# Firsthand Technology Value Fund, Inc.: Form 10-Q for the period ended Sep 30, 2024

- Company: [Firsthand Technology Value Fund, Inc.](/companies/svvc.md) (CIK 1495584)
- Form: 10-Q
- Filed: 2024-11-14
- Accepted by EDGAR: Nov 14, 2024, 16:03 ET
- Period: 2024-09-30
- Accession: 0001437749-24-035294
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1495584/000143774924035294/sccv20240930c_10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1495584/000143774924035294/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Net income | 3 months, 2024-07-01 to 2024-09-30 | $526.2k | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2024-01-01 to 2024-09-30 | $283.8k | us-gaap:NetIncomeLoss |
| Basic EPS | 3 months, 2024-07-01 to 2024-09-30 | $0.08 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2024-01-01 to 2024-09-30 | $0.04 | us-gaap:EarningsPerShareBasic |
| Operating cash flow | 3 months, 2024-07-01 to 2024-09-30 | $99 | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Operating cash flow | 9 months, 2024-01-01 to 2024-09-30 | $41 | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Total assets | at 2024-09-30 | $2.2m | us-gaap:Assets |
| Total liabilities | at 2024-09-30 | $669.7k | us-gaap:Liabilities |
| Shares outstanding | at 2024-09-30 | 6,893,056 shares | dei:EntityCommonStockSharesOutstanding |

## Management's discussion and analysis

As filed, 25,085 characters.

### FORWARD-LOOKING STATEMENTS

The matters discussed in this report, as well as in future oral and written statements by management of the Company, include forward-looking statements based on current management expectations that involve substantial risks and uncertainties which could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements. Forward-looking statements related to future events or our future financial performance. We generally identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these terms or other similar words. Important assumptions include our ability to originate new investments and to achieve certain margins and levels of profitability and the availability of additional capital. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this report should not be regarded as a representation by us that our plans or objectives will be achieved. The forward-looking statements contained in this report include, without limitations, statements as to:

- our future operating results;
- our business prospects and the prospects of our prospective portfolio companies;
- the impact of investments that we expect to make;
- the impact of a protracted decline in the liquidity of the credit markets on our business;
- our informal relationships with third parties;
- the expected market for venture capital investments and our addressable market;
- the dependence of our future success on the general economy and its impact on the industries in which we invest;
- our ability to access the equity market;
- the ability of our portfolio companies to achieve their objectives;
- our expected financings and investments;
- our regulatory structure and tax status;
- our ability to operate as a business development company and a regulated investment company;
- the adequacy of our cash resources and working capital;
- the timing of cash flows, if any, from the operation of our portfolio companies;
- the timing, form, and amount of any dividend distributions;
- impact of fluctuation of interest rates on our business;
- valuation of any investments in portfolio companies particularly those having no liquid trading market; and
- our ability to recover unrealized losses.

You should not place undue reliance on these forward-looking statements. The forward-looking statements made in this report relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances occurring after the date of this report.

The following discussion should be read in conjunction with our consolidated financial statements and related notes and other financial information appearing elsewhere in this prospectus. In addition to historical information, the following discussion and other parts of this prospectus contain forward-looking information that involves risks and uncertainties. Our actual results could differ materially from those anticipated by such forward-looking information due to the factors discussed under “Risk Factors” and “Forward-Looking Statements” appearing elsewhere herein.

### OVERVIEW

We are an externally managed, closed-end, non-diversified management investment company organized as a Maryland corporation that has elected to be treated as a BDC under the 1940 Act. As such, we are required to comply with certain regulatory requirements. For instance, we generally have to invest at least 70% of our total assets in “qualifying assets,” including securities of private or micro-cap public U.S. companies, cash, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less. In addition, for tax purposes we are treated as a corporation and are subject to federal and state taxes on our income. FCM serves as our investment adviser and manages the investment process on a daily basis.

