The information contained in this section should be read in conjunction with our
2022 Consolidated Financial Statements and notes thereto.
OVERVIEW
We are an externally managed, closed-end, non-diversified management investment
company organized as a Maryland corporation that has elected to be treated as a
BDC under the 1940 Act. As such, we are required to comply with certain
regulatory requirements. For instance, we generally have to invest at least 70%
of our total assets in "qualifying assets," including securities of private or
micro-cap public U.S. companies, cash, cash equivalents, U.S. government
securities and high-quality debt investments that mature in one year or less. In
addition, for tax purposes we have elected to be treated as a RIC under
Subchapter M of the Code. FCM serves as our investment adviser and manages the
investment process on a daily basis.
Our investment objective is to seek long-term growth of capital, principally by
seeking capital gains on our equity and equity-related investments. There can be
no assurance that we will achieve our investment objective. Under normal
circumstances, we invest at least 80% of our net assets for investment purposes
in technology companies. We consider technology companies to be those companies
that derive at least 50% of their revenues from products and/or services within
the information technology sector or in the "cleantech" sector. Information
technology companies include, but are not limited to, those focused on computer
hardware, software, telecommunications, networking, Internet, and consumer
electronics. While there is no standard definition of cleantech, it is generally
regarded as including goods and services designed to harness renewable energy
and materials, eliminate emissions and waste, and reduce the use of natural
resources. In addition, under normal circumstances we invest at least 70% of our
total assets in privately held companies and public companies with market
capitalizations of less than $250 million. Our portfolio is primarily composed
of equity and equity derivative securities of technology and cleantech companies
(as defined above). These investments generally range between $1 million and $10
million each, although the investment size will vary proportionately with the
size of our capital base. We acquire our investments through direct investments
in private companies, negotiations with selling shareholders, and in organized
secondary marketplaces for private securities.
While our primary focus is to invest in illiquid private technology and
cleantech companies, we also may invest in micro-cap publicly traded companies.
In addition, we may invest up to 30 percent of the portfolio in opportunistic
investments that do not constitute the private companies and micro-cap public
companies described above. These other investments may include investments in
securities of public companies that are actively traded or in actively traded
derivative securities such as options on securities or security indices. These
other investments may also include investments in high-yield bonds, distressed
debt, or securities of public companies that are actively traded and securities
of companies located outside of the United States. Our investment activities are
managed by FCM.
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The following table summarizes the fair value of our investment portfolio by
industry sector as of December 31, 2022 and December 31, 2021.
December 31, 2022 December 31, 2021
Medical Devices 55.9% 28.6%
Automotive 29.0% 24.5%
Aerospace 25.8% 5.8%
Semiconductor Equipment 11.5% 32.8%
Equipment Leasing 2.9% 2.0%
Intellectual Property 2.4% 1.1%
Advanced Materials 1.4% 0.7%
Exchange-Traded/Money Market Funds 2.2% 0.7%
(Liabilities)/Other Assets (31.1%) 3.8%
Net Assets 100.0% 100.0%
Certain trends in the technology industry may have an impact on the portfolio in
coming quarters. In particular, the semiconductor industry, which has
historically been a highly cyclical industry, has enjoyed a period of strong
growth over the past several years. Given the substantial weighting of
semiconductor investments in the current portfolio, the Fund will be sensitive
to changes in this industry. Fund performance may also be impacted by the speed
of adoption of certain new technologies, including, but not limited to: electric
drivetrains for trucks, electron intra-operative radiation for cancer treatment,
X-ray inspection of electronic components, and small form factor satellites.
MATURITY OF PRIVATE COMPANIES IN THE CURRENT PORTFOLIO
The Fund invests in private companies at various stages of maturity. As our
portfolio companies mature, they move from the "early (development) stage" to
the "middle (revenue) stage" and then to the "late stage." We expect that this
continuous progression may create a pipeline of potential exit opportunities
through initial public offerings (IPOs) or acquisitions. Of course, some
companies do not progress.
The illustration below describes typical characteristics of companies at each
stage of maturity and where we believe our current portfolio companies fit
within these categories. We expect some of our portfolio companies to transition
between stages of maturity over time. The transition may be forward if the
company is maturing and is successfully executing its business plan or may be
backward if the company is not successfully executing its business plan or
decides to change its business plan substantially from its original plan.
