Company Quick10K Filing
Quick10K
Firsthand Technology Value Fund
10-Q 2019-09-30 Quarter: 2019-09-30
10-Q 2019-06-30 Quarter: 2019-06-30
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
8-K 2019-11-13 Other Events, Exhibits
8-K 2019-11-08 Other Events, Exhibits
8-K 2019-10-29 Other Events, Exhibits
8-K 2019-10-25 Amend Bylaw, Exhibits
8-K 2019-09-19 Other Events, Exhibits
8-K 2019-08-20 Other Events, Exhibits
8-K 2019-08-09 Other Events, Exhibits
8-K 2019-07-25 Other Events, Exhibits
8-K 2019-06-17 Other Events, Exhibits
8-K 2019-05-30 Shareholder Vote
8-K 2019-05-17 Other Events, Exhibits
8-K 2019-05-10 Other Events, Exhibits
8-K 2019-04-30 Other Events, Exhibits
8-K 2019-03-22 Other Events, Exhibits
8-K 2019-03-18 Other Events, Exhibits
8-K 2019-01-28 Other Events, Exhibits
8-K 2019-01-02 Other Events, Exhibits
8-K 2018-12-04 Other Events, Exhibits
8-K 2018-11-20 Other Events, Exhibits
8-K 2018-11-14 Other Events, Exhibits
8-K 2018-11-13 Other Events, Exhibits
8-K 2018-11-09
8-K 2018-10-19 Other Events, Exhibits
8-K 2018-09-12 Other Events, Exhibits
8-K 2018-08-31 Other Events, Exhibits
8-K 2018-08-31 Other Events, Exhibits
8-K 2018-08-29 Other Events, Exhibits
8-K 2018-08-16 Other Events, Exhibits
8-K 2018-05-23 Shareholder Vote
8-K 2018-05-17 Other Events, Exhibits
8-K 2018-05-10 Other Events, Exhibits
8-K 2018-04-27 Other Events, Exhibits
8-K 2018-03-16 Other Events, Exhibits
8-K 2018-03-12 Other Events, Exhibits
8-K 2018-03-12 Other Events, Exhibits
8-K 2018-03-01 Other Events, Exhibits
8-K 2018-02-14 Other Events, Exhibits
8-K 2018-02-14 Other Events, Exhibits
8-K 2018-01-28
8-K 2018-01-23 Other Events, Exhibits
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FLAG Flag Financial 0
NMS Neiman Marcus 0
CMFN CM Finance 0
CSA TH Merger Company 0
CBH Commerce Bancorp 0
TCPC Blackrock Tcp Capital 0
DRIV Digital River 0
SVVC 2019-09-30
Part I. Financial Information
Item 1. Financial Statements
Note 1. The Company
Note 2. Summary of Significant Accounting Policies
Note 3. Business Risks and Uncertainties
Note 4. Investment Management Fee
Note 5. Debt
Note 6. Fair Value
Note 7. Federal Income Taxes
Note 8. Investment Transactions
Note 9. Share Buybacks
Note 10. Investments in Affiliates and Controlled Investments
Note 11. Recent Accounting Pronouncements
Note 12. Subsequent Events
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Item 4. Controls and Procedures.
Part II. Other Information
Item 1. Legal Proceedings.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Item 3. Defaults Upon Senior Securities.
Item 4. Mine Safety Disclosures.
Item 5. Other Information.
Item 6. Exhibits.
EX-31.1 fp0047487_ex311.htm
EX-31.2 fp0047487_ex312.htm
EX-32 fp0047487_ex32.htm

Firsthand Technology Value Fund Earnings 2019-09-30

SVVC 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 fp0047487_10q.htm fp0047100_INXS

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period of September 30, 2019 or

 

TRANSITION QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission File Number 333-168195

 

FIRSTHAND TECHNOLOGY VALUE FUND, INC.

(Exact Name of Registrant as Specified in Charter)

 

MARYLAND
(State or Other Jurisdiction of
Incorporation or Organization)

27-3008946
(I.R.S. Employer
Identification No)

   

150 Almaden Boulevard, Suite 1250
San Jose, California
(Address of Principal Executive Offices)

95113
(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (408) 886-7096

 

Securities registered pursuant to Scction 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, par value $0.001 per share

SVVC

The NASDAQ Global Select Market

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     ☑Yes         ☐ No

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceeding 12 months (or for such shorter period that the registrant was required to sunmit such files).     ☑Yes         ☐ No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

☐ Large Accelerated Filer ☑   Accelerated Filer  
     
☐ Non-accelerated Filer ☐ Smaller Reporting Company ☐ Emerging growth company
(Do not check if smaller reporting company)    

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
☐Yes         ☑ No

 

 

 

 

 

TABLE OF CONTENTS

 

PART I. FINANCIAL INFORMATION

2

Item 1. Financial Statements

2

Consolidated Statements of Assets and Liabilities as of September 30, 2019 (Unaudited) and December 31, 2018

3

Consolidated Statements of Operations (Unaudited) for the Three Months Ended September 30, 2019, and September 30, 2018, and for the Nine Months Ended September 30, 2019, and September 30, 2018

4

Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended September 30, 2019, and September 30, 2018, and for the Nine Months Ended September 30, 2019, and September 30, 2018

5

Consolidated Statements of Changes in Net Assets (Unaudited) for the Three Months Ended September 30, 2019, and September 30, 2018, and for the Nine Months Ended September 30, 2019, and September 30, 2018

6

Selected Per Share Data and Ratios for the Nine Months Ended September 30, 2019 (Unaudited) (Consolidated), for the Year Ended December 31, 2018 (Consolidated), for the Year Ended December 31, 2017 (Consolidated), for the Year Ended December 31, 2016 (Consolidated), for the Year Ended December 31, 2015, and for the Year Ended December 31, 2014

7

Consolidated Schedule of Investments as of September 30, 2019 (Unaudited) and for the Year Ended December 31, 2018

9

Consolidated Notes To Financial Statements (Unaudited)

21

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

41

Item 3. Quantitative and Qualitative Disclosures About Market Risk

49

Item 4. Controls and Procedures

51

PART II. OTHER INFORMATION

52

Item 1. Legal Proceedings

53

Item 1A. Risk Factors

53

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

53

Item 3. Defaults Upon Senior Securities

53

Item 4. Mine Safety Disclosures

53

Item 5. Other Information

53

Item 6. Exhibits

53

SIGNATURES

54

 

1

 

 

PART I. FINANCIAL INFORMATION

 

Item 1.    Financial Statements

 

 

See accompanying notes to financial statements

2

 

 

Firsthand Technology Value Fund, Inc.

 

Consolidated Statements of Assets and Liabilities

 

   

AS OF
SEPTEMBER 30,
2019
(UNAUDITED)

   

AS OF
DECEMBER 31,
2018

 

ASSETS

               

Investment securities:

               

Unaffiliated investments at acquisition cost

  $ 18,860,427  *   $ 3,961,467  *

Affiliated investments at acquisition cost

    4,744,427       31,002,275  

Controlled investments at acquisition cost

    144,577,070       132,313,596  

Total acquisition cost

  $ 168,181,924     $ 167,277,338  

Unaffiliated investments at market value

  $ 14,559,660  *   $ 5,696,042  *

Affiliated investments at market value

    5,597,418       34,045,111  

Controlled investments at market value

    128,524,051       170,112,417  

Total market value ** (Note 6)

    148,681,129       209,853,570  

Cash

    18,904        

Receivable for securities sold

          1,005  

Receivable from dividends and interest

    1,767,698       2,308,366  

Deferred tax benefit

    6,565,417        

Other assets

    11,183       18,713  

Total Assets

    157,044,331       212,181,654  

LIABILITIES

               

Payable for securities purchased

          365,783  

Incentive fees payable (Note 4)

          9,261,847  

Payable to affiliates (Note 4)

    5,023,005       2,334,727  

Deferred tax liability

          8,432,559  

Consulting fee payable

    36,000       19,500  

Accrued expenses and other payables

    115,122       149,279  

Total Liabilities

    5,174,127       20,563,695  

NET ASSETS

  $ 151,870,204     $ 191,617,959  
                 

Net Assets consist of:

               

Common Stock, par value $0.001 per share 100,000,000 shares authorized

  $ 7,179     $ 7,179  

Paid-in-capital

    178,770,434       178,770,434  

Total distributable earnings (loss)

    (26,907,409 )     12,840,346  

NET ASSETS

  $ 151,870,204     $ 191,617,959  
                 

Shares of Common Stock outstanding

    7,302,146       7,302,146  

Shares of Treasury Stock outstanding

    (123,376 )     (123,376 )

Total Shares of Common Stock outstanding

    7,178,770       7,178,770  

Net asset value per share (Note 2)

  $ 21.16     $ 26.69  

 

*

Includes Fidelity Investment Money Market Treasury Portfolio - Class I, which invests primarily in U.S. Treasury securities. The yields as of 09/30/19 and 12/31/18 were 1.82% and 2.24%, respectively. Please see https://fundresearch.fidelity.com/mutual-funds/summary/316175504 for additional information.

 

**

Includes warrants whose primary risk exposure is equity contracts.

 

 

See accompanying notes to financial statements

3

 

 

Firsthand Technology Value Fund, Inc.

 

Consolidated Statements of Operations (Unaudited)

 

   

FOR THE THREE MONTHS ENDED

   

FOR THE NINE MONTHS ENDED

 
   

SEPTEMBER 30,
2019

   

SEPTEMBER 30,
2018

   

SEPTEMBER 30,
2019

   

SEPTEMBER 30,
2018

 

INVESTMENT INCOME

                               

Unaffiliated interest

  $ 7,579     $ 793     $ 33,929     $ 4,901  

Affiliated/Controlled interest

    392,826       974,557       866,833       2,328,359  

Affiliated/Controlled loan origination income

                      21,000  

TOTAL INVESTMENT INCOME

    400,405       975,350       900,762       2,354,260  

EXPENSES

                               

Investment advisory fees (Note 4)

    774,945       1,124,398       2,716,206       2,972,059  

Administration fees

    36,840       58,652       108,375       168,831  

Custody fees

    4,215       8,171       11,664       27,482  

Transfer agent fees

    8,947       7,058       26,275       23,817  

Registration and filing fees

    7,738       7,713       22,962       22,887  

Professional fees

    92,758       94,916       275,184       288,557  

Printing fees

    9,354       16,008       43,733       46,420  

Trustees fees

    50,000       50,000       150,000       150,000  

Compliance Fees

    29,939       30,634       88,841       88,223  

Miscellaneous fees

    2,889       22,653       46,833       68,020  

TOTAL GROSS EXPENSES

    1,017,625       1,420,203       3,490,073       3,856,296  

Incentive fee adjustments (Note 4)

          9,633,974       (9,261,847 )     14,808,766  

TOTAL NET EXPENSES

    1,017,625       11,054,177       (5,771,774 )     18,665,062  

NET INVESTMENT INCOME (LOSS), BEFORE TAXES

    (617,220 )     (10,078,827 )     6,672,536       (16,310,802 )

Deferred tax benefit

    172,698       (1,411,413 )     690,897       448,208  

Net investment income (loss), net of deferred taxes

    (444,522 )     (11,490,240 )     7,363,433       (15,862,594 )

Net Realized and Unrealized Loss on Investments:

                               

Net realized gains (losses) from security transactions on:

                               

Affiliated/Controlled

    2,117,628       (11,335,187 )     (2,498,193 )     (11,373,458 )

Non-affiliated and other assets

    (712,819 )     (772,541 )     3,058,364       138,640  

Written options

                98,590        

Deferred tax benefit/expenses

    (336,521 )     2,942,451       (221,778 )     2,681,974  

Net realized gains (losses), net of deferred taxes

    1,068,288       (9,165,277 )     436,983       (8,552,844 )

Net change in unrealized appreciation (depreciation) on:

                               

Non-affiliated investments

    (435,035 )     9,064,505       (6,035,342 )     9,967,736  

Affiliated/controlled investments and foreign currency

    (9,932,151 )     44,955,098       (51,499,088 )     70,897,750  

Affiliated/controlled warrants investments (1)

    2,393,291       6,439,956       (4,542,596 )     2,089,649  

Deferred tax benefit/expenses

    1,806,944       (13,096,357 )     14,528,855       (19,779,098 )

Net change in unrealized appreciation (depreciation), net of deferred taxes

    (6,166,951 )     47,363,202       (47,548,171 )     63,176,037  

Net Realized and Unrealized Gains (Losses) on Investments, Net of Deferred Taxes

    (5,098,663 )     38,197,925       (47,111,188 )     54,623,193  

Net Increase (Decrease) In Net Assets Resulting From Operations, Net of Deferred Taxes

  $ (5,543,185 )   $ 26,707,685     $ (39,747,755 )   $ 38,760,599  

Net Increase/(Decrease) In Net Assets Per Share Resulting From Operations (2)

  $ (0.78 )   $ 3.67     $ (5.54 )   $ 5.32  

 

(1)

Primary exposure is equity risk.