Our investment objective is to seek long-term growth of capital, principally by seeking capital gains on our equity and equity-related investments. There can be no assurance that we will achieve our investment objective. Under normal circumstances, we invest at least 80% of our net assets for investment purposes in technology companies. We consider technology companies to be those companies that derive at least 50% of their revenues from products and/or services within the information technology sector or in 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 invest at least 70% of our total assets in privately held companies and public companies with market capitalizations of 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 our capital base. We acquire our investments through direct investments in private companies, negotiations with selling shareholders, and in organized secondary marketplaces for private securities.

While our primary focus is to invest in illiquid private technology and cleantech companies, we also may invest in micro-cap publicly traded companies. In addition, we may invest up to 30 percent of the portfolio in opportunistic investments that do not constitute the private companies and micro-cap public companies described above. These other investments may include investments in securities of public companies that are actively traded or in actively traded derivative securities such as options on securities or security indices. These other investments may also include investments in high-yield bonds, distressed debt, or securities of public companies that are actively traded and securities of companies located outside of the United States. Our investment activities are managed by FCM.

### PORTFOLIO COMPOSITION

We make investments in securities of both public and private companies. Our portfolio investments consist principally of equity and equity-like securities, including common and preferred stock, warrants for the purchase of common and preferred stock, and convertible and term notes. The fair value of our investment portfolio was approximately $1.4 million as of September 30, 2024, as compared to approximately $8.7 million as of December 31, 2023.

The following table summarizes the fair value of our investment portfolio by industry sector as of September 30, 2024, and December 31, 2023.

|  | September 30, 2024 | December 31, 2023 |
| --- | ---: | ---: |
| Exchange-Traded/Money Market Funds | 64.6% | 5.8% |
| Advanced Materials | 22.8% | 31.7% |
| Other Assets/(Liabilities) | 7.3% | (593.0)% |
| Medical Devices | 3.1% | 7.0% |
| Equipment Leasing | 2.2% | 8.8% |
| Aerospace | 0.0% | 333.2% |
| Semiconductor Equipment | 0.0% | 306.5% |
| Automotive | 0.0% | 0.0% |
| Intellectual Property | 0.0% | 0.0% |
| Net Assets | 100.0% | 100.0% |

41

### MATURITY OF PRIVATE COMPANIES IN THE CURRENT PORTFOLIO

The Fund invests in private companies at various stages of maturity. As our portfolio companies mature, they move from the “early (development) stage” to the “middle (revenue) stage” and then to the “late stage.” We expect that this continuous progression may create a pipeline of potential exit opportunities through initial public offerings (IPOs) or acquisitions. Of course, some companies do not progress. The illustration below describes typical characteristics of companies at each stage of maturity and where we believe our current portfolio companies fit within these categories. We expect some of our portfolio companies to transition between stages of maturity over time. The transition may be forward if the company is maturing and is successfully executing its business plan or may be backward if the company is not successfully executing its business plan or decides to change its business plan substantially from its original plan.

| EARLY STAGE | MIDDLE STAGE | LATE STAGE |
| --- | --- | --- |
| Developing product or service for market, high level of research and development, little or no revenue. | Established product, customers, business model; limited revenues. | Appreciable revenue; may be break-even or profitable; IPO or acquisition candidate. |

### RESULTS OF OPERATIONS

*Comparison of the three months ended September 30, 2024 to the three months ended September 30, 2023.*

### INVESTMENT INCOME

For the three months ended September 30, 2024, we had investment income of $35,792 primarily attributable to interest accrued on convertible/term note investments with Hera Systems and money market funds.

For the three months ended September 30, 2023, we had investment loss of $(234,126) primarily attributable to interest accrued on convertible/term note investments with Hera Systems.

The higher level of investment income in the three months ended September 30, 2024, compared to the three months ended September 30, 2023, was due to decline in accrued interest on current notes was due to a downward adjustment to accrued interest taken during the quarter ended September 30, 2023.

### OPERATING EXPENSES

Operating expenses totaled approximately $391,753 during the three months ended September 30, 2024, and $(2,099,513) during the three months ended September 30, 2023.

