UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549








Form 10-K






(Mark One)

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

For the fiscal year ended December 31,
2014

or

| | [   ] | 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: 814-00830



Firsthand Technology Value Fund, Inc.

(Exact name of registrant as specified
in its charter)








|Maryland                                                               | 27-3008946                                  
|---------------------------------------------------------------------- | --------------------------------------------
|(State or other jurisdiction of
        incorporation or organization) | (I.R.S. Employer
        Identification No.)



150 Almaden Boulevard, Suite 1250

San Jose, California 95113

(Address and zip code of principal executive
offices)



(408) 886-7096

(Registrant’s telephone number,
including area code)








Securities registered pursuant to Section
12(b) of the Act:



|Title of each class            | Name of each exchange on which registered
|------------------------------ | -----------------------------------------
|Common Stock, $0.001 par value | The NASDAQ Global Market                 

Securities registered pursuant to Section
12(g) of the Act:

None








Indicate by check mark if
the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [  ] No [X]





Indicate by check mark if
the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes [  ] No [X]





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 issuer 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 (Section 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 if disclosure of delinquent
filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s
knowledge, in the definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment
to this Form 10-K.[  ]





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





|Large accelerated filer[  ] | Accelerated
    filer[X] | Non-accelerated filer [  ]
        (Do not check if a smaller
        reporting company) | Smaller reporting company[  ]
|--------------------------- | ------------------------ | ---------------------------------------------------------------------------------------- | -----------------------------





Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Act). Yes [  ] No [X]





The aggregate market value of the Common Stock
held by non-affiliates of the registrant as of December 31, 2017 was approximately $66 million (computed using the closing price
of $8.96 per share of Common Stock on December 29, 2017, as reported by the NASDAQ Global Market).





As of March 9, 2018, Firsthand Technology Value
Fund had 7,302,146 shares of common stock, par value $0.001 per share, outstanding. of the registrant’s definitive proxy
statement prepared in connection with the Annual Meeting of Stockholders to be held in 2017 are incorporated by reference in Part
III of this Form 10-K.











(COVER PAGE)











DEAR
FELLOW SHAREHOLDERS



The
Roku IPO in September 2017 punctuated what was otherwise an up-and-down year for Firsthand Technology Value Fund. In addition
to Roku, the Fund enjoyed an IPO exit from Cloudera (NYSE: CLDR) and the acquisition of Turn by Amobee. I am pleased to report
that the Fund’s net asset value (NAV) appreciated 18.9% for the year ended December 31, 2017, while SVVC stock was up 16.8%
for the period.



POSITIVE
PERFORMERS



The
biggest newsmaker for the Fund in 2017 was Roku, which went public in late September. Our initial investment in the streaming
video hardware and software company came in 2015, and our total investment was approximately $2.3 million (or roughly $9.25 per
share). Roku went public at $14.00 per share and closed the year at $51.78 per share (note that the Fund currently values Roku
at a 10% discount to reflect the fact that we currently hold restricted shares). Roku is a prime beneficiary of the trend toward
over-the-top (OTT) delivery of television and movie/video content and is among the industry leaders in streaming hardware and
software.



With
expectations for continued outperformance, we held the majority of our position in Nutanix (NASDAQ: NTNX) throughout 2017. We
were rewarded with appreciation of 32.8% for the year, and we forecast continued revenue growth and shrinking losses for the company
through 2018.



We
received a dose of good news early in the year when Amobee announced that it was acquiring Turn, an advertising technology company
in which we invested in 2013. The Fund’s total investment in Turn was approximately $15.6 million. Although the investment,
at best, may yield a small profit, we are pleased with the valuation that management was able to achieve in a very challenging
market environment for adtech companies. We believe that it is sometimes better to cash out and redeploy assets than to hang on
and hope for a profit down the road.



Two
of our semiconductor industry holdings were also strong performers in 2017. Pivotal Systems’ continued growth and market
momentum propelled it to a record-high valuation to close the year. We believe that Pivotal currently is the best-positioned company
in our portfolio for a near-term exit, based on the maturity of its business. Revasum, a relatively recent investment (November
2016) for the Fund, posted a strong performance in its first full year of operations and raised a new round of growth capital late
in the year. The company’s wafer grinders and chemical-mechanical planarization (CMP) tools are used by semiconductor manufacturers
worldwide.



Although
we achieved an IPO exit with Cloudera (NYSE: CLDR), the investment had very little impact on portfolio performance, given its
relatively small size.



A
FEW DISAPPOINTMENTS



After
a prolonged period of product and financial struggles, Jawbone called it quits in 2017. We received in July a Notice of Assignment
for the Benefit of Creditors from the company, explaining that Jawbone’s assets are being liquidated and the company is being
wound down. We do not expect to receive any proceeds from the liquidation.



One
of the Fund’s early stage investments, Rorus, also discontinued operations late in the year. The maker of low-cost water
filtration systems was unable to get a toehold in a marketplace marked by intense competition.



We
purchased shares of Sunrun in 2013, and the company went public in August 2015. We closed our position in Sunrun common stock
during 2017, realizing a loss of approximately $2.7 million.



TAKING
LONGER



One
of the primary risks involved in investing in small, private companies is that they may take longer than expected to develop their
technology or establish a market for their products or services. Frustratingly, we find several of our portfolio companies in this
position, and their changing valuations throughout the year reflect this reality. Companies such as Hera Systems, QMAT, Silicon
Genesis, and Wrightspeed have faced more difficulty than expected in bringing their technologies out of the lab. Still others, including



CONTINUED
ON INSIDE BACK COVER















DOCUMENTS
INCORPORATED BY REFERENCE



Portions
of the registrant’s definitive proxy statement prepared in connection with the Annual Meeting of Stockholders to be held
in 2018 are incorporated by reference in Part III of this Form 10-K.



2







TABLE
OF CONTENTS



|PART I.   |                                                                                                   |   
|--------- | ------------------------------------------------------------------------------------------------- | --
|Item 1.   | Business                                                                                          | 4 
|Item 1A.  | Risk Factors                                                                                      | 17
|Item 2.   | Properties                                                                                        | 24
|Item 3.   | Legal Proceedings                                                                                 | 25
|Item 4    | Mine Safety Disclosures                                                                           | 25
|PART II.  |                                                                                                   |   
|Item 5.   | Market for Registrant’s Common Equity, Related Matters, and Issuer Purchases of Equity Securities | 25
|Item 6.   | Selected Financial Data                                                                           | 26
|Item 7.   | Management’s Discussion and Analysis of Financial Condition and Results of Operations             | 29
|Item 8.   | Financial Statements and Supplemental Data                                                        | 42
|Item 9.   | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure              | 83
|Item 9A.  | Controls and Procedures                                                                           | 83
|Item 9B.  | Other Information                                                                                 | 83
|PART III. |                                                                                                   |   
|Item 10.  | Directors, Executive Officers, and Corporate Governance                                           | 84
|Item 11.  | Executive Compensation                                                                            | 84
|Item 12.  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters    | 84
|Item 13.  | Certain Relationships and Related Transactions and Director Independence                          | 84
|Item 14.  | Principal Accountant Fees and Services                                                            | 84
|PART IV.  |                                                                                                   |   
|Item 15.  | Exhibits and Financial Statements Schedules                                                       | 85







3







PART
I



Item
1. Business



FORWARD
LOOKING STATEMENTS

This
report, and other statements that we may make, may contain forward-looking statements, which relate to future events or our future
performance or financial condition. We use words such as “anticipates,” “believes,” “expects,”
“plans,” “will,” “may,” “continues,” “seeks,” “likely,”
“intends,” and similar expressions to identify forward-looking statements. The forward-looking statements contained
in this Annual Report on Form 10-K involve risks and uncertainties, including forward-looking statements as to:



| | ● | our
                                         future operating results,
| | - | ----------------------------------------------------------------------



| | ● | our
                                         business prospects and the prospects of our prospective portfolio companies,
| | - | -------------------------------------------------------------------------------------------------------------------------



| | ● | the
                                         impact of investments that we expect to make,
| | - | ------------------------------------------------------------------------------------------



| | ● | our
                                         contractual arrangements and relationships with third parties,
| | - | -----------------------------------------------------------------------------------------------------------



| | ● | the
                                         dependence of our future success on the general economy and its impact on the industries
                                         in which we invest,
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | the
                                         ability of our prospective portfolio companies to achieve their objectives,
| | - | ------------------------------------------------------------------------------------------------------------------------



| | ● | our
                                         expected financings and investments,
| | - | ---------------------------------------------------------------------------------



| | ● | the
                                         adequacy of our cash resources and working capital, and
| | - | ----------------------------------------------------------------------------------------------------



| | ● | the
                                         timing of cash flows, if any, from the operations of our prospective portfolio companies.
| | - | --------------------------------------------------------------------------------------------------------------------------------------



Our
actual results could differ materially from those projected in the forward-looking statements for any reason, including the factors
set forth in “Risk Factors” and elsewhere in this Annual Report on Form 10-K. In addition, several factors that could
materially affect our actual results are the ability of the portfolio companies in which we invest to achieve their objectives;
our ability to source favorable private investments; changes in the securities markets, especially the markets for technology
companies including those that may be early stage or micro-cap companies; the dependence of our future success of the general
economy and its impact on the industries in which we invest and other factors discussed in our periodic filings with the Securities
and Exchange Commission (the “SEC”).



