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 June 30, 2016

 
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, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting 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

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

The issuer had 22,181,003 shares of common stock, $0.01 par value per share, outstanding as of August 9, 2016.

 

 


 
 

TABLE OF CONTENTS

GSV CAPITAL CORP.
 
TABLE OF CONTENTS

 
  PAGE

PART I.

FINANCIAL INFORMATION

        

Item 1.

Condensed Consolidated Financial Statements (Unaudited)

    1  
Condensed Consolidated Statements of Assets and Liabilities as of June 30, 2016 and December 31, 2015     1  
Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2016 and 2015     3  
Condensed Consolidated Statements of Changes in Net Assets for the six months ended June 30, 2016 and 2015     5  
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2016 and 2015     6  
Condensed Consolidated Schedule of Investments as of June 30, 2016     7  
Condensed Consolidated Schedule of Investments as of December 31, 2015     13  
Notes to Condensed Consolidated Financial Statements as of June 30, 2016     19  
Note 1 — Nature of Operations and Significant Accounting Policies     19  
Note 2 — Related-Party Arrangements     27  
Note 3 — Investments at Fair Value     29  
Note 4 — Equity Offerings and Related Expenses     35  
Note 5 — Net Increase/(Decrease) in Net Assets Resulting from Operations per Common Share — Basic and Diluted     35  
Note 6 — Commitments and Contingencies     36  
Note 7 — Financial Highlights     37  
Note 8 — Income Taxes     38  
Note 9 — Long-Term Liabilities     39  
Note 10 — Subsequent Events     41  

Item 2.

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

    43  
Forward-Looking Statements     43  
Overview     44  
Investments — (Portfolio Activity)     45  
Results of Operations     46  
Liquidity and Capital Resources     50  
Equity Issuances & Debt Capital Activities     50  
Contractual Obligations     51  
Off-Balance Sheet Arrangements     51  
Distributions     51  
Borrowings     52  
Related-Party Transactions     53  
Critical Accounting Policies     55  
Recent Developments     57  

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

    57  

Item 4.

Controls and Procedures

    58  

i


 
 

ii


 
 

TABLE OF CONTENTS

Item 1. Condensed Consolidated Financial Statements (Unaudited)

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

   
  June 30,
2016
  December 31,
2015
ASSETS
                 
Investments at fair value:
                 
Investments in controlled securities (cost of $22,831,552 and $21,830,392, respectively) (1)   $ 23,666,295     $ 22,871,790  
Investments in affiliated securities (cost of $71,984,912 and $73,942,123, respectively) (1)     62,705,806       66,075,585  
Investments in non-controlled/non-affiliated securities (cost of $197,104,024 and $197,577,328, respectively)     226,652,817       260,861,392  
Investments in treasury bill (cost of $29,999,640 and $29,999,968, respectively)     29,999,700       30,000,000  
Investments owned and pledged (amortized cost of $1,849,291 and $3,675,192, respectively) (2)     1,850,371       3,676,693  
Total Investments (cost of $323,769,419 and $327,025,003,
respectively)
    344,874,989       383,485,460  
Cash     2,457,294       13,349,877  
Restricted cash     75,681       52,931  
Due from:
                 
GSV Asset Management (1)     1,623       220,770  
Portfolio companies (1)     52,492       56,371  
Interest and dividends receivable     137,448       97,183  
Prepaid expenses and other assets     163,720       227,826  
Deferred financing costs (3)     298,984       352,653  
Total Assets     348,062,231       397,843,071  
LIABILITIES
                 
Due to:
                 
GSV Asset Management (1)     532,690       5,047,429  
Accounts payable and accrued expenses     267,097       105,587  
Accrued incentive fees (1)     9,288,757       17,314,565  
Accrued management fees (1)     583,472       683,423  
Accrued interest payable     1,056,563       1,056,563  
Payable for securities purchased     26,499,600       26,499,357  
Deferred tax liability     12,476,155       12,476,155  
Line of credit payable     3,500,000        
Convertible Senior Notes payable 5.25% due September 15, 2018 (2) (3)     67,077,582       66,649,047  
Total Liabilities     121,281,916       129,832,126  
Commitments and contingencies (Note 6)
                 
Net Assets   $ 226,780,315     $ 268,010,945  

 
 
See accompanying notes to condensed consolidated financial statements.

1


 
 

TABLE OF CONTENTS

GSV CAPITAL CORP. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES – (continued)
(UNAUDITED)

   
  June 30,
2016
  December 31,
2015
NET ASSETS
                 
Common stock, par value $0.01 per share (100,000,000 authorized; 22,181,003 issued and outstanding, respectively)   $ 221,810     $ 221,810  
Paid-in capital in excess of par     237,757,527       237,757,527  
Accumulated net investment loss     (17,539,071 )       (16,634,037 )  
Accumulated net realized gains (losses) on investments     (2,289,367 )       2,681,342  
Accumulated net unrealized appreciation of investments     8,629,416       43,984,303  
Net Assets   $ 226,780,315     $ 268,010,945  
Net Asset Value Per Share   $ 10.22     $ 12.08  

(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. In accordance with the terms of the Company’s Convertible Senior Notes payable, the Company deposited $10,867,500 in an escrow account with U.S. Bank National Association, the trustee. These funds were used to purchase six U.S. Treasury Strips with an original cost of $10,845,236. As of June 30, 2016, five of the government securities purchased had matured and the proceeds were used by the trustee in accordance with the terms of the escrow agreement. At June 30, 2016, the remaining government securities are scheduled to mature on August 15, 2016 and are shown on the Condensed Consolidated Statements of Assets and Liabilities as “Investments owned and pledged” with an amortized cost of $1,849,291.
(3) Deferred debt issuance costs of $1,947,572 related to the Company’s issuance of the Convertible Senior Notes payable were previously classified as “Deferred financing costs” as of December 31, 2015. In accordance with ASU 2015-03, this balance has been retrospectively reclassified as a direct deduction from the Convertible Senior Notes on the Condensed Consolidated Statements of Assets and Liabilities at June 30, 2016. Refer to “Note 1 — Nature of Operations and Significant Accounting Policies — Recently Adopted Accounting Standards,” as well as “Note 9 — Long-Term Liabilities” for further detail.

 
 
See accompanying notes to condensed consolidated financial statements.

2


 
 

TABLE OF CONTENTS

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

       
  Three Months Ended June 30,   Six Months Ended June 30,
     2016   2015   2016   2015
INVESTMENT INCOME
                                   
Interest income from controlled securities (1)   $ 15,528     $     $ 20,417     $  
Interest income/(reversal of interest accrual) from affiliated securities (1) (3)     (73,894 )       69,165       18,584       120,396  
Interest income from non-controlled/non-affiliated securities     4,247       7,945       9,532       15,738  
Dividend income from non-controlled/non-affiliated securities           46,781             46,781  
Total Investment Income     (54,119 )       123,891       48,533       182,915  
OPERATING EXPENSES
                                   
Management fees (1)     1,740,223       2,010,385       3,698,223       3,931,513  
(Reversal of incentive fee accrual)/Incentive fees (1)     (2,907,224 )       1,565,339       (8,025,808 )       9,777,067  
Costs incurred under administration
agreement (1)
    698,692       785,036       1,298,642       1,587,432  
Directors’ fees     86,250       107,500       172,500       192,806  
Professional fees     388,375       394,228       1,025,503       735,972  
Interest expense     1,184,326       1,228,783       2,367,489       2,597,586  
Other expenses     207,280       143,153       417,018       264,478  
Gain on fair value adjustment for embedded derivative           (1,000 )             (1,000 )  
Total Operating Expenses     1,397,922       6,233,424       953,567       19,085,854  
Benefit for taxes on net investment loss           2,494,459             7,718,070  
Net Investment Loss     (1,452,041 )       (3,615,074 )       (905,034 )       (11,184,869 )  
Net Realized Gains/(Losses):
                                   
From non-controlled/non-affiliated securities     1,104,361       13,636,614       (4,970,709 )       26,855,017  
Net Realized Gains/(Losses) on investments     1,104,361       13,636,614       (4,970,709 )       26,855,017  
Provision for taxes on realized gains on investments           (5,567,830 )             (10,964,904 )  
Net Change in Unrealized Appreciation/ (Depreciation) on investments:
                                   
From controlled securities     60,073       (8,277 )       (206,655 )       (33,572 )  
From affiliated securities     (5,219,631 )       (804,967 )       (6,367,818 )       (657,088 )  
From non-controlled/non-affiliated securities     (10,774,328 )       (4,931,155 )       (28,780,414 )       22,730,342  
Total Change in Unrealized Appreciation/(Depreciation) on investments     (15,933,886 )       (5,744,399 )       (35,354,887 )       22,039,682  
(Provision)/Benefit for taxes on unrealized appreciation/depreciation on investments           2,372,190             (8,998,803 )  
Net Increase/(Decrease) in Net Assets Resulting from Operations   $ (16,281,566 )     $ 1,081,501     $ (41,230,630 )     $ 17,746,123  
Net Increase/(Decrease) in Net Assets Resulting from Operations per Common Share
                                   
Basic   $ (0.74 )     $ 0.06     $ (1.86 )     $ 0.92  
Diluted (2)   $ (0.74 )     $ 0.06     $ (1.86 )     $ 0.81  
Weighted-Average Common Shares Outstanding
                                   
Basic     22,181,003       19,320,100       22,181,003       19,320,100  
Diluted (2)     22,181,003       19,320,100       22,181,003       23,564,228  

(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.

3


 
 

TABLE OF CONTENTS

GSV CAPITAL CORP. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS – (continued)
(Unaudited)

(2) For the three and six months ended June 30, 2016, 5,710,212 potentially dilutive common shares 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. For the three months ended June 30, 2015, 4,244,128 potentially dilutive common shares were excluded from the weighted-average common shares outstanding for diluted net increase in net assets resulting from operations per common share because the effect of these shares would have been anti-dilutive. Refer to “Note 5 — Net Increase/(Decrease) in Net Assets Resulting from Operations per Common Share — Basic and Diluted” for further detail.
(3) Interest income for each of the three and six months ended June 30, 2016 reflects the reversal of previously accrued interest from loans to Fullbridge, Inc.

 
 
See accompanying notes to condensed consolidated financial statements.

4


 
 

TABLE OF CONTENTS

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

   
  Six months
ended
June 30,
2016
  Six months
ended
June 30,
2015
Net Increase/(Decrease) in Net Assets Resulting from Operations
                 
Net investment loss   $ (905,034 )     $ (11,184,869 )  
Net realized gains/(losses) on investments     (4,970,709 )       26,855,017  
Provision for taxes on realized gains on investments           (10,964,904 )  
Net change in unrealized appreciation/ (depreciation) of investments     (35,354,887 )       22,039,682  
Provision for taxes on unrealized appreciation of investments           (8,998,803 )  
Net Increase/(Decrease) in Net Assets Resulting from Operations     (41,230,630 )       17,746,123  
Total Increase/(Decrease) in Net Assets     (41,230,630 )       17,746,123  
Net assets at beginning of period     268,010,945       285,903,673  
Net Assets at End of Period   $ 226,780,315     $ 303,649,796  
Capital Share Activity
                 
Shares issued            
Shares outstanding at beginning of period     22,181,003       19,320,100  
Shares Outstanding at End of Period     22,181,003       19,320,100  

 
 
See accompanying notes to condensed consolidated financial statements.

5


 
 

TABLE OF CONTENTS

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

   
  Six months
ended
June 30,
2016
  Six months
ended
June 30,
2015
Cash Flows from Operating Activities
                 
Net increase/(decrease) in net assets resulting from operations   $ (41,230,630 )     $ 17,746,123  
Adjustments to reconcile net increase/(decrease) in net assets resulting from operations to net cash provided by/(used in) operating activities:
                 
Net realized (gains)/losses on investments     4,970,709       (26,855,017 )  
Net change in unrealized depreciation/(appreciation) of investments     35,354,887       (22,039,682 )  
Gain on fair value adjustment for embedded derivative           (1,000 )  
Deferred tax liability           12,245,637  
Amortization of discount on Convertible Senior Notes     428,535       276,213  
Amortization of deferred financing costs     53,669       203,022  
Amortization of fixed income security premiums and discounts     (8,099 )       (37,092 )  
Change in restricted cash     (22,750 )       7,708  
Non-cash dividend income           (46,781 )  
Purchases of investments in:
                 
Portfolio investments     (10,514,101 )       (10,544,564 )  
United States treasury bills     (59,999,523 )       (200,014,903 )  
Proceeds from sales or maturity of investments in:
                 
Portfolio investments     6,972,598       40,162,114  
United States treasury bills     60,000,000       200,000,000  
United States treasury strips     1,834,000       1,816,000  
Changes in operating assets and liabilities:
                 
Due from GSV Asset Management (1)     219,147       203,701  
Due from portfolio companies (1)     3,879       16,985  
Prepaid expenses and other assets     64,106       532,944  
Interest and dividends receivable     (40,265 )       (92,577 )  
Due to GSV Asset Management (1)     (4,514,739 )       5,929  
Payable for securities purchased     243       (500,123 )  
Accounts payable and accrued expenses     161,510       (230,781 )  
Accrued incentive fees (1)     (8,025,808 )       9,777,067  
Accrued management fees (1)     (99,951 )       28,852  
Accrued interest payable           (82,895 )  
Net Cash Provided by/(Used in) Operating Activities     (14,392,583 )       22,576,880  
Cash Flows from Financing Activities
                 
Borrowings under Credit Facility     3,500,000       6,000,000  
Repayments under Credit Facility           (24,000,000 )  
Net Cash Provided by/(Used in) Financing Activities     3,500,000       (18,000,000 )  
Total Increase/(Decrease) in Cash     (10,892,583 )       4,576,880  
Cash at Beginning of period     13,349,877       3,472,880  
Cash at End of Period   $ 2,457,294     $ 8,049,760  
Supplemental Information:
                 
Interest Paid   $ 1,811,250     $ 2,680,481  
Non-Cash Operating Items:
                 
Transactions in Portfolio Company Investments
                 
Structured notes converted to convertible notes   $     $ 609,683  

(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.

6


 
 

TABLE OF CONTENTS

GSV CAPITAL CORP. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS
June 30, 2016
(Unaudited)

         
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     $ 2,422,470       1.07 %  
Common shares, Class A           5,773,690       16,189,935       42,799,010       18.87 %  
Total                 17,198,903       45,221,480       19.94 %  
Dropbox, Inc.
    San Francisco, CA                                      
Preferred shares, Series A-1     Online Storage       552,486       5,015,773       7,268,861       3.21 %  
Common shares           760,000       8,641,153       9,999,049       4.41 %  
Total                 13,656,926       17,267,910       7.62 %  
Spotify Technology S.A. **
    Stockholm, Sweden                                      
Common shares     Music Streaming Service       9,541       13,599,572       16,210,657       7.15 %  
Coursera, Inc.     Mountain View, CA                                      
Preferred shares, Series B     Online Education       2,961,399       14,519,519       14,435,486       6.37 %  
PayNearMe, Inc. (1)
    Sunnyvale, CA                                      
Preferred shares, Series E     Cash Payment Network       5,480,348       14,000,398       13,974,887       6.16 %  
Twitter, Inc. **
    San Francisco, CA                                      
Common shares     Social Communication       800,600       14,271,866       13,538,146       5.97 %  
Declara, Inc. (1)
                                            
Convertible Promissory Note 6% Due
12/30/2016***
    Palo Alto, CA     $ 2,000,000       2,000,000       2,000,000       0.88 %  
Preferred shares, Series A     Social Cognitive Learning       10,716,390       9,999,999       9,999,999       4.41 %  
Total                 11,999,999       11,999,999       5.29 %  
General Assembly Space, Inc.
    New York, NY                                      
Preferred shares, Series C     Online Education       126,552       2,999,978       5,953,295       2.63 %  
Common shares           133,213       2,999,983       5,942,737       2.62 %  
Total                 5,999,961       11,896,032       5.25 %  
JAMF Holdings, Inc.
    Minneapolis, MN                                      
Preferred shares, Series B     Mobile Device Management       73,440       9,999,928       11,685,548       5.15 %  
Curious.com Inc. (1)
    Menlo Park, CA                                      
Preferred shares, Series B     Online Education       3,407,834       12,000,006       11,637,813       5.13 %  
Avenues Global Holdings, LLC (4)
    New York, NY                                      
Preferred shares, Junior Preferred Stock     Globally-focused Private
School
      10,014,270       10,151,854       10,941,240       4.82 %  
Lyft, Inc.
    San Francisco, CA                                      
Preferred shares, Series E     Peer to Peer Ridesharing       128,563       2,503,585       3,358,708       1.48 %  
Preferred shares, Series D           346,266       3,518,477       7,349,860       3.24 %  
Total                 6,022,062       10,708,568       4.72 %  
StormWind, LLC (2) (6)
    Scottsdale, AZ                                      
Preferred shares, Series C     Interactive Learning       2,779,134       4,000,787       5,124,368       2.26 %  
Preferred shares, Series B              3,279,629       2,019,687       4,925,563       2.17 %  
Preferred shares, Series A           366,666       110,000       550,683       0.24 %  
Total                 6,130,474       10,600,614       4.67 %  

 
 
See accompanying notes to condensed consolidated financial statements.