Significant components of net operating expenses for the three months ended September 30, 2024 were management fee expense waiver of $19,472 (see Note 4), professional fees (audit, legal, and consulting) of $194,475, director fees of $169,445 and compliance fees $27,811.

Significant components of net operating expenses for the three months ended September 30, 2023, were a management fee waiver of $(2,500,000), printing fees of $106,912 and professional fees (audit, legal, and consulting) of $87,623.

The higher level of net operating expenses for the three months ended ended September 30, 2024, compared to the three months ended September 30, 2023, is primarily attributed to the waiver of management fees in September 2023 (see Note 4).

### NET INVESTMENT INCOME/(LOSS)

The net investment income/(loss) before taxes was $(355,961) for the three months ended September 30, 2024, and $1,865,387 for the three months ended September 30, 2023.

The lower level of net investment loss for the three months ended September 30, 2024, as compared to net investment gain for the three months ended September 30, 2023, is primarily attributed to decrease in management fees and the waiver of management fees (see Note 4)

### NET INVESTMENT REALIZED GAINS AND LOSSES AND UNREALIZED APPRECIATION AND DEPRECIATION

A summary of the net realized and unrealized gains and losses on investments for the three-month period ended September 30, 2024, and September 30, 2023, is shown below.

|  | Three Months Ended September 30, 2024 |
| --- | ---: |
| Realized gains | $(11,686,668) |
| Net change in unrealized depreciation on investments | 12,568,856 |
| Net realized and unrealized gains on investments | $882,188 |

|  | As of September 30, 2024 |
| --- | ---: |
| Gross unrealized appreciation on portfolio investments | $— |
| Gross unrealized depreciation on portfolio investments | (115,544,196) |
| Net unrealized depreciation on portfolio investments | $(115,544,196) |

|  | Three Months Ended September 30, 2023 |
| --- | ---: |
| Realized gains | $(1) |
| Net change in unrealized depreciation on investments | (12,283,746) |
| Net realized and unrealized losses on investments | $(12,283,747) |

|  | As of September 30, 2023 |
| --- | ---: |
| Gross unrealized appreciation on portfolio investments | $— |
| Gross unrealized depreciation on portfolio investments | (126,091,989) |
| Net unrealized depreciation on portfolio investments | $(126,091,989) |

43

During the three months ended September 30, 2024, we recognized net realized losses of $11,686,668.

During the three months ended September 30, 2024, net unrealized depreciation on total investments increased by $12,568,856. The change in net unrealized appreciation and depreciation of our private investments is based on portfolio asset valuations determined in good faith by our Board of Directors. This change in net unrealized depreciation was primarily attributable to the sale of Hera Systems.

During the three months ended September 30, 2023, we recognized net realized losses of approximately $1.

### NET INCREASE/(DECREASE) IN ASSETS RESULTING FROM OPERATIONS AND CHANGE IN NET ASSETS PER SHARE

For the three months ended September 30, 2024, the net increase in net assets resulting from operations (net of deferred taxes) totaled $526,227 and basic and fully diluted net change in net assets per share for the three months ended September 30, 2024, was $0.08.

For the three months ended September 30, 2023, the net decrease in net assets resulting from operations (net of deferred taxes) totaled $(10,418,360) and basic and fully diluted net change in net assets per share for the three months ended September 30, 2023, was $(1.51).

The increase in net assets resulting from operations for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, is due primarily to a decline in net realized and unrealized losses.

#### The following information is a comparison for the nine months ended September 30, 2024 and September 30, 2023

### INVESTMENT INCOME

For the nine months ended September 30, 2024, we had investment income of $97,793 primarily attributable to interest accrued on convertible/term note investments with Hera Systems.

For the nine months ended September 30, 2023, we had investment income of $88,812 primarily attributable to interest accrued on convertible/term note investments with Hera Systems.

The higher level of investment income in the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, was due to an increase in accrued interest on current notes.