Unpredictable
or unknown factors could also have material adverse effects on us. Since our actual results, performance or achievements could
differ materially from those expressed in, or implied by, these forward-looking statements, we cannot give any assurance that any
of the events anticipated by the forward-looking statements will occur, or, if any of them do, what impact they will have on our
results of operations and financial condition. All forward-looking statements included in this Annual Report on Form 10-K are expressly
qualified in their entirety by the foregoing cautionary statements. You are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. We do not undertake any obligation to update, amend or clarify these forward-looking
statements or the risk factors contained in this Annual Report on Form 10-K, whether as a result of new information, future events
or otherwise, except as may be required under the federal securities laws. Although we undertake no obligation to revise or update
any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult
any additional disclosures that we may make directly to you or through reports that we in the future may file with the SEC.



GENERAL

Firsthand
Technology Value Fund, Inc. (“we,” “us,” “our,” the “Company” or “SVVC”)
is an externally managed, closed-end, non-diversified management investment company organized as a Maryland corporation that has
elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940 (the “1940
Act”). As such, we are required to comply with certain regulatory requirements. For instance, we generally have to invest
at least 70 percent of our total assets in “qualifying assets,” including securities of private or micro-cap public
U.S. companies, cash, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or
less. In addition, for tax purposes we have elected to be treated as a regulated investment company, or RIC, under Subchapter
M of the Internal Revenue Code of 1986, as amended, which we refer to as the “Code.” Firsthand Capital Management,
Inc. (the “Investment Adviser”, the “Adviser”, or “FCM”) serves as our investment adviser
and manages the investment process on a daily basis.







4







We
were incorporated under the Maryland General Corporation Law in April 2010 and acquired our initial portfolio of securities through
the reorganization (the “Reorganization”) into us of Firsthand Technology Value Fund (“TVF”), an open-end
mutual fund and a series of Firsthand Funds, which is a Delaware statutory trust. The reorganization was completed on April 15,
2011 and we commenced operations on April 18, 2011.



Our
investment objective is to seek long-term growth of capital, principally by seeking capital gains on our equity and equity-related
investments. There can be no assurance that we will achieve our investment objective. Under normal circumstances, we invest at
least 80 percent of our total assets for investment purposes in technology companies. We consider technology companies to be those
companies that derive at least 50 percent of their revenues from products and/or services within the information technology sector
and in the “cleantech” sector. Information technology companies include, but are not limited to, those focused on
computer hardware, software, telecommunications, networking, Internet, and consumer electronics. While there is no standard definition
of cleantech, it is generally regarded as including goods and services designed to harness renewable energy and materials, eliminate
emissions and waste, and reduce the use of natural resources. In addition, under normal circumstances we invest at least 70 percent
of our assets in privately held companies and public companies with market capitalizations less than $250 million. Our portfolio
is primarily composed of equity and equity derivative securities of technology and cleantech companies (as defined above). These
investments generally range between $1 million and $10 million each, although the investment size will vary proportionately with
the size of our capital base. We acquire our investments through direct investments in private companies, negotiations with selling
shareholders, and in organized secondary marketplaces for private securities.



While
our primary focus is to invest in illiquid private technology and cleantech companies, we may also invest in micro-cap publicly
traded companies. In addition, we may invest up to 30% of the portfolio in opportunistic investments that do not constitute the
private companies and micro-cap public companies described above. These other investments may include investments in securities
of public companies that are actively traded. These other investments may also include investments in high-yield bonds, distressed
debt, or securities of public companies that are actively traded; and securities of companies located outside of the United States.
Our investment activities are managed by FCM.



Neither
our investments nor an investment in us are intended to constitute a balanced investment program. We expect to be risk-seeking
rather than risk-averse in our investment approach. There is no assurance that our investment objective will be achieved.



We
invest a substantial portion of our assets in securities that we consider to be private venture capital equity investments. These
private venture capital equity investments usually do not pay interest or dividends and usually are subject to legal or contractual
restrictions on resale that may adversely affect the liquidity and marketability of such securities. We expect to make speculative
venture capital investments with limited marketability and a greater risk of investment loss than less-speculative investments.
Subject to the diversification requirements applicable to a regulated investment company (“RIC”), we may commit all
of our assets to only a few investments.



Subject
to continuing to meet the compliance tests applicable to BDCs, there are no limitations on the types of securities or other assets
in which we may invest. Investments may include the following:



| | ● | Venture
                                         capital investments, whether in corporate, partnership, or other form, including development-stage
                                         or start-up entities;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Equity,
                                         equity-related securities (including options and warrants), and debt with equity features
                                         from either private or public issuers;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Debt
                                         obligations of all types having varying terms with respect to security or credit support,
                                         subordination, purchase price, interest payments, and maturity;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Foreign
                                         securities;
| | - | ------------------------------------------------------------



| | ● | Intellectual
                                         property or patents or research and development in technology or product development
                                         that may lead to patents or other marketable technology; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Miscellaneous
                                         investments.
| | - | -------------------------------------------------------------------







5







The
table below provides a summary of our investments as of December 31, 2017.





|INVESTMENT                                                      |  | BUSINESS DESCRIPTION    |  | FAIR VALUE1 |           
|--------------------------------------------------------------- |  | ----------------------- |  | ----------- | ----------
|AliphCom, Inc.                                                  |  | Consumer Electronics    |  | $           | 0         
|EQX Capital, Inc.                                               |  | Equipment Leasing       |  |             | 4,020,010 
|Fidelity Investments Money Market Treasury Portfolio - Class I2 |  | Investment Company      |  |             | 1,705,375 
|Hera Systems, Inc.                                              |  | Aerospace               |  |             | 2,144,610 
|Hightail, Inc.                                                  |  | Cloud Computing         |  |             | 8,561,704 
|IntraOp Medical Corp.                                           |  | Medical Devices         |  |             | 20,979,677
|Nutanix, Inc. 2                                                 |  | Networking              |  |             | 16,185,476
|Phunware, Inc.                                                  |  | Mobile Computing        |  |             | 12,018,563
|Pivotal Systems Corp.                                           |  | Semiconductor Equipment |  |             | 34,653,460
|QMAT, Inc.                                                      |  | Advanced Materials      |  |             | 23,359,026
|QuickLogic Corp. 2                                              |  | Semiconductors          |  |             | 2,088,000 
|Revasum, Inc.                                                   |  | Semiconductor Equipment |  |             | 14,803,056
|Roku, Inc.                                                      |  | Consumer Electronics    |  |             | 11,650,500
|Rorus, Inc.                                                     |  | Water Purification      |  |             | 0         
|Silicon Genesis Corp.                                           |  | Intellectual Property   |  |             | 6,094,569 
|SVXR, Inc.                                                      |  | Semiconductor Equipment |  |             | 2,000,000 
|Telepathy Investors, Inc.                                       |  | Consumer Electronics    |  |             | 1,503,650 
|UCT Coatings, Inc.                                              |  | Advanced Materials      |  |             | 922,054   
|Vufine, Inc.                                                    |  | Consumer Electronics    |  |             | 1,434,160 
|Wrightspeed, Inc.                                               |  | Automotive              |  |             | 10,715,635





| | 1 | Fair
                                         value for our private company holdings was determined in good faith by our board of directors
                                         on December 31, 2017. For public companies, the figure represents the market value of
                                         our securities on December 31, 2017, less any discount due to resale restriction on the
                                         security.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2 | Public
                                         company.
| | - | --------------------------------------------------------



INVESTMENTS
AND STRATEGIES



The
following is a summary description of the types of assets in which we may invest, the investment strategies we may use, and the
attendant risks associated with our investments and strategies.



