~~FORM 10-Q~~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 June 30, ~~2018~~2019



[ ]	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 814-01253

Venture Lending & Leasing IX, Inc.

(Exact Name of Registrant as specified in its charter)



Maryland	82-2040715
(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~~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 ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes [x] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, 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 :~~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~~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~~issuer’s classes of common stock, as of the latest practicable date:



Class		Outstanding as of August 14, ~~2018~~2019
Common Stock, ~~$.001~~$0.001 par value		100,000

VENTURE LENDING & LEASING IX, INC.

INDEX



PART I — FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Statements of Assets and Liabilities (Unaudited)
	As of June 30, ~~2018~~2019 and December 31, ~~2017~~2018

	Condensed Statements of Operations (Unaudited)
	For the three and six months ended June 30, 2019 and 2018

	Condensed ~~Statement~~Statements of Changes in Net Assets (Unaudited)
	For the three and six months ended June 30, 2019 and 2018

	Condensed ~~Statement~~Statements of Cash Flows (Unaudited)
	For the six months ended June 30, 2019 and 2018

	Condensed Schedules of Investments (Unaudited)
	As of June 30, 2019 and December 31, 2018

	Notes to Condensed Financial Statements (Unaudited)

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

Item 3.	Quantitative and Qualitative Disclosures About Market Risk

Item 4.	Controls and Procedures

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings

Item 1A.	Risk Factors

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

Item 3.	Defaults Upon Senior Securities

Item 4.	Mine Safety ~~Issues~~Disclosures

Item 5.	Other Information

Item 6.	Exhibits

SIGNATURES

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

VENTURE LENDING & LEASING IX, INC.

CONDENSED STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)

AS OF JUNE 30, ~~2018~~2019 AND DECEMBER 31, ~~2017~~2018


	June 30, 2018			December 31, 2017			June 30, 2019			December 31, 2018
ASSETS
Loans, at estimated fair value
(Cost of $19,527,403 and $0)	$	19,527,403		$	—
(cost of $130,203,718 and $79,045,107)							$	130,203,718		$	79,045,107
Cash and cash equivalents	33,016,704			25,000			3,711,441			832,815
Other Assets	279,347			—
Dividend and interest receivables							1,732,259			985,020
Other assets							1,168,111			1,316,366
Total assets	52,823,454			25,000			136,815,529			82,179,308

LIABILITIES
Borrowings under debt facility							56,500,000			6,000,000
Accrued management fees	1,210,808			—			1,811,250			1,811,250
Due to the manager	—			184,165
Derivative liability - interest rate swap							900,934			—
Accounts payable and other accrued liabilities	347,527			$	—		1,709,597			279,331
Total liabilities	1,558,335			184,165			60,921,781			8,090,581

NET ASSETS	$	51,265,119		$	(159,165	)	$	75,893,748		$	74,088,727

Analysis of Net Assets:

Capital paid in on shares of capital stock	$	54,525,000		$	25,000		$	102,525,000		$	82,525,000
Accumulated undistributed deficit	(1,244,654		)	(184,165		)
Net unrealized depreciation on investments							(900,934		)	(1,148,292		)
Distribution in excess of net investment income	(2,015,227		)	—			(25,730,318		)	(7,287,981		)
Net assets (equivalent to $512.65 and ($0.16) per share based on 100,000 shares of capital stock outstanding - See Note 6)	$	51,265,119		$	(159,165	)
Net assets (equivalent to $758.94 and $740.89 per share based on 100,000 shares of capital stock outstanding - See Note 5 and Note 11)							$	75,893,748		$	74,088,727

Commitments & Contingent Liabilities:
Unfunded unexpired commitments (See Note 4)	$	11,250,000		$	—
Unexpired unfunded commitments (See Note 10)							$	69,000,000		$	31,025,000

See notes to condensed financial statements

VENTURE LENDING & LEASING IX, INC.

CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2019 AND 2018


	For the Three Months Ended June 30, 2018			For the Six Months Ended June 30, 2018			For the Three Months Ended June 30, 2019			For the Three Months Ended June 30, 2018			For the Six Months Ended June 30, 2019			For the Six Months Ended June 30, 2018

INVESTMENT INCOME:
Interest on loans	$	224,753		$	224,753		$	5,405,804		$	224,753		$	9,370,411		$	224,753
Other interest and other income	19,573			19,573			93,128			19,573			144,366			19,573
Total investment income	244,326			244,326			5,498,932			244,326			9,514,777			244,326

EXPENSES:
Management fees	1,210,808			1,210,808			1,811,250			1,210,808			3,622,500			1,210,808
Organization costs	681			27,654			—			681			—			27,654
Interest expense							895,339			—			1,611,904			—
Banking and professional fees	25,672			25,672			116,612			25,672			292,203			25,672
Other operating expenses	40,680			40,680			30,210			40,680			64,175			40,680
Total expenses	1,277,841			1,304,814			2,853,411			1,277,841			5,590,782			1,304,814
Net investment income (loss)							2,645,521			(1,033,515		)	3,923,995			(1,060,488		)

Net loss	(1,033,515		)	(1,060,488		)
Net realized loss from derivative instruments							(3,995		)	—			(4,914		)	—
Net change in unrealized gain from loans							12,314			—			—			—
Net change in unrealized loss from derivative instruments							(597,571		)	—			(900,934		)	—
Net realized and change in unrealized loss from loans and derivative instruments							(589,252		)	—			(905,848		)	—

Net decrease in net assets resulting from operations	$	(1,033,515	)	$	(1,060,488	)
Net decrease in net assets resulting from operations per share	$	(10.34	)	$	(10.61	)
Net increase (decrease) in net assets resulting from operations							$	2,056,269		$	(1,033,515	)	$	3,018,147		$	(1,060,488	)

Amounts per common share:
Net increase (decrease) in net assets resulting from operations per share							$	20.56		$	(10.34	)	$	30.18		$	(10.61	)
Weighted average shares outstanding	100,000			100,000			100,000			100,000			100,000			100,000

See notes to condensed financial statements

VENTURE LENDING & LEASING IX, INC.

