Venture Lending & Leasing VII, Inc. - FORM 10-Q

Attached files

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EX-32.2 - VLL7INC 10-Q 06.30.18 EXHIBIT 32.2 - Venture Lending & Leasing VII, Inc.	vll710q06302018ex322.htm
EX-32.1 - VLL7INC 10-Q 06.30.18 EXHIBIT 32.1 - Venture Lending & Leasing VII, Inc.	vll710q06302018ex321.htm
EX-31.2 - VLL7INC 10-Q 06.30.18 EXHIBIT 31.2 - Venture Lending & Leasing VII, Inc.	vll710q063018ex312.htm
EX-31.1 - VLL7INC 10-Q 06.30.18 EXHIBIT 31.1 - Venture Lending & Leasing VII, Inc.	vll710q063018ex311.htm

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 June 30, 2018



[ ]	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 814-00969

Venture Lending & Leasing VII, Inc.

(Exact Name of Registrant as specified in its charter)



Maryland	45-5589518
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

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

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



Large accelerated filer [ ]	Accelerated filer [ ]	Non-accelerated filer [x]	Smaller reporting company [ ]



Emerging growth company [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act [ ]

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 August 14, 2018
Common Stock, $.001 par value		100,000

VENTURE LENDING & LEASING VII, INC.

INDEX



PART I — FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Statements of Assets and Liabilities (Unaudited)
	As of June 30, 2018 and December 31, 2017

	Condensed Statements of Operations (Unaudited)
	For the three and six months ended June 30, 2018 and 2017

	Condensed Statements of Changes in Net Assets (Unaudited)
	For the six months ended June 30, 2018 and 2017

	Condensed Statements of Cash Flows (Unaudited)
	For the six months ended June 30, 2018 and 2017

	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 Disclosures

Item 5.	Other Information

Item 6.	Exhibits

SIGNATURES

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

VENTURE LENDING & LEASING VII, INC.

CONDENSED STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)

AS OF JUNE 30, 2018 AND DECEMBER 31, 2017



	June 30, 2018			December 31, 2017
ASSETS
Loans, at estimated fair value
(cost of $331,922,075 and $350,356,204)	$	305,555,613		$	325,189,783
Derivative asset - swap	540,268			—
Cash and cash equivalents	5,215,051			4,931,102
Other assets	4,674,922			6,149,703

Total assets	315,985,854			11,080,805

LIABILITIES
Borrowings under debt facility	133,400,000			121,000,000
Accrued management fees	1,974,912			2,101,691
Accounts payable and other accrued liabilities	568,636			511,880

Total liabilities	135,943,548			123,613,571

NET ASSETS	$	180,042,306		$	(112,532,766	)

Analysis of Net Assets:

Capital paid in on shares of capital stock	$	322,645,000		$	321,025,000
Net unrealized depreciation on investments	(25,826,195		)	(25,167,021		)
Distribution in excess of net investment income	(116,776,499		)	(83,200,962		)
Net assets (equivalent to $1,800.42 and $2,126.57 per share based on 100,000 shares of capital stock outstanding - See Note 6 and Note 11)	$	180,042,306		$	212,657,017

Commitments & Contingent Liabilities:
Unfunded unexpired commitments (See Note 4)	$	500,000		$	67,050,000

See notes to condensed financial statements

VENTURE LENDING & LEASING VII, INC.

CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2018 AND 2017



	For the Three Months Ended June 30, 2018			For the Three Months Ended June 30, 2017			For the Six Months Ended June 30, 2018			For the Six Months Ended June 30, 2017


INVESTMENT INCOME:
Interest on loans	$	12,837,659		$	13,615,073		$	24,269,673		$	25,326,820
Other interest and other income	48,544			48,676			70,971			62,674
Total investment income	12,886,203			13,663,749			24,340,644			25,389,494

EXPENSES:
Management fees	1,974,912			2,313,852			4,104,619			4,556,836
Interest expense	1,627,174			2,004,659			3,050,505			3,872,014
Banking and professional fees	70,127			113,230			218,545			257,261
Other operating expenses	29,988			336,859			61,474			372,832
Total expenses	3,702,201			4,768,600			7,435,143			9,058,943
Net investment income	9,184,002			8,895,149			16,905,501			16,330,551

Net realized loss from investments	(1,683,556		)	(3,179,256		)	(2,078,694		)	(6,784,147		)
Net change in unrealized gain (loss) from investments	1,322,492			(3,224,533		)	(659,173		)	(330,350		)
Net realized and change in unrealized loss from investments	(361,064		)	(6,403,789		)	(2,737,867		)	(7,114,497		)
Net increase in net assets resulting from operations	$	8,822,938		$	2,491,360		$	14,167,634		$	9,216,054

Amount per common share:
Net increase in net assets resulting from operations per share	$	88.23		$	24.91		$	141.68		$	92.16
Weighted average shares outstanding	100,000			100,000			100,000			100,000

See notes to condensed financial statements

VENTURE LENDING & LEASING VII, INC.

