Board of Directors declared a dividend of $0.20 per share payable on December 12, 2019 to stockholders of record as of the close of business on December 2, 2019. The dividend will be paid in cash.





Modified Dutch Auction Tender Offer





On October 21, 2019, the Company commenced a modified “Dutch Auction” tender offer (the “Modified Dutch Auction Tender Offer”) to purchase for cash up to $10.0 million in shares of its common stock from its stockholders.  In accordance with the terms of the Modified Dutch Auction Tender Offer, the Company intends to select the lowest price per share, not less than $6.00 per share and not greater than $8.00 per share, less any applicable withholding taxes and without interest, that will allow the Company to purchase that number of shares having an aggregate purchase price of $10.0 million. Upon the terms and subject to the conditions of the Modified Dutch Auction Tender Offer, if shares having an aggregate purchase price of less than $10.0 million are properly tendered and not properly withdrawn, the Company will purchase all shares properly tendered and not properly withdrawn. The Company expects to use available cash to fund any purchases of its shares of common stock in the Modified Dutch Auction Tender Offer and to pay for all related fees and expenses. The Modified Dutch Auction Tender Offer will expire at 5:00 P.M. ET, on November 20, 2019, unless extended by the Company.





Share Repurchase Program





From October 1, 2019 through November 7, 2019 , we repurchased an additional 28,000 shares under the Share Repurchase Program for an aggregate purchase price of $168,655 .








Liquidity and Capital Resources





Our liquidity and capital resources are generated primarily from the sales of our investments and advances from our $12.0 million Credit Facility. In addition, on March 28, 2018, we issued $40.0 million aggregate principal amount of 4.75% Convertible Senior Notes due 2023 , as discussed further below and in “Note 10—Debt Capital Activities” to our condensed consolidated financial statements as of September 30, 2019 .





Our primary uses of cash are to make investments, pay our operating expenses, and make distributions to our stockholders. For the nine months ended September 30, 2019 , our operating expenses were $7,983,161 . For the nine months ended September 30, 2018 , our operating expenses, net of any fee waivers, were $10,405,282 .


Cash Reserves and Liquid SecuritiesSeptember 30, 2019December 31, 2018Cash$45,155,784$28,184,163Borrowing availability under the Credit Facility(1)—12,000,000Securities of publicly traded portfolio companies:Unrestricted securities(2)12,449,21644,589,406Total securities of publicly traded portfolio companies12,449,21644,589,406Total Cash Reserves and Liquid Securities$57,605,000$84,773,569


​


_______________________


|    |                                                                                                                                                                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Subject to leverage and borrowing base restrictions and other requirements under the Credit Facility as ofSeptember 30, 2019andDecember 31, 2018. The Credit Facility matured on May 31, 2019. Refer to “Note 10—Debt Capital Activities” to our condensed consolidated financial statements as ofSeptember 30, 2019for details.

|    |                                                                                                                                                                                                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | “Unrestricted securities” represents common stock of our publicly traded companies that are not subject to any restrictions upon sale. We may incur losses if we liquidate these positions to pay operating expenses or fund new investments.  As ofSeptember 30, 2019, this balance represents our shares of common stock in Lyft, Inc.




During the nine months ended September 30, 2019 , cash increased to $45,155,784 from $28,184,163 at the beginning of the year. The increase in cash was primarily due to proceeds from the sale of our Spotify Technology S.A. and Dropbox, Inc. shares, offset by our investments in Neutron Holdings, Inc. (d/b/a Lime), Aspiration Partners, Inc.,  GreenAcreage Real Estate Corp., and  Treehouse Real Estate Investment Trust, Inc., interest payments related to our 4.75% Convertible Senior Notes due 2023, and cash used for share repurchase.








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Contractual Obligations


​Payments Due By Period (dollars in millions)​TotalLess than1 year1–3 years3–5 yearsMore than5 yearsPayable for securities purchased(1)$44.7$44.7$—$—$—Credit Facility payable(2)(3)—————Convertible Senior Notes(4)40.0——40.0—Operating lease liability$0.9$0.2$0.4$0.3$0.0Total$85.6$44.9$0.4$40.3$—


​


_______________________


|    |                                                                                                                                                                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | “Payable for securities purchased” relates to the purchase of the U.S. Treasury bill on margin. This balance was subsequently repaid on October 3, 2019, when the $50.0 million United States Treasury bill matured and the $5.25 million margin deposit that we posted as collateral was returned.

