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TABLE OF CONTENTS


 
​
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________
​
FORM 10-Q
____________________________
​
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934​
FOR THE QUARTERLY PERIOD ENDED September 30, 2019
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934​
COMMISSION FILE NUMBER: 814-00852
__________________________
​
Sutter Rock Capital Corp.
(Exact name of registrant as specified in its charter)
____________________________
​
Maryland
27-4443543
(State of incorporation)
(I.R.S. Employer Identification No.)
One Sansome Street, Suite 730, San Francisco, CA
94104
(Address of principal executive offices)
(Zip Code)
 
 
(650) 235-4769
(Registrant’s telephone number, including area code)
​

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of Each Class
 
Trading Symbol
 
Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share
 
SSSS
 
Nasdaq Capital Market

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer o
Accelerated filer x
Non-accelerated filer o (Do not check if a smaller reporting company)
Smaller reporting company o
Emerging growth company o
​
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

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

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


 
​

TABLE OF CONTENTS


​​

SUTTER ROCK CAPITAL CORP.

TABLE OF CONTENTS
 
 
PAGE
PART I. FINANCIAL INFORMATION
 
 
 
 
 
 
 
 
PART II. OTHER INFORMATION
 


i
TABLE OF CONTENTS


PART I

Item 1. Condensed Consolidated Financial Statements

SUTTER ROCK CAPITAL CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)
​
September 30,
2019
 
December 31,
2018
ASSETS
​

 
​

Investments at fair value:
​

 
​

Non-controlled/non-affiliate investments (cost of $94,863,935 and $105,869,607, respectively)
$
161,350,359

 
$
170,067,233

Non-controlled/affiliate investments (cost of $47,576,383 and $42,333,854, respectively)
30,241,445

 
5,931,863

Controlled investments (cost of $13,291,886 and $22,960,942, respectively)
8,251,634

 
22,816,733

Total Portfolio Investments
199,843,438

 
198,815,829

Investments in U.S. Treasury bills (cost of $49,993,250 and $99,982,067, respectively)
49,995,500

 
99,994,000

Total Investments (cost of $205,725,454 and $271,146,470, respectively)
249,838,938

 
298,809,829

Cash
45,155,784

 
28,184,163

Escrow proceeds receivable
2,086,145

 
2,494,582

Interest and dividends receivable
125,348

 
255,670

Deferred financing costs
5,502

 
267,541

Prepaid expenses and other assets(3)
2,332,410

 
207,769

Total Assets
299,544,127

 
330,219,554

LIABILITIES
​

 
​

Accounts payable and accrued expenses(3)
2,142,052

 
490,687

Accrued incentive fees, net of waiver of incentive fees(1)
—

 
4,660,472

Accrued management fees, net of waiver of management fees(1)
—

 
415,056

Accrued interest payable
—

 
475,000

Payable for securities purchased
44,742,449

 
89,480,103

Deferred tax liability
—

 
885,566

4.75% Convertible Senior Notes due March 28, 2023(2)
38,710,596

 
38,434,511

Total Liabilities
85,595,097

 
134,841,395

Commitments and contingencies (Notes 7 and 10)
​

 
​

Net Assets
$
213,949,030

 
$
195,378,159

NET ASSETS
​

 
​

Common stock, par value $0.01 per share (100,000,000 authorized; 19,041,519 and 19,762,647 issued and outstanding, respectively)
$
190,415

 
$
197,626

Paid-in capital in excess of par
189,155,021

 
192,322,399

Accumulated net investment loss
(23,116,027
)
 
(16,228,294
)
Accumulated net realized gain/(loss) on investments
3,606,136

 
(7,691,365
)
Accumulated net unrealized appreciation of investments
44,113,485

 
26,777,793

Net Assets
$
213,949,030

 
$
195,378,159

Net Asset Value Per Share
$
11.24

 
$
9.89

See accompanying notes to condensed consolidated financial statements.
__________________________________________________
(1)
This balance references a related-party transaction. Refer to “Note 3—Related-Party Arrangements” for more detail.
(2)
As of September 30, 2019 and December 31, 2018, the 4.75% Convertible Senior Notes due March 28, 2023 had a face value of $40,000,000. Refer to “Note 10—Debt Capital Activities” for a reconciliation of the carrying value to the face value.
(3)
This balance includes a right of use asset and corresponding operating lease liability, respectively. Refer to "Note 7—Commitments and Contingencies—Operating Leases and Related Deposits" for more detail.

