VENTURE LENDING & LEASING IV INC - FORM 10-Q

FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

[X]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2010

[ ]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ______________

Commission file number 814-00640

Venture Lending & Leasing IV, Inc.

(Exact Name of Registrant as specified in its charter)


Maryland	20-0372373
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)


2010 North First Street, Suite 310	San Jose, CA 95131
(Address of principal executive offices)	(Zip Code)

(408) 436-8577

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) 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 x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). 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 definition of “large accelerated filer”, “accelerated filer”, and ‘smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer x 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 x

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
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 as of May 13, 2010

Common Stock, $.001 par value

100,000

VENTURE LENDING & LEASING IV, INC.

INDEX

PART I -- FINANCIAL INFORMATION

Item 1.

Financial Statements

Condensed Statements of Assets and Liabilities (Unaudited)

As of March 31, 2010 and December 31, 2009

Condensed Statements of Operations (Unaudited)

For the three months ended March 31, 2010 and 2009

Condensed Statements of Changes in Net Assets (Unaudited)

For the three months ended March 31, 2010 and 2009

Condensed Statements of Cash Flows (Unaudited)

For the three months ended March 31, 2010 and 2009

Notes to Condensed Financial Statements (Unaudited)

Item 2.

Management's Discussion and Analysis of Financial

Condition and Results of Operations

Item 3.

Quantitative & Qualitative Disclosures About Market Risk

Item 4.

Controls and Procedures

Item 4T.

Controls and Procedures

PART II -- OTHER INFORMATION

Item 1.

Legal Proceedings

Item 1A.

Risk Factors

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.

Defaults Upon Senior Securities

Item 4.

Removed and Reserved

Item 5.

Other Information

Item 6.

Exhibits

SIGNATURES

VENTURE LENDING & LEASING IV, INC.

CONDENSED STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)

AS OF MARCH 31, 2010 AND DECEMBER 31, 2009


	March 31, 2010	December 31, 2009
*ASSETS*
Loans, at estimated fair value
(Cost of $71,491,394 and $90,664,727)	$ 57,460,557	$ 78,115,522
Cash and cash equivalents	4,916,471	5,798,774
Other investment (Cost of $770,621 and $768,247)	35,621	33,247
Other assets	733,613	1,067,235

Total assets	63,146,262	85,014,778

*LIABILITIES*
Borrowings under debt facility	-	-
Accrued management fees	392,789	531,342
Accounts payable and other accrued liabilities	100,862	93,552

Total liabilities	493,651	624,894

NET ASSETS	$ 62,652,611	$ 84,389,884

Analysis of Net Assets:

Capital paid in on shares of capital stock	$ 245,025,000	$ 245,025,000
Return of capital distributions	(165,560,844)	(145,305,203)
Accumulated deficit	(16,811,545)	(15,329,913)
Net assets (equivalent to $626.53 and $843.90 per share based on
100,000 shares of capital stock outstanding - see Note 5)	$ 62,652,611	$ 84,389,884

See Notes to Condensed Financial Statements

VENTURE LENDING & LEASING IV, INC.

CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009


	For the Three Months Ended	For the Three Months Ended
	March 31, 2010	March 31, 2009

*INVESTMENT INCOME:*
Interest on loans	$ 2,265,557	$ 7,144,593
Other interest and other income	76	193,579
Total investment income	2,265,633	7,338,172

*EXPENSES:*
Management fees	394,664	1,370,605
Interest expense	-	1,209,579
Banking and professional fees	118,152	158,933
Other operating expenses	26,732	29,087
Total expenses	539,548	2,768,204
Net investment income	1,726,085	4,569,968

Net realized loss from investments	(13,734)	(222,849)
Net change in unrealized loss from
investments	(1,481,632)	(5,336,628)
Net realized and unrealized loss from
hedging activities	-	(78,334)
Net realized and unrealized loss from
investments and hedging activities	(1,495,366)	(5,637,811)

Net increase (decrease) in net assets
resulting from operations	$ 230,719	$ (1,067,843)
Net increase (decrease) in net assets
resulting from operations per share	$ 2.31	$ (10.68)
Weighted average shares outstanding	100,000	100,000

See Notes to Condensed Financial Statements

VENTURE LENDING & LEASING IV, INC.

CONDENSED STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009


	For the Three Months Ended	For the Three Months Ended
	March 31, 2010	March 31, 2009


Increase in net assets resulting from operations:
Net investment income	$ 1,726,085	$ 4,569,968
Net realized loss from investment
transactions	(13,734)	(222,849)
Net change in unrealized loss from
investments	(1,481,632)	(5,336,628)
Net realized and unrealized loss
from hedging activities	-	(78,334)

Net increase (decrease) in net assets resulting
from operations	230,719	(1,067,843)

Distributions of income to shareholder	(1,712,351)	(3,856,557)
Return of capital to shareholder	(20,255,641)	(22,982,502)

Total decrease	(21,737,273)	(27,906,902)

Net assets
Beginning of period	84,389,884	211,890,358

End of period	$ 62,652,611	$ 183,983,456

See Notes to Condensed Financial Statements

VENTURE LENDING & LEASING IV, INC.

CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009


	For the Three Months Ended March 31, 2010	For the Three Months Ended March 31, 2009
*CASH FLOWS FROM OPERATING ACTIVITIES:*
Net increase (decrease) in net assets resulting from operations	$ 230,719	$ (1,067,843)
Adjustments to reconcile net increase (decrease) in net assets resulting
from operations to net cash provided by operating activities:
Net realized loss from investments	13,734	222,849
Net change in unrealized loss from investments	1,481,632	5,336,628
Net unrealized gain from hedging activities	-	(412,228)
Receipt of stock in lieu of fees	-	(138,594)
Amortization of deferred costs related to borrowing facility	-	290,374
Net decrease in other assets and other investments	331,248	1,024,847
Net decrease in accounts payable, other
accrued liabilities, and accrued management fees	(131,243)	(739,415)
Origination of loans	-	(1,558,639)
Principal payments on loans	18,991,607	42,215,848
Acquisition of equity securities	-	(18,671)
Net cash provided by operating activities	20,917,697	45,155,156
*CASH FLOWS FROM FINANCING ACTIVITIES:*
Cash distribution to shareholder	(21,800,000)	(24,000,000)
Repayments of debt facility	-	(35,000,000)
Payment of bank facility fees and costs	-	(1,019)
Net cash used in financing activities	(21,800,000)	(59,001,019)
Net decrease in cash and cash equivalents	(882,303)	(13,845,863)
*CASH AND CASH EQUIVALENTS:*
Beginning of period	5,798,774	53,634,366
End of period	$ 4,916,471	$ 39,788,503
*SUPPLEMENTAL DISCLOSURES:*
*CASH PAID DURING THE PERIOD FOR:*
Interest	$ -	$ 2,509,972
*NON-CASH ACTIVITIES:*
Distributions of equity securities to shareholder	$ 167,992	$ 2,839,059
Receipt of equity securities as repayment of loan	$ 167,992	$ 2,681,794

See Notes to Condensed Financial Statements

VENTURE LENDING & LEASING IV, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

ORGANIZATION AND OPERATIONS OF THE FUND

Venture Lending & Leasing IV, Inc., (the “Fund”), was incorporated in Maryland on October 31, 2003 as a nondiversified closed-end management investment company electing status as a business development company (“BDC”) under the Investment Company Act of 1940 and is managed by Westech Investment Advisors, Inc. (“Manager” or “Management”). One hundred percent of the stock of the Fund is held by Venture Lending & Leasing IV, LLC (the “Company”). Prior to commencing its operations on May 28, 2004, the Fund had no operations other than the sale to the Company of 100,000 shares of common stock, $0.001 par value for $25,000 in November 2003. This issuance of stock was a requirement in order to apply for a finance lender's license from the California Commissioner of Corporations.

