Notes to Consolidated Financial Statements
DECEMBER 31, 2022
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.
65
Firsthand Technology Value Fund, Inc.
Notes to Consolidated Financial Statements - continued
DECEMBER 31, 2022
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 the Advisor as the valuation designee appointed by the Board of Directors, and subject to oversight by the Board of Directors. On December 31, 2022, our financial statements include venture capital investments valued at approximately $35.9 million. The fair values of our venture capital investments were also determined by the Advisor as the valuation designee. 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 December 31, 2022, we held $35,929,005 in restricted securities. At December 31, 2021, we held $59,744,294 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 an adjustment to interest income. The Company applied an interest adjustment of approximately $21,400,000 during the year ended December 31, 2022. There was no interest adjustment during the year ended December 31, 2021.
66
Firsthand Technology Value Fund, Inc.
Notes to Consolidated Financial Statements - continued
DECEMBER 31, 2022
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.
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.
67
Firsthand Technology Value Fund, Inc.
Notes to Consolidated Financial Statements - continued
DECEMBER 31, 2022
The average quarterly volume of the Company’s derivatives during the year ended December 31, 2022 is as follows:
| Schedule of derivatives |
|
|
|
| |
PURCHASED OPTIONS
(CONTRACTS) |
WARRANTS
(NOTIONAL VALUE) |
WRITTEN OPTIONS
(CONTRACTS) |
Firsthand Technology Value Fund, Inc. |
— |
872,412 |
— |
NOTE 3. BUSINESS RISKS AND UNCERTAINTIES
We 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 Advisor’s Valuation Committee or the independent valuation firm;
|
68
Firsthand Technology Value Fund, Inc.
Notes to Consolidated Financial Statements - continued
DECEMBER 31, 2022
| |
(2)
|
the Valuation Committee of the Board on a quarterly basis reviews the preliminary valuation of the Advisor’s 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 Advisor’s Valuation Committee and the independent valuation firms; and
|
| |
(3)
|
at each quarterly Board meeting, the Board considers the valuations recommended by the Advisor’s 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, 2022, 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. For the year ended December 31, 2022, there were no incentive fee adjustments. For the year ended December 31, 2021, there were no incentive fee adjustments. For the year ended December 31, 2020, there were no incentive fee adjustments.
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.
69
Firsthand Technology Value Fund, Inc.
Notes to Consolidated Financial Statements - continued
DECEMBER 31, 2022
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.
Securities and other assets that do not have market quotations readily available are valued at their fair value as determined by FCM, as the Board’s valuation designee under SEC rule 2a-5. Those valuations are determined in accordance with the Valuation Procedures used by FCM, subject to oversight by the Board.
In pricing illiquid, privately placed securities, FCM, as the valuation designee, is responsible for (1) determining overall valuation guidelines and (2) ensuring that the investments of the Company are valued within the prescribed guidelines.
FCM and the Board receive information and recommendations from 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.
|
70
Firsthand Technology Value Fund, Inc.
Notes to Consolidated Financial Statements - continued
DECEMBER 31, 2022
| |
-
|
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 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 December 31, 2022:
| Schedule of fair value of net asset |
|
|
|
|
|
|
|
|
|
ASSETS |
|
LEVEL 1
QUOTED PRICES |
|
|
LEVEL 2 OTHER
SIGNIFICANT
OBSERVABLE INPUTS |
|
|
LEVEL 3 SIGNIFICANT
OBSERVABLE INPUTS |
|
Common Stocks |
|
|
|
|
|
|
|
|
|
|
|
|
Advanced Materials |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
337,500 |
|
Automotive |
|
|
— |
|
|
|
— |
|
|
|
546 |
|
Equipment Leasing |
|
|
— |
|
|
|
— |
|
|
|
11,130 |
|
Intellectual Property |
|
|
— |
|
|
|
— |
|
|
|
111 |
|
Semiconductor Equipment |
|
|
3,520,496 |
|
|
|
— |
|
|
|
— |
|
Total Common Stocks |
|
|
3,520,496 |
|
|
|
— |
|
|
|
349,287 |
|
71
Firsthand Technology Value Fund, Inc.
Notes to Consolidated Financial Statements - continued
DECEMBER 31, 2022
ASSETS (continued) |
|
LEVEL 1
QUOTED PRICES |
|
|
LEVEL 2 OTHER
SIGNIFICANT
OBSERVABLE INPUTS |
|
|
LEVEL 3 SIGNIFICANT
OBSERVABLE INPUTS |
|
Preferred Stocks |
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
384,067 |
|
Automotive |
|
|
— |
|
|
|
— |
|
|
|
1,049,478 |
|
Equipment Leasing |
|
|
— |
|
|
|
— |
|
|
|
865,995 |
|
Intellectual Property |
|
|
— |
|
|
|
— |
|
|
|
737,112 |
|
Total Preferred Stocks |
|
|
— |
|
|
|
— |
|
|
|
3,036,652 |
|
Asset Derivatives * |
|
|
|
|
|
|
|
|
|
|
|
|
Equity Contracts |
|
|
— |
|
|
|
— |
|
|
|
957,125 |
|
Total Asset Derivatives |
|
|
— |
|
|
|
— |
|
|
|
957,125 |
|
Convertible Notes |
|
|
|
|
|
|
|
|
|
|
|
|
Advanced Materials |
|
|
— |
|
|
|
— |
|
|
|
100,000 |
|
Aerospace |
|
|
— |
|
|
|
— |
|
|
|
6,559,791 |
|
Automotive |
|
|
— |
|
|
|
— |
|
|
|
7,809,430 |
|
Medical Devices |
|
|
— |
|
|
|
— |
|
|
|
17,116,721 |
|
Total Convertible Notes |
|
|
— |
|
|
|
— |
|
|
|
31,585,942 |
|
Mutual Funds |
|
|
672,422 |
|
|
|
— |
|
|
|
— |
|
Total |
|
$ |
4,192,918 |
|
|
$ |
— |
|
|
$ |
35,929,006 |
|
|
*
|
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.
The following is a summary of the inputs used to value the Company’s net assets as of December 31, 2021.
ASSETS |
|
LEVEL 1
QUOTED PRICES |
|
|
LEVEL 2 OTHER
SIGNIFICANT
OBSERVABLE INPUTS |
|
|
LEVEL 3 SIGNIFICANT
UNOBSERVABLE INPUTS |
|
Common Stocks |
|
|
|
|
|
|
|
|
|
|
|
|
Advanced Materials |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
613,650 |
|
Automotive |
|
|
— |
|
|
|
— |
|
|
|
1,126 |
|
Equipment Leasing |
|
|
— |
|
|
|
— |
|
|
|
31,490 |
|
Intellectual Property |
|
|
— |
|
|
|
— |
|
|
|
277 |
|
Semiconductor Equipment |
|
|
30,754,595 |
|
|
|
— |
|
|
|
— |
|
Total Common Stocks |
|
|
30,754,595 |
|
|
|
— |
|
|
|
646,543 |
|
72
Firsthand Technology Value Fund, Inc.
Notes to Consolidated Financial Statements - continued
DECEMBER 31, 2022
ASSETS (continued) |
|
LEVEL 1
QUOTED PRICES |
|
|
LEVEL 2 OTHER
SIGNIFICANT
OBSERVABLE INPUTS |
|
|
LEVEL 3 SIGNIFICANT
UNOBSERVABLE INPUTS |
|
Preferred Stocks |
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
324,245 |
|
Automotive |
|
|
— |
|
|
|
— |
|
|
|
1,777,068 |
|
Equipment Leasing |
|
|
— |
|
|
|
— |
|
|
|
1,898,420 |
|
Intellectual Property |
|
|
— |
|
|
|
— |
|
|
|
1,050,442 |
|
Medical Devices |
|
|
— |
|
|
|
— |
|
|
|
670,062 |
|
Semiconductor Equipment |
|
|
— |
|
|
|
— |
|
|
|
280,160 |
|
Total Preferred Stocks |
|
|
— |
|
|
|
— |
|
|
|
6,000,397 |
|
Asset Derivatives * |
|
|
|
|
|
|
|
|
|
|
|
|
Equity Contracts |
|
|
— |
|
|
|
— |
|
|
|
802,210 |
|
Total Asset Derivatives |
|
|
— |
|
|
|
— |
|
|
|
802,210 |
|
Convertible Notes |
|
|
|
|
|
|
|
|
|
|
|
|
Advanced Materials |
|
|
— |
|
|
|
— |
|
|
|
100,000 |
|
Aerospace |
|
|
— |
|
|
|
— |
|
|
|
4,380,000 |
|
Automotive |
|
|
— |
|
|
|
— |
|
|
|
21,404,015 |
|
Medical Devices |
|
|
— |
|
|
|
— |
|
|
|
26,411,129 |
|
Total Convertible Notes |
|
|
— |
|
|
|
— |
|
|
|
52,295,144 |
|
Mutual Funds |
|
|
629,653 |
|
|
|
— |
|
|
|
— |
|
Total |
|
$ |
31,384,248 |
|
|
$ |
— |
|
|
$ |
59,744,294 |
|
|
*
|
Asset derivatives include warrants.
|
73
Firsthand Technology Value Fund, Inc.
