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Aug 8, 2018
GSV Capital Corp. Reports Second Quarter 2018 Financial Results
Net Asset Value of $10.46 per Share as of June 30, 2018

WOODSIDE, Calif., Aug. 08, 2018 (GLOBE NEWSWIRE) -- GSV Capital Corp. (“GSV Capital” or the “Company”) (Nasdaq:GSVC) today announced financial results for the quarter ended June 30, 2018.  Net assets totaled approximately $217.1 million, or $10.46 per share, at June 30, 2018, as compared to $9.64 per share at December 31, 2017 and $9.11 per share at June 30, 2017.

"We are pleased to report a strong second quarter for GSV Capital, which was highlighted by Spotify's successful public listing and also driven by positive developments across the portfolio,” said Michael Moe, Chairman of GSV Capital’s Board of Directors. 

"Looking ahead, GSV Capital is well positioned to execute against its disciplined growth investment strategy," Moe continued. “We believe we have developed a portfolio and pipeline of  leading, late-stage venture-backed companies with strong operating fundamentals and the potential for scaled valuation growth. At the same time, the IPO environment continues to show signs of strength, which has historically been a catalyst our stock."

Investment Portfolio as of June 30, 2018

At June 30, 2018, GSV Capital held positions in 28 portfolio companies with an aggregate fair value of approximately $216.3 million.  As a result of the Company’s continued strategy to increase the size of its investments in individual portfolio companies, GSV Capital’s investment portfolio has become more concentrated  around its top positions. For example, the Company’s top five portfolio company investments accounted for 62.1% of the total portfolio at fair value, excluding treasuries, as of June 30, 2018, compared to 41.8% as of June 30, 2017.

Top Five Investments at June 30, 2018

$ in millions (rounded) Fair
Value 
% of Total
Portfolio 
Spotify Technology S. A. $ 39.6   18.3 %
Palantir Technologies, Inc.   35.5   16.4  
Dropbox, Inc.   25.5   11.8  
Coursera, Inc.   18.4   8.5  
StormWind, LLC   15.3   7.1  
Total $ 134.3   62.1 %

Of the five key investment themes GSV Capital has identified in its portfolio as of June 30, 2018, Education Technology is its largest commitment, accounting for 30.1% of the total portfolio (excluding treasuries) at fair value. Cloud Computing and Big Data represents 29.6% of the total portfolio (excluding treasuries) at fair value, and Social Mobile, Marketplaces, and Sustainability represent 21.5%, 18.4% and 0.4% of the total portfolio (excluding treasuries) at fair value, respectively

Second Quarter 2018 Portfolio Investment Activity

During the three months ended June 30, 2018, GSV Capital made the following new investment:

Portfolio Company   Investment   Transaction
Date
  Gross
Payments
SharesPost, Inc. (1)   Common Shares   6/15/2018   $ 100,221  

During the three months ended June 30, 2018, GSV Capital sold investments in the following portfolio company:

Portfolio Company   Shares Sold   Average
Net Share
Price
  Net Proceeds
(in millions)
  Realized
Gain
(in millions) (3)
General Assembly Space, Inc. (2)   259,765     $ 35.92     $ 7.8     $ 3.3  

__________________

(1)  On June 15, 2018GSV Capital exercised its 770,934 warrants to purchase shares of SharesPost, Inc.'s common stock, with a $0.13 strike price.

(2)  On April 16, 2018, Adecco Group, a Swiss staffing company, announced that it was acquiring technology education provider General
Assembly Space, Inc. for $412.5 million, including debt financing. GSV Capital received approximately $7.8 million in net proceeds as a result of the transaction prior to quarter-end.  GSV Capital expects to receive approximately $1.5 million of additional proceeds related to the transaction, and currently being held in escrow, in 2019.

(3)  Includes expected escrow proceeds of $1.5 million described above.