In the Manager's opinion, the accompanying financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of financial position and results of operations for interim periods. Certain information and note disclosures normally included in audited annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted; however, the Fund believes that the disclosures made are adequate to make the information presented not misleading. The interim results for the three months ended March 31, 2010 are not necessarily indicative of what the results would be for a full year. It is suggested that these financial statements be read in conjunction with the financial statements and the notes included in the Fund’s Annual Report on Form 10-K for the year ended December 31, 2009.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand, money market funds, and demand deposits in banks with maturities of 90 days or less.

Interest Income

Interest income on loans is recognized using the effective interest method including amounts resulting from the amortization of discounts resulting from the allocation of amounts ascribed to equity securities received as part of the loan transaction. Additionally, fees received as part of the transaction are added to the loan discount and amortized over the life of the loan.

Valuation Procedures

The Fund accounts for loans at fair value in accordance with the “Valuation Methods” below. All valuations are determined under the direction of Management, in accordance with this Policy.

The Fund’s loans are valued in connection with the issuance of its periodic financial statements, the issuance or repurchase of the Fund’s shares at a price equivalent to the current net asset value per share, and at such other times as required by law. On a quarterly basis, Management will submit to the Board of Directors (“Board”) a “Valuation Report,” which details the rationale for the valuation of investments.

Valuation Methods

At March 31, 2010 and December 31, 2009, the financial statements include nonmarketable investments ($57,496,178 and $78,148,769 or approximately 91% and 92% of total assets, respectively), with fair values determined by the Manager in the absence of readily determinable market values. Because of the inherent uncertainty of these valuations, estimated fair values of such investments may differ significantly from the values that would have been used had a ready market for the securities existed, and the differences could be material. Below is the information used by the Manager in making these estimates.

Fair value is the price that would be received to sell an asset or paid to settle a liability in an orderly transaction between market participants. There is no secondary market for the loans, hence Management determines fair value based on hypothetical markets. Venture loans are generally held to maturity and are recorded at estimated fair value. Management determines whether to adjust the estimated fair value of a loan based on a number of factors, including but not limited to the borrower’s payment history, available cash and “burn rate,” revenues, net income or loss, the likelihood that the borrower will be able to secure additional financing in the future, as well as an evaluation of the general interest rate environment. The amount of any valuation adjustment is determined based upon a credit analysis of the borrower and an analysis of the expected recovery from the borrower, including consideration of factors such as the nature and quality of the Fund’s security interests in collateral, the estimated value of the Fund’s collateral, the size of the loan, and the estimated time that will elapse before the Fund achieves a recovery.

Money market funds and debt instruments held as Cash and Cash Equivalents are valued at their most recently posted net asset value, if available, or at amortized cost, provided such amount is not materially different from quoted price.

Warrants and Stock

Warrants and stock that are received in connection with loan transactions generally will be assigned a fair value at the time of acquisition. These securities are then distributed by the Fund to the Company at the assigned value. Warrants are valued based on a modified Black-Scholes option pricing model which takes into account underlying estimated stock value, expected term, volatility, risk-free interest rate, among other factors. Warrants are typically distributed immediately upon receipt to the Company.

Nonaccrual Loans

The Fund’s policy is to place a loan on nonaccrual status when the loan stops performing and Management deems that it is unlikely that the loan will return to performing status. When a loan is placed on nonaccrual status, all interest previously accrued but not collected is reversed for the quarter in which the loan was placed on nonaccrual status. Any uncollected interest related to quarters prior to when the loan was placed on nonaccrual status is added to the principal balance, and the aggregate balance of the principal and interest is evaluated in accordance with the policy for valuation of loans in determining Management’s best estimate of fair value. Interest received by the Fund on nonaccrual loans will be recorded on a cash basis.

As of March 31, 2010 and December 31, 2009, loans with a cost basis of $23.9 million and $20.9 million and a fair value of $10.0 million and $8.6 million, respectively, have been classified as nonaccrual.

Commitment Fees

Unearned income and commitment fees on loans are recognized using the effective-interest method over the term of the loan. Commitment fees are carried as liabilities when received for commitments upon which no draws have been made. When the first draw is made, the fee is treated as unearned income and is recognized as described above. If a draw is never made, the commitment fee less any applicable legal costs becomes recognized as other income after the commitment expires.

Interest Rate Swap Agreement

In prior years, the Fund entered into an interest rate swap agreement to hedge its interest rate on its borrowings under its debt facility. Unrealized gains and losses from hedging activities have been separately reported from unrealized gains and losses from investment activities and are included in net realized and unrealized loss from hedging activities in these financial statements. The fair value of the interest rate swap is recorded in other liabilities. The valuation of the swap agreement is based on future expected interest rates on the notional principal balance remaining which is comparable to what a prospective acquirer would pay on the measurement date.

On June 9, 2009, the Fund paid approximately $0.3 million to terminate its swap agreement in connection with the termination of the debt facility, and thus the Fund has no interest rate swap transactions outstanding as of March 31, 2010.

Recently Issued Accounting Pronouncements

In January 2010, the FASB issued Accounting Standards Update No. 2010-06 (“ASU 2010-06”), Improving Disclosures about Fair Value Measurements, which, among other things, amends ASC 820 to require entities to separately present purchases, sales, issuances, and settlements in their reconciliation of Level 3 fair value measurements (i.e., to present such items on a gross basis rather than on a net basis), and which clarifies existing disclosure requirements provided by ASC 820 regarding the level of disaggregation and the inputs and valuation techniques used to measure fair value for measurements that fall within either Level 2 or Level 3 of the fair value hierarchy. ASU 2010-06 is effective for interim and annual periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements (which are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years). The adoption of ASU 2010-06 did not have a material impact on the Fund’s financial statements. Certain parts of the ASU 2010-06 are not yet effective. Management is currently assessing the impact that the adoption of ASU 2010-06 will have on the Fund’s financial statement disclosures.

Tax Status

As long as the Fund qualifies as a Regulated Investment Company (“RIC”), it will not pay any federal or state corporate income tax on income that is distributed to its shareholder (pass-through status). Should the Fund not qualify as a RIC or lose its RIC status, it could be taxed as an ordinary corporation on its taxable income for that year (even if that income is distributed to its shareholder), and all distributions out of its earnings and profits will be taxable to its shareholder as ordinary income. As of March 31, 2010, the Fund had no uncertain tax positions.

The Fund's tax years open to examination by major jurisdictions are 2006 and forward.

