BDCA Venture, Inc. (“BDCA Venture” or the “Company”) (Nasdaq:
BDCV), a closed-end fund that has elected to be regulated as a
business development company under the Investment Company Act of
1940, as amended (the “1940 Act”), announced today operating and
financial results for the three and nine month periods ended
September 30, 2015.
Q3 2015 Highlights and Recent Developments:
Termination of Investment Advisory Agreement – On October 5,
2015, the Company’s Board of Directors (the “Board”) approved the
termination of the Investment Advisory and Administrative Services
Agreement dated July 1, 2014 (the “Investment Advisory Agreement”)
between the Company and its investment adviser, BDCA Venture
Adviser, LLC (the “Adviser”). The effective date of termination of
the Investment Advisory Agreement will be December 6, 2015, unless
shortened or extended by mutual written agreement of the Company
and the Adviser (the “Termination Date”). Following the Termination
Date, the Adviser will no longer be obligated to perform investment
advisory and administrative services or provide personnel to serve
as officers of the Company.
Investment Objective and Strategy – On October 5, 2015, the
Board determined that the Company will no longer make investments
in new venture capital-backed or high growth companies and will now
shift its focus to the orderly monetization of the Company’s
current holdings. The Company may consider making opportunistic
follow-on investments in its existing portfolio companies. The
Board may also consider using the Company’s available cash
resources to make suitable liquid investments, which generate
current income that would enable the Company to offset some of its
ongoing operating expenses. The Board is continuing to assess the
Company's investment objective and strategy, use of available cash
resources and its business operations going forward.
Distribution Policy – The Company has paid regular first, second
and third quarter cash distributions in the amount of $0.15 per
share, or a total of approximately $4.4 million. The Board has
confirmed that the previously declared fourth quarter of 2015
distribution of $0.15 per share will be paid on December 18, 2015
to stockholders of record on December 4, 2015. Since the Company
currently expects to incur a net investment loss and net realized
loss for 2015, these distributions are likely to represent a return
of capital and stockholders should not draw any conclusions about
the Company’s investment performance from the amount of these
scheduled distributions. The Board is currently assessing the
Company's distribution policy. However, the Board does not
currently intend to pay regular quarterly distributions for
2016.
Stock Repurchase Program – On September 22, 2014, the Board
authorized a stock repurchase program of up to $5 million. This
stock repurchase program expired on September 22, 2015, without
being extended by the Board. During the nine months ended September
30, 2015, the Company repurchased 117,510 shares of its common
stock at an average price of $4.96 per share. On November 10, 2015,
the Board authorized a stock repurchase program of up to $1
million. Under the repurchase program, the Company may repurchase
shares of its common stock in open market transactions, including
through block purchases, depending on prevailing market conditions
and other factors.
Engagement of Third Party Administrator – On November 10, 2015,
the Board approved the Company’s engagement of US Bancorp Fund
Services, LLC to provide administration and accounting services to
the Company pursuant to an Administration Servicing Agreement and a
Fund Accounting Servicing Agreement, respectively. The Board is
also negotiating with another third party to provide administrative
consulting services to the Company, including the provision of
personnel to act as certain executive officers of the Company,
including the Chief Executive Officer and Chief Financial Officer,
following the Termination Date.
Balance Sheet: Net assets at September 30, 2015 were
$54.5 million (or $5.63 per share), consisting of 12 portfolio
company investments with a fair value of $39.0 million and cash and
cash equivalents of $16.2 million. There were 9,676,484 shares of
common stock issued and outstanding as of September 30, 2015.
Results of Operations and Change in Net Asset Value
(“NAV”): At September 30, 2015, NAV was $5.63 per share, a
decline of $0.66 per share from June 30, 2015 and $1.19 per share
from December 31, 2014. The change in NAV for the three and nine
months ended September 30, 2015 is summarized in the following
table.
Three Months Ended
Nine Months Ended September 30, 2015 September 30,
2015 Amount
Per Share(1)
Amount
Per Share(1)
Net Asset Value, Beginning of Period (2) $ 61,133,575 $ 6.29
$ 66,833,537 $ 6.82 Components of the Change in Net Asset
Value: Net Investment Income (Loss) 335,992 0.03 (1,356,175 ) (0.14
) Net Realized Loss - - (1,162,132 ) (0.12 ) Net Decrease in
Unrealized Appreciation (5,336,179 ) (0.54 ) (4,896,912 ) (0.50 )
Stockholder Distributions (1,452,508 ) (0.15 ) (4,385,400 ) (0.45 )
Repurchases of Common Stock (3) (230,430 ) -
(582,468 ) 0.02 Change in Net Asset Value
(6,683,125 ) (0.66 ) (12,383,087 )
(1.19 ) Net Asset Value, End of Period (2) $ 54,450,450
$ 5.63 $ 54,450,450 $ 5.63
(1)
Unless otherwise indicated, per share data is based on
weighted average common shares outstanding during the period.
(2)
Per share data is based on total common shares outstanding at the
beginning and end of the corresponding period.
