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EX-32.2 - EXHIBIT 32.2 - SURO CAPITAL CORP.v466533_exh32x2.htm
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EX-31.2 - EXHIBIT 31.2 - SURO CAPITAL CORP.v466533_exh31x2.htm
EX-31.1 - EXHIBIT 31.1 - SURO CAPITAL CORP.v466533_exh31x1.htm

  

  

 

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 March 31, 2017

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

COMMISSION FILE NUMBER: 814-00852



 

GSV Capital Corp.

(Exact name of registrant as specified in its charter)



 

 
Maryland   27-4443543
(State of incorporation)   (I.R.S. Employer Identification No.)

 
2925 Woodside Road
Woodside, CA
  94062
(Address of principal executive offices)   (Zip Code)

(650) 235-4769

(Registrant’s telephone number, including area code)



 

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 period that 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 o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).Yes o No o

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 filer o   Accelerated filer x
Non-accelerated filer o (Do not check if a smaller reporting company)   Smaller reporting company o
Emerging growth company o     

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 o No x

The issuer had 22,181,003 shares of common stock, $0.01 par value per share, outstanding as of May 10, 2017.

 

 


 
 

TABLE OF CONTENTS

GSV CAPITAL CORP.
 
TABLE OF CONTENTS

 
  PAGE

PART I.

FINANCIAL INFORMATION

        

Item 1.

Condensed Consolidated Financial Statements

    1  
Condensed Consolidated Statements of Assets and Liabilities as of March 31, 2017 (Unaudited) and December 31, 2016     1  
Condensed Consolidated Statements of Operations for the three months ended March 31, 2017 and 2016 (Unaudited)     2  
Condensed Consolidated Statements of Changes in Net Assets for the three months ended March 31, 2017 and 2016 (Unaudited)     3  
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2017 and 2016 (Unaudited)     4  
Condensed Consolidated Schedule of Investments as of March 31, 2017 (Unaudited)     5  
Condensed Consolidated Schedule of Investments as of December 31, 2016     10  
Notes to Condensed Consolidated Financial Statements as of March 31, 2017 (Unaudited)     16  
Note 1 — Nature of Operations and Significant Accounting Policies     16  
Note 2 — Related-Party Arrangements     23  
Note 3 — Investments at Fair Value     27  
Note 4 — Equity Offerings and Related Expenses     32  
Note 5 — Net Increase/(Decrease) in Net Assets Resulting from Operations per Common Share – Basic and Diluted     33  
Note 6 — Commitments and Contingencies     33  
Note 7 — Financial Highlights     34  
Note 8 — Income Taxes     35  
Note 9 — Long-Term Liabilities     36  
Note 10 — Subsequent Events     37  
Note 11 — Supplemental Financial Data     38  

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of   Operations

    39  
Forward-Looking Statements     39  
Overview     40  
Investments — (Portfolio Activity)     41  
Results of Operations     42  
Liquidity and Capital Resources     44  
Equity Issuances and Debt Capital Activities     44  
Contractual Obligations     45  
Off-Balance Sheet Arrangements     45  
Distributions     45  
Borrowings     46  
Critical Accounting Policies     46  
Recent Developments     47  

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

    47  

Item 4.

Controls and Procedures

    47  

i


 
 

ii


 
 

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

GSV CAPITAL CORP. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

   
  March 31,
2017
  December 31,
2016
     (Unaudited)     
ASSETS
                 
Investments at fair value:
                 
Investments in controlled securities (cost of $22,941,049 and $22,893,441, respectively)(1)   $ 20,777,821     $ 19,037,566  
Investments in affiliated securities (cost of $49,873,338 and $51,773,388, respectively)(1)     41,971,308       42,444,690  
Investments in non-controlled/non-affiliated securities (cost of $181,314,443 and $204,101,445, respectively)     207,905,578       200,532,890  
Investments in treasury bill (cost of $59,996,000 and $29,998,750, respectively)     59,997,000       29,998,490  
Total Investments (cost of $314,124,830 and $308,767,024,
respectively)
    330,651,707       292,013,636  
Cash     1,358,545       8,332,634  
Interest and dividends receivable     205,680       92,946  
Prepaid expenses and other assets     157,667       213,942  
Deferred financing costs     329,625       311,268  
Total Assets     332,703,224       300,964,426  
LIABILITIES
                 
Due to:
                 
GSV Asset Management(1)     59,864       422,025  
Accounts payable and accrued expenses     241,526       335,611  
Accrued incentive fees(1)     3,843,752       2,126,444  
Accrued management fees(1)     424,206       524,054  
Accrued interest payable     150,936       1,056,563  
Payable for securities purchased     53,996,000       26,498,750  
Deferred tax liability     10,359,371       10,359,371  
Convertible Senior Notes payable 5.25% due September 15, 2018(2)     67,715,873       67,512,798  
Total Liabilities     136,791,528       108,835,616  
Commitments and contingencies (Notes 6 and 9)
                 
Net Assets   $ 195,911,696     $ 192,128,810  
NET ASSETS
                 
Common stock, par value $0.01 per share (100,000,000 authorized; 22,181,003 and 22,181,003 issued and outstanding, respectively)   $ 221,810     $ 221,810  
Paid-in capital in excess of par     221,237,636       221,237,636  
Accumulated net investment loss     (6,252,208 )      (1,443,996 ) 
Accumulated net realized losses on investments     (25,463,049 )      (773,882 ) 
Accumulated net unrealized appreciation/(depreciation) of investments     6,167,507       (27,112,758 ) 
Net Assets   $ 195,911,696     $ 192,128,810  
Net Asset Value Per Share   $ 8.83     $ 8.66  

(1) This balance is a related-party transaction. Refer to “Note 2 — Related-Party Arrangements” for more detail.
(2) The Convertible Senior Notes have a face value of $69,000,000. Refer to “Note 9 — Long-Term Liabilities” for a reconciliation of the carrying value to the face value.

 
 
See accompanying notes to condensed consolidated financial statements.

1


 
 

TABLE OF CONTENTS

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

   
  Three months
ended
March 31,
2017
  Three months
ended
March 31,
2016
INVESTMENT INCOME
                 
Interest income from controlled securities(1)   $ 59,409     $ 4,889  
Interest income from affiliated securities(1)     95,677       92,478  
Interest income from non-controlled/non-affiliated securities     8,373       5,285  
Dividend income from controlled securities(1)     175,000        
Total Investment Income     338,459       102,652  
OPERATING EXPENSES
                 
Management fees(1)     1,272,618       1,958,000  
Incentive fees/(Reversal of Incentive fees)(1)     1,717,308       (5,118,584 ) 
Costs incurred under Administration Agreement(1)     531,484       599,950  
Directors’ fees     82,917       86,250  
Professional fees     262,190       637,128  
Interest expense     1,126,773       1,183,163  
Income tax expense     800        
Other expenses     152,581       209,738  
Total Operating Expenses     5,146,671       (444,355 ) 
Net Investment Income/(Loss)     (4,808,212 )      547,007  
Net Realized Losses:
                 
From affiliated securities     (1,903,414 )       
From non-controlled/non-affiliated securities     (22,785,753 )      (6,075,070 ) 
Net Realized Losses on Investments     (24,689,167 )      (6,075,070 ) 
Net Change in Unrealized Appreciation/(Depreciation) of Investments:
                 
From controlled securities     1,692,647       (266,728 ) 
From affiliated securities     1,426,668       (1,148,187 ) 
From non-controlled/non-affiliated securities     30,160,950       (18,006,086 ) 
Net Change in Unrealized Appreciation/(Depreciation) of
Investments
    33,280,265       (19,421,001 ) 
Net Increase/(Decrease) in Net Assets Resulting from Operations   $ 3,782,886     $ (24,949,064 ) 
Net Increase/(Decrease) in Net Assets Resulting from Operations per Common Share
                 
Basic   $ 0.17     $ (1.12 ) 
Diluted(2)   $ 0.17     $ (1.12 ) 
Weighted-Average Common Shares Outstanding
                 
Basic     22,181,003       22,181,003  
Diluted(2)     22,181,003       22,181,003  

(1) This balance is a related-party transaction. Refer to “Note 2 — Related-Party Arrangements” for more detail.
(2) For the three months ended March 31, 2017 and 2016, 5,751,815 and 5,710,212 potentially dilutive common shares, respectively, were excluded from the weighted-average common shares outstanding for diluted net increase/(decrease) in net assets resulting from operations per common share because the effect of these shares would have been anti-dilutive. Refer to “Note 5 — Net Increase/(Decrease) in Net Assets Resulting from Operations per Common Share — Basic and Diluted” for further detail.

 
 
See accompanying notes to condensed consolidated financial statements.

2


 
 

TABLE OF CONTENTS

GSV CAPITAL CORP. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
(UNAUDITED)

   
  Three months
ended
March 31,
2017
  Three months
ended
March 31,
2016
Net Increase/(Decrease) in Net Assets Resulting from Operations
                 
Net investment income/(loss)   $ (4,808,212 )    $ 547,007  
Net realized losses on investments     (24,689,167 )      (6,075,070 ) 
Net change in unrealized Appreciation/(Depreciation) of investments     33,280,265       (19,421,001 ) 
Net Increase/(Decrease) in Net Assets Resulting from Operations     3,782,886       (24,949,064 ) 
Total Increase/(Decrease) in Net Assets     3,782,886       (24,949,064 ) 
Net assets at beginning of period     192,128,810       268,010,945  
Net Assets at End of Period   $ 195,911,696     $ 243,061,881  
Capital Share Activity
                 
Shares issued            
Shares outstanding at beginning of period     22,181,003       22,181,003  
Shares outstanding at end of period     22,181,003       22,181,003  

 
 
See accompanying notes to condensed consolidated financial statements.

3


 
 

TABLE OF CONTENTS

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

   
  Three months
ended
March 31,
2017
  Three months
ended
March 31,
2016
Cash Flows from Operating Activities
                 
Net increase/(decrease) in net assets resulting from operations   $ 3,782,886     $ (24,949,064 ) 
Adjustments to reconcile net increase/(decrease) in net assets resulting from operations to net cash used in operating activities:
                 
Net realized losses on investments     24,689,167       6,075,070  
Net change in unrealized appreciation/(depreciation) of investments     (33,280,265 )      19,421,001  
Amortization of discount on Convertible Senior Notes     203,075       214,028  
Amortization of deferred financing costs           23,833  
Amortization of fixed income security premiums and discounts     (32,796 )      (14,301 ) 
Paid in kind Interest     (17,897 )       
Change in restricted cash           (22,750 ) 
Purchases of investments in:
                 
Portfolio investments     (280 )      (6,005,951 ) 
United States treasury bills     (59,996,000 )      (29,999,883 ) 
Proceeds from sales or maturity of investments in:
                 
Portfolio investments           5,039,632  
United States treasury bills     30,000,000       30,000,000  
United States treasuries strips           1,834,000  
Change in operating assets and liabilities:
                 
Due from GSV Asset Management(1)           219,147  
Due from portfolio companies(1)           3,880  
Prepaid expenses and other assets     56,275       66,603  
Interest and dividends receivable     (112,734 )      (88,351 ) 
Due to GSV Asset Management(1)     (362,161 )      (5,021,739 ) 
Payable for securities purchased     27,497,250       526  
Accounts payable and accrued expenses     (94,085 )      287,574  
Accrued incentive fees(1)     1,717,308       (5,118,585 ) 
Accrued management fees(1)     (99,848 )      (27,511 ) 
Accrued interest payable     (905,627 )      (905,625 ) 
Net Cash Used in Operating Activities     (6,955,732 )      (8,968,466 ) 
Cash Flows from Financing Activities
                 
Deferred offering costs     (18,357 )       
Net Cash Used in Financing Activities     (18,357 )       
Total Decrease in Cash Balance     (6,974,089 )      (8,968,466 ) 
Cash Balance at Beginning of Period     8,332,634       13,349,877  
Cash Balance at End of Period   $ 1,358,545     $ 4,381,411  
Supplemental Information:
                 
Interest Paid   $ 1,811,250     $ 2,088,788  
Taxes Paid   $ 800     $  

(1) This balance is a related-party transaction. Refer to “Note 2 — Related-Party Arrangements” for more detail.

 
 
See accompanying notes to condensed consolidated financial statements.

4


 
 

TABLE OF CONTENTS

GSV CAPITAL CORP. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS
(UNAUDITED)
March 31, 2017

         
Portfolio Investments*   Headquarters/Industry   Shares/ Principal   Cost   Fair Value   % of
Net Assets
Palantir Technologies, Inc.
    Palo Alto, CA                                      
Preferred shares, Series G     Data Analysis       326,797     $ 1,008,968     $ 2,093,135       1.06 % 
Common shares, Class A           5,773,690       16,189,935       36,980,484       18.88 % 
Total                 17,198,903       39,073,619       19.94 % 
Spotify Technology S.A.**
    Stockholm, Sweden                                      
Common shares     On-Demand Music Streaming       9,541       13,599,572       19,606,755       10.01 % 
Dropbox, Inc.
    San Francisco, CA                                      
Preferred shares, Series A-1     Cloud Computing Services       552,486       5,015,773       7,182,318       3.67 % 
Common shares           760,000       8,641,153       9,880,000       5.04 % 
Total                 13,656,926       17,062,318       8.71 % 
General Assembly Space, Inc.
    New York, NY                                      
Preferred shares, Series C     Online Education       126,552       2,999,978       7,334,954       3.74 % 
Common shares           133,213       2,999,983       7,721,025       3.94 % 
Total                 5,999,961       15,055,979       7.68 % 
JAMF Holdings, Inc.
    Minneapolis, MN                                      
Preferred shares, Series B     Mobile Device Management       73,440       9,999,928       14,889,935       7.60 % 
Coursera, Inc.
    Mountain View, CA                                      
Preferred shares, Series B     Online Education       2,961,399       14,519,519       14,510,855       7.41 % 
Lytro, Inc.
    Mountain View, CA                                      
Preferred shares, Series D     Light Field Imaging Platform       159,160       502,081       500,001       0.26 % 
Preferred shares, Series C-1           3,378,379       10,000,002       10,405,407       5.31 % 
Total                 10,502,083       10,905,408       5.57 % 
Course Hero, Inc.
    Redwood City, CA                                      
Preferred shares, Series A     Online Education       2,145,509       5,000,001       10,532,304       5.38 % 
Ozy Media, Inc.(1)
    Mountain View, CA                                      
Convertible Promissory Note 5%
Due 2/28/2018***
    Digital Media Platform     $ 2,000,000       2,000,000       2,000,000       1.02 % 
Preferred shares, Series B              922,509       4,999,999       4,999,999       2.55 % 
Preferred shares, Series A              1,090,909       3,000,200       3,000,000       1.53 % 
Preferred shares, Series Seed           500,000       500,000       500,000       0.26 % 
Total                 10,500,199       10,499,999       5.36 % 
Chegg, Inc.**
    Santa Clara, CA                                      
Common shares     Online Education Services       1,182,792       14,022,863       9,982,764       5.10 % 
Curious.com, Inc.(1)
    Menlo Park, CA                                      
Preferred shares, Series B     Online Education       3,407,834       12,000,006       9,780,484       4.99 % 
StormWind, LLC(2)(6)
    Scottsdale, AZ                                      
Preferred shares, Series C     Interactive Learning       2,779,134       4,000,787       4,650,838       2.37 % 
Preferred shares, Series B              3,279,629       2,019,687       4,470,403       2.28 % 
Preferred shares, Series A           366,666       110,000       499,796       0.26 % 
Total                 6,130,474       9,621,037       4.91 % 

5


 
 

