10-Q

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

FORM 10-Q

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

For the quarterly period of June 30, 2020 or

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

Commission File Number 333-168195

FIRSTHAND TECHNOLOGY VALUE FUND, INC.

(Exact Name of Registrant as Specified in Charter)

MARYLAND (State or Other Jurisdiction of Incorporation or Organization)	27-3008946 (I.R.S. Employer Identification No)
150 Almaden Boulevard, Suite 1250 San Jose, California (Address of Principal Executive Offices)	95113 (Zip Code)

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

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

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

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

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at June 30, 2020
Common Stock, $0.001 par value per share	6,893,056

TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION	2
Item 1. Financial Statements	2
Consolidated Statements of Assets and Liabilities as of June 30, 2020 (Unaudited) and December 31, 2019	3
Consolidated Statements of Operations (Unaudited) for the Three Months Ended June 30, 2020, and June 30, 2019, and for the Six Months Ended June 30, 2020, and June 30, 2019	4
Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended June 30, 2020, and June 30, 2019, and for the Six Months Ended June 30, 2020, and June 30, 2019	5
Consolidated Statements of Changes in Net Assets (Unaudited) for the Three Months Ended June 30, 2020, and June 30, 2019, and for the Six Months Ended June 30, 2020, and June 30, 2019	6
Selected Per Share Data and Ratios for the Six Months Ended June 30, 2020 (Unaudited) (Consolidated), for the Year Ended December 31, 2019 (Consolidated), for the Year Ended December 31, 2018 (Consolidated), for the Year Ended December 31, 2017 (Consolidated), for the Year Ended December 31, 2016, and for the Year Ended December 31, 2015	7
Consolidated Schedule of Investments as of June 30, 2020 (Unaudited) and for the Year Ended December 31, 2019	9
Consolidated Notes To Financial Statements (Unaudited)	19
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	38
Item 3. Quantitative and Qualitative Disclosures About Market Risk.	46
Item 4. Controls and Procedures	48
PART II. OTHER INFORMATION	49
Item 1. Legal Proceedings	50
Item 1A. Risk Factors	50
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	50
Item 3. Defaults Upon Senior Securities	50
Item 4. Mine Safety Disclosures	50
Item 5. Other Information	50
Item 6. Exhibits	50
SIGNATURES	51

1

PART I. FINANCIAL INFORMATION

Item 1.    Financial Statements

See accompanying notes to financial statements

2

Firsthand Technology Value Fund, Inc.

Consolidated Statements of Assets and Liabilities

	AS OF JUNE 30, 2020 (UNAUDITED)			AS OF DECEMBER 31, 2019
ASSETS
Investment securities:
Unaffiliated investments at acquisition cost	$	2,271,917	*	$	11,722,468	*
Affiliated investments at acquisition cost		4,744,427			4,744,427
Controlled investments at acquisition cost		133,424,163			127,774,164
Total acquisition cost	$	140,440,507		$	144,241,059
Unaffiliated investments at market value	$	1,727,852	*	$	7,364,183	*
Affiliated investments at market value		6,144,417			5,715,273
Controlled investments at market value		94,129,119			107,475,131
Total market value ** (Note 6)		102,001,388			120,554,587
Receivable from dividends and interest		3,991,690			2,507,714
Deferred tax benefit		—			7,842,583
Other assets		25,911			21,800
Total Assets		106,018,989			130,926,684
LIABILITIES
Due to Custodian		13,151			—
Payable to affiliates (Note 4)		4,495,322			3,461,822
Consulting fee payable		15,250			16,500
Accrued expenses and other payables		180,175			358,971
Total Liabilities		4,703,898			3,837,293
NET ASSETS	$	101,315,091		$	127,089,391
Net Assets consist of:
Common Stock, par value $0.001 per share 100,000,000 shares authorized	$	6,893		$	7,179
Paid-in-capital		176,770,722			178,770,434
Total distributable earnings (loss)		(75,462,524	)		(51,688,222	)
NET ASSETS	$	101,315,091		$	127,089,391
Shares of Common Stock outstanding		7,016,432			7,302,146
Shares of Treasury Stock outstanding		(123,376	)		(123,376	)
Total Shares of Common Stock outstanding		6,893,056			7,178,770
Net asset value per share (Note 2)	$	14.70		$	17.70

* Includes Fidelity Investment Money Market Treasury Portfolio - Class I, which invests primarily in U.S. Treasury securities. The yields as of 06/30/20 and 12/31/19 were 0.08% and 1.50% respectively. Please see https://fundresearch.fidelity.com/mutual-funds/summary/316175504 for additional information.

** Includes warrants whose primary risk exposure is equity contracts.

See accompanying notes to financial statements

3

Firsthand Technology Value Fund, Inc.

Consolidated Statements of Operations (Unaudited)

	FOR THE THREE MONTHS ENDED						FOR THE SIX MONTHS ENDED
	JUNE 30, 2020			JUNE 30, 2019			JUNE 30, 2020			JUNE 30, 2019
INVESTMENT INCOME
Unaffiliated interest	$	2,654		$	21,779		$	10,436		$	26,350
Affiliated/controlled interest		919,100			(336,314	)		1,683,615			474,007
TOTAL INVESTMENT INCOME		921,754			(314,535	)		1,694,051			500,357
EXPENSES
Investment advisory fees (Note 4)		465,986			908,003			974,435			1,941,261
Administration fees		29,754			36,410			63,900			71,535
Custody fees		2,840			3,570			6,801			7,449
Transfer agent fees		7,963			8,763			16,111			17,328
Registration and filing fees		7,882			7,654			15,764			15,224
Professional fees		89,535			99,606			169,765			182,426
Printing fees		26,164			17,284			52,328			34,379
Trustees fees		50,000			50,000			100,000			100,000
Compliance fees		29,533			29,614			59,066			58,902
Miscellaneous fees		11,446			24,536			22,889			43,944
TOTAL GROSS EXPENSES		721,103			1,185,440			1,481,059			2,472,448
Incentive fee adjustments (Note 4)		—			(8,185,187	)		—			(9,261,847	)
TOTAL NET EXPENSES		721,103			(6,999,747	)		1,481,059			(6,789,399	)
NET INVESTMENT GAIN, BEFORE TAXES		200,651			6,685,212			212,992			7,289,756
Deferred tax benefit/(expense)		—			419,693			—			518,199
Net investment income (loss), net of deferred taxes		200,651			7,104,905			212,992			7,807,955
Net Realized and Unrealized Gain (Loss) on Investments:
Net realized gains/(losses) from security transactions on:
Affiliated/Controlled		—			(5,006,358	)		—			(4,615,821	)
Non-affiliated/controlled and other assets		(3,613,484	)		30,398			(1,392,066	)		3,771,183
Written options (1)		—			98,590			—			98,590
Deferred tax benefit/expenses		(2,803,718	)		1,113,819			(5,816,064	)		114,743
Net realized gains (losses), net of deferred taxes		(6,417,202	)		(3,763,551	)		(7,208,130	)		(631,305	)
Net change in unrealized appreciation (depreciation) on:
Non-affiliated investments		4,434,948			(4,397,476	)		3,814,220			(5,600,307	)
Affiliated/controlled investments and foreign currency		23,838,341			(30,712,323	)		(15,575,422	)		(41,566,937	)
Affiliated/controlled warrants investments (1)		(580,907	)		(9,580,412	)		(2,991,445	)		(6,935,887	)
Deferred tax benefit/(expense)		—			9,981,388			(2,026,517	)		12,721,911
Net change in unrealized appreciation (depreciation), net of deferred taxes		27,692,382			(34,708,823	)		(16,779,164	)		(41,381,220	)
Net Realized and Unrealized Gain (Loss) on Investments, Net of Deferred Taxes		21,275,180			(38,472,374	)		(23,987,294	)		(42,012,525	)
Net Increase (Decrease) In Net Assets Resulting From Operations, Net of Deferred Taxes	$	21,475,831		$	(31,367,469	)	$	(23,774,302	)	$	(34,204,570	)
Net Increase/(Decrease) In Net Assets Per Share Resulting From Operations (2)	$	3.01		$	(4.36	)	$	(3.41	)	$	(4.76	)

(1) Primary exposure is equity risk.

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

See accompanying notes to financial statements

4

Firsthand Technology Value Fund, Inc.

Consolidated Statements of Cash Flows (Unaudited)

	FOR THE THREE MONTHS ENDED JUNE 30, 2020			FOR THE THREE MONTHS ENDED JUNE 30, 2019			FOR THE SIX MONTHS ENDED JUNE 30, 2020			FOR THE SIX MONTHS ENDED JUNE 30, 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net increase (decrease) in Net Assets resulting from operations	$	21,475,831		($	31,367,469	)	($	23,774,302	)	($	34,204,570	)
Adjustments to reconcile net increase (decrease) in Net Assets derived from operations to net cash provided by (used in) operating activities
Purchases of investments		(415,000	)		(17,859,740	)		(3,640,000	)		(19,459,740	)
Proceeds from disposition of investments		1,602,382			17,934,979			3,823,800			25,986,094
Net purchases / sales from short-term investments		(930,726	)		(3,624,020	)		2,224,686			(7,029,637	)
Increase (decrease) in dividends, interest, and reclaims receivable		(818,047	)		1,561,075			(1,483,976	)		834,049
Increase (decrease) in receivable in investment sold		—			2,662,281			—			(310,899	)
Increase in Due to Custodian		13,151			—			13,151			—
Increase (decrease) in payable to affiliates		495,519			937,617			1,033,500			2,000,162
Increase (decrease) in incentive fees payable		—			(8,185,187	)		—			(9,261,847	)
Increase (decrease) in other assets		13,794			(4,909,551	)		(4,111	)		(4,927,647	)
Decrease (increase) in accrued expenses and other payables		(182,103	)		(125,615	)		(180,046	)		(22,858	)
Increase (decrease) in deferred tax benefit		2,803,718			(6,592,606	)		7,842,583			(8,432,559	)
Net realized gain (loss) from investments		3,613,484			4,975,960			1,392,066			844,638
Net realized gain from written options		—			(98,590	)		—			(98,590	)
Net unrealized appreciation (depreciation) from investments, other assets, and warrants transactions		(27,692,382	)		44,690,211			14,752,647			54,103,131
Net cash (used in) operating activities		(20,379	)		(655	)		1,999,998			19,727
CASH FLOWS FROM FINANCING ACTIVITIES
Cost of shares repurchased		—			—			(1,999,998	)		—
Distributions paid from net realized gains		—			—			—			—
Net cash (used in) financing activities		—			—			(1,999,998	)		—
Net increase (decrease) in cash		(20,379	)		(655	)		—			19,727
Cash - beginning of period		20,379			20,382			—			—
Cash - end of period	$	—		$	19,727		$	—		$	19,727

See accompanying notes to financial statements

5

Firsthand Technology Value Fund, Inc.

Consolidated Statements of Changes in Net Assets (Unaudited)

	FOR THE THREE MONTHS ENDED JUNE 30, 2020			FOR THE THREE MONTHS ENDED JUNE 30, 2019			FOR THE SIX MONTHS ENDED JUNE 30, 2020			FOR THE SIX MONTHS ENDED JUNE 30, 2019
FROM OPERATIONS:
Net investment gain (loss), net of deferred taxes	$	200,651		$	7,104,905		$	212,992		$	7,807,955
Net realized gain (loss) from security transactions, written options and warrants transactions, net of deferred taxes		(6,417,202	)		(3,763,551	)		(7,208,130	)		(631,305	)
Net change in unrealized appreciation (depreciation) on investments and warrants transactions, net of deferred taxes		27,692,382			(34,708,823	)		(16,779,164	)		(41,381,220	)
Net increase (decrease) in net assets from operations		21,475,831			(31,367,469	)		(23,774,302	)		(34,204,570	)
FROM CAPITAL SHARE TRANSACTIONS:
Value for shares repurchased		—			—			(1,999,998	)		—
Net decrease in net assets from capital share transactions		—			—			(1,999,998	)		—
TOTAL INCREASE/(DECREASE) IN NET ASSETS		21,475,831			(31,367,469	)		(25,774,300	)		(34,204,570	)
NET ASSETS:
Beginning of period		79,839,260			188,780,858			127,089,391			191,617,959
End of period	$	101,315,091		$	157,413,389		$	101,315,091		$	157,413,389
COMMON STOCK ACTIVITY:
Shares repurchased		—			—			—			—
Net decrease in shares outstanding		—			—			(285,714	)		—
Shares outstanding, beginning of period		6,893,056			7,178,770			7,178,770			7,178,770
Shares outstanding, end of period		6,893,056			7,178,770			6,893,056			7,178,770

See accompanying notes to financial statements

6

Firsthand Technology Value Fund, Inc.

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

	FOR THE SIX MONTHS ENDED JUNE 30, 2020 (UNAUDITED)			FOR THE YEAR ENDED DECEMBER 31, 2019			FOR THE YEAR ENDED DECEMBER 31, 2018			FOR THE YEAR ENDED DECEMBER 31, 2017			FOR THE YEAR ENDED DECEMBER 31, 2016			FOR THE YEAR ENDED DECEMBER 31, 2015
Net asset value at beginning of period	$	17.70		$	26.69		$	23.83		$	20.04		$	22.79		$	24.49
Income from investment operations:
Net investment income (loss), before deferred taxes		0.03	(1)		0.90	(1)		(1.29	)(1)		(0.62	)		(0.52	)		(0.06	)(1)
Deferred tax benefit		—			(0.08	)		0.07			—			—			—
Net investment gain (losses)		0.03			0.82			(1.22	)		(0.62	)		(0.52	)		(0.06	)
Net realized and unrealized gains (losses) on investments, before deferred taxes		(2.37	)		(12.15	)		5.13			4.21			(2.76	)		(1.78	)
Deferred tax expense		(1.12	)		2.34			(1.23	)		—			—			—
Net realized and unrealized gains (losses) on investments		(3.49	)		(9.81	)		3.90			4.21			(2.76	)		(1.78	)
Total from investment operations		(3.46	)		(8.99	)		2.68			3.59			(3.28	)		(1.84	)
Distributions from:
Realized capital gains		—			—			(0.03	)		—			—			—
Anti-dilutive effect from capital share transactions		0.46			—			0.21			0.20			0.53			0.14
Net asset value at end of period	$	14.70		$	17.70		$	26.69		$	23.83		$	20.04		$	22.79
Market value at end of period	$	4.09		$	6.43		$	11.20		$	8.96		$	7.67		$	8.17
Total return
Based on Net Asset Value		(16.95	)%(A)		(33.68	)%		12.39	%		18.91	%		(12.07	)%		(6.94	)%
Based on Market Value		(36.39	)%(A)		(42.59	)%		25.43	%		16.82	%		(6.12	)%		(56.19	)%
Net assets at end of period (millions)	$	101.3		$	127.1		$	191.6		$	174.0		$	148.9		$	175.6

See accompanying notes to financial statements

7

Firsthand Technology Value Fund, Inc.

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

	FOR THE SIX MONTHS ENDED JUNE 30, 2020 (UNAUDITED)			FOR THE YEAR ENDED DECEMBER 31, 2019			FOR THE YEAR ENDED DECEMBER 31, 2018			FOR THE YEAR ENDED DECEMBER 31, 2017			FOR THE YEAR ENDED DECEMBER 31, 2016			FOR THE YEAR ENDED DECEMBER 31, 2015
Ratio of total expenses to average net assets:
Before tax (benefit)/expense		3.07	%(B)		(2.84	)%(2)		6.75	%(2)		4.13	%(2)		2.90	%(2)		1.36	%(2)
Deferred tax (benefit)/expense (3)(4)		16.26	%(B)		9.91	%		4.43	%		—			—			—
Total expenses		19.33	%(B)		(12.75	)%(2)		11.18	%(2)		4.13	%		2.90	%		1.36	%
Total expenses, excluding incentive fees and deferred tax expense		3.07	%(B)		2.80	%		2.77	%		2.98	%		2.90	%		2.68	%
Ratio of net investment income (loss) to average net assets:
Before tax benefit		0.44	%(B)		3.93	%(2)		(4.93	)%(2)		(3.07	)%		(2.36	)%		(0.24	)%
Deferred tax benefit (4)(5)		—	(B)		(0.33	)%		0.28	%		—			—			—
Net investment income (loss)		0.44	%(B)		3.60	%		(4.65	)%		(3.07	)%		(2.36	)%		(0.24	)%
Portfolio turnover rate		2	%(A)		18	%		44	%		22	%		49	%		22	%

(1) Calculated using average shares outstanding.

(2) Amount includes the incentive fee. For the years ended December 31, 2019, December 31, 2018, December 31, 2017 and December 31, 2015 the ratio of the incentive fee to average net assets was (5.64)%, 3.98%, 1.15% and (1.32)%, respectively.

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

(4) The deferred tax expense and tax benefit are allocated based on average net assets.

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

(A) Not Annualized.

(B) Annualized.

See accompanying notes to financial statements

8

Firsthand Technology Value Fund, Inc.