CONDENSED ~~STATEMENT~~STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2019 AND 2018

For the Six Months Ended June 30, 2018
Net decrease in net assets resulting from operations:
Net loss $ (1,060,488 )
Net decrease in net assets resulting from operations (1,060,488 )

Return of capital to shareholder (2,015,228 )
Contributions from shareholder 54,500,000

Net increase in capital transactions 52,484,772

Total increase in net assets 51,424,284

Net assets
Beginning of period (159,165 )

End of period (undistributed net investment income of $0) $ 51,265,119



	Common Stock
	Shares	Par Value		Additional Paid-in Capital		Total Distributable Earnings (Loss)			Net Assets
Balance at March 31, 2018	100,000	$	100	$	24,900	$	(211,138	)	$	(186,138	)
Net decrease in net assets resulting from operations	—	—		—		(1,033,515		)	(1,033,515		)
Return of capital to shareholder	—	—		—		(2,015,228		)	(2,015,228		)
Contributions from shareholder	—	—		54,500,000		—			54,500,000
Balance at June 30, 2018	100,000	$	100	$	54,524,900	$	(3,259,881	)	$	51,265,119

Balance at March 31, 2019	100,000	$	100	$	92,524,900	$	(25,608,200	)	$	66,916,800
Net increase in net assets resulting from operations	—	—		—		2,056,269			2,056,269
Distributions of income to shareholder	—	—		—		(2,641,527		)	(2,641,527		)
Return of capital to shareholder	—	—		—		(437,794		)	(437,794		)
Contributions from shareholder	—	—		10,000,000		—			10,000,000
Balance at June 30, 2019	100,000	$	100	$	102,524,900	$	(26,631,252	)	$	75,893,748

Balance at December 31, 2017	100,000	$	100	$	24,900	$	(184,165	)	$	(159,165	)
Net decrease in net assets resulting from operations	—	—		—		(1,060,488		)	(1,060,488		)
Return of capital to shareholder	—	—		—		(2,015,228		)	(2,015,228		)
Contributions from shareholder	—	—		54,500,000		—			54,500,000
Balance at June 30, 2018	100,000	$	100	$	54,524,900	$	(3,259,881	)	$	51,265,119

Balance at December 31, 2018	100,000	$	100	$	82,524,900	$	(8,436,273	)	$	74,088,727
Net increase in net assets resulting from operations	—	—		—		3,018,147			3,018,147
Distributions of income to shareholder	—	—		—		(3,919,081		)	(3,919,081		)
Return of capital to shareholder	—	—		—		(17,294,045		)	(17,294,045		)
Contributions from shareholder	—	—		20,000,000		—			20,000,000
Balance at June 30, 2019	100,000	$	100	$	102,524,900	$	(26,631,252	)	$	75,893,748

See notes to condensed financial statements

VENTURE LENDING & LEASING IX INC.

CONDENSED ~~STATEMENT~~STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2019 AND 2018



	For the Six Months Ended June 30, 2019			For the Six Months Ended June 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net increase (decrease) in net assets resulting from operations	$	3,018,147		$	(1,060,488	)
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash used in operating activities:
Net realized loss from derivative instruments	4,914			—
Net change in unrealized loss from derivative instruments	900,934			—
Amortization of deferred costs related to borrowing facility	211,610			—
Net increase in dividend and interest receivables	(747,239		)	—
Net increase in other assets	(63,355		)	(279,347		)
Net increase in accounts payable, other accrued liabilities and accrued management fees	1,430,266			1,374,169
Origination of loans	(63,900,000		)	(22,000,000		)
Principal payments on loans	11,978,871			2,472,597
Acquisition of equity securities	(4,450,608		)	(2,015,227		)
Net cash used in operating activities	(51,616,460		)	(21,508,296		)

CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distribution to shareholder	(16,000,000		)	—
Contribution from shareholder	20,000,000			54,500,000
Borrowings under debt facility	60,500,000			—
Repayments of borrowings under debt facility	(10,000,000		)	—
Payments made for interest rate swap	(4,914		)	—
Net cash provided by financing activities	54,495,086			54,500,000

Net increase in cash and cash equivalents	2,878,626			32,991,704

CASH AND CASH EQUIVALENTS:
Beginning of period	832,815			25,000
End of period	$	3,711,441		$	33,016,704

SUPPLEMENTAL DISCLOSURES:
CASH PAID DURING THE PERIOD:
Interest - Debt facility	$	1,282,796		$	—
NON-CASH OPERATING AND FINANCING ACTIVITIES:
Distributions of equity securities to shareholder	$	5,213,126		$	2,015,227
Receipt of equity securities as repayment of loans	$	762,518		$	—

See notes to condensed financial statements

VENTURE LENDING & LEASING IX, INC.

CONDENSED SCHEDULES OF INVESTMENTS (UNAUDITED)

AS OF JUNE 30, 2019

As of June 30, 2019, all loans were valued using significant unobservable inputs and were made to non-affiliates. Additionally, all loans were pledged as collateral as part of the debt facility.

For the Six Months Ended June 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net decrease in net assets resulting from operations $ (1,060,488 )
Adjustments to reconcile net decrease in net assets resulting from operations to net cash used in operating activities:
Net increase in other assets (279,347 )
Net increase in accounts payable, other accrued liabilities, and accrued management fees 1,374,169
Origination of loans (22,000,000 )
Principal payments on loans 2,472,597
Acquisition of equity securities (2,015,227 )
Net cash used in operating activities (21,508,296 )

CASH FLOWS FROM FINANCING ACTIVITIES:
Contributions from shareholder 54,500,000
Net cash provided by financing activities 54,500,000

Net increase in cash and cash equivalents 32,991,704

CASH AND CASH EQUIVALENTS:
Beginning of period 25,000
End of period $ 33,016,704

SUPPLEMENTAL DISCLOSURES:
NON-CASH OPERATING AND FINANCING ACTIVITIES:
Distributions of equity securities to shareholder $ 2,015,227



Industry	Borrower	Percent of Net Assets (a)	Collateral	Interest Rate	End of Term Payment	Principal		Cost		Fair Value		Maturity Date

Biotechnology
	Antheia, Inc.		Senior Secured	11.5%		$	1,484,545	$	1,391,594	$	1,391,594	12/1/2022
Biotechnology Total		1.8%				$	1,484,545	$	1,391,594	$	1,391,594

Enterprise Networking
	SnapRoute, Inc.		Senior Secured	11.0%		$	3,364,222	$	3,216,569	$	3,216,569	11/1/2021
Enterprise Networking Total		4.2%				$	3,364,222	$	3,216,569	$	3,216,569

Internet
	Amino Payments, Inc.		Senior Secured	9.0%	4.8%	$	580,886	$	560,288	$	560,288	12/1/2021
	FindShadow, PBC		Senior Secured	11.5%		618,860		577,435		577,435		4/1/2022
	MyPizza Technologies, Inc.		Senior Secured	11.5%		4,918,545		4,598,940		4,598,940		12/1/2022
	Osix Corporation		Senior Secured	12.2%		98,917		84,656		84,656		12/1/2021
	Protecht, Inc.		Senior Secured	12.5%		987,958		941,397		941,397		12/1/2021
	Serface Care, Inc.		Senior Secured	12.2%		742,235		687,198		687,198		2/1/2022
	Serface Care, Inc.		Senior Secured	12.2%		247,193		240,379		240,379		2/1/2022
	Serface Care, Inc. Subtotal					989,428		927,577		927,577
	Thrive Market, Inc.		Senior Secured	12.2%		7,415,033		7,192,263		7,192,263		4/1/2022
Internet Total		19.6%				$	15,609,627	$	14,882,556	$	14,882,556

