Venture Lending & Leasing V, 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, 2012



[ ]	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 814-00731

Venture Lending & Leasing V, Inc.

(Exact Name of Registrant as specified in its charter)



Maryland	14-1974295
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
	(State or other jurisdiction of incorporation or organization)
104 La Mesa Drive, Suite 102	Portola Valley, CA 94028
(Address of principal executive offices)	(Zip Code)

(650) 234-4300

(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]

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 11, 2012
Common Stock, $.001 par value		100,000

VENTURE LENDING & LEASING V, INC.

INDEX



PART I — FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Statements of Assets and Liabilities (Unaudited) As of March 31, 2012 and December 31, 2011

	Condensed Statements of Operations (Unaudited) For the three months ended March 31, 2012 and 2011

	Condensed Statements of Changes in Net Assets (Unaudited) For the three months ended March 31, 2012 and 2011

	Condensed Statements of Cash Flows (Unaudited) For the three months ended March 31, 2012 and 2011

	Notes to Condensed Financial Statements (Unaudited)

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

Item 3.	Quantitative and Qualitative Disclosures About Market Risk

Item 4.	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.	Mine Safety Issues

Item 5.	Other Information

Item 6.	Exhibits

SIGNATURES

VENTURE LENDING & LEASING V, INC.

CONDENSED STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)

AS OF MARCH 31, 2012 AND DECEMBER 31, 2011



	March 31, 2012			December 31, 2011
ASSETS
Loans, at estimated fair value (Cost of $96,131,549 and $110,427,384)	$	90,370,914		$	105,250,110
Cash and cash equivalents	8,947,815			7,657,584
Other investments (Cost of $761,696 and $764,513)	26,696			29,513
Other assets	1,256,389			1,515,313

Total assets	100,601,814			114,452,520

LIABILITIES
Accrued management fees	628,761			715,328
Accounts payable and other accrued liabilities	96,616			217,380

Total liabilities	725,377			932,708

NET ASSETS	$	99,876,437		$	113,519,812

Analysis of Net Assets:

Capital paid in on shares of capital stock	$	193,525,000		$	193,525,000
Return of capital distributions	(86,255,919		)	(73,195,905		)
Distributable income (accumulated deficit)	(7,392,644		)	(6,809,283		)
Net assets (equivalent to $998.76 and $1,135.20 per share based on 100,000 shares of capital stock outstanding - See Note 5)	$	99,876,437		$	113,519,812

See notes to condensed financial statements

VENTURE LENDING & LEASING V, INC.

CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2012 AND 2011



	For the Three Months Ended			For the Three Months Ended
	March 31, 2012			March 31, 2011


INVESTMENT INCOME:
Interest on loans	$	3,834,836		$	5,909,010
Other interest and other income	250,623			18,482
Total investment income	4,085,459			5,927,492

EXPENSES:
Management fees	628,761			1,005,425
Interest expense	—			40,745
Banking and professional fees	114,779			75,274
Other operating expenses	23,958			28,520
Total expenses	767,498			1,149,964
Net investment income	3,317,961			4,777,528

Net realized gain (loss) from investments	—			(132,849		)
Net change in unrealized gain (loss) from investments	(583,360		)	1,386,488
Net realized and unrealized gain (loss) from investment activities	(583,360		)	1,253,639

Net increase (decrease) in net assets resulting from operations	$	2,734,601		$	6,031,167

Net increase (decrease) in net assets resulting from operations per share	$	27.35		$	60.31
Weighted average shares outstanding	100,000			100,000

See notes to condensed financial statements

VENTURE LENDING & LEASING V, INC.

CONDENSED STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2012 AND 2011



	For the Three Months Ended			For the Three Months Ended
	March 31, 2012			March 31, 2011
Net increase (decrease) in net assets resulting from operations:
Net investment income	$	3,317,961		$	4,777,528
Net realized gain (loss) from investments	—			(132,849		)
Net change in unrealized gain (loss) from investments	(583,360		)	1,386,488

Net increase (decrease) in net assets resulting from operations	2,734,601			6,031,167

Distributions of income to shareholder	(3,317,961		)	(4,644,679		)
Return of capital to shareholder	(13,060,015		)	(5,497,355		)
Increase (decrease) in capital transactions	(16,377,976		)	(10,142,034		)
Total increase (decrease)	(13,643,375		)	(4,110,867		)

Net assets
Beginning of period	113,519,812			163,720,540

End of period	$	99,876,437		$	159,609,673

See notes to condensed financial statements

VENTURE LENDING & LEASING V, INC.

CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2012 AND 2011



	For the Three Months Ended			For the Three Months Ended
	March 31, 2012			March 31, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net increase (decrease) in net assets resulting from operations	$	2,734,601		$	6,031,167
Adjustments to reconcile net increase (decrease) in net assets
resulting from operations to net cash provided by (used in):
operating activities:
Net realized loss (gain) from investments	—			132,849
Net change in unrealized loss (gain) from investments	583,360			(1,386,488		)
Net amortization of deferred costs related to borrowing facility	—			24,412
Net decrease (increase) in other assets and other investments	261,741			(104,963		)
Net increase (decrease) in accounts payable, other accrued liabilities, and accrued management fees	(207,331		)	(786,927		)
Origination of loans	(409,602		)	(24,070,510		)
Principal payments on loans	14,343,351			17,143,247
Acquisition of equity securities	(15,889		)	(1,733,265		)
Net cash provided by (used in) operating activities	17,290,231			(4,750,478		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distribution to shareholder	(16,000,000		)	(7,000,000		)
Net cash provided by (used in) financing activities	(16,000,000		)	(7,000,000		)
Net increase (decrease) in cash and cash equivalents	1,290,231			(11,750,478		)
CASH AND CASH EQUIVALENTS:
Beginning of period	7,657,584			25,771,479
End of period	$	8,947,815		$	14,021,001
SUPPLEMENTAL DISCLOSURES:
CASH PAID DURING THE PERIOD FOR:
Interest	$	—		$	46,667
NON-CASH ACTIVITIES:
Receipt of equity securities as repayment of loan	$	178,329		$	555,013
Receipt of equity securities as payment for waiver	$	183,758		$	—
Distributions of equity securities to shareholder	$	377,976		$	3,142,033
Conversion of receivable to stock	$	—		$	1,595
Conversion of note to stock	$	—		$	250,000

See notes to condensed financial statements

VENTURE LENDING & LEASING V, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

1. ORGANIZATION AND OPERATIONS OF THE FUND

Venture Lending & Leasing V, Inc. (the “Fund”), was incorporated in Maryland on August 21, 2006 as a nondiversified closed-end management investment company electing status as a business development company (“BDC”) under the Investment Company Act of 1940, as amended ("1940 Act") and is managed by Westech Investment Advisors, LLC, formerly known as Westech Investment Advisors, Inc. (“Manager” or “Management”).

One hundred percent of the stock of the Fund is held by Venture Lending & Leasing V, LLC (the “Company”).

Prior to commencing its operations on February 21, 2007, 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 September 2006. This issuance of stock was a requirement in order to apply for a finance lender's license from the California Commissioner of Corporations, which was obtained by the Fund on January 10, 2007.

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, 2012 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, 2011.

2. 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 from the amortization of discounts attributable 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 the Manager, in accordance with these methods.

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

As of March 31, 2012 and December 31, 2011, the financial statements include nonmarketable investments ( $90,397,610 and $105,279,623 or approximately 90% and 92% of total assets, respectively) with fair values determined by the Manager in the absence of readily determinable market values. Because of the illiquidity of the Fund's investments, a substantial portion of its assets are carried at fair value as determined by the Manager in accordance with the Fund's policy as approved by the Board. 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.

Loans

Fair value is the price that would be received to sell an asset or paid to lower 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. The determination of fair value is based on a number of factors including the amount for which an investment could be exchanged in a current sale, which assumes an orderly disposition over a reasonable period other than in a forced sale. Management considers the fact that no ready market exists for substantially all of the investments held by the Fund. 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. We have evaluated these factors and have concluded that the effect of deterioration in the quality of the underlying collateral, increase in the size of the loan and increase in the estimated time to recovery would have the effect of lowering the value of the current portfolio of loans.

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, 2012 and December 31, 2011, loans with a cost basis of $11.3 million and $10.4 million and a fair value of $5.7 million and $5.3 million, respectively, have been classified as nonaccrual.

Cash Equivalents

Money market funds held as Cash Equivalents are valued at their most recently traded net asset value.

Warrants

Warrants 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 stock value, expected term, volatility, and risk-free interest rate, among other factors.

Underlying asset value is estimated based on information available, including information regarding recent rounds of funding of the portfolio company, or the publicly-quoted stock price at the end of the financial reporting period for warrants for comparable publicly-quoted securities.

Volatility, or the amount of uncertainty or risk about the size of the changes in the warrant price, is based on an index of publicly traded companies grouped by industry and which are similar in nature to the underlying client companies issuing the warrant (“Industry Index”). The volatility assumption for each Industry Index is based on the average volatility for individual public companies within the client company's industry for a period of time approximating the expected life of the warrants. For the three months ended March 31, 2012, the Fund is using the volatility rate ranging from 41% to 62%. The effect of a hypothetical increase in the volatility calculated from the indexes used in the modified Black-Scholes option pricing model would have the effect of increasing the value of the warrants.

The remaining expected lives of warrants are based on historical experience of the average life of the warrants, as warrants are often exercised in the event of acquisitions, mergers, or initial public offerings, and cancelled due to events such as bankruptcies, restructuring activities, or additional financings. These events cause the expected term to be less than the remaining contractual term of the warrants. The remaining expected lives of warrants may be adjusted from time to time to reflect new facts and circumstances. For the three months ended March 31, 2012, the Fund is assuming the average duration of a warrant is 3 years. The effect of a hypothetical increase in the estimated initial term of the warrants used in the modified Black-Scholes option pricing model would have the effect of increasing the value of the warrants.

The risk-free interest rate is derived from the constant maturity tables issued by the U.S. Treasury Department. For the three months ended March 31, 2012, the Fund is using monthly risk free rate of 0.0051%. The effect of a hypothetical increase in the estimated risk free rate used in the modified Black-Scholes option pricing model would have the effect of increasing the value of the warrants.