Second Quarter 2018 Financial Results

  Quarter Ended
June 30, 2018
Quarter Ended
June 30, 2017
 

$ in millions
 

per share
 

$ in millions
 

per share
         
Net investment loss   $(5.4)     $(0.26)     $(5.9)     $(0.27)  
         
Net realized gain/(loss) on investments   3.4     0.16     (0.7)     (0.03)  
         
Net change in unrealized appreciation of investments, net of tax benefit(1)   10.9     0.52     12.8     0.58  
         
Net increase in net assets resulting from operations - basic   $8.9     $0.42     $6.2     $0.28  
         
Repurchase of common stock(2)   (2.2)     0.05     -     -  
         
Increase/(decrease) in net asset value   $6.7     $0.47     $6.2     $0.28  

__________________

(1)  Includes related net tax benefit of $1,010,871 for Q2 2018.

(2)  During the quarter ended June 30, 2018, the Company repurchased 315,625 shares of GSV Capital common stock for approximately $2.2 million in cash under its Share Repurchase Program. The use of cash in connection with the repurchases decreased net asset value as of period end; however, the reduction in shares outstanding as of period end resulted in an increase in the net asset value per share.

Weighted-average common basic shares outstanding were approximately 21.0 million and 22.2 million for the quarters ended June 30, 2018 and 2017, respectively.

GSV Capital’s liquid assets were $158.6 million as of June 30, 2018, consisting of $93.5 million of cash and $65.1 million of marketable securities, $25.5 million of which is subject to sales restrictions.

At quarter-end and as of August 8, 2018, GSV Capital did not have any borrowings outstanding under its $12.0 million credit facility.

Share Repurchase Program

Under the publicly announced share repurchase program, as of June 30, 2018, the Company had repurchased 1,430,090 shares of its common stock for approximately $8.3 million.  From July 1, 2018 through August 8, 2018, the Company repurchased an additional 230,623 shares of its common stock for an aggregate purchase price of $1.6 million.

As of August 8, 2018, the dollar value of shares that may yet be purchased by the Company under the program is approximately $5.0 million.

Conference Call and Webcast

Management will hold a conference call and webcast for investors today at 2:00 p.m. PT (5:00 p.m. ET). The conference call access number for U.S. participants is 800-682-0995, and the conference call access number for participants outside the U.S. is +1 334-323-0523. The conference ID number for both access numbers is 8260328.  Additionally, interested parties can listen to a live webcast of the call from the "Investor Relations" section of GSV Capital's website at http://investors.gsvcap.com/. An archived replay of the webcast will also be available for 12 months following the live presentation.

A replay of the conference call may be accessed until 5:00 p.m. PT (8:00 p.m. ET) on August 15, 2018 by dialing 888-203-1112 (U.S.) or +1 334-323-0505 (International) and using conference ID number 8260328.

About GSV Capital Corp.                                                                                              

GSV Capital Corp. (GSVC) is a publicly traded investment fund that seeks to invest in high-growth, venture-backed private companies. Led by industry veteran Michael Moe and CEO Mark Klein, the fund seeks to create a portfolio of high-growth emerging private companies via a repeatable and disciplined investment approach, as well as to provide investors with access to such companies through its publicly traded common stock. GSV Capital is headquartered in Woodside, CA.www.gsvcap.com

Follow GSV Capital on Twitter: @gsvcap

Forward-Looking Statements

Statements included herein may constitute “forward-looking statements,” which relate to future events or our future performance or financial condition. These statements are not guarantees of our future performance, condition or results of operations and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in our filings with the SEC. GSV Capital Corp. undertakes no duty to update any forward-looking statements made herein, unless required to do so by law.