 

(2)

Per share results are calculated based on weighted average shares outstanding for each period.

 

See accompanying notes to financial statements

4

 

 

Firsthand Technology Value Fund, Inc.

 

Consolidated Statements of Cash Flows (Unaudited)

 

   

FOR THE
THREE MONTHS
ENDED
SEPTEMBER 30,
2019

   

FOR THE
THREE MONTHS
ENDED
SEPTEMBER 30,
2018

   

FOR THE
NINE
MONTHS
ENDED
SEPTEMBER 30,
2019

   

FOR THE
NINE
MONTHS
ENDED
SEPTEMBER 30,
2018

 

CASH FLOWS FROM OPERATING ACTIVITIES

                               

Net increase (decrease) in Net Assets resulting from operations

  $ (5,543,185 )   $ 26,707,685     $ (39,747,755 )   $ 38,760,599  

Adjustments to reconcile net increase (decrease) in Net Assets derived from operations to net cash provided by (used in) operating activities

                               

Purchases of investments

    (1,651,410 )     (19,231,350 )     (21,111,150 )     (48,038,121 )

Proceeds from disposition of investments

    15,757,730       24,584,064       41,743,824       66,288,520  

Net purchases / sales from short-term investments

    (13,848,862 )     (4,310,960 )     (20,878,499 )     (14,734,750 )

Increase (decrease) in dividends, interest, and reclaims receivable

    (293,381 )     (832,454 )     540,668       (1,832,546 )

Increase (decrease) in receivable in investment sold

    311,904       391,165       1,005       (211,168 )

Increase (decrease) in payable for investment purchased

    (365,783 )           (365,783 )      

Increase (decrease) in payable to affiliates

    688,116       140,940       2,688,278       272,963  

Increase (decrease) in incentive fees payable

          9,633,974       (9,261,847 )     14,808,766  

Increase (decrease) in other assets

    12,883       15,408       7,530       15,121  

Decrease (increase) in accrued expenses and other payables

    5,201       (23,624 )     (17,657 )     (60,004 )

Increase (decrease) in deferred tax benefit/liability

    (1,643,123 )     11,565,319       (14,997,976 )     16,648,916  

Net realized gain (loss) from investments

    (1,404,809 )     12,107,728       (560,171 )     11,234,818  

Net realized gain from written options

                (98,590 )      

Net unrealized appreciation (depreciation) from investments, other assets, and warrants transactions

    7,973,896       (60,459,559 )     62,077,027       (82,955,135 )

Net cash (used in) operating activities

    (823 )     288,336       18,904       197,979  
                                 

CASH FLOWS FROM FINANCING ACTIVITIES

                               

Cost of shares repurchased

          (288,330 )           (288,330 )

Distributions paid from net realized gains

                       

Net cash (used in) financing activities

          (288,330 )           (288,330 )
                                 

Net increase (decrease) in cash

    (823 )     6       18,904       (90,351 )

Cash - beginning of period

    19,727       19,720             110,077  

Cash - end of period

  $ 18,904     $ 19,726     $ 18,904     $ 19,726  

 

 

See accompanying notes to financial statements

5

 

 

Firsthand Technology Value Fund, Inc.

 

Consolidated Statements of Changes in Net Assets (Unaudited)

 

   

FOR THE
THREE MONTHS
ENDED
SEPTEMBER 30,
2019

   

FOR THE
THREE MONTHS
ENDED
SEPTEMBER 30,
2018

   

FOR THE
NINE
MONTHS
ENDED
SEPTEMBER 30,
2019

   

FOR THE
NINE
MONTHS
ENDED
SEPTEMBER 30,
2018

 

FROM OPERATIONS:

                               

Net investment income (loss), net of deferred taxes

  $ (444,522 )   $ (11,490,240 )   $ 7,363,433     $ (15,862,594 )

Net realized gain (loss) from security transactions, written options and warrants transactions, net of deferred taxes

    1,068,288       (9,165,277 )     436,983       (8,552,844 )

Net change in unrealized appreciation (depreciation) on investments, and warrants transactions, net of deferred taxes

    (6,166,951 )     47,363,202       (47,548,171 )     63,176,037  

Net increase (decrease) in net assets from operations

    (5,543,185 )     26,707,685       (39,747,755 )     38,760,599  
                                 

FROM CAPITAL SHARE TRANSACTIONS:

                               

Value for shares repurchased

          (420,458 )           (420,458 )

Net increase (decrease) in net assets from capital share transactions

          (420,458 )           (420,458 )

TOTAL INCREASE (DECREASE) IN NET ASSETS

    (5,543,185 )     26,287,227       (39,747,755 )     38,340,141  
                                 

NET ASSETS:

                               

Beginning of period

    157,413,389       186,046,503       191,617,959       173,993,589  

End of period

  $ 151,870,204     $ 212,333,730     $ 151,870,204     $ 212,333,730  
                                 

COMMON STOCK ACTIVITY:

                               

Shares redeemed

          (26,110 )           (26,110 )

Net decrease in shares outstanding

          (26,110 )           (26,110 )

Shares outstanding, beginning of period

    7,178,770       7,302,146       7,178,770       7,302,146  

Shares outstanding, end of period

    7,178,770       7,276,036       7,178,770       7,276,036  

 

See accompanying notes to financial statements

6

 

 

Firsthand Technology Value Fund, Inc.

 

Financial Highlights
Selected per share data and ratios for a share outstanding throughout each period

 

   

FOR THE
NINE MONTHS
ENDED
SEPTEMBER 30,
2019
*
(UNAUDITED)

   

FOR THE
YEAR ENDED
DECEMBER 31,
2018
*

   

FOR THE
YEAR ENDED
DECEMBER 31,
2017
*

   

FOR THE
YEAR ENDED
DECEMBER 31,
2016
*

   

FOR THE
YEAR ENDED
DECEMBER 31,
2015
*

   

FOR THE
YEAR ENDED
DECEMBER 31,
2014

 

Net asset value at beginning of period

  $ 26.69     $ 23.83     $ 20.04     $ 22.79     $ 24.49     $ 28.32  

Income from investment operations:

                                               

Net investment income (loss), before deferred taxes

    0.93  (1)     (1.29 )(1)     (0.62 )     (0.52 )     (0.06 )(1)     (1.26 )

Deferred tax benefit

    0.10       0.07                          

Net investment gain (losses)

    1.03       (1.22 )     (0.62 )     (0.52 )     (0.06 )     (1.26 )

Net realized and unrealized gains (losses) on investments, before deferred taxes

    (8.55 )     5.13       4.21       (2.76 )     (1.78 )     3.04  

Deferred tax expense

    1.99       (1.23 )                        

Net realized and unrealized gains (losses) on investments

    (6.56 )     3.90       4.21       (2.76 )     (1.78 )     3.04  

Total from investment operations

    (5.53 )     2.68       3.59       (3.28 )     (1.84 )     1.78  
                                                 

Distributions from:

                                               

Realized capital gains

          (0.03 )                       (5.86 )

Anti-dilutive effect from capital share transactions

          0.21       0.20       0.53       0.14       0.25  

Net asset value at end of period

  $ 21.16     $ 26.69     $ 23.83     $ 20.04     $ 22.79     $ 24.49  
                                                 

Market value at end of period

  $ 7.65     $ 11.20     $ 8.96     $ 7.67     $ 8.17     $ 18.65  
                                                 

Total return

                                               

Based on Net Asset Value

    (20.72 )%(A)     12.39 %     18.91 %     (12.07 )%     (6.94 )%     12.54 %

Based on Market Value

    (31.70 )%(A)     25.43 %     16.82 %     (6.12 )%     (56.19 )%     4.76 %

Net assets at end of period (millions)

  $ 151.9     $ 191.6     $ 174.0     $ 148.9     $ 175.6     $ 209.7  

 

See accompanying notes to financial statements

7

 

 

Firsthand Technology Value Fund, Inc.

 

Financial Highlights - continued
Selected per share data and ratios for a share outstanding throughout each period

 

   

FOR THE
NINE MONTHS
ENDED
SEPTEMBER 30,
2019
*
(UNAUDITED)

 

FOR THE
YEAR ENDED
DECEMBER 31,
2018
*

 

FOR THE
YEAR ENDED
DECEMBER 31,
2017
*

 

FOR THE
YEAR ENDED
DECEMBER 31,
2016
*

 

FOR THE
YEAR ENDED
DECEMBER 31,
2015
*

 

FOR THE
YEAR ENDED
DECEMBER 31,
2014

Ratio of total expenses to average net assets:

                                               

Before tax benefit

    (4.57 )%(B)(2)     6.75 %(2)     4.13 %(2)     2.90 %(2)     1.36 %(2)     5.29 %(2)

Deferred tax expense (3)(4)

    11.87 %(B)     4.43 %                        

Total expenses

    (7.30 )%(B)(2)     11.18 %(2)     4.13 %     2.90 %     1.36 %     5.29 %

Total expenses, excluding incentive fees and deferred tax expense

    2.76 %(B)     2.77 %     2.98 %     2.90 %     2.68 %     3.12 %

Ratio of net investment income (loss) to average net assets:

                                               

Before tax benefit

    5.28 %(B)(2)     (4.93 )%(2)     (3.07 )%     (2.36 )%     (0.24 )%     (4.31 )%

Deferred tax benefit (4)(5)

    0.55 %(B)     0.28 %                        

Net investment income (loss)

    5.83 %(B)     (4.65 )%     (3.07 )%     (2.36 )%     (0.24 )%     (4.31 )%

Portfolio turnover rate

    15 %(A)     44 %     22 %     49 %     22 %     95 %

 

*

Consolidated

 

(1)

Calculated using average shares outstanding.

 

(2)

Amount includes the incentive fee. For the period ended September 30, 2019, the years ended December 31, 2018, December 31, 2017, December 31, 2016, December 31, 2015, and December 31, 2014, the ratio of the incentive fee to average net assets was (7.33)%, 3.98%, 1.15%, (1.32)%, 2.17% and 3.85%, respectively.

 

(3)

Deferred tax expense estimate is derived from net investment income (loss), and realized and unrealized gains (losses).

 

(4)

The deferred tax epxense and tax benefit are allocated based on average net assets.

 

(5)

Deferred tax benefit estimate for the ratio calculation is derived from net investment income (loss) only.

 

(A)

Not Annualized.

 

(B)

Annualized.

 

See accompanying notes to financial statements

8

 

 

Firsthand Technology Value Fund, Inc.

 

Consolidated Schedule of Investments

 

SEPTEMBER 30, 2019 (UNAUDITED)

 

PORTFOLIO
COMPANY
(% OF NET
ASSETS)
AND INDUSTRY

TYPE OF INVESTMENT

 

ACQUISITION DATE

   

SHARES/PAR
VALUE ($)

   

COST BASIS

   

VALUE

 

EQX CAPITAL, INC.