SUMMARY OF INVESTMENTS

Loans generally are made to borrowers pursuant to commitments whereby the Fund agrees to finance assets and provide working capital up to a specified amount for the term of the commitments, upon the terms and subject to the conditions specified by such commitment. As of March 31, 2010, the Fund's investments in loans are primarily to companies based within the United States and are diversified among borrowers in the industries shown below. The percentage of net assets that each industry group represents is shown with the industry totals below (the sum of the percentages does not equal 100 percent because the percentages are based on net assets as opposed to total loans).

The Fund 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; that is, an exit price. The exit price assumes the asset or liability was exchanged in an orderly transaction; it was not a forced liquidation or distressed sale.

Loan balances are summarized by borrower. Typically a borrower's balance will be composed of several loans drawn under a commitment made by the Fund with the interest rate on each loan fixed at the time each loan is funded. Each loan drawn under a commitment has a different maturity date and amount. For the three month periods ended March 31, 2010 and 2009, the weighted average interest rate on performing loans was 15.60% and 14.82%, respectively. Interest is calculated using the effective interest method, and rates earned by the Fund will fluctuate based on many factors including volatility, early payoffs, and recovery of interest from non-performing assets.

Loans as of March 31, 2010 are in non-affiliates and consist of the following (industry classifications are unaudited):


	Percentage of	Estimated Fair	Par Value	Final
Borrower	Net Assets	Value 3/31/10	3/31/10	Maturity Date
Biotechnology
Bioabsorbable Therapeutics, Inc.		$87,569	$912,569	*
SanBio, Inc.		193,902	193,902	6/1/10
Subtotal:	0.4%	$281,471	$1,106,471

Carrier Networking
Kodiak Networks, Inc.		$50,310	$50,310	4/1/10
Opvista, Inc.		807,250	1,607,250	*
Wavebender, Inc.		102,078	102,078	1/1/11
Subtotal:	1.5%	$959,638	$1,759,638

Computers & Storage
D-Wave Systems, Inc.		$21,712	$21,712	7/1/10
Gear Six, Inc.		72,102	222,102	12/1/10
NComputing, Inc.		319,962	319,962	9/1/10
Panta Systems, Inc.		78,693	808,693	*
Vidyo, Inc.		577,658	577,658	10/1/10
Subtotal:	1.7%	$1,070,127	$1,950,127

Enterprise Networking
Envivio, Inc.		$1,077,014	$1,077,014	1/1/11
PacketMotion, Inc.		663,072	663,072	3/1/11
Vyatta, Inc.		783,179	783,179	2/1/11
Subtotal:	4.0%	$2,523,265	$2,523,265

Internet
Blekko, Inc.		$267,566	$267,566	12/1/11
BuzzLogic, Inc.		376,604	376,604	8/1/11
Collarity, Inc.		524,169	704,169	*
Cuil, Inc.		3,250,530	3,250,530	12/1/12
Delve Networks, Inc.		276,992	276,992	7/1/11
Donnerwood Media, Inc.		404,026	404,026	5/1/11
EForce Media, Inc.		762,432	1,512,432	*
Genius.com Inc.		64,846	64,846	8/1/10
iGroup Network, Inc.		33,862	33,862	8/1/10


Inigral, Inc.		78,780	78,780	8/1/11
Insider Guides, Inc.		618,986	618,986	4/1/11
Koders, Inc.		134,675	134,675	5/1/11
Loomia, Inc.		309,785	309,785	12/1/11
Multiply, Inc.		490,137	490,137	9/1/11
Philotic, Inc.		62,466	62,466	7/1/11
Quantcast Corp.		3,732,454	3,732,454	1/1/13
RPM Communications, Inc.		0	222,630	*
SnapJot, Inc.		0	103,532	*
SugarSync, Inc.		1,375,677	1,375,677	5/1/11
TheFind, Inc.		656,873	656,873	12/1/11
ThisNext, Inc.		297,577	297,577	1/1/12
Tribe Networks, Inc.		0	465,007	*
UStream.TV, Inc.		59,473	59,473	10/1/10
VetCentric, Inc.		1,371,473	1,371,473	10/1/11
Videojax, Inc.		51,331	311,331	*
Whole Life Connect, Inc.		0	497,174	*
Youku.com, Inc.		2,382,643	2,382,643	1/1/12
Subtotal:	28.0%	$17,583,357	$20,061,700

Medical Devices
Accuri Cytometers, Inc.		$222,830	$222,830	9/1/10
AirXpanders, Inc.		479,236	479,236	9/1/11
Biomerix Corp.		781,099	781,099	12/1/11
CyberHeart, Inc.		835,114	835,114	8/1/11
Evera Medical, Inc.		150,660	566,660	*
iBalance Medical, Inc.		185,380	285,380	*
Intellidx, Inc.		203,786	903,786	*
MyoScience, Inc.		373,681	373,681	6/1/11
Nellix, Inc.		185,077	185,077	7/1/11
Softscope Medical Technologies, Inc.		213,909	213,909	6/1/11
Varix Medical Corp.		203,223	203,223	9/1/11
Subtotal:	6.1%	$3,833,995	$5,049,995

Other Healthcare
Chakshu Research, Inc.		$528,161	$1,028,161	*
NanoSphere, Inc.		1,277,555	1,277,555	8/1/10
Pharmacy TV Network, Inc.		0	336,005	*
Subtotal:	2.9%	$1,805,716	$2,641,721

Other Technology
EoPlex Tehcnologies, Inc.		$430,305	$430,305	6/1/11
Integrity Block, Inc.		72,913	92,913	*
Nanoconduction, Inc.		236,150	336,150	*


Nanogram Corporation		278,375	278,375	12/1/10
Nanosolar, Inc.		17,614	17,614	5/1/10
Oryxe Energy International, Inc.		371,320	501,320	*
Sezmi Corp.		1,405,875	1,405,875	2/1/12
Solaria Corp.		1,988,899	1,988,899	3/1/11
Sub-One Technology, Inc.		1,393,195	1,393,195	12/1/11
Subtotal:	9.9%	$6,194,646	$6,444,646

Security
Dragnet Solutions, Inc.		$484,817	$484,817	6/1/11
Guardian Analytics, Inc.		605,111	605,111	12/1/11
Nevis Networks, Inc.		108,762	288,762	*
TrustedID, Inc.		669,424	669,424	6/1/11
Subtotal:	3.0%	$1,868,114	$2,048,114

Semiconductors & Equipment
Alereon, Inc.		$251,137	$326,137	*
Celestial Semiconductor, Inc.		277,398	1,177,398	*
Cswitch		0	71,487	*
Discera, Inc.		138,579	138,579	1/1/11
Gigafin Networks, Inc.		72,414	1,772,414	*
Intelleflex Corp.		656,794	656,794	4/1/11
InvenSense, Inc.		170,136	170,136	1/1/11
SiPort, Inc.		817,844	817,844	7/1/11
Tela Innovations, Inc.		99,322	99,322	10/1/10
Zenverge, Inc.		779,226	779,226	7/1/11
Subtotal:	5.2%	$3,262,850	$6,009,337

