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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 8-K

 

Current Report Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):

 

November 5, 2015

 

GSV CAPITAL CORP.

(Exact name of registrant as specified in its charter)

 

Maryland 1-35156 27-4443543
(State or other jurisdiction of incorporation) (Commission File Number) (I.R.S. Employer Identification No.)

 

2925 Woodside Road

Woodside, CA 94062

(Address of principal executive offices and zip code)

 

Registrant’s telephone number, including area code: (650) 235-4769

 

 

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 
 

 

Item 2.02Results of Operations and Financial Condition.

 

On November 5, 2015, the registrant issued a press release announcing its financial results for the fiscal quarter ended September 30, 2015. The text of the press release is included as Exhibit 99.1 to this Form 8-K.

 

The information disclosed under this Item 2.02, including Exhibit 99.1 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.

 

Item 9.01Financial Statements and Exhibits.

 

(a)Not applicable.

 

(b)Not applicable.

 

(c)Not applicable.

 

(d)Exhibits.

 

Exhibit No.Description

 

99.1Press release dated November 5, 2015

 

 
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: November 5, 2015 GSV CAPITAL CORP.  
     
     
  By:  /s/ William F. Tanona  
    William F. Tanona
Chief Financial Officer, Treasurer and Corporate Secretary		  

 

 
 

 

EXHIBIT INDEX

 

Exhibit No.Description of Exhibits

 

99.1Press Release dated November 5, 2015

 

 
 

 

 

Exhibit 99.1

 

GSV Capital Corp.

Page 1 of 9

 

 

 

GSV Capital Corp. Reports Third Quarter 2015 Results of Operations and Declares a $2.76 Dividend

 

Net Asset Value of $16.17 Per Share as of September 30, 2015

 

WOODSIDE, Calif., November 5, 2015 (GLOBE NEWSWIRE) -- GSV Capital Corp. (“GSV Capital” or the “Company”) (Nasdaq:GSVC) today announced financial results for the third quarter ended September 30, 2015. Net assets totaled $312.5 million, or $16.17 per share, at September 30, 2015, as compared to $15.72 per share at June 30, 2015 and $15.17 per share at September 30, 2014. On November 4, 2015, GSV Capital’s Board of Directors declared a distribution in the amount of $2.76 per share payable on December 31, 2015 to the Company’s common stockholders of record as of the close of business on November 16, 2015.

 

“For the third consecutive quarter, we report the highest per share NAV achieved since inception,” said Michael Moe, Chief Executive Officer of GSV Capital. “We are also pleased to announce that our Board of Directors has declared a distribution in the amount of $2.76 per share, comprised of approximately 50% cash and 50% common stock. We appreciate our stockholders’ ongoing support of GSV Capital, and will continue to work hard to add value and serve our stockholders.”

 

Investment Portfolio as of September 30, 2015

 

At September 30, 2015, GSV Capital owned positions in 48 portfolio companies with an aggregate fair value of $349.8 million. Excluding Treasuries, the Company’s three largest investments comprised 29.0% of the total portfolio value, while its top ten portfolio companies accounted for 54.7% of the total portfolio value.

 

Top Ten Investments at September 30, 2015

 

$ in millions (rounded)  Fair Value   % of Total Portfolio 
Palantir Technologies, Inc.  $54.6    15.6%
Dropbox, Inc.   25.0    7.2 
Twitter, Inc.   21.6    6.2 
Coursera, Inc.   14.4    4.1 
Solexel, Inc.   14.0    4.0 
PayNearMe, Inc.   14.0    4.0 
Avenues Global Holdings, LLC   12.1    3.5 
Lyft, Inc.   12.0    3.4 
Dataminr, Inc.   11.9    3.4 
JAMF Holdings, Inc.   11.6    3.3 
Total (rounded)  $191.2    54.7%

 

 

 

Of the five key investment themes GSV Capital has identified in its portfolio, Cloud Computing and Big Data is its largest commitment, constituting 35.6% of the total portfolio. Education Technology represents 29.0% of the total portfolio, and Social Mobile, Marketplaces and Sustainability make up 16.5%, 12.3% and 6.6% of the total portfolio, respectively.