TABLE OF CONTENTS

GSV CAPITAL CORP. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)
(UNAUDITED)
March 31, 2017

         
Portfolio Investments*   Headquarters/Industry   Shares/ Principal   Cost   Fair Value   % of
Net Assets
Declara, Inc.(1)
    Palo Alto, CA                                      
Convertible Promissory Note 9%
Due 6/30/2017***
    Social Cognitive Learning     $ 2,120,658     $ 2,120,658     $ 2,827,020       1.44 % 
Preferred shares, Series A           10,716,390       9,999,999       4,608,048       2.35 % 
Total                 12,120,657       7,435,068       3.79 % 
Lyft, Inc.
    San Francisco, CA                                      
Preferred shares, Series E     On-Demand Transportation       128,563       2,503,585       3,149,703       1.60 % 
Preferred shares, Series D     Services       176,266       1,792,749       4,163,403       2.13 % 
Total                 4,296,334       7,313,106       3.73 % 
NestGSV, Inc. (d/b/a GSV Labs, Inc.)(2)
    Redwood City, CA                                      
Convertible Promissory Note 8%
Due 7/31/2017***
    Global Innovation Platform     $ 500,000       490,768       488,488       0.25 % 
Unsecured Promissory Note 12%
Due 5/29/2017***
           $ 526,000       516,234       516,234       0.25 % 
Preferred shares, Series A-4              3,720,424       4,904,498       3,832,037       1.96 % 
Preferred shares, Series A-3              1,561,625       2,005,730       1,342,998       0.69 % 
Preferred shares, Series A-2              450,001       605,500       234,001       0.12 % 
Preferred shares, Series A-1              1,000,000       1,021,778       400,000       0.20 % 
Common shares              200,000       1,000       10,000       0.01 % 
Preferred Warrants Series A-3 – Strike Price $1.33 – Expiration
Date 4/4/2019
             187,500             13,125       0.01 % 
Preferred Warrants Series A-4 – Strike Price $1.33 – Expiration
Date 10/6/2019
             500,000             80,000       0.04 % 
Preferred Warrants Series A-4 – Strike Price $1.33 – Expiration
Date 7/18/2021
             250,000       74,380       45,000       0.02 % 
Preferred Warrants Series A-4 – Strike Price $1.33 – Expiration
Date 11/29/2021
          100,000       29,275       18,000       0.01 % 
Total                 9,649,163       6,979,883       3.56 % 
SugarCRM, Inc.
    Cupertino, CA                                      
Preferred shares, Series E     Customer Relationship       373,134       1,500,522       2,436,565       1.24 % 
Common shares     Manager       1,524,799       5,476,502       3,827,245       1.95 % 
Total                 6,977,024       6,263,810       3.19 % 
Avenues Global Holdings, LLC(4)
    New York, NY                                      
Preferred shares, Junior Preferred Stock     Globally-focused Private
School
      10,014,270       10,151,854       6,128,733       3.13 % 
Snap Inc. (f/k/a Snapchat, Inc.)**(10)
    Venice, CA                                      
Common shares, Class A     Social Communication       130,208       2,001,135       2,933,586       1.50 % 
Common shares, Class B           130,208       2,001,135       2,933,586       1.50 % 
Total                 4,002,270       5,867,172       3.00 % 
Dataminr, Inc.
    New York, NY                                      
Preferred shares, Series C     Social Media Analytics       301,369       1,100,909       1,389,311       0.71 % 
Preferred shares, Series B           904,977       2,063,356       4,171,944       2.13 % 
Total                 3,164,265       5,561,255       2.84%  

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TABLE OF CONTENTS

GSV CAPITAL CORP. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)
(UNAUDITED)
March 31, 2017

         
Portfolio Investments*   Headquarters/Industry   Shares/ Principal   Cost   Fair Value   % of
Net Assets
Enjoy Technology, Inc.
    Menlo Park, CA                                      
Preferred shares, Series B     On-Demand Commerce       1,681,520     $ 4,000,280     $ 4,000,000       2.04 % 
Preferred shares, Series A           879,198       1,002,440       1,441,885       0.74 % 
Total                 5,002,720       5,441,885       2.78 % 
Parchment, Inc.
    Scottsdale, AZ                                      
Preferred shares, Series D     E-Transcript Exchange       3,200,512       4,000,982       4,544,727       2.32 % 
Whittle Schools, LLC(1)(5)
    New York, NY                                      
Preferred shares, Series B     Globally-focused Private       3,000,000       3,000,000       3,000,000       1.53 % 
Common shares     School       229       1,577,097       1,500,000       0.77 % 
Total                 4,577,097       4,500,000       2.30 % 
SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.)(2)
    Woodside, CA                                      
Preferred shares, Class A     Clean Technology       14,300,000       7,151,412       4,176,901       2.13 % 
Common shares           100,000       10,000             % 
Total                 7,161,412       4,176,901       2.13 % 
CUX, Inc. (d/b/a CorpU)(1)
    Philadelphia, PA                                      
Senior Subordinated Convertible Promissory Note 8%,
Due 11/26/2018***(8)
    Corporate Education     $ 1,166,400       1,166,400       1,166,400       0.60 % 
Convertible preferred shares, Series D              169,033       778,607       775,861       0.39 % 
Convertible preferred shares, Series C              615,763       2,006,077       1,913,484       0.98 % 
Preferred Warrants Series D – Strike Price $4.59 – Expiration Date 2/25/2018           16,903             4,902       % 
Total                 3,951,084       3,860,647       1.97 % 
Knewton, Inc.
    New York, NY                                      
Preferred shares, Series E     Online Education       375,985       4,999,999       3,398,904       1.73 % 
A Place for Rover Inc. (f/k/a DogVacay, Inc.)(11)
    Santa Monica, CA                                      
Common shares     Peer-to-Peer Pet Services       707,991       2,506,119       2,500,051       1.28 % 
SharesPost, Inc.
    San Bruno, CA                                      
Preferred shares, Series B     Online Marketplace Finance       1,771,653       2,259,716       2,249,999       1.15 % 
Common warrants, $0.13 Strike Price, Expiration Date 6/15/2018           770,934       23,128       84,803       0.04 % 
Total                 2,282,844       2,334,802       1.19 % 
Maven Research, Inc.(1)
    San Francisco, CA                                      
Preferred shares, Series C     Knowledge Networks       318,979       2,000,447       1,999,998       1.02 % 
Preferred shares, Series B           49,505       217,206       256,931       0.13 % 
Total                 2,217,653       2,256,929       1.15 % 
DreamBox Learning, Inc.
    Bellevue, WA                                      
Preferred shares, Series A-1     Education Technology       7,159,221       1,502,362       1,503,436       0.77 % 
Preferred shares, Series A           3,579,610       758,017       751,718       0.38 % 
Total                 2,260,379       2,255,154       1.15 % 
Strategic Data Command, LLC(1)(7)
    Sunnyvale, CA                                      
Common shares     Big Data Consulting       2,400,000       989,277       2,229,633       1.14%  

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TABLE OF CONTENTS

GSV CAPITAL CORP. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)
(UNAUDITED)
March 31, 2017

         
Portfolio Investments*   Headquarters/Industry   Shares/ Principal   Cost   Fair Value   % of
Net Assets
Clever, Inc.
    San Francisco, CA                                      
Preferred shares, Series B     Education Software       1,799,047     $ 2,000,601     $ 2,000,001       1.02 % 
EdSurge, Inc.(1)
    Burlingame, CA                                      
Preferred shares, Series A-1     Education Media Platform       378,788       501,360       500,000       0.25 % 
Preferred shares, Series A           494,365       500,801       563,576       0.29 % 
Total                 1,002,161       1,063,576       0.54 % 
Tynker (f/k/a Neuron Fuel, Inc.)
    Mountain View, CA                                      
Preferred shares, Series A     Computer Software       534,162       309,310       892,051       0.46 % 
Fullbridge, Inc.
    Cambridge, MA                                      
Common shares     Business Education       517,917       6,150,506             % 
Junior note 1.49%, Due 11/9/2021***         $ 2,270,458       2,270,863       877,359       0.45 % 
Total                 8,421,369       877,359       0.45 % 
4C Insights (f/k/a The Echo Systems Corp.)
    Chicago, IL                                      
Common shares     Social Data Platform       436,219       1,436,404       505,744       0.26 % 
Circle Media (f/k/a S3 Digital Corp.
(d/b/a S3i))
(1)
    New York, NY                                      
Promissory Note 12%,
Due 11/17/2017***
    Sports Analytics     $ 25,000       30,203       28,008       0.01 % 
Preferred shares, Series A              1,864,495       1,777,576       316,964       0.16 % 
Preferred warrants, $1.17 Strike Price, Expiration Date 11/18/2022              5,360       576             % 
Preferred warrants, $1.17 Strike Price, Expiration Date 8/29/2021              175,815                   % 
Preferred warrants, $1.17 Strike Price, Expiration Date 6/26/2021              38,594                   % 
Preferred warrants, $1.17 Strike Price, Expiration Date 9/30/2020              160,806                   % 
Preferred warrants, $1.00 Strike Price, Expiration Date 11/21/2017           500,000       31,354             % 
Total                 1,839,709       344,972       0.17 % 
Aspiration Partners, Inc.
    Marina Del Rey, CA                                      
Preferred shares, Series A     Financial Services       540,270       1,001,815       324,162       0.17 % 
Handle Financial, Inc.
(f/k/a Paynearme, Inc.)
(9)

    Sunnyvale, CA                                      
Common shares     Cash Payment Network       548,034       14,000,398       76,725       0.04 % 
Global Education Learning (Holdings) Ltd.(1)**
    Hong Kong                                      
Preferred shares, Series A     Education Technology       2,126,475       675,495             % 
Total Portfolio Investments                 254,128,830       270,654,707       138.15 % 
U.S. Treasury
                                            
U.S. Treasury Bill, 0%,
due 4/6/2017***
        $ 60,000,000       59,996,000       59,997,000       30.63 % 
TOTAL INVESTMENTS               $ 314,124,830     $ 330,651,707       168.78 % 

* All portfolio investments are non-control/non-affiliated and non-income-producing, unless identified. Equity investments are subject to lock-up restrictions upon their initial public offering. The Company’s officers and staff may serve on the board of directors of the Company’s portfolio investments.

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TABLE OF CONTENTS

GSV CAPITAL CORP. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)
(UNAUDITED)
March 31, 2017

** 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. Of GSV Capital Corp.’s total portfolio, 10.7% of its total investments are non-qualifying assets.
*** Investment is income-producing.
(1) Denotes an Affiliate Investment. “Affiliate Investments” are investments in those companies that are “Affiliated Companies” of GSV Capital Corp., as defined in the Investment Company Act of 1940, as amended. A company is deemed to be an “Affiliate” of GSV Capital Corp. if GSV Capital Corp. owns 5% or more of the voting securities of such company.
(2) Denotes a Control Investment. “Control Investments” are investments in those companies that are “Controlled Companies” of GSV Capital Corp., as defined in the Investment Company Act of 1940, as amended. A company is deemed to be a “Controlled Company” of GSV Capital Corp. if GSV Capital Corp. owns more than 25% of the voting securities of such company.
(3) Investment was on non-accrual status as of March 31, 2017.
(4) GSV Capital Corp.’s investment in Avenues Global Holdings, LLC is held through its wholly owned subsidiary, GSVC AV Holdings, Inc.
(5) GSV Capital Corp.’s investment in Whittle Schools, LLC is held through its wholly owned subsidiary, GSVC WS Holdings, Inc. Whittle Schools, LLC is an investment that is collateralized by Avenues Global Holdings, LLC, as well as the personal collateral of Chris Whittle, the former chairman of Avenues Global Holdings, LLC.
(6) GSV Capital Corp.’s investment in StormWind, LLC is held through its wholly owned subsidiary, GSVC SW Holdings, Inc.
(7) GSV Capital Corp.’s investment in Strategic Data Command, LLC is held through its wholly owned subsidiary, GSVC SVDS Holdings, Inc.
(8) 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 (November 26, 2018).
(9) On March 28, 2017, Paynearme, Inc. changed its name to Handle Financial, Inc. As part of the process, Handle Financial, Inc. initiated a 10:1 reverse stock split.
(10) On March 1, 2017, Snap Inc. priced its initial public offering, selling 145,000,000 shares of Class A common stock at a price of $17.00 per share. At March 31, 2017, GSV Capital Corp. valued Snap Inc., based on its March 31, 2017 closing price. The Company’s common stock of Snap Inc. (f/k/a Snapchat, Inc.), are restricted until July 31, 2017 due to Snap Inc.’s IPO.
(11) On March 29, 2017, A Place for Rover Inc. acquired DogVacay, Inc. and pursuant to a plan of reorganization, the Company received common shares of A Place for Rover Inc. in exchange for the Company’s previously held Preferred shares, Series B-1 of DogVacay, Inc.

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TABLE OF CONTENTS

GSV CAPITAL CORP. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2016

         
Portfolio Investments*   Headquarters/Industry   Shares/ Principal   Cost   Fair Value   % of
Net Assets
Palantir Technologies, Inc.
    Palo Alto, CA                                      
Preferred shares, Series G     Data Analysis       326,797     $ 1,008,968     $ 2,223,594       1.16 % 
Common shares, Class A           5,773,690       16,189,935       39,285,371       20.45 % 
Total                 17,198,903       41,508,965       21.61 % 
Spotify Technology S.A.**
    Stockholm, Sweden                                      
Common shares     On-Demand Music Streaming       9,541       13,599,572       18,931,691       9.85 % 
Coursera, Inc.
    Mountain View, CA                                      
Preferred shares, Series B     Online Education       2,961,399       14,519,519       14,510,855       7.55 % 
JAMF Holdings, Inc.
    Minneapolis, MN                                      
Preferred shares, Series B     Mobile Device Management       73,440       9,999,928       13,856,754       7.21 % 
General Assembly Space, Inc.
    New York, NY                                      
Preferred shares, Series C     Online Education       126,552       2,999,978       6,697,132       3.49 % 
Common shares           133,213       2,999,983       7,049,632       3.67 % 
Total                 5,999,961       13,746,764       7.16 % 
Dropbox, Inc.
    San Francisco, CA                                      
Preferred shares, Series A-1     Cloud Computing Services       552,486       5,015,773       5,552,484       2.89 % 
Common shares           760,000       8,641,153       7,638,000       3.98 % 
Total                 13,656,926       13,190,484       6.87 % 
Lytro, Inc.
    Mountain View, CA                                      
Preferred shares, Series D     Light Field Imaging Platform       159,160       502,081       500,001       0.26 % 
Preferred shares, Series C-1           3,378,379       10,000,002       10,408,150       5.42 % 
Total                 10,502,083       10,908,151       5.68 % 
Ozy Media, Inc.(1)
    Mountain View, CA                                      
Convertible Promissory Note 5%
Due 2/28/2018***
    Digital Media Platform     $ 2,000,000       2,000,000       2,000,000       1.04 % 
Preferred shares, Series B              922,509       4,999,999       4,999,999       2.60 % 
Preferred shares, Series A              1,090,909       3,000,200       3,000,000       1.56 % 
Preferred shares, Series Seed           500,000       500,000       610,000       0.32 % 
Total                 10,500,199       10,609,999       5.52 % 
Course Hero, Inc.
    Redwood City, CA                                      
Preferred shares, Series A     Online Education       2,145,509       5,000,001       10,532,304       5.48 % 
Curious.com Inc.(1)
    Menlo Park, CA                                      
Preferred shares, Series B     Online Education       3,407,834       12,000,006       9,984,954       5.20 % 
StormWind, LLC(2)(6)
    Scottsdale, AZ                                      
Preferred shares, Series C     Interactive Learning       2,779,134       4,000,787       4,650,838       2.42 % 
Preferred shares, Series B              3,279,629       2,019,687       4,470,403       2.33 % 
Preferred shares, Series A           366,666       110,000       499,796       0.26 % 
Total                 6,130,474       9,621,037       5.01 % 
Chegg, Inc.**
    Santa Clara, CA                                      
Common shares     Online Education Services       1,182,792       14,022,863       8,729,005       4.54 % 