Software
Anchor Intelligence, Inc.		$563,046	$563,046	8/1/11
Athena Design Systems, Inc.		29,837	76,837	*
Berkeley Design Automation, Inc.		252,000	252,000	4/1/11
BlueRoads Corporation		175,448	2,445,448	*
Cloudmark, Inc.		664,998	664,998	3/1/11
Cloudshare, Inc.		55,346	55,346	9/1/10
Demandbase, Inc.		218,637	218,637	11/1/10
Future Point Systems, Inc.		177,105	177,105	5/1/12
Gazillion, Inc.		1,068,074	1,068,074	3/1/11
Integrien Corp.		974,091	974,091	*
JasperSoft, Inc.		724,706	724,706	5/1/11
Kabira Technologies, Inc.		793,707	793,707	*
Kareo, Inc.		89,872	89,872	12/1/10
Market6, Inc.		169,900	169,900	7/1/10
Orb Networks, Inc.		107,033	107,033	8/1/10


RingCube Technologies, Inc.		707,756	707,756	10/1/11
Steelwedge Software, Inc.		1,198,259	1,198,259	*
Universal Ad, Inc.		187,264	362,264	*
Xtime, Inc.		126,354	126,354	1/1/11
Zoove Corp.		90,808	90,808	7/1/11
Subtotal:	13.3%	$8,374,241	$10,866,241

Technology Services
OpSource, Inc.		$1,653,263	$1,653,263	12/1/11
SG Micro, Inc.		307,082	307,082	4/1/11
Subtotal:	3.1%	$1,960,345	$1,960,345

Wireless
Cellfire, Inc.		$673,847	$673,847	4/1/11
DeFi Mobile, Ltd.		200,346	337,348	*
Dilithium Networks, Inc.		1,301,721	1,301,721	6/1/11
Emotive Communications, Inc.		144,589	394,589	*
Hands-On Mobile, Inc.		296,424	296,424	5/1/10
July Systems, Inc.		455,321	455,321	2/1/12
Nextivity, Inc.		1,487,664	2,227,664	*
Ortiva Wireless, Inc.		886,240	886,240	5/1/11
Quickoffice, Inc.		93,939	93,939	7/1/10
SandLinks, Inc.		68,984	268,984	*
Send Me, Inc.		1,316,649	1,316,649	4/1/12
SmartDrive Systems, Inc.		135,299	135,299	6/1/10
Venturi Wireless, Inc.		272,840	272,840	11/1/10
Wavion, Inc.		408,929	408,929	7/1/10
Subtotal:	12.3%	$7,742,792	$9,069,794

Total: (Cost of $71,491,394)	91.7%	$57,460,557	$71,491,394

* As of March 31, 2010 loans with a cost basis of $23.9 million and a fair value of $10.0 million have been classified as nonaccrual. These loans have been accelerated from original maturity and are due in their entirety. During the period for which these loans have been on non-accrual status, no interest income has been recognized.

Loans as of December 31, 2009 are in non-affiliates and consist of the following (industry classifications are unaudited):


	Percentage of	Estimated Fair	Par Value	Final
Borrower	Net Assets	Value 12/31/09	12/31/09	Maturity Date
Biotechnology
Bioabsorbable Therapeutics, Inc.		$172,963	$912,963	*
SanBio, Inc.		470,563	470,563	6/1/10


Trellis Bioscience, Inc.		173,790	173,790	12/1/10
Subtotal:	1.0%	$817,316	$1,557,316

Carrier Networking
Kodiak Networks, Inc.		$196,266	$196,266	4/1/10
Opvista, Inc.		807,250	1,607,250	*
Overture Networks, Inc.		120,463	120,463	2/1/10
Wavebender, Inc.		103,372	103,372	1/1/11
Subtotal:	1.5%	$1,227,351	$2,027,351

Computers & Storage
Cloudshield, Inc.		$805,441	$805,441	4/1/11
D-Wave Systems, Inc.		45,043	45,043	7/1/10
Gear Six, Inc.		291,222	291,222	12/1/10
NComputing, Inc.		445,277	445,277	9/1/10
Panta Systems, Inc.		78,693	808,693	*
Vidyo, Inc.		809,898	809,898	10/1/10
Subtotal:	2.9%	$2,475,574	$3,205,574

Enterprise Networking
Envivio, Inc.		$1,451,594	$1,451,594	1/1/11
PacketMotion, Inc.		798,291	798,291	3/1/11
Vyatta, Inc.		999,379	999,379	2/1/11
Subtotal:	3.9%	$3,249,264	$3,249,264

Internet
Aggregate Knowledge, Inc.		$740,354	$740,354	12/1/11
Blekko, Inc.		307,107	307,107	12/1/11
BuzzLogic, Inc.		486,302	486,302	8/1/11
Collarity, Inc.		535,618	715,618	*
Cuil, Inc.		3,563,005	3,563,005	12/1/12
Delve Networks, Inc.		320,605	320,605	7/1/11
Donnerwood Media, Inc.		483,185	483,185	5/1/11
EForce Media, Inc.		762,432	1,512,432	*
Genius.com, Inc.		101,242	101,242	8/1/10
iGroup Network, Inc.		53,528	53,528	8/1/10
Inigral, Inc.		92,883	92,883	8/1/11
Insider Guides, Inc.		792,254	792,254	4/1/11
Koders, Inc.		158,735	158,735	5/1/11
Loomia, Inc.		351,522	351,522	12/1/11
Multiply, Inc.		570,185	570,185	9/1/11
Philotic, Inc.		84,749	84,749	7/1/11
Quantcast, Corp.		4,169,098	4,169,098	1/1/13
Radar Networks, Inc.		305,023	305,023	10/1/10


RPM Communications, Inc.		62,632	222,632	*
SnapJot, Inc.		0	103,532	*
SugarSync, Inc.		1,645,128	1,645,128	5/1/11
TheFind, Inc.		760,747	760,747	12/1/11
ThisNext, Inc.		375,549	375,549	5/1/11
Tribe Networks. Inc.		0	465,007	*
UStream.TV, Inc.		83,540	83,540	10/1/10
VetCentric, Inc.		1,420,937	1,420,937	10/1/11
Videojax, Inc.		51,331	311,331	*
Whole Life Connect, Inc		0	497,174	*
Youku.com, Inc.		2,795,891	2,795,891	1/1/12
Subtotal:	25.0%	$21,073,582	$23,489,295

Medical Devices
Accuri Cytometers, Inc.		$328,882	$328,882	9/1/10
AirXpanders, Inc.		493,179	493,179	9/1/11
Ample Medical, Inc.		18,734	32,734	*
Biomerix, Corp.		924,209	924,209	12/1/11
CyberHeart, Inc.		975,031	975,031	8/1/11
Evera Medical, Inc.		364,779	564,779	9/1/11
iBalance Medical, Inc.		793,637	793,637	9/1/10
Intellidx, Inc.		1,063,114	1,163,114	4/1/11
MyoScience, Inc.		517,757	517,757	6/1/11
Nellix, Inc.		238,734	238,734	7/1/11
Softscope Medical Technologies, Inc.		262,893	262,893	6/1/11
Varix Medical, Corp.		192,363	192,363	9/1/11
Subtotal:	7.3%	$6,173,312	$6,487,312

Other Healthcare
Advanced ICU Care, Inc.		$109,827	$109,827	10/1/10
Chakshu Research, Inc.		512,336	1,012,336	*
NanoSphere, Inc.		1,890,288	1,890,288	8/1/10
Pharmacy TV Network, Inc.		0	336,005	*
Skylight Healthcare Systems, Inc.		2,415,766	2,415,766	10/1/11
Subtotal:	5.8%	$4,928,217	$5,764,222