Notes to Consolidated Financial Statements - continued
DECEMBER 31, 2022
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.
| Schedule of unobservable inputs of fair value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTMENTS AT FAIR
VALUE USING SIGNIFICANT
UNOBSERVABLE INPUTS
(LEVEL 3) |
|
BALANCE
AS OF
12/31/21 |
|
|
NET
PURCHASES/
CONVERSIONS |
|
|
NET SALES/
CONVERSIONS |
|
|
NET REALIZED
GAINS/
(LOSSES) |
|
|
NET UNREALIZED
APPRECIATION
(DEPRECIATION)(1) |
|
|
TRANSFERS
IN (OUT) OF
LEVEL 3 |
|
|
BALANCE
AS OF
12/31/22 |
|
Common Stocks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advanced Materials |
|
$ |
613,650 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(276,150 |
) |
|
$ |
— |
|
|
$ |
337,500 |
|
Automotive |
|
|
1,126 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(580 |
) |
|
|
— |
|
|
|
546 |
|
Equipment Leasing |
|
|
31,490 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(20,360 |
) |
|
|
— |
|
|
|
11,130 |
|
Intellectual Property |
|
|
277 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(166 |
) |
|
|
— |
|
|
|
111 |
|
Total Common Stocks |
|
|
646,543 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(297,256 |
) |
|
|
— |
|
|
|
349,287 |
|
Preferred Stocks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace |
|
|
324,245 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
59,822 |
|
|
|
— |
|
|
|
384,067 |
|
Automotive |
|
|
1,777,068 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(727,590 |
) |
|
|
— |
|
|
|
1,049,478 |
|
Equipment Leasing |
|
|
1,898,420 |
|
|
|
— |
|
|
|
(350,000 |
) |
|
|
— |
|
|
|
(682,425 |
) |
|
|
— |
|
|
|
865,995 |
|
Intellectual Property |
|
|
1,050,442 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(313,330 |
) |
|
|
— |
|
|
|
737,112 |
|
Medical Devices |
|
|
670,062 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(670,062 |
) |
|
|
— |
|
|
|
— |
|
Semiconductor Equipment |
|
|
280,160 |
|
|
|
— |
|
|
|
— |
|
|
|
(4,082,192 |
) |
|
|
3,802,032 |
|
|
|
— |
|
|
|
— |
|
Total Preferred Stocks |
|
|
6,000,397 |
|
|
|
— |
|
|
|
(350,000 |
) |
|
|
(4,082,192 |
) |
|
|
1,468,447 |
|
|
|
— |
|
|
|
3,036,652 |
|
Asset Derivatives |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Contracts |
|
|
802,210 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
154,915 |
|
|
|
— |
|
|
|
957,125 |
|
Total Asset Derivatives |
|
|
802,210 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
154,915 |
|
|
|
— |
|
|
|
957,125 |
|
Convertible Notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advanced Materials |
|
|
100,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
100,000 |
|
Aerospace |
|
|
4,380,000 |
|
|
|
7,414,791 |
|
|
|
(5,235,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6,559,791 |
|
Automotive |
|
|
21,404,015 |
|
|
|
2,625,000 |
|
|
|
— |
|
|
|
— |
|
|
|
(16,219,585 |
) |
|
|
— |
|
|
|
7,809,430 |
|
Medical Devices |
|
|
26,411,129 |
|
|
|
2,400,000 |
|
|
|
— |
|
|
|
— |
|
|
|
(11,694,408 |
) |
|
|
— |
|
|
|
17,116,721 |
|
Total Convertible Notes |
|
|
52,295,144 |
|
|
|
12,439,791 |
|
|
|
(5,235,000 |
) |
|
|
— |
|
|
|
(27,913,993 |
) |
|
|
— |
|
|
|
31,585,942 |
|
Total |
|
$ |
59,744,294 |
|
|
$ |
12,439,791 |
|
|
$ |
(5,585,000 |
) |
|
$ |
(4,082,192 |
) |
|
$ |
(26,587,887 |
) |
|
$ |
— |
|
|
$ |
35,929,006 |
|
|
(1)
|
The net change in unrealized appreciation (depreciation) from Level 3 instruments held as of December 31, 2022 was $(30,670,079).
|
74
Firsthand Technology Value Fund, Inc.
Notes to Consolidated Financial Statements - continued
DECEMBER 31, 2022
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
12/31/20 |
|
|
NET
PURCHASES/
CONVERSIONS |
|
|
NET SALES/
CONVERSIONS |
|
|
NET
REALIZED
GAINS/
(LOSSES) |
|
|
NET
UNREALIZED
APPRECIATION
(DEPRECIATION)(1) |
|
|
TRANSFERS
IN (OUT) OF
LEVEL 3 |
|
|
BALANCE
AS OF
12/31/2021 |
|
Common Stocks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advanced Materials |
|
$ |
1,074,300 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(460,650 |
) |
|
$ |
— |
|
|
$ |
613,650 |
|
Automotive |
|
|
7,643 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(6,517 |
) |
|
|
— |
|
|
|
1,126 |
|
Equipment Leasing |
|
|
27,440 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4,050 |
|
|
|
— |
|
|
|
31,490 |
|
Intellectual Property |
|
|
369 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(92 |
) |
|
|
— |
|
|
|
277 |
|
Total Common Stocks |
|
|
1,109,752 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(463,209 |
) |
|
|
— |
|
|
|
646,543 |
|
Preferred Stocks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace |
|
|
286,464 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
37,781 |
|
|
|
— |
|
|
|
324,245 |
|
Automotive |
|
|
12,720,065 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(10,942,997 |
) |
|
|
— |
|
|
|
1,777,068 |
|
Equipment Leasing |
|
|
2,177,560 |
|
|
|
— |
|
|
|
(500,000 |
) |
|
|
— |
|
|
|
220,860 |
|
|
|
— |
|
|
|
1,898,420 |
|
Intellectual Property |
|
|
1,330,267 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(279,825 |
) |
|
|
— |
|
|
|
1,050,442 |
|
Medical Devices |
|
|
4,976,452 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(4,306,390 |
) |
|
|
— |
|
|
|
670,062 |
|
Semiconductor Equipment |
|
|
6,209,012 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(5,928,852 |
) |
|
|
— |
|
|
|
280,160 |
|
Total Preferred Stocks |
|
|
27,699,820 |
|
|
|
— |
|
|
|
(500,000 |
) |
|
|
— |
|
|
|
(21,199,423 |
) |
|
|
— |
|
|
|
6,000,397 |
|
Asset Derivatives |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Contracts |
|
|
781,912 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
20,298 |
|
|
|
— |
|
|
|
802,210 |
|
Total Asset Derivatives |
|
|
781,912 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
20,298 |
|
|
|
— |
|
|
|
802,210 |
|
Convertible Notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advanced Materials |
|
|
100,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
100,000 |
|
Aerospace |
|
|
2,630,000 |
|
|
|
1,750,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4,380,000 |
|
Automotive |
|
|
10,804,015 |
|
|
|
10,600,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
21,404,015 |
|
Medical Devices |
|
|
21,411,129 |
|
|
|
5,000,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
26,411,129 |
|
Total Convertible Notes |
|
|
34,945,144 |
|
|
|
17,350,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
52,295,144 |
|
Total |
|
$ |
64,536,628 |
|
|
$ |
17,350,000 |
|
|
$ |
(500,000 |
) |
|
$ |
— |
|
|
$ |
(21,642,334 |
) |
|
$ |
— |
|
|
$ |
59,744,294 |
|
|
(1)
|
The net change in unrealized appreciation (depreciation) from Level 3 instruments held as of December 31, 2021 was $(21,642,162).
|
75
Firsthand Technology Value Fund, Inc.
Notes to Consolidated Financial Statements - continued
DECEMBER 31, 2022
The table below represents quantitative disclosure about significant unobservable inputs for Level 3 fair value measurements at December 31, 2022:
| Schedule of unobservable inputs fair value measurements |
|
|
|
|
|
FAIR
VALUE AT
12/31/22 |
VALUATION TECHNIQUES(1) |
UNOBSERVABLE INPUTS |
RANGE
(WEIGHTED AVG.)(2) |
Direct venture capital investments: Advanced Materials |
$0.3M |
Market Comparable Companies
Option Pricing Model |
EBITDA Multiple(3)
Revenue Multiple(3)
Years to Maturity(3)
Volatility(3)
Risk-Free Rate(3)
Discount for Lack of Marketability(4) |
5.7x - 7.6x (6.7x)
0.7x – 1.0x (0.9x)
5 years (5 years)
50.0% (50.0%)
3.99% (3.99%)
22.7% (22.7%) |
Direct venture capital investments: Aerospace |
$7.9M |
Market Comparable Companies
Option Pricing Model |
EBITDA Multiple(3)
Years to Maturity(3)
Volatility(3)
Risk-Free Rate(3)
|
5.2x (5.2x)
5 years (5 years)
60.0% (60.0%)
3.99% (3.99%)
|
Direct venture capital investments: Automotive |
$8.9M |
Prior Transaction Analysis
Option Pricing Model
Probability-Weighted Expected Return Method |
Years to Maturity(3)
Volatility(3)
Risk-Free Rate(3)
Discount for Lack of Marketability(4)
Going Concern Probability(3) |
5 years (5 years)
50.0% (50.0%)
3.99% (3.99%)
0.0% - 22.7% (0.0%)
10% (10%)
|
Direct venture capital investments: Equipment Leasing |
$0.9M |
Market Comparable Companies
Liquidation Value
Option Pricing Model |
EBITDA Multiple(3)
Years to Maturity(3)
Volatility(3)
Risk-Free Rate(3) |
2.6x – 3.5x (3.2x)
5 years (5 years)
50.0% (50.0%)
3.99% (3.99%)
|
Direct venture capital investments: Intellectual Property |
$0.7M |
Discounted Cash Flow
Option Pricing Model
|
Weighted Average Cost of Capital(4)
Years to Maturity(3)
Volatility(3)
Risk-Free Rate(3)
Discount for Lack of Marketability(4) |
12.5% (12.5%)
5 years (5 years)
55.0% (55.0%)
3.99% (3.99%)
0.0% - 24.3% (0.0%) |
Direct venture capital investments: Medical Devices |
$17.1M |
Market Comparable Companies
|
Revenue Multiple(3)
|
2.2x – 2.5x (2.3x) |
|
(1)
|
As of December 31, 2021, the Fund used Market Comparable Companies approaches to value certain investments. As of December 31, 2022, the Fund discontinued use of these approaches in certain cases in which more reliable indications of value were developed.
|
|
(2)
|
Weighted average is calculated by weighing the significant unobservable input by the relative fair value of each investment in the category
|
|
(3)
|
An increase in the input would result in an increase in the security’s valuation; a decrease in the input would result in a decrease in the security’s valuation.
|
|
(4)
|
An increase in the input would result in a decrease in the security’s valuation; a decrease in the input would result in an increase in the security’s valuation.
|
76
Firsthand Technology Value Fund, Inc.
Notes to Consolidated Financial Statements - continued
DECEMBER 31, 2022
Changes in any of our unobservable inputs, individually, may change the fair value of certain of the Company’s investments.
Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Additionally, the fair value of the Company’s investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that the Company may ultimately realize. Further, such investments are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If the Company was required to liquidate a portfolio investment in a forced or liquidation sale, it could realize significantly less than the value at which the Company has recorded it.