Medical Devices
	CytoVale, Inc.		Senior Secured	12.0%		$	618,240	$	577,732	$	577,732	3/1/2022
	CytoVale, Inc.		Senior Secured	12.0%		618,494		606,192		606,192		6/1/2022
	CytoVale, Inc.		Senior Secured	12.0%		494,847		484,524		484,524		7/1/2022
	CytoVale, Inc. Subtotal					1,731,581		1,668,448		1,668,448
	Medrobotics Corporation, Inc.		Senior Secured	12.0%		9,886,922		8,716,831		8,716,831		6/1/2021
	NeuMoDx Molecular, Inc.		Senior Secured	12.0%		3,461,736		3,206,429		3,206,429		4/1/2023
	NeuMoDx Molecular, Inc.		Senior Secured	12.0%		3,464,988		3,392,572		3,392,572		4/1/2023
	NeuMoDx Molecular, Inc. Subtotal					6,926,724		6,599,001		6,599,001
Medical Devices Total		22.4%				$	18,545,227	$	16,984,280	$	16,984,280

Other Healthcare
	Caredox, Inc.		Senior Secured	11.8%		$	1,165,294	$	1,115,464	$	1,115,464	10/1/2021
	Discover Echo, Inc.		Senior Secured	11.0%		470,015		446,882		446,882		12/1/2020
	Sparta Software Corporation		Senior Secured	11.5%	2.2%	490,735		466,980		466,980		5/1/2022
	Therapydia, Inc.		Senior Secured	12.0%	1.7%	123,832		111,643		111,643		3/1/2023
	Therapydia, Inc.		Senior Secured	12.5%	1.7%	123,625		123,625		123,625		6/1/2023
	Therapydia, Inc. Subtotal					247,457		235,268		235,268
Other Healthcare Total		3.0%				$	2,373,501	$	2,264,594	$	2,264,594

Other Technology
	Aclima, Inc.		Senior Secured	11.5%	2.3%	$	867,502	$	846,985	$	846,985	4/1/2022
	Aclima, Inc.		Senior Secured	11.0%	2.0%	1,807,770		1,723,639		1,723,639		7/1/2021
	Aclima, Inc. Subtotal					2,675,272		2,570,624		2,570,624



Industry	Borrower	Percent of Net Assets (a)	Collateral	Interest Rate	End of Term Payment	Principal		Cost		Fair Value		Maturity Date
	Apollo Flight Research Inc.		Senior Secured	11.0%		495,327		467,425		467,425		6/1/2022
	AvantStay, Inc.		Senior Secured	11.0%		990,540		938,005		938,005		6/1/2022
	Beanfields, PBC		Senior Secured	12.5%		864,974		802,344		802,344		3/1/2023
	Brightside Benefit, Inc.		Senior Secured	12.1%		741,949		688,563		688,563		9/1/2022
	Brightside Benefit, Inc.		Senior Secured	12.4%		989,684		966,882		966,882		3/1/2023
	Brightside Benefit, Inc. Subtotal					1,731,633		1,655,445		1,655,445
	DOSH Holdings, Inc.		Senior Secured	11.0%		4,952,388		4,677,870		4,677,870		6/1/2022
	DOSH Holdings, Inc.		Senior Secured	11.0%		1,238,432		1,213,212		1,213,212		6/1/2022
	DOSH Holdings, Inc. Subtotal					6,190,820		5,891,082		5,891,082
	Dragonfly Vert, Inc.		Senior Secured	12.5%		988,949		945,895		945,895		12/1/2021
	Fitplan, Inc.*^		Senior Secured	12.5%		741,693		700,004		700,004		3/1/2022
	Fitplan, Inc.*^		Senior Secured	12.5%		247,288		247,288		247,288		3/1/2022
	Fitplan, Inc.*^		Senior Secured	12.5%		494,722		474,894		474,894		3/1/2022
	Fitplan, Inc.*^ Subtotal					1,483,703		1,422,186		1,422,186
	Higher Ground Education, Inc.		Senior Secured	12.5%		2,473,461		2,278,917		2,278,917		1/1/2023
	Hint, Inc.		Senior Secured	11.0%		2,183,103		2,001,842		2,001,842		8/1/2021
	Kobo360, Inc.*^		Senior Secured	11.2%		247,412		240,930		240,930		6/1/2020
	Kobo360, Inc.*^		Senior Secured	11.2%		247,469		247,469		247,469		9/1/2020
	Kobo360, Inc.*^ Subtotal					494,881		488,399		488,399
	Kogniz, Inc.		Senior Secured	12.8%		338,787		268,319		268,319		9/1/2021
	Make School, Inc.		Senior Secured	11.2%		873,526		836,948		836,948		8/1/2021
	Nevada Nanotech Systems, Inc.		Senior Secured	12.0%		814,573		758,532		758,532		6/1/2021
	NewGlobe Schools, Inc.		Senior Secured	12.5%		3,957,329		3,737,731		3,737,731		8/1/2022
	Noteleaf, Inc.		Senior Secured	12.5%		1,470,312		1,375,901		1,375,901		4/1/2023
	Plant Prefab, Inc.		Senior Secured	11.0%		495,284		454,776		454,776		2/1/2022
	Plant Prefab, Inc.		Senior Secured	11.0%		495,373		484,335		484,335		2/1/2022
	Plant Prefab, Inc. Subtotal					990,657		939,111		939,111
	Platform Science, Inc.		Senior Secured	12.0%		1,237,033		1,141,296		1,141,296		2/1/2022
	Plethora, Inc		Senior Secured	11.5%		1,179,545		1,061,920		1,061,920		3/1/2022
	Romaine Empire, Inc.		Senior Secured	11.0%	4.1%	2,972,075		2,767,690		2,767,690		2/1/2023
	Saber es Poder, Inc.		Senior Secured	10.5%		495,435		468,021		468,021		3/1/2022
	Saber es Poder, Inc.		Senior Secured	10.5%		247,754		248,891		248,891		5/1/2022
	Saber es Poder, Inc. Subtotal					743,189		716,912		716,912
	SkyKick, Inc.		Senior Secured	11.0%		4,952,002		4,707,778		4,707,778		6/1/2022
	Strong Arm Technologies, Inc.		Senior Secured	12.0%		882,298		849,310		849,310		5/1/2021
	Theatro Labs, Inc.		Senior Secured	12.0%		1,483,523		1,436,785		1,436,785		8/1/2022
	Thras.io, Inc.		Senior Secured	12.0%	45.2%	270,994		237,368		237,368		4/1/2024
	Thras.io, Inc.		Senior Secured	12.0%	45.1%	179,570		179,570		179,570		4/1/2024
	Thras.io, Inc.		Senior Secured	12.0%	45.1%	177,037		177,037		177,037		5/1/2024
	Thras.io, Inc.		Senior Secured	12.0%	45.1%	262,500		262,500		262,500		6/1/2024
	Thras.io, Inc.		Senior Secured	19.3%	45.1%	350,000		350,000		350,000		6/1/2024
	Thras.io, Inc. Subtotal					1,240,101		1,206,475		1,206,475
	Velo Holdings Limited		Senior Secured	12.0%		2,474,903		2,288,478		2,288,478		6/1/2022
	Virtuix Holdings, Inc.		Senior Secured	12.2%		247,262		240,829		240,829		4/1/2022
	Voodoo Manufacturing, Inc.		Senior Secured	12.0%		371,151		337,527		337,527		3/1/2022
	Wheels Labs, Inc.		Senior Secured	12.5%		4,451,562		4,261,341		4,261,341		8/1/2022
Other Technology Total		63.8%				$	51,252,491	$	48,395,047	$	48,395,047