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EARLY STAGE MIDDLE STAGE LATE STAGE
Developing product or Established product, Appreciable revenue; may be
service for market, high customers, business model; break-even or profitable;
level of research and limited revenues. IPO or acquisition
development, little or no
candidate.
revenue.
[[Image Removed]]
RESULTS OF OPERATIONS
The following information is a comparison for the year ended December 31, 2022,
December 31, 2021, and December 31, 2020.
INVESTMENT INCOME
For the year ended December 31, 2022, we had investment income of $(10,008,422)
primarily attributable to an interest adjustment on convertible/term note
investments with IntraOp Medical Corp and Wrightspeed.
For the year ended December 31, 2021, we had investment income of $6,318,695
primarily attributable to interest accrued on convertible/term note investments
with IntraOp Medical Corp, Hera, and Wrightspeed.
For the year ended December 31, 2020, we had investment income of $3,650,934
primarily attributable to interest accrued on convertible/term note investments
with IntraOp Medical Corp, Hera, and Wrightspeed.
The lower level of investment income in the year ended December 31, 2022
compared to the year ended December 31, 2021 was due to an interest adjustment
on notes issued by IntraOp and Wrightspeed.
The higher level of investment income in the year ended December 31, 2021
compared to the year ended December 31, 2020 was due to increasing principal
amounts on notes issued by IntraOp, Hera and Wrightspeed.
OPERATING EXPENSES
Operating expenses totaled approximately $2,439,045 during the year ended
December 31, 2022, $3,255,258 during the year ended December 31, 2021, and
$3,029,435 during the year ended December 31, 2020.
Significant components of operating expenses for the year ended December 31,
2022, were a management fee expense of $1,366,496 and professional fees (audit,
legal, accounting, and consulting) of $397,138. Significant components of
operating expenses for the year ended December 31, 2021, were a management fee
expense of $2,220,811 and professional fees (audit, legal, accounting, and
consulting) of $367,471. Significant components of operating expenses for the
year ended December 31, 2020, were a management fee expense of $2,016,981 and
professional fees (audit, legal, accounting, and consulting) of $415,447.
The lower level of operating expenses for the year ended December 31, 2022
compared to the year ended December 31, 2021 is primarily attributable to a
decrease in our total net assets, on which the investment advisory fees are
based.
29
The higher level of operating expenses for the year ended December 31, 2021
compared to the year ended December 31, 2020 is primarily attributable to an
increase in total net assets, on which the investment advisory fees are based.
NET INVESTMENT GAIN/(LOSS)
The net investment gain/(loss) before taxes was $(12,447,467) for the year ended
December 31, 2022, $3,063,437 for the year ended December 31, 2021, and $621,499
for the year ended December 31, 2020.
The greater net investment loss before taxes in the year ended December 31, 2022
compared to the year ended December 31, 2021 is primarily attributable to an
interest adjustment on convertible notes with IntraOp Medical and Wrightspeed,
on which we accrue income.
The greater net investment gain before taxes in the year ended December 31, 2021
compared to the year ended December 31, 2020 is primarily attributable to
increased investments in convertible note with IntraOp Medical, Hera Systems and
Wrightspeed on which we accrue income.
NET INVESTMENT REALIZED GAINS AND LOSSES AND UNREALIZED APPRECIATION AND
DEPRECIATION
A summary of the net realized and unrealized gains and losses on investments for
the years ended December 31, 2022, December 31, 2021, and December 31, 2020, is
shown below.
Year Ended
December 31, 2022
Realized losses $ (3,129,665 )
Net change in unrealized depreciation on investments $ (48,567,901 )
Net realized and unrealized loss on investments $ (51,697,566 )
As of
December 31, 2022
Gross unrealized appreciation on portfolio investments $ 957,122
Gross unrealized depreciation on portfolio investments $ (103,625,209 )
Net unrealized depreciation on portfolio investments,
warrants, and other assets $ (102,668,087 )
Year Ended
December 31, 2021
Realized gains $ 11,753,065
Net change in unrealized depreciation on investments $ (22,204,246 )
Net realized and unrealized loss on investments $ (10,451,181 )
As of
December 31, 2021
Gross unrealized appreciation on portfolio investments $ 18,046,155
Gross unrealized depreciation on portfolio investments $ (72,146,172 )
Net unrealized depreciation on portfolio investments,
warrants, and other assets $ (54,100,017 )
30
Year Ended
December 31, 2020
Realized losses $ (7,516,642 )
Net change in unrealized depreciation on investments $ (8,209,299 )
Deferred tax benefit
$ (7,842,583 )
Net realized and unrealized loss on investments $ (23,568,524 )
As of
December 31, 2020
Gross unrealized appreciation on portfolio investments $ 21,165,955
Gross unrealized depreciation on portfolio investments $ (53,061,752 )
Net unrealized depreciation on portfolio investments,
warrants, and other assets
$ (31,895,797 )
During the year ended December 31, 2022, we recognized net realized losses of
approximately $3,129,665 from the sale of investments. Realized losses were
higher compared to the Fund's realized gains in 2021 due to the sale of
investments, primarily Pivotal in 2022.
