GSV Capital Corp. Reports Third Quarter 2018 Financial Results

November 7, 2018

Net Asset Value of $10.58 per Share as of September 30, 2018

Board of Directors Approves Additional $5.0 Million for Share Repurchase Program, Bringing Share Repurchase Program Total to $20.0 Million

WOODSIDE, Calif., Nov. 07, 2018 (GLOBE NEWSWIRE) -- GSV Capital Corp. (“GSV Capital” or the “Company”) (Nasdaq:GSVC) today announced financial results for the quarter ended September 30, 2018. Net assets totaled approximately $213.4 million, or $10.58 per share, at September 30, 2018, as compared to $9.64 per share at December 31, 2017 and $9.69 per share at September 30, 2017.

"We are pleased to report a strong third quarter for GSV Capital, which was 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. 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. The IPO environment continues to show signs of strength, and we remain confident that our portfolio companies planning to go public in the near-term will be well received."

"We are also happy to announce that the GSV Capital Board of Directors has authorized the expansion of our current share repurchase program by $5.0 million to an aggregate of $20.0 million,” Moe continued. “Under this program, we have repurchased a total of approximately $14.2 million in shares, including approximately $4.1 million in the third quarter of 2018. Since inception of the Share Repurchase Program, we have repurchased approximately 11% of GSV Capital common stock.”

Investment Portfolio as of September 30, 2018

At September 30, 2018, GSV Capital held positions in 26 portfolio companies with an aggregate fair value of approximately $217.2 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 62.9% of the total portfolio at fair value as of September 30, 2018, compared to 47.8% as of September 30, 2017. GSV Capital’s portfolio investments do not include the Company’s investments in treasuries.

Top Five Investments at September 30, 2018

$ in millions	Fair Value		% of Total Portfolio Investments
Spotify Technology S. A.	$	42.6	19.6 %
Palantir Technologies, Inc.		35.0	16.1 %
Dropbox, Inc.		23.5	10.8 %
Coursera, Inc.		20.6	9.5 %
StormWind, LLC		15.0	6.9 %
Total	$	136.7	62.9 %

Third Quarter 2018 Portfolio Investment Activity

During the three months ended September 30, 2018, GSV Capital made the following new investments:

Portfolio Company	Investment	Transaction Date	Gross Payments (in millions)
Knewton, Inc.	Unsecured Convertible Promissory Note	7/23/2018	$0.1
Nextdoor.com, Inc.	Common Stock	9/27/2018	$6.3

During the three months ended September 30, 2018, GSV Capital exited investments in the following portfolio companies:

Portfolio Company	Exit Date	Shares Sold	Net Proceeds (in millions)	Realized Gain / (Loss) (in millions)⁽¹⁾
Lytro, Inc.	8/1/2018	3,537,539	$0.8	($9.3)
SugarCRM, Inc.	8/30/2018	1,897,933	$2.6	($4.1)
DreamBox Learning, Inc.	9/5/2018	10,738,831	$5.2	$3.3

__________________

(1)	Includes expected escrow proceeds of approximately $1.0 million.

Third Quarter 2018 Financial Results

	Quarter Ended September 30, 2018		Quarter Ended September 30, 2017

	$ in millions	per share	$ in millions	per share

Net investment loss	$(3.9)	$(0.19)	$(6.6)	$(0.30)

Net realized gain/(loss) on investments	(10.1)	(0.49)	1.0	0.05

Net change in unrealized appreciation of investments, net of tax benefit⁽¹⁾	14.4	0.70	15.7	0.71

Net increase in net assets resulting from operations - basic	$0.3	$0.02	$10.1	$0.46

Repurchase of common stock⁽²⁾	(4.1)	0.10	(2.8)	0.12

Increase/(decrease) in net asset value⁽³⁾	$(3.7)	$0.12	$7.3	$0.58

__________________

(1)	Includes related net tax benefit of $0.2 million and $<0.1 million for the quarters ended September 20, 2018 and 2017, respectively.
(2)	During the quarters ended September 30, 2018 and 2017, the Company repurchased 575,958 and 574,109 shares of GSV Capital common stock, respectively, for approximately $4.1 million and $2.8 million, respectively, 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.
(3)	Total may not sum, due to rounding.

Weighted-average common basic shares outstanding were approximately 20.5 million and 22.0 million for the quarters ended September 30, 2018 and 2017, respectively.

GSV Capital’s liquid assets were $102.6 million as of September 30, 2018, consisting of $36.6 million of cash and $66.0 million of unrestricted marketable securities. At quarter-end and as of November 7, 2018, GSV Capital did not have any borrowings outstanding under its $12.0 million credit facility.

Convertible Senior Notes

GSV Capital’s 5.25% Convertible Senior Notes due 2018 matured on September 15, 2018. Pursuant to the terms of the 5.25% Convertible Senior Notes due 2018, the Company repaid the remaining outstanding aggregate principal amount of the 5.25% Convertible Senior Notes due 2018, including accrued but unpaid interest, upon maturity. As a result the 5.25% Convertible Senior Notes were no longer outstanding as of such date.