CONDENSED STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2018 AND 2017



	For the Six Months Ended June 30, 2018			For the Six Months Ended June 30, 2017
Net increase in net assets resulting from operations:
Net investment income	$	16,905,501		$	16,330,551
Net realized loss from investments	(2,078,694		)	(6,784,147		)
Net change in unrealized loss from investments	(659,173		)	(330,350		)

Net increase in net assets resulting from operations	14,167,634			9,216,054

Distributions of income to shareholder	(14,826,807		)	(9,546,403		)
Return of capital to shareholder	(33,575,538		)	(2,150,848		)
Contributions from shareholder	1,620,000			26,500,000
Increase (decrease) in capital transactions	(46,782,345		)	14,802,749

Total increase (decrease) in net assets	(32,614,711		)	24,018,803

Net assets
Beginning of period	212,657,017			183,522,710

End of period (Undistributed net investment income of $0 and $0)	$	180,042,306		$	207,541,513

See notes to condensed financial statements.

VENTURE LENDING & LEASING VII, INC.

CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2018 AND 2017



	For the Six Months Ended June 30, 2018			For the Six Months Ended June 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net increase in net assets resulting from operations	$	14,167,634		$	9,216,054
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used in) operating activities:
Net realized loss from investments	2,078,694			6,784,147
Net change in unrealized loss from investments	659,173			330,350
Amortization of deferred costs and fees related to borrowing facility and interest rate cap agreements	187,185			866,764
Net (increase) decrease in other assets	1,287,595			(1,163,599		)
Net increase (decrease) in accounts payable, other accrued liabilities, and accrued management fees	(69,423		)	615,641
Origination of loans	(51,000,000		)	(145,102,500		)
Principal payments on loans	67,065,326			82,506,247
Acquisition of equity securities	(1,389,939		)	(11,099,033		)
Net cash provided by (used in) operating activities	32,986,245			(57,045,929		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions to shareholder	(46,600,000		)	—
Contributions from shareholder	1,620,000			26,500,000
Borrowings under debt facility	23,400,000			51,000,000
Repayment of debt facility	(11,000,000		)	(20,000,000		)
Payment received from interest rate caps	—			225,509
Payment made for interest rate swap	(122,829		)	—
Payment received from interest rate swap	533			—
Net cash provided by (used in) financing activities	(32,702,296		)	57,725,509
Net increase in cash and cash equivalents	283,949			679,580
CASH AND CASH EQUIVALENTS:
Beginning of period	4,931,102			8,779,375
End of period	$	5,215,051		$	9,458,955
SUPPLEMENTAL DISCLOSURES:
CASH PAID DURING THE PERIOD:
Interest	$	2,737,541		$	3,248,418
Settlement under interest rate swap agreement	$	122,829		$	—
NON-CASH OPERATING AND FINANCING ACTIVITIES:
Distributions of equity securities to shareholder	$	1,802,345		$	11,697,251
Receipt of equity securities as repayment of loans	$	412,406		$	598,218

See notes to condensed financial statements

VENTURE LENDING & LEASING VII, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)


1.	ORGANIZATION AND OPERATIONS OF THE FUND

Venture Lending & Leasing VII, Inc. (the “Fund”), was incorporated in Maryland on June 21, 2012 as a non-diversified 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, (“Manager” or “Management”). The Fund will be dissolved on December 31, 2022 unless an election is made to dissolve earlier by the Board of Directors of the Fund (the “Board”). One hundred percent of the stock of the Fund is held by Venture Lending & Leasing VII, LLC (the “Company”). Prior to commencing its operations on December 18, 2012, 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 July 2012. This issuance of stock was a requirement to apply for a finance lender’s license from the California Commissioner of Corporations, which was obtained on September 20, 2012.

The Fund’s investment objective is to achieve a superior risk adjusted investment return and seeks to achieve that objective by providing debt financing to portfolio companies; most of which are private. The Fund generally received warrants to acquire equity securities in connection with its portfolio investments and distributes these warrants to its shareholder upon receipt. The Fund also has guidelines for the percentage of total assets which will be invested in different types of assets. The portfolio investments of the Fund primarily consist of debt financing to early and late stage venture capital-backed technology companies.

In the Manager’s opinion, the accompanying condensed interim financial statements (hereafter referred to as “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 Generally Accepted Accounting Principles in the United States of America (“GAAP”) 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 six months ended June 30, 2018 are not necessarily indicative of what the results would be for a full year. These financial statements should 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, 2017.


2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The preparation of financial statements in conformity with GAAP 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. Certain prior year amounts have been reclassified to conform to the current year presentation.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand and cash equivalents with maturities of 90 days or less. Included in this are money market mutual funds that are valued at their most recently traded price prior to the valuation date. Within cash and cash equivalents, as of June 30, 2018, the Fund held $5,215,051 units in the Blackrock Treasury Trust Institutional Fund at $1 per unit at a yield of 1.66%, which represents approximately 2.90% of the net assets of the Fund.

Interest Income

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

Investment 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 those valuation methods.

The Fund’s loans are valued coincident 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 submits to the Board a valuation report and valuation notes, which details the rationale for the valuation of each investment.

As of June 30, 2018 and December 31, 2017, the financial statements include nonmarketable investments of $305.6 million and $325.2 million, respectively (or 96.70% of total assets for both periods), 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 readily available market for the securities existed, and the differences could be material. Below is the information used by the Manager in making these estimates.

