Firsthand Technology(SVVC) - 2024 Q3 - Quarterly Report

Investment Income and Losses - Investment income for the three months ended September 30, 2024, was $35,792, compared to an investment loss of$(234,126) for the same period in 2023, indicating a significant recovery [150]. - For the nine months ended September 30, 2024, investment income was $97,793, up from$88,812 in the same period of 2023, attributed to increased accrued interest [164]. - Net investment income before taxes for the nine months ended September 30, 2024, was $2,280,700, compared to$1,360,195 for the same period in 2023, primarily due to the management fee waiver [169]. - Net investment loss before taxes for the three months ended September 30, 2024, was $(355,961), compared to a net investment gain of$1,865,387 for the same period in 2023, reflecting a decline in management fees [156]. - The company recognized net realized losses of approximately $(11,686,668) for the nine months ended September 30, 2024, compared to$(7,864,982) for the same period in 2023 [172][173]. Operating Expenses - Operating expenses for the three months ended September 30, 2024, totaled approximately $391,753, a decrease from$(2,099,513) in the same period of 2023, primarily due to a management fee waiver in 2023 [152][154]. - Operating expenses for the nine months ended September 30, 2024, were approximately $(2,182,907), compared to$(1,271,383) in 2023, with a significant management fee waiver of $(3,079,128) in 2024 [166][168]. Net Assets and Operations - The net increase in net assets resulting from operations for the three months ended September 30, 2024, was$526,227, while the net decrease for the same period in 2023 was $(10,418,360) [162][163]. - For the nine months ended September 30, 2024, the net increase in net assets resulting from operations totaled$283,776, with a basic and fully diluted net change in net assets per share of $0.04 [173]. - In contrast, for the nine months ended September 30, 2023, the net decrease in net assets resulting from operations was$(29,928,895), with a basic and fully diluted net change in net assets per share of $(4.34) [174]. Portfolio Valuation and Composition - The fair value of the investment portfolio decreased to approximately$1.4 million as of September 30, 2024, from approximately $8.7 million as of December 31, 2023 [144]. - The portfolio composition as of September 30, 2024, included 64.6$(115,544,196), compared to $(126,091,989) as of September 30, 2023, indicating a reduction in unrealized losses [158][160]. - As of September 30, 2024, the gross unrealized depreciation on portfolio investments was$(115,544,196), a slight improvement from $(126,091,989) as of September 30, 2023 [170][171]. - During the same period, net unrealized depreciation on total investments decreased by$9,689,744, primarily due to an increase in the fair value of portfolio companies, notably Hera [171]. Cash and Obligations - The company holds a portion of its assets in cash and cash equivalents, which may lead to losses if management fees exceed interest income due to the low yield environment [194]. - The company is required to distribute substantially all of its net realized gains to stockholders on an annual basis, impacting cash reserves from liquidated investments [196]. - The company does not have any contractual obligations or off-balance sheet arrangements that require disclosure [177][178]. Impact of Inflation - Inflation has not significantly affected the company's results of operations, although portfolio companies may experience its impacts [185].