1
TABLE OF CONTENTS
SUTTER ROCK CAPITAL CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

​
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2019
 
2018
 
2019
 
2018
INVESTMENT INCOME
​

 
​

 
 
 
 
Non-controlled/non-affiliate investments:
​

 
​

 
 
 
 
Interest income
$
298,515

 
$
164,310

 
$
635,187

 
$
174,922

Non-controlled/affiliate investments:
​

 
​

 
 
 
 
Interest income
81,711

 
65,790

 
201,304

 
521,685

Controlled investments:
​

 
​

 
 
 
 
Interest income
—

 
16,252

 
58,937

 
41,153

Dividend income
—

 
—

 
200,000

 
350,000

Total Investment Income
380,226

 
246,352

 
1,095,428

 
1,087,760

OPERATING EXPENSES
​

 
​

 
 
 
 
Management fees(1)
—

 
1,345,090

 
848,723

 
3,954,732

Incentive fees/(Reversal of incentive fee accrual)(1)
—

 
804,520

 
(4,660,472
)
 
4,863,939

Costs incurred under Administration Agreement(1)
—

 
355,599

 
306,084

 
1,176,857

Directors’ fees
99,620

 
86,250

 
272,120

 
258,750

Professional fees
807,143

 
552,179

 
4,179,093

 
1,218,875

Compensation expense
3,070,409

 
—

 
3,702,517

 
—

Interest expense
591,512

 
1,311,534

 
1,795,885

 
3,925,292

Income tax expense
954

 
(6,235
)
 
34,666

 
142,264

Other expenses
512,792

 
107,688

 
1,504,545

 
756,994

Total Operating Expenses
5,082,430

 
4,556,625

 
7,983,161

 
16,297,703

Management fee waiver(1)
—

 
(402,074
)
 
—

 
(892,421
)
Incentive fee waiver(1)
—

 
—

 
—

 
(5,000,000
)
Total operating expenses, net of waiver of management and incentive fees
5,082,430

 
4,154,551

 
7,983,161

 
10,405,282

Net Investment Loss
(4,702,204
)
 
(3,908,199
)
 
(6,887,733
)
 
(9,317,522
)
Realized Gains/(Losses) on Investments:
​

 
​

 
​

 
​

Non-controlled/non-affiliated investments
1,772,961

 
(10,119,771
)
 
23,632,332

 
(7,532,483
)
Non-controlled/affiliate investments
—

 
—

 
(12,334,831
)
 
—

Controlled investments
—

 
—

 
—

 
(680
)
Net Realized Gain/(Loss) on Investments
1,772,961

 
(10,119,771
)
 
11,297,501

 
(7,533,163
)
Realized loss on partial repurchase of 5.25% Convertible Senior Notes due 2018
—

 
—

 
—

 
(397,846
)
Change in Unrealized Appreciation/(Depreciation) of Investments:
 
 
​

 
 
 
 
Non-controlled/non-affiliated investments
(7,998,030
)
 
16,245,474

 
2,279,117

 
36,655,159

Non-controlled/affiliate investments
11,264,416

 
(2,350,413
)
 
19,067,052

 
(10,979,378
)
Controlled investments
4,924,309

 
247,314

 
(4,896,043
)
 
6,472,584

Net Change in Unrealized Appreciation/(Depreciation) of Investments
8,190,695

 
14,142,375

 
16,450,126

 
32,148,365

Benefit from taxes on unrealized depreciation of investments
—

 
214,404

 
885,566

 
1,225,275

Net Change in Net Assets Resulting from Operations
$
5,261,452

 
$
328,810

 
$
21,745,460

 
$
16,125,108

Net Change in Net Assets Resulting from Operations per Common Share:
 
 
​

 
 
 
 
Basic
$
0.27

 
$
0.02

 
$
1.11

 
$
0.77

Diluted(2)
$
0.25

 
$
0.02

 
$
1.00

 
$
0.72

Weighted-Average Common Shares Outstanding
​

 
​

 
​

 
​

Basic
19,472,785

 
20,462,626

 
19,650,651

 
20,858,192

Diluted(2)
23,204,129

 
20,462,626

 
23,381,995

 
27,728,434

See accompanying notes to condensed consolidated financial statements.
____________________________________________________________________________________________________________________________
(1)
This balance references a related-party transaction. Refer to “Note 3—Related-Party Arrangements” for more detail.
(2)
For the three months ended September 30, 2018, 7,173,218 potentially dilutive common shares were excluded from the weighted-average common shares outstanding for diluted net change in net assets resulting from operations per common share because the effect of these shares would have been anti-dilutive. For three and nine months ended September 30, 2019 and the nine months ended September 30, 2018, 0 potentially dilutive common shares were excluded from the weighted-average common shares outstanding for diluted net change in net assets resulting from operations per common share. Refer to “Note 6—Net Change in Net Assets Resulting from Operations per Common Share—Basic and Diluted” for further detail.