Loans

The Fund defines fair value as the price that would be received to sell an asset or paid to lower a liability in an orderly transaction between market participants at the measurement date. Because there is no readily available market price and no secondary market for substantially all of the debt investments made by the Fund into borrowing portfolio companies, Management determines fair value based on hypothetical markets, and several factors related to each borrower, 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, and an evaluation of the general interest rate environment. The amount of any valuation adjustment considers estimated amount and timing of cash payments of principal and interest from the borrower and/or liquidation analysis and 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. Management has evaluated these factors and has concluded that together, the effect of deterioration in the quality of the underlying collateral, increase in the size of the loan, increase in the estimated time to recovery and increase in the hypothetical market coupon rate would have the effect of lowering the value of the current portfolio of loans.

Non-accrual Loans

The Fund’s policy is to classify a loan as non-accrual when the portfolio company is delinquent for three consecutive months on its monthly loan payments, or in the opinion of Management, either ceases or drastically curtails its operations and Management deems that it is unlikely that the loan will return to performing status. When a loan is placed on non-accrual status, all interest previously accrued but not collected is reversed for the quarter in which the loan was placed on non-accrual status. Any uncollected interest related to quarters prior to when the loan was placed on non-accrual 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 non-accrual loans will be recognized as interest income if and when the proceeds received exceed the book value of the respective loan.

If a borrower of a non-accrual loan resumes making regular payments and Management believes that such borrower has regained the ability to service the loan on a sustainable basis, the loan is reclassified back to accrual, or performing status. Interest that would have been accrued during the non-accrual status will be added back to the remaining payment schedule causing a change in the effective interest rate.

As of June 30, 2018, loans with a cost basis of $38.1 million and a fair value of $11.7 million have been classified as non-accrual. As of December 31, 2017 loans with a cost basis of $35.5 million and a fair value of $11.4 million were classified as non-accrual.

Warrants and Equity Securities

Warrants and equity securities that are received in connection with loan transactions will be measured at fair value at the time of acquisition. Warrants are valued based on a modified Black-Scholes option pricing model which considers among several factors, the underlying stock value, expected term, volatility, and the risk-free interest rate. It is anticipated that such securities will be distributed by the Fund to the Company simultaneously with, or shortly following, their acquisition.

The 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 portfolio 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 portfolio company’s industry for a period approximating the expected life of the warrants. A hypothetical increase in the volatility of the warrants 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 terminated 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. For the six months ended June 30, 2018 and 2017, the Fund assumed the average duration of a warrant is 3.5 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. 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.

The Fund engages an independent valuation company to provide valuation assistance with respect to the warrants received as part of loan consideration, including an evaluation of the Fund’s valuation methodology and the reasonableness of the assumptions used from the perspective of a market participant. The independent valuation company also calculates several of the inputs used, such as volatility and risk-free rate.

Other Assets and Liabilities

Other Assets include costs incurred in conjunction with borrowings under the Fund’s debt facility and are stated at initial cost. Those costs are capitalized and then amortized over the term of the facility.

As of June 30, 2018 and December 31, 2017, the fair values of Other Assets and Liabilities are estimated at their carrying values because of the short-term nature of these assets or liabilities.

As of June 30, 2018 and December 31, 2017, based on borrowing rates available to the Fund, the estimated fair values of the borrowings under the debt facility were $133.4 million and $121.0 million, respectively.

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.

Deferred Bank Fees

The deferred bank fees and costs associated with the debt facility are included in Other Assets in the Condensed Statement of Assets and Liabilities and are being amortized over the estimated life of the facility, which currently is on October 30, 2022. The amortization of these costs is recorded as interest expense in the Condensed Statements of Operations.

Interest Rate Cap Agreements

The Fund had entered into interest rate cap agreements which were primarily valued on the basis of the future

expected interest rates on the remaining notional principal balance. This methodology was comparable to what a prospective

acquirer would use in determining the amount they would pay on the measurement date. Valuation pricing models utilized

to fair value the caps consider inputs such as forward rates, anticipated interest rate volatility relating to the reference rate,

as well as time value and other factors underlying cap instruments. The interest rate cap contracts were recorded in the

Condensed Statement of Assets and Liabilities at the estimated fair value. Subsequent changes in fair value were recorded

in the Net change in unrealized gain (loss) from investments in the Condensed Statements of Operations and the quarterly

interest received on the interest rate cap contracts, if any, was recorded in Net realized gain (loss) from investments in the

Condensed Statements of Operations. The monthly interest received or paid on the interest rate cap contracts, if any, were recorded in Net realized gain (loss) from investments in the Statements of Operations. The interest rate cap agreements expired in November 2017.

Interest Rate Swap Agreement

The Fund has entered into a cancellable interest rate swap agreement to hedge its interest rate on its expected borrowings under its loan facility (see Note 9). Cancellable interest rate swaps are primarily valued on the basis of quotes obtained from brokers and dealers and adjusted for counterparty risk and the optionality to terminate the swap early. The valuation of the swap agreement also considers the future expected interest rates on the notional principal balance remaining which is comparable to what a prospective acquirer would pay on the measurement date. Valuation pricing models consider inputs such as forward rates, anticipated interest rate volatility relating to the reference rate, as well as time value and other factors underlying swap instruments. The contract is recorded at fair value in either Other assets or Other current liabilities in the Statements of Assets and Liabilities, depending on whether the value of the contract is in favor of the Fund or the counterparty. The changes in fair value are recorded in Net realized and change in unrealized gain (loss) from investments in the Statements of Operations and the quarterly interest received or paid on the interest rate swap contract, if any, will be recorded in Net realized gain (loss) from investments in the Condensed Statements of Operations. The interest rate swap agreement terminates on December 1, 2020 with an option to terminate the swap early on June 1, 2020.