7


 
 

TABLE OF CONTENTS

GSV CAPITAL CORP. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)
June 30, 2016
(Unaudited)

         
Portfolio Investments*   Headquarters/Industry   Shares/ Principal   Cost   Fair Value   % of
Net Assets
Ozy Media, Inc. (1)
    Mountain View, CA                                      
Preferred shares, Series B     Daily News and       922,509     $ 4,999,999     $ 4,647,141       2.05 %  
Preferred shares, Series A     Information Site       1,090,909       3,000,200       3,871,154       1.71 %  
Preferred shares, Series Seed           500,000       500,000       1,517,757       0.67 %  
Total                 8,500,199       10,036,052       4.43 %  
Lytro, Inc.
    Mountain View, CA                                      
Preferred shares, Series C-1     Light Field Imaging Platform       3,378,379       10,000,002       10,000,002       4.41 %  
Solexel, Inc. (d/b/a Beamreach Solar, Inc.)
    Milpitas, CA                                      
Preferred shares, Series D     Solar Power       1,613,413       2,419,751       1,565,011       0.69 %  
Preferred shares, Series C           5,300,158       11,598,648       7,526,224       3.32 %  
Total                 14,018,399       9,091,235       4.01 %  
SugarCRM, Inc.
    Cupertino, CA                                      
Preferred shares, Series E     Customer Relationship       373,134       1,500,522       2,929,102       1.30 %  
Common shares     Manager       1,524,799       5,476,502       6,041,235       2.66 %  
Total                 6,977,024       8,970,337       3.96 %  
NestGSV, Inc. (d/b/a GSV Labs, Inc.) (2)
    Redwood City, CA                                      
Convertible Promissory Note 8% Due
7/31/2017***
    Incubator     $ 500,000       501,164       500,000       0.22 %  
Unsecured Promissory Note 10% Due
11/23/2016
           $ 500,000       500,000       500,000       0.22 %  
Preferred shares, Series D              3,720,424       4,904,498       4,706,336       2.08 %  
Preferred shares, Series C              1,561,625       2,005,730       1,650,381       0.73 %  
Preferred shares, Series B              450,001       605,500       284,626       0.13 %  
Preferred shares, Series A              1,000,000       1,021,778       476,377       0.21 %  
Common shares              200,000       1,000             %  
Preferred warrants, Series C – $1.33 Strike Price, Expiration Date 4/4/2019              187,500             41,250       0.02 %  
Preferred warrants, Series D – $1.33 Strike Price, Expiration Date 10/6/2019           500,000             180,000       0.08 %  
Total                 9,539,670       8,338,970       3.69 %  
Dataminr, Inc.
    New York, NY                                      
Preferred shares, Series C     Social Media Analytics       301,369       1,100,909       1,535,648       0.68 %  
Preferred shares, Series B           904,977       2,063,356       4,611,377       2.03 %  
Total                 3,164,265       6,147,025       2.71 %  
Chegg, Inc. **
    Santa Clara, CA                                      
Common shares     Textbook Rental       1,182,792       14,022,863       5,913,960       2.61 %  
Enjoy Technology, Inc.
    Menlo Park, CA                                      
Preferred shares, Series B     Online Shopping       1,681,520       4,000,280       4,000,000       1.76 %  
Preferred shares, Series A           879,198       1,002,440       1,439,400       0.64 %  
Total                 5,002,720       5,439,400       2.40 %  
Course Hero, Inc.
    Redwood City, CA                                      
Preferred shares, Series A     Online Education       2,145,509       5,000,001       5,421,614       2.39 %  
Knewton, Inc.
    New York, NY                                      
Preferred shares, Series E     Online Education       375,985       4,999,999       4,953,723       2.18 %

 
 
See accompanying notes to condensed consolidated financial statements.

8


 
 

TABLE OF CONTENTS

GSV CAPITAL CORP. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)
June 30, 2016
(Unaudited)

         
Portfolio Investments*   Headquarters/Industry   Shares/ Principal   Cost   Fair Value   % of
Net Assets
GSV Sustainability Partners (2)
    Woodside, CA                                      
Preferred shares, Class A     Clean Technology       14,300,000     $ 7,151,412     $ 4,726,711       2.08 %  
Common shares           100,000       10,000             %  
Total                 7,161,412       4,726,711       2.08 %  
Whittle Schools, LLC (1) (5)
    New York, NY                                      
Preferred shares, Series B     Globally-focused Private
School
      3,000,000       3,000,000       3,000,000       1.32 %  
Common shares           229       1,577,097       1,500,000       0.66 %  
Total                 4,577,097       4,500,000       1.98 %  
Parchment, Inc.
    Scottsdale, AZ                                      
Preferred shares, Series D     E-Transcript Exchange       3,200,512       4,000,982       4,000,000       1.76 %  
Snapchat, Inc.
    Venice, CA                                      
Preferred shares, Series F     Social Communication       130,208       4,002,270       3,999,990       1.76 %  
CUX, Inc. (d/b/a CorpU) (1)
    San Francisco, CA                                      
Senior Subordinated Convertible Promissory Note 8% Due 11/26/2018*** (9)     Corporate Education     $ 1,080,000       1,080,000       1,080,000       0.48 %  
Convertible preferred shares, Series D              169,033       778,607       775,861       0.34 %  
Convertible preferred shares, Series C              615,763       2,006,077       1,913,484       0.84 %  
Preferred warrants, $4.59 Strike Price, Expiration Date 2/25/2018           16,903             2,874       %  
Total                 3,864,684       3,772,219       1.66 %  
DogVacay, Inc.
    Santa Monica, CA                                      
Preferred shares, Series B-1     Dog Boarding       514,562       2,506,119       2,500,771       1.11 %  
SharesPost, Inc.
    San Bruno, CA                                      
Preferred shares, Series B     Online Marketplace Finance       1,771,653       2,259,716       2,249,999       0.99 %  
Common warrants, $0.13 Strike Price, Expiration Date 6/15/2018           770,934       23,128       138,768       0.06 %  
Total                 2,282,844       2,388,767       1.05 %  
Maven Research, Inc. (1)
    San Francisco, CA                                      
Preferred shares, Series C     Knowledge Networks       318,979       2,000,447       1,999,998       0.88 %  
Preferred shares, Series B           49,505       217,206       249,691       0.11 %  
Total                 2,217,653       2,249,689       0.99 %  
DreamBox Learning, Inc.
    Bellevue, WA                                      
Preferred shares, Series A-1     Education Technology       7,159,221       1,502,362       1,271,818       0.56 %  
Preferred shares, Series A           3,579,610       758,017       635,909       0.28 %  
Total                 2,260,379       1,907,727       0.84 %  
Clever, Inc.
    San Francisco, CA                                      
Preferred shares, Series B     Education Software       1,799,047       2,000,601       1,549,493       0.68 %  
Strategic Data Command, LLC (1) (7)
    Sunnyvale, CA                                      
Common shares     Software Development       2,400,000       989,277       1,207,400       0.54 %

 
 
See accompanying notes to condensed consolidated financial statements.

9


 
 

TABLE OF CONTENTS

GSV CAPITAL CORP. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)
June 30, 2016
(Unaudited)

         
Portfolio Investments*   Headquarters/Industry   Shares/ Principal   Cost   Fair Value   % of
Net Assets
Circle Media (f/k/a S3 Digital Corp.
(d/b/a S3i))
(1)

    New York, NY                                      
Promissory Note 12%, 11/17/2016***     Sports Analytics     $ 25,000     $ 26,544     $ 26,544       0.01 %  
Preferred shares, Series A              1,864,495       1,777,576       1,066,293       0.48 %  
Preferred warrants, $1.17 Strike Price, Expiration Date 11/18/2022              5,360       576       161       %  
Preferred warrants, $1.17 Strike Price, Expiration Date 8/29/2021              175,815             5,274       %  
Preferred warrants, $1.17 Strike Price, Expiration Date 6/26/2021              38,594             1,158       %  
Preferred warrants, $1.17 Strike Price, Expiration Date 9/30/2020              160,806             4,824       %  
Preferred warrants, $1.00 Strike Price, Expiration Date 11/21/2017           500,000       31,354       20,000       0.01 %  
Total                 1,836,050       1,124,254       0.50 %  
Fullbridge, Inc. (1)
    Cambridge, MA                                      
Convertible Promissory Note 10% Due 3/2/2016 (3)     Business Education     $ 1,030,507       1,021,259       216,862       0.10 %  
Convertible Promissory Note 10% Due 3/14/2017 (3)            $ 1,000,000       1,000,000       905,986       0.40 %  
Preferred shares, Series D              1,655,167       2,957,062             %  
Preferred shares, Series C              1,728,724       3,193,444             %  
Common warrants – Strike Price $0.91, Expiration Date 3/2/2020              283,106       35,767             %  
Common warrants – Strike Price $0.91, Expiration Date 3/22/2020              186,170       23,521             %  
Common warrants – Strike Price $0.91, Expiration Date 5/16/2019              192,308       24,296             %  
Common warrants – Strike Price $0.91, Expiration Date 4/3/2019              412,088       52,063             %  
Common warrants – Strike Price $0.91, Expiration Date 10/10/2018              82,418       10,412             %  
Common warrants – Strike Price $0.91, Expiration Date 12/11/2018              82,418       10,413             %  
Common warrants – Strike Price $0.91, Expiration Date 2/18/2019           714,286       90,242             %  
Total                 8,418,479       1,122,848       0.50 %  
EdSurge, Inc. (1)
    Burlingame, CA                                      
Preferred shares, Series A-1     Education Media Platform       378,788       501,360       530,887       0.24 %  
Preferred shares, Series A           494,365       500,801       549,758       0.24 %  
Total                 1,002,161       1,080,645       0.48 %  
Tynker (f/k/a Neuron Fuel, Inc.)
    San Jose, CA                                      
Preferred shares, Series A     Computer Software       534,162       309,310       838,393       0.37 %  
Aspiration Partners, Inc.
    Marina Del Rey, CA                                      
Preferred shares, Series A     Financial Services       18,009       1,001,815       800,141       0.35 %  
4C Insights (f/k/a The Echo Systems Corp.)
    Chicago, IL                                      
Preferred shares, Series A     Social Data Platform       512,365       1,436,404       569,646       0.25 %  
Cricket Media (f/k/a ePals Inc.) (11)
    Herndon, VA                                      
Common shares     Online Education       1,333,333       2,448,959       143,733       0.06 %

 
 
See accompanying notes to condensed consolidated financial statements.

10


 
 

TABLE OF CONTENTS

GSV CAPITAL CORP. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)
June 30, 2016
(Unaudited)

         
Portfolio Investments*   Headquarters/Industry   Shares/ Principal   Cost   Fair Value   % of
Net Assets
Earlyshares.com, Inc.
    Miami, FL                                      
Convertible Promissory Note 5%,
8/2/2016*** (10)
    Equity Crowdfunding     $ 50,000     $ 50,840     $ 50,840       0.02 %  
Preferred shares, Series A           165,715       261,598             %  
Total                 312,438       50,840       0.02 %  
Upwork Global Inc. (f/k/a Odesk Corporation)
    Redwood City, CA                                      
Common Shares     Online Workplace Platform       25,159       183,269       47,672       0.02 %  
AliphCom, Inc. (d/b/a Jawbone)
    San Francisco, CA                                      
Common shares     Smart Device Company       150,000       793,152       8,919       %  
Orchestra One, Inc. (f/k/a Learnist Inc.)
    San Francisco, CA                                      
Common shares     Consumer Health Technology       57,026       4,959,614       4,362       %  
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, expire 1/9/2017           109,375                   %  
Total                 1,903,414             %  
Total Portfolio Investments                 291,920,488       313,024,918       138.03 %  
U.S. Treasury
                                            
U.S. Treasury Bill, 0%, due
7/7/2016***
           $ 30,000,000       29,999,640       29,999,700       13.22 %  
U.S. Treasury Strips (8)
                                            
United States Treasury Strip Coupon, 0.00% due 8/15/2016         $ 1,851,000       1,849,291       1,850,371       0.82 %  
Total Investments               $ 323,769,419     $ 344,874,989       152.07 %  

* 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. All investments are pledged as collateral, unless otherwise noted, to the Credit Facility. 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, 10.3% 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) Investments were on non-accrual status as of June 30, 2016.

 
 
See accompanying notes to condensed consolidated financial statements.

11


 
 

TABLE OF CONTENTS

GSV CAPITAL CORP. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)
June 30, 2016
(Unaudited)

(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) Refer to “Note 9 — Long-Term Liabilities.” In accordance with the terms of the Company’s Convertible Senior Notes, the Company deposited $10,867,500 in an escrow account with U.S. Bank National Association, the trustee. These funds were used to purchase six U.S. Treasury Strips with an original cost of $10,845,236. As of June 30, 2016, five of the government securities purchased had matured and the proceeds were used by the trustee in accordance with the terms of the escrow agreement. At June 30, 2016, the remaining government securities are shown on the Condensed Consolidated Schedule of Investments with an amortized cost of $1,849,291. These securities do not represent collateral under the Credit Facility, as these securities are pledged exclusively for the repayment of interest under the Convertible Senior Notes.
(9) Interest will accrue daily on the unpaid principal balance of the note. 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). Interest began compounding annually on November 26, 2015.
(10) Interest will accrue daily on the unpaid principal balance of the note. 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 (August 2, 2016). Interest began compounding annually on February 26, 2015.
(11) On October 22, 2013, Cricket Media (f/k/a ePals Inc.), priced its initial public offering, selling 40,267,333 shares at a price of CAD $0.075 per share. As of May 4, 2016, Cricket Media (f/k/a ePals Inc.) was voluntarily delisted from the TSX Venture Exchange as part of a restructuring, after which Cricket Media became privately traded.

 
 
See accompanying notes to condensed consolidated financial statements.

12


 
 

TABLE OF CONTENTS

GSV CAPITAL CORP. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2015
(Unaudited)

         
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     $ 3,018,787       1.13 %  
Common shares, Class A           5,773,690       16,189,935       53,334,461       19.90 %  
Total                 17,198,903       56,353,248       21.03 %  
Dropbox, Inc.
    San Francisco, CA                                      
Preferred shares, Series A-1     Online Storage       552,486       5,015,773       9,359,241       3.49 %  
Common shares           760,000       8,641,153       12,872,947       4.80 %  
Total                 13,656,926       22,232,188       8.29 %  
Twitter, Inc. **
    San Francisco, CA                                      
Common shares     Social Communication       800,600       14,271,866       18,525,884       6.91 %  
Spotify Technology S.A. **
    Stockholm, Sweden                                      
Common shares     Music Streaming Service       9,541       13,599,572       16,219,700       6.05 %  
Coursera, Inc .
    Mountain View, CA                                      
Preferred shares, Series B     Online Education       2,961,399       14,519,519       14,435,486       5.39 %  
Solexel, Inc.
    Milpitas, CA                                      
Preferred shares, Series D     Solar Power       1,613,413       2,419,751       2,420,120       0.90 %  
Preferred shares, Series C           5,300,158       11,598,648       11,607,346       4.33 %  
Total                 14,018,399       14,027,466       5.23 %  
PayNearMe, Inc. (1)
    Sunnyvale, CA                                      
Preferred shares, Series E     Cash Payment Network       5,480,348       14,000,398       13,974,887       5.21 %  
Lyft, Inc.
    San Francisco, CA                                      
Preferred shares, Series E     Peer to Peer Ridesharing       128,563       2,503,585       2,976,876       1.11 %  
Preferred shares, Series D           493,490       5,003,631       10,992,490       4.10 %  
Total                 7,507,216       13,969,366       5.21 %  
Declara, Inc. (1) (12)
                                            
Convertible Promissory Note 6%
Due 12/30/2016***
    Palo Alto, CA     $ 2,000,000       2,000,000       2,000,000       0.75 %  
Preferred shares, Series A     Social Cognitive Learning       10,716,390       9,999,999       9,999,999       3.73 %  
Total                 11,999,999       11,999,999       4.48 %  
General Assembly Space, Inc.
    New York, NY                                      
Preferred shares, Series C     Online Education       126,552       2,999,978       5,765,799       2.15 %  
Common shares           133,213       2,999,983       5,755,573       2.15 %  
Total                 5,999,961       11,521,372       4.30 %  
Dataminr, Inc.
    New York, NY                                      
Preferred shares, Series C     Social Media Analytics       301,369       1,100,909       2,845,044       1.06 %  
Preferred shares, Series B           904,977       2,063,356       8,543,345       3.19 %  
Total                 3,164,265       11,388,389       4.25 %  
Avenues Global Holdings, LLC (3)
    New York, NY                                      
Preferred shares, Junior Preferred Stock     Globally-focused Private
School
      10,014,270       10,151,857       11,015,633       4.11 %  
JAMF Holdings, Inc.
    Minneapolis, MN                                      
Preferred shares, Series B     Mobile Device Management       73,440       9,999,928       10,722,799       4.00 %  

 
 
See accompanying notes to condensed consolidated financial statements.

