November 8, 2017

GSV Capital Corp. Reports Third Quarter 2017 Financial Results

Net Asset Value of $9.69 per Share as of September 30, 2017; Board of Directors Approves Extension of, and Additional $5.0 Million for, Share Repurchase Program

GSV Capital Corp. Reports Third Quarter 2017 Financial Results

WOODSIDE, Calif., Nov. 08, 2017 (GLOBE NEWSWIRE) -- GSV Capital Corp. ("GSV Capital" or the "Company") (Nasdaq:GSVC) today announced financial results for the quarter ended September 30, 2017. Net assets totaled approximately $209.4 million, or $9.69 per share, at September 30, 2017, as compared to $9.11 per share at June 30, 2017 and $8.83 per share at March 31, 2017.

"GSV Capital remains focused on taking proactive steps to enhance shareholder value as we continue to concentrate the portfolio around blue chip venture backed companies with a line of sight to an IPO or liquidity event," said Michael Moe, Executive Chairman of GSV Capital.

"We are pleased that GSV Capital's common stock has appreciated approximately 52% since we reported second quarter earnings and announced a $5.0 million discretionary, open-market share repurchase program. But as of November 7th, it still traded at a roughly 39% discount to the $9.69 of net asset value per share we are reporting in the third quarter," Moe continued. "Accordingly, we are pleased to report that our Board of Directors has authorized an expansion of the repurchase program to $10.0 million in aggregate amount of common stock and an extension through November 6, 2018, whichever comes first. As of November 7th, we have repurchased approximately $4.5 million of common stock under the program."

Investment Portfolio as of September 30, 2017

At September 30, 2017, GSV Capital held positions in 37 portfolio companies with an aggregate fair value of approximately $289.8 million. Excluding U.S. Treasuries, the Company's top five portfolio company investments accounted for 47.8% of the total portfolio at fair value. Reflective of the Company's continued strategy to consolidate the portfolio around top positions, at this time last year, the top ten portfolio company investments comprised approximately 55% of the Company's portfolio at fair value (excluding U.S. Treasuries).

Top Five Investments at September 30, 2017

       
$ in millions (rounded) Fair Value   % of Total
Portfolio
 
Palantir Technologies, Inc. $ 36.5   12.6 %
JAMF Holdings, Inc.   35.2   12.1  
Spotify Technology S.A.   32.3   11.1  
Coursera, Inc.   18.4   6.3  
Dropbox, Inc.   16.5   5.7  
Total (rounded) $ 138.9   47.8 %
           

Of the five key investment themes GSV Capital has identified in its portfolio as of September 30, 2017, Cloud Computing and Big Data is its largest commitment, accounting for 36.0% of the total portfolio (excluding U.S. Treasuries) at fair value. Education Technology represents 34.5% of the total portfolio (excluding U.S. Treasuries) at fair value, and Social Mobile, Marketplaces, and Sustainability represent 18.2%, 10.8% and 0.5% of the total portfolio (excluding U.S. Treasuries) at fair value, respectively.

Third Quarter 2017 Portfolio Investment Activity

During the nine months ended September 30, 2017, GSV Capital did not purchase any investments.

During the nine months ended September 30, 2017, GSV Capital sold shares in the following portfolio companies:

                   
          Average   Net   Realized
      Shares   Net Share   Proceeds   Gains(2)
Portfolio Company     Sold   Price (1)   (in millions)   (in millions)
                   
Chegg, Inc.     400,600   $14.33   $5.7   $1.0
Snap, Inc     260,416   $15.49   $4.0   <$0.1
                         
(1) The average net share price is the net share price realized after deducting all commissions and fees on the sale(s), if applicable.
(2) Realized gains (net) exclude any realized losses from portfolio investments that we wrote-off during the period, as discussed further in our quarterly report on Form 10-Q for the quarter ended September 30, 2017.

Subsequent to quarter-end, through November 8, 2017, GSV Capital sold shares in the following portfolio companies:

                   
          Average   Net   Realized
      Shares   Net Share   Proceeds   Gains
Portfolio Company     Sold   Price (1)   (in millions)   (in millions)
                   
Chegg, Inc.     182,192   $15.69   $2.9   $0.7
Spotify Technology S.A.     3,657   $3,800.00   $13.9   $8.7
                   
                   
(1) The average net share price is the net share price realized after deducting all commissions and fees on the sale(s), if applicable.
 