Recent Accounting Pronouncements

In October 2016, the Securities and Exchange Commission (“SEC”) adopted new rules and forms and amended other rules to enhance the reporting and disclosure of information by registered investment companies. As part of these changes, the SEC amended Regulation S-X to standardize and enhance disclosures in investment company financial statements. Implementation of the new or amended rules is required for reporting periods ending after August 1, 2017. The Fund has reviewed the requirements and adopted the amendments to Regulation S-X to provide the required disclosure in Footnote 8 - Interest Rate Cap Agreement and Footnote 9 - Cancellable Interest Rate Swap Agreement for the periods presented.

In November 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-18, “Statement of Cash Flows (topic 230): Restricted Cash, a consensus of the FASB Emerging Issues Task Force,” which requires that a statement of cash flows explain the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-the-period and end-of-the-period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for annual reporting periods, and the interim periods within those periods, beginning after December 15, 2017. We do not believe that ASU 2016-18 will have a material impact on our financial statements and disclosures.


3.	SCHEDULES OF INVESTMENTS

As of June 30, 2018, all loans were made to non-affiliates as follows (unaudited):



Borrower	Percentage of Net Assets		Estimated Fair Value 6/30/2018		Par Value 6/30/2018	Final Maturity Date
Biotechnology
Phylagen, Inc.		$	267,954	$	267,954	03/01/2020
Subtotal	0.1%	$	267,954	$	267,954

Computers & Storage
Canary Connect, Inc.		$	1,995,566	$	3,467,699	*
HyperGrid, Inc.			764,475		764,475	12/01/2019
Rigetti & Co., Inc.			2,165,610		2,165,610	01/01/2020
Subtotal	2.7%	$	4,925,651	$	6,397,784

Internet
Amino Payments, Inc.		$	732,088	$	732,088	03/01/2021
Apartment List, Inc			742,152		742,152	11/01/2019
Betaworks Studio, LLC.**			348,895		348,895	07/01/2018
Bitfinder, Inc.			437,850		437,850	09/01/2020
Bombfell, Inc.			958,944		958,944	04/01/2021
CapLinked, Inc.			119,257		119,257	01/01/2019
Cowboy Analytics, ApS, Inc.			132,812		380,000	*
CustomMade Ventures Corp.			692,526		692,526	*
Deja Mi, Inc.			50,000		803,288	*
Digital Caddies**			0		987,584	*
Dinner Lab			0		280,299	*
DreamCloud Holdings, LLC			761,075		761,075	08/01/2020
Eventbite, Inc.			27,021,449		27,021,449	09/01/2022
Giddy Apps			0		999,454	*
Glide, Inc.**			189,962		4,298,955	*
Handy Technologies, Inc.			4,794,909		4,794,909	12/01/2020
Homelight, Inc.			524,810		524,810	12/01/2019
Honk Technologies, Inc.			1,689,882		1,689,882	05/01/2020
Leading ED			0		76	*
Placester, Inc.			1,497,402		1,497,402	10/01/2019
Playstudios, Inc.			1,111,777		1,111,777	03/01/2021
Radius Intelligence, Inc.			7,048,708		7,048,708	10/01/2021



Borrower	Percentage of Net Assets		Estimated Fair Value 6/30/2018		Par Value 6/30/2018	Final Maturity Date
Relay Network, LLC			1,768,369		1,768,369	09/01/2020
SocialChorus, Inc.			112,973		112,973	09/01/2018
Spot.IM, Ltd.**			673,843		673,843	05/01/2020
Super Home, Inc.			79,469		79,469	03/01/2019
Tango Card, Inc.			1,414,079		1,414,079	11/01/2020
Thrive Market, Inc.			3,612,543		3,612,543	09/01/2019
Tictail, Inc.			1,028,390		1,028,390	05/01/2021
TouchofModern, Inc.			3,415,540		3,415,540	05/01/2020
Traackr, Inc.			216,466		216,466	04/01/2019
WHI INC			48,191		1,115,653	*
YouDocs Beauty, Inc.			1,192,024		1,192,024	*
Subtotal	34.7%	$	62,416,385	$	70,860,729

Medical Devices
Anutra Medical, Inc.		$	382,305	$	382,305	12/01/2019
AxioMed, Inc.			14,238		14,238	*
Keystone Heart, Inc.**			2,331,492		2,331,492	11/01/2020
MyoScience, Inc.			347,237		347,237	07/01/2018
Renovia, Inc.			1,726,646		1,726,646	11/01/2020
Subtotal	2.7%	$	4,801,918	$	4,801,918

Other Healthcare
4G Clinical LLC		$	810,461	$	810,461	07/01/2020
Caredox, Inc.			190,057		190,057	01/01/2019
Clover Health Investment Corp.			28,109,738		28,109,738	10/01/2022
Hello Doctor, Ltd.**			55,294		55,294	03/01/2019
Hi.Q, Inc.			1,872,807		1,872,807	05/01/2020
Lean Labs, Inc.			99,202		99,202	04/01/2019
MD Revolution, Inc.			864,067		864,067	03/01/2020
mPharma Data, Inc.**			684,490		684,490	03/01/2021
Myolex, Inc.			518,438		726,537	*
Physicians Software			0		148,042	*
Project Healthy Living, Inc.			941,569		941,569	09/01/2019
Sparta Software Corporation			137,531		137,531	06/01/2020
Trio Health Advisory Group, Inc.			287,077		287,077	02/01/2019
Wellist, Inc.			187,107		187,107	12/01/2019
Subtotal	19.3%	$	34,757,838	$	35,113,979