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GSV CAPITAL CORP. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)
December 31, 2015
(Unaudited)

         
Portfolio Investments*   Headquarters/Industry   Shares/ Principal   Cost   Fair Value   % of
Net Assets
Ozy Media, Inc. (1)
    Mountain View, CA                                      
Preferred shares, Series B     Daily News and       922,509     $ 4,999,999     $ 4,690,178       1.75 %  
Preferred shares, Series A     Information Site       1,090,909       3,000,200       3,907,004       1.46 %  
Preferred shares, Series Seed           500,000       500,000       1,531,812       0.57 %  
Total                 8,500,199       10,128,994       3.78 %  
Curious.com Inc. (1)
    Menlo Park, CA                                      
Preferred shares, Series B     Online Education       2,839,861       10,000,003       9,996,311       3.73 %  
SugarCRM, Inc.
    Cupertino, CA                                      
Preferred shares, Series E     Customer Relationship
      373,134       1,500,522       2,152,983       0.80 %  
Common shares     Manager       1,524,799       5,476,502       7,830,323       2.92 %  
Total                 6,977,024       9,983,306       3.72 %  
StormWind, LLC (2) (5)
    Scottsdale, AZ                                      
Preferred shares, Series C     Interactive Learning       2,779,134       4,000,787       4,599,718       1.72 %  
Preferred shares, Series B              3,279,629       2,019,687       4,633,228       1.73 %  
Preferred shares, Series A           366,666       110,000       518,000       0.19 %  
Total                 6,130,474       9,750,946       3.64 %  
Chegg, Inc. **
    Santa Clara, CA                                      
Common shares     Textbook Rental       1,182,792       14,022,863       7,960,190       2.97 %  
Lytro, Inc.
    Mountain View, CA                                      
Preferred shares, Series C-1     Consumer Electronics       2,533,784       7,500,001       7,500,001       2.80 %  
NestGSV, Inc. (d/b/a GSV Labs, Inc.) (2)
    Redwood City, CA                                      
Preferred shares, Series D     Incubator       3,720,424       4,904,498       4,960,565       1.85 %  
Preferred shares, Series C              1,561,625       2,005,730       1,733,404       0.65 %  
Preferred shares, Series B              450,000       605,500             0.00 %  
Preferred shares, Series A              1,000,000       1,021,778             0.00 %  
Preferred warrants, Series D – $1.33 Strike Price, Expiration Date 10/6/2019              500,000             145,000       0.05 %  
Common shares              200,000       1,000             0.00 %  
Preferred warrants, Series C – $1.33 Strike Price, Expiration Date 4/9/2019           187,500             31,875       0.01 %  
Total                 8,538,506       6,870,844       2.56 %  
GSV Sustainability Partners (2)
    Woodside, CA                                      
Preferred shares, Class A     Clean Technology       14,300,000       7,151,412       6,250,000       2.33 %  
Common shares           100,000       10,000       0.00       0.00 %  
Total                 7,161,412       6,250,000       2.33 %  
Fullbridge, Inc. (1)
    Cambridge, MA                                      
Convertible Promissory Note 10% Due 3/2/2016***     Business Education
  
    $ 1,030,507       1,020,859       1,020,859       0.39 %  
Preferred shares, Series D              1,655,167       2,956,022       3,111,714       1.16 %  
Preferred shares, Series C              1,728,724       3,193,444       1,625,001       0.61 %  
Common Warrants – Strike Price $0.91, Expiration Date 3/2/2020              283,106       35,767       2,831       0.00 %  
Common Warrants – Strike Price $0.91, Expiration Date 3/22/2020              186,170       23,521       1,862       0.00 %  
Common Warrants – Strike Price $0.91, Expiration Date 5/16/2019              192,308       24,296       1,923       0.00 %  
Common Warrants – Strike Price $0.91, Expiration Date 4/3/2019              412,088       52,063       4,121       0.00 %

 
 
See accompanying notes to condensed consolidated financial statements.

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GSV CAPITAL CORP. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)
December 31, 2015
(Unaudited)

         
Portfolio Investments*   Headquarters/Industry   Shares/ Principal   Cost   Fair Value   % of
Net Assets
Common Warrants – Strike Price $0.91, Expiration Date 12/11/2018              82,418     $ 10,413     $ 824       0.00 %  
Common Warrants – Strike Price $0.91, Expiration Date 10/10/2018              82,418       10,412       824       0.00 %  
Common Warrants – Strike Price $0.91, Expiration Date 2/18/2019           714,286       90,242       7,143       0.00 %  
Total                 7,417,039       5,777,102       2.16 %  
Enjoy Technology, Inc.
    Menlo Park, CA                                      
Preferred shares, Series B     Online Shopping       1,681,520       4,000,280       4,000,000       1.49 %  
Preferred shares, Series A           879,198       1,002,440       1,439,400       0.54 %  
Total                 5,002,720       5,439,400       2.03 %  
Course Hero, Inc.
    Redwood City, CA                                      
Preferred shares, Series A     Online Education       2,145,509       5,000,001       5,000,001       1.87 %  
Knewton, Inc.
    New York, NY                                      
Preferred shares, Series E     Online Education       375,985       4,999,999       4,954,086       1.85 %  
Whittle Schools, LLC (1) (4)
    New York, NY                                      
Preferred shares, Series B     Globally-focused Private
School
      3,000,000       3,000,000       3,000,000       1.12 %  
Common shares           229       1,577,097       1,500,000       0.56 %  
Total                 4,577,097       4,500,000       1.68 %  
Parchment, Inc.
    Scottsdale, AZ                                      
Preferred shares, Series D     E-Transcript Exchange       3,200,512       4,000,982       4,000,000       1.49 %  
CUX, Inc. (d/b/a CorpU) (1)
    San Francisco, CA                                      
Senior Subordinated Convertible Promissory Note 8% Due 11/26/2018*** (10)     Corporate Education
  
  
    $ 1,080,000       1,080,000       1,080,000       0.40 %  
Convertible preferred shares, Series D              169,033       778,607       775,861       0.29 %  
Convertible preferred shares, Series C              615,763       2,006,077       1,959,127       0.73 %  
Preferred warrants, $4.59 Strike Price, Expiration Date 2/25/2018           16,903             10,142       %  
Total                 3,864,684       3,825,130       1.42 %  
Bloom Energy Corporation
    Sunnyvale, CA                                      
Common shares     Fuel Cell Energy       201,589       3,855,601       3,014,861       1.12 %  
DogVacay, Inc.
    Santa Monica, CA                                      
Preferred shares, Series B-1     Dog Boarding       514,562       2,506,119       2,500,771       0.93 %  
SharesPost, Inc. (6)
    San Bruno, CA                                      
Preferred shares, Series B     Online Marketplace Finance       1,771,653       2,259,716       2,249,999       0.84 %  
Common warrants, $0.13 Strike Price, Expiration Date 6/15/2018           770,934       23,128       177,315       0.07 %  
Total                 2,282,844       2,427,314       0.91 %  
Maven Research, Inc. (1)
    San Francisco, CA                                      
Preferred shares, Series C     Knowledge Networks       318,979       2,000,447       1,999,998       0.75 %  
Preferred shares, Series B           49,505       217,206       249,691       0.09 %  
Total                 2,217,653       2,249,689       0.84 %

 
 
See accompanying notes to condensed consolidated financial statements.

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TABLE OF CONTENTS

GSV CAPITAL CORP. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)
December 31, 2015
(Unaudited)

         
Portfolio Investments*   Headquarters/Industry   Shares/ Principal   Cost   Fair Value   % of
Net Assets
DreamBox Learning, Inc.
    Bellevue, WA                                      
Preferred shares, Series A-1     Education Technology       7,159,221     $ 1,502,362     $ 1,448,538       0.54 %  
Preferred shares, Series A           3,579,610       758,017       724,269       0.27 %  
Total                 2,260,379       2,172,807       0.81 %  
Clever, Inc.
    San Francisco, CA                                      
Preferred shares, Series B     Education Software       1,799,047       2,000,601       2,026,414       0.76 %  
Circle Media (f/k/a S3 Digital Corp.
(d/b/a S3i))
(1)

    New York, NY                                      
Promissory Note 12%, 11/18/2016***     Sports Analytics     $ 25,000       26,104       25,000       0.01 %  
Preferred shares, Series A              1,864,495       1,777,576       1,156,175       0.43 %  
Preferred warrants, $1.17 Strike Price, Expiration Date 11/18/2022              5,360       576       429       %  
Preferred warrants, $1.17 Strike Price, Expiration Date 8/29/2021              175,815             14,065       0.01 %  
Preferred warrants, $1.17 Strike Price, Expiration Date 6/26/2021              38,594             3,088       0.00 %  
Preferred warrants, $1.17 Strike Price, Expiration Date 9/30/2020              160,806             12,864       0.00 %  
Preferred warrants, $1.00 Strike Price, Expiration Date 11/21/2017           500,000       31,354       55,000       0.02 %  
Total                 1,835,610       1,266,621       0.47 %  
EdSurge, Inc. (1)
    Burlingame, CA                                      
Preferred shares, Series A-1     Education Media Platform       375,909       500,960       500,000       0.18 %  
Preferred shares, Series A           494,365       500,801       524,867       0.20 %  
Total                 1,001,761       1,024,867       0.38 %  
Strategic Data Command, LLC (1) (7) (13)
    Sunnyvale, CA                                      
Common shares     Software Development       2,400,000       989,277       1,001,650       0.37 %  
Aspiration Partners, Inc.
    Marina Del Rey, CA                                      
Preferred shares, Series A     Financial Services       18,009       1,001,815       918,720       0.34 %  
4C Insights (f/k/a The Echo Systems Corp.)
    Chicago, IL                                      
Preferred shares, Series A     Social Data Platform       512,365       1,436,404       850,210       0.32 %  
Tynker (f/k/a Neuron Fuel, Inc.)
    San Jose, CA                                      
Preferred shares, Series A     Computer Software       534,162       309,310       674,108       0.25 %  
Gilt Groupe Holdings, Inc. (15)
    New York, NY                                      
Common shares     e-Commerce Flash Sales       248,600       6,594,433       539,387       0.20 %  
AlwaysOn, Inc. (1)
    Woodside, CA                                      
Preferred shares, Series A-1     Social Media       4,465,925       876,023       133,978       0.05 %  
Preferred shares, Series A              1,066,626       1,027,391       191,993       0.07 %  
Preferred warrants Series A, $1.00 strike price, expire 1/9/2017           109,375                   0.00 %  
Total                 1,903,414       325,971       0.12 %  
Earlyshares.com, Inc.
    Miami, FL                                      
Convertible Promissory Note 5%,
8/2/2016 (11)
    Equity Crowdfunding
  
    $ 50,000       50,840       50,000       0.02 %  
Preferred shares, Series A           165,715       261,598       125,115       0.05 %  
Total                 312,438       175,115       0.07 %

 
 
See accompanying notes to condensed consolidated financial statements.

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GSV CAPITAL CORP. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)
December 31, 2015
(Unaudited)

         
Portfolio Investments*   Headquarters/Industry   Shares/ Principal   Cost   Fair Value   % of
Net Assets
AliphCom, Inc. (d/b/a Jawbone)
    San Francisco, CA                                      
Common shares     Smart Device Company       150,000     $ 793,152     $ 130,910       0.05 %  
Upwork Global Inc. (f/k/a Odesk Corporation)
    Redwood City, CA                                      
Common Shares     Online Workplace Platform       25,159       183,269       114,964       0.05 %  
Cricket Media (f/k/a ePals Inc.) ** (8)
    Herndon, VA                                      
Common shares     Online Education       1,333,333       2,448,959       67,296       0.04 %  
Orchestra One, Inc. (f/k/a Learnist Inc.) (1) (14)
    San Francisco, CA                                      
Common shares     Consumer Health Technology       57,026       4,959,616       4,364       0.00 %  
Global Education Learning (Holdings) Ltd. (1) **
    Hong Kong                                      
Preferred shares, Series A     Education Technology       2,126,475       675,375             0.00 %  
Total Portfolio Investments                 293,349,843       349,808,767       130.52 %  
U.S. Treasury
                                            
U.S. Treasury Bill, 0%, due 1/7/2016            $ 30,000,000       29,999,968       30,000,000       11.19 %  
U.S. Treasury Strips (9)
                                            
United States Treasury Strip Coupon, 0.00% due 8/15/2016            $ 1,851,000       1,842,412       1,843,170       0.69 %  
United States Treasury Strip Coupon, 0.00% due 2/15/2016         $ 1,834,000       1,832,780       1,833,523       0.68 %  
Total                 3,675,192       3,676,693       1.37 %  
Total Investments               $ 327,025,003     $ 383,485,460       143.08 %  

* 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. All investments are pledged as collateral, unless otherwise noted, to the Credit Facility. 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.
*** 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) GSV Capital Corp.’s investment in Avenues Global Holdings, LLC is held through its wholly owned subsidiary GSVC AV Holdings, Inc.
(4) 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.
(5) GSV Capital Corp.’s investment in StormWind, LLC is held through its wholly owned subsidiary GSVC SW Holdings, Inc.

 
 
See accompanying notes to condensed consolidated financial statements.

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GSV CAPITAL CORP. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)
December 31, 2015
(Unaudited)

(6) GSV Capital Corp.’s investment in SharesPost, Inc. is held through its wholly owned subsidiary SPNPM Holdings, LLC.
(7) GSV Capital Corp.’s investment in Strategic Data Command, LLC is held through its wholly owned subsidiary GSVC SVDS Holdings, Inc.
(8) On October 22, 2013, Cricket Media (f/k/a ePals Inc.), priced its initial public offering, selling 40,267,333 shares at a price of CAD $0.075 per share. At December 31, 2015, GSV Capital Corp. valued Cricket Media (f/k/a ePals Inc.), based on its December 31, 2015 closing price. As of May 4, 2016, Cricket Media (f/k/a ePals Inc.) was voluntarily delisted from the TSX Venture Exchange as part of a restructuring, after which Cricket Media became privately traded.
(9) Refer to “Note 9 — Long Term Liabilities.” In accordance with the terms of the Company’s Convertible Senior Notes payable, the Company deposited $10,867,500 in an escrow account with U.S. Bank National Association, the trustee. These funds were used to purchase six U.S. Treasury Strips with an original cost of $10,845,236. As of December 31, 2015, four of the government securities purchased had matured and the proceeds were used by the trustee in accordance with the terms of the escrow agreement. At December 31, 2015, the remaining government securities are shown on the Condensed Consolidated Schedule of Investments with an amortized cost of $3,675,192. These securities do not represent collateral under the Credit Facility, as these securities are pledged exclusively for the repayment of interest under the Convertible Senior Notes.
(10) Interest will accrue daily on the unpaid principal balance of the note. 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). Interest will compound annually beginning on November 26, 2015.
(11) Interest will accrue daily on the unpaid principal balance of the note. 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 (August 2, 2016). Interest will compound annually beginning on February 26, 2015.
(12) On December 30, 2015, Declara, Inc. effected a 2:1 forward stock split on all its common and preferred shares.
(13) On December 22, 2015, Strategic Data Command, LLC effected a 3:1 stock split on its common shares.
(14) On October 28, 2015, Orchestra One, Inc. (f/k/a Learnist Inc.) completed a change in business, recapitalization and series A-1 preferred stock financing. The Company elected to convert its existing preferred shares into common shares effective November 9, 2015.
(15) On January 6, 2016, Gilt Groupe Holdings, Inc. entered into an agreement and plan of merger with Lord and Taylor Acquisition, Inc. to acquire the outstanding Gilt Groupe Holdings, Inc. common stock for approximately $2.1697 per share less applicable costs of the transaction. These are estimates and are subject to change in connection with the final aggregate merger consideration.

 
 
See accompanying notes to condensed consolidated financial statements.

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GSV CAPITAL CORP. AND SUBSIDIARIES
 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(Unaudited)

NOTE 1 — NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

GSV Capital Corp. (the “Company” or “GSV Capital”) was formed in September 2010 as a Maryland corporation structured as 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 shares are 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 June 30, 2016, 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 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(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 consolidated financial statements for the interim period have been included. The results of operations for the current period are not necessarily indicative of results that ultimately may be achieved for any other interim period or for the year ending December 31, 2016. The interim unaudited condensed consolidated financial statements and notes hereto should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s annual report on Form 10-K for the year ended December 31, 2015.