On annual basis, the Fund engages an independent valuation company to provide us with valuation assistance. This company evaluates our valuation methodology and makes sure that the assumptions made in the valuation model remain reasonable.

The inputs of the modified Black-Scholes option pricing model are refreshed every quarter. The independent third party also calculates several of the inputs used such as volatility and risk free rate. Upon the receipt of such data, a sample test is performed to ensure the accuracy of third party calculation and that the source of data is reliable and consistent with the way in which calculations were made in prior periods. Such inputs are entered into the database with a second review to ensure the accuracy of input information. All calculations of warrant values are performed by one employee and reviewed by a second party.

Other Assets and Liabilities

As of March 31, 2012 and December 31, 2011, the fair values of Other Assets and Liabilities approximated their carrying values because of the short-term nature of these assets or liabilities based on Level 2 inputs.

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 forfeited commitment fee less any applicable legal costs becomes recognized as other income after the commitment expires.

Recently Issued Accounting Pronouncements

In May 2011, FASB issued ASU 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS, which amends guidance on fair value measurements to clarify the FASB's intent about the application of existing fair value measurement and disclosure requirements (e.g., to require entities to disclose quantitative information about the unobservable inputs used in a fair value measurement that is categorized within Level III of the fair value hierarchy) and to change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The guidance also requires enhanced disclosures about fair value measurements, including, among other things, (a) for fair value measurements categorized within Level III of the fair value hierarchy, (1) quantitative information about the significant unobservable inputs used in the measurement, and (2) a description of the valuation processes used by the reporting entity, and (3) a narrative description of the sensitivity of the fair value to changes in unobservable inputs and interrelationships between those inputs if a change in those inputs would result in a significantly different fair value measurements and (b) the categorization by level of the fair value hierarchy for items that are not measured at fair value in the statement of assets and liabilities but for which the fair value is required to be disclosed.

The amended guidance is to be applied prospectively and is effective for public entities (like the Fund) for interim and annual periods beginning after December 15, 2011, with early application permitted (but not earlier than interim periods beginning after December 15, 2011). The Fund adopted this guidance on January 1, 2012. As the adoption of this guidance was primarily limited to enhanced disclosures, such adoption did not have a material impact on the Fund's 2012 financial statements.

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 qualification as a RIC, 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 would be taxable to its shareholder as ordinary income. As of March 31, 2012 the Fund had no uncertain tax positions.

The Fund's tax years open to examination by major jurisdictions are 2008 and forward.

3. 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, 2012, the Fund's investments in loans are primarily to companies based within the United States and are diversified among borrowers in the industry segments 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 settle 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 period ended March 31, 2012 and 2011, the weighted-average interest rate on performing loans was 16.62% and 17.59%, respectively. Interest is calculated using the effective interest method, and rates earned by the Fund will fluctuate

based on many factors including early payoffs, volatility of values ascribed to warrants, and loans funded during the year.

Loans as of March 31, 2012 are to non-affiliates and consist of the following:



	Percentage of	Estimated Fair		Par Value		Final
Borrower	Net Assets	Value 3/31/2012		3/31/2012		Maturity Date
Biotechnology
Stem CentRx, Inc.		$	667,604	$	667,604	1/1/2014
Subtotal:	0.7%	$	667,604	$	667,604

Computers & Storage
D-Wave Systems, Inc.		$	927,877	$	927,877	1/1/2014
Nexenta Systems, Inc.		424,797		424,797		5/1/2013
Subtotal:	1.4%	$	1,352,674	$	1,352,674

Enterprise Networking
Vyatta, Inc.		$	191,265	$	191,265	9/1/2012
Subtotal:	0.2%	$	191,265	$	191,265

Internet
Akademos, Inc.		$	500,765	$	500,765	12/1/2013
Blekko, Inc.		1,186,194		1,186,194		2/1/2013
CloudTalk, Inc.		50,105		150,105		*
DisplayLink, Ltd.		784,413		784,413		6/1/2013
Genius.com, Inc.		156,010		156,010		8/1/2013
Insider Guides, Inc.		2,625,494		2,625,494		9/1/2014
Involver, Inc.		562,795		562,795		6/1/2013
Juice in the City, Inc.		255,168		255,168		2/1/2014
LOLapps, Inc.		701,014		701,014		1/1/2014
MMJK, Inc.		539,653		539,653		12/1/2012
Mojo Motors, Inc.		253,585		253,585		6/1/2014
Philotic, Inc.		108,392		108,392		8/1/2013
Plastic Jungle, Inc.		383,431		383,431		11/1/2012
Quantcast Corp.		2,731,516		2,731,516		4/1/2014
Queryable Corp.		285,286		285,286		4/1/2014
Radius Intelligence, Inc.		32,980		32,980		3/1/2014
Rivet Games, Inc.		646,623		1,246,623		*
Rocket Fuel, Inc.		421,372		421,372		3/1/2013
Semantic Sugar, Inc.		45,390		45,390		7/1/2012
Sittercity, Inc.		1,878,181		1,878,181		2/1/2014
Topsy Labs, Inc.		1,954,745		1,954,745		4/1/2015
Ustream, Inc.		2,852,648		2,852,648		1/1/2014
WeddingWire, Inc.		674,129		674,129		2/1/2014
Worktopia, Inc.		25,000		30,000		*
Youku.com, Inc.		1,279,932		1,279,932		7/1/2013
Subtotal:	21%	$	20,934,821	$	21,639,821