 

 

 

 

GSV Capital Corp.

Page 2 of 9

 

Third Quarter 2015 Portfolio Investment Activity

 

In the third quarter of 2015, GSV Capital invested approximately $6.6 million, including one new investment of approximately $1.0 million in Aspiration Partners, and three follow-on investments of $4.0 million in Enjoy Technology, $1.0 million in GSVlabs, and $0.6 million in GSV Sustainability Partners. Subsequent to quarter-end, GSV Capital invested an additional $1.2 million in GSV Sustainability Partners.

 

During the third quarter of 2015, GSV Capital sold shares in the following portfolio companies:

     

 

 

Average

        
   Shares  Share  Net   Realized 
Portfolio Company  Sold  Price  Proceeds   Gain/(Loss) 1 
                 
2U, Inc.  1,319,233  $35.77  $47,192,835   $37,160,718 
SugarCRM, Inc.  375,000  $5.00   1,874,000    549,710 
Global Education Learning (Holdings) Ltd.  N/A  N/A   3,354,594    - 
Totus Solutions, Inc.  N/A  N/A   50,000    (6,052,203)
DailyBreak, Inc.  2,225,795  0.00   3,000    (2,854,204)
The rSmart Group, Inc.  1,201,923  0.00   5,000    (1,264,160)
NewZoom, Inc.  1,250,000  0.00   0    (260,476)
Total        $52,479,429   $27,279,385 

 

1 Realized gains (losses) excludes any realized gains (losses) incurred on the maturity of GSV Capital’s treasury investments.

 

At quarter-end, and as of November 5, 2015, GSV Capital had $18.0 million of borrowing capacity available to it under its credit facility.

 

Third Quarter 2015 Financial Results

 

  

Three Months Ended

September 30, 2015

 

Three Months Ended

September 30, 2014

   $ in millions (rounded) 

 

per share

  $ in millions (rounded) 

 

per share

Net investment loss  ($32.8)  ($1.70)  ($4.9)  ($0.25)
             
Net realized gains  $27.3  $1.40  $17.2  $0.89
             
(Provision)/Benefit for taxes on net realized gains 2  $11.3  $0.59  ($7.0)  ($0.36)
             
Net change in unrealized appreciation/(depreciation) of investments  ($22.0)  ($1.14)  $1.3  $0.07
             
(Provision)/Benefit for taxes on unrealized appreciation (depreciation) of investments 2  $25.0  $1.30  ($0.5)  ($0.03)
             
Net increase in net assets resulting from operations - basic  $8.9  $0.45  $6.0  $0.31
             

 

_____________________________

 

2 Due to GSV Capital’s change in tax status to a RIC from a C Corporation, the associated accrued benefits and provisions from previous periods 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 three months ended September 30, 2015.

 

 

Weighted average common basic shares outstanding were approximately 19.3 million for each of the three months ended September 30, 2015 and September 30, 2014.

 

 

 

 

GSV Capital Corp.

Page 3 of 9

 

GSV Capital’s liquid assets ended the quarter at $105.2 million, consisting of $56.8 million of cash, $18.0 million of unused borrowings available under the Company’s credit facility and $30.3 million of public securities not subject to lock-up agreements, of which $0.2 million are subject to periodic sales restrictions.

 

Dividend Declaration for 2015

 

On November 4, 2015, GSV Capital’s Board of Directors declared a distribution in the amount of $2.76 per share payable on December 31, 2015 to the Company’s common stockholders of record as of the close of business on November 16, 2015. The dividend will be paid in cash or shares of the Company’s common stock at the election of the stockholders, although the total amount of cash to be distributed to all stockholders will be limited to approximately 50% of the total dividend to be paid to all stockholders; provided, however, that in no event will the Company distribute less than 20% of the total dividend in cash. The remainder of the dividend (approximately 50%) will be paid in the form of shares of the Company’s common stock.