VENTURE
CAPITAL INVESTMENTS

We
define venture capital as the money and resources made available to privately held start-up firms and privately held and publicly
traded small businesses with exceptional growth potential. These businesses can range in stage from pre-revenue to generating
positive cash flow. Most of our long-term venture capital investments are in thinly capitalized, unproven, small companies focused
on commercializing risky technologies. These businesses also tend to lack management depth, have limited or no history of operations,
and have not attained profitability. Because of the speculative nature of these investments, these securities have a significantly
greater risk of loss than traditional investment securities. Some of our venture capital investments will never realize their
potential, and some will be unprofitable or result in the complete loss of our investment.



We
acquire our investments through direct investments in private companies, negotiations with selling shareholders, and in organized
secondary marketplaces for private securities. Our current focus is on investing in late-stage private companies, particularly
those with potential for near-term realizations by way of IPO or acquisition.



6







In
connection with our venture capital investments, we may participate in providing a variety of services to our portfolio companies,
including the following:



| | ● | Recruiting
                                         management,
| | - | ---------------------------------------------------------------



| | ● | Formulating
                                         operating strategies,
| | - | --------------------------------------------------------------------------



| | ● | Formulating
                                         intellectual property strategies,
| | - | --------------------------------------------------------------------------------------



| | ● | Assisting
                                         in financial planning,
| | - | -------------------------------------------------------------------------



| | ● | Providing
                                         management in the initial start-up stages, and
| | - | -------------------------------------------------------------------------------------------------



| | ● | Establishing
                                         corporate goals.
| | - | ----------------------------------------------------------------------



We
may assist in raising additional capital for these companies from other potential investors and may subordinate our own investment
to that of other investors. We typically find it necessary or appropriate to provide additional capital of our own. We may introduce
these companies to potential joint venture partners, suppliers, and customers. In addition, we may assist in establishing relationships
with investment bankers and other professionals. We may also assist with mergers and acquisitions (“M&As”). We
do not currently derive income from these companies for the performance of any of the above services.



We
may control, be represented on, or have observer rights on the Board of Directors of a portfolio company through one or more of
our officers or directors, who may also serve as officers of the portfolio company. We indemnify our officers and directors for
serving on the Boards of Directors or as officers of portfolio companies, which exposes us to additional risks. Particularly during
the early stages of an investment, we may, in rare instances, in effect be conducting the operations of the portfolio company.
Our goal is to assist each company in establishing its own independent capitalization, management, and Board of Directors. As
a venture capital-backed company emerges from the developmental stage with greater management depth and experience, we expect
that our role in the portfolio company's operations will diminish.



EQUITY,
EQUITY-RELATED SECURITIES AND DEBT WITH EQUITY FEATURES

We
may invest in equity, equity-related securities, and debt with equity features. These securities include common stock, preferred
stock, debt instruments convertible into common or preferred stock, limited partnership interests, other beneficial ownership
interests and warrants, options, or other rights to acquire any of the foregoing.



We
may make investments in companies with operating histories that are unprofitable or marginally profitable, that have negative
net worth, or that are involved in bankruptcy or reorganization proceedings. These investments would involve businesses that management
believes have potential through the infusion of additional capital and management assistance. In addition, we may make investments
in connection with the acquisition or divestiture of companies or divisions of companies. There is a significantly greater risk
of loss with these types of securities than is the case with traditional investment securities.



Warrants,
options, and convertible or exchangeable securities generally give the investor the right to acquire specified equity securities
of an issuer at a specified price during a specified period or on a specified date. Warrants and options fluctuate in value in
relation to the value of the underlying security and the remaining life of the warrant or option, while convertible or exchangeable
securities fluctuate in value both in relation to the intrinsic value of the security without the conversion or exchange feature
and in relation to the value of the conversion or exchange feature, which is like a warrant or an option. When we invest in these
securities, we incur the risk that the option feature will expire worthless, thereby either eliminating or diminishing the value
of our investment.



Most
of our current portfolio company investments are in the equity securities of private companies. Investments in equity securities
of private companies often involve securities that are restricted as to sale and cannot be sold in the open market without registration
under the Securities Act of 1933 or pursuant to a specific exemption from these registrations. Opportunities for sale are more
limited than in the case of marketable securities, although these investments may be purchased at more advantageous prices and
may offer attractive investment opportunities. Even if one of our portfolio companies completes an IPO, we are typically subject
to a lock-up agreement for 180 days, and the stock price may decline substantially before we are free to sell.



We
may also invest in publicly traded securities of whatever nature, including relatively small, emerging growth companies that management
believes have long-term growth potential. These investments may be through open-market transactions or through private placements
in publicly traded companies (“PIPEs”). Securities purchased in PIPE transactions are typically subject to a lock-up
agreement for 180 days, or are issued as unregistered securities that are not freely available for six months.



7







Even
if we have registration rights to make our investments in privately held and publicly traded companies more marketable, a considerable
amount of time may elapse between a decision to sell or register the securities for sale and the time when we are able to sell
the securities. The prices obtainable upon sale may be adversely affected by market conditions or negative conditions affecting
the issuer during the intervening time. We may elect to hold formerly restricted securities after they have become freely marketable,
either because they remain relatively illiquid or because we believe that they may appreciate in value, during which holding period
they may decline in value and be especially volatile as unseasoned securities. If we need funds for investment or working capital
purposes, we might need to sell marketable securities at disadvantageous times or prices.



DEBT
OBLIGATIONS

We
may hold debt securities, including in privately held and thinly traded public companies, for income and as a reserve pending
more speculative investments. Debt obligations may include U.S. government and agency securities, commercial paper, bankers' acceptances,
receivables or other asset-based financing, notes, bonds, debentures, or other debt obligations of any nature and repurchase agreements
related to these securities. These obligations may have varying terms with respect to security or credit support; subordination;
purchase price; interest payments; and maturity from private, public, or governmental issuers of any type located anywhere in
the world. We may invest in debt obligations of companies with operating histories that are unprofitable or marginally profitable,
that have negative net worth or are involved in bankruptcy or reorganization proceedings, or that are start-up or development-stage
entities. In addition, we may participate in the acquisition or divestiture of companies or divisions of companies through issuance
or receipt of debt obligations. As of December 31, 2017, the debt obligations held in our portfolio consisted of convertible bridge
notes and term notes. The convertible bridge notes generally do not generate cash payments to us, nor are they held for that purpose.
Our convertible bridge notes and the interest accrued thereon are held for the purpose of potential conversion into equity at
a future date. The term notes we hold are income generating.



Our
investments in debt obligations may be of varying quality, including non-rated, unsecured, highly speculative debt investments
with limited marketability. Investments in lower-rated and non-rated securities, commonly referred to as “junk bonds,”
including our venture debt investments, are subject to special risks, including a greater risk of loss of principal and non-payment
of interest. Generally, lower-rated securities offer a higher return potential than higher-rated securities, but involve greater
volatility of price and greater risk of loss of income and principal, including the possibility of default or bankruptcy of the
issuers of these securities. Lower-rated securities and comparable non-rated securities will likely have large uncertainties or
major risk exposure to adverse conditions and are predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation. The occurrence of adverse conditions and uncertainties to
issuers of lower-rated securities would likely reduce the value of lower-rated securities held by us, with a commensurate effect
on the value of our shares.



The
markets in which lower-rated securities or comparable non-rated securities are traded generally are more limited than those in
which higher-rated securities are traded. The existence of limited markets for these securities may restrict our ability to obtain
accurate market quotations for the purposes of valuing lower-rated or non-rated securities and calculating net asset value or
to sell securities at their fair value. Any economic downturn could adversely affect the ability of issuers' lower-rated securities
to repay principal and pay interest thereon. The market values of lower-rated and non-rated securities also tend to be more sensitive
to individual corporate developments and changes in economic conditions than higher-rated securities. In addition, lower-rated
securities and comparable non- rated securities generally present a higher degree of credit risk. Issuers of lower-rated securities
and comparable non-rated securities are often highly leveraged and may not have more traditional methods of financing available
to them, so that their ability to service their debt obligations during an economic downturn or during sustained periods of rising
interest rates may be impaired. The risk of loss owing to default by these issuers is significantly greater because lower-rated
securities and comparable non-rated securities generally are unsecured and frequently are subordinated to the prior payment of
senior indebtedness. We may incur additional expenses to the extent that we are required to seek recovery upon a default in the
payment of principal or interest on our portfolio holdings.