Common Stock *(1)(2)(4)

    6/10/2016       100,000     $ 20,000     $ 23,490  

(1.5%) Equipment Leasing

Preferred Stock - Series A *(1)(2)(4)

    6/10/2016       3,200,000       3,200,000       2,221,440  
                                2,244,930  
                                   

HERA SYSTEMS, INC. (7.8%) Aerospace

Convertible Promissory Note Matures January 2020 Interest Rate 10% (1)(2)(4)

    5/31/2018       500,000       500,000       500,000  
 

Convertible Promissory Note Matures January 2020 Interest Rate 10% (1)(2)(4)

    1/19/2018       500,000       500,000       500,000  
 

Preferred Stock - Series A *(1)(2)(4)

    9/18/2015       3,642,324       2,000,000       431,615  
 

Preferred Stock - Series B *(1)(2)(4)

    8/07/17 - 2/1/19       7,039,203       6,587,102       2,270,847  
 

Preferred Stock - Series C *(1)(2)(4)

    8/7/2019       1,000,000       1,000,000       322,600  
 

Preferred Stock Warrants - Series B *(1)(2)(4)

    8/7/2017       6,214,922       0       2,004,623  
 

Preferred Stock Warrants - Series B *(1)(2)(4)

    9/28/2017       700,000       0       225,785  
 

Preferred Stock Warrants - Series B *(1)(2)(4)

    7/9/18 - 9/4/18       12,250,000       0       3,951,237  
 

Preferred Stock Warrants - Series B *(1)(2)(4)

    2/1/2019       5,250,000       0       1,693,387  
                                11,900,094  
                                   

INTRAOP MEDICAL CORP. (13.3%)

Preferred Stock - Series C *(1)(2)(4)

    7/12/2013       26,856,187       26,299,938       2,928,398  

Medical Devices

Convertible Note Matures June 2020 Interest Rate 15% (1)(2)(4)

    7/12/2019       1,300,000       1,300,000       1,300,000  
 

Convertible Note Matures June 2020 Interest Rate 15% (1)(2)(4)

    12/31/2018       10,961,129       10,961,129       10,961,129  
 

Term Note Matures February 2020 Interest Rate 8% (1)(2)(4)

    2/28/2014       3,000,000       3,000,000       3,000,000  

 

See accompanying notes to financial statements

9

 

 

Firsthand Technology Value Fund, Inc.

 

Consolidated Schedule of Investments - continued

 

SEPTEMBER 30, 2019 (UNAUDITED)

 

PORTFOLIO
COMPANY
(% OF NET
ASSETS)
AND INDUSTRY

TYPE OF INVESTMENT

 

ACQUISITION DATE

   

SHARES/PAR
VALUE ($)

   

COST BASIS

   

VALUE

 

INTRAOP MEDICAL CORP. (continued)

Term Note Matures February 2020 Interest Rate 8% (1)(2)(4)

    2/10/2017       2,000,000     $ 2,000,000     $ 2,000,000  
                                20,189,527  
                                   

KYMA, INC. (0.1%) Advanced Materials

Convertible Note Matures March 2020 Interest Rate 10% (1)(4)

    3/11/2019       100,000       100,000       100,000  
                                   

LYNCEAN TECHNOLOGIES, INC. (0.6%)

Preferred Stock - Series B *(1)(4)

    7/3/2018       869,792       1,000,000       978,038  

Semiconductor Equipment

                                 
                                   

PHUNWARE, INC. (0.7%)

Common Stock*

    3/14/2014       692,913       4,634,517       997,795  

Mobile Computing

                                 
                                   

PIVOTAL SYSTEMS CORP.

Common Stock *(1)(2)(4)

    11/28/12 - 9/2/16       45,090,506       12,294,557       40,379,306  

(26.6%)

                                 

Semiconductor Equipment

                                 
                                   

QMAT, INC. (0.0%) Advanced Materials

Convertible Note Matures December 2019 Interest Rate 8% (1)(2)(4)

    3/28/2019       400,000       400,000        
 

Convertible Note Matures December 2019 Interest Rate 8% (1)(2)(4)

    5/1/2019       200,000       200,000        
 

Convertible Note Matures December 2019 Interest Rate 8% (1)(2)(4)

    3/13/2019       100,000       100,000        
 

Convertible Note Matures December 2019 Interest Rate 8% (1)(2)(4)

    5/31/2019       200,000       200,000        
 

Convertible Note Matures December 2019 Interest Rate 8% (1)(2)(4)

    8/30/2019       150,000       150,000        
 

Preferred Stock Warrants - Series A *(1)(2)(4)

    12/14/2012       2,000,000       0        

 

See accompanying notes to financial statements

10

 

 

Firsthand Technology Value Fund, Inc.

 

Consolidated Schedule of Investments - continued

 

SEPTEMBER 30, 2019 (UNAUDITED)

 

PORTFOLIO
COMPANY
(% OF NET
ASSETS)
AND INDUSTRY

TYPE OF INVESTMENT

 

ACQUISITION DATE

   

SHARES/PAR
VALUE ($)

   

COST BASIS

   

VALUE

 

QMAT, INC. (continued)

Preferred Stock - Series A *(1)(2)(4)

    12/14/12 - 04/28/16       16,000,240     $ 9,680,305     $  
 

Convertible Note Matures December 2019 Interest Rate 8% (1)(2)(4)

    12/14/18 - 2/28/19       7,502,600       7,502,600        
 

Preferred Stock Warrants - Series C *(1)(2)(4)

    12/14/2018       4,932,208       0        
 

Convertible Note Matures December 2019 Interest Rate 8% (1)(2)(4)

    5/14/2019       100,000       100,000        
 

Convertible Note Matures December 2019 Interest Rate 8% (1)(2)(4)

    8/14/2019       400,000       400,000        
 

Convertible Note Matures December 2019 Interest Rate 8% (1)(2)(4)

    7/30/2019       200,000       200,000        
 

Convertible Note Matures December 2019 Interest Rate 8% (1)(2)(4)

    6/14/2019       100,000       100,000        
 

Convertible Note Matures December 2019 Interest Rate 8% (1)(2)(4)

    9/26/2019       200,000       200,000        
 

Convertible Note Matures December 2019 Interest Rate 8% (1)(2)(4)

    7/11/2019       100,000       100,000        
 

Convertible Note Matures December 2019 Interest Rate 8% (1)(2)(4)

    6/28/2019       220,000       220,000        
 

Preferred Stock - Series B *(1)(2)(4)

    09/28/16 - 11/07/16       2,000,000       2,000,000        
                                 
                                   

QUICKLOGIC CORP. (0.1%)

Common Stock *

    12/27/16 - 11/09/17       600,000       852,983       210,900  

Semiconductors

                                 

 

See accompanying notes to financial statements

11

 

 

Firsthand Technology Value Fund, Inc.

 

Consolidated Schedule of Investments - continued

 

SEPTEMBER 30, 2019 (UNAUDITED)

 

PORTFOLIO
COMPANY
(% OF NET
ASSETS)
AND INDUSTRY

TYPE OF INVESTMENT

 

ACQUISITION DATE

   

SHARES/PAR
VALUE ($)

   

COST BASIS

   

VALUE

 

REVASUM, INC. (23.7%)

Common Stock *(1)(2)(4)

    11/14/16 - 11/30/18       46,834,340     $ 13,512,264     $ 36,023,127  

Semiconductor Equipment

                                 
                                   

SILICON GENESIS CORP. (1.0%)

Preferred Stock - Series 1-G *(1)(2)(4)

    3/10/2016       48,370,793       3,880,592       666,066  

Intellectual Property

Preferred Stock - Series 1-H *(1)(2)(4)

    3/10/2016       837,942       936,895       72,817  
 

Common Stock *(1)(2)(4)

    4/18/2011       921,892       169,045       737  
 

Common Stock Warrants *(1)(2)(4)

    4/18/2011       37,982       6,678       12  
 

Preferred Stock - Series 1-F *(1)(2)(4)

    4/18/2011       912,453       456,389       145,354  
 

Common Stock Warrants *(1)(2)(4)

    10/13/2011       5,000,000             2,000  
 

Common Stock Warrants *(1)(2)(4)

    2/6/2012       3,000,000             1,200  
 

Preferred Stock - Series 1-E *(1)(2)(4)

    4/18/2011       5,704,480       2,372,403       658,296  
 

Preferred Stock - Series 1-C *(1)(2)(4)

    4/18/2011       82,914       109,518       5,373  
 

Preferred Stock - Series 1-D *(1)(2)(4)

    4/18/2011       850,830       431,901       14,210  
                                1,566,065  
                                   

SVXR, INC. (3.2%)

Preferred Stock - Series A *(1)(3)(4)

    1/11/17 - 8/29/18       8,219,454       4,082,192       4,879,068  

Semiconductor Equipment

                                 
                                   

TELEPATHY INVESTORS, INC.

Preferred Stock - Series A *(1)(2)(4)

    7/29/2014       15,238,000       3,999,999       0  

(0.0%) Consumer Electronics

Convertible Note Matures December 2019 Interest Rate 10% (1)(2)(4)

    4/20/2016       500,000       500,000       0  
 

Convertible Note Matures December 2019 Interest Rate 10% (1)(2)(4)

    6/23/2015       2,000,000       2,000,000       0  

 

See accompanying notes to financial statements

12

 

 

Firsthand Technology Value Fund, Inc.

 

Consolidated Schedule of Investments - continued

 

SEPTEMBER 30, 2019 (UNAUDITED)

 

PORTFOLIO
COMPANY
(% OF NET
ASSETS)
AND INDUSTRY

TYPE OF INVESTMENT

 

ACQUISITION DATE

   

SHARES/PAR
VALUE ($)

   

COST BASIS

   

VALUE

 

TELEPATHY INVESTORS, INC. (continued)

Convertible Note Matures December 2019 Interest Rate 10% (1)(2)(4)

    5/3/2017       300,000     $ 300,000     $ 0  
 

Convertible Note Matures December 2019 Interest Rate 10% (1)(2)(4)

    9/7/2018       200,000       200,000       0  
 

Convertible Note Matures December 2019 Interest Rate 10% (1)(2)(4)

    1/29/2016       300,000       300,000       0  
 

Convertible Note Matures December 2019 Interest Rate 10% (1)(2)(4)

    12/13/2016       500,000       500,000       0  
 

Convertible Note Matures December 2019 Interest Rate 10% (1)(2)(4)

    6/21/2016       150,000       150,000       0  
                                0  
                                   

UCT COATINGS, INC.

Common Stock *(1)(3)(4)

    4/18/2011       1,500,000       662,235       718,350  

(0.5%)

                                 

Advanced Materials

                                 
                                   

WRIGHTSPEED, INC.

Common Stock *(1)(2)(4)

    6/7/2019       69,102       7,460,851       11,112  

(10.7%) Automotive

Common Stock Warrants *(1)(2)(4)

    6/7/2019       181              
 

Convertible Note Matures December 2019 Interest Rate 12% (1)(2)(4)

    6/7/2019       4,929,015       4,929,015       4,929,015  
 

Preferred Stock - Series AA *(1)(2)(4)

    6/7/2019 - 9/25/2019       39,096,067       11,145,889       11,220,572  
 

Preferred Stock Warrants - Series AA *(1)(2)(4)

    6/7/2019       609,742             60,303  
                                16,221,002  
                                   

INVESTMENT COMPANY (8.0%)

Fidelity Investments Money Market Treasury Portfolio - Class I (5)

    Various       12,272,927       12,272,927       12,272,927  

 

See accompanying notes to financial statements

13

 

 

Firsthand Technology Value Fund, Inc.

 

Consolidated Schedule of Investments - continued

 

SEPTEMBER 30, 2019 (UNAUDITED)

 

PORTFOLIO
COMPANY
(% OF NET
ASSETS)
AND INDUSTRY

TYPE OF INVESTMENT

 

ACQUISITION DATE

   

SHARES/PAR
VALUE ($)

   

COST BASIS

   

VALUE

 

TOTAL INVESTMENTS (Cost $168,181,924) — 97.8%

                            $ 148,681,129  
                                   

Other assets in excess of Liabilities— 2.2%

                              3,189,075  
                                   

NET ASSETS — 100.0%

                            $ 151,870,204  

 

*

Non-income producing security.

(1)

Restricted security. Fair Value is determined by or under the direction of the Company’s Board of Directors (See note 3). At September 30, 2019, we held $135,199,507 (or 89.0% of net assets) in restricted securities (see Note 2).

(2)

Controlled investments.

(3)

Affiliated issuer.

(4)

Fair Value Level 3 security.

(5)

The Fidelity Investments Money Market Portfolio invests primarily in U.S. Treasury securities.

 

See accompanying notes to financial statements

14

 

 

Firsthand Technology Value Fund, Inc.

