What changed in this filing

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Item 7. Management’s Discussion and Analysis

2021-03-12 compared with 2020-03-13 · 297 added, 265 removed, 255 unchanged (69% of the section changed)

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

• the effect and consequences of the novel coronavirus (“COVID-19”) public health crisis on matters including global, U.S.

and local economies, our business operations and continuity, potential disruption to our portfolio companies, tightened availability to capital and financing, the health and productivity of our employees, the ability of third-party providers to continue uninterrupted service, and the regulatory environment in which we operate;

• our future operating results;

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We are an internally-managed, non-diversified closed-end management investment company that has elected to be regulated as a business development company ("BDC") under the Investment Company Act of 1940, as amended (the “1940 Act”), and has elected to be treated, and intends to qualify annually, as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).

Our investment objective is to maximize our portfolio’s total return, principally by seeking capital gains on our equity and equity-related investments.

Our investment objective is to maximize our portfolio’s total return, principally by seeking capital gains on our equity and equity-related investments, and to a lesser extent, income from debt investments.

We invest principally in the equity securities of what we believe to be rapidly growing venture-capital-backed emerging companies.

We acquire our investments through direct investments in prospective portfolio companies, secondary marketplaces for private companies and negotiations with selling stockholders.

In addition, we may invest in private credit and in the founders equity, founders warrants, forward purchase agreements, and PIPE transactions of SPACs.

We may also invest on an opportunistic basis in select publicly traded equity securities or certain non-U.S.

companies that otherwise meet our investment criteria.

companies that otherwise meet our investment criteria, subject to applicable requirements of the 1940 Act.

To the extent we make investments in private equity funds and hedge funds that are excluded from the definition of “investment company” under the 1940 Act by Section 3(c)(1) or 3(c)(7) of the 1940 Act, we will limit such investments to no more than 15% of our net assets.

In regard to the regulatory requirements for BDCs under the 1940 Act, some of these investments may not qualify as investments in “eligible portfolio companies,” and thus may not be considered “qualifying assets.” “Eligible portfolio companies” generally include U.S.

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We would not be required, however, to dispose of any non-qualifying assets in such circumstances.

Our investment philosophy is based on a disciplined approach of identifying promising investments in high-growth, venture-backed companies across several key industry themes which may include, among others, social mobile, cloud computing and big data, internet commerce, financial technology, mobility, and enterprise software.

computing and big data, internet commerce, financial technology, mobility, and enterprise software.

Our investment decisions are based on a disciplined analysis of available information regarding each potential portfolio company’s business operations, focusing on the portfolio company’s growth potential, the quality of recurring revenues, and path to profitability, as well as an understanding of key market fundamentals.

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Typically, our preferred stock investments are non-income producing, have different voting rights than our common stock investments and are generally convertible into common stock at our discretion.

We seek to create a low-turnover portfolio that includes investments in companies representing a broad range of investment themes.

Starting in 2017, we began to focus our investment strategy to increase the size of our investments in individual portfolio companies.

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

As our investment strategy is primarily focused on equity positions, 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.

We seek to create a low-turnover portfolio that includes investments in companies representing a broad range on investment themes.

Name Change to SuRo Capital Corp.

Articles of Amendment

On and effective June 22, 2020, the Company changed its name to “SuRo Capital Corp.” from “Sutter Rock Capital Corp” (the“Name Change”) by filing Articles of Amendment (the “Articles of Amendment”) to its Articles of Amendment and Restatement, as amended (the “Charter”), with the Department of Assessments and Taxation of the State of Maryland to effect the Name Change.

In accordance with the Maryland General Corporation Law and the Charter, the Company’s board of directors approved the Name Change and the Articles of Amendment.

Stockholder approval was not required.

Second Amended and Restated Bylaws

In connection with the Name Change, the Company’s board of directors also approved an amendment and restatement of the Company’s Amended and Restated Bylaws (the “Amended and Restated Bylaws”) to reflect the Name Change.

The Amended and Restated Bylaws became effective on June 22, 2020 and did not require stockholder approval.

For more information regarding the foregoing events, please refer to the Company’s current report on Form 8-K filed with the SEC on June 16, 2020.

Internalization of Operating Structure

On and effective March 12, 2019 (the "Effective Date"), our Board of Directors approved internalizing our operating structure ("Internalization") and we began operating as an internally managed non-diversified closed-end management investment company that has elected to be regulated as a BDC under the 1940 Act.

Our Board of Directors approved the Internalization in order to better align the interests of the Company's stockholders with its management.

As an internally managed BDC, the Company is managed by its employees, rather than the employees of an external investment adviser, thereby allowing for greater transparency to stockholders through robust disclosure regarding the Company's compensation structure.

Prior to the Effective Date, we were externally managed by our former investment adviser, GSV Asset Management, LLC (“GSV Asset Management”), pursuant to an investment advisory agreement (the “Investment Advisory Agreement”), and our former administrator, GSV Capital Service Company, LLC (“GSV Capital Service Company”), provided the administrative services necessary for our operations pursuant to an administration agreement (the “Administration Agreement”).

In connection with our Internalization, the Investment Advisory Agreement and the Administration Agreement were terminated as of the Effective Date, and as a result no fees or expenses will be due or payable under the Investment Advisory Agreement and the Administration Agreement going forward.

In addition, Michael T.

Moe resigned from our Board of Directors as of the Effective Date in connection with our Internalization, and as of such date, we entered into a Consulting Agreement with Mr.

Moe (the former Chairman of our Board of Directors and the Chief Executive Officer and Chief Investment Officer of GSV Asset Management), pursuant to which Mr.

Moe provides certain services to us in connection with our transition to an internally managed operating structure.

We also entered into an Amended and Restated Trademark License Agreement (the "Amended and Restated Trademark License Agreement") with GSV Asset Management to permit us to use the trade name “GSV”, and other state or unregistered “GSV” marks, including the trading symbol “GSVC.” Effective as of July 30, 2019, we changed our name to Sutter Rock Capital Corp.

and effective as of August 1, 2019, we changed our trading symbol to “SSSS”.

See “- Rebranding to Sutter Rock Capital Corp.”

In connection with our Internalization, the Investment Advisory Agreement and the Administration Agreement were terminated as of the Effective Date, in accordance with their respective terms.

As a result, we no longer pay any fees or expenses under an investment advisory agreement or administration agreement, and instead pay the operating costs associated with employing investment management professionals including, without limitation, compensation expenses related to salaries, discretionary bonuses and restricted stock grants.

See “Part II, Item 8—Note 11—Stock-Based Compensation” in this Form 10-K for more information.

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

Rebranding to Sutter Rock Capital Corp.

Articles of Amendment

On and effective July 30, 2019, the Company changed its name to “Sutter Rock Capital Corp.” from “GSV Capital Corp.” (the “Name Change”) by filing Articles of Amendment (the “Articles of Amendment”) to its Articles of Amendment and Restatement, as amended (the “Charter”), with the Department of Assessments and Taxation of the State of Maryland to effectuate the Name Change.

In accordance with the Maryland General Corporation Law and the Charter, the Company’s Board of Directors approved the Name Change and the Articles of Amendment.

Stockholder approval was not required.