Medical Devices
Cayenne Medical, Inc.		$	1,535,853	$	1,535,853	3/1/2014
Cellscape Corp.		86,932		86,932		12/1/2012
ConforMIS, Inc.		5,171,716		5,171,716		5/1/2014
CV Ingenuity Corp.		644,654		644,654		4/1/2014
CyberHeart, Inc.		282,114		562,114		*
iBalance Medical, Inc.		107,255		207,255		*
Intellidx, Inc.		13,941		923,941		*
Oculus Innovative Sciences, Inc.		1,743,524		1,743,524		11/1/2013
Spinal Kinetics, Inc.		923,789		923,789		10/1/2013
Suneva Medical, Inc.		1,155,736		1,155,736		6/1/2013
Xlumena, Inc.		885,351		885,351		5/1/2014
Subtotal:	12.6%	$	12,550,865	$	13,840,865

Other Healthcare
Pathway Genomics Corp.		$	805,174	$	805,174	7/1/2013
Subtotal:	0.8%	$	805,174	$	805,174

Other Technology
Ampulse Corp.		$	1,595,689	$	1,595,689	7/1/2013
Coulomb Technologies, Inc.		768,192		768,192		6/1/2013
Daylight Solutions, Inc.		781,181		781,181		8/1/2013
EcoSMART Technologies, Inc.		2,148,522		2,148,522		10/1/2013
eIQ Energy, Inc.		265,868		265,868		6/1/2013
Lehigh Technologies, Inc.		2,753,426		2,753,426		1/1/2015
PlantSense, Inc.		78,165		166,675		*
Solaria Corp.		2,872,212		2,872,212		9/1/2014
Streamlite, Inc.		3,810,049		3,810,049		12/1/2013
Svaya Nanotechnologies, Inc.		262,098		262,098		6/1/2014
The Climate Corporation		1,941,224		1,941,224		4/1/2013
ZeaChem, Inc.		2,684,186		2,684,186		7/1/2013
Subtotal:	20%	$	19,960,812	$	20,049,322

Security
Dragnet Solutions, Inc.		$	207,553	$	282,553	*
Nevis Networks, Inc.		20,000		263,762		*
TrustedID, Inc.		204,937		233,937		*
Subtotal:	0.4%	$	432,490	$	780,252


Software
AcousticEye, Ltd.		$	490,481	$	660,481	*
Athena Design Systems, Inc.		5,000		52,209		*
Atlantis Computing, Inc.		61,726		61,726		9/1/2012
BlueRoads Corp.		—		811,989		*
ClearPath, Inc.		1,103,180		1,103,180		11/1/2014



Cloudmark, Inc.		1,967,128		1,967,128		2/1/2013
Collarity, Inc.		—		669,821		*
Corduro, Inc.		276,862		366,862		5/1/2014
D Software Inc.		45,451		45,451		1/1/2013
Demandbase, Inc.		266,026		266,026		10/1/2012
EnPrecis, Inc.		84,414		84,414		11/1/2013
Future Point Systems, Inc.		114,883		114,883		5/1/2013
Gazillion, Inc.		1,225,336		1,225,336		8/1/2014
gloStream, Inc.		1,212,432		1,212,432		7/1/2014
Image Vision Labs, Inc.		307,871		307,871		6/1/2014
Intalio, Inc.		1,123,697		1,123,697		2/1/2014
Kareo, Inc.		259,902		259,902		2/1/2014
KIT Digital, Inc.		3,615,403		3,615,403		9/1/2013
Knowledge Adventure, Inc.		146,465		146,465		5/1/2012
Krux Digital, Inc.		352,475		352,475		12/1/2013
Lending Stream, Ltd.		7,795,613		7,795,613		12/1/2014
MarketFish, Inc.		65,306		65,306		9/1/2012
Medsphere Systems Corp.		642,955		642,955		10/1/2012
Mr. Number, Inc.		122,137		122,137		11/1/2012
Palantir Technologies, Inc.		3,850,671		3,850,671		6/1/2013
Queplix Corp.		175,338		350,338		*
RivalWatch, Inc.		182,045		242,045		*
SoundHound, Inc.		628,821		628,821		9/1/2013
Validare, Inc.		152,662		152,662		10/1/2013
Verix, Inc.		828,028		1,108,028		*
XOS Technologies, Inc.		2,189,772		2,189,772		10/1/2014
Xtime, Inc.		291,662		291,662		10/1/2013
Subtotal:	29.6%	$	29,583,742	$	31,887,761

Technology Services
DigitalPath, Inc.		$	979,527	$	979,527	10/1/2014
Subtotal:	1%	$	979,527	$	979,527

Wireless
DeFi Global, Inc.		$	—	$	337,344	*
GPShopper, LLC		178,640		178,640		2/1/2014
July Systems, Inc.		394,796		394,796		9/1/2013
Nextivity, Inc.		1,708,472		1,898,472		*
SandLinks, Inc.		68,984		268,984		*
Silent Communication, Ltd.		258,522		523,522		*

Venturi Wireless, Inc.		302,526		335,526		*
Subtotal:	2.9%	$	2,911,940	$	3,937,284

Total (Cost of $96,131,549):		$	90,370,914	$	96,131,549

* As of March 31, 2012, loans with a cost basis and fair value of $11.3 million and $5.7 million, respectively, have

been classified as nonaccrual. During the period for which these loans have been on non-accrual status, no interest income has been recognized.