 

Consolidated Schedule of Investments

 

DECEMBER 31, 2018

 

PORTFOLIO
COMPANY
(% OF NET
ASSETS)
AND INDUSTRY

INVESTMENT TYPE

 

ACQUISITION DATE

   

SHARES/PAR
VALUE ($)

   

COST BASIS

   

VALUE

 

EQX CAPITAL,

Common Stock *(1)(2)(4)

    6/10/16       100,000     $ 20,000     $ 36,470  

INC (1.8%)Equipment Leasing

Preferred Stock - Series A *(1)(2)(4)

    6/10/16       4,000,000       4,000,000       3,491,600  
                                3,528,070  

HERA SYSTEMS, INC. (3.5%) Aerospace

Convertible Promissory Note Matures January 2019 Interest Rate 10% (1)(2)(4)

    5/31/18       500,000       500,000       500,000  
 

Convertible Promissory Note Matures January 2019 Interest Rate 10% (1)(2)(4)

    1/19/18       500,000       500,000       500,000  
 

Preferred Stock - Series A *(1)(2)(4)

    9/18/15       3,642,324       2,000,000       207,977  
 

Preferred Stock - Series B *(1)(2)(4)

    8/07/17 - 9/4/18       5,539,203       5,087,102       1,231,365  
 

Preferred Stock Warrants - Series B *(1)(2)(4)

    8/7/17       6,214,922       0       1,380,956  
 

Preferred Stock Warrants - Series B *(1)(2)(4)

    9/28/17       700,000       0       155,540  
 

Preferred Stock Warrants - Series B *(1)(2)(4)

    7/9/18 - 9/4/18       12,250,000       0       2,721,950  
                                6,697,788  

INTRAOP MEDICAL CORP. (15.4%)

Convertible Note Matures June 2020 Interest Rate 8% (1)(2)(4)

    12/31/18       10,961,129       10,961,129       10,961,129  

Medical Devices

Preferred Stock - Series C *(1)(2)(4)

    7/12/13       26,856,187       26,299,938       13,565,328  
 

Term Note Matures February 2020 Interest Rate 8% (1)(2)(4)

    2/10/17       2,000,000       2,000,000       2,000,000  
 

Term Note Matures February 2020 Interest Rate 8% (1)(2)(4)

    2/28/14       3,000,000       3,000,000       3,000,000  
                                29,526,457  

 

See accompanying notes to financial statements

15

 

 

Firsthand Technology Value Fund, Inc.

 

Consolidated Schedule of Investments - continued

 

DECEMBER 31, 2018

 

PORTFOLIO
COMPANY
(% OF NET
ASSETS)
AND INDUSTRY

INVESTMENT TYPE

 

ACQUISITION DATE

   

SHARES/PAR
VALUE ($)

   

COST BASIS

   

VALUE

 

LYNCEAN TECHNOLOGIES, INC. (0.5%) Semiconductor Equipment

Preferred Stock - Series B *(1)(4)

    7/3/18       869,792     $ 1,000,000     $ 1,000,000  
                                   

PHUNWARE, INC. (10.0%) Mobile Computing

Common Stock *(1)(3)(4)

    3/14/14       1,495,113       9,999,997       19,121,150  
                                   

PIVOTAL SYSTEMS CORP. (28.1%) Semiconductor Equipment

Common Stock *(1)(2)(4)

    11/28/12 - 09/02/16       53,758,441       19,446,197       53,825,978  
                                   

QMAT, INC. (7.0%)

Preferred Stock - Series A *(1)(2)(4)

    12/14/12 - 04/28/16       16,000,240       9,680,305       4,612,549  

Advanced Materials

Preferred Stock - Series B *(1)(2)(4)

    9/28/16 - 11/7/16       2,000,000       2,000,000       1,594,000  
 

Convertible Note Matures December 2019 Interest Rate 8% (1)(2)(4)

    12/14/18       7,002,600       7,002,600       7,002,600  
 

Preferred Stock Warrants - Series C *(1)(2)(4)

    12/14/18       4,932,208       0       81,381  
 

Preferred Stock Warrants - Series A *(1)(2)(4)

    12/14/12       2,000,000       0       112,000  
                                13,402,530  
                                   

QUICKLOGIC CORP. (0.4%) Semiconductors

Common Stock *

    12/27/16 - 11/09/17       1,000,000       1,488,025       734,000  
                                   

REVASUM, INC. (30.6%) Semiconductor Equipment

Common Stock *(1)(2)(4)

    11/14/16 - 11/30/18       53,834,340       18,537,905       58,608,601  

 

See accompanying notes to financial statements

16

 

 

Firsthand Technology Value Fund, Inc.

 

Consolidated Schedule of Investments - continued

 

DECEMBER 31, 2018

 

PORTFOLIO
COMPANY
(% OF NET
ASSETS)
AND INDUSTRY

INVESTMENT TYPE

 

ACQUISITION DATE

   

SHARES/PAR
VALUE ($)

   

COST BASIS

   

VALUE

 

ROKU, INC. (1.8%) Consumer Electronics

Common Stock *

    05/26/15 - 08/06/15       115,000     $ 1,035,000     $ 3,523,600  
                                   

SILICON GENESIS CORP. (1.7%)

Preferred Stock - Series 1-E *(1)(2)(4)

    4/18/11       5,704,480       2,372,403       1,233,879  

Intellectual Property

Preferred Stock - Series 1-C *(1)(2)(4)

    4/18/11       82,914       109,518       25,463  
 

Preferred Stock - Series 1-D *(1)(2)(4)

    4/18/11       850,830       431,901       68,917  
 

Common Stock *(1)(2)(4)

    4/18/11       921,892       169,045       4,517  
 

Common Stock Warrants *(1)(2)(4)

    4/18/11       37,982       6,678       84  
 

Preferred Stock - Series 1-F *(1)(2)(4)

    4/18/11       912,453       456,389       270,816  
 

Common Stock Warrants *(1)(2)(4)

    10/13/11       5,000,000       0       2,000  
 

Common Stock Warrants *(1)(2)(4)

    2/6/12       3,000,000       0       1,200  
 

Preferred Stock - Series 1-G *(1)(2)(4)

    3/10/16       48,370,793       3,880,592       1,443,530  
 

Preferred Stock - Series 1-H *(1)(2)(4)

    3/10/16       837,942       936,895       137,339  
                                3,187,745  
                                   

SVXR, INC. (2.6%) Semiconductor Equipment

Preferred Stock - Series A *(1)(3)(4)

    1/11/17 - 8/29/18       8,219,454       4,082,192       4,923,206  
                                   

TELEPATHY INVESTORS, INC. (0.7%)

Convertible Note Matures January 2019 Interest Rate 10% (1)(2)(4)

    6/21/16       150,000       150,000       14,678  

Consumer Electronics

Convertible Note Matures January 2019 Interest Rate 10% (1)(2)(4)

    9/7/18       200,000       200,000       19,570  

 

See accompanying notes to financial statements

17

 

 

Firsthand Technology Value Fund, Inc.

 

Consolidated Schedule of Investments - continued

 

DECEMBER 31, 2018

 

PORTFOLIO
COMPANY
(% OF NET
ASSETS)
AND INDUSTRY

INVESTMENT TYPE

 

ACQUISITION DATE

   

SHARES/PAR
VALUE ($)

   

COST BASIS

   

VALUE

 

TELEPATHY INVESTORS, INC. (continued)

Convertible Note Matures January 2019 Interest Rate 10% (1)(2)(4)

    4/20/16       500,000     $ 500,000     $ 48,925  
 

Convertible Note Matures January 2019 Interest Rate 10% (1)(2)(4)

    6/23/15       2,000,000       2,000,000       195,700  
 

Convertible Note Matures January 2019 Interest Rate 10% (1)(2)(4)

    5/3/17       300,000       300,000       29,355  
 

Preferred Stock -Series A *(1)(2)(4)

    7/29/14       15,238,000       3,999,999       927,994  
 

Convertible Note Matures January 2019 Interest Rate 10% (1)(2)(4)

    1/29/16       300,000       300,000       29,355  
 

Convertible Note Matures January 2019 Interest Rate 10% (1)(2)(4)

    12/13/16       500,000       500,000       48,925  
                                1,314,502  
                                   

UCT COATINGS, INC. (0.4%) Advanced Materials

Common Stock *(1)(3)(4)

    4/18/11       1,500,000       662,235       748,950  
                                   

VUFINE, INC. (0.0%) Consumer Electronics

Convertible Note Matures July 2019 Interest Rate 12% (1)(2)(4)

    10/31/18       200,000       200,000       1,537  
 

Convertible Note Matures July 2019 Interest Rate 12% (1)(2)(4)

    7/10/17       1,500,000       1,500,000       11,526  
 

Convertible Note Matures July 2019 Interest Rate 12% (1)(2)(4)

    9/13/18       100,000       100,000       768  
 

Convertible Note Matures October 2019 Interest Rate 12% (1)(2)(4)

    10/16/17       250,000       250,000       1,921  
 

Convertible Note Matures July 2019 Interest Rate 12% (1)(2)(4)

    1/31/18       350,000       350,000       2,689  

 

See accompanying notes to financial statements

18

 

 

Firsthand Technology Value Fund, Inc.

 

Consolidated Schedule of Investments - continued

 

DECEMBER 31, 2018

 

PORTFOLIO
COMPANY
(% OF NET
ASSETS)
AND INDUSTRY

INVESTMENT TYPE

 

ACQUISITION DATE

   

SHARES/PAR
VALUE ($)

   

COST BASIS

   

VALUE

 

VUFINE, INC. (0.0%) (continued)

Convertible Note Matures July 2019 Interest Rate 12% (1)(2)(4)

    6/19/18       300,000     $ 300,000     $ 2,305  
 

Common Stock *(1)(2)(4)

    2/26/15       750,000       15,000       0  
 

Preferred Stock - Series A *(1)(2)(4)

    03/04/15 - 02/18/16       22,500,000       2,250,000       0  
                                20,746  

WRIGHTSPEED, INC. (4.8%) Automotive

Convertible Note Matures December 2019 Interest Rate 12% (1)(3)(4)

    12/31/18       100,000       100,000       2,751  
 

Convertible Note Matures December 2019 Interest Rate 12% (1)(3)(4)

    5/1/18       3,700,000       3,700,000       101,787  
 

Convertible Note Matures December 2019 Interest Rate 12% (1)(3)(4)

    6/21/18       2,000,000       2,000,000       55,020  
 

Convertible Note Matures December 2019 Interest Rate 12% (1)(3)(4)

    8/10/18       3,000,000       3,000,000       82,530  
 

Preferred Stock - Series C *(1)(3)(4)

    4/11/13       2,267,659       1,922,975       494,803  
 

Preferred Stock - Series D *(1)(3)(4)

    12/15/14       1,100,978       3,375,887       310,806  
 

Preferred Stock - Series E *(1)(3)(4)

    7/10/15       450,814       1,658,996       136,732  
 

Preferred Stock - Series F *(1)(3)(4)

    8/31/17       90,707       499,995       41,344  
 

Preferred Stock Warrants - Series F *(1)(3)(4)

    12/31/18       200,000       0       90,980  
 

Preferred Stock Warrants - Series F *(1)(3)(4)

    12/31/18       200,000       0       224  
 

Preferred Stock Warrants - Series F *(1)(3)(4)

    4/9/18       13,606       0       22  
 

Preferred Stock Warrants - Series F *(1)(3)(4)

    4/26/18       6,803       0       11  
 

Preferred Stock Warrants - Series F *(1)(3)(4)

    8/10/18       6,000,000       0       2,729,400  

 

See accompanying notes to financial statements

19

 

 

Firsthand Technology Value Fund, Inc.

 

Consolidated Schedule of Investments - continued

 

DECEMBER 31, 2018

 

PORTFOLIO
COMPANY
(% OF NET
ASSETS)
AND INDUSTRY

INVESTMENT TYPE

 

ACQUISITION DATE

   

SHARES/PAR
VALUE ($)

   

COST BASIS

   

VALUE

 

WRIGHTSPEED, INC. (continued)

Preferred Stock Warrants - Series F *(1)(3)(4)

    5/1/18       7,400,000     $ 0     $ 3,366,260  
 

Preferred Stock Warrants - Series F *(1)(3)(4)

    6/21/18       4,000,000       0       1,819,600  
 

Preferred Stock Warrants - Series F *(1)(3)(4)

    8/10/18       6,000,000       0       6,720  
 

Preferred Stock Warrants - Series F *(1)(3)(4)

    5/1/18       7,400,000       0       8,288  
 

Preferred Stock Warrants - Series F *(1)(3)(4)

    6/21/18       4,000,000       0       4,480  
 

Preferred Stock Warrants - Series F *(1)(3)(4)

    8/31/17       18,141       0       29  
 

Preferred Stock Warrants - Series F *(1)(3)(4)

    2/7/18       11,338       0       18  
                                9,251,805  
                                   

INVESTMENT COMPANY (0.2%)

Fidelity Investments Money Market Treasury Portfolio - Class I (5)

    Various       438,442       438,442       438,442  
                                   

TOTAL INVESTMENTS (Cost $167,277,338) — 109.5%

                              209,853,570  
                                   

LIABILITIES IN EXCESS OF OTHER ASSETS — (9.5)%

                              (18,235,611 )
                                   

NET ASSETS — 100%

                            $ 191,617,959  

 

*

Non-income producing security.