The
market value of investments in debt securities that carry no equity participation usually reflects yields generally available
on securities of similar quality and type at the time purchased. When interest rates decline, the market value of a debt portfolio
already invested at higher yields can be expected to rise if the securities are protected against early call. Similarly, when
interest rates increase, the market value of a debt portfolio already invested at lower yields can be expected to decline. Deterioration
in credit quality also generally causes a decline in market value of the security, while an improvement in credit quality generally
leads to increased value.



8







FOREIGN
SECURITIES

We
may make investments in securities of issuers whose principal operations are conducted outside the United States, and whose earnings
and securities are stated in foreign currency. In order to maintain our status as a BDC, our investments in non-qualifying assets,
including the securities of companies organized outside the U.S., would be limited to 30 percent of our assets, because we must
invest at least 70 percent of our assets in “qualifying assets,” and securities of foreign companies are not “qualifying
assets.”



Compared
to otherwise comparable investments in securities of U.S. issuers, currency exchange risk of securities of foreign issuers is
a significant variable. The value of these investments to us will vary with the relation of the currency in which they are denominated
to the U.S. dollar, as well as with intrinsic elements of value such as credit risk, interest rates, and performance of the issuer.
Investments in foreign securities also involve risks relating to economic and political developments, including nationalization,
expropriation of assets, currency exchange freezes, and local recession. Securities of many foreign issuers are less liquid and
more volatile than those of comparable U.S. issuers. Interest and dividend income and capital gains on our foreign securities
may be subject to withholding and other taxes that may not be recoverable by us. We may seek to hedge all or part of the currency
risk of our investments in foreign securities through the use of futures, options, and forward currency purchases or sales.



INTELLECTUAL
PROPERTY

We
believe there is a role for organizations that can assist in technology transfer. Scientists and institutions that develop and
patent intellectual property perceive the need for and rewards of entrepreneurial commercialization of their inventions. Our form
of investment may be:



| | ● | Funding
                                         research and development in the development of a technology,
| | - | -------------------------------------------------------------------------------------------------------------



| | ● | Obtaining
                                         licensing rights to intellectual property or patents,
| | - | --------------------------------------------------------------------------------------------------------



| | ● | Acquiring
                                         intellectual property or patents, or
| | - | ---------------------------------------------------------------------------------------



| | ● | Forming
                                         and funding companies or joint ventures to commercialize further intellectual property.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------



Income
from our investments in intellectual property or its development may take the form of participation in licensing or royalty income,
fee income, or some other form of remuneration. In order to satisfy RIC requirements, these investments will normally be held
in an entity taxable as a corporation. Investment in developmental intellectual property rights involves a high degree of risk
that can result in the loss of our entire investment as well as additional risks, including uncertainties as to the valuation
of an investment and potential difficulty in liquidating an investment. Further, investments in intellectual property generally
require investor patience, as investment return may be realized only after or over a long period. At some point during the commercialization
of a technology, our investment may be transformed into ownership of securities of a development-stage or start-up company, as
discussed under “Venture Capital Investments” above.



REPURCHASE
OF SHARES



Our
shareholders do not have the right to compel us to redeem our shares. We may, however, purchase outstanding shares of our common
stock from time to time, subject to approval of our Board of Directors and in compliance with applicable corporate and securities
laws. The Board of Directors may authorize public open-market purchases or privately negotiated transactions from time to time
when deemed to be in the best interest of our shareholders. Public purchases would be conducted only after notification to shareholders
through a press release or other means. The Board of Directors may or may not decide to undertake any purchases of our common
stock.



Our
repurchases of our common shares would decrease our total assets and would therefore likely have the effect of increasing our
expense ratio. Subject to our investment restrictions, we may borrow money to finance the repurchase of our common stock in the
open market pursuant to any tender offer. Interest on any borrowings to finance share repurchase transactions would reduce our
net assets. If, because of market fluctuations or other reasons, the value of our assets falls below the required 1940 Act coverage
requirements, we may have to reduce our borrowed debt to the extent necessary to comply with the requirement. To achieve a reduction,
it is possible that we may be required to sell portfolio securities at inopportune times when it may be disadvantageous to do
so.





9







PORTFOLIO
COMPANY TURNOVER



Changes
with respect to portfolio companies will be made as our management considers necessary in seeking to achieve our investment objective.
The rate of portfolio turnover will not be treated as a limiting or relevant factor when circumstances exist that are considered
by management to make portfolio changes advisable.



Although
we expect that many of our investments will be relatively long term in nature, we may make changes in particular portfolio holdings
whenever it is considered that an investment no longer has substantial growth potential or has reached its anticipated level of
performance, or (especially when cash is not otherwise available) that another investment appears to have a relatively greater
opportunity for capital appreciation. We may also make general portfolio changes to increase our cash to position us in a defensive
posture. We may make portfolio changes without regard to the length of time we have held an investment, or whether a sale results
in profit or loss, or whether a purchase results in the reacquisition of an investment that we may have only recently sold. Our
investments in privately held companies are illiquid, which limits portfolio turnover. The portfolio turnover rate may vary greatly
during a year as well as from year to year and may also be affected by cash requirements.



COMPETITION



We
compete for investments with a number of business development companies and other investment funds (including private equity funds
and venture capital funds), reverse merger and special purpose acquisition company (“SPACs”) sponsors, investment
bankers that underwrite initial public offerings, hedge funds that invest in private investments in public equities (PIPEs), traditional
financial services companies such as commercial banks, and other sources of financing. Many of these entities have greater financial
and managerial resources than we do. Furthermore, many of our competitors are not subject to the regulatory restrictions that
the 1940 Act will impose on us as a business development company. We believe we compete with these entities primarily on the
basis of our willingness to make smaller, non-controlling investments, the experience and contacts of our investment professionals
within our targeted industries, our responsive and efficient investment analysis and decision-making processes, and the investment
terms that we offer. We do not seek to compete primarily on the deal terms we offer to potential portfolio companies. We use the
industry information available to FCM to assess investment risks and determine appropriate pricing for our investments in portfolio
companies. In addition, we believe that the relationships of Kevin Landis (FCM's President and Chief Investment Officer), and
the other senior investment professionals FCM retains, enable us to learn about, and compete effectively for, financing opportunities
with attractive companies in the industries in which we seek to invest. For additional information concerning the competitive
risks we face, see “Risk Factors—Risks relating to our business and structure—We
operate in a highly competitive market for investment opportunities.”



REGULATION



The
Small Business Investment Incentive Act of 1980 added the provisions of the 1940 Act applicable only to BDCs. BDCs are a special
type of investment company. After a company files its election to be treated as a BDC, it may not withdraw its election without
first obtaining the approval of holders of a majority of its outstanding voting securities. The following is a brief description
of the 1940 Act provisions applicable to BDCs, qualified in its entirety by reference to the full text of the 1940 Act and the
rules issued thereunder by the Securities and Exchange Commission (“SEC”).



Generally,
to be eligible to elect BDC status, a company must primarily engage in the business of furnishing capital and making significant
managerial assistance available to companies that do not have ready access to capital through conventional financial channels.
Such companies that satisfy certain additional criteria described below are termed “eligible portfolio companies.”
In general, in order to qualify as a BDC, a company must: (i) be a domestic company; (ii) have registered a class of its securities
pursuant to Section 12 of the Securities Exchange Act of 1934 (the “Exchange Act”); (iii) operate for the purpose
of investing in the securities of certain types of portfolio companies, including early-stage or emerging companies and businesses
suffering or just recovering from financial distress (see following paragraph); (iv) make available significant managerial assistance
to such portfolio companies; and (v) file a proper notice of election with the SEC.



