N-Q 1 v409723_nq.htm N-Q

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM N-Q

 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT

INVESTMENT COMPANY

 

Investment Company Act File Number 811-22759

 

SharesPost 100 Fund

(Exact name of Registrant as specified in charter)

 

1370 Willow Road

Menlo Park, CA 94025

(Address of principal executive offices) (Zip code)

 

National Corporate Research, Ltd.

c/o SharesPost 100 Fund

615 South DuPont Highway

City of Dover, County of Kent, Delaware 19901

(Name and address of agent for service)

 

Copy to:

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

666 Third Avenue

New York, NY 10017

 

Registrant's telephone number, including area code: (800) 834-8707

 

Date of fiscal year end: December 31

 

Date of reporting period: March 31, 2015

 

 
 

 

FORM N-Q

 

Item 1. Schedule of Investments.

 

SharesPost 100 Fund

SCHEDULE OF INVESTMENTS

As of 03/31/2015 (Unaudited)

 

   Number     
   of Shares   Fair Value 
COMMON STOCK IN PRIVATE COMPANIES – 40.7%          
ADVERTISING – 8.3%          
Chartboost(a)   250,000   $682,500 
Turn, Inc.(a)   256,250    2,006,438 
         2,688,938 
ANALYTICS/BIG DATA – 6.3%          
INRIX, Inc.(a)   60,250    2,067,780 
CLEAN TECHNOLOGY – 6.1%          
Clean Power Finance, Inc.(a)   555,000    1,720,500 
Sunrun, Inc.(a)   25,000    252,500 
         1,973,000 
CONSUMER ELECTRONICS – 2.8%          
Jawbone(a)   125,000    912,500 
E-COMMERCE – 2.2%          
One Kings Lane, Inc.(a)   75,083    731,308 
           
ENTERPRISE SOFTWARE – 0.7%          
Apptio, Inc.(a)   9,832    216,304 
           
GAMES – 7.2%          
KABAM, Inc.(a)   1,190,000    2,344,300 
HEALTHCARE/BIOTECH – 1.3%          
Practice Fusion(a)   14,000    22,400 
ZocDoc(a)   15,000    404,850 
         427,250 
HOSTING/STORAGE – 0.7%          
Hightail, Inc.(a)   136,028    235,329 
SECURITY – 2.7%          
AlienVault(a)   200,000    744,000 
Good Technology, Inc.(a)   40,000    140,400 
         884,400 
SOFTWARE – 2.4%          
DocuSign, Inc.(a)   4,000    53,320 
Jumio, Inc.(a)   110,000    727,100 
         780,420 
TOTAL COMMON STOCK (Cost $10,975,215)        13,261,529 
           
PREFERRED STOCK IN PRIVATE COMPANIES – 16.2%          
           
ADVERTISING – 0.9%          
AddThis(a)   100,000    286,000 

 

 
 

 

SharesPost 100 Fund

SCHEDULE OF INVESTMENTS

As of 03/31/2015 (Unaudited)

 

   Number     
   of Shares   Fair Value 
CONSUMER ELECTRONICS – 2.3%          
Jawbone(a)   102,938   $751,447 
           
CONSUMER WEB – 0.3%          
Trusper(a)   7,961    100,012 
           
FINANCE/PAYMENTS – 2.6%          
Social Finance   34,000    850,000 
           
GAMES – 6.3%          
KABAM, Inc.(a)   1,046,017    2,060,654 
           
HEALTHCARE/BIOTECH – 2.1%          
ZocDoc(a)   25,000    674,750 
           
SECURITY – 1.7%          
Lookout, Inc.(a)   52,000    537,680 
TOTAL PREFERRED STOCK (Cost $5,068,537)        5,260,543 
           
SHORT-TERM INVESTMENTS – 42.2%         
UMB Money Market Fiduciary, 0.01%(b) (Cost $13,753,447)   13,753,447    13,753,447 
           
TOTAL INVESTMENTS – 99.1% (Cost $29,797,199)        32,275,519 
           
Other assets less liabilities – 0.9%        296,698 
           
NET ASSETS –100.0%       $32,572,217 

 

 

(a) Non-income Producing

 

(b) Rate disclosed represents the seven day yield as of 3/31/15. The UMB Money Market Fiduciary account is an interest-bearing money market deposit account maintained by UMB Bank, n.a. in its capacity as a custodian for various participating custody accounts.