 

In the event that the amount of cash to be distributed to all stockholders electing to receive the dividend in cash would exceed 50% of the total dividend, each stockholder electing to receive cash will receive a pro rata portion of the total cash to be distributed based on the number of shares held by each such stockholder. The remainder of the dividend in excess of a stockholder’s pro rata share of the total amount of cash to be distributed will be paid in the form of shares of the Company’s common stock. The number of shares of the Company’s common stock to be issued to stockholders receiving all or a portion of the dividend in shares of common stock will be based on the volume weighted average price per share of GSV Capital’s common stock on the Nasdaq Capital Market on December 28, 29 and 30, 2015.

 

The Company will mail an election form to receive cash or common stock only to registered stockholders promptly after the November 16, 2015 record date. Registered stockholders are those stockholders who own their stock directly and not through a bank, broker or nominee. The completed election form must be received by GSV Capital’s transfer agent, American Stock Transfer & Trust Company, LLC, prior to 5:00 p.m. ET on December 18, 2015. Registered stockholders with questions regarding the dividend may call American Stock Transfer at 800-937-5449. Registered stockholders who do not make an election will be deemed to have elected to receive 100% of their dividend in common stock.

 

Stockholders who hold their shares through a bank, broker or nominee will not receive an election form from the Company and should contact their bank, broker or nominee for instructions on how to make an election.

 

Regardless of whether a stockholder receives the dividend in cash, stock, or some combination of cash and stock, the entire amount of this dividend will be fully taxable to stockholders, and GSV Capital will report the actual tax characteristics of each year’s dividends annually to stockholders and the IRS on Form 1099-DIV.

 

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 800-894-5910, and the conference call number for participants outside of the United States is 1 785-424-1052. The conference ID number for both call numbers is 4263706. Additionally, interested parties can listen to a live webcast of the call from the “Investors” 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 through November 12, 2015 by dialing 888-203-1112 (U.S.) or 1 719-457-0820 (international) and using conference ID number 4263706.

 

 

 

GSV Capital Corp.

Page 4 of 9

 

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 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

 

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 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.

William Tanona

(650) 235-4769

IR@gsvam.com

 

 

 

 

GSV Capital Corp.

Page 5 of 9

 

GSV CAPITAL CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

 

 

   September 30, 2015   December 31, 2014 
ASSETS  (Unaudited)     
Investments at fair value:          
Investments in controlled securities (cost of $20,631,912 and $17,933,651 respectively) (1)  $22,986,021   $18,819,335 
Investments in affiliated securities (cost of $71,650,488 and $80,760,208 respectively) (1)   66,865,382    70,172,313 
Investments in non-controlled/non-affiliated securities (cost of $187,578,628 and $202,417,830 respectively)   259,938,971    281,992,669 
Investments in treasury bill (cost of $25,000,604 and $100,001,692 respectively)   25,000,604    100,000,056 
Investments owned and pledged (amortized cost of $3,669,246 and $7,286,332 respectively) (2)   3,680,616    7,298,042 
   Total Investments (cost of $308,530,878 and $408,399,713 respectively)   378,471,594    478,282,415 
           
Cash   56,844,097    3,472,880 
Restricted cash   52,931    48,889 
Due from:          
  GSV Asset Management(1)   205,472    204,825 
  Portfolio companies(1)   60,371    85,356 
Interest and dividends receivable   128,747    26,671 
Prepaid expenses and other assets   346,985    596,926 
Deferred financing costs   2,299,565    2,928,134 
Total Assets   438,409,762    485,646,096 
           
LIABILITIES          
Due to:          
  GSV Asset Management(1)   19,980    23,396 
Accounts payable and accrued expenses   67,863    292,950 
Accrued incentive fees (1)    24,977,501    14,137,899 
Accrued management fees (1)    687,672    641,276 
Accrued interest payable   150,938    1,139,458 
Payable for securities purchased   22,000,596    90,001,692 
Current taxes payable   31,801    134,733 
Deferred tax liability   9,408,847    6,907,666 
Line of credit payable   -    18,000,000 
Convertible Senior Notes embedded derivative liability   -    1,000 
Convertible Senior Notes payable 5.25% due September 15, 2018   68,562,077    68,462,353 
Total Liabilities   125,907,275    199,742,423 
Commitments and contingencies (Note 6)          
Net Assets  $312,502,487   $285,903,673 
           