2
TABLE OF CONTENTS


SUTTER ROCK CAPITAL CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
​
Nine Months Ended September 30,
 
2019
 
2018
Net Assets at Beginning of Year
$
195,378,159

 
$
204,762,866

 
 
 
 
Change in Net Assets Resulting from Operations
​

 
​

Net investment gain
619,702

 
7,473

Net realized loss on investments
(4,065,693
)
 
(776,725
)
Realized loss on partial repurchase of 5.25% Convertible Senior Notes due 2018
—

 
(397,846
)
Net change in unrealized appreciation of investments
20,699,751

 
8,133,394

Provision for taxes on unrealized appreciation of investments
(94,147
)
 
—

Net Change in Net Assets Resulting from Operations
17,159,613

 
6,966,296

Change in Net Assets Resulting from Capital Transactions
​

 
​

Repurchases of common stock
—

 
(1,241,428
)
Net Change in Net Assets Resulting from Capital Transactions
—

 
(1,241,428
)
Total Change in Net Assets
17,159,613

 
5,724,868

Net Assets at March 31
$
212,537,772

 
$
210,487,734

 
 
 
 
Change in Net Assets Resulting from Operations
​

 
​

Net investment loss
$
(2,805,231
)
 
$
(5,416,796
)
Net realized gain on investments
13,590,233

 
3,363,333

Net change in unrealized appreciation/(depreciation) of investments
(12,440,320
)
 
9,872,595

Benefit from taxes on unrealized depreciation of investments
979,713

 
1,010,871

Net Change in Net Assets Resulting from Operations
(675,605
)
 
8,830,003

Change in Net Assets Resulting from Capital Transactions
​

 
​

Repurchases of common stock
(737,119
)
 
(2,169,124
)
Net Decrease in Net Assets Resulting from Capital Transactions
(737,119
)
 
(2,169,124
)
Total Change in Net Assets
(1,412,724
)
 
6,660,879

Net Assets at June 30
$
211,125,048

 
$
217,148,613

 
 
 
 
Change in Net Assets Resulting from Operations
​

 
​

Net investment loss
$
(4,702,204
)
 
$
(3,908,199
)
Net realized gain/(loss) on investments
1,772,961

 
(10,119,771
)
Net change in unrealized appreciation of investments
8,190,695

 
14,142,375

Benefit from taxes on unrealized depreciation of investments
—

 
214,404

Net Change in Net Assets Resulting from Operations
5,261,452

 
328,810

Change in Net Assets Resulting from Capital Transactions
​

 
​

Stock-based compensation
1,449,121

 
—

Repurchases of common stock
(3,886,591
)
 
(4,074,059
)
Net Decrease in Net Assets Resulting from Capital Transactions
(2,437,470
)
 
(4,074,059
)
Total Change in Net Assets
2,823,982

 
(3,745,249
)
Net Assets at September 30
$
213,949,030

 
$
213,403,364

 
 
 
 
Capital Share Activity
​

 
​

Shares outstanding at beginning of year
19,762,647

 
21,246,345

Shares issued
—

 
—

Shares repurchased
(721,128
)
 
(1,071,390
)
Shares Outstanding at End of Period
19,041,519

 
20,174,955

​
See accompanying notes to condensed consolidated financial statements.

3
TABLE OF CONTENTS
SUTTER ROCK CAPITAL CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


​
Nine Months Ended September 30,
 
2019
 
2018
Cash Flows from Operating Activities
​

 
​

Net change in net assets resulting from operations
$
21,745,460

 
$
16,125,108

Adjustments to reconcile net change in net assets resulting from operations to net cash provided by operating activities:
​

 
​

Net realized (gain)/loss on investments
(11,297,501
)
 
7,533,163

Net change in unrealized appreciation of investments
(16,450,126
)
 
(32,148,365
)
Change in deferred tax liability
(885,566
)
 
(1,568,789
)
Amortization of discount on 5.25% Convertible Senior Notes due 2018
—

 
492,170

Amortization of discount on 4.75% Convertible Senior Notes due 2023
276,084

 
188,091

Amortization of deferred financing costs
—

 
51,636

Amortization of fixed income security premiums and discounts
(3,729
)
 
(25,909
)
Write-off of deferred offering costs
267,541

 
325,248

Stock-based compensation
1,449,121

 
—

Paid-in-kind interest
(383,980
)
 
(254,881
)
Adjustments to escrow proceeds receivable
26,221

 
—

Purchases of investments in:
​

 
​

Portfolio investments
(25,309,145
)
 
(6,676,590
)
U.S. Treasury bills
(249,933,583
)
 
(299,911,885
)
Proceeds from sales or maturity of investments in:
​

 
​

Portfolio investments
52,322,735

 
34,892,791

U.S. Treasury bills
300,000,000

 
300,000,000

Change in operating assets and liabilities:
​

 
​

Due from controlled investments
—

 
840

Prepaid expenses and other assets
(2,124,641
)
 
(189,201
)
Interest and dividends receivable
130,322

 
(275,542
)
Deferred financing costs
(5,502
)
 
—

Escrow proceeds receivable
408,437

 
(2,038,825
)
Due to GSV Asset Management(1)
—

 
(231,610
)
Payable for securities purchased
(44,737,654
)
 
91,551

Accounts payable and accrued expenses
1,651,365

 
93,040

Accrued incentive fees(1)
(4,660,472
)
 
(136,061
)
Accrued management fees(1)
(415,056
)
 
(110,109
)
Accrued interest payable
(475,000
)
 