### OPERATING EXPENSES

Operating expenses totaled approximately $(2,182,907) during the nine months ended September 30, 2024, and $(1,271,383) during the nine months ended September 30, 2023.

Significant components of net operating expenses for the nine months ended September 30, 2024 were a management fee waiver of $(3,079,128) (see Note 4), and professional fees (audit, legal, and consulting) of $351,579 and director fees of $211,112.

Significant components of net operating expenses for the nine months ended September 30, 2023, were a management fee waiver of $(2,500,000), professional fees (audit, legal, and consulting) of $249,832 and printing fees of $207,383.

The lower level of net operating expenses for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, is primarily attributable to a larger management fee waiver in 2024 (see Note 4).

### NET INVESTMENT INCOME/(LOSS)

The net investment income/(loss) before taxes was $2,280,700 for the nine months ended September 30, 2024, and $1,360,195 for the nine months ended September 30, 2023.

The greater net investment income in the nine months ended September 30, 2024, compared to the net investment income in the nine months ended September 30, 2023, is primarily due to the management fee waiver (see Note 4)

### NET INVESTMENT REALIZED GAINS AND LOSSES AND UNREALIZED APPRECIATION AND DEPRECIATION

A summary of the net realized and unrealized gains and loss on investments for the nine-month periods ended September 30, 2024, and September 30, 2023, is shown below.

|  | Nine Months Ended September 30, 2024 |
| --- | ---: |
| Realized gains | $(11,686,668) |
| Net change in unrealized depreciation on investments | 9,689,744 |
| Net realized and unrealized gains/(losses) on investments | $(1,996,924) |

|  | As of September 30, 2024 |
| --- | ---: |
| Gross unrealized appreciation on portfolio investments | $— |
| Gross unrealized depreciation on portfolio investments | (115,544,196) |
| Net unrealized depreciation on portfolio investments | $(115,544,196) |

|  | Nine Months Ended September 30, 2023 |
| --- | ---: |
| Realized gains | $(7,864,982) |
| Net change in unrealized depreciation on investments | (23,424,108) |
| Net realized and unrealized gains/(losses) on investments | $(31,289,090) |

| Gross unrealized appreciation on portfolio investments | As of September 30, 2023 |
| --- | ---: |
| Gross unrealized depreciation on portfolio investments | (126,091,989) |
| Net unrealized depreciation on portfolio investments | $(126,091,989) |

During the nine months ended September 30, 2024, we recognized $(11,868,668) in net realized losses.

During the nine months ended September 30, 2024, net unrealized depreciation on total investments decreased by $9,689,744. The change in net unrealized appreciation and depreciation of our private investments is based on portfolio asset valuations determined in good faith by our Board of Directors. This change in net unrealized depreciation was primarily attributable to a increase in the fair value of our portfolio companies, notably Hera.

During the nine months ended September 30, 2023, we recognized net realized losses of approximately $(7,864,982) from the sale of investments.

### NET INCREASE/(DECREASE) IN ASSETS RESULTING FROM OPERATIONS AND CHANGE IN NET ASSETS PER SHARE

For the nine months ended September 30, 2024, the net increase in net assets resulting from operations (net of deferred taxes) totaled $283,776 and basic and fully diluted net change in net assets per share for the nine months ended September 30, 2024, was $0.04.

For the nine months ended September 30, 2023, the net decrease in net assets resulting from operations (net of deferred taxes) totaled $(29,928,895) and basic and fully diluted net change in net assets per share for the nine months ended September 30, 2023, was $(4.34).

The increase in net assets resulting from operations for the nine months ended September 30, 2024, as compared to the net decrease in net assets for the nine months ended September 30, 2023, is due primarily to an increase in net realized and unrealized gains (losses).

### DISTRIBUTION POLICY

Our board of directors will determine the timing and amount, if any, of our distributions. We are not required to pay any minimum level of distributions of our income or capital gains.

### CONTRACTUAL OBLIGATIONS

The Fund does not have any Contractual Obligations that meet the requirements for disclosure under Item 303 of Regulation S-K.