In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the unrealized gains or losses reflected in the valuations currently assigned. The below chart represents quantitative disclosure about significant unobservable inputs for Level 3 fair value measurements at December 31, 2021:
|
FAIR
VALUE AT
12/31/21 |
VALUATION TECHNIQUES(1) |
UNOBSERVABLE INPUTS |
RANGE
(WEIGHTED AVG.)(2) |
Direct venture capital investments: Advanced Materials |
$0.7M |
Market Comparable Companies
Option Pricing Model |
EBITDA Multiple(3)
Revenue Multiple(3)
Years to Maturity(3)
Volatility(3)
Risk-Free Rate(3)
Discount for Lack of Marketability(4) |
8.0x - 9.4x (8.7x)
1.0x (1.0x)
5 years (5 years)
50.0% (50.0%)
1.26% (1.26%)
22.7% (22.7%) |
Direct venture capital investments: Aerospace |
$5.5M |
Prior Transaction Analysis
Option Pricing Model
Probability-Weighted Expected Return Method |
Years to Maturity(3)
Volatility(3)
Risk-Free Rate(3)
Going Concern Probability(3) |
5 years (5 years)
50.0% (50.0%)
1.26% (1.26%)
25% (25%) |
Direct venture capital investments: Automotive |
$23.2M |
Prior Transaction Analysis
Option Pricing Model
Probability-Weighted Expected Return Method |
Years to Maturity(3)
Volatility(3)
Risk-Free Rate(3)
Discount for Lack of Marketability(4)
Going Concern Probability(3) |
5 years (5 years)
50.0% (50.0%)
1.26% (1.26%)
0.0% - 22.7% (0.0%)
10% (10%) |
Direct venture capital investments: Equipment Leasing |
$1.9M |
Market Comparable Companies
Discounted Cash Flow
Option Pricing Model |
EBITDA Multiple(3)
Weighted Average Cost of Capital(4)
Years to Maturity(3)
Volatility(3)
Risk-Free Rate(3) |
3.7x - 8.4x (5.8x)
20.0% (20.0%)
5 years (5 years)
50.0% (50.0%)
1.26% (1.26%) |
77
Firsthand Technology Value Fund, Inc.
Notes to Consolidated Financial Statements - continued
DECEMBER 31, 2022
continued |
FAIR
VALUE AT
12/31/21 |
VALUATION TECHNIQUES(1) |
UNOBSERVABLE INPUTS |
RANGE
(WEIGHTED AVG.)(2) |
Direct venture capital investments: Intellectual Property |
$1.0M |
Discounted Cash Flow
Option Pricing Model |
Weighted Average Cost of Capital(4)
Years to Maturity(3)
Volatility(3)
Risk-Free Rate(3)
Discount for Lack of Marketability(4) |
12.5% (12.5%)
5 years (5 years)
55.0% (55.0%)
1.26% (1.26%)
0.0% - 24.3% (0.0%) |
Direct venture capital investments: Medical Devices |
$27.1M |
Market Comparable Companies
Option Pricing Model |
Revenue Multiple(3)
Years to Maturity(3)
Volatility(3)
Risk-Free Rate(3) |
3.8x (3.8x)
4 years (4 years)
55.0% (55.0%)
1.12% (1.12%) |
Direct venture capital investments:
Semiconductor
Equipment |
$0.3M |
Market Comparable Companies
Option Pricing Model |
Revenue Multiple(3)
Years to Maturity(3)
Volatility(3)
Risk-Free Rate(3) |
2.2x – 2.6x (2.4x)
5 years (5 years)
50.0% (50.0%)
1.26% (1.26%) |
|
(1)
|
As of December 31, 2020, the Fund used Discounted Cash Flow approaches to value certain investments. As of December 31, 2021, the Fund discontinued use of these approaches in certain cases in which more reliable indications of value were developed.
|
|
(2)
|
Weighted average is calculated by weighing the significant unobservable input by the relative fair value of each investment in the category.
|
|
(3)
|
An increase in the input would result in an increase in the security’s valuation; a decrease in the input would result in a decrease in the security’s valuation.
|
|
(4)
|
An increase in the input would result in an decrease in the security’s valuation; a decrease in the input would result in a increase in the security’s valuation.
|
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.
78
Firsthand Technology Value Fund, Inc.
Notes to Consolidated Financial Statements - continued
DECEMBER 31, 2022
The following information is based upon the U.S. federal income tax cost of portfolio investments as of December 31, 2022.
| Schedule of federal income tax cost of portfolio investments |
|
|
|
| |
|
FEDERAL INCOME
TAX COST: |
|
Gross unrealized appreciation |
|
$ |
957,122 |
|
Gross unrealized depreciation |
|
|
(103,625,209 |
) |
Net unrealized (depreciation) |
|
$ |
(102,668,087 |
) |
Federal income tax cost, Investments |
|
$ |
142,790,010 |
|
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 has a full valuation allowance based on management’s estimate of future realization of such assets. 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:
| Schedule of income tax provision |
|
|
|
|
|
|
|
|
| |
|
2022 |
|
|
2021 |
|
Deferred tax (expense)/benefit |
|
|
|
|
|
|
|
|
Federal |
|
$ |
— |
|
|
$ |
— |
|
State |
|
|
— |
|
|
|
— |
|
Total deferred tax (expense)/benefit |
|
$ |
— |
|
|
$ |
— |
|
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, and (ii) 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, 2022 are as follows:
| Schedule of deferred tax assets and liabilities |
|
|
|
|
|
|
| |
|
2022 |
|
|
2021 |
|
Deferred tax assets: |
|
|
|
|
|
|
|
|
Net operating loss carryforward |
|
$ |
4,616,720 |
|
|
$ |
261,739 |
|
Capital loss carryforward |
|
|
6,960,412 |
|
|
|
6,084,731 |
|
Net unrealized losses (gains) on investment securities |
|
|
28,726,530 |
|
|
|
15,137,185 |
|
Total deferred tax assets, net |
|
|
40,303,662 |
|
|
|
21,483,655 |
|
Valuation allowance |
|
|
(40,303,662 |
) |
|
|
(21,483,655 |
) |
Net |
|
$ |
— |
|
|
$ |
— |
|
For the year ended December 31, 2022, the Company had an effective tax rate of 0% and a statutory tax rate of 21% (27.98% with state income tax) with the difference being attributable to changes in the components of the deferred tax assets and the valuation allowance account.
79
Firsthand Technology Value Fund, Inc.
Notes to Consolidated Financial Statements - continued
DECEMBER 31, 2022
For the year ended December 31, 2021, the Company had an effective tax rate of 0% and a statutory tax rate of 21% with the difference primarily being attributable to changes to the total gross deferred tax asset valuation account.
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 not generate the necessary appropriate character of income within the carryforward periods to realize its deferred tax assets, and as such, has placed a full allowance on the 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, 2022, the Company did not have any interest or penalties associated with the underpayment of any income taxes.
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, 2022, the Company had net operating loss carryforwards for federal and state of income tax purposes of $16,500,072, which may be carried forward indefinitely.
As of December 31, 2022, the Company had net capital loss carryforwards for federal and state income tax purposes, which may be carried forward for 5 years, as follows:
| Schedule of net capital loss carryforwards |
|
|
|
EXPIRATION DATE |
|
AMOUNT |
|
12/31/24 |
|
$ |
14,230,073 |
|
12/31/25 |
|
|
7,516,642 |
|
12/31/27 |
|
|
3,129,665 |
|
Total |
|
$ |
24,876,380 |
|
80
Firsthand Technology Value Fund, Inc.
Notes to Consolidated Financial Statements - continued
DECEMBER 31, 2022
NOTE 8. INVESTMENT TRANSACTIONS
Investment transactions (excluding short-term investments) were as follows for the year ended December 31, 2022.
| Schedule of investment transactions |
|
|
|
|
PURCHASES AND SALES |
|
|
|
|
Purchases of investment securities |
|
$ |
9,412,526 |
|
Proceeds from sales and maturities of investment securities |
|
$ |
9,937,261 |
|
The Fund may purchase securities from, or sell securities to, an affiliated Fund under specific conditions outlined in procedures adopted by the Board. The procedures have been designed to ensure that any purchase or sale of securities by the Funds from or to another Fund or portfolio that is or could be considered an affiliate by virtue of having a common investment advisor (or affiliated investment advisors), common Trustees, and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2022, the Firsthand Technology Value Fund and the Firsthand Technology Opportunities Fund engaged in the following securities purchases and sales:
| Schedule of securities purchases and sales |
|
|
| |
Purchases |
Sales |
Firsthand Technology Value Fund |
$ — |
$ 2,480,868 |
Firsthand Technology Opportunities Fund |
$ 2,480,868 |
$ — |
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.
TENDER OFFERS. 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,
81
Firsthand Technology Value Fund, Inc.
Notes to Consolidated Financial Statements - continued
DECEMBER 31, 2022
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.
On December 16, 2019, the Fund announced the commencement of a “modified Dutch auction” tender offer to purchase up to $2 million of its common stock at a price per share not less than $6.00 and not greater than $8.00, in $0.10 increments. The tender offer expired on February 14, 2020, and resulted in the purchase by the Fund of 285,714 shares of common stock at a price of $7.00 per share. As of March 31, 2020, the Fund had 6,893,056 shares outstanding.
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, 2021, through December 31, 2022, is noted below:
| Schedule of investments in affiliates and controlled investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFILIATE/
CONTROLLED
INVESTMENTS* |
|
VALUE AT
12/31/21 |
|
|
PURCHASE/
MERGER |
|
|
INTEREST |
|
|
SALES/
MATURITY/
EXPIRATION |
|
|
REALIZED
GAIN (LOSS) |
|
|
CHANGE IN
APPRECIATION/
DEPRECIATION |
|
|
VALUE
12/31/22 |
|
|
SHARES HELD
AT 12/31/22 |
|
Equipment Leasing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQX Capital, Inc. Common Stock* |
|
$ |
31,490 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(20,360 |
) |
|
$ |
11,130 |
|
|
|
100,000 |
|
EQX Capital, Inc. Series A Preferred Stock* |
|
|
1,898,420 |
|
|
|
— |
|
|
|
— |
|
|
|
(350,000 |
) |
|
|
— |
|
|
|
(682,425 |
) |
|
|
865,995 |
|
|
|
1,950,000 |
|
Total Equipment Leasing |
|
$ |
1,929,910 |
|
|
|
|
|
|
$ |
— |
|
|
|
|
|
|
$ |
— |
|
|
$ |
(702,785 |
) |
|
$ |
877,125 |
|
|
|
|
|
Aerospace |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hera Systems, Inc. Convertible Note* |
|
|
150,000 |
|
|
|
— |
|
|
|
15,417 |
|
|
|
(150,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
150,000 |
|
|
|
— |
|
|
|
15,788 |
|
|
|
(150,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
150,000 |
|
|
|
— |
|
|
|
15,657 |
|
|
|
(150,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
150,000 |
|
|
|
— |
|
|
|
15,488 |
|
|
|
(150,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
250,000 |
|
|
|
— |
|
|
|
29,951 |
|
|
|
(250,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
150,000 |
|
|
|
— |
|
|
|
15,256 |
|
|
|
(150,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
150,000 |
|
|
|
— |
|
|
|
15,133 |
|
|
|
(150,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
— |
|
|
|
75,000 |
|
|
|
6,125 |
|
|
|
(75,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
82
Firsthand Technology Value Fund, Inc.