An
eligible portfolio company generally is a domestic company that is not an investment company or a company excluded from investment
company status pursuant to exclusions for certain types of financial companies (such as brokerage firms, banks, insurance companies,
and investment banking firms) and that: (i) has a fully diluted market capitalization of less than $250 million and has a class
of equity securities listed on a national securities exchange, (ii) does not have a class of securities listed on a national securities
exchange, or (iii) is controlled by the BDC by itself or together with others (control under the 1940 Act is presumed to exist
where a person owns at least 25 percent of the outstanding voting securities of the portfolio company) and the BDC has a representative
on the Board of Directors of such company.





10







We
may be examined periodically by the SEC for compliance with the 1940 Act.



As
with other companies regulated by the 1940 Act, a BDC must adhere to certain substantive regulatory requirements. A majority of
our directors must be persons who are not interested persons, as that term is defined in the 1940 Act. Additionally, we are required
to provide and maintain a bond issued by a reputable fidelity insurance company to protect the BDC. Furthermore, as a BDC, we
are prohibited from protecting any director or officer against any liability to us or our shareholders arising from willful malfeasance,
bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of such person's office.



The
1940 Act provides that we may not make an investment in non-qualifying assets unless at the time at least 70 percent of the value
of our total assets (measured as of the date of our most recently filed financial statements) consists of qualifying assets. Qualifying
assets include: (i) securities of eligible portfolio companies; (ii) securities of certain companies that were eligible portfolio
companies at the time we initially acquired their securities and in which we retain a substantial interest; (iii) securities of
certain controlled companies; (iv) securities of certain bankrupt, insolvent, or distressed companies; (v) securities received
in exchange for or distributed in or with respect to any of the foregoing; and (vi) cash items, U.S. government securities, and
high quality short-term debt. The SEC has adopted a rule permitting a BDC to invest its cash in certain money market funds. The
1940 Act also places restrictions on the nature of the transactions in which, and the persons from whom, securities can be purchased
in some instances in order for the securities to be considered qualifying assets.



We
are permitted by the 1940 Act, under specified conditions, to issue multiple classes of debt and a single class of preferred stock
if our asset coverage, as defined in the 1940 Act, is at least 200 percent after the issuance of the debt or the preferred stock
(i.e., such senior securities may not
be in excess of our net assets). Under specific conditions, we are also permitted by the 1940 Act to issue warrants.



Except
under certain conditions, we may sell our securities at a price that is below the prevailing net asset value per share only during
the 12-month period after (i) a majority of our directors and our disinterested directors have determined that such sale would
be in the best interest of us and our stockholders, and (ii) the holders of a majority of our outstanding voting securities and
the holders of a majority of our voting securities held by persons who are not affiliated persons of ours approve our ability
to make such issuances. A majority of the disinterested directors must determine in good faith that the price of the securities
being sold is not less than a price that closely approximates the market value of the securities, less any distribution discount
or commission.



Certain
transactions involving certain closely related persons of the Company, including its directors, officers, and employees, may require
the prior approval of the SEC. However, the 1940 Act ordinarily does not restrict transactions between us and our portfolio companies.



SUBCHAPTER
M STATUS



We
elected to be treated as a RIC, taxable under Subchapter M of the Internal Revenue Code of 1986 (the “Code”), for
federal income tax purposes. In general, a RIC is not taxable on its income or gains to the extent it distributes such income
or gains to its shareholders. In order to qualify as a RIC, we must, in general, (1) annually derive at least 90 percent of our
gross income from dividends, interest, and gains from the sale of securities and similar sources (the “Income Source Rule”);
(2) quarterly meet certain investment asset diversification requirements; and (3) annually distribute at least 90 percent of our
investment company taxable income as a dividend (the “Income Distribution Rule”). Any taxable investment company income
not distributed will be subject to corporate level tax. Any taxable investment company income distributed generally will be taxable
to shareholders as dividend income.





11







Although
we may retain income and gains subject to the limitations described above (including paying corporate level tax on such amounts),
we could be subject to an additional four percent excise tax if we fail to distribute 98 percent of our aggregate annual taxable
income.



As
noted above, in order to qualify as a RIC, we must meet certain investment asset diversification requirements each quarter. Because
of the specialized nature of our investment portfolio, in some years we have been able to satisfy the diversification requirements
under Subchapter M of the Code primarily as a result of receiving certifications from the SEC under the Code with respect to each
taxable year beginning after 1998 that we were “principally engaged in the furnishing of capital to other corporations which
are principally engaged in the development or exploitation of inventions, technological improvements, new processes, or products
not previously generally available” for such year.



Although
we generally intend to qualify as a RIC for each taxable year, under certain circumstances we may choose to take action with respect
to one or more taxable years to ensure that we would be taxed under Subchapter C of the Code (rather than Subchapter M) for such
year or years. We will choose to take such action only if we determine that the result of the action will benefit us and our shareholders.



INVESTMENT
OPPORTUNITY



SVVC
invests primarily in equity securities of private technology companies in the United States. We believe that the growth potential
exhibited by private technology companies, including cleantech companies, creates an attractive investment environment for SVVC.



The
last 15 years has been marked by dramatic changes in the initial public offering (“IPO”) market. Since the dot-com
bubble burst in 2000, emerging technology companies have often chosen to stay private longer. The combination of volatile equity
markets, increased regulatory requirements (such as the Sarbanes-Oxley Act of 2002), and a lack of investment research coverage
has made it less attractive for companies to access the public markets through an IPO. We believe the result is an environment
with more opportunities to invest in relatively mature private companies, either directly via primary investments or by purchasing
shares in the growing secondary market.



At
the same time we believe there are a number of powerful trends creating opportunities for innovative companies and investors alike.
The dramatic growth of social networking, cloud computing, and powerful, connected mobile computing devices has enabled new ways
of communicating, doing business, and accessing information anytime, anywhere. The Company was established to benefit from convergence
of exciting technologies and the growth of private investment opportunities.



COMPETITIVE
ADVANTAGES



We
believe that we have the following competitive advantages over other capital providers in technology and cleantech companies:



MANAGEMENT
EXPERTISE

Kevin
Landis, our Chief Executive Officer and Chief Financial Officer, has principal management responsibility for Firsthand Capital
Management, Inc. as its owner, President and Chief Investment Officer. Mr. Landis has more than 20 years of experience in technology
sector investing, and he intends to dedicate a substantial portion of his time to managing the Company. Mr. Landis controls FCM
and is a trustee of Firsthand Funds and a director of the Company.



DISCIPLINED
INVESTMENT APPROACH

The
Investment Adviser employs a disciplined approach in selecting investments. The Investment Adviser's investment philosophy focuses
on ensuring that our investments have an appropriate return profile relative to risk. When market conditions make it difficult
for us to invest according to our criteria, the Investment Adviser intends to be highly selective in deploying our capital. We
believe this approach enables us to build an attractive investment portfolio that meets our return and value criteria over the
long term.





12







We
believe it is critical to conduct extensive due diligence on investment targets. In evaluating new investments we, through the
Investment Adviser, conduct a rigorous due diligence process that draws from the Investment Adviser’s investment experience, industry
expertise, and network of contacts.



FOCUSING
ON INVESTMENTS THAT CAN GENERATE POSITIVE RISK-ADJUSTED RETURNS



The
Investment Adviser seeks to maximize the potential for capital appreciation. In making investment decisions the Investment Adviser
seeks to pursue and invest in companies that meet several of the following criteria:



| | ● | outstanding
                                         technology,
| | - | ----------------------------------------------------------------



| | ● | barriers
                                         to entry (i.e.,patents and other intellectual property rights),
| | - | -----------------------------------------------------------------------------------------------------------------



| | ● | experienced
                                         management team,
| | - | ---------------------------------------------------------------------



| | ● | established
                                         financial sponsors that have a history of creating value with portfolio companies,
| | - | ---------------------------------------------------------------------------------------------------------------------------------------



| | ● | strong
                                         and competitive industry position, and
| | - | --------------------------------------------------------------------------------------



| | ● | viable
                                         exit strategy.
| | - | --------------------------------------------------------------



Assuming
a potential investment meets most or all of our investment criteria, the Investment Adviser intends to be flexible in adopting
transaction structures that address the needs of prospective portfolio companies and their owners. Our investment philosophy is
focused on internal rates of return over the life of an investment. Given our investment criteria and due diligence process, we
structure our investments so they correlate closely with the success of our portfolio companies.