Loans as of December 31, 2011 are to non-affiliates and consist of the following:



	Percentage of	Estimated Fair		Par Value		Final
Borrower	Net Assets	Value 12/31/11		12/31/2011		Maturity Date
Biotechnology
Stem CentRx, Inc.		$	751,244	$	751,244	1/1/2014
Subtotal:	0.7%	$	751,244	$	751,244

Computers & Storage
D-Wave Systems, Inc.		$	1,071,662	$	1,071,662	1/1/2014
Nexenta Systems, Inc.		505,729		505,729		5/1/2013
Subtotal:	1.4%	$	1,577,391	$	1,577,391

Enterprise Networking
Vyatta, Inc.		$	277,315	$	277,315	9/1/2012
Subtotal:	0.2%	$	277,315	$	277,315

Internet
Akademos, Inc.		$	556,782	$	556,782	12/1/2013
Blekko, Inc.		1,482,610		1,482,610		2/1/2013
CloudTalk, Inc.		86,148		121,148		10/1/2013
Collarity, Inc.		—		669,821		*
DisplayLink, Ltd.		907,901		907,901		6/1/2013
Fwix, Inc.		38,706		38,706		3/1/2014
Genius.com, Inc.		163,650		163,650		8/1/2013
Insider Guides, Inc.		3,142,283		3,142,283		9/1/2014
Involver, Inc.		670,235		670,235		6/1/2013
Juice in the City, Inc.		282,436		282,436		2/1/2014
LOLapps, Inc.		786,437		786,437		1/1/2014
MGEL, Inc.		218,350		218,350		1/1/2013
MMJK, Inc.		692,304		692,304		12/1/2012
Mojo Motors, Inc.		278,897		278,897		6/1/2014
Philotic, Inc.		136,428		136,428		8/1/2013
Plastic Jungle, Inc.		565,919		565,919		11/1/2012
Quantcast Corp.		3,284,405		3,284,405		4/1/2014
Queryable Corp.		314,214		314,214		4/1/2014
Rivet Games, Inc.		1,415,200		1,415,200		8/1/2014
Rocket Fuel, Inc.		514,972		514,972		3/1/2013
Semantic Sugar, Inc.		75,640		75,640		7/1/2012
Sittercity, Inc.		2,128,481		2,128,481		2/1/2014
Topsy Labs, Inc.		2,128,724		2,128,724		12/1/2014
Ustream, Inc.		3,343,372		3,343,372		1/1/2014
WeddingWire, Inc.		757,101		757,101		2/1/2014
Worktopia, Inc.		25,000		30,000		*



Youku.com, Inc.		1,495,657		1,495,657		7/1/2013
Subtotal:	22.5%	$	25,491,852	$	26,201,673

Medical Devices
Cayenne Medical, Inc.		$	1,693,997	$	1,693,997	3/1/2014
Cellscape Corp.		123,323		123,323		12/1/2012
ConforMIS, Inc.		6,440,740		6,440,740		5/1/2014
CV Ingenuity Corp.		732,687		732,687		4/1/2014
CyberHeart, Inc.		382,114		562,114		*
iBalance Medical, Inc.		133,903		233,903		*
Intellidx, Inc.		33,791		923,791		*
Oculus Innovative Sciences, Inc.		1,977,151		1,977,151		11/1/2013
Spinal Kinetics, Inc.		1,066,967		1,066,967		10/1/2013
Suneva Medical, Inc.		1,381,455		1,381,455		6/1/2013
Xlumena, Inc.		974,529		974,529		5/1/2014
Subtotal:	13.2%	$	14,940,657	$	16,110,657

Other Healthcare
Pathway Genomics Corp.		$	1,047,635	$	1,047,635	7/1/2013
Subtotal:	0.9%	$	1,047,635	$	1,047,635

Other Technology
Ampulse Corp.		$	1,878,268	$	1,878,268	7/1/2013
Coulomb Technologies, Inc.		890,910		890,910		6/1/2013
Daylight Solutions, Inc.		974,696		974,696		8/1/2013
EcoSMART Technologies, Inc.		2,547,275		2,547,275		10/1/2013
eIQ Energy, Inc.		308,653		308,653		6/1/2013
Lehigh Technologies, Inc.		2,974,106		2,974,106		10/1/2014
PlantSense, Inc.		—		453,509		*
Sezmi Corp.		52,609		52,609		2/1/2012
Solaria Corp.		3,094,938		3,094,938		9/1/2014
Streamlite, Inc.		4,447,139		4,447,139		12/1/2013
Svaya Nanotechnologies, Inc.		288,548		288,548		6/1/2014
The Climate Corp.		2,295,289		2,295,289		4/1/2013
ZeaChem, Inc.		3,115,900		3,115,900		7/1/2013
Subtotal:	20.1%	$	22,868,331	$	23,321,840