Consolidated Schedule of Investments

JUNE 30, 2020 (UNAUDITED)

PORTFOLIO COMPANY (% OF NET ASSETS) AND INDUSTRY	TYPE OF INVESTMENT	ACQUISITION DATE		SHARES/PAR VALUE ($)		COST BASIS		VALUE
EQX CAPITAL, INC.	Common Stock *(1)(2)(4)		6/10/2016		100,000	$	20,000	$	27,920
(2.2%) Equipment Leasing	Preferred Stock - Series A *(1)(2)(4)		6/10/2016		2,800,000		2,800,000		2,202,200
									2,230,120
HERA SYSTEMS, INC. (4.1%) Aerospace	Convertible Promissory Note Matures December 2020 Interest Rate 10% (1)(2)(4)		5/31/2018		500,000		500,000		500,000
	Convertible Promissory Note Matures December 2020 Interest Rate 10% (1)(2)(4)		1/19/2018		500,000		500,000		500,000
	Convertible Promissory Note Matures December 2020 Interest Rate 10% (1)(2)(4)		3/23/2020		250,000		250,000		250,000
	Convertible Promissory Note Matures December 2020 Interest Rate 10% (1)(2)(4)		6/26/2020		200,000		200,000		200,000
	Convertible Promissory Note Matures December 2020 Interest Rate 10% (1)(2)(4)		4/29/2020		40,000		40,000		40,000
	Convertible Promissory Note Matures December 2020 Interest Rate 10% (1)(2)(4)		5/29/2020		20,000		20,000		20,000
	Preferred Stock - Series A *(1)(2)(4)		9/18/2015		3,642,324		2,000,000		33,145
	Preferred Stock - Series B *(1)(2)(4)		8/07/17 - 2/1/19		7,039,203		6,587,102		546,242
	Preferred Stock - Series C *(1)(2)(4)		8/7/2019-2/12/20		2,650,000		2,650,000		205,640
	Preferred Stock Warrants - Series B *(1)(2)(4)		7/9/18 - 9/4/18		12,250,000		0		949,007
	Preferred Stock Warrants - Series B *(1)(2)(4)		2/1/2019		5,250,000		0		406,718
	Preferred Stock Warrants - Series B *(1)(2)(4)		8/7/2017		6,214,922		0		481,470
	Preferred Stock Warrants - Series B *(1)(2)(4)		9/28/2017		700,000		0		54,229
									4,186,451

See accompanying notes to financial statements

9

Firsthand Technology Value Fund, Inc.

Consolidated Schedule of Investments - continued

JUNE 30, 2020 (UNAUDITED)

PORTFOLIO COMPANY (% OF NET ASSETS) AND INDUSTRY	TYPE OF INVESTMENT	ACQUISITION DATE		SHARES/PAR VALUE ($)		COST BASIS		VALUE
INTRAOP MEDICAL CORP. (21.3%) Medical Devices	Convertible Note Matures December 2020 Interest Rate 15% (1)(2)(4)		12/31/2018		10,961,129	$	10,961,129	$	10,961,129
	Convertible Note Matures December 2020 Interest Rate 15% (1)(2)(4)		7/12/2019		1,300,000		1,300,000		1,300,000
	Convertible Note Matures December 2020 Interest Rate 15% (1)(2)(4)		10/11/2019		500,000		500,000		500,000
	Convertible Note Matures December 2020 Interest Rate 15% (1)(2)(4)		10/29/2019		500,000		500,000		500,000
	Convertible Note Matures December 2020 Interest Rate 15% (1)(2)(4)		2/27/2020		1,000,000		1,000,000		1,000,000
	Convertible Note Matures December 2020 Interest Rate 15% (1)(2)(4)		3/25/2020		500,000		500,000		500,000
	Convertible Note Matures December 2020 Interest Rate 15% (1)(2)(4)		5/8/2020		400,000		400,000		400,000
	Preferred Stock - Series C *(1)(2)(4)		7/12/2013		26,856,187		26,299,938		1,393,031
	Term Note Matures December 2020 Interest Rate 8% (1)(2)(4)		2/28/2014		3,000,000		3,000,000		3,000,000
	Term Note Matures December 2020 Interest Rate 8% (1)(2)(4)		2/10/2017		2,000,000		2,000,000		2,000,000
									21,554,160
KYMA, INC. (0.1%) Advanced Materials	Convertible Note Matures March 2021 Interest Rate 10% (1)(4)		3/11/2019		100,000		100,000		100,000

See accompanying notes to financial statements

10

Firsthand Technology Value Fund, Inc.

Consolidated Schedule of Investments - continued

JUNE 30, 2020 (UNAUDITED)

PORTFOLIO COMPANY (% OF NET ASSETS) AND INDUSTRY	TYPE OF INVESTMENT	ACQUISITION DATE		SHARES/PAR VALUE ($)		COST BASIS		VALUE
LYNCEAN TECHNOLOGIES, INC. (0.9%)	Preferred Stock - Series B *(1)(4)		7/3/2018		869,792	$	1,000,000	$	949,900
Semiconductor Equipment
PHUNWARE, INC. (0.1%)	Common Stock*		3/14/2014		82,913		554,560		101,983
Mobile Computing
PIVOTAL SYSTEMS CORP. (39.6%)	Common Stock *(1)(2)(4)		11/28/12 - 9/2/16		45,090,506		12,294,557		40,159,316
Semiconductor Equipment
QUICKLOGIC CORP. (0.0%)	Common Stock *		12/27/16 - 11/09/17		2,857		50,187		8,799
Semiconductors
REVASUM, INC. (11.4%)	Common Stock *(1)(2)(4)		11/14/16 - 11/30/18		46,834,340		13,512,264		11,514,975
Semiconductor Equipment
SILICON GENESIS CORP. (1.2%)	Preferred Stock - Series 1-E *(1)(2)(4)		4/18/2011		5,704,480		2,372,403		512,833
Intellectual Property	Preferred Stock - Series 1-C *(1)(2)(4)		4/18/2011		82,914		109,518		2,512
	Preferred Stock - Series 1-D *(1)(2)(4)		4/18/2011		850,830		431,901		6,636
	Common Stock *(1)(2)(4)		4/18/2011		921,892		169,045		276
	Common Stock Warrants *(1)(2)(4)		4/18/2011		37,982		6,678		4
	Preferred Stock - Series 1-F *(1)(2)(4)		4/18/2011		912,453		456,389		113,327
	Common Stock Warrants *(1)(2)(4)		10/13/2011		5,000,000		0		65
	Common Stock Warrants *(1)(2)(4)		2/6/2012		3,000,000		0		39

See accompanying notes to financial statements

11

Firsthand Technology Value Fund, Inc.

Consolidated Schedule of Investments - continued

JUNE 30, 2020 (UNAUDITED)

PORTFOLIO COMPANY (% OF NET ASSETS) AND INDUSTRY	TYPE OF INVESTMENT	ACQUISITION DATE		SHARES/PAR VALUE ($)		COST BASIS		VALUE
SILICON GENESIS CORP. (continued)	Preferred Stock - Series 1-G *(1)(2)(4)		3/10/2016		48,370,793	$	3,880,592	$	503,298
	Preferred Stock - Series 1-H *(1)(2)(4)		3/10/2016		837,942		936,895		56,645
									1,195,635
SVXR, INC. (5.3%)	Preferred Stock - Series A *(1)(3)(4)		1/11/17 - 8/29/18		8,219,454		4,082,192		5,377,167
Semiconductor Equipment
TELEPATHY INVESTORS, INC.	Preferred Stock - Series A *(1)(2)(4)		7/29/2014		15,238,000		3,999,999		0
(0.0%) Consumer Electronics	Convertible Note Matures June 2020 Interest Rate 10% (1)(2)(4)		4/20/2016		500,000		500,000		0
	Convertible Note Matures June 2020 Interest Rate 10% (1)(2)(4)		6/23/2015		2,000,000		2,000,000		0
	Convertible Note Matures June 2020 Interest Rate 10% (1)(2)(4)		5/3/2017		300,000		300,000		0
	Convertible Note Matures June 2020 Interest Rate 10% (1)(2)(4)		9/7/2018		200,000		200,000		0
	Convertible Note Matures June 2020 Interest Rate 10% (1)(2)(4)		1/29/2016		300,000		300,000		0
	Convertible Note Matures June 2020 Interest Rate 10% (1)(2)(4)		12/13/2016		500,000		500,000		0
	Convertible Note Matures June 2020 Interest Rate 10% (1)(2)(4)		6/21/2016		150,000		150,000		0
									0

See accompanying notes to financial statements

12

Firsthand Technology Value Fund, Inc.

Consolidated Schedule of Investments - continued

JUNE 30, 2020 (UNAUDITED)

PORTFOLIO COMPANY (% OF NET ASSETS) AND INDUSTRY	TYPE OF INVESTMENT	ACQUISITION DATE		SHARES/PAR VALUE ($)		COST BASIS		VALUE
UCT COATINGS, INC. (0.8%)	Common Stock *(1)(3)(4)		4/18/2011		1,500,000	$	662,235	$	767,250
Advanced Materials
WRIGHTSPEED, INC.	Common Stock *(1)(2)(4)		6/7/2019		69,102		7,460,851		4,623
(13.1%) Automotive	Common Stock Warrants *(1)(2)(4)		6/7/2019		181		0		7
	Convertible Note Matures December 2020 Interest Rate 12% (1)(2)(4)		6/7/2019		4,929,015		4,929,015		4,929,015
	Preferred Stock - Series AA *(1)(2)(4)		6/7/2019 - 6/8/2020		59,096,063		16,885,887		8,299,451
	Preferred Stock Warrants - Series AA *(1)(2)(4)		6/7/2019		609,756		0		55,366
									13,288,462
INVESTMENT COMPANY (0.6%)	Fidelity Investments Money Market Treasury Portfolio - Class I (5)		Various		567,170		567,170		567,170
TOTAL INVESTMENTS (Cost $140,440,507) — 100.7%									102,001,388
LIABILITIES IN EXCESS OF OTHER ASSETS— (0.7%)									(686,297	)
NET ASSETS — 100.0%								$	101,315,091

* Non-income producing security.

(1) Restricted security. Fair Value is determined by or under the direction of the Company’s Board of Directors (See note 3). At June 30, 2020, we held $101,323,436 (or 100.0% of net assets) in restricted securities (see Note 2).

(2) Controlled investments.

(3) Affiliated issuer.

(4) Fair Value Level 3 security.

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

See accompanying notes to financial statements

13

Firsthand Technology Value Fund, Inc.

Consolidated Schedule of Investments

DECEMBER 31, 2019

PORTFOLIO COMPANY (% OF NET ASSETS) AND INDUSTRY	TYPE OF INVESTMENT	ACQUISITION DATE		SHARES/PAR VALUE ($)		COST BASIS		VALUE
EQX CAPITAL, INC.	Common Stock *(1)(2)(4)		6/10/2016		100,000	$	20,000	$	28,990
(2.0%) Equipment Leasing	Preferred Stock - Series A *(1)(2)(4)		6/10/2016		3,200,000		3,200,000		2,490,880
									2,519,870
HERA SYSTEMS, INC. (6.3%) Aerospace	Convertible Promissory Note Matures December 2020 Interest Rate 10% (1)(2)(4)		5/31/2018		500,000		500,000		500,000
	Convertible Promissory Note Matures December 2020 Interest Rate 10% (1)(2)(4)		1/19/2018		500,000		500,000		500,000
	Preferred Stock - Series A *(1)(2)(4)		9/18/2015		3,642,324		2,000,000		247,314
	Preferred Stock - Series B *(1)(2)(4)		8/07/17 - 2/1/19		7,039,203		6,587,102		1,397,282
	Preferred Stock - Series C *(1)(2)(4)		8/7/2019-11/12/19		2,400,000		2,400,000		476,400
	Preferred Stock Warrants - Series B *(1)(2)(4)		7/9/18 - 9/4/18		12,250,000		0		2,430,890
	Preferred Stock Warrants - Series B *(1)(2)(4)		2/1/2019		5,250,000		0		1,041,810
	Preferred Stock Warrants - Series B *(1)(2)(4)		8/7/2017		6,214,922		0		1,233,289
	Preferred Stock Warrants - Series B *(1)(2)(4)		9/28/2017		700,000		0		138,908
									7,965,893
INTRAOP MEDICAL CORP. (14.9%) Medical Devices	Convertible Note Matures June 2020 Interest Rate 15% (1)(2)(4)		12/31/2018		10,961,129		10,961,129		10,961,129
	Convertible Note Matures June 2020 Interest Rate 15% (1)(2)(4)		7/12/2019		1,300,000		1,300,000		1,300,000
	Convertible Note Matures June 2020 Interest Rate 15% (1)(2)(4)		10/11/2019		500,000		500,000		500,000

See accompanying notes to financial statements

14

Firsthand Technology Value Fund, Inc.

Consolidated Schedule of Investments - continued

DECEMBER 31, 2019

PORTFOLIO COMPANY (% OF NET ASSETS) AND INDUSTRY	TYPE OF INVESTMENT	ACQUISITION DATE		SHARES/PAR VALUE ($)		COST BASIS		VALUE
INTRAOP MEDICAL CORP. (continued)	Convertible Note Matures June 2020 Interest Rate 15% (1)(2)(4)		10/29/2019		500,000	$	500,000	$	500,000
	Preferred Stock - Series C *(1)(2)(4)		7/12/2013		26,856,187		26,299,938		702,826
	Term Note Matures February 2020 Interest Rate 8% (1)(2)(4)		2/28/2014		3,000,000		3,000,000		3,000,000
	Term Note Matures February 2020 Interest Rate 8% (1)(2)(4)		2/10/2017		2,000,000		2,000,000		2,000,000
									18,963,955
KYMA, INC. (0.1%) Advanced Materials	Convertible Note Matures March 2020 Interest Rate 10% (1)(4)		3/11/2019		100,000		100,000		100,000
LYNCEAN TECHNOLOGIES, INC. (0.8%)	Preferred Stock - Series B *(1)(4)		7/3/2018		869,792		1,000,000		992,520
Semiconductor Equipment
PHUNWARE, INC. (0.6%)	Common Stock*		3/14/2014		682,913		4,567,633		812,666
Mobile Computing
PIVOTAL SYSTEMS CORP. (32.8%)	Common Stock *(1)(2)(4)		11/28/12 - 9/2/16		45,090,506		12,294,557		41,670,037
Semiconductor Equipment
QUICKLOGIC CORP. (0.2%)	Common Stock *		12/27/16 - 11/09/17		42,857		852,980		257,142
Semiconductors

See accompanying notes to financial statements

15

Firsthand Technology Value Fund, Inc.

Consolidated Schedule of Investments - continued

DECEMBER 31, 2019

PORTFOLIO COMPANY (% OF NET ASSETS) AND INDUSTRY	TYPE OF INVESTMENT	ACQUISITION DATE		SHARES/PAR VALUE ($)		COST BASIS		VALUE
REVASUM, INC. (15.1%)	Common Stock *(1)(2)(4)		11/14/16 - 11/30/18		46,834,340	$	13,512,264	$	19,173,339
Semiconductor Equipment
SILICON GENESIS CORP. (1.2%)	Preferred Stock - Series 1-E *(1)(2)(4)		4/18/2011		5,704,480		2,372,403		645,177
Intellectual Property	Preferred Stock - Series 1-C *(1)(2)(4)		4/18/2011		82,914		109,518		5,157
	Preferred Stock - Series 1-D *(1)(2)(4)		4/18/2011		850,830		431,901		13,699
	Common Stock *(1)(2)(4)		4/18/2011		921,892		169,045		645
	Common Stock Warrants *(1)(2)(4)		4/18/2011		37,982		6,678		11
	Preferred Stock - Series 1-F *(1)(2)(4)		4/18/2011		912,453		456,389		142,434
	Common Stock Warrants *(1)(2)(4)		10/13/2011		5,000,000		0		2,000
	Common Stock Warrants *(1)(2)(4)		2/6/2012		3,000,000		0		1,200
	Preferred Stock - Series 1-G *(1)(2)(4)		3/10/2016		48,370,793		3,880,592		651,458
	Preferred Stock - Series 1-H *(1)(2)(4)		3/10/2016		837,942		936,895		71,309
									1,533,090
SVXR, INC. (3.8%) Semiconductor Equipment	Preferred Stock - Series A *(1)(3)(4)		1/11/17 - 8/29/18		8,219,454		4,082,192		4,881,123
TELEPATHY INVESTORS, INC. (0.0%)	Preferred Stock - Series A *(1)(2)(4)		7/29/2014		15,238,000		3,999,999		0
Consumer Electronics	Convertible Note Matures March 2020 Interest Rate 10% (1)(2)(4)		4/20/2016		500,000		500,000		0
	Convertible Note Matures March 2020 Interest Rate 10% (1)(2)(4)		6/23/2015		2,000,000		2,000,000		0

See accompanying notes to financial statements

16

Firsthand Technology Value Fund, Inc.