Trading Symbol

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

Amended and Restated Bylaws

In connection with the Name Change, the Company’s Board of Directors also approved an amendment and restatement of the Company’s Bylaws (the “Amended and Restated Bylaws”) to reflect the Name Change.

The Amended and Restated Bylaws became effective on July 30, 2019 and did not require stockholder approval.

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

Board of Directors

Election of New Director

On and effective July 17, 2019, the Company’s Board of Directors elected Lisa Westley as a director of the Company.

Westley is not an “interested person” (as defined in Section 2(a)(19) of the 1940 Act) of the Company and will serve as one of the Company’s independent directors.

She will serve as a director for a term expiring in 2020 and until her successor is duly elected and qualified.

Westley will be entitled to the applicable annual fee and other compensation pursuant to the Company’s director compensation arrangements, under terms consistent with those previously disclosed by the Company.

There are no arrangements or understandings between Ms.

Westley and any other persons pursuant to which Ms.

Westley was elected as a director of the Company.

Increased Number of Directors

In connection with Ms.

Westley’s election as a director, the Board of Directors increased the number of directors that constitutes the full Board of Directors to five directors from four directors, effective July 17, 2019, in accordance with the Company’s bylaws.

The Company had previously reduced the number of directors that constitutes the full Board of Directors to four directors from five directors, effective July 1, 2019, in connection with David S.

Pottruck’s departure from the Board of Directors.

For more information regarding Mr.

Pottruck’s departure and such reduction in the number of directors, please refer to the Company’s current report on Form 8-K filed with the SEC on June 10, 2019.

Changes to Committee Composition

On and effective July 31, 2019, the Company’s Board of Directors appointed Ms.

Westley as Chair of the Board of Director’s Compensation Committee and as a member of the Audit Committee, the Nominating and Corporate Governance Committee, and the Valuation Committee.

In connection with Ms.

Westley’s appointment as Chair of the Compensation Committee, Ronald M.

Lott, the former Chair of the Compensation Committee, was appointed as Chair of the Nominating and Corporate Governance Committee, effective July 31, 2019.

As a result of the foregoing, the Board of Director’s committees are composed of the following individuals, each of whom is considered independent under the rules of the Nasdaq Capital Market and is not an “interested person” of the Company as that term is defined in Section 2(a)(19) of the 1940 Act.

The Audit Committee is comprised of Marc Mazur, Leonard A.

Potter, Ronald M.

Lott, and Lisa Westley.

Mazur serves as Chair of the Audit Committee.

The Nominating and Corporate Governance Committee is comprised of Marc Mazur, Leonard A.

Potter, Ronald M.

Lott, and Lisa Westley.

Lott was appointed Chair of the Nominating and Corporate Governance Committee on July 31, 2019.

The Valuation Committee is comprised of Marc Mazur, Leonard A.

Potter, Ronald M.

Lott, and Lisa Westley.

Potter serves as Chair of the Valuation Committee.

The Compensation Committee is comprised of Marc Mazur, Leonard A.

Potter, Ronald M.

Lott, and Lisa Westley.

Westley was appointed as Chair of the Compensation Committee on July 31, 2019.

Changes to Compensation

On and effective July 31, 2019, the Company’s Board of Directors approved the following changes to director compensation:

(i) the annual fee paid to independent directors increased to $100,000 from $80,000, (ii) the annual fee paid to the Chair of the Audit Committee increased to $15,000 from $10,000, and (iii) the annual fee paid to the chairs of the other committees of the Board of Directors increased to $10,000 from $5,000.

Recent COVID-19 Developments

In March 2020, the outbreak of the novel coronavirus (“COVID-19”) was recognized as a pandemic by the World Health Organization.

Shortly thereafter, the President of the United States declared a National Emergency throughout the United States attributable to such pandemic.

The pandemic has become increasingly widespread in the United States, including in the markets in which the Company primarily operates.

As of the year ended December 31, 2020, and subsequent to December 31, 2020, the COVID-19 pandemic has had a significant impact on the U.S.

and global economy.

We have and continue to assess the impact of the COVID-19 pandemic on our portfolio companies.

We cannot predict the full impact of the COVID-19 pandemic, including its duration in the United States and worldwide, the effectiveness of governmental responses designed to mitigate strain to businesses and the economy, and the magnitude of the economic impact of the outbreak, including with respect to the travel restrictions, business closures and other quarantine measures imposed on service providers and other individuals by various local, state, and federal governmental authorities, as well as non-U.S.

governmental authorities.

While several countries, as well as certain states, counties and cities in the United States, have relaxed initial public health restrictions with a view to partially or fully reopening their economies, many cities world-wide have since experienced a surge in the reported number of cases, hospitalizations and deaths related to the COVID-19 pandemic.

These increases have led to the re-introduction of restrictions and business shutdowns in certain states, counties and cities in the United States and globally and could continue to lead to the re-introduction of such restrictions and business shutdowns elsewhere.

Additionally, as of March 2021, travelers from the United States are not allowed to visit Canada, Australia or the majority of countries in Europe, Asia, Africa and South America.

These continued travel restrictions may prolong the global economic downturn.

In addition, although the Federal Food and Drug Administration authorized vaccines produced by Pfizer-BioNTech and Moderna for emergency use starting in December 2020, it remains unclear how quickly the vaccines will be distributed nationwide and globally or when “herd immunity” will be achieved and the restrictions that were imposed to slow the spread of the virus will be lifted entirely.

The delay in distributing the vaccines could lead people to continue to self-isolate and not participate in the economy at pre-pandemic levels for a prolonged period of time.

Even after the COVID-19 pandemic subsides, the U.S.

economy and most other major global economies may continue to experience a recession, and we anticipate our business and operations could be materially adversely affected by a prolonged recession in the United States and other major markets.

As such, we are unable to predict the duration of any business and supply-chain disruptions, the extent to which the COVID-19 pandemic will negatively affect our portfolio companies’ operating results or the impact that such disruptions may have on our results of operations and financial condition.

Though the magnitude of the impact remains to be seen, we expect our portfolio companies and, by extension, our operating results to be adversely impacted by the COVID-19 pandemic and, depending on the duration and extent of the disruption to the operations of our portfolio companies, we expect that certain portfolio companies will experience financial distress and may possibly default on their financial obligations to us and their other capital providers.

Some of our portfolio companies have significantly curtailed business operations, furloughed or laid off employees and terminated service providers, and deferred capital expenditures, which could impair their business on a permanent basis and additional portfolio companies may take similar actions.

We continue to closely monitor our portfolio companies, which includes assessing each portfolio company’s operational and liquidity exposure and outlook;

however, any of these developments would likely result in a decrease in the value of our investment in any such portfolio company.

In addition, to the extent that the impact to our portfolio companies results in reduced interest payments or permanent impairments on our investments, we could see a decrease in our net investment income, which would increase the percentage of our cash flows dedicated to our debt obligations and could impact the amount of any future distributions to our stockholders.

In response to the COVID-19 pandemic, we instituted a temporary work-from-home policy in March 2020, pursuant to which our employees have and continue to primarily work remotely without disruption to our operations.

This policy will remain in effect until it is deemed safe to return to our office.