Share Repurchase Program

Under the publicly announced share repurchase program, as of September 30, 2018, the Company had repurchased 2,006,048 shares of its common stock for approximately $12.4 million. From October 1, 2018 through November 7, 2018, the Company repurchased an additional 259,954 shares of its common stock for an aggregate purchase price of $1.8 million.

As of November 7, 2018, in light of the Board of Directors’ authorization to increase the amount of shares of Company common stock that may be repurchased under the share repurchase program, the dollar value of shares that may yet be purchased by the Company under the program is approximately $5.8 million.

Conference Call and Webcast

Management will hold a conference call and webcast for investors on the same day at 2:00 p.m. PT (5:00 p.m. ET). The conference call access number for U.S. participants is 877-830-2596, and the conference call access number for participants outside the U.S. is +1 785-424-1745. The conference ID number for both access numbers is 8100153. 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 November 14, 2018 by dialing 888-203-1112 (U.S.) or +1 719-457-0820 (International) and using conference ID number 8100153.

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

GSV CAPITAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)

	September 30, 2018			December 31, 2017
ASSETS
Investments at fair value:
Non-controlled/non-affiliate investments (cost of $102,192,243 and $137,526,726, respectively)	$	181,222,034		$	179,908,234
Non-controlled/affiliate investments (cost of $42,226,859 and $41,886,312, respectively)	5,834,265			16,473,098
Controlled investments (cost of $22,616,441 and $23,161,314, respectively)	30,134,871			24,207,161
Total Portfolio Investments	217,191,170			220,588,493
Investments in U.S. Treasury bills (cost of $99,967,958 and $99,985,833, respectively)	99,983,000			99,994,000
Total Investments (cost of $267,003,501 and $302,560,185, respectively)	317,174,170			320,582,493
Cash	36,623,050			59,838,600
Due from controlled investments	—			840
Escrow proceeds receivable	2,642,281			603,456
Interest and dividends receivable	310,683			35,141
Prepaid expenses and other assets	398,184			208,983
Deferred financing costs	215,048			413,023
Total Assets	357,363,416			381,682,536
LIABILITIES
Due to GSV Asset Management⁽¹⁾	87			231,697
Accounts payable and accrued expenses	551,243			458,203
Accrued incentive fees, net of waiver of incentive fees⁽¹⁾	9,142,024			9,278,085
Accrued management fees, net of waiver of management fees⁽¹⁾	314,338			424,447
Accrued interest payable	—			1,056,563
Payable for securities purchased	89,577,376			89,485,825
Deferred tax liability	6,033,512			7,602,301
5.25% Convertible Senior Notes due September 15, 2018⁽²⁾	—			68,382,549
4.75% Convertible Senior Notes due March 28, 2023⁽²⁾	38,341,472			—
Total Liabilities	143,960,052			176,919,670

Net Assets	$	213,403,364		$	204,762,866
NET ASSETS
Common stock, par value $0.01 per share (100,000,000 authorized; 20,174,955 and 21,246,345 issued and outstanding, respectively)	$	201,749		$	212,463
Paid-in capital in excess of par	195,110,116			202,584,012
Accumulated net investment loss	(17,911,239		)	(8,593,717		)
Accumulated net realized gains/(losses) on investments	(7,790,909		)	140,100
Accumulated net unrealized appreciation of investments	43,793,648			10,420,008
Net Assets	$	213,403,364		$	204,762,866
Net Asset Value Per Share	$	10.58		$	9.64

