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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 7, 2016

 

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 7, 2016, the registrant issued a press release announcing its financial results for the fiscal quarter ended September 30, 2016. 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 7, 2016

 

 
 

 

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 7, 2016 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

 

99.1 Press Release dated November 7, 2016

  

 

 

Exhibit 99.1

 

Page 1 of 8

 


 

 

GSV Capital Corp. Reports Third Quarter 2016 Financial Results and

Paid a $0.04 Dividend per Share

 

Net Asset Value of $10.08 per Share as of September 30, 2016

 

WOODSIDE, Calif., November 7, 2016 (GLOBE NEWSWIRE) -- GSV Capital Corp. (“GSV Capital” or the “Company”) (Nasdaq:GSVC) today announced financial results for the quarter ended September 30, 2016. Net assets totaled approximately $223.6 million, or $10.08 per share, at September 30, 2016, as compared to $10.22 per share at June 30, 2016.

 

“We launched GSV Capital to provide public investors with unique access to the most dynamic, fastest-growing private companies in the world," said Michael Moe, Chief Executive Officer of GSV Capital. “We are pleased to report continued strong fundamentals in the portfolio, especially for top names, including Dropbox, Palantir, Snap, Coursera, Lyft, and Spotify.”

 

Dividend Information

 

On August 3, 2016, GSV Capital’s Board of Directors declared a per share cash dividend of $0.04, which was paid on August 24, 2016 to the Company’s stockholders of record as of the close of business on August 16, 2016.

 

Investment Portfolio as of September 30, 2016

 

At September 30, 2016, GSV Capital held positions in 46 portfolio companies with an aggregate fair value of approximately $298.3 million. Excluding Treasuries, the Company’s top ten portfolio company investments accounted for 55.3% of the total portfolio at fair value.

 

Top Ten Investments at September 30, 2016

 

$ in millions (rounded)  Fair Value   % of Total Portfolio 
Palantir Technologies, Inc.  $43.0    14.4%
Dropbox, Inc.   17.1    5.7 
Spotify Technology S.A.   16.2    5.4 
Coursera, Inc.   14.4    4.8 
PayNearMe, Inc.   14.0    4.7 
JAMF Holdings, Inc.   12.4    4.2 
General Assembly Space, Inc.   12.4    4.1 
Ozy Media, Inc.   12.1    4.0 
Declara, Inc.   12.0    4.0 
Curious.com, Inc.   11.3    3.8 
Total (rounded)  $164.9    55.3%

 

Of the five key investment themes GSV Capital has identified in its portfolio as of September 30, 2016, Cloud Computing and Big Data is its largest commitment, accounting for 33.7% of the total portfolio at fair value. Education Technology represents 32.5% of the total portfolio at fair value, and Social Mobile, Marketplaces and Sustainability represent 14.9%, 14.4% and 4.5% of the total portfolio at fair value, respectively.

 

 

Page 2 of 8

 

Third Quarter 2016 Portfolio Investment Activity

 

In the third quarter of 2016, GSV Capital invested approximately $2.5 million, including a follow-on investment of approximately $2.0 million in Ozy Media, Inc. and approximately $0.5 million follow-on investment in Lytro, Inc.

 

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

 

       Average             
   Shares   Net Share   Net   Realized     
Portfolio Company  Sold   Price 1   Proceeds   Gains 2   IRR 
                     
Lyft, Inc.   170,000   $24.00   $4,080,000   $2,351,752    42.9%
Twitter, Inc.   800,600   $18.21    14,578,469    306,603    0.4%
Total            $18,658,469   $2,658,355      

 

__________

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

 

Subsequent to third quarter-end, through November 7, 2016, GSV Capital sold shares in the following portfolio company:

 

       Average         
   Shares   Net Share   Net   Realized 
Portfolio Company  Sold   Price 1   Proceeds   Loss 2 
                 
Upwork Global Inc.   25,159   $4.31   $108,530   $(77,819)

 

__________

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

 

At quarter-end and as of November 7, 2016, GSV Capital had no borrowings outstanding and $18.0 million of borrowing capacity available to it under its credit facility.