As of March 11, 2021, there is no indication of a reportable subsequent event impacting the Company’s financial statements for the year ended December 31, 2020.

The Company continues to observe and respond to the evolving COVID-19 environment and its potential impact on areas across its business.

Portfolio and Investment Activity

Year Ended December 31, 2020

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.

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Treasury bills, was $280,779,774.

During year ended December 31, 2019 , we funded investments in an aggregate amount of $25,530,000 (not including capitalized transaction costs) as shown in the following table:

Portfolio Company

Transaction Date

Gross Payments

During the year ended December 31, 2020, we funded investments in an aggregate amount of $31,242,228 (not including capitalized transaction costs) as shown in the following table:

Portfolio Company Investment Transaction Date Gross Payments

Neutron Holdings, Inc.

(d/b/a/ Lime)

Preferred shares, Series D

(d/b/a Lime) Junior Preferred Convertible Note 4% Due 5/11/2027 5/11/2020 $ 506,339

Rent the Runway, Inc.

Preferred Shares, Series G 6/17/2020 5,000,001

Palantir Lending Trust SPV I Collateralized Loan 15% Due 6/19/2022 6/19/2020 6,870,000

Coursera, Inc.

Preferred Shares, Series F 7/15/2020 2,838,354

Blink Health, Inc.

Preferred Shares, Series A 10/27/2020 4,999,995

Blink Health, Inc.

Preferred Shares, Series C 10/27/2020 4,999,987

Enjoy Technology, Inc.

Convertible Note 14% Due 1/30/2024 11/30/2020 521,112

GreenAcreage Real Estate Corp.

Common Shares 12/17/2020 503,220

GreenAcreage Real Estate Corp.

Common Shares 12/29/2020 503,220

Residential Homes for Rent, LLC

(d/b/a Second Avenue) Term Loan 15% Due 12/23/2023 12/23/2020 3,000,000

Residential Homes for Rent, LLC

(d/b/a Second Avenue) Preferred Shares, Series A 12/23/2020 1,500,000

Total $ 31,242,228

During the year ended December 31, 2020, we capitalized fees of $190,799.

During the year ended December 31, 2020, we exited investments in an amount of $31,245,944, net of transaction costs, and realized a net gain on investments of $16,441,223 (including U.S.

Treasury investments and adjustments to amounts held in escrow receivable) as shown in following table:

Portfolio Company Net Proceeds Realized Gain/(Loss) (2)

Parchment, Inc.

$ 10,876,621 $ 6,785,364

4C Insights (f/k/a The Echo Systems Corp.) (4)

807,952 (628,452)

Palantir Technologies, Inc.

11,671,878 8,357,068

Palantir Lending Trust SPV I (6)

7,889,493 988,892 (7)

Total $ 31,245,944 $ 15,502,872

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

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

Treasury investments.

(3) On January 31, 2020, Parchment, Inc.

closed a merger with Credentials Solutions.

As a result of the transaction, we received $10,876,621 in net proceeds.

As of December 31, 2020, we received all escrow proceeds of $90,275.

(4) On July 29, 2020, SuRo Capital Corp.

exited its investment in 4C Insights (f/k/a The Echo Systems Corp.).

In connection with this exit, SuRo Capital Corp.

received 112,374 Class A common shares in Kinetiq Holdings, LLC in addition to cash proceeds and amounts currently held in escrow.

As of December 31, 2020, we have received $12,900 in escrow proceeds, and expect to receive $43,223 in additional escrow proceeds in 2021.

(5) As of December 31, 2020, we held 4,618,952 remaining Class A common shares of Palantir Technologies, Inc., all of which were subject to lock-up restrictions.

(6) The Palantir Lending Trust SPV I promissory note was initially collateralized with 2,260,000 Class A common shares of Palantir Technologies, Inc.

The collateralized loan to Palantir Lending Trust SPV I matures on June 19, 2022 and includes a 15% interest rate.

Through the collateralized loan, SuRo Capital Corp.

participated in additional upside in a future Palantir Technologies, Inc.

liquidity event by receiving a percentage of the share price appreciation as captured in the Equity Participation in Underlying Collateral security.

As of December 31, 2020, the balance of the loan and all guaranteed interest has been fully repaid, and SuRo Capital Corp.

retains the right to upside on 1,312,290 shares as captured in the Equity Participation in Underlying Collateral security.

The net proceeds figure does not include accrued guaranteed interest received of $782,125.

(7) The realized gain from SuRo Capital Corp.'s investment in Palantir Lending Trust SPV I is generated by the proceeds from the sale of a portion of the shares collateralizing the promissory note to Palantir Lending Trust SPV I and attributable to the Equity Participation in Underlying Collateral.

During the year ended December 31, 2020, we did not write-off any investments and our CUX, Inc.

(d/b/a CorpU) Series D preferred warrants with a strike price of $4.59, expired on February 14, 2020.

As the COVID-19 situation continues to evolve, we are maintaining close communications with our portfolio companies to proactively assess and manage potential risks across our investment portfolio.

Year Ended December 31, 2019

During the year ended December 31, 2019, we funded investments in an aggregate amount of $25,530,000 (not including capitalized transaction costs) as shown in the following table:

Portfolio Company Investment Transaction Date Gross Payments

Neutron Holdings, Inc.

(d/b/a Lime) Preferred Shares, Series D 1/25/2019 $ 10,000,000

Aspiration Partners, Inc.

Convertible Promissory Note 5% 1/31/2021

Convertible Promissory Note 5% Due 1/31/2021 8/12/2019 $ 280,000

GreenAcreage Real Estate Corp.

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Common shares 9/11/2019 $ 7,500,000

Stormwind, LLC

Preferred shares, Series D

Stormwind, LLC Preferred shares, Series D 11/26/2019 $ 250,000

Total $ 25,530,000

During the year ended December 31, 2019, we capitalized fees of $39,685.

During the year ended December 31, 2019 , we sold or amended investments in an amount of $ 65,603,252 , net of transaction costs, and realized a net gain on investments of approximately $19,179,340 (including U.S.

During the year ended December 31, 2019, we sold investments in an amount of $65,603,252, net of transaction costs, and realized a net gain on investments of $19,179,340 (including U.S.

Treasury investments) as shown in following table:

Portfolio Investment

Average Net Share Price (1)

Realized Gain/(Loss) (2)

Portfolio Investment Net Proceeds Realized Gain/(Loss) (2)

Declara, Inc.

Spotify Technology S.A.

$ — $ (12,334,151)

Spotify Technologies S.A.

32,547,633 22,545,550

Dropbox, Inc.

19,723,591 6,066,664

Knewton, Inc.

51,511 (5,083,701)

(d/b/a CorpU) (7)

13,280,517 8,983,623

EdSurge, Inc.

— (1,002,161)

Total $ 65,603,252 $ 19,066,493

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

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

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

Treasury investments.

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entered into a definitive agreement to be acquired by Declara Holdings, Inc., a subsidiary of Futuryng, Inc.

Despite the existence of an earn-out provision, as a result of the transaction, we do not expect to receive any proceeds.

Despite the existence of an earn-out provision, as a result of the transaction, the Company does not expect to receive any proceeds.