Security
	Axonius, Inc.		Senior Secured	12.0%		$	451,631	$	434,098	$	434,098	9/1/2021



Industry	Borrower	Percent of Net Assets (a)	Collateral	Interest Rate	End of Term Payment	Principal		Cost		Fair Value		Maturity Date
	Nok Nok Labs, Inc.		Senior Secured	12.5%		988,240		964,880		964,880		6/1/2022
	Safetrust Holdings, Inc.		Senior Secured	12.5%		407,508		375,298		375,298		6/1/2021
Security Total		2.4%				$	1,847,379	$	1,774,276	$	1,774,276

Semiconductors and Equipment
	ETA Compute, Inc.		Senior Secured	12.0%		$	1,441,406	$	1,382,196	$	1,382,196	11/1/2021
Semiconductors and Equipment Total		1.8%				$	1,441,406	$	1,382,196	$	1,382,196

Software
	Alkanza Inc.		Senior Secured	12.5%		$	742,020	$	640,688	$	640,688	3/1/2022
	Blockdaemon, Inc.		Senior Secured	11.2%		218,370		198,519		198,519		8/1/2021
	Blockdaemon, Inc.		Senior Secured	11.2%		247,422		235,508		235,508		6/1/2022
	Blockdaemon, Inc. Subtotal					465,792		434,027		434,027
	Dynamics, Inc.		Senior Secured	12.5%		6,557,312		5,728,098		5,728,098		8/1/2021
	ICX Media, Inc.		Senior Secured	12.5%		494,719		449,055		449,055		5/1/2022
	Interana, Inc.		Senior Secured	11.2%		2,440,968		2,370,178		2,370,178		6/1/2021
	Invoice2Go, Inc.		Senior Secured	12.0%		989,160		862,002		862,002		3/1/2022
	Invoice2Go, Inc.		Senior Secured	12.0%		989,590		972,077		972,077		7/1/2022
	Invoice2Go, Inc.		Senior Secured	12.0%		989,997		970,422		970,422		11/1/2022
	Invoice2Go, Inc. Subtotal					2,968,747		2,804,501		2,804,501
	Ipolipo, Inc.		Senior Secured	12.0%		2,473,300		2,375,033		2,375,033		12/1/2021
	Metawave Corporation		Senior Secured	12.0%		989,553		947,679		947,679		7/1/2022
	Metricly, Inc.		Senior Secured	12.2%		480,271		447,640		447,640		11/1/2021
	Mines.io, Inc.*^		Senior Secured	12.2%		741,689		688,427		688,427		12/1/2021
	Mines.io, Inc.*^		Senior Secured	12.5%		494,512		494,512		494,512		3/1/2022
	Mines.io, Inc.*^ Subtotal					1,236,201		1,182,939		1,182,939
	Oohlala Mobile, Inc.*^		Senior Secured	11.5%		225,823		225,823		225,823		9/1/2021
	Oohlala Mobile, Inc.*^		Senior Secured	11.5%		433,102		433,102		433,102		9/1/2021
	Oohlala Mobile, Inc.*^ Subtotal					658,925		658,925		658,925
	OrderGroove, Inc.		Senior Secured	12.0%		2,473,716		2,330,233		2,330,233		6/1/2023
	OrderGroove, Inc.		Senior Secured	12.0%		1,236,250		1,209,676		1,209,676		6/1/2023
	OrderGroove, Inc. Subtotal					3,709,966		3,539,909		3,539,909
	Owl Cameras, Inc.		Senior Secured	12.5%		3,459,895		3,212,982		3,212,982		12/1/2022
	PlushCare, Inc.		Senior Secured	11.8%		989,613		930,801		930,801		5/1/2022
	Resilio, Inc.		Senior Secured	12.8%		181,169		151,169		151,169		3/1/2021
	Resilio, Inc.		Senior Secured	12.8%		196,417		196,417		196,417		5/1/2021
	Resilio, Inc. Subtotal					377,586		347,586		347,586
	Skillshare, Inc.		Senior Secured	12.0%		1,628,700		1,550,290		1,550,290		6/1/2021
	Skillshare, Inc.		Senior Secured	12.5%		989,137		971,045		971,045		1/1/2022
	Skillshare, Inc.		Senior Secured	12.8%		989,258		970,699		970,699		4/1/2022
	Skillshare, Inc. Subtotal					3,607,095		3,492,034		3,492,034
	Stitch Labs, Inc.		Senior Secured	12.0%		1,483,988		1,376,206		1,376,206		2/1/2022
	Stitch Labs, Inc.		Senior Secured	12.2%		742,309		724,793		724,793		6/1/2022
	Stitch Labs, Inc. Subtotal					2,226,297		2,100,999		2,100,999
	Swivel, Inc.		Senior Secured	12.0%		247,420		225,634		225,634		8/1/2022
	Swivel, Inc.		Senior Secured	12.0%		247,474		247,474		247,474		10/1/2022
	Swivel, Inc. Subtotal					494,894		473,108		473,108
	Talla, Inc.		Senior Secured	12.5%		494,627		451,791		451,791		5/1/2022
	Trendalytics Innovation Labs, Inc.		Senior Secured	12.8%		296,758		258,242		258,242		6/1/2022
	Venuetize, LLC		Senior Secured	12.2%		247,254		220,962		220,962		4/1/2022
	Workspot, Inc.		Senior Secured	12.0%		677,403		628,671		628,671		9/1/2021



