UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

For the quarterly period ended ~~September 30, 2020~~March 31, 2021


[ ]			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)

Securities registered pursuant to Section 12(b) of the Act: None

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 every Interactive Data File required to be submitted 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 such files). Yes [ ] No [ ]

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


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 ~~November~~May 13, ~~2020~~2021
Common Stock, $0.001 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 ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020

			Condensed Statements of Operations (Unaudited)
			For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~

			Condensed Statements of Changes in Net Assets (Unaudited)
			For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~

			Condensed Statements of Cash Flows (Unaudited)
			For the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~

			Condensed Schedules of Investments (Unaudited)
			As of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020

			~~Condensed Schedule of Derivative Instrument (Unaudited)~~
			~~As of December 31, 2019~~

			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 ~~SEPTEMBER 30, 2020~~MARCH 31, 2021 AND DECEMBER 31, ~~2019~~2020


		September 30, 2020		December 31, 2019			March 31, 2021		December 31, 2020
ASSETS	ASSETS					ASSETS
Loans, at estimated fair value	Loans, at estimated fair value					Loans, at estimated fair value
(cost of $60,737,472 and $104,598,706)		$	45,404,472	$	85,964,990
(cost of $45,046,007 and $52,013,198)						(cost of $45,046,007 and $52,013,198)	$	32,452,872	$	38,860,537

Cash and cash equivalents	Cash and cash equivalents	1,512,425		354,105		Cash and cash equivalents	9,250,166		1,866,875
Dividend and interest receivables	Dividend and interest receivables	353,537		843,808		Dividend and interest receivables	198,530		258,786
Other assets	Other assets	117,377		357,581		Other assets	41,619		46,917

Total assets	Total assets	47,387,811		87,520,484		Total assets	41,943,187		41,033,115

LIABILITIES	LIABILITIES					LIABILITIES
Borrowings under debt facility		—		15,400,000

Accrued management fees	Accrued management fees	296,174		547,003		Accrued management fees	262,145		256,457
Derivative liability		—		22,136

Accounts payable and other accrued liabilities	Accounts payable and other accrued liabilities	32,924		283,325		Accounts payable and other accrued liabilities	63,220		29,641

Total liabilities	Total liabilities	329,098		16,252,464		Total liabilities	325,365		286,098

NET ASSETS	NET ASSETS	$	47,058,713	$	71,268,020	NET ASSETS	$	41,617,822	$	40,747,017

Analysis of Net Assets:	Analysis of Net Assets:					Analysis of Net Assets:

Capital paid in on shares of capital stock	Capital paid in on shares of capital stock	$	323,845,000	$	323,245,000	Capital paid in on shares of capital stock	$	323,845,000	$	323,845,000

Total distributable losses	Total distributable losses	(276,786,287)		(251,976,980)		Total distributable losses	(282,227,178)		(283,097,983)
Net assets (equivalent to $470.59 and $712.68 per share based on 100,000 shares of capital stock outstanding - See Note 5 and Note 10)		$	47,058,713	$	71,268,020
Net assets (equivalent to $416.18 and $407.47 per share based on 100,000 shares of capital stock outstanding - See Note 5 and Note 10)						Net assets (equivalent to $416.18 and $407.47 per share based on 100,000 shares of capital stock outstanding - See Note 5 and Note 10)	$	41,617,822	$	40,747,017

See notes to condensed financial statements (unaudited).

VENTURE LENDING & LEASING VII, INC.

CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER 30,~~MARCH 31, 2021 AND 2020 ~~AND 2019~~


		For the Three Months Ended September 30, 2020		For the Three Months Ended September 30, 2019		For the Nine Months Ended September 30, 2020		For the Nine Months Ended September 30, 2019			For the Three Months Ended March 31, 2021		For the Three Months Ended March 31, 2020

INVESTMENT INCOME:	INVESTMENT INCOME:									INVESTMENT INCOME:
Interest on loans	Interest on loans	$	1,207,720	$	3,410,395	$	5,093,571	$	19,373,049	Interest on loans	$	701,209	$	2,200,982
Other interest and other income	Other interest and other income	419		4,802		2,443		38,644		Other interest and other income	384		1,660
Total investment income	Total investment income	1,208,139		3,415,197		5,096,014		19,411,693		Total investment income	701,593		2,202,642

EXPENSES:	EXPENSES:									EXPENSES:
Management fees	Management fees	296,174		665,198		1,094,600		2,549,160		Management fees	262,145		442,543

Interest expense	Interest expense	5,402		568,727		489,970		2,395,784		Interest expense	—		222,622
Banking and professional fees	Banking and professional fees	61,677		58,324		258,871		352,667		Banking and professional fees	78,820		112,059
Other operating expenses	Other operating expenses	68,169		63,619		131,217		137,425		Other operating expenses	24,583		33,730
Total expenses	Total expenses	431,422		1,355,868		1,974,658		5,435,036		Total expenses	365,548		810,954
Net investment income	Net investment income	776,717		2,059,329		3,121,356		13,976,657		Net investment income	336,045		1,391,688

Net realized loss from loans		(903,953)		(9,784,311)		(2,048,489)		(10,211,702)
Net realized gain (loss) from derivative instrument		—		40,506		(54,743)		179,933
Net change in unrealized gain from loans		1,578,900		6,645,649		3,300,716		3,074,407
Net change in unrealized gain (loss) from derivative instrument		—		(14,791)		22,136		(339,583)
Net realized gain (loss) from loans										Net realized gain (loss) from loans	1,106		(419,627)
Net realized loss from derivative instrument										Net realized loss from derivative instrument	—		(11,138)
Net change in unrealized gain (loss) from loans										Net change in unrealized gain (loss) from loans	559,525		(1,456,561)
Net change in unrealized loss from derivative instrument										Net change in unrealized loss from derivative instrument	—		(15,755)
Net realized and change in unrealized gain (loss) from loans and derivative instrument	Net realized and change in unrealized gain (loss) from loans and derivative instrument	674,947		(3,112,947)		1,219,620		(7,296,945)		Net realized and change in unrealized gain (loss) from loans and derivative instrument	560,631		(1,903,081)
Net increase (decrease) in net assets resulting from operations	Net increase (decrease) in net assets resulting from operations	$	1,451,664	$	(1,053,618)	$	4,340,976	$	6,679,712	Net increase (decrease) in net assets resulting from operations	$	896,676	$	(511,393)

Amounts per common share:	Amounts per common share:									Amounts per common share:
Net increase (decrease) in net assets resulting from operations per share	Net increase (decrease) in net assets resulting from operations per share	$	14.52	$	(10.54)	$	43.41	$	66.80	Net increase (decrease) in net assets resulting from operations per share	$	8.97	$	(5.11)
Weighted average shares outstanding	Weighted average shares outstanding	100,000		100,000		100,000		100,000		Weighted average shares outstanding	100,000		100,000

See notes to condensed financial statements (unaudited).

VENTURE LENDING & LEASING VII, INC.

CONDENSED STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)

FOR THE THREE ~~AND~~ ~~NINE~~ MONTHS ENDED ~~SEPTEMBER 30,~~MARCH 31, 2021 AND 2020 ~~AND 2019~~


		Common Stock										Common Stock
		Shares	Par Value		Additional Paid-in Capital		Total Distributable Earnings (Loss)		Net Assets			Shares	Par Value		Additional Paid-in Capital		Total Distributable Earnings (Loss)		Net Assets
Balance at June 30, 2019		100,000	$	100	$	322,644,900	$	(240,547,597)	$	82,097,403

Balance at December 31, 2019											Balance at December 31, 2019	100,000	$	100	$	323,244,900	$	(251,976,980)	$	71,268,020
Net decrease in net assets resulting from operations	Net decrease in net assets resulting from operations	—	—		—		(1,053,618)		(1,053,618)		Net decrease in net assets resulting from operations	—	—		—		(511,393)		(511,393)
Distributions to shareholder	Distributions to shareholder	—	—		—		(7,786,150)		(7,786,150)		Distributions to shareholder	—	—		—		(15,030,677)		(15,030,677)

Balance at September 30, 2019		100,000	$	100	$	322,644,900	$	(249,387,365)	$	73,257,635

Balance at June 30, 2020		100,000	$	100	$	323,244,900	$	(271,207,105)	$	52,037,895
Net increase in net assets resulting from operations		—	—		—		1,451,664		1,451,664
Distributions to shareholder		—	—		—		(7,030,846)		(7,030,846)
Contributions from shareholder		—	—		600,000		—		600,000
Balance at September 30, 2020		100,000	$	100	$	323,844,900	$	(276,786,287)	$	47,058,713
Balance at March 31, 2020											Balance at March 31, 2020	100,000	$	100	$	323,244,900	$	(267,519,050)	$	55,725,950

Balance at December 31, 2018		100,000	$	100	$	322,644,900	$	(194,846,577)	$	127,798,423
Balance at December 31, 2020											Balance at December 31, 2020	100,000	$	100	$	323,844,900	$	(283,097,983)	$	40,747,017
Net increase in net assets resulting from operations	Net increase in net assets resulting from operations	—	—		—		6,679,712		6,679,712		Net increase in net assets resulting from operations	—	—		—		896,676		896,676
Distributions to shareholder	Distributions to shareholder	—	—		—		(61,220,500)		(61,220,500)		Distributions to shareholder	—	—		—		(25,871)		(25,871)

Balance at September 30, 2019		100,000	$	100	$	322,644,900	$	(249,387,365)	$	73,257,635

Balance at December 31, 2019		100,000	$	100	$	323,244,900	$	(251,976,980)	$	71,268,020
Net increase in net assets resulting from operations		—	—		—		4,340,976		4,340,976
Distributions to shareholder		—	—		—		(29,150,283)		(29,150,283)

Contributions from shareholder		—	—		600,000		—		600,000
Balance at September 30, 2020		100,000	$	100	$	323,844,900	$	(276,786,287)	$	47,058,713
Balance at March 31, 2021											Balance at March 31, 2021	100,000	$	100	$	323,844,900	$	(282,227,178)	$	41,617,822

See notes to condensed financial statements (unaudited).

VENTURE LENDING & LEASING VII, INC.

CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE ~~NINE~~THREE MONTHS ENDED ~~SEPTEMBER 30,~~MARCH 31, 2021 AND 2020 ~~AND 2019~~


		For the Nine Months Ended September 30, 2020		For the Nine Months Ended September 30, 2019			For the Three Months Ended March 31, 2021		For the Three Months Ended March 31, 2020 (a)
CASH FLOWS FROM OPERATING ACTIVITIES:	CASH FLOWS FROM OPERATING ACTIVITIES:					CASH FLOWS FROM OPERATING ACTIVITIES:
Net increase in net assets resulting from operations		$	4,340,976	$	6,679,712
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:
Net realized loss from loans		2,048,489		10,211,702
Net realized loss (gain) from derivative instrument		54,743		(179,933)
Net change in unrealized gain from loans		(3,300,716)		(3,074,407)
Net change in unrealized loss (gain) from derivative instrument		(22,136)		339,583
Net increase (decrease) in net assets resulting from operations						Net increase (decrease) in net assets resulting from operations	$	896,676	$	(511,393)
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by operating activities:						Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by operating activities:
Net realized (gain) loss from loans						Net realized (gain) loss from loans	(1,106)		419,627
Net realized loss from derivative instrument						Net realized loss from derivative instrument	—		11,138
Net change in unrealized (gain) loss from loans						Net change in unrealized (gain) loss from loans	(559,525)		1,456,561
Net change in unrealized loss from derivative instrument						Net change in unrealized loss from derivative instrument	—		15,755
Amortization of deferred costs related to borrowing facility	Amortization of deferred costs related to borrowing facility	308,500		280,778		Amortization of deferred costs related to borrowing facility	—		93,593
Net decrease in dividend and interest receivables	Net decrease in dividend and interest receivables	490,272		1,277,586		Net decrease in dividend and interest receivables	60,256		174,459
Net increase in other assets		(68,297)		(112,879)
Net decrease in accounts payable, other accrued liabilities and accrued management fees		(501,230)		(957,418)
Net (increase) decrease in other assets						Net (increase) decrease in other assets	5,298		(47,717)
Net increase (decrease) in accounts payable, other accrued liabilities and accrued management fees						Net increase (decrease) in accounts payable, other accrued liabilities and accrued management fees	39,267		(287,365)

Principal payments on loans	Principal payments on loans	41,662,462		93,984,019		Principal payments on loans	6,832,481		14,330,623
Accretion of discount on loans						Accretion of discount on loans	109,944		323,357

Net cash provided by operating activities	Net cash provided by operating activities	45,013,063		108,448,743		Net cash provided by operating activities	7,383,291		15,978,638
CASH FLOWS FROM FINANCING ACTIVITIES:	CASH FLOWS FROM FINANCING ACTIVITIES:					CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions to shareholder	Cash distributions to shareholder	(29,000,000)		(56,250,000)		Cash distributions to shareholder	—		(15,000,000)
Contributions from shareholder		600,000		—

Borrowings under debt facility	Borrowings under debt facility	22,800,000		17,500,000		Borrowings under debt facility	—		15,600,000
Repayments of borrowings under debt facility	Repayments of borrowings under debt facility	(38,200,000)		(72,660,000)		Repayments of borrowings under debt facility	—		(16,500,000)
Payments made for derivative instrument	Payments made for derivative instrument	(54,743)		—		Payments made for derivative instrument	—		(11,138)
Payments received from derivative instrument		—		179,933

Net cash used in financing activities	Net cash used in financing activities	(43,854,743)		(111,230,067)		Net cash used in financing activities	—		(15,911,138)
Net increase (decrease) in cash and cash equivalents		1,158,320		(2,781,324)
Net increase in cash and cash equivalents						Net increase in cash and cash equivalents	7,383,291		67,500
CASH AND CASH EQUIVALENTS:	CASH AND CASH EQUIVALENTS:					CASH AND CASH EQUIVALENTS:
Beginning of period	Beginning of period	354,105		2,839,766		Beginning of period	1,866,875		354,105
End of period	End of period	$	1,512,425	$	58,442	End of period	$	9,250,166	$	421,605
SUPPLEMENTAL DISCLOSURES:	SUPPLEMENTAL DISCLOSURES:					SUPPLEMENTAL DISCLOSURES:
CASH PAID DURING THE PERIOD:	CASH PAID DURING THE PERIOD:					CASH PAID DURING THE PERIOD:
Interest - Debt facility	Interest - Debt facility	$	250,375	$	2,282,308	Interest - Debt facility	$	—	$	158,302

NON-CASH OPERATING AND FINANCING ACTIVITIES:	NON-CASH OPERATING AND FINANCING ACTIVITIES:					NON-CASH OPERATING AND FINANCING ACTIVITIES:
Distributions of equity securities and convertible loan to shareholder	Distributions of equity securities and convertible loan to shareholder	$	150,283	$	4,970,501	Distributions of equity securities and convertible loan to shareholder	$	25,871	$	30,677
Receipt of equity securities and convertible loan as repayment of loans	Receipt of equity securities and convertible loan as repayment of loans	$	150,283	$	4,970,501	Receipt of equity securities and convertible loan as repayment of loans	$	25,871	$	30,677

(a) Certain prior period information has been disclosed to conform to current presentation.