The exit of Declara, Inc.

included a 12% Convertible Promissory Note with a principal value of $2,334,152.

As of May 2, 2019, all remaining shares of Spotify Technology S.A.

(4) As of May 2, 2019, all remaining shares of Spotify Technologies S.A.

held by us had been sold.

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held by us had been sold.

On May 31, 2019, a sale of substantially all of the assets of Knewton, Inc.

(6) On May 31, 2019, a sale of substantially all of Knewton, Inc.

to Wiley Education was completed.

As a result of the transaction, we have received $51,511 in net proceeds and expect to receive approximately $26,000 in additional proceeds held in escrow.

We expect to receive the proceeds held in escrow in 2020.

As a result of the transaction, we received $51,511 in net proceeds in 2019 and $26,254 in escrow proceeds in 2020.

(7) On October 24, 2019, CUX, Inc.

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held by us had been sold.

As of December 12, 2019, all remaining shares of EdSurge, Inc., were sold in a transaction with the International Society for Technology in Education (ISTE).

(9) As of December 12, 2019, all remaining shares of EdSurge, Inc.

held by us had been sold in a transaction with the International Society for Technology in Education (ISTE).

As a result of the transaction, we do not expect to receive any proceeds.

Portfolio and Investment Activity - 2018

During the year ended December 31, 2019, we did not write-off any investments.

Year Ended December 31, 2018

During the year ended December 31, 2018, we funded investments in an aggregate amount of $10,636,685 (not including capitalized transaction costs) as shown in the following table:

Portfolio Company

Transaction Date

Gross Payments

Portfolio Company Investment Transaction Date Gross Payments

Ozy Media, Inc.

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NestGSV, Inc.

(d/b/a GSV Labs, Inc.) (3)

(d/b/a OneValley, Inc.) (3)

Unsecured Convertible Promissory Note 12% Due 12/31/2019 12/31/2018 300,000

Total $ 10,636,685

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(3) Effective July 31, 2018, we agreed to extend the Convertible Promissory Note to NestGSV, Inc.

(d/b/a GSV Labs, Inc.) until December 31, 2018, with a new interest rate of 12%.

(d/b/a OneValley, Inc.) until December 31, 2018, with a new interest rate of 12%.

Previously accrued interest will be capitalized into the principal of the extended note.

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During the year ended December 31, 2018, we capitalized fees of $32,350.

During the year ended December 31, 2018, we sold investments or received repayments from portfolio companies in an amount of $32,395,839, net of transaction costs, and realized a net loss on investments of approximately $7,433,619 (including U.S.

Treasury investments) as shown in following table:

Portfolio Investment

Realized Gain/(Loss) (1)

Portfolio Investment Net Proceeds Realized Gain/(Loss) (1)

$ 9,446,315 $ 3,437,847

NestGSV, Inc.

(d/b/a GSV Labs, Inc.) (3)

(d/b/a OneValley, Inc.) (3)

592,129 (680)

Avenues Global Holdings, LLC 5,923,795 (4,228,059)

General Assembly Space, Inc.

7,820,191 3,292,552

791,596 (9,711,762)

SugarCRM, Inc.

2,645,183 (4,332,777)

DreamBox Learning, Inc.

5,176,630 2,916,251

Total $ 32,395,839 $ (8,626,628)

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

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We have received approximately $7.8 million in net proceeds as a result of the transaction, with approximately $1.5 million of additional proceeds held in escrow.

We have received approximately $1.4 million in escrow proceeds in 2019 and expect to receive approximately $61,000 in additional escrow proceeds in 2020.

We have received approximately $1.4

million and $0 in escrow proceeds in 2019 and 2020, respectively, and expect to receive $60,557 in additional escrow proceeds in 2021.

(5) On March 27, 2018, Lytro, Inc.

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As a result of the transaction, we have received $0.8 million in net proceeds and expect to receive approximately $0.4 million in additional proceeds held in escrow.

We have received approximately $170,000 in escrow proceeds in 2019 and expect to receive approximately $168,000 in additional escrow proceeds in 2020.

We have received approximately $170,000 and $168,000 in escrow proceeds in 2019 and 2020, respectively.

(6) On June 14, 2018, SugarCRM, Inc.

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We received all escrow proceeds as of December 31, 2019.

During the quarter and year ended December 31, 2018 we did not write-off any investments.

Portfolio and Investment Activity - 2017

During quarter and year ended December 31, 2017, we did not purchase or close on any investments.

We did, however, pay $2,080 in capitalized fees.

The table below summarizes the portfolio investments we wrote-off and sold during the year ended December 31, 2017:

Portfolio Company

Gain/(Loss) (1)

AliphCom, Inc.

(d/b/a Jawbone)

AlwaysOn, Inc.

Beamreach Solar, Inc.

(f/k/a Solexel, Inc.)

Cricket Media (f/k/a ePals Corporation)

EarlyShares.com, Inc.

Orchestra One, Inc.

(f/k/a Learnist, Inc.)

Global Education Learning (Holdings) Ltd.

JAMF Holdings, Inc.

Spotify Technology S.A.

Dataminr, Inc.

Whittle Schools, LLC

Strategic Data Command, LLC (2)

Palantir Technologies, Inc.

Circle Media (f/k/a S3 Digital Corp.

Handle Financial, Inc.

(f/k/a PayNearMe, Inc.)

Total Disposals

_______________________

Realized gain/(loss) does not include any realized gain/(loss) incurred on the maturity of our U.S.

Treasury investments.

Net proceeds do not include amounts that were held in escrow.

Refer to “Note 2 — Significant Accounting Policies — Escrow Proceeds Receivable” to our consolidated financial statements as of December 31, 2018 for further detail.

Represents only a partial sale of our investment in the denoted portfolio companies.

Results of Operations - Comparison of the years ended December 31, 2019 , 2018 , and 2017

During the year ended December 31, 2018 we did not write-off any investments.

Results of Operations

Comparison of the years ended December 31, 2020, 2019, and 2018

Operating results for the years ended December 31, 2020, 2019, and 2018 are as follows:

Year Ended December 31,

2020 2019 2018

Total Investment Income $ 1,824,127 $ 1,495,724 $ 1,617,836

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Management fee waiver — — (892,421)

Gross Operating Expenses

Total Operating Expenses $ 16,338,543 $ 10,946,792 $ 15,144,834

Management fees — 848,723 5,199,900

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Compensation expense (1)

8,801,841 4,286,972 —

Interest expense 2,247,817 2,372,570 4,545,471

Income tax expense

Tax expense 43,574 33,825 482,994

Other expenses 1,837,530 2,085,391 899,457

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Realized loss on partial repurchase of 5.25% Convertible Senior Notes due 2018

— — (397,846)

Net change in unrealized appreciation/(depreciation) of investments

73,410,631 13,339,859 9,641,050

Benefit from taxes on unrealized depreciation of investments — 885,566 6,716,735

Net Increase in Net Assets Resulting from Operations

Net Change in Net Assets Resulting from Operations $ 75,337,438 $ 23,953,697 $ 891,743

__________________

(1) For the year ended December 31, 2020, this balance includes $1,962,431 of accelerated recognition of compensation cost related to the cancellation of unvested options on April 28, 2020.