ABILITY
TO SOURCE AND EVALUATE TRANSACTIONS THROUGH THE INVESTMENT ADVISER'S RESEARCH CAPABILITY AND ESTABLISHED NETWORK

FCM's
investment management team has overseen investments in dozens of private companies across various industries while employed by
FCM and its affiliates since 1994. We believe the expertise of the Investment Adviser's management team enables FCM to identify,
assess, and structure investments successfully across all levels of a company's capital structure and to manage potential risk
and return at all stages of the economic cycle.



We
seek to identify potential investments both through active origination and through dialogue with numerous management teams, members
of the financial community, and corporate partners with whom Mr. Landis has long-standing relationships. We believe that the team's
broad network of contacts within the investment, commercial banking, private equity and investment management communities in combination
with their strong reputation in investment management, enables us to attract well-positioned prospective portfolio companies.



LONGER
INVESTMENT HORIZON WITH ATTRACTIVE PUBLICLY TRADED MODEL

Unlike
private equity and venture capital funds, we are not subject to standard periodic capital return requirements. Such requirements
typically stipulate that funds raised by a private equity or venture capital fund, together with any capital gains on such invested
funds, must be returned to investors after a pre-agreed time period. These provisions often force private equity and venture capital
funds to seek returns on their investments through mergers, public equity offerings, or other liquidity events more quickly than
they otherwise might, potentially resulting in both a lower overall return to investors and an adverse impact on their portfolio
companies. While we are required to distribute substantially all realized gains, we believe that with our dividend reinvestment
plan and our flexibility to make investments with a long-term view and without the capital return requirements of traditional
private investment vehicles provide us with the opportunity to generate returns on invested capital and at the same time enable
us to be a better long-term partner for our portfolio companies.



INVESTMENTS



FCM
seeks to create a diversified portfolio of equity securities by making initial investments of approximately $1 million to $10
million of capital, on average, in the securities of micro-cap public and private companies.



Our
portfolio consists primarily of equity securities of private companies and cash and we expect that our portfolio will continue
to consist primarily of, equity positions in private companies and cash. These investments include holdings in several private
technology and cleantech companies. Moreover, we may acquire investments in the secondary market and, in analyzing such investments,
we will employ the same analytical process as we use for our primary investments. For description of our current investments,
see “Portfolio Investments.”





13







We
generally seek to invest in companies from the broad variety of industries in which the Investment Adviser has expertise. The
following is a representative list of the industries in which we may elect to invest.



| | ● | Advanced
                                         Materials
| | - | -----------------------------------------------------------



| | ● | Advertising
                                         Technology
| | - | ---------------------------------------------------------------



| | ● | Automotive
| | - | ----------



| | ● | Biofuels
| | - | --------



| | ● | Cloud
                                         Computing
| | - | --------------------------------------------------------



| | ● | Computer
                                         Hardware
| | - | ----------------------------------------------------------



| | ● | Computer
                                         Peripherals
| | - | -------------------------------------------------------------



| | ● | Computer
                                         Software
| | - | ----------------------------------------------------------



| | ● | Electronic
                                         Components
| | - | --------------------------------------------------------------



| | ● | Energy
                                         Efficiency
| | - | ----------------------------------------------------------



| | ● | Fuel
                                         Cells
| | - | ---------------------------------------------------



| | ● | Medical
                                         Devices
| | - | --------------------------------------------------------



| | ● | Mobile
                                         Computing
| | - | ---------------------------------------------------------



| | ● | Semiconductors
| | - | --------------



| | ● | Social
                                         Networking
| | - | ----------------------------------------------------------



| | ● | Solar
                                         Photovoltaics
| | - | ------------------------------------------------------------



| | ● | Solid-state
                                         Lighting
| | - | -------------------------------------------------------------



| | ● | Telecommunications
| | - | ------------------



| | ● | Water
                                         Purification
| | - | -----------------------------------------------------------



| | ● | Wearable
                                         Technology
| | - | ------------------------------------------------------------



| | ● | Wind-Generated
                                         Electricity
| | - | -------------------------------------------------------------------



We
may invest in other industries if we are presented with attractive opportunities.



We
may on a limited basis purchase or sell options on indexes or securities. We may engage in these transactions to manage risks
or otherwise protect the value of the portfolio, and to use these strategies to a limited extent on an opportunistic basis.



INVESTMENT
SELECTION



The
Investment Adviser seeks to maximize the potential for capital appreciation.



PROSPECTIVE
PORTFOLIO COMPANY CHARACTERISTICS

We
have identified several criteria that we believe are important in identifying and investing in prospective portfolio companies.
These criteria provide general guidelines for our investment decisions; however, we caution you that no single portfolio company
(or prospective portfolio company) will meet all of these criteria. Generally, we use our experience and access to market information
generated to identify investment candidates and to structure investments quickly and effectively.



Outstanding
Technology

Our
investment philosophy places a premium on identifying companies that have developed disruptive technologies, that is, technologies
with the potential to dramatically alter the economics or performance of a particular type of product or service.



Barriers
to Entry

We
believe having defensible barriers to entry, in the form of patents or other intellectual property rights, is critically important
in technology industries, in which change happens very rapidly. We seek out companies that have secured protection of key technologies
through patents, trademarks, or other means.





14





Experienced
management and established financial sponsor relationship

We
generally require that our portfolio companies have an experienced management team. We also require the portfolio companies to
have in place proper incentives to induce management to succeed and to act in concert with our interests as investors, including
having significant equity interests. In addition, we focus our investments in companies backed by strong financial sponsors that
have a history of creating value and with whom members of our investment adviser have an established relationship.



Strong
and defensible competitive market position in industry

We
seek to invest in target companies that have developed leading market positions within their respective markets and are well positioned
to capitalize on growth opportunities. We seek companies that demonstrate significant competitive advantages versus their competitors,
which should help to protect their market position and profitability.



Viable
exit strategy

We
seek to invest in companies that we believe will provide a steady stream of cash flow to reinvest in their respective businesses.
In addition, we also seek to invest in companies whose business models and expected future cash flows offer attractive exit possibilities.
These companies include candidates for strategic acquisition by other industry participants and companies that may repay our investments
through an initial public offering of common stock or another capital market transaction. In today's market environment, we believe
that a strategic sale is more likely than an IPO for many of our portfolio companies, although IPOs cannot be ruled out. We believe
that an acquisition by a strategic buyer is possible at any time for any of our companies.



DUE
DILIGENCE

We
believe it is critical to conduct extensive due diligence on investment targets. In evaluating new investments, we, through the
Investment Adviser, conduct a rigorous due diligence process that draws from the Investment Adviser's investment experience, industry
expertise, and network of contacts. The Investment Adviser conducts extensive due diligence investigations in their investment
activities. In conducting due diligence, the Investment Adviser uses publicly available information as well as information from
its relationships with former and current management teams, consultants, competitors, and investment bankers.



Our
due diligence typically includes:



| | ● | review
                                         of historical and prospective financial information;
| | - | ----------------------------------------------------------------------------------------------------



| | ● | review
                                         of technology, product, and business plan;
| | - | ------------------------------------------------------------------------------------------



| | ● | on-site
                                         visits;
| | - | --------------------------------------------------------



| | ● | interviews
                                         with management, employees, customers, and vendors of the potential portfolio company;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------



| | ● | background
                                         checks; and
| | - | ---------------------------------------------------------------



| | ● | research
                                         relating to the company's management, industry, markets, products and services, and competitors.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------



Upon
the completion of due diligence, the Investment Adviser's investment committee determines whether to pursue the potential investment.
Additional due diligence with respect to any investment may be conducted on our behalf by attorneys and accountants prior to the
closing of the investment, as well as other outside consultants, experts, and/or advisers, as appropriate. To the extent unaffiliated,
third-party consultants, experts, and/or advisers are used, we will be responsible for those expenses.



INVESTMENT
STRUCTURE

Once
we have determined that a prospective portfolio company is suitable for investment, we work with the management of that company
and its other capital providers to structure an investment. We negotiate among these parties to agree on how our investment is
expected to perform relative to the other capital in the portfolio company's capital structure.