__________________________________

(1)	This balance references a related-party transaction.
(2)	As of September 30, 2018 and December 31, 2017, the 5.25% Convertible Senior Notes due September 15, 2018 had a face value of $0 and $69,000,000, respectively. As of September 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 SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
INVESTMENT INCOME
Non-controlled/non-affiliate investments:
Interest income	$	164,310		$	(21,447	)	$	174,922		$	(4,640	)
Other income	—			—			—			73,096
Non-controlled/affiliate investments:
Interest income	65,790			(48,398		)	521,685			143,974
Controlled investments:
Interest income	16,252			69,757			41,153			196,534
Dividend income	—			175,000			350,000			475,000
Total Investment Income	246,352			174,912			1,087,760			883,964
OPERATING EXPENSES
Management fees⁽¹⁾	1,345,090			1,397,332			3,954,732			4,210,932
Incentive fees⁽¹⁾	804,520			3,334,052			4,863,939			7,482,185
Costs incurred under Administration Agreement⁽¹⁾	355,599			472,413			1,176,857			1,453,007
Directors’ fees	86,250			86,250			258,750			242,230
Professional fees	552,179			353,933			1,218,875			1,318,931
Interest expense	1,311,534			1,207,548			3,925,292			3,489,381
Income tax expense	(6,235		)	4,889			142,264			51,379
Other expenses	107,688			119,122			756,994			479,419
Total Operating Expenses	4,556,625			6,975,539			16,297,703			18,727,464
Management fee waiver⁽¹⁾	(402,074		)	(174,666		)	(892,421		)	(526,366		)
Incentive fee waiver⁽¹⁾	—			—			(5,000,000		)	—
Total operating expenses, net of waiver of management and incentive fees	4,154,551			6,800,873			10,405,282			18,201,098
Net Investment Loss	(3,908,199		)	(6,625,961		)	(9,317,522		)	(17,317,134		)
Realized Gains/(Losses) on Investments:
Non-controlled/non-affiliated investments	(10,119,771		)	1,033,577			(7,532,483		)	(21,748,173		)
Controlled investments	—			—			(680		)	(2,578,909		)
Net Realized Gains/(Losses) on Investments	(10,119,771		)	1,033,577			(7,533,163		)	(24,327,082		)
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	16,245,474			20,367,064			36,655,159			65,931,446
Non-controlled/affiliate investments	(2,350,413		)	(9,822,081		)	(10,979,378		)	(10,082,924		)
Controlled investments	247,314			5,091,700			6,472,584			5,820,954
Net Change in Unrealized Appreciation/(Depreciation) of Investments	14,142,375			15,636,683			32,148,365			61,669,476
Benefit from taxes on unrealized depreciation of investments	214,404			26,705			1,225,275			26,705
Net Increase in Net Assets Resulting from Operations	$	328,810		$	10,071,004		$	16,125,108		$	20,051,965
Net Increase in Net Assets Resulting from Operations per Common Share:
Basic	$	0.02		$	0.46		$	0.77		$	0.91
Diluted⁽²⁾	$	0.02		$	0.40		$	0.72		$	0.84
Weighted-Average Common Shares Outstanding
Basic	20,462,626			22,000,571			20,858,192			22,120,198
Diluted⁽²⁾	20,462,626			27,752,386			27,728,434			27,872,013

____________________________________

(1)

This balance references a related-party transaction.

(2)

For the three months ended September 30, 2018, 7,173,218 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. For the nine months ended September 30, 2018 and the three and nine months ended September 30, 2017, 0 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 SUBSIDIARIES
FINANCIAL HIGHLIGHTS (UNAUDITED)

	Three Months Ended September 30,						Nine Months Ended September 30,
Per Basic Share Data	2018			2017			2018			2017
Net asset value at beginning of period	$	10.46		$	9.11		$	9.64		$	8.66
Net investment loss⁽¹⁾	(0.19		)	(0.30		)	(0.45		)	(0.78		)
Net realized gain/(loss) on investments⁽¹⁾	(0.49		)	0.05			(0.36		)	(1.10		)
Realized loss on partial repurchase of 5.25% Convertible Senior Notes due 2018⁽¹⁾	—			—			(0.02		)	—
Net change in unrealized appreciation of investments⁽¹⁾	0.69			0.71			1.54			2.79
Benefit from taxes on unrealized depreciation of investments⁽¹⁾	0.01			—			0.06			—
Repurchase of common stock⁽¹⁾	0.10			0.12			0.17			0.12
Net asset value at end of period	$	10.58		$	9.69		$	10.58		$	9.69
Per share market value at end of period	$	6.91		$	5.41		$	6.91		$	5.41
Total return based on market value⁽²⁾	0.73		%	24.65		%	26.79		%	7.55		%
Total return based on net asset value⁽²⁾	1.15		%	6.37		%	9.75		%	11.89		%
Shares outstanding at end of period	20,174,955			21,606,894			20,174,955			21,606,894
Ratios/Supplemental Data:
Net assets at end of period	$	213,403,364		$	209,379,965		$	213,403,364		$	209,379,965
Average net assets	$	214,704,044		$	201,557,182		$	210,108,076		$	196,478,030
Ratio of gross operating expenses to average net assets⁽³⁾	8.51		%	13.73		%	10.18		%	12.74		%
Ratio of incentive fee waiver to average net assets⁽³⁾	—		%	—		%	(2.38		)%	—		%
Ratio of management fee waiver to average net assets⁽³⁾	(0.19		)%	(0.34		)%	(0.42		)%	(0.36		)%
Ratio of net operating expenses to average net assets⁽³⁾	8.32		%	13.34		%	7.38		%	12.36		%
Ratio of net investment loss to average net assets⁽³⁾	(7.30		)%	(13.04		)%	(5.95		)%	(11.78		)%
Portfolio Turnover Ratio	2.98		%	—		%	3.08		%	—		%

_______________________________

(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 and nine months ended September 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 nine months ended September 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.

Source: GSV Capital Corp

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GSV Capital Corp. Reports Third Quarter 2018 Financial Results

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