Refer to "Note 11— Stock-Based Compensation" for more detail.

Investment Income

For the year ended December 31, 2020 as compared to the year ended December 31, 2019

Investment income increased to $1,824,127 for the year ended December 31, 2020 from $1,495,724 for the year ended December 31, 2019.

The increase was due to an increase in dividend income received from GreenAcreage Real Estate Investment Trust, Inc.

and guaranteed interest from Palantir Lending Trust SPV I, partially offset by a decrease in accrued interest income due to the placement of some debt investments on non-accrual status and decreased Treehouse Real Estate Investment Trust, Inc.

dividends, relative to the year ended December 31, 2019.

For the year ended December 31, 2019 as compared to the year ended December 31, 2018

Investment income decreased to $1,495,724 for the year ended December 31, 2019 from $1,617,836 for the year ended December 31, 2018.

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earned in the year ended December 31, 2019.

For the year ended December 31, 2018 as compared to the year ended December 31, 2017

Investment income increased to $1,617,836 for the year ended December 31, 2018 from $852,768 for the year ended December 31, 2017.

The increase was primarily due to increased interest income related to our debt investments in Ozy Media, Inc., NestGSV, Inc.

GSV Labs, Inc.), and CUX, Inc.

(d/b/a CorpU) and interest on cash balances not earned in the prior year.

Dividend income also increased during the year as the total dividends received from SPBRX, Inc.

(f/k/a GSV Sustainability Partners, Inc.) increased from $475,000 in 2017 to $625,000 in 2018.

Operating Expenses

For the year ended December 31, 2020 as compared to the year ended December 31, 2019

Total operating expenses increased to $16,338,543 for the year ended December 31, 2020, from $10,946,792 for the year ended December 31, 2019.

The increase in operating expense was primarily due to the accelerated recognition of compensation cost related to the cancellation of unvested options on April 28, 2020, as well as reversal of the incentive fee accrual as a result of the Internalization.

The notable increase was partially offset by removal of management and professional fees related to the termination of the Investment Advisory Agreement and Administration Agreements.

For the year ended December 31, 2019 as compared to the year ended December 31, 2018

Total operating expenses, net of waiver of management and incentive fees, increased to $10,946,792 for the year ended December 31, 2019, from $9,252,413 for the year ended December 31, 2018.

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The increase was partially offset by a decrease in interest expense due to the extinguishment of the Convertible Senior Notes due September 15, 2018, as compared to the year ended December 31, 2018.

For the year ended December 31, 2018 as compared to the year ended December 31, 2017

Total operating expenses, net of waiver of management and incentive fees, decreased to $9,252,413 for the year ended December 31, 2018, from $21,731,583 for the year ended December 31, 2017.

The decrease was primarily due to a decrease in the accrued incentive fees, enhanced by the one-time incentive fee accrual forfeiture of $5.0 million per the Waiver Agreement and, to a lesser extent, an increase in GSV Asset Management’s management fee waiver and costs incurred under Administration Agreement.

The increase in GSV Asset Management’s management fee waiver under the Waiver Agreement during the year ended December 31, 2018 resulted primarily from the exclusion of our cash balance from the calculation of the base management fee.

The decrease in total operating expenses between periods was also, to a lesser extent, the result of a decrease in professional fees, which include legal, valuation, audit, and consulting fees.

Net Investment Loss

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For the year ended December 31, 2020, we recognized net investment loss of $14,514,416, compared to net investment loss of $9,451,068 for the year ended December 31, 2019.

The change between periods resulted from the increase in operating expenses, as discussed above, and a decrease in total investment income between periods.

The change between periods resulted from the increase in operating expenses, as discussed above, and an increase in total investment income between periods.

For the year ended December 31, 2019 as compared to the year ended December 31, 2018

For the year ended December 31, 2018, we recognized a net investment loss of $7,634,577, compared to a net investment loss of $20,878,815 for the year ended December 31, 2017.

The decrease in net investment loss resulted primarily from the decrease in operating expenses, net of waiver of management fees and one-time incentive fee accrual forfeiture, as discussed above, and an increase in total investment income between 2018 and 2017, also discussed above.

For the year ended December 31, 2019, we recognized net investment loss of $9,451,068, compared to net investment loss of $7,634,577 for the year ended December 31, 2018.

The change between periods resulted from the increase in operating expenses, as discussed above, and a decrease in total investment income between periods.

Net Realized Gain on Investments

For the year ended December 31, 2020 as compared to the year ended December 31, 2019

For the year ended December 31, 2019 , we recognized net realized gain on our investments of $19,179,340 , compared to net realized loss of $7,433,619 for the year ended December 31, 2018 .

The components of our net realized gains/losses on portfolio investments for the year ended December 31, 2019 and 2018 , excluding U.S.

For the year ended December 31, 2020, we recognized net realized gain on our investments of $16,441,223, compared to net realized gain of $19,179,340 for the year ended December 31, 2019.

The components of our net realized gains/losses on

portfolio investments for the year ended December 31, 2020 and 2019, excluding U.S.

Treasury investments, are reflected in the tables above, under “—Portfolio and Investment Activity.”

For the year ended December 31, 2019 as compared to the year ended December 31, 2018

For the year ended December 31, 2018, we recognized a net realized loss of $7,433,619 on our investments, compared to a net realized gain of $913,982 for the year ended December 31, 2017.

The components of our net realized gains and losses on portfolio investments for the year ended December 31, 2018 and 2017, excluding U.S.

For the year ended December 31, 2019, we recognized net realized gain on our investments of $19,179,340, compared to net realized loss of $7,433,619 for the year ended December 31, 2018.

The components of our net realized gains/losses on portfolio investments for the year ended December 31, 2019 and 2018, excluding U.S.

Treasury investments, are reflected in the tables above, under “—Portfolio and Investment Activity.”

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For the year ended December 31, 2020, we had a net change in unrealized appreciation/depreciation of $73,410,631.

For the year ended December 31, 2018, we had a net change in unrealized appreciation/depreciation of $9,641,050.

For the year ended December 31, 2017, we had a net change in unrealized appreciation of $34,775,696.

For the year ended December 31, 2019, we had a net change in unrealized appreciation/depreciation of $13,339,859 For the year ended December 31, 2018, we had a net change in unrealized appreciation of $9,641,050.

The following tables summarize, by portfolio company, the significant changes in unrealized appreciation and/or depreciation of our investment portfolio for the years ended December 31, 2020, 2019, and 2018.

Portfolio Company

Net Change in Unrealized Appreciation/(Depreciation) For the Year Ended December 31, 2019

Declara, Inc.

Ozy Media, Inc.

Course Hero, Inc.

Portfolio Company Net Change in Unrealized Appreciation/(Depreciation) For the Year Ended December 31, 2020

Palantir Technologies, Inc.

Coursera, Inc.

Parchment, Inc.

Knewton, Inc.

Course Hero, Inc.

Forge Global, Inc.

Palantir Lending Trust SPV I (1)

Nextdoor, Inc.

4C Insights (f/k/a The Echo Systems Corp.) (1)

Aspiration Partners, Inc.

Enjoy Technology, Inc.

(d/b/a CorpU)

Palantir Technologies, Inc.

A Place for Rover Inc.