NET ASSETS          
Common stock, par value $0.01 per share          
(100,000,000 authorized; 19,320,100 issued and outstanding)  $193,201   $193,201 
Paid-in capital in excess of par   275,837,514    275,837,514 
Accumulated net investment loss   (75,941,010)   (31,972,292)
Accumulated net realized gains on investments   54,984,417    496,782 
Accumulated net unrealized appreciation of investments   57,428,365    41,348,468 
Net Assets  $312,502,487   $285,903,673 
           
Net Asset Value Per Share  $16.17   $14.80 

 

 

(1)This balance is a related-party transaction.
(2)In accordance with the terms of the Company’s Convertible Senior Notes payable, the Company deposited $10,867,500 in an escrow account with the Trustee. These funds were used to purchase six U.S. Treasury Strips with an original cost of $10,845,236. As of September 30, 2015, four of the government securities purchased had matured and the proceeds were used by the trustee in accordance with the terms of the escrow agreement. At September 30, 2015, the remaining government securities are shown on the Condensed Consolidated Statements of Assets and Liabilities as “Investments owned and pledged” with an amortized cost of $3,669,246.

 

 

 

 

GSV Capital Corp.

Page 6 of 9

 

GSV CAPITAL CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

   Three Months Ended September 30,   Nine Months Ended September 30, 
   2015   2014   2015   2014 
INVESTMENT INCOME                    
Interest income from controlled securities (1)  $-   $4,083   $-   $9,816 
Interest income from affiliated securities(1)   31,992    9,294    152,388    112,747 
Interest income from non-controlled/non-affiliated securities   7,371    8,594    23,109    36,369 
Dividend income from non-controlled/non-affiliated securities   -    -    46,781    887 
Total Investment Income   39,363    21,971    222,278    159,819 
                     
OPERATING EXPENSES                    
Management fees (1)   2,063,017    1,949,705    5,994,530    5,639,564 
Incentive fees (1)   1,062,535    3,684,300    10,839,602    5,498,585 
Costs incurred under Administration Agreement(1)   598,456    718,896    2,185,888    2,557,129 
Directors’ fees   94,620    65,000    287,426    195,000 
Professional fees   265,429    442,683    1,001,401    1,301,777 
Interest and credit facility expense   1,183,833    1,442,063    3,781,419    4,155,759 
Income tax expense   852,970    -    852,970    - 
Other expenses   118,417    115,922    382,895    434,849 
Gain on fair value adjustment for embedded derivative   -    (147,000)   (1,000)   (787,000)
Total Operating Expenses   6,239,277    8,271,569    25,325,131    18,995,663 
                     
(Provision)/Benefit for taxes on net investment loss (2)   (26,583,935)   3,368,311    (18,865,865)   7,740,594 
                     
Net Investment Loss   (32,783,849)   (4,881,287)   (43,968,718)   (11,095,250)
                     
Net Realized Gains (Losses):                    
From affiliated securities   (10,170,567)   -    (10,161,030)   10,419 
From non-controlled/non-affiliated securities   37,460,383    17,160,816    64,305,863    17,832,576 
Net Realized Gains (Losses) on investments   27,289,816    17,160,816    54,144,833    17,842,995 
                     
(Provision)/Benefit for taxes on net realized                    
gains on investments (2)   11,307,706    (7,006,762)   342,802    (7,285,295)
                     
Net Change in Unrealized Appreciation                    
 (Depreciation) of investments:                    
From controlled securities   719,143    46,029    685,571    (367,942)
From affiliated securities   5,124,897    (3,783,766)   4,467,809    (7,650,194)
From non-controlled/non-affiliated securities   (27,825,708)   4,998,420    (5,095,366)   17,677,865 
Net Change in Unrealized Appreciation                    
 (Depreciation) of investments   (21,981,668)   1,260,683    58,014    9,659,729 
                     
(Provision)/Benefit for taxes on unrealized                    
appreciation/depreciation of investments (2)   25,020,686    (514,737)   16,021,883    (3,944,068)
                     
Net Increase in Net Assets                    
Resulting from Operations  $8,852,691   $6,018,713   $26,598,814   $5,178,111 
                     
Net Increase in Net Assets Resulting                    
from Operations per Common Share                    
Basic  $0.45   $0.31   $1.37   $0.27 
Diluted(3)  $0.42   $0.30   $1.27   $0.27 
                     
Weighted Average Common Shares Outstanding                    
Basic   19,320,100    19,320,100    19,320,100    19,320,100 
Diluted(3)   23,564,228    23,564,228    23,564,228    19,320,100 

 

 

 

 

GSV Capital Corp.