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TABLE OF CONTENTS

GSV CAPITAL CORP. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)
December 31, 2016

         
Portfolio Investments*   Headquarters/Industry   Shares/ Principal   Cost   Fair Value   % of
Net Assets
Declara, Inc.(1)
    Palo Alto, CA                                      
Convertible Promissory Note 9%
Due 6/30/2017***(12)
    Social Cognitive Learning     $ 2,120,658     $ 2,120,658     $ 2,827,020       1.47 % 
Preferred shares, Series A           10,716,390       9,999,999       4,786,654       2.49 % 
Total                 12,120,657       7,613,674       3.96 % 
Lyft, Inc.
    San Francisco, CA                                      
Preferred shares, Series E     On-Demand Transportation       128,563       2,503,585       3,249,430       1.69 % 
Preferred shares, Series D     Services       176,266       1,792,749       4,203,062       2.19 % 
Total                 4,296,334       7,452,492       3.88 % 
Avenues Global Holdings, LLC(4)
    New York, NY                                      
Preferred shares, Junior Preferred Stock     Globally-focused Private
School
      10,014,270       10,151,854       6,128,733       3.19 % 
SugarCRM, Inc.
    Cupertino, CA                                      
Preferred shares, Series E     Customer Relationship       373,134       1,500,522       2,354,476       1.23 % 
Common shares     Manager       1,524,799       5,476,502       3,762,442       1.96 % 
Total                 6,977,024       6,116,918       3.19 % 
Dataminr, Inc.
    New York, NY                                      
Preferred shares, Series C     Social Media Analytics       301,369       1,100,909       1,377,256       0.72 % 
Preferred shares, Series B           904,977       2,063,356       4,135,745       2.15 % 
Total                 3,164,265       5,513,001       2.87 % 
Enjoy Technology, Inc.
    Menlo Park, CA                                      
Preferred shares, Series B     On-Demand Commerce       1,681,520       4,000,280       4,000,000       2.08 % 
Preferred shares, Series A           879,198       1,002,440       1,443,091       0.75 % 
Total                 5,002,720       5,443,091       2.83 % 
NestGSV, Inc. (d/b/a GSV Labs, Inc.)(2)
    Redwood City, CA                                      
Convertible Promissory Note 8%
Due 7/31/2017***
    Global Innovation Platform     $ 500,000       457,592       427,900       0.22 % 
Unsecured Promissory Note 12%
Due 5/29/2017***
           $ 526,000       501,802       496,725       0.26 % 
Preferred shares, Series A-4(14)              3,720,424       4,904,498       2,715,910       1.41 % 
Preferred shares, Series A-3(14)              1,561,625       2,005,730       952,591       0.50 % 
Preferred shares, Series A-2(14)              450,001       605,500       166,500       0.09 % 
Preferred shares, Series A-1(14)              1,000,000       1,021,778       270,000       0.14 % 
Common shares              200,000       1,000             0.00 % 
Preferred warrants, Series A-3 – $1.33 Strike Price, Expiration
Date 4/4/2019
             187,500             5,625       % 
Preferred warrants, Series A-4 – $1.33 Strike Price, Expiration
Date 10/6/2019
             500,000             40,000       0.02 % 
Preferred warrants, Series A-4 – $1.33 Strike Price, Expiration
Date 7/18/2021
             250,000       74,380       22,500       0.01 % 
Preferred warrants, Series A-4 – $1.33 Strike Price, Expiration
Date 11/29/2021
          100,000       29,275       9,000        
Total                 9,601,555       5,106,751       2.65%  

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TABLE OF CONTENTS

GSV CAPITAL CORP. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)
December 31, 2016

         
Portfolio Investments*   Headquarters/Industry   Shares/ Principal   Cost   Fair Value   % of
Net Assets
Whittle Schools, LLC(1)(5)
    New York, NY                                      
Preferred shares, Series B     Globally-focused Private       3,000,000     $ 3,000,000     $ 3,000,000       1.56 % 
Common shares     School       229       1,577,097       1,500,000       0.78 % 
Total                 4,577,097       4,500,000       2.34 % 
Snap Inc. (f/k/a Snapchat, Inc.)
    Venice, CA                                      
Preferred shares, Series F(17)     Social Communication       130,208       2,001,135       2,184,565       1.14 % 
Common shares, Class A(17)           130,208       2,001,135       2,184,565       1.14 % 
Total                 4,002,270       4,369,130       2.28 % 
SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.)(2)
    Woodside, CA                                      
Preferred shares, Class A     Clean Technology       14,300,000       7,151,412       4,309,778       2.24 % 
Common shares           100,000       10,000             % 
Total                 7,161,412       4,309,778       2.24 % 
Parchment, Inc.
    Scottsdale, AZ                                      
Preferred shares, Series D     E-Transcript Exchange       3,200,512       4,000,982       4,000,000       2.08 % 
CUX, Inc. (d/b/a CorpU)(1)
    Philadelphia, PA                                      
Senior Subordinated Convertible Promissory Note 8%, Due 11/26/2018***(8)     Corporate Education     $ 1,166,400       1,166,400       1,166,400       0.61 % 
Convertible preferred shares, Series D              169,033       778,607       775,861       0.40 % 
Convertible preferred shares, Series C              615,763       2,006,077       1,913,484       1.00 % 
Preferred warrants, Series D, $4.59 Strike Price, Expiration Date 2/25/2018           16,903             4,395       % 
Total                 3,951,084       3,860,140       2.01 % 
Knewton, Inc.
    New York, NY                                      
Preferred shares, Series E     Online Education       375,985       4,999,999       3,782,409       1.97 % 
DogVacay, Inc.
    Santa Monica, CA                                      
Preferred shares, Series B-1     Peer-to-Peer Pet Services       514,562       2,506,119       2,500,771       1.30 % 
SharesPost, Inc.
    San Bruno, CA                                      
Preferred shares, Series B     Online Marketplace Finance       1,771,653       2,259,716       2,249,999       1.17 % 
Common warrants, $0.13 Strike Price, Expiration Date 6/15/2018           770,934       23,128       69,384       0.04 % 
Total                 2,282,844       2,319,383       1.21 % 
DreamBox Learning, Inc.
    Bellevue, WA                                      
Preferred shares, Series A-1     Education Technology       7,159,221       1,502,362       1,503,436       0.78 % 
Preferred shares, Series A           3,579,610       758,017       751,718       0.39 % 
Total                 2,260,379       2,255,154       1.17 % 
Maven Research, Inc.(1)
    San Francisco, CA                                      
Preferred shares, Series C     Knowledge Networks       318,979       2,000,447       1,999,998       1.04 % 
Preferred shares, Series B           49,505       217,206       223,763       0.12 % 
Total                 2,217,653       2,223,761       1.16 % 
Strategic Data Command, LLC(1)(7)
    Sunnyvale, CA                                      
Common shares     Big Data Consulting       2,400,000       989,277       2,052,555       1.07%  

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CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)
December 31, 2016

         
Portfolio Investments*   Headquarters/Industry   Shares/ Principal   Cost   Fair Value   % of
Net Assets
Clever, Inc.
    San Francisco, CA                                      
Preferred shares, Series B     Education Software       1,799,047     $ 2,000,601     $ 2,000,001       1.04 % 
EdSurge, Inc.(1)
    Burlingame, CA                                      
Preferred shares, Series A-1     Education Media Platform       378,788       501,360       500,000       0.26 % 
Preferred shares, Series A           494,365       500,801       588,294       0.31 % 
Total                 1,002,161       1,088,294       0.57 % 
Tynker (f/k/a Neuron Fuel, Inc.)
    Mountain View, CA                                      
Preferred shares, Series A     Computer Software       534,162       309,310       881,367       0.46 % 
Fullbridge, Inc.
    Cambridge, MA                                      
Common shares     Business Education       517,917       6,150,506             % 
Junior note 1.49%, Due 11/9/2021           2,270,458       2,270,858       877,359       0.46 % 
Total                 8,421,364       877,359       0.46 % 
Circle Media (f/k/a S3 Digital Corp.
(d/b/a S3i))
(1)

    New York, NY                                      
Promissory Note 12%, Due 11/17/2017***(15)     Sports Analytics     $ 25,000       26,840       26,544       0.01 % 
Preferred shares, Series A              1,864,495       1,777,576       484,769       0.26 % 
Preferred warrants, $1.17 Strike Price, Expiration Date 11/18/2022              5,360       576             % 
Preferred warrants, $1.17 Strike Price, Expiration Date 8/29/2021              175,815                   % 
Preferred warrants, $1.17 Strike Price, Expiration Date 6/26/2021              38,594                   % 
Preferred warrants, $1.17 Strike Price, Expiration Date 9/30/2020              160,806                   % 
Preferred warrants, $1.00 Strike Price, Expiration Date 11/21/2017           500,000       31,354             % 
Total                 1,836,346       511,313       0.27 % 
4C Insights (f/k/a The Echo Systems Corp.)
    Chicago, IL                                      
Common shares     Social Data Platform       436,219       1,436,404       505,744       0.26 % 
Aspiration Partners, Inc.
    Marina Del Rey, CA                                      
Preferred shares, Series A(11)     Financial Services       540,270       1,001,815       307,954       0.16 % 
PayNearMe, Inc.
    Sunnyvale, CA                                      
Common shares(13)     Cash Payment Network       5,480,348       14,000,398       164,410       0.09 % 
Global Education Learning (Holdings) Ltd.(1)**
    Hong Kong                                      
Preferred shares, Series A     Education Technology       2,126,475       675,495             % 
AlwaysOn, Inc.(1)
    Woodside, CA                                      
Preferred shares, Series A-1     Social Media       4,465,925       876,023             % 
Preferred shares, Series A              1,066,626       1,027,391             % 
Preferred warrants Series A, $1.00 Strike Price, Expiration Date 1/9/2017           109,375                   % 
Total                 1,903,414             % 
Orchestra One, Inc. (f/k/a Learnist Inc.)
    San Francisco, CA                                      
Common shares     Consumer Health Technology       57,026       4,959,614             —%  

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CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)
December 31, 2016

         
Portfolio Investments*   Headquarters/Industry   Shares/ Principal   Cost   Fair Value   % of
Net Assets
Cricket Media (f/k/a ePals Inc.)(10)
    Herndon, VA                                      
Common shares     Online Education       133,333     $ 2,448,959     $       % 
Earlyshares.com, Inc.
    Miami, FL                                      
Convertible Promissory Note 5%,
Due 2/26/2017***(9)(3)
    Equity Crowdfunding     $ 50,000       50,840             % 
Preferred shares, Series A           165,715       261,598             % 
Total                 312,438             % 
Beamreach Solar, Inc. (f/k/a Solexel, Inc.)
    Milpitas, CA                                      
Convertible Promissory Note 9%,
Due 5/10/2017***(3)(16)
    Solar Power     $ 250,000       254,444             % 
Preferred shares, Series D              1,613,413       2,419,751             % 
Preferred shares, Series C           5,300,158       11,598,648             % 
Total                 14,272,843             % 
AliphCom, Inc. (d/b/a Jawbone)
    San Francisco, CA                                      
Common shares     Smart Device Company       150,000       793,152             % 
Total Portfolio Investments                 278,768,274       262,015,146       136.38 % 
U.S. Treasury
                                            
U.S. Treasury Bill, 0%,
due 1/5/2017***
        $ 30,000,000       29,998,750       29,998,490       15.62 % 
TOTAL INVESTMENTS               $ 308,767,024     $ 292,013,636       152.00 % 

* All portfolio investments are non-control/non-affiliated and non-income-producing, unless identified. Equity investments are subject to lock-up restrictions upon their initial public offering. Unless otherwise noted, all investments were pledged as collateral under the Credit Facility, which expired in accordance with its terms on December 31, 2016. The Company’s officers and staff may serve on the board of directors of the Company’s portfolio investments.
** 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. Of GSV Capital Corp.’s total portfolio, 9.47% of its total investments are non-qualifying assets.
*** Investment is income-producing.
(1) Denotes an Affiliate Investment. “Affiliate Investments” are investments in those companies that are “Affiliated Companies” of GSV Capital Corp., as defined in the Investment Company Act of 1940, as amended. A company is deemed to be an “Affiliate” of GSV Capital Corp. if GSV Capital Corp. owns 5% or more of the voting securities of such company.
(2) Denotes a Control Investment. “Control Investments” are investments in those companies that are “Controlled Companies” of GSV Capital Corp., as defined in the Investment Company Act of 1940, as amended. A company is deemed to be a “Controlled Company” of GSV Capital Corp. if GSV Capital Corp. owns more than 25% of the voting securities of such company.
(3) Investment was on non-accrual status as of December 31, 2016.
(4) GSV Capital Corp.’s investment in Avenues Global Holdings, LLC is held through its wholly owned subsidiary GSVC AV Holdings, Inc.
(5) GSV Capital Corp.’s investment in Whittle Schools, LLC is held through its wholly owned subsidiary GSVC WS Holdings, Inc. Whittle Schools, LLC is an investment that is collateralized by Avenues Global Holdings, LLC, as well as the personal collateral of Chris Whittle, the former chairman of Avenues Global Holdings, LLC.
(6) GSV Capital Corp.’s investment in StormWind, LLC is held through its wholly owned subsidiary GSVC SW Holdings, Inc.

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December 31, 2016

(7) GSV Capital Corp.’s investment in Strategic Data Command, LLC is held through its wholly owned subsidiary GSVC SVDS Holdings, Inc.
(8) 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 (November 26, 2018).
(9) Interest will accrue daily on the unpaid principal balance of the note. Interest began compounding annually on February 26, 2015. Accrued interest is not payable until the earlier of (a) the closing of a subsequent equity offering by Earlyshares.com, Inc., or (b) the maturity of the note (February 26, 2017).
(10) On June 6, 2016, Cricket Media (f/k/a ePals Inc.) declared a 10:1 reverse split of its common shares.
(11) On July 29, 2016, Aspiration Partners, Inc. declared a 30:1 split of its preferred shares.
(12) On December 30, 2016, Declara, Inc. extended the maturity date of the note held for one year until June 30, 2017.
(13) On December 21, 2016, PayNearMe, Inc. converted its Series E Preferred shares into Common Class A shares on a 1:1 basis.
(14) On December 15, 2016, NestGSV, Inc. (d/b/a GSV Labs, Inc.) converted its Series A, B, C, and D Preferred shares into Series A-1, A-2, A-3, and A-4 preferred shares, respectively, on a 1:1 basis.
(15) On December 31, 2016, Circle Media (f/k/a S3 Digital Corp. (d/b/a S3i)) extended the maturity date of the note held for one year until November 17, 2017.
(16) Interest will accrue daily on the unpaid principal balance of the note. Interest began compounding annually on November 26, 2016. Accrued interest is not payable until the earlier of (a) the closing of a subsequent equity offering by Beamreach Solar, Inc. (f/k/a Solexel, Inc.), or (b) the maturity of the note (May 10, 2017).
(17) On October 26, 2016, the Snap Inc. board of directors approved a distribution of shares of Class A common stock as a dividend to the holders of all preferred stock and common stock outstanding on October 31, 2016. One share of Class A common stock was distributed for each share of preferred stock and common stock outstanding.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2017
(Unaudited)

NOTE 1 — NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

GSV Capital Corp. (the “Company” or “GSV Capital”), formed in September 2010 as a Maryland corporation, is an externally managed, non-diversified closed-end management investment company. The Company has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Company’s investment activities are managed by GSV Asset Management, LLC (“GSV Asset Management”), and GSV Capital Service Company, LLC (“GSV Capital Service Company”) provides the administrative services necessary for the Company to operate.