During the year ended December 31, 2022, net unrealized depreciation on total
investments increased by $48,567,901. The change in net unrealized appreciation
and depreciation of our private investments is based on portfolio asset
valuations determined in good faith by our Board of Directors. The increase in
unrealized depreciation on total investments during the year is due primarily to
the decrease in value of our investments, most notably IntraOp Medical,
Wrightspeed, and Revasum.
During the year ended December 31, 2021, we recognized net realized gains of
approximately $11,753,065 from the sale of investments. Realized gains were
higher compared to the Fund's realized losses in 2020 due to the sale of
investments, primarily Pivotal in 2021.
During the year ended December 31, 2021, net unrealized depreciation on total
investments increased by $22,204,246. The change in net unrealized appreciation
and depreciation of our private investments is based on portfolio asset
valuations determined in good faith by our Board of Directors. The increase in
unrealized depreciation on total investments during the year is due primarily to
the decrease in value of our investments, most notably, IntraOp Medical,
Wrightspeed and SVXR.
During the year ended December 31, 2020, we recognized net realized losses of
approximately $7,516,642 from the sale/write-off of investments. Realized losses
were lower compared to the Fund's realized losses in 2019 due to the
sale/write-off of our QMAT and Vufine positions in the 2019 year.
During the year ended December 31, 2020, net unrealized depreciation on total
investments increased by $8,209,299. The change in net unrealized appreciation
and depreciation of our private investments is based on portfolio asset
valuations determined in good faith by our Board of Directors. The increase in
unrealized depreciation on total investments during the year is due primarily to
the decrease in value of our investments, most notably, Hera Systems, Pivotal
and Revasum.
INCOME AND EXCISE TAXES
Beginning on June 30, 2018, we were no longer able to qualify as a regulated
investment company ("RIC") under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"). This change in tax status resulted from the
increase in the value of a single holding, Pivotal Systems Corp., which meant
that we were no longer able to satisfy the diversification requirements for
qualification as a RIC. As a result of this change, we will be 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
31
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.
NET INCREASE/(DECREASE) IN ASSETS RESULTING FROM OPERATIONS AND CHANGE IN NET
ASSETS PER SHARE
For the year ended December 31, 2022, the net decrease in net assets resulting
from operations (net of deferred taxes) totaled $64,145,033 and the basic and
fully diluted net change in net assets per share for the year ended December 31,
2022 was $(9.31).
For the year ended December 31, 2021, the net decrease in net assets resulting
from operations (net of deferred taxes) totaled $7,387,744 and the basic and
fully diluted net change in net assets per share for the year ended December 31,
2020 was $(1.07).
For the year ended December 31, 2020, the net decrease in net assets resulting
from operations (net of deferred taxes) totaled $22,947,025 and the basic and
fully diluted net change in net assets per share for the year ended December 31,
2020 was $(3.31).
The greater decrease in net assets resulting from operations (net of deferred
taxes) for the year ended December 31, 2022 as compared to the year ended
December 31, 2021, is due primarily to a greater decrease in the asset
valuations of our holdings, which are determined in good faith by our Board of
Directors.
The lesser decrease in net assets resulting from operations (net of deferred
taxes) for the year ended December 31, 2021 as compared to the year ended
December 31, 2020, is due primarily to a greater increase in realized gains from
investments, most notably Pivotal Systems.
The lesser decrease in net assets resulting from operations (net of deferred
taxes) for the year ended December 31, 2020 as compared to the year ended
December 31, 2019, is due primarily to a lesser decrease in the asset valuations
of our holdings, which are determined in good faith by our Board of Directors.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Our liquidity and capital resources are generated primarily from sales or
liquidation proceeds of our investments. In management's view, we have
sufficient liquidity and capital resources to pay our operating expenses and
conduct investment activities over the next twelve months.