(3)
Represents the increase in net asset value attributable to
repurchases of common stock during the period. The increase in net
asset value per share attributable to repurchases of common stock
for the three months ended September 30, 2015 was $0.01 per share.
However, for purposes of this presentation, the per share amount
attributable to repurchases of common stock was decreased by $0.01
per share to a total of $0.00 per share to reconcile the change in
net asset value per share to the other per share information
presented.
Portfolio Analysis: As of September 30, 2015, the Company
held equity investments in 12 portfolio companies, one of which is
publicly traded (Tremor Video) and 11 of which are private
companies, with a fair value of $39.0 million.
Based on the quarterly calls with the management of the
Company’s private portfolio companies, the Company does not believe
that any of its 11 private portfolio companies will complete an IPO
or a strategic merger or sale during the next 12 months, other than
Suniva. The Company further believes there may be limited
opportunities to sell its interests in existing private portfolio
companies to third parties in privately negotiated transactions.
Accordingly, it is possible that an orderly monetization of the
Company’s current holdings may take three to five years or
more.
The table below sets forth: (i) the unrealized appreciation
(depreciation) of each of the Company’s portfolio companies held as
of September 30, 2015, and (ii) the net change in unrealized
appreciation (depreciation) during the three and nine months ended
September 30, 2015 of each of the Company’s portfolio
companies.
Quarter to Year to September 30,
2015 Date Date Change In Change In
Unrealized Unrealized Unrealized
Appreciation Appreciation Appreciation
Portfolio Company Cost Fair Value
(Depreciation) (Depreciation) (Depreciation)
SilkRoad, Inc. $ 6,337,785 $ 8,750,000 $ 2,412,215 $
(610,000 ) $ (110,000 ) Metabolon, Inc. 4,000,000 7,180,000
3,180,000 (410,000 ) (610,000 ) Mode Media Corporation 4,999,999
6,710,000 1,710,001 (790,000 ) (140,000 ) Zoosk, Inc. 2,999,999
3,630,000 630,001 (340,000 ) (160,000 ) Deem, Inc. 3,000,000
3,400,000 400,000 (370,000 ) (890,000 ) Centrify Corporation
2,999,999 3,320,000 320,001 (220,000 ) 10,000 Harvest Power, Inc.
2,904,526 3,120,000 215,474 100,000 500,000 BrightSource Energy,
Inc. 3,274,177 1,598,488 (1,675,689 ) 22,990 179,943 Tremor Video,
Inc. 1,999,997 557,998 (1,441,999 ) (314,999 ) 836,005 MBA
Polymers, Inc. 2,000,000 360,000 (1,640,000 ) (1,060,000 )
(1,740,000 ) Suniva, Inc. 2,554,287 330,000 (2,224,287 ) (1,350,000
) (1,410,000 ) Agilyx Corporation 4,332,356 -
(4,332,356 ) - (1,380,000 )
Total
portfolio company investments $ 41,403,125 $ 38,956,486 $
(2,446,639 ) $ (5,342,009 ) $ (4,914,052 ) Funds held in
escrow from sale of investment 704,101 621,498
(82,603 ) 5,830 17,140
Total
portfolio company financial assets $ 42,107,226 $ 39,577,984 $
(2,529,242 ) $ (5,336,179 ) $ (4,896,912 )
For additional information concerning the Company and its
operating and financial results for the three and nine month
periods ended September 30, 2015, please refer to the Company’s
Quarterly Report on Form 10-Q, which was filed with the SEC on
November 12, 2015.
About BDCA Venture, Inc.
BDCA Venture, Inc. (www.BDCV.com) is a closed-end fund regulated
as a business development company under the Investment Company Act
of 1940. BDCA Venture’s shares are listed on Nasdaq under the
ticker symbol “BDCV.”
Forward-Looking Statements
This press release may contain statements of a forward-looking
nature relating to future events. These forward-looking statements
are subject to the inherent uncertainties in predicting future
results and conditions. These statements reflect BDCA Venture’s
current beliefs, and a number of important factors could cause
actual results to differ materially from those expressed in this
press release, including the factors set forth in “Risk Factors”
set forth in BDCA Venture’s Form 10-K and Form 10-Q filed with the
Securities and Exchange Commission (“SEC”), and subsequent filings
with the SEC. Please refer to BDCA Venture’s SEC filings for a more
detailed discussion of the risks and uncertainties associated with
its business, including but not limited to the risks and
uncertainties associated with investing in micro- and small-cap
companies. Except as required by the federal securities laws, BDCA
Venture undertakes no obligation to revise or update any
forward-looking statements, whether as a result of new information,
future events or otherwise. The reference to BDCA Venture’s website
has been provided as a convenience, and the information contained
on such website is not incorporated by reference into this press
release.
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version on businesswire.com: http://www.businesswire.com/news/home/20151112005809/en/
BDCA Venture, Inc.Investor Relations
Contact:Frederic (Rick) M. Schweiger, 720-489-4912Chief
Executive Officer and Presidentrschweiger@bdcv.com
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