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 “GSVC”. The Company began its investment operations during the second quarter of 2011.

The table below displays all the Company’s subsidiaries as of March 31, 2017, 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 “— Summary of Significant Accounting Policies — Basis of Consolidation” below for further detail.

     
Subsidiary   Jurisdiction of Incorporation   Formation Date   Percentage Owned
GCL     Delaware       April 13, 2012       100 % 
Subsidiaries below are referred to collectively, as the “GSVC Holdings”
                          
GSVC AE Holdings, Inc. (“GAE”)     Delaware       November 28, 2012       100 % 
GSVC AV Holdings, Inc. (“GAV”)     Delaware       November 28, 2012       100 % 
GSVC NG Holdings, Inc. (“GNG”)     Delaware       November 28, 2012       100 % 
GSVC SW Holdings, Inc. (“GSW”)     Delaware       November 28, 2012       100 % 
GSVC WS Holdings, Inc. (“GWS”)     Delaware       November 28, 2012       100 % 
GSVC SVDS Holdings, Inc. (“SVDS”)     Delaware       August 13, 2013       100 % 

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.

Summary of 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

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2017
(Unaudited)

NOTE 1 — NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES  – (continued)

(“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 condensed 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, 2017. The interim unaudited condensed consolidated financial statements and notes hereto should be read in conjunction with the audited condensed consolidated financial statements and notes thereto contained in the Company’s annual report on Form 10-K for the year ended December 31, 2016.

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 condensed 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 consolidated financial statements in accordance with GAAP requires the Company 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.

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:

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.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2017
(Unaudited)

NOTE 1 — NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES  – (continued)

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 3 — 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 quarter 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 closing price of such security on 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 GSV Asset 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 of GSV Asset Management responsible for the portfolio investment;
2. Preliminary valuation conclusions are then documented and discussed with GSV Asset Management senior management;
3. An independent third-party valuation firm is engaged by the Valuation Committee to conduct independent appraisals and review GSV Asset 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 GSV Asset Management and the independent third-party valuation firm; and

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March 31, 2017
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NOTE 1 — NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES  – (continued)

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.

The Valuation Committee engages at least one independent valuation firm to perform valuations of its investments that are not publicly traded or for which there are no readily available market quotations. The Company’s board of directors considers the independent valuations provided by the valuation firm(s), among other factors, in making its fair value determinations. The table below shows the percentages of the Company’s investments for which there are no readily available market quotations and for which an independent valuation firm was engaged to perform valuations during the current and prior fiscal year.

 
For the quarter ended March 31, 2016     100 % 
For the quarter ended June 30, 2016     100 % 
For the quarter ended September 30, 2016     100 % 
For the quarter ended December 31, 2016     100 % 
For the quarter ended March 31, 2017     100 % 

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

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March 31, 2017
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NOTE 1 — NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES  – (continued)

common stock and equity-linked securities with different rights and preferences, the Company generally uses 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 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.

Warrants

The Company’s board of directors will ascribe value to warrants based on fair value analyses that can include discounted cash flow analyses, option pricing models, comparable analyses and other techniques as deemed appropriate.

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, 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.

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.

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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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2017
(Unaudited)

NOTE 1 — NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES  – (continued)

Portfolio Company Investment Classification

GSV Capital is a non-diversified company within the meaning of the 1940 Act. GSV Capital 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 March 31, 2017 and December 31, 2016, respectively, for details regarding the nature and composition of the Company’s investment portfolio.

Cash

The Company places its cash with U.S. Bank, N.A. 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 both U.S. Bank, N.A. and Silicon Valley Bank are high-quality financial institutions and that the risk of loss associated with any uninsured balance is remote.

Deferred Financing Costs

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 the shelf registration statement has expired. 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 using the effective interest method. As of March 31, 2017, and December 31, 2016, the Company had deferred financing costs of $329,625 and $311,268, respectively, on the Condensed Consolidated Statements of Assets and Liabilities.

Revenue Recognition

The Company’s revenue recognition policies are as follows:

Sales:  Gains or losses on the sale of investments are determined using the specific identification method.

Interest:  Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis.

Dividends:  Dividend income is recognized 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 March 31, 2017 and December 31, 2016, the Company had no escrow deposits.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2017
(Unaudited)

NOTE 1 — NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES  – (continued)

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 expects to continue to operate in a manner so as to qualify for the tax treatment applicable to RICs. In order to qualify 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 and meet certain source of income and asset diversification requirements on a quarterly basis. 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 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 “Minimum Distribution Amount”), it will generally be required to pay an excise tax equal to 4% of the amount by which the Minimum Distribution Amount exceeds the distributions for the year. To the extent that the Company determines that its estimated current year annual taxable income will be in excess of 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 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 status 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 condensed consolidated financial statements of the Company. Included in the Company’s condensed 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 condensed 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

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2017
(Unaudited)

NOTE 1 — NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES  – (continued)

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 as a RIC. If the Company fails to requalify 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 a C corporation for its 2012 and 2013 taxable years. Refer to “Note 8 — Income Taxes” for further details regarding the Company’s tax status.

Per Share Information

Basic net increase/(decrease) in net assets resulting from operations per common share is computed using the weighted-average number of shares outstanding for the period presented. Diluted net increase/(decrease) 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 5 — Net Increase/(Decrease) in Net Assets Resulting from Operations per Common Share — Basic and Diluted” for further detail.

Recently Adopted Accounting Standards

On October 13, 2016, the Securities and Exchange Commission (the “SEC”) amended Regulation S-X to, among other things, standardize the reporting of certain derivative investments in the financial statements of business development companies. The amendments to Regulation S-X also update the required disclosure for other investments and investments in and advances to affiliates and amend the rules regarding the general form and content of a business development company’s financial statements. The compliance date for the amendments to Regulation S-X is August 1, 2017. Management is evaluating the amended rules to determine the impact to the Company.

NOTE 2 — RELATED-PARTY ARRANGEMENTS

Investment Advisory Agreement

The Company has entered into an investment advisory agreement with GSV Asset Management (the “Advisory Agreement”). GSV Asset Management is controlled by Michael Moe, the Company’s Chief Executive Officer and Chair of the Company’s board of directors. Mr. Moe, through his ownership interest in GSV Asset Management, is entitled to a portion of any profits earned by GSV Asset Management in performing its services under the Advisory Agreement. Mr. Moe, William Tanona, the Company’s Chief Financial Officer, Treasurer and Corporate Secretary, and Mark W. Flynn, the Company’s President, as principals of GSV Asset Management, collectively manage the business and internal affairs of GSV Asset Management. Mark Klein, a member of the Company’s board of directors, or entities with which he is affiliated, receives 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.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2017
(Unaudited)

NOTE 2 — RELATED-PARTY ARRANGEMENTS  – (continued)

Under the terms of the Advisory Agreement, GSV Asset Management is paid a base management fee of 2% of gross assets, which is the Company’s total assets reflected on the its Condensed Consolidated Statements of Assets and Liabilities (with no deduction for liabilities) reduced by any non-portfolio investments, and 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 January 1, 2017 through December 31, 2017, however, pursuant to a voluntary waiver by GSV Asset Management, the Company will pay GSV Asset Management a base management fee of 1.75%, a 0.25% reduction from the 2.0% base management fee payable under the Advisory Agreement. This waiver of a portion of the base management fee is not subject to recourse against or reimbursement by the Company.

Under the Advisory Agreement, there are 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 has, 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 will be transferred to the Company, net of any personal taxes incurred, upon such receipt for the benefit of the Company and its stockholders.

Incentive Fees

For GAAP purposes, in accordance with the AICPA’s Technical Practice Aids (“TPA”) (TIS 6910.2), the Company is 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 March 31, 2017 and December 31, 2016. This accrual considers 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 months ended March 31, 2017, the Company accrued incentive fees of $1,717,308, and for the three months ended March 31, 2016, the Company reversed previously accrued incentive fees of $5,118,584.

Management Fees

GSV Asset Management earned $1,272,618 and $1,958,000 in management fees for the three months ended March 31, 2017 and 2016, respectively.

As of March 31, 2017, there were no receivables owed to the Company by GSV Asset Management In addition, as of March 31, 2017, the Company owed GSV Asset Management $59,864 for the reimbursement of other expenses.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2017
(Unaudited)

NOTE 2 — RELATED-PARTY ARRANGEMENTS  – (continued)

As of December 31, 2016, there were no receivables owed to the Company by GSV Asset Management. In addition, as of December 31, 2016, the Company owed GSV Asset Management $422,025 primarily for the reimbursement of overhead allocation expenses.

Administration Agreement

The Company has entered into an administration agreement with GSV Capital Service Company (the “Administration Agreement”) to provide administrative services, including furnishing the Company with office facilities, equipment, clerical, bookkeeping, record keeping services and other administrative services. GSV Asset Management controls GSV Capital Service Company. The Company reimburses 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 providing administrative services. While there is no limit on the total amount of expenses the Company may be required to reimburse to GSV Capital Service Company, GSV Capital Service Company will only charge the Company for the actual expenses GSV Capital Service Company incurs on the Company’s behalf, or the Company’s allocable portion thereof, without any profit to GSV Capital Service Company. There were $531,484, and $599,950 in such costs incurred under the Administration Agreement for the three months ended March 31, 2017 and 2016, respectively.

License Agreement

The Company entered into a license agreement with GSV Asset Management pursuant to which GSV Asset Management has agreed to grant the Company a non-exclusive, royalty-free license to use the name “GSV.” Under this agreement, the Company has the right to use the GSV name for so long as the Advisory Agreement with GSV Asset Management is in effect. Other than with respect to this limited license, the Company has no legal right to the “GSV” name.

Other Arrangements

Mark Moe, who is the brother of the Company’s Chief Executive Officer, Michael Moe, 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. Diane Flynn, who is the spouse of the Company’s President, Mark Flynn, served as Chief Marketing Officer of NestGSV, Inc. until her resignation in January 2017. 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 President, Mark Flynn. As of March 31, 2017, the fair values of the Company’s investments in NestGSV, Inc. and Enjoy Technology, Inc. were $6,979,883 and $5,441,885, respectively. Another one of the Company’s portfolio companies, SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.), previously utilized office space paid for by GSV Asset Management without paying GSV Asset Management or the Company any consideration for rent. The Company did not consider this an arms-length transaction. In August 2016, SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.) moved out of the office space paid for by GSV Asset Management.

In addition, the Company’s executive officers and directors, and the principals of the Company’s investment adviser, GSV Asset Management, serve or may serve as officers and directors 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. For example, as of May 9, 2017, GSV Asset Management also manages Coursera@GSV Fund, LP, and Coursera@GSV-EDBI Fund, LP, special purpose vehicles each comprised of an underlying investment in Coursera stock (the “Coursera Funds”). GSV Asset Management also serves as sub-adviser for certain investment series of GSV Ventures I LLC,

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2017
(Unaudited)

NOTE 2 — RELATED-PARTY ARRANGEMENTS  – (continued)

GSV Ventures II LLC, GSV Ventures V LLC, GSV Ventures VI LLC and a pooled investment fund, GSV Ventures III LLC, each a venture capital fund (collectively, the “GSV Ventures Funds”), as well as GSV Coursera LLC, a special purpose venture capital vehicle comprised of an underlying investment in Coursera stock (collectively, with the GSV Ventures Funds, referred to as the “GSV Funds”). GSV Asset Management will likely manage one or more private funds, or series within such private funds, in the future. The Company has no ownership interests in the Coursera Funds or the GSV Funds sub-advised by GSV Asset Management.

While the investment focus of each of these entities, including the Coursera Funds and the GSV Funds, may be different from the Company’s investment objective, it is likely that new investment opportunities that meet the Company’s investment objective will come to the attention of one of these entities, or new entities that will likely be formed in the future in connection with another investment advisory client or program, and, if so, such opportunity might not be offered, or otherwise made available, to the Company. However, the Company’s executive officers, directors and investment adviser, GSV Asset Management, intend to treat the Company in a fair and equitable manner consistent with their applicable duties under law so that the Company will not be disadvantaged in relation to any other particular client. In addition, while GSV Asset Management anticipates that it will from time to time identify investment opportunities that are appropriate for both the Company and the other funds that are currently, or in the future may be, managed by GSV Asset Management, to the extent it does identify such opportunities, GSV Asset Management has established an allocation policy to ensure that the Company has priority over such other funds. The Company’s board of directors will monitor on a quarterly basis any such allocation of investment opportunities between the Company and any such other funds.

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. During the year ended December 31, 2016, the Company received other income of $212,795 from the proceeds of Michael Moe’s sale of common shares of 2U, Inc. (f/k/a 2tor, Inc.), one of the Company’s former portfolio companies, that Mr. Moe received while serving on 2U’s board of directors. These sales proceeds were remitted directly to the Company.