Security
Dragnet Solutions, Inc.		$	216,921	$	291,921	*
Nevis Networks, Inc.		—		263,762		*
TrustedID, Inc.		204,937		233,937		*
Subtotal:	0.4%	$	421,858	$	789,620

Software
AcousticEye, Ltd.		$	490,481	$	660,481	*
Athena Design Systems, Inc.		—		53,849		*
Atlantis Computing, Inc.		87,558		87,558		9/1/2012



BlueRoads Corp.		—		811,989		*
ClearPath, Inc.		957,109		957,109		6/1/2014
Cloudmark, Inc.		2,414,733		2,414,733		2/1/2013
Cloudshare, Inc.		312,528		312,528		2/1/2012
Corduro, Inc.		247,565		337,565		12/1/2013
D Software Inc.		54,630		54,630		1/1/2013
Demandbase, Inc.		348,734		348,734		10/1/2012
EnPrecis, Inc.		94,320		94,320		11/1/2013
Future Point Systems, Inc.		129,783		129,783		*
Gazillion, Inc.		1,348,862		1,348,862		8/1/2014
gloStream, Inc.		1,306,878		1,306,878		5/1/2014
Image Vision Labs, Inc.		337,251		337,251		6/1/2014
Intalio, Inc.		1,254,570		1,254,570		2/1/2014
Kareo, Inc.		287,673		287,673		2/1/2014
KIT Digital, Inc.		4,129,869		4,129,869		9/1/2013
Knowledge Adventure, Inc.		304,546		304,546		5/1/2012
Krux Digital, Inc.		392,575		392,575		12/1/2013
Lending Stream, Ltd.		8,199,735		8,199,735		12/1/2014
MarketFish, Inc.		89,354		89,354		9/1/2012
Medsphere Systems Corp.		995,334		995,334		10/1/2012
Mr. Number, Inc.		164,326		164,326		11/1/2012
Palantir Technologies, Inc.		4,832,117		4,832,117		6/1/2013
Queplix Corp.		196,838		346,838		*
RivalWatch, Inc.		187,982		247,982		*
SoundHound, Inc.		712,638		712,638		9/1/2013
Validare, Inc.		172,028		172,028		10/1/2013
Verix, Inc.		828,028		1,108,028		*
XOS Technologies, Inc.		2,392,461		2,392,461		10/1/2014
Xtime, Inc.		336,715		336,715		10/1/2013
Subtotal:	29.6%	$	33,607,221	$	35,223,059

Technology Services
DigitalPath, Inc.		$	1,068,954	$	1,068,954	10/1/2014
Subtotal:	0.9%	$	1,068,954	$	1,068,954

Wireless
Cellfire, Inc.		$	18,389	$	18,389	1/1/2012
DeFi Global, Inc.		—		337,344		*
GPShopper, LLC		196,750		196,750		2/1/2014
July Systems, Inc.		479,008		479,008		9/1/2013
Nextivity, Inc.		1,708,472		1,898,472		*
SandLinks, Inc.		68,984		268,984		*
Silent Communication, Ltd.		423,522		523,522		*
Venturi Wireless, Inc.		302,527		335,527		*
Subtotal:	2.8%	$	3,197,652	$	4,057,996

Total (Cost of $110,427,384):	92.7%	$	105,250,110	$	110,427,384

*As of December 31, 2011, loans with a cost basis and fair value of $10.4 million and $5.3 million, respectively, have been classified as nonaccrual. 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. At March 31, 2012, and December 31, 2011, the Fund had unexpired unfunded commitments to borrowers of $0.1 million and 4.5 million, respectively.

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.

Transfer of investments between levels of the fair value hierarchy were recorded on the actual date of the event or change in circumstances that caused the transfer. There were no transfers in and out of Level 1, 2, and 3 during the period ended March 31, 2012.

The Fund's cash equivalents were valued at the traded 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, 2012 and December 31, 2011 measured at fair value on a recurring basis:



As of March 31, 2012	Level 1		Level 3		Total
ASSETS:
Loans to borrowers	$	—	$	90,370,914	$	90,370,914
Other investments	—		26,696		26,696
Cash equivalents	8,947,815		—		8,947,815
Total	$	8,947,815	$	90,397,610	$	99,345,425



As of December 31, 2011	Level 1		Level 3		Total
ASSETS:
Loans to borrowers	$	—	$	105,250,110	$	105,250,110
Other investment	—		29,513		29,513
Cash equivalents	7,657,584		—		7,657,584
Total	$	7,657,584	$	105,279,623	$	112,937,207

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, 2012
	Loans to borrowers			Other investment			Warrants			Stock		Convertible Notes
Beginning balance	$	105,250,110		$	29,513		$	—		$	—	$	—
Acquisitions and originations	409,602			—			377,976			—		—
Additional investments	—			835			—			—		—
Principal reductions	(14,705,438		)	(3,652		)	—			—		—
Distribution to shareholder	—			—			(377,976		)	—		—
Net change in unrealized gain(loss) from investments	(583,360		)	—			—			—		—
Ending balance	$	90,370,914		$	26,696		$	—		$	—	$	—