(f/k/a DogVacay, Inc.)

StormWind, LLC (1,342,526)

NestGSV, Inc.

(d/b/a GSV Labs, Inc.) (2,326,760)

Dropbox, Inc.

Stormwind, LLC

Spotify Technology S.A.

Treehouse Real Estate Investment Trust, Inc.

SharesPost, Inc.

Ozy Media, Inc.

Neutron Holdings, Inc.

(d/b/a/ Lime) (6,515,508)

Parchment, Inc.

Total $ 73,410,631

_______________________

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

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

(2) “Other” represents investments (including U.S.

Treasury bills) for which individual change in unrealized appreciation/(depreciation) was less than $1.0 million for the year ended December 31, 2020.

Portfolio Company

Net Change in Unrealized Appreciation/(Depreciation) For the Year Ended December 31, 2018

Portfolio Company

Net Change in Unrealized Appreciation/(Depreciation) for the Year Ended December 31, 2017

Spotify Technology S.A.

Beamreach Solar, Inc.

(f/k/a Solexel, Inc.) (1)

Portfolio Company Net Change in Unrealized Appreciation/(Depreciation) For the Year Ended December 31, 2019 Portfolio Company Net Change in Unrealized Appreciation/(Depreciation) for the Year Ended December 31, 2018

Declara, Inc.

$ 12,334,151 Lytro, Inc.

Ozy Media, Inc.

12,218,812 Lyft, Inc.

Course Hero, Inc.

11,567,394 Coursera, Inc.

Handle Financial, Inc.

(f/k/a PayNearMe, Inc.) (1)

Coursera, Inc.

10,458,012 SharesPost, Inc.

Parchment, Inc.

4,745,425 Avenues Global Holdings, LLC (1)

Orchestra One, Inc.

(f/k/a Learnist, Inc.) (1)

Aspiration Partners, Inc.

3,511,682 Course Hero, Inc.

Dropbox, Inc.

Knewton, Inc.

2,979,116 SugarCRM, Inc.

NestGSV, Inc.

(d/b/a GSV Labs, Inc.)

Enjoy Technology, Inc.

1,155,396 Palantir Technologies, Inc.

Coursera, Inc.

Knewton, Inc.

StormWind, LLC

(d/b/a CorpU) (1,804,892) Knewton, Inc.

Palantir Technologies, Inc.

(2,471,310) Declara, Inc.

Ozy Media, Inc.

Cricket Media (f/k/a ePals, Inc.) (1)

AlwaysOn, Inc.

A Place for Rover Inc.

(f/k/a DogVacay, Inc.) (2,548,128) Ozy Media, Inc.

NestGSV, Inc.

(d/b/a OneValley, Inc.) (3,663,624) Chegg, Inc.

Dropbox, Inc.

(4,219,119) Spotify Technology S.A.

Aspiration Partners, Inc.

General Assembly Space, Inc.

Circle Media (f/k/a/ S3 Digital Corp.

(d/b/a S3i)) (1)

Curious.com, Inc.

Strategic Data Command, LLC (2)

Maven Research, Inc.

Dataminr, Inc.

General Assembly Space, Inc.

SugarCRM, Inc.

(f/k/a GSV Sustainability Partners, Inc.)

JAMF Holdings, Inc.

Stormwind, LLC (4,343,218) General Assembly Space, Inc.

(11,313,418) Curious.com, Inc.

Palantir Technologies, Inc.

Ozy Media, Inc.

Declara, Inc.

Spotify Technology S.A.

1,444,856 Other (2)

Total $ 13,339,859 Total $ 9,641,050

_______________________

The change in unrealized appreciation for this investment resulted from writing off an investment that was previously reduced in value to zero.

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

(2) “Other” represents investments (including U.S.

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Please refer to “Note 12—Subsequent Events” to our consolidated financial statements as of December 31, 2020 for details regarding activity in our investment portfolio from January 1, 2021 through March 11, 2021.

As the COVID-19 situation continues to evolve, we are maintaining close communications with our portfolio companies to proactively assess and manage potential risks across our investment portfolio.

We are frequently in negotiations with various private companies with respect to investments in such companies.

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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.

Share Repurchase Program

On March 9, 2020, our Board of Directors authorized a $5.0 million increase in the amount of shares of our common stock that may be repurchased under the discretionary Share Repurchase Program until the earlier of (i) March 8, 2021 or (ii) the repurchase of $30.0 million in aggregate amount of our common stock.

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

Please refer to "Note 5—Share Repurchase Program, Equity Offerings and Related Expenses” to our consolidated financial statements as of December 31, 2019 for additional information on the Share Repurchase Program.

From January 1, 2020 through March 13, 2020 , we repurchased an additional 237,612 shares under the Share Repurchase Program for an aggregate purchase price of $ 1.5 million.

Appointment of CCO

On March 9, 2020, our Board of Directors appointed Allison Green, our Chief Financial Officer, Treasurer and Secretary, to serve as our Chief Compliance Officer effective March 15, 2020.

Carl Rizzo served as our Chief Compliance Officer pursuant to an agreement between us and Alaric Compliance Services LLC until March 15, 2020.

On January 26, 2021, the Company’s Board of Directors declared a dividend of $0.25 per share paid, in cash, on February 19, 2021 to stockholders of record as of the close of business on February 5, 2021.

On March 8, 2021, the Company's Board of Directors declared a dividend of $0.25 per share payable on April 15, 2021 to stockholders of record as of the close of business on March 30, 2021.

The dividend will be paid in cash.

Conversion of 4.75% Convertible Senior Notes due 2023

Effective as of February 5, 2021, the conversion price applicable to the 4.75% Convertible Senior Notes due 2023 was adjusted to $9.25 per share (108.0505 shares of the Company’s common stock per $1,000 principal amount of the 4.75% Convertible Senior Notes due 2023) from the most recent conversion price of $9.42 per share (106.1681 shares of the Company’s common stock per $1,000 principal amount of the 4.75% Convertible Senior Notes due 2023), which had been in effect since December 30, 2020.

The adjustment to the conversion rate of the 4.75% Convertible Senior Notes due 2023 was made pursuant to the supplemental indenture governing the 4.75% Convertible Senior Notes due 2023 as a result of the Company’s cash dividend of $0.25 per share, paid on February 19, 2021 to stockholders of record as of the close of business on February 5, 2021.

Redemption of 4.75% Convertible Senior Notes due 2023

On February 19, 2021, the Company caused notices of redemption to be issued to the holders of its 4.75% Convertible Senior Notes due 2023 regarding the Company’s exercise of its option to redeem, in whole, the issued and outstanding 4.75% Convertible Senior Notes due 2023, pursuant to the Indenture, dated as of March 28, 2018, between the Company and U.S.

Bank National Association, as trustee, and the First Supplemental Indenture, dated as of March 28, 2018, between the Company and U.S.

Bank National Association, as trustee.

The Company will redeem $38,215,000 in aggregate principal amount of the issued and outstanding 4.75% Convertible Senior Notes due 2023 on March 29, 2021 (the “Redemption Date”).

The 4.75% Convertible Senior Notes due 2023 will be redeemed at 100% of their principal amount ($1,000 per note), plus the accrued and unpaid interest thereon from September 30, 2020, through, but excluding, the Redemption Date.