See notes to condensed financial statements (unaudited).

VENTURE LENDING & LEASING VII, INC.

CONDENSED SCHEDULE OF INVESTMENTS (UNAUDITED)

AS OF ~~SEPTEMBER 30, 2020~~MARCH 31, 2021


Industry	Industry	Borrower	Percent of Net Assets (a)	Collateral	Interest Rate (b)	End of Term Payment (c)	Principal		Cost		Fair Value		Maturity Date	Industry	Borrower	Percent of Net Assets (a)	Collateral	Interest Rate (b)	End of Term Payment (c)	Principal		Cost		Fair Value		Maturity Date
Computers & Storage
		Canary Connect, Inc.		Senior Secured	12.8%		$	151,342	$	145,405	$	145,405	12/1/2020
Computers & Storage Total			0.3%				$	151,342	$	145,405	$	145,405

Internet	Internet													Internet
		Amino Payments, Inc.		Senior Secured	10.8%		$	358,869	$	348,025	$	348,025	9/1/2021
		Bombfell, Inc.		Senior Secured	11.0%		597,384		509,705		154,254		*
		Cowboy Analytics, LLC		Senior Secured	5.5%		259,030		125,247		49,489		*		Bombfell, Inc.		Senior Secured	11.0%		$	597,384	$	287,205	$	—	*
		CustomMade, Inc.		Senior Secured	—%		1,651,771		706,776		706,776		*		Cowboy Analytics, LLC		Senior Secured	5.5%		259,030		113,847		40,894		*
		Digital Caddies, Inc. **		Senior Secured	18.0%		989,068		987,584		—		*		CustomMade, Inc.		Senior Secured	—%		1,651,771		706,776		706,776		*
		Leading ED, Inc.		Senior Secured	10.0%		175,000		76		—		*		Digital Caddies, Inc. **		Senior Secured	18.0%		989,068		987,584		—		*
		Tango Card, Inc.		Senior Secured	12.0%		113,238		113,018		113,018		11/1/2020		Leading ED, Inc.		Senior Secured	10.0%		175,000		76		—		*
		Wristcam Inc. ** ^		Senior Secured	11.0%		3,775,908		2,396,828		729,296		*		Wristcam Inc. ** ^		Senior Secured	11.0%		3,011,489		2,058,422		471,864		*
		YouDocs Beauty, Inc.		Senior Secured	11.0%		1,350,000		1,192,024		1,192,024		*		YouDocs Beauty, Inc.		Senior Secured	11.0%		1,350,000		1,192,024		1,192,024		*
Internet Total	Internet Total		7.0%				$	9,270,268	$	6,379,283	$	3,292,882		Internet Total		5.8%				$	8,033,742	$	5,345,934	$	2,411,558

Medical Devices	Medical Devices													Medical Devices
		AxioMed, Inc.		Unsecured	—%		$	14,238	$	14,238	$ -		*		AxioMed, Inc.		Unsecured	—%		$	14,238	$	14,238	$	—	*
		Renovia, Inc.		Senior Secured	11.0%		378,846		339,025		339,025		9/1/2021		Renovia, Inc.		Senior Secured	11.0%		217,239		185,989		185,989		9/1/2021
Medical Devices Total	Medical Devices Total		0.7%				$	393,084	$	353,263	$	339,025		Medical Devices Total		0.4%				$	231,477	$	200,227	$	185,989

Other Healthcare	Other Healthcare													Other Healthcare
		Clover Health Investments Corporation		Senior Secured	11.3%		$	7,207,644	$	7,207,644	$	7,207,644	10/1/2022		Clover Health Investments Corporation		Senior Secured	11.3%		$	5,627,932	$	5,627,932	$	5,627,932	10/1/2022
		Clover Health Investments Corporation		Senior Secured	11.0%		10,359,649		10,359,649		10,359,649		3/1/2022		Clover Health Investments Corporation		Senior Secured	11.0%		7,324,376		7,163,977		7,163,977		3/1/2022
		Clover Health Investments Corporation Subtotal					17,567,293		17,567,293		17,567,293				Clover Health Investments Corporation Subtotal					12,952,308		12,791,909		12,791,909
		mPharma Data, Inc. ** ^		Senior Secured	10.0%		75,342		75,105		75,105		3/1/2021		Myolex, Inc.		Senior Secured	18.0%		762,531		726,537		211,873		*
		mPharma Data, Inc. ** ^		Senior Secured	10.0%		25,535		25,425		25,425		11/1/2020		Physician Software Systems, LLC		Senior Secured	18.0%		164,677		148,042		—		*
		mPharma Data, Inc. ** ^ Subtotal					100,877		100,530		100,530
		Myolex, Inc.		Senior Secured	18.0%		762,531		726,537		238,967		*
		Physician Software Systems, LLC		Senior Secured	18.0%		164,677		148,042		—		*
Other Healthcare Total	Other Healthcare Total		38.1%				$	18,595,378	$	18,542,402	$	17,906,790		Other Healthcare Total		31.2%				$	13,879,516	$	13,666,488	$	13,003,782

Other Technology	Other Technology													Other Technology
		Consumer Physics, Inc. ** ^		Senior Secured	11.0%		$	670,989	$	654,666	$	617,367	12/1/2021		Consumer Physics, Inc. ** ^		Senior Secured	11.0%		$	401,805	$	395,736	$	382,738	12/1/2021
		Finiks, Inc.		Senior Secured	2.7%		667,500		33,375		41,125		*		Finiks, Inc.		Senior Secured	2.7%		667,500		17,249		40,875		*
		Gap Year Global, Inc.		Senior Secured	18.0%		90,768		86,359		—		*		Gap Year Global, Inc.		Senior Secured	18.0%		90,768		86,359		—		*
		Heartwork, Inc.		Senior Secured	18.0%		379,462		371,981		27,353		*		Heartwork, Inc.		Senior Secured	18.0%		379,462		371,981		20,443		*
		Hint, Inc.		Senior Secured	11.0%		900,923		900,923		900,923		7/1/2021		Hint, Inc.		Senior Secured	11.0%		370,263		370,263		370,263		7/1/2021
		Hint, Inc.		Senior Secured	11.0%		550,371		542,228		542,228		3/1/2021		Neuehouse, LLC		Senior Secured	12.0%		1,750,000		1,292,765		1,742,318		*
		Hint, Inc. Subtotal					1,451,294		1,443,151		1,443,151				Plenty Unlimited, Inc.		Senior Secured	9.0%	11.7%	827,521		819,739		819,739		9/1/2021
		LanzaTech New Zealand Ltd.		Senior Secured	13.3%		561,098		559,537		559,537		3/1/2021		VentureBeat, Inc.		Senior Secured	12.0%		804,064		395,996		340,235		*
		Neuehouse, LLC		Senior Secured	12.0%		1,750,000		1,292,765		1,292,765		*
		PDQ Enterprises LLC **		Senior Secured	11.0%		594,265		592,137		592,137		2/1/2021
		Plenty Unlimited, Inc.		Senior Secured	9.0%	11.7%	292,920		290,897		290,897		1/1/2021
		Plenty Unlimited, Inc.		Senior Secured	9.0%	9.4%	349,055		347,898		347,898		3/1/2021
		Plenty Unlimited, Inc.		Senior Secured	9.0%	11.7%	1,371,831		1,349,495		1,349,495		9/1/2021
		Plenty Unlimited, Inc. Subtotal					2,013,806		1,988,290		1,988,290
		VentureBeat, Inc.		Senior Secured	12.0%		825,775		532,574		38,843		*
Other Technology Total	Other Technology Total		14.0%				$	9,004,957	$	7,554,835	$	6,600,568		Other Technology Total		8.9%				$	5,291,383	$	3,750,088	$	3,716,611

Security
		Nok Nok Labs, Inc.		Senior Secured	12.5%		$	72,965	$	71,638	$	71,638	12/1/2020
Security Total			0.2%				$	72,965	$	71,638	$	71,638

Software	Software													Software
		Aptible, Inc.		Senior Secured	11.8%		$	42,763	$	42,533	$	42,533	2/1/2021
		Bloomboard, Inc.		Senior Secured	11.5%		2,498,239		1,551,361		576,120		*
		DealPath, Inc.		Senior Secured	11.0%		456,312		452,762		452,762		5/1/2021
		Estify, Inc.		Senior Secured	18.0%		842,819		761,990		178,775		*
		FieldAware US, Inc.		Senior Secured	11.0%		7,616,117		6,862,946		6,862,946		*		Bloomboard, Inc.		Senior Secured	11.5%		$	2,542,024	$	1,152,496	$	1,059,568	*
		GoFormz, Inc.		Senior Secured	12.0%		334,931		328,177		328,177		6/1/2021		DealPath, Inc.		Senior Secured	11.0%		117,219		116,912		116,912		5/1/2021
		Invoice2Go, Inc.		Senior Secured	11.8%		356,137		356,137		356,137		4/1/2021		Estify, Inc.		Senior Secured	18.0%		842,819		713,355		148,174		*
		Invoice2Go, Inc.		Senior Secured	11.8%		415,458		411,914		411,914		4/1/2021		FieldAware US, Inc.		Senior Secured	11.0%		8,629,085		6,712,946		6,712,946		*
		Invoice2Go, Inc.		Senior Secured	11.8%		415,474		415,474		415,474		4/1/2021		GoFormz, Inc.		Senior Secured	12.0%		127,650		126,571		126,571		6/1/2021
		Invoice2Go, Inc. Subtotal					1,187,069		1,183,525		1,183,525				Invoice2Go, Inc.		Senior Secured	11.8%		61,109		61,109		61,109		4/1/2021
		Metarail, Inc.		Senior Secured	12.0%		650,188		637,395		75,240		11/1/2022		Invoice2Go, Inc.		Senior Secured	11.8%		61,110		60,978		60,978		4/1/2021
		Swrve, Inc.		Senior Secured	11.8%		188,594		186,290		186,290		11/1/2020		Invoice2Go, Inc.		Senior Secured	11.8%		52,380		52,380		52,380		4/1/2021
		Truss Technology Corporation		Senior Secured	2.2%		2,000,000		238,275		—		*		Invoice2Go, Inc. Subtotal					174,599		174,467		174,467
		VenueNext, Inc.		Senior Secured	18.0%		113,271		51,330		43,372		*		Metarail, Inc.		Senior Secured	12.0%		735,278		725,683		489,327		7/1/2023
		Viewpost Holdings, LLC.		Senior Secured	11.5%		11,000,000		9,965,243		3,288,080		*		Truss Technology Corporation		Senior Secured	2.2%		2,000,000		238,275		—		*
		Vuemix, Inc.		Senior Secured	11.3%		18,754		18,666		18,666		11/1/2020		Viewpost Holdings, LLC.		Senior Secured	11.5%		11,000,000		9,636,032		2,958,869		*
Software Total	Software Total		28.1%				$	26,949,057	$	22,280,493	$	13,236,486		Software Total		28.3%				$	26,168,674	$	19,596,737	$	11,786,834

Technology Services	Technology Services													Technology Services
		AirHelp, Inc.		Senior Secured	10.0%		$	23,267	$	23,242	$	23,242	10/1/2020		Blazent, Inc.		Senior Secured	12.0%		$	1,464,421	$	719,767	$	498,501	*
		Blazent, Inc.		Senior Secured	12.0%		1,554,190		1,036,590		342,182		*		Dolly, Inc.		Senior Secured	12.0%		508,530		502,246		502,246		5/1/2021
		Dolly, Inc.		Senior Secured	12.0%		551,358		545,301		545,301		5/1/2021		PayJoy, Inc. **		Senior Secured	10.0%		182,737		181,037		181,037		8/1/2021
		Fluxx Labs		Senior Secured	11.8%		76,503		76,053		76,053		11/1/2020		TrueFacet, Inc.		Senior Secured	18.0%		871,610		839,387		—		*
		PayJoy, Inc. **		Senior Secured	10.0%		392,245		385,052		385,052		8/1/2021		Zeel Networks, Inc.		Senior Secured	11.0%		244,096		244,096		166,314		6/1/2021
Technology Services Total														Technology Services Total		3.2%				$	3,271,394	$	2,486,533	$	1,348,098
		TrueFacet, Inc.		Senior Secured	18.0%		946,610		839,386		13,101		*
		Zeel Networks, Inc.		Senior Secured	11.0%		481,576		476,162		398,380		1/1/2021		Grand Total	78.0%				$	56,876,186	$	45,046,007	$	32,452,872
Technology Services Total			3.8%				$	4,025,749	$	3,381,786	$	1,783,311

Wireless
		Nextivity, Inc.		Senior Secured	12.0%		$	422,541	$	422,541	$	422,541	6/1/2021
		Nextivity, Inc.		Senior Secured	12.0%		1,549,098		1,549,055		1,549,055		6/1/2021
		Nextivity, Inc. Subtotal					1,971,639		1,971,596		1,971,596
		Parallel Wireless, Inc.		Senior Secured	11.8%		56,823		56,771		56,771		10/1/2020
Wireless Total			4.3%				$	2,028,462	$	2,028,367	$	2,028,367

		Grand Total	96.5%				$	70,491,262	$	60,737,472	$	45,404,472

* As of ~~September 30, 2020,~~March 31, 2021, loans with a cost basis of ~~$30.4~~$28.4 million and a fair value of ~~$15.8~~$16.1 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.” As of ~~September 30, 2020, 5.2%~~March 31, 2021, 33.2% of the Fund’s total assets represented non-qualifying assets. Under Section 55(a) of the 1940 Act, the Fund is prohibited from acquiring any additional non-qualifying assets unless, at the time of acquisition, certain specified qualifying assets (e.g., securities issued by an "eligible portfolio company," as defined in Section 2(a)(46)) represent at least 70% of its total assets at the time of acquisition of any additional non-qualifying assets. As part of this calculation, the numerator consists of the value of the Fund's investments in all eligible portfolio companies and the denominator consists of total assets less those assets described in Section 55(a)(7) of the 1940 Act.

