GSV Capital Corp. (“GSV Capital” or the “Company”)
(Nasdaq:GSVC) today announced financial results for the quarter
ended March 31, 2019. Net assets totaled approximately $212.5
million, or $10.75 per share, at March 31, 2019, as compared to
$9.89 per share at December 31, 2018 and $9.99 per share at March
31, 2018.
“As our portfolio companies gain scale, they are
increasingly attracting the attention of private
investors,” said Mark Klein, President and Chief Executive
Officer of GSV Capital. “We expect this trend to continue and
to contribute to the growth of our Net Asset Value.”
“Looking ahead, GSV Capital is well positioned
to execute against its disciplined growth investment strategy, and
we will continue to be opportunistic and disciplined with our
current cash and liquid assets,” Klein continued.
Investment Portfolio as of March 31,
2019At March 31, 2019, GSV Capital held positions in 26
portfolio companies with an aggregate fair value of approximately
$213.6 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
consolidated around its top positions. The Company’s top five
portfolio company investments accounted for approximately 57% of
the total portfolio at fair value as of March 31, 2019 and for
approximately 90% of GSV Capital’s market capitalization at May 7,
2019.
Top Five Investments at March 31,
2019
$ in millions |
Fair Value |
|
% of Total Portfolio |
Palantir
Technologies, Inc. |
$ |
30.1 |
|
14.1 |
% |
Coursera, Inc. |
|
28.7 |
|
13.4 |
|
Lyft, Inc. |
|
22.1 |
|
10.3 |
|
Spotify Technologies S.A. |
|
20.9 |
|
9.8 |
|
Course Hero, Inc. |
|
20.6 |
|
9.6 |
|
Total
(rounded) |
$ |
122.4 |
|
57.3 |
% |
|
|
|
|
|
|
First Quarter 2019 Portfolio Investment
Activity
During the quarter ended March 31, 2019, GSV
Capital made the following new investments:
Portfolio Company |
|
Investment |
|
Transaction Date |
|
Gross Payments(in millions) |
Neutron Holdings, Inc. (d/b/a Lime) |
|
Preferred Shares, Series D |
|
1/25/2019 |
|
|
|
$10.0 |
|
During the quarter ended March 31, 2019, GSV
Capital exited investments in the following portfolio
companies:
Portfolio Company |
|
Shares Sold |
|
AverageNet Share Price (1) |
|
Net Proceeds (in millions) |
|
Realized Gain/(Loss)(in millions) |
Declara,
Inc.(2) |
|
10,716,390 |
|
|
|
$– |
|
|
|
$– |
|
|
|
$(12.3) |
|
Spotify Technologies S.A. |
|
85,000 |
|
|
|
139.66 |
|
|
|
11.9 |
|
|
|
8.3 |
|
__________________(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) Exit of
Declara includes a 12% Convertible Promissory Note with a principal
value of $2.3 million.
Subsequent to quarter-end, through May 7, 2019,
GSV Capital exited positions in the following portfolio
companies:
Portfolio Company |
|
Shares Sold |
|
AverageNet Share Price (1) |
|
Net Proceeds (in millions) |
|
Realized Gain/(Loss)(in millions) |
Spotify
Technology S.A. |
|
150,360 |
|
|
|
$137.51 |
|
|
|
$20.7 |
|
|
|
$14.3 |
|
|
Dropbox, Inc. |
|
95,800 |
|
|
|
23.72 |
|
|
|
2.3 |
|
|
|
0.8 |
|
|
__________________(1) The average net share
price is the net share price realized after deducting all
commissions and fees on the sale(s), if applicable.