Notes to Consolidated Financial Statements - continued
DECEMBER 31, 2022
AFFILIATE/
CONTROLLED
INVESTMENTS* |
|
VALUE AT
12/31/21 |
|
|
PURCHASE/
MERGER |
|
|
INTEREST |
|
|
SALES/
MATURITY/
EXPIRATION |
|
|
REALIZED
GAIN (LOSS) |
|
|
CHANGE IN
APPRECIATION/
DEPRECIATION |
|
|
VALUE
12/31/22 |
|
|
SHARES HELD
AT 12/31/22 |
|
Hera Systems, Inc. Convertible Note* |
|
$ |
150,000 |
|
|
$ |
— |
|
|
$ |
17,175 |
|
|
$ |
(150,000 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
— |
|
|
|
90,000 |
|
|
|
6,900 |
|
|
|
(90,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
— |
|
|
|
70,000 |
|
|
|
5,075 |
|
|
|
(70,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
— |
|
|
|
75,000 |
|
|
|
5,167 |
|
|
|
(75,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
— |
|
|
|
55,000 |
|
|
|
3,575 |
|
|
|
(55,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
— |
|
|
|
75,000 |
|
|
|
4,542 |
|
|
|
(75,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
— |
|
|
|
75,000 |
|
|
|
4,229 |
|
|
|
(75,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
200,000 |
|
|
|
— |
|
|
|
21,203 |
|
|
|
(200,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
150,000 |
|
|
|
— |
|
|
|
16,054 |
|
|
|
(150,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
150,000 |
|
|
|
— |
|
|
|
16,168 |
|
|
|
(150,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
150,000 |
|
|
|
— |
|
|
|
16,308 |
|
|
|
(150,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
150,000 |
|
|
|
— |
|
|
|
16,464 |
|
|
|
(150,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
50,000 |
|
|
|
— |
|
|
|
5,518 |
|
|
|
(50,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
250,000 |
|
|
|
— |
|
|
|
27,756 |
|
|
|
(250,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
250,000 |
|
|
|
— |
|
|
|
28,098 |
|
|
|
(250,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
250,000 |
|
|
|
— |
|
|
|
28,408 |
|
|
|
(250,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
— |
|
|
|
150,000 |
|
|
|
13,458 |
|
|
|
(150,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
220,000 |
|
|
|
— |
|
|
|
25,429 |
|
|
|
(220,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
200,000 |
|
|
|
— |
|
|
|
23,371 |
|
|
|
(200,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
20,000 |
|
|
|
— |
|
|
|
2,355 |
|
|
|
(20,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
40,000 |
|
|
|
— |
|
|
|
4,746 |
|
|
|
(40,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
500,000 |
|
|
|
— |
|
|
|
71,384 |
|
|
|
(500,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
83
Firsthand Technology Value Fund, Inc.
Notes to Consolidated Financial Statements - continued
DECEMBER 31, 2022
AFFILIATE/
CONTROLLED
INVESTMENTS* |
|
VALUE AT
12/31/21 |
|
|
PURCHASE/
MERGER |
|
|
INTEREST |
|
|
SALES/
MATURITY/
EXPIRATION |
|
|
REALIZED
GAIN (LOSS) |
|
|
CHANGE IN
APPRECIATION/
DEPRECIATION |
|
|
VALUE
12/31/22 |
|
|
SHARES HELD
AT 12/31/22 |
|
Hera Systems, Inc. Convertible Note* |
|
$ |
500,000 |
|
|
$ |
— |
|
|
$ |
73,869 |
|
|
$ |
(500,000 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
— |
|
|
|
— |
|
|
|
311 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
— |
|
|
|
90,000 |
|
|
|
4,625 |
|
|
|
(90,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
— |
|
|
|
100,000 |
|
|
|
4,722 |
|
|
|
(100,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Hera Systems, Inc. Convertible Note* |
|
|
— |
|
|
|
5,359,791 |
|
|
|
4,466 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,359,791 |
|
|
|
5,359,791 |
|
Hera Systems, Inc. Convertible Note* |
|
|
— |
|
|
|
1,200,000 |
|
|
|
500 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,200,000 |
|
|
|
1,200,000 |
|
Hera Systems, Inc. Series A Preferred* |
|
|
8,377 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,642 |
) |
|
|
4,735 |
|
|
|
3,642,324 |
|
Hera Systems, Inc. Series B Preferred* |
|
|
229,479 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
46,106 |
|
|
|
275,585 |
|
|
|
7,039,203 |
|
Hera Systems, Inc. Series B Warrants* |
|
|
398,738 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
79,870 |
|
|
|
478,608 |
|
|
|
12,250,000 |
|
Hera Systems, Inc. Series B Warrants* |
|
|
202,296 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
40,521 |
|
|
|
242,817 |
|
|
|
6,214,922 |
|
Hera Systems, Inc. Series B Warrants* |
|
|
170,888 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
34,230 |
|
|
|
205,118 |
|
|
|
5,250,000 |
|
Hera Systems, Inc. Series B Warrants* |
|
|
22,785 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4,564 |
|
|
|
27,349 |
|
|
|
700,000 |
|
Hera Systems, Inc. Series C Preferred* |
|
|
86,390 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
17,357 |
|
|
|
103,747 |
|
|
|
2,650,000 |
|
Total Aerospace |
|
$ |
5,498,953 |
|
|
|
|
|
|
$ |
580,691 |
|
|
|
|
|
|
$ |
— |
|
|
$ |
219,006 |
|
|
$ |
7,897,750 |
|
|
|
|
|
Medical Devices |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IntraOp Medical Corp. Convertible Note* |
|
|
10,961,129 |
|
|
|
— |
|
|
|
(5,721,295 |
) |
|
|
— |
|
|
|
— |
|
|
|
(4,214,960 |
) |
|
|
6,746,169 |
|
|
|
10,961,129 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
1,300,000 |
|
|
|
— |
|
|
|
(542,140 |
) |
|
|
— |
|
|
|
— |
|
|
|
(499,898 |
) |
|
|
800,102 |
|
|
|
1,300,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
500,000 |
|
|
|
— |
|
|
|
(178,884 |
) |
|
|
— |
|
|
|
— |
|
|
|
(192,269 |
) |
|
|
307,731 |
|
|
|
500,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
500,000 |
|
|
|
— |
|
|
|
(183,777 |
) |
|
|
— |
|
|
|
— |
|
|
|
(192,269 |
) |
|
|
307,731 |
|
|
|
500,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
3,000,000 |
|
|
|
— |
|
|
|
58,522 |
|
|
|
— |
|
|
|
— |
|
|
|
(1,153,611 |
) |
|
|
1,846,389 |
|
|
|
3,000,000 |
|
84
Firsthand Technology Value Fund, Inc.
Notes to Consolidated Financial Statements - continued
DECEMBER 31, 2022
AFFILIATE/
CONTROLLED
INVESTMENTS* |
|
VALUE AT
12/31/21 |
|
|
PURCHASE/
MERGER |
|
|
INTEREST |
|
|
SALES/
MATURITY/
EXPIRATION |
|
|
REALIZED
GAIN (LOSS) |
|
|
CHANGE IN
APPRECIATION/
DEPRECIATION |
|
|
VALUE
12/31/22 |
|
|
SHARES HELD
AT 12/31/22 |
|
IntraOp Medical Corp. Convertible Note* |
|
$ |
1,000,000 |
|
|
$ |
— |
|
|
$ |
(296,025 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(384,537 |
) |
|
$ |
615,463 |
|
|
|
1,000,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
400,000 |
|
|
|
— |
|
|
|
(104,983 |
) |
|
|
— |
|
|
|
— |
|
|
|
(153,815 |
) |
|
|
246,185 |
|
|
|
400,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
500,000 |
|
|
|
— |
|
|
|
(141,630 |
) |
|
|
— |
|
|
|
— |
|
|
|
(192,269 |
) |
|
|
307,731 |
|
|
|
500,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
750,000 |
|
|
|
— |
|
|
|
(157,131 |
) |
|
|
— |
|
|
|
— |
|
|
|
(288,403 |
) |
|
|
461,597 |
|
|
|
750,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
500,000 |
|
|
|
— |
|
|
|
(111,390 |
) |
|
|
— |
|
|
|
— |
|
|
|
(192,269 |
) |
|
|
307,731 |
|
|
|
500,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
500,000 |
|
|
|
— |
|
|
|
(6,781 |
) |
|
|
— |
|
|
|
— |
|
|
|
(192,268 |
) |
|
|
307,732 |
|
|
|
500,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
500,000 |
|
|
|
— |
|
|
|
(10,274 |
) |
|
|
— |
|
|
|
— |
|
|
|
(192,268 |
) |
|
|
307,732 |
|
|
|
500,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
1,000,000 |
|
|
|
— |
|
|
|
(29,178 |
) |
|
|
— |
|
|
|
— |
|
|
|
(384,537 |
) |
|
|
615,463 |
|
|
|
1,000,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
500,000 |
|
|
|
— |
|
|
|
(17,877 |
) |
|
|
— |
|
|
|
— |
|
|
|
(192,268 |
) |
|
|
307,732 |
|
|
|
500,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
1,000,000 |
|
|
|
— |
|
|
|
(105,249 |
) |
|
|
— |
|
|
|
— |
|
|
|
(384,537 |
) |
|
|
615,463 |
|
|
|
1,000,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
500,000 |
|
|
|
— |
|
|
|
(20,753 |
) |
|
|
— |
|
|
|
— |
|
|
|
(192,268 |
) |
|
|
307,732 |
|
|
|
500,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
500,000 |
|
|
|
— |
|
|
|
(421 |
) |
|
|
— |
|
|
|
— |
|
|
|
(192,268 |
) |
|
|
307,732 |
|
|
|
500,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
500,000 |
|
|
|
— |
|
|
|
(34,726 |
) |
|
|
— |
|
|
|
— |
|
|
|
(192,268 |
) |
|
|
307,732 |
|
|
|
500,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
— |
|
|
|
200,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(76,907 |
) |
|
|
123,093 |
|
|
|
200,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
— |
|
|
|
700,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(269,176 |
) |
|
|
430,824 |
|
|
|
700,000 |
|
85
Firsthand Technology Value Fund, Inc.