Other Technology
AltSchool, PBC		$	19,311,490	$	19,311,490	06/01/2021
Asset Avenue, Inc.**			30,990		162,189	*
Astro, Inc.			0		283,511	*
BloomLife, Inc.			216,230		216,230	04/01/2020
Candy Club Holdings, Inc.			27,987		27,987	09/01/2018



Borrower	Percentage of Net Assets		Estimated Fair Value 6/30/2018		Par Value 6/30/2018	Final Maturity Date
Cardlab. ApS**			0		140,954	*
Consumer Physics, Inc.**			1,078,442		1,078,442	03/01/2019
Ensyn Corporation			2,606,685		2,606,685	11/01/2019
Eponym, Inc.			40,000		1,294,716	*
ETN Media, Inc.			528,944		528,944	07/01/2020
Faster Faster, Inc.			560,346		560,346	01/01/2019
Flo Water, Inc.			271,909		271,909	05/01/2020
FMTwo Games, Inc.			18,900		500,000	*
Gap Year Global, Inc.			15,334		86,359	*
Greats Brand, Inc.			263,883		263,883	12/01/2019
Heartwork, Inc.			440,444		440,444	09/01/2020
Hint, Inc.			4,773,542		4,773,542	07/01/2021
Hyperloop Technologies, Inc.			4,235,410		4,235,410	06/01/2019
ICON Aircraft, Inc.			3,249,003		3,249,003	05/01/2019
June Life, Inc.			1,626,559		1,626,559	03/01/2020
LanzaTech New Zealand Ltd.			7,331,901		7,331,901	03/01/2021
Mark One Lifestyle			0		76,347	*
Neuehouse, LLC			3,169,156		3,169,156	06/01/2019
Noteleaf, Inc.			1,324,560		1,324,560	09/01/2020
nWay, Inc.			567,024		737,087	*
PDQ Enterprises LLC**			3,311,100		3,311,100	02/01/2021
Pinnacle Engines, Inc.			57,097		57,097	*
PLAE, Inc.			1,335,159		1,335,159	12/01/2020
Planet Labs, Inc.			31,936,360		31,936,360	08/01/2022
Plenty Unlimited, Inc.			5,554,018		5,554,018	09/01/2021
Plethora, Inc			877,302		877,302	03/01/2019
Prana Holdings, Inc.			150,000		185,691	*
Rosco & Benedetto Co, Inc.			192,097		192,097	09/01/2019
Seriforge, Inc.			27,433		27,433	09/01/2018
SkyKick, Inc.			2,103,960		2,103,960	11/01/2020
TAE Technologies, Inc.			11,831,799		11,831,799	04/01/2021
CommunityCo, LLC			94,459		94,459	03/01/2019
Theatro Labs, Inc.			690,344		690,344	03/01/2019
VentureBeat, Inc.			579,314		756,370	*
Virtuix Holdings, Inc.			611,372		611,372	07/01/2020
Wine Plum, Inc.			1,041,059		1,041,059	09/01/2019
Subtotal	62.3%	$	112,081,612	$	114,903,274

Security
Guardian Analytics, Inc.		$	1,860,646	$	1,860,646	02/01/2019
Nok Nok Labs, Inc.			557,450		557,450	12/01/2020
ThinAir Labs, Inc.			0		1,105,396	*
Subtotal	1.3%	$	2,418,096	$	3,523,492



Borrower	Percentage of Net Assets		Estimated Fair Value 6/30/2018		Par Value 6/30/2018	Final Maturity Date
Semiconductors & Equipment
ETA Compute, Inc.		$	352,226	$	352,226	08/01/2020
Subtotal	0.2%	$	352,226	$	352,226