Other Technology
EoPlex Tehcnologies, Inc.		$527,634	$527,634	6/1/11
Integrity Block, Inc.		72,913	92,913	*
Nanoconduction, Inc.		439,577	539,577	*
Nanogram, Corp.		449,091	449,091	12/1/10
Nanosolar, Inc.		65,578	65,578	5/1/10
Oryxe Energy International, Inc.		391,642	521,642	*


Sezmi, Corp.		1,793,646	1,793,646	2/1/12
Solaria, Corp.		2,463,265	2,463,265	3/1/11
Sub-One Technology, Inc.		1,552,491	1,552,491	12/1/11
Subtotal:	9.2%	$7,755,837	$8,005,837

Security
CipherOptics, Inc.		$146,617	$146,617	3/1/10
Dragnet Solutions, Inc.		574,091	574,091	6/1/11
Guardian Analytics, Inc.		619,189	619,189	8/1/11
Nevis Networks, Inc.		123,762	303,762	*
TrustedID, Inc.		759,593	759,593	6/1/11
Subtotal:	2.6%	$2,223,252	$2,403,252

Semiconductors & Equipment
Alereon, Inc.		$528,072	$528,072	7/1/10
Azuro, Inc.		326,868	326,868	2/1/10
Celestial Semiconductor, Inc.		277,398	1,177,398	*
Cswitch, Corp.		0	71,487	*
Discera, Inc.		198,132	198,132	1/1/11
Gigafin Networks, Inc.		72,414	1,772,414	*
Insilica, Inc.		502,965	502,965	11/1/10
Integrated Materials, Inc.		117,533	117,533	3/1/10
Intelleflex, Corp.		811,691	811,691	4/1/11
InvenSense, Inc.		282,415	282,415	1/1/11
SiPort, Inc.		947,603	947,603	7/1/11
Teknovus, Inc.		60,910	60,910	3/1/10
Tela Innovations, Inc.		150,845	150,845	10/1/10
Zenverge, Inc.		966,393	966,393	7/1/11
Subtotal:	6.2%	$5,243,239	$7,914,726

Software
Anchor Intelligence, Inc.		$648,108	$648,108	12/1/11
Athena Design Systems, Inc.		29,837	76,837	*
Berkeley Design Automation, Inc.		421,775	421,775	4/1/11
BlueRoads, Corp.		175,448	2,445,448	*
Cloudmark, Inc.		856,880	856,880	3/1/11
Cloudshare, Inc.		81,561	81,561	9/1/10
Demandbase, Inc.		293,081	293,081	11/1/10
Future Point Systems, Inc.		181,817	181,817	4/1/12
Gazillion, Inc.		1,312,700	1,312,700	3/1/11
Integrien, Corp.		1,075,739	1,075,739	7/1/10
JasperSoft, Inc.		862,849	862,849	5/1/11
Kabira Technologies, Inc.		1,069,892	1,069,892	12/1/10
Kareo, Inc.		101,619	101,619	12/1/10


Market6, Inc.		301,142	301,142	7/1/10
Orb Networks, Inc.		158,962	158,962	8/1/10
RingCube Technologies, Inc.		765,749	765,749	10/1/11
Steelwedge Software , Inc.		1,228,259	1,228,259	*
Ultriva, Inc.		67,256	67,256	1/1/10
Universal Ad, Inc.		173,583	348,583	*
Xtime, Inc.		176,201	176,201	1/1/11
Zoove, Corp.		163,693	163,693	7/1/11
Subtotal:	12.0%	$10,146,151	$12,638,151

Technology Services
Neutral Tandem, Inc.		$386,537	$386,537	3/1/10
OpSource, Inc.		2,171,701	2,171,701	12/1/11
SG Micro, Inc.		380,841	380,841	4/1/11
Subtotal:	3.5%	$2,939,079	$2,939,079

Wireless
Cellfire, Inc.		$1,041,066	$1,041,066	4/1/11
DeFi Mobile, Ltd.		337,344	337,344	*
Dilithium Networks, Inc.		1,530,907	1,530,907	6/1/11
Emotive Communications, Inc.		143,630	393,630	*
Hands-On Mobile, Inc.		638,217	638,217	5/1/10
July Systems, Inc.		523,480	523,480	*
Nextivity, Inc.		1,487,664	2,227,664	*
Ortiva Wireless, Inc.		1,018,036	1,018,036	5/1/11
Quickoffice, Inc.		145,523	145,523	7/1/10
SandLinks, Inc.		125,324	255,324	*
Send Me, Inc.		1,529,053	1,529,053	4/1/12
SmartDrive Systems, Inc.		240,106	240,106	6/1/10
Venturi Wireless, Inc.		415,453	415,453	11/1/10
Wavion, Inc.		629,572	629,572	7/1/10
WiSpry, Inc.		57,973	57,973	4/1/10
Subtotal:	11.7%	$9,863,348	$10,983,348

Total: (Cost of $90,664,727)	92.6%	$78,115,522	$90,664,727

* As of December 31, 2009, loans with a cost basis of $20.9 million and a fair value of $8.6 million have been classified as non-accrual. These loans have been accelerated from original maturity and are due in their entirety. During the period for which these loans have been on non-accrual status, no interest income has been recognized.

The Fund provides asset-based financing primarily to start-up and emerging growth venture-capital-backed companies. These loans are generally secured by assets of the borrowers. As a result, the Fund is subject to general credit risk associated with such companies.

Valuation Hierarchy

The Fund categorizes its fair value measurements according to a three-level hierarchy. The hierarchy prioritizes the inputs used by the Fund’s valuation techniques. A level is assigned to each fair value measurement based on the lowest level input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are defined as follows:


Level 1		Unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date.
Level 2		Prices or valuations based on observable inputs other than quoted prices in active markets for identical assets and liabilities.
Level 3		Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

The Fund’s cash equivalents were valued at the net asset value of the money market fund. As a result, these measurements are classified as Level 1. The Fund uses estimated exit values when determining the value of its investments. Because these transactions are individually negotiated and unique, and there is no market in which these assets trade, the inputs for these assets, which are discussed in the Valuation Methods listed above, are classified as Level 3.

The following table presents the balances of assets as of March 31, 2010 and assets as of December 31, 2009 measured at fair value on a recurring basis:


As of March 31, 2010	Level 1	Level 3	Total
*ASSETS:*
Loans to borrowers	$ -	$ 57,460,557	$ 57,460,557
Other investment	-	35,621	35,621
Cash equivalents	4,916,471	-	4,916,471

Total assets	$ 4,916,471	$ 57,496,178	$ 62,412,649



As of December 31, 2009	Level 1	Level 3	Total
*ASSETS:*
Loans to borrowers	$ -	$ 78,115,522	$ 78,115,522
Other investment	-	33,247	33,247
Cash equivalents	5,798,774	-	5,798,774

Total assets	$ 5,798,774	$ 78,148,769	$ 83,947,543

The following table provides a summary of changes in Level 3 assets measured at fair value on a recurring basis:


	For the Three Months Ended
	March 31, 2010
	Loans to borrowers	Other investment
Beginning balance	$ 78,115,522	$ 33,247
Additional investments	-	2,374
Principal reductions	(19,159,599)	-
Net change in the unrealized loss
from investments	(1,481,632)	-
Net realized loss from investments	(13,734)	-
Ending balance	$ 57,460,557	$ 35,621

EARNINGS PER SHARE

Basic earnings per share are computed by dividing net increase (decrease) in net assets resulting from operations by the weighted average common shares outstanding. Diluted earnings per share are computed by dividing net increase (decrease) in net assets resulting from operations by the weighted average common shares outstanding, including the dilutive effects of potential common shares (e.g., stock options). The Fund has no instruments that would be potential common shares; thus, reported basic and diluted earnings per share are the same.