Notes to Consolidated Financial Statements - continued
DECEMBER 31, 2022
AFFILIATE/
CONTROLLED
INVESTMENTS* |
|
VALUE AT
12/31/21 |
|
|
PURCHASE/
MERGER |
|
|
INTEREST |
|
|
SALES/
MATURITY/
EXPIRATION |
|
|
REALIZED
GAIN (LOSS) |
|
|
CHANGE IN
APPRECIATION/
DEPRECIATION |
|
|
VALUE
12/31/22 |
|
|
SHARES HELD
AT 12/31/22 |
|
IntraOp Medical Corp. Convertible Note* |
|
$ |
— |
|
|
$ |
150,000 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(57,681 |
) |
|
$ |
92,319 |
|
|
|
150,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
— |
|
|
|
350,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(134,588 |
) |
|
|
215,412 |
|
|
|
350,000 |
|
IntraOp Medical Corp. Series C Preferred* |
|
|
670,062 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(670,062 |
) |
|
|
— |
|
|
|
26,856,187 |
|
IntraOp Medical Corp. Term Note* |
|
|
2,000,000 |
|
|
|
— |
|
|
|
39,452 |
|
|
|
— |
|
|
|
— |
|
|
|
(769,074 |
) |
|
|
1,230,926 |
|
|
|
2,000,000 |
|
Total Medical Devices |
|
$ |
27,081,191 |
|
|
|
|
|
|
$ |
(7,564,540 |
) |
|
|
|
|
|
$ |
— |
|
|
$ |
(11,364,470 |
) |
|
$ |
17,116,721 |
|
|
|
|
|
Semiconductor Equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pivotal Systems Corp. CDI*(1) |
|
|
9,287,771 |
|
|
|
— |
|
|
|
— |
|
|
|
(2,107,064 |
) |
|
|
2,097,192 |
|
|
|
(9,277,899 |
) |
|
|
— |
|
|
|
— |
|
SVXR, Inc. Series A Preferred Stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(4,082,192 |
) |
|
|
4,082,192 |
|
|
|
— |
|
|
|
— |
|
Revasum, Inc. CDI*(1) |
|
|
21,466,824 |
|
|
|
2,734 |
|
|
|
— |
|
|
|
(3,100,396 |
) |
|
|
(1,146,382 |
) |
|
|
(13,702,284 |
) |
|
|
3,520,496 |
|
|
|
39,774,889 |
|
Total Semiconductor Equipment |
|
$ |
30,754,595 |
|
|
|
|
|
|
$ |
— |
|
|
|
|
|
|
$ |
(3,131,382 |
) |
|
$ |
(18,897,991 |
) |
|
$ |
3,520,496 |
|
|
|
|
|
Intellectual Property |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Silicon Genesis Corp. Common Stock* |
|
|
277 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(166 |
) |
|
|
111 |
|
|
|
921,892 |
|
Silicon Genesis Corp. Common Warrants* |
|
|
3 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2 |
) |
|
|
1 |
|
|
|
37,982 |
|
Silicon Genesis Corp. Series 1-C Preferred Stock* |
|
|
1,990 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,028 |
) |
|
|
962 |
|
|
|
82,914 |
|
Silicon Genesis Corp. Series 1-D Preferred* |
|
|
5,275 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,723 |
) |
|
|
2,552 |
|
|
|
850,830 |
|
Silicon Genesis Corp. Series 1-E Preferred* |
|
|
453,506 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(132,914 |
) |
|
|
320,592 |
|
|
|
5,704,480 |
|
Silicon Genesis Corp. Series 1-F Preferred* |
|
|
100,187 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(29,381 |
) |
|
|
70,806 |
|
|
|
912,453 |
|
86
Firsthand Technology Value Fund, Inc.
Notes to Consolidated Financial Statements - continued
DECEMBER 31, 2022
AFFILIATE/
CONTROLLED
INVESTMENTS* |
|
VALUE AT
12/31/21 |
|
|
PURCHASE/
MERGER |
|
|
INTEREST |
|
|
SALES/
MATURITY/
EXPIRATION |
|
|
REALIZED
GAIN (LOSS) |
|
|
CHANGE IN
APPRECIATION/
DEPRECIATION |
|
|
VALUE
12/31/22 |
|
|
SHARES HELD
AT 12/31/22 |
|
Silicon Genesis Corp. Series 1-G Preferred* |
|
$ |
439,206 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(132,535 |
) |
|
$ |
306,671 |
|
|
$ |
48,370,793 |
|
Silicon Genesis Corp. Series 1-H Preferred* |
|
|
50,277 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(14,748 |
) |
|
|
35,529 |
|
|
|
837,942 |
|
Total Intellectual Property |
|
$ |
1,050,721 |
|
|
|
|
|
|
$ |
— |
|
|
|
|
|
|
$ |
— |
|
|
$ |
(313,497 |
) |
|
$ |
737,224 |
|
|
|
|
|
Advanced Materials |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UCT Coatings, Inc. Common Stock |
|
|
613,650 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(276,150 |
) |
|
|
337,500 |
|
|
|
1,500,000 |
|
Total Advanced Materials |
|
$ |
613,650 |
|
|
|
|
|
|
$ |
— |
|
|
|
|
|
|
$ |
— |
|
|
$ |
(276,150 |
) |
|
$ |
337,500 |
|
|
|
|
|
Automotive |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wrightspeed, Inc. Common Stock* |
|
|
1,126 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(580 |
) |
|
|
546 |
|
|
|
69,102 |
|
Wrightspeed, Inc. Convertible Note* |
|
|
— |
|
|
|
125,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(84,375 |
) |
|
|
40,625 |
|
|
|
125,000 |
|
Wrightspeed, Inc. Convertible Note* |
|
|
— |
|
|
|
165,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(111,375 |
) |
|
|
53,625 |
|
|
|
165,000 |
|
Wrightspeed, Inc. Convertible Note* |
|
|
— |
|
|
|
135,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(91,125 |
) |
|
|
43,875 |
|
|
|
135,000 |
|
Wrightspeed, Inc. Convertible Note* |
|
|
— |
|
|
|
250,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(168,750 |
) |
|
|
81,250 |
|
|
|
250,000 |
|
Wrightspeed, Inc. Convertible Note* |
|
|
— |
|
|
|
250,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(168,750 |
) |
|
|
81,250 |
|
|
|
250,000 |
|
Wrightspeed, Inc. Convertible Note* |
|
|
— |
|
|
|
250,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(168,750 |
) |
|
|
81,250 |
|
|
|
250,000 |
|
Wrightspeed, Inc. Convertible Note* |
|
|
— |
|
|
|
250,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(168,750 |
) |
|
|
81,250 |
|
|
|
250,000 |
|
Wrightspeed, Inc. Convertible Note* |
|
|
— |
|
|
|
250,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(168,750 |
) |
|
|
81,250 |
|
|
|
250,000 |
|
Wrightspeed, Inc. Convertible Note* |
|
|
— |
|
|
|
250,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(168,750 |
) |
|
|
81,250 |
|
|
|
250,000 |
|
Wrightspeed, Inc. Convertible Note* |
|
|
— |
|
|
|
250,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(168,750 |
) |
|
|
81,250 |
|
|
|
250,000 |
|
Wrightspeed, Inc. Convertible Note* |
|
|
— |
|
|
|
65,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(43,875 |
) |
|
|
21,125 |
|
|
|
65,000 |
|
Wrightspeed, Inc. Convertible Note* |
|
|
— |
|
|
|
185,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(124,875 |
) |
|
|
60,125 |
|
|
|
185,000 |
|
Wrightspeed, Inc. Convertible Note* |
|
|
— |
|
|
|
200,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(135,000 |
) |
|
|
65,000 |
|
|
|
200,000 |
|
Wrightspeed, Inc. Convertible Note* |
|
|
700,000 |
|
|
|
— |
|
|
|
(20,533 |
) |
|
|
— |
|
|
|
— |
|
|
|
(472,500 |
) |
|
|
227,500 |
|
|
|
700,000 |
|
87
Firsthand Technology Value Fund, Inc.