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 which 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 condensed 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 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. 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.

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.

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June 30, 2016
(Unaudited)

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

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 end 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; however, if they are subject to restrictions upon sale (such as lock-up restrictions), they may be discounted accordingly. 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, the board of directors or the valuation committee of the board of directors (the “Valuation Committee”), does not 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, or on behalf of, 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
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

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June 30, 2016
(Unaudited)

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

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, 2015     100 %  
For the quarter ended June 30, 2015     100 %  
For the quarter ended September 30, 2015     100 %  
For the quarter ended December 31, 2015     100 %  
For the quarter ended March 31, 2016     100 %  
For the quarter ended June 30, 2016     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 may be valued at a discount for a lack of marketability (“DLOM”), to the most recently available closing market prices depending upon the nature of the sales restriction. These investments are generally classified as Level 2 assets. The DLOM used is generally based upon the market value of publicly traded put options with similar terms.

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

In determining the value of equity or equity-linked securities (including warrants to purchase common or preferred stock) in a portfolio company, the Company considers the rights, preferences and limitations of such securities. In cases where a portfolio company’s capital structure includes multiple classes of preferred and common stock and equity-linked securities with different rights and preferences, the Company 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

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June 30, 2016
(Unaudited)

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

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 values its debt investments 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 periodically 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 the lock-up restrictions have expired, but other factors restrict the sale of the investment, the Company will consider the nature of any restrictions on the sale of the investment. The Company will classify the investment as either Level 2 subject to an appropriate DLOM to reflect the restrictions upon sale or as Level 1. The Company transfers investments between levels based on the fair value at the end of the measurement period in accordance with ASC 820.

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. The embedded derivative liability is carried at fair value.

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.

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,

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(Unaudited)

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

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 June 30, 2016 and December 31, 2015, 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

On December 31, 2013, the Company entered into a Loan and Security Agreement (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 Company recorded origination costs related to the Credit Facility as deferred financing costs. These costs are deferred and amortized as part of interest expense using the effective interest method over the expected life of the Credit Facility. In the event that the Company modifies or extinguishes the Credit Facility, it follows the guidance in ASC 470-50, Modification and Extinguishments. For modifications to or exchanges of the Credit Facility, any unamortized origination costs are expensed. Included within deferred financing costs are offering costs incurred relating to the Company’s shelf registration statement on Form N-2. The Company defers these offering costs until capital is raised pursuant to the shelf registration statement or 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 June 30, 2016 and December 31, 2015, the Company had deferred financing costs of $298,984, and $352,653, respectively, on the Condensed Consolidated Statements of Assets and Liabilities.

   
  June 30,
2016
  December 31,
2015
Unamortized origination costs   $ 96,035     $ 210,998  
Deferred offering costs     202,949       141,655  
Deferred Financing Costs   $ 298,984     $ 352,653  

Restricted Cash

As of June 30, 2016 and December 31, 2015, the Company had restricted cash of $75,681 and $52,931, respectively, which is included on the Condensed Consolidated Statements of Assets and Liabilities. As of June 30, 2016 and December 31, 2015, restricted cash consisted of a deposit for the Company’s fidelity bond as well as excess funds remaining in escrow after the purchase of the government securities that will be used to make the scheduled interest payments on the Company’s $69 million Convertible Senior Notes, which bear interest at a fixed rate of 5.25% per year and mature on September 15, 2018 (the “Convertible Senior Notes”). See the table below and “Note 9 — Long-Term Liabilities” for further detail.

   
  June 30,
2016
  December 31,
2015
Deposit for the Company’s Fidelity Bond   $ 25,000     $ 25,000  
Excess funds     50,681       27,931  
Restricted Cash   $ 75,681     $ 52,931  

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(Unaudited)

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

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 issuer, 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 June 30, 2016 and December 31, 2015, the Company had no escrow deposits.

Unrealized Appreciation or Depreciation of Investments

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

U.S. Federal and State Income Taxes

The Company has 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”), for the 2014 taxable year, qualified to elect to be treated as a RIC for the 2015 taxable year 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 the which 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.

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June 30, 2016
(Unaudited)

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

The Company was taxed as a regular corporation (a “C corporation”) under subchapter C of the Code, for its 2012 taxable year. In September 2014, the Company filed its 2013 tax return as a RIC and sought to be granted RIC status for its 2013 taxable year; however, the Company determined it would not be eligible to elect to be treated as a RIC for the 2013 taxable year unless it was certified by the Securities and Exchange Commission (the “SEC”) as “principally engaged in the furnishing of capital to other corporations which are principally engaged in the development or exploitation of inventions, technological improvements, new processes, or products not previously generally available” for the 2013 taxable year. In September 2015, the Company determined it was in the best interests of its stockholders to file its 2013 tax return as a C corporation.

The Company determined, however, that it satisfied the requirements to qualify as a RIC for the 2014 taxable year and elected to be treated as a RIC in its 2014 tax return filed in September 2015. 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 consolidated financial statements, the GSVC Holdings are taxable subsidiaries, regardless of whether the Company is a RIC. These taxable subsidiaries are not consolidated for income tax purposes and may generate income tax expenses as a result of their ownership of the portfolio companies. Such income tax expenses and deferred taxes, if any, will be reflected in the Company’s consolidated financial statements.

The Company has also qualified to be treated as a RIC for the 2015 taxable year and intends to be treated as a RIC in future periods. If it is not treated as a RIC, the Company will be taxed as a C corporation under the Code for such taxable year. If the Company has previously qualified as a RIC but is subsequently unable to qualify for treatment as a RIC, and certain amelioration provisions are not applicable, the Company would be subject to tax on all of its taxable income (including its net capital gains) at regular corporate rates. The Company would not be able to deduct distributions to stockholders, nor would it be required to make distributions. Distributions, including distributions of net long-term capital gain, would generally be taxable to its stockholders as ordinary dividend income to the extent of the Company’s current and accumulated earnings and profits. Subject to certain limitations under the Code, corporate stockholders would be eligible to claim a dividend received deduction with respect to such dividend; non-corporate stockholders would generally be able to treat such dividends as “qualified dividend income,” which is subject to reduced rates of U.S. federal income tax. Distributions in excess of the Company’s current and accumulated earnings and profits would be treated first as a return of capital to the extent of the stockholder’s tax basis, and any remaining distributions would be treated as a capital gain. In order to requalify as a RIC, in addition to the other requirements discussed above, the Company would be required to distribute all of its previously undistributed earnings attributable to the period it failed to qualify as a RIC by the end of the first year that it intends to requalify 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. 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

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June 30, 2016
(Unaudited)

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

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

In April 2015, the FASB issued Accounting Standards Update (“ASU”) 2015-03, Interest — Imputation of Interest (Topic 835): Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 requires companies to present debt issuance costs related to a recognized debt liability in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. Debt issuance costs related to lines of credit are not required to be deducted from the carrying amount of that debt liability.

Public companies are required to apply ASU 2015-03 retrospectively for interim and annual reporting periods beginning after December 15, 2015. The Company has adopted this standard beginning with the interim period ended March 31, 2016.

As a result, deferred financing costs of $1,947,572 as of December 31, 2015, related to the Convertible Senior Notes are now presented as a direct reduction to the Convertible Senior Notes in the Condensed Consolidated Statements of Assets and Liabilities. In prior periods, these deferred debt financing costs had been presented as assets on the Condensed Consolidated Statements of Assets and Liabilities. The unamortized balances of debt issuance costs related to the Credit Facility remain in “Deferred financing costs” on the Condensed Consolidated Statements of Assets and Liabilities. Refer to “— Deferred Financing Costs” above and “Note 9 — Long-Term Liabilities” for further detail.

On January 1, 2016, the Company adopted ASU 2015-02, Amendments to the Consolidation Analysis (ASC 810), which amends the guidance for determining whether an entity is a variable interest entity (“VIE”). ASU 2015-02 eliminates the separate consolidation guidance for limited partnerships and, with it, the presumption that a general partner should consolidate a limited partnership. In addition, ASU 2015-02 changes the guidance for determining if fee arrangements qualify as variable interests and the effect fee arrangements have on the determination of the primary beneficiary. Adoption of ASU 2015-02 did not affect the consolidation analysis for any of the Company’s investments.

NOTE 2 — RELATED-PARTY ARRANGEMENTS

Investment Advisory Agreement

The Company has entered into an investment advisory agreement with GSV Asset Management (the “Advisory Agreement”). Pursuant to the Advisory Agreement, GSV Asset Management will be paid a base annual 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.

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NOTE 2 — RELATED-PARTY ARRANGEMENTS  – (continued)

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 June 30, 2016 and December 31, 2015. 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 and six months ended June 30, 2016, the Company reversed previously accrued incentive fees of $2,907,224 and $8,025,808, respectively. For the three and six months ended June 30, 2015, the Company accrued incentive fees of $1,565,339 and $9,777,067, respectively.

Management Fees

GSV Asset Management earned $1,740,223 and $3,698,223 in management fees for the three and six months ended June 30, 2016, respectively. GSV Asset Management earned $2,010,385 and $3,931,513 in management fees for the three and six months ended June 30, 2015, respectively.

As of June 30, 2016, GSV Asset Management owed the Company $1,623 for reimbursement of expenses paid for by the Company that were the responsibility of GSV Asset Management. In addition, as of June 30, 2016, the Company owed GSV Asset Management $532,690 for the reimbursement of other expenses.

As of December 31, 2015, GSV Asset Management owed the Company $220,770 for reimbursement of expenses paid for by the Company that were the responsibility of GSV Asset Management. In addition, as of December 31, 2015, the Company owed GSV Asset Management $5,047,429 for earned incentive fees and, to a lesser extent, for the reimbursement of other 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. The Company reimburses GSV Capital Service Company an allocable portion of overhead and other expenses in performing its obligations under the Administration Agreement. There were $698,692 and $1,298,642 in such costs incurred under the Administration Agreement for the three and six months ended June 30, 2016, respectively. There were $785,036 and $1,587,432 in such costs incurred under the Administration Agreement for the three and six months ended June 30, 2015, 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.

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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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 June 30, 2016, the Company had 96 positions in 47 portfolio companies. At December 31, 2015, the Company had 96 positions in 48 portfolio companies. The following table summarizes the composition of the Company’s investment portfolio by security type at cost and fair value as of June 30, 2016 and December 31, 2015:

       
  June 30, 2016   December 31, 2015
     Cost   Fair Value   Cost   Fair Value
Private Portfolio Companies
                                   
Common Stock   $ 57,869,513     $ 83,904,774     $ 60,910,974     $ 102,319,140  
Preferred Stock     199,274,667       203,993,497       197,215,605       216,291,092  
Debt Investments     6,179,807       5,280,232       4,177,804       4,175,859  
Warrants     301,772       394,309       301,772       469,306  
Subtotal – Private Portfolio Companies     263,625,759       293,572,812       262,606,155       323,255,397  
Publicly Traded Portfolio Companies
                                   
Common Stock     28,294,729       19,452,106       30,743,688       26,553,370  
Total Private and Publicly Traded Portfolio Companies     291,920,488       313,024,918       293,349,843       349,808,767  
Non-Portfolio Investments
                                   
U.S. Treasury Bill     29,999,640       29,999,700       29,999,968       30,000,000  
U.S. Treasury Strips     1,849,291       1,850,371       3,675,192       3,676,693  
Total Non-Portfolio Investments     31,848,931       31,850,071       33,675,160       33,676,693  
Total Investments   $ 323,769,419     $ 344,874,989     $ 327,025,003     $ 383,485,460  

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(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 June 30, 2016 and December 31, 2015, are as follows:

       
  June 30, 2016  
     Quoted Prices in
Active Markets
for Identical
Securities
(Level 1)
  Significant Other
Observable
Inputs
(Level 2)
  Significant Other
Unobservable
Inputs
(Level 3)
  Total
Assets at fair value
                                   
Private Portfolio Companies
                                   
Common Stock   $     $     $ 83,904,774     $ 83,904,774  
Preferred Stock                 203,993,497       203,993,497  
Debt Investments                 5,280,232       5,280,232  
Warrants                 394,309       394,309  
Subtotal – Private Portfolio Companies                 293,572,812       293,572,812  
Publicly Traded Portfolio Companies
                                   
Common Stock     19,452,106                   19,452,106  
Total Private and Publicly Traded Portfolio Companies     19,452,106             293,572,812       313,024,918  
Non-Portfolio Investments
                                   
U.S. Treasury Bill     29,999,700                   29,999,700  
U.S. Treasury Strips     1,850,371                   1,850,371  
Total Non-Portfolio Investments     31,850,071                   31,850,071  
Total Assets at Fair Value   $ 51,302,177     $     $ 293,572,812     $ 344,874,989  

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(Unaudited)

NOTE 3 — INVESTMENTS AT FAIR VALUE  – (continued)

       
  December 31, 2015  
     Quoted Prices in
Active Markets
for Identical
Securities
(Level 1)
  Significant Other
Observable
Inputs
(Level 2)
  Significant Other
Unobservable
Inputs
(Level 3)
  Total
Assets at fair value
                                   
Private Portfolio Companies
                                   
Common Stock   $     $     $ 102,319,140     $ 102,319,140  
Preferred Stock                 216,291,092       216,291,092  
Debt Investments                 4,175,859       4,175,859  
Warrants                 469,306       469,306  
Subtotal – Private Portfolio Companies                 323,255,397       323,255,397  
Publicly Traded Portfolio Companies
                                   
Common Stock     26,486,074       67,296             26,553,370  
Total Private and Publicly Traded Portfolio Companies     26,486,074       67,296       323,255,397       349,808,767  
Non-Portfolio Investments
                                   
U.S. Treasury Bill     30,000,000                   30,000,000  
U.S. Treasury Strips     3,676,693                   3,676,693  
Total Non-Portfolio Investments     33,676,693                   33,676,693  
Total Assets at Fair Value   $ 60,162,767     $ 67,296     $ 323,255,397     $ 383,485,460  

Significant Unobservable Inputs for Level 3 Assets and Liabilities

In accordance with ASC 820, the tables below provide quantitative information about the Company’s fair value measurements of its Level 3 assets as of June 30, 2016 and December 31, 2015. 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 June 30, 2016 and December 31, 2015. 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.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(Unaudited)

NOTE 3 — INVESTMENTS AT FAIR VALUE  – (continued)

As of June 30, 2016
Asset Fair Value Valuation Techniques Unobservable inputs Range
(Weighted Average)
  
  
  
  
Common stock in
private companies
  
  
  
  
$83,904,774
  
Market approach
Precedent transactions (1)
N/A
Revenue multiples 3.3x – 4.0x (3.7x)
EBIT multiples 4.5x – 23.0x (13.8x)
  
Income approach
Revenue multiples 2.0x (2.0x)
EBIT multiples 10.0x (10.0x)
Discount rate 45% (45%)
Liquidation value Liquidation value N/A
  
  
  
Preferred stock in
private companies
  
  
  
$203,993,497
  
Market approach
Precedent transactions (1)
N/A
Revenue multiples 1.5x – 4.2x (2.5x)
  
Income approach
Revenue multiples 1.0x – 5.0x (3.7x)
EBIT multiples 5.0x – 35.0x (18.9x)
Discount rate 30% – 50% (41%)
Debt Investments   $5,280,232 Market approach Amortized cost N/A
  
Warrants
  
    $394,309
  
Option pricing model
Term to expiration (Years) 1.00 – 3.00 (2.01)
Strike price 0.13 – 4.59 (1.45)
Volatility 8.9% – 42.9% (31.7%)
(1) Precedent transactions include recent rounds of financing, recent purchases made by the Company, and tender offers.

As of December 31, 2015
Asset Fair Value Valuation Techniques Unobservable inputs Range
(Weighted Average)
  
  
  
Common stock in
private companies
  
  
  
$102,319,140
Market approach Precedent transactions (1)
N/A
  
Income approach
Revenue multiples 4.5x – 5.4x (5.0x)
EBIT multiples 34.2x (34.2x)
Discount rate 35% (35%)
Liquidation value Liquidation value N/A
  
  
Preferred stock in
private companies
  
  
$216,291,092
Market approach Precedent transactions (1)
N/A
  
Income approach
Revenue multiples 1.3x – 6.0x (3.4x)
EBIT multiples 12.0x – 32.0x (19.5x)
Discount rate 30% – 50% (40%)
Debt Investments   $4,175,859 Market approach Amortized cost N/A
  
Warrants
  
    $469,306
  
Option pricing model
Term to expiration (Years) 1.03 – 3.00 (2.46)
Strike price 0.13 – 4.59 (1.20)
Volatility 30% – 50% (40.9%)
(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 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.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(Unaudited)

NOTE 3 — INVESTMENTS AT FAIR VALUE  – (continued)

During the three and six months ended June 30, 2016, due to a restructuring of Cricket Media, Cricket Media was transferred from Level 1 to Level 3. During the three and six months ended June 30, 2016, Cricket Media converted from Level 1 public common stock to Level 3 private common stock.

