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Nov 7, 2018
GSV Capital Corp. Reports Third Quarter 2018 Financial Results

Net Asset Value of $10.58 per Share as of September 30, 2018

Board of Directors Approves Additional $5.0 Million for Share Repurchase Program, Bringing Share Repurchase Program Total to $20.0 Million

WOODSIDE, Calif., Nov. 07, 2018 (GLOBE NEWSWIRE) -- GSV Capital Corp. (“GSV Capital” or the “Company”) (Nasdaq:GSVC) today announced financial results for the quarter ended September 30, 2018.  Net assets totaled approximately $213.4 million, or $10.58 per share, at September 30, 2018, as compared to $9.64 per share at December 31, 2017 and $9.69 per share at September 30, 2017.

"We are pleased to report a strong third quarter for GSV Capital, which was 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. 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. The IPO environment continues to show signs of strength, and we remain confident that our portfolio companies planning to go public in the near-term will be well received."

"We are also happy to announce that the GSV Capital Board of Directors has authorized the expansion of our current share repurchase program by $5.0 million to an aggregate of $20.0 million,” Moe continued. “Under this program, we have repurchased a total of approximately $14.2 million in shares, including approximately $4.1 million in the third quarter of 2018. Since inception of the Share Repurchase Program, we have repurchased approximately 11% of GSV Capital common stock.”

Investment Portfolio as of September 30, 2018

At September 30, 2018, GSV Capital held positions in 26 portfolio companies with an aggregate fair value of approximately $217.2 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 62.9% of the total portfolio at fair value as of September 30, 2018, compared to 47.8% as of September 30, 2017. GSV Capital’s portfolio investments do not include the Company’s investments in treasuries.

Top Five Investments at September 30, 2018

$ in millions Fair Value % of Total Portfolio Investments
Spotify Technology S. A. $ 42.6 19.6  %
Palantir Technologies, Inc.   35.0 16.1  %
Dropbox, Inc.   23.5 10.8  %
Coursera, Inc.   20.6   9.5  %
StormWind, LLC   15.0   6.9  %
Total $ 136.7  62.9  % 

Third Quarter 2018 Portfolio Investment Activity

During the three months ended September 30, 2018, GSV Capital made the following new investments:

Portfolio Company   Investment   Transaction Date   Gross Payments
(in millions)
Knewton, Inc.   Unsecured Convertible Promissory Note   7/23/2018   $0.1
Nextdoor.com, Inc.   Common Stock   9/27/2018   $6.3

                                                                                                                                                                   
During the three months ended September 30, 2018, GSV Capital exited investments in the following portfolio companies:

Portfolio Company   Exit Date   Shares Sold   Net Proceeds
(in millions)
Realized
Gain / (Loss)
(in millions) (1)
Lytro, Inc.   8/1/2018   3,537,539   $0.8 ($9.3)
SugarCRM, Inc.   8/30/2018   1,897,933   $2.6 ($4.1)
DreamBox Learning, Inc.   9/5/2018   10,738,831   $5.2 $3.3

__________________

(1) Includes expected escrow proceeds of approximately $1.0 million.

Third Quarter 2018 Financial Results

  Quarter Ended
September 30, 2018
Quarter Ended
September 30, 2017
         
   $ in millions
 per share
 $ in millions
 per share
         
Net investment loss $(3.9) $(0.19) $(6.6) $(0.30)
         
Net realized gain/(loss) on investments (10.1) (0.49) 1.0 0.05
         
Net change in unrealized appreciation of investments, net of tax benefit(1) 14.4 0.70 15.7 0.71
         
Net increase in net assets resulting from operations - basic $0.3 $0.02 $10.1 $0.46
         
Repurchase of common stock(2) (4.1) 0.10 (2.8) 0.12
         
Increase/(decrease) in net asset value(3) $(3.7) $0.12 $7.3 $0.58

__________________

(1) Includes related net tax benefit of $0.2 million and $<0.1 million for the quarters ended September 20, 2018 and 2017, respectively.
(2) During the quarters ended September 30, 2018 and 2017, the Company repurchased 575,958 and 574,109 shares of GSV Capital common stock, respectively, for approximately $4.1 million and $2.8 million, respectively, 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.
(3) Total may not sum, due to rounding.

Weighted-average common basic shares outstanding were approximately 20.5 million and 22.0 million for the quarters ended September 30, 2018 and 2017, respectively.

GSV Capital’s liquid assets were $102.6 million as of September 30, 2018, consisting of $36.6 million of cash and $66.0 million of unrestricted marketable securities. At quarter-end and as of November 7, 2018, GSV Capital did not have any borrowings outstanding under its $12.0 million credit facility.