^ Entity is not domiciled in the United States and does not have its principal place of business in the United States.

(a) The percentage of net assets that each industry group represents is shown with the industry totals (the sum of the percentages does not equal 100% because the percentages are based on net assets as opposed to total loans).

(b)The interest rate is the designated annual interest rate exclusive of any original issue discount, fees or end of term payment.

(c) The end of term payments are contractually due on the maturity date and are in addition to the interest rate shown. End of term payments are the percentage of the final payment divided by the original loan amount and are amortized over the full term of the loan.

As of ~~September 30, 2020,~~March 31, 2021, all loans were made to non-affiliates.

See notes to condensed financial statement (unaudited).

VENTURE LENDING & LEASING VII, INC.

CONDENSED SCHEDULE OF INVESTMENTS (UNAUDITED)

AS OF DECEMBER 31, ~~2019~~2020


Industry	Industry	Borrower	Percent of Net Assets (a)	Collateral	Interest Rate (b)	End of Term Payment (c)	Principal		Cost		Fair Value		Maturity Date	Industry	Borrower	Percent of Net Assets (a)	Collateral	Interest Rate (b)	End of Term Payment (c)	Principal		Cost		Fair Value		Maturity Date
Computers & Storage
		Canary Connect, Inc.		Senior Secured	12.8%		$	577,487	$	509,119	$	509,119	12/1/2020
		Rigetti & Co., Inc.		Senior Secured	9.0%	2.8%	194,537		194,122		194,122		1/1/2020
Computers & Storage Total			1.0%				$	772,024	$	703,241	$	703,241

Internet	Internet													Internet
		Amino Payments, Inc.		Senior Secured	10.8%		$	448,596	$	422,199	$	422,199	9/1/2021
		Bombfell, Inc.		Senior Secured	11.0%		656,522		647,811		647,811		10/1/2021
		Cowboy Analytics, LLC		Senior Secured	5.5%		259,030		142,347		71,877		*
		CustomMade, Inc.		Senior Secured	0.0%		1,651,771		706,026		706,026		*
		Digital Caddies, Inc. **		Senior Secured	18.0%		989,068		987,584		—		*
		Giddy Apps, Inc.		Senior Secured	11.5%		1,240,498		965,454		—		*
		Leading ED, Inc.		Senior Secured	10.0%		175,000		76		—		*
		Relay Network, LLC		Senior Secured	8.0%	4.4%	355,349		353,403		353,403		9/1/2020
		Relay Network, LLC		Senior Secured	8.0%	4.4%	355,319		350,310		350,310		9/1/2020		Amino Payments, Inc.		Senior Secured	10.8%		$	358,869	$	346,344	$	289,447	*
		Relay Network, LLC Subtotal					710,668		703,713		703,713				Bombfell, Inc.		Senior Secured	11.0%		597,384		297,205		3,748		*
		Spot.IM, Ltd. ** ^		Senior Secured	11.8%		46,419		45,732		45,732		5/1/2020		Cowboy Analytics, LLC		Senior Secured	5.5%		259,030		119,547		43,789		*
		Spot.IM, Ltd. ** ^		Senior Secured	12.5%		46,752		46,415		46,415		5/1/2020		CustomMade, Inc.		Senior Secured	—%		1,651,771		706,776		706,776		*
		Spot.IM, Ltd. ** ^ Subtotal					93,171		92,147		92,147				Digital Caddies, Inc. **		Senior Secured	18.0%		989,068		987,584		—		*
		Tango Card, Inc.		Senior Secured	12.0%		595,825		591,279		591,279		11/1/2020		Leading ED, Inc.		Senior Secured	10.0%		175,000		76		—		*
		Wristcam Inc. ** ^		Senior Secured	11.0%		3,775,908		3,069,657		890,055		*		Wristcam Inc. ** ^		Senior Secured	11.0%		3,011,489		2,208,422		693,591		*
		YouDocs Beauty, Inc.		Senior Secured	11.0%		1,350,000		1,192,024		1,192,024		*		YouDocs Beauty, Inc.		Senior Secured	11.0%		1,350,000		1,192,024		1,192,024		*
Internet Total	Internet Total		7.5%				$	11,946,057	$	9,520,317	$	5,317,131		Internet Total		7.2%				$	8,392,611	$	5,857,978	$	2,929,375

Medical Devices	Medical Devices													Medical Devices
		AxioMed, Inc.		Unsecured	0.0%		$	14,238	$	14,238	$	—	*		AxioMed, Inc.		Unsecured	—%		$	14,238	$	14,238	$	—	*
		Renovia, Inc.		Senior Secured	11.0%		220,276		217,530		217,530		6/1/2020		Renovia, Inc.		Senior Secured	11.0%		313,361		288,880		288,880		9/1/2021
		Renovia, Inc.		Senior Secured	11.0%		394,841		392,580		392,580		11/1/2020
		Renovia, Inc. Subtotal					615,117		610,110		610,110
Medical Devices Total	Medical Devices Total		0.9%				$	629,355	$	624,348	$	610,110		Medical Devices Total		0.7%				$	327,599	$	303,118	$	288,880

Other Healthcare	Other Healthcare													Other Healthcare
		4G Clinical LLC		Senior Secured	11.0%		$	255,880	$	252,650	$	252,650	7/1/2020
		Clover Health Investments Corporation		Senior Secured	11.3%		9,417,408		9,417,408		9,417,408		10/1/2022
		Clover Health Investments Corporation		Senior Secured	11.0%		14,722,192		14,722,191		14,722,191		3/1/2022
		Clover Health Investments Corporation Subtotal					24,139,600		24,139,599		24,139,599
		MD Revolution, Inc.		Senior Secured	12.5%		139,624		138,801		138,801		3/1/2020
		mPharma Data, Inc. ** ^		Senior Secured	10.0%		135,340		133,045		133,045		11/1/2020		Clover Health Investments Corporation		Senior Secured	11.0%		$	9,033,546	$	8,792,010	$	8,792,010	3/1/2022
		mPharma Data, Inc. ** ^		Senior Secured	10.0%		181,549		180,264		180,264		3/1/2021		Clover Health Investments Corporation		Senior Secured	11.3%		6,428,843		6,428,843		6,428,843		10/1/2022
		mPharma Data, Inc. ** ^ Subtotal					316,889		313,309		313,309				Clover Health Investments Corporation Subtotal					15,462,389		15,220,853		15,220,853
		Myolex, Inc.		Senior Secured	18.0%		762,531		726,537		238,967		*		mPharma Data, Inc. ** ^		Senior Secured	10.0%		38,140		38,071		38,071		3/1/2021
		Physician Software Systems, LLC		Senior Secured	18.0%		164,677		148,042		—		*		Myolex, Inc.		Senior Secured	18.0%		762,531		726,537		211,873		*
		Sparta Software Corporation		Senior Secured	10.0%	2.5%	42,282		41,691		41,691		6/1/2020		Physician Software Systems, LLC		Senior Secured	18.0%		164,677		148,042		—		*
Other Healthcare Total	Other Healthcare Total		35.1%				$	25,821,483	$	25,760,629	$	25,125,017		Other Healthcare Total		38.0%				$	16,427,737	$	16,133,503	$	15,470,797

Other Technology	Other Technology													Other Technology
		BloomLife, Inc.		Senior Secured	12.0%		$	44,885	$	44,433	$	44,433	4/1/2020		Consumer Physics, Inc. ** ^		Senior Secured	11.0%		$	538,240	$	527,610	$	490,311	12/1/2021
		Consumer Physics, Inc. ** ^		Senior Secured	11.0%		822,854		787,630		729,155		1/1/2022		Finiks, Inc.		Senior Secured	2.7%		667,500		27,115		44,731		*
		Flo Water, Inc.		Senior Secured	11.5%		64,052		62,946		62,946		5/1/2020		Gap Year Global, Inc.		Senior Secured	18.0%		90,768		86,359		—		*
		Gap Year Global, Inc.		Senior Secured	18.0%		90,768		86,359		—		*		Heartwork, Inc.		Senior Secured	18.0%		379,462		371,981		27,353		*
		Heartwork, Inc.		Senior Secured	18.0%		379,462		371,981		73,493		*		Hint, Inc.		Senior Secured	11.0%		639,224		639,224		639,224		7/1/2021
		Hint, Inc.		Senior Secured	11.0%		1,321,439		1,277,919		1,277,919		3/1/2021		Hint, Inc.		Senior Secured	11.0%		278,952		276,573		276,573		3/1/2021
		Hint, Inc.		Senior Secured	11.0%		1,644,377		1,644,377		1,644,377		7/1/2021		Hint, Inc. Subtotal					918,176		915,797		915,797
		Hint, Inc. Subtotal					2,965,816		2,922,296		2,922,296				LanzaTech New Zealand Ltd.		Senior Secured	13.3%		285,170		284,714		284,713		3/1/2021
		June Life, Inc.		Senior Secured	11.8%		129,682		128,895		128,895		3/1/2020		Neuehouse, LLC		Senior Secured	12.0%		1,750,000		1,292,765		1,292,765		*
		June Life, Inc.		Senior Secured	11.8%		129,691		129,319		129,319		3/1/2020		PDQ Enterprises LLC **		Senior Secured	11.0%		240,964		240,531		240,531		2/1/2021
		June Life, Inc. Subtotal					259,373		258,214		258,214				Plenty Unlimited, Inc.		Senior Secured	9.0%	9.4%	217,703		217,280		217,280		3/1/2021
		LanzaTech New Zealand Ltd.		Senior Secured	13.0%		355,735		351,225		351,225		3/1/2020		Plenty Unlimited, Inc.		Senior Secured	9.0%	11.7%	159,868		159,505		159,505		1/1/2021
		LanzaTech New Zealand Ltd.		Senior Secured	13.3%		1,336,381		1,328,045		1,328,045		3/1/2021		Plenty Unlimited, Inc.		Senior Secured	9.0%	11.7%	1,103,738		1,089,466		1,089,467		9/1/2021
		LanzaTech New Zealand Ltd.		Senior Secured	13.0%		1,033,301		1,027,199		1,027,199		9/1/2020		Plenty Unlimited, Inc. Subtotal					1,481,309		1,466,251		1,466,252
		LanzaTech New Zealand Ltd. Subtotal					2,725,417		2,706,469		2,706,469				VentureBeat, Inc.		Senior Secured	12.0%		804,064		485,996		363,883		*
		MobyFox, Inc.		Senior Secured	4.0%		500,000		193,300		47,500		*
		Neuehouse, LLC		Senior Secured	12.0%		1,750,000		1,297,265		1,297,265		*
		Noteleaf, Inc.		Senior Secured	11.0%		489,249		485,228		485,228		9/1/2020
		PDQ Enterprises LLC **		Senior Secured	11.0%		1,597,950		1,583,889		1,583,889		2/1/2021
		PLAE, Inc.		Senior Secured	9.0%	3.2%	621,378		613,950		365,025		12/1/2020
		Plenty Unlimited, Inc.		Senior Secured	9.0%	9.4%	720,381		715,351		715,351		3/1/2021
		Plenty Unlimited, Inc.		Senior Secured	9.0%	11.7%	669,055		657,374		657,374		1/1/2021
		Plenty Unlimited, Inc.		Senior Secured	9.0%	11.7%	2,129,724		2,074,806		2,074,806		9/1/2021
		Plenty Unlimited, Inc. Subtotal					3,519,160		3,447,531		3,447,531
		SkyKick, Inc.		Senior Secured	10.5%		179,654		178,576		178,576		10/1/2020
		SkyKick, Inc.		Senior Secured	10.5%		329,036		325,320		325,320		6/1/2020
		SkyKick, Inc.		Senior Secured	10.5%		196,798		195,476		195,476		11/1/2020
		SkyKick, Inc. Subtotal					705,488		699,372		699,372
		TAE Technologies, Inc.		Senior Secured	12.5%		1,411,739		1,397,787		1,397,787		4/1/2021
		TAE Technologies, Inc.		Senior Secured	12.5%		5,320,565		5,205,606		5,205,606		3/1/2021
		TAE Technologies, Inc. Subtotal					6,732,304		6,603,393		6,603,393
		VentureBeat, Inc.		Senior Secured	12.0%		825,775		607,172		212,669		*
		Virtuix Holdings, Inc.		Senior Secured	11.0%		191,811		189,767		189,767		7/1/2020
Other Technology Total	Other Technology Total		30.5%				$	24,285,742	$	22,961,195	$	21,728,645		Other Technology Total		12.6%				$	7,155,653	$	5,699,119	$	5,126,336

Security
		Nok Nok Labs, Inc.		Senior Secured	12.5%		$	278,668	$	262,884	$	262,884	12/1/2020
Security Total			0.4%				$	278,668	$	262,884	$	262,884

Semiconductors & Equipment
		ETA Compute, Inc.		Senior Secured	10.5%		$	72,471	$	72,179	$	72,179	8/1/2020
Semiconductors & Equipment Total			0.1%				$	72,471	$	72,179	$	72,179