	For the Three Months Ended
	March 31, 2011
	Loans to borrowers			Other investment			Warrants		Stock		Convertible Notes
Beginning balance	$	137,614,630		$	283,202		$	—	$	—	$	—
Acquisitions and originations	24,070,510			—			1,932,514		257,884		97,881
Additional investments	—			—			—		—		—
Principal reductions	(17,698,259		)	(8,411		)	—		—		—
Distribution to shareholder	—			—			(1,932,514)		(1,111,639)		(97,881)
Conversion of note to stock	—			(250,000		)	—		250,000		—
Conversion of receivable to stock	—			—			—		1,595		—
Net change in unrealized gain (loss) from investments	1,386,488			—			—		—		—
Net realized gain (loss) from investments	(735,009		)	—			—		602,160		—
Ending balance	$	144,638,360		$	24,791		$	—	$	—	$	—

4. 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.

5. CAPITAL STOCK

As of March 31, 2012 and December 31, 2011, 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 $270.0 million. Total contributed capital to the Company through March 31, 2012 and December 31, 2011 was $202.5 million, of which $193.5 million was contributed to the Fund.

The chart below shows the distributions of the Fund for the three months ended March 31, 2012 and 2011.



	For the Three Months Ended		For the Three Months Ended
	March 31, 2012		March 31, 2011
Cash distributions	$	16,000,000	$	7,000,000
Distributions of equity securities	377,976		3,142,033

Total distributions to shareholder	$	16,377,976	$	10,142,033

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.

6. DEBT FACILITY

On February 20, 2009, the Fund entered into agreements with Union Bank, N.A. that established a secured revolving loan facility in an initial amount of up to $30,000,000. Loans under the facility may have been, at the option of the Fund, either Reference Rate loans or LIBOR loans. The interest rate on this facility was LIBOR plus 2.50 percent or Reference Rate (as defined in the agreement) plus 0.75 percent. The facility terminated on February 18, 2011. The balance of the Fund's outstanding debt as of December 31, 2011 and March 31, 2012 was zero.

The Fund paid a commitment fee of 0.40 percent (annual fee paid quarterly) based on the total commitment related to the facility.

Bank fees of $155,000 were incurred in connection with initially procuring the facility. Legal costs of $139,963 were incurred in negotiating the facility. Prior to the termination of the facility, both the bank fees and the legal costs were being capitalized on a straight line basis over the expected life of the facility (February 2011). The facility terminated in February 2011 and all bank fees and legal costs are fully amortized.

7. OTHER INVESTMENTS

Other Investment at March 31, 2012 is comprised of an interest in Sensors Licensing, LLC ("SL LLC").

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 SL LLC, a newly formed LLC in conjunction with a licensing agreement between SL LLC and an unaffiliated third party. The Fund and Venture Lending & Leasing IV, 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 during 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, 2012 is $26,696.

8. 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, 2012 and 2011. 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			For the Three Months Ended
	March 31, 2012			March 31, 2011

Total return*	10.72		%	15.07		%

Per share amounts:
Net asset value, beginning of period	$	1,135.20		$	1,637.21
Net investment income	33.18			47.78
Net change in unrealized and realized gain (loss) from investments	(5.83		)	12.53
Net increase (decrease) in net assets from operations	27.35			60.31
Return of capital to shareholder	(130.61		)	(54.97		)
Income distributions to shareholder	(33.18		)	(46.45		)

Net asset value, end of period	$	998.76		$	1,596.10

Net assets, end of period	$	99,876,437		$	159,609,673

Ratios to average net assets:

Expenses *	2.97		%	2.85		%
Net investment income *	12.86		%	11.82		%
* 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 V, 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 the 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 V, 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 expected to become 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 February 21, 2007, the Fund completed its first closing of capital contributions, 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 under the Internal Revenue Code with the filing of its federal corporate income tax return for 2007. 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 Regulated Investment Company (“RIC”) under the Internal Revenue Code. If the Fund fails to meet these requirements, it would be taxed as an ordinary corporation on its taxable income for that year (even if that income were distributed to the Company) and all distributions out of its earnings and profits would be taxable to the Members of the Company as ordinary income; thus, such income would 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 borrowers' ability to repay their loans may be adversely impacted by a number of factors, and as a result, loans 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.

Transactions with Venture Lending & Leasing VI, Inc. (“Fund VI”)

The Manager also serves as investment manager for Fund VI. Initially the amount of each Investment has been allocated 50% to the Fund and 50% to Fund VI so long as the Fund has capital available to invest. After February 2011, the Fund is no longer permitted to enter into new commitments to borrowers; however, the Fund is permitted to fund existing commitments. While investing the Fund's capital in the same companies in which Fund VI is also investing should provide the Fund with greater diversification and access to larger transactions, it can also result in a slower pace of investment than would be the case if the Fund were investing in companies by itself.

Critical Accounting Policies

We identified and determined the most critical accounting principles upon which our financial statements depend by considering accounting policies that involve the most complex or subjective decisions or assessments. Such 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, 2011 (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 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, 2012 and 2011

Total investment income for the three months ended March 31, 2012 and 2011 was $4.1 million and $5.9 million, respectively, which primarily consisted of interest on the venture loans outstanding. The remaining income consisted of interest and dividends on the temporary investment of cash, late fees and fees earned from waivers to loan agreements. The decrease in investment income is due to the decrease in the average loans outstanding from $134.4 million for the three months ended March 31, 2011 to $92.3 million for the three months ended March 31, 2012 and the decrease in average yield from 17.59% for the three months ended March 31, 2011 to 16.62% for the three months ended March 31, 2012, which is not unexpected at this stage of the life of the Fund.