Software
Apptimize, Inc.		$	216,688	$	216,688	03/01/2019
Aptible, Inc.			234,183		234,183	02/01/2021
Bloomboard, Inc.			751,755		2,001,360	*
BlueCart, Inc.			447,672		447,672	01/01/2020
Commerce Cooperative			0		782,436	*
DealPath, Inc.			1,526,502		1,526,502	05/01/2021
DemystData Limited			1,153,628		1,153,628	07/01/2020
Drift Marketplace, Inc.			441,979		441,979	03/01/2020
Due, Inc.			18,301		981,699	*
Estify, Inc.			848,416		848,416	11/01/2020
FieldAware US, Inc.			8,057,398		8,057,398	08/01/2021
Gearbox Software, LLC			6,884,371		6,884,371	03/01/2021
GoFormz, Inc.			1,148,041		1,148,041	11/01/2020
HealthPrize Technologies, LLC			152,275		152,275	12/01/2019
Highfive Technologies, Inc.			3,790,557		3,790,557	10/01/2021
IntelinAir, Inc.			102,863		102,863	06/01/2019
Interset Software, Inc.**			1,339,056		1,339,056	10/01/2020
Invoice2Go, Inc.			5,648,787		5,648,787	04/01/2021
JethroData, Inc.**			360,156		856,877	*
Libre Wireless Technologies, Inc.			316,267		316,267	01/01/2020
Meta Company			4,256,052		4,256,052	06/01/2021
Metarail, Inc.			679,173		679,173	10/01/2021
Metric Insights, Inc.			450,086		450,086	07/01/2019
Mine.io**			399,753		399,753	07/01/2020
Mintigo, Inc.**			1,317,461		1,317,461	07/01/2021
Norse Networks, Inc.			357,386		3,445,429	*
PowerInbox, Inc.**			298,375		298,375	06/01/2020
Swrve, Inc.			1,930,314		1,930,314	05/01/2020
The/Studio Technologies, Inc.			569,889		569,889	06/01/2020
Truss Technology			0		2,000,000	*
Unmetric, Inc.			246,366		246,366	02/01/2020
VenueNext, Inc.			1,109,453		1,109,453	05/01/2020
Viewpost Holdings, LLC.			3,919,295		10,596,459	*
Vuemix, Inc.			229,923		229,923	11/01/2020
Workspot, Inc.			213,931		213,931	02/01/2019
Xeeva			2,001,491		2,001,491	07/01/2020
Subtotal	28.6%	$	51,417,843	$	66,675,210



Borrower	Percentage of Net Assets		Estimated Fair Value 6/30/2018		Par Value 6/30/2018	Final Maturity Date
Technology Services
AirHelp, Inc.		$	2,036,953	$	2,036,953	10/01/2020
Akademos, Inc.***			778,755		778,755	08/01/2020
Blazent, Inc.			2,277,709		2,277,709	08/01/2020
Blue Technologies Limited**			615,514		615,514	04/01/2020
Callisto Media, Inc.			5,369,569		5,369,569	03/01/2021
Dolly, Inc.			691,777		691,777	06/01/2020
Fluxx Labs			1,230,227		1,230,227	12/01/2019
FSA Store, Inc.			2,202,888		2,202,888	12/01/2020
ParkJockey Global, Inc.			424,945		424,945	06/01/2019
PayJoy, Inc.**			1,139,245		1,139,245	08/01/2021
Sixup PBC, Inc.**			264,005		264,005	06/01/2019
TrueFacet, Inc.			1,074,996		1,074,996	06/01/2021
Zeel Networks, Inc.			1,576,045		1,576,045	08/01/2020
Subtotal	10.9%	$	19,682,628	$	19,682,628

Wireless
InVenture Capital Corporation**		$	631,702	$	631,702	09/01/2019
Juvo Mobile, Inc.**			923,712		923,712	02/01/2020
Kicksend Holdings, Inc.			0		61,475	*
Nextivity, Inc.			6,924,724		6,924,724	06/01/2021
Parallel Wireless, Inc.			3,953,324		3,953,324	10/01/2020
Subtotal	6.9%	$	12,433,462	$	12,494,937

Total Loans	169.7%	$	305,555,613	$	335,074,131
(Cost of $331,922,075)
Derivative asset - swap		$	540,268	$	—

*As of June 30, 2018, loans with a cost basis of $38.1 million and a fair value of $11.7 million were classified as non-accrual. These loans have been accelerated from their 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.

** Indicates assets that the Fund deems “non-qualifying assets” under Section 55(a) of the 1940 Act. Qualifying assets must represent at least 70% of the Fund’s total assets at the time of acquisition of any additional non-qualifying assets. As of June 30, 2018, 5.1% of the Fund’s assets represented non-qualifying assets. As part of this calculation, the numerator consists of all eligible portfolio companies as defined in Section 2(a)(46), and the denominator consists of total assets less the assets described in Section 55(a)(7).

*** Indicates assets that are not senior loans.

As of December 31, 2017, all loans were made to non-affiliates as follows:



Borrower	Percentage of Net Assets	Estimated Fair Value 12/31/2017		Par Value 12/31/2017		Final Maturity Date

Biotechnology
Phylagen, Inc.		$	349,718	$	349,718	03/01/2020
Subtotal:	0.2%	$	349,718	$	349,718



Borrower	Percentage of Net Assets	Estimated Fair Value 12/31/2017		Par Value 12/31/2017		Final Maturity Date

Computers & Storage
Canary Connect, Inc.		$	3,841,635	$	3,841,635	12/01/2020
HyperGrid, Inc.		983,652		983,652		12/01/2019
Rigetti & Co., Inc.		2,825,214		2,825,214		01/01/2020
Subtotal:	3.6%	$	7,650,501	$	7,650,501