 

 

Page 3 of 8

 

Third Quarter 2016 Financial Results

 

  

Quarter Ended

September 30, 2016

  

Quarter Ended

September 30, 2015

 
  

 

$ in millions (rounded)

  

 

 

per share

  

 

$ in millions (rounded)

  

 

 

per share

 
 Net investment loss  $(4.2)  $(0.19)  $(32.8)  $(1.70)
                     
Net realized gains  $2.7   $0.12   $27.3   $1.40 
                     
Benefit for taxes on net realized gains   -    -   $11.3   $0.59 
                     
Net change in unrealized depreciation of investments  $(1.3)  $(0.06)  $(22.0)  $(1.14)
                     
Benefit for taxes on unrealized depreciation of investments  $0.6   $0.02   $25.0   $1.30 
                     
Distributions from realized gain  $(0.9)  $(0.04)   -    - 
                     
Net increase/(decrease) in net assets resulting from operations - basic  $(2.3)  $(0.10)  $8.9   $0.45 

 

Weighted-average common basic shares outstanding were approximately 22.2 million for the quarter ended September 30, 2016 and 19.3 million for the quarter ended September 30, 2015.

 

GSV Capital’s liquid assets ended the quarter at $37.8 million, consisting of $11.4 million of cash, $18.0 million of unused borrowings available under the Company’s credit facility and $8.4 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 877-419-6593, and the conference call number for participants outside of the United States is 1-719-325-4824. The conference ID number for both call numbers is 2157689. 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, 2016 by dialing 888-203-1112 (U.S.) or 1-719-457-0820 (international) and using conference ID number 2157689.

 

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

 

 

Page 4 of 8

 

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

 

 

 

 

Page 5 of 8

 

GSV CAPITAL CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (Unaudited)

 

   September 30, 2016   December 31, 2015 
ASSETS        
Investments at fair value:          
Investments in controlled securities (cost of $22,832,672 and $21,830,392, respectively) (1)  $22,050,846   $22,871,790 
Investments in affiliated securities (cost of $73,984,911 and $73,942,123, respectively) (1)   64,121,729    66,075,585 
Investments in non-controlled/non-affiliated securities (cost of $181,608,512 and $197,577,328, respectively)   212,097,381    260,861,392 
Investments in treasury bill (cost of $29,999,935 and $29,999,968, respectively)   29,999,935    30,000,000 
Investments owned and pledged (amortized cost of $0 and $3,675,192, respectively) (2)   -    3,676,693 
Total Investments (cost of $308,426,030 and $327,025,003, respectively)   328,269,891    383,485,460 
           
Cash   11,445,113    13,349,877 
Restricted cash   115,431    52,931 
Due from:          
GSV Asset Management (1)   77,021    220,770 
Portfolio companies (1)   679    56,371 
Interest and dividends receivable   222,361    97,183 
Prepaid expenses and other assets   315,238    227,826 
Deferred financing costs (3)   356,268    352,653 
Total Assets   340,802,002    397,843,071 
           
LIABILITIES          
Due to:          
GSV Asset Management (1)   895,932    5,047,429 
Accounts payable and accrued expenses   364,239    105,587 
Accrued incentive fees (1)   9,509,476    17,314,565 
Accrued management fees (1)   541,988    683,423 
Accrued interest payable   150,938    1,056,563 
Payable for securities purchased   26,499,909    26,499,357 
Deferred tax liability   11,924,845    12,476,155 
Convertible Senior Notes payable 5.25% due September 15, 2018 (2)(3)   67,294,938    66,649,047 
Total Liabilities   117,182,265    129,832,126 
           
Commitments and contingencies          
           
Net Assets  $223,619,737   $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   237,757,527    237,757,527 
Accumulated net investment loss   (21,760,725)   (16,634,037)
Accumulated net realized gains/(losses) on investments   (517,892)   2,681,342 
Accumulated net unrealized appreciation of investments   7,919,017    43,984,303 
Net Assets  $223,619,737   $268,010,945 
           
Net Asset Value Per Share  $10.08   $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 September 30, 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.
(3)Deferred debt issuance costs of $1,947,572 related to the Company’s issuance of the Convertible Senior Notes payable were previously classified as “Deferred financing costs” as of December 31, 2015. In accordance with FASB ASU 2015-03, this balance has been retrospectively reclassified as a direct deduction from the Convertible Senior Notes on the Condensed Consolidated Statements of Assets and Liabilities at September 30, 2016.