Contact

GSV Capital Corp.
(650) 235-4769
IR@gsvam.com


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

June 30,
 2018
  December 31,
 2017
ASSETS  
Investments at fair value:  
Non-controlled/non-affiliate investments (cost of $115,469,512 and $137,526,726, respectively) $ 178,256,152     $ 179,908,234  
Non-controlled/affiliate investments (cost of $42,212,967 and $41,886,312, respectively) 8,170,787     16,473,098  
Controlled investments (cost of $22,568,505 and $23,161,314, respectively) 29,839,622     24,207,161  
Total Portfolio Investments 216,266,561     220,588,493  
Investments in U.S. Treasury bills (cost of $99,973,483 and $99,985,833, respectively) 99,986,200     99,994,000  
Total Investments (cost of $280,224,467 and $302,560,185, respectively) 316,252,761     320,582,493  
Cash 93,485,576     59,838,600  
Due from controlled investments     840  
Escrow proceeds receivable 1,660,279     603,456  
Interest and dividends receivable 285,783     35,141  
Prepaid expenses and other assets 88,232     208,983  
Deferred financing costs 52,917     413,023  
Total Assets 411,825,548     381,682,536  
LIABILITIES          
Due to GSV Asset Management(1) 233,005     231,697  
Accounts payable and accrued expenses 559,537     458,203  
Accrued incentive fees, net of waiver of incentive fees(1) 8,337,504     9,278,085  
Accrued management fees, net of waiver of management fees(1) 316,888     424,447  
Accrued interest payable 1,268,750     1,056,563  
Payable for securities purchased 89,615,630     89,485,825  
Deferred tax liability 6,247,915     7,602,301  
5.25% Convertible Senior Notes due September 15, 2018(2) 49,849,273     68,382,549  
4.75% Convertible Senior Notes due March 28, 2023(2) 38,248,433      
Total Liabilities 194,676,935     176,919,670  
           
Net Assets $ 217,148,613     $ 204,762,866  
NET ASSETS  
Common stock, par value $0.01 per share (100,000,000 authorized; 20,750,913 and 21,246,345 issued and outstanding, respectively) $ 207,509     $ 212,463  
Paid-in capital in excess of par 199,178,414     202,584,012  
Accumulated net investment loss (14,003,040 )   (8,593,717 )
Accumulated net realized gains on investments 2,328,862     140,100  
Accumulated net unrealized appreciation of investments 29,436,868     10,420,008  
Net Assets $ 217,148,613     $ 204,762,866  
Net Asset Value Per Share $ 10.46     $ 9.64  

____________________
(1)   This balance references a related-party transaction.
(2)   As of June 30, 2018 and December 31, 2017, the 5.25% Convertible Senior Notes due September 15, 2018 had a face value of $49,982,000 and $69,000,000, respectively.  As of June 30, 2018 and December 31, 2017, the 4.75% Convertible Senior Notes due March 28, 2023 had a face value of $40,000,000 and $0, respectively.


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

Three Months Ended June 30,   Six Months Ended June 30,  
  2018   2017   2018   2017  
INVESTMENT INCOME        
Non-controlled/non-affiliate investments:        
Interest income $ 8,932     $ 8,434     $ 10,612     $ 16,807  
Other income     73,096         73,096  
Non-controlled/affiliate investments:        
Interest income 221,813     96,695     455,895     192,372  
Controlled investments:        
Interest income 11,328     67,368     24,901     126,777  
Dividend income 350,000     125,000     350,000     300,000  
Total Investment Income 592,073     370,593     841,408     709,052  
OPERATING EXPENSES        
Management fees(1) 1,286,066     1,359,180     2,609,642     2,813,600  
Incentive fees(1) 2,588,085     2,430,825     4,059,419     4,148,133  
Costs incurred under Administration Agreement(1) 397,113     449,110     821,258     980,594  
Directors’ fees 86,250     73,063     172,500     155,980  
Professional fees 326,798     702,808     666,696     964,998  
Interest expense 1,473,695     1,155,060     2,613,758     2,281,833  
Income tax expense 26,229     45,690     148,499     46,490  
Other expenses 160,036     207,716     649,306     360,297  
Total Operating Expenses 6,344,272     6,423,452     11,741,078     11,751,925  
Management fee waiver(1) (335,403 )   (169,898 )   (490,347 )   (351,700 )
Incentive fee waiver(1)         (5,000,000 )    
Total operating expenses, net of waiver of management and incentive fees 6,008,869     6,253,554     6,250,731     11,400,225  
Net Investment Loss (5,416,796 )   (5,882,961 )   (5,409,323 )   (10,691,173 )
Realized Gains/(Losses) on Investments:        
Non-controlled/non-affiliated investments 3,363,333     4,003     2,587,288     (22,781,750 )
Controlled investments     (675,495 )   (680 )   (2,578,909 )
Net Realized Gains/(Losses) on Investments 3,363,333     (671,492 )   2,586,608     (25,360,659 )
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 10,555,021     15,403,432     20,409,685     45,564,382  
Non-controlled/affiliate investments (952,635 )   (1,687,511 )   (8,628,965 )   (260,843 )
Controlled investments 270,209     (963,393 )   6,225,269     729,254  
Net Change in Unrealized Appreciation of Investments 9,872,595     12,752,528     18,005,989     46,032,793  
Benefit from taxes on unrealized depreciation of investments 1,010,871         1,010,871      
Net Increase in Net Assets Resulting from Operations $ 8,830,003     $ 6,198,075     $ 15,796,299     $ 9,980,961  
Net Increase in Net Assets Resulting from Operations per Common Share:        
Basic $ 0.42     $ 0.28     $ 0.75     $ 0.45  
Diluted(2) $ 0.35     $ 0.26     $ 0.66     $ 0.44  
Weighted-Average Common Shares Outstanding        
Basic 20,968,850     22,181,003     21,059,254     22,181,003  
Diluted(2) 28,866,674     27,932,818     27,796,112     27,932,818  