Holders of the 4.75% Convertible Senior Notes due 2023 may surrender such notes for conversion into shares of the Company’s common stock in lieu of receiving cash at any time prior to the close of business on the business day immediately preceding the Redemption Date.

A copy of the notice of redemption was included as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on February 19, 2021.

Please refer to that Current Report on Form 8-K for additional information.

As of December 31, 2020, $38,215,000 in aggregate principal amount of the 4.75% Convertible Senior Notes due 2023 were outstanding (the “Outstanding Amount”).

Hypothetically, assuming all holders of the 4.75% Convertible Senior Notes due 2023 voluntarily submit the Outstanding Amount for conversion into shares of the Company’s common stock prior to the Redemption Date in accordance with the terms of the First Supplemental Indenture at the current conversion price of $9.25 per share (108.0505 shares of the Company’s common stock per $1,000 principal amount of the 4.75% Convertible Senior Notes due 2023), approximately 4,129,150 shares of the Company’s common stock would be issued.

The dilutive effect of such conversions on the Company’s net asset value per share of $15.14 as of December 31, 2020 would be approximately $1.01.

The Company has been closely monitoring the COVID-19 pandemic, its broader impact on the global economy and the more recent impacts on the U.S.

Subsequent to December 31, 2020, the global outbreak of the COVID-19 pandemic, and the related effect on the U.S.

and global economies, may have adverse consequences for the business operations of some of the Company’s portfolio companies and, as a result, may have adverse effects on the Company’s operations.

The ultimate economic fallout from the pandemic, and the long-term impact on economies, markets, industries and individual issuers, remain uncertain.

The operational and financial performance of the issuers of securities in which the Company invests depends on future developments, including the duration and spread of the outbreak, and such uncertainty may in turn adversely affect the value and liquidity of the Company’s investments and negatively impact the Company’s performance.

As of March 11, 2021, there is no indication of a reportable subsequent event impacting the Company’s financial statements for the year ended December 31, 2020.

The Company continues to observe and respond to the evolving COVID-19 environment and its potential impact on areas across its business.

Liquidity and Capital Resources

Our liquidity and capital resources are generated primarily from the sales of our investments and advances from our $12.0 million Credit Facility.

The Credit Facility matured and expired on May 31, 2019.

See "—Credit Facility" for details.

In addition, on March 28, 2018, we issued $40.0 million aggregate principal amount of 4.75% Convertible Senior Notes due 2023 , as discussed further below and in “Note 10—Debt Capital Activities” to our consolidated financial statements as of December 31, 2019 .

Our liquidity and capital resources are generated primarily from the sales of our investments and the net proceeds from public offerings of our equity and debt securities.

Our $12.0 million senior secured revolving Credit Facility with Western Alliance Bank (the "Credit Facility") matured and expired on May 31, 2019 and no amounts were outstanding under the Credit Facility as of such date.

See “Note 10—Debt Capital Activities.” In addition, on March 28, 2018, we issued $40.0 million aggregate principal amount of 4.75% Convertible Senior Notes due 2023, as discussed further below and in “Note 10—Debt Capital Activities” to our consolidated financial statements as of December 31, 2020.

Our primary uses of cash are to make investments, pay our operating expenses, and make distributions to our stockholders.

For the year ended December 31, 2019 , our operating expenses were $10,946,792 .

For the years ended December 31, 2018 and 2017, our operating expenses, net of any fee waivers, were $9,252,413 and $21,731,583, respectively.

Cash Reserves and Liquid Securities

December 31, 2019

December 31, 2018

December 31, 2017

For the year ended December 31, 2020, our operating expenses were $16,338,543, including compensation expense related to the cancellation of the options granted under the 2019 Equity Incentive Plan.

For the years ended December 31, 2019 and 2018, our operating expenses were $10,946,792 and $9,252,413, net of fee waivers, respectively.

Cash Reserves and Liquid Securities December 31, 2020 December 31, 2019 December 31, 2018

Cash $ 45,793,724 $ 44,861,263 $ 28,184,163

Borrowing availability under the Credit Facility (1)

— — 12,000,000

Securities of publicly traded portfolio companies:

Unrestricted securities (2)

Total securities of publicly traded portfolio companies

— — 44,589,406

Subject to other sales restrictions (3)

94,635,398 — —

Securities of publicly traded portfolio companies 94,635,398 — 44,589,406

Total Cash Reserves and Liquid Securities $ 140,429,122 $ 44,861,263 $ 84,773,569

_______________________

Subject to leverage and borrowing base restrictions and other requirements under the Credit Facility as of December 31, 2019 and December 31, 2018 .

(1) Subject to leverage and borrowing base restrictions and other requirements under the Credit Facility as of December 31, 2018.

The Credit Facility matured on May 31, 2019.

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We may incur losses if we liquidate these positions to pay operating expenses or fund new investments.

As of December 31, 2019 , this

balance is $0 as we are not holding any publicly traded portfolio companies.

As of December 31, 2020, this balance was $0 as we were not holding any publicly traded portfolio companies that were not subject to other sales restrictions.

As of December 31, 2019, this balance was $0 as we were not holding any publicly traded portfolio companies.

As of December 31, 2018, this balance represents our shares of common stock in Spotify Technology S.A.

and Dropbox, Inc.

(3) As of December 31, 2020, this balance represents our shares of common stock in Palantir Technologies, Inc.

that were subject to certain lock-up restrictions.

During the year ended December 31, 2020, cash increased to $45,793,724 from $44,861,263 at the beginning of the year.

The increase in cash was primarily due to proceeds from the sale of our Spotify Technology S.A., Dropbox, Inc., and Lyft, Inc.

shares, offset by our investments in Neutron Holdings, Inc.

(d/b/a Lime), Aspiration Partners, Inc., GreenAcreage Real Estate Corp., Treehouse Real Estate Investment Trust, Inc., and Stormwind LLC, interest payments related to our 4.75% Convertible Senior Notes due 2023, cash used to repurchase our common stock under the Share Repurchase Program and Modified Dutch Auction Tender Offer, cash used to pay dividends, and cash used for our operating expenses.

The increase in cash was primarily due to proceeds from the sale of our common stock, interest income, dividends, and escrow proceeds received from our investments, offset by cash used to purchase investments, pay dividends, repurchase our common stock under the Share Repurchase Program, make interest payments related to our 4.75% Convertible Senior Notes due 2023, and pay operating expenses.

Currently, we believe we have ample liquidity to support our near-term capital requirements.

As the impact of the COVID-19 continues to unfold and consistent with past and current practices, we will continue to evaluate our overall liquidity position and take proactive steps to maintain the appropriate liquidity position based upon the current circumstances.

Contractual Obligations

Payments Due By Period (dollars in millions)

A summary of our significant contractual payment obligations as of December 31, 2020 is as follows:

Payments Due By Period ( in millions)

Total Less than

1 year 1–3 years 3–5 years More than

Payable for securities purchased (1)

Credit Facility payable (2)

$ 134.2 $ 134.2 $ — $ — $ —

Convertible Senior Notes (2)

38.2 — 38.2 — —

Operating lease liability 0.8 0.2 0.4 0.2 —

Total $ 173.2 $ 134.4 $ 38.6 $ 0.2 $ —

_______________________

(1) “Payable for securities purchased” relates to the purchase of U.S.