Consolidated Schedule of Investments - continued

DECEMBER 31, 2019

PORTFOLIO COMPANY (% OF NET ASSETS) AND INDUSTRY	TYPE OF INVESTMENT	ACQUISITION DATE		SHARES/PAR VALUE ($)		COST BASIS		VALUE
TELEPATHY INVESTORS, INC. (continued)	Convertible Note Matures March 2020 Interest Rate 10% (1)(2)(4)		5/3/2017		300,000	$	300,000	$	0
	Convertible Note Matures March 2020 Interest Rate 10% (1)(2)(4)		9/7/2018		200,000		200,000		0
	Convertible Note Matures March 2020 Interest Rate 10% (1)(2)(4)		1/29/2016		300,000		300,000		0
	Convertible Note Matures March 2020 Interest Rate 10% (1)(2)(4)		12/13/2016		500,000		500,000		0
	Convertible Note Matures March 2020 Interest Rate 10% (1)(2)(4)		6/21/2016		150,000		150,000		0
									0
UCT COATINGS, INC. (0.7%)	Common Stock *(1)(3)(4)		4/18/2011		1,500,000		662,235		834,150
Advanced Materials
WRIGHTSPEED, INC.	Common Stock *(1)(2)(4)		6/7/2019		69,102		7,460,851		3,980
(12.3%) Automotive	Common Stock Warrants *(1)(2)(4)		6/7/2019		181		0		0
	Convertible Note Matures December 2020 Interest Rate 12% (1)(2)(4)		6/7/2019		4,929,015		4,929,015		4,929,015
	Preferred Stock - Series AA *(1)(2)(4)		6/7/2019 - 9/25/2019		47,284,219		13,495,888		10,625,710
	Preferred Stock Warrants - Series AA *(1)(2)(4)		6/7/2019		609,756		0		90,242
									15,648,947

See accompanying notes to financial statements

17

Firsthand Technology Value Fund, Inc.

Consolidated Schedule of Investments - continued

DECEMBER 31, 2019

PORTFOLIO COMPANY (% OF NET ASSETS) AND INDUSTRY	TYPE OF INVESTMENT	ACQUISITION DATE		SHARES/PAR VALUE ($)		COST BASIS		VALUE
INVESTMENT COMPANY (4.1%)	Fidelity Investments Money Market Treasury Portfolio - Class I (5)		Various		5,201,855	$	5,201,855	$	5,201,855
TOTAL INVESTMENTS (Cost $144,241,059) — 94.9%									120,554,587
OTHER ASSETS IN EXCESS OF LIABILITIES— 5.1%									6,534,804
NET ASSETS — 100.0%								$	127,089,391

* Non-income producing security.

(1) Restricted security. Fair Value is determined by or under the direction of the Company’s Board of Directors (See note 3). At December 31, 2019, we held $114,282,924 (or 89.9% of net assets) in restricted securities (see Note 2).

(2) Controlled investments.

(3) Affiliated issuer.

(4) Fair Value Level 3 security.

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

See accompanying notes to financial statements

18

Firsthand Technology Value Fund, Inc.

Notes to Consolidated Financial Statements

JUNE 30, 2020 (UNAUDITED)

NOTE 1. THE COMPANY

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

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

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

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

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

19

Firsthand Technology Value Fund, Inc.

Notes to Consolidated Financial Statements - continued

JUNE 30, 2020 (UNAUDITED)

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

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

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

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

PORTFOLIO INVESTMENT VALUATIONS. Investments are stated at “value” as defined in the 1940 Act and in the applicable regulations of the Securities and Exchange Commission and in accordance with GAAP. Value, as defined in Section 2(a)(41) of the 1940 Act, is (i) the market value of those securities for which a market quotation is readily available and (ii) the fair value as determined in good faith by, or under the direction of, the Board of Directors for all other securities and assets. On June 30, 2020, our financial statements include venture capital investments valued at approximately $49.6 million. The fair values of our venture capital investments were determined in good faith by, or under the direction of, the Board. Upon sale of these investments, the values that are ultimately realized may be different from what is presently estimated. The difference could be material. Also see note 6 regarding the fair value of the company’s investments.

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

RESTRICTED SECURITIES. At June 30, 2020, we held $101,323,436 in restricted securities. At December 31, 2019, we held $114,282,924 in restricted securities.

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

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

20

Firsthand Technology Value Fund, Inc.

Notes to Consolidated Financial Statements - continued

JUNE 30, 2020 (UNAUDITED)

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

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

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

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

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

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

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

The average monthly volume of the Company’s derivatives during the six months ended June 30, 2020 is as follows:

	PURCHASED OPTIONS (CONTRACTS)	WARRANTS (NOTIONAL VALUE)	WRITTEN OPTIONS (CONTRACTS)
Firsthand Technology Value Fund, Inc.	—	3,477,913	—

21

Firsthand Technology Value Fund, Inc.

Notes to Consolidated Financial Statements - continued

JUNE 30, 2020 (UNAUDITED)

NOTE 3. BUSINESS RISKS AND UNCERTAINTIES

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

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

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

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

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

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

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

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

NOTE 4. INVESTMENT MANAGEMENT FEE

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

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

The incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Management Agreement, as of the termination date), commencing on April 15, 2011, and equals 20% of the Company’s realized capital gains, if any, on a cumulative basis from inception through the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid incentive fees, provided that the incentive fee determined as of December 31, 2019, 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 three months ended June 30, 2020, there were no incentive fee adjustments. For the three months ended June 30, 2019, there was an incentive fee adjustment of ($8,185,187).

NOTE 5. DEBT

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

NOTE 6. FAIR VALUE

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

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

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

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

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

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

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

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

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

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

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

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

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

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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 June 30, 2020:

ASSETS	LEVEL 1 QUOTED PRICES		LEVEL 2 OTHER SIGNIFICANT OBSERVABLE INPUTS		LEVEL 3 SIGNIFICANT UNOBSERVABLE INPUTS
Common Stocks
Advanced Materials	$	—	$	—	$	767,250
Automotive		—		—		4,623
Equipment Leasing		—		—		27,920
Intellectual Property		—		—		276
Mobile Computing		101,983		—		—
Semiconductor Equipment		—		—		51,674,291
Semiconductors		8,799		—		—
Total Common Stocks		110,782		—		52,474,360

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ASSETS (continued)	LEVEL 1 QUOTED PRICES		LEVEL 2 OTHER SIGNIFICANT OBSERVABLE INPUTS		LEVEL 3 SIGNIFICANT UNOBSERVABLE INPUTS
Preferred Stocks
Aerospace	$	—	$	—	$	785,027
Automotive		—		—		8,299,451
Equipment Leasing		—		—		2,202,200
Intellectual Property		—		—		1,195,251
Medical Devices		—		—		1,393,031
Semiconductor Equipment		—		—		6,327,067
Total Preferred Stocks		—		—		20,202,027
Asset Derivatives *
Equity Contracts		—		—		1,946,905
Total Asset Derivatives		—		—		1,946,905
Convertible Notes
Advanced Materials		—		—		100,000
Aerospace		—		—		1,510,000
Automotive		—		—		4,929,015
Medical Devices		—		—		20,161,129
Total Convertible Notes		—		—		26,700,144
Mutual Funds		567,170		—		—
Total	$	677,952	$	—	$	101,323,436

* 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.

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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 12/31/19		NET PURCHASES/ CONVERSIONS		NET SALES/ CONVERSIONS			NET REALIZED GAINS/ (LOSSES)		NET UNREALIZED APPRECIATION (DEPRECIATION)(1)			TRANSFERS IN (OUT) OF LEVEL 3		BALANCE AS OF 6/30/2020
Common Stocks
Advanced Materials	$	834,150	$	—	$	—		$	—	$	(66,900	)	$	—	$	767,250
Automotive		3,980		—		—			—		643					4,623
Equipment Leasing		28,990		—		—			—		(1,070	)		—		27,920
Intellectual Property		645		—		—			—		(369	)		—		276
Semiconductor Equipment		60,843,376		—		—			—		(9,169,085	)		—		51,674,291
Total Common Stocks		61,711,141		—		—			—		(9,236,781	)		—		52,474,360
Preferred Stocks
Aerospace		2,120,996		250,000		—			—		(1,585,969	)		—		785,027
Automotive		10,625,710		3,389,999		—			—		(5,716,258	)		—		8,299,451
Equipment Leasing		2,490,880		—		(400,000	)		—		111,320			—		2,202,200
Intellectual Property		1,529,234		—		—			—		(333,983	)		—		1,195,251
Medical Devices		702,826		—		—			—		690,205			—		1,393,031
Semiconductor Equipment		5,873,643		—		—			—		453,424			—		6,327,067
Total Preferred Stocks		23,343,289		3,639,999		(400,000	)		—		(6,381,261	)		—		20,202,027
Asset Derivatives
Equity Contracts		4,938,350		—		—			—		(2,991,445	)		—		1,946,905
Total Asset Derivatives		4,938,350		—		—			—		(2,991,445	)		—		1,946,905
Convertible Notes
Advanced Materials		100,000		—		—			—		—			—		100,000
Aerospace		1,000,000		510,000		—			—		—			—		1,510,000
Automotive		4,929,015		—		—			—		—			—		4,929,015
Medical Devices		18,261,129		1,900,000		—			—		—			—		20,161,129
Total Convertible Notes		24,290,144		2,410,000		—			—		—			—		26,700,144
Total	$	114,282,924	$	6,049,999	$	(400,000	)	$	—	$	(18,609,487	)	$	—	$	101,323,436

(1) The net change in unrealized appreciation (depreciation) from Level 3 instruments held as of June 30, 2020 was $(18,609,487).

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The table below represents quantitative disclosure about significant unobservable inputs for Level 3 fair value measurements at June 30, 2020:

	FAIR VALUE AT 6/30/20	VALUATION TECHNIQUES	UNOBSERVABLE INPUTS	RANGE (WEIGHTED AVG.)
Direct venture capital investments: Advanced Materials	$0.9M	Market Comparable Companies Discounted Cash Flow Option Pricing Model	EBITDA Multiple Revenue Multiple Weighted Average Cost of Capital Years to Maturity Volatility Risk-Free Rate Discount for Lack of Marketability	9.6% - 11.7% (10.7%) 0.6% - 0.8% (0.7%) 21.5% (21.5%) 5 years (5 years) 50.0% (50.0%) 0.29% (0.29%) 22.7% (22.7%)
Direct venture capital investments: Aerospace	$4.2M	Prior Transaction Analysis Option Pricing Model	Years to Maturity Volatility Risk-Free Rate Going Concern Probability	5 years (5 years) 50.0% (50.0%) 0.29% (0.29%) 30% (30%)
Direct venture capital investments: Automotive	$13.3M	Prior Transaction Analysis Option Pricing Model	Years to Maturity Volatility Risk-Free Rate Discount for Lack of Marketability Going Concern Probability	5 years (5 years) 50.0% (50.0%) 0.29% (0.29%) 22.7% (22.7%) 45% (45%)
Direct venture capital investments: Consumer Electronics	$0.0M	Prior Transaction Analysis Option Pricing Model	Years to Maturity Volatility Risk-Free Rate Transaction Completion Probability	5 years (5 years) 70.0% (70.0%) 0.29% (0.29%) 90%
Direct venture capital investments: Equipment Leasing	$2.2M	Market Comparable Companies Discounted Cash Flow Option Pricing Model	EBITDA Multiple Weighted Average Cost of Capital Years to Maturity Volatility Risk-Free Rate	6.1% - 7.3% (6.3%) 20.0% (20.0%) 5 years (5 years) 50.0% (50.0%) 0.29% (0.29%)
Direct venture capital investments: Intellectual Property	$1.2M	Discounted Cash Flow Option Pricing Model	Weighted Average Cost of Capital Years to Maturity Volatility Risk-Free Rate Discount for Lack of Marketability	10.0% (10.0%) 5 years (5 years) 55.0% (55.0%) 0.29% (0.29%) 0.0% - 24.3% (0.0%)

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	FAIR VALUE AT 6/30/20	VALUATION TECHNIQUES	UNOBSERVABLE INPUTS	RANGE (WEIGHTED AVG.)
Direct venture capital investments: Medical Devices	$21.5M	Market Comparable Companies Option Pricing Model	Revenue Multiple Years to Maturity Volatility Risk-Free Rate	2.9x – 3.0x (2.9x) 4 years (4 years) 50% (50%) 0.24% (0.24%)
Direct venture capital investments: Semiconductor Equipment	$58.0M	Prior Transaction Analysis Option Pricing Model	Years to Maturity Volatility Risk-Free Rate Discount for Lack of Marketability Adjustment for Market Movement	0 years – 5 years (0.3 years) 40.0% - 86.8% (70.8%) 0.29% (0.29%) 0.0% - 12.6% (2.4%) -2.3% - 0.0% (-0.1%)

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.

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

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RIC, based on changes in the composition of our portfolio. Consequently, at the close of each fiscal quarter beginning with the quarter ended June 30, 2018, we will record a deferred tax liability for any net realized gains and net ordinary income for the year-to-date period plus net unrealized gains as of the end of the quarter.

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

The following information is based upon the U.S. federal income tax cost of portfolio investments as of June 30, 2020.

	FEDERAL INCOME TAX COST:
Gross unrealized appreciation	$	31,219,569
Gross unrealized depreciation		(69,658,688	)
Net unrealized depreciation	$	(38,439,119	)
Federal income tax cost, Investments	$	140,440,507

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

The Company’s income tax provision consists of the following as of December 31, 2019

Deferred tax (expense)/benefit
Federal	$	11,989,897
State		4,285,245
Total deferred tax (expense)/benefit	$	16,275,142

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Such temporary differences are principally: (i) taxes on unrealized gains/(losses), which are attributable to the temporary difference between fair market value and tax basis, (ii) the net tax effects of temporary differences between the carrying amounts of assets and liabilities for

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financial reporting and income tax purposes, and (iii) the net tax benefit of accumulated net operating losses and capital loss carryforwards. Deferred tax assets and liabilities are measured using effective tax rates expected to apply to taxable income in the years such temporary differences are realized or otherwise settled.

Components of the Company’s deferred tax assets and liabilities as of December 31, 2019 are as follows:

	AMOUNT
Deferred tax assets (liabilities):
Net operating loss carryforward	$	1,292,784
Capital loss carryforward		7,270,082
Net unrealized losses (gains) on investment securities		6,627,475
Incentive fee		—
Total deferred tax assets (liabilities), net		15,190,341
Valuation allowance		(7,347,758	)
Net	$	7,842,583

For the year ended December 31, 2019, the Company had an effective tax rate of 20.14% and a statutory tax rate of 27.98% with the difference primarily being attributable to the deferred tax benefits recognized during the year.

The effective tax rate and statutory federal income tax rate for the three- and six- month periods ended June 30, 2020 and 2019 were as follows:

	THREE MONTHS ENDED JUNE 30, 2020	THREE MONTHS ENDED JUNE 30, 2019	SIX MONTHS ENDED JUNE 30, 2020	SIX MONTHS ENDED JUNE 30, 2019
Effective tax rate	11.6%	26.9%	-49.2%	28.1%
Statutory federal income tax rate	21%	21%	21%	21%

The variance in the effective tax rate and statutory federal income tax rate for the three- and six-month periods ending June 30, 2020 is the result of changes to the deferred tax asset valuation allowance account. At June 30, 2020, the Company has established a full valuation allowance on its net deferred tax assets.

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.

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.

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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, 2019, 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, 2019, the Company had net operating loss carryforwards for federal and state of income tax purposes of $4,620,386, which may be carried forward indefinitely.

As of December 31, 2019, the Company had net capital loss carryforwards for federal and state income tax purposes, which may be carried forward for 5 years, as follows:

EXPIRATION DATE	AMOUNT
12/31/23	$	4,994,658
12/31/24		20,988,480
Total	$	25,983,138

NOTE 8. INVESTMENT TRANSACTIONS

Investment transactions (excluding short-term investments) were as follows for the quarter ended June 30, 2020.

PURCHASES AND SALES
Purchases of investment securities	$	3,640,000
Proceeds from sales and maturities of investment securities	$	(3,823,800	)

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

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“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, 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, 2019, through June 30, 2020, is noted below:

AFFILIATE/ CONTROLLED INVESTMENTS*	VALUE AT 12/31/19		PURCHASES/ MERGER		INTEREST		SALES/ MATURITY/ EXPIRATION			REALIZED GAIN (LOSS)		CHANGE IN APPRECIATION/ DEPRECIATION			VALUE 6/30/20		SHARES HELD AT 6/30/2020
EQX Capital, Inc. Common Stock*	$	28,990	$	—	$	—	$	—		$	—	$	(1,070	)	$	27,920		100,000
EQX, Inc. Preferred Stock - Series A*		2,490,880		—		—		(400,000	)		—		111,320			2,202,200		2,800,000

33

Firsthand Technology Value Fund, Inc.