Industry	Borrower	Percent of Net Assets (a)	Collateral	Interest Rate	End of Term Payment	Principal		Cost		Fair Value		Maturity Date
Software Total		44.4%				$	36,089,196	$	33,695,848	$	33,695,848

Technology Services
	Keyo AI Inc.		Senior Secured	10.0%		$	495,587	$	464,763	$	464,763	2/1/2022
	Lifit, Inc.*^		Senior Secured	12.0%		494,952		447,334		447,334		8/1/2022
	Loansnap Holdings Inc.*		Senior Secured	11.0%		2,724,688		2,574,407		2,574,407		6/1/2022
	Relimetrics, Inc.		Senior Secured	11.2%		371,246		352,738		352,738		1/1/2022
	Zeel Networks, Inc.		Senior Secured	11.0%		1,237,658		1,161,818		1,161,818		3/1/2022
	Zeel Networks, Inc.		Senior Secured	11.0%		1,238,017		1,215,698		1,215,698		3/1/2022
	Zeel Networks, Inc. Subtotal					2,475,675		2,377,516		2,377,516
Technology Services Total		8.2%				$	6,562,148	$	6,216,758	$	6,216,758
Grand Total		171.6%				$	138,569,742	$	130,203,718	$	130,203,718

* Indicates assets that the Fund deems “non-qualifying assets” under Section 55(a) of the 1940 Act. Qualifying assets must represent at least 70% of the Fund’s total assets at the time of acquisition of any additional non-qualifying assets. As of June 30, 2019, 5.1% of the Fund’s total assets represented non-qualifying assets. As part of this calculation, the numerator consists of all eligible portfolio companies as defined in Section 2(a)(46) of the 1940 Act; and the denominator consists of total assets less the 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).

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

See notes to condensed financial statements

VENTURE LENDING & LEASING IX, INC.

CONDENSED SCHEDULES OF INVESTMENTS (UNAUDITED)

AS OF DECEMBER 31, 2018

As of December 31, 2018, all loans were valued using significant unobservable inputs and were made to non-affiliates. Additionally, all loans were pledged as collateral as part of the debt facility.



Industry	Borrower	Percent of Net Assets (a)	Collateral	Interest Rate	End of Term Payment	Principal		Cost		Fair Value		Maturity Date

Biotechnology
	Antheia, Inc.		Senior Secured	11.5%		$	1,485,403	$	1,376,139	$	1,376,139	12/1/2022
Biotechnology Total		1.9%				$	1,485,403	$	1,376,139	$	1,376,139

Enterprise Networking
	SnapRoute, Inc.		Senior Secured	11.0%		$	3,466,659	$	3,266,067	$	3,266,067	11/1/2021
Enterprise Networking Total		4.4%				$	3,466,659	$	3,266,067	$	3,266,067

Internet
	Amino Payments, Inc.		Senior Secured	9.0%	4.8%	$	625,521	$	597,770	$	597,770	12/1/2021
	DreamCloud Holdings, LLC		Senior Secured	12.0%		4,948,333		4,232,618		4,232,618		12/1/2021
	Osix Corporation		Senior Secured	12.3%		98,605		80,379		80,379		12/1/2021
	Protecht, Inc.		Senior Secured	12.5%		988,684		926,867		926,867		12/1/2021
	Thrive Market, Inc.		Senior Secured	12.3%		7,420,042		7,134,488		7,134,488		4/1/2022
Internet Total		17.5%				$	14,081,185	$	12,972,122	$	12,972,122

Medical Devices
	CytoVale, Inc.		Senior Secured	12.0%		$	618,631	$	566,206	$	566,206	3/1/2022
	Medrobotics Corporation, Inc.		Senior Secured	12.0%		9,893,475		8,990,046		8,990,046		6/1/2021
	NeuMoDx Molecular, Inc.		Senior Secured	12.0%		3,463,954		3,168,810		3,168,810		4/1/2023
Medical Devices Total		17.2%				$	13,976,060	$	12,725,062	$	12,725,062

Other Healthcare
	Caredox, Inc.		Senior Secured	11.8%		$	1,237,487	$	1,168,686	$	1,168,686	10/1/2021
	Discover Echo, Inc.		Senior Secured	11.0%		610,296		571,549		571,549		12/1/2020
Other Healthcare Total		2.4%				$	1,847,783	$	1,740,235	$	1,740,235

Other Technology
	Aclima, Inc.		Senior Secured	11.0%	0.5%	$	2,109,845	$	1,987,764	$	1,987,764	7/1/2021
	Brightside Benefit, Inc.		Senior Secured	12.1%		742,419		676,970		676,970		9/1/2022
	Dragonfly Vert, Inc.		Senior Secured	12.5%		984,722		928,746		928,746		12/1/2021
	Fitplan, Inc.* ^		Senior Secured	12.5%		742,195		689,277		689,277		3/1/2022
	Hint, Inc.		Senior Secured	11.0%		2,475,778		2,217,362		2,217,362		8/1/2021
	Kobo360 Inc.* ^		Senior Secured	11.3%		247,553		235,597		235,597		6/1/2020
	Kobo360 Inc.* ^		Senior Secured	11.3%		247,607		247,607		247,607		9/1/2020
	Kobo360 Inc.* ^ Subtotal					495,160		483,204		483,204
	Kogniz, Inc.		Senior Secured	12.8%		370,935		274,751		274,751		9/1/2021
	Make School, Inc.		Senior Secured	11.3%		990,265		937,821		937,821		8/1/2021
	Nevada Nanotech Systems, Inc.		Senior Secured	12.0%		989,590		906,963		906,963		6/1/2021
	Plethora, Inc.		Senior Secured	9.5%	4.3%	500,151		462,877		462,877		6/1/2021
	Plethora, Inc.		Senior Secured	9.5%	4.3%	248,860		244,096		244,096		9/1/2021
	Plethora, Inc.		Senior Secured	9.5%	4.3%	496,863		486,908		486,908		10/1/2021
	Plethora, Inc. Subtotal					1,245,874		1,193,881		1,193,881
	Scoot Networks, Inc.		Senior Secured	12.8%		879,262		818,310		818,310		3/1/2021
	SkyKick, Inc.		Senior Secured	11.0%		4,952,637		4,660,147		4,660,147		6/1/2022