Investments in Controlled and Affiliated Portfolio Companies

Under the 1940 Act, the Company’s investments in controlled and affiliated portfolio companies are deemed to be related-party transactions.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2017
(Unaudited)

NOTE 3 — INVESTMENTS AT FAIR VALUE

The Company’s investments in portfolio companies consist primarily of equity securities (such as common stock, preferred stock and warrants 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 March 31, 2017, the Company had 80 positions in 39 portfolio companies. At December 31, 2016, the Company had 91 positions in 45 portfolio companies. The following table summarizes the composition of the Company’s investment portfolio by security type at cost and fair value as of March 31, 2017 and December 31, 2016:

       
  March 31, 2017 (Unaudited)   December 31, 2016
     Cost   Fair Value   Cost   Fair Value
Private Portfolio Companies
                                   
Common Stock   $ 73,577,946     $ 84,837,662     $ 81,274,687     $ 83,074,410  
Preferred Stock     153,771,912       161,817,770       174,462,577       162,238,879  
Debt Investments     8,595,126       7,903,509       8,849,434       7,821,948  
Warrants     158,713       245,830       158,713       150,904  
Subtotal – Private Portfolio Companies     236,103,697       254,804,771       264,745,411       253,286,141  
Publicly Traded Portfolio Companies
                                   
Common Stock     18,025,133       15,849,936       14,022,863       8,729,005  
Total Private and Publicly Traded Portfolio Companies     254,128,830       270,654,707       278,768,274       262,015,146  
Non-Portfolio Investments
                                   
U.S. Treasury Bill     59,996,000       59,997,000       29,998,750       29,998,490  
Total Investments   $ 314,124,830     $ 330,651,707     $ 308,767,024     $ 292,013,636  

  

The industrial themes and geographic compositions of the Company’s portfolio at fair value as of March 31, 2017 and December 31, 2016 were as follows:

   
  March 31, 2017   December 31, 2016
     (Unaudited)     
Industry Theme
                 
Education Technology     36.6 %      36.8 % 
Big Data/Cloud     34.2       34.3  
Social/Mobile     17.6       17.6  
Marketplaces     10.1       9.7  
Sustainability     1.5       1.6  
Total     100.00 %      100.00 % 

  

   
  March 31, 2017   December 31, 2016
     (Unaudited)     
Geographic Region
                 
West     71.5 %      71.5 % 
Northeast     15.6       15.8  
International     7.2       7.2  
Mid-west     5.7       5.5  
Total     100.00 %      100.00 % 

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2017
(Unaudited)

NOTE 3 — INVESTMENTS AT FAIR VALUE  – (continued)

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

 
Industry Theme   Industry
Big Data/Cloud     Big Data Consulting
Cloud Computing Services
Customer Relationship Manager
Data Analysis
Mobile Device Management
Social Cognitive Learning
Social Media Analytics
 
Education Technology     Business Education
Computer Software
Corporate Education
Education Media Platform
Education Software
Education Technology
E-Transcript Exchange
Globally-focused Private School
Interactive Learning
Online Education
Online Education Services
 
Marketplaces     Cash Payment Network
Financial Services
Global Innovation Platform
Knowledge Networks
On-Demand Commerce
On-Demand Transportation Services
Online Marketplace Finance
Peer-to-Peer Pet Services
 
Social/Mobile     Digital Media Platform
Light Field Imaging Platform
On-Demand Music Streaming
Social Communication
Social Data Platform
Sports Analytics
 
Sustainability     Clean Technology  

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2017
(Unaudited)

NOTE 3 — INVESTMENTS AT FAIR VALUE  – (continued)

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 March 31, 2017 and December 31, 2016 are as follows:

       
  As of March 31, 2017 (Unaudited)   Total
  Quoted Prices in
Active Markets for Identical Securities
(Level 1)
  Significant Other
Observable
Inputs
(Level 2)
  Significant Other
Unobservable
Inputs
(Level 3)
Assets at fair value
                                   
Private Portfolio Companies
                                   
Common Stock   $     $     $ 84,837,662     $ 84,837,662  
Preferred Stock                 161,817,770       161,817,770  
Debt Investments                 7,903,509       7,903,509  
Warrants                 245,830       245,830  
Subtotal – Private Portfolio Companies                 254,804,771       254,804,771  
Publicly Traded Portfolio Companies
                                   
Common Stock     15,849,936                   15,849,936  
Total Private and Publicly Traded Portfolio Companies     15,849,936             254,804,771       270,654,707  
Non-Portfolio Investments
                                   
U.S. Treasury Bill     59,997,000                   59,997,000  
Total Assets at Fair Value   $ 75,846,936     $     $ 254,804,771     $ 330,651,707  

       
  As of December 31, 2016   Total
  Quoted Prices in
Active Markets
for Identical
Securities
(Level 1)
  Significant Other
Observable
Inputs
(Level 2)
  Significant Other
Unobservable
Inputs
(Level 3)
Assets at fair value
                                   
Private Portfolio Companies
                                   
Common Stock   $     $     $ 83,074,410     $ 83,074,410  
Preferred Stock                 162,238,879       162,238,879  
Debt Investments                 7,821,948       7,821,948  
Warrants                 150,904       150,904  
Subtotal – Private Portfolio Companies                 253,286,141       253,286,141  
Publicly Traded Portfolio Companies
                                   
Common Stock     8,729,005                   8,729,005  
Total Private and Publicly Traded Portfolio Companies     8,729,005             253,286,141       262,015,146  
Non-Portfolio Investments
                                   
U.S. Treasury Bill     29,998,490                   29,998,490  
Total Assets at Fair Value   $ 38,727,495     $     $     $ 292,013,636  

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2017
(Unaudited)

NOTE 3 — INVESTMENTS AT FAIR VALUE  – (continued)

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 March 31, 2017 and December 31, 2016. 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 March 31, 2017 and December 31, 2016. 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.

As of March 31, 2017 (Unaudited)
Asset Fair Value Valuation
Technique/Approach
Unobservable inputs Range
(Weighted Average)
  
  
  
Common stock in
private companies
  
  
  
$84,827,662
  
Market approach
Precedent transactions(1)
N/A
Revenue multiples 1.4x – 6.5x (4.1x)
  
  
  
$10,000
  
Discounted Cash
Flow(2)
Discount rate 20.0% (20.0%)
Long-term revenue growth 4.0% (4.0%)
  
  
  
Option Pricing Method(2)
Long-term profit margin
(EBIT)
25.0% (25.0%)
Time to liquidity (Years) 3.0 (3.0)
Equity Volatility 40.0% (40.0%)
  
  
  
Preferred stock in private companies
151,831,833 Market approach Precedent transactions(1) N/A
Revenue multiples 1.4x – 6.5x (3.2x)
EBIT multiples 15.0x (15.0x)
Discount for lack of control 15.0% (15.0%)
  
  
  
5,809,036
  
Discounted Cash
Flow(2)
Discount rate 20.0% (20.0%)
Long-term revenue growth 4.0% (4.0%)
  
Option Pricing Method(2)
Long-term profit margin
(EBIT)
25.0% (25.0%)
Time to liquidity (Years) 3.0 (3.0)
Equity Volatility 40.0% (40.0%)
4,176,901 PWERM Discount rate 12.0% (12.0%)
  
  
  
Debt Investments
$7,903,509 Market approach Liquidation Value N/A
  
  
  
Warrants
  
245,830
  
Option pricing model
Term to expiration (Years) 0.9 – 2.8 (2.1)
Volatility 11.5% – 48.0% (40.7%)
(1) Precedent transactions include recent rounds of financing, recent purchases made by the Company, and tender offers.
(2) As of December 31, 2016, the Company used a market approach to value certain common and preferred stock investments. As of March 31, 2017, 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.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2017
(Unaudited)

NOTE 3 — INVESTMENTS AT FAIR VALUE  – (continued)

As of December 31, 2016
Asset Fair Value Valuation Techniques Unobservable inputs Range
(Weighted Average)
  
  
  
  
Common stock in private companies
  
  
  
  
$83,074,410
  
Market approach
Precedent transactions(1) N/A
Revenue multiples 0.8x – 5.2x (3.3x)
EBIT multiples 37.5x (37.5x)
  
  
  
  
Preferred stock in private companies
  
  
  
  
$157,929,101
  
  
  
  
Market approach
Precedent transactions(1)
N/A
Revenue multiples 0.8x – 5.3x (2.7x)
EBIT multiples 37.5x (37.5x)
Subscriber multiples 669.9x (669.6x)
Discount for lack of control 15.0% (15.0%)
$4,309,778 PWERM Discount rate 12.0% (12.0%)
Debt Investments $7,821,948 Market approach Liquidation Value N/A
  
Warrants
  
$150,904
  
Option pricing model
Term to expiration (Years) 1.2 – 3.0 (2.1)
Volatility 10.4% – 49.3% (43.2%)
(1) Precedent transactions include recent rounds of financing, recent purchases made by the Company, and tender offers.

The significant unobservable inputs used in determining the fair value of the assets and liabilities are shown above. 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 aggregate values of Level 3 assets and liabilities changed during the three months ended March 31, 2017 as follows:

         
  Three months ended March 31, 2017 (Unaudited)
     Common
Stock
  Preferred
Stock
  Debt
Investments
  Warrants   Total
Assets:
                                            
Fair value as of December 31, 2016   $ 83,074,410     $ 162,238,879     $ 7,821,948     $ 150,904     $ 253,286,141  
Transfers out of Level 3     (2,184,565 )      (2,184,565 )                  (4,369,130 ) 
Purchases, capitalized fees and interest                 18,177             18,177  
Realized losses     (8,201,725 )      (16,183,412 )      (305,280 )            (24,690,417 ) 
Exercises, conversions and assignments(1)     2,506,119       (2,506,119 )                   
Amortization of fixed income security premiums and discounts                 32,796             32,796  
Net change in unrealized appreciation included in earnings     9,643,423       20,452,987       335,868       94,926       30,527,204  
Fair Value as of March 31, 2017   $ 84,837,662     $ 161,817,770     $ 7,903,509     $ 245,830     $ 254,804,771  
Net change in unrealized appreciation of Level 3 investments still held as of March 31, 2017   $ 1,441,698     $ 4,264,227     $ 30,588     $ 94,926     $ 5,831,439  

(1) During three months ended March 31, 2017, the Company’s portfolio investments had the following corporate actions which are reflected above:

   
Portfolio Company   Transfer from   Transfer to
A Place for Rover Inc. (f/k/a DogVacay, Inc.)   Preferred shares, Series B-1   Common Shares

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GSV CAPITAL CORP. AND SUBSIDIARIES
 
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2017
(Unaudited)

NOTE 3 — INVESTMENTS AT FAIR VALUE  – (continued)

The aggregate values of Level 3 assets and liabilities changed during the year ended December 31, 2016 as follows:

         
  Year ended December 31, 2016
     Common
Stock
  Preferred
Stock
  Debt
Investments
  Warrants   Total
Assets:
                                            
Fair value as of December 31, 2015   $ 102,319,140     $ 216,291,092     $ 4,175,859     $ 469,306     $ 323,255,397  
Transfers into Level 3     143,733                         143,733  
Purchases of investments     3,080       9,016,702       5,201,294       103,655       14,324,731  
Sales of investments     (3,509,238 )      (7,651,891 )      (574,380 )            (11,735,509 ) 
Realized gains (losses)     (7,127,146 )      4,430,221             (246,714 )      (2,943,639 ) 
Exercises, conversions and assignments(1)     23,588,443       (23,588,443 )                   
Amortization of fixed income security premiums and discounts                 44,714             44,714  
Net change in unrealized depreciation included in earnings     (32,343,602 )      (36,258,802 )      (1,025,539 )      (175,343 )      (69,803,286 ) 
Fair Value as of December 31, 2016   $ 83,074,410     $ 162,238,879     $ 7,821,948     $ 150,904     $ 253,286,141  
Net change in unrealized depreciation of Level 3 investments still held as of December 31, 2016   $ (39,307,692 )    $ (40,126,793 )    $ (1,025,539 )    $ (195,637 )    $ (80,655,661 ) 

(1) During year ended December 31, 2016, the Company’s portfolio investments had the following corporate actions which are reflected above:

   
Portfolio Company   Transfer from   Transfer to
4C Insights (f/k/a The Echo Systems Corp.)   Preferred shares, Series A   Common Shares
PayNearMe, Inc.   Preferred shares, Series E   Common Shares
Fullbridge, Inc.   Preferred shares, Series C   Common Shares
Fullbridge, Inc.   Preferred shares, Series D   Common Shares
Fullbridge, Inc.   Convertible Promissory
Note 10% Due 3/2/2016
  Junior Note, 1.49%,
November 9, 2021
Fullbridge, Inc.   Convertible Promissory
Note 10% Due 3/14/2017
  Junior Note, 1.49%,
November 9, 2021

The portfolio companies in which the Company invests periodically offer their shares in IPOs, which are typically subject to lock-up agreements for 180 days following the IPO. Refer to “Note 1 — Nature of Operations and Significant Accounting Policies — Summary of Significant Accounting Policies — Levelling Policy” for further detail.

NOTE 4 — EQUITY OFFERINGS AND RELATED EXPENSES

No new shares of the Company’s common stock were issued during the three months ended March 31, 2017 and 2016, respectively.

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GSV CAPITAL CORP. AND SUBSIDIARIES
 
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2017
(Unaudited)

NOTE 5 — NET INCREASE/(DECREASE) 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/(decrease) in net assets resulting from operations per common share for the three months ended March 31, 2017 and 2016. The use of the if-converted method as promulgated under ASC 260 considers all potentially dilutive securities in a company’s capital structure when calculating diluted earnings per share, regardless of whether it would be economically beneficial for a holder of such potentially dilutive security to exercise their conversion option (such as out of the money warrants.) In scenarios where diluted net increase in net assets resulting from operations per share is higher than basic net increase in net assets resulting from operations per share, ASC 260 prohibits the separate presentation of the diluted net increase in net assets resulting from operations per share figure. In scenarios where diluted net decrease in net assets resulting from operations per share is lower than basic net decrease in net assets resulting from operations per share, ASC 260 prohibits the separate presentation of the net decrease in net assets resulting from operations per share figure.

   
  Three months ended March 31,
     2017   2016
     (Unaudited)   (Unaudited)
Net increase/(decrease) in net assets resulting from operations per share – basic:
                 
Net increase/(decrease) in net assets resulting from operations   $ 3,782,886     $ (24,949,064 ) 
Weighted-average common shares – basic     22,181,003       22,181,003  
Net increase/(decrease) in net assets resulting from operations per share – basic:   $ 0.17     $ (1.12 ) 
Net increase/(decrease) in net assets resulting from operations per share – diluted:
                 
Net increase/(decrease) in net assets resulting from operations, before adjustments   $ 3,782,886     $ (24,949,064 ) 
Adjustments for interest on Convertible Senior Notes and deferred financing costs            
Net increase/(decrease) in net assets resulting from operations, as adjusted     3,782,886       (24,949,064 ) 
Weighted-average common shares outstanding – basic     22,181,003       22,181,003  
Adjustments for dilutive effect of Convertible Senior Notes(1)            
Weighted-average common shares outstanding – diluted     22,181,003       22,181,003  
Net increase/(decrease) in net assets resulting from operations per share – diluted   $ 0.17     $ (1.12 ) 

(1) For the three months ended March 31, 2017 and 2016, 5,751,815 and 5,710,212 potentially dilutive common shares, respectively, were excluded from the weighted-average common shares outstanding for diluted net increase/(decrease) in net assets resulting from operations per common share because the effect of these shares would have been anti-dilutive.

NOTE 6 — 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 March 31, 2017 and December 31, 2016, the Company had not entered into any investment agreements that required it to make a future investment in a portfolio company.

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GSV CAPITAL CORP. AND SUBSIDIARIES
 
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2017
(Unaudited)

NOTE 6 — COMMITMENTS AND CONTINGENCIES  – (continued)

The Company is currently not subject to any material legal proceedings, nor, to its knowledge, is any material legal proceeding threatened against it. 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.

NOTE 7 — FINANCIAL HIGHLIGHTS

   
  Three months ended
March 31, 2017
  Three months ended
March 31, 2016
     (Unaudited)   (Unaudited)
Per Share Data
                 
Net asset value at beginning of period   $ 8.66     $ 12.08  
Net investment income/(loss)     (0.22 )(1)      0.02 (1) 
Realized loss     (1.11 )(1)      (0.27 )(1) 
Change in unrealized appreciation/(depreciation)     1.50 (1)      (0.87 )(1) 
Net asset value at end of period   $ 8.83     $ 10.96  
Per share market value at end of period   $ 4.48     $ 5.60  
Total return based on market value     (10.93 )%(2)      (15.28 )%(2) 
Total return based on net asset value     1.96 %(2)      (9.27 )%(2) 
Shares outstanding at end of period     22,181,003       22,181,003  
Ratios/Supplemental Data:
                 
Net assets at end of period   $ 195,911,696     $ 243,061,881  
Average net assets   $ 191,439,679     $ 275,907,870  
Annualized Ratios
                 
Ratio of gross operating expenses to average net assets(3)     10.90 %      (0.65 )% 
Ratio of net income tax provisions to average net assets(3)     %      % 
Ratio of net operating expenses to average net assets(3)     10.90 %      (0.65 )% 
Ratio of net investment loss to average net assets(3)     (10.19 )%      0.80 % 
Portfolio Turnover Ratio     0.00 %      1.49 % 

(1) Based on weighted-average number of shares outstanding for the 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 period. 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 are not annualized. For each of the three months ended March 31, 2017 and 2016, the Company did not incur any non-recurring expenses. 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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GSV CAPITAL CORP. AND SUBSIDIARIES
 
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2017
(Unaudited)

NOTE 8 — 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. Accordingly, the Company must generally distribute at least 90% of its ICTI to qualify for the treatment accorded to a RIC and to maintain its RIC status. As part of maintaining RIC status, undistributed taxable income (subject to a 4% excise tax) pertaining to a given fiscal year may be distributed up to 12 months subsequent to the end of that fiscal year, provided such dividends are declared prior to the later of (1) the fifteenth day of the ninth month following the close of that fiscal year or (2) the extended due date for filing the U.S. federal income tax return for that fiscal year.