Convertible Senior Notes

GSV Capital’s 5.25% Convertible Senior Notes due 2018 matured on September 15, 2018. Pursuant to the terms of the 5.25% Convertible Senior Notes due 2018, the Company repaid the remaining outstanding aggregate principal amount of the 5.25% Convertible Senior Notes due 2018, including accrued but unpaid interest, upon maturity. As a result the 5.25% Convertible Senior Notes were no longer outstanding as of such date.

Share Repurchase Program

Under the publicly announced share repurchase program, as of September 30, 2018, the Company had repurchased 2,006,048 shares of its common stock for approximately $12.4 million. From October 1, 2018 through November 7, 2018, the Company repurchased an additional 259,954 shares of its common stock for an aggregate purchase price of $1.8 million.

As of November 7, 2018, in light of the Board of Directors’ authorization to increase the amount of shares of Company common stock that may be repurchased under the share repurchase program, the dollar value of shares that may yet be purchased by the Company under the program is approximately $5.8 million.

Conference Call and Webcast

Management will hold a conference call and webcast for investors on the same day at 2:00 p.m. PT (5:00 p.m. ET).  The conference call access number for U.S. participants is 877-830-2596, and the conference call access number for participants outside the U.S. is +1 785-424-1745. The conference ID number for both access numbers is 8100153.  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 November 14, 2018 by dialing 888-203-1112 (U.S.) or +1 719-457-0820 (International) and using conference ID number 8100153.

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)

September 30,
 2018
  December 31,
 2017
ASSETS  
Investments at fair value:  
Non-controlled/non-affiliate investments (cost of $102,192,243 and $137,526,726, respectively) $ 181,222,034     $ 179,908,234  
Non-controlled/affiliate investments (cost of $42,226,859 and $41,886,312, respectively) 5,834,265     16,473,098  
Controlled investments (cost of $22,616,441 and $23,161,314, respectively) 30,134,871     24,207,161  
Total Portfolio Investments 217,191,170     220,588,493  
Investments in U.S. Treasury bills (cost of $99,967,958 and $99,985,833, respectively) 99,983,000     99,994,000  
Total Investments (cost of $267,003,501 and $302,560,185, respectively) 317,174,170     320,582,493  
Cash 36,623,050     59,838,600  
Due from controlled investments     840  
Escrow proceeds receivable 2,642,281     603,456  
Interest and dividends receivable 310,683     35,141  
Prepaid expenses and other assets 398,184     208,983  
Deferred financing costs 215,048     413,023  
Total Assets 357,363,416     381,682,536  
LIABILITIES  
Due to GSV Asset Management(1) 87     231,697  
Accounts payable and accrued expenses 551,243     458,203  
Accrued incentive fees, net of waiver of incentive fees(1) 9,142,024     9,278,085  
Accrued management fees, net of waiver of management fees(1) 314,338     424,447  
Accrued interest payable     1,056,563  
Payable for securities purchased 89,577,376     89,485,825  
Deferred tax liability 6,033,512     7,602,301  
5.25% Convertible Senior Notes due September 15, 2018(2)     68,382,549  
4.75% Convertible Senior Notes due March 28, 2023(2) 38,341,472      
Total Liabilities 143,960,052     176,919,670  
       
Net Assets $ 213,403,364     $ 204,762,866  
NET ASSETS  
Common stock, par value $0.01 per share (100,000,000 authorized; 20,174,955 and 21,246,345 issued and outstanding, respectively) $ 201,749     $ 212,463  
Paid-in capital in excess of par 195,110,116     202,584,012  
Accumulated net investment loss (17,911,239 )   (8,593,717 )
Accumulated net realized gains/(losses) on investments (7,790,909 )   140,100  
Accumulated net unrealized appreciation of investments 43,793,648     10,420,008  
Net Assets $ 213,403,364     $ 204,762,866  
Net Asset Value Per Share $ 10.58     $ 9.64  