Notes to Consolidated Financial Statements - continued

JUNE 30, 2020 (UNAUDITED)

AFFILIATE/ CONTROLLED INVESTMENTS*	VALUE AT 12/31/19		PURCHASES/ MERGER		INTEREST		SALES/ MATURITY/ EXPIRATION		REALIZED GAIN (LOSS)		CHANGE IN APPRECIATION/ DEPRECIATION			VALUE 6/30/20		SHARES HELD AT 6/30/2020
Hera Systems, Inc. Series C Preferred*	$	476,400	$	250,000	$	—	$	—	$	—	$	(520,760	)	$	205,640		2,650,000
Hera Systems, Inc. Series A Preferred*		247,314		—		—		—		—		(214,169	)		33,145		3,642,324
Hera Systems, Inc. Convertible Note*		500,000		—		25,278		—		—		—			500,000		500,000
Hera Systems, Inc. Convertible Note*		500,000		—		25,278		—		—		—			500,000		500,000
Hera Systems, Inc. Convertible Note*		—		250,000		6,944		—		—		—			250,000		250,000
Hera Systems, Inc. Convertible Note*		—		40,000		700		—		—		—			40,000		40,000
Hera Systems, Inc. Convertible Note*		—		20,000		183		—		—		—			20,000		20,000
Hera Systems, Inc. Convertible Note*		—		200,000		278		—		—		—			200,000		200,000
Hera Systems, Inc. Series B Preferred*		1,397,282		—		—		—		—		(851,040	)		546,242		7,039,203
Hera Systems, Inc. Series B Warrants*		138,908		—		—		—		—		(84,679	)		54,229		700,000
Hera Systems, Inc. Series B Warrants*		1,233,289		—		—		—		—		(751,819	)		481,470		6,214,922
Hera Systems, Inc. Series B Warrants*		2,430,890		—		—		—		—		(1,481,883	)		949,007		12,250,000
Hera Systems, Inc. Series B Warrants*		1,041,810		—		—		—		—		(635,092	)		406,718		5,250,000
IntraOp Medical Corp. Series C Preferred*		702,826		—		—		—		—		690,205			1,393,031		26,856,187
IntraOp Medical Corp. Convertible Note*		1,300,000		—		97,233		—		—		—			1,300,000		1,300,000
IntraOp Medical Corp. Convertible Note*		500,000		—		37,397		—		—		—			500,000		500,000
IntraOp Medical Corp. Convertible Note*		500,000		—		37,397		—		—		—			500,000		500,000
IntraOp Medical Corp. Convertible Note*		—		1,000,000		51,370		—		—		—			1,000,000		1,000,000
IntraOp Medical Corp. Convertible Note*		—		500,000		20,137		—		—		—			500,000		500,000

34

Firsthand Technology Value Fund, Inc.

Notes to Consolidated Financial Statements - continued

JUNE 30, 2020 (UNAUDITED)

AFFILIATE/ CONTROLLED INVESTMENTS*	VALUE AT 12/31/19		PURCHASES/ MERGER		INTEREST		SALES/ MATURITY/ EXPIRATION		REALIZED GAIN (LOSS)		CHANGE IN APPRECIATION/ DEPRECIATION			VALUE 6/30/20		SHARES HELD AT 6/30/2020
IntraOp Medical Corp. Convertible Note*	$	—	$	400,000	$	8,877	$	—	$	—	$	—		$	400,000		400,000
IntraOp Medical Corp. Term Note*		3,000,000		—		119,672		—		—		—			3,000,000		3,000,000
IntraOp Medical Corp. Term Note*		2,000,000		—		79,781		—		—		—			2,000,000		2,000,000
IntraOp Medical Corp. Convertible Note*		10,961,129		—		942,807		—		—		—			10,961,129		10,961,129
Pivotal Systems Common Stock*		41,670,037		—		—		—		—		(1,510,721	)		40,159,316		45,090,506
Revasum, Common Stock*		19,173,339		—		—		—		—		(7,658,364	)		11,514,975		46,834,340
Silicon Genesis Corp., Common Stock *		645		—		—		—		—		(369	)		276		921,892
Silicon Genesis Corp., Common Warrants*		11		—		—		—		—		(7	)		4		37,982
Silicon Genesis Corp., Common Warrants*		2,000		—		—		—		—		(1,935	)		65		5,000,000
Silicon Genesis Corp., Common Warrants*		1,200		—		—		—		—		(1,161	)		39		3,000,000
Silicon Genesis Corp., Series 1-C Preferred*		5,157		—		—		—		—		(2,645	)		2,512		82,914
Silicon Genesis Corp., Series 1-D Preferred*		13,699		—		—		—		—		(7,063	)		6,636		850,830
Silicon Genesis Corp., Series 1-E Preferred*		645,177		—		—		—		—		(132,344	)		512,833		5,704,480
Silicon Genesis Corp., Series 1-F Preferred*		142,434		—		—		—		—		(29,107	)		113,327		912,453
Silicon Genesis Corp., Series 1-G Preferred*		651,458		—		—		—		—		(148,160	)		503,298		48,370,793
Silicon Genesis Corp., Series 1-H Preferred*		71,309		—		—		—		—		(14,664	)		56,645		837,942

35

Firsthand Technology Value Fund, Inc.

Notes to Consolidated Financial Statements - continued

JUNE 30, 2020 (UNAUDITED)

AFFILIATE/ CONTROLLED INVESTMENTS*	VALUE AT 12/31/19		PURCHASES/ MERGER		INTEREST			SALES/ MATURITY/ EXPIRATION		REALIZED GAIN (LOSS)		CHANGE IN APPRECIATION/ DEPRECIATION			VALUE 6/30/20		SHARES HELD AT 6/30/2020
SVXR, Inc., Preferred Stock Series A	$	4,881,123	$	—	$	—		$	—	$	—	$	496,044		$	5,377,167		8,219,454
Telepathy Investors, Inc. Convertible Note*		—		—		(34,807	)		—		—		—			—		2,000,000
Telepathy Investors, Inc. Convertible Note*		—		—		(5,221	)		—		—		—			—		300,000
Telepathy Investors, Inc. Convertible Note*		—		—		(2,610	)		—		—		—			—		150,000
Telepathy Investors, Inc. Convertible Note*		—		—		(8,702	)		—		—		—			—		500,000
Telepathy Investors, Inc. Convertible Note*		—		—		(5,221	)		—		—		—			—		300,000
Telepathy Investors, Inc. Convertible Note*		—		—		(8,702	)		—		—		—			—		500,000
Telepathy Investors, Inc. Convertible Note*		—		—		(3,481	)		—		—		—			—		200,000
Telepathy Inc. Preferred Stock Series A*		—		—		—			—		—		—			—		15,238,000
UCT Coatings, Inc.Common Stock		834,150		—		—			—		—		(66,900	)		767,250		1,500,000
Wrightspeed, Inc., Common Stock*		3,980		—		—			—		—		643			4,623		69,102
Wrightspeed, Inc., Common Stock Warrants*		—		—		—			—		—		7			7		181
Wrightspeed, Inc., Convertible Note		4,929,015		—		299,027			—		—		—			4,929,015		4,929,015
Wrightspeed, Inc., Preferred Stock- Series AA*		10,625,710		3,389,999		—			—		—		(5,716,258	)		8,299,451		59,096,063

36

Firsthand Technology Value Fund, Inc.

Notes to Consolidated Financial Statements - continued

JUNE 30, 2020 (UNAUDITED)

AFFILIATE/ CONTROLLED INVESTMENTS*	VALUE AT 12/31/19		PURCHASES/ MERGER		INTEREST		SALES/ MATURITY/ EXPIRATION		REALIZED GAIN (LOSS)		CHANGE IN APPRECIATION/ DEPRECIATION			VALUE 6/30/20		SHARES HELD AT 6/30/2020
Wrightspeed, Inc., Preferred Stock Warrants- Series AA*	$	90,242	$	—	$	—	$	—	$	—	$	(34,876	)	$	55,366		609,756
Total Affiliates and Controlled Investments		113,190,404				1,683,615				—		(18,566,867	)		100,273,536
Total Affiliates		5,715,273				—				—		429,144			6,144,417
Total Controlled Investments	$	107,475,131			$	1,683,615			$	—	$	(18,996,011	)	$	94,129,119

* Controlled Investments.

As of June 30, 2020, Kevin Landis represented the Company and sat on the board of directors of Hera Systems, Inc.; IntraOp Medical, Inc.; Pivotal Systems, Inc.; Revasum, Inc.; Silicon Genesis Corp.; Telepathy Investors, Inc.; and Wrightspeed, Inc. Serving on boards of directors of portfolio companies may cause conflicts of interest. The Adviser has adopted various procedures to ensure that the Company will not be unfavorably affected by these potential conflicts.

NOTE 11. SUBSEQUENT EVENTS

Management has evaluated the impact of all subsequent events on the Company through the date the financial statements were issued, and has determined that there were no subsequent events requiring recognition or disclosure in the financial statements.

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

FORWARD-LOOKING STATEMENTS

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

● our future operating results;

● our business prospects and the prospects of our prospective portfolio companies;

● the impact of investments that we expect to make;

● the impact of a protracted decline in the liquidity of the credit markets on our business;

● our informal relationships with third parties;

● the expected market for venture capital investments and our addressable market;

● the dependence of our future success on the general economy and its impact on the industries in which we invest;

● our ability to access the equity market;

● the ability of our portfolio companies to achieve their objectives;

● our expected financings and investments;

● our regulatory structure and tax status;

● our ability to operate as a business development company and a regulated investment company;

● the adequacy of our cash resources and working capital;

● the timing of cash flows, if any, from the operation of our portfolio companies;

● the timing, form, and amount of any dividend distributions;

● impact of fluctuation of interest rates on our business;

● valuation of any investments in portfolio companies particularly those having no liquid trading market; and

● our ability to recover unrealized losses.

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

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

OVERVIEW

We are an externally managed, closed-end, non-diversified management investment company organized as a Maryland corporation that has elected to be treated as a BDC under the 1940 Act. As such, we are required to comply with certain regulatory requirements. For instance, we generally have to invest at least 70% of our total assets in “qualifying assets,”

38

including securities of private or micro-cap public U.S. companies, cash, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less. In addition, for tax purposes we are treated as a corporation and are subject to federal and state taxes on our income. FCM serves as our investment adviser and manages the investment process on a daily basis.

Our investment objective is to seek long-term growth of capital, principally by seeking capital gains on our equity and equity-related investments. There can be no assurance that we will achieve our investment objective. Under normal circumstances, we invest at least 80% of our net assets for investment purposes in technology companies. We consider technology companies to be those companies that derive at least 50% of their revenues from products and/or services within the information technology sector or in the “cleantech” sector. Information technology companies include, but are not limited to, those focused on computer hardware, software, telecommunications, networking, Internet, and consumer electronics. While there is no standard definition of cleantech, it is generally regarded as including goods and services designed to harness renewable energy and materials, eliminate emissions and waste, and reduce the use of natural resources. In addition, under normal circumstances we invest at least 70% of our total assets in privately held companies and public companies with market capitalizations of less than $250 million. Our portfolio is primarily composed of equity and equity derivative securities of technology and cleantech companies (as defined above). These investments generally range between $1 million and $10 million each, although the investment size will vary proportionately with the size of our capital base. We acquire our investments through direct investments in private companies, negotiations with selling shareholders, and in organized secondary marketplaces for private securities.

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

PORTFOLIO COMPOSITION

We make investments in securities of both public and private companies. Our portfolio investments consist principally of equity and equity-like securities, including common and preferred stock, warrants for the purchase of common and preferred stock, and convertible and term notes. The fair value of our investment portfolio was approximately $102.0 million as of June 30, 2020, as compared to approximately $120.6 million as of December 31, 2019.

The following table summarizes the fair value of our investment portfolio by industry sector as of June 30, 2020, and December 31, 2019.

	June 30, 2020	December 31, 2019
Semiconductor Equipment	57.2%	52.5%
Medical Devices	21.3%	14.9%
Automotive	13.1%	12.3%
Aerospace	4.1%	6.3%
Equipment Leasing	2.2%	2.0%
Intellectual Property	1.2%	1.2%
Advanced Materials	0.9%	0.8%
Mobile Computing	0.1%	0.6%
Consumer Electronics	0.0%	0.0%
Semiconductor	0.0%	0.2%
Exchange-Traded/Money Market Funds	0.6%	4.1%
Other Liabilities	(0.7)%	5.1%
Net Assets	100.0%	100.0%

39

MATURITY OF PRIVATE COMPANIES IN THE CURRENT PORTFOLIO

The Fund invests in private companies at various stages of maturity. As our portfolio companies mature, they move from the “early (development) stage” to the “middle (revenue) stage” and then to the “late stage.” We expect that this continuous progression may create a pipeline of potential exit opportunities through initial public offerings (IPOs) or acquisitions. Of course, some companies do not progress.

The illustration below describes typical characteristics of companies at each stage of maturity and where we believe our current portfolio companies fit within these categories. We expect some of our portfolio companies to transition between stages of maturity over time. The transition may be forward if the company is maturing and is successfully executing its business plan or may be backward if the company is not successfully executing its business plan or decides to change its business plan substantially from its original plan.

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

RESULTS OF OPERATIONS

Comparison of the three months ended June 30, 2020, to the three months ended June 30, 2019.

INVESTMENT INCOME

For the three months ended June 30, 2020, we had investment income of $921,754 primarily attributable to our interest accrued on convertible/term note investments with IntraOp Medical, Hera Systems and Wrightspeed.

For the three months ended June 30, 2019, we had investment income of ($314,535) primarily attributable to a write-off/reduction of our interest accrued on convertible/term note investments with Vufine and Telepathy Investors.

The higher level of investment income in the three months ended June 30, 2020, compared to the three months ended June 30, 2019, was due to the adjustments of our interest accrued on convertible/term note investments with Vufine and Telepathy Investors in the three months ended June 30, 2019.

40

OPERATING EXPENSES

Net operating expenses totaled approximately $721,103 during the three months ended June 30, 2020, and $(6,999,747) during the three months ended June 30, 2019.

Significant components of net operating expenses for the three months ended June 30, 2020, were management fee expense of $465,986, and professional fees (audit, legal, and consulting) of $89,535. Significant components of operating expenses for the three months ended June 30, 2019, were management fee expense of $908,003, incentive fees (which were accrued but are not payable until gains in the portfolio are realized) of ($8,185,187), and professional fees (audit, legal, and consulting) of $99,606.

The higher level of net operating expenses for the three months ended June 30, 2020, compared to the three months ended June 30, 2019, is primarily attributable to the reversal of the incentive fee accrual in the three months ended June 30, 2019, which is a quarterly accrual based on what the incentive fee would be if the entire portfolio were liquidated at fair market value.

NET INVESTMENT INCOME/(LOSS)

The net investment income/(loss) before taxes was $200,651 for the three months ended June 30, 2020, and $6,685,212 for the three months ended June 30, 2019.

The lesser net investment income in the three months ended June 30, 2020, compared to the three months ended June 30, 2019, is primarily attributable to the reversal of the incentive fee accrual in the three months ended June 30, 2019, which is a quarterly accrual based on what the incentive fee would be if the entire portfolio were liquidated at fair market value.

NET INVESTMENT REALIZED GAINS AND LOSSES AND UNREALIZED APPRECIATION AND DEPRECIATION

A summary of the net realized and unrealized gains and losses on investments for the three-month periods ended June 30, 2020, and June 30, 2019, is shown below.

	Three Months Ended June 30, 2020
Realized losses	$	(3,613,484	)
Net change in unrealized depreciation on investments		27,692,382
Deferred tax expense		(2,803,718	)
Net realized and unrealized gains on investments, net of deferred taxes	$	21,275,180

	As of June 30, 2020
Gross unrealized appreciation on portfolio investments	$	31,219,569
Gross unrealized depreciation on portfolio investments		(69,658,688	)
Net unrealized depreciation on portfolio investments	$	(38,439,119	)

	Three Months Ended June 30, 2019
Realized losses	$	(4,877,370	)
Net change in unrealized appreciation on investments		(44,690,211	)
Deferred tax benefit		11,095,207
Net realized and unrealized losses on investments, net of deferred taxes	$	(38,472,374	)

41

	As of June 30, 2019
Gross unrealized appreciation on portfolio investments	$	56,899,185
Gross unrealized depreciation on portfolio investments		(68,426,084	)
Net unrealized depreciation on portfolio investments	$	(11,526,899	)

During the three months ended June 30, 2020, we recognized net realized losses of $3,613,484.

During the three months ended June 30, 2020, net unrealized depreciation on total investments decreased by $27,692,382. The change in net unrealized appreciation and depreciation of our private investments is based on portfolio asset valuations determined in good faith by our Board of Directors. This change in net unrealized depreciation was primarily composed of an increase in the valuations of our Pivotal Systems, IntraOp and Revasum holdings.

During the three months ended June 30, 2019, we recognized net realized losses of $4,877,370.

During the three months ended June 30, 2019, net unrealized appreciation on total investments decreased by $44,690,211. The change in net unrealized appreciation and depreciation of our private investments is based on portfolio asset valuations determined in good faith by our Board of Directors. This change in net unrealized depreciation was primarily composed of a decrease in the valuations of our Pivotal Systems, Phunware, QMAT, IntraOp and Revasum holdings.