Software	Software													Software
		Aptible, Inc.		Senior Secured	11.8%		$	114,677	$	113,164	$	113,164	2/1/2021
		Bloomboard, Inc.		Senior Secured	11.5%		2,507,253		1,726,360		1,609,258		*
		BlueCart, Inc.		Senior Secured	12.8%		8,832		8,821		8,821		1/1/2020
		BlueCart, Inc.		Senior Secured	12.5%		17,613		17,561		17,561		1/1/2020
		BlueCart, Inc. Subtotal					26,445		26,382		26,382
		DealPath, Inc.		Senior Secured	11.0%		931,379		917,163		917,163		5/1/2021
		DemystData Limited		Senior Secured	11.8%		185,689		182,802		182,802		5/1/2020
		DemystData Limited		Senior Secured	11.8%		128,725		128,084		128,084		7/1/2020
		DemystData Limited Subtotal					314,414		310,886		310,886
		Drift Marketplace, Inc.		Senior Secured	11.0%		27,932		27,877		27,877		3/1/2020
		Drift Marketplace, Inc.		Senior Secured	11.0%		21,052		21,008		21,008		3/1/2020
		Drift Marketplace, Inc.		Senior Secured	11.0%		20,949		20,782		20,782		3/1/2020
		Drift Marketplace, Inc. Subtotal					69,933		69,667		69,667
		Estify, Inc.		Senior Secured	18.0%		842,819		818,731		261,969		*
		FieldAware US, Inc.		Senior Secured	11.0%		7,616,117		7,177,946		4,483,233		*
		Gearbox Software, LLC		Senior Secured	11.0%		1,322,592		1,317,051		1,317,051		3/1/2021
		Gearbox Software, LLC		Senior Secured	11.0%		790,132		787,238		787,238		11/1/2020
		Gearbox Software, LLC		Senior Secured	11.0%		977,945		952,723		952,723		9/1/2020
		Gearbox Software, LLC Subtotal					3,090,669		3,057,012		3,057,012
		GoFormz, Inc.		Senior Secured	12.0%		716,482		683,705		683,705		11/1/2020
		Invoice2Go, Inc.		Senior Secured	11.8%		779,652		779,652		779,652		4/1/2021
		Invoice2Go, Inc.		Senior Secured	11.8%		221,827		217,619		217,619		6/1/2020		Aptible, Inc.		Senior Secured	11.8%		$	17,356	$	17,308	$	17,308	2/1/2021
		Invoice2Go, Inc.		Senior Secured	11.8%		909,416		893,275		893,275		4/1/2021		Bloomboard, Inc.		Senior Secured	11.5%		2,542,024		1,225,605		1,132,676		*
		Invoice2Go, Inc.		Senior Secured	11.8%		909,506		909,506		909,506		4/1/2021		DealPath, Inc.		Senior Secured	11.0%		289,086		287,577		287,577		5/1/2021
		Invoice2Go, Inc. Subtotal					2,820,401		2,800,052		2,800,052				Estify, Inc.		Senior Secured	18.0%		842,819		737,672		154,458		*
		JethroData, Inc. ** ^		Senior Secured	18.0%		704,868		681,877		327,328		*		FieldAware US, Inc.		Senior Secured	11.0%		8,629,085		6,862,946		6,862,946		*
		Metarail, Inc.		Senior Secured	12.0%		672,294		649,249		285,595		6/1/2022		GoFormz, Inc.		Senior Secured	12.0%		232,837		229,478		229,478		6/1/2021
		Migo Money, Inc. ** ^		Senior Secured	12.0%		129,034		126,786		126,786		7/1/2020		Invoice2Go, Inc.		Senior Secured	11.8%		206,485		206,485		206,485		4/1/2021
		Swrve, Inc.		Senior Secured	11.8%		988,691		942,283		942,283		11/1/2020		Invoice2Go, Inc.		Senior Secured	11.8%		240,892		240,892		240,892		4/1/2021
		The/Studio Technologies, Inc.		Senior Secured	11.0%		165,210		161,987		161,987		6/1/2020		Invoice2Go, Inc.		Senior Secured	11.8%		240,887		239,594		239,593		4/1/2021
		Truss Technology Corporation		Senior Secured	2.2%		2,000,000		238,275		—		*		Invoice2Go, Inc. Subtotal					688,264		686,971		686,970
		VenueNext, Inc.		Senior Secured	11.0%		276,785		272,729		272,729		5/1/2020		Metarail, Inc.		Senior Secured	12.0%		735,278		723,738		487,382		7/1/2023
		Viewpost Holdings, LLC.		Senior Secured	11.5%		11,000,000		10,324,150		3,646,987		*		Truss Technology Corporation		Senior Secured	2.2%		2,000,000		238,275		—		*
		Vuemix, Inc.		Senior Secured	11.3%		98,925		97,130		97,130		11/1/2020		VenueNext, Inc.		Senior Secured	—%		58,678		51,330		43,372		*
		Xeeva, Inc.		Senior Secured	12.0%		636,722		634,250		634,250		7/1/2020		Viewpost Holdings, LLC.		Senior Secured	11.5%		11,000,000		9,849,781		3,172,617		*
Software Total	Software Total		29.2%				$	35,723,118	$	31,829,784	$	20,827,566		Software Total		32.1%				$	27,035,427	$	20,910,681	$	13,074,784

Technology Services	Technology Services													Technology Services
		AirHelp, Inc.		Senior Secured	10.0%		$	224,210	$	222,872	$	222,872	10/1/2020		Blazent, Inc.		Senior Secured	12.0%		$	1,464,421	$	989,830	$	768,564	*
		AirHelp, Inc.		Senior Secured	10.0%		158,653		158,004		158,004		7/1/2020		Dolly, Inc.		Senior Secured	12.1%		530,265		514,590		514,590		5/1/2021
		AirHelp, Inc.		Senior Secured	10.0%		228,495		226,378		226,378		5/1/2020		PayJoy, Inc. **		Senior Secured	10.0%		288,795		284,794		284,794		8/1/2021
		AirHelp, Inc. Subtotal					611,358		607,254		607,254				TrueFacet, Inc.		Senior Secured	18.0%		871,610		839,387		—		*
		Akademos, Inc.		Junior Secured	13.5%	1.5%	310,059		296,533		296,533		8/1/2020		Zeel Networks, Inc.		Senior Secured	11.0%		481,576		480,198		402,417		1/1/2021
		Blazent, Inc.		Senior Secured	12.0%		1,554,190		1,176,871		519,570		*
		Blue Technologies Limited ** ^		Senior Secured	11.0%		73,765		73,282		73,282		4/1/2020
		Callisto Media, Inc.		Senior Secured	10.0%		677,238		674,538		674,538		12/1/2020
		Callisto Media, Inc.		Senior Secured	10.0%		867,752		863,859		863,859		6/1/2020
		Callisto Media, Inc.		Senior Secured	10.0%		514,237		512,656		512,656		9/1/2020
		Callisto Media, Inc.		Senior Secured	10.0%		836,205		832,109		832,109		3/1/2021
		Callisto Media, Inc. Subtotal					2,895,432		2,883,162		2,883,162
		Dolly, Inc.		Senior Secured	12.0%		610,970		597,981		597,981		5/1/2021
		Fluxx Labs		Senior Secured	11.8%		225,096		222,897		222,897		6/1/2020
		PayJoy, Inc. **		Senior Secured	10.0%		687,580		665,991		665,991		8/1/2021
		TrueFacet, Inc.		Senior Secured	18.0%		946,610		893,580		4,969		*
		Zeel Networks, Inc.		Senior Secured	11.0%		571,424		556,082		556,082		8/1/2020
Technology Services Total	Technology Services Total		9.0%				$	8,486,484	$	7,973,633	$	6,427,721		Technology Services Total		4.8%				$	3,636,667	$	3,108,799	$	1,970,365
															Grand Total	95.4%				$	62,975,694	$	52,013,198	$	38,860,537
Wireless
		Juvo Mobile, Inc. **		Senior Secured	11.0%		$	37,413	$	37,350	$	37,350	2/1/2020
		Juvo Mobile, Inc. **		Senior Secured	11.0%		18,792		18,773		18,773		1/1/2020
		Juvo Mobile, Inc. ** Subtotal					56,205		56,123		56,123
		Nextivity, Inc.		Senior Secured	12.0%		808,783		808,783		808,783		6/1/2021
		Nextivity, Inc.		Senior Secured	12.0%		2,964,747		2,964,590		2,964,590		6/1/2021
		Nextivity, Inc. Subtotal					3,773,530		3,773,373		3,773,373
		Parallel Wireless, Inc.		Senior Secured	11.8%		543,960		541,246		541,246		10/1/2020
		Parallel Wireless, Inc.		Senior Secured	11.8%		522,646		519,754		519,754		4/1/2020
		Parallel Wireless, Inc. Subtotal					1,066,606		1,061,000		1,061,000
Wireless Total			6.9%				$	4,896,341	$	4,890,496	$	4,890,496

		Grand Total	120.6%				$	112,911,743	$	104,598,706	$	85,964,990

* As of December 31, ~~2019,~~2020, loans with a cost basis of ~~$33.5~~$29.8 million and a fair value of ~~$15.6~~$17.0 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.” As of December 31, ~~2019, 5.6%~~2020, 4.3% of the Fund’s total assets represented non-qualifying assets. Under Section 55(a) of the 1940 Act, the Fund is prohibited from acquiring any additional non-qualifying assets unless, at the time of acquisition, certain specified qualifying assets (e.g., securities issued by an "eligible portfolio company," as defined in Section 2(a)(46)) represent at least 70% of its total assets. As part of this

calculation, the numerator consists of the value of the Fund's investments in all eligible portfolio companies and the denominator consists of total assets less those assets described in Section 55(a)(7) of the 1940 Act.

^ Entity is not domiciled in the United States and does not have its principal place of business in the United States.

(b) The interest rate is the designated annual interest rate exclusive of any original issue discount, fees or end of term payment.

As of December 31, ~~2019,~~2020, all loans were made to non-affiliates.

See notes to condensed financial statements (unaudited).

~~VENTURE LENDING & LEASING VII, INC.~~

~~CONDENSED SCHEDULE OF DERIVATIVE INSTRUMENT (UNAUDITED)~~

~~AS OF DECEMBER 31, 2019~~

~~The Fund utilized the cancellation option for the Fund to terminate the swap early effective as of May 28, 2020. As such, there was no derivative instruments as of September 30, 2020.~~

AS OF DECEMBER 31, 2019
Description and terms of payments to be received from another party Description and terms of payments to be paid to another party Counterparty Maturity Date Notional Amount Value Upfront payments/receipts Unrealized appreciation/(depreciation)
(a)
Cancellable Interest Rate Swap Agreement - Floating interest rate greater of USD-LIBOR-BBA
Fixed interest rate 1.900%, to be paid monthly MUFG Union Bank, N.A. 12/1/2020 $ 25,927,448 $ (22,136) $ — $ (22,136)
Total $ 25,927,448 $ (22,136) $ — $ (22,136)

(a) The unrealized appreciation/depreciation were valued using prices or valuation based on observable inputs other than quoted price in active markets for identical assets and liabilities. See "Note 3. Fair Value Disclosures" for more information.

~~See notes to condensed financial statements (unaudited).~~

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 (the “1940 Act”) and is managed by Westech Investment Advisors, LLC (the “Manager” or “Management”). The Fund will be dissolved on December 31, 2022 unless the Board of Directors (the “Board”) opts to elect early dissolution. One hundred percent of the stock of the Fund is held by Venture Lending & Leasing VII, LLC (the “Company”). Prior to commencing 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 superior risk-adjusted investment returns and it seeks to achieve that objective by providing debt financing to portfolio companies, most of which are private. The Fund generally receives warrants to acquire equity securities in connection with its portfolio investments and generally distributes these warrants to its shareholder upon receipt, or soon thereafter. The Fund also has guidelines for the percentages of total assets that are 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 United States Generally Accepted Accounting Principles (“U.S. 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 ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 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, ~~2019.~~2020.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting and Use of Estimates

The preparation of financial statements in conformity with U.S. 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. As an investment company, the Fund follows accounting and reporting guidance as set forth in Topic 946 (“Financial Services – Investment Companies”) of the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification, as amended (“ASC”). Certain prior period information has been reclassified to conform to the current year presentation.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand and money market mutual funds with maturities of 90 days or less. Money market mutual funds held as cash equivalents are valued at their most recently traded net asset value. Within cash and cash equivalents, as of March 31, 2021, the Fund held 9,250,166 units in the Blackrock

~~value.~~Treasury Trust Institutional Fund valued at $1 per unit at a yield of 0.03%, which represented 22.23% of the net assets of the Fund. Within cash and cash equivalents, as of ~~September 30,~~December 31, 2020, the Fund held ~~1,512,425~~1,866,875 units in the Blackrock Treasury Trust Institutional Fund valued at $1 per unit at a yield of ~~0.04%~~0.02%, which represented 3.21% of the net assets of the Fund. Within cash and cash equivalents, as of December 31, 2019, the Fund held 354,105 units in the Blackrock Treasury Trust Institutional Fund valued at $1 per unit at a yield of 1.6%, which represented 0.5%4.6% 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 resulting from the ~~amortization~~accretion of ~~equity securities~~discount on loans included as additional compensation as part of the loan agreements. Additionally, fees received as part of the transaction are added to the loan discount and ~~amortized~~accreted over the life of the loan.

Realized Gains and Losses from Loans

Realized gains ~~and~~or losses on the sale of loans are computed using the difference between the amortized cost and the sales proceeds. Realized losses on loan write-offs are recognized when management determines a loan is uncollectible.

Investment Valuation

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 the valuation methods.

As of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, the financial statements included nonmarketable investments of ~~$45.4~~$32.5 million and ~~$86.0~~$38.9 million, respectively, (or ~~95.8%~~77.4% and ~~98.2%~~94.7% of the total assets, respectively), with the 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 in its borrowing portfolio companies, Management determines fair value based on hypothetical markets, and on 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 the 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, the effect of deterioration in the quality of the underlying collateral, increase in 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 payment, 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 time a loan was classified as non-accrual will be added back to the remaining payment schedule causing a change in the effective interest rate.

As of ~~September 30, 2020,~~March 31, 2021, loans with a cost basis of ~~$30.4~~$28.4 million and a fair value of ~~$15.8~~$16.1 million were classified as non-accrual. As of December 31, ~~2019,~~2020, loans with a cost basis of ~~$33.5~~$29.8 million and a fair value of ~~$15.6~~$17.0 million were classified as non-accrual.

Warrants and Equity Securities

Warrants and equity securities received in connection with loan transactions are measured at a 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 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 of time 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. As of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, the Fund assumed the average duration of a warrant is 4.0 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. However, the estimated initial term of the warrants is one factor, of many, used in the valuation of warrants, and by itself does not have a significant impact on the result of operations.

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. The costs are amortized over the term of the facility.

The fair values of other assets and accrued liabilities are estimated at their carrying values because of the short-term nature of these assets and liabilities.

The carrying values of the borrowings under the debt facility approximates their fair value based on the borrowing rates available to the Fund.

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 Statements of Assets and Liabilities and were amortized over the estimated life of the facility. These fees and costs were fully amortized on July 16, 2020, when the debt facility was terminated. The amortization of these costs is recorded as interest expense in the Condensed Statements of Operations.

Derivative Instrument

The Fund ~~uses~~used derivative instruments to manage its exposure to changes in interest rates on expected borrowings under its debt facility, as the Fund originates fixed rate loans (see Note 8).

Derivative instruments ~~are~~were primarily valued on the basis of quotes obtained from banks, brokers and dealers and adjusted for counterparty risk and the optionality of the interest rate ~~floor.~~terms. The valuation of the derivative instruments 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 derivative instruments.