First Quarter 2019 Financial
Results
|
Quarter EndedMarch 31, 2019 |
Quarter EndedMarch 31, 2018 |
|
|
|
|
$ in millions |
per share |
$ in millions |
per share |
|
|
|
|
|
Net investment income |
$ |
0.6 |
|
$ |
0.03 |
|
$ |
0.0 |
|
$ |
0.00 |
|
|
|
|
|
|
Net realized loss on investments |
|
(4.1 |
) |
|
(0.21 |
) |
|
(0.8 |
) |
|
(0.04 |
) |
|
|
|
|
|
Net change in unrealized appreciation of investments |
|
20.7 |
|
|
1.05 |
|
|
8.1 |
|
|
0.38 |
|
|
|
|
|
|
Realized loss on partial repurchase of 5.25% Convertible Senior
Notes due 2018 |
|
- |
|
|
- |
|
|
(0.4 |
) |
|
(0.02 |
) |
|
|
|
|
|
Provision for taxes on unrealized appreciation of investments |
|
(0.1 |
) |
|
(0.01 |
) |
|
- |
|
|
- |
|
|
|
|
|
|
Net increase in net assets resulting from operations –
basic(2) |
$ |
17.2 |
|
$ |
0.86 |
|
$ |
7.0 |
|
$ |
0.32 |
|
|
|
|
|
|
Repurchase of common stock(1) |
|
- |
|
|
- |
|
|
(1.2 |
) |
|
0.03 |
|
|
|
|
|
|
Increase in net asset value(2) |
$ |
17.2 |
|
$ |
0.86 |
|
$ |
5.7 |
|
$ |
0.35 |
|
__________(1) During the quarter ended
March 31, 2018, the Company repurchased 179,807 shares of GSV
Capital common stock for approximately $1.2 million in cash. 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.(2) Total may not sum due to
rounding.
Weighted-average common basic shares outstanding
were approximately 19.8 million and 21.2 million for the quarters
ended March 31, 2019 and 2018, respectively.
GSV Capital’s liquid assets were $64.9 million
as of March 31, 2019, consisting of $25.0 million of cash and $39.9
million of public securities not subject to lock-up agreements.
At quarter-end, GSV Capital did not have any
borrowings outstanding and $12.0 million of borrowing capacity
available under its $12.0 million credit facility. As of May
7, 2019, GSV Capital had no borrowings outstanding and $12.0
million of borrowing capacity available to it under its credit
facility.
Conference Call and Webcast
Management will hold a conference call and
webcast for investors at 2:00 p.m. PT (5:00 p.m. ET). The
conference call access number for U.S. participants
is 334-323-0509, and the conference call access number for
participants outside the U.S. is 800-667-5617. The
conference ID number for both access numbers
is 8575743. 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 May 15, 2019 by
dialing 888-203-1112 (U.S.) or +1 719-457-0820 (International)
and using conference ID number 8575743.
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. 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 San Francisco, CA.
www.gsvcap.com
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@gsvcap.com
GSV CAPITAL CORP. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
ASSETS AND LIABILITIES (UNAUDITED)
|
March 31, 2019 |
|
December 31, 2018 |
ASSETS |
|
|
|
Investments at fair
value: |
|
|
|
Non-controlled/non-affiliate investments (cost of $112,265,183 and
$105,869,607, respectively) |
$ |
193,484,417 |
|
|
$ |
170,067,233 |
|
Non-controlled/affiliate investments (cost of $29,999,703 and
$42,333,854, respectively) |
2,620,361 |
|
|
5,931,863 |
|
Controlled investments (cost of $22,962,133 and $22,960,942,
respectively) |
17,466,686 |
|
|
22,816,733 |
|
Total Portfolio Investments |
213,571,464 |
|
|
198,815,829 |
|
Investments in U.S. Treasury bills (cost of $99,961,333 and