(1)

Restricted security. Fair Value is determined by or under the direction of the Company’s Board of Directors (See note 3). At December 31, 2018, we held $205,157,528 (or 107.07% of net assets) in restricted securities (see Note 2).

(2)

Controlled Investments.

(3)

Affiliated issuer.

(4)

Fair Value Level 3 Security.

(5)

The Fidelity Investments Money Market Portfolio invests primarily in U.S. Treasury securities.

 

See accompanying notes to financial statements

20

 

 

Firsthand Technology Value Fund, Inc.

 

Notes to Financial Statements

 

SEPTEMBER 30, 2019 (UNAUDITED)

 

NOTE 1. THE COMPANY

 

Firsthand Technology Value Fund, Inc. (the “Company,” the “Fund,” “us,” “our,” and “we”), is a Maryland corporation and an externally managed, non-diversified, closed-end management investment company that has elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). The Company acquired its initial portfolio of securities through the reorganization of Firsthand Technology Value Fund, a series of Firsthand Funds, into the Company. The reorganization was completed on April 15, 2011. The Company commenced operations on April 18th, 2011. Under normal circumstances, the Company will invest at least 80% of its assets for investment purposes in technology companies, which are considered to be those companies that derive at least 50% of their revenues from products and/ or services within the information technology sector or the “cleantech” sector. Information technology companies include, but are not limited to, those focused on computer hardware, software, telecommunications, networking, Internet, and consumer electronics. While there is no standard definition of cleantech, it is generally regarded as including goods and services designed to harness renewable energy and materials, eliminate emissions and waste, and reduce the use of natural resources. In addition, under normal circumstances we will invest at least 70% of our assets in privately held companies and in public companies with market capitalizations less than $250 million. Our portfolio is primarily composed of equity and equity derivative securities of technology and cleantech companies (as defined above). These investments generally range between $1 million and $10 million each, although the investment size will vary proportionately with the size of the Company’s capital base. The Company’s shares are listed on the NASDAQ Global Market under the symbol “SVVC.” Firsthand Capital Management, Inc., which was previously known as SiVest Group, Inc. (“FCM” or the “Advisor”), serves as the investment adviser to the Company.

 

The Company is an investment company and follows accounting and reporting guidance in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946.

 

CONSOLIDATION OF SUBSIDIARIES. On May 8, 2015, the Board of Directors of the Company approved the formation of a fully owned and controlled subsidiary (as defined by the 1940 Act) of the Company named Firsthand Venture Investors (“FVI”), a California general partnership formed on March 30, 2015. After the close of business on June 30, 2015, the Company contributed substantially all of its assets to FVI in return for a controlling general partner ownership interest in FVI. The transaction was completed on July 1, 2015. Under this structure, we have all or substantially all of our investment activities conducted through our fully owned subsidiary, FVI.

 

During the fiscal years ended December 31, 2016 and 2017, with the approval of its Board of Directors, the Company organized three separate fully owned and controlled subsidiaries (as defined by the 1940 Act). Each subsidiary was a Cayman Islands corporation and the financial statements of each subsidiary were reported on a consolidated basis with the Company. Each subsidiary was formed for the purpose of holding one or more investments made by the Company, and was treated as a controlled foreign corporation under the Internal Revenue Code not separately subject to U.S. federal income tax. FVI was treated as the sole U.S. shareholder of each subsidiary.

 

The Board of Directors of the Company approved the liquidation of those three Cayman subsidiaries on November 2, 2018. That liquidation was completed on December 27, 2018.

 

21

 

 

Firsthand Technology Value Fund, Inc.

 

Notes to Financial Statements - continued

 

SEPTEMBER 30, 2019 (UNAUDITED)

 

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The following is a summary of significant accounting policies followed in the preparation of the Company’s financial statements included in this report:

 

BASIS OF PRESENTATION. The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) pursuant to the requirements on Form 10-K. ASC 946, Financial Services—Investment Companies (“ASC 946”), and Articles 6, 10 and 12 of Regulation S-X. In the opinion of management, all adjustments, which are of a normal recurring nature, considered necessary for the fair presentation of the financial statements for the periods presented, have been included.

 

Under the 1940 Act, ASC 946, and the regulations pursuant to Article 6 of Regulation S-X, we are precluded from consolidating any entity other than another investment company or an operating company which provides substantially all of its services to benefit us. Consequentially, as of December 31, 2018, the Company consolidated some special purpose entities. These special purpose entities only hold investments of the Company and have no other significant asset and liabilities. All significant intercompany transactions and balances have been eliminated in consolidation.

 

USE OF ESTIMATES. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

 

PORTFOLIO INVESTMENT VALUATIONS. Investments are stated at “value” as defined in the 1940 Act and in the applicable regulations of the Securities and Exchange Commission and in accordance with GAAP. Value, as defined in Section 2(a)(41) of the 1940 Act, is (i) the market value of those securities for which a market quotation is readily available and (ii) the fair value as determined in good faith by, or under the direction of, the Board of Directors for all other securities and assets. On September 30, 2019, our financial statements include venture capital investments valued at approximately $58.8 million. The fair values of our venture capital investments were determined in good faith by, or under the direction of, the Board. Upon sale of these investments, the values that are ultimately realized may be different from what is presently estimated. The difference could be material. Also see note 6 regarding the fair value of the company’s investments.

 

CASH AND CASH EQUIVALENTS. The Company considers liquid assets deposited with a bank, investments in money market funds, and certain short-term debt instruments with maturities of three months or less to be cash equivalents. These investments represent amounts held with financial institutions that are readily accessible to pay our expenses or purchase investments. Cash and cash equivalents are valued at cost plus accrued interest, which approximates market value.

 

RESTRICTED SECURITIES. At September 30, 2019, we held $135,199,507 in restricted securities. At December 31, 2018, we held $205,157,528 in restricted securities.

 

INCOME RECOGNITION. Dividend income is recorded on the ex-dividend date. Interest income is accrued as earned. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Other non-cash dividends are recognized as investment income at the fair value of the property received. When debt securities are determined to be non-income producing, the Company ceases accruing interest and writes off any previously accrued interest. These write-offs are recorded as a debit to interest income.

 

SHARE VALUATION. The net asset value (“NAV”) per share of the Fund is calculated by dividing the sum of the value of the securities held by the Fund, plus cash or other assets, minus all liabilities (including estimated accrued expenses) by the total number of shares outstanding of the Fund, rounded to the nearest cent.

 

22

 

 

Firsthand Technology Value Fund, Inc.

 

Notes to Financial Statements - continued

 

SEPTEMBER 30, 2019 (UNAUDITED)

 

REALIZED GAIN OR LOSS AND UNREALIZED APPRECIATION OR DEPRECIATION OF PORTFOLIO INVESTMENTS. A realized gain or loss is recognized when an investment is disposed of and is computed as the difference between the Company’s cost basis in the investment at the disposition date and the net proceeds received from such disposition. Realized gains and losses are calculated on a specific identification basis. Unrealized appreciation or depreciation is computed as the difference between the fair value of the investment and the cost basis of such investment.

 

INCOME TAXES. The Company provides for state and federal corporate income tax, as appropriate, because it is regarded as a corporation under Subchapter C of the Code. The Company recognizes interest and penalties in income tax expense.

 

FOREIGN CURRENCY TRANSLATION. The accounting records of the Company are maintained in U.S. dollars. All assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the foreign exchange rate on the date of valuation. The Company does not isolate that portion of the results of operation resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. The Company’s investments in foreign securities may involve certain risks, including without limitation: foreign exchange restrictions, expropriation, taxation or other political, social, or economic risks, all of which could affect the market and/or credit risk of the investment. In addition, changes in the relationship of foreign currencies to the U.S. dollar can significantly affect the value of these investments and therefore the earnings of the Company.

 

SECURITIES TRANSACTIONS. Securities transactions are accounted for on the date the transaction for the purchase or sale of the securities is entered into by the Company (i.e., trade date).

 

CONCENTRATION OF CREDIT RISK. The Company places its cash and cash equivalents with financial institutions and, at times, cash held in checking accounts may exceed the Federal Deposit Insurance Corporation insured limit.

 

OPTIONS. The Company is subject to equity price risk in the normal course of pursuing its investment objectives and may enter into options written to hedge against changes in the value of equities. The Company may purchase put and call options to attempt to provide protection against adverse price effects from anticipated changes in prevailing prices of securities or stock indices. The Company may also write put and call options. When the Company writes an option, an amount equal to the premium received by the Company is recorded as a liability and is subsequently adjusted to the current fair value of the option written.

 

Premiums received from writing options that expire unexercised are treated by the Company on the expiration date as realized gains from investments. The difference between the premium and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is also treated as a realized gain, or, if the premium is less than the amount paid for the closing purchase transaction, as a realized loss. If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security or currency in determining whether the Company has realized a gain or loss. The Company as writer of an option bears the market risk of an unfavorable change in the price of the security underlying the written option.

 

The average quarterly volume of the Company’s derivatives during the nine months ended September 30, 2019 is as follows:

 

 

PURCHASED OPTIONS
(CONTRACTS)

WARRANTS
(NOTIONAL VALUE)

WRITTEN OPTIONS
(CONTRACTS)

Firsthand Technology Value Fund, Inc.

10,648,919

20

 

23

 

 

Firsthand Technology Value Fund, Inc.

 

Notes to Financial Statements - continued

 

SEPTEMBER 30, 2019 (UNAUDITED)

 

NOTE 3. BUSINESS RISKS AND UNCERTAINTIES

 

We plan to invest a substantial portion of our assets in privately-held companies, the securities of which are inherently illiquid. We also seek to invest in small publicly-traded companies that we believe have exceptional growth potential and to make opportunistic investments in publicly-traded companies, both large and small. In the case of investments in small publicly-traded companies, although these companies are publicly traded, their stock may not trade at high volumes, and prices can be volatile, which may restrict our ability to sell our positions. We may also be subject to contractual restrictions or securities law limits on our ability to sell portfolio holdings because of, for example, our affiliation with a portfolio company or the relative size of our holding in a company. These privately held and publicly traded businesses tend to lack management depth, have limited or no history of operations and typically have not attained profitability. Because of the speculative nature of our investments and the lack of public markets for privately held investments, there is greater risk of loss than is the case with traditional investment securities.

 

We do not choose investments based on a strategy of diversification. We also do not rebalance the portfolio should one of our portfolio companies increase in value substantially relative to the rest of the portfolio. Therefore, the value of our portfolio may be more vulnerable to events affecting a single sector, industry or portfolio company and, therefore, may be subject to greater volatility than a company that follows a diversification strategy.

 

Because there is typically no public or readily-ascertainable market for our interests in the small privately-held companies in which we invest, the valuation of those securities is determined in good faith by the Valuation Committee, comprised of all members of the Board who are not “interested persons” of the Company, as such term is defined in Section 2(a)(19) of the 1940 Act, in accordance with our Valuation Procedures and is subject to significant estimates and judgments. The determined value of the securities in our portfolio may differ significantly from the values that would be placed on these securities if a ready market for the securities existed. Any changes in valuation are recorded in our Statement of Operations as “Net increase (decrease) in unrealized appreciation on investments.” Changes in valuation of any of our investments in privately-held companies from one period to another may be volatile.

 

The Board has engaged an independent valuation firm to provide it with valuation assistance with respect to certain of our portfolio investments. The Company intends to continue to engage an independent valuation firm to provide us with assistance regarding our determination of the fair value of select portfolio investments each quarter unless directed by the Board to cancel such valuation services. The scope of the services rendered by an independent valuation firm is at the discretion of the Board. The Board is ultimately and solely responsible for determining the fair value of the Company’s investments in good faith.