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

For the three months ended June 30, 2020, the net increase in net assets resulting from operations (net of deferred taxes) totaled $21,475,831, and basic and fully diluted net change in net assets per share for the three months ended June 30, 2020, was $3.01.

For the three months ended June 30, 2019, the net decrease in net assets resulting from operations (net of deferred taxes) totaled ($31,367,469), and basic and fully diluted net change in net assets per share for the three months ended June 30, 2020, was ($4.36).

The greater increase in net assets resulting from operations for the three months ended June 30, 2020, as compared to the three months ended June 30, 2019, is due primarily to an increase in the valuation of certain of our investments, primarily Pivotal Systems, IntraOp and Revasum.

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The following information is a comparison for the six months ended June 30, 2020, and the six months ended June 30, 2019.

INVESTMENT INCOME

For the six months ended June 30, 2020, we had investment income of $1,694,051 primarily attributable to interest accrued on convertible/term note investments with IntraOp Medical Corp, Hera Systems and Wrightspeed.

For the six months ended June 30, 2019, we had investment income of $500,357 primarily attributable to interest accrued on convertible/term note investments with Wrightspeed and IntraOp Medical Corp.

The higher level of investment income in the six months ended June 30, 2020, compared to the six months ended June 30, 2019, was due to increased principal in convertible notes and an adjustments of our interest accrued on convertible/term note investments with Vufine and Telepathy Investors in the previous six month period.

OPERATING EXPENSES

Net operating expenses totaled approximately $1,481,059 during the six months ended June 30, 2020, and ($6,789,399) during the six months ended June 30, 2019.

Significant components of net operating expenses for the six months ended June 30, 2020, were management fee expense of $974,435 and professional fees (audit, legal, and consulting) of $169,765. Significant components of operating expenses for the six months ended June 30, 2019, were management fee expense of $1,941,261, professional fees (audit, legal, and consulting) of $182,426 and incentive fees (which were accrued but are not payable until gains in the portfolio are realized) of ($9,261,847).

The greater level of net operating expenses for the six months ended June 30, 2020, compared to the six months ended June 30, 2019, is primarily attributable to the reversal of the incentive fee accrual in the six months ended June 30, 2019, which is an accrual based on what the incentive fee would be if the entire portfolio were liquidated at fair market value.

NET INVESTMENT INCOME/(LOSS)

The net investment income/(loss) before taxes was $212,992 for the six months ended June 30, 2020, and $7,289,756 for the six months ended June 30, 2019.

The lesser net investment income in the six months ended June 30, 2020, compared to the six months ended June 30, 2019, is primarily attributable to the reversal of the incentive fee accrual in the six months ended June 30, 2019, which is an accrual based on what the incentive fee would be if the entire portfolio were liquidated at fair market value.

NET INVESTMENT REALIZED GAINS AND LOSSES AND UNREALIZED APPRECIATION AND DEPRECIATION

A summary of the net realized and unrealized gains and loss on investments for the six-month periods ended June 30, 2020, and June 30, 2019, is shown below.

	Six Months Ended June 30, 2020
Realized losses	$	(1,392,066	)
Net change in unrealized depreciation on investments		(14,752,647	)
Deferred tax expense		(7,842,581	)
Net realized and unrealized losses on investments	$	(23,987,294	)

	As of June 30, 2020
Gross unrealized appreciation on portfolio investments	$	31,219,569
Gross unrealized depreciation on portfolio investments		(69,658,688	)
Net unrealized depreciation on portfolio investments	$	(38,439,119	)

43

	Six Months Ended June 30, 2019
Realized losses	$	(746,048	)
Net change in unrealized appreciation on investments		(54,103,131	)
Deferred tax benefit		12,836,654
Net realized and unrealized gains on investments	$	(42,012,525	)

	As of June 30, 2019
Gross unrealized appreciation on portfolio investments	$	56,899,185
Gross unrealized depreciation on portfolio investments		(68,426,084	)
Net unrealized depreciation on portfolio investments	$	(11,526,899	)

During the six months ended June 30, 2020, we recognized net realized losses of $1,392,066 from the sale of investments. Realized losses were higher than those in the year-ago period due to the sale of our QuickLogic and Phunware shares.

During the six months ended June 30, 2020, net unrealized depreciation on total investments increased by $14,752,647. The change in net unrealized appreciation and depreciation of our private investments is based on portfolio asset valuations determined in good faith by our Board of Directors. This change in net unrealized depreciation was primarily caused by a decrease in the valuations of our Wrightspeed and Revasum holdings.

During the six months ended June 30, 2019, we recognized net realized losses of $746,048 from the sale of investments.

During the six months ended June 30, 2019, net unrealized appreciation on total investments decreased by $54,103,131. The change in net unrealized appreciation and depreciation of our private investments is based on portfolio asset valuations determined in good faith by our Board of Directors. This change in net unrealized depreciation was primarily caused by a decrease in the valuations of our Pivotal Systems, Phunware, QMAT, IntraOp and Revasum holdings.

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

For the six months ended June 30, 2020, the net decrease in net assets resulting from operations (net of deferred taxes) totaled ($25,774,302) and basic and the fully diluted net change in net assets per share for the six months ended June 30, 2020 was ($3.41).

For the six months ended June 30, 2019, the net decrease in net assets resulting from operations (net of deferred taxes) totaled ($34,204,570) and basic and the fully diluted net change in net assets per share for the six months ended June 30, 2019 was ($4.76).

The lesser decrease in net assets resulting from operations for the six months ended June 30, 2020, as compared to the six months ended June 30, 2019, is due primarily to smaller declines in the valuation of certain of our investments, primarily Wrightspeed and Revasum, during the period.

DISTRIBUTION POLICY

During the years that the Company qualifies as a RIC our board of directors will determine the timing and amount, if any, of our distributions. 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.

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OFF-BALANCE SHEET ARRANGEMENTS

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

CRITICAL ACCOUNTING POLICIES

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

Valuation of Portfolio Investments

As a business development company, we generally invest in illiquid equity and equity derivatives of securities of venture capital stage technology companies. Under written procedures established by our board of directors, securities traded on stock exchanges, or quoted by NASDAQ, are valued according to the NASDAQ Stock Market, Inc. (“NASDAQ”) official closing price, if applicable, or at their last reported sale price as of the close of trading on the New York Stock Exchange (“NYSE”) (normally 4:00 P.M. Eastern Time). If a security is not traded that day, the security will be valued at its most recent bid price. Securities traded in the over-the-counter market, but not quoted by NASDAQ, are valued at the last sale price (or, if the last sale price is not readily available, at the most recent closing bid price as quoted by brokers that make markets in the securities) at the close of trading on the NYSE. Securities traded both in the over-the-counter market and on a stock exchange are valued according to the broadest and most representative market. We obtain these market values from an independent pricing service or at the mean between the bid and ask prices obtained from at least two brokers or dealers (if available, otherwise by a principal market maker or a primary market dealer). In addition, a large percentage of our portfolio investments are in the form of securities that are not publicly traded. The fair value of securities and other investments that are not publicly traded may not be readily determinable. We value these securities quarterly at fair value as determined in good faith by our board of directors. Our board of directors may use the services of a nationally recognized independent valuation firm to aid it in determining the fair value of these securities. The methods for valuing these securities may include: fundamental analysis (sales, income, or earnings multiples, etc.), discounts from market prices of similar securities, purchase price of securities, subsequent private transactions in the security or related securities, or discounts applied to the nature and duration of restrictions on the disposition of the securities, as well as a combination of these and other factors. Because such valuations, and particularly valuations of private securities and private companies, are inherently uncertain, may fluctuate over short periods of time, and may be based on estimates, our determinations of fair value may differ materially from the values that would have been used if a ready market for these securities existed. Our net asset value could be adversely affected if our determinations regarding the fair value of our investments were materially higher than the values that we ultimately realize upon the disposal of such securities.

Revenue Recognition

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

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

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

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Recently Issued Accounting Standards

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

Inflation

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

SUBSEQUENT EVENTS

Subsequent to the close of the fiscal quarter on June 30, 2020, 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 the purchase and sale of public and private securities. Since that date, we have purchased private securities with an aggregate cost of approximately $970 thousand and sold public securities with an aggregate value of approximately $3.5 million.

On and effective August 7, 2020, the Board of Directors of Firsthand Technology Value Fund, Inc. (the “Company”) amended and restated the Company’s Amended and Restated Bylaws. The Amended and Restated Bylaws provide that the Maryland Control Share Acquisition Act applies to any acquisition or proposed acquisition of shares of stock of the Company to the extent provided in the Maryland Control Share Acquisition Act. The Amended and Restated Bylaws contain a provision exempting Kevin Landis and his associates from the Maryland Control Share Acquisition Act. The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the full text of the Amended and Restated Bylaws, a copy of which is attached hereto as Exhibit 3.1 hereto and incorporated herein by reference.

Item 3.    Quantitative and Qualitative Disclosures About Market Risk.

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

VALUATION RISK

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

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

46

private companies, are inherently uncertain, may fluctuate over short periods of time, and may be based on estimates, our determinations of fair value may differ materially from the values that would have been used if a ready market for these securities existed.

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

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

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

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

PRIVATELY PLACED SMALL COMPANIES RISK

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

WE CURRENTLY HOLD A PORTION OF OUR ASSETS IN CASH

As of June 30, 2020, a portion of the Company’s assets was invested in cash and/or cash equivalents, which are expected to earn low yields. Given the current low interest rate environment, to the extent the management fee and other operating expenses exceed interest income on the cash holdings of the Company, the Company may experience losses. Furthermore, the investment advisory fee payable by us will not be reduced while our assets are invested in cash-equivalent securities.

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

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

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Item 4.    Controls and Procedures.

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

(b) Changes in Internal Control Over Financial Reporting There have been no changes in our internal control over financial reporting, as defined in Rule 13a-15(f) under the Exchange Act, that occurred during the fiscal quarter ended June 30, 2020, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

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Item 1.    Legal Proceedings.

We are not a party to any material pending legal proceeding, and no such proceedings are known to be contemplated.

Item 1A.    Risk Factors.

There have been no material changes from risk factors as previously disclosed in our Form 10-K for the period ended December 31, 2019, in response to Item 1A of Part 1 of Form 10-K.

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

None.

Item 3.    Defaults Upon Senior Securities.

None.

Item 4.    Mine Safety Disclosures.

None.

Item 5.    Other Information.

None.

Item 6.    Exhibits.

EXHIBIT NUMBER	DESCRIPTION
3.1	Registrant’s Amended and Restated Bylaws - filed herewith
31.1	Chief Executive Officer Certification Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Chief Financial Officer Certification Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.	Chief Executive Officer and Chief Financial Officer Certification Pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

Pursuant to the requirements of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	FIRSTHAND TECHNOLOGY VALUE FUND, INC. (Registrant)
Dated: August 10, 2020
	Kevin Landis Chief Executive Officer and Chief Financial Officer

EXHIBIT INDEX

EXHIBIT NUMBER	Description
3.1	Registrant’s Amended and Restate Bylaws
31.1	Chief Executive Officer Certification Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Chief Financial Officer Certification Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.	Chief Executive Officer and Chief Financial Officer Certification Pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

EX-3.1

FIRSTHAND TECHNOLOGY VALUE FUND, INC.

AMENDED AND RESTATED BYLAWS

ARTICLE I

OFFICES

Section 1. PRINCIPAL OFFICE. The principal office of the Corporation in the State of Maryland shall be located at such place as the Board of Directors may designate.

Section 2. ADDITIONAL OFFICES. The Corporation may have additional offices, including a principal executive office, at such places as the Board of Directors may from time to time determine or the business of the Corporation may require.

ARTICLE II

MEETINGS OF STOCKHOLDERS

Section 1. PLACE. All meetings of stockholders shall be held at the principal executive office of the Corporation or at such other place as shall be set in accordance with these Bylaws and stated in the notice of the meeting.

Section 2. ANNUAL MEETING. An annual meeting of stockholders for the election of directors and the transaction of any business within the powers of the Corporation shall be held on the date and at the time and place set by the Board of Directors.

Section 3. SPECIAL MEETINGS.

(a)       General. The chairman of the Board, the president or the Board of Directors may call a special meeting of the stockholders. Subject to subsection (b) of this Section 3, a special meeting of stockholders shall also be called by the secretary of the Corporation to act on any matter that may properly be considered at a meeting of stockholders upon the written request of stockholders entitled to cast not less than a majority of all the votes entitled to be cast on such matter at such meeting. Subject to subsection (b) of this Article II, Section 3, any special meeting shall be held at such place, date and time as may be designated by the chairman of the Board, the president or the Board of Directors, whoever shall have called the meeting. In fixing a date for any special meeting, the chairman of the Board, the president or the Board of Directors may consider such factors as he, she or it deems relevant, including, without limitation, the nature of the matters to be considered, the facts and circumstances surrounding any request for the meeting and any plan of the Board of Directors to call an annual meeting or a special meeting.

(b)       Stockholder Requested Special Meetings. (1) Any stockholder of record seeking to have stockholders request a special meeting shall, by sending written notice to the secretary (the “Record Date Request Notice”) by registered mail, return receipt requested, request the Board of Directors to fix a record date to determine the stockholders entitled to request a special meeting (the “Request Record Date”). The Record Date Request Notice shall set forth the purpose of the meeting and the matters proposed to be acted on at it, shall be signed by one or more stockholders of record as of the date of signature (or their agents duly authorized in a writing accompanying the Record Date Request Notice), shall bear the date of signature of each such stockholder (or such agent) and shall set forth all information relating to each such stockholder and each matter proposed to be acted on at the meeting that would be required to be disclosed in connection with the solicitation of proxies for the election of directors in an election contest (even if an election contest is not involved), or would otherwise be required in connection with such a solicitation, in each case pursuant to Regulation 14A (or any successor provision) under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”). Upon receiving the Record Date Request Notice, the Board of Directors may fix a Request Record Date. The Request Record Date shall not precede and shall not be more than ten days after the close of business on the date on which the resolution fixing the Request Record Date is adopted by the Board of Directors. If the Board of Directors, within ten days after the date on which a valid Record Date Request Notice is received, fails to adopt a resolution fixing the Request Record Date, the Request Record Date shall be the close of business on the tenth day after the first date on which a Record Date Request Notice is received by the secretary.

(2)        In order for any stockholder to request a special meeting to act on any matter that may properly be considered at a meeting of stockholders, one or more written requests for a special meeting (collectively, the “Special Meeting Request”) signed by stockholders of record (or their agents duly authorized in a writing accompanying the request) as of the Request Record Date entitled to cast not less than a majority of all of the votes entitled to be cast on such matter at such meeting (the “Special Meeting Percentage”) shall be delivered to the secretary. In addition, the Special Meeting Request shall (a) set forth the purpose of the meeting and the matters proposed to be acted on at it (which shall be limited to those lawful matters set forth in the Record Date Request Notice received by the secretary), (b) bear the date of signature of each such stockholder (or such agent) signing the Special Meeting Request, (c) set forth (i) the name and address, as they appear in the Corporation’s books, of each stockholder signing such request (or on whose behalf the Special Meeting Request is signed), (ii) the class, series and number of all shares of stock of the Corporation which are owned (beneficially or of record) by each such stockholder and (iii) the nominee holder for, and number of, shares of stock of the Corporation owned beneficially but not of record by such stockholder, (d) be sent to the secretary by registered mail, return receipt requested, and (e) be received by the secretary within 60 days after the Request Record Date. Any requesting stockholder (or agent duly authorized in a writing accompanying the revocation of the Special Meeting Request) may revoke his, her or its request for a special meeting at any time by written revocation delivered to the secretary.

(3)       The secretary shall inform the requesting stockholders of the reasonably estimated cost of preparing and mailing or delivering the notice of the meeting (including the Corporation’s proxy materials). The secretary shall not be required to call a special meeting upon stockholder request and such meeting shall not be held unless, in addition to the documents required by paragraph (2) of this Section 3(b), the secretary receives payment of such reasonably estimated cost prior to the preparation and mailing or delivery of such notice of the meeting.

(4)       In the case of any special meeting called by the secretary upon the request of stockholders (a “Stockholder-Requested Meeting”), such meeting shall be held at such place, date and time as may be designated by the Board of Directors; provided, however, that the date of any Stockholder-Requested Meeting shall be not more than 90 days after the record date for such meeting (the “Meeting Record Date”); and provided further that if the Board of Directors fails to designate, within ten days after the date that a valid Special Meeting Request is actually received by the secretary (the “Delivery Date”), a date and time for a Stockholder-Requested Meeting, then such meeting shall be held at 2:00 p.m. local time on the 90th day after the Meeting Record Date or, if such 90th day is not a Business Day (as defined below), on the first preceding Business Day; and provided further that in the event that the Board of Directors fails to designate a place for a Stockholder-Requested Meeting within ten days after the Delivery Date, then such meeting shall be held at the principal executive office of the Corporation. In the case of any Stockholder-Requested Meeting, if the Board of Directors fails to fix a Meeting Record Date that is a date within 30 days after the Delivery Date, then the close of business on the 30th day after the Delivery Date shall be the Meeting Record Date. The Board of Directors may revoke the notice for any Stockholder-Requested Meeting in the event that the requesting stockholders fail to comply with the provisions of paragraph (3) of this Section 3(b).