Industry	Borrower	Percent of Net Assets (a)	Collateral	Interest Rate	End of Term Payment	Principal		Cost		Fair Value		Maturity Date
	Strong Arm Technologies, Inc.		Senior Secured	12.0%		1,081,134		1,031,438		1,031,438		5/1/2021
	Theatro Labs, Inc.		Senior Secured	12.0%		1,484,478		1,426,311		1,426,311		8/1/2022
	Virtuix Holdings, Inc.		Senior Secured	12.3%		247,423		239,317		239,317		4/1/2022
Other Technology Total		24.9%				$	19,791,717	$	18,472,262	$	18,472,262

Security
	Axonius, Inc.		Senior Secured	12.0%		$	494,882	$	470,235	$	470,235	9/1/2021
	Nok Nok Labs, Inc.		Senior Secured	12.5%		988,949		959,222		959,222		6/1/2022
	Safetrust Holdings, Inc.		Senior Secured	12.5%		494,508		447,173		447,173		6/1/2021
Security Total		2.5%				$	1,978,339	$	1,876,630	$	1,876,630

Semiconductors and Equipment
	ETA Compute, Inc.		Senior Secured	12.0%		$	1,484,845	$	1,404,604	$	1,404,604	11/1/2021
Semiconductors and Equipment Total		1.9%				$	1,484,845	$	1,404,604	$	1,404,604

Software
	Blockdaemon, Inc.		Senior Secured	11.3%		$	247,555	$	219,310	$	219,310	8/1/2021
	Dynamics, Inc.		Senior Secured	12.5%		7,420,031		6,251,460		6,251,460		8/1/2021
	Interana, Inc.		Senior Secured	11.3%		2,970,465		2,865,164		2,865,164		6/1/2021
	Invoice2Go, Inc.		Senior Secured	12.0%		989,788		829,825		829,825		3/1/2022
	Ipolipo, Inc.		Senior Secured	12.0%		2,453,333		2,323,285		2,323,285		12/1/2021
	Metricly, Inc.		Senior Secured	12.3%		494,715		450,708		450,708		11/1/2021
	Mines.io, Inc.* ^		Senior Secured	12.3%		742,179		671,683		671,683		12/1/2021
	Mines.io, Inc.* ^		Senior Secured	12.5%		494,618		494,618		494,618		3/1/2022
	Mines.io, Inc.* ^ Subtotal					1,236,797		1,166,301		1,166,301
	Oohlala Mobile, Inc.* ^		Senior Secured	11.5%		247,581		247,581		247,581		9/1/2021
	Oohlala Mobile, Inc.* ^		Senior Secured	11.5%		469,136		469,136		469,136		9/1/2021
	Oohlala Mobile, Inc.* ^ Subtotal					716,717		716,717		716,717
	OrderGroove, Inc.		Senior Secured	12.0%		2,474,167		2,311,992		2,311,992		6/1/2023
	PlushCare, Inc.		Senior Secured	11.8%		990,205		917,120		917,120		5/1/2022
	Resilio, Inc.		Senior Secured	12.8%		225,964		180,310		180,310		3/1/2021
	Resilio, Inc.		Senior Secured	12.8%		240,276		240,276		240,276		5/1/2021
	Resilio, Inc. Subtotal					466,240		420,586		420,586
	Skillshare, Inc.		Senior Secured	12.0%		1,978,640		1,862,640		1,862,640		6/1/2021
	Stitch Labs, Inc.		Senior Secured	12.0%		1,484,916		1,346,447		1,346,447		2/1/2022
	Venuetize, LLC		Senior Secured	12.3%		247,416		214,060		214,060		4/1/2022
	Workspot, Inc.		Senior Secured	12.0%		742,276		674,121		674,121		9/1/2021
	Zoomdata, Inc.		Senior Secured	11.5%		736,105		699,299		699,299		3/1/2022
Software Total		31.4%				$	25,649,366	$	23,269,035	$	23,269,035

Technology Services
	Keyo AI Inc.		Senior Secured	10.0%		$	495,800	$	455,925	$	455,925	2/1/2022
	Relimetrics, Inc.		Senior Secured	11.3%		371,450		347,197		347,197		1/1/2022
	Zeel Networks, Inc.		Senior Secured	11.0%		1,238,318		1,139,829		1,139,829		3/1/2022
Technology Services Total		2.6%				$	2,105,568	$	1,942,951	$	1,942,951
Grand Total		106.7%				$	85,866,925	$	79,045,107	$	79,045,107

* Indicates assets that the Fund deems “non-qualifying assets” under Section 55(a) of the 1940 Act. Qualifying assets must represent at least 70% of the Fund’s total assets at the time of acquisition of any additional non-qualifying assets. As of December 31, 2018, 3.8% of the Fund’s total assets represented non-qualifying assets. As part of this calculation, the numerator consists of all eligible portfolio companies as defined in Section 2(a)(46) of the 1940 Act; and the denominator consists of total assets less the 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.

See notes to condensed financial statements

VENTURE LENDING & LEASING IX, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)


1.	ORGANIZATION AND OPERATIONS OF THE FUND

Venture Lending & Leasing IX, Inc. (the “Fund”) was incorporated in Maryland on June 28, 2017 as a non-diversified, closed-end management investment company electing status as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (“1940 Act”) and is managed by Westech Investment Advisors, LLC ~~(“Manager”~~(the “Manager” or “Management”). The Fund will be dissolved on December 31, 2028 unless ~~an election is made to dissolve earlier by~~ the Board of Directors ~~of the Fund~~ (the “Board”). opts to elect early dissolution. One hundred percent of the stock of the Fund is held by Venture Lending & Leasing IX, LLC (the “Company”). Prior to commencing its operations on May 2, 2018, the Fund had no operations other than accruing organizational expenses and the sale to the Company of 100,000 shares of common stock, $0.001 par value ~~(“Shares”)~~for $25,000 in June ~~2017 and the receipt of $25,000 from the Company as consideration for the purchase of the Shares.~~2017. 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 22, 2017.

The Fund’s investment objective is to achieve a superior ~~risk adjusted~~risk-adjusted investment ~~return~~returns and it seeks to achieve that objective by providing debt financing to portfolio ~~companies;~~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.~~receipt, or soon thereafter. The Fund also has guidelines for the ~~percentage~~percentages of total assets ~~which will be~~that are invested in different types of assets.

The portfolio investments of the Fund primarily consist of debt financing to early and ~~late~~expansion 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 ~~in the United States of America~~ (“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 six months ended June 30, ~~2018~~2019 are not necessarily indicative of what the results would be for a full year. These financial statements should be read in conjunction with the financial statements and the notes included in the Fund’s Annual Report on Form 10-K for the year ended December 31, ~~2017.~~2018.


2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

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”).

