GSV Capital Corp. Reports Fourth Quarter and Fiscal Year 2016 Financial Results

WOODSIDE, Calif., March 16, 2017 (GLOBE NEWSWIRE) — GSV Capital Corp. (“GSV Capital” or the “Company”) (Nasdaq:GSVC) today announced financial results for the quarter and fiscal year ended December 31, 2016. Net assets totaled approximately $192.1 million, or $8.66 per share, at December 31, 2016, as compared to $10.08 per share at September 30, 2016 and $12.08 per share at December 31, 2015. 

While we are disappointed with the decline in NAV during the quarter, our long-term strategic focus on identifying and investing in the world’s most dynamic, venture-backed private companies remains unchanged,” said Michael Moe, Chief Executive Officer of GSV Capital. “We believe that Snap’s successful IPO is a strong positive signal for other top names in the GSV Capital portfolio and we are encouraged by recent developments in the broader growth economy.”

Investment Portfolio as of December 31, 2016

At December 31, 2016, GSV Capital held positions in 45 portfolio companies with an aggregate fair value of approximately $262.0 million. Excluding Treasuries, the Company’s top ten portfolio company investments accounted for 60.2% of the total portfolio at fair value.

   
Top Ten Investments at December 31, 2016  
   
$ in millions (rounded)   Fair
Value
% of Total
Portfolio
 
Palantir Technologies, Inc.   $ 41.5 15.8 %
Spotify Technology S.A.     18.9 7.2  
Coursera, Inc.     14.5 5.5  
JAMF Holdings, Inc.     13.9 5.3  
General Assembly Space, Inc.     13.7 5.2  
Dropbox, Inc.     13.2 5.0  
Lytro, Inc.     10.9 4.2  
Ozy Media, Inc.     10.6 4.0  
Course Hero, Inc.     10.5 4.0  
Curious.com, Inc.     10.0 3.8  
Total (rounded)   $ 157.8 60.2 %
           

Of the five key investment themes GSV Capital has identified in its portfolio as of December 31, 2016, Education Technology is its largest commitment, accounting for 36.8% of the total portfolio at fair value. Cloud Computing and Big Data represents 34.3% of the total portfolio at fair value, and Social Mobile, Marketplaces and Sustainability represent 17.5%, 9.8% and 1.6% of the total portfolio at fair value, respectively.

Fourth Quarter 2016 Portfolio Investment Activity

In the fourth quarter of 2016, GSV Capital invested $526,000 in NestGSV, Inc. and $250,000 in Beamreach Solar, Inc.

GSV Capital sold shares in the following portfolio companies during the fourth quarter of 2016:

                     
          Average          
      Shares   Net Share   Net   Realized  
Portfolio Company     Sold   Price 1   Proceeds   Loss 2  
                     
Upwork Global Inc.     25,159   $ 4.31   $ 108,531   $ (77,819 )  
NestGSV, Inc.     N/A   N/A   $ 500,000        
                     

 __________

(1) The average net share price is the net share price realized after deducting all commissions and fees on the sale(s).
(2) Realized loss excludes any realized gains/(losses) incurred on the maturity of GSV Capital’s treasury investments.
   

As of December 31, 2016, GSV Capital had no borrowings outstanding under its credit facility, which matured in accordance with its terms on December 31, 2016.

     
Fourth Quarter 2016 Financial Results    
     
  Quarter Ended
December 31, 2016
Quarter Ended
December 31, 2015
$ in millions
(rounded)

 

per share

 

$ in millions
(rounded
)

 

per share

Net investment income/(loss)

$ 3.9   $ 0.17   $ (4.7 ) $ (0.24 )
         
Net realized losses $ (0.3 ) $ (0.01 ) $ (0.0 ) $ (0.00 )
         
Benefit for taxes on net realized losses                
         
Net change in unrealized depreciation of investments $ (36.6 ) $ (1.65 ) $ (13.5 ) $ (0.69 )
         
Benefit for taxes on unrealized depreciation of investments $ 1.6   $ 0.07   $ 0.0   $ 0.00  
         
Net decrease in net assets resulting from operations – basic $ (31.5 ) $ (1.42 ) $ (18.1 ) $ (0.94 )
         

Weighted-average common basic shares outstanding were approximately 22.2 million for the quarter ended December 31, 2016 and 19.4 million for the quarter ended December 31, 2015.