Management fees for the three months ended March 31, 2012 and 2011 were $0.6 million and $1.0 million, respectively. Management fees are equal to 2.5% of assets under management. As management fees are based on assets under management, the decrease is due to the decrease in assets under management relative to the previous year.

Total interest expense for the three months ended March 31, 2012 and 2011 were $0 and less than $0.1 million. In 2011, no debt was drawn and the interest expense is composed of fees associated with the facility.

Total banking and professional fees for the three months ended March 31, 2012 and 2011 were $0.1 million and

less than $0.1 million, respectively.

Total other operating expenses for the three months ended March 31, 2012 and 2011 were less than $0.1 million.

Net investment income for the three months ended March 31, 2012 and 2011 was $3.3 million and $4.8 million, respectively.

Total net realized loss from investments was $0 and $0.1 million for the three months ended March 31, 2012 and 2011, respectively.

Net change in unrealized gain (loss) from investments was $(0.6) million and $1.4 million for the three months ended March 31, 2012 and 2011, respectively. The unrealized gain (loss) consists of fair market value adjustments to loans.

Net increase in net assets resulting from operations for the three months ended March 31, 2012 and 2011 was $2.7 million and $6.0 million, respectively. On a per share basis, the net increase in net assets resulting from operations was $27.35 and $60.31 for the three months ended March 31, 2012 and 2011, respectively.

Liquidity and Capital Resources - March 31, 2012 and December 31, 2011

Total capital contributed to the Fund was $193.5 million, prior to distribution of capital, as of March 31, 2012 and December 31, 2011. Committed capital to the Company at March 31, 2012 and December 31, 2011 was $270.0 million, of which $202.5 million has been called. The remaining $67.5 million in committed capital as of March 31, 2012 remains uncalled. On December 9, 2011, the Fund's board resolved that no future capital calls would be made, thus the Fund no longer has access to additional capital from investors.

As of March 31, 2012 and December 31, 2011, 8.9% and 6.7%, respectively, of the Fund's assets consisted of cash and cash equivalents. The Fund invested its assets in venture loans during the three months ended March 31, 2012 and 2011. Amounts disbursed under the Fund's loan commitments totaled approximately $0.4 million during the three months ended March 31, 2012. Net loan amounts outstanding after amortization and fair market adjustment decreased by approximately $14.9 million for the same period. Unexpired, unfunded commitments totaled approximately $0.1 million as of March 31, 2012.



As of	Cumulative Amount Disbursed	Principal Reductions and Fair Market Adjustments	Balance Outstanding – Fair Value	Unexpired Unfunded Commitments
March 31, 2012	$450.6 million	$360.2 million	$90.4 million	$0.1 million
December 31, 2011	$450.2 million	$344.9 million	$105.3 million	$4.5 million

Venture loans are privately negotiated transactions. Investments in these assets are relatively illiquid. It is the Fund's experience that not all unfunded commitments will be used by borrowers.

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'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 net income for the three months ended March 31, 2012. 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.

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

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 2011 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 February 21, 2007, the Fund sold 100,000 shares to the Fund's sole shareholder, Venture Lending & Leasing V, LLC for $25,000 in September 2006. No other shares of the Fund have been sold; however, the Fund received an additional $193.5 million of paid in capital during the period from February 21, 2007 through March 31, 2012 which has been and will be used to acquire venture loans and fund operations.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Issues

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits



Exhibit Number	Description
3(i)	Articles of Incorporation of the Fund as filed with the Maryland Secretary of State on August 21, 2006, incorporated by reference to the Fund's Form 10 filed with the Securities and Exchange Commission on October 10, 2006.
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 October 10, 2006.
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 V, INC.
(Registrant)
		Chairman and Chief Executive Officer
By:	/s/ Maurice C. Werdegar	By:	/s/ Martin D. Eng
Maurice C. Werdegar		Martin D. Eng
President and Chief Executive Officer		Chief Financial Officer
Date:	May 11, 2012	Date:	May 11, 2012

EXHIBIT INDEX



Exhibit Number	Description
3(i)	Articles of Incorporation of the Fund as filed with the Maryland Secretary of State on August 21, 2006, incorporated by reference to the Fund's Form 10 filed with the Securities and Exchange Commission on October 10, 2006.
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 October 10, 2006.
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:


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


2.	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;


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 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 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;


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 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.


5.	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):


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.

Date: May 11, 2012

/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:


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


2.	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;


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 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 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;


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 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.


5.	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):


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.

Date: May 11, 2012

/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 V, Inc. (the "Fund") on Form 10-Q for the period ending March 31, 2012 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 11, 2012

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 V, Inc. (the "Fund") on Form 10-Q for the period ending March 31, 2012 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 11, 2012

Venture Lending & Leasing V, Inc. - FORM 10-Q - May 11, 2012

Venture Lending & Leasing V, Inc. Reports