 

 
 

 

SHARESPOST 100 FUND

 

 

Notes to Schedule of Investments March 31, 2015 (Unaudited)

 

Organization - SharesPost 100 Fund (the “Fund”) was established as a limited liability company under the laws of the State of Delaware on August 20, 2012 and converted into a Delaware statutory trust on March 22, 2013. The Fund is registered with the Securities and Exchange Commission (the “SEC”) as a non-diversified, closed-end management investment company that operates as an “interval fund” under the Investment Company Act of 1940, as amended (the “1940 Act”). The shares of beneficial interest of the Fund (the “Shares”) will be continuously offered under Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”). As an interval fund, the Fund will make quarterly repurchase offers for 5% of the Fund’s outstanding Shares at net asset value (“NAV”). The Fund’s inception date was March 25, 2014. Prior to March 25, 2014, the Fund had been inactive except for matters relating to the Fund’s establishment, designation and planned registration of the Fund’s Shares under the Securities Act and the sale of 5,000 Shares (“Initial Shares”) for $100,000 to SP Investments Management, LLC (the “Investment Adviser”), which occurred on July 30, 2013.

 

The investment objective of the Fund is to provide investors capital appreciation, which it seeks to achieve by investing in the equity securities of certain private, operating, late-stage, growth companies primarily comprising the SharesPost 100, a list of companies selected and maintained by the Investment Adviser. The Investment Adviser’s primary strategy will be to invest in portfolio companies (each, a “Portfolio Company”) and generally to hold such securities until a liquidity event with respect to such Portfolio Company occurs, such as an initial public offering or a merger or acquisition transaction.

 

Investment Valuation - The Fund’s NAV is based in large part on the value of its securities which will be carried at fair value in accordance with the provision of FASB ASC Topic 820, Fair value Measurements and Disclosures. Where reliable market prices are available for those securities, the Investment Adviser will rely on those prices. However, because the securities in which the Fund invests are often illiquid, market prices may not be readily available or, where available, may be unreliable. At any point in time, there may be few recent purchase or sale transactions or offers on which to base the value of a given private share. In addition, the prices reflected in recent transactions or offers may be extremely sensitive to changes in supply or demand, including changes fueled by investor perceptions or other conditions.

 

When reliable market values are not available, the Fund’s investments will be valued by the Investment Adviser pursuant to fair valuation procedures and methodologies adopted by the Board of Trustees. While the Fund and the Investment Adviser will use good faith efforts to determine the fair value of the Fund’s securities, value will be dependent on the judgment of the Investment Adviser. The Investment Adviser may also rely to some extent on information provided by the Portfolio Companies. From time to time, the Fund may determine that it should modify its estimates or assumptions, as new information becomes available. As a consequence, the value of the securities and therefore the Fund’s NAV may vary. This may adversely affect Shareholders. Other than in connection with a liquidity event of a Portfolio Company, the Fund will generally sell Portfolio Company securities only in order (and only to the extent necessary) to fund quarterly repurchases of Fund Shares. However, because of the uncertainty and judgment involved in the valuation of the private shares, which do not have a readily available market, the estimated value of such shares may be different from values that would have been used had a ready market existed for such shares. In addition, in the event that the Fund desires to sell Portfolio Company shares, the Fund may also not be able to sell these securities at the prices at which they are carried on the Fund’s books, or may have to delay their sale in order to do so. This may adversely affect the Fund’s NAV.