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 (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 GSVC Holdings are C corporations for U.S. federal and state income tax purposes. The Company uses the asset and liability method to account for the GSVC Holdings’ income taxes. Using this method, the Company recognizes deferred tax assets and liabilities for the estimated future tax effects attributable to temporary differences between the financial reporting and tax bases of assets and liabilities. In addition, the Company recognizes deferred tax benefits associated with net operating loss carryforwards that it may use to offset future tax obligations. The Company measures deferred tax assets and liabilities using the enacted tax rates expected to apply to taxable income in the years in which it expects to recover or settle those temporary differences.

As of both March 31, 2017 and December 31, 3016, the Company recorded a deferred tax liability of approximately $10.4 million, of which approximately $10.2 million has been recorded in the event that such gains are recognized by December 31, 2018, and approximately $0.2 million relates to the difference in the book and tax basis of certain equity investments and tax net 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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GSV CAPITAL CORP. AND SUBSIDIARIES
 
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2017
(Unaudited)

NOTE 8 — INCOME TAXES  – (continued)

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 2013 – 2016 and 2012 – 2016, respectively.

The Company and the GSVC Holdings accrue all interest and penalties related to uncertain tax positions as incurred. As of March 31, 2017, there were no interest or penalties incurred related to uncertain tax positions.

NOTE 9 — LONG-TERM LIABILITIES

Convertible Senior Notes Payable

On September 17, 2013, the Company issued $69 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, commencing on March 15, 2014 (the “Convertible Senior Notes”). The Convertible Senior Notes mature on September 15, 2018, unless previously repurchased or converted in accordance with their terms. The Company does not have the right to redeem the Convertible Senior Notes prior to maturity. The Convertible Senior Notes 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 Convertible Senior Notes, which is equivalent to a conversion price of approximately $12.00 per share of common stock.

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

   
  March 31,
2017
  December 31,
2016
     (Unaudited)     
Aggregate principal amount of Convertible Senior Notes   $ 69,000,000     $ 69,000,000  
Unamortized embedded derivative discount     (224,885 )      (261,099 ) 
Direct deduction of deferred debt issuance costs     (1,059,242 )      (1,226,103 ) 
Convertible Senior Notes   $ 67,715,873     $ 67,512,798  

As of March 31, 2017 and December 31, 2016, the principal amount of the Convertible Senior Notes exceeded the value of the underlying shares multiplied by the per share closing price of the Company’s common stock.

The Convertible Senior Notes are the Company’s senior, unsecured obligations and rank senior in right of payment to any future indebtedness that is expressly subordinated in right of payment to the Convertible Senior Notes, equal in right of payment to any future unsecured indebtedness that is not so subordinated to the Convertible Senior Notes, junior to any future secured indebtedness to the extent of the value of the assets securing such indebtedness, and structurally junior to all future indebtedness (including trade payables) incurred by the Company’s subsidiaries.

Embedded Derivative

The Convertible Senior Notes contained an interest make-whole payment provision pursuant to which holders who converted their notes prior to September 15, 2016, would receive, in addition to a number of shares of the Company’s common stock calculated at the applicable conversion rate for the principal amount of notes being converted, the cash proceeds from the sale by the escrow agent of the portion of the U.S. Treasury Strips in the escrow account that were remaining with respect to any of the first six interest payments that had not been made on the notes being converted. Under FASB ASC 815-10-15-74(a), the interest make-whole payment was considered an embedded derivative and was separated from the host

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GSV CAPITAL CORP. AND SUBSIDIARIES
 
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2017
(Unaudited)

NOTE 9 — LONG-TERM LIABILITIES  – (continued)

contract, the Convertible Senior Notes, and carried at fair value. The interest make-whole payment provision expired on September 15, 2016 rendering the embedded derivative with no value, however the original value of the embedded derivative of $700,000 continues to be amortized over the life of the Convertible Senior Notes.

Credit Facility

The Company entered into a Loan and Security Agreement, effective December 31, 2013 (the “Loan Agreement”), with Silicon Valley Bank, pursuant to which Silicon Valley Bank agreed to provide the Company with an $18 million credit facility (the “Credit Facility”). The Credit Facility expired on December 31, 2016 in accordance with its terms. Under the Credit Facility, the Company was permitted to borrow an amount equal to the lesser of $18 million or 20% of the Company’s then-current net asset value.

The Credit Facility bore interest at a per annum rate equal to the greater of (i) the prime rate plus 4.75% or (ii) 8.0% on amounts drawn under the Credit Facility based on a 360-day year. In addition, a fee of $180,000 per annum (1.0% of the $18 million revolving line of credit) was charged under the Loan Agreement. Under the terms of the Credit Facility, the Company was required to repay all outstanding borrowings on the Credit Facility so that there is at least one 30-day period every 12 months during which the Company has no balance outstanding. The Company made certain customary representations and warranties under the Loan Agreement and was required to comply with various covenants, reporting requirements, and other customary requirements for similar credit facilities. The Loan Agreement included usual and customary events of default for credit facilities of a similar nature, including, without limitation, nonpayment, misrepresentation of representations and warranties in a material respect, breach of covenant, cross-default to certain other indebtedness, bankruptcy, change of control, and the occurrence of a material adverse effect.

The Credit Facility was secured by all of the Company’s property and assets, except for the Company’s assets pledged to secure certain obligations in connection with the Company’s issuance of the Convertible Senior Notes and, as provided for in the Loan Agreement, as may be pledged in connection with any future issuance by the Company of Convertible Senior Notes on substantially similar terms. Borrowing under the Credit Facility was subject to the leverage restrictions contained in the 1940 Act. In addition, under the Loan Agreement, and as provided for therein, the Company has agreed not to incur certain additional permitted indebtedness in an aggregate amount exceeding 50% of the Company’s then-applicable net asset value. For the three months ended March 31, 2016, the Company had no borrowings outstanding under the Credit Facility.

NOTE 10 — SUBSEQUENT EVENTS

Portfolio Activity

From March 31, 2017 through May 10, 2017, the Company did not purchase or sell 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.

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GSV CAPITAL CORP. AND SUBSIDIARIES
 
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2017
(Unaudited)

NOTE 11 — SUPPLEMENTAL FINANCIAL DATA

In accordance with the SEC’s Regulation S-X and GAAP, we are not permitted to consolidate any subsidiary or other entity that is not an investment company, including those in which we have a controlling interest. We had an unconsolidated subsidiary for the three months ended March 31, 2017, that met at least one of the significant conditions of the SEC’s Regulation S-X. Accordingly, pursuant to Regulation S-X, summarized, comparative financial information is presented below for our unconsolidated significant subsidiary for the three months ended March 31, 2017 and 2016.

   
Income Statement Data for the Three Months Ended:   March 31,
2017
  March 31,
2016
     (Unaudited)   (Unaudited)
Revenue   $ 1,125,028     $ 863,646  
Gross profit     1,101,751       811,938  
Loss from operations     (185,648 )      (604,777 ) 
Total net income including net income attributable to non-controlling interest            
Net loss attributable to controlling interest     (185,648 )      (604,777 ) 

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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 statements as to:

our future operating results;
our business prospects and the prospects of our portfolio companies;
the impact of investments that we expect to make;
our contractual arrangements and relationships with third parties;
the dependence of our future success on the general economy and its impact on the industries in which we invest;
the ability of our portfolio companies to achieve their objectives;
our expected financings and investments;
the adequacy of our cash resources and working capital; and
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:

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;
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;
a contraction of available credit and/or an inability to access the equity markets could impair our investment activities;
interest rate volatility could adversely affect our results, particularly because we use leverage as part of our investment strategy; and
the risks, uncertainties and other factors we identify in “Risk Factors” in this quarterly report on Form 10-Q and our annual report on Form 10-K, and in our 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 this quarterly report on Form 10-Q and our annual report on Form 10-K, in the “Risk Factors” section. 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.

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The following analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the related notes thereto contained elsewhere in this quarterly report on Form 10-Q.

Overview

We are an externally managed, non-diversified closed-end management investment company that has elected to be regulated as a business development company 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 regards to the regulatory requirements for business development companies 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 non-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 activities are managed by GSV Asset Management. GSV Capital Service Company provides the administrative services necessary for us to operate.

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. GSV Asset Management’s 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 our investment adviser, GSV Asset Management, evaluates 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, warrants, 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.

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Investments — (Portfolio 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 March 31, 2017, of all of our portfolio investments, excluding U.S. Treasury Bills, was $270,654,707.

During the three months ended March 31, 2017, we did not purchase or close on any investments. We did, however, pay $280 in capitalized fees. The table below summarizes the portfolio investments we wrote-off during the three months ended March 31, 2017:

Quarter ended March 31, 2017

   
Portfolio Company   Net Proceeds   Realized
Gains/(Losses)(1)
AliphCom, Inc. (d/b/a Jawbone)   $     $ (793,152 ) 
AlwaysOn, Inc.           (1,903,414 ) 
Beamreach Solar, Inc. (f/k/a Solexel, Inc.)           (14,272,840 ) 
Cricket Media (f/k/a ePals Corporation)           (2,448,959 ) 
EarlyShares.com, Inc.           (312,438 ) 
Orchestra One, Inc. (f/k/a Learnist, Inc.)           (4,959,614 ) 
Total Sales   $     $ (24,690,417 ) 

(1) Realized losses exclude any realized losses incurred on the maturity of our treasury investments.

The table below summarizes the portfolio investments we sold during the three months ended March 31, 2016:

Quarter ended March 31, 2016

   
Portfolio Company   Net Proceeds   Realized
Gains/(Losses)(1)
Bloom Energy Corporation   $ 2,973,437     $ (882,162 ) 
Gilt Groupe Holdings, Inc.(2)     427,270       (6,167,164 ) 
Lyft, Inc.     1,638,925       974,224  
Total Sales   $ 5,039,632     $ (6,075,102 ) 

(1) Realized gains/(losses) exclude any realized gains/(losses) incurred on the maturity of our treasury investments.
(2) In January 2016, Gilt Groupe Holdings, Inc. sold for $250 million to Hudson’s Bay Co., the parent company of Saks Fifth Avenue.

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Results of Operations — For the three months ended March 31, 2017 and 2016

Operating results for the three months ended March 31, 2017 and 2016 are as follows:

       
  March 31, 2017   March 31, 2016
     Total   Per Basic
Share(1)
  Total   Per Basic
Share(1)
Total Investment Income   $ 338,459       0.02     $ 102,652       0.00  
Interest income     163,459       0.01       97,367       0.00  
Dividend income     175,000       0.01       5,285       0.00  
Total Operating Expenses     5,146,671       0.23       (444,355 )      (0.02 ) 
Management fees     1,272,618       0.06       1,958,000       0.09  
Incentive fees/(reversal of incentive fees)     1,717,308       0.08       (5,118,584 )      (0.23 ) 
Costs incurred under Administration Agreement     531,484       0.02       599,950       0.03  
Directors’ fees     82,917             86,250       0.00  
Professional fees     262,190       0.01       637,128       0.03  
Interest expense     1,126,773       0.05       1,183,163       0.05  
Income tax expense     800                   0.00  
Other expenses     152,581       0.01       209,738       0.01  
Net investment income/(loss)     (4,808,212 )      (0.22 )      547,007       0.02  
Net realized loss on investments     (24,689,167 )      (1.11 )      (6,075,070 )      (0.27 ) 
Net change in unrealized appreciation/(depreciation) of investments     33,280,265       1.50       (19,421,001 )      (0.87 ) 
Net increase/(decrease) in net assets resulting from operations   $ 3,782,886     $ 0.17     $ (24,949,064 )      (1.12 ) 

(1) The per-share figures noted are based on a weighted average of 22,181,003 shares outstanding for each of the three months ended March 31, 2017 and 2016.

Comparison of the three months ended March 31, 2017 and 2016

Investment Income

Investment income increased to $338,459 for the three months ended March 31, 2017, from $102,652 for the three months ended March 31, 2016. The increase was primarily due to increased dividend income and, to a lesser extent, increased interest income. The increase in dividend income resulted from a $175,000 dividend from our investment in SPBRX, Inc. (f/k/a GSV Sustainability Partners, Inc.). The increase in interest income resulted from our acquisition of additional interest-bearing debt investments during the three months ended March 31, 2017. As of March 31, 2017, the cost of our debt investments increased to $8,595,126 from $5,688,296 as of March 31, 2016, which allowed us to earn additional interest income on our portfolio investments.

Operating Expenses

Total operating expenses increased to $5,146,671 for the three months ended March 31, 2017, from $(444,355) for the three months ended March 31, 2016. Total operating expenses increased during the three months ended March 31, 2017, as compared to the three months ended March 31, 2016, primarily due to fact that we had a reversal of accrued incentive fees for the three months ended March 31, 2016, whereas we accrued incentive fees during the three months ended March 31, 2017. We accrued incentive fees during the three months ended March 31, 2017 as a result of the unrealized appreciation of our portfolio investments in the aggregate during the period. The increase in total operating expenses caused by the accrual of incentive fees during the three months ended March 31, 2017, as discussed above, was partially offset by lower management fees period over period, resulting from lower average gross assets outstanding, as well as a decrease in professional fees period over period, which includes legal, valuation, audit and consulting fees.

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Net Investment Income/Loss

For the three months ended March 31, 2017, we recognized net investment loss of $4,808,212, compared to net investment income of $547,007 for the three months ended March 31, 2016. The increase in net investment loss resulted primarily from the accrual of incentive fees during the three months ended March 31, 2017, as discussed above, partially offset by the increase in investment income.

Net Realized Loss on Investments

For the three months ended March 31, 2017, we recognized net realized losses of $24,689,167, compared to net realized losses of $6,075,070 for the three months ended March 31, 2016. The components of our net realized losses on portfolio investments, excluding treasury investments, are reflected above, under “—  Overview — Investments — (Portfolio Activity).”

Net Change in Unrealized Appreciation/(Depreciation) of Investments

For the three months ended March 31, 2017, we had a net change in unrealized appreciation of $33,280,265. For the three months ended March 31, 2016, we had a net change in unrealized depreciation of $19,421,001. The following tables summarize, by portfolio company, the significant changes in unrealized appreciation/(depreciation) of our investment portfolio for each of the three months ended March 31, 2017 and 2016.