 

With respect to investments for which market quotations are not readily available or when such market quotations are deemed not to represent fair value, the Board has approved a multi-step valuation process to be followed each quarter, as described below:

 

 

(1)

each quarter the valuation process begins with each portfolio company or investment being initially valued by the Adviser Valuation Committee or the independent valuation firm;

 

 

(2)

the Valuation Committee of the Board on a quarterly basis reviews the preliminary valuation of the Adviser Valuation Committee and that of the independent valuation firms and makes the fair value determination, in good faith, based on the valuation recommendations of the Adviser Valuation Committee and the independent valuation firms; and

 

24

 

 

Firsthand Technology Value Fund, Inc.

 

Notes to Financial Statements - continued

 

SEPTEMBER 30, 2019 (UNAUDITED)

 

 

(3)

at each quarterly Board meeting, the Board considers the valuations recommended by the Adviser Valuation Committee and the independent valuation firms that were previously submitted to the Valuation Committee of the Board and ratifies the fair value determinations made by the Valuation Committee of the Board.

 

NOTE 4. INVESTMENT MANAGEMENT FEE

 

The Company has entered into an investment management agreement (the “Investment Management Agreement”) with FCM pursuant to which the Company will pay FCM a fee for providing investment management services consisting of two components—a base management fee and an incentive fee.

 

The base management fee will be calculated at an annual rate of 2.00% of our gross assets. For services rendered under the Investment Management Agreement, the base management fee will be payable quarterly in arrears. The base management fee will be calculated based on the average of (1) the value of our gross assets at the end of the current calendar quarter and (2) the value of the Company’s gross assets at the end of the preceding calendar quarter; and will be appropriately adjusted for any share issuances or repurchases during the current calendar quarter. Base management fees for any partial month or quarter will be pro-rated.

 

The incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Management Agreement, as of the termination date), commencing on April 15, 2011, and equals 20% of the Company’s realized capital gains, if any, on a cumulative basis from inception through the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid incentive fees, provided that the incentive fee determined as of December 31, 2018, will be calculated for a period of shorter than twelve calendar months to take into account any realized gains computed net of all realized capital losses and unrealized capital depreciation from inception. As of September 30, 2019, there was no incentive fee adjustment. As of September 30, 2018, there was an incentive fee adjustment for $9,633,974.

 

NOTE 5. DEBT

 

The Company currently has no plan to use leverage and does not have any significant outstanding debt obligations (other than normal operating expense accruals).

 

NOTE 6. FAIR VALUE

 

Securities traded on stock exchanges, or quoted by NASDAQ, are valued according to the NASDAQ Stock Market, Inc. (“NASDAQ”) official closing price, if applicable, or at their last reported sale price as of the close of trading on the New York Stock Exchange (“NYSE”) (normally 4:00 P.M. Eastern Time). If a security is not traded that day, the security will be valued at its most recent bid price.

 

Securities traded in the over-the-counter market, but not quoted by NASDAQ, are valued at the last sale price (or, if the last sale price is not readily available, at the most recent closing bid price as quoted by brokers that make markets in the securities) at the close of trading on the NYSE.

 

Securities traded both in the over-the-counter market and on a stock exchange are valued according to the broadest and most representative market.

 

25

 

 

Firsthand Technology Value Fund, Inc.

 

Notes to Financial Statements - continued

 

SEPTEMBER 30, 2019 (UNAUDITED)

 

Securities and other assets that do not have market quotations readily available are valued at their fair value as determined in good faith by the Board in accordance with the Valuation Procedures adopted by the Valuation Committee of the Board.

 

In pricing illiquid, privately placed securities, the Board of Directors is responsible for (1) determining overall valuation guidelines and (2) ensuring that the investments of the Company are valued within the prescribed guidelines.

 

The Valuation Committee, comprised of all of the independent Board members, is responsible for determining the valuation of the Company’s assets within the guidelines established by the Board of Directors. The Valuation Committee receives information and recommendations from the Adviser and an independent valuation firm.

 

The values assigned to these investments are based on available information and do not necessarily represent amounts that might ultimately be realized when that investment is sold, as such amounts depend on future circumstances and cannot reasonably be determined until the individual investments are actually liquidated or become readily marketable.

 

APPROACHES TO DETERMINING FAIR VALUE. GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). In effect, GAAP applies fair value terminology to all valuations whereas the 1940 Act applies market value terminology to readily marketable assets and fair value terminology to other assets.

 

The main approaches to measuring fair value utilized are the market approach, the income approach, and the asset-based approach. The choice of which approach to use in a particular situation depends on the specific facts and circumstances associated with the company, as well as the purpose for which the valuation analysis is being conducted. Firsthand and the independent valuation firm rely primarily on the market approach. We also considered the income and asset-based approaches in our analysis because certain of the portfolio companies do not have substantial operating earnings relative to the value of their underlying assets.

 

 

-

Market Approach (M): The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. For example, the market approach often uses market multiples derived from a set of comparables. Multiples might lie in ranges with a different multiple for each comparable. The selection of where within the range each appropriate multiple falls requires the use of judgment in considering factors specific to the measurement (qualitative and quantitative).

 

 

-

Income Approach (I): The income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) to a single present value amount (discounted). The measurement is based on the value indicated by current market expectations about those future amounts. Those valuation techniques include present value techniques; option-pricing models, such as the Black-Scholes-Merton formula (a closed-form model) and a binomial model (a lattice model), which incorporate present value techniques; and the multi-period excess earnings method, which is used to measure the fair value of certain assets.

 

 

-

Asset-Based Approach (A): The asset-based approach examines the value of a company’s assets net of its liabilities to derive a value for the equity holders.

 

FAIR VALUE MEASUREMENT. In accordance with the guidance from the Financial Accounting Standards Board on fair value measurements and disclosures under GAAP, the Company discloses the fair value of its investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to

 

26

 

 

Firsthand Technology Value Fund, Inc.

 

Notes to Financial Statements - continued

 

SEPTEMBER 30, 2019 (UNAUDITED)

 

valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements).

 

The guidance establishes three levels of the fair value hierarchy as follows:

 

 

Level 1 -

Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the date of measurement.

 

 

Level 2 -

Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument in an inactive market, prices for similar instruments in an active or inactive market, interest rates, prepayment speeds, credit risks, yield curves, default rates, and similar data.

 

 

Level 3 -

Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Company’s own assumptions about the assumptions a market participant would use in valuing the asset or liability based on the best information available.

 

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.

 

The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

 

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following is a summary of the inputs used to value the Company’s net assets as of September 30, 2019:

 

ASSETS

 

LEVEL 1
QUOTED PRICES

   

LEVEL 2 OTHER
SIGNIFICANT
OBSERVABLE INPUTS

   

LEVEL 3 SIGNIFICANT
UNOBSERVABLE INPUTS

 

Common Stocks

                       

Advanced Materials

  $     $     $ 718,350  

Automotive

                11,112  

Equipment Leasing

                23,490  

Intellectual Property

                737  

Mobile Computing

    997,795              

Semiconductors

    210,900              

Semiconductors Equipment

                76,402,433  

Total Common Stocks

    1,208,695             77,156,122  

 

27

 

 

Firsthand Technology Value Fund, Inc.

 

Notes to Financial Statements - continued

 

SEPTEMBER 30, 2019 (UNAUDITED)

 

ASSETS (continued)

 

LEVEL 1
QUOTED PRICES

   

LEVEL 2 OTHER
SIGNIFICANT
OBSERVABLE INPUTS

   

LEVEL 3 SIGNIFICANT
UNOBSERVABLE INPUTS

 

Preferred Stocks

                       

Aerospace

  $     $     $ 3,025,062  

Automotive

                11,220,572  

Equipment Leasing

                2,221,440  

Intellectual Property

                1,562,116  

Medical Devices

                2,928,398  

Semiconductor Equipment

                5,857,106  

Total Preferred Stocks

                26,814,694  

Asset Derivatives *

                       

Equity Contracts

                7,938,547  

Total Asset Derivatives

                7,938,547  

Convertible Notes

                       

Advanced Materials

                100,000  

Aerospace

                1,000,000  

Automotive

                4,929,015  

Medical Devices

                17,261,129  

Total Convertible Notes

                23,290,144  

Mutual Funds

    12,272,927              

Total

  $ 13,481,622     $     $ 135,199,507  

 

* Asset derivatives include warrants.

 

At the end of each calendar quarter, management evaluates the Level 2 and Level 3 assets and liabilities for changes in liquidity, including but not limited to: whether a broker is willing to execute at the quoted price, the depth and consistency of prices from third party services, and the existence of contemporaneous, observable trades in the market. Additionally, management evaluates the Level 1 and Level 2 assets and liabilities on a quarterly basis for changes in listings or delistings on national exchanges. Transfers in and out of the levels are recognized at the value at the end of the period. There were no transfers between Levels 1 and 2 as of September 30, 2019.

 

28

 

 

Firsthand Technology Value Fund, Inc.

 

Notes to Financial Statements - continued

 

SEPTEMBER 30, 2019 (UNAUDITED)

 

Following is a reconciliation of Level 3 assets (at either the beginning or the ending of the period) for which significant unobservable inputs were used to determine fair value.

 

INVESTMENTS AT FAIR
VALUE USING SIGNIFICANT
UNOBSERVABLE INPUTS
(LEVEL 3)

 

BALANCE
AS
OF
12/31/18

   

NET
PURCHASES/
CONVERSIONS

   

NET SALES/
CONVERSIONS

   

NET REALIZED
GAINS/
(LOSSES)

   

NET
UNREALIZED
APPRECIATION
(DEPRECIATION)(1)

   

TRANSFERS
IN
(OUT) OF
LEVEL 3

   

BALANCE
AS
OF
9
/30/2019

 

Common Stocks

                                                       

Advanced Materials

  $ 748,950     $     $     $     $ (30,600 )   $     $ 718,350  

Automotive

          7,460,851                   (7,449,739 )           11,112  

Consumer Electronics

                      (15,000 )     15,000              

Equipment Leasing

    36,470                         (12,980 )           23,490  

Intellectual Property

    4,517                         (3,780 )           737  

Mobile Computing

    19,121,150             (1,370,461 )     (3,995,017 )     (12,757,877 )     (997,795 )      

Semiconductor Equipment

    112,434,579             (14,689,087 )     2,511,807       (23,854,866 )           76,402,433  

Preferred Stocks

                                                       

Advanced Materials

    6,206,549                         (6,206,549 )            

Aerospace

    1,439,342       2,500,000                   (914,280 )           3,025,062  

Automotive

    983,685       11,148,889       (7,460,852 )           6,548,850             11,220,572  

Consumer Electronics

    927,994                   (2,250,000 )     1,322,006              

Equipment Leasing

    3,491,600             (800,000 )           (470,160 )           2,221,440  

Intellectual Property

    3,179,944                         (1,617,828 )           1,562,116  

Medical Devices

    13,565,328                         (10,636,930 )           2,928,398  

Semiconductor Equipment

    5,923,206                         (66,100 )           5,857,106  

Asset Derivatives

                                                       

Equity Contracts

    12,481,143                         (4,542,596 )           7,938,547  

Convertible Notes

                                                       

Advanced Materials

    7,002,600       2,970,000                   (9,872,600 )           100,000  

Aerospace

    1,000,000                                     1,000,000  

Automotive

    242,088       8,229,015       (12,100,000 )           8,557,912             4,929,015  

Consumer Electronics

    407,254       45,000             (2,745,000 )     2,292,746              

Medical Devices

    15,961,129       1,300,000                               17,261,129  

Total

  $ 205,157,528     $ 33,653,755     $ (36,420,400 )   $ (6,493,210 )   $ (59,700,371 )   $ (997,795 )   $ 135,199,507  

 

(1) The net change in unrealized appreciation (depreciation) from Level 3 instruments held as of September 30, 2019 was ($58,892,793).

 

29

 

 

Firsthand Technology Value Fund, Inc.

 

Notes to Financial Statements - continued

 

SEPTEMBER 30, 2019 (UNAUDITED)

 

The below chart represents quantitative disclosure about significant unobservable inputs for Level 3 fair value measurements at September 30, 2019:

 

 

FAIR VALUE
AT 9/30/19

VALUATION TECHNIQUES

UNOBSERVABLE INPUTS

RANGE
(WEIGHTED AVG.)