 

 

 

Page 6 of 8

 

GSV CAPITAL CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

 

   Three months ended September 30,   Nine months ended September 30, 
   2016   2015   2016   2015 
INVESTMENT INCOME                
Interest income from controlled securities (1)  $23,000   $-   $43,417   $- 
Interest income/(reversal of interest accrual) from affiliated securities (1)    61,145    31,992    79,858    152,388 
Interest income from non-controlled/non-affiliated securities   2,503    7,371    11,906    23,109 
Dividend income from non-controlled/non-affiliated securities   -    -    -    46,781 
Total Investment Income   86,648    39,363    135,181    222,278 
                     
OPERATING EXPENSES                    
Management fees (1)   1,625,963    2,063,017    5,324,186    5,994,530 
Incentive fees / (Reversal of incentive fee accrual) (1)   220,719    1,062,535    (7,805,089)   10,839,602 
Costs incurred under administration agreement (1)   627,444    598,456    1,926,085    2,185,888 
Directors’ fees   86,250    94,620    258,750    287,426 
Professional fees   416,353    265,429    1,441,856    1,001,401 
Interest expense   1,189,736    1,183,833    3,557,225    3,781,419 
Income tax expense   -    852,970    -    852,970 
Other expenses   141,838    118,417    558,856    382,895 
Gain on fair value adjustment for embedded derivative   -    -    -    (1,000)
Total Operating Expenses   4,308,303    6,239,277    5,261,869    25,325,131 
                     
Provision for taxes on net investment loss (3)   -    (26,583,935)   -    (18,865,865)
                     
Net Investment Loss   (4,221,655)   (32,783,849)   (5,126,688)   (43,968,718)
                     
Net Realized Gains/(Losses):                    
From affiliated securities   -    (10,170,567)   -    (10,161,030)
From non-controlled/non-affiliated securities   2,658,715    37,460,383    (2,311,994)   64,305,863 
Net Realized Gains/(Losses) on investments   2,658,715    27,289,816    (2,311,994)   54,144,833 
                     
Benefit from taxes on realized                    
gains on investments (3)   -    11,307,706    -    342,802 
                     
Net Change in Unrealized Appreciation/                    
 (Depreciation) of Investments:                    
From controlled securities   (1,616,568)   719,143    (1,823,224)   685,571 
From affiliated securities   (584,077)   5,124,897    (6,951,895)   4,467,809 
From non-controlled/non-affiliated securities   938,936    (27,825,708)   (27,841,477)   (5,095,366)
Total Change in Unrealized Appreciation/                    
 (Depreciation) of investments   (1,261,709)   (21,981,668)   (36,616,596)   58,014 
                     
Benefit from taxes on unrealized                    
appreciation/depreciation of investments (3)   551,310    25,020,686    551,310    16,021,883 
                     
Net Increase/(Decrease) in Net Assets                    
Resulting from Operations  $(2,273,339)  $8,852,691   $(43,503,968)  $26,598,814 
                     
Net Increase/(Decrease) in Net Assets Resulting                    
from Operations per Common Share                    
Basic  $(0.10)  $0.45   $(1.96)  $1.37 
Diluted (2)  $(0.10)  $0.42   $(1.96)  $1.27 
                     
Weighted-Average Common Shares Outstanding                    
Basic   22,181,003    19,320,100    22,181,003    19,320,100 
Diluted (2)   22,181,003    23,564,228    22,181,003    23,564,228 

 

(1)This balance is a related-party transaction.
(2)For the three and nine months ended September 30, 2016, 5,751,815 potentially dilutive common shares were excluded from the weighted-average common shares outstanding for diluted net decrease in net assets resulting from operations per common share because the effect of these shares would have been anti-dilutive.
(3)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 from net realized gains, and a benefit from unrealized appreciation of investments for the three and nine months ended September 30, 2015.