The Fund is a party to a master netting arrangement with MUFG Union Bank, N.A., however, the Fund has elected not to offset assets and liabilities under these arrangements for financial statement presentation purposes. The contract is recorded at gross fair value in either derivative asset or derivative liability in the Condensed 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 change in unrealized gain (loss) from derivative instrument in the Condensed Statements of Operations and the quarterly interest received or paid on the derivative instruments, if any, is recorded in net realized gain (loss) from derivative instrument in the Condensed Statements of Operations.

The Fund utilized the cancellation option to terminate the cancellable interest rate swap early effective as of May 28, 2020.

3. FAIR VALUE DISCLOSURES

The Fund provides asset-based financing primarily to start-up and emerging growth venture-backed companies pursuant to commitments whereby the Fund agrees to finance assets and provide working or growth capital up to a specified amount for the term of the commitment, upon the terms and subject to the conditions specified by such commitment. Even though these loans are generally secured by the assets of the borrowers, the Fund in most cases is subject to the credit risk of such companies. As of ~~September 30, 2020,~~March 31, 2021, the Fund’s investments in loans were primarily to companies based within the United States and were diversified among borrowers in the industry segments shown in the Condensed Schedules of Investments. All loans are senior to unsecured creditors and other secured creditors, unless as indicated in the Condensed Schedules of Investments.

The Fund defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; that is, an exit price. The exit price assumes the asset or liability was exchanged in an orderly transaction; it was not a forced liquidation or distressed sale. Because there is no readily available market price and no secondary market for substantially all of the ~~debt~~loan investments made by the Fund to borrowing portfolio companies, Management determines fair value (or estimated exit value) based on a hypothetical market, and several factors related to each borrower.

Loan balances in the Condensed Schedules of Investments are listed 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 months ended September 30, 2020 and 2019,~~The tables below show the weighted-average interest rate onof the performing loans ~~was 13.93%~~ and 14.08%, respectively, which was inclusive of both cash and non-cash interest income. For the three months ended September 30, 2020 and 2019, the weighted-average interest rate on the cash portion of the interest income was 12.00% ~~and~~ ~~11.88%, respectively. For the nine months ended September 30, 2020 and 2019, the weighted-average interest rate on performing loans was 14.14%~~ ~~and~~ 18.59%, respectively, which was inclusive of both cash and non-cash interest income. For the nine months ended September 30, 2020 and 2019, the weighted-average interest rate on the cash portion of the interest income was 12.11% ~~and~~ ~~16.16%, respectively.~~all loans.

For the three months ended September 30, 2020 and 2019, the weighted-average interest rate on all loans was 9.61% and 11.83%, respectively, which was inclusive of both cash and non-cash interest income. For the three months ended September 30, 2020 and 2019, the weighted-average interest rate on the cash portion of the interest income was 8.28% and 10.45%, respectively. For the ninemonths ended September 30, 2020 and 2019, the weighted-average interest rate on all loans was 10.78% and 16.70%, respectively, which was inclusive of both cash and non-cash interest income. For the nine~~months ended September 30, 2020 and 2019, the weighted-average interest rate on the cash portion of the interest income was 9.24% and 14.52%, respectively.~~


Performing Loans	For the Three Months Ended March 31, 2021	For the Three Months Ended March 31, 2020
Weighted-Average Interest Rate - Cash	11.42%	11.91%
Weighted-Average Interest Rate- Non-Cash	2.31%	2.06%
Weighted-Average Interest Rate	13.73%	13.97%


All Loans	For the Three Months Ended March 31, 2021	For the Three Months Ended March 31, 2020
Weighted-Average Interest Rate - Cash	6.68%	9.62%
Weighted-Average Interest Rate- Non-Cash	1.24%	1.66%
Weighted-Average Interest Rate	7.92%	11.28%

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 new loans funded during the period.

The risk profile of a loan changes when events occur that impact the credit analysis of the borrower and loan as discussed in the Fund’s loan accounting policy. Such changes result in the fair value adjustments made to the individual loans, which in accordance with U.S. GAAP, would be based on 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. Where the risk profile is consistent with the original underwriting, which is frequently the case for this loan portfolio, the cost basis of the loan often approximates fair value.

On July 8, 2020, the Fund paid off its remaining outstanding debt balance under the facility. All loans as of December 31, 2019 were pledged as collateral for the debt facility, and the Fund’s borrowings were generally

~~collateralized by all assets of the Fund. As of both September 30, 2020 and December 31, 2019, the Fund had no unexpired unfunded commitments to borrowers.~~

Valuation Hierarchy

Under the FASB ASC Topic 820 (“Fair Value Measurement”), 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.

~~Transfers of investments between levels of the fair value hierarchy are 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, or 3 during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 and ~~2019.~~2020.

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’s derivative instruments ~~are~~were based on quotes from the market makers that derive fair values from market data, and therefore, ~~are~~were classified as Level 2. The Fund’s borrowings under the debt facility ~~are~~were also classified as Level 2, because the carrying values of the borrowings are based on rates that are observable at commonly quoted intervals, which are Level 2 inputs, and that approximate fair values. The ~~Fund’s~~Funds’ loan transactions are individually negotiated and unique, and because there is little to no market in which these assets trade, the inputs for these assets ~~which~~ are valued using estimated exit ~~values,~~values. As a result, the Fund's loan transactions are classified as Level 3.

The following tables provide quantitative information about the Fund’s Level 3 fair value measurements of the Fund’s investments by industry as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019.~~2020. In addition to the techniques and inputs noted in the tables below, the Fund may also use other valuation techniques and methodologies when determining its fair value measurements.

Investment Type - Level 3

~~Debt~~Loan Investments

Fair Values at
~~September 30, 2020~~March 31, 2021

Valuation Techniques / Methodologies

Unobservable Inputs

Weighted Averages (a) / Amounts and Ranges

~~Computers and Storage~~Internet

~~145,405~~

~~Hypothetical market analysis~~

~~Hypothetical market coupon rate~~

37% *

~~Internet~~

~~3,292,882~~

~~Hypothetical market analysis~~

~~Hypothetical market coupon rate~~

~~16% (14%-17%)~~

~~Investment Type - Level 3~~

~~Debt Investments~~

~~Fair Values at~~
~~September 30, 2020~~

~~Valuation Techniques / Methodologies~~

~~Unobservable Inputs~~

~~Weighted Averages~~ ~~(a)~~ ~~/ Amounts and Ranges~~

2,411,558

Income approach

Expected amount and timing of cash flow payments

Discount rate

$~~1,303,629~~1,182,849
($0 - ~~$3,407,444)~~$3,557,469)

1%0% (0% - 1%)

Medical Devices

~~339,025~~185,989

Hypothetical market analysis

Hypothetical market coupon rate

~~31%~~70% *

Income approach

Expected amount and timing of cash flow payments

Discount rate

$0 *

0% *

Other Healthcare

~~17,906,790~~13,003,782

Hypothetical market analysis

Hypothetical market coupon rate

13% *

Income approach

Expected amount and timing of cash flow payments

Discount rate

$1,250,945
($0 - $1,250,945)

1% (0% - 1%)

Other Technology

3,716,611

Hypothetical market analysis

Hypothetical market coupon rate

14% ~~(12%~~(11% - ~~14%~~15%)

Income approach

Expected amount and timing of cash flow payments

Discount rate

$~~1,169,713~~2,108,326
($0 - ~~$1,169,713)~~$2,787,929)

1% (0% - 1%)

Software

11,786,834

Hypothetical market analysis

Hypothetical market coupon rate

14% (13% - 17%)

Income approach

Expected amount and timing of cash flow payments

Discount rate

$6,956,305
($0 - $9,635,716)

1% (0% - 1%)

~~Other~~ Technology Services

~~6,600,568~~1,348,098

Hypothetical market analysis

Hypothetical market coupon rate

~~14% (12%~~16% (11% - ~~15%~~20%)

Income approach

Expected amount and timing of cash flow payments

Discount rate

$~~2,030,410~~1,191,577
($0 - ~~$2,787,929)~~$1,506,183)

1% (0% - 1%)

~~Security~~Total loan investments

~~71,638~~ $

~~Hypothetical market analysis~~

~~Hypothetical market coupon rate~~

24% *

32,452,872

~~Software~~

~~13,236,486~~

~~Hypothetical market analysis~~

~~Hypothetical market coupon rate~~

~~14% (13% - 23%)~~

~~Income approach~~

~~Expected amount and timing of cash flow payments~~

~~Discount rate~~

~~$8,481,801~~
~~($0 - $9,815,716)~~

~~1% (0% - 2%)~~

~~Technology Services~~

~~1,783,311~~

~~Hypothetical market analysis~~

~~Hypothetical market coupon rate~~

~~14% (11% - 17%)~~

(a)The weighted average hypothetical market coupon rates were calculated using the relative fair value of the loans.

*There is only one loan within the industry.

Investment Type - Level 3

~~Debt~~Loan Investments

Fair Values at
~~September 30,~~December 31, 2020

Valuation Techniques / Methodologies

Unobservable Inputs

~~Weighted Averages~~ Weighted-Averages(a) / Amounts and Ranges

~~Income approach~~

~~Expected amount and timing of cash flow payments~~

~~Discount rate~~

~~$965,062~~
~~($50,000 - $1,542,354)~~

1%

~~Wireless~~Internet

~~2,028,367~~$

2,929,375

Income approach

Expected amount and timing of cash flow payments

Discount rate

$1,243,528
($0 - $3,407,444)

1% (0% - 1%)

Medical Devices

288,880

Hypothetical market analysis

Hypothetical market coupon rate

~~12% (12% - 13%)~~31% *

Income approach

Expected amount and timing of cash flow payments

Discount rate

$0 *

0% *

~~Total debt investments~~Other Healthcare

~~45,404,472~~

~~(a)The weighted average hypothetical market coupon rates were calculated using the relative fair value of the loans.~~

*There is only one loan within the industry.

Investment Type - Level 3
Debt Investments Fair Values at
December 31, 2019 Valuation Techniques / Methodologies Unobservable Inputs
Weighted Averages (a) / Amounts and Ranges
Computers and Storage $ 703,241 Hypothetical market analysis Hypothetical market coupon rate 31% (14%-38%)
Internet 5,317,131 Hypothetical market analysis Hypothetical market coupon rate 14% (13%-17%)
Income approach Expected amount and timing of cash flow payments

Discount rate $1,570,447
($0 - $2,124,565)

1% (0% - 3%)
Medical Devices 610,110 Hypothetical market analysis Hypothetical market coupon rate 13%
Income approach Expected amount and timing of cash flow payments

Discount rate $0

0%
Other Healthcare 25,125,017 Hypothetical market analysis Hypothetical market coupon rate 14% (12%-16%)
Income approach Expected amount and timing of cash flow payments

Discount rate $1,130,989
($0 - $1,130,989)

3% (0% - 3%)
Other Technology 21,728,645 Hypothetical market analysis Hypothetical market coupon rate 14% (12%-19%)

~~Investment Type - Level 3~~

~~Debt Investments~~

~~Fair Values at~~
~~December 31, 2019~~

~~Valuation Techniques / Methodologies~~

~~Unobservable Inputs~~

~~Weighted Averages~~ ~~(a)~~ ~~/ Amounts and Ranges~~

~~Income approach~~

~~Expected amount and timing of cash flow payments~~

~~Discount rate~~

~~$1,746,842~~
~~($0 - $2,787,929)~~

~~3% (0% - 3%)~~

~~Security~~

~~262,884~~15,470,797

Hypothetical market analysis

Hypothetical market coupon rate

24% *14% (11%-14%)

Income approach

Expected amount and timing of cash flow payments

Discount rate

$1,250,945
($0 - $1,250,945)

1% (0% - 1%)

~~Semiconductors and Equipment~~Other Technology

~~72,179~~5,126,336

Hypothetical market analysis

Hypothetical market coupon rate

12% *14% (12%-15%)

Income approach

Expected amount and timing of cash flow payments

Discount rate

$1,910,812
($0 - $2,787,929)

1% (0% - 1%)

Software

~~20,827,566~~13,074,784

Hypothetical market analysis

Hypothetical market coupon rate

~~15%~~13% (13%~~-23%~~-17%)

Income approach

Expected amount and timing of cash flow payments

Discount rate

$~~5,224,576~~7,133,099
($0 - ~~$7,616,116)~~$9,815,716)

3%1% (0% - 3%2%)

Technology Services

~~6,427,721~~1,970,365

Hypothetical market analysis

Hypothetical market coupon rate

~~13% (11%-26%~~16% (14%-20%)

Income approach

Expected amount and timing of cash flow payments

Discount rate

$~~1,667,641~~1,336,693
($~~100,000~~0- $1,776,246)

1% (0% - ~~$1,682,635)~~

2%

~~Wireless~~

~~4,890,496~~

~~Hypothetical market analysis~~

~~Hypothetical market coupon rate~~

~~12% (12% - 14%~~1%)

Total ~~Debt~~Loan Investments

~~85,964,990~~38,860,537

(a)The weighted average hypothetical market coupon rates were calculated using the relative fair value of the loans.

* There is only one loan within the industry.

The following tables present the balances of assets and liabilities as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 measured at fair value on a recurring basis:


As of September 30, 2020
As of March 31, 2021										As of March 31, 2021
ASSETS:	ASSETS:	Level 1		Level 2		Level 3		Total		ASSETS:	Level 1		Level 2		Level 3		Total
Loans†	Loans†	$	—	$	—	$	45,404,472	$	45,404,472	Loans†	$	—	$	—	$	32,452,872	$	32,452,872

Cash equivalents	Cash equivalents	1,512,425		—		—		1,512,425		Cash equivalents	9,250,166		—		—		9,250,166
Total assets	Total assets	$	1,512,425	$	—	$	45,404,472	$	46,916,897	Total assets	$	9,250,166	$	—	$	32,452,872	$	41,703,038

As of December 31, 2019
ASSETS: Level 1 Level 2 Level 3 Total
Loans†
$ — $ — $ 85,964,990 $ 85,964,990
Cash equivalents 354,105 — — 354,105
Total assets $ 354,105 $ — $ 85,964,990 $ 86,319,095
LIABILITIES: Level 1 Level 2 Level 3 Total
Borrowings under debt facility $ — $ 15,400,000 $ — $ 15,400,000
Derivative liability — 22,136 — 22,136
Total liabilities $ — $ 15,422,136 $ — $ 15,422,136


As of December 31, 2020
ASSETS:	Level 1		Level 2		Level 3		Total
Loans†	$	—	$	—	$	38,860,537	$	38,860,537

Cash equivalents	1,866,875		—		—		1,866,875
Total assets	$	1,866,875	$	—	$	38,860,537	$	40,727,412

†For a detailed listing of borrowers comprising this amount, please refer to the Condensed Schedules of Investments.