Page 7 of 9

 

(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 periods were reversed, resulting in a provision for net investment loss, a benefit for net realized gains, and a benefit for unrealized depreciation and appreciation of investments for the three and nine months ended September 30, 2015.
(3)For the nine months ended September 30, 2014, 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.

Page 8 of 9

 

GSV CAPITAL CORP. AND SUBSIDIARIES

FINANCIAL HIGHLIGHTS

 

    Three months ended       Three months ended  
    September 30, 2015       September 30, 2014  
     (Unaudited)        (Unaudited)  
Per Share Data:              
Net asset value at beginning of period $  15.72     $ 14.86  
Net investment loss    (1.70) (1)      (0.25) (1)
Net realized gains    1.40 (1)      0.89 (1)
(Provision)/Benefit for taxes on net realized capital gains    0.59 (1)      (0.36) (1)
Net change in unrealized appreciation/(depreciation) of investments    (1.14) (1)      0.06 (1)
(Provision)/Benefit for taxes on unrealized appreciation/(deprecation) of investments   1.30 (1)      (0.03) (1)
Net asset value at end of period $ 16.17     $ 15.17  
               
Per share market value at end of period $  7.85     $ 10.01  
Total return based on net asset value   2.86 % (2)     2.09 %(2)
Total return based on market value   (23.86) % (2)     (5.30) % (2)
Shares outstanding at end of period   19,320,100       19,320,100  
               
Ratios / Supplemental Data:              
Net assets at end of period $  312,502,487     $ 293,144,555  
Average net assets $  303,720,148     $ 293,430,624  
               
Annualized ratios              
Ratio of total operating expenses to average net assets (3)   8.24 %     11.18 %
Ratio of net income tax provisions to average net assets(3)   12.87 %     1.42 %
Ratio of net operating expenses to average net assets (3)   21.11 %     12.60 %
               
Ratio of net investment loss to average net assets (3)   (43.30) %     (6.60) %
Portfolio turnover ratio   1.78 %     2.81 %
               
    Nine months ended       Nine months ended  
    September 30, 2015       September 30, 2014  
    (Unaudited)       (Unaudited)  
Per Share Data              
Net asset value at beginning of period $  14.80 (1)   $ 14.91 (1)
Net investment loss    (2.28) (1)     (0.57) (1)
Net realized gains    2.80 (1)     0.92 (1)
(Provision)/Benefit for taxes on net realized capital gains    0.02 (1)     (0.38) (1)
Net change in unrealized appreciation   0.00 (1)     0.49 (1)
(Provision)/Benefit for taxes on unrealized appreciation of investments    0.83 (1)     (0.20) (1)
Net asset value at end of period $  16.17     $ 15.17  
               
Per share market value at end of period $  7.85     $ 10.01  
Total return based on net asset value   9.26 %(2)     1.74 %(2)
Total return based on market value   (9.04) %(2)     (17.20) %(2)
Shares outstanding at end of period   19,320,100       19,320,100  
               
Ratios / Supplemental Data:              
Net assets at end of period    312,502,487       293,144,555  
Average net assets    299,491,050       285,484,323  
               
Annualized ratios              
Ratio of total operating expenses to average net assets (3)   11.31 %     8.90 %
Ratio of net income tax provisions to average net assets(3)   (1.12) %     1.22 %
Ratio of net operating expenses to average net assets (3)   10.19 %     10.12 %
               
Ratio of net investment loss to average net assets (3)   (19.63) %     (5.20) %
Portfolio turnover ratio   4.53 %     12.59 %

 

 

 

 

GSV Capital Corp.

Page 9 of 9

 

(1)Based on weighted average number of shares outstanding for the year/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 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.

(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 are not annualized. For the three and nine months ended September 30, 2015 and 2014, 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.