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand and ~~cash equivalents~~money market mutual funds with maturities of 90 days or less. ~~Included in this are money~~Money market mutual funds ~~that~~held as cash equivalents are valued at their most recently traded ~~prior to the valuation date.~~net asset value. Within cash and cash equivalents, as of June 30, ~~2018,~~2019, the Fund held ~~33,016,704~~3,711,441 units in the Blackrock Treasury Trust Institutional Fund valued at $1 per unit at a yield of ~~1.66%~~1.95%, which ~~represents 64.4%~~represented 4.9% 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 of ~~discounts attributable to~~ equity securities ~~received~~included as additional compensation as part of athe loan ~~transaction.~~agreements. Additionally, fees received as part of the transaction are added to the loan discount and amortized over the life of the loan.

Investment Valuation Procedures

The Fund accounts for loans at fair value in accordance with the valuation methods below. All valuations are determined under the direction of the Manager, in accordance with ~~those~~the valuation methods.

The Fund’s loans are valued coincident with the issuance of its ~~periodic~~quarterly financial statements, the issuance or repurchase of the Fund’s shares at a price equivalent to the current net asset value per share, and at such other times as required by law. On a quarterly basis, Management submits to the Board a valuation report and valuation notes, which ~~details~~detail the rationale for the valuation of each investment.

As of June 30, 2019 and December 31, 2018, the financial statements ~~include~~included nonmarketable investments of ~~$19.5~~$130.2 million and $79.0 million, respectively, (or ~~37.0%~~95.2% and 96.2% of total ~~assets)~~assets, respectively), ~~and as of December 31, 2017,~~with the ~~Fund had not yet commenced investment operations and accordingly had no nonmarketable investments. The~~ fair ~~value of each investment is~~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~~ready market for the securities existed, and the differences could be material. Below is the information used by the Manager in making these estimates.

Loans

The Fund defines fair value as the price that would be received to sell an asset or paid to lower a liability in an orderly transaction between market participants at the measurement date. Because there is no readily available market price and no secondary market for substantially all of the debt investments made by the Fund ~~into~~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, ~~together,~~ 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~~Non-Accrual Loans

The Fund’s policy is to classify a loan onas non-accrual when the portfolio company is delinquent for three consecutive months on its monthly loan ~~payments,~~payment, or, in the opinion of Management, either ceases or drastically curtails its ~~operations~~operation 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 June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, there were no loans classified as non-accrual.

Warrants and Equity Securities

Warrants and equity securities ~~that are~~ received in connection with loan transactions ~~will be~~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 ~~the~~ risk-free interest rate. It is anticipated that such securities will be distributed by the Fund to the Company simultaneously with, or shortly following, their acquisition.

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

Volatility, or the amount of uncertainty or risk about the size of the changes in the warrant price, is based on an index of publicly traded companies grouped by industry and which are similar in nature to the underlying portfolio companies issuing the warrant (“Industry Index”). The volatility assumption for each Industry Index is based on the average volatility for individual public companies within the portfolio company’s industry for a period 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. ~~The~~For the six months ended June 30, 2019 and 2018, the Fund assumed the average duration of a warrant is 3.5 years ~~for the six months ended June 30, 2018.~~since inception. The effect of a hypothetical increase in the estimated initial term of the warrants used in the modified Black-Scholes option pricing model would have the effect of increasing the value of the warrants.

The risk-free interest rate is derived from the constant maturity tables issued by the U.S. Treasury Department. The effect of a hypothetical increase in the estimated risk-free rate used in the modified Black-Scholes option pricing model would have the effect of increasing the value of the warrants.

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

Other Assets and Liabilities

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

As of June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, the fair values of Other ~~Assets~~assets and ~~Liabilities~~accrued liabilities are estimated at their carrying values because of the short-term nature of these assets and liabilities.

As of June 30, 2019 and December 31, 2018, based on the borrowing rates available to the Fund, the estimated fair values of the borrowings under the debt facility were $56.5 million and $6.0 million, respectively.

Commitment Fees

Unearned income and commitment fees on loans are recognized using the ~~effective interest~~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

~~Recent Accounting Pronouncements~~

~~In November 2016,~~The deferred bank fees and costs associated with the ~~Financial Accounting Standards Board (“FASB”) issued ASU 2016-18, “Statement~~debt facility are included in Other assets in the Condensed Statements of ~~Cash Flows (topic 230): Restricted Cash, a consensus~~Assets and Liabilities and are being amortized over the estimated life of the ~~FASB Emerging Issues Task Force,”~~facility, which ~~requires that a statement~~currently matures on December 20, 2021. The amortization of ~~cash flows explain the change during the period~~these costs is recorded as Interest expense in the ~~total cash, cash equivalents,~~Condensed Statements of Operations.

Interest Rate Swap and ~~amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash~~Floor Agreement

The Fund has entered into an interest rate swap and ~~restricted cash equivalents should be included~~floor agreement to hedge its interest rate on its expected borrowings under its debt facility (see Note 8). The floor allows the Fund to match the swap with ~~cash~~the terms of the variable rate index of the debt facility. The interest rate swap and ~~cash equivalents when reconciling the beginning-of-the-period and end-of-the-period total amounts shown~~floor are primarily valued on the ~~statement~~basis of ~~cash flows. ASU 2016-18 is effective~~quotes obtained from banks, brokers and dealers and adjusted for ~~annual reporting periods,~~counterparty risk and the ~~interim periods within those periods, beginning after December 15, 2017. We do not believe that ASU 2016-18 will have~~optionality of the interest rate floor. The valuation of the swap and floor agreement also considers the future expected interest rates on the notional principal balance remaining which is comparable to what a ~~material impact~~prospective acquirer would pay on ~~our financial statements~~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 ~~disclosures.~~

~~3. SCHEDULES OF INVESTMENTS~~

Asother factors underlying swap instruments. The contract is recorded at fair value in either Derivative asset - interest rate swap or Derivative liability - interest rate swap in the Condensed Statements of ~~June 30, 2018, all loans were made to non-affiliates as follows (unaudited):~~

Borrower
Percentage of
Net Assets
Estimated
Fair Value
6/30/2018
Par Value 6/30/2018
Final
Maturity
Date

Internet
Amino Payments, Inc. $ 581,737
$ 581,737
12/01/2021
Protecht, Inc. 913,482
913,482
12/01/2021
Subtotal: 2.9% $ 1,495,219
$ 1,495,219

Medical Devices
Medrobotics Corporation, Inc. $ 8,641,436
$ 8,641,436
06/01/2021
Subtotal: 16.9% $ 8,641,436
$ 8,641,436

Other Technology
Discover Echo, Inc. $ 664,465
$ 664,465
12/01/2020
Hint, Inc. 2,145,732
2,145,732
08/01/2021
Plethora, Inc 448,629
448,629
06/01/2021
Strong Arm Technologies, Inc. 1,038,506
1,038,506
05/01/2021
Subtotal: 8.4% $ 4,297,332
$ 4,297,332