CAPITAL STOCK

As of March 31, 2010 and December 31, 2009, there were 10,000,000 shares of $0.001 par value common stock authorized, and 100,000 shares issued and outstanding. Total committed capital of the Company is $250.0 million. Total contributed capital to the Fund as of March 31, 2010 and December 31, 2009 was $245.0 million. The chart below shows the distributions of the Fund for the three months ended March 31, 2010 and 2009 .



	2010	2009
Cash distributions	$21,800,000	$24,000,000
Distributions of securities	167,992	2,839,059

Total distributions to shareholder	$21,967,992	$26,839,059

Final classification of the distributions as either a return of capital or a distribution of income is an annual determination made at the end of each year dependent upon the Fund’s current year and cumulative earnings and profits.

DEBT FACILITY

On June 10, 2009, the Fund fully paid off all of its borrowing under the debt facility and incurred a realized loss of $0.3 million as a result of terminating the interest rate swap agreement associated with the facility.

OTHER INVESTMENT

In 2009, the Fund repossessed the collateral from a borrower who was having financial difficulties. At the time of the repossession, the loan from the borrower had a cost basis of $2,433,298 and a book value of $1,213,298. The

repossessed assets were immediately contributed to a newly formed LLC (Sensors Licensing, LLC, “SL LLC”) in conjunction with a licensing agreement between SL LLC and an unaffiliated third party. The Fund and Venture Lending & Leasing V, Inc. each have a 50% ownership interest in SL LLC.

At the time the assets were contributed to SL LLC they were valued at $1,750,000 based on expectations of cash flows from the licensing arrangement. The Fund took a realized loss on the loan in the amount of $1,558,298 at the time the transaction was consummated in 2009. The realized loss is the difference between the Fund’s portion of the value of the assets repossessed and the book value of $2,433,298.

SL LLC collected $200,000 and distributed $100,000 to the Fund. The unaffiliated third party cancelled the licensing agreement in 2009. SL LLC continues to distribute proceeds from the sale of equipment as cash becomes available.

Because the collateral is highly customized and no current buyer or lessee has been identified, the Fund had taken a $735,000 fair market reduction in 2009, which represents the difference between the previously determined fair value, the collections to date, and the expected liquidation value of the assets should no buyer or lessee be found. The Fund’s portion of the expected liquidation value of the asset as of March 31, 2010 is $35,621.

FINANCIAL HIGHLIGHTS

Accounting principles generally accepted in the United States of America require disclosure of financial highlights of the Fund for the periods presented, the three months ended March 31, 2010. The total rate of return is defined as the return based on the change in value during the period of a theoretical investment made at the beginning of the period. The total rate of return assumes a constant rate of return for the Fund during the period reported and weights each cash flow by the amount of time held in the Fund. This required methodology differs from an internal rate of return.

The ratios of expenses and net investment income to average net assets, calculated below, are annualized and are computed based upon the aggregate weighted average net assets of the Fund for the periods presented. Net investment income is inclusive of all investment income net of expenses, and excludes realized or unrealized gains and losses.

Beginning and ending net asset values per share are based on the beginning and ending number of shares outstanding. Other per share information is calculated based upon the aggregate weighted average net assets of the Fund for the periods presented.

The following per share data and ratios have been derived from the information provided in the financial statements:


	For the Three Months Ended March 31, 2010	For the Three Months Ended March 31, 2009


Total return *	1.24%	-2.02%

Per share amounts:
Net asset value, beginning of year	$ 843.90	$ 2,118.90
Net investment income	17.26	45.70
Net change in realized and unrealized
loss from investments and hedging activities	(14.95)	(56.38)
Net increase (decrease) in net assets resulting from operations	2.31	(10.68)
Income distributions to shareholder	(17.12)	(38.56)
Return of capital to shareholder	(202.56)	(229.83)


Net asset value, end of period	$ 626.53	$ 1,839.83

Net assets, end of period	$ 62,652,611	$ 183,983,456

Ratios to average net assets:

Expenses *	2.88%	5.23%
Net investment income *	9.20%	8.64%
* Annualized

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

The information in this Quarterly Report on Form 10-Q contains certain “forward-looking statements” within the meaning of the securities laws. These forward-looking statements reflect the current view of Venture Lending & Leasing IV, Inc. (the “Fund”) with respect to future events and financial performance and are subject to a number of risks and uncertainties, many of which are beyond the Fund’s control. All statements, other than statements of historical facts included in this report, regarding strategy, future operations, financial position, estimated revenues, projected costs, prospects, plans and objectives of the Fund are forward-looking statements. When used in this report, the words “will”, “believe”, “anticipate”, “intend”, “estimate”, “expect”, “project” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. All forward-looking statements speak only as of the date of this report. The Fund does not undertake any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

General

The Fund is 100% owned by Venture Lending & Leasing IV, LLC (the “Company”). The Fund's shares of Common Stock, $.001 par value were sold to its shareholder under a stock purchase agreement. The Fund has issued 100,000 of the Fund’s 10,000,000 authorized shares. The Fund's shareholder may make additional capital contributions to the Fund.

In addition to the historical information contained herein, this Quarterly Report on Form 10-Q contains certain forward-looking statements. The reader of this Quarterly Report should understand that all such forward-looking statements are subject to various uncertainties and risks that could affect their outcome. The Fund's actual results could differ materially from those suggested by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, variances in the actual versus projected growth in assets, return on assets, loan losses, expenses, rates charged on loans and earned on securities investments and competition. This entire Quarterly Report should be read to put such forward-looking statements in context and to gain a more complete understanding of the uncertainties and risks involved in the Fund's business.

Overview

The Fund is a financial services company primarily providing financing and advisory services to a variety of carefully selected venture-backed companies primarily located throughout the United States with a focus on growth oriented companies. The Fund’s portfolio is well diversified and consists of companies in the communications, information services, media, and technology, including software and technology-enabled business services, bio-technology, and medical devices industry sectors, among others. The Fund’s capital is generally used by our portfolio companies to finance acquisitions of fixed assets and/or for working capital. On May 28, 2004, the Fund completed its first closing of capital, made its first investments, and became a non-diversified, closed-end investment company that elected to be treated as a business development company under the Investment Company Act of 1940. The Fund elected to be treated for federal income tax purposes as a regulated investment company (“RIC”) under the Internal Revenue Code with the filing of its federal corporate income tax return for 2004. Pursuant to this election, the Fund generally will not have to pay corporate-level taxes on any income it distributes to the stockholder as dividends, allowing the Fund’s shareholder to substantially reduce or eliminate its corporate-level tax liability.