 

 

Page 7 of 8

 

GSV CAPITAL CORP. AND SUBSIDIARIES

FINANCIAL HIGHLIGHTS (Unaudited)

 

   Three months ended     Three months ended   
Per Share Data:  September 30, 2016     September 30, 2015   
             
Net asset value at beginning of period  $10.22     $15.72   
Net investment loss   (0.19 )(1)   (1.70 )(1)
Realized gain    0.12  (1)   1.40  (1)
Benefit from taxes on net realized capital gains   -  (1)   0.59  (1)
Net change in unrealized depreciation    (0.06 )(1)   (1.14 )(1)
Benefit from taxes on unrealized depreciation of investments   0.02  (1)   1.30  (1)
Dividends from realized gain   (0.04 )   -   
Net asset value at end of period  $10.08     $16.17   
               
Per share market value at end of period  $4.72     $7.85   
Total return based on market value   (5.23 )%(2)   (23.86 )%(2)
Total return based on net asset value   (0.59 )%(2)   2.86  %(2)
Shares outstanding at end of period   22,181,003      19,320,100   
    .          
Ratio/Supplemental Data:              
Net assets at end of period  $223,619,737     $312,502,487   
Average net assets  $226,900,410     $303,720,148   
               
Annualized ratios              
Ratio of gross operating expenses to average net assets (3)   7.53  %   8.24  %
Ratio of net income tax provisions to average net assets (3)   (0.96 )%   12.87  %
Ratio of net operating expenses to average net assets (3)   6.57  %   21.11  %
               
Ratio of net investment loss to              
average net assets (3)   (7.38 )%   (43.30 )%
               
Portfolio Turnover Ratio   0.82  %   1.78  %

 

 

 

 

Page 8 of 8

 

GSV CAPITAL CORP. AND SUBSIDIARIES

FINANCIAL HIGHLIGHTS (Unaudited)

 

   Nine months ended     Nine months ended   
   September 30, 2016     September 30, 2015   
Per Share Data:              
Net asset value at beginning of period  $12.08  (1)  $14.80  (1)
Net investment loss   (0.23 )(1)   (2.28 )(1)
Realized gain/(loss)   (0.10 )(1)   2.80  (1)
Benefit from taxes on net realized capital gains   -  (1)   0.02  (1)
Net change in unrealized appreciation/(depreciation)   (1.65 )(1)   0.00  (1)
Benefit from taxes on unrealized appreciation/depreciation of investments   0.02      0.83   
Dividends from realized gain   (0.04 )   -   
Net asset value at end of period  $10.08     $16.17   
               
Per share market value at end of period  $4.72     $7.85   
Total return based on market value   (28.03 )%(2)   (9.04 )%(2)
Total return based on net asset value   (15.90 )%(2)   9.26  %(2)
Shares outstanding at end of period   22,181,003      19,320,100   
               
Ratio / Supplemental Data:              
Net assets at end of period  $223,619,737     $312,502,487   
Average net assets  $250,723,620     $299,491,050   
               
Annualized ratios              
Ratio of gross operating expenses to average net assets (3)   2.80  %   11.31  %
Ratio of net income tax provisions to average net assets (3)   (0.29 )%   (1.12 )%
Ratio of net operating expenses to average net assets (3)   2.51  %   10.19  %
               
Ratio of net investment loss to average net assets (3)   (2.72 )%   (19.63 )%
               
Portfolio Turnover Ratio   4.05  %   4.53  %

 

(1) Based on weighted-average number of shares outstanding for the 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 each of the three and nine months ended September 30, 2016 and 2015, 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.