Direct venture capital investments: Advanced Materials

$0.8M

Market Comparable Companies

Option Pricing Model

Revenue Multiple

EBITDA Multiple

Years to Maturity

Volatility

Risk-Free Rate

Discount for Lack of Marketability

Weighted Average Cost of Capital

0.9x - 1.3x (1.1x)

7.7x - 9.5x (8.6x)

5 years (5 years)

50.0% (50.0%)

1.88% (1.88%)

22.7% (22.7%)

23.1% (23.1%)

Direct venture capital investments: Aerospace

$11.9M

Prior Transaction Analysis

Option Pricing Model

Years to Maturity

Volatility

Risk-Free Rate

5 years (5 years)

60.0% (60.0%)

1.55% (1.55%)

Direct venture capital investments: Automotive

$16.2M

Prior Transaction Analysis

Option Pricing Model

Years to Maturity

Volatility

Risk-Free Rate

3 years (3 years)

50.0% (50.0%)

1.56% (1.56%)

Direct venture capital investments: Consumer Electronics

$0.0M

Prior Transaction Analysis

Option Pricing Model

Years to Maturity

Volatility

Risk-Free Rate

5 years (5 years)

70.0% (70.0%)

1.55% (1.55%)

Direct venture capital investments: Equipment Leasing

$2.2M

Market Comparable Companies

Discounted Cash Flow

Option Pricing Model

EBITDA Multiple

Weighted Average Cost of Capital

Years to Maturity

Volatility

Risk-Free Rate

4.8x - 7.6x (5.5x)

20.0% (20.0%)

5 years (5 years)

50.0% (50.0%)

1.55% (1.55%)

Direct venture capital investments: Intellectual Property

$1.6M

Prior Transaction Analysis

Discounted Cash Flow

Option Pricing Model

Weighted Average Cost of Capital

Years to Maturity

Volatility

Risk-Free Rate

Discount for Lack of Marketability

Adjustment for Market Movement

10.0% (10.0%)

5 years (5 years)

55.0% (55.0%)

1.55% (1.55%)

0.0% - 24.3% (0.1%)

-63.2% (-63.2%)

Direct venture capital investments: Medical Devices

$20.2M

Market Comparable Companies

Option Pricing Model

Revenue Multiple

Years to Maturity

Volatility

Risk-Free Rate

3.1x - 4.0x (3.5x)

4 years (4 years)

50.0% (50.0%)

1.56% (1.56%)

Direct venture capital investments: Semiconductor Equipment

$82.3M

Prior Transaction Analysis

Option Pricing Model

Years to Maturity

Volatility

Risk-Free Rate

Discount for Lack of Marketability

0 years - 5 years (0.8 years)

40.0% -50.0% (47.0%)

1.55% (1.55%)

0.0% - 12.1% (9.2%)

 

30

 

 

Firsthand Technology Value Fund, Inc.

 

Notes to Financial Statements - continued

 

SEPTEMBER 30, 2019 (UNAUDITED)

 

NOTE 7. FEDERAL INCOME TAXES

 

Beginning in 2018, we were no longer able to qualify as a RIC under Subchapter M of the Code. The increase in value that resulted from the initial public offerings (IPOs) of Pivotal Systems and Revasum meant that we were no longer able to satisfy the diversification requirements for qualification as a RIC. As a result of this change, we were taxed as a corporation for our fiscal year ended December 31, 2018, and will continue to be taxed in that manner for future fiscal years, paying federal and applicable state corporate taxes on our taxable income, unless and until we are able to once again qualify as a RIC, based on changes in the composition of our portfolio. Consequently, at the close of each fiscal quarter beginning with the quarter ended June 30, 2018, we will record a deferred tax liability for any net realized gains and net ordinary income for the year-to-date period plus net unrealized gains as of the end of the quarter.

 

The reorganization described in Note 1 (the formation of FVI as a fully owned subsidiary for investment activities) was structured to avoid any adverse tax consequences for the Company and its shareholders. For the fiscal years which the Company operates as a RIC, we believe Company’s engaging in investment activities through FVI did not, in our view, jeopardize the Company’s ability to continue to qualify as a RIC under the Code at that time when the Company was eligible to be treated as a RIC.

 

The following information is based upon the U.S. federal income tax cost of portfolio investments as of September 30, 2019.

 

   

FEDERAL INCOME
TAX COST:

 

Gross unrealized appreciation

  $ 59,465,312  

Gross unrealized depreciation

    (78,966,107 )

Net unrealized appreciation

  $ (19,500,795 )

Federal income tax cost, Investments

  $ 168,181,924  

 

The Company did not qualify as a regulated investment company pursuant to Subchapter M of the Internal Revenue Code, therefore it is taxed as a corporation. As a corporation, the Company is obligated to pay federal and state income tax on taxable income. The Company’s net deferred tax asset balance was reduced, and continued to be completely offset, by the deferred tax liability. The Company is currently using an estimated tax rate of 21% for Federal and 6.98% for state taxes.

 

The Company’s income tax provision consists of the following as of December 31, 2018

 

Deferred tax expense (benefit)

       

Federal

  $ 5,922,998  

State

    1,969,708  

Total deferred tax expense

  $ 7,892,706  

 

The reconciliation between the federal statutory income tax rate of 21% and the effective tax rate on net investment income (loss) and realized and unrealized gain (loss) follows:

 

   

AMOUNT

   

RATE

 

Application of statutory income tax rate

  $ 5,922,998       21.00 %

State income taxes net of federal benefit

    1,969,708       6.98 %

Total income tax expense

  $ 7,892,706       27.98 %

 

31

 

 

Firsthand Technology Value Fund, Inc.

 

Notes to Financial Statements - continued

 

SEPTEMBER 30, 2019 (UNAUDITED)

 

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Such temporary differences are principally: (i) taxes on unrealized gains/(losses), which are attributable to the temporary difference between fair market value and tax basis, (ii) the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting and income tax purposes, and (iii) the net tax benefit of accumulated net operating losses and capital loss carryforwards. Deferred tax assets and liabilities are measured using effective tax rates expected to apply to taxable income in the years such temporary differences are realized or otherwise settled.

 

Components of the Company’s deferred tax assets and liabilities as of December 31, 2018 are as follows:

 

   

AMOUNT

 

Deferred tax assets:

       

Net operating loss carryforward (tax basis)

  $ 505,388  

Capital loss carryforward (tax basis)

    1,397,685  

Incentive fee adjustment (tax basis)

    2,118,584  

Total deferred tax assets

    4,021,657  
         

Deferred tax liabilities

       

Net unrealized gains on investment securities (tax basis)

    (11,914,362 )

Total net deferred tax liability

  $ (7,892,705 )

 

To the extent the Company has a deferred tax asset or if a portion of the deferred tax liability is offset by a tax asset resulting from net operating losses, consideration is given to whether or not a valuation allowance is required against the deferred tax asset amount. A valuation allowance is required if, based on the evaluation criterion provided by Accounting Standard Codification (“ASC”) 740, Income Taxes (ASC 740), it is more-likely-than-not that some portion or all of the deferred tax asset will not be realized. Among the factors considered in assessing the Company’s valuation allowance are: the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of the statutory carryforward periods, and the associated risks that operating and capital loss carryforwards may expire unused. Based on the Company’s assessment, it has determined that in the future it is more likely than not that the Company will generate the necessary appropriate character of income within the carryforward periods to realize its deferred tax assets.

 

From time to time, and as new information becomes available, the Company will modify its forecasts, estimates or assumptions regarding its deferred tax liability or asset.

 

Modifications of the Company’s estimates or assumptions regarding its deferred tax liability and/or asset balances and any applicable valuation allowance, changes in generally accepted accounting principles or related guidance or interpretations thereof, limitations imposed on net operating losses (if any), and changes in applicable tax law could result in increases or decreases in the Company’s NAV, which could be material. Such changes could have a material impact on the Company’s NAV and results of operations with respect to the Company’s shareholders in the period it is recorded, even though the shareholders at such time might not have held shares in the Company at the time the deferred tax asset or liability had been established.

 

The Company’s policy is to classify interest and penalties associated with underpayment of federal and state income taxes, if any, as income tax expense on its Statement of Operations. As of December 31, 2018, the Company did not have any interest or penalties associated with the underpayment of any income taxes.

 

32

 

 

Firsthand Technology Value Fund, Inc.

 

Notes to Financial Statements - continued

 

SEPTEMBER 30, 2019 (UNAUDITED)

 

The Company files income tax returns in the U.S. federal jurisdiction and California. The Company has reviewed all major jurisdictions and concluded that there is no significant impact on the Company’s net assets and no tax liability resulting from unrecognized tax benefits relating to uncertain tax positions expected to be taken on its tax returns. Furthermore, management of the Company is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next 12 months.

 

As of December 31, 2018, the Company had net operating loss carryforwards for federal and state of income tax purposes of $1,806,014, which may be carried forward indefinitely:

 

As of December 31, 2018, the Company had net capital loss carryforwards for federal and state income tax purposes, which may be carried forward for 5 years, as follows:

 

EXPIRATION DATE

 

AMOUNT

 

12/31/23

  $ 4,994,658  

Total

  $ 4,994,658  

 

NOTE 8. INVESTMENT TRANSACTIONS

 

Investment transactions (excluding short-term investments) were as follows for the quarter ended September 30, 2019.

 

PURCHASES AND SALES

       

Purchases of investment securities

  $ 21,111,150  

Proceeds from sales and maturities of investment securities

  $ (41,743,824 )

 

NOTE 9. SHARE BUYBACKS

 

SHARE BUYBACKS. On April 26, 2016, the Board of Directors of the Fund approved a discretionary share repurchase plan (the “Plan”). Pursuant to the Plan, the Fund was authorized to purchase in the open market up to $2 million worth of its common stock. The Plan allowed the Fund to acquire its own shares at certain thresholds below its NAV per share, in accordance with the guidelines specified in Rule 10b-18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The intent of the Plan was to increase NAV per share and thereby enhance shareholder value. The Fund completed the repurchase plan in September 2016, having repurchased and retired a total of 272,008 shares of stock, at a total cost of approximately $2 million.

 

On November 10, 2017, the Board of Directors of the Fund approved a discretionary share purchase plan (the “Plan”). Pursuant to the Plan, the Fund was authorized to purchase in the open market up to $2 million worth of its common stock. The Plan allowed the Fund to acquire its own shares in accordance with the guidelines specified in Rule 10b-18 of the Exchange Act. The intent of the Plan was to increase NAV per share and thereby enhance shareholder value. As of December 31, 2017, the Fund had repurchased and retired 128,551 shares of stock at a total cost of approximately $1.1 million. The Fund had 7,302,146 shares outstanding as of December 31, 2017.

 

On August 31, 2018, the Fund announced a plan to repurchase up to $2 million worth of SVVC stock in the open market by March 31, 2019. The Fund completed this open market repurchase plan on October 24, 2018. Through that date, the Fund repurchased 123,376 shares at an average price of $16.21 per share, for total consideration of $2.0 million. As of December 31, 2018, the Fund had 7,178,770 shares outstanding.

 

33

 

 

Firsthand Technology Value Fund, Inc.

 

Notes to Financial Statements - continued

 

SEPTEMBER 30, 2019 (UNAUDITED)

 

TENDER OFFER. On December 22, 2014, pursuant to our agreement with a shareholder, the Fund commenced a tender offer to purchase up to $20 million of its issued and outstanding common shares for cash at a price per share equal to 95% of the Company’s NAV per share determined as of the close of ordinary trading on the NASDAQ Global Market on December 31, 2014 ($23.2702 per share). The tender offer, which expired on January 22, 2015 at 12:00 midnight, New York City time, was oversubscribed. Because the number of shares tendered exceeded the maximum amount of its offer, the Fund purchased shares from tendering shareholders on a pro-rata basis based on the number of shares properly tendered. Of the 5,044,728 shares properly tendered, the Fund purchased 859,468 shares of common stock pursuant to the tender offer.