Our primary uses of cash are to make investments, pay our operating expenses,
and make distributions to our stockholders. For the years ended December 31,
2022, 2021, and 2020, our operating expenses were $2,439,045, $3,255,258, and
$3,029,435, respectively.
For the year ended December 31, 2022, our total cash reserves and liquid
securities decreased approximately 74%, primarily due to the purchase of
portfolio securities. We believe that our current liquid assets are sufficient
to meet the Company's short-term financing needs.
During the year ended December 31, 2022, cash and cash equivalents increased to
$675,826 at the end of the year, from $616,064 at the beginning of the year. The
increase in cash and cash equivalents primarily resulted from the sale of
portfolio investments in 2022.
At December 31, 2022, we had investments in public and private securities
totaling approximately $40.1 million. Also, at December 31, 2022, we had
approximately $0.0 million in cash. We primarily invest cash on hand in money
market treasury portfolios. We expect the portion of our portfolio consisting of
cash and cash equivalents to decrease as we become fully invested.
32
As of December 31, 2022, net assets totaled approximately $30.6 million, with an
NAV per share of $4.44. Our primary use of funds will be investments in
portfolio companies and payments of fees and other operating expenses we incur.
Additionally, we expect to raise additional capital to support our future growth
through future equity offerings. To the extent we determine to raise additional
equity through an offering of our common stock at a price below NAV, existing
investors will experience dilution.
PORTFOLIO INVESTMENTS
PRIVATE INVESTMENTS
We make investments in securities of both public and private companies. December
31, 2022, we had investments in the following private companies:
EQX Capital, Inc.
EQX Capital, Inc. ("EQX"), San Francisco, California, is an equipment leasing
company.
At December 31, 2022, our investment in EQX consisted of 1,950,000 shares of
Series A preferred stock and 100,000 shares of common stock with an aggregate
fair value of approximately $0.9 million.
Hera Systems, Inc.
Hera Systems, Inc. ("Hera"), San Jose, CA, is currently developing a
constellation of micro satellites to launch into low Earth orbit with imaging
and communications capabilities.
At December 31, 2022, our investment in Hera consisted of 3,642,324 shares of
Series A preferred stock, 7,039,203 shares of Series B preferred stock,
2,650,000 shares of Series C preferred stock, $1,200,000 par value convertible
note, $5,359,791 par value convertible note, and 24,414,922 shares of Series B
warrants with an aggregate fair value of approximately $7.9 million.
IntraOp Medical Corp.
IntraOp Medical Corporation ("IntraOp"), Sunnyvale, California, manufactures and
markets the Mobetron, a medical device for delivering Intra Operative Electron
Radiation Therapy to cancer patients.
At December 31, 2021, our investment in IntraOp consisted of 26,856,187 shares
of Series C preferred stock, $3,000,000 par value term note, $2,000,000 par
value term note, $1,300,000 par value convertible note, $500,000 par value
convertible note, $500,000 par value convertible note, $500,000 par value
convertible note, $500,000 par value convertible note, $1,000,000 par value
convertible note, $400,000 par value convertible note, $750,000 par value
convertible note, $1,000,000 par value convertible note, $1,000,000 par value
convertible note, $500,000 par value convertible note, $500,000 par value
convertible note, $500,000 par value convertible note, $500,000 par value
convertible note, $500,000 par value convertible note, $500,000 par value
convertible note, $200,000 par value convertible note, $150,000 par value
convertible note, $350,000 par value convertible note, $700,000 par value
convertible note, and a $10,961,129 par value convertible note with a combined
aggregate fair value of approximately $17.1 million.
33
Kyma, Inc.
Kyma, Inc. ("Kyma"), Raleigh, NC, is a supplier of high-quality gallium
nitride-based wafers to semiconductor device manufacturers in the electronics
and optical markets.
At December 31, 2022, our investment in Kyma consisted of a $100,000 par value
convertible note with a combined fair value of approximately $100 thousand.
Lyncean Technologies, Inc.
Lyncean Technologies, Inc. ("Lyncean"), Fremont, CA, is a developer X-ray and
extreme ultraviolet (EUV) light sources for laboratory and commercial use.