(5)       If written revocations of the Special Meeting Request have been delivered to the secretary and the result is that stockholders of record (or their agents duly authorized in writing), as of the Request Record Date, entitled to cast less than the Special Meeting Percentage have delivered, and not revoked, requests for a special meeting to the secretary: (i) if the notice of meeting has not already been delivered, the secretary shall refrain from delivering the notice of the meeting and send to all requesting stockholders who have not revoked such requests written notice of any revocation of a request for a special meeting on the matter, or (ii) if the notice of meeting has been delivered and if the secretary first sends to all requesting stockholders who have not revoked requests for a special meeting on the matter written notice of any revocation of a request for the special meeting and written notice of the Corporation’s intention to revoke the notice of the meeting or for the chairman of the meeting to adjourn the meeting without action on the matter, (A) the secretary may revoke the notice of the meeting at any time before ten days before the commencement of the meeting or (B) the chairman of the meeting may call the meeting to order and adjourn the meeting without acting on the matter. Any request for a special meeting received after a revocation by the secretary of a notice of a meeting shall be considered a request for a new special meeting.

(6)       The Board of Directors, the chairman of the Board or the president may appoint regionally or nationally recognized independent inspectors of elections to act as the agent of the Corporation for the purpose of promptly performing a ministerial review of the validity of any purported Special Meeting Request received by the secretary. For the purpose of permitting the inspectors to perform such review, no such purported Special Meeting Request shall be deemed to have been received by the secretary until the earlier of (i) five Business Days after actual receipt by the secretary of such purported request and (ii) such date as the independent inspectors certify to the Corporation that the valid requests received by the secretary represent, as of the Request Record Date, stockholders of record entitled to cast not less than the Special Meeting Percentage. Nothing contained in this paragraph (6) shall in any way be construed to suggest or imply that the Corporation or any stockholder shall not be entitled to contest the validity of any request, whether during or after such five Business Day period, or to take any other action (including, without limitation, the commencement, prosecution or defense of any litigation with respect thereto, and the seeking of injunctive relief in such litigation).

(7)       For purposes of these Bylaws, “Business Day” shall mean any day other than a Saturday, a Sunday or a day on which banking institutions in the State of California are authorized or obligated by law or executive order to close.

Section 4. NOTICE OF MEETINGS. Not less than ten nor more than 90 days before each meeting of stockholders, the secretary shall give to each stockholder entitled to vote at such meeting and to each stockholder not entitled to vote who is entitled to notice of the meeting notice in writing or by electronic transmission stating the time and place of the meeting and, in the case of a special meeting or as otherwise may be required by any statute, the purpose for which the meeting is called, by mail, by presenting it to such stockholder personally, by leaving it at the stockholder’s residence or usual place of business, by electronic transmission or by any other means permitted by Maryland law. If mailed, such notice shall be deemed to be given when deposited in the United States mail addressed to the stockholder at the stockholder’s address as it appears on the records of the Corporation, with postage thereon prepaid. If transmitted electronically, such notice shall be deemed to be given when transmitted to the stockholder by an electronic transmission to any address or number of the stockholder at which the stockholder receives electronic transmissions. The Corporation may give a single notice to all stockholders who share an address, which single notice shall be effective as to any stockholder at such address, unless a stockholder sharing such an address objects to receiving such single notice or revokes a prior consent to receiving such single notice. Failure to give notice of any meeting to one or more stockholders, or any irregularity in such notice, shall not affect the validity of any meeting fixed in accordance with this Article II or the validity of any proceedings at any such meeting.

Subject to Section 11(a) of this Article II, any business of the Corporation may be transacted at an annual meeting of stockholders without being specifically designated in the notice, except such business as is required by any statute to be stated in such notice. No business shall be transacted at a special meeting of stockholders except as specifically designated in the notice. The Corporation may postpone or cancel a meeting of stockholders by making a public announcement (as defined in Section 11(c)(3) of this Article II) of such postponement or cancellation prior to the meeting. Notice of the date, time and place to which the meeting is postponed shall be given not less than ten days prior to such date and otherwise in the manner set forth in this section.

Section 5. ORGANIZATION AND CONDUCT. Every meeting of stockholders shall be conducted by an individual appointed by the Board of Directors to be chairman of the meeting or, in the absence of such appointment or appointed individual, by the chairman of the Board, if any, or, in the case of a vacancy in the office or absence of the chairman of the Board, by one of the following officers present at the meeting in the following order: the vice chairman of the Board, if any, the chief executive officer, the president, the vice presidents in their order of rank and, within each rank, in their order of seniority, the secretary, the treasurer or, in the absence of such officers, a chairman chosen by the stockholders by the vote of a majority of the votes cast by stockholders present in person or by proxy. The secretary, or, in the case of a vacancy in the office or absence of the secretary, an assistant secretary, or, in the case of a vacancy in the office of assistant secretary or the absence of both the secretary and all assistant secretaries, an individual appointed by the Board of Directors or, in the absence of such appointment, an individual appointed by the chairman of the meeting shall act as secretary. In the event that the secretary presides at a meeting of stockholders, an assistant secretary, or, in the absence of all assistant secretaries, an individual appointed by the Board of Directors or the chairman of the meeting, shall record the minutes of the meeting. Even if present at the meeting, the person holding the office named herein may delegate to another person the power to act as chairman or secretary of the meeting. The order of business and all other matters of procedure at any meeting of stockholders shall be determined by the chairman of the meeting. The chairman of the meeting may prescribe such rules, regulations and procedures and take such action as, in the discretion of the chairman and without any action by the stockholders, are appropriate for the proper conduct of the meeting, including, without limitation, (a) restricting admission to the time set for the commencement of the meeting; (b) limiting attendance or participation at the meeting to stockholders of record of the Corporation, their duly authorized proxies and such other individuals as the chairman of the meeting may determine; (c) limiting the time allotted to questions or comments; (d) determining when and for how long the polls should be opened and when the polls should be closed and when announcement of the results should be made; (e) maintaining order and security at the meeting; (f) removing any stockholder or any other individual who refuses to comply with meeting procedures, rules or guidelines as set forth by the chairman of the meeting; (g) concluding a meeting or recessing or adjourning the meeting, whether or not a quorum is present, to a later date and time and at a place announced at the meeting; and (h) complying with any state and local laws and regulations concerning safety and security. Unless otherwise determined by the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with any rules of parliamentary procedure.

Section 6. QUORUM. At any meeting of stockholders, the presence in person or by proxy of the holders of shares of stock of the Corporation entitled to cast a majority of the votes entitled to be cast (without regard to class) shall constitute a quorum at any meeting of the stockholders, except with respect to any such matter that, under applicable statutes or regulatory requirements, requires approval by a separate vote of one or more classes of stock, in which case the presence in person or by proxy of the holders of shares entitled to cast a majority of the votes entitled to be cast by each such class on such a matter shall constitute a quorum. This section shall not affect any requirement under any statute or the charter of the Corporation (the “Charter”) for the vote necessary for the adoption of any measure.

If, however, such quorum shall not be present at any meeting of the stockholders, the chairman of the meeting may adjourn the meeting sine die or from time to time to a date not more than 120 days after the original record date without notice other than announcement at the meeting. At such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally notified.

The stockholders present either in person or by proxy, at a meeting which has been duly called and at which a quorum has been established, may continue to transact business until adjournment, notwithstanding the withdrawal from the meeting of enough stockholders to leave fewer than required to establish a quorum.

Section 7. VOTING. A plurality of all the votes cast at a meeting of stockholders duly called and at which a quorum is present shall be sufficient to elect a director. However, directors shall be elected by a majority of all the votes entitled to be cast at a meeting of stockholders duly called and at which a quorum is present for which (i) the secretary of the Corporation receives notice that a stockholder has nominated an individual for election as a director in compliance with the requirements of advance notice of stockholder nominees for director set forth in Article II, Section 11 of these Bylaws, and (ii) such nomination has not been withdrawn by such stockholder on or before the close of business on the tenth day before the date of filing of the definitive proxy statement of the Corporation with the Securities and Exchange Commission, and, as a result of which, the number of nominees is greater than the number of directors to be elected at the meeting. Each share may be voted for as many individuals as there are directors to be elected and for whose election the holder is entitled to vote. A majority of the votes cast at a meeting of stockholders duly called and at which a quorum is present shall be sufficient to approve any other matter which may properly come before the meeting, unless a different vote is required by statute, by the Charter or by these Bylaws. Unless otherwise provided by statute or in the Charter, each outstanding share, regardless of class, entitles the holder thereof to cast one vote on each matter submitted to a vote at a meeting of stockholders.

Section 8. PROXIES. A holder of record of shares of stock of the Corporation may cast votes in person or by proxy executed by the stockholder or by the stockholder’s duly authorized agent in any manner permitted by applicable law. Such proxy or evidence of authorization of such proxy shall be filed with the secretary of the Corporation before or at the meeting. No proxy shall be valid more than eleven months after its date unless otherwise provided in the proxy.

Section 9. VOTING OF STOCK BY CERTAIN HOLDERS. Stock of the Corporation registered in the name of a corporation, partnership, trust or other entity, if entitled to be voted, may be voted by the president or a vice president, a general partner, trustee or managing member thereof, as the case may be, or a proxy appointed by any of the foregoing individuals, unless some other person who has been appointed to vote such stock pursuant to a bylaw or a resolution of the governing body of such corporation or other entity or agreement of the partners of a partnership presents a certified copy of such bylaw, resolution or agreement, in which case such person may vote such stock. Any director or fiduciary may vote stock registered in the name of such person in the capacity as such director or fiduciary, either in person or by proxy.

Shares of stock of the Corporation directly or indirectly owned by it shall not be voted at any meeting and shall not be counted in determining the total number of outstanding shares entitled to be voted at any given time, unless they are held by it in a fiduciary capacity, in which case they may be voted and shall be counted in determining the total number of outstanding shares at any given time.

The Board of Directors may adopt by resolution a procedure by which a stockholder may certify in writing to the Corporation that any shares of stock registered in the name of the stockholder are held for the account of a specified person other than the stockholder. The resolution shall set forth the class of stockholders who may make the certification, the purpose for which the certification may be made, the form of certification and the information to be contained in it; if the certification is with respect to a record date, the time after the record date within which the certification must be received by the Corporation; and any other provisions with respect to the procedure which the Board of Directors considers necessary or desirable. On receipt by the secretary of the Corporation of such certification, the person specified in the certification shall be regarded as, for the purposes set forth in the certification, the holder of record of the specified stock in place of the stockholder who makes the certification.

Section 10. INSPECTORS. The Board of Directors, in advance of any meeting, may, but need not, appoint one or more individual inspectors or one or more entities that designate individuals as inspectors to act at the meeting or any postponement or adjournment thereof. If an inspector or inspectors are not appointed, the person presiding at the meeting may, but need not, appoint one or more inspectors. In case any person who may be appointed as an inspector fails to appear or act, the vacancy may be filled by appointment made by the Board of Directors in advance of the meeting or at the meeting by the chairman of the meeting. Except as otherwise provided by the chairman of the meeting, the inspectors, if any, shall (i) determine the number of shares of stock represented at the meeting, in person or by proxy, and the validity and effect of proxies, (ii) receive and tabulate all votes, ballots or consents, (iii) report such tabulation to the chairman of the meeting, (iv) hear and determine all challenges and questions arising in connection with the right to vote, and (v) do such acts as are proper to fairly conduct the election or vote. Each such report shall be in writing and signed by the inspector or by a majority of them if there is more than one inspector acting at such meeting. If there is more than one inspector, the report of a majority shall be the report of the inspectors. The report of the inspector or inspectors on the number of shares represented at the meeting and the results of the voting shall be prima facie evidence thereof.

Section 11. ADVANCE NOTICE OF STOCKHOLDER NOMINEES FOR DIRECTOR AND OTHER STOCKHOLDER PROPOSALS.

(a)       Annual Meetings of Stockholders. (1) Nominations of individuals for election to the Board of Directors and the proposal of other business to be considered by the stockholders may be made at an annual meeting of stockholders (i) pursuant to the Corporation’s notice of meeting, (ii) by or at the direction of the Board of Directors or (iii) by any stockholder of the Corporation who was a stockholder of record at the record date set by the Board of Directors for the purpose of determining stockholders entitled to vote at the annual meeting, at the time of giving of notice by the stockholder as provided for in this Section 11(a) and at the time of the annual meeting (and any postponement or adjournment thereof), who is entitled to vote at the meeting in the election of each individual so nominated or on any such other business and who has complied with this Section 11(a).

(2)       For any nomination or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (iii) of paragraph (a)(1) of this Section 11, the stockholder must have given timely notice thereof in writing to the secretary of the Corporation and, in the case of any such other business, such other business must otherwise be a proper matter for action by the stockholders. To be timely, a stockholder’s notice shall set forth all information required under this Section 11 and shall be delivered to the secretary at the principal executive office of the Corporation not earlier than the 150th day nor later than 5:00 p.m., Pacific Time, on the 120th day prior to the first anniversary of the date of the proxy statement (as defined in Section 11(c)(3) of this Article II) for the preceding year’s annual meeting; provided, however, that in connection with the Corporation’s first annual meeting or in the event that the date of the annual meeting is advanced or delayed by more than 30 days from the first anniversary of the date of the preceding year’s annual meeting, in order for notice by the stockholder to be timely, such notice must be so delivered not earlier than the 150th day prior to the date of such annual meeting and not later than 5:00 p.m., Pacific Time, on the later of the 120th day prior to the date of such annual meeting, as originally convened, or the tenth day following the day on which public announcement of the date of such meeting is first made. The public announcement of a postponement or adjournment of an annual meeting shall not commence a new time period for the giving of a stockholder’s notice as described above.

(3)       Such stockholder’s notice shall set forth:

(i)        as to each individual whom the stockholder proposes to nominate for election or reelection as a director (each, a “Proposed Nominee”),

(A)        all information relating to the Proposed Nominee that would be required to be disclosed in connection with the solicitation of proxies for the election of the Proposed Nominee as a director in an election contest (even if an election contest is not involved), or would otherwise be required in connection with such solicitation, in each case pursuant to Regulation 14A (or any successor provision) under the Exchange Act; and

(B)        whether such stockholder believes any such Proposed Nominee is, or is not, an “interested person” of the Corporation, as defined in the Investment Company Act of 1940, as amended, and the rules promulgated thereunder (the “Investment Company Act”) and information regarding such individual that is sufficient, in the discretion of the Board of Directors or any authorized officer of the Corporation, to make such determination;

(ii)        as to any other business that the stockholder proposes to bring before the meeting, a description of such business, the stockholder’s reasons for proposing such business at the meeting and any material interest in such business of such stockholder or any Stockholder Associated Person (as defined below), individually or in the aggregate, including any anticipated benefit to the stockholder or the Stockholder Associated Person therefrom;

(iii)        as to the stockholder giving the notice, any Proposed Nominee and any Stockholder Associated Person,

(A)        the class, series and number of all shares of stock or other securities of the Corporation or affiliate thereof (collectively, the “Company Securities”), if any, which are owned (beneficially or of record) by such stockholder, Proposed Nominee or Stockholder Associated Person, the date on which each such Company Security was acquired and the investment intent of such acquisition, and any short interest (including any opportunity to profit or share in any benefit from any decrease in the price of such stock or other security) in any Company Securities of any such person;

(B)        the nominee holder for, and number of, any Company Securities owned beneficially but not of record by such stockholder, Proposed Nominee or Stockholder Associated Person;

(C)        whether and the extent to which such stockholder, Proposed Nominee or Stockholder Associated Person, directly or indirectly (through brokers, nominees or otherwise), is subject to or during the last six months has engaged in any hedging, derivative or other transaction or series of transactions or entered into any other agreement, arrangement or understanding (including any short interest, any borrowing or lending of securities or any proxy or voting agreement), the effect or intent of which is to (I) manage risk or benefit of changes in the price of (x) Company Securities or (y) any security of any other closed-end investment company (a “Peer Group Company”) for such stockholder, Proposed Nominee or Stockholder Associated Person or (II) increase or decrease the voting power of such stockholder, Proposed Nominee or Stockholder Associated Person in the Corporation or any affiliate thereof (or, as applicable, in any Peer Group Company) disproportionately to such person’s economic interest in the Company Securities (or, as applicable, in any Peer Group Company); and

(D)        any substantial interest, direct or indirect (including, without limitation, any existing or prospective commercial, business or contractual relationship with the Corporation), by security holdings or otherwise, of such stockholder, Proposed Nominee or Stockholder Associated Person, in the Corporation or any affiliate thereof, other than an interest arising from the ownership of Company Securities where such stockholder, Proposed Nominee or Stockholder Associated Person receives no extra or special benefit not shared on a pro rata basis by all other holders of the same class or series;

(iv)        as to the stockholder giving the notice, any Stockholder Associated Person with an interest or ownership referred to in clauses (ii) or (iii) of this paragraph (3) of this Section 11(a) and any Proposed Nominee,

(A)        the name and address of such stockholder, as they appear on the Corporation’s stock ledger, and the current name and business address, if different, of each such Stockholder Associated Person and any Proposed Nominee and

(B)        the investment strategy or objective, if any, of such stockholder and each such Stockholder Associated Person who is not an individual and a copy of the prospectus, offering memorandum or similar document, if any, provided to investors or potential investors in such stockholder and each such Stockholder Associated Person;

(v)        the name and address of any person who contacted or was contacted by the stockholder giving the notice or any Stockholder Associated Person about the Proposed Nominee or other business proposal; and

(vi)        to the extent known by the stockholder giving the notice, the name and address of any other stockholder supporting the nominee for election or reelection as a director or the proposal of other business on the date of such stockholder’s notice.