Treasury bills on margin.

This balance was subsequently repaid on January 2, 2020, when the $50.0 million United States Treasury bill matured and the $5.25 million margin deposit that we posted as collateral was returned.

The Credit Facility matured on May 31, 2019.

The weighted-average interest rate incurred under the Credit Facility was 0.00% for the year ended December 31, 2019 .

Treasury bills on margin and repurchase of our common stock under the Share Repurchase Program.

This balance was subsequently repaid in early January 2021, when the $150.0 million United States Treasury bill matured and the $15.8 million margin deposit that we posted as collateral was returned.

(2) The balance shown for the "Convertible Senior Notes" reflects the principal balance payable to investors for the 4.75% Convertible Senior Notes due 2023 as of December 31, 2020.

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For more information on the Share Repurchase Program, see " — Recent Developments" and "Part II.

For more information on the Share Repurchase Program, see "Part II.

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities".

Modified Dutch Auction Tender Offer

On October 21, 2019, the Company commenced a modified “Dutch Auction” tender offer (the “Modified Dutch Auction Tender Offer”) to purchase for cash up to $10.0 million in shares of its common stock from its stockholders, which expired on November 20, 2019.

In accordance with the terms of the Modified Dutch Auction Tender Offer, the Company selected the lowest price per share of not less than $6.00 per share and not greater than $8.00 per share, less any applicable withholding taxes and without interest, that could allow the Company to purchase that number of shares having an aggregate purchase price of $10.0 million.

Upon the terms and subject to the conditions of the Modified Dutch Auction Tender Offer, if shares having an aggregate purchase price of less than $10.0 million were properly tendered and not properly withdrawn, the Company would purchase all shares properly tendered and not properly withdrawn.

Pursuant to the Modified Dutch Auction Tender Offer, the Company repurchased 1,449,275 shares, representing 7.6% of its outstanding shares, on or about November 22, 2019, at a price of $6.90 per share on a pro rata basis, excluding fees and expenses relating to the self-tender offer.

The Company has determined that the proration factor for the tender offer was 78.1%.

used available cash to fund the purchases of its shares of common stock in the Modified Dutch Auction Tender Offer and to pay for all related fees and expenses.

Off-Balance Sheet Arrangements

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However, we may employ hedging and other risk management techniques in the future.

Credit Facility

Pursuant to the Loan Agreement, Western Alliance Bank had agreed to provide us with the $12.0 million Credit Facility, which, among other things, matured on May 31, 2019 and bore interest at a per annum rate equal to the prime rate plus 3.50% .

In addition, the Loan Agreement required payment of a fee for unused amounts during the revolving period.

During year ended December 31, 2019 we had no borrowings outstanding under the Credit Facility and had paid no unused fee.

Refer to “Note 10—Debt Capital Activities” to our consolidated financial statements as of December 31, 2019 for more information.

Equity Issuances & Debt Capital Activities

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

At-the-Market Offering

On July 29, 2020, the Company entered into an At-the-Market Sales Agreement, dated July 29, 2020 (the "Initial Sales Agreement"), with BTIG, LLC, JMP Securities LLC, and Ladenburg Thalmann & Co., Inc.

(collectively, the "Agents").

Under the Initial Sales Agreement, the Company may, but has no obligation to, issue and sell up to $50,000,000 in aggregate amount of shares of its common stock (the "Shares") from time to time through the Agents or to them as principal for their own account (the "ATM Program").

On September 23, 2020, the Company increased the maximum amount of Shares to be sold through the ATM Program to $150,000,000 from $50,000,000.

In connection with the upsize of the ATM Program to $150,000,000, the Company entered into the Amendment No.

1 to the At-the-Market Sales Agreement, dated September 23, 2020, with the Agents.

The Company intends to use the net proceeds from the ATM Program to make investments in portfolio companies in accordance with its investment objective and strategy and for general corporate purposes.

During the year ended December 31, 2020, the Company issued and sold 3,808,979 shares under the ATM Program at a weighted-average price of $13.36 per share, for gross proceeds of $50,900,326 and net proceeds of $49,882,319, after deducting commissions to the Agents on Shares sold.

As of December 31, 2020, up to $99,099,674 in aggregate amount of the Shares remain available for sale under the ATM Program.

Refer to “Note 5—Common Stock” to our consolidated financial statements as of December 31, 2020 for more information regarding the ATM Program.

4.75% Convertible Senior Notes due 2023

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We do not have the right to redeem the 4.75% Convertible Senior Notes due 2023 prior to March 27, 2021.

In connection with the issuance of the 4.75% Convertible Senior Notes due 2023 , we were required under the terms of the Credit Facility to deposit the proceeds from the 4.75% Convertible Senior Notes due 2023 offering into an account at Western Alliance Bank and were required to maintain at least $65.0 million (or such lesser amount to the extent such funds would be used to repay or repurchase a portion of the outstanding 5.25% Convertible Senior Notes due 2018 prior to their maturity and repayment in full) in an account at Western Alliance Bank until such time as the 5.25% Convertible Senior Notes due 2018 were repaid in full.

Refer to “Note 10—Debt Capital Activities” to our consolidated financial statements as of December 31, 2019 for more information regarding the 4.75% Convertible Senior Notes due 2023 .

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

On December 15, 2017, we announced the commencement of a cash tender offer (the "Tender Offer") to purchase any and all of the $69.0 million aggregate principal amount of outstanding 5.25% Convertible Senior Notes due 2018.

As of the expiration of the Tender Offer on January 17, 2018, approximately $4.8 million aggregate principal amount of the 5.25% Convertible Senior Notes due 2018 representing approximately 7.0% of the outstanding 5.25% Convertible Senior Notes due 2018, were validly tendered and not validly withdrawn pursuant to the Tender Offer.

On March 27, 2018, we repurchased an additional $14.2 million aggregate principal amount of the outstanding 5.25% Convertible Senior Notes due 2018.

The 5.25% Convertible Senior Notes due 2018 matured on September 15, 2018 (the “Maturity Date”).

Pursuant to the terms of the 5.25% Convertible Senior Notes due 2018 and the indenture related thereto, we repaid the remaining outstanding aggregate principal amount of the 5.25% Convertible Senior Notes due 2018, including accrued but unpaid interest, on the Maturity Date and the 5.25% Convertible Senior Notes were no longer outstanding as of such date.

Refer to “Note 10—Debt Capital Activities” to our consolidated financial statements as of December 31, 2019 for more information regarding the 5.25% Convertible Senior Notes due 2018.

During the year ended December 31, 2020, the Company issued 174,888 shares of its common stock and cash for fractional shares upon the conversion of $1,785,000 in aggregate principal amount of the 4.75% Convertible Senior Notes due 2023.

Refer to “—Recent Developments” and “Note 10—Debt Capital Activities” to our consolidated financial statements as of December 31, 2020 for more information regarding the 4.75% Convertible Senior Notes due 2023.

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What changed 10-K

Item 7. Management’s Discussion and Analysis