At December 31, 2022, our investment in Lyncean consisted of 869,792 shares of
Series B preferred stock with a combined fair value of approximately $0.
Silicon Genesis Corp.
Silicon Genesis Corporation ("SiGen"), San Jose, CA, provides engineered
substrate process technology for the semiconductor, display, optoelectronics,
and solar markets.
At December 31, 2022, our investments in SiGen consisted of 82,914 shares of
Series 1-C preferred stock, 850,830 shares of Series 1-D preferred stock,
5,704,480 shares of Series 1-E preferred stock, 912,453 shares of Series 1-F
preferred stock, 48,370,793 shares of Series 1-G preferred stock, 837,942 shares
of Series 1-H preferred stock, 921,892 shares of common stock, and warrants for
37,982 shares of common stock with a combined fair value of approximately $0.7
million.
UCT Coatings, Inc.
UCT Coatings, Inc. ("UCT"), Stuart, Florida, is a leader in the development of
metal coatings that reduce friction and improve efficiency in mechanical
systems.
At December 31, 2022, our investments in UCT consisted of 1,500,000 shares of
common stock with a combined fair value of approximately $338 thousand.
Wrightspeed, Inc.
Wrightspeed, Inc. ("Wrightspeed"), San Jose, California, is a supplier of
electric drivetrains for heavy-duty commercial vehicles.
At December 31, 2022, our investments in Wrightspeed consisted of 69,102 shares
of common stock, 60,733,693 shares of Series AA preferred stock, warrants to
purchase 609,756 shares of Series AA preferred stock, $750,000 par value
convertible note, $400,000 par value convertible note, $900,000 par value
convertible note, $1,050,000 par value convertible note, $400,000 par value
convertible note, $375,000 par value convertible note, $2,000,000 par value
convertible note, $1,400,000 par value convertible note, $1,200,000 par value
convertible note, $700,000 par value convertible note, $300,000 par value
convertible note, $1,000,000 par value convertible note, $1,000,000 par value
convertible note, $1,000,000 par value convertible note, $1,000,000 par value
convertible note, $1,000,000 par value convertible note, $1,000,000 par value
convertible note, $1,000,000 par value convertible note, $200,000 par value
convertible note, $185,000 par value convertible note, $65,000 par value
convertible note, $250,000 par value convertible note, $250,000 par value
convertible note, $250,000 par value convertible note, $250,000 par value
convertible note, $250,000 par value convertible note, $250,000 par value
convertible note, $250,000 par value convertible note, $135,000 par value
convertible note, $165,000 par value convertible note, $125,000 par value
convertible note, and a $4,929,015 par value convertible note with a combined
fair value of approximately $8.9 million.
34
PUBLIC INVESTMENTS
At December 31, 2022, we had investments in the following public securities:
Revasum, Inc.
Revasum, ("Revasum"), San Luis Obispo, California, designs CMP and grinding
technology for the semiconductor equipment industry.
At December 31, 2022, our investment in Revasum consisted of 39,774,889 shares
of CDIs with an aggregate fair value of approximately $3.5 million.
Fidelity Investments Money Market Treasury Portfolio - Class I
Fidelity Investments Money Market Treasury Portfolio - Class I ("Money Market")
is a money market portfolio that invests primarily in U.S. treasury securities.
At December 31, 2022, our investment in Money Market consisted of 672,422 shares
of the money market fund with a market value of approximately $672 thousand.
DISTRIBUTION POLICY
Our board of directors will determine the timing and amount, if any, of our
distributions. For each year in which the Fund has qualified as a RIC, we intend
to pay distributions on an annual basis out of assets legally available
therefore. In order to qualify as a RIC and to avoid corporate-level tax on our
income, we must distribute to our stockholders at least 90% of our ordinary
income and realized net short-term capital gains in excess of realized net
long-term capital losses, if any, on an annual basis. In addition, we also
intend to distribute any realized net capital gains (i.e., realized net
long-term capital gains in excess of realized net short-term capital losses) at
least annually.
CONTRACTUAL OBLIGATIONS
The Fund does not have any Contractual Obligations that meet the requirements
for disclosure under Item 303 of Regulation S-K.
OFF-BALANCE SHEET ARRANGEMENTS
The Fund does not have any Off-Balance Sheet Arrangements.