The Fund will seek to meet the ongoing requirements, including the diversification requirements, to qualify as a RIC under the Internal Revenue Code. If the Fund fails to meet these requirements, it will be taxed as an ordinary corporation on its taxable income for that year (even if that income is distributed to the Company) and all distributions out of its earnings and profits will be taxable to the Members of the Company as ordinary income; thus, such income will be subject to a double layer of tax. There is no assurance that the Fund will meet the ongoing requirements to qualify as a RIC for tax purposes.

The Fund's investment objective is to achieve a high total return. The Fund seeks to achieve its investment objective by providing debt financing to portfolio companies. Since inception, the Fund's investing activities have focused primarily on private debt securities. The Fund generally receives warrants to acquire equity securities in connection with its portfolio investments. The Fund generally distributes these warrants to its shareholder upon receipt. The Fund also has guidelines for the percentages of total assets which will be invested in different types of assets.

The portfolio investments of the Fund consist of debt financing to early and late stage venture capital backed technology companies. The borrower’s ability to repay its loans may be adversely impacted by a number of factors, and as a result, the loan may not fully be repaid. Furthermore, the Fund’s security interest in any collateral over the borrower’s assets may be insufficient to make up any shortfall in payments.

Critical Accounting Policies

We identified the most critical accounting principles upon which our financial statements depend and determined the critical accounting principles by considering accounting policies that involve the most complex or subjective decisions or assessments. The two critical accounting policies relate to the valuation of loans and treatment of non-accrual loans.

Loans are held at estimated fair value as determined by Management, in accordance with the valuation methods described in the valuation of loans section of Note 2 of the Fund’s Annual Report on Form 10-K for the year ended December 31, 2009 (Summary of Significant Accounting Policies). Critical factors in determining the fair value of a loan include payment history, collateral position, financial strength of the borrower, prospects for the borrower's raising future equity rounds, likelihood of sale or acquisition of the borrower, and length of expected holding period of the loan, as well as an evaluation of the general interest rate environment. The actual value of the loans may differ from Management's estimates which would affect net income as well as assets.

Results of Operations –For the three months ended March 31, 2010 and 2009.

Total investment income for the three months ended March 31, 2010 and 2009 was $2.3 million and $7.3 million, respectively, which primarily consisted of interest on venture loans outstanding during the period. The remaining income consisted of interest and dividends on the temporary investment of cash and late fees. The decrease in investment income is caused because the Fund is no longer funding new loans and the existing portfolio continues to pay down. Average performing loans decreased to $58.1 million for the three months ended March 31, 2010 from $192.8 million for the three months ended March 31, 2009. This was partially offset by increasing interest rates, as average interest rates increased to 15.60% for the three months ended March 31, 2010 from 14.82% for the three months ended March 31, 2009. Interest is calculated using the effective interest method, and rates earned by the Fund will fluctuate based on many factors including volatility, early payoffs, and recovery of interest from non-performing assets.

Management fees for the three months ended March 31, 2010 and 2009 were $0.4 million and $1.4 million, respectively. Management fees are based on assets under management, and decreased due to the decrease in assets under management relative to the previous year.

Total interest expense was $0 and $1.2 million for the three months ended March 31, 2010 and 2009, respectively. Interest expense decreased for the period because the Fund paid off its loans in 2009 and did not have any debt outstanding throughout 2010.

Total banking and professional fees was $0.1 million and $0.2 million for the three months ended March 31, 2010 and 2009, respectively. The decrease for the period was primarily related to a decrease in credit insurance fees and banking fees resulting from the elimination of the credit facility.

The total other operating expenses for the three months ended March 31, 2010 and 2009 were less than $0.1 million and did not materially change.

Net investment income for the three months ended March 31, 2010 and 2009 was $1.7 million and $4.6 million, respectively.

Total net realized loss from investments was less than $0.1 million and $0.2 million for the three months ended March 31, 2010 and 2009, respectively. The realized losses consist of write offs, net of recoveries of previously written off uncollectible loans.

Net change in unrealized loss from investments for the three months ended March 31, 2010 and 2009 was $1.5 million and $5.3 million, respectively. The unrealized loss consists of fair market value adjustments of loans.

The net realized and unrealized loss from hedging activities for the three months ended March 31, 2010 and 2009 was $0 and $0.1 million, respectively. The realized and unrealized loss consists of the net decline in value of the Fund’s interest rate swap transaction. The Fund settled its interest rate swap transaction during 2009 and there were no hedging activities during 2010.

Net increase (decrease) in net assets resulting from operations for the three months ended March 31, 2010 and 2009 was $0.2 million and ($1.1) million, respectively. On a per share basis, net increase (decrease) in net assets resulting from operations was $2.31 and $(10.68) for the three months ended March 31, 2010 and 2009, respectively.

Liquidity and Capital Resources – March 31, 2010

Total capital contributed to the Fund was $245.0 million, prior to the distribution of capital, as of March 31, 2010. Committed capital to the Company at March 31, 2010 was $250.0 million, all of which had been called.

In the prior years, the Fund entered into an interest rate swap agreement to hedge its interest rate on its borrowings under its debt facility. Unrealized gains and losses from hedging activities have been separately reported from unrealized gains and losses from investments and are included in net realized and unrealized loss from hedging activities in these financial statements. Valuation of the swap agreement was based on future expected interest rates on the notional principal balance remaining which is comparable to what a prospective acquirer would pay on the measurement date. On June 9, 2009, the Fund paid approximately $0.3 million in order to terminate its swap agreement in connection with the repayment of borrowings under the Fund’s debt facility (see Note 6). This amount has been recorded in net realized and unrealized loss from hedging activities in the condensed statement of operations.

As of March 31, 2010, 8% of the Fund's assets consisted of cash and cash equivalents. The Fund no longer has any unexpired unfunded commitments and does not anticipate funding any additional loans. Net loan amounts outstanding after amortization and fair market adjustment decreased by approximately $20.6 million during the three months ended March 31, 2010.


As of	Cumulative Amount Disbursed	Principal Reductions and Fair Market Adjustment	Balance Outstanding – Fair Value	Unexpired Unfunded Commitments
March 31, 2010	$934.5 million	$877.0 million	$57.5 million	$0
December 31, 2009	$934.5 million	$856.4 million	$78.1 million	$0

The Fund seeks to meet the requirements to qualify for the special pass-through status available to RICs under the Internal Revenue Code, and thus to be relieved of federal income tax on that part of its net investment income and realized capital gains that it distributes to its shareholder. To qualify as a RIC, the Fund must distribute to its

shareholder for each taxable year at least 90% of its investment company taxable income (consisting generally of net investment income and net short-term capital gain) (“Distribution Requirement”). To the extent that the terms of the Fund’s venture loans provide for the receipt by the Fund of additional interest at the end of the loan term or provide for the receipt by the Fund of a purchase price for the asset at the end of the loan term (“residual income”), the Fund would be required to accrue such residual income over the life of the loan, and to include such accrued income in its gross income for each taxable year even if it receives no portion of such residual income in that year. Thus, in order to meet the Distribution Requirement and avoid payment of income taxes or an excise tax on undistributed income, the Fund may be required in a particular year to distribute as a dividend an amount in excess of the total amount of income it actually receives. Those distributions will be made from the Fund's cash assets, from amounts received through amortization of loans or from borrowed funds.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Fund's business activities contain elements of risk. The Fund considers the principal types of market risk to be interest rate risk and credit risk. The Fund considers the management of risk essential to conducting its business and to maintaining profitability. Accordingly, the Fund's risk management procedures are designed to identify and analyze the Fund's risks, to set appropriate policies and limits and to continually monitor these risks and limits by means of reliable administrative and information systems and other policies and programs.