             
Portfolio Company   Change in
Unrealized
Appreciation/
(Depreciation)
  March 31, 2017   December 31, 2016
  Cost   Fair Value   Unrealized
Appreciation/
(Depreciation)
  Cost   Fair Value   Unrealized
Appreciation/
(Depreciation)
Beamreach Solar lnc. (f/k/a Solexel, Inc.)   $ 14,272,843     $     $     $     $ 14,272,843     $     $ (14,272,843 ) 
Orchestra One, Inc. (f/k/a Learnist Inc.)     4,959,614                         4,959,614             (4,959,614 ) 
Dropbox, Inc.     3,871,834       13,656,926       17,062,318       3,405,392       13,656,926       13,190,484       (466,442 ) 
Cricket Media (f/k/a ePals Inc.)     2,448,959                         2,448,959             (2,448,959 ) 
AlwaysOn Inc.     1,903,414                         1,903,414             (1,903,414 ) 
NestGSV, Inc. (d/b/a GSV Labs, Inc.)     1,825,524       9,649,163       6,979,883       (2,669,280 )      9,601,555       5,106,751       (4,494,804 ) 
General Assembly Space, Inc.     1,309,215       5,999,961       15,055,979       9,056,018       5,999,961       13,746,764       7,746,803  
Chegg, Inc.     1,253,759       14,022,863       9,982,764       (4,040,099 )      14,022,863       8,729,005       (5,293,858 ) 
JAMF Holdings, Inc.     1,033,181       9,999,928       14,889,935       4,890,007       9,999,928       13,856,754       3,856,826  
Palantir Technologies, Inc.     (2,435,346 )      17,198,903       39,073,619       21,874,716       17,198,903       41,508,965       24,310,062  
Other(1)     2,837,268       243,597,086       227,607,209       (15,989,877 )      214,702,058       195,874,913       (18,827,145 ) 
Totals   $ 33,280,265     $ 314,124,830     $ 330,651,707     $ 16,526,877     $ 308,767,024     $ 292,013,636     $ (16,753,388 ) 

  

             
Portfolio Company   Change in Unrealized Appreciation/(Depreciation)   March 31, 2016   December 31, 2015
  Cost   Fair Value   Unrealized Appreciation/(Depreciation)   Cost   Fair Value   Unrealized Appreciation/(Depreciation)
Palantir Technologies, Inc.   $ (10,236,707 )    $ 17,198,903     $ 46,116,541     $ 28,917,638     $ 17,198,903     $ 56,353,248     $ 39,154,345  
Gilt Groupe Holdings, Inc.     6,055,046                         6,594,433       539,387       (6,055,046 ) 
Stormwind, LLC     1,032,647       6,130,474       10,783,593       4,653,119       6,130,474       9,750,946       3,620,472  
Twitter, Inc.     (5,275,954 )      14,271,866       13,249,930       (1,021,936 )      14,271,866       18,525,884       4,254,018  
Dropbox, Inc.     (3,047,448 )      13,656,926       19,184,740       5,527,814       13,656,926       22,232,188       8,575,262  
Chegg, Inc.     (2,684,938 )      14,022,863       5,275,252       (8,747,611 )      14,022,863       7,960,190       (6,062,673 ) 
Dataminr, Inc.     (2,607,255 )      3,164,265       8,781,134       5,616,869       3,164,265       11,388,389       8,224,124  
SugarCRM, Inc.     (1,356,844 )      6,977,024       8,626,462       1,649,438       6,977,024       9,983,306       3,006,282  
SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.)     (1,245,000 )      7,161,412       5,005,000       (2,156,412 )      7,161,412       6,250,000       (911,412 ) 
Other(1)     (54,548 )      237,512,703       240,113,240       2,600,537       237,846,837       240,501,922       2,655,085  
Totals   $ (19,421,001 )    $ 320,096,436     $ 357,135,892     $ 37,039,456     $ 327,025,003     $ 383,485,460     $ 56,460,457  

(1) Other represents all investments (including U.S. Treasury Bills and U.S. Treasury Strips) for which individual change in unrealized appreciation/(depreciation) was less than $1,000,000 for the three months ended March 31, 2017 and 2016.

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Net Increase/Decrease in Net Assets Resulting from Operations

For the three months ended March 31, 2017, our net increase in net assets resulting from operations was $3,782,886.

For the three months ended March 31, 2016, our net decrease in net assets resulting from operations was $24,949,064.

Liquidity and Capital Resources

Our liquidity and capital resources are generated primarily from the sales of our investments and advances from any credit facility from which we may borrow. For example, prior to its expiration in accordance with its terms on December 31, 2016, we also generated liquidity and capital resources from advances from the Credit Facility and may enter into an agreement for a new credit facility in the future. In management’s view, we have sufficient liquidity and capital resources to pay our operating expenses and conduct investment activities.

Our primary uses of cash are to make investments, pay our operating expenses and make distributions to our stockholders. For the three months ended March 31, 2017 and 2016, our operating expenses were $5,146,671, and $(444,355), respectively.

   
Cash reserves and liquid securities   As of
March 31,
2017
  As of
December 31,
2016
Cash   $ 1,358,545     $ 8,332,634  
Securities of publicly traded portfolio companies
                 
Unrestricted securities(1)     9,982,764       8,729,005  
Subject to other sales restrictions(2)     5,867,172        
Total securities of publicly traded portfolio companies     15,849,936       8,729,005  
Total cash reserves and liquid securities   $ 17,208,481     $ 17,061,639  

(1) “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.
(2) As of March 31, 2017, this balance represents our shares of common stock of Snap Inc. (f/k/a Snapchat, Inc.), which are restricted until July 31, 2017 due to Snap Inc.’s IPO.

During the three months ended March 31, 2017, cash and cash equivalents decreased to $1,358,545 from $8,332,634 at the beginning of the period. The decrease was primarily due to an additional $2,500,000 margin deposit posted for the purchase of a Treasury Bill, as well as $1,811,250 in interest payments on the Convertible Senior Notes, $1,372,466 in management fees paid, $717,274 in allocation of overhead expenses paid to GSV Capital Service Company and $291,185 of audit fees. During the three months ended March 31, 2017, there were no significant financing activities that impacted our cash and cash equivalents.

Equity Issuances & Debt Capital Activities

There were no sales of our equity or debt securities during the three months ended March 31, 2017 or 2016.

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Contractual Obligations

         
  Payments Due By Period
(dollars in millions)
     Total   Less than
1 year
  1 – 3 years   3 – 5 years   More than
5 years
Payable for securities purchased(1)   $ 54.0     $ 54.0     $     $     $  
Convertible Senior Notes(2)     69.0             69.0              
Total   $ 123.0     $ 54.0     $ 69.0     $     $  

(1) “Payable for securities purchased” relates to the purchase of the United States Treasury Bill on margin. The payable for securities purchased was subsequently repaid on April 6, 2017, when the $60.0 million United States Treasury Bill matured and the $6.0 million margin deposit that was posted as collateral was returned.
(2) The balance shown for the Convertible Senior Notes reflects the principal balance payable to investors. Refer to “Note 9 — Long-Term Liabilities” to our condensed consolidated financial statements as of March 31, 2017, for more information.

Off-Balance Sheet Arrangements

As of March 31, 2017, 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.

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. The following table lists the distributions, including dividends and returns of capital, if any, per share that we have declared since our formation through March 31, 2017. The table is divided by fiscal year according to record date:

     
Date Declared   Record Date   Payment Date   Amount
per Share
Fiscal 2015:
                          
November 4, 2015(1)     November 16, 2015       December 31, 2015     $ 2.76  
Fiscal 2016:
                          
August 3, 2016(2)     August 16, 2016       August 24, 2016       0.04  
Total               $ 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 business development companies that primarily make debt investments. If there are earnings or realized capital gains to be distributed, we intend to declare and pay a distribution at least annually. The amount of realized capital gains available for distribution to stockholders will be impacted by our tax status.

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Our current intention is to make any future distributions out of assets legally available therefrom in 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. In addition, reinvested dividends have the effect of increasing our gross assets, which may correspondingly increase the management fee payable to our investment adviser, GSV Asset Management. 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 status 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 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 1 — Nature of Operations and Significant Accounting Policies — Summary of Significant Accounting Policies — U.S. Federal and State Income Taxes” and “Note 8 — Income Taxes” to our condensed consolidated financial statements as of March 31, 2017 for more information. The GSVC Holdings included in our condensed consolidated financial statements are taxable subsidiaries, regardless of whether we are 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 our condensed consolidated financial statements.

Borrowings

Convertible Senior Notes payable

On September 17, 2013, we issued $69 million aggregate principal amount of Convertible Senior Notes (including $9 million aggregate principal amount issued pursuant to the exercise of the initial purchasers’ option to purchase additional Convertible Senior Notes), which bear interest at a fixed rate of 5.25% per year, are payable semi-annually and mature on September 15, 2018, unless previously repurchased or converted in accordance with their terms. We do not have the right to redeem the Convertible Senior Notes prior to maturity. As of March 31, 2017, the Convertible Senior Notes were convertible into shares of our common stock based on a conversion rate of 83.3596 shares of our common stock per $1,000 principal amount of the Convertible Senior Notes, which is equivalent to a conversion price of approximately $12.00 per share of common stock. Refer to “Note 1 — Nature of Operations and Significant Accounting Policies — Summary of Significant Accounting Policies” and “Note 9 — Long-Term Liabilities” to our condensed consolidated financial statements as of March 31, 2017 for more information regarding the Convertible Senior Notes.

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 condensed 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

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could differ materially from such estimates. See “Note 1 — Nature of Operations and Significant Accounting Policies — Summary of Significant Accounting Policies” to our condensed consolidated financial statements as of March 31, 2017 for further detail regarding our critical accounting policies and recently issued accounting pronouncements not yet required to be adopted by us.

Recent Developments

Portfolio Activity

From March 31, 2017 through May 10, 2017, we did not purchase or sell any investments.

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.

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, such as the recent market volatility in China, geopolitical unrest in the Middle East and as a result of the referendum vote relating to the United Kingdom’s exit from the European Union 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 indirect effect on the business, financial condition and results of operations of the portfolio companies in which we invest.

As of March 31, 2017, all of our debt investments bore a fixed rate of interest. The Convertible Senior Notes bear a fixed rate of interest.

Item 4. Controls and Procedures

As of March 31, 2017, we, 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 in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow 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.

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 quarter ended March 31, 2017, 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 party to any pending material legal proceedings.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in “Item 1A. Risk Factors” in our annual report on Form 10-K for the fiscal year ended December 31, 2016, filed with the SEC on March 16, 2017, which could materially affect our business, financial condition and/or operating results. The risks described in our annual report on Form 10-K are not the only risks we face. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, also may materially and adversely affect our business, financial condition and/or operating results. Other than as described below, during the three months ended March 31, 2017, there have been no material changes to the risk factors discussed in “Item 1A. Risk Factors” of our annual report on Form 10-K for the fiscal year ended December 31, 2016:

Our inability to successfully appoint a new independent member to our board of directors may result in our failure to regain compliance with Nasdaq Listing Rules and our common stock may be delisted from the Nasdaq Capital Market, which may reduce the price of our common stock and levels of liquidity available to our stockholders.

On March 15, 2017, each of Catherine J. Friedman and Bradford C. Koenig resigned as a member of our board of directors, effective as of March 17, 2017. Both Ms. Friedman and Mr. Koenig were independent directors of the board of directors and, as a result of their resignations, our board of directors no longer comprises a majority of independent directors (as defined by Nasdaq Listing Rule 5605(a)(2)), as required by Nasdaq Listing Rule 5605(b)(1).

On March 22, 2017, in accordance with the Nasdaq Listing Rules and in connection with the resignations of Ms. Friedman and Mr. Koenig, we notified Nasdaq of our noncompliance with Nasdaq Listing Rule 5605(b)(1) and our desire to use the cure period provided by Nasdaq Listing Rule 5605(b)(1)(A). Later on March 22, 2017, we received a notice from Nasdaq acknowledging our noncompliance and confirming that Nasdaq will provide us with the requisite cure period.

In accordance with Nasdaq Listing Rule 5605(b)(1)(A), we have until the earlier of our next annual stockholders’ meeting or March 17, 2018, or if our next annual stockholders’ meeting is held before September 13, 2017, then we have until September 13, 2017 to regain compliance with Nasdaq Listing Rule 5605(b)(1).

To remedy the noncompliance with Nasdaq Listing Rule 5605(b)(1) prior to the expiration of the applicable cure period described above, our board of directors has appointed two new directors: Marc Mazur and David S. Pottruck. Mr. Mazur was appointed to serve as a member of the board of directors, effective March 17, 2017, in order to fill the vacancy created by Ms. Friedman’s resignation. Mr. Mazur is an “independent director,” as defined by Nasdaq Listing Rule 5605(a)(2). David S. Pottruck was appointed to serve as a member of the board of directors, effective May 31, 2017, in order to fill the vacancy created by Mr. Koenig’s resignation. Upon the effective date of his appointment to the board of directors, Mr. Pottruck is expected to be an “independent director,” as defined by Nasdaq Listing Rule 5605(a)(2). As a result of the appointments of Messrs. Mazur and Pottruck to the board of directors, we expect to be back in compliance with Nasdaq Listing Rule 5605(b)(1) effective May 31, 2017.

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If we fail to regain compliance with Nasdaq Listing Rules, our common stock may be delisted from the Nasdaq Capital Market. Therefore, there can be no assurance that the Nasdaq Listing Council will determine to continue the listing of our common stock on the Nasdaq Capital Market. If our common stock is delisted, it may become more difficult for our stockholders to sell our stock in the public market and the price of our common stock may be adversely affected. Delisting from the Nasdaq Capital Market could also result in other negative implications including the potential loss or reduction of confidence by customers, creditors, suppliers and employees, the potential loss or reduction of investor interest, and fewer business development opportunities, any of which could materially adversely affect our results of operations and financial condition.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosure

Not applicable.

Item 5. Other Information

Not applicable.

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:

 
3.1   Articles of Amendment and Restatement(1)
3.2   Articles of Amendment(2)
3.3   Bylaws(1)
11.1    Statement re Computation of per Share Earnings (Included in “Note 5 — Net Increase/(Decrease) in Net Assets Resulting from Operations per Common Share — Basic and Diluted” to our Condensed Consolidated Financial Statements contained in this report)*
31.1    Certification of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended*
31.2    Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended*
32.1    Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
32.2    Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

(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 Current Report on Form 8-K (File No. 814-00852) filed on June 1, 2011, and incorporated by reference herein.
* Filed herewith.