MANAGERIAL
ASSISTANCE

As
a business development company, we offer, and must provide upon request, managerial assistance to certain of our portfolio companies.
This assistance could involve, among other things, monitoring the operations of our portfolio companies, participating in board
and management meetings, consulting with and advising officers of portfolio companies, and providing other organizational and
financial guidance. We may receive fees for these services. FCM will provide such managerial assistance on our behalf to portfolio
companies that request this assistance. For a description of relationships between us and our portfolio companies, please see
“Portfolio Companies.”



15







ONGOING
RELATIONSHIPS WITH PORTFOLIO COMPANIES



Monitoring

FCM
monitors our portfolio companies on an ongoing basis. Specifically, FCM monitors the financial trends of each portfolio company
to determine if they are meeting their respective business plans and to assess the appropriate course of action for each company.



FCM
has several methods of evaluating and monitoring the performance and fair value of our investments, which may include the following:



| | ● | Assessment
                                         of success in adhering to portfolio company's technology development, business plan and
                                         compliance with covenants;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Periodic
                                         and regular contact with portfolio company management and, if appropriate, the financial
                                         or strategic sponsor, to discuss financial position, requirements, and accomplishments;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Comparisons
                                         to other portfolio companies in the industry, if any;
| | - | ----------------------------------------------------------------------------------------------------------



| | ● | Attendance
                                         at and participation in board meetings; and
| | - | -----------------------------------------------------------------------------------------------



| | ● | Review
                                         of monthly and quarterly financial statements and financial projections for portfolio
                                         companies.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Valuation
Process



The
following is a description of the steps we take each quarter to determine the value of our portfolio. Investments for which market
quotations are readily available are recorded in our financial statements at such market quotations. With respect to investments
for which market quotations are not readily available, our board of directors undertakes a multi-step valuation process each quarter,
as described below under “Determination of Net Asset Value.” Currently, our Board of Directors solicits valuation
recommendations from a third-party valuation firm on a quarterly basis.



We
expect that all of our portfolio investments will be recorded at fair value as determined under the valuation process discussed
above. As a result, there will be uncertainty with respect to the value of our portfolio investments.



INVESTMENT
MANAGEMENT AGREEMENT



MANAGEMENT
SERVICES

FCM
has entered into an Investment Management Agreement (the “Investment Management Agreement”) with us whereby FCM provides
investment management services. Subject to the overall supervision of our board of directors, the Investment Adviser manages the
day-to-day operations of, provides investment management services to, and serves as portfolio manager for us. Mr. Landis, FCM's
President and Chief Investment Officer, has been primarily responsible for our portfolio management since our inception. Under
the terms of the Investment Management Agreement, FCM will:



| | ● | determine
                                         the composition of our portfolio, the nature and timing of the changes to our portfolio,
                                         and the manner of implementing such changes;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | identify,
                                         evaluate and negotiate the structure of the investments we make (including performing
                                         due diligence on our prospective portfolio companies); and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | close
                                         and monitor the investments we make.
| | - | -----------------------------------------------------------------------------------



FCM's
services under the Investment Management Agreement are not exclusive, and it is free to furnish similar services to other entities
so long as its services to us are not impaired. FCM currently serves as investment manager to Firsthand Funds, a family of open-end
mutual funds.



INVESTMENT
MANAGEMENT FEE

Pursuant
to the Investment Management Agreement, we pay FCM a fee for investment management services consisting of two components—a
base management fee and an incentive fee.



The
base management fee will be calculated at an annual rate of 2.00% of our gross assets. For services rendered under the Investment
Management Agreement, the base management fee will be payable quarterly in arrears. The base management fee will be calculated
based on the average of (1) the value of our gross assets at the end of the current calendar quarter and (2) the value of our
gross assets at the end of the preceding calendar quarter; and appropriately adjusted for any share issuances or repurchases during
the current calendar quarter. Base management fees for any partial month or quarter will be pro-rated. The incentive fee is determined
and payable in arrears as of the end of each calendar year (or upon termination of the Investment Management Agreement, as of
the termination date), and equals 20% of our realized capital gains, if any, on a cumulative basis from inception through the
end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis,
less the aggregate amount of any previously paid incentive fees.





16







Mathematically,
the formula for computing the annual incentive fee can be written as:



|Incentive
    fee | = | 20% | x | ( | Cumulative
    realized gains | - | Cumulative
    realized losses | - | Unrealized
    depreciation | ) | - | Previously paid
                                                                                incentive fees
|----------------- | - | --- | - | - | ----------------------------- | - | ------------------------------ | - | --------------------------- | - | - | --------------------------------------------------------------------------------------------------------------





For
the purposes of calculating realized capital gains, the cost basis of each security acquired in the Reorganization shall be equal
to the greater of the original purchase price of that security by Firsthand Funds or the fair market value of the security at
the time of the Reorganization.



EXAMPLE
INCENTIVE FEE CALCULATION



EXAMPLE:
INCENTIVE FEE ON CAPITAL GAINS:



Assumptions

Year
1 = no net realized capital gains or losses

Year
2 = $50,000 realized capital gains and $20,000 realized capital losses and unrealized capital depreciation. Capital gain incentive
fee = 20% x (realized capital gains for year computed net of all realized capital losses and unrealized capital depreciation at
year end)



Calculation
of Incentive Fee





| | Year 1 incentive fee | = 20% x (0)                
| | -------------------- | ---------------------------
| |                      | = 0                        
| |                      | = no incentive fee         
| | Year 2 incentive fee | = 20% x ($50,000 - $20,000)
| |                      | = 20% x $30,000            
| |                      | = $6,000                   





AVAILABLE
INFORMATION



Additional
information about us, including quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed
or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, are available free of charge on our website at www.firsthandtvf.com.
Information on our website is not part of this Annual Report on Form 10-K.



EMPLOYEES

We
do not currently have any direct employees. Mr. Landis, our chief executive officer, is the majority
owner and chief investment officer of the Investment Adviser. The Investment Adviser currently employs a staff of 12, including
investment, legal, and administrative professionals.



17







Item
1A. Risk Factors



Investing
in Firsthand Technology Value Fund involves a number of significant risks relating to our business and investment objective. As
a result, there can be no assurance that we will achieve our investment objective.



RISKS
RELATING TO OUR BUSINESS AND STRUCTURE



WE
HAVE A LIMITED OPERATING HISTORY.

We
were incorporated in April 2010 and commenced operations on April 15, 2011. We are subject to all of the business risks and uncertainties
associated with any business, including the risk that we will not achieve our investment objective and that the value of your
investment could decline substantially. The net assets of SVVC, as of December 31, 2017, were approximately $174 million.



WE
ARE DEPENDENT UPON FCM'S KEY PERSONNEL FOR OUR FUTURE SUCCESS.

If
the Investment Adviser is unable to hire and retain qualified personnel, or if it loses any key member of its management team,
our ability to achieve our investment objective could be significantly impaired.



We
depend on the diligence, skill, and access to the network of business contacts of the management of FCM, including Mr. Landis,
the owner, president and chief executive officer of FCM. We also depend, to a significant extent, on FCM's access to the investment
information and deal flow generated by Mr. Landis and any other investment professionals of FCM. Mr. Landis and other management
personnel of FCM evaluate, negotiate, structure, close, and monitor our investments. Our future success depends on the continued
service of Mr. Landis and other management personnel of FCM. The resignation of FCM, or the departure of Mr. Landis or any other
key managers hired by FCM could have a material adverse effect on our ability to achieve our investment objective. In addition,
we can offer no assurance that FCM will remain the Investment Adviser.



THE
INVESTMENT ADVISER AND ITS MANAGEMENT HAS LIMITED EXPERIENCE MANAGING A BUSINESS DEVELOPMENT COMPANY.

The
1940 Act imposes numerous constraints on the operations of business development companies. For example, business development companies
are required to invest at least 70% of their total assets primarily in securities of private or micro-cap U.S. public companies,
cash, cash equivalents, U.S. government securities, and other high quality debt investments that mature in one year or less. These
constraints may hinder the Investment Adviser's ability to take advantage of attractive investment opportunities and to achieve
our investment objective. Under the 1940 Act, our ability to own publicly-traded securities with market capitalizations in excess
of $250 million is limited. While Mr. Landis has more than 20 years of experience managing technology stock mutual funds investments
and more than 15 years of experience managing private equity investments, Mr. Landis and FCM have only managed a business development
company since April 2011, when they began managing SVVC. The investment philosophy and techniques used by Mr. Landis and FCM may
differ from those of other funds. Accordingly, we can offer no assurance that SVVC will replicate the historical performance of
other investment companies with which Mr. Landis has been affiliated, and we caution you that our investment returns could be
substantially lower than the returns achieved by such other companies.