$99,982,067, respectively) |
99,980,000 |
|
|
99,994,000 |
|
Total Investments (cost of $265,188,352 and $271,146,470,
respectively) |
313,551,464 |
|
|
298,809,829 |
|
Cash |
24,997,482 |
|
|
28,184,163 |
|
Escrow proceeds
receivable |
2,177,555 |
|
|
2,494,582 |
|
Interest and dividends
receivable |
345,884 |
|
|
255,670 |
|
Deferred financing costs |
267,541 |
|
|
267,541 |
|
Receivable for unsettled
trades |
2,017,423 |
|
|
— |
|
Prepaid expenses and other
assets |
699,114 |
|
|
207,769 |
|
Total Assets |
344,056,463 |
|
|
330,219,554 |
|
LIABILITIES |
|
|
|
Due to GSV Asset
Management(1) |
207,710 |
|
|
— |
|
Accounts payable and accrued
expenses |
2,345,086 |
|
|
490,687 |
|
Accrued incentive fees, net of
waiver of incentive fees(1) |
— |
|
|
4,660,472 |
|
Accrued management fees, net
of waiver of management fees(1) |
— |
|
|
415,056 |
|
Accrued interest payable |
— |
|
|
475,000 |
|
Payable for securities
purchased |
89,460,654 |
|
|
89,480,103 |
|
Deferred tax liability |
979,713 |
|
|
885,566 |
|
4.75% Convertible Senior Notes
due March 28, 2023(2) |
38,525,528 |
|
|
38,434,511 |
|
Total Liabilities |
131,518,691 |
|
|
134,841,395 |
|
|
|
|
|
Net
Assets |
$ |
212,537,772 |
|
|
$ |
195,378,159 |
|
NET
ASSETS |
|
|
|
Common stock, par value $0.01
per share (100,000,000 authorized; 19,762,647 and 19,762,647 issued
and outstanding, respectively) |
$ |
197,626 |
|
|
$ |
197,626 |
|
Paid-in capital in excess of
par |
192,322,399 |
|
|
192,322,399 |
|
Accumulated net investment
loss |
(15,608,592 |
) |
|
(16,228,294 |
) |
Accumulated net realized
losses on investments |
(11,757,058 |
) |
|
(7,691,365 |
) |
Accumulated net unrealized
appreciation of investments |
47,383,397 |
|
|
26,777,793 |
|
Net Assets |
$ |
212,537,772 |
|
|
$ |
195,378,159 |
|
Net Asset Value Per Share |
$ |
10.75 |
|
|
$ |
9.89 |
|
___________________________(1) This balance references a
related-party transaction. (2) As of March 31, 2019 and
December 31, 2018, the 4.75% Convertible Senior Notes due
March 28, 2023 had a face value of $40,000,000.
GSV CAPITAL CORP. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (UNAUDITED)
|
Three Months Ended March 31, 2019 |
|
Three Months EndedMarch 31, 2018 |
INVESTMENT
INCOME |
|
|
|
Non-controlled/non-affiliate
investments: |
|
|
|
Interest income |
$ |
138,497 |
|
|
$ |
1,680 |
|
Non-controlled/affiliate
investments: |
|
|
|
Interest income |
59,466 |
|
|
234,082 |
|
Controlled investments: |
|
|
|
Interest income |
29,287 |
|
|
13,573 |
|
Total Investment Income |
227,250 |
|
|
249,335 |
|
OPERATING
EXPENSES |
|
|
|
Management fees(1) |
848,723 |
|
|
1,323,576 |
|
(Reversal of Incentive fee
accrual)/Incentive fees(1) |
(4,660,472 |
) |
|
1,471,334 |
|
Costs incurred under
Administration Agreement(1) |
306,084 |
|
|
424,145 |
|
Directors’ fees |
86,250 |
|
|
86,250 |
|
Professional fees |
2,061,922 |
|
|
339,898 |
|
Interest expense |
604,168 |
|
|
1,140,063 |
|
Income tax expense |
3,763 |
|
|
122,270 |
|
Other expenses |
357,110 |
|
|
489,270 |
|
Total Operating Expenses |
(392,452 |
) |
|
5,396,806 |
|
Management fee waiver(1) |
— |
|
|
(154,944 |
) |
Incentive fee waiver(1) |
— |
|
|
(5,000,000 |
) |
Total operating expenses, net of waiver of management and incentive
fees |
(392,452 |
) |
|
241,862 |
|