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

For the Three Months Ended ~~September 30, 2020~~March 31, 2021

Loans

Warrants

Beginning balance

~~55,423,299~~38,860,537

—

Acquisitions and originations

—

~~30,845~~25,871

Principal reductions ~~and accretion of discounts~~

~~(10,693,774)~~(6,858,352)

—

Accretion of discount of loan

(109,944)

Distributions to shareholder

—

~~(30,845)~~(25,871)

Net change in unrealized gain from loans

~~1,578,900~~559,525

—

Net realized ~~loss~~gain from loans

~~(903,953)~~1,106

—

Ending balance

~~45,404,472~~32,452,872

—

Net change in unrealized gain from loans relating to loans still held at ~~September 30, 2020~~March 31, 2021

~~619,946~~494,670

For the Nine Months Ended September 30, 2020
Loans Warrants Stock
Beginning balance $ 85,964,990 $ — $ —
Acquisitions and originations — 141,283 9,000
Principal reductions and accretion of discounts (41,812,745) — —
Distributions to shareholder — (141,283) (9,000)
Net change in unrealized gain from loans 3,300,716 — —
Net realized loss from loans (2,048,489) — —
Ending balance $ 45,404,472 $ — $ —
Net change in unrealized gain from loans relating to loans still held at September 30, 2020 $ 1,585,989


		For the Three Months Ended September 30, 2019						For the Three Months Ended March 31, 2020 (a)
		Loans		Warrants		Stock				Loans		Warrants		Stock
Beginning balance	Beginning balance	$	124,341,109	$	—	$	—		Beginning balance	$	85,964,990	$	—	$	—
Acquisitions and originations	Acquisitions and originations	—		80,864		455,286			Acquisitions and originations	—		21,677		9,000
Principal reductions and accretion of discounts		(16,571,498)		—		—
Principal reductions									Principal reductions	(14,361,301)		—		—
Accretion of discount of loan									Accretion of discount of loan	(323,357)
Distributions to shareholder	Distributions to shareholder	—		(80,864)		(455,286)			Distributions to shareholder	—		(21,677)		(9,000)
Net change in unrealized loss from loans	Net change in unrealized loss from loans	6,645,649		—		—			Net change in unrealized loss from loans	(1,456,561)		—		—
Net realized loss from loans	Net realized loss from loans	(9,784,311)		—		—			Net realized loss from loans	(419,627)		—		—
Ending balance	Ending balance	$	104,630,949	$	—	$	—		Ending balance	$	69,404,144	$	—	$	—
Net change in unrealized gain from loans relating to loans still held at September 30, 2019		$	541,710
Net change in unrealized loss from loans relating to loans still held at March 31, 2020									Net change in unrealized loss from loans relating to loans still held at March 31, 2020	$	(1,811,110)

For the Nine Months Ended September 30, 2019
Loans Warrants Stock Convertible Loan
Beginning balance $ 210,722,764 $ — $ — $ —
Acquisitions and originations — 204,462 455,286 4,310,753
Principal reductions and accretion of discounts (98,954,520) — — —
Distributions to shareholder — (204,462) (455,286) (4,310,753)
Net change in unrealized loss from loans 3,074,407 — — —
Net realized loss from loans (10,211,702) — — —
Ending balance $ 104,630,949 $ — $ — $ —
Net change in unrealized loss from loans relating to loans still held at September 30, 2019 $ (2,138,523)
(a) Certain prior period information has been disclosed to conform to current presentation.

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 (loss) 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 (loss) per share are the same.

5. CAPITAL STOCK

As of both ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, 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, as of both ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, was $375.0 million. Total contributed capital to the Company

through ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 was $375.0 million, of which $323.8 million ~~and $323.2 million~~ was contributed to the Fund ~~respectively.~~as of both periods.

The chart below shows the distributions of the Fund for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 and ~~2019.~~2020.


		For the Nine Months Ended September 30, 2020		For the Nine Months Ended September 30, 2019			For the Three Months Ended March 31, 2021		For the Three Months Ended March 31, 2020
Cash distributions	Cash distributions	$	29,000,000	$	56,250,000	Cash distributions	$	—	$	15,000,000
Distributions of equity securities and convertible loan	Distributions of equity securities and convertible loan	150,283		4,970,501		Distributions of equity securities and convertible loan	25,871		30,677
Total distributions to shareholder	Total distributions to shareholder	$	29,150,283	$	61,220,501	Total distributions to shareholder	$	25,871	$	15,030,677

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 July 18, 2013, the Fund established a secured, syndicated revolving loan facility in an initial amount of up to $125.0 million led by Wells Fargo, N.A. and MUFG Union Bank, N.A. InOn November 2014, the debt facility size thereunder was increased to $255.0 million. On October 30, 2017, the Fund entered into an agreement with Wells Fargo Bank, N.A., Wells Fargo Securities, LLC, MUFG Union Bank, N.A. and ING Capital, LLC that (i) reduced the size of the facility to $200.0 million and (ii) amended the interest rate options and commitment fee (the “First Amendment”). All of the assets of the Fund ~~collateralize~~collateralized borrowings by the Fund. Loans under the facility may be, at the option of the Fund, a Reference Rate Loan, a LIBOR Loan or a LIBOR Market Index Rate Loan. The First Amendment facility can be accelerated in the event of default, such as failure by the Fund to make timely interest or principal payments.

On July 8, 2020, the Fund paid off its remaining outstanding debt balance under the facility. On July 9, 2020, the Fund notified its lenders of its intention to permanently reduce its aggregate commitments to zero, terminating the debt facility effective July 16, 2020.

Under the terms of this facility, at its option, the Fund was permitted to reduce the lenders’ commitments established in the First Amendment by $5.0 million or more once each calendar month. Beginning March 29, 2019, the lenders’ commitments automatically and permanently reduce each fiscal quarter by an amount equal to 12.5% of the aggregate amount of such commitments.

Borrowings under the facility were collateralized by receivables from loans to portfolio companies advanced by the Fund with assignment of such receivables to the financial institution, plus all of the other assets of the Fund. The Fund paid interest on its borrowings and a fee on the unused portion of the facility. Such borrowings, pursuant to the election of the Fund, bore interest at an annual rate of either (i) Reference Rate plus 1.75%, (ii) LIBOR plus 2.75% or (iii) LIBOR Market Index Rate plus 2.75%. When the Fund used 50% or more of the maximum amount available under the amended loan agreement, the applicable commitment fee was 0.25% of the unused portion of the loan facility; otherwise, the applicable commitment fee was 0.50% of the unused portion. The Fund paid the unused credit line fee quarterly.

Bank fees and other costs of $1.1 million incurred in connection with the acquisition of the facility ~~have~~had been capitalized and were amortized to interest expense on a straight-line basis over the expected life of the facility. They were fully amortized ~~in the quarter~~ when the debt facility was terminated on July 16, 2020.

The facility was revolving and as such did not have a specified repayment schedule, although advances were secured by the assets of the Fund and thus repayments were required as assets decline. The facility contained various covenants including financial covenants related to: (i) minimum debt service coverage ratio, (ii) interest coverage ratio, (iii) maximum loan loss reserves and (iv) unfunded commitment ratio. There were also various restrictive covenants, including limitations on: (i) the incurrence of liens, (ii) consolidations, mergers and asset sales

~~and (iii) capital expenditures. Through the termination of the debt facility on July 16, 2020 and December 31, 2019, Management was not aware of instances of non-compliance with financial covenants.~~

~~As of September 30, 2020, the debt facility balance is zero.~~

~~The following is the summary of the outstanding facility draws as of December 31, 2019:~~


	~~Amount~~		~~Maturity Date~~	All-In Interest Rate**
~~LIBOR Market Index Rate Loan~~	$	~~15,400,000~~	~~October 30, 2020~~	~~Variable based on 1-Month LIBOR rate~~
~~Total Outstanding~~	$	~~15,400,000~~

**Inclusive of 2.75% applicable LIBOR margin plus LIBOR rate.

7. MANAGEMENT FEE

As compensation for its services to the Fund, for the two-year period that commenced with the first capital closing, which took place on December 18, 2012, the Manager received a management fee (“Management Fee”) computed and paid at the end of each quarter at an annual rate of 2.5% of the Company’s committed equity capital (regardless of when or if the capital was called) as of the last day of each fiscal quarter. Following this two-year period, starting on December 18, 2014, Management Fees are calculated and paid at the end of each quarter at an annual rate of 2.5% of the Fund’s total assets (including amounts derived from borrowed funds) as of the last day of each quarter. Management Fees of $0.3 million and ~~$0.7~~$0.4 million were recognized as expenses for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019, respectively. Management Fees of $1.1 million and $2.5 million were recognized as expenses for the nine months ended September 30, 2020 and 2019,~~ respectively.

8. DERIVATIVE INSTRUMENT

The Fund uses derivative instruments to manage its exposure to changes in interest rates on expected borrowings under its debt facility, as the Fund originates fixed rate loans.

Cancellable Interest Rate Swap Agreement

On November 21, 2017, the Fund entered into a cancellable interest rate swap transaction with MUFG Union Bank, N.A. The Fund has entered into a cancellable interest rate swap agreement to manage the Fund's exposure to change in interest rates on its expected borrowings under its debt facility, as the Fund originates fixed rate loans. The Fund may adjust the notional principal amount in order to remain in compliance with the hedging requirements the Fund's debt facility.

The Fund paid a fixed rate of 1.90% and received from the counterparty a floating rate based upon a 1-Month LIBOR rate. Payments were made monthly. Payments to or from the counterparty were recorded to net realized gain (loss) from derivative instrument. The Fund utilized the cancellation option to terminate the cancellable interest rate swap early effective as of May 28, 2020.

The following ~~tables show the Fund’s derivative instrument at fair value on the Fund’s Condensed Statement of Assets and Liabilities as of September 30, 2020 and December 31, 2019:~~

~~Derivative Liability~~

~~Derivatives Instrument~~

~~September 30, 2020~~

~~December 31, 2019~~

~~Cancellable Interest rate swap~~

—

~~22,136~~

~~The following~~ table shows the effect of the Fund’s derivative instrument on the Fund’s Condensed Statements of Operations:


			For the Three Months Ended September 30,				For the Nine Months Ended September 30,						For the Three Months Ended March 31,
Derivative Instrument	Derivative Instrument	Statement of Operations Caption	2020		2019		2020		2019		Derivative Instrument	Statement of Operations Caption	2021		2020
Cancellable Interest rate swap	Cancellable Interest rate swap	Net realized gain (loss) from derivative instrument	$	—	$	40,506	$	(54,743)	$	179,933	Cancellable Interest rate swap	Net realized loss from derivative instrument	$	—	$	(11,138)
		Net change in unrealized gain (loss) from derivative instrument	$	—	$	(14,791)	$	22,136	$	(339,583)		Net change in unrealized loss from derivative instrument	$	—	$	(15,755)

9. TAX STATUS

The Fund has elected to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code (the “Code”) and operates in a manner to qualify for the tax treatment applicable to RICs. Failing to maintain at least 70% of total assets in “qualifying assets” will result in the loss of BDC status, resulting in losing its favorable tax treatment as a RIC. As of ~~September 30, 2020,~~March 31, 2021, the Fund has met the BDC and RIC requirements.

In order to qualify for favorable tax treatment as a RIC, the Fund is required to distribute annually to its shareholder at least 90% of its investment company taxable income, as defined by the Code. To avoid federal excise taxes, the Fund must distribute annually at least 98% of its ordinary income and 98.2% of net capital gains from the current year and any undistributed ordinary income and net capital gains from the preceding years. The Fund, at its discretion, may carry forward taxable income in excess of calendar year distributions and pay a 4% excise tax on this income. If the Fund chooses to do so, all other things being equal, this would increase expenses and reduce the amount available to be distributed to its shareholder. The Fund will accrue excise tax on estimated undistributed taxable income as required.

Below are tables summarizing the cost of investments for federal income tax purposes and the appreciation and depreciation of the investments reported on the Condensed Schedules of Investments and Condensed Statements of Assets and Liabilities.

As of ~~September 30, 2020:~~March 31, 2021:


Asset	Asset	Cost		Unrealized Appreciation		Unrealized Depreciation		Net Appreciation (Depreciation)		Asset	Cost		Unrealized Appreciation		Unrealized Depreciation		Net Appreciation (Depreciation)
Loans	Loans	$	60,737,472	$	—	$	(15,333,000)	$	(15,333,000)	Loans	$	45,046,007	$	473,179	$	(13,066,314)	$	(12,593,135)
Total	Total	$	60,737,472	$	—	$	(15,333,000)	$	(15,333,000)	Total	$	45,046,007	$	473,179	$	(13,066,314)	$	(12,593,135)

As of December 31, 2020:


Asset	Cost		Unrealized Appreciation		Unrealized Depreciation		Net Appreciation (Depreciation)
Loans	$	52,013,198	$	17,616	$	(13,170,276)	$	(13,152,660)
Total	$	52,013,198	$	17,616	$	(13,170,276)	$	(13,152,660)

~~As of December 31, 2019:~~

Asset Cost Unrealized Appreciation Unrealized Depreciation Net Appreciation (Depreciation)
Loans $ 104,598,706 $ — $ (18,633,716) $ (18,633,716)
Total $ 104,598,706 $ — $ (18,633,716) $ (18,633,716)
Liability Cost Unrealized Appreciation Unrealized Depreciation Net Appreciation (Depreciation)
Derivative liability $ — $ — $ (22,136) $ (22,136)
Total $ — $ — $ (22,136) $ (22,136)

Dividends from net investment income and distributions from net realized capital gains are determined in accordance with U.S. federal income tax regulations, which may differ from those amounts determined in accordance with U.S. GAAP. These book/tax differences are either temporary or permanent in nature. To the extent these differences are permanent, they are charged or credited to paid-in-capital or accumulated net realized gain (loss), as appropriate, in the period that the differences arise. Temporary and permanent differences are primarily attributable to differences in the tax treatment of certain loans and the tax characterization of income and non-deductible expenses. These differences are generally determined in conjunction with the preparation of the Fund’s annual RIC tax return.

