News Releases

Waterside Capital Earnings Release

NORFOLK, VA, November 19, 2008: Waterside Capital Corp. (Nasdaq: WSCC), a Small Business Investment Company (SBIC), held its annual shareholders meeting yesterday and reported financial results for the three months ended September 30, 2008.

The company's net decrease in stockholders' equity resulting from operations (which includes net operating income plus realized and unrealized gains or losses on investments) was $373,000 or a $.19 loss per share for the three months ended September 30, 2008, compared to a decrease of $240,000 or a $.13 loss per share for the three months ended September 30, 2007. The per share performance was calculated using shares outstanding of 1,915,548.

At the annual shareholders meeting, CEO Lin Earley stated the company had successfully refinanced the $16.1 million of outstanding debentures with SBA. The refinanced $16.1 million will mature September 1, 2018 and has an average interest rate of 6.48%. The company expects that the lower interest rate will reduce interest expense by approximately $300,000 annually and help improve operating performance as a result. Management continues to focus on expense control, raising additional capital, and business development activities to generate new, risk appropriate investments.

At September 30, 2008, Waterside's loans and investments had a fair value of $20.8 million compared with $23.2 million reported at September 30, 2007. The decrease in stockholders’equity resulting from operations at September 30, 2008 included a one-time expense of $113,000 of amortization from deferred financing costs related to the refinancing of the SBA debentures. Operating expenses have decreased by $140,000 compared to September 30, 2007, excluding one time expenses related to the redemption of SBA debentures.

Additionally, the decrease in stockholders' equity from operations at September 30, 2008 included $209,000 of unrealized depreciation on the investment portfolio. For the three months ended September 30, 2008, the company originated new investments of $190,000 and received proceeds from principal collected on notes receivable and debt securities of $30,000. This compared to the company's funding of $4.0 million in new investments for the three months ended September 30, 2007, and receiving proceeds from the sale of investments, principal collected on debt securities, and proceeds from collection of notes receivable of $2.0 million. The net asset value of the common shares decreased to $3.64 per share at September 30, 2008 from the $4.90 reported at September 30 2007. The decrease in net asset value was due to the above mentioned $373,000 decrease in shareholders equity resulting from operations.

A quorum of shareholders was present at the annual meeting and all items on the proxy delivered to shareholders passed.

About Waterside Capital Corporation
Waterside Capital Corporation is a Small Business Investment Company (SBIC) headquartered in the Mid-Atlantic Region that specializes in venture capital, financing and small business loans. The capital investment firm serves small businesses in the Mid-Atlantic Region, Richmond, Hampton Roads, Virginia, Washington DC, North Carolina, and Maryland.

For more information contact:
Franklin (Lin) Earley, CEO, (757) 626-1111 x 307,

Julie Stroh, CFO, (757) 626-1111 x 301,