|    |                                             
|--- | --------------------------------------------
|(2) | The Credit Facility matured on May 31, 2019.

|    |                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------
|(3) | The weighted-average interest rate incurred under the Credit Facility was 0.00% for the three andnine months ended September 30, 2019.

|    |                                                                                                                                                                                                                                                                                                                           
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(4) | The balance shown for the "Convertible Senior Notes" reflects the principal balance payable to investors for the4.75% Convertible Senior Notes due 2023as ofSeptember 30, 2019. Refer to “Note 10—Debt Capital Activities” to our condensed consolidated financial statements as ofSeptember 30, 2019for more information.




Share Repurchase Program





During the nine months ended September 30, 2019 , we repurchased 721,128 shares of our common stock pursuant to the Share Repurchase Program. As of September 30, 2019 , the dollar value of shares that remained available to be purchased under the Share Repurchase Program was approximately $5.2 million .





Under the Share Repurchase Program, we may repurchase our outstanding common stock in the open market provided that we comply with the prohibitions under our insider trading policies and procedures and the applicable provisions of the 1940 Act and the Securities Exchange Act of 1934, as amended.





For more information on the Share Repurchase Program, see "Part II. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds".





Off-Balance Sheet Arrangements





As of September 30, 2019 , we had no off-balance sheet arrangements, including any risk management of commodity pricing or other hedging practices. However, we may employ hedging and other risk management techniques in the future.





Credit Facility





Pursuant to the Loan Agreement, Western Alliance Bank had agreed to provide us with the $12.0 million Credit Facility, which, among other things, matured on May 31, 2019 and bore interest at a per annum rate equal to the prime rate plus 3.50% . In addition, the Loan Agreement required payment of a fee for unused amounts during the revolving period. Refer to “Note 10—Debt Capital Activities” to our condensed consolidated financial statements as of September 30, 2019 for more information.





Equity Issuances & Debt Capital Activities





We made no sales of our equity securities during the nine months ended September 30, 2019 or the year ended December 31, 2018 .





5.25% Convertible Senior Notes due 2018 - Tender Offer, Repurchase, and Repayment





On December 15, 2017, we announced the commencement of a cash tender offer (the "Tender Offer") to purchase any and all of the $69.0 million aggregate principal amount of outstanding 5.25% Convertible Senior Notes due 2018 .  As of the expiration of the Tender Offer on January 17, 2018, approximately $4.8 million aggregate principal amount of the 5.25% Convertible Senior Notes due 2018 representing approximately 7.0% of the outstanding 5.25% Convertible Senior Notes due 2018 , were validly





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tendered and not validly withdrawn pursuant to the Tender Offer.  On March 27, 2018, we repurchased an additional $14.2 million aggregate principal amount of the outstanding 5.25% Convertible Senior Notes due 2018 .





The 5.25% Convertible Senior Notes due 2018 matured on September 15, 2018 (the “Maturity Date”). Pursuant to the terms of the 5.25% Convertible Senior Notes due 2018 and the indenture related thereto, we repaid the remaining outstanding aggregate principal amount of the 5.25% Convertible Senior Notes due 2018, including accrued but unpaid interest, on the Maturity Date and the 5.25% Convertible Senior Notes were no longer outstanding as of such date. Refer to “Note 10—Debt Capital Activities” to our condensed consolidated financial statements as of September 30, 2019 for more information regarding the 5.25% Convertible Senior Notes due 2018 .





4.75% Convertible Senior Notes due 2023





On March 28, 2018, we issued $40.0 million aggregate principal amount of 4.75% Convertible Senior Notes due 2023 , which bear interest at a fixed rate of 4.75% per year, payable semi-annually in arrears on March 31 and September 30 of each year, commencing on September 30, 2018. We received $38.7 million in proceeds from the offering, net of underwriting discounts and commissions and other offering expenses. The 4.75% Convertible Senior Notes due 2023 mature on March 28, 2023, unless previously repurchased or converted in accordance with their terms. We do not have the right to redeem the 4.75% Convertible Senior Notes due 2023 prior to March 27, 2021.





In connection with the issuance of the 4.75% Convertible Senior Notes due 2023 , we are required under the terms of the Credit Facility to deposit the proceeds from the 4.75% Convertible Senior Notes due 2023 offering into an account at Western Alliance Bank and are required to maintain at least $65.0 million (or such lesser amount to the extent such funds are used to repay or repurchase a portion of the outstanding 5.25% Convertible Senior Notes due 2018 prior to their maturity and repayment in full) in an account at Western Alliance Bank until such time as the 5.25% Convertible Senior Notes due 2018 are repaid in full. Refer to “Note 10—Debt Capital Activities” to our condensed consolidated financial statements as of September 30, 2019 for more information regarding the 4.75% Convertible Senior Notes due 2023 .





Distributions





The timing and amount of our distributions, if any, will be determined by our Board of Directors and will be declared out of assets legally available for distribution. Subsequent to September 30, 2019, on November 5, 2019, our Board of Directors declared a dividend of $0.20 per share payable on December 12, 2019 to stockholders of record as of the close of business on December 2, 2019. Refer to “— Recent Developments” for more information.





The following table lists the distributions, including dividends and returns of capital, if any, per share that we have declared since our formation through September 30, 2019 . The table is divided by fiscal year according to record date:


Date DeclaredRecord DatePayment DateAmount per ShareFiscal Year 2015:November 4, 2015(1)November 16, 2015December 31, 2015$2.76Fiscal Year 2016:August 3, 2016(2)August 16, 2016August 24, 20160.04Total$2.80


___________________________


|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The distribution was paid in cash or shares of our common stock at the election of stockholders, although the total amount of cash distributed to all stockholders was limited to approximately 50% of the total distribution to be paid to all stockholders. As a result of stockholder elections, the distribution consisted of approximately 2,860,903 shares of common stock issued in lieu of cash, or approximately 14.8% of our outstanding shares prior to the distribution, as well as cash of $26,358,885. The number of shares of common stock comprising the stock portion was calculated based on a price of $9.425 per share, which equaled the average of the volume weighted-average trading price per share of our common stock on December 28, 29 and 30, 2015. None of the $2.76 per share distribution represented a return of capital.

|    |                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Of the total distribution of $887,240 on August 24, 2016, $820,753 represented a distribution from realized gains and $66,487 represented a return of capital.




We intend to focus on making capital gains-based investments from which we will derive primarily capital gains. As a consequence, we do not anticipate that we will pay distributions on a quarterly basis or become a predictable distributor of distributions, and we expect that our distributions, if any, will be much less consistent than the distributions of other BDCs that primarily make debt investments. If there are earnings or realized capital gains to be distributed, we intend to declare and pay a





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distribution at least annually. The amount of realized capital gains available for distribution to stockholders will be impacted by our treatment as a RIC.





Our current intention is to make any future distributions out of assets legally available in the form of additional shares of our common stock under our dividend reinvestment plan, unless a stockholder elects to receive dividends and/or long-term capital gains distributions in cash. Under the dividend reinvestment plan, if a stockholder owns shares of common stock registered in its own name, the stockholder will have all cash distributions (net of any withholding) automatically reinvested in additional shares of common stock unless the stockholder opts out of our dividend reinvestment plan by delivering a written notice to our dividend paying agent prior to the record date of the next dividend or distribution. Any distributions reinvested under the plan will nevertheless remain taxable to the U.S. stockholder, although no cash distribution has been made. As a result, if a stockholder does not elect to opt out of the dividend reinvestment plan, it will be required to pay applicable federal, state and local taxes on any reinvested dividends even though such stockholder will not receive a corresponding cash distribution. Stockholders who hold shares in the name of a broker or financial intermediary should contact the broker or financial intermediary regarding any election to receive distributions in cash.





We elected to be treated as a RIC under Subchapter M of the Code beginning with our taxable year ended December 31, 2014 and continue to qualify to be treated as a RIC. So long as we qualify and maintain our tax treatment as a RIC, we generally will not pay corporate-level U.S. federal and state income taxes on any ordinary income or capital gains that we distribute at least annually to our stockholders as dividends. Rather, any tax liability related to income earned by the RIC will represent obligations of our investors and will not be reflected in our condensed consolidated financial statements. In order to qualify as a RIC and to avoid corporate-level income tax on the income we distribute to our stockholders, we are required, under Subchapter M of the Code, to distribute at least 90% of our ordinary income and short-term capital gains to our stockholders on an annual basis. See “Note 2—Significant Accounting Policies— U.S. Federal and State Income Taxes ” and “Note 9—Income Taxes” to our condensed consolidated financial statements as of September 30, 2019 for more information.








Critical Accounting Policies





Critical accounting policies and practices are the policies that are both most important to the portrayal of our financial condition and results, and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. These include estimates of the fair value of our Level 3 investments and other estimates that affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements and the reported amounts of certain revenues and expenses during the reporting period. It is likely that changes in these estimates will occur in the near term. Our estimates are inherently subjective in nature and actual results could differ materially from such estimates. See “Note 2—Significant Accounting Policies” to our condensed consolidated financial statements as of September 30, 2019 for further detail regarding our critical accounting policies and recently issued or adopted accounting pronouncements.








Related-Party Transactions





See “Note 3—Related-Party Arrangements” to our condensed consolidated financial statements as of September 30, 2019 for more information.





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Item 3. Quantitative and Qualitative Disclosures about Market Risk





Market Risk





Our equity investments are primarily in growth companies that in many cases have short operating histories and are generally illiquid. In addition to the risk that these companies may fail to achieve their objectives, the price we may receive for these companies in private transactions may be significantly impacted by periods of disruption and instability in the capital markets. While these periods of disruption generally have little actual impact on the operating results of our equity investments, these events may significantly impact the prices that market participants will pay for our equity investments in private transactions. This may have a significant impact on the valuation of our equity investments.





Interest Rate Risk





We are subject to financial market risks, which could include, to the extent we utilize leverage with variable rate structures, changes in interest rates. As we invest primarily in equity rather than debt instruments, we would not expect fluctuations in interest rates to directly impact the return on our portfolio investments, although any significant change in market interest rates could potentially have an adverse effect on the business, financial condition and results of operations of the portfolio companies in which we invest.





As of September 30, 2019 , all of our debt investments and outstanding borrowings bore fixed rates of interest. The Credit Facility, however, is indexed to the prime rate. We do not expect a significant impact on our net investment income or loss due to changes in the prime rate; however, the table below indicates the impact on our net investment income or loss should the prime rate change. Based on our September 30, 2019 Condensed Consolidated Statement of Assets and Liabilities, the following table shows the various, incremental impact of changes in interest rates on our net income or loss related to the Credit Facility for the nine months ended September 30, 2019 , assuming no changes in our investment income and borrowing structure. Although we believe that this measure is indicative of our sensitivity to the below-referenced interest rate changes, it does not reflect potential changes in credit quality, size and composition of the assets on our statement of assets and liabilities and other BDCs that could affect net increase or decrease in net assets resulting from operations, or net income or loss.





Basis Point Change(1)InterestIncomeInterestExpenseNetIncome/(Loss)Up 300 Basis points$—$270,000$(270,000)Up 200 Basis points$—$180,000$(180,000)Up 100 Basis points$—$90,000$(90,000)Down 100 Basis points$—$(90,000)$90,000Down 200 Basis points$—$(180,000)$180,000Down 300 Basis points$—$(270,000)$270,000


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|    |                                                                                                                                                                                                                                                                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Assumes we have borrowed $12.0 million under the Credit Facility for thenine months ended September 30, 2019. Our actual borrowings under the Credit Facility will vary based on our needs throughout the year. For thenine months ended September 30, 2019, our actual average borrowings under the Credit Facility were$0. The Credit Facility matured on May 31, 2019.




Although we believe that this measure is indicative of our sensitivity to the above-referenced interest rate changes, it does not reflect potential changes in credit quality, size and composition of the assets on our statement of assets and liabilities and other BDC’s that could affect net increase or decrease in net assets resulting from operations, or net income or loss.








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Item 4. Controls and Procedures





Evaluation of Disclosure Controls and Procedures





As of September 30, 2019 , our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective and provided reasonable assurance that information required to be disclosed in our periodic SEC filings is recorded, processed, summarized and reported within the time periods specified by the SEC and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. However, in evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of such possible controls and procedures.





Changes in Internal Control Over Financial Reporting





There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended September 30, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.








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PART II





OTHER INFORMATION








|        |                   
|------- | ------------------
|Item 1. | Legal Proceedings​




Although we and our subsidiaries may, from time to time, be involved in litigation arising out of our and our subsidiaries’ operations in the normal course of business or otherwise, neither we nor any of our subsidiaries are currently a party to any pending material legal proceedings.








|         |             
|-------- | ------------
|Item 1A. | Risk Factors




Investing in our securities involves a number of significant risks. In addition to the other information contained in this report, you should carefully consider the factors discussed in our annual report on Form 10-K for the fiscal year ended December 31, 2018 , filed with the SEC on April 18, 2019, which could materially affect our business, financial condition and/or operating results. Although the risks described below and in our annual report on Form 10-K for the fiscal year ended December 31, 2018 represent the principal risks associated with an investment in us, they are not the only risks we face. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, might materially and adversely affect our business, financial condition and/or operating results. Other than as described below, during the nine months ended September 30, 2019 , there have been no material changes to the risk factors discussed in "Item 1A. Risk Factors" of Part I of our annual report on Form 10-K for the fiscal year ended December 31, 2018 .





We have internalized our operating structure, including our management and investment functions; as a result, we may incur significant costs and face significant risks associated with being self-managed, including adverse effects on our business and financial condition.





On March 12, 2019, our Board of Directors approved internalizing our operating structure, including our management and investment functions. There can be no assurances that internalizing our operating structure will be beneficial to us and our stockholders, as we may incur the costs and risks discussed below and may not be able to effectively replicate the services previously provided to us by our former investment adviser, GSV Asset Management, and our former administrator, GSV Capital Service Company.





While we will no longer bear the costs of the various fees and expenses we previously paid to GSV Asset Management under the Investment Advisory Agreement, our direct expenses will generally include general and administrative costs, including legal, accounting, and other expenses related to corporate governance, SEC reporting and compliance, as well as costs and expenses related to making and managing our investments. We will also now incur the compensation and benefits costs of our officers and other employees and consultants, and we may issue equity awards to our officers, employees and consultants, which awards may decrease net income and funds from our operations and may dilute our stockholders. We may also be subject to potential liabilities commonly faced by employers, such as workers disability and compensation claims, potential labor disputes and other employee-related liabilities and grievances.





In addition, if the expenses we assume as a result of our internalization are higher than the expenses we would have paid to GSV Asset Management and/or reimbursed to GSV Capital Service Company, our earnings per share may be lower as a result of our internalization than they otherwise would have been, potentially decreasing the amount of funds available to distribute to our stockholders and the value of our shares.





Further, in connection with internalizing our operating structure, we may experience difficulty integrating these functions as a stand-alone entity, and we could have difficulty retaining our personnel, including those performing management, investment and general and administrative functions. These personnel have a great deal of know-how and experience. We may also fail to properly identify the appropriate mix of personnel and capital needs to operate successfully as a stand-alone entity. An inability to effectively manage our internalization could result in our incurring excess costs and operating inefficiencies, and may divert our management’s attention from managing our investments.





Internalization transactions have also, in some cases, been the subject of litigation. Even if these claims are without merit, we could be forced to spend significant amounts of time and money defending claims, which would reduce the amount of funds available for us to make investments and to pay distributions, and may divert our management’s attention from managing our investments.








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All of these factors could have a material adverse effect on our results of operations, financial condition, and ability to pay distributions.








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|        |                                                            
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|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds




Sales of Unregistered Equity Securities





We did not sell any equity securities during the period covered in this report that were not registered under the Securities Act of 1933, as amended.





Issuer Purchases of Equity Securities (1)





Information relating to the Company’s purchases of its common stock during the nine months ended September 30, 2019 is as follows:





PeriodTotalNumber ofSharesPurchased(2)AveragePrice PaidPer ShareTotal Numberof SharesPurchased asPart of PubliclyAnnouncedPlans or ProgramsApproximateDollar Value ofShares that MayYet Be PurchasedUnder the ShareRepurchaseProgramJanuary 1 through January 31, 2019—$——$4,789,673February 1 through February 28, 2019———4,789,673March 1 through March 31, 2019———4,789,673April 1 through April 30, 2019———4,789,673May 1 through May 31, 201990,6966.3890,6964,211,341June 1 through June 30, 201960,1056.4125,1054,052,555July 1 through July 31, 2019———4,052,555August 1 through August 31, 2019223,2916.37223,2917,629,372September 1 through September 30, 2019(3)382,0366.45382,0365,165,963Total756,128721,128





During the nine months ended September 30, 2019 , we repurchased 721,128 shares of our common stock pursuant to the Share Repurchase Program.


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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | On August 8, 2017, we announced the $5.0 million discretionary open-market Share Repurchase Program under which our Board of Directors authorized the repurchase of shares of our common stock in the open market until the earlier of (i) August 6, 2018 or (ii) the repurchase of $5.0 million in aggregate amount of our common stock. On November 7, 2017, our Board of Directors authorized an extension of, and an increase in the amount of shares of our common stock that may be repurchased under, the discretionary Share Repurchase Program until the earlier of (i) November 6, 2018 or (ii) the repurchase of $10.0 million in aggregate amount of our common stock. On May 3, 2018, the Company’s Board of Directors authorized an additional $5.0 million increase in the amount of shares of our common stock that may be repurchased under the discretionary Share Repurchase Program until the earlier of (i) November 6, 2018 or (ii) the repurchase of $15.0 million in aggregate amount of our common stock. On November 1, 2018, the Company’s Board of Directors authorized a $5.0 million increase in the amount of shares of the Company’s common stock that may be repurchased under the discretionary Share Repurchase Program until the earlier of (i) October 31, 2019 or (ii) the repurchase of $20.0 million in aggregate amount of the Company’s common stock. On August 5, 2019, our Board of Directors authorized a $5.0 million increase in the amount of shares of our common stock that may be repurchased under the discretionary Share Repurchase Program until the earlier of (i) August 4, 2020 or (ii) the repurchase of $25.0 million in aggregate amount of our common stock. The timing and number of shares to be repurchased will depend on a number of factors, including market conditions and alternative investment opportunities. The Share Repurchase Program may be suspended, terminated or modified at any time for any reason and does not obligate us to acquire any specific number of shares of our common stock. During thethree and nine months ended September 30, 2019, the Company repurchased605,327and721,128, respectively, of shares of the Company’s common stock pursuant to the Share Repurchase Program. As ofSeptember 30, 2019, the dollar value of shares that remained available to be purchased by the Company under the Share Repurchase Program was approximately$5.2million.

|    |                                                                                                                                                                            
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Includes purchases of our common stock made on the open market by or on behalf of any “affiliated purchaser,” as defined in Exchange Act Rule 10b-18(a)(3), of the Company.

|    |                                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | Subsequent to quarter-end, throughNovember 7, 2019, the Company repurchased an additional28,000shares under the Share Repurchase Program for an aggregate purchase price of$168,655.










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|        |                                  
|------- | ---------------------------------
|Item 3. | ​​Defaults Upon Senior Securities




None.








|        |                        
|------- | -----------------------
|Item 4. | Mine Safety Disclosures




Not applicable.








|        |                  
|------- | -----------------
|Item 5. | Other Information




Not applicable.








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|        |         
|------- | --------
|Item 6. | Exhibits

​


The following exhibits are filed as part of this report or hereby incorporated by reference to exhibits previously filed with the SEC:


3.1Articles of Amendment and Restatement(1)3.2Articles of Amendment(2)3.3Articles of Amendment(3)3.4Bylaws(1)3.5Amended and Restated Bylaws(3)10.1Sutter Rock Capital Corp. 2019 Equity Incentive Plan(4)10.2Form of Sutter Rock Capital Corp. Non-Qualified Stock Option Award(4)31.1Certification of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended*31.2Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended*32.1Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*32.2Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*


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|    |                                                                                                                                                                                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Previously filed in connection with Pre-Effective Amendment No. 2 to the Registrant’s Registration Statement on Form N-2 (File No. 333-171578) filed on March 30, 2011, and incorporated by reference herein.

​


|    |                                                                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Previously filed in connection with the Registrant’s Current Report on Form 8-K (File No. 814-00852) filed on June 1, 2011, and incorporated by reference herein.




|    |                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | Previously filed in connection with the Registrant’s Current Report on Form 8-K (File No. 814-00852) filed on August 1, 2019, and incorporated by reference herein.




|    |                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(4) | Previously filed in connection with the Registrant's Registration Statement on Form S-8 (File No. 333-233755) filed on September 13, 2019, and incorporated by reference herein.

​


|  |                
|- | ---------------
|* | Filed herewith.







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SIGNATURES





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





SUTTER ROCK CAPITAL CORP.Date:November 7, 2019By:/s/ Mark D. KleinMark D. KleinPresident and Chief Executive Officer(Principal Executive Officer)Date:November 7, 2019By:/s/ Allison GreenAllison GreenChief Financial Officer, Treasurer, and Corporate Secretary(Principal Financial and Accounting Officer)





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