     
Fiscal Year 2016 Financial Results    
     
  Fiscal Year Ended
December 31, 2016
Fiscal Year Ended
December 31, 2015

$ in millions
(rounded)

 

per share

$ in millions
(rounded)

 

per share

Net investment loss

$ (1.3 ) $ (0.06 ) $ (48.7 ) $ (2.52 )
         
Net realized gains/(losses) $ (2.6 ) $ (0.12 ) $ 54.1   $ 2.80  
         
Benefit for taxes on net realized gains         $ 0.3   $ 0.02  
         
Net change in unrealized depreciation of investments $ (73.2 ) $ (3.30 ) $ (13.4 ) $ (0.69 )
         
Benefit for taxes on unrealized depreciation of investments $ 2.1   $ 0.10   $ 16.1   $ 0.83  
         
Net increase/(decrease) in net assets resulting from operations – basic $ (75.0 ) $ (3.38 ) $ 8.5   $ 0.44  
         

Weighted-average common basic shares outstanding were approximately 22.2 million for the fiscal year ended December 31, 2016 and 19.3 million for the fiscal year ended December 31, 2015.

GSV Capital’s liquid assets ended the quarter at $17.1 million, consisting of $8.3 million of cash and $8.7 million of public securities not subject to lock-up agreements, none of which are subject to periodic sales restrictions.

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 number for U.S. participants is 877-852-6543, and the conference call number for participants outside of the United States is 1-719-325-4839. The conference ID number for both call numbers is 8092483. 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 March 23, 2017 by dialing 888-203-1112 (U.S.) or 1-719-457-0820 (international) and using conference ID number 8092483.

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, the Company 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

The GSV Capital Corp. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=12750

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.

 
GSV CAPITAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
 
  December 31, 2016   December 31, 2015
ASSETS      
Investments at fair value:          
Investments in controlled securities (cost of $22,893,441 and $21,830,392, respectively) (1) $  19,037,566     $ 22,871,790  
Investments in affiliated securities (cost of $51,773,388 and $73,942,123, respectively) (1)    42,444,690        66,075,585  
Investments in non-controlled/non-affiliated securities (cost of $204,101,445 and $197,577,328, respectively)    200,532,890        260,861,392  
Investments in treasury bill (cost of $29,998,750 and $29,999,968, respectively)    29,998,490       30,000,000  
Investments owned and pledged (amortized cost of $0 and $3,675,192, respectively) (2)         3,676,693  
Total Investments (cost of $308,767,024 and $327,025,003, respectively)   292,013,636       383,485,460  
           
Cash   8,332,634       13,349,877  
Restricted cash         52,931  
Due from:          
GSV Asset Management (1)         220,770  
Portfolio companies (1)         56,371  
Interest and dividends receivable    92,946       97,183  
Prepaid expenses and other assets   213,942       227,826  
Deferred financing costs    311,268        352,653  
Total Assets   300,964,426        397,843,071  
           
LIABILITIES          
Due to:          
GSV Asset Management (1)   422,025       5,047,429  
Accounts payable and accrued expenses    335,611       105,587  
Accrued incentive fees (1)   2,126,444       17,314,565  
Accrued management fees (1)    524,054       683,423  
Accrued interest payable    1,056,563       1,056,563  
Payable for securities purchased    26,498,750       26,499,357  
Deferred tax liability    10,359,371       12,476,155  
Convertible Senior Notes payable 5.25% due September 15, 2018 (2)   67,512,798        66,649,047  
Total Liabilities   108,835,616        129,832,126  
           
Commitments and contingencies (Notes 6 and 9)          
Net Assets $ 192,128,810     $ 268,010,945  
           
NET ASSETS          
Common stock, par value $0.01 per share          
(100,000,000 authorized; 22,181,003 issued and outstanding, respectively) $  221,810     $  221,810  
Paid-in capital in excess of par    221,237,636        237,757,527  
Accumulated net investment loss    (1,443,996 )      (16,634,037 )
Accumulated net realized gains (losses) on investments    (773,882 )      2,681,342  
Accumulated net unrealized appreciation (depreciation) of investments    (27,112,758 )      43,984,303  
Net Assets $ 192,128,810     $  268,010,945  
           
Net Asset Value Per Share $ 8.66     $ 12.08  
           

(1) This balance is a related-party transaction.
(2) The Convertible Senior Notes have a face value of $69,000,000. In accordance with the terms of the Company’s Convertible Senior Notes payable, the Company deposited $10,867,500 in an escrow account with U.S. Bank N.A., the trustee. These funds were used to purchase six U.S. Treasury Strips with an original cost of $10,845,236. As of December 31, 2016, all of the government securities purchased had matured and the proceeds were used by the trustee in accordance with the terms of the escrow agreement.
   