(1,056,563
)
Net Cash Provided by Operating Activities
21,595,331

 
15,169,308

Cash Flows from Financing Activities
​

 
​

Proceeds from the issuance of 4.75% Convertible Senior Notes due 2023
—

 
40,000,000

Deferred debt issuance costs
—

 
(1,846,620
)
Repurchases of common stock
(4,623,710
)
 
(7,484,610
)
Repayment of 5.25% Convertible Senior Notes due 2018
—

 
(69,272,565
)
Realized loss on repurchase of 5.25% Convertible Senior Notes due 2018
—

 
397,846

Deferred offering costs
—

 
(178,910
)
Net Cash Used in Financing Activities
(4,623,710
)
 
(38,384,859
)
Total Increase/(Decrease) in Cash Balance
16,971,621

 
(23,215,550
)
Cash Balance at Beginning of Year
28,184,163

 
59,838,600

Cash Balance at End of Period
$
45,155,784

 
$
36,623,050

​
See accompanying notes to condensed consolidated financial statements.

 
Nine Months Ended September 30,
 
2019
 
2018
Supplemental Information:
​

 
​

Interest paid
$
2,007,872

 
$
4,080,817

Taxes paid
$
34,666

 
$
492,303

See accompanying notes to condensed consolidated financial statements.
_______________________
(1)
This balance references a related-party transaction. Refer to “Note 3—Related-Party Arrangements” for more detail.

4
TABLE OF CONTENTS


SUTTER ROCK CAPITAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED)
September 30, 2019
Portfolio Investments*
 
Headquarters/
Industry
 
Date of Initial Investment
 
Shares/
Principal
 
Cost
 
Fair Value
 
% of Net
Assets
NON-CONTROLLED/NON-AFFILIATE
 
 
 
 
 
 
 
 
 
 
 
 
Coursera, Inc.
 
Mountain View, CA
 
 
 
 
 
 
 
 
 
 
Preferred shares, Series B
 
Online Education
 
6/9/2013
 
2,961,399

 
$
14,519,519

 
$
34,768,769

 
16.25
%
Palantir Technologies, Inc.
 
Palo Alto, CA
 
 
 
 
 
 
 
 
 
 
Common shares, Class A
 
Data Analysis
 
5/7/2012
 
5,773,690

 
16,189,935

 
30,369,609

 
14.19
%
Course Hero, Inc.
 
Redwood City, CA
 
 
 
 
 
 
 
 
 
 
Preferred shares, Series A
 
Online Education
 
9/18/2014
 
2,145,509

 
5,000,001

 
15,974,104

 
7.47
%
Lyft, Inc.**
 
San Francisco, CA
 
 
 
 
 
 
 
 
 
 
Common shares, Class A(3)(7)
 
On-Demand Transportation Services
 
3/21/2014
 
304,829

 
4,296,894

 
12,449,216

 
5.82
%
Nextdoor.com, Inc.
 
San Francisco, CA
 
 
 
 
 
 
 
 
 
 
Common shares
 
Social Networking
 
9/27/2018
 
580,360

 
10,006,578

 
11,124,195

 
5.20
%
Neutron Holdings, Inc. (d/b/a/ Lime)
 
San Francisco, CA
 
 
 
 
 
 
 
 
 
 
Preferred Shares, Series D
 
Micromobility
 
1/25/2019
 
41,237,113

 
10,006,800

 
10,491,783

 
4.90
%
Parchment, Inc.
 
Scottsdale, AZ
 
 
 
 
 
 
 
 
 
 
Preferred shares, Series D 8%
 
E-Transcript Exchange
 
10/1/2012
 
3,200,512

 
4,000,982

 
9,249,630

 
4.32
%
SharesPost, Inc.
 
San Francisco, CA
 
 
 
 
 
 
 
 
 
 
Preferred shares, Series B
 
Online Marketplace Finance
 
7/19/2011
 
1,771,653

 
2,259,716

 
7,601,668

 
3.55
%
Common shares
 
 
 
7/20/2011
 
770,934

 
123,987

 
1,093,939

 
0.51
%
Total
 
 
 
 
 
 
 
2,383,703

 
8,695,607

 
4.06
%
Enjoy Technology, Inc.
 
Menlo Park, CA
 
 
 
 
 
 
 
 
 
 
Preferred shares, Series B
 
On-Demand Commerce
 
7/29/2015
 
1,681,520

 
4,000,280

 
5,785,270

 
2.70
%
Preferred shares, Series A
 
 
 
10/16/2014
 
879,198

 
1,002,440

 
2,752,022

 
1.29
%
Total
 
 
 
 
 
 
 
5,002,720

 
8,537,292

 
3.99
%
Aspiration Partners, Inc.
 