### OFF-BALANCE SHEET ARRANGEMENTS

The Fund does not have any Off-Balance Sheet Arrangements.

### CRITICAL ACCOUNTING POLICIES

This discussion of our financial condition and results of operations is based upon our financial statements, which are prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. The preparation of these financial statements will require management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ. In addition to the discussion below, we will describe our critical accounting policies in the notes to our future financial statements.

#### Valuation of Portfolio Investments

As a business development company, we generally invest in illiquid equity and equity derivatives of securities of venture capital stage technology companies. Under written procedures established by our board of directors, 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. We obtain these market values from an independent pricing service or at the mean between the bid and ask prices obtained from at least two brokers or dealers (if available, otherwise by a principal market maker or a primary market dealer). In addition, a large percentage of our portfolio investments are in the form of securities that are not publicly traded. The fair value of securities and other investments that are not publicly traded may not be readily determinable. We value these securities quarterly at fair value as determined in good faith by our board of directors. Our board of directors may use the services of a nationally recognized independent valuation firm to aid it in determining the fair value of these securities.

The methods for valuing these securities may include: fundamental analysis (sales, income, or earnings multiples, etc.), discounts from market prices of similar securities, purchase price of securities, subsequent private transactions in the security or related securities, or discounts applied to the nature and duration of restrictions on the disposition of the securities, as well as a combination of these and other factors. Because such valuations, and particularly valuations of private securities and private companies, are inherently uncertain, may fluctuate over short periods of time, and may be based on estimates, our determinations of fair value may differ materially from the values that would have been used if a ready market for these securities existed. Our net asset value could be adversely affected if our determinations regarding the fair value of our investments were materially higher than the values that we ultimately realize upon the disposal of such securities.

#### Revenue Recognition

We record interest or dividend income on an accrual basis to the extent that we expect to collect such amounts. We do not accrue as a receivable interest on loans and debt securities if we have reason to doubt our ability to collect such interest. Loan origination fees, original issue discount, and market discount are capitalized, and we amortize any such amounts as interest income. Upon the prepayment of a loan or debt security, any unamortized loan origination is recorded as interest income. We will record prepayment premiums on loans and debt securities as interest income when we receive such amounts.

#### Net Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation

We measure realized gains or losses by the difference between the net proceeds from the repayment or sale and the cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized. Net change in unrealized appreciation or depreciation reflects the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when gains or losses are realized.

#### Recently Issued Accounting Standards

From time to time, new accounting pronouncements are issued by the FASB or other standards setting bodies that are adopted by us as of the specified effective date. We believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial statements upon effectiveness.

#### Inflation

Inflation has not had a significant effect on our results of operations in any of the reporting periods presented herein. However, our portfolio companies have experienced, and may in the future experience, the impacts of inflation on their operating results.

### SUBSEQUENT EVENTS

Subsequent to the close of the fiscal quarter on September 30, 2024, and through the date of the issuance of the financial statements included herein, there have been no material events related to our portfolio of investments. Since that date, there have been no purchases or sales of securities by the Fund.

## Market risk

As filed, 5,812 characters.

The Company’s business activities contain elements of risk. We consider the principal types of market risk to be valuation risk and small company investment risk.

### VALUATION RISK

Value, as defined in Section 2(a)(41) of the 1940 Act, is (i) the market price for those securities for which market quotations are readily available and (ii) fair value as determined in good faith by, or under the direction of, the Board of Directors for all other assets.