(4)        Such stockholder’s notice shall, with respect to any Proposed Nominee, be accompanied by a written undertaking executed by the Proposed Nominee (i) certifying that such Proposed Nominee (a) is not, and will not become a party to, any agreement, arrangement or understanding with any person or entity other than the Corporation in connection with service or action as a director that has not been disclosed to the Corporation and (b) will serve as a director of the Corporation if elected; and (ii) attaching a completed Proposed Nominee questionnaire (which questionnaire shall be provided by the Corporation, upon request, to the stockholder providing the notice and shall include all information relating to the Proposed Nominee that would be required to be disclosed in connection with the solicitation of proxies for the election of the Proposed Nominee as a director in an election contest (even if an election contest is not involved), or would otherwise be required in connection with such solicitation, in each case pursuant to Regulation 14A (or any successor provision) under the Exchange Act, or would be required pursuant to the rules of any national securities exchange on which any securities of the Corporation are listed or over-the-counter market on which any securities of the Corporation are traded).

(5)        Notwithstanding anything in this subsection (a) of this Section 11 to the contrary, in the event that the number of directors to be elected to the Board of Directors is increased, and there is no public announcement of such action at least 130 days prior to the first anniversary of the date of the proxy statement (as defined in Section 11(c)(3) of this Article II) for the preceding year’s annual meeting, a stockholder’s notice required by this Section 11(a) shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the secretary at the principal executive office of the Corporation not later than 5:00 p.m., Pacific Time, on the tenth day following the day on which such public announcement is first made by the Corporation.

(6)        For purposes of this Section 11, “Stockholder Associated Person” of any stockholder means (i) any person acting in concert with such stockholder, (ii) any beneficial owner of shares of stock of the Corporation owned of record or beneficially by such stockholder (other than a stockholder that is a depositary) and (iii) any person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such stockholder or such Stockholder Associated Person.

(b)        Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of individuals for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected only (i) by or at the direction of the Board of Directors or (ii) provided that the special meeting has been called in accordance with Section 3 of this Article II for the purpose of electing directors, by any stockholder of the Corporation who is a stockholder of record at the record date set by the Board of Directors for the purpose of determining stockholders entitled to vote at the special meeting, at the time of giving of notice provided for in this Section 11 and at the time of the special meeting (and any postponement or adjournment thereof), who is entitled to vote at the meeting in the election of each individual so nominated and who has complied with the notice procedures set forth in this Section 11. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more individuals to the Board of Directors, any stockholder may nominate an individual or individuals (as the case may be) for election as a director as specified in the Corporation’s notice of meeting, if the stockholder’s notice, containing the information required by paragraphs (a)(3) and (4) of this Section 11, is delivered to the secretary at the principal executive office of the Corporation not earlier than the 120^th day prior to such special meeting and not later than 5:00 p.m., Pacific Time, on the later of the 90^th day prior to such special meeting or the tenth day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. The public announcement of a postponement or adjournment of a special meeting shall not commence a new time period for the giving of a stockholder’s notice as described above.

(c)        General. (1) If information submitted pursuant to this Section 11 by any stockholder proposing a nominee for election as a director or any proposal for other business at a meeting of stockholders shall be inaccurate in any material respect, such information may be deemed not to have been provided in accordance with this Section 11. Any such stockholder shall notify the Corporation of any inaccuracy or change (within two Business Days of becoming aware of such inaccuracy or change) in any such information. Upon written request by the secretary of the Corporation or the Board of Directors, any such stockholder shall provide, within five Business Days of delivery of such request (or such other period as may be specified in such request), (A) written verification, satisfactory, in the discretion of the Board of Directors or any authorized officer of the Corporation, to demonstrate the accuracy of any information submitted by the stockholder pursuant to this Section 11, and (B) a written update of any information (including, if requested by the Corporation, written confirmation by such stockholder that it continues to intend to bring such nomination or other business proposal before the meeting) submitted by the stockholder pursuant to this Section 11 as of an earlier date. If a stockholder fails to provide such written verification or written update within such period, the information as to which written verification or a written update was requested may be deemed not to have been provided in accordance with this Section 11.

(2)        Only such individuals who are nominated in accordance with this Section 11 shall be eligible for election by stockholders as directors, and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with this Section 11. The chairman of the meeting shall have the power to determine whether a nomination or any other business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with this Section 11.

(3)        For purposes of this Section 11, “the date of the proxy statement” shall have the same meaning as “the date of the company’s proxy statement released to shareholders” as used in Rule 14a-8(e) promulgated under the Exchange Act, as interpreted by the Securities and Exchange Commission from time to time. “Public announcement” shall mean disclosure (i) in a press release reported by the Dow Jones News Service, Associated Press, Business Wire, PR Newswire or other widely circulated news or wire service or (ii) in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to the Exchange Act or the Investment Company Act.

(4)        Notwithstanding the foregoing provisions of this Section 11, a stockholder shall also comply with all applicable requirements of state law and of the Exchange Act with respect to the matters set forth in this Section 11. Nothing in this Section 11 shall be deemed to affect any right of a stockholder to request inclusion of a proposal in, or the right of the Corporation to omit a proposal from, any proxy statement filed by the Corporation with the Securities and Exchange Commission pursuant to Rule 14a-8 (or any successor provision) under the Exchange Act. Nothing in this Section 11 shall require disclosure of revocable proxies received by the stockholder or Stockholder Associated Person pursuant to a solicitation of proxies after the filing of an effective Schedule 14A by such stockholder or Stockholder Associated Person under Section 14(a) of the Exchange Act.

(5)        Notwithstanding anything in these Bylaws to the contrary, except as otherwise determined by the chairman of the meeting, if the stockholder giving notice as provided for in this Section 11 does not appear in person or by proxy at such annual or special meeting to present each nominee for election as a director or the proposed business, as applicable, such matter shall not be considered at the meeting.

Section 12. VOTING BY BALLOT. Voting on any question or in any election may be viva voce unless the presiding officer shall order or any stockholder shall demand that voting be by ballot.

Section 13. CONTROL SHARE ACQUISITION ACT. Title 3, Subtitle 7 (the “Maryland Control Share Acquisition Act”) of the Maryland General Corporation Law, or any successor statute (the “MGCL”), shall apply to any acquisition or proposed acquisition of shares of stock of the Corporation to the extent provided in the Maryland Control Share Acquisition Act. Notwithstanding the foregoing, the Maryland Control Share Acquisition Act shall not apply to any acquisition by Kevin Landis, or any associates thereof, of shares of stock of the Corporation.

Section 14. STOCKHOLDERS’ CONSENT IN LIEU OF MEETING. Any action required or permitted to be taken at any meeting of stockholders may be taken without a meeting if a unanimous consent setting forth the action is given in writing or by electronic transmission by each stockholder entitled to vote on the matter and filed with the minutes of proceedings of the stockholders.

ARTICLE III

DIRECTORS

Section 1. GENERAL POWERS. The business and affairs of the Corporation shall be managed under the direction of its Board of Directors.

Section 2. NUMBER, TENURE AND QUALIFICATIONS. A majority of the entire Board of Directors may establish, increase or decrease the number of directors, provided that the number thereof shall never be less than the minimum number required by the MGCL nor more than 15, and further provided that the tenure of office of a director shall not be affected by any decrease in the number of directors. Any director of the Corporation may resign at any time by delivering his or her resignation to the Board of Directors, the chairman of the Board or the secretary. Any resignation shall take effect immediately upon its receipt or at such later time specified in the resignation. The acceptance of a resignation shall not be necessary to make it effective unless otherwise stated in the resignation.

Section 3. ANNUAL AND REGULAR MEETINGS. An annual meeting of the Board of Directors shall be held immediately after and at the same place as the annual meeting of stockholders, no notice other than this Bylaw being necessary. In the event such meeting is not so held, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors. Regular meetings of the Board of Directors shall be held from time to time at such places and times as provided by the Board of Directors by resolution, without notice other than such resolution.

Section 4. SPECIAL MEETINGS. Special meetings of the Board of Directors may be called by or at the request of the chairman of the Board of Directors, the president or by a majority of the directors then in office. The person or persons authorized to call special meetings of the Board of Directors may fix the time and place of any special meeting of the Board of Directors called by them. The Board of Directors may provide, by resolution, the time and place of special meetings of the Board of Directors without notice other than such resolution.

Section 5. NOTICE. Notice of any special meeting of the Board of Directors shall be delivered personally or by telephone, electronic mail, facsimile transmission, United States mail or courier to each director at his or her business or residence address. Notice by personal delivery, telephone, electronic mail or facsimile transmission shall be given at least 24 hours prior to the meeting. Notice by United States mail shall be given at least three days prior to the meeting. Notice by courier shall be given at least two days prior to the meeting. Telephone notice shall be deemed to be given when the director or his or her agent is personally given such notice in a telephone call to which the director or his or her agent is a party. Electronic mail notice shall be deemed to be given upon transmission of the message to the electronic mail address given to the Corporation by the director. Facsimile transmission notice shall be deemed to be given upon completion of the transmission of the message to the number given to the Corporation by the director and receipt of a completed answer-back indicating receipt. Notice by United States mail shall be deemed to be given when deposited in the United States mail properly addressed, with postage thereon prepaid. Notice by courier shall be deemed to be given when deposited with or delivered to a courier properly addressed. Neither the business to be transacted at, nor the purpose of, any annual, regular or special meeting of the Board of Directors need be stated in the notice, unless specifically required by statute or these Bylaws.

Section 6. QUORUM. A majority of the directors shall constitute a quorum for transaction of business at any meeting of the Board of Directors, provided that, if less than a majority of such directors is present at such meeting, a majority of the directors present may adjourn the meeting from time to time without further notice, and provided further that if, pursuant to applicable law, the Charter or these Bylaws, the vote of a majority or other percentage of a particular group of directors is required for action, a quorum must also include a majority or such other percentage of such group.

The directors present at a meeting which has been duly called and at which a quorum has been established may continue to transact business until adjournment, notwithstanding the withdrawal from the meeting of enough directors to leave fewer than required to establish a quorum.

Section 7 VOTING. The action of a majority of the directors present at a meeting at which a quorum is present shall be the action of the Board of Directors, unless the concurrence of a greater proportion is required for such action by statute, the Charter or these Bylaws. If enough directors have withdrawn from a meeting to leave fewer than required to establish a quorum, but the meeting is not adjourned, the action of the majority of that number of directors necessary to constitute a quorum at such meeting shall be the action of the Board of Directors, unless the concurrence of a greater proportion is required for such action by statute, the Charter or these Bylaws.

Section 8. ORGANIZATION. At each meeting of the Board of Directors, the chairman of the Board or, in the absence of the chairman, the vice chairman of the Board, if any, shall act as chairman of the meeting. In the absence of both the chairman and vice chairman of the Board, the chief executive officer or, in the absence of the chief executive officer, the president or, in the absence of the president, a director chosen by a majority of the directors present, shall act as chairman of the meeting. The secretary or, in his or her absence, an assistant secretary of the Corporation, or, in the absence of the secretary and all assistant secretaries, an individual appointed by the chairman of the meeting, shall act as secretary of the meeting

Section 9. TELEPHONE MEETINGS. Subject to the provisions of the Investment Company Act, directors may participate in a meeting by means of a conference telephone or other communications equipment if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by these means shall constitute presence in person at the meeting.

Section 10. CONSENT BY DIRECTORS WITHOUT A MEETING. Subject to the provisions of the Investment Company Act, any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, if a consent to such action is given in writing or by electronic transmission by each director and is filed with the minutes of proceedings of the Board of Directors.

Section 11. VACANCIES. If for any reason any or all the directors cease to be directors, such event shall not terminate the Corporation or affect these Bylaws or the powers of the remaining directors hereunder, if any. Pursuant to the Corporation’s election in Article IV of the Charter, subject to applicable requirements of the Investment Company Act, except as may be provided by the Board of Directors in setting the terms of any class or series of preferred stock, (a) any vacancy on the Board of Directors may be filled only by a majority of the remaining directors, even if the remaining directors do not constitute a quorum and (b) any director elected to fill a vacancy shall serve for the remainder of the full term of the class in which the vacancy occurred and until a successor is elected and qualifies.

Section 12. COMPENSATION. Directors shall not receive any stated salary for their services as directors but, by resolution of the Board of Directors, may receive compensation per year and/or per meeting and/or per visit to real property or other facilities owned or leased by the Corporation and for any service or activity they perform or engage in as directors. Directors may be reimbursed for expenses of attendance, if any, at each annual, regular or special meeting of the Board of Directors or of any committee thereof and for their expenses, if any, in connection with each property visit and any other service or activity they perform or engage in as directors; but nothing herein contained shall be construed to preclude any directors from serving the Corporation in any other capacity and receiving compensation therefor.

Section 13. LOSS OF DEPOSITS. No director shall be liable for any loss which may occur by reason of the failure of the bank, trust company, savings and loan association, or other institution with whom moneys or stock have been deposited.

Section 14. SURETY BONDS. Unless required by law, no director shall be obligated to give any bond or surety or other security for the performance of any of his or her duties.

Section 15. RELIANCE. Each director and officer of the Corporation shall, in the performance of his or her duties with respect to the Corporation, be entitled to rely on any information, opinion, report or statement, including any financial statement or other financial data, prepared or presented by an officer or employee of the Corporation whom the director or officer reasonably believes to be reliable and competent in the matters presented, by a lawyer, certified public accountant or other person, as to a matter which the director or officer reasonably believes to be within the person’s professional or expert competence, or, with respect to a director, by a committee of the Board of Directors on which the director does not serve, as to a matter within its designated authority, if the director reasonably believes the committee to merit confidence.

Section 16. RATIFICATION. The Board of Directors or the stockholders may ratify any act, omission, failure to act or determination made not to act (an “Act”) by the Corporation or its officers to the extent that the Board of Directors or the stockholders could have originally authorized the Act and, if so ratified, such Act shall have the same force and effect as if originally duly authorized, and such ratification shall be binding upon the Corporation and its stockholders. Any Act questioned in any proceeding on the ground of lack of authority, defective or irregular execution, adverse interest of a director, officer or stockholder, non-disclosure, miscomputation, the application of improper principles or practices of accounting or otherwise, may be ratified, before or after judgment, by the Board of Directors or by the stockholders, and such ratification shall constitute a bar to any claim or execution of any judgment in respect of such questioned Act.

Section 17. EMERGENCY PROVISIONS. Notwithstanding any other provision in the Charter or these Bylaws, this Section 17 shall apply during the existence of any catastrophe, or other similar emergency condition, as a result of which a quorum of the Board of Directors under Article III of these Bylaws cannot readily be obtained (an “Emergency”). The existence of an Emergency shall be determined by the Board of Directors in its sole and absolute discretion. During any Emergency, unless otherwise provided by the Board of Directors, (i) a meeting of the Board of Directors or a committee thereof may be called by any director or officer by any means feasible under the circumstances; (ii) notice of any meeting of the Board of Directors during such an Emergency may be given less than 24 hours prior to the meeting to as many directors and by such means as may be feasible at the time, including publication, television or radio; and (iii) the number of directors necessary to constitute a quorum shall be one-third of the entire Board of Directors.

ARTICLE IV

COMMITTEES

Section 1. NUMBER, TENURE AND QUALIFICATIONS. The Board of Directors may appoint from among its members an Executive Committee, an Audit Committee, a Valuation Committee, a Nominating Committee, a Compensation Committee and other committees, composed of one or more directors, to serve at the pleasure of the Board of Directors. In the absence of any member of any such committee, the members thereof present at any meeting, whether or not they constitute a quorum, may appoint another director to act in the place of such absent member.

Section 2. POWERS. The Board of Directors may delegate to committees appointed under Section 1 of this Article any of the powers of the Board of Directors, except as prohibited by law. Except as may be otherwise provided by the Board of Directors, any committee may delegate some or all of its power and authority to one or more subcommittees, composed of one or more directors, as the committee deems appropriate in its sole discretion.

Section 3. MEETINGS. Notice of committee meetings shall be given in the same manner as notice for special meetings of the Board of Directors. A majority of the members of the committee shall constitute a quorum for the transaction of business at any meeting of the committee. The act of a majority of the committee members present at a meeting shall be the act of such committee. The Board of Directors may designate a chairman of any committee, and such chairman or, in the absence of a chairman, any two members of any committee (if there are at least two members of the committee) may fix the time and place of its meeting unless the Board of Directors shall otherwise provide.