 
GSV CAPITAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
      Year ended     Year ended     Year ended
      December 31, 2016     December 31, 2015     December 31, 2014
INVESTMENT INCOME                  
Interest income from controlled securities (1)   $  101,999     $     $ 10,233  
Interest income from affiliated securities (1)       159,016        214,420       130,021  
Interest income from non-controlled/non-affiliated securities       262,473        29,695       44,805  
Dividend income from affiliated securities (1)                  
Dividend income from non-controlled/non-affiliated securities           46,781       887  
Other income from non-controlled/non-affiliated securities     212,795              
Total Investment Income     736,283       290,896       185,946  
                   
OPERATING EXPENSES                  
Management fees (1)      6,896,347       8,044,801       7,562,488  
Incentive fees (1)     (15,188,121 )     8,170,326       3,614,347  
Costs incurred under Administration Agreement (1)     2,545,316       2,681,079       3,199,904  
Directors’ fees      345,000       373,676       260,000  
Professional fees     1,966,906       1,357,988       1,764,722  
Interest expense      4,731,430       4,961,169       5,503,843  
Income tax expense      –       880,778        
Other expenses     702,768       509,418       668,635  
Gain on fair value adjustment for embedded derivative      –       (1,000 )     (798,000 )
Total Operating Expenses     1,999,646       26,978,235       21,775,939  
                   
(Provision)/Benefit for taxes on net investment loss (2)           (21,969,370 )     8,810,102  
                   
Net Investment Loss     (1,263,363 )     (48,656,709 )     (12,779,891 )
                   
Net Realized Gains/(Losses):                  
From affiliated securities      –        (10,170,567 )     10,419  
From non-controlled/non-affiliated securities     (2,634,471 )      64,314,796       23,915,705  
Net Realized Gains/(Losses) on investments      (2,634,471 )      54,144,229       23,926,124  
                   
(Provision)/Benefit for taxes on net realized                  
gain on investments (2)           342,802       (9,769,036 )
                   
Net Change in Unrealized                  
Depreciation of investments:                  
From controlled securities      (4,897,273 )      (627,139 )     (662,619 )
From affiliated securities       (13,571,477 )      1,386,378       (6,867,225 )
From non-controlled/non-affiliated securities       (54,745,095 )      (14,181,484 )     1,718,047  
Net Change in Unrealized                  
 Depreciation of investments     (73,213,845 )      (13,422,245 )     (5,811,797 )
                   
Benefit for taxes on unrealized                  
depreciation of investments (2)     2,116,784       16,058,080       2,371,829  
                   
Net Increase/(Decrease) in Net Assets                  
Resulting from Operations   $ (74,994,895 )   $ 8,466,157     $ (2,062,771 )
                   
Net Increase/(Decrease) in Net Assets Resulting                  
from Operations per Common Share                  
Basic   $ (3.38 )   $ 0.44     $ (0.11 )
Diluted (3)   $ (3.38 )   $ 0.44     $ (0.11 )
                   
Weighted-Average Common Shares Outstanding                  
Basic      22,181,003       19,327,938       19,320,100  
Diluted (3)      22,181,003       19,327,938       19,320,100  
                         

(1) This balance is a related-party transaction.
(2) Due to the Company’s change in tax status to a regulated investment company (“RIC”) from a C Corporation, the associated accrued benefits and provisions from previous years were reversed, resulting in a provision for net investment loss, a benefit for net realized gains, and a benefit for unrealized depreciation of investments for the year ended December 31, 2015.
(3) For the years ended December 31, 2016, 2015 and 2014, respectively, 5,751,815, 5,710,212 and 4,244,128 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
 
  
 
    Three months ended     Three months ended    
    December 31,     December 31,    
    2016       2015      
Net asset value at beginning of period $ 10.08     $ 16.17      
Net investment income/(loss)   0.17   (1 )   (0.24 ) (1 )  
Realized loss   (0.01 ) (1 )     (1 )  
Change in unrealized depreciation   (1.65 ) (1 )   (0.69 ) (1 )  
Benefit for taxes on unrealized deprecation of investments   0.07   (1 )     (1 )  
Cash distributions paid          (1.36 )    
Effect of shares issued including dilution          (1.80 )    
Net asset value at end of period 8.66     $  12.08      
               