The aggregate values of Level 3 assets and liabilities changed during the three and six months ended June 30, 2016 and 2015, as follows:

         
  Three months ended June 30, 2016
     Common Stock   Preferred Stock   Debt Investments   Warrants   Total
Assets:
                                            
Fair value as of March 31, 2016   $ 86,298,618     $ 214,250,621     $ 5,685,506     $ 394,791     $ 306,629,536  
Transfer into Level 3     143,733                         143,733  
Purchases of investments           4,006,990       501,160             4,508,150  
Sales of investments           (1,932,965 )                   (1,932,965 )  
Realized gains           1,104,244                   1,104,244  
Net change in unrealized depreciation included in earnings     (2,537,577 )       (13,435,393 )       (906,434 )       (482 )       (16,879,886 )  
Fair Value as of June 30, 2016   $ 83,904,774     $ 203,993,497     $ 5,280,232     $ 394,309     $ 293,572,812  
Net change in unrealized depreciation of Level 3 investments still held as of June 30, 2016   $ (2,537,577 )     $ (13,435,393 )     $ (906,434 )     $ (482 )     $ (16,879,886 )  

           
  Three months ended June 30, 2015
     Common Stock   Preferred Stock   Debt Investments   Warrants   Embedded Derivative   Total
Assets:
                                                     
Fair value as of March 31, 2015   $ 84,436,041     $ 213,643,985     $ 2,382,930     $ 743,775     $     $ 301,206,731  
Purchases of investments     1,400       1,550,460       49,360                   1,601,220  
Sales of investments     (12,373 )                               (12,373 )  
Amortization of fixed income security premiums and discounts                 14,235                   14,235  
Net change in unrealized appreciation/(depreciation) included in earnings     8,005,584       2,789,474       59,489       (49,461 )             10,805,086  
Fair Value as of June 30, 2015   $ 92,430,652     $ 217,983,919     $ 2,506,014     $ 694,314     $     $ 313,614,899  
Net change in unrealized appreciation/(depreciation) on Level 3 investments still held as of June 30, 2015   $ 8,005,584     $ 2,789,474     $ 59,489     $ (49,461 )     $     $ 10,805,086  
Liabilities:
                                                     
Fair Value of March 31, 2015   $     $     $     $     $ 1,000     $ 1,000  
Gain on fair value adjustment for embedded derivative                             (1,000 )       (1,000 )  
Fair Value as of June 30, 2015   $     $     $     $     $     $  

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(Unaudited)

NOTE 3 — INVESTMENTS AT FAIR VALUE  – (continued)

         
  Six months ended June 30, 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  
Transfer into Level 3     143,733                         143,733  
Purchases of investments           8,512,101       2,002,000             10,514,101  
Sales of investments     (3,400,707 )       (3,571,891 )                   (6,972,598 )  
Realized gains/(losses) on investments     (7,049,327 )       2,078,469                   (4,970,858 )  
Amortization of fixed income security premiums and discounts                              
Net change in unrealized depreciation included in earnings     (8,108,065 )       (19,316,274 )       (897,627 )       (74,997 )       (28,396,963 )  
Fair Value as of June 30, 2016   $ 83,904,774     $ 203,993,497     $ 5,280,232     $ 394,309     $ 293,572,812  
Net change in unrealized depreciation on Level 3 investments still held as of June 30, 2016   $ (15,003,849 )     $ (19,316,274 )     $ (897,627 )     $ (74,997 )     $ (35,292,747 )  

           
  Six months ended June 30, 2015
     Common
Stock
  Preferred
Stock
  Debt
Investments
  Warrants   Embedded
Derivative
  Total
Assets:
                                                     
Fair value as of December 31, 2014   $ 85,598,467     $ 193,847,045     $ 1,374,210     $ 904,345     $     $ 281,724,067  
Purchases of investments     2,680       9,566,558       1,022,107                   10,591,345  
Sales of investments     (12,373 )                               (12,373 )  
Amortization of fixed income security premiums and discounts                 21,882                   21,882  
Net change in unrealized appreciation/(depreciation) included in earnings     6,841,878       14,570,316       87,815       (210,031 )             21,289,978  
Fair Value as of June 30, 2015   $ 92,430,652     $ 217,983,919     $ 2,506,014     $ 694,314     $     $ 313,614,899  
Net change in unrealized appreciation (depreciation) on Level 3 investments still held as of June 30, 2015   $ 6,841,878     $ 14,570,316     $ 87,815     $ (210,031 )     $     $ 21,289,978  
Liabilities:
                                                     
Fair Value of December 31, 2014   $     $     $     $     $ 1,000     $ 1,000  
Gain on fair value adjustment for embedded derivative                             (1,000 )       (1,000 )  
Fair Value as of June 30, 2015   $     $     $     $     $     $  

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.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(Unaudited)

NOTE 4 — EQUITY OFFERINGS AND RELATED EXPENSES

No new shares of the Company’s common stock were issued during each of the six months ended June 30, 2016 and 2015.

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 and six months ended June 30, 2016 and 2015. 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 its 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 June 30,   Six months ended June 30,
     2016   2015   2016   2015
Earnings/(loss) per common share – basic:
                                   
Net increase/(decrease) in net assets resulting from operations   $ (16,281,566 )     $ 1,081,501     $ (41,230,630 )     $ 17,746,123  
Weighted-average common
shares – basic
    22,181,003       19,320,100       22,181,003       19,320,100  
Earnings/(loss) per common share – basic:   $ (0.74 )     $ 0.06     $ (1.86 )     $ 0.92  
Earnings/(loss) per common share – diluted:
                                   
Net increase/(decrease) in net assets resulting from operations, before adjustments   $ (16,281,566 )     $ 1,081,501     $ (41,230,630 )     $ 17,746,123  
Adjustments for interest on Convertible Senior Notes and deferred debt issuance costs                       1,280,003  
Net increase/(decrease) in net assets resulting from operations, as
adjusted
    (16,281,566 )       1,081,501       (41,230,630 )       19,026,126  
Weighted-average common shares outstanding – basic     22,181,003       19,320,100       22,181,003       19,320,100  
Adjustments for dilutive effect of Convertible Senior Notes (1) (2)                       4,244,128  
Weighted-average common shares outstanding – diluted     22,181,003       19,320,100       22,181,003       23,564,228  
Earnings/(loss) per common share – diluted   $ (0.74 )     $ 0.06     $ (1.86 )     $ 0.81  

(1) For each of the three and six months ended June 30, 2016, 5,710,212 potentially dilutive common shares

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(Unaudited)

NOTE 5 — NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS PER COMMON SHARE — BASIC AND DILUTED  – (continued)

were excluded from the weighted-average common shares outstanding for diluted net decrease in net assets resulting from operations per common share because the effect of these shares would have been anti-dilutive.
(2) For the three months ended June 30, 2015, 4,244,128 potentially dilutive common shares were excluded from the weighted-average common shares outstanding for diluted net increase in net assets resulting from operations per common share because the effect of these shares would have been anti-dilutive.

NOTE 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 each of June 30, 2016 and December 31, 2015, the Company had not entered into any investment agreements that required it to make a future investment in a portfolio company.

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.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(Unaudited)

NOTE 7 — FINANCIAL HIGHLIGHTS

   
  Three months
ended
June 30, 2016
  Three months
ended
June 30, 2015
Per Share Data:
                 
Net asset value at beginning of period   $ 10.96     $ 15.66  
Net investment loss     (0.07 ) (1)       (0.19 ) (1)  
Realized gain     0.05  (1)       0.71  (1)  
Provision for taxes on net realized capital gains     —  (1)       (0.29 ) (1)  
Net change in unrealized depreciation     (0.72 ) (1)       (0.29 ) (1)  
Benefit for taxes on unrealized depreciation of investments     —  (1)       0.12  (1)  
Net asset value at end of period   $ 10.22     $ 15.72  
Per share market value at end of period   $ 5.02     $ 10.31  
Total return based on market value     (10.36 )% (2)       5.20 % (2)  
Total return based on net asset value     (6.75 )% (2)       0.38 % (2)  
Shares outstanding at end of period     22,181,003       19,320,100  
Ratio/Supplemental Data:
                 
Net assets at end of period   $ 226,780,315     $ 303,649,796  
Average net assets   $ 240,846,901     $ 295,688,346  
Annualized ratios
                 
Ratio of gross operating expenses to average net assets (3)     2.33 %       8.55 %  
Ratio of net income tax provisions to average net assets (3)     %       (0.96 )%  
Ratio of net operating expenses to average net assets (3)     2.33 %       7.59 %  
Ratio of net investment loss to average net assets (3)     (2.42 )%       (4.96 )%  
Portfolio Turnover Ratio     0.61 %       0.39 %  

   
  Six months
ended
June 30, 2016
  Six months
ended
June 30, 2015
Per Share Data:
                 
Net asset value at beginning of period   $ 12.08  (1)     $ 14.80  (1)  
Net investment loss     (0.04 ) (1)       (0.58 ) (1)  
Realized gain/(loss)     (0.22 ) (1)       1.39  (1)  
Provision for taxes on net realized capital gains     —  (1)       (0.57 ) (1)  
Net change in unrealized appreciation/(depreciation)     (1.59 ) (1)       1.15  (1)  
Provision for taxes on unrealized appreciation of investments           (0.47 )  
Net asset value at end of period   $ 10.22     $ 15.72  
Per share market value at end of period   $ 5.02     $ 10.31  
Total return based on market value     (24.05 )% (2)       19.47 % (2)  
Total return based on net asset value     (15.31 )% (2)       6.22 % (2)  
Shares outstanding at end of period     22,181,003       19,320,100  
Ratio/Supplemental Data:
                 
Net assets at end of period   $ 226,780,315     $ 303,649,796  
Average net assets   $ 262,765,462     $ 293,486,377  
Annualized ratios
              

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(Unaudited)

NOTE 7 — FINANCIAL HIGHLIGHTS  – (continued)

   
  Six months
ended
June 30, 2016
  Six months
ended
June 30, 2015
Ratio of gross operating expenses to average net assets (3)     0.73 %       13.11 %  
Ratio of net income tax provisions to average net assets (3)     %       (8.41 )%  
Ratio of net operating expenses to average net assets (3)     0.73 %       4.70 %  
Ratio of net investment loss to average net assets (3)     (0.69 )%       (7.69 )%  
Portfolio Turnover Ratio     2.12 %       2.72 %  

(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 and six months ended June 30, 2016 and 2015, 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.

NOTE 8 — INCOME TAXES

The Company has elected to be treated as a RIC under Subchapter M of the Code and operates 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 federal income tax return for that fiscal year.

As a result of the Company electing to be treated as a RIC in September 2015 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 are sufficient net capital loss carryforwards to completely offset

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GSV CAPITAL CORP. AND SUBSIDIARIES
 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(Unaudited)

NOTE 8 — INCOME TAXES  – (continued)

recognized built-in gains as well as available net operating losses. The Company has recorded a $12.5 million deferred tax liability as of June 30, 2016, of which approximately $10.2 million has been recorded in the event such gains are recognized by December 31, 2019.

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. The Company has recorded a $12.5 million deferred tax liability as of June 30, 2016, of which approximately $2.3 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.

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 June 30, 2016, 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 the 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). The Convertible Senior Notes 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 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 were convertible into shares of the Company’s common stock based on an initial conversion rate of 61.5091 shares of the Company’s common stock per $1,000 of principal amount of the Convertible Senior Notes, which was equivalent to an initial conversion price of approximately $16.26 per share of common stock. As a result of the Company’s dividend paid on December 31, 2015 to stockholders of record on November 16, 2015, the conversion rate was increased to 82.7567 shares of common stock per $1,000 principal amount of the Convertible Senior Notes, which is equivalent to a conversion price of approximately $12.08 per share of common stock.

The terms of the offering required the Company to place $10,867,500 from the offering in an escrow account (the “Interest Escrow”) with U.S. Bank National Association (the “Trustee”) under the indenture pursuant to which the Convertible Senior Notes were issued. Funds in the Interest Escrow were used to purchase six U.S. Treasury Strips (“Government Securities”) with an original cost of $10,845,236. The Government Securities have been, and will continue to be, used to make the first six scheduled interest

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GSV CAPITAL CORP. AND SUBSIDIARIES
 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(Unaudited)

NOTE 9 — LONG-TERM LIABILITIES  – (continued)

payments on the Convertible Senior Notes, unless the Company elects to make the interest payments from the Company’s available funds. The interest payments on the Convertible Senior Notes are secured by a pledge of the Company’s interest in the Interest Escrow. At June 30, 2016, the remaining Government Securities are shown on the Condensed Consolidated Schedule of Investments and have an amortized cost of $1,849,291. The table below shows a reconciliation from the aggregate principal amount of Convertible Senior Notes to the balance shown on the Condensed Consolidated Statement of Assets and Liabilities.

   
  June 30,
2016
  December 31,
2015
Aggregate principal amount of convertible senior notes   $ 69,000,000     $ 69,000,000  
Amortization of embedded derivative discount     (333,610 )       (403,381 )  
Direct deduction of deferred debt issuance costs     (1,588,808 )       (1,947,572 )  
Convertible Senior Notes   $ 67,077,582     $ 66,649,047  

As of June 30, 2016 and December 31, 2015, 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 (other than to the extent of the Interest Escrow) 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 contain an interest make-whole payment provision pursuant to which holders who convert their notes prior to September 15, 2016, will 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 Government Securities in the escrow account that are remaining with respect to any of the first six interest payments that have not been made on the notes being converted. Under ASC 815-10-15-74(a), the interest make-whole payment is considered an embedded derivative and is separated from the host contract, the Convertible Senior Notes, and carried at fair value.

The Company used a binomial lattice model to estimate the fair value of the embedded derivative in the Convertible Senior Notes. A binomial lattice model generates potential outcomes at various points in time, starting from the date of valuation until the expiration date of the embedded derivative.

Credit Facility

The Company entered into the Loan Agreement, effective December 31, 2013, with Silicon Valley Bank to provide the Company with an $18 million Credit Facility. Under the Credit Facility, the Company is 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 matures on December 31, 2016, and bears 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) is charged under the Loan Agreement. Under the terms of the Credit Facility, the Company must repay all outstanding borrowings so that there is at least one 30-day period every 12 months during which the Company has no balance outstanding. Under the Loan Agreement, the Company has made certain customary

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GSV CAPITAL CORP. AND SUBSIDIARIES
 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(Unaudited)

NOTE 9 — LONG-TERM LIABILITIES  – (continued)

representations and warranties and is required to comply with various covenants, reporting requirements, and other customary requirements for similar credit facilities. The Loan Agreement includes usual and customary events of default for credit facilities of this nature, including, without limitation, nonpayment, misrepresentation of representations and warranties in a material respect, breach of covenant, cross-default to certain other indebtedness, bankruptcy, change of control, and the occurrence of a material adverse effect.

The Credit Facility is 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. As of June 30, 2016, the Company had $3,500,000 in borrowings under the Credit Facility. For the three and six months ended June 30, 2016, the Company had average borrowings outstanding under the Credit Facility of $153,846 and $76,923, respectively. For the three and six months ended June 30, 2015, the Company had average borrowings outstanding under the Credit Facility of $2,373,626 and $7,486,188, respectively.

Borrowing under the Credit Facility is 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.

NOTE 10 — SUBSEQUENT EVENTS

Portfolio Activity

From June 30, 2016 through August 9, 2016, the Company did not purchase any investments.

From June 30, 2016 through August 9, 2016, the Company sold investments of $16,978,469 net of transaction costs as shown in the following table:

         
Sales by Portfolio Company   Transaction Date   Shares Sold   Average Net
Share Price (1)
  Net Proceeds   Realized
Gain/(Loss)
Twitter, Inc.     July 8, 2016       500,000     $ 18.04     $ 9,019,053     $ 259,477  
Twitter, Inc.     July 25, 2016       300,600       18.49       5,559,416       47,126  
Lyft, Inc.     July 29, 2016       100,000       24.00       2,400,000       1,383,880  
Totals                     $ 16,978,469     $ 1,690,483  

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

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GSV CAPITAL CORP. AND SUBSIDIARIES
 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(Unaudited)

NOTE 10 — SUBSEQUENT EVENTS  – (continued)

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. From June 30, 2016 through August 9, 2016, the Company made no such escrow deposits.

Dividends

On August 3, 2016, the Company’s board of directors declared a dividend of $0.04 per share payable on August 24, 2016 to stockholders of record at the close of business on August 16, 2016.

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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 equity 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;
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 our annual report on Form 10-K and in our filings with the SEC.