 

 
 

 

SHARESPOST 100 FUND

 

 

The Board of Trustees has delegated the day-to-day responsibility for determining these fair values to the Investment Adviser, but the Board of Trustees has the ultimate responsibility for determining the fair value of the portfolio of the Fund. The Investment Adviser has developed the Fund’s valuation procedures and methodologies, which have been approved by the Board of Trustees, and will make valuation determinations and act in accordance with those procedures and methodologies, and in accordance with the 1940 Act. Valuation determinations are to be reviewed and, as necessary, ratified or revised quarterly by the Board of Trustees (or more frequently if necessary), including in connection with any quarterly repurchase offer.

 

Accounting policies generally accepted in the United States of America (“GAAP”) defines fair value, establishes a three-tier framework for measuring fair value based on a hierarchy of inputs, and expands disclosure about fair value measurements. It also provides guidance on determining when there has been a significant decrease in the volume and level of activity for an asset or liability, when a transaction is not orderly and how that information must be incorporated into a fair value measurement. The hierarchy distinguishes between market data obtained from independent sources (observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below:

 

  Level 1 — quoted prices for active markets for identical securities. An active market for the security is a market in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis. A quoted price in an active market provides the most reliable evidence of fair value.

 

  Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc. and quoted prices for identical or similar assets in markets that are not active.) Inputs that are derived principally from or corroborated by observable market data. An adjustment to any observable input that is significant to the fair value may render the measurement a Level 3 measurement.

 

  Level 3 — significant unobservable inputs, including the Fund’s own assumptions in determining the fair value of investments.

 

For the period ended March 31, 2015, there were no transfers in and out of Level 1, Level 2 and Level 3. It is the Fund’s policy to recognize transfers into and out of all Levels at the end of the reporting period.

 

A description of the valuation techniques applied to the Fund’s major categories of assets and liabilities measured at fair value on a recurring basis follows:

 

Securities traded on a national exchange (or reported on the NASDAQ national market) are stated at the last reported sales price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized in Level 1 of the fair value hierarchy. Stocks traded on inactive markets or valued by reference to similar instruments which are marketable and to the extent the inputs are observable and timely, are categorized in Level 2 of the fair value hierarchy.

 

 
 

 

SHARESPOST 100 FUND

 

 

The Fund’s portfolio holdings are in Level 3 investments. As they are not publicly traded, and many are subject to restrictions on resale, the investments are less liquid than publicly traded securities, resulting in an increased liquidity risk to the Fund.

 

The Fund’s portfolio investments will generally not be in publicly traded securities. Investments for which observable market prices in active markets do not exist are reported at fair value, as determined in good faith by the Investment Adviser under consistently applied policies and procedures approved by the Board of Trustees in accordance with GAAP. In connection with that determination, members of the Investment Adviser’s portfolio management team will prepare Portfolio Company valuations using the most recent Portfolio Company financial statements and forecasts. The types of factors that the Investment Adviser will take into account in determining fair value, subject to review and ratification where required by the Board of Trustees with respect to such non-traded investments will include, as relevant and, to the extent available, the Portfolio Company’s earnings, the markets in which the Portfolio Company does business, comparison to valuations of publicly traded companies in the Portfolio Company’s industry, comparisons to recent sales of comparable companies, the discounted value of the cash flows of the Portfolio Company and other relevant factors. This information may not be available because it is difficult to obtain financial and other information with respect to private companies. Because such valuations are inherently uncertain and may be based on estimates, the determinations of fair market value may differ materially from the values that would be assessed if a readily available market for these securities existed. Based on these factors, the investments in private companies will generally be presented as a Level 3 investment.