Third Quarter 2017 Financial Results

     
  Quarter Ended
September 30, 2017
Quarter Ended
September 30, 2016


$ in millions


per share


$ in millions


per share
         
Net investment loss $ (6.6 ) $ (0.30 ) $ (4.2 ) $ (0.19 )
         
Net realized gain   1.0     0.05     2.7     0.12  
         
Net change in unrealized appreciation/(depreciation) of investments(1)   15.7     0.71     (0.7 )   (0.03 )
         
Net increase/(decrease) in net assets resulting from operations - basic $ 10.1   $ 0.46   $ (2.3 ) $ (0.10 )
         
Dividends distributed   -     -     (0.9 )   (0.04 )
         
Repurchase of common stock(2)   (2.8 )   0.12     -     -  
         
Increase/(decrease) in net asset value $ 7.3   $ 0.58   $ (3.2 ) $ (0.14 )
                         
(1) Inclusive of related tax benefit
(2) During the quarter ended September 30, 2017, the Company repurchased 574,109 shares of GSV Capital common stock for approximately $2.8 million in cash. The use of cash in connection with the repurchase decreased net asset value as of period end; however, the reduction in shares outstanding as of period end resulted in a beneficial net increase in the net asset value per share.
 

Weighted-average common basic shares outstanding were approximately 22.0 million and 22.2 million for the quarters ended September 30, 2017 and 2016, respectively.

GSV Capital's liquid assets were $16.8 million as of September 30, 2017, consisting of $5.2 million of cash and $11.6 million of public securities not subject to lock-up agreements.

At quarter-end, GSV Capital had $8.0 million of borrowings outstanding and $4.0 million of borrowing capacity available under its $12.0 million credit facility. As of November 8, 2017, GSV Capital has no borrowings outstanding and $12.0 million of borrowing capacity available to it under its credit facility.

Share Repurchase Program

On November 7, 2017, the Company's Board of Directors authorized an extension of, and an increase in the amount of shares of the Company's common stock that may be purchased under, the discretionary repurchase program until the earlier of (i) November 6, 2018 or (ii) the repurchase of $10.0 million in aggregate amount of the Company's common stock. Under the repurchase program, the Company may, but is not obligated to, repurchase its outstanding common stock from time to time in the open market provided that the Company complies with the prohibitions under its insider trading policies and procedures and the applicable provisions of the Investment Company Act of 1940, as amended, and the Securities Exchange Act of 1934, as amended. The timing and number of shares to be repurchased will depend on a number of factors, including market conditions and alternative investment opportunities.

During the nine months ended September 30, 2017, the Company repurchased 574,109 shares of GSV Capital common stock for approximately $2.8 million. From October 1, 2017 through November 7, 2017, the Company repurchased an additional 302,355 shares of GSV Capital common stock for approximately $1.7 million.

As of November 8, 2017, the dollar value of shares that may yet be purchased by the Company under the discretionary repurchase program is approximately $5.5 million.

Recent Developments

On October 17, 2017, Mark Flynn resigned from his positions as President of the Company and as a member of the Company's Board of Directors, effective October 17, 2017. In connection with Mr. Flynn's resignation, the Board reduced the number of directors that constitute the full Board to six (6) directors from seven (7) directors. Mr. Flynn continues to provide services to GSV Asset Management pursuant to a consulting agreement with GSV Asset Management. In addition, on October 17, 2017, the Board appointed William Tanona to serve as President of the Company, effective October 17, 2017, in order to fill the vacancy created by Mr. Flynn's resignation as President of the Company. Mr. Tanona currently serves, and will continue to serve, as Chief Financial Officer, Treasurer and Corporate Secretary of the Company.

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 888-855-5428, and the conference call access number for participants outside the U.S. is 719-457-0349. The conference ID number for both access numbers is 1095310. 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 15, 2017 by dialing 866-375-1919 (U.S.) or 719-457-0820 (International) and using conference ID number 1095310.

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, 2017   December 31, 2016
       
ASSETS      
Investments at fair value:          
Non-controlled/non-affiliate investments (cost of $172,562,763 and $204,101,445, respectively) $ 234,922,519     $ 200,532,890  
Non-controlled/affiliate investments (cost of $49,198,848 and $51,773,388, respectively) (1)   29,787,226       42,444,690  
Controlled investments (cost of $23,101,258 and $22,893,441, respectively) (1)   25,066,337       19,037,566  
Investments in treasury bill (cost of $99,991,125 and $29,998,750, respectively)   99,994,000       29,998,490  
Total Investments (cost of $344,853,994 and $308,767,024, respectively)   389,770,082       292,013,636  
           
Cash   5,154,436       8,332,634  
Interest and dividends receivable   218,437       92,946  
Prepaid expenses and other assets   297,785       213,942  
Deferred financing costs   425,316       311,268  
Total Assets   395,866,056       300,964,426  
           