Software
Interana, Inc. $ 2,830,262
$ 2,830,262
06/01/2021
Oohlala Mobile, Inc.* 453,573
453,573
09/01/2021
Skillshare, Inc. 1,809,581
1,809,581
06/01/2021
Subtotal: 9.9% $ 5,093,416
$ 5,093,416

Total Loans (Cost of $19,527,403) 38.1% $ 19,527,403
$ 19,527,403

* Indicates assets thatAssets and Liabilities, depending on whether the value of the contract is in favor of the Fund ~~deems “non-qualifying assets” under Section 55(a)~~or the counterparty. The changes in fair value are recorded in Net change in unrealized gain (loss) from derivative instruments in the Condensed Statements of the 1940 Act. Qualifying assets must represent at least 70% of the Fund’s total assets at the time of acquisition of any additional non-qualifying assets. As of June 30, 2018, 0.9% of the Fund’s assets represented non-qualifying assets. As part of this calculation, the numerator consists of all eligible portfolio companies as defined in Section 2(a)(46);Operations and the ~~denominator consists~~quarterly interest received or paid on the contract, if any, is recorded in Net realized gain (loss) from derivative instruments in the Condensed Statements of ~~total assets less the assets described in Section 55(a)(7).~~Operations. The interest rate swap and floor agreement terminates on December 20, 2021.

~~As of December 31, 2017, the Fund had not yet commenced investment operations and accordingly had no loans or other investments to report.~~

4.3. FAIR VALUE DISCLOSURES

The Fund ~~primarily~~ provides asset-based financing primarily to start-up and emerging growth venture-backed companies ~~which are generally made to borrowers~~ 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 June 30, ~~2018,~~2019, the Fund’s investments in loans were primarily to companies based within the United States and ~~it is anticipated that the Fund’s portfolio will be well~~were diversified ~~and consist of companies~~among borrowers in the ~~communications, information services, media, and technology, including software and technology-enabled business services, bio-technology, and medical devices~~ industry ~~sectors, among others. The percentage~~segments shown in the Condensed Schedules of net assets that each industry group represents is shown with the industry totals above (the sum of the percentages does not equal 100 percent because the percentages are based on net assets as opposed to total loans).Investments. All loans are senior to unsecured creditors and other secured creditors, unless as indicated in the ~~Schedule above.~~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 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 ~~tables above~~Condensed Schedules of Investments are ~~summarized~~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 ~~may have~~has a different maturity date and amount.

For the three and six months ended June 30, 2019, the weighted-average interest rate on both the performing and all loans was 19.04% and 18.36%, respectively, which was inclusive of both cash and non-cash interest income. For the period from May 2, 2018, the commencement of investment operations, through June 30, 2018, the weighted-average interest rate on both the performing and all loans was 18.37%~~, which was inclusive of both cash~~. For the three and ~~non-cash interest income. The~~six months ended June 30, 2019, the weighted-average interest rate on the cash portion of the interest income was ~~13.11% for~~13.25% and 12.95%, respectively. For the ~~period.~~ period from May 2, 2018, the commencement of investment operations, through June 30, 2018, the weighted-average interest rate on the cash portion of the interest income was 13.11%.

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 ~~described~~discussed in ~~our~~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 primarily the case for this loan portfolio, the ~~par value~~cost basis of the loan ~~will approximate~~often approximates fair value.

All loans as of June 30, 2019 and December 31, 2018 were pledged as collateral for the debt facility, and the Fund’s borrowings are generally collateralized by all assets of the Fund. As of June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, the Fund ~~has~~had unexpired unfunded commitments to borrowers of ~~$11.3~~$69.0 million and ~~$0.0~~$31.0 million, respectively.

Valuation Hierarchy

Under the ~~Financial Accounting Standards Board~~FASB ASC Topic 820 (“~~FASB”) Accounting Standards Codification (“ASC”) 820-10 “Fair~~Fair Value Measurement”), the Fund categorizes its fair value measurements according to in 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, and 3 during the ~~period~~three and six months ended June 30, 2019 and 2018.

The Fund’s cash equivalents were valued at the traded net asset value of the money market ~~mutual fund, and therefore,~~fund. As a result, these measurements are classified as Level 1.

The Fund’s interest rate swap derivative is based on quotes from the market makers that derive fair values from market data, and therefore, is classified as Level 2. The Fund’s borrowings under the debt facility are also classified as Level 2, because the borrowings are based on rates that are observable at commonly quoted intervals, which are Level 2 inputs. The Fund’s loan transactions are individually negotiated and unique, and because there is no market in which these assets trade, the inputs for these assets, which are valued using estimated exit values, are classified as Level 3.

The following table provides quantitative information about the Fund’s Level 3 fair value measurements of ~~its~~the Fund’s investments by industry as of June 30, 2019 and December 31, 2018. 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 Investments	Fair Values at June 30, 2019		Valuation Techniques / Methodologies	Unobservable Inputs	Weighted Averages / Amounts or Ranges

Biotechnology	$	1,391,594	Hypothetical market analysis	Hypothetical market coupon rate	15%

Enterprise Networking	3,216,569		Hypothetical market analysis	Hypothetical market coupon rate	15%

Internet	14,882,556		Hypothetical market analysis	Hypothetical market coupon rate	15%

Medical Devices	16,984,280		Hypothetical market analysis	Hypothetical market coupon rate	20%
			Income approach	Expected amount and timing of cash flow payments Discount rate	$10,961,111 3%

Other Healthcare	2,264,594		Hypothetical market analysis	Hypothetical market coupon rate	16%

Other Technology	48,395,047		Hypothetical market analysis	Hypothetical market coupon rate	16%

Security	1,774,276		Hypothetical market analysis	Hypothetical market coupon rate	16%

Semiconductors and Equipment	1,382,196		Hypothetical market analysis	Hypothetical market coupon rate	16%

Software	33,695,848		Hypothetical market analysis	Hypothetical market coupon rate	18%
			Income approach	Expected amount and timing of cash flow payments Discount rate	$494,539 3%

Technology Services	6,216,758		Hypothetical market analysis	Hypothetical market coupon rate	15%

Total debt investments	$	130,203,718

~~Investment Type - Level 3~~

Investment Type - Level 3

Debt Investments

Fair Value at 6/30/18

Valuation Techniques / Methodologies

Unobservable Input

Weighted Average / Amount / Range

Fair Values at December 31, 2018

Valuation Techniques / Methodologies

Unobservable Inputs

Weighted Averages / Amounts or Ranges

Biotechnology

1,376,139

Hypothetical market analysis