Internet
Amino Payments, Inc.		$	718,898	$	718,898	03/01/2021
Apartment List, Inc.		969,280		969,280		11/01/2019
Betaworks Studio, LLC**		2,344,366		2,344,366		07/01/2018
Better Doctor, Inc.		1,313,150		1,313,150		12/01/2020
Bitfinder, Inc.		476,274		476,274		09/01/2020
Bombfell, Inc.		950,217		950,217		04/01/2021
CapLinked, Inc.		219,962		219,962		01/01/2019
ConnectedYard, Inc.		423,421		471,785		06/01/2020
Cowboy Analytics, LLC		196,411		380,000		*
CustomMade Ventures Corp.		688,026		688,026		*
DailyFeats, Inc.		3,434,717		3,434,717		12/01/2020
Deja Mi, Inc.		53,094		834,476		*
Digital Caddies, Inc.**		—		987,584		*
Dinner Lab, Inc.		—		282,894		*
DreamCloud Holdings, LLC		890,304		890,304		08/01/2020
Eloquii Design, Inc.		481,537		481,537		09/01/2018
Eventbite, Inc.		13,081,547		13,081,547		02/01/2022
FLYR, Inc.		143,795		143,795		06/01/2018
Giddy Apps, Inc.		—		999,454		*
Glide, Inc.**		253,989		4,422,705		*
Handy Technologies, Inc.		4,745,656		4,745,656		12/01/2020
Homelight, Inc.		871,559		871,559		12/01/2019
Honk Technologies, Inc.		2,124,520		2,124,520		05/01/2020
Hotel Tonight, Inc.		4,500,668		4,500,668		01/01/2019
Kiwi Crate, Inc.		147,652		147,652		04/01/2018
Leading ED, Inc.		1,000		1,515		*
Monetate, Inc.		455,394		455,394		06/01/2018
Node, Inc.		402,161		402,161		01/01/2020
Placester, Inc.		1,983,527		1,983,527		10/01/2019
Playstudios, Inc.		1,547,766		1,547,766		03/01/2021
Quri, Inc.		459,519		459,519		06/01/2018
Radius Intelligence, Inc.		6,975,493		6,975,493		10/01/2021
Relay Network, LLC		2,319,797		2,319,797		09/01/2020
ShipBob, Inc.		617,602		617,602		01/01/2020
SocialChorus, Inc.		475,330		475,330		09/01/2018
Spot.IM, Ltd.**		835,033		835,033		05/01/2020



Borrower	Percentage of Net Assets	Estimated Fair Value 12/31/2017		Par Value 12/31/2017		Final Maturity Date
Super Home, Inc.		126,831		126,831		03/01/2019
Tango Card, Inc.		1,448,020		1,448,020		11/01/2020
Thrive Market, Inc.		4,881,645		4,881,645		09/01/2019
Tictail, Inc.		1,086,519		1,086,519		05/01/2021
TouchofModern, Inc.		4,317,741		4,317,741		05/01/2020
Traackr, Inc.		364,673		364,673		04/01/2019
Viyet, Inc.		343,706		343,706		06/01/2020
WHI, Inc.		200,000		1,200,999		*
YouDocs Beauty, Inc.		1,192,024		1,192,024		*
Subtotal:	32.5%	$	69,062,824	$	77,516,321

Medical Devices
Anutra Medical, Inc.		$	624,708	$	624,708	12/01/2019
AxioMed, LLC		14,238		14,238		*
JustRight Surgical LLC		1,311,845		1,311,845		07/01/2019
Keystone Heart, Inc.**		2,709,462		2,709,462		11/01/2020
MyoScience, Inc.		2,343,407		2,343,407		07/01/2018
Renovia, Inc.		1,911,275		1,911,275		11/01/2020
Subtotal:	4.2%	$	8,914,935	$	8,914,935

Other Healthcare
4G Clinical LLC		$	942,135	$	942,135	07/01/2020
Caredox, Inc.		340,488		340,488		01/01/2019
Clover Health Investment Corp.		27,898,780		27,898,780		10/01/2022
Hello Doctor, Ltd. **		87,237		87,237		03/01/2019
Hi.Q, Inc.		2,199,285		2,199,285		05/01/2020
Lean Labs, Inc.		148,618		148,618		04/01/2019
MD Revolution, Inc.		1,069,491		1,069,491		03/01/2020
mPharma Data, Inc. **		717,609		717,609		03/01/2021
Myolex, Inc.		459,926		668,025		03/01/2019
Physician Software Systems, LLC		—		148,042		*
Project Healthy Living, Inc.		1,263,519		1,263,519		09/01/2019
Sparta Software Corporation		164,769		164,769		06/01/2020
Trio Health Advisory Group, Inc.		482,660		482,660		02/01/2019
Wellist PBC, Inc.		259,737		259,737		12/01/2019
Subtotal:	16.9%	$	36,034,254	$	36,390,395

Other Technology
AltSchool, PBC		$	4,447,010	$	4,447,010	06/01/2020
Asset Avenue, Inc.**		30,000		159,244		*
Astro, Inc.		84,108		280,359		*
BloomLife, Inc.		264,513		264,513		04/01/2020
Candy Club Holdings, Inc.		218,536		218,536		09/01/2018
CardLab, ApS**		—		140,954		*