Net Investment Income |
619,702 |
|
|
7,473 |
|
Realized
Gains/(Losses) on Investments: |
|
|
|
Non-controlled/non-affiliated
investments |
8,269,138 |
|
|
(776,045 |
) |
Non-controlled/affiliate
investments |
(12,334,831 |
) |
|
— |
|
Controlled investments |
— |
|
|
(680 |
) |
Net Realized Losses on Investments |
(4,065,693 |
) |
|
(776,725 |
) |
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 |
17,028,343 |
|
|
9,854,664 |
|
Non-controlled/affiliate
investments |
9,022,648 |
|
|
(7,676,330 |
) |
Controlled investments |
(5,351,240 |
) |
|
5,955,060 |
|
Net Change in Unrealized Appreciation/(Depreciation) of
Investments |
20,699,751 |
|
|
8,133,394 |
|
Provision for taxes on unrealized appreciation of investments |
(94,147 |
) |
|
— |
|
Net Increase in Net Assets Resulting from
Operations |
$ |
17,159,613 |
|
|
$ |
6,966,296 |
|
Net Change in Net
Assets Resulting from Operations per Common Share: |
|
|
|
Basic |
$ |
0.87 |
|
|
$ |
0.33 |
|
Diluted |
$ |
0.75 |
|
|
$ |
0.30 |
|
Weighted-Average
Common Shares Outstanding |
|
|
|
Basic |
19,762,647 |
|
|
21,150,662 |
|
Diluted |
23,493,991 |
|
|
26,713,656 |
|
___________________________(1) This balance references a
related-party transaction.
GSV CAPITAL CORP. AND
SUBSIDIARIESFINANCIAL HIGHLIGHTS
(UNAUDITED)
|
|
Three Months Ended March 31, |
|
|
2019 |
|
2018 |
Per Basic Share
Data |
|
|
|
|
Net asset value at beginning
of the year |
|
$ |
9.89 |
|
|
$ |
9.64 |
|
Net investment income(1) |
|
0.03 |
|
|
— |
|
Net realized loss on investments(1) |
|
(0.21 |
) |
|
(0.04 |
) |
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) |
|
1.05 |
|
|
0.38 |
|
Provision for taxes on unrealized appreciation of
investments(1) |
|
(0.01 |
) |
|
— |
|
Repurchase of common stock(1) |
|
— |
|
|
0.03 |
|
Net asset value at end of
period |
|
$ |
10.75 |
|
|
$ |
9.99 |
|
Per share market value at end
of period |
|
$ |
7.58 |
|
|
$ |
7.54 |
|
Total return based on market
value(2) |
|
45.21 |
% |
|
38.35 |
% |
Total return based on net
asset value(2) |
|
8.70 |
% |
|
3.62 |
% |
Shares outstanding at end of
period |
|
19,762,647 |
|
|
21,066,538 |
|
Ratios/Supplemental
Data: |
|
|
|
|
Net assets at end of
period |
|
$ |
212,537,772 |
|
|
$ |
210,487,734 |
|
Average net assets |
|
$ |
194,819,568 |
|
|
$ |
204,070,345 |
|
Ratio of gross operating
expenses to average net assets(3) |
|
4.15 |
% |
|
10.14 |
% |
Ratio of incentive fee waiver
to average net assets |
|
— |
% |
|
(2.45 |
)% |
Ratio of management fee waiver
to average net assets |
|
— |
% |
|
(0.31 |
)% |
Ratio of income tax provision
to average net assets |
|
0.05 |
% |
|
— |
% |
Ratio of net operating
expenses to average net assets(3) |
|
4.20 |
% |
|
7.38 |
% |
Ratio of net investment loss
to average net assets(3) |
|
1.29 |
% |
|
0.02 |
% |
Portfolio Turnover Ratio |
|
4.85 |
% |
|
0.11 |
% |
___________________________(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
months ended March 31, 2019, the Company excluded $2,387,356 of
non-recurring expenses and did not annualize the income tax
provision. For the three months ended March 31, 2018 the
Company excluded $352,667 of non-recurring expenses and did not
annualize the incentive fee waiver. 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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