Although we believe 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. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this quarterly report on Form 10-Q should not be regarded as a representation by us that our plans and objectives will be achieved. These risks and uncertainties include those described or identified in our 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, or 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 which 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 June 30, 2016, of all of our portfolio investments, excluding U.S. Treasury Bills and Strips, was $313,024,918. The following table summarizes the investment purchases we funded during the six months ended June 30, 2016. “Total Gross Payments” include both the actual cost of an investment as well as capitalized costs (such as legal and other fees) associated with entering into a portfolio company investment. Refer to “Note 1 — Nature of Operations and Significant Accounting Policies” to our condensed consolidated financial statements as of June 30, 2016 for further detail.

     
Fundings by Portfolio Company (Industry)   Quarter ended
March 31,
2016
  Quarter ended
June 30,
2016
  Total
Curious.com Inc. (Online Education)   $ 2,000,003     $     $ 2,000,003  
Fullbridge, Inc. (Business Education)     1,000,000             1,000,000  
Lytro, Inc. (Light Field Imaging Platform)     2,500,001             2,500,001  
NestGSV, Inc. (d/b/a GSV Labs, Inc.) (Incubator)     500,000       500,000       1,000,000  
Snapchat, Inc. (Social Communication)           3,999,990       3,999,990  
Capitalized Fees     5,947       8,160       14,107  
Total Gross Payments   $ 6,005,951     $ 4,508,150     $ 10,514,101  

The tables below summarize the portfolio investments we sold during the six months ended June 30, 2016 and 2015, respectively.

         
  Six months ended June 30, 2016
Sales by Portfolio Company   Quarter Ended   Shares Sold   Average Net
Share Price (1)
  Net
Proceeds
  Realized
Gains/
(Losses) (2)
Bloom Energy Corporation     March 31, 2016       201,589     $ 14.75     $ 2,973,438     $ (882,162 )  
Gilt Groupe Holdings, Inc. (3)     March 31, 2016       248,600       1.72       427,270       (6,167,164 )  
Lyft, Inc.     March 31, 2016       65,557       25.00       1,638,925       974,224  
Lyft, Inc.     June 30, 2016       81,667       23.67       1,932,965       1,104,244  
Total                     $ 6,972,598     $ (4,970,858 )  

         
  Six months ended June 30, 2015
Sales by Portfolio Company   Quarter Ended   Shares Sold   Average Net
Share Price (1)
  Net
Proceeds
  Realized
Gains (2)
Twitter, Inc.     March 31, 2015       400,000     $ 48.90     $ 19,558,200     $ 13,220,095  
Twitter, Inc.     June 30, 2015       400,000       51.52       20,608,011       13,666,419  
Total                     $ 40,166,211     $ 26,886,514  

(1) The average net share price is the net share price realized after deducting all commissions and fees on the sale(s).
(2) Realized gains/(losses) exclude any realized gains/(losses) incurred on the maturity of our treasury investments.
(3) 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 June 30, 2016 and 2015

           
           
  June 30, 2016   June 30, 2015   Change   Explanation
  Total   Per Basic
Share (1)
  Total   Per Basic
Share (1)
Total Investment Income   $ (54,119 )     $ (0.00 )     $ 123,891     $ 0.01     $ (178,010 )       Total investment income decreased between periods. Interest income decreased for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015, primarily due to the reversal of previously accrued interest from loans to Fullbridge, Inc. Dividend income decreased because there were no dividends earned during the three months ended June 30, 2016.  
Interest income/(reversal of interest accrual)      
(54,119
)        
(0.00
)        
77,110
       
0.01
       
(131,229
)  
Dividend income                 46,781       0.00       (46,781 )  
  
  
  
  
 
Total Operating Expenses     1,397,922       0.06       6,233,424       0.32       (4,835,502 )       Total operating expenses decreased for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015, primarily due to the reversal of previously accrued incentive fees during the three months ended June 30, 2016, which resulted from lower overall net realized gains as well as the unrealized depreciation of our portfolio investments in the aggregate. Operating expenses decreased, to a lesser extent, because management fees decreased due to lower gross assets outstanding. Costs under the Administration Agreement decreased due to lower travel expenses and overhead allocation expenses for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015.  
Management fees     1,740,223       0.08       2,010,385       0.10       (270,162 )  
(Reversal of incentive fee accrual)/Incentive fees      
(2,907,224
)        
(0.13
)        
1,565,339
       
0.08
       
(4,472,563
)  
Costs incurred under Administration Agreement      
698,692
       
0.03
       
785,036
       
0.04
       
(86,344
)  
Directors’ fees     86,250       0.00       107,500       0.01       (21,250 )  
Professional fees     388,375       0.02       394,228       0.02       (5,853 )  
Interest expense     1,184,326       0.05       1,228,783       0.06       (44,457 )  
Other expenses     207,280       0.01       143,153       0.01       64,127  
Gain on fair value adjustment for embedded derivative      
       
       
(1,000
)        
(0.00
)        
1,000
 
    
Benefit for taxes on net investment loss                 2,494,459       0.13       (2,494,459 )         
Benefit for taxes on net investment loss decreased between periods due to our election to be treated as a RIC, which resulted in no new tax benefits being accrued.
 
  
  
  
 
Net Investment Loss     (1,452,041 )       (0.07 )       (3,615,074 )       (0.19 )       2,163,033       Our net investment loss decreased between periods primarily due to the large reversal of incentive fees and no accrual of new tax provisions for the three months ended June 30, 2016, as discussed above.  
  
  
  
 
Net Realized Gains on Investments     1,104,361       0.05       13,636,614       0.71       (12,532,253 )       The components of our net realized gains on portfolio investments excluding treasury investments are reflected in the tables above, under “— Overview — Investments —  (Portfolio Activity).”  
  
  
  
 
Provision for taxes on Realized Gains on Investments      
       
       
(5,567,830
)        
(0.29
)        
5,567,830
       
Our provision for taxes on realized gains on investments decreased between periods due to our election to be treated as a RIC, which resulted in no new tax provisions being accrued.
 
  
  
  
 
Net Change in Unrealized Depreciation of Investments      
(15,933,886
)        
(0.72
)        
(5,744,399
)        
(0.29
)        
(10,189,487
)        
The components of our net change between periods in unrealized depreciation of investments are reflected in the table below, under “Net Change in Unrealized Appreciation/(Depreciation) of Investments.”
 
  
  
  
  
 
Provision for taxes on unrealized depreciation of investments      
       
       
2,372,190
       
0.12
       
(2,372,190
)        
Our provision for taxes on net change in unrealized depreciation of investments decreased between periods due to our election to be treated as a RIC, which resulted in no accruals of new tax benefits.
 
  
  
  
 
Net Increase/(Decrease) in Net Assets Resulting from Operations      
$(16,281,566
)        
$(0.74
)        
$1,081,501
       
$0.06
       
$(17,363,067
)                                                     

(1) The per-share figures are based on weighted averages of 22,181,003 and 19,320,100 shares of common stock outstanding for the three months ended June 30, 2016 and 2015, respectively.

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For the six months ended June 30, 2016 and 2015

           
           
  June 30, 2016   June 30, 2015   Change   Explanation
  Total   Per Basic Share (1)   Total   Per Basic Share (1)
Total Investment Income   $ 48,533     $ 0.00     $ 182,915     $ 0.01     $ (134,382 )       Total investment income decreased between periods. Interest income decreased for the six months ended June 30, 2016, as compared to the six months ended June 30, 2015, primarily due to the reversal of previously accrued interest from loans to Fullbridge, Inc. Dividend income decreased because there were no dividends earned during the six months ended June 30, 2016.  
Interest income     48,533       0.00       136,134       0.01       (87,601 )  
Dividend income                 46,781       0.00       (46,781 )  
  
  
  
  
 
Total Operating Expenses     953,567       0.04       19,085,854       0.99       (18,132,287 )       Total operating expenses decreased for the six months ended June 30, 2016, as compared to the six months ended June 30, 2015, primarily due to the reversal of previously accrued incentive fees, which primarily resulted from net realized losses from the sales of our investments in Bloom Energy Corporation and Gilt Groupe Holdings, Inc., as well as the unrealized depreciation of our portfolio investments in the aggregate. Operating expenses also decreased, to a lesser extent, because management fees decreased due to lower gross assets outstanding and because costs under the Administration Agreement decreased due to lower travel expenses and overhead allocation expenses for the six months ended June 30, 2016, as compared to the six months ended June 30, 2015.  
Management fees     3,698,223       0.17       3,931,513       0.20       (233,290 )  
(Reversal of incentive fee accrual)/Incentive fees      
(8,025,808
)        
(0.36
)        
9,777,067
       
0.51
       
(17,802,875
)  
Costs incurred under Administration Agreement      
1,298,642
       
0.06
       
1,587,432
       
0.08
       
(288,790
)  
Directors’ fees     172,500       0.01       192,806       0.01       (20,306 )  
Professional fees     1,025,503       0.05       735,972       0.04       289,531  
Interest expense     2,367,489       0.11       2,597,586       0.13       (230,097 )  
Other expenses     417,018       0.02       264,478       0.01       152,540  
Gain on fair value adjustment for embedded derivative      
       
       
(1,000
)        
(0.00
)        
1,000
 
  
 
    
Benefit for taxes on net investment loss                 7,718,070       0.40       (7,718,070 )       Benefit for taxes on net investment loss decreased between periods due to our election to be treated as a RIC, which resulted in no new tax benefits being accrued.  
  
  
  
 
Net Investment Loss     (905,034 )       (0.04 )       (11,184,869 )       (0.58 )       10,279,835       Our net investment loss decreased between periods primarily due to the large reversal of incentive fees and no accrual of new tax provisions for the six months ended June 30, 2016, as discussed above.  
  
  
  
  
 
Net Realized Gains/(Losses) on Investments      
(4,970,709
)        
(0.22
)        
26,855,017
       
1.39
       
(31,825,726
)        
The components of our net realized gains and losses on portfolio investments excluding treasury investments are reflected in the tables above, under “— Overview —  Investments — (Portfolio Activity).”
 
  
  
  
  
 
Provision for taxes on Realized Gains on Investments      
       
       
(10,964,904
)        
(0.57
)        
10,964,904
       
Our provision for taxes on realized gains on investments decreased between periods due to our election to be treated as a RIC, which resulted in no new tax provisions being accrued.
 
  
  
  
 
Net Change in Unrealized Appreciation/
(Depreciation) of Investments
     
(35,354,887
)        
(1.59
)        
22,039,682
       
1.15
       
(57,394,569
)        
  
The components of our net change between periods in unrealized appreciation/(deprecation) of investments are reflected in the table below, under “Net Change in Unrealized Appreciation/(Depreciation) of Investments.”
 
  
  
  
  
 
Provision for taxes on Unrealized Appreciation of Investments      
       
       
(8,998,803
)        
(0.47
)        
8,998,803
       
Our provision for taxes on net change in unrealized appreciation of investments decreased between periods due to our election to be treated as a RIC, which resulted in no accruals of new tax provisions.
 
  
  
  
  
 
Net Increase/(Decrease) in Net Assets Resulting from Operations      
$(41,230,630
)        
$(1.86
)        
$17,746,123
       
$0.92
       
$(58,976,753
)                                                     

(1) The per-share figures are based on weighted averages of 22,181,003 and 19,320,100 shares of common stock outstanding for the six months ended June 30, 2016 and 2015, respectively.

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Net Change in Unrealized Appreciation/(Depreciation) of Investments

For the three months ended June 30, 2016, we had a net change in unrealized depreciation of $15,933,886. For the three months ended June 30, 2015, we had a net change in unrealized depreciation of $5,744,399. 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 June 30, 2016 and 2015, respectively.

             
Portfolio Company   Change in
Unrealized
Appreciation/
(Depreciation)
  As of June 30, 2016   As of March 31, 2016
  Cost   Fair Value   Unrealized
Appreciation/
(Depreciation)
  Cost   Fair Value   Unrealized
Appreciation/
(Depreciation)
Fullbridge, Inc.   $ (4,885,195 )     $ 8,418,479     $ 1,122,848     $ (7,295,631 )     $ 8,428,132     $ 6,017,696     $ (2,410,436 )  
Solexel, Inc.     (4,935,262 )       14,018,399       9,091,235       (4,927,164 )       14,018,399       14,026,497       8,098  
Dataminr, Inc.     (2,634,109 )       3,164,265       6,147,025       2,982,760       3,164,265       8,781,134       5,616,869  
Lyft, Inc.     (2,151,193 )       6,022,062       10,708,568       4,686,506       6,846,063       13,683,762       6,837,699  
Dropbox, Inc.     (1,916,830 )       13,656,926       17,267,910       3,610,984       13,656,926       19,184,740       5,527,814  
Other (1)     588,703       278,489,288       300,537,403       22,048,115       273,982,651       295,442,063       21,459,412  
Totals   $ (15,933,886 )     $ 323,769,419     $ 344,874,989     $ 21,105,570     $ 320,096,436     $ 357,135,892     $ 37,039,456  

             
Portfolio Company   Change in
Unrealized
Appreciation/
(Depreciation)
  As of June 30, 2015   As of March 31, 2015
  Cost   Fair Value   Unrealized
Appreciation/
(Depreciation)
  Cost   Fair Value   Unrealized
Appreciation/
(Depreciation)
Twitter, Inc.   $ (24,186,724 )     $ 14,271,866     $ 28,997,732     $ 14,725,866     $ 21,213,458     $ 60,126,048     $ 38,912,590  
Palantir Technologies, Inc.     2,412,783       17,200,023       48,783,020       31,582,997       17,200,023       46,370,237       29,170,214  
Dropbox, Inc.     4,391,357       13,656,926       30,027,479       16,370,553       13,656,926       25,636,122       11,979,196  
2U, Inc. (f/k/a 2tor, Inc.)     7,848,117       10,032,117       38,219,499       28,187,382       10,032,117       30,371,382       20,339,265  
JAMF Holdings, Inc.     1,238,327       9,999,928       11,237,917       1,237,989       9,999,928       9,999,590       (338 )  
Spotify Technology S.A.     2,500,645       3,598,472       8,152,255       4,553,783       3,598,472       5,651,610       2,053,138  
Other (1)     51,096       335,160,624       330,424,438       (4,736,186 )       333,561,891       328,774,609       (4,787,282 )  
Totals   $ (5,744,399 )     $ 403,919,956     $ 495,842,340     $ 91,922,384     $ 409,262,815     $ 506,929,598     $ 97,666,783  

(1) Other represents all investments (including U.S. Treasury Bills and U.S. Treasury Strips) whose individual change in unrealized appreciation/(depreciation) was less than $1,000,000 for each of the three months ended June 30, 2016 and 2015.

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For the six months ended June 30, 2016, we had a net change in unrealized depreciation of $35,354,887. For the six months ended June 30, 2015, we had a net change in unrealized appreciation of $22,039,682. The following tables summarize, by portfolio company, the significant changes in unrealized appreciation/(depreciation) of our investment portfolio for each of the six months ended June 30, 2016 and 2015, respectively.