Marina Del Rey, CA
 
 
 
 
 
 
 
 
 
 
Preferred shares, Series A
 
Financial Services
 
8/11/2015
 
540,270

 
1,001,815

 
7,525,788

 
3.52
%
Convertible Promissory Note 5%, Due 1/31/2021
 
 
 
8/12/2019
 
$
280,000

 
281,190

 
570,171

 
0.27
%
Total
 
 
 
 
 
 
 
1,283,005

 
8,095,959

 
3.78
%
Treehouse Real Estate Investment Trust, Inc.
 
Los Angeles, CA
 
 
 
 
 
 
 
 
 
 
Common shares
 
Cannabis REIT
 
9/11/2019
 
312,500

 
7,500,000

 
7,500,000

 
3.51
%
Clever, Inc.
 
San Francisco, CA
 
 
 
 
 
 
 
 
 
 
Preferred shares, Series B
 
Education Software
 
12/5/2014
 
1,799,047

 
2,000,601

 
2,000,001

 
0.93
%
A Place for Rover Inc. (f/k/a DogVacay, Inc.)
 
Seattle, WA
 
 
 
 
 
 
 
 
 
 
Common shares
 
Peer-to-Peer Pet Services
 
11/3/2014
 
707,991

 
2,506,119

 
1,078,061

 
0.50
%
Tynker (f/k/a Neuron Fuel, Inc.)
 
Mountain View, CA
 
 
 
 
 
 
 
 
 
 
Preferred shares, Series A 8%
 
Computer Software
 
8/8/2012
 
534,162

 
309,310

 
789,491

 
0.37
%
4C Insights (f/k/a The Echo Systems Corp.)
 
Chicago, IL
 
 
 
 
 
 
 
 
 
 
Common shares
 
Social Data Platform
 
3/30/2012
 
436,219

 
1,436,404

 
226,642

 
0.11
%
Fullbridge, Inc.
 
Cambridge, MA
 
 
 
 
 
 
 
 
 
 
Common shares
 
Business Education
 
5/13/2012
 
517,917

 
6,150,506

 
—

 
—
%
Promissory note 1.47%, Due 11/9/2021(4)
 
 
 
3/3/2016
 
$
2,270,458

 
2,270,858

 
—

 
—
%
Total
 
 
 
 
 
 
 
8,421,364

 
—

 
—
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Non-controlled/Non-affiliate
 
 
 
 
 
 
 
$
94,863,935

 
$
161,350,359

 
75.42
%
See accompanying notes to condensed consolidated financial statements.

5
TABLE OF CONTENTS


SUTTER ROCK CAPITAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED) - continued
September 30, 2019
Portfolio Investments*
 
Headquarters/
Industry
 
Date of Initial Investment
 
Shares/
Principal
 
Cost
 
Fair Value
 
% of Net
Assets
NON-CONTROLLED/AFFILIATE(1)
 
 
 
 
 
 
 
 
 
 
 
 
Ozy Media, Inc.
 
Mountain View, CA
 
 
 
 
 
 
 
 
 
 
Preferred shares, Series C-2 6%(8)
 
Digital Media Platform
 
9/11/2019
 
683,482

 
2,414,178

 
3,156,106

 
1.48
%
Common Warrants, Strike Price $0.01, Expiration Date 4/9/2028
 
 
 
4/9/2018
 
295,565

 
30,647

 
1,362,555

 
0.64
%
Preferred shares, Series B 6%
 
 
 
10/3/2014
 
922,509

 
4,999,999

 
5,001,420

 
2.34
%
Preferred shares, Series A 6%
 
 
 
12/11/2013
 
1,090,909

 
3,000,200

 
5,037,476

 
2.35
%
Preferred shares, Series Seed 6%
 
 
 
11/2/2012
 
500,000

 
500,000

 
2,308,843

 
1.08
%
Total
 
 
 
 
 
 
 
10,945,024

 
16,866,400

 
7.88
%
GreenAcreage Real Estate Corp.
 
New York, NY
 
 
 
 
 
 
 
 
 
 
Common shares
 
Cannabis REIT
 
8/12/2019
 
375,000

 
7,501,530

 
7,500,000

 
3.51
%
NestGSV, Inc. (d/b/a GSV Labs, Inc.)
 
San Mateo, CA
 
 
 
 
 
 
 
 
 
 
Derivative Security, Expiration Date 8/23/2024(10)
 
Global Innovation Platform
 
8/23/2019
 
1

 
8,555,124

 
3,772,217

 
1.76
%
Convertible Promissory Note 8% Due 8/23/2024***(10)
 
 
 
2/17/2016
 
$
1,010,198

 
1,028,838

 
1,010,198

 
0.47
%
Preferred Warrants Series A-3, Strike Price $1.33, Expiration Date 4/4/2021
 
 
 
4/4/2014
 
187,500

 
—

 
24,375

 
0.01
%
Preferred Warrants Series A-4, Strike Price $1.33, Expiration Date 10/6/2021
 
 
 
10/6/2014
 
500,000

 
—

 
145,000

 
0.07
%
Preferred Warrants Series A-4, Strike Price $1.33, Expiration Date 7/18/2021
 
 
 
7/8/2016
 
250,000

 
74,380

 
67,500

 
0.03
%
Preferred Warrants Series B, Strike Price $2.31, Expiration Date 11/29/2021
 
 
 
11/29/2016
 
100,000

 
29,275

 
—

 
—
%
Preferred Warrant Series B, Strike Price $2.31, Expiration Date 5/29/2022
 
 
 
5/29/2017
 
125,000

 
70,379

 
—

 
—
%
Preferred Warrant Series B, Strike Price $2.31, Expiration Date 12/31/2023
 
 
 
12/31/2018
 
250,000

 
5,080

 
5,000

 
0.00
%
Total
 
 
 
 
 
 
 
9,763,076

 
5,024,290

 
2.35
%
EdSurge, Inc.
 