 

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following is a summary of the inputs used to value the Fund’s investments as of March 31, 2015:

 

Investment in Securities      Level 2   Level 3     
   Level 1   Other Significant   Significant     
   Quoted Prices   Observable Inputs   Unobservable Inputs   Total 
Security Type                    
Common stock in private companies*  $-   $-   $13,261,529   $13,261,529 
Preferred stock in private companies*   -    -    5,260,543    5,260,543 
Short Term Investments   13,753,447    -    -    13,753,447 
Total  $13,753,447   $-   $18,522,072   $32,275,519 

 

 

*All sub-categories within the security type represent their respective evaluation status. For a detailed breakout by industry, please refer to the Schedule of Investments.

 

The following is a rollforward of the activity in investments in which significant unobservable inputs (Level 3) were used in determining fair value on a recurring basis:

 

   Beginning
balance
January 1,
2015
   Transfers
into
Level 3
during
the period
   Transfers
out of
Level 3
during the
period
   Purchases   (Sales)   Net
realized
gain
   Change in net unrealized gain   Ending
balance
March 31,
2015
 
SharesPost 100 Fund                                        
Common stock in private companies  $10,065,285   $-   $-   $2,884,375   $(867,220)  $396,220   $782,869   $13,261,529 
Preferred stock in private companies   4,118,072    -    -    1,116,400    -    -    26,071    5,260,543 
   $14,183,357   $-   $-   $4,000,775   $(867,220)  $396,220   $808,940   $18,522,072 

 

The following is a summary of quantitative information about significant unobservable valuation inputs for Level 3 Fair Value Measurements for investments held as of March 31, 2015:

 

Type of Level 3 Investment Fair Value as of
March 31, 2015
  Valuation Technique   Unobservable Inputs Range (Avg)
Common stock in private companies $        13,261,529   Market approach   Precedent Transactions n/a  
               
      Income approach   Revenue Multiples 1.2 - 7.0 (3.4)  
          Stage Discout Rates 10% - 30% (22%)  
          Execution Discount Rates 15% - 70% (37.5%)  
          Discounts For Lack of 17% - 18% (17.3%)  
          Marketability        
                   
                   
                   
                   
Preferred stock in private companies              5,260,543   Market approach   Precedent Transactions n/a  
               
      Income approach   Revenue Multiples 1.1 - 3.6 (2.4)  
          Stage Discout Rates 20% - 30% (24.2%)  
          Execution Discount Rates 25% - 50% (39.2%)  
          Discounts For Lack of 17% - 18% (17.5%)  
          Marketability        

 

Federal Income Tax Information

 

At March 31, 2015, gross unrealized gains and losses of investments based on cost for federal income tax purposes were as follows:

     
Cost of investments  $29,797,199 
      
Gross unrealized gain  $2,681,421 
Gross unrealized loss   (203,101)
      
Net unrealized gain on investments  $2,478,320 

 

 
 

 

Item 2. Controls and Procedures.

 

(a) The Registrant's principal executive and principal financial officers have concluded, based on their evaluation of the Registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the Registrant's disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the Registrant on Form N-Q is recorded, processed, summarized and reported within the required time periods and that information required to be disclosed by the Registrant in the reports that it files or submits on Form N-Q is accumulated and communicated to the Registrant's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

 

(b) There were no changes to the Registrant's internal control over financial reporting that occurred during the Registrant's most recently ended fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting.

 

Item 3. Exhibits.

 

(a) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940.

 

 Exhibit No.Description of Exhibit
99.1Certification of Principal Executive Officer
99.2Certification of Principal Financial Officer

 

 
 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

SharesPost 100 Fund

 

By: /s/ Sven Weber                             

Sven Weber

President

 

Date:  5/20/2015

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By: /s/ Sven Weber                             

Sven Weber

President

(Principal Executive Officer)

 

Date:  5/20/2015

 

 

By: /s/ Vera Mumm                              

Vera Mumm

Treasurer

(Principal Financial Officer)

 

Date:  5/20/2015

 

 

EXHIBIT INDEX

 

(a) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940. (EX-99.CERT)