             
Portfolio Company   Change in
Unrealized
Appreciation/
(Depreciation)
  As of June 30, 2016   As of December 31, 2015
  Cost   Fair Value   Unrealized
Appreciation/
(Depreciation)
  Cost   Fair Value   Unrealized
Appreciation/
(Depreciation)
Palantir Technologies, Inc.   $ (11,131,768 )     $ 17,198,903     $ 45,221,480     $ 28,022,577     $ 17,198,903     $ 56,353,248     $ 39,154,345  
Fullbridge, Inc.     (5,655,694 )       8,418,479       1,122,848       (7,295,631 )       7,417,039       5,777,102       (1,639,937 )  
Dataminr, Inc.     (5,241,364 )       3,164,265       6,147,025       2,982,760       3,164,265       11,388,389       8,224,124  
Twitter, Inc.     (4,987,738 )       14,271,866       13,538,146       (733,720 )       14,271,866       18,525,884       4,254,018  
Dropbox, Inc.     (4,964,278 )       13,656,926       17,267,910       3,610,984       13,656,926       22,232,188       8,575,262  
Solexel, Inc.     (4,936,231 )       14,018,399       9,091,235       (4,927,164 )       14,018,399       14,027,466       9,067  
Chegg, Inc.     (2,046,230 )       14,022,863       5,913,960       (8,108,903 )       14,022,863       7,960,190       (6,062,673 )  
Lyft, Inc.     (1,775,644 )       6,022,062       10,708,568       4,686,506       7,507,216       13,969,366       6,462,150  
GSV Sustainability Partners     (1,523,289 )       7,161,412       4,726,711       (2,434,701 )       7,161,412       6,250,000       (911,412 )  
SugarCRM, Inc.     (1,012,969 )       6,977,024       8,970,337       1,993,313       6,977,024       9,983,306       3,006,282  
Gilt Groupe Holdings, Inc.     6,055,046                         6,594,433       539,387       (6,055,046 )  
Other (1)     1,865,272       218,857,220       222,166,769       3,309,549       215,034,657       216,478,934       1,444,277  
Totals   $ (35,354,887 )     $ 323,769,419     $ 344,874,989     $ 21,105,570     $ 327,025,003     $ 383,485,460     $ 56,460,457  

             
Portfolio Company   Change in
Unrealized
Appreciation/
(Depreciation)
  As of June 30, 2015   As of December 31, 2014
  Cost   Fair Value   Unrealized
Appreciation/
(Depreciation)
  Cost   Fair Value   Unrealized
Appreciation/
(Depreciation)
Twitter, Inc.   $ (15,136,093 )     $ 14,271,866     $ 28,997,732     $ 14,725,866     $ 27,551,563     $ 57,413,522     $ 29,861,959  
Dataminr, Inc.     7,931,309       3,164,265       11,876,054       8,711,789       3,164,265       3,944,745       780,480  
2U, Inc. (f/k/a 2tor, Inc.)     14,876,990       10,032,117       38,219,499       28,187,382       10,032,117       23,342,509       13,310,392  
Lyft, Inc.     3,659,875       7,507,216       11,162,511       3,655,295       5,003,634       4,999,054       (4,580 )  
Chegg, Inc.     1,099,996       14,022,863       9,273,089       (4,749,774 )       14,022,863       8,173,093       (5,849,770 )  
JAMF Holdings, Inc.     1,238,327       9,999,928       11,237,917       1,237,989       9,999,928       9,999,590       (338 )  
Spotify Technology S.A.     2,475,382       3,598,472       8,152,255       4,553,783       3,598,472       5,676,873       2,078,401  
Palantir Technologies, Inc.     3,306,585       17,200,023       48,783,020       31,582,997       17,198,903       45,475,315       28,276,412  
Dropbox, Inc.     4,958,996       13,656,926       30,027,479       16,370,553       13,656,926       25,068,483       11,411,557  
SugarCRM, Inc.     1,029,396       8,301,474       12,291,890       3,990,416       8,299,914       11,260,934       2,961,020  
Gilt Groupe Holdings, Inc.     (1,973,186 )       6,594,433       1,194,922       (5,399,511 )       6,594,433       3,168,108       (3,426,325 )  
Other (1)     (1,427,895 )       295,570,373       284,625,972       (10,944,401 )       289,276,695       279,760,189       (9,516,506 )  
Totals   $ 22,039,682     $ 403,919,956     $ 495,842,340     $ 91,922,384     $ 408,399,713     $ 478,282,415     $ 69,882,702  

(1) Other represents all investments (including U.S. Treasury Bills and U.S. Treasury Strips) whose individual change in unrealized appreciation/(depreciation) was less than $1,000,000 for each of the six months ended June 30, 2016 and 2015.

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Liquidity and Capital Resources

Our liquidity and capital resources are generated primarily from the net proceeds of public offerings of our equity and debt securities, advances from our Credit Facility, as well as the sales of our investments. 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 six months ended June 30, 2016 and 2015, our operating expenses were $953,567 and $19,085,854, respectively.

   
Cash Reserves and Liquid Securities   As of
June 30,
2016
  As of
June 30,
2015
Cash   $ 2,457,294     $ 8,049,760  
Amounts available for borrowing under the Credit Facility (1)     14,500,000       18,000,000  
Securities of Publicly Traded
                 
Portfolio Companies (2)
                 
Unrestricted securities (3)     19,452,106       38,270,821  
Subject to other Sales Restrictions (4)           38,456,939  
Total     19,452,106       76,727,760  
Total Cash reserves and Liquid securities   $ 36,409,400     $ 102,777,520  

(1) Subject to leverage and borrowing base restrictions under the Credit Facility. Refer to “Note 9 —  Long-Term Liabilities” to our condensed consolidated financial statements as of June 30, 2016 for details regarding the Credit Facility.
(2) Our portfolio investments are pledged as collateral to secure any borrowings under the Credit Facility. We may incur losses if we liquidate these positions to pay operating expenses or fund new investments.
(3) “Unrestricted Securities” represents common stock of our publicly traded companies that are not subject to any restrictions upon sale.
(4) As of June 30, 2015, this balance represents our common shares of Cricket Media (f/k/a ePals Inc.) and 2U, Inc. (f/k/a 2tor, Inc.). These shares are freely tradable, however at certain times in the past, these shares may have been subject to black-out periods as a result of Michael Moe’s previously held seats on the boards of directors of these portfolio companies. Mr. Moe resigned from his position as a director of Cricket Media in May 2016. Mr. Moe’s term as a director of 2U, Inc. expired on June 7, 2016, and he did not stand for re-election.

During the six months ended June 30, 2016, our balance of cash and cash equivalents decreased to $2,457,294 at the end of the period, from $13,349,877 at the beginning of the period. The decline in cash and cash equivalents was primarily due to $4,993,660 and $3,798,175 in payments to GSV Asset Management for earned incentive and management fees, respectively. Additionally, our cash balance declined due to $3,541,026 of net purchases of investments, excluding treasury strips. During the six months ended June 30, 2016, there were no financing activities that impacted our cash and cash equivalents, other than borrowings under the Credit Facility.

Equity Issuances & Debt Capital Activities

There were no sales of our equity or debt securities during the six months ended June 30, 2016 or the year ended December 31, 2015.

As a result of our distribution, which was paid on December 31, 2015, we issued 2,860,903 shares of common stock. Refer to “— Distributions” below for details of the distribution paid.

As of June 30, 2016, we had borrowings of $3,500,000 under the Credit Facility.

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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)   $ 26.5     $ 26.5     $     $     $  
Convertible Senior Notes (2)     69.0             69.0              
Credit Facility (3) (4)     3.5       3.5                    
Total   $ 99.0     $ 30.0     $ 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 July 7, 2016, when the United States Treasury Bill matured and the $3.5 million margin deposit that was posted as collateral was returned.
(2) The balance reflected 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 June 30, 2016 for more information.
(3) The total unused amount available under the Credit Facility as of June 30, 2016, was $14,500,000.
(4) The weighted-average interest rates incurred under the Credit Facility were 2.02% and 4.04% for the three and six months ended June 30, 2016, respectively.

Off-Balance Sheet Arrangements

As of June 30, 2016, 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 dividends, 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 cash distributions, including dividends and returns of capital, if any, per share that we have declared since our formation on January 6, 2011 through June 30, 2016. 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  
Total               $ 2.76  

(1) The dividend 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 dividend to be paid to all stockholders. As a result of stockholder elections, the dividend 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 dividend, 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 dividend 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 dividends on a quarterly basis or become a predictable distributor of dividends, and we expect that our dividends, if any, will be much less consistent than the dividends 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 dividend at least annually. The amount of realized capital gains available for distribution to stockholders will be impacted by our tax status.

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

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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.

Although we elected to be treated as a RIC under Subchapter M of the Code for the 2014 taxable year and continue to qualify to be treated as a RIC, we were taxed as a C Corporation under the Code for our 2013 taxable year. 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. Included in our condensed consolidated financial statements, the GSVC Holdings 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.

We have also qualified to be treated as a RIC for the 2015 taxable year and continue to operate in a manner so as to qualify for the tax treatment applicable to RICs. 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 June 30, 2016 for more information.

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 June 30, 2016, the Convertible Senior Notes were convertible into shares of our common stock based on a conversion rate of 82.7567 shares of our common stock per $1,000 principal amount of the Convertible Senior Notes, which is equivalent to a conversion price of approximately $12.08 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 June 30, 2016 for more information regarding the Convertible Senior Notes.

Credit Facility

We entered into the Loan Agreement, effective December 31, 2013, with Silicon Valley Bank to provide us with an $18 million Credit Facility, which matures on December 31, 2016 and bears 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. As of June 30, 2016, we had $3,500,000 in borrowings under the Credit Facility. Refer to “Note 9 — Long-Term Liabilities” to our condensed consolidated financial statements as of June 30, 2016 for a detailed discussion of the Credit Facility.

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Related-Party Transactions

We have entered into the Advisory Agreement with GSV Asset Management. GSV Asset Management is controlled by Michael T. Moe, our Chief Executive Officer and Chair of our 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, our Chief Financial Officer, Treasurer and Secretary, and Mark Flynn, our President, as principals of GSV Asset Management, collectively manage the business and internal affairs of GSV Asset Management. Mark Klein, a member of our board of directors, or entities with which he is affiliated, may receive fees from GSV Asset Management in connection with any offering of our securities and, from time to time, for consulting or non-investment advisory services he may provide to GSV Asset Management.

Pursuant to the Advisory Agreement, GSV Asset Management is paid a base annual fee of 2.00% of gross assets, which is our total assets as reflected on our 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 our 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, or (ii) 20% of our realized capital gains, if any, on a cumulative basis from inception through the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid incentive fees.

Incentive Fees

For GAAP purposes, in accordance with the AICPA’s TPA (TIS 6910.2), we are required to accrue incentive fees as if we had fully liquidated our entire investment portfolio at the fair value stated on the Condensed Consolidated Statements of Assets and Liabilities as of June 30, 2016 and December 31, 2015. This accrual considers both the hypothetical liquidation of our portfolio described previously, as well as our actual cumulative realized gains and losses since inception and any previously paid incentive fees.

For the three and six months ended June 30, 2016, we reversed previously accrued incentive fees of $2,907,224 and $8,025,808, respectively. For the three and six months ended June 30, 2015, the Company accrued incentive fees of $1,565,339 and $9,777,067, respectively.

Management Fees

GSV Asset Management earned $1,740,223 and $3,698,223 in management fees for the three and six months ended June 30, 2016, respectively. GSV Asset Management earned $2,010,385 and $3,931,513 in management fees for the three and six months ended June 30, 2015, respectively.

As of June 30, 2016, GSV Asset Management owed us $1,623 for reimbursement of expenses we paid that were the responsibility of GSV Asset Management. In addition, as of June 30, 2016, we owed GSV Asset Management $532,690 for the reimbursement of other expenses.

As of December 31, 2015, GSV Asset Management owed us $220,770 for reimbursement of expenses we paid that were the responsibility of GSV Asset Management. In addition, as of December 31, 2015, we owed GSV Asset Management $5,047,429 for earned incentive fees and, to a lesser extent, for the reimbursement of other expenses.

We have entered into the Administration Agreement with GSV Capital Service Company to provide administrative services, including furnishing us with office facilities, equipment, clerical, bookkeeping services and other administrative services. GSV Asset Management controls GSV Capital Service Company. We reimburse 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 our President, Chief Financial Officer, Chief Compliance Officer and other staff providing administrative services, which creates a conflict that our board of directors must monitor. While there is no limit on the total amount of expenses we may be required to reimburse GSV Capital Service Company, our administrator will only charge us for the actual expenses it incurs on our behalf, or our allocable portion thereof, without any profit to GSV Capital Service Company. There were $698,692 and $1,298,642 in such costs incurred under the Administration Agreement for the three and six months ended June 30, 2016, respectively. There were

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$785,036 and $1,587,432 in such costs incurred under the Administration Agreement for the three and six months ended June 30, 2015, respectively.

Mark Moe, who is the brother of our 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 our portfolio companies. Diane Flynn, who is the spouse of our President, Mark Flynn, serves as Chief Marketing Officer of NestGSV, Inc. Ron Johnson, the Chief Executive Officer of Enjoy Technology, Inc., one of our portfolio companies, is the brother-in-law of our President, Mark Flynn. As of June 30, 2016, the fair values of our investments in NestGSV, Inc. and Enjoy Technology, Inc. were $8,338,970 and $5,439,400, respectively. Another one of our portfolio companies, GSV Sustainability Partners, utilizes office space paid for by GSV Asset Management without paying GSV Asset Management or us any consideration for rent. We do not consider this an arms-length transaction.

In addition, our executive officers and directors, and the principals of our investment adviser, GSV Asset Management, serve or may serve as officers and directors of entities that operate in a line of business similar to our own, 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 us or our stockholders. For example, as of August 9, 2016, 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”), and serves as sub-adviser for certain investment series of GSV Ventures I LLC, GSV Ventures II LLC, GSV Ventures III LLC and GSV Ventures IV LLC, each a venture capital and growth equity fund (collectively, the “GSV Ventures Funds”), and will likely manage one or more private funds, or series within such private funds in the future. We have no ownership interests in the Coursera Funds or the GSV Ventures Funds sub-advised by GSV Asset Management.

While the investment focus of each of these entities, including the Coursera Funds and the GSV Ventures Funds, may be different from our investment objective, it is likely that new investment opportunities that meet our 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 us. However, our executive officers, directors and investment adviser, GSV Asset Management, intend to treat us in a fair and equitable manner consistent with their applicable duties under law so that we 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 us 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 we have priority over such other funds. Our board of directors will monitor on a quarterly basis any such allocation of investment opportunities between us and any such other funds.

GSV Asset Management is the owner of the “GSV” name and marks, which we are permitted to use pursuant to a non-exclusive license agreement between us and GSV Asset Management. GSV Asset Management and its principals also use and may permit other entities to use the “GSV” name and marks in connection with businesses and activities unrelated to our operations. The use of the “GSV” name and marks in connection with businesses and activities unrelated to our operations may not be in the best interests of us or our stockholders and may result in actual or perceived conflicts of interest.

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

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We also adopted a code of ethics which applies to, among others, our senior officers, including our Chief Executive Officer, President, Chief Financial Officer and Chief Compliance Officer, as well as any other officers and our directors and employees. Our code of ethics requires that all employees and directors avoid any conflict, or the appearance of a conflict, between an individual’s personal interests and our interests. Pursuant to our code of ethics, each officer, employee and director must disclose any conflicts of interest, or actions or relationships that might give rise to a conflict, to our Chief Compliance Officer. Our board of directors is charged with approving any waivers under our code of ethics. As required by the Nasdaq corporate governance listing standards, the Audit Committee of our board of directors is also required to review and approve any transactions with related parties (as such term is defined in Item 404 of Regulation S-K).

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 could differ materially from such estimates. We believe that the following discussion addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations and require management’s most difficult, subjective and complex judgments.

Investments at Fair Value

We apply fair value accounting in accordance with GAAP and the AICPA’s Audit and Accounting Guide for Investment Companies. We value our 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 we have the ability to access at the measurement date.

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

Level 3  — Valuations based on unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

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” to our condensed consolidated financial statements as of June 30, 2016, may include changes in fair value that are attributable to both observable inputs (Levels 1 and 2) and unobservable inputs (Level 3).

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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 end of the quarter in which the reclassifications occur. Refer to “Note 1 — Nature of Operations and Significant Accounting Policies — Levelling Policy” to our condensed consolidated financial statements as of June 30, 2016, for a detailed discussion of the levelling of our 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; however, if they are subject to restrictions upon sale (such as lock-up restrictions), they may be discounted accordingly. We may also obtain quotes with respect to certain of our investments from pricing services, brokers or dealers in order to value assets. When doing so, we determine whether the quote obtained is sufficient according to GAAP to determine the fair value of the security. If determined to be adequate, we use 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, does not 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, or on behalf of, the Valuation Committee to conduct independent appraisals and review management’s preliminary valuations and make its own independent assessment, for all investments for which there are no readily available market quotations;
4. The Valuation Committee discusses the valuations and recommends to our 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
5. Our 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, we consider 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. We assign 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 our investments that are not publicly traded or for which there are no readily available market quotations. Our board of directors considers the independent valuations provided by the valuation firm(s), among other factors, in making our fair value determinations.

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Recent Developments

Portfolio Activity

From June 30, 2016 through August 9, 2016, we did not purchase any investments.

From June 30, 2016 through August 9, 2016, we sold investments of $16,978,469 net of transaction costs as shown in the following table:

         
Sales by Portfolio Company   Transaction Date   Shares Sold   Average Net
Share Price (1)
  Net Proceeds   Realized
Gain/(Loss)
Twitter, Inc.     July 8, 2016       500,000     $ 18.04     $ 9,019,053     $ 259,477  
Twitter, Inc.     July 25, 2016       300,600       18.49       5,559,416       47,126  
Lyft, Inc.     July 29, 2016       100,000       24.00       2,400,000       1,383,880  
Totals                     $ 16,978,469     $ 1,690,483  

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

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. From June 30, 2016 through August 9, 2016, we made no such escrow deposits.

Dividends

On August 3, 2016, our board of directors declared a dividend of $0.04 per share payable on August 24, 2016 to stockholders of record at the close of business on August 16, 2016.

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 June 30, 2016, all of our debt investments bore a fixed rate of interest. As of June 30, 2016, all of our borrowings bore a fixed rate of interest with the exception of the Credit Facility, which is indexed to the prime rate. We do not expect a significant impact on net investment income or loss due to changes in the prime rate, based on its historical stability. The table below, however, indicates the impact on our net investment income or loss should the prime rate rise.