Notes to Consolidated Financial Statements - continued
DECEMBER 31, 2022
AFFILIATE/
CONTROLLED
INVESTMENTS* |
|
VALUE AT
12/31/21 |
|
|
PURCHASE/
MERGER |
|
|
INTEREST |
|
|
SALES/
MATURITY/
EXPIRATION |
|
|
REALIZED
GAIN (LOSS) |
|
|
CHANGE IN
APPRECIATION/
DEPRECIATION |
|
|
VALUE
12/31/22 |
|
|
SHARES HELD
AT 12/31/22 |
|
Wrightspeed, Inc. Convertible Note* |
|
$ |
1,000,000 |
|
|
$ |
— |
|
|
$ |
(1,333 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(675,000 |
) |
|
$ |
325,000 |
|
|
|
1,000,000 |
|
Wrightspeed, Inc. Convertible Note* |
|
|
1,000,000 |
|
|
|
— |
|
|
|
(13,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
(675,000 |
) |
|
|
325,000 |
|
|
|
1,000,000 |
|
Wrightspeed, Inc. Convertible Note* |
|
|
1,000,000 |
|
|
|
— |
|
|
|
(64,355 |
) |
|
|
— |
|
|
|
— |
|
|
|
(675,000 |
) |
|
|
325,000 |
|
|
|
1,000,000 |
|
Wrightspeed, Inc. Convertible Note* |
|
|
1,000,000 |
|
|
|
— |
|
|
|
(45,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
(675,000 |
) |
|
|
325,000 |
|
|
|
1,000,000 |
|
Wrightspeed, Inc. Convertible Note* |
|
|
300,000 |
|
|
|
— |
|
|
|
(10,100 |
) |
|
|
— |
|
|
|
— |
|
|
|
(202,500 |
) |
|
|
97,500 |
|
|
|
300,000 |
|
Wrightspeed, Inc. Convertible Note* |
|
|
400,000 |
|
|
|
— |
|
|
|
(51,807 |
) |
|
|
— |
|
|
|
— |
|
|
|
(270,000 |
) |
|
|
130,000 |
|
|
|
400,000 |
|
Wrightspeed, Inc. Convertible Note* |
|
|
2,000,000 |
|
|
|
— |
|
|
|
(250,063 |
) |
|
|
— |
|
|
|
— |
|
|
|
(1,350,000 |
) |
|
|
650,000 |
|
|
|
2,000,000 |
|
Wrightspeed, Inc. Convertible Note* |
|
|
1,400,000 |
|
|
|
— |
|
|
|
(145,600 |
) |
|
|
— |
|
|
|
— |
|
|
|
(945,000 |
) |
|
|
455,000 |
|
|
|
1,400,000 |
|
Wrightspeed, Inc. Convertible Note* |
|
|
1,200,000 |
|
|
|
— |
|
|
|
(105,600 |
) |
|
|
— |
|
|
|
— |
|
|
|
(810,000 |
) |
|
|
390,000 |
|
|
|
1,200,000 |
|
Wrightspeed, Inc. Convertible Note* |
|
|
1,000,000 |
|
|
|
— |
|
|
|
(76,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
(675,000 |
) |
|
|
325,000 |
|
|
|
1,000,000 |
|
Wrightspeed, Inc. Convertible Note* |
|
|
1,000,000 |
|
|
|
— |
|
|
|
(24,333 |
) |
|
|
— |
|
|
|
— |
|
|
|
(675,000 |
) |
|
|
325,000 |
|
|
|
1,000,000 |
|
Wrightspeed, Inc. Convertible Note* |
|
|
1,000,000 |
|
|
|
— |
|
|
|
(53,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
(675,000 |
) |
|
|
325,000 |
|
|
|
1,000,000 |
|
Wrightspeed, Inc. Convertible Note* |
|
|
1,050,000 |
|
|
|
— |
|
|
|
(159,157 |
) |
|
|
— |
|
|
|
— |
|
|
|
(708,750 |
) |
|
|
341,250 |
|
|
|
1,050,000 |
|
Wrightspeed, Inc. Convertible Note* |
|
|
400,000 |
|
|
|
— |
|
|
|
(56,294 |
) |
|
|
— |
|
|
|
— |
|
|
|
(270,000 |
) |
|
|
130,000 |
|
|
|
400,000 |
|
Wrightspeed, Inc. Convertible Note* |
|
|
375,000 |
|
|
|
— |
|
|
|
(50,813 |
) |
|
|
— |
|
|
|
— |
|
|
|
(253,125 |
) |
|
|
121,875 |
|
|
|
375,000 |
|
Wrightspeed, Inc. Convertible Note* |
|
|
900,000 |
|
|
|
— |
|
|
|
(147,524 |
) |
|
|
— |
|
|
|
— |
|
|
|
(607,500 |
) |
|
|
292,500 |
|
|
|
900,000 |
|
Wrightspeed, Inc. Convertible Note* |
|
|
750,000 |
|
|
|
— |
|
|
|
(131,069 |
) |
|
|
— |
|
|
|
— |
|
|
|
(506,250 |
) |
|
|
243,750 |
|
|
|
750,000 |
|
Wrightspeed, Inc. Convertible Note* |
|
|
4,929,015 |
|
|
|
— |
|
|
|
(1,625,767 |
) |
|
|
— |
|
|
|
— |
|
|
|
(3,327,085 |
) |
|
|
1,601,930 |
|
|
|
4,929,015 |
|
Wrightspeed, Inc. Series AA Preferred* |
|
|
1,777,068 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(727,590 |
) |
|
|
1,049,478 |
|
|
|
60,733,693 |
|
88
Firsthand Technology Value Fund, Inc.
Notes to Consolidated Financial Statements - continued
DECEMBER 31, 2022
AFFILIATE/
CONTROLLED
INVESTMENTS* |
|
VALUE AT
12/31/21 |
|
|
PURCHASE/
MERGER |
|
|
INTEREST |
|
|
SALES/
MATURITY/
EXPIRATION |
|
|
REALIZED
GAIN (LOSS) |
|
|
CHANGE IN
APPRECIATION/
DEPRECIATION |
|
|
VALUE
12/31/22 |
|
|
SHARES HELD
AT 12/31/22 |
|
Wrightspeed, Inc. Series AA Warrants* |
|
$ |
7,500 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(4,268 |
) |
|
$ |
3,232 |
|
|
|
609,756 |
|
Total Automotive |
|
$ |
23,189,709 |
|
|
|
|
|
|
$ |
(3,031,348 |
) |
|
|
|
|
|
$ |
— |
|
|
$ |
(16,952,023 |
) |
|
$ |
8,862,686 |
|
|
|
|
|
Total Affiliates and Controlled Investments |
|
$ |
90,118,729 |
|
|
|
|
|
|
$ |
(10,015,197 |
) |
|
|
|
|
|
$ |
(3,131,382 |
) |
|
$ |
(48,287,910 |
) |
|
$ |
39,349,502 |
|
|
|
|
|
Total Affiliates |
|
|
613,650 |
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
(4,082,192 |
) |
|
|
3,806,042 |
|
|
|
337,500 |
|
|
|
|
|
Total Controlled Investments |
|
$ |
89,505,079 |
|
|
|
|
|
|
$ |
(10,015,197 |
) |
|
|
|
|
|
$ |
950,810 |
|
|
$ |
(52,093,952 |
) |
|
$ |
39,012,002 |
|
|
|
|
|
|
*
|
Controlled Investments.
|
|
(1)
|
CDI CHESS Depositary Interests
|
A summary of the Company’s investments in affiliates and controlled investments for the period from December 31, 2020, through December 31, 2021, is noted below:
AFFILIATE/
CONTROLLED
INVESTMENTS* |
|
VALUE AT
12/31/20 |
|
|
PURCHASES/
MERGER |
|
|
INTEREST |
|
|
SALES/
MATURITY/
EXPIRATION |
|
|
REALIZED
GAIN (LOSS) |
|
|
CHANGE IN
APPRECIATION/
DEPRECIATION |
|
|
VALUE
12/31/21 |
|
|
SHARES
HELD AT
12/31/21 |
|
EQX Capital, Inc. Common Stock* |
|
$ |
27,440 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
4,050 |
|
|
$ |
31,490 |
|
|
|
100,000 |
|
EQX, Inc. Preferred Stock - Series A* |
|
|
2,177,560 |
|
|
|
— |
|
|
|
— |
|
|
|
(500,000 |
) |
|
|
— |
|
|
|
220,860 |
|
|
|
1,898,420 |
|
|
|
2,300,000 |
|
Hera Systems, Inc. Series C Preferred* |
|
|
75,260 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
11,130 |
|
|
|
86,390 |
|
|
|
2,650,000 |
|
Hera Systems, Inc. Series A Preferred* |
|
|
11,291 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,914 |
) |
|
|
8,377 |
|
|
|
3,642,324 |
|
Hera Systems, Inc. Convertible Note* |
|
|
500,000 |
|
|
|
— |
|
|
|
82,877 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
500,000 |
|
|
|
500,000 |
|
Hera Systems, Inc. Convertible Note* |
|
|
500,000 |
|
|
|
— |
|
|
|
76,710 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
500,000 |
|
|
|
500,000 |
|
Hera Systems, Inc. Convertible Note* |
|
|
250,000 |
|
|
|
— |
|
|
|
27,347 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
250,000 |
|
|
|
250,000 |
|
Hera Systems, Inc. Convertible Note* |
|
|
40,000 |
|
|
|
— |
|
|
|
4,334 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
40,000 |
|
|
|
40,000 |
|
Hera Systems, Inc. Convertible Note* |
|
|
20,000 |
|
|
|
— |
|
|
|
2,150 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
20,000 |
|
|
|
20,000 |
|
Hera Systems, Inc. Convertible Note* |
|
|
200,000 |
|
|
|
— |
|
|
|
21,342 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
200,000 |
|
|
|
200,000 |
|
Hera Systems, Inc. Convertible Note* |
|
|
220,000 |
|
|
|
— |
|
|
|
23,223 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
220,000 |
|
|
|
220,000 |
|
Hera Systems, Inc. Convertible Note* |
|
|
150,000 |
|
|
|
— |
|
|
|
15,686 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
150,000 |
|
|
|
150,000 |
|
89
Firsthand Technology Value Fund, Inc.
Notes to Consolidated Financial Statements - continued
DECEMBER 31, 2022
AFFILIATE/
CONTROLLED
INVESTMENTS* |
|
VALUE AT
12/31/20 |
|
|
PURCHASES/
MERGER |
|
|
INTEREST |
|
|
SALES/
MATURITY/
EXPIRATION |
|
|
REALIZED
GAIN (LOSS) |
|
|
CHANGE IN
APPRECIATION/
DEPRECIATION |
|
|
VALUE
12/31/21 |
|
|
SHARES
HELD AT
12/31/21 |
|
Hera Systems, Inc. Convertible Note* |
|
$ |
250,000 |
|
|
$ |
— |
|
|
$ |
25,946 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
250,000 |
|
|
|
250,000 |
|
Hera Systems, Inc. Convertible Note* |
|
|
250,000 |
|
|
|
— |
|
|
|
25,664 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
250,000 |
|
|
|
250,000 |
|
Hera Systems, Inc. Convertible Note* |
|
|
250,000 |
|
|
|
— |
|
|
|
25,425 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
250,000 |
|
|
|
250,000 |
|
Hera Systems, Inc. Convertible Note* |
|
|
— |
|
|
|
50,000 |
|
|
|
4,722 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
50,000 |
|
|
|
50,000 |
|
Hera Systems, Inc. Convertible Note* |
|
|
— |
|
|
|
150,000 |
|
|
|
13,292 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
150,000 |
|
|
|
150,000 |
|
Hera Systems, Inc. Convertible Note* |
|
|
— |
|
|
|
150,000 |
|
|
|
11,750 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
150,000 |
|
|
|
150,000 |
|
Hera Systems, Inc. Convertible Note* |
|
|
— |
|
|
|
150,000 |
|
|
|
10,375 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
150,000 |
|
|
|
150,000 |
|
Hera Systems, Inc. Convertible Note* |
|
|
— |
|
|
|
150,000 |
|
|
|
9,250 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
150,000 |
|
|
|
150,000 |
|
Hera Systems, Inc. Convertible Note* |
|
|
— |
|
|
|
200,000 |
|
|
|
10,333 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
200,000 |
|
|
|
200,000 |
|
Hera Systems, Inc. Convertible Note* |
|
|
— |
|
|
|
150,000 |
|
|
|
6,625 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
150,000 |
|
|
|
150,000 |
|
Hera Systems, Inc. Convertible Note* |
|
|
— |
|
|
|
150,000 |
|
|
|
5,333 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
150,000 |
|
|
|
150,000 |
|
Hera Systems, Inc. Convertible Note* |
|
|
— |
|
|
|
150,000 |
|
|
|
3,667 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
150,000 |
|
|
|
150,000 |
|
Hera Systems, Inc. Convertible Note* |
|
|
— |
|
|
|
150,000 |
|
|
|
2,958 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
150,000 |
|
|
|
150,000 |
|
Hera Systems, Inc. Convertible Note* |
|
|
— |
|
|
|
150,000 |
|
|
|
1,375 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
150,000 |
|
|
|
150,000 |
|
Hera Systems, Inc. Convertible Note* |
|
|
— |
|
|
|
150,000 |
|
|
|
167 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
150,000 |
|
|
|
150,000 |
|
Hera Systems, Inc. Series B Preferred* |
|
|
199,913 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
29,566 |
|
|
|
229,479 |
|
|
|
7,039,203 |
|
Hera Systems, Inc. Series B Warrants* |
|
|
19,789 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,996 |
|
|
|
22,785 |
|
|
|
700,000 |
|
Hera Systems, Inc. Series B Warrants* |
|
|
175,696 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
26,600 |
|
|
|
202,296 |
|
|
|
6,214,922 |
|
Hera Systems, Inc. Series B Warrants* |
|
|
346,307 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
52,431 |
|
|
|
398,738 |
|
|
|
12,250,000 |
|
Hera Systems, Inc. Series B Warrants* |
|
|
148,418 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
22,470 |
|
|
|
170,888 |
|
|
|
5,250,000 |
|
IntraOp Medical Corp. Series C Preferred* |
|
|
4,976,452 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(4,306,390 |
) |
|
|
670,062 |
|
|
|
26,856,187 |
|
90
Firsthand Technology Value Fund, Inc.
