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, 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 GeneralAssembly 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 EndedJune 30,
2018 |
Quarter EndedJune 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) 235-4769IR@gsvam.com
GSV CAPITAL CORP. AND
SUBSIDIARIESCONDENSED 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
SUBSIDIARIESCONDENSED 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
SUBSIDIARIESFINANCIAL 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.
GSV Capital (NASDAQ:GSVC)
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