Borrower	Percentage of Net Assets	Estimated Fair Value 12/31/2017		Par Value 12/31/2017		Final Maturity Date
CommunityCo, LLC		149,167		149,167		03/01/2019
Consumer Physics, Inc.**		1,429,161		1,429,161		03/01/2019
Ensyn Corporation		3,555,156		3,555,156		11/01/2019
Eponym, Inc.		100,000		1,357,124		*
ETN Media, Inc.		634,866		634,866		07/01/2020
Faster Faster, Inc.		918,653		918,653		01/01/2019
Flo Water, Inc.		376,147		376,147		05/01/2020
FMTwo Game, Inc.		18,900		500,000		*
Gap Year Global, Inc.		113,439		113,439		10/01/2018
Greats Brand, Inc.		351,973		351,973		12/01/2019
Heartwork, Inc.		479,714		479,714		09/01/2020
Hint, Inc.		4,728,235		4,728,235		07/01/2021
Hyperloop Technologies, Inc.		6,110,809		6,110,809		06/01/2019
ICON Aircraft, Inc.		6,604,519		6,604,519		09/01/2019
June Life, Inc.		2,020,813		2,020,813		03/01/2020
LanzaTech New Zealand Ltd.		8,048,027		8,048,027		03/01/2021
Mark One Lifestyle, Inc.		—		76,347		*
Neuehouse, LLC		3,340,451		3,340,451		06/01/2019
Noteleaf, Inc.		1,443,199		1,443,199		09/01/2020
nWay, Inc.		883,855		1,224,468		*
PDQ Enterprises LLC**		3,382,474		3,382,474		02/01/2021
Pinnacle Engines, Inc.		97,097		97,097		*
PLAE, Inc.		1,436,153		1,436,153		12/01/2020
Planet Labs, Inc.		25,639,534		25,639,534		11/01/2021
Plenty Unlimited, Inc.		5,558,137		5,558,137		09/01/2021
Plethora, Inc		1,347,776		1,347,776		03/01/2019
Prana Holdings, Inc.		175,000		470,066		*
Rosco & Benedetto Co.		258,808		258,808		09/01/2019
Seriforge, Inc.		78,000		78,000		09/01/2018
SkyKick, Inc.		2,386,323		2,386,323		11/01/2020
TAE Technologies, Inc.		11,701,080		11,701,080		04/01/2021
Theatro Labs, Inc.		1,113,286		1,113,286		03/01/2019
VentureBeat, Inc.		702,620		806,102		*
Virtuix Holdings, Inc.		711,821		711,821		07/01/2020
Wine Plum, Inc.		1,410,920		1,410,920		09/01/2019
Subtotal:	48.1%	$	102,350,280	$	105,370,461

Security
Guardian Analytics, Inc.		$	3,111,334	$	3,111,334	02/01/2019
Identiv, Inc.**		2,205,887		2,205,887		08/01/2020
Kryptnostic, Inc.		5,000		302,293		*
Nok Nok Labs, Inc.		634,666		634,666		12/01/2020
ThinAir Labs, Inc.		1,066,594		1,066,594		02/01/2020
Subtotal:	3.3%	$	7,023,481	$	7,320,774



Borrower	Percentage of Net Assets	Estimated Fair Value 12/31/2017		Par Value 12/31/2017		Final Maturity Date
Semiconductors & Equipment
ETA Compute, Inc.		$	425,658	$	425,658	08/01/2020
Subtotal:	0.2%	$	425,658	$	425,658

Software
Addepar, Inc.		$	1,333,487	$	1,333,487	06/01/2018
Apptimize, Inc.		420,545		420,545		03/01/2019
Aptible, Inc.		238,534		238,534		02/01/2021
Atigeo Corporation		1,001,669		1,170,880		*
Bloomboard, Inc.		751,755		2,001,360		*
BlueCart, Inc.		567,820		567,820		01/01/2020
DealPath, Inc.		1,552,176		1,552,176		05/01/2021
DemystData Limited		1,377,575		1,377,575		07/01/2020
DocSend, Inc.		135,959		135,959		06/01/2018
Drift Marketplace, Inc.		550,359		550,359		03/01/2020
Due, Inc.		93,277		932,772		*
ElasticBeam, Inc.		874,047		874,047		09/01/2018
Estify, Inc.		940,557		940,557		11/01/2020
FieldAware US, Inc.		8,533,001		8,533,001		07/01/2020
FoxCommerce, Inc.		—		803,790		*
Gearbox Software, LLC		2,712,251		2,712,251		09/01/2020
GoFormz, Inc.		1,165,642		1,165,642		11/01/2020
HealthPrize Technologies, LLC		195,364		195,364		12/01/2019
Highfive Technologies, Inc.		3,760,217		3,760,217		10/01/2021
IntelinAir, Inc.		147,247		147,247		06/01/2019
Interset Software, Inc. **		1,612,450		1,612,450		10/01/2020
Invoice2Go, Inc.		4,298,135		4,298,135		04/01/2021
JethroData, Inc. **		822,579		822,579		10/01/2019
Libre Wireless Technologies, Inc.		399,350		399,350		01/01/2020
Mconcierge System, Inc.		29,000		390,495		*
Meta Company		4,769,026		4,769,026		06/01/2021
Metric Insights, Inc.		633,139		633,139		07/01/2019
Mine.io **		462,139		462,139		07/01/2020
Mintigo, Inc. **		1,543,903		1,543,903		07/01/2021
Norse Networks, Inc.		357,386		3,445,429		*
Overops, Inc.		111,560		111,560		03/01/2018
PowerInbox, Inc.**		361,516		361,516		06/01/2020
Swrve, Inc.		3,218,971		3,218,971		05/01/2020
The/Studio Technologies, Inc.		683,418		683,418		06/01/2020
Truss Technology Corp.		—		2,000,000		*
Unmetric, Inc.		307,320		307,320		02/01/2020
VenueNext, Inc.		1,344,322		1,344,322		05/01/2020
Viewpost Holdings, LLC		4,518,457

Venture Lending & Leasing VII, Inc. - FORM 10-Q - August 14, 2018

Attached files