__________________________________

(1) This balance references a related-party transaction.
(2) As of September 30, 2018 and December 31, 2017, the 5.25% Convertible Senior Notes due September 15, 2018 had a face value of $0 and $69,000,000, respectively.  As of September 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 September 30,   Nine Months Ended September 30,
  2018   2017   2018   2017
INVESTMENT INCOME        
Non-controlled/non-affiliate investments:        
Interest income $ 164,310     $ (21,447 )   $ 174,922     $ (4,640 )
Other income             73,096  
Non-controlled/affiliate investments:        
Interest income 65,790     (48,398 )   521,685     143,974  
Controlled investments:        
Interest income 16,252     69,757     41,153     196,534  
Dividend income     175,000     350,000     475,000  
Total Investment Income 246,352     174,912     1,087,760     883,964  
OPERATING EXPENSES        
Management fees(1) 1,345,090     1,397,332     3,954,732     4,210,932  
Incentive fees(1) 804,520     3,334,052     4,863,939     7,482,185  
Costs incurred under Administration Agreement(1) 355,599     472,413     1,176,857     1,453,007  
Directors’ fees 86,250     86,250     258,750     242,230  
Professional fees 552,179     353,933     1,218,875     1,318,931  
Interest expense 1,311,534     1,207,548     3,925,292     3,489,381  
Income tax expense (6,235 )   4,889     142,264     51,379  
Other expenses 107,688     119,122     756,994     479,419  
Total Operating Expenses 4,556,625     6,975,539     16,297,703     18,727,464  
Management fee waiver(1) (402,074 )   (174,666 )   (892,421 )   (526,366 )
Incentive fee waiver(1)         (5,000,000 )    
Total operating expenses, net of waiver of management and incentive fees 4,154,551     6,800,873     10,405,282     18,201,098  
Net Investment Loss (3,908,199 )   (6,625,961 )   (9,317,522 )   (17,317,134 )
Realized Gains/(Losses) on Investments:        
Non-controlled/non-affiliated investments (10,119,771 )   1,033,577     (7,532,483 )   (21,748,173 )
Controlled investments         (680 )   (2,578,909 )
Net Realized Gains/(Losses) on Investments (10,119,771 )   1,033,577     (7,533,163 )   (24,327,082 )
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 16,245,474     20,367,064     36,655,159     65,931,446  
Non-controlled/affiliate investments (2,350,413 )   (9,822,081 )   (10,979,378 )   (10,082,924 )
Controlled investments 247,314     5,091,700     6,472,584     5,820,954  
Net Change in Unrealized Appreciation/(Depreciation) of Investments 14,142,375     15,636,683     32,148,365     61,669,476  
Benefit from taxes on unrealized depreciation of investments 214,404     26,705     1,225,275     26,705  
Net Increase in Net Assets Resulting from Operations $ 328,810     $ 10,071,004     $ 16,125,108     $ 20,051,965  
Net Increase in Net Assets Resulting from Operations per Common Share:          
Basic $ 0.02     $ 0.46     $ 0.77     $ 0.91  
Diluted(2) $ 0.02     $ 0.40     $ 0.72     $ 0.84  
Weighted-Average Common Shares Outstanding        
Basic 20,462,626     22,000,571     20,858,192     22,120,198  
Diluted(2) 20,462,626     27,752,386     27,728,434     27,872,013  

____________________________________

(1) This balance references a related-party transaction.
(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 increase in net assets resulting from operations per common share because the effect of these shares would have been anti-dilutive. For the nine months ended September 30, 2018 and the three and nine months ended September 30, 2017, 0 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 September 30,   Nine Months Ended September 30,
Per Basic Share Data   2018   2017   2018   2017
Net asset value at beginning of period   $ 10.46     $ 9.11     $ 9.64     $ 8.66  
Net investment loss(1)   (0.19 )   (0.30 )   (0.45 )   (0.78 )
Net realized gain/(loss) on investments(1)   (0.49 )   0.05     (0.36 )   (1.10 )
Realized loss on partial repurchase of 5.25% Convertible Senior Notes due 2018(1)           (0.02 )    
Net change in unrealized appreciation of investments(1)   0.69     0.71     1.54     2.79  
Benefit from taxes on unrealized depreciation of investments(1)   0.01         0.06      
Repurchase of common stock(1)   0.10     0.12     0.17     0.12  
Net asset value at end of period   $ 10.58     $ 9.69     $ 10.58     $ 9.69  
Per share market value at end of period   $ 6.91     $ 5.41     $ 6.91     $ 5.41  
Total return based on market value(2)   0.73 %   24.65 %   26.79 %   7.55 %
Total return based on net asset value(2)   1.15 %   6.37 %   9.75 %   11.89 %
Shares outstanding at end of period   20,174,955     21,606,894     20,174,955     21,606,894  
Ratios/Supplemental Data:                
Net assets at end of period   $ 213,403,364     $ 209,379,965     $ 213,403,364     $ 209,379,965  
Average net assets   $ 214,704,044     $ 201,557,182     $ 210,108,076     $ 196,478,030  
Ratio of gross operating expenses to average net assets(3)   8.51 %   13.73 %   10.18 %   12.74 %
Ratio of incentive fee waiver to average net assets(3)   %   %   (2.38 )%   %
Ratio of management fee waiver to average net assets(3)   (0.19 )%   (0.34 )%   (0.42 )%   (0.36 )%
Ratio of net operating expenses to average net assets(3)   8.32 %   13.34 %   7.38 %   12.36 %
Ratio of net investment loss to average net assets(3)   (7.30 )%   (13.04 )%   (5.95 )%   (11.78 )%
Portfolio Turnover Ratio   2.98 %   %   3.08 %   %

_______________________________

(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 the Waiver Agreement, are not annualized. For the three and nine months ended September 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 nine months ended September 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