Burlingame, CA
 
 
 
 
 
 
 
 
 
 
Preferred shares, Series A-1
 
Education Media Platform
 
11/12/2015
 
378,788

 
501,360

 
248,587

 
0.12
%
Preferred shares, Series A
 
 
 
2/28/2014
 
494,365

 
500,801

 
261,676

 
0.12
%
Total
 
 
 
 
 
 
 
1,002,161

 
510,263

 
0.24
%
CUX, Inc. (d/b/a CorpU)
 
Philadelphia, PA
 
 
 
 
 
 
 
 
 
 
Senior Subordinated Convertible Promissory Note 10% Due 2/14/2020***(6)
 
Corporate Education
 
11/26/2014
 
$
1,360,489

 
1,362,249

 
340,492

 
0.16
%
Convertible preferred shares, Series D 6%
 
 
 
5/31/2013
 
169,033

 
778,607

 
—

 
—
%
Convertible preferred shares, Series C 8%
 
 
 
3/29/2012
 
615,763

 
2,006,077

 
—

 
—
%
Preferred Warrants Series D, Strike Price $4.59, Expiration Date 2/14/2020
 
 
 
5/31/2013
 
16,903

 
—

 
—

 
—
%
Total
 
 
 
 
 
 
 
4,146,933

 
340,492

 
0.16
%
Maven Research, Inc.
 
San Francisco, CA
 
 
 
 
 
 
 
 
 
 
Preferred shares, Series C
 
Knowledge Networks
 
7/2/2012
 
318,979

 
2,000,447

 
—

 
—
%
Preferred shares, Series B
 
 
 
2/28/2012
 
49,505

 
217,206

 
—

 
—
%
Total
 
 
 
 
 
 
 
2,217,653

 
—

 
—
%
Curious.com, Inc.
 
Menlo Park, CA
 
 
 
 
 
 
 
 
 
 
Common shares
 
Online Education
 
11/22/2013
 
1,135,944

 
12,000,006

 
—

 
—
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Non-controlled/Affiliate
 
 
 
 
 
 
 
$
47,576,383

 
$
30,241,445

 
14.13
%

See accompanying notes to condensed consolidated financial statements.

6
TABLE OF CONTENTS


SUTTER ROCK CAPITAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED) - continued
September 30, 2019
Portfolio Investments*
 
Headquarters/
Industry
 
Date of Initial Investment
 
Shares/
Principal
 
Cost
 
Fair Value
 
% of Net
Assets
CONTROLLED(2)
 
 
 
 
 
 
 
 
 
 
 
 
StormWind, LLC(5)
 
Scottsdale, AZ
 
 
 
 
 
 
 
 
 
 
Preferred shares, Series C 8%
 
Interactive Learning
 
1/7/2014
 
2,779,134

 
4,000,787

 
4,593,188

 
2.15
%
Preferred shares, Series B 8%
 
 
 
12/16/2011
 
3,279,629

 
2,019,687

 
2,699,990

 
1.26
%
Preferred shares, Series A 8%
 
 
 
2/25/2014
 
366,666

 
110,000

 
78,258

 
0.04
%
Total
 
 
 
 
 
 
 
6,130,474

 
7,371,436

 
3.45
%
SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.)
 
Cupertino, CA
 
 
 
 
 
 
 
 
 
 
Preferred shares, Class A***(9)
 
Clean Technology
 
4/15/2014
 
14,300,000

 
7,151,412

 
880,198

 
0.41
%
Common shares
 
 
 
4/15/2014
 
100,000

 
10,000

 
—

 
—
%
Total
 
 
 
 
 
 
 
7,161,412

 
880,198

 
0.41
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Controlled
 
 
 
 
 
 
 
$
13,291,886

 
$
8,251,634

 
3.86
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Portfolio Investments
 
 
 
 
 
 
 
$
155,732,204

 
$
199,843,438

 
93.41
%
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury bill, 0%, due 10/3/2019***(3)
 
 
 
9/27/2019
 
$
50,000,000

 
49,993,250

 
49,995,500

 
23.37
%
 
 
 
 
 
 
 
 
 
 
 
 
 
TOTAL INVESTMENTS
 
 
 
 
 
 
 