___________________
 (1)  This balance references a related-party transaction.
 (2)  For the three and six months ended June 30, 2018 and 2017, no potentially dilutive common shares were excluded from the weighted-average common shares outstanding for diluted net increase in net assets resulting from operations per common share.


GSV CAPITAL CORP. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS (UNAUDITED)

  Three Months Ended June 30,   Six Months Ended June 30,
Per Basic Share Data   2018   2017   2018   2017
Net asset value at beginning of period   $ 9.99     $ 8.83     $ 9.64     $ 8.66  
Net investment loss(1)   (0.26 )   (0.27 )   (0.26 )   (0.48 )
Net realized gain/(loss) on investments(1)   0.16     (0.03 )   0.12     (1.14 )
Realized loss on partial repurchase of 5.25% Convertible Senior Notes due 2018(1)           (0.02 )    
Net change in unrealized appreciation/(depreciation) of investments(1)   0.47     0.57     0.86     2.08  
Benefit from taxes on unrealized depreciation of investments(1)   0.05         0.05      
Repurchase of common stock(1)   0.05         0.07      
Net asset value at end of period   $ 10.46     $ 9.11     $ 10.46     $ 9.11  
Per share market value at end of period   $ 6.86     $ 4.34     $ 6.86     $ 4.34  
Total return based on market value(2)   (9.02 )%   (3.13 )%   25.87 %   (13.72 )%
Total return based on net asset value(2)   4.69 %   3.17 %   8.53 %   5.20 %
Shares outstanding at end of period   20,750,913     22,181,003     20,750,913     22,181,003  
Ratios/Supplemental Data:                
Net assets at end of period   $ 217,148,613     $ 202,109,771     $ 217,148,613     $ 202,109,771  
Average net assets   $ 210,027,033     $ 196,335,041     $ 207,058,773     $ 193,899,415  
Ratio of gross operating expenses to average net assets(3)   12.25 %   13.12 %   11.15 %   12.22 %
Ratio of incentive fee waiver to average net assets(3)   %   %   (2.41 )%   %
Ratio of management fee waiver to average net assets(3)   (0.65 )%   (0.34 )%   (0.48 )%   (0.36 )%
Ratio of net operating expenses to average net assets(3)   11.60 %   12.78 %   8.26 %   11.86 %
Ratio of net investment loss to average net assets(3)   (10.46 )%   (12.02 )%   (5.30 )%   (11.12 )%
Portfolio Turnover Ratio   0.05 %   %   0.10 %   %

__________________
(1)  Based on weighted-average number of shares outstanding for the relevant period.
(2)  Total return based on market value is based on the change in market price per share between the opening and ending market values per share in the year. Total return based on net asset value is based upon the change in net asset value per share between the opening and ending net asset values per share.
(3)  Financial Highlights for periods of less than one year are annualized and the ratios of operating expenses to average net assets and net investment loss to average net assets are adjusted accordingly. Non-recurring expenses, including the $5.0 million accrued incentive fee forfeiture pursuant to GSV Asset Management’s waiver agreement, are not annualized. For the three and six months ended June 30, 2018, the Company excluded $0 and $352,667 of non-recurring expenses, respectively and did not annualize the incentive fee waiver. For the three and six months ended June 30, 2017, the Company did not incur any non-recurring expenses. Because the ratios are calculated for the Company’s common stock taken as a whole, an individual investor’s ratios may vary from these ratios.

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Source: GSV Capital Corp