                                 
    Year ended     Year ended     Year ended     Year ended     Year ended    
    December 31,     December 31,     December 31,     December 31,     December 31,    
    2016       2015       2014       2013       2012      
Net asset value at beginning of year $ 12.08     $ 14.80     $ 14.91     $ 13.07     $ 12.95      
Issuance of common shares                           1.91   (4 )  
Underwriters’ discount                           (0.72 ) (2 )  
Offering costs                           (0.04 ) (2 )  
Net investment loss     (0.06 ) (1 )   (2.52 ) (1 )   (0.66 ) (1 )   (0.46 ) (1 )   (0.51 ) (1 )  
Realized gain (loss)    (0.12 ) (1 )   2.80   (1 )   1.24   (1 )    (1.12 ) (1 )   (0.09 ) (1 )  
(Provision)/Benefit for taxes on net realized capital gains/losses     (1 )   0.02   (1 )   (0.51 ) (1 )    0.49   (1 )        
Change in unrealized appreciation (depreciation)   (3.30 ) (1 )   (0.69 ) (1 )    (0.30 ) (1 )    4.53   (1 )   (0.43 ) (5 )  
(Provision)/Benefit for taxes on unrealized appreciation/deprecation of investments   0.10   (1 )   0.83   (1 )    0.12   (1 )    (1.60 ) (1 )        
Distributions from realized gain   (0.04 )     (2.76 )                      
Dilution from shares issued         (0.40 )                      
Net asset value at end of year 8.66     $ 12.08     $ 14.80     $ 14.91     $ 13.07      
                                 
Per share market value at end of year $ 5.03     $  9.37     $ 8.63       12.09       8.43      
Total return based on market value   (23.29 ) %(3)   8.57   %(3)   (28.62 ) %(3)   43.42   %(3)   (39.57 ) %(6)  
Total return based on net asset value   (27.74 ) %(3)   (0.27 ) %(3)   (0.74 ) %(3)   14.08   %(3)   0.93   %(6)  
Shares outstanding at end of year   22,181,003       22,181,003       19,320,100       19,320,100       19,320,100      
            .     .              
Ratios / Supplemental Data:                                
Net assets at end of year $ 192,128,810     $   268,010,945      $  285,903,673         287,966,444       252,582,801      
Average net assets $ 243,577,514     $   296,560,393      $  284,953,811         250,121,052       208,050,344      
                                 
Ratios                                
Ratio of gross operating expenses to average net assets   0.82   %   9.10   %   7.64   %   8.83   %   4.10   %  
Ratio of net income tax provisions to average net assets   (0.87 ) %   (1.88 ) %   (0.50 ) %   (3.33 ) %     %  
Ratio of net operating expenses to average net assets   (0.05 ) %   7.22   %   7.14   %   5.50   %   4.10   %  
                                 
Ratio of net investment loss to average net assets   (0.52 ) %   (16.41 ) %   (4.48 ) %   (3.55 ) %   (3.98 ) %  
Portfolio Turnover Ratio   4.46   %   8.30   %   19.45   %   2.96   %   13.26   %  
                                           

(1 ) Based on weighted-average number of shares outstanding for the year.
(2 ) Based on shares outstanding at end of period.
(3 ) 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. The closing market price per share adjusted for dividends on December 31, 2015 is $6.61. 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.
(4 ) Issuance of common shares for the year ended December 31, 2012 is based on the change in net asset value from the secondary offerings on February 10, 2012 and May 11, 2012.
(5 ) Includes the impact of the different share amounts as a result of calculating certain per share data based on the weighted average basic shares outstanding during the period and certain per share data based on the shares outstanding as of a period end or transaction date.
(6 ) 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 and the issuance of common shares in the period. The percentage returns noted above are based on the increase in our net asset value attributable to issuances of our common stock at a premium to our net asset value per share, rather than investment returns. Such issuances of our common stock at a premium to net asset value per share are not typical, and may not occur in the future. The total returns are not annualized.
   
CONTACT: Contact

GSV Capital Corp.
(650) 235-4769
IR@gsvam.com

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