Notes to Consolidated Financial Statements - continued
DECEMBER 31, 2022
AFFILIATE/
CONTROLLED
INVESTMENTS* |
|
VALUE AT
12/31/20 |
|
|
PURCHASES/
MERGER |
|
|
INTEREST |
|
|
SALES/
MATURITY/
EXPIRATION |
|
|
REALIZED
GAIN (LOSS) |
|
|
CHANGE IN
APPRECIATION/
DEPRECIATION |
|
|
VALUE
12/31/21 |
|
|
SHARES
HELD AT
12/31/21 |
|
IntraOp Medical Corp. Convertible Note* |
|
$ |
1,300,000 |
|
|
$ |
— |
|
|
$ |
240,279 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,300,000 |
|
|
|
1,300,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
500,000 |
|
|
|
— |
|
|
|
88,550 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
500,000 |
|
|
|
500,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
500,000 |
|
|
|
— |
|
|
|
89,188 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
500,000 |
|
|
|
500,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
1,000,000 |
|
|
|
— |
|
|
|
168,986 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,000,000 |
|
|
|
1,000,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
500,000 |
|
|
|
— |
|
|
|
83,661 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
500,000 |
|
|
|
500,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
400,000 |
|
|
|
— |
|
|
|
65,844 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
400,000 |
|
|
|
400,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
500,000 |
|
|
|
— |
|
|
|
79,747 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
500,000 |
|
|
|
500,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
750,000 |
|
|
|
— |
|
|
|
118,279 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
750,000 |
|
|
|
750,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
— |
|
|
|
1,000,000 |
|
|
|
105,249 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,000,000 |
|
|
|
1,000,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
— |
|
|
|
500,000 |
|
|
|
421 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
500,000 |
|
|
|
500,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
— |
|
|
|
500,000 |
|
|
|
34,726 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
500,000 |
|
|
|
500,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
— |
|
|
|
500,000 |
|
|
|
20,753 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
500,000 |
|
|
|
500,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
— |
|
|
|
500,000 |
|
|
|
17,877 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
500,000 |
|
|
|
500,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
— |
|
|
|
1,000,000 |
|
|
|
29,178 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,000,000 |
|
|
|
1,000,000 |
|
91
Firsthand Technology Value Fund, Inc.
Notes to Consolidated Financial Statements - continued
DECEMBER 31, 2022
AFFILIATE/
CONTROLLED
INVESTMENTS* |
|
VALUE AT
12/31/20 |
|
|
PURCHASES/
MERGER |
|
|
INTEREST |
|
|
SALES/
MATURITY/
EXPIRATION |
|
|
REALIZED
GAIN (LOSS) |
|
|
CHANGE IN
APPRECIATION/
DEPRECIATION |
|
|
VALUE
12/31/21 |
|
|
SHARES
HELD AT
12/31/21 |
|
IntraOp Medical Corp. Convertible Note* |
|
$ |
— |
|
|
$ |
500,000 |
|
|
$ |
10,274 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
500,000 |
|
|
$ |
500,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
— |
|
|
|
500,000 |
|
|
|
6,781 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
500,000 |
|
|
|
500,000 |
|
IntraOp Medical Corp. Term Note* |
|
|
3,000,000 |
|
|
|
— |
|
|
|
240,003 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,000,000 |
|
|
|
3,000,000 |
|
IntraOp Medical Corp. Term Note* |
|
|
2,000,000 |
|
|
|
— |
|
|
|
160,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,000,000 |
|
|
|
2,000,000 |
|
IntraOp Medical Corp. Convertible Note* |
|
|
10,961,129 |
|
|
|
— |
|
|
|
2,175,191 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10,961,129 |
|
|
|
10,961,129 |
|
Pivotal Systems CDI (1)* |
|
|
22,530,347 |
|
|
|
— |
|
|
|
— |
|
|
|
(15,604,355 |
) |
|
|
11,753,038 |
|
|
|
(9,391,259 |
) |
|
|
9,287,771 |
|
|
|
14,589,506 |
|
Revasum, Inc. CDI (1)* |
|
|
12,637,451 |
|
|
|
13,512,264 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
8,829,373 |
|
|
|
21,466,824 |
|
|
|
46,834,340 |
|
Silicon Genesis Corp., Common Stock * |
|
|
369 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(92 |
) |
|
|
277 |
|
|
|
921,892 |
|
Silicon Genesis Corp., Common Warrants* |
|
|
6 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3 |
) |
|
|
3 |
|
|
|
37,982 |
|
Silicon Genesis Corp., Common Warrants* |
|
|
100 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(100 |
) |
|
|
— |
|
|
|
— |
|
Silicon Genesis Corp., Common Warrants* |
|
|
60 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(60 |
) |
|
|
— |
|
|
|
— |
|
Silicon Genesis Corp., Series 1-C Preferred* |
|
|
3,325 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,335 |
) |
|
|
1,990 |
|
|
|
82,914 |
|
Silicon Genesis Corp., Series 1-D Preferred* |
|
|
8,763 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,488 |
) |
|
|
5,275 |
|
|
|
850,830 |
|
Silicon Genesis Corp., Series 1-E Preferred* |
|
|
567,596 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(114,090 |
) |
|
|
453,506 |
|
|
|
5,704,480 |
|
Silicon Genesis Corp., Series 1-F Preferred* |
|
|
125,462 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(25,275 |
) |
|
|
100,187 |
|
|
|
912,453 |
|
Silicon Genesis Corp., Series 1-G Preferred* |
|
|
562,359 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(123,153 |
) |
|
|
439,206 |
|
|
|
48,370,793 |
|
92
Firsthand Technology Value Fund, Inc.
Notes to Consolidated Financial Statements - continued
DECEMBER 31, 2022
AFFILIATE/
CONTROLLED
INVESTMENTS* |
|
VALUE AT
12/31/20 |
|
|
PURCHASES/
MERGER |
|
|
INTEREST |
|
|
SALES/
MATURITY/
EXPIRATION |
|
|
REALIZED
GAIN (LOSS) |
|
|
CHANGE IN
APPRECIATION/
DEPRECIATION |
|
|
VALUE
12/31/21 |
|
|
SHARES
HELD AT
12/31/21 |
|
Silicon Genesis Corp., Series 1-H Preferred* |
|
$ |
62,762 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(12,485 |
) |
|
$ |
50,277 |
|
|
|
837,942 |
|
SVXR, Inc., Preferred Stock Series A |
|
|
5,377,578 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(5,377,578 |
) |
|
|
— |
|
|
|
8,219,454 |
|
UCT Coatings, Inc.Common Stock |
|
|
1,074,300 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(460,650 |
) |
|
|
613,650 |
|
|
|
1,500,000 |
|
Wrightspeed, Inc., Common Stock* |
|
|
7,643 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(6,517 |
) |
|
|
1,126 |
|
|
|
69,102 |
|
Wrightspeed, Inc., Common Stock Warrants* |
|
|
12 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(12 |
) |
|
|
— |
|
|
|
— |
|
Wrightspeed, Inc., Convertible Note* |
|
|
4,929,015 |
|
|
|
— |
|
|
|
682,682 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4,929,015 |
|
|
|
4,929,015 |
|
Wrightspeed, Inc., Convertible Note* |
|
|
750,000 |
|
|
|
— |
|
|
|
95,569 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
750,000 |
|
|
|
750,000 |
|
Wrightspeed, Inc., Convertible Note* |
|
|
900,000 |
|
|
|
— |
|
|
|
113,625 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
900,000 |
|
|
|
900,000 |
|
Wrightspeed, Inc., Convertible Note* |
|
|
1,050,000 |
|
|
|
— |
|
|
|
131,157 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,050,000 |
|
|
|
1,050,000 |
|
Wrightspeed, Inc., Convertible Note* |
|
|
400,000 |
|
|
|
— |
|
|
|
49,494 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
400,000 |
|
|
|
400,000 |
|
Wrightspeed, Inc., Convertible Note* |
|
|
375,000 |
|
|
|
— |
|
|
|
46,187 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
375,000 |
|
|
|
375,000 |
|
Wrightspeed, Inc., Convertible Note* |
|
|
400,000 |
|
|
|
— |
|
|
|
49,007 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
400,000 |
|
|
|
400,000 |
|
Wrightspeed, Inc., Convertible Note* |
|
|
2,000,000 |
|
|
|
— |
|
|
|
244,063 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,000,000 |
|
|
|
2,000,000 |
|
Wrightspeed, Inc., Convertible Note* |
|
|
— |
|
|
|
1,400,000 |
|
|
|
145,600 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,400,000 |
|
|
|
1,400,000 |
|
Wrightspeed, Inc., Convertible Note* |
|
|
— |
|
|
|
1,200,000 |
|
|
|
105,600 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,200,000 |
|
|
|
1,200,000 |
|
Wrightspeed, Inc., Convertible Note* |
|
|
— |
|
|
|
1,000,000 |
|
|
|
76,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,000,000 |
|
|
|
1,000,000 |
|
Wrightspeed, Inc., Convertible Note* |
|
|
— |
|
|
|
1,000,000 |
|
|
|
64,355 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,000,000 |
|
|
|
1,000,000 |
|
Wrightspeed, Inc., Convertible Note* |
|
|
— |
|
|
|
1,000,000 |
|
|
|
53,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,000,000 |
|
|
|
1,000,000 |
|
Wrightspeed, Inc., Convertible Note* |
|
|
— |
|
|
|
1,000,000 |
|
|
|
45,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,000,000 |
|
|
|
1,000,000 |
|
Wrightspeed, Inc., Convertible Note* |
|
|
— |
|
|
|
300,000 |
|
|
|
10,100 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
300,000 |
|
|
|
300,000 |
|
93
Firsthand Technology Value Fund, Inc.