LIABILITIES          
Due to:          
GSV Asset Management (1)   323,897       422,025  
Accounts payable and accrued expenses   257,386       335,611  
Accrued incentive fees (1)   9,608,629       2,126,444  
Accrued management fees (1)   -       524,054  
Accrued interest payable   156,104       1,056,563  
Payable for shares repurchased   153,560       -  
Payable for securities purchased   89,491,125       26,498,750  
Deferred tax liability   10,332,666       10,359,371  
Credit facility payable   8,000,000       -  
Convertible Senior Notes Payable 5.25% due September 15, 2018 (2)   68,162,724       67,512,798  
Total Liabilities   186,486,091       108,835,616  
           
Net Assets $ 209,379,965     $ 192,128,810  
           
NET ASSETS          
Common stock, par value $0.01 per share          
(100,000,000 authorized; 21,606,894 and 22,181,003 issued and outstanding, respectively) $ 216,069     $ 221,810  
Paid-in capital in excess of par   218,442,567       221,237,636  
Accumulated net investment loss   (18,761,130 )     (1,443,996 )
Accumulated net realized losses on investments   (25,100,964 )     (773,882 )
Accumulated net unrealized appreciation/(depreciation) of investments   34,583,423       (27,112,758 )
Net Assets $ 209,379,965     $ 192,128,810  
           
Net Asset Value Per Share $ 9.69     $ 8.66  
           
(1) This balance is a related-party transaction.          
(2) The Convertible Senior Notes have a face value of $69,000,000.          
           

 

           
GSV CAPITAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
           
    Three Months Ended September 30,   Nine Months Ended September 30,  
      2017       2016       2017       2016    
INVESTMENT INCOME                          
Non-controlled/non-affiliate investments:                          
Interest income / (reversal of interest accrual)   $ (21,447 )   $ 2,503     $ (4,640 )   $ 11,906    
Other income     -       -       73,096       -    
Non-controlled/affiliate investments:                          
Interest income / (reversal of interest accrual) (1)     (48,398 )     61,145       143,974       79,858    
Controlled investments:                          
Interest income (1)     69,757       23,000       196,534       43,417    
Dividend income (1)     175,000       -       475,000       -    
Total Investment Income     174,912       86,648       883,964       135,181    
                           
OPERATING EXPENSES                          
Management fees (1)     1,397,332       1,625,963       4,210,932       5,324,186    
Incentive fees/(reversal of incentive fee accrual) (1)     3,334,052       220,719       7,482,185       (7,805,089 )  
Costs incurred under administration agreement (1)     472,413       627,444       1,453,007       1,926,085    
Directors' fees     86,250       86,250       242,230       258,750    
Professional fees     353,933       416,353       1,318,931       1,441,856    
Interest expense     1,207,548       1,189,736       3,489,381       3,557,225    
Tax expense     4,889       -       51,379       -    
Other expenses     119,122       141,838       479,419       558,856    
Total Operating Expenses     6,975,539       4,308,303       18,727,464       5,261,869    
Management fee waiver     (174,666 )     -       (526,366 )     -    
Total operating expenses,                          
net of waiver of management fees     6,800,873       4,308,303       18,201,098       5,261,869    
Net Investment Loss     (6,625,961 )     (4,221,655 )     (17,317,134 )     (5,126,688 )  
                           
Realized Gains/(Losses):                          
Non-controlled/non-affiliate investments     1,033,577       2,658,715       (21,748,173 )     (2,311,994 )  
Non-controlled/affiliate investments     -       -       (2,578,909 )     -    
Net Realized Gains/(Losses)     1,033,577       2,658,715       (24,327,082 )     (2,311,994 )  
                           
Change in Unrealized Appreciation/(Depreciation):                          
Non-controlled/non-affiliate investments     20,367,064       938,936       65,931,446       (27,841,477 )  
Non-controlled/affiliate investments     (9,822,081 )     (584,077 )     (10,082,924 )     (6,951,895 )  
Controlled investments     5,091,700       (1,616,568 )     5,820,954       (1,823,224 )  
Total Change in Unrealized Appreciation/(Depreciation)     15,636,683       (1,261,709 )     61,669,476       (36,616,596 )  
                           
Benefit from taxes on unrealized                          
depreciation of investments     26,705       551,310       26,705       551,310    
                           
Net Increase/(Decrease) in Net Assets                          
Resulting from Operations   $ 10,071,004     $ (2,273,339 )   $ 20,051,965     $ (43,503,968 )  
                           
Net Increase/(Decrease) in Net Assets Resulting                          
from Operations per Common Share                          
Basic   $ 0.46     $ (0.10 )   $ 0.91     $ (1.96 )  
Diluted (2)   $ 0.40     $ (0.10 )   $ 0.84     $ (1.96 )  
                           
Weighted-Average Common Shares Outstanding                          
Basic     22,000,571       22,181,003       22,120,198       22,181,003    
Diluted (2)     27,752,386       22,181,003       27,872,013       22,181,003    
                                   
(1) This balance is a related-party transaction.
(2) For the three and nine months ended September 30, 2016, 5,710,212 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.
 