Because there is typically no public market for our interests in the small privately-held companies in which we invest, the valuation of the securities in that portion of our portfolio is determined in good faith by our Board of Directors with the assistance of our Valuation Committee, comprised of the independent members of our Board of Directors, in accordance with our Valuation Procedures. In addition, the Board of Directors may use the services of a nationally recognized independent valuation firm to aid it in determining the fair value of some of these securities. In the absence of a readily ascertainable market value, the determined value of our portfolio of securities may differ significantly from the values that would be placed on the portfolio if a ready market for such securities existed. Determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment, although our valuation policy is intended to provide a consistent basis for determining fair value of the portfolio investments. The methods for valuing these securities may include: fundamental analysis (sales, income, or earnings multiples, etc.), discounts from market prices of similar securities, purchase price of securities, subsequent private transactions in the security or related securities, or discounts applied to the nature and duration of restrictions on the disposition of the securities, as well as a combination of these and other factors. Because such valuations, and particularly valuations of private securities and private companies, are inherently uncertain, may fluctuate over short periods of time, and may be based on estimates, our determinations of fair value may differ materially from the values that would have been used if a ready market for these securities existed.

Furthermore, changes in valuation of any of our investments in privately-held companies from one period to another may be volatile.

Investments in privately held, immature companies are inherently more volatile than investments in more mature businesses. Such immature businesses are inherently fragile and easily affected by both internal and external forces.

Our portfolio companies can lose much or all of their value suddenly in response to an internal or external adverse event. Conversely, these immature businesses can gain suddenly in value in response to an internal or external positive development.

The values assigned to our assets are based on available information and do not necessarily represent amounts that might ultimately be realized, as these amounts depend on future circumstances and cannot be reasonably determined until the individual investments are actually liquidated or become readily marketable. Upon sale of investments, the values that are ultimately realized may be different from what is presently estimated. This difference could be material.

### PRIVATELY PLACED SMALL COMPANIES RISK

The Company invests in small companies, and its investments in these companies are considered speculative in nature. The Company’s investments often include securities that are subject to legal or contractual restrictions on resale that adversely affect the liquidity and marketability of such securities. As a result, the Company is subject to risk of loss which may prevent our shareholders from achieving price appreciation, dividend distributions and return of capital.

### WE CURRENTLY HOLD A PORTION OF OUR ASSETS IN CASH

As of September 30, 2024, a portion of the Company’s assets was invested in cash and/or cash equivalents, which are expected to earn low yields. Given the current low interest rate environment, to the extent the management fee and other operating expenses exceed interest income on the cash holdings of the Company, the Company may experience losses. Furthermore, the investment advisory fee payable by us will not be reduced while our assets are invested in cash-equivalent securities.

In some cases, particularly for primary transactions, it is to our advantage to hold sufficient cash reserve so that we can make additional subsequent investments in these companies in order to (a) avoid having our earlier investments become diluted in future dilutive financings, (b) invest additional capital into existing portfolio companies in case additional investments are necessary, and/or (c) exercise warrants, options, or convertible securities that were acquired as part of the earlier transactions. For this reason, in the case of primary transactions (as opposed to secondary transactions where we do not buy the securities from the issuing companies but instead from existing stockholders), we typically reserve cash in an amount at least equal to our initial investment for such follow-on opportunities. Cash reserves held with respect to a particular investment should, therefore, decline as it is held longer, and will typically not be needed once that portfolio company becomes public or we determine it is no longer in our best interest to make investments in such portfolio company.

We may from time to time liquidate various investments. We are required to distribute substantially all of our net realized gains to stockholders on an annual basis and, therefore, will generally hold the proceeds of liquidated investments in cash pending its distribution.

## Controls and procedures

As filed, 1,440 characters.

(a) Evaluation of Disclosure Controls and Procedures As of the end of the period covered by this Quarterly Report on Form 10-Q, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective and provided reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

(b) Changes in Internal Control Over Financial Reporting There have been no changes in our internal control over financial reporting, as defined in Rule 13a-15(f) under the Exchange Act, that occurred during the fiscal quarter ended September 30, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 181 characters.

There have been no material changes from risk factors as previously disclosed in our Form 10-K for the period ended December 31, 2023, in response to Item 1A of Part 1 of Form 10-K.

Filed Nov 14, 2024.
Source: SEC EDGAR, the filing index for accession 0001437749-24-035294. Last ingested by Listed: Oct 24, 2026, 15:07 ET. No prices; not investment advice.