Section 4. TELEPHONE MEETINGS. Members of a committee of the Board of Directors may participate in a meeting by means of a conference telephone or other communications equipment if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by these means shall constitute presence in person at the meeting.

Section 5. CONSENT BY COMMITTEES WITHOUT A MEETING. Any action required or permitted to be taken at any meeting of a committee of the Board of Directors may be taken without a meeting, if a consent to such action is given in writing or by electronic transmission by each member of the committee and is filed with the minutes of proceedings of such committee.

Section 6. VACANCIES. Subject to the provisions hereof, the Board of Directors shall have the power at any time to change the membership of any committee, to appoint the chair of any committee, to fill all vacancies, to designate alternate members to replace any absent or disqualified member or to dissolve any such committee. Subject to the power of the Board of Directors, the members of the committee shall have the power to fill any vacancies on the committee.

ARTICLE V

OFFICERS

Section 1. GENERAL PROVISIONS. The officers of the Corporation shall include a president, a secretary and a treasurer and may include a chief executive officer, one or more vice presidents, a chief operating officer, a chief financial officer, a chief compliance officer, one or more assistant secretaries and one or more assistant treasurers. In addition, the Board of Directors may from time to time elect such other officers with such powers and duties as it shall deem necessary or desirable. The Board of Directors may designate a chairman of the Board and a vice chairman of the Board, who shall not, solely by reason of such designation, be officers of the Corporation but shall have such powers and duties as determined by the Board of Directors from time to time. The officers of the Corporation shall be elected annually by the Board of Directors, except that the chief executive officer or president may from time to time appoint one or more vice presidents, assistant secretaries and assistant treasurers or other officers. Each officer shall serve until his or her successor is elected and qualifies or until his or her death, or his or her resignation or removal in the manner hereinafter provided. Any two or more offices except president and vice president may be held by the same person. Election of an officer or agent shall not of itself create contract rights between the Corporation and such officer or agent.

Section 2. REMOVAL AND RESIGNATION. Any officer or agent of the Corporation may be removed, with or without cause, by the Board of Directors if in its judgment the best interests of the Corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Any officer of the Corporation may resign at any time by delivering his or her resignation to the Board of Directors, the chairman of the Board, the president or the secretary. Any resignation shall take effect immediately upon its receipt or at such later time specified in the notice of resignation. The acceptance of a resignation shall not be necessary to make it effective unless otherwise stated in the resignation. Such resignation shall be without prejudice to the contract rights, if any, of the Corporation.

Section 3. VACANCIES. A vacancy in any office may be filled by the Board of Directors for the balance of the term.

Section 4. CHIEF EXECUTIVE OFFICER. The Board of Directors may designate a chief executive officer. In the absence of such designation, the president shall be the chief executive officer of the Corporation. The chief executive officer shall have general responsibility for implementation of the policies of the Corporation, as determined by the Board of Directors, and for the management of the business and affairs of the Corporation. He or she may execute any deed, mortgage, bond, contract or other instrument, except in cases where the execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation or shall be required by law to be otherwise executed; and in general shall perform all duties incident to the office of chief executive officer and such other duties as may be prescribed by the Board of Directors from time to time.

Section 5. CHIEF OPERATING OFFICER. The Board of Directors may designate a chief operating officer. The chief operating officer shall have the responsibilities and duties as set forth by the Board of Directors or the chief executive officer.

Section 6. CHIEF FINANCIAL OFFICER. The Board of Directors may designate a chief financial officer. The chief financial officer shall have the responsibilities and duties as set forth by the Board of Directors or the chief executive officer.

Section 7. CHIEF COMPLIANCE OFFICER. The Board of Directors may designate a chief compliance officer. The chief compliance officer shall have the responsibilities and duties as set forth by the Board of Directors or the chief executive officer.

Section 8. PRESIDENT. In the absence of a designation of a chief operating officer by the Board of Directors, the president shall be the chief operating officer. In the absence of a designation of a chief executive officer by the Board of Directors, the president shall be the chief executive officer. He or she may execute any deed, mortgage, bond, contract or other instrument, except in cases where the execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation or shall be required by law to be otherwise executed; and in general shall perform all duties incident to the office of president and such other duties as may be prescribed by the Board of Directors from time to time.

Section 9. VICE PRESIDENTS. In the absence of the president or in the event of a vacancy in such office, the vice president (or in the event there be more than one vice president, the vice presidents in the order designated at the time of their election or, in the absence of any designation, then in the order of their election) shall perform the duties of the president and when so acting shall have all the powers of and be subject to all the restrictions upon the president; and shall perform such other duties as from time to time may be assigned to such vice president by the president or the Board of Directors. The Board of Directors may designate one or more vice presidents as executive vice president or as vice president for particular areas of responsibility.

Section 10. SECRETARY. The secretary shall (a) keep the minutes of the proceedings of the stockholders, the Board of Directors and committees of the Board of Directors in one or more books provided for that purpose; (b) see that all notices are duly given in accordance with the provisions of these Bylaws or as required by law; (c) be custodian of the corporate records and of the seal of the Corporation; (d) keep a register of the post office address of each stockholder which shall be furnished to the secretary by such stockholder; (e) have general charge of the stock transfer books of the Corporation; and (f) in general perform such other duties as from time to time may be assigned to him by the chief executive officer, the president or the Board of Directors.

Section 11. TREASURER. The treasurer shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors and in general perform such other duties as from time to time may be assigned to him or her by the chief executive officer, the president or the Board of Directors. In the absence of a designation of a chief financial officer by the Board of Directors, the treasurer shall be the chief financial officer of the Corporation.

The treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the president and Board of Directors, at the regular meetings of the Board of Directors or whenever it may so require, an account of all his or her transactions as treasurer and of the financial condition of the Corporation.

Section 12. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The assistant secretaries and assistant treasurers, in general, shall perform such duties as shall be assigned to them by the secretary or treasurer, respectively, or by the president or the Board of Directors.

ARTICLE VI

CONTRACTS, CHECKS AND DEPOSITS

Section 1. CONTRACTS. The Board of Directors or any manager of the Corporation approved by the Board of Directors and acting within the scope of its authority pursuant to a management or advisory agreement with the Corporation may authorize any officer or agent to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the Corporation and such authority may be general or confined to specific instances. Any agreement, deed, mortgage, lease or other document shall be valid and binding upon the Corporation when duly authorized or ratified by action of the Board of Directors or a manager or adviser acting within the scope of its authority pursuant to a management or advisory agreement and executed by the chief executive officer, the president or any other person authorized by the Board of Directors or such a manager or adviser.

Section 2. CHECKS AND DRAFTS. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation shall be signed by such officer or agent of the Corporation in such manner as shall from time to time be determined by the Board of Directors.

Section 3. DEPOSITS. All funds of the Corporation not otherwise employed shall be deposited or invested from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board of Directors may designate.

ARTICLE VII

STOCK

Section 1. CERTIFICATES; REQUIRED INFORMATION. Except as may be otherwise provided by the Board of Directors or any officer of the Corporation, stockholders of the Corporation are not entitled to certificates representing the shares of stock held by them. In the event that the Corporation issues shares of stock represented by certificates, such certificates shall be in such form as prescribed by the Board of Directors or a duly authorized officer, shall contain the statements and information required by the MGCL and shall be signed by the officers of the Corporation in any manner permitted by the MGCL. In the event that the Corporation issues shares of stock without certificates, to the extent then required by the MGCL the Corporation shall provide to the record holders of such shares a written statement of the information required by the MGCL to be included on stock certificates. There shall be no difference in the rights and obligations of stockholders based on whether or not their shares are represented by certificates.

Section 2. TRANSFERS. All transfers of shares of stock shall be made on the books of the Corporation in such manner as the Board of Directors or any officer of the Corporation may prescribe and, if such shares are certificated, upon surrender of certificates duly endorsed. The issuance of a new certificate upon the transfer of certificated shares is subject to the determination of the Board of Directors or an officer of the Corporation that such shares shall no longer be represented by certificates. Upon the transfer of uncertificated shares, to the extent then required by the MGCL, the Corporation shall provide to record holders of such shares a written statement of the information required by the MGCL to be included on stock certificates.

The Corporation shall be entitled to treat the holder of record of any share of stock as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise expressly provided by the laws of the State of Maryland.

Notwithstanding the foregoing, transfers of shares of any class or series of stock will be subject in all respects to the Charter and all of the terms and conditions contained therein.

Section 3. REPLACEMENT CERTIFICATE. Any officer of the Corporation may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, destroyed, stolen or mutilated, upon the making of an affidavit of that fact by the person claiming the certificate to be lost, destroyed, stolen or mutilated; provided, however, if such shares have ceased to be certificated, no new certificate shall be issued unless requested in writing by such stockholder and the Board of Directors or an officer of the Corporation has determined that such certificates may be issued. Unless otherwise determined by an officer of the Corporation, the owner of such lost, destroyed, stolen or mutilated certificate or certificates, or his or her legal representative, shall be required, as a condition precedent to the issuance of a new certificate or certificates, to give the Corporation a bond in such sums as it may direct as indemnity against any claim that may be made against the Corporation.

Section 4. FIXING OF RECORD DATE. The Board of Directors may set, in advance, a record date for the purpose of determining stockholders entitled to notice of or to vote at any meeting of stockholders or determining stockholders entitled to receive payment of any dividend or the allotment of any other rights, or in order to make a determination of stockholders for any other proper purpose. Such date, in any case, shall not be prior to the close of business on the day the record date is fixed and shall be not more than 90 days and, in the case of a meeting of stockholders, not less than ten days, before the date on which the meeting or particular action requiring such determination of stockholders of record is to be held or taken.

When a record date for the determination of stockholders entitled to notice of and to vote at any meeting of stockholders has been set as provided in this section, such record date shall continue to apply to the meeting if adjourned or postponed, except if the meeting is adjourned or postponed to a date more than 120 days after the record date originally fixed for the meeting, in which case a new record date for such meeting may be determined as set forth herein.

Section 5. STOCK LEDGER. The Corporation shall maintain at its principal office or at the office of its counsel, accountants or transfer agent, an original or duplicate share ledger containing the name and address of each stockholder and the number of shares of each class held by such stockholder.

Section 6. FRACTIONAL STOCK. The Board of Directors may authorize the Corporation to issue fractional shares of stock on such terms and under such conditions as it may determine.

ARTICLE VIII

ACCOUNTING YEAR

The Board of Directors shall have the power, from time to time, to fix the fiscal year of the Corporation by a duly adopted resolution.

ARTICLE IX

DISTRIBUTIONS

Section 1. AUTHORIZATION. Dividends and other distributions upon the stock of the Corporation may be authorized by the Board of Directors, subject to the provisions of law and the Charter. Dividends and other distributions may be paid in cash, property or stock of the Corporation, subject to the provisions of law and the Charter.

Section 2. CONTINGENCIES. Before payment of any dividends or other distributions, there may be set aside out of any assets of the Corporation available for dividends or other distributions such sum or sums as the Board of Directors may from time to time, in its absolute discretion, think proper as a reserve fund for contingencies, for equalizing dividends or other distributions, for repairing or maintaining any property of the Corporation or for such other purpose as the Board of Directors shall determine to be in the best interest of the Corporation, and the Board of Directors may modify or abolish any such reserve.

ARTICLE X

SEAL

Section 1. SEAL. The Board of Directors may authorize the adoption of a seal by the Corporation. The seal shall contain the name of the Corporation and the year of its incorporation and the words “Incorporated Maryland,” or shall be in such other form as may approved by the Board of Directors. The Board of Directors may authorize one or more duplicate seals and provide for the custody thereof.

Section 2. AFFIXING SEAL. Whenever the Corporation is permitted or required to affix its seal to a document, it shall be sufficient to meet the requirements of any law, rule or regulation relating to a seal to place the word “(SEAL)” adjacent to the signature of the person authorized to execute the document on behalf of the Corporation.

ARTICLE XI

INDEMNIFICATION AND ADVANCE OF EXPENSES

To the maximum extent permitted by Maryland law, in effect from time to time, the Corporation shall indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, shall pay or reimburse reasonable expenses in advance of final disposition of a proceeding to (a) any individual who is a present or former director or officer of the Corporation and who is made or threatened to be made a party to, or witness in, the proceeding by reason of his or her service in that capacity or (b) any individual who, while a director or officer of the Corporation and at the request of the Corporation, serves or has served as a director, officer, partner, trustee, manager or member of another corporation, real estate investment trust, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise and who is made or threatened to be made a party to, or witness in, the proceeding by reason of his or her service in that capacity. The rights to indemnification and advance for expenses provided by the Charter and these Bylaws shall vest immediately upon the election of a director or officer. The Corporation may, with the approval of its Board of Directors, provide such indemnification and advance for expenses to an individual who served a predecessor of the Corporation in any of the capacities described in (a) or (b) above and to any employee or agent of the Corporation or a predecessor of the Corporation. The indemnification and payment or reimbursement of expenses provided in these Bylaws shall not be deemed exclusive of or limit in any way other rights to which any person seeking indemnification or payment or reimbursement of expenses may be or may become entitled under any bylaw, resolution, insurance, agreement or otherwise. Any indemnification or payment or reimbursement of expenses made pursuant to this Article XI shall be subject to applicable requirements of the Investment Company Act.

Neither the amendment nor repeal of this Article, nor the adoption or amendment of any other provision of the Bylaws or the Charter inconsistent with this Article, shall apply to or affect in any respect the applicability of the preceding paragraph with respect to any act or failure to act which occurred prior to such amendment, repeal or adoption.

ARTICLE XII

WAIVER OF NOTICE

Whenever any notice of a meeting is required to be given pursuant to the Charter or these Bylaws or pursuant to applicable law, a waiver thereof in writing or by electronic transmission, given by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Neither the business to be transacted at nor the purpose of any meeting need be set forth in the waiver of notice, unless specifically required by statute. The attendance of any person at any meeting shall constitute a waiver of notice of such meeting, except where such person attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting has not been lawfully called or convened.

ARTICLE XIII

INSPECTION OF RECORDS

A stockholder that is otherwise eligible under applicable law to inspect the Corporation’s books of account, stock ledger, or other specified documents of the Corporation shall have no right to make such inspection if the Board of Directors determines that such stockholder has an improper purpose for requesting such inspection.

ARTICLE XIV

INVESTMENT COMPANY ACT

If and to the extent that any provision of the MGCL, including, without limitation, Subtitle 6 and Subtitle 7, of Title 3 of the MGCL, or any provision of the Charter or these Bylaws conflicts with any provision of the Investment Company Act, the applicable provision of the Investment Company Act shall control.

ARTICLE XV

EXCLUSIVE FORUM FOR CERTAIN LITIGATION

Unless the Corporation consents in writing to the selection of an alternative forum, the Circuit Court for Baltimore City, Maryland, or, if that Court does not have jurisdiction, the United States District Court for the District of Maryland, Northern Division, shall be the sole and exclusive forum for (a) any Internal Corporate Claim, as such term is defined in Section 1-101(p) of the MGCL, (b) any derivative action or proceeding brought on behalf of the Corporation, other than actions arising under federal securities laws, (c) any action asserting a claim of breach of any duty owed by any director or officer or other employee of the Corporation to the Corporation or to the stockholders of the Corporation, (d) any action asserting a claim against the Corporation or any director or officer or other employee of the Corporation arising pursuant to any provision of the MGCL or the Charter or these Bylaws, or (e) any other action asserting a claim against the Corporation or any director or officer or other employee of the Corporation that is governed by the internal affairs doctrine. None of the foregoing actions, claims or proceedings may be brought in any court sitting outside the State of Maryland unless the Corporation consents in writing to such court.

ARTICLE XVI

AMENDMENT OF BYLAWS

The Board of Directors shall have the exclusive power, at any time, to adopt, alter or repeal any provision of these Bylaws and to make new Bylaws.

Amended and restated as of August 7, 2020.

EX-31.1

Certification of Chief Executive Officer

Pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a)

I, Kevin Landis, certify that:

1. I have reviewed the Quarterly Report on Form 10-Q of Firsthand Technology Value Fund, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement or a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure control and procedures to be designed under our supervision, to ensure material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Name: Kevin Landis

Title: Chief Executive Officer

Dated: August 10, 2020

EX-31.2

Certification of Chief Financial Officer

Pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a)

I, Kevin Landis, certify that:

1. I have reviewed the Quarterly Report on Form 10-Q of Firsthand Technology Value Fund, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement or a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure control and procedures to be designed under our supervision, to ensure material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Name: Omar Billawala

Title: Chief Financial Officer

Dated: August 10, 2020

EX-32

Certification of CEO and CFO Pursuant to
18 U.S.C. Section 1350,

As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of Firsthand Technology Value Fund, Inc. (the “Company”) for the quarter ended June 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Kevin Landis and Omar Billawala, as Chief Executive Officer and Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

(1) The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 134; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Name: Kevin Landis

Title: Chief Executive Officer

Dated: August 10, 2020

Name: Omar Billawala

Title: Chief Financial Officer

Dated: August 10, 2020