 

   
GSV CAPITAL CORP. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS (Unaudited)
 
             
  Three Months Ended     Three Months Ended    
  September 30, 2017     September 30, 2016    
Per Basic Share Data:                
Net asset value at beginning of period $ 9.11   (1 )   $ 10.22   (1 )  
Net investment loss   (0.30 ) (1 )     (0.19 ) (1 )  
Realized gain   0.05   (1 )     0.12   (1 )  
Change in unrealized appreciation/(depreciation)   0.71   (1 )     (0.06 ) (1 )  
Benefit from taxes on unrealized depreciation of investments   -   (1 )     0.02   (1 )  
Dividends distributed   -         (0.04 )    
Repurchase of common stock   0.12   (1 )     -      
Net asset value at end of period $ 9.69   (1 )   $ 10.08   (1 )  
                 
Per share market value at end of period $ 5.41       $ 4.72      
Total return based on market value   24.65   %(2)     (5.23 ) %(2)  
Total return based on net asset value   6.37   %(2)     (0.59 ) %(2)  
Shares outstanding at end of period   21,606,894         22,181,003      
                 
Ratios / Supplemental Data:                
Net assets at end of period $ 209,379,965       $ 223,619,737      
Average net assets $ 201,557,182       $ 226,900,410      
                 
Ratio of gross operating expenses to average net assets (3)   13.73   %     7.53   %  
Ratio of net income tax provisions to average net assets(3)   (0.05 ) %     (0.96 ) %  
Ratio of operating expenses to average net assets (3)   13.68   %     6.57   %  
Ratio of management fee waiver to average net assets(3)   (0.34 ) %     -   %  
Ratio of net operating expenses to average net assets (3)   13.34   %     6.57   %  
                 
Ratio of net investment loss to average net assets (3)   (13.04 ) %     (7.38 ) %  
Portfolio Turnover Ratio   0.00   %     0.82   %  
                 
  Nine Months Ended     Nine Months Ended    
  September 30, 2017     September 30, 2016    
Per Basic Share Data:                
Net asset value at beginning of period $ 8.66   (1 )   $ 12.08   (1 )  
Net investment loss   (0.78 ) (1 )     (0.23 ) (1 )  
Realized loss   (1.10 ) (1 )     (0.10 ) (1 )  
Change in unrealized appreciation/(depreciation)   2.79   (1 )     (1.65 ) (1 )  
Benefit from taxes on unrealized depreciation of investments   -   (1 )     0.02   (1 )  
Dividends distributed   -         (0.04 )    
Repurchase of common stock   0.12   (1 )     -      
Net asset value at end of period $ 9.69   (1 )   $ 10.08   (1 )  
                 
Per share market value at end of period $ 5.41       $ 4.72      
Total return based on market value   7.55   %(2)     (28.03 ) %(2)  
Total return based on net asset value   11.89   %(2)     (15.90 ) %(2)  
Shares outstanding at end of period   21,606,894         22,181,003      
                 
Ratios / Supplemental Data:                
Net assets at end of period $ 209,379,965       $ 223,619,737      
Average net assets $ 196,478,030       $ 250,723,620      
                 
Ratio of gross operating expenses to average net assets (3)   12.74   %     2.80   %  
Ratio of net income tax provisions to average net assets(3)   (0.02 ) %     (0.29 ) %  
Ratio of operating expenses to average net assets (3)   12.72   %     2.51   %  
Ratio of management fee waiver to average net assets(3)   (0.36 ) %     -   %  
Ratio of net operating expenses to average net assets (3)   12.36   %     2.51   %  
                 
Ratio of net investment loss to average net assets (3)   (11.78 ) %     (2.72 ) %  
Portfolio Turnover Ratio   0.00   %     4.05   %  
                     
(1) The per-share figures noted are based on a weighted average of 22,000,571, and 22,181,003 basic common shares outstanding for the three months ended September 30, 2017, and 2016, respectively. The per-share figures noted are based on a weighted average of 22,120,198 and 22,181,003 basic common shares outstanding for the nine months ended September 30, 2017 and 2016, respectively.
(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 period. 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 are not annualized. For each of the three and nine months ended September 30, 2017 and 2016, 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.
 

 


Close window | Back to top

Copyright 2017 GSV Capital Corp.