THE
INVESTMENT ADVISER AND ITS MANAGEMENT MANAGE OTHER FUNDS.

In
addition to managing SVVC, FCM is also the investment adviser to two open-end mutual funds in the Firsthand Funds family: Firsthand
Technology Opportunities Fund and Firsthand Alternative Energy Fund. Mr. Landis, who has primary responsibility for SVVC, also
serves as portfolio manager of Firsthand Alternative Energy Fund and Firsthand Technology Opportunities Fund. This may reduce
the time FCM and its investment management team have to devote to the affairs of SVVC. The other funds managed by FCM have stated
investment objectives which differ from our own. Accordingly, there may be times when the interests of FCM's management team differ
from our interests.



THE
INVESTMENT ADVISER MAY NOT BE ABLE TO ACHIEVE THE SAME OR SIMILAR RETURNS TO THOSE ACHIEVED BY ITS INVESTMENT PROFESSIONALS WHILE
THEY WERE EMPLOYED AT PRIOR JOBS.

Although
Mr. Landis has been a portfolio manager of a number of open-end mutual funds in the Firsthand Funds family, Mr. Landis's track
record and achievements are not necessarily indicative of future results that will be achieved by FCM on our behalf. FCM and its
investment professionals' skills and expertise may not be as well suited to our objectives, strategies and requirements as they
are for certain other funds. FCM and many of its investment professionals are relatively inexperienced in managing closed end
funds and our investment objectives, policies and regulatory limitations differ substantially from the other funds FCM and its
investment professionals have managed. Similarly, while the research and operational professionals that support Mr. Landis in
his management of Firsthand Funds are substantially the same individuals that will be supporting us, there is no assurance that
they will be able to provide the same level of services to us as they did (or currently do) for Firsthand Funds.





18







OUR
FINANCIAL CONDITION AND RESULTS OF OPERATION WILL DEPEND ON OUR ABILITY TO MANAGE FUTURE GROWTH EFFECTIVELY.

Our
ability to achieve our investment objective will depend on our ability to grow, which will depend, in turn, on FCM's ability to
identify, invest in, and monitor companies that meet our investment criteria.



Accomplishing
this result on a cost-effective basis will be largely a function of FCM's structuring of the investment process, its ability to
provide competent, attentive, and efficient services to us and our access to financing on acceptable terms. The management team
of FCM will have substantial responsibilities under the Investment Management Agreement. In addition, the employees of FCM may
also be called upon to provide managerial assistance to our portfolio companies as the principals of our administrator. Such demands
on their time may distract them or slow our rate of investment. Any failure to manage our future growth effectively could have
a material adverse effect on our business, financial condition, and results of operations.



WE
OPERATE IN A HIGHLY COMPETITIVE MARKET FOR INVESTMENT OPPORTUNITIES.

A
number of entities will compete with us to make the types of investments that we plan to make. We will compete with other venture
capital firms and venture capital funds, various public and private investment funds, including hedge funds, other business development
companies, commercial and investment banks, commercial financing companies, and various technology and alternative energy companies'
internal venture capital arms. Many of our potential competitors are substantially larger and have considerably greater financial,
technical and marketing resources than we do. For example, some competitors may have a stronger network of contacts and better
connections for deal flows or have access to funding sources that are not available to us. In addition, some of our competitors
have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of investments and
establish more relationships than us. Furthermore, many of our competitors are not subject to the regulatory restrictions that
the 1940 Act will impose on us as a business development company. We cannot assure you that the competitive pressures we face
will not have a material adverse effect on our business, financial condition and results of operations. Also, as a result of this
competition, we may not be able to take advantage of attractive investment opportunities from time to time, and we can offer no
assurance that we will be able to identify and make investments that are consistent with our investment objective.



REGULATIONS
GOVERNING OUR OPERATION AS A BUSINESS DEVELOPMENT COMPANY WILL AFFECT OUR ABILITY TO, AND THE WAY IN WHICH WE, RAISE ADDITIONAL
CAPITAL.

We
are not generally able to issue and sell our common stock at a price below net asset value per share. We may, however, sell our
common stock at a price below the current net asset value of the common stock, or sell warrants, options, or rights to acquire
such common stock, at a price below the current net asset value of the common stock if our board of directors determines that
such sale is in the best interests SVVC, and our stockholders approve SVVC's policy and practice of making such sales. Our stockholders
have not approved a policy or practice of selling our common stock below our net asset value per share. However, our board of
directors may ask our stockholders to vote on such a policy and practice at upcoming stockholders meetings. In any such case,
the price at which our securities are to be issued and sold may not be less than a price which, in the determination of our board
of directors, closely approximates the market value of such securities (less any distributing commission or discount).



WE
INTEND TO ELECT TO BE TREATED AS A REGULATED INVESTMENT COMPANY (RIC), AND WE WILL BE SUBJECT TO CORPORATE-LEVEL INCOME TAX IF
WE ARE UNABLE TO QUALIFY AS A RIC.

To
qualify as a RIC under the Code and obtain RIC tax benefits, we must meet certain income source, asset diversification, and annual
distribution requirements. The annual distribution requirement for a RIC is satisfied if we distribute at least 90% of our ordinary
income and realized net short-term capital gains in excess of realized net long-term capital losses, if any, to our stockholders
on an annual basis. To qualify as a RIC, we must also meet certain asset diversification requirements at the end of each calendar
quarter. Failure to meet these tests may result in our having to dispose of certain investments quickly in order to prevent the
loss of RIC status. Any such dispositions could be made at disadvantageous prices and may result in losses. If we fail to qualify
for RIC tax benefits for any reason and remain or become subject to corporate income tax, the resulting corporate taxes could
substantially reduce our net assets, the amount of income available for distribution, and the amount of our distributions. Such
a failure would have a material adverse effect on us and our stockholders.





19







ANY
FAILURE ON OUR PART TO MAINTAIN OUR STATUS AS A BUSINESS DEVELOPMENT COMPANY WOULD REDUCE OUR OPERATING FLEXIBILITY.



If
we do not remain a business development company, we might be regulated as a closed-end investment company under the 1940 Act,
which would subject us to substantially more regulatory restrictions under the 1940 Act and correspondingly decrease our operating
flexibility and increase our cost of doing business. Furthermore, any failure to comply with the requirements imposed on business
development companies by the 1940 Act could cause the SEC to bring an enforcement action against us or expose us to claims of
private litigants.



IF
WE DO NOT INVEST A SUFFICIENT PORTION OF OUR ASSETS IN QUALIFYING ASSETS, WE COULD FAIL TO QUALIFY AS A BUSINESS DEVELOPMENT COMPANY
OR BE PRECLUDED FROM INVESTING ACCORDING TO OUR CURRENT BUSINESS STRATEGY.

As
a business development company, we may not acquire any assets other than “qualifying assets” unless, at the time of
and after giving effect to such acquisition, at least 70% of our total assets are qualifying assets. See “Regulation.”



We
may be precluded from investing in what we believe are attractive investments if such investments are not qualifying assets for
purposes of the 1940 Act. If we do not invest a sufficient portion of our assets in qualifying assets, we could lose our status
as a business development company, which would have a material adverse effect on our business, financial condition, and results
of operations. Similarly, these rules could prevent us from making follow-on investments in existing portfolio companies (which
could result in the dilution of our position) or could require us to dispose of investments at inappropriate times in order to
comply with the 1940 Act. If we need to dispose of such investments quickly, it would be difficult to dispose of such investments
on favorable terms. For example, we may have difficulty in finding a buyer and, even if we do find a buyer, we may have to sell
the investments at a substantial loss.



WE
ARE A NON-DIVERSIFIED INVESTMENT COMPANY WITHIN THE MEANING OF THE 1940 ACT, AND THEREFORE WE ARE NOT LIMITED WITH RESPECT TO
THE PROPORTION OF OUR ASSETS THAT MAY BE INVESTED IN SECURITIES OF A SINGLE ISSUER.

We
are classified as a non-diversified investment company within the meaning of the 1940 Act, which means that we are not limited
by the 1940 Act with respect to the proportion of our assets that we may invest in securities of a single issuer. To the extent