Book and tax basis differences relating to shareholder dividends and distributions and other permanent book and tax differences are reclassified among the Fund’s capital accounts. In addition, the character of income and gains to be distributed is determined in accordance with income tax regulations that may differ from U.S. GAAP. The determination of the tax attributes of the Fund’s distributions is made annually as of the end of the Fund’s taxable year and is generally based upon its taxable income for the full taxable year and distributions paid for the full taxable year. As a result, a determination made on a quarterly basis may not be representative of the actual tax attributes of the Fund’s distributions for a full taxable year. As of ~~September 30, 2020,~~March 31, 2021, the Fund had determined the tax attributes of its distributions taxable year-to-date to be from its current and accumulated earnings and profits. There is not yet, however, certainty as to what the actual tax attributes of the Fund’s distributions to the shareholders will be by the year-ended December 31, ~~2020.~~2021.

The Fund anticipates distributing all distributable earnings by the end of the year. ~~The~~For the three months ended March 31, 2021, the Fund had no0.3 million in undistributed earnings ~~through September 30, 2020~~. The Fund may pay distributions in excess of its taxable net investment income. This excess would be a tax-free return of capital in the period and reduce the shareholder’s tax basis in its shares.

The Fund’s tax returns remain open for examination by the federal government for a period of three years and California tax authorities for a period of four years from when they are filed. As of ~~September 30, 2020,~~March 31, 2021, the Fund had no uncertain tax positions and no capital loss carryforwards.

10. FINANCIAL HIGHLIGHTS

U.S. GAAP requires disclosure of financial highlights of the Fund for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019.~~2020.

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 September 30, 2020 For the Three Months Ended September 30, 2019 For the Nine Months Ended September 30, 2020 For the Nine Months Ended September 30, 2019

Total return ** 2.80 % (1.35) % 8.62 % 5.46 %

Per share amounts:
Net asset value, beginning of period $ 520.38 $ 820.97 $ 712.68 $ 1,277.98
Net investment income 7.77 20.59 31.21 139.77
Net realized and change in unrealized gain (loss) from loans and derivative instrument 6.75 (31.11) 12.20 (72.96)
Net increase (decrease) in net assets resulting from operations 14.52 (10.52) 43.41 66.81
Distributions to shareholder (70.31) (77.87) (291.50) (612.21)
Contribution from Shareholder 6.00 — 6.00 —
Net asset value, end of period $ 470.59 $ 732.58 $ 470.59 $ 732.58
Net assets, end of period $ 47,058,713 $ 73,257,635 $ 47,058,713 $ 73,257,635

Ratios to average net assets:
Expenses* 3.31 % 6.96 % 4.61 % 7.00 %
Net investment income* 5.96 % 10.57 % 7.29 % 18.00 %
Portfolio turn-over rate -% -% -% -%
Average debt outstanding $ 1,050,000 $ 38,710,000 $ 7,380,000 $ 55,234,000
*Annualized
**Total return amounts presented above are not annualized


	For the Three Months Ended March 31, 2021			For the Three Months Ended March 31, 2020

Total return **	2.20		%	(0.78)		%

Per share amounts:
Net asset value, beginning of period	$	407.47		$	712.68

Net investment income	3.36			13.92
Net realized and change in unrealized gain (loss) from loans and derivative instrument	5.61			(19.03)
Net increase (decrease) in net assets resulting from operations	8.97			(5.11)
Distributions to shareholder	(0.26)			(150.31)

Net asset value, end of period	$	416.18		$	557.26
Net assets, end of period	$	41,617,822		$	55,725,950

Ratios to average net assets:
Expenses*	3.59		%	4.93		%
Net investment income*	3.30		%	8.47		%
Portfolio turn-over rate	-%			-%
Average debt outstanding	$	—		$	13,925,000
*Annualized
**Total return amounts presented above are not annualized

11. SUBSEQUENT EVENTS

The Fund evaluated subsequent events through the date the financial statements were issued, and determined that no additional subsequent events had occurred that would require accrual or disclosure in the financial statements.

1917

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

In addition to the historical information contained herein, 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 the Fund with respect to future events and financial performance and are subject to several risks and uncertainties, many of which are beyond the Fund’s control. All statements, other than statements of historical facts included in this Quarterly Report, regarding the strategy, future operations, financial position, estimated revenues, projected costs, prospects, plans and objectives of the Fund are forward-looking statements. For example, statements in this Form 10-Q regarding the potential future impact of the COVID-19 pandemic on the Fund’s business and results of operations 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 resulting from new information, future events or otherwise, except as required by law.

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, competition and macro-economic changes including inflation, interest rate expectations, among other factors including those set forth in the section of this Quarterly Report titled “Risk Factors” and in Item 1A - “Risk Factors” in the Fund’s ~~2019~~2020 Annual Report on Form 10-K. 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 100% owned by the Company. The Fund’s shares of common stock, at $0.001 par value, were sold to its sole shareholder, the Company, under a stock purchase agreement. The Fund has issued 100,000 of the Fund’s 10,000,000 authorized shares. The Company may make additional capital contributions to the Fund.

The Fund primarily provides debt financing and advisory services to a variety of carefully selected venture-backed companies that have received equity funding from traditional sources of venture capital equity funding (i.e. a professionally managed venture capital firm), as well as non-traditional sources of venture capital equity funding (e.g. micro VC funds, angel investors and strategic investors) (collectively, “Venture-Backed Companies”), primarily throughout the United States with a focus on growth-oriented companies. Secondarily, the Fund may invest in special situations, which are expected to consist principally of convertible and subordinated debt instruments of public and late-stage private companies. The Fund’s portfolio consists of companies in the communications, information services, media, technology (including software and technology-enabled business services), biotechnology, and medical devices industry sectors, among others. The Fund’s capital is generally used by its portfolio companies to finance acquisitions of fixed assets and working capital. On December 18, 2012, the Company completed its first closing of capital contributions and the Fund made its first investment and became a non-diversified, closed-end investment company that elected to be treated as a BDC under the 1940 Act. While the Fund intends to operate as a non-diversified investment company within the meaning of Section 5(b)(2) of the 1940 Act, from time to time the Fund may act as a diversified investment company within the meaning of Section 5(b)(1) of the 1940 Act.

The Fund elected to be treated for federal income tax purposes as a RIC under the Code with the filing of its federal corporate income tax return for 2013. Pursuant to this election, the Fund generally will not have to pay corporate-level taxes on any income distributed to its shareholder as dividends, allowing the Company to substantially reduce or eliminate its corporate-level tax liability.

2018

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

The portfolio investments of the Fund primarily consist of debt financing to Venture-Backed Companies in the technology sector. The borrower’s ability to repay its loans may be adversely impacted by several factors, and as a result, the loan may not be fully 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 VIII, Inc. (“Fund VIII”)

The Manager also serves as investment manager for Fund VIII. The Fund’s Board of Directors determined that so long as Fund VIII had capital available to invest in loan transactions with final maturities earlier than December 31, 2025 (the date on which Fund VIII will be dissolved), the Fund would invest in each portfolio company in which Fund VIII invested (“Investments”). Initially the amount of each Investment was allocated 50% to the Fund and 50% to Fund VIII, or such other allocations as were determined by the respective fund boards, so long as the Fund had capital available to invest. Effective June 30, 2017, the Fund was no longer permitted to enter new commitments to borrowers; however, the Fund was permitted to fund existing commitments, in which Fund VIII may also be invested. The Fund’s last commitment expired on July 31, 2018. The ability of the Fund to co-invest with Fund VIII, and other clients advised by the Manager, is subject to the conditions (“Conditions”) with which the Funds are currently complying while seeking certain exemptive relief from the Securities and Exchange Commission (“SEC”) from the provisions of Sections 17(d) and 57 of the 1940 Act and Rule 17d-1 thereunder. To the extent that clients, other than Fund VIII, advised by the Manager (but in which the Manager has no proprietary interest) invest in opportunities available to the Fund, the Manager will allocate such opportunities among the Fund and such other clients in a manner deemed fair and equitable considering all of the circumstances in accordance with the Conditions.

Critical Accounting Policies, Practices and Estimates

Critical Accounting Policies and Practices are those accounting policies and practices that are both the most important to the portrayal of the Fund’s net assets and results of operations and require the most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Critical accounting estimates are accounting estimates where the nature of the estimates is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and the impact of the estimates on net assets or operating performance is material.

In evaluating the most critical accounting policies and estimates, the Manager has identified the estimation of fair value of the Fund’s loan investments as the most critical of the accounting policies and accounting estimates applied to the Fund’s reporting of net assets or operating performance. In accordance with U.S. GAAP, the Fund defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; that is, an exit price. The exit price assumes the asset or liability was exchanged in an orderly transaction; it was not a forced liquidation or distressed sale. There is no readily available market price or secondary market for the loans made by the Fund to borrowers, hence the Manager determines fair value based on a hypothetical market and the estimates are subject to high levels of

2119

judgment and uncertainty. The Fund’s loan investments are considered Level 3 fair value measurements in the fair value hierarchy due to the lack of observability over many of the important inputs used in determining fair value.

Critical judgments and inputs in determining the fair value of a loan include the estimated timing and amount of future cash flows and probability of future payments, based on the assessment of payment history, available cash and “burn rate,” revenues, net income or loss, operating results, financial strength of borrower, prospects for the borrower’s raising future equity rounds, likelihood of sale or acquisition of the borrower, length of expected holding period of the loan, collateral position, the timing and amount of liquidation of collateral for loans that are experiencing significant credit deterioration and, as a result, collection becomes collateral-dependent, as well as an evaluation of the general interest rate environment. Management has evaluated these factors and has concluded that the effect of a 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 decreasing the fair value of loan investments. The risk profile of a loan changes when events occur that impact the credit analysis of the borrower and the loan. Such changes result in the fair value being adjusted from par value of the individual loan. Where the risk profile is consistent with the original underwriting, the par value of the loan often approximates fair value.

The actual value of the loans may differ from Management’s estimates, which would affect net change in net assets resulting from operations as well as assets.

~~Recent Development~~

~~Due to the recent outbreak~~COVID-19’s Impact on Results of ~~the novel strain of coronavirus (COVID-19), the Fund may be directly~~Operations and indirectly affected by the increased financial market volatility and disruption of the global economy. Among other things, the aforementioned events could impair the ability of borrowers to make scheduled payments, result in loss of revenue, or cause the Fund to incur additional expenses.Liquidity & Capital Resources

The ~~COVID-19 pandemic did not have a material effect on the Fund’s business and results of operations through the third fiscal quarter ended September 30, 2020, but these are not necessarily indicative~~slowdown of the ~~results to be expected for the full fiscal year. In the short-term, valuation of some~~global and local economies in 2020 had had an impact on a number of the Fund’s ~~debt investments resulted in unrealized gain from loans in~~portfolio companies’ business and operations. Due to the ~~third fiscal quarter ended September 30, 2020, as many~~increased market volatility, valuation of the Fund’s ~~debt portfolio companies proactively reduced expenses, restructured their revenue programs~~loan investments contributed to increased unrealized losses from loans for the quarter ended March 31, 2020. At the end of 2020, vaccines have been approved for deployment by various government health agencies, resulting in loosening shelter-in-place and ~~amended their performance plans~~quarantine restrictions. The recent market stability, in addition to ~~manage their capital~~the recovering local and ~~liquidity requirements. These efforts partially offset the continued financial market volatility that also~~global economies, factored into the Fund’s ~~loan~~ valuation ~~adjustment.~~adjustments. For the quarter ended March 31, 2021, the Fund recognized unrealized gains from loans compared to the recognized unrealized losses for the same period in 2020.

~~Given the~~Although markets have begun to stabilize and economies have begun to recover, uncertainty ~~of the COVID-19 situation,~~remains regarding the full extent of the long-term economic impact on the Fund’s business operations, ~~result~~results of operations, and access to liquidity and capital ~~resources is unpredictable at this time and~~resources. The impact on the Fund will depend on many factors ~~outside of~~beyond the Fund’s control, including, without limitations, the timing, extent, trajectory, and duration of the pandemic.

In addition, the speed of economic recovery may vary across different industries both locally and globally. The Fund is ~~maintaining~~continuing to maintain close communications with its ~~debt~~loan portfolio companies to proactively assess and manage potential risks. In addition, Management ~~has increased~~is continuing to maintain oversight analysis of credits across the Fund's ~~debt~~loan investment portfolio in an attempt to manage the potential credit risk and improve loan performance. As part of its risk management strategy, Management is tracking mitigating factors and their effectiveness in improving credit analysis. For example, Management is taking into consideration the borrowers’ participation to the U.S. Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”). PPP is created as a part of the recently enacted Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which provides assistance to small businesses to maintain their payroll, hire back employees who may have been laid off, and cover applicable overhead expenses.

The Fund believes that the existing cash balance and scheduled monthly payments from borrowers will be sufficient to satisfy its liquidity requirements associated with its existing operations.

Results of Operations - For the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~

Total investment income for the three months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ was ~~$1.2~~$0.7 million and ~~$3.4~~$2.2 million, respectively, which primarily consisted of interest on venture loans outstanding. The remaining income consisted of interest and dividends on the temporary investment of cash. The decrease in total investment income was primarily due to the decrease in average outstanding balance of performing loans, calculated using the month-end balances, from ~~$96.8~~$62.7 million for the three months ended ~~September 30, 2019~~March 31, 2020 to ~~$34.7~~$19.0 million for the three months ended ~~September 30, 2020.~~March 31, 2021. The weighted-average interest rate on performing loans was ~~13.93%~~13.73% and ~~14.08%~~13.97% for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively. Also, for the same periods, the weighted-average interest rate on all loans was ~~9.61%~~7.92% and ~~11.83%~~11.28%, respectively. Interest is calculated using the effective interest method, and rates earned by the Fund will fluctuate based on many factors including early payoffs and volatility of

values ascribed to warrants during the three months ended September 30, 2020. The weighted-average interest rate on performing loans and all loans decreased primarily due to loan repayments and loan payoffs since the Fund is no longer making new investments.

Total investment income for the nine months ended September 30, 2020 and 2019 was $5.1 million and $19.4 million, respectively, which primarily consisted of interest on venture loans outstanding. The remaining income consisted of interest and dividends on the temporary investment of cash. The decrease in total investment income was primarily due to the decrease in average outstanding balance of performing loans, calculated using the month-end balances, from $138.3 million for the nine months ended September 30, 2019 to $47.9 million for the nine months ended September 30, 2020. The weighted-average interest rate on performing loans was 14.14% and 18.59% for the nine months ended September 30, 2020 and 2019, respectively. For the same periods, the weighted-average interest rate on all loans was 10.78% and 16.70%, respectively. Interest is calculated using the effective interest method, and rates earned by the Fund will fluctuate based on many factors including early payoffs and volatility of values ascribed to warrants during the nine months ended September 30, 2020.March 31, 2021. The weighted-average interest rate on performing loans and all loans decreased primarily due to loan repayments and loan payoffs since the Fund is no longer making new investments.

