EX-99.1 2 tv500369_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

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GSV Capital Corp. Reports Second Quarter 2018 Financial Results

 

Net Asset Value of $10.46 per Share as of June 30, 2018

  

WOODSIDE, Calif., August 8, 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%

 

 

 
 

 

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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, 2018 GSV 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.

 

 
 

 

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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.

 

 
 

 

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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

 

 
 

 

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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.

 

 
 

 

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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.

 

 
 

 

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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.