Notes to Consolidated Financial Statements - continued
DECEMBER 31, 2022
AFFILIATE/
CONTROLLED
INVESTMENTS* |
|
VALUE AT
12/31/20 |
|
|
PURCHASES/
MERGER |
|
|
INTEREST |
|
|
SALES/
MATURITY/
EXPIRATION |
|
|
REALIZED
GAIN (LOSS) |
|
|
CHANGE IN
APPRECIATION/
DEPRECIATION |
|
|
VALUE
12/31/21 |
|
|
SHARES
HELD AT
12/31/21 |
|
Wrightspeed, Inc., Convertible Note* |
|
$ |
— |
|
|
$ |
700,000 |
|
|
$ |
20,533 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
700,000 |
|
|
|
700,000 |
|
Wrightspeed, Inc., Convertible Note* |
|
|
— |
|
|
|
1,000,000 |
|
|
|
24,333 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,000,000 |
|
|
|
1,000,000 |
|
Wrightspeed, Inc., Convertible Note* |
|
|
— |
|
|
|
1,000,000 |
|
|
|
13,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,000,000 |
|
|
|
1,000,000 |
|
Wrightspeed, Inc., Convertible Note* |
|
|
— |
|
|
|
1,000,000 |
|
|
|
1,333 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,000,000 |
|
|
|
1,000,000 |
|
Wrightspeed, Inc., Preferred Stock- Series AA* |
|
|
12,720,065 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(10,942,997 |
) |
|
|
1,777,068 |
|
|
|
60,733,693 |
|
Wrightspeed, Inc., Preferred Stock Warrants- Series AA* |
|
|
91,524 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(84,024 |
) |
|
|
7,500 |
|
|
|
609,756 |
|
Total Affiliates and Controlled Investments |
|
$ |
98,772,992 |
|
|
|
|
|
|
$ |
6,116,176 |
|
|
|
|
|
|
$ |
11,753,038 |
|
|
$ |
(21,652,946 |
) |
|
$ |
90,118,729 |
|
|
|
|
|
Total Affiliates |
|
|
6,451,878 |
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
(5,838,228 |
) |
|
|
613,650 |
|
|
|
|
|
Total Controlled Investments |
|
$ |
92,321,114 |
|
|
|
|
|
|
$ |
6,116,176 |
|
|
|
|
|
|
$ |
11,753,038 |
|
|
$ |
(15,814,718 |
) |
|
$ |
89,505,079 |
|
|
|
|
|
|
*
|
Controlled investments.
|
|
(1)
|
CDI CHESS Depositary Interests
|
As of December 31, 2022, Kevin Landis, the Company’s Chairman, President and Chief Executive Officer, represented the Company and sat on the boards of directors of Hera Systems, Inc.; IntraOp Medical Corp.; Revasum, Inc.; Silicon Genesis Corp.; and Wrightspeed, Inc. Serving on boards of directors of portfolio companies may cause conflicts of interest. The Advisor has adopted various procedures to ensure that the Company will not be unfavorably affected by these potential conflicts.
Unconsolidated Significant Subsidiaries
Our investments are generally in small companies in a variety of industries. In accordance with Rules 3-09 and 4-08(g) of Regulation S-X (“Rule 3-09” and “Rule 4-08(g),” respectively), we must determine which of our unconsolidated controlled portfolio companies are considered “significant subsidiaries,” if any. In evaluating these investments, there are three tests utilized to determine if any of our controlled investments are considered significant subsidiaries: the investment test, the asset test, and the income test. Rule 3-09 requires separate audited financial statements of an unconsolidated majority-owned subsidiary in an annual report if any of the three tests exceeds 20%. Rule 4-08(g) requires summarized financial information in an annual report if any of the three tests exceeds 10% and summarized financial information in a quarterly report if any of the three tests exceeds 20%.
94
Firsthand Technology Value Fund, Inc.
Notes to Consolidated Financial Statements - continued
DECEMBER 31, 2022
As of December 31, 2022, our investments in IntraOp Medical Corp. (“IntraOp”) and Wrightspeed, Inc. (“Wrightspeed”) exceeded the 20% significance threshold in at least one of the tests under Rule 3-09 (the “Rule”). The Rule requires audited financial statements be attached as exhibits to the Form 10-K. However, because Wrightspeed’s audited financial statements are not yet available, summarized financial statement information will be provided as noted below which is a requirement of Rule 4-08(g) for investments that exceed 10% of one of the significance tests.
WRIGHTSPEED, INC.
| Schedule of consolidated financial statements |
|
|
BALANCE SHEET DATA AS OF: |
12/31/2022 |
12/31/2021 |
| |
|
|
Total Current Assets |
$ 2,488,241 |
$ 4,198,248 |
Total Non-Current Assets |
$ 110,775 |
$ 383,215 |
Total Current Liabilities |
$ 37,590,276 |
$ 31,934,883 |
Total Non-Current Liabilities |
$ 134,311 |
$ 134,311 |
Non-controlling interest |
$ — |
$ — |
| |
| | |
INCOME STATEMENT DATA FOR THE YEARS ENDED: |
12/31/2022 |
12/31/2021 |
12/31/2020 |
| |
|
|
|
Revenue |
$ — |
$ — |
$ — |
Gross Profits |
$ — |
$ — |
$ — |
Income/(loss) from operations |
$ (5,122,665) |
$ (11,332,253) |
$ (9,115,909) |
Total net income/(loss) including net income/(loss) attributable to non-controlling interest |
$ (7,658,198) |
$ (13,748,238) |
$ (10,300,084) |
Net Income/(loss) attributable to non-controlling interest |
$ — |
$ — |
$ — |
As of December 31, 2022, Revasum, Inc. (“Revasum”) and Hera Systems, Inc. (“Hera”) exceeded the 10% threshold (but less than 20%) in at least one of the three tests under Rule 4-08(g). Accordingly, summarized financial information is presented below for Hera and Revasum.
HERA SYSTEMS, INC.
| Schedule of consolidated financial statements |
|
|
BALANCE SHEET DATA AS OF: |
12/31/2022 |
12/31/2021 |
Total Current Assets |
$ 6,108,143 |
$ 261,528 |
Total Non-Current Assets |
$ 140,285 |
$ 1,949,018 |
Total Current Liabilities |
$ 11,571,082 |
$ 3,407,132 |
Total Non-Current Liabilities |
$ 1,203,300 |
$ 1,748,021 |
Non-controlling interest |
$ — |
$ — |
| |
| | |
INCOME STATEMENT DATA FOR THE YEARS ENDED: |
12/31/2022 |
12/31/2021 |
12/31/2020 |
Revenue |
$ 4,541,826 |
$ — |
$ — |
Gross Profits |
$ 339,482 |
$ — |
$ — |
Income/(loss) from operations |
$ 1,180,839 |
$ (1,537,472) |
$ (1,635,629) |
Total net income/(loss) including net income/(loss) attributable to non-controlling interest |
$ 3,581,348 |
$ (2,455,401) |
$ (2,535,886) |
Net Income/(loss) attributable to non-controlling interest |
$ — |
$ — |
$ — |
95
Firsthand Technology Value Fund, Inc.
Notes to Consolidated Financial Statements - continued
DECEMBER 31, 2022
REVASUM, INC.
| Schedule of consolidated financial statements |
|
|
BALANCE SHEET DATA AS OF: |
1/1/2023 |
1/2/2022 |
Total Current Assets |
$ 13,721,000 |
$ 15,419,000 |
Total Non-Current Assets |
$ 4,405,000 |
$ 7,123,000 |
Total Current Liabilities |
$ 10,134,000 |
$ 5,991,000 |
Total Non-Current Liabilities |
$ — |
$ 728,000 |
Non-controlling interest |
$ — |
$ — |
| |
| | |
INCOME STATEMENT DATA FOR THE YEARS ENDED: |
1/1/2023 |
1/2/2022 |
1/3/2021 |
Revenue |
$ 14,749,000 |
$ 13,710,000 |
$ 15,368,000 |
Gross Profits |
$ 4,403,000 |
$ 4,843,000 |
$ 4,888,000 |
Income/(loss) from operations |
$ (7,895,000) |
$ (5,244,000) |
$ (8,927,000) |
Total net income/(loss) including net income/(loss) attributable to non-controlling interest |
$ (8,933,000) |
$ (1,965,000) |
$ (9,156,000) |
Net Income/(loss) attributable to non-controlling interest |
$ — |
$ — |
$ — |
NOTE 11. MARKET DISRUPTION AND GEOPOLITICAL RISKS
Certain local, regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues, or other events could have a significant impact on a security or instrument. Since 2020, the novel strain of coronavirus (COVID-19) has negatively affected the worldwide economy, as well as the economies of individual countries, the financial health of individual companies and the market in general in significant and unforeseen ways. Following Russia’s large-scale invasion of Ukraine, the President of the United States signed an Executive Order in February 2022 prohibiting U.S. persons from entering transactions with the Central Bank of Russia and Executive Orders in March 2022 prohibiting U.S. persons from importing oil and gas from Russia as well as other popular Russian exports, such as diamonds, seafood and vodka. The duration of the coronavirus outbreak and the Russian-Ukraine conflict could adversely affect the Company’s performance. The ultimate impact of COVID-19 and Russia invasion on the financial performance of the Company’s investments is not reasonably estimable at this time.
NOTE 12. SUBSEQUENT EVENTS
Management has evaluated the impact of all subsequent events on the Company through the date the financial statements were issued. Subsequent to year end, private securities with an approximate aggregate value of $498 thousand were sold. Included in the sale of private securities is the sale of all the securities of Silicon Genesis Corp. held by the Fund.
96