The Fund anticipates managing its credit risk by maintaining a portfolio that is diverse by industry, size of investment, stage of development, and borrower. The Fund has limited exposure to public market price fluctuations as the Fund primarily invests in private business enterprises and the Fund generally distributes all equity securities upon receipt to the Company.

The Fund entered into interest rate swap transactions to hedge its interest rate on its borrowings under its debt facility. Unrealized gains and losses from hedging activities are separately reported from unrealized gains and losses from investments and are included in net realized and unrealized loss from hedging activities in these financial statements. The fair value of the interest rate swap is recorded in other liabilities and the change in the fair value is recorded as a change in unrealized loss from investment and hedging activities.

The Fund's sensitivity to changes in interest rates is regularly monitored and analyzed by measuring the characteristics of assets and liabilities. The Fund utilizes various methods to assess interest rate risk in terms of the potential effect on interest income net of interest expense, the value of net assets and the value at risk in an effort to ensure that the Fund is insulated from any significant adverse effects from changes in interest rates.

Based on the model used for the sensitivity of interest income net of interest expense, if the balance sheet were to remain constant and no actions were taken to alter the existing interest rate sensitivity, a hypothetical immediate 100 basis point change in interest rates would have affected net income by less than $0.1 million. This translates to less than 1% of income for the nine months ended March 31, 2010. Although Management believes that this measure is indicative of the Fund's sensitivity to interest rate changes, it makes estimates to adjust for potential changes in credit quality, size and composition of the balance sheet and other business developments that could affect net income. Accordingly, no assurances can be given that actual results would not differ materially from the potential outcome simulated by these estimates.

Item 4. Controls and Procedures

See response to Item 4T.

Item 4T. Controls and Procedures

Evaluation of Disclosure Controls and Procedures:

As of the end of the period covered by this quarterly report on Form 10-Q, the Fund's chief executive officer and chief financial officer conducted an evaluation of the Fund's disclosure controls and procedures (as defined in Rules 13a-15 and 15d-15 of the Securities Exchange Act of 1934). Based upon this evaluation, the Fund's chief executive officer and chief financial officer concluded that the Fund's disclosure controls and procedures were effective in timely alerting them of any material information relating to the Fund that is required to be disclosed by the Fund in the reports it files or submits under the Securities Exchange Act of 1934.

Changes in Internal Controls:

There were no changes in the Fund's internal controls or in other factors that could materially affect these controls during the period covered by this quarterly report on Form 10-Q.

PART II -- OTHER INFORMATION

Item 1. Legal Proceedings

The Fund may become party to certain lawsuits from time to time in the normal course of business. While the outcome of these legal proceedings cannot at this time be predicted with certainty, the Fund does not expect these proceedings will have a material effect upon the Fund's financial condition or results of operation. Management is not aware of any pending legal proceedings involving the Fund.

Item 1A.

Risk Factors

See item 1A – ‘Risk Factors’ in the Fund’s 2009 Annual Report on Form 10-K for a detailed description of the risks attendant to the Fund and its business.

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

Prior to the Fund’s commencement of operations on May 28, 2004, the Fund sold 100,000 shares to the Fund’s sole shareholder, Venture Lending & Leasing IV, LLC for $25,000 in November 2003. No other shares of the Fund have been sold; however the Fund received an additional $245.0 million of paid in capital during the period from May 28, 2004 through March 31, 2010 which is expected to be used to acquire venture loans and fund operations.

Item 3. Defaults Upon Senior Securities

Not applicable

Item 4.

Removed and Reserved

None

Item 5. Other Information

None

Item 6. Exhibits


Exhibit Number	Description
3(i)	Articles of Amendment and Restatement as filed with the Maryland Secretary of State on October 14, 2004, incorporated by reference to the Fund’s Form 10-Q filed with the Securities and Exchange Commission on May 13, 2005.
3(ii)	Amended and Restated Bylaws of the Fund, incorporated by reference to the Fund’s Form 10-K filed with the Securities and Exchange Commission on March 25, 2010.
4.1	Form of Purchase Agreement between the Fund and the Company, incorporated by reference to the Fund’s Registration Statement on Form 10 filed with the Securities and Exchange Commission on December 10, 2003.
31.1-32.2	Certifications pursuant to The Sarbanes-Oxley Act of 2002

SIGNATURES

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

VENTURE LENDING & LEASING IV, INC.

(Registrant)

By:

/S/ Maurice C. Werdegar

By:

/S/ Martin D. Eng

Maurice C. Werdegar

Martin D. Eng

Chief Executive Officer

Chief Financial Officer

Date:

May 13, 2010

Date:

May 13, 2010

EXHIBIT INDEX


Exhibit Number	Description
3(i)	Articles of Amendment and Restatement as filed with the Maryland Secretary of State on October 14, 2004, incorporated by reference to the Fund’s Form 10-Q filed with the Securities and Exchange Commission on May 13, 2005.
3(ii)	Amended and Restated Bylaws of the Fund, incorporated by reference to the Fund’s Form 10-K filed with the Securities and Exchange Commission on March 25, 2010.
4.1	Form of Purchase Agreement between the Fund and the Company, incorporated by reference to the Fund’s Registration Statement on Form 10 filed with the Securities and Exchange Commission on December 10, 2003.
31.1-32.2	Certifications pursuant to The Sarbanes-Oxley Act of 2002

Exhibit 31.1

CERTIFICATION PURSUANT TO
RULE 13a-14

I, Martin D. Eng certify that:

I have reviewed this quarterly report on Form 10-Q of Venture Lending & Leasing IV, Inc.;

Based on my knowledge, this report does not contain any untrue statement of 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;

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;

The registrant’s other certifying officer 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:

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that 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;

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

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by 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; and

The registrant’s other certifying officer 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 registrant’s board of directors (or persons performing the equivalent functions):

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

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.

Date: May 13, 2010

/S/ Martin D. Eng

Martin D. Eng

Chief Financial Officer

Exhibit 31.2

CERTIFICATION PURSUANT TO
RULE 13a-14

I, Maurice C. Werdegar, certify that:

I have reviewed this quarterly report on Form 10-Q of Venture Lending & Leasing IV, Inc.;

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.

Date: May 13, 2010

/S/ Maurice C. Werdegar

Maurice C. Werdegar

Chief Executive Officer

Exhibit 32.1

CERTIFICATION 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 of Venture Lending & Leasing IV, Inc. (the "Fund") on Form 10-Q for the period ending March 31, 2010 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Maurice C. Werdegar, Chief Executive Officer of the Fund, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

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

/S/ Maurice C. Werdegar

Maurice C. Werdegar

Chief Executive Officer

May 13, 2010

Exhibit 32.2

CERTIFICATION 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 of Venture Lending & Leasing IV, Inc. (the "Fund") on Form 10-Q for the period ending March 31, 2010 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Martin D. Eng, Chief Financial Officer of the Fund, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

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

/S/ Martin D. Eng

Martin D. Eng

Chief Financial Officer

May 13, 2010

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