CRITICAL ACCOUNTING POLICIES
This discussion of our financial condition and results of operations is based
upon our financial statements, which are prepared in accordance with accounting
principles generally accepted in the United States of America, or GAAP. The
preparation of these financial statements will require management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities, revenues, and expenses. Changes in the economic environment,
financial markets, and any other parameters used in determining such estimates
could cause actual results to differ. In addition to the discussion below, we
will describe our critical accounting policies in the notes to our future
financial statements.
Valuation of Portfolio Investments
As a business development company, we generally invest in illiquid equity and
equity derivatives of securities of venture capital stage technology companies.
Under written procedures established by our board of directors, securities
traded on stock exchanges, or quoted by NASDAQ, are valued according to the
NASDAQ Stock Market, Inc. ("NASDAQ") official closing price, if applicable, or
at their last reported sale price as of the close of trading on the New York
Stock Exchange ("NYSE") (normally 4:00 P.M. Eastern Time). If a security is not
traded that day, the security will be valued at its most recent bid price.
Securities traded in the over-the-counter market, but not quoted by NASDAQ, are
valued at the last sale price (or, if the last sale price is not readily
available, at the most recent closing bid price as quoted by brokers that make
markets in the securities) at the close of trading on the NYSE. Securities
traded both in the over-the-counter market and on a stock exchange are valued
according to the broadest and most representative market. We obtain these market
values from an independent pricing service or at the mean between the bid and
ask prices obtained
35
from at least two brokers or dealers (if available, otherwise by a principal
market maker or a primary market dealer). In addition, a large percentage of our
portfolio investments are in the form of securities that are not publicly
traded. The fair value of securities and other investments that are not publicly
traded may not be readily determinable. We value these securities quarterly at
fair value as determined in good faith by our board of directors. Our board of
directors may use the services of a nationally recognized independent valuation
firm to aid it in determining the fair value of these securities. The methods
for valuing these securities may include: fundamental analysis (sales, income,
or earnings multiples, etc.), discounts from market prices of similar
securities, purchase price of securities, subsequent private transactions in the
security or related securities, or discounts applied to the nature and duration
of restrictions on the disposition of the securities, as well as a combination
of these and other factors. Because such valuations, and particularly valuations
of private securities and private companies, are inherently uncertain, may
fluctuate over short periods of time, and may be based on estimates, our
determinations of fair value may differ materially from the values that would
have been used if a ready market for these securities existed. Our net asset
value could be adversely affected if our determinations regarding the fair value
of our investments were materially higher than the values that we ultimately
realize upon the disposal of such securities.
Revenue Recognition
We record interest income on an accrual basis and dividend income on the
ex-dividend date to the extent that we expect to collect such amounts. We do not
accrue as a receivable interest on loans and debt securities if we have reason
to doubt our ability to collect such interest. Loan origination fees, original
issue discount, and market discount are capitalized, and we amortize any such
amounts as interest income. Upon the prepayment of a loan or debt security, any
unamortized loan origination is recorded as interest income. We will record
prepayment premiums on loans and debt securities as interest income when we
receive such amounts.
Net Realized Gains or Losses and Net Change in Unrealized Appreciation or
Depreciation
We measure realized gains or losses by the difference between the net proceeds
from the repayment or sale and the cost basis of the investment, without regard
to unrealized appreciation or depreciation previously recognized. Net change in
unrealized appreciation or depreciation reflects the change in portfolio
investment values during the reporting period, including any reversal of
previously recorded unrealized appreciation or depreciation, when gains or
losses are realized.
Recently Issued Accounting Standards
From time to time, new accounting pronouncements are issued by the FASB or other
standards setting bodies that are adopted by us as of the specified effective
date. We believe that the impact of recently issued standards that are not yet
effective will not have a material impact on our financial statements upon
effectiveness.
Inflation
Inflation has not had a significant effect on our results of operations in any
of the reporting periods presented herein. However, our portfolio companies have
experienced, and may in the future experience, the impacts of inflation on their
operating results.
SUBSEQUENT EVENTS
Subsequent to the close of the year on December 31, 2022, and through the date
of the issuance of the financial statements included herein, a number of
material events related to our portfolio of investments occurred, consisting
primarily of purchased and sold securities. Since that date, we have sold
private securities with an approximate aggregate value of $498 thousand.
Included in the sale of private securities is the sale of all the securities of
Silicon Genesis Corp. held by the Fund.
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