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Based on our June 30, 2016 condensed consolidated balance sheet, the following table shows the impact of changes in interest rates on our net income or loss for the six months ended June 30, 2016, assuming no changes in our investment and borrowing structure:

     
Basis Point Change   Interest
Income
  Interest
Expense
  Net Income/
(Loss)
Up 300 Basis points   $     $ 990,000     $ (990,000 )  
Up 200 Basis points   $     $ 900,000     $ (900,000 )  
Up 100 Basis points   $     $ 810,000     $ (810,000 )  
Down 100 Basis points   $     $     $  
Down 200 Basis points   $     $     $  
Down 300 Basis points   $     $     $  

Although we believe that this measure is indicative of our sensitivity to interest rate changes, it does not reflect potential changes in credit quality, size and composition of the assets on the balance sheet and other business developments that could affect net increase or decrease in net assets resulting from operations, or net income or loss.

Item 4. Controls and Procedures

As of June 30, 2016, 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 June 30, 2016, 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 GSV Asset Management may, from time to time, be involved in litigation arising out of our and GSV Asset Management’s operations in the normal course of business or otherwise, except as set forth in “Item 3. Legal Proceedings” of our annual report on Form 10-K for the year ended December 31, 2015, filed with the SEC on March 15, 2016, neither we nor GSV Asset Management is currently a party to any pending material legal proceedings. There have been no material developments in the legal proceedings described in “Item 3. Legal Proceedings” of our annual report on Form 10-K for the fiscal year ended December 31, 2015, since the date such report was filed with the SEC.

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, 2015, filed with the SEC on March 15, 2016, 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. During the six months ended June 30, 2016, 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, 2015.

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

Not applicable.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosure

Not applicable.

Item 5. Other Information

Not applicable.

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Item 6. Exhibits

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

 
 3.1   Articles of Amendment and Restatement (1)
 3.2   Articles of Amendment (2)
 3.3   Bylaws (1)
11.1   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 the Registrant’s 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 (unaudited)

             
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
  Purchases   Sales   Realized and
Unrealized
Gains/(Losses)
  Fair Value at
June 30,
2016
Control Investments
                                                              
StormWind, LLC (1)
                                                              
Preferred shares, Series C   $     $ 4,599,718     $     $     $     $ 524,650     $ 5,124,368  
Preferred shares, Series B           4,633,228                         292,335       4,925,563  
Preferred shares, Series A           518,000                         32,683       550,683  
NestGSV, Inc. (d/b/a GSV Labs, Inc.)
                                                              
Convertible Promissory Note 8% Due 07/31/2017***     15,000                   501,160             (1,160 )       500,000  
Unsecured Promissory Note 10% Due 11/23/2016     5,417                   500,000                      500,000  
Preferred shares, Series D           4,960,565                         (254,229 )       4,706,336  
Preferred shares, Series C           1,733,404                         (83,023 )       1,650,381  
Preferred shares, Series B                                   284,626       284,626  
Preferred shares, Series A                                   476,377       476,377  
Common shares                                          
Preferred warrants, Series C – $1.33 Strike Price, Expiration Date
4/4/2019
          31,875                         9,375       41,250  
Preferred warrants Series D – $1.33 Strike Price, Expiration Date
10/6/2019
          145,000                         35,000       180,000  
GSV Sustainability Partners
                                                              
Preferred shares, Class A           6,250,000                         (1,523,289 )       4,726,711  
Common shares                                          
Total Control Investments   $ 20,417     $ 22,871,790     $     $ 1,001,160     $     $ (206,655 )     $ 23,666,295  
Affiliate Investments
                                                              
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, expire 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%,
11/17/2016***
    1,496       25,000             440             1,104       26,544  
Preferred shares, Series A           1,156,175                         (89,882 )       1,066,293  
Preferred warrants, $1.17 Strike Price, Expiration Date
11/18/2022
          429                         (268 )       161  
Preferred warrants, $1.17 Strike Price, Expiration Date
8/29/2021
          14,065                         (8,791 )       5,274  
Preferred warrants, $1.17 Strike Price, Expiration Date
6/26/2021
          3,088                         (1,930 )       1,158  

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Schedule 12-14 — Schedule of Investments in and Advances to Affiliates (unaudited) – (continued)

             
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
  Purchases   Sales   Realized and
Unrealized
Gains/(Losses)
  Fair Value at
June 30,
2016
Preferred warrants, $1.17 Strike Price, Expiration Date
9/30/2020
  $     $ 12,864     $     $     $     $ (8,040 )     $ 4,824  
Preferred warrants, $1.00 Strike Price, Expiration Date
11/21/2017
          55,000                         (35,000 )       20,000  
CUX, Inc. (d/b/a CorpU)
                                                              
Senior Subordinated Convertible Promissory Note 8% Due 11/26/2018*** (4)     43,082       1,080,000                               1,080,000  
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                         (7,268 )       2,874  
Curious.com Inc.
                                                              
Preferred shares, Series B           9,996,311             2,000,003             (358,501 )       11,637,813  
Declara, Inc.
                                                              
Convertible Promissory Note 6% Due 12/30/2016***     59,835       2,000,000                               2,000,000  
Preferred shares, Series A           9,999,999                               9,999,999  
EdSurge, Inc.
                                                              
Preferred shares, Series A-1           500,000             400             30,487       530,887  
Preferred shares, Series A           524,867                         24,891       549,758  
Fullbridge, Inc.
                                                              
Convertible Promissory Note, 10% Due 3/2/2016 (3)     (85,829 )       1,020,859             400             (804,397 )       216,862  
Convertible Promissory Note, 10% Due 3/14/2017 (3)                       1,000,000             (94,014 )       905,986  
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 )        
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 )        

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Schedule 12-14 — Schedule of Investments in and Advances to Affiliates (unaudited) – (continued)

             
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
  Purchases   Sales   Realized and
Unrealized
Gains/(Losses)
  Fair Value at
June 30,
2016
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                               249,691  
Orchestra One, Inc. (f/k/a Learnist Inc.) (5)
                                                              
Common shares           4,364       (4,364 )                          
Ozy Media, Inc.
                                                              
Preferred shares, Series B           4,690,178                         (43,037 )       4,647,141  
Preferred shares, Series A           3,907,004                         (35,850 )       3,871,154  
Preferred shares, Series Seed           1,531,812                         (14,055 )       1,517,757  
PayNearMe, Inc.
                                                              
Preferred shares, Series E           13,974,887                               13,974,887  
Strategic Data Command, LLC (6)
                                                              
Common shares           1,001,650                         205,750       1,207,400  
Total Affiliate Investments   $ 18,584     $ 66,075,585     $ (4,364 )     $ 3,002,403     $     $ (6,367,818 )     $ 62,705,806  

* 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) Investments were on non-accrual status as of June 30, 2016.
(4) Interest will accrue daily on the unpaid principal balance of the note. 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). Interest began compounding annually on November 26, 2015.
(5) 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 June 30, 2016. As such, the Company has reflected a “transfer out” of the “Affiliate Investment” category above as of June 30, 2016 to indicate that the investment in Orchestra One, Inc., while still held as of June 30, 2016, does not meet the criteria of an Affiliate Investment as defined in the Investment Company Act of 1940, as amended.
(6) 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 (unaudited) – (continued)

             
Portfolio Company/Type of Investment*   Amount of
Interest, Fees
or Dividends
Credited in
Income
  Fair Value at
December 31,
2014
  Transfer
from Control
Investment
To Affiliate
Investment
  Purchases   Sales   Realized and
Unrealized
Gains/(Losses)
  Fair Value at
December 31,
2015
Control Investments
                                                              
AlwaysOn, Inc.
                                                              
Preferred shares, Series A   $     $ 629,309     $ (629,309 )     $     $     $     $  
Preferred shares, Series A-1           491,252       (491,252 )                          
Preferred warrants Series A, $1.00 strike price, expire 1/9/2017                                          
StormWind, LLC (1)
                                                              
Preferred shares, Series C           4,338,830                         260,888       4,599,718  
Preferred shares, Series B           4,347,608                         285,620       4,633,228  
Preferred shares, Series A           391,592                         126,408       518,000  
NestGSV, Inc. (d/b/a GSV Labs, Inc.)
                                                              
Preferred shares, Series D           1,460,557             3,499,999             9       4,960,565  
Preferred shares, Series C           1,503,832                         229,572       1,733,404  
Preferred shares, Series B           265,980                         (265,980 )        
Preferred shares, Series A           440,000                         (440,000 )        
Common shares           1,000                         (1,000 )        
Preferred warrants Series D – $1.33 Strike Price, Expiration Date
10/6/2019
          65,000                         80,000       145,000  
Preferred warrants, Series C – $1.33 Strike Price, Expiration Date
4/9/2019
          24,375                         7,500       31,875  
GSV Sustainability Partners
                                                              
Preferred shares, Class A           4,850,000             2,300,156             (900,156 )       6,250,000  
Common shares           10,000                         (10,000 )        
Total Control Investments   $     $ 18,819,335     $ (1,120,561 )     $ 5,800,155     $     $ (627,139 )     $ 22,871,790  
Affiliate Investments
                                                              
AlwaysOn, Inc.
                                                              
Preferred shares, Series A   $     $     $ 629,309     $     $     $ (437,316 )     $ 191,993  
Preferred shares, Series A-1                 491,252       320             (357,594 )       133,978  
Preferred warrants Series A, $1.00 strike price, expire 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))
                                                              
Preferred shares, Series A           1,705,006             293,558             (842,389 )       1,156,175  
Term Loan, 12%, 09/30/2015***     (6,440 )       288,114                   (292,798 )       4,684        
Term Loan, 12%, 11/18/2016*** (7)                       26,104             (1,104 )       25,000  
Preferred warrants, $1.00 Strike Price, Expiration Date
11/21/2017
          165,000                         (110,000 )       55,000  
Preferred warrants, $1.17 Strike Price, Expiration Date
8/29/2021
          58,019                         (43,954 )       14,065  

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Schedule 12-14 — Schedule of Investments in and Advances to Affiliates (unaudited) – (continued)

             
Portfolio Company/Type of Investment*   Amount of
Interest, Fees
or Dividends
Credited in
Income
  Fair Value at
December 31,
2014
  Transfer
from Control
Investment
To Affiliate
Investment
  Purchases   Sales   Realized and
Unrealized
Gains/(Losses)
  Fair Value at
December 31,
2015
Preferred warrants, $1.17 Strike Price, Expiration Date
9/30/2020
  $     $ 64,322     $     $     $     $ (51,458 )     $ 12,864  
Preferred warrants, $1.16 Strike Price, Expiration Date
6/26/2021
          12,736                         (9,648 )       3,088  
Circle Media, Inc. – Preferred Warrants Series A (f/k/a S3 Digital Corp.) – Strike Price $1.166, Expiration Date
11/18/2022
                      576             (147 )       429  
CUX, Inc. (d/b/a CorpU)
                                                              
Senior Subordinated Convertible Promissory Note 8% Due 11/26/2018 *** (5)     80,631       1,007,671             80,000             (7,671 )       1,080,000  
Convertible preferred shares, Series C           2,292,582                         (333,455 )       1,959,127  
Convertible preferred shares, Series D           716,066                         59,795       775,861  
Preferred warrants, $4.59 Strike Price, Expiration Date
2/25/2018
          12,508                         (2,366 )       10,142  
Cricket Media (f/k/a ePals Inc.) ** (4) (6)
                                                              
Common shares           331,126       (331,126 )                          
Curious.com Inc.
                                                              
Preferred shares, Series B           9,996,311                               9,996,311  
Declara, Inc.
                                                              
Declara, Inc., Convertible Promissory Note 6% Due 12/30/2016     658                   2,000,000                   2,000,000  
Preferred shares, Series A           10,019,825                         (19,826 )       9,999,999  
EdSurge, Inc.
                                                              
Preferred shares, Series A           505,328                         19,539       524,867  
Preferred shares, Series A-1                       500,960             (960 )       500,000  
Fullbridge, Inc.
                                                              
Convertible Promissory Note, 10% Interest rate, 3/2/2016***     142,645                   1,014,395             6,464       1,020,859  
Preferred shares, Series D           3,111,714                               3,111,714  
Preferred shares, Series C           1,625,001                               1,625,001  
Common warrants, $0.91 Strike Price, Expiration Date
2/18/2019
          1,862                         5,281       7,143  
Common warrants, $0.91 Strike Price, Expiration Date
4/3/2019
          824                         3,297       4,121  
Common warrants, $0.91 Strike Price, Expiration Date
3/2/2020
          4,121                         (1,290 )       2,831  
Common warrants, $0.91 Strike Price, Expiration Date
5/16/2019
          1,923                               1,923  
Common warrants, $0.91 Strike Price, Expiration Date
3/22/2020
          7,143                         (5,281 )       1,862  

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Schedule 12-14 — Schedule of Investments in and Advances to Affiliates (unaudited) – (continued)

             
Portfolio Company/Type of Investment*   Amount of
Interest, Fees
or Dividends
Credited in
Income
  Fair Value at
December 31,
2014
  Transfer
from Control
Investment
To Affiliate
Investment
  Purchases   Sales   Realized and
Unrealized
Gains/(Losses)
  Fair Value at
December 31,
2015
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  
Global Education Learning (Holdings) Ltd. **
                                                              
Preferred shares, Series A           3,995,221                   (3,660,394 )       (334,827 )        
Orchestra One, Inc. (f/k/a Learnist Inc.)
                                                              
Common Shares (7)                 5,379,310                   (5,374,946 )       4,364  
Preferred shares, Series D           2,319,014       (2,319,014 )                          
Preferred shares, Series E           1,610,296       (1,610,296 )                          
Preferred shares, Series F           1,450,000       (1,450,000 )                          
Maven Research, Inc.
                                                              
Preferred shares, Series C           1,999,998                               1,999,998  
Preferred shares, Series B           249,691                               249,691  
Ozy Media, Inc.
                                                              
Preferred shares, Series B           4,999,999                         (309,821 )       4,690,178  
Preferred shares, Series A           4,165,091                         (258,087 )       3,907,004  
Preferred shares, Series Seed           1,573,000                         (41,188 )       1,531,812  
PayNearMe, Inc.
                                                              
Preferred shares, Series E           9,982,064             3,999,998             (7,175 )       13,974,887  
The rSmart Group, Inc.
                                                              
Preferred shares, Series B           192,586             1,920       (5,000 )       (189,506 )        
Strategic Data Command, LLC (3)
                                                              
Common shares           1,000,000                   (12,373 )       14,023       1,001,650  
Totus Solutions, Inc.
                                                              
Convertible Promissory Note 6%, Expiration Date,
4/1/2016***
    (3,074 )       78,425             760       (50,000 )       (29,185 )        
Preferred shares, Series B           128,902                         (128,902 )        
Preferred shares, Series A                                          
Common Shares                                          
Total Affiliate Investments   $ 214,420     $ 70,172,313     $ 789,435     $ 7,918,591     $ (4,020,565 )     $ (8,784,189 )     $ 66,075,585  

* 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.

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Schedule 12-14 — Schedule of Investments in and Advances to Affiliates (unaudited) – (continued)

(3) GSV Capital Corp.’s investment in Strategic Data Command, LLC is held through its wholly owned subsidiary GSVC SVDS Holdings, Inc.
(4) On October 22, 2013, Cricket Media (f/k/a ePals Inc.) priced its initial public offering, selling 40,267,333 shares at a price of CAD $0.075 per share. At December 31, 2015, GSV Capital Corp. valued Cricket Media based on its December 31, 2015 closing price. GSV Capital Corp.’s Chief Executive Officer, Michael Moe, serves on the board of directors for Cricket Media, which subjects GSV Capital Corp. to insider trading restrictions under Canadian securities law.
(5) Interest will accrue daily on the unpaid principal balance of the note. 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). Interest will compound annually beginning on November 26, 2015.
(6) Subsequent to the filing of its annual report on Form 10-K for the fiscal year ended December 31, 2015, GSV Capital Corp. identified that its investment in Cricket Media was inappropriately included as an affiliate as of December 31, 2015 in the accompanying Schedule of Investments in and Advances to Affiliates. Therefore, the Schedule of Investments in and Advances to Affiliates included in this quarterly report has been corrected to remove all Cricket Media balances related to the year ended December 31, 2015, including the total fair value of $67,296. Management does not consider these amounts to be material to its previously issued Schedule of Investments in and Advances to Affiliates.
(7) Subsequent to the filing of GSV Capital Corp.’s annual report on Form 10-K for the fiscal year ended December 31, 2015, certain typographical formatting matters were identified where Schedule of Investments in and Advances to Affiliates activities were formatted in the incorrect columns. Such formatting matters have been corrected in this presentation.

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SIGNATURES

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

 
  GSV CAPITAL CORP.
Date: August 9, 2016
    
    

By:

/s/ Michael T. Moe

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

Date: August 9, 2016  

By:

/s/ William Tanona

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

68


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