$
205,725,454

 
$
249,838,938

 
116.77
%

See accompanying notes to condensed consolidated financial statements.
__________________________________________
*
All portfolio investments are non-control/non-affiliated and non-income-producing, unless otherwise identified. Equity investments are subject to lock-up restrictions upon their initial public offering (“IPO”). Preferred dividends are generally only payable when declared and paid by the portfolio company's board of directors. The Company’s directors, officers, employees and staff, as applicable, may serve on the board of directors of the Company’s portfolio investments. (Refer to “Note 3—Related-Party Arrangements”). All portfolio investments are considered Level 3 and valued using significant unobservable inputs, unless otherwise noted. (Refer to “Note 4—Investments at Fair Value”). All of the Company's portfolio investments are restricted as to resale, unless otherwise noted, and were valued at fair value as determined in good faith by the Company’s Board of Directors. (Refer to "Note 2—Significant Accounting Policies—Investments at Fair Value").
**
Indicates assets that Sutter Rock Capital Corp. believes do not represent “qualifying assets” under Section 55(a) of the Investment Company Act of 1940, as amended (the “1940 Act”). Of the Company’s total investments as of September 30, 2019, 4.98% of its total investments are non-qualifying assets.
***
Investment is income-producing.

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



7
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SUTTER ROCK CAPITAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED) - continued
September 30, 2019

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

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

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

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

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

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

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

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

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





8
TABLE OF CONTENTS


SUTTER ROCK CAPITAL CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2018
Portfolio Investments*
 
Headquarters/
Industry
 
Date of Initial Investment
 
Shares/
Principal
 
Cost
 
Fair Value
 
% of Net
Assets
NON-CONTROLLED/NON-AFFILIATE
 
 
 
 
 
 
 
 
 
 
 
 
Palantir Technologies, Inc.
 
Palo Alto, CA
 
 
 
 
 
 
 
 
 
 
Common shares, Class A
 
Data Analysis
 
5/7/2012
 
5,773,690

 
$
16,189,935

 
$
34,053,394

 
17.43
%
Spotify Technology S.A.**
 
Stockholm, Sweden
 
 
 
 
 
 
 
 
 
 
Common shares(3)(7)
 
On-Demand Music Streaming
 
8/6/2012
 
235,360

 
10,002,084

 
26,713,360

 
13.67
%
Coursera, Inc.
 
Mountain View, CA
 
 
 
 
 
 
 
 
 
 
Preferred shares, Series B
 
Online Education
 
6/9/2013
 
2,961,399

 
14,519,519

 
23,111,889

 
11.83
%
Dropbox, Inc.**
 
San Francisco, CA
 
 
 
 
 
 
 
 
 
 
Common shares(3)(8)
 
Cloud Computing Services
 
11/15/2011
 
874,990

 
13,656,926

 
17,876,046

 
9.15
%
Lyft, Inc.
 
San Francisco, CA
 
 
 
 
 
 
 
 
 
 
Preferred shares, Series E
 
On-Demand Transportation
 
3/11/2015
 
128,563

 
2,503,585

 
6,583,483

 
3.37
%
Preferred shares, Series D
 
 
 
3/21/2014
 
176,266

 
1,792,749

 
9,026,269

 
4.62
%
Total
 
 
 
 
 
 
 
4,296,334

 
15,609,752

 
7.99
%
Course Hero, Inc.
 
Redwood City, CA
 
 
 
 
 
 
 
 
 
 
Preferred shares, Series A
 
Online Education
 
9/18/2014
 
2,145,509

 
5,000,001

 
14,106,625

 
7.22
%
Nextdoor.com, Inc.
 
San Francisco, CA
 
 
 
 
 
 
 
 
 
 
Common shares
 
Social Networking
 
9/27/2018
 
580,360

 
10,006,578

 
10,097,442

 
5.17
%
SharesPost, Inc.
 
San Francisco, CA
 
 
 
 
 
 
 
 
 
 
Preferred shares, Series B
 
Online Marketplace Finance
 
7/19/2011
 
1,771,653

 
2,259,716

 
5,943,577

 
3.04
%
Common shares(13)
 
 
 
7/20/2011
 
770,934

 
123,987

 
855,327

 
0.44
%
Total
 
 
 
 
 
 
 
2,383,703

 
6,798,904

 
3.48
%
Parchment, Inc.
 
Scottsdale, AZ
 
 
 
 
 
 
 
 
 
 
Preferred shares, Series D 8%
 
E-Transcript Exchange
 
10/1/2012
 
3,200,512

 
4,000,982

 
6,151,161

 
3.15
%
Enjoy Technology, Inc.
 
Menlo Park, CA
 
 
 
 
 
 
 
 
 
 
Preferred shares, Series B
 
On-Demand Commerce
 
7/29/2015
 
1,681,520

 
4,000,280

 
4,000,000

 
2.05
%
Preferred shares, Series A
 
 
 
10/16/2014
 
879,198

 
1,002,440

 
2,091,436

 
1.07
%
Total
 
 
 
 
 
 
 
5,002,720

 
6,091,436

 
3.12
%
A Place for Rover Inc. (f/k/a DogVacay, Inc.)
 