Management fees for the three months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ were $0.3 million and ~~$0.7 million, respectively. Management fees for the nine months ended September 30, 2020 and 2019 were $1.1 million and $2.5~~$0.4 million, respectively. Management fees were calculated as 2.5% of the Fund’s total assets and decreased for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 due to a decrease in the Fund’s total assets.

Interest expense was ~~less than $0.1 million~~$0 and ~~$0.6~~$0.2 million for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively. Interest expense was comprised of amounts related to interest on debt amounts drawn down, unused credit line fees and amounts amortized from deferred fees incurred in conjunction with the loan facility. Interest expense decreased due to the debt facility payoff in July 2020.

Interest expense was $0.5 million and $2.4 million for the nine months ended September 30, 2020 and 2019, respectively. Interest expense was comprised of amounts related to interest on debt amounts drawn down, unused credit line fees and amounts amortized from deferred fees incurred in conjunction with the loan facility. Interest expense decreased primarily due to the debt facility payoff in July 2020.

Banking and professional fees were less than $0.1 million and $0.1 million for ~~both~~the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019, respectively. Banking and professional fees were $0.3 million and $0.4 million for the nine months ended September 30, 2020 and 2019,~~ respectively. The banking and professional fees were comprised of legal, audit, banking and other professional fees. Banking and professional fees decreased for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 primarily due to the decrease in legal fees and audit fees.

Other operating expenses were less than $0.1 million for both three months ended ~~September 30, 2020~~March 31, 2021 and ~~2019. Other operating expenses were $0.1 million for both ninemonths ended September 30, 2020 and 2019.~~2020. These expenses included director fees, custody fees, tax fees and other expenses related to the operations of the Fund.

Net investment income for the three months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ was ~~$0.8~~$0.3 million and ~~$2.1 million, respectively. Net investment income for the nine months ended September 30, 2020 and 2019 was $3.1 million and $14.0~~$1.4 million, respectively.

Net realized ~~loss~~gain (loss) from loans was ~~$0.9~~less than $0.1 million and ~~$9.8~~$(0.4) million for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019, respectively. Net realized loss from loans was $2.0 million and $10.2 million for the nine months ended September 30, 2020 and 2019,~~ respectively. The realized loss will vacillate based on the timing of the ultimate resolution of certain ~~loans..~~loans.

Net realized ~~gain (loss)~~loss from derivative instrument was $0 and less than ~~$0.1~~$(0.1) million for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019, respectively. Net realized gain (loss) from derivative instrument was less than $(0.1) million and $0.2 million for the nine months ended September 30, 2020 and 2019,~~ respectively. This was actual cash paid to derivative instrument in the period as a result of actual LIBOR interest rate fluctuation.

Net change in unrealized gain (loss) from loans was ~~$1.6~~$0.6 million and ~~$6.6~~$(1.5) million for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019, respectively. Net change in unrealized gain from loans was $3.3 million and $3.1 million for the nine months ended September 30, 2020 and 2019,~~ respectively. The net change in unrealized loss from loans consisted of fair value adjustments taken against loans as a result of an improvement or deterioration in certain portfolio companies’ performance as well as reversal of prior adjustments on realized loan losses.

Net change in unrealized ~~gain (loss)~~loss from derivative instrument was $0 and less than $(0.1) million for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019, respectively. Net change in unrealized gain (loss) from derivative instrument was less than $0.1 million and $(0.3) million for the nine months ended September 30, 2020 and 2019,~~ respectively. The net change in unrealized loss from derivative instrument consisted of fair market value adjustments to the interest rate swap. The decrease was due to the reversal of previous valuation adjustment. ~~The unrealized gain was due to the reversal of prior fair value adjustments as a result of terminating the derivative instrument.~~

Net increase (decrease) in net assets resulting from operations for the three months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ was ~~$1.5~~$0.9 million and ~~$(1.1)~~$(0.5) million, respectively. On a per share basis, the net increase in net assets resulting from operations was ~~$14.52~~$8.97 and ~~$(10.54)~~$(5.11) for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively.

Net increase in net assets resulting from operations for the nine months ended September 30, 2020 and 2019 was $4.3 million and $6.7 million, respectively. On a per share basis, the net increase in net assets resulting from operations was $43.41 and $66.80 for the nine months ended September 30, 2020 and 2019, respectively.

Liquidity and Capital Resources – ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020

The Fund is owned entirely by the Company. As of both ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, the Company had subscriptions for capital in the amount of $375.0 million, of which all had been called and received as of both periods. Total capital contributed to the Fund was $323.8 million ~~and $323.2 million~~ as of ~~September 30, 2020~~both March 31, 2021 and December 31, ~~2019, respectively.~~

2020.

The change in cash for the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ was as follows:


		For the Nine Months Ended September 30, 2020		For the Nine Months Ended September 30, 2019			For the Three Months Ended March 31, 2021		For the Three Months Ended March 31, 2020
Net cash provided by operating activities	Net cash provided by operating activities	$	45,013,063	$	108,448,743	Net cash provided by operating activities	$	7,383,291	$	15,978,638
Net cash used in financing activities	Net cash used in financing activities	(43,854,743)		(111,230,067)		Net cash used in financing activities	—		(15,911,138)
Net increase (decrease) in cash and cash equivalents		$	1,158,320	$	(2,781,324)
Net increase in cash and cash equivalents						Net increase in cash and cash equivalents	$	7,383,291	$	67,500

As of ~~September 30,~~March 31, 2021 and March 31, 2020, 22.2% and ~~December 31, 2019, 3.2% and 0.5%~~0.8% respectively, of the Fund’s net assets consisted of cash and cash equivalents.

On July 18, 2013, the Fund established a secured, syndicated revolving loan facility in an initial amount of up to $125.0 million led by Wells Fargo, N.A. and MUFG Union Bank, N.A. InOn November 2014, the debt facility size thereunder was increased to $255.0 million. All of the assets of the Fund collateralized borrowings by the Fund. The Fund paid interest on its borrowings and a fee on the unused portion of the facility. The facility was renewed and amended on October 30, 2017. The amended facility had a term of three years, but could be accelerated in the event of default, such as failure by the Fund to make timely interest or principal payments. Beginning March 29, 2019, the lenders’ commitments automatically and permanently reduced each fiscal quarter by an amount equal to 12.5% of the aggregate amount of such commitments.

For the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, the Fund investments primarily consisted of venture loans. No amounts were disbursed under the Fund’s loan commitments during the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021. Net loan amounts outstanding after amortization and valuation adjustments decreased by ~~$40.6~~$6.4 million for the same period.

As of

Cumulative Amount
Disbursed

Principal
Reductions and Fair
Market Adjustments

Balance Outstanding - Fair Value

Unexpired
Unfunded
Commitments

~~September 30, 2020~~March 31, 2021

$960.2 million

$~~914.8~~927.7 million

$~~45.4~~32.5 million

$ -

December 31, ~~2019~~2020

$960.2 million

$~~874.2~~921.3 million

$~~86.0~~38.9 million

$ -

Because venture loans are privately negotiated transactions, investments in these assets are relatively illiquid.

The Fund seeks to maintain the requirements to qualify for the special pass-through status available to RICs under the 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) (the “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 undistributed 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, or from amounts received through amortization of loans.

As of ~~September 30, 2020,~~March 31, 2021, the Fund had a cash ~~reserves~~balance of ~~$1.5~~$9.3 million and approximately ~~$24.8~~$15.3 million in scheduled loan receivable payments over the next twelve months, which are sufficient to meet the operational expenses of the Fund over the next year.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Fund’s business activities contain various elements of risk, of which Management considers interest rate and credit risk to be the principal types of risks. Because the Fund considers the management of risk essential to conducting its business and to maintaining profitability, 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 manages its market 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 distributes all equity investments upon receipt to the Company.

The Fund’s investments are subject to market risk based on several factors, including, but not limited to, the borrower’s credit history, available cash, support of the borrower’s underlying investors, available liquidity, “burn rate,” revenue income, security interest, secondary markets for collateral, the size of the loan, term of the loan and the ability to exit via initial public offering or merger and acquisition.

The Fund’s exposure to interest rate sensitivity 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. Because the Fund terminated the debt facility on July 16, 2020 and does not plan to borrow in the future, a significant change in market interest rates will not have a material effect on the Fund's interest expense.

Because all of the Fund’s loans impose a fixed interest rate upon funding, changes in short-term interest rates will not directly affect interest income associated with the loan portfolio as of ~~September 30, 2020.~~March 31, 2021. Changes in short-term interest rates could also affect interest rate expense, realized gain from investments and interest on the Fund’s short-term investments.

Based on the Fund’s Condensed Statements of Assets and Liabilities as of ~~September 30, 2020,~~March 31, 2021, the following table shows the approximate annualized increase (decrease) in components of net assets resulting from operations of hypothetical base rate changes in interest rates, assuming no changes in investments and cash balances.


Effect of Interest Rate Change By	Effect of Interest Rate Change By	Other Interest and Other Income (Loss)		Total Income (Loss)		Effect of Interest Rate Change By	Other Interest and Other Income (Loss)		Total Income (Loss)
(0.50)%	(0.50)%	$	(7,562)	$	(7,562)	(0.50)%	$	(46,251)	$	(46,251)
1%	1%	$	15,124	$	15,124	1%	$	92,502	$	92,502
2%	2%	$	30,249	$	30,249	2%	$	185,003	$	185,003
3%	3%	$	45,373	$	45,373	3%	$	277,505	$	277,505
4%	4%	$	60,497	$	60,497	4%	$	370,007	$	370,007
5%	5%	$	75,621	$	75,621	5%	$	462,508	$	462,508

Although Management believes that the foregoing analysis is indicative of the Fund’s sensitivity to interest rate changes, it does not take into consideration potential changes in the credit market, credit quality, size and composition of the assets in the portfolio. It also does not assume any new fundings to borrowers, repayments from

borrowers or defaults on borrowings. Accordingly, no assurances can be given that actual results would not differ materially from the table above.

The Fund is not sensitive to changes in foreign currency exchange rates, commodity prices and other market rates or prices.

Item 4. Controls and Procedures

Disclosure Controls and Procedures:

At the end of the period covered by this report, the Fund carried out an evaluation under the supervision and with the participation of its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Fund’s disclosure controls and procedures pursuant to Rules 13a-15(b) and 15d-15(b) of the Securities Exchange Act of 1934 (“Exchange Act”). Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Fund’s disclosure controls and procedures were effective as of the end of the period in ensuring that information required to be disclosed was recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and in providing reasonable assurance that information required to be disclosed by the Fund in such reports is accumulated and communicated to the Fund’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

Changes in Internal Controls:

There have not been any changes in the Fund’s internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the Fund’s fiscal quarter ended ~~September 30, 2020~~March 31, 2021 that has materially affected, or is reasonably likely to materially affect, the Fund’s internal control over financial reporting.

2724

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 any legal proceedings cannot now be predicted with certainty, the Fund does not expect any such 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. The Fund is not a party to any material legal proceedings.

Item 1A. Risk Factors

The following discussion point should be read in conjunction with Item 1A - “Risk Factors” in the Fund’s 2019 Annual Report on Form 10-K for a detailed description of the risks attendant to the Fund and its business. Except as set forth below, thereThere have been no material changes to the risk factors reported in the Fund’s ~~2019~~2020 Annual Report on Form 10-K.

~~Public Health Crises and Coronavirus Risk~~. Public health crises, such as the recent outbreak of the novel strain of coronavirus (“COVID-19”), may have direct and indirect adverse impact on the Fund’s portfolio companies’ business operations and results of operations. Several countries and individual U.S. states have reacted to this rapidly evolving COVID-19 outbreak by instituting quarantines, shelter-in-place orders, travel restrictions, bans on public gathering, and closures of a wide range of businesses beginning March 2020. These measures have had an adverse impact on the global economy and contributed to significant volatility in the financial markets. Starting mid-to-late April 2020, many countries and states started to ease restrictions on businesses and social activity. However, spikes in COVID-19 cases in some countries and states may hinder re-opening plans and delay economic recovery locally and globally.

The full extent of the impact of the COVID-19 outbreak on the Fund’s portfolio companies’ business operations and results of operations is unknown at this time and will depend on many factors outside of the Fund’s control, including, without limitations, the timing, extent, trajectory and duration of the pandemic. Management is continuing to work with the Fund’s portfolio companies that may be directly or indirectly affected by the outbreak to evaluate the continued impact on the borrowers’ ability to make timely payments and creditworthiness.

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

None.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

2825


Exhibit Number			Description
3(i)			Articles of Incorporation of the Fund as filed with the Maryland Secretary of State on June 21, 2012, incorporated by reference to the Fund’s Form 10 filed with the Securities and Exchange Commission on September 19, 2012.
3(ii)			Bylaws of the Fund, incorporated by reference to the Fund’s Form 10 filed with the Securities and Exchange Commission on September 19, 2012.
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 September 19, 2012.
31.1			Chief Executive Officer (Principal Executive Officer) certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (Rules 13a -14(a) and 15d-14(a) Certification).
31.2			Chief Financial Officer (Principal Financial Officer) certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (Rules 13a -14(a) and 15d-14(a) Certification).
32.1			Chief Executive Officer (Principal Executive Officer) certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (Section 1350 Certification).
32.2			Chief Financial Officer (Principal Financial Officer) certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (Section 1350 Certification).

2926

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 thereunto duly authorized.

VENTURE LENDING & LEASING VII, INC.

(Registrant)


By:	/s/ Maurice C. Werdegar	By:	/s/ Judy N. Bornstein
Maurice C. Werdegar		Judy N. Bornstein
Chief Executive Officer		Chief Financial Officer
(Principal Executive Officer)		(Principal Financial Officer)
Date:	~~November~~May 13, ~~2020~~2021	Date:	~~November~~May 13, ~~2020~~2021

3027


			AS OF DECEMBER 31, 2019
Description and terms of payments to be received from another party	Description and terms of payments to be paid to another party	Counterparty	Maturity Date	Notional Amount		Value		Upfront payments/receipts		Unrealized appreciation/(depreciation) (a)
Cancellable Interest Rate Swap Agreement - Floating interest rate greater of USD-LIBOR-BBA	Fixed interest rate 1.900%, to be paid monthly	MUFG Union Bank, N.A.	12/1/2020	$	25,927,448	$	(22,136)	$	—	$	(22,136)
Total				$	25,927,448	$	(22,136)	$	—	$	(22,136)