 

NOTE 10. INVESTMENTS IN AFFILIATES AND CONTROLLED INVESTMENTS

 

Under the 1940 Act, the Company is required to identify investments where it owns greater than 5% (but less than 25%) of the portfolio company’s outstanding voting shares as an affiliate of the Company. Also, under the 1940 Act, the Company is required to identify investments where it owns greater than 25% of the portfolio company’s outstanding voting shares as a controlled investment of the Company. A summary of the Company’s investments in affiliates and controlled investments for the period from December 31, 2018, through September 30, 2019, is noted below:

 

AFFILIATE/
CONTROLLED
INVESTMENTS*

 

VALUE AT
12/31/18

   

PURCHASES/
MERGER

   

INTEREST

   

SALES/
MATURITY/
EXPIRATION

   

REALIZED
GAIN (LOSS)

   

CHANGE IN
APPRECIATION/
DEPRECIATION

   

VALUE
9
/30/19

   

SHARES
HELD AT
9
/30/19

 

EQX Capital, Inc. Common Stock*

  $ 36,470     $     $     $     $     $ (12,980 )   $ 23,490       100,000  

EQX, Inc. Preferred Stock - Series A*

    3,491,600                   (800,000 )           (470,160 )     2,221,440       3,200,000  

Hera Systems, Inc. Series C Preferred*

          1,000,000                         (677,400 )     322,600       1,000,000  

Hera Systems, Inc. Series A Preferred*

    207,977                               223,638       431,615       3,642,324  

Hera Systems, Inc. Convertible Note*

    500,000             37,917                         500,000       500,000  

Hera Systems, Inc. Convertible Note*

    500,000             37,917                         500,000       500,000  

Hera Systems, Inc. Series B Preferred*

    1,231,365       1,500,000                         (460,518 )     2,270,847       7,039,203  

Hera Systems, Inc. Series B Warrants*

    155,540                               70,245       225,785       700,000  

Hera Systems, Inc. Series B Warrants*

    1,380,956                               623,667       2,004,623       6,214,922  

Hera Systems, Inc. Series B Warrants*

    2,721,950                               1,229,287       3,951,237       12,250,000  

Hera Systems, Inc. Series B Warrants*

                                  1,693,387       1,693,387       5,250,000  

IntraOp Medical Corp. Convertible Note*

          1,300,000       43,274                         1,300,000       1,300,000  

IntraOp Medical Corp. Series C Preferred*

    13,565,328                               (10,636,930 )     2,928,398       26,856,187  

 

34

 

 

Firsthand Technology Value Fund, Inc.

 

Notes to Financial Statements - continued

 

SEPTEMBER 30, 2019 (UNAUDITED)

 

AFFILIATE/
CONTROLLED
INVESTMENTS*

 

VALUE AT
12/31/18

   

PURCHASES/
MERGER

   

INTEREST

   

SALES/
MATURITY/
EXPIRATION

   

REALIZED
GAIN (LOSS)

   

CHANGE IN
APPRECIATION/
DEPRECIATION

   

VALUE
9
/30/19

   

SHARES
HELD AT
9
/30/19

 

IntraOp Medical Corp. Term Note*

  $ 3,000,000     $     $ 179,507     $     $     $     $ 3,000,000       3,000,000  

IntraOp Medical Corp. Term Note*

    2,000,000             119,671                         2,000,000       2,000,000  

IntraOp Medical Corp. Convertible Note*

    10,961,129             1,229,749                         10,961,129       10,961,129  

Phunware, Inc. Common Stock (1)

    19,121,150                   (1,370,462 )     (3,995,017 )     (12,757,876 )     997,795       692,913  

Pivotal Systems Common Stock*

    53,825,978                   (8,267,812 )     1,116,173       (6,295,033 )     40,379,306       45,090,506  

QMAT, Preferred Stock Series A*

    4,612,549                               (4,612,549 )           16,000,240  

QMAT, Preferred Stock Series B*

    1,594,000                               (1,594,000 )           2,000,000  

QMAT, Series A Warrant*

    112,000                               (112,000 )           2,000,000  

QMAT, Preferred Stock Warrants - Series C*

    81,381                               (81,381 )           4,932,208  

QMAT, Convertible Note*

    7,002,600       500,000       (27,627 )                 (7,502,600 )           7,502,600  

QMAT, Convertible Note

          100,000                         (100,000 )           100,000  

QMAT, Convertible Note

          400,000                         (400,000 )           400,000  

QMAT, Convertible Note

          200,000                         (200,000 )           200,000  

QMAT, Convertible Note

          100,000                         (100,000 )           100,000  

QMAT, Convertible Note

          200,000                         (200,000 )           200,000  

QMAT, Convertible Note

          100,000                         (100,000 )           100,000  

QMAT, Convertible Note

          220,000                         (220,000 )           220,000  

Revasum, Common Stock*

    58,608,601                   (6,421,275 )     1,395,634       (17,559,833 )     36,023,127       46,834,340  

Silicon Genesis Corp., Common Stock *

    4,517                               (3,780 )     737       921,892  

Silicon Genesis Corp., Common Warrants*

    84                               (72 )     12       37,982  

 

35

 

 

Firsthand Technology Value Fund, Inc.

 

Notes to Financial Statements - continued

 

SEPTEMBER 30, 2019 (UNAUDITED)

 

AFFILIATE/
CONTROLLED
INVESTMENTS*

 

VALUE AT
12/31/18

   

PURCHASES/
MERGER

   

INTEREST

   

SALES/
MATURITY/
EXPIRATION

   

REALIZED
GAIN (LOSS)

   

CHANGE IN
APPRECIATION/
DEPRECIATION

   

VALUE
9
/30/19

   

SHARES
HELD AT
9
/30/19

 

Silicon Genesis Corp., Common Warrants*

  $ 2,000     $     $     $     $     $     $ 2,000       5,000,000  

Silicon Genesis Corp., Common Warrants*

    1,200                                     1,200       3,000,000  

Silicon Genesis Corp., Series 1-C Preferred*

    25,463                               (20,090 )     5,373       82,914  

Silicon Genesis Corp., Series 1-D Preferred*

    68,918                               (54,708 )     14,210       850,830  

Silicon Genesis Corp., Series 1-E Preferred*

    1,233,878                               (575,582 )     658,296       5,704,480  

Silicon Genesis Corp., Series 1-F Preferred*

    270,816                               (125,462 )     145,354       912,453  

Silicon Genesis Corp., Series 1-G Preferred*

    1,443,530                               (777,464 )     666,066       48,370,793  

Silicon Genesis Corp., Series 1-H Preferred*

    137,339                               (64,522 )     72,817       837,942  

SVXR, Inc., Preferred Stock Series A

    4,923,206                               (44,138 )     4,879,068       8,219,454  

Telepathy Investors, Inc. Convertible Note*

    195,700             (728,400 )                 (195,700 )           2,000,000  

Telepathy Investors, Inc. Convertible Note*

    29,355             (43,980 )                 (29,355 )           300,000  

Telepathy Investors, Inc. Convertible Note*

    14,678             (36,677 )                 (14,678 )           150,000  

Telepathy Investors, Inc. Convertible Note*

    48,925             (94,524 )                 (48,925 )           500,000  

Telepathy Investors, Inc. Convertible Note*

    29,355             (86,523 )                 (29,355 )           300,000  

 

36

 

 

Firsthand Technology Value Fund, Inc.

 

Notes to Financial Statements - continued

 

SEPTEMBER 30, 2019 (UNAUDITED)

 

AFFILIATE/
CONTROLLED
INVESTMENTS*

 

VALUE AT
12/31/18

   

PURCHASES/
MERGER

   

INTEREST

   

SALES/
MATURITY/
EXPIRATION

   

REALIZED
GAIN (LOSS)

   

CHANGE IN
APPRECIATION/
DEPRECIATION

   

VALUE
9
/30/19

   

SHARES
HELD AT
9
/30/19

 

Telepathy Investors, Inc. Convertible Note*

  $ 48,925     $     $ (132,081 )   $     $     $ (48,925 )   $       500,000  

Telepathy Investors, Inc. Convertible Note*

    19,570             (3,144 )                 (19,570 )           200,000  

Telepathy Investors, Inc. Series A Preferred*

    927,994                               (927,994 )           15,238,000  

UCT Coatings, Inc.Common Stock

    748,950                               (30,600 )     718,350       1,500,000  

Vufine, Inc., Convertible Note*

    11,526             (266,301 )           (1,500,000 )     1,488,474              

Vufine, Inc., Convertible Note*

    1,921             (36,329 )           (250,000 )     248,079              

Vufine, Inc. Convertible Note*

    2,305             (19,332 )           (300,000 )     297,695              

Vufine, Inc. Convertible Note*

    768             (3,616 )           (100,000 )     99,232              

Vufine, Inc. Convertible Note*

    1,537             (4,077 )           (200,000 )     198,463              

Vufine, Inc., Convertible Note*

    2,689             (38,548 )           (350,000 )     347,311              

Vufine, Inc., Convertible Note

          45,000                   (45,000 )                  

Vufine, Inc., Common Stock*

                            (15,000 )     15,000              

Vufine, Inc., Series A, Preferred Stock*

                            (2,250,000 )     2,250,000              

Wrightspeed, Inc., Common Stock*

          7,460,851                         (7,449,739 )     11,112       69,102  

Wrightspeed, Inc., Common Stock Warrants*

                                              181  

Wrightspeed, Inc., Convertible Note

          4,929,015       190,589                         4,929,015       4,929,015  

Wrightspeed, Inc., Preferred Stock- Series AA*

          11,145,889                         74,683       11,220,572       39,096,067  

Wrightspeed, Inc., Preferred Stock Warrants- Series AA*

                                  60,303       60,303       609,742  

 

37

 

 

Firsthand Technology Value Fund, Inc.

 

Notes to Financial Statements - continued

 

SEPTEMBER 30, 2019 (UNAUDITED)

 

AFFILIATE/
CONTROLLED
INVESTMENTS*

 

VALUE AT
12/31/18

   

PURCHASES/
MERGER

   

INTEREST

   

SALES/
MATURITY/
EXPIRATION

   

REALIZED
GAIN (LOSS)

   

CHANGE IN
APPRECIATION/
DEPRECIATION

   

VALUE
9
/30/19

   

SHARES
HELD AT
9
/30/19

 

Wrightspeed, Inc., Series C Preferred Stock*

  $ 494,803     $     $     $ (1,922,975 )   $     $ 1,428,172     $        

Wrightspeed, Inc., Series D Preferred Stock*

    310,806                   (3,375,887 )           3,065,081              

Wrightspeed, Inc., Series E Preferred Stock*

    136,732                   (1,658,996 )           1,522,264              

Wrightspeed, Inc., Series F Preferred Stock*

    41,344       3,000             (502,995 )           458,651              

Wrightspeed, Inc. Series F Warrants*

    29                               (29 )            

Wrightspeed, Inc. Convertible Note*

    101,787             199,403       (3,700,000 )           3,598,213              

Wrightspeed, Inc. Convertible Note*

    55,020             104,667       (2,000,000 )           1,944,980              

Wrightspeed, Inc. Convertible Note*

    82,530             157,000       (3,000,000 )           2,917,470              

Wrightspeed, Inc. Convertible Note*

    2,751             5,233       (100,000 )           97,249              

Wrightspeed, Inc. Convertible Note*

          250,000       12,250       (250,000 )                        

Wrightspeed, Inc. Convertible Note*

          500,000       18,833       (500,000 )                        

Wrightspeed, Inc. Convertible Note*

          500,000       17,833       (500,000 )                        

Wrightspeed, Inc. Convertible Note*

          300,000       9,500       (300,000 )                        

Wrightspeed, Inc. Convertible Note*

          100,000       2,633       (100,000 )                        

Wrightspeed, Inc. Convertible Note*

          600,000       12,600       (600,000 )                        

Wrightspeed, Inc. Convertible Note*

          150,000       2,650       (150,000 )                        

Wrightspeed, Inc. Convertible Note*

          250,000       3,083       (250,000 )                        

Wrightspeed, Inc. Convertible Note*

          650,000       3,683       (650,000 )                        

Wrightspeed, Inc. Preferred Stock Warrants - Series A*

    90,980                               (90,980 )            

 

38

 

 

Firsthand Technology Value Fund, Inc.

 

Notes to Financial Statements - continued

 

SEPTEMBER 30, 2019 (UNAUDITED)

 

AFFILIATE/
CONTROLLED
INVESTMENTS*

 

VALUE AT
12/31/18

   

PURCHASES/
MERGER

   

INTEREST

   

SALES/
MATURITY/
EXPIRATION

   

REALIZED
GAIN (LOSS)

   

CHANGE IN
APPRECIATION/
DEPRECIATION

   

VALUE
9
/30/19

   

SHARES
HELD AT
9
/30/19

 

Wrightspeed, Inc. Preferred Stock Warrants - Series F*

  $ 224     $     $     $     $     $ (224 )   $        

Wrightspeed, Inc. Preferred Stock Warrants - Series F*

    22                               (22 )