Seattle, WA
 
 
 
 
 
 
 
 
 
 
Common shares
 
Peer-to-Peer Pet Services
 
11/3/2014
 
707,991

 
2,506,119

 
3,511,661

 
1.80
%
Knewton, Inc.
 
New York, NY
 
 
 
 
 
 
 
 
 
 
Preferred shares, Series E
 
Online Education
 
12/16/2013
 
375,985

 
4,999,999

 
2,021,690

 
1.03
%
Convertible Promissory Note 8% Due 12/31/2019(12)
 
 
 
7/23/2018
 
$
134,405

 
135,213

 
134,405

 
0.07
%
Total
 
 
 
 
 
 
 
5,135,212

 
2,156,095

 
1.10
%
Clever, Inc.
 
San Francisco, CA
 
 
 
 
 
 
 
 
 
 
Preferred shares, Series B
 
Education Software
 
12/5/2014
 
1,799,047

 
2,000,601

 
2,000,001

 
1.02
%
Aspiration Partners, Inc.
 
Marina Del Rey, CA
 
 
 
 
 
 
 
 
 
 
Preferred shares, Series A
 
Financial Services
 
8/11/2015
 
540,270

 
1,001,815

 
999,975

 
0.51
%
Tynker (f/k/a Neuron Fuel, Inc.)
 
Mountain View, CA
 
 
 
 
 
 
 
 
 
 
Preferred shares, Series A 8%
 
Computer Software
 
8/8/2012
 
534,162

 
309,310

 
789,492

 
0.41
%
4C Insights (f/k/a The Echo Systems Corp.)
 
Chicago, IL
 
 
 
 
 
 
 
 
 
 
Common shares
 
Social Data Platform
 
3/30/2012
 
436,219

 
1,436,404

 
—

 
—
%
Fullbridge, Inc.
 
Cambridge, MA
 
 
 
 
 
 
 
 
 
 
Common shares
 
Business Education
 
5/13/2012
 
517,917

 
6,150,506

 
—

 
—
%
Promissory Note 1.49% Due 11/9/2021(4)
 
 
 
3/3/2016
 
$
2,270,458

 
2,270,858

 
—

 
—
%
Total
 
 
 
 
 
 
 
8,421,364

 
—

 
—
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Non-controlled/Non-affiliate
 
 
 
 
 
 
 
$
105,869,607

 
$
170,067,233

 
87.05
%
See accompanying notes to condensed consolidated financial statements.

9
TABLE OF CONTENTS


SUTTER ROCK CAPITAL CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS –continued
December 31, 2018
Portfolio Investments*
 
Headquarters/
Industry
 
Date of Initial Investment
 
Shares/
Principal
 
Cost
 
Fair Value
 
% of Net
Assets
NON-CONTROLLED/AFFILIATE(1)
 
 
 
 
 
 
 
 
 
 
 
 
Ozy Media, Inc.
 
Mountain View, CA
 
 
 
 
 
 
 
 
 
 
Convertible Promissory Note 5% Due 12/31/2018(11)
 
Digital Media Platform
 
8/31/2016
 
$
2,102,384

 
$
2,102,384

 
$
3,153,575

 
1.61
%
Preferred shares, Series B 6%
 
 
 
10/3/2014
 
922,509

 
4,999,999

 
—

 
—
%
Preferred shares, Series A 6%
 
 
 
12/11/2013
 
1,090,909

 
3,000,200

 
—

 
—
%
Preferred shares, Series Seed 6%
 
 
 
11/2/2012
 
500,000

 
500,000

 
—

 
—
%
Common Warrants, Strike Price $0.01, Expiration Date 4/9/2028(11)
 
 
 
4/9/2018
 
295,565

 
30,647

 
—

 
—
%
Total
 
 
 
 
 
 
 
10,633,230

 
3,153,575

 
1.61
%
CUX, Inc. (d/b/a CorpU)
 
Philadelphia, PA
 
 
 
 
 
 
 
 
 
 
Senior Subordinated Convertible Promissory Note 10% Due 2/14/2020***(6)
 
Corporate Education
 
11/26/2014
 
$
1,360,489

 
1,361,969

 
1,360,489

 
0.70
%
Convertible preferred shares, Series D 6%
 
 
 
5/31/2013
 
169,033

 
778,607

 
878,005

 
0.45
%
Convertible preferred shares, Series C 8%
 
 
 
3/29/2012
 
615,763

 
2,006,077

 
—

 
—
%
Preferred Warrants Series D, Strike Price $4.59, Expiration Date 2/14/2020(9)
 
 
 
5/31/2013
 
16,903

 
—

 
19,946

 
0.01
%
Total
 
 
 
 
 
 
 
4,146,653

 
2,258,440

 
1.16
%
EdSurge, Inc.
 
Burlingame, CA