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Schedule 12-14 — Schedule of Investments in and Advances to Affiliates
as of March 31, 2017 (unaudited)

           
Control Investments
Portfolio Company/Type of Investment*
  Amount of
Interest, Fees
or Dividends
Credited in
Income
  Fair Value at
December 31,
2016
  Purchases,
Capitalized
Fees and
Interest
  Sales   Realized and
Unrealized
Gains/(Losses)
  Fair Value at
March 31,
2017
StormWind, LLC(1)
                                                     
Preferred shares, Series C   $     $ 4,650,838     $     $     $     $ 4,650,838  
Preferred shares, Series B           4,470,403                         4,470,403  
Preferred shares, Series A           499,796                         499,796  
NestGSV, Inc. (d/b/a GSV Labs, Inc.)
                                                     
Convertible Promissory Note 8% Due
07/31/2017***
    29,197       427,900       33,176             27,412       488,488  
Unsecured Promissory Note 12% Due
05/29/2017***
    30,212       496,725       14,432             5,077       516,234  
Preferred stock Series A-4           2,715,910                   1,116,127       3,832,037  
Preferred stock Series A-3           952,591                   390,407       1,342,998  
Preferred stock Series A-2           166,500                   67,501       234,001  
Preferred stock Series A-1           270,000                   130,000       400,000  
Common shares                             10,000       10,000  
Preferred Warrant Series A-3 – Strike Price $1.33, Expiration Date 4/4/2019           5,625                   7,500       13,125  
Preferred Warrant Series A-4 – Strike Price $1.33, Expiration Date 10/6/2019           40,000                   40,000       80,000  
Preferred Warrant Series A-4 – Strike Price $1.33, Expiration Date 7/18/2021           22,500                   22,500       45,000  
Preferred Warrant Series A-4 – Strike Price $1.33, Expiration Date 11/29/2021           9,000                   9,000       18,000  
SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.)
                                                     
Preferred shares, Class A     175,000       4,309,778                   (132,877 )      4,176,901  
Common shares                                    
Total Control Investments   $ 234,409     $ 19,037,566     $ 47,608     $     $ 1,692,647     $ 20,777,821  

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Schedule 12-14 — Schedule of Investments in and Advances to Affiliates
as of March 31, 2017 (unaudited) – (continued)

           
Affiliate Investments
Portfolio Company/Type of Investment*
  Interest,
Fees or
Dividends
Credited in
Income
  Fair Value at
December 31,
2016
  Purchases,
Capitalized
Fees and
Interest
  Sales   Realized and
Unrealized
Gains/(Losses)
  Fair Value at
March 31,
2017
Whittle Schools, LLC(2)
                                                     
Preferred shares, Series B   $     $ 3,000,000     $     $     $     $ 3,000,000  
Common shares           1,500,000                         1,500,000  
Circle Media (f/k/a S3 Digital Corp.
(d/b/a S3i))

                                                     
Promissory Note, 12%, 11/17/2017***     949       26,544       3,364             (1,900 )      28,008  
Preferred shares, Series A           484,769                   (167,805 )      316,964  
Preferred warrants, $1.17 Strike Price, Expiration Date 11/18/2022                                    
Preferred warrants, $1.17 Strike Price, Expiration Date 8/29/2021                                    
Preferred warrants, $1.17 Strike Price, Expiration Date 6/26/2021                                    
Preferred warrants, $1.17 Strike Price, Expiration Date 9/30/2020                                    
Preferred warrants, $1.00 Strike Price, Expiration Date 11/21/2017                                    
CUX, Inc. (d/b/a CorpU)
                                                     
Senior Subordinated Convertible Promissory Note 8% Due
11/26/2018***(3)
    23,008       1,166,400                         1,166,400  
Convertible preferred shares, Series D           775,861                         775,861  
Convertible preferred shares, Series C           1,913,484                         1,913,484  
Preferred warrants, Series D, Strike Price $4.59, Expiration Date 2/25/2018           4,395                   507       4,902  
Curious.com Inc.
                                                     
Preferred shares, Series B           9,984,954                   (204,470 )      9,780,484  
Declara, Inc.
                                                     
Convertible Promissory Note 9% Due
6/30/2017***
    47,062       2,827,020                         2,827,020  
Preferred shares, Series A           4,786,654                   (178,606 )      4,608,048  
EdSurge, Inc.
                                                     
Preferred shares, Series A-1           500,000                         500,000  
Preferred shares, Series A           588,294                   (24,718 )      563,576  
Global Education
                                                     
Learning (Holdings) Ltd.**
                                                     
Preferred shares, Series A                                    
Maven Research, Inc.
                                                     
Preferred shares, Series C           1,999,998                         1,999,998  
Preferred shares, Series B           223,763                   33,168       256,931  
Ozy Media, Inc.
                                                     
Convertible Promissory Note 5%, Due
02/28/2018***
    24,658       2,000,000                         2,000,000  
Preferred shares, Series B           4,999,999                         4,999,999  
Preferred shares, Series A           3,000,000                         3,000,000  
Preferred shares, Series Seed           610,000                   (110,000 )      500,000  
Strategic Data Command, LLC(4)
                                                     
Common shares           2,052,555                   177,078       2,229,633  
Total Affiliate Investments   $ 95,677     $ 42,444,690     $ 3,364           $ (476,746 )    $ 41,971,308  

* All portfolio investments are non-control/non-affiliated and non-income-producing, unless identified. Equity investments are subject to lock-up restrictions upon their initial public offering.

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Schedule 12-14 — Schedule of Investments in and Advances to Affiliates
as of March 31, 2017 (unaudited) – (continued)

** 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.
*** Investment is income-producing.
(1) GSV Capital Corp.’s investment in StormWind, LLC is held through its wholly owned subsidiary, GSVC SW Holdings, Inc.
(2) GSV Capital Corp.’s investment in Whittle Schools, LLC is held through its wholly owned subsidiary, GSVC WS Holdings, Inc. Whittle Schools, LLC is an investment that is collateralized by Avenues Global Holdings, LLC, as well as the personal collateral of Chris Whittle, the former chairman of Avenues Global Holdings, LLC.
(3) 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 (November 26, 2018).
(4) GSV Capital Corp.’s investment in Strategic Data Command, LLC is held through its wholly owned subsidiary, GSVC SVDS Holdings, Inc.

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Schedule 12-14 — Schedule of Investments in and Advances to Affiliates
as of December 31, 2016

               
               
Control Investments
Portfolio Company/Type of
Investment*
  Amount of
Interest, Fees
or Dividends
Credited in
Income
  Fair Value at
December 31,
2015
  Transfer
from Control
Investment To
Non-Control/
Non-Affiliate
Investment
  Corporate
Action
  Purchases   Sales   Realized and
Unrealized
Gains/(Losses)
  Fair Value at
December 31,
2016
StormWind, LLC(1)
                                                                       
Preferred shares, Series C   $     $ 4,599,718     $     $     $     $     $ 51,120     $ 4,650,838  
Preferred shares, Series B           4,633,228                               (162,825 )      4,470,403  
Preferred shares, Series A           518,000                               (18,204 )      499,796  
NestGSV, Inc. (d/b/a GSV Labs, Inc.)
                                                                       
Convertible Promissory Note 8% Due 07/31/2017***     16,889                   425,620       31,972             (29,692 )      427,900  
Convertible Promissory Note 8% Due 06/30/16***     48,248                   (500,000 )      500,000                    
Promissory Note 10% Due
11/23/2016
    26,000                         500,000       (500,000 )             
Unsecured Promissory Note 12% Due 05/29/2017     10,862                         501,802             (5,077 )      496,725  
Preferred shares, Series D           4,960,565             (4,904,498 )                  (56,067 )       
Preferred shares, Series C           1,733,404             (2,005,730 )                  272,326        
Preferred shares, Series B                       (605,500 )                  605,500        
Preferred shares, Series A                       (1,021,778 )                  1,021,778        
Preferred stock Series A-4                       4,904,498                   (2,188,588 )      2,715,910  
Preferred stock Series A-3                       2,005,730                   (1,053,139 )      952,591  
Preferred stock Series A-2                       605,500                   (439,000 )      166,500  
Preferred stock Series A-1                       1,021,778                   (751,778 )      270,000  
Common shares                                                
Preferred Warrant Series A-4 – Strike Price $1.33333, Expiration Date
10/6/2019
                                        40,000       40,000  
Preferred Warrant Series A-4 – Strike Price $1.33333, Expiration Date
7/18/2021
                      74,380                   (51,880 )      22,500  
Preferred Warrant Series A-4 – Strike Price $1.33333, Expiration Date
11/29/2021
                            29,275             (20,275 )      9,000  
Preferred Warrant Series A-3 – Strike Price $1.33333, Expiration Date
4/4/2019
                                        5,625       5,625  
Preferred warrants, Series D – $1.33 Strike Price, Expiration Date
10/6/2019
          145,000                               (145,000 )       
Preferred warrants, Series C – $1.33 Strike Price, Expiration Date
4/4/2019
          31,875                               (31,875 )       
Preferred warrants Series D – Strike Price $1.33, Expiration Date
7/18/2021
                                               
SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.)
                                                                       
Preferred shares, Class A           6,250,000                               (1,940,222 )      4,309,778  
Common shares                                                
Total Control Investments   $ 101,999     $ 22,871,790     $     $     $ 1,563,049     $ (500,000 )    $ (4,897,273 )    $ 19,037,566  

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Schedule 12-14 — Schedule of Investments in and Advances to Affiliates
as of December 31, 2016 – (continued)

               
               
Affiliate Investments
Portfolio Company/Type of
Investment*
  Interest, Fees
or Dividends
Credited in
Income
  Fair Value at
December 31,
2015
  Transfer from
Affiliate
Investment To
Non-Control
/Non-Affiliate
Investment
  Corporate
Action
  Purchases   Sales   Realized and
Unrealized
Gains/(Losses)
  Fair Value at
December 31,
2016
AlwaysOn, Inc.
                                                                       
Preferred shares, Series A-1   $     $ 133,978     $     $     $     $     $ (133,978 )    $  
Preferred shares, Series A           191,993                               (191,993 )       
Preferred warrants Series A, $1.00 Strike Price, Expiration Date 1/9/2017                                                
Whittle Schools, LLC(2)
                                                                       
Preferred shares, Series B           3,000,000                                     3,000,000  
Common shares           1,500,000                                     1,500,000  
Circle Media (f/k/a S3 Digital Corp. (d/b/a S3i))
                                                                       
Promissory Note, 12%, 11/17/2017***     3,304       25,000                   736             808       26,544  
Preferred shares, Series A           1,156,175                               (671,406 )      484,769  
Preferred warrants, $1.17 Strike Price, Expiration Date 11/18/2022           429                               (429 )       
Preferred warrants, $1.17 Strike Price, Expiration Date 8/29/2021           14,065                               (14,065 )       
Preferred warrants, $1.17 Strike Price, Expiration Date 6/26/2021           3,088                               (3,088 )       
Preferred warrants, $1.17 Strike Price, Expiration Date 9/30/2020           12,864                               (12,864 )       
Preferred warrants, $1.00 Strike Price, Expiration Date 11/21/2017           55,000                               (55,000 )       
CUX, Inc. (d/b/a CorpU)
                                                                       
Senior Subordinated Convertible Promissory Note 8% Due
11/26/2018***(3)
    87,318       1,080,000                   86,400                   1,166,400  
Convertible preferred shares, Series D           775,861                                     775,861  
Convertible preferred shares, Series C           1,959,127                               (45,643 )      1,913,484  
Preferred warrants, $4.59 Strike Price, Expiration Date 2/25/2018           10,142                               (5,747 )      4,395  
Curious.com Inc.
                                                                       
Preferred shares, Series B           9,996,311                   2,000,003             (2,011,360 )      9,984,954  
Declara, Inc.
                                                                       
Convertible Promissory Note 9% Due
6/30/2017***
    120,523       2,000,000                   120,658             706,362       2,827,020  
Preferred shares, Series A           9,999,999                               (5,213,345 )      4,786,654  
EdSurge, Inc.
                                                                       
Preferred shares, Series A-1           500,000                   400             (400 )      500,000  
Preferred shares, Series A           524,867                               63,427       588,294  
Fullbridge, Inc.(6)
                                                                       
Convertible Promissory Note, 10% Due 3/2/2016     (85,829 )      1,020,859       (354,075 )            400             (667,184 )       
Convertible Promissory Note, 10% Due 3/14/2017                 (935,849 )            1,000,000             (64,151 )       
Preferred shares, Series D           3,111,714                   1,040             (3,112,754 )       
Preferred shares, Series C           1,625,001                               (1,625,001 )       
Common warrants, $0.91 Strike Price, Expiration Date 3/2/2020           2,831                               (2,831 )       
Common warrants, $0.91 Strike Price, Expiration Date 3/22/2020           1,862                               (1,862 )       

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TABLE OF CONTENTS

Schedule 12-14 — Schedule of Investments in and Advances to Affiliates
as of December 31, 2016 – (continued)

               
               
Affiliate Investments
Portfolio Company/Type of
Investment*
  Interest, Fees
or Dividends
Credited in
Income
  Fair Value at
December 31,
2015
  Transfer from
Affiliate
Investment To
Non-Control
/Non-Affiliate
Investment
  Corporate
Action
  Purchases   Sales   Realized and
Unrealized
Gains/(Losses)
  Fair Value at
December 31,
2016
Common warrants, $0.91 Strike Price, Expiration Date 5/16/2019   $     $ 1,923     $     $     $     $     $ (1,923 )    $  
Common warrants, $0.91 Strike Price, Expiration Date 4/3/2019           4,121                               (4,121 )       
Common warrants, $0.91 Strike Price, Expiration Date 10/10/2018           824                               (824 )       
Common warrants, $0.91 Strike Price, Expiration Date 12/11/2018           824                               (824 )       
Common warrants, $0.91 Strike Price, Expiration Date 2/18/2019           7,143                               (7,143 )       
Global Education
                                                                       
Learning (Holdings) Ltd.**
                                                                       
Preferred shares, Series A                             120             (120 )       
Maven Research, Inc.
                                                                       
Preferred shares, Series C           1,999,998                                     1,999,998  
Preferred shares, Series B           249,691                               (25,928 )      223,763  
Orchestra One, Inc. (f/k/a Learnist Inc.)(4)
                                                                       
Common shares           4,364       (4,364 )                               
Ozy Media, Inc.
                                                                       
Convertible Promissory Note 5%, Due 02/28/2018***     33,700                         2,000,000                   2,000,000  
Preferred shares, Series B           4,690,178                               309,821       4,999,999  
Preferred shares, Series A           3,907,004                               (907,004 )      3,000,000  
Preferred shares, Series Seed           1,531,812                               (921,812 )      610,000  
PayNearMe, Inc.(6)
                                                                       
Preferred shares, Series E           13,974,887       (13,974,887 )                               
Strategic Data Command, LLC(5)
                                                                       
Common shares           1,001,650                               1,050,905       2,052,555  
Total Affiliate Investments   $ 159,016     $ 66,075,585     $ (15,269,175 )    $     $ 5,209,757           $ (13,571,477 )    $ 42,444,690  

* All portfolio investments are non-control/non-affiliated and non-income-producing, unless identified. Equity investments are subject to lock-up restrictions upon their initial public offering.
** 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.
*** Investment is income-producing.
(1) GSV Capital Corp.’s investment in StormWind, LLC is held through its wholly owned subsidiary GSVC SW Holdings, Inc.
(2) GSV Capital Corp.’s investment in Whittle Schools, LLC is held through its wholly owned subsidiary GSVC WS Holdings, Inc. Whittle Schools, LLC is an investment that is collateralized by Avenues Global Holdings, LLC, as well as the personal collateral of Chris Whittle, the former chairman of Avenues Global Holdings, LLC.
(3) 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 (November 26, 2018).

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TABLE OF CONTENTS

Schedule 12-14 — Schedule of Investments in and Advances to Affiliates
as of December 31, 2016 – (continued)

(4) GSV Capital Corp.’s ownership percentage in Orchestra One, Inc. (f/k/a Learnist Inc.) decreased to below 5% and, as such, Orchestra One, Inc. is no longer classified as an “affiliate investment” as of September 30, 2016. As such, the Company has reflected a “transfer out” of the “Affiliate Investment” category above as of September 30, 2016 to indicate that the investment in Orchestra One, Inc., while still held as of September 30, 2016, does not meet the criteria of an affiliate investment as defined in the Investment Company Act of 1940, as amended.
(5) GSV Capital Corp.’s investment in Strategic Data Command, LLC is held through its wholly owned subsidiary GSVC SVDS Holdings, Inc.
(6) GSV Capital Corp.’s ownership percentage in PayNearMe, Inc. and Fullbridge, Inc. decreased to below 5% and, as such, PayNearMe, Inc. and Fullbridge, Inc. are no longer classified as “affiliate investments” as of December 31, 2016. As such, the Company has reflected a “transfer out” of the “Affiliate Investment” category above as of December 31, 2016 to indicate that the investment in PayNearMe, Inc. and Fullbridge, Inc., while still held as of December 31, 2016, does not meet the criteria of an affiliate investment as defined in the Investment Company Act of 1940, as amended.

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TABLE OF CONTENTS

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.

 
  GSV CAPITAL CORP.
Date: May 10, 2017
 

By:

/s/ Michael T. Moe

Michael T. Moe
Chief Executive Officer and
Chairman of the Board of Directors
(Principal Executive Officer)

Date: May 10, 2017  

By:

/s/ William Tanona

William Tanona
Chief Financial Officer,
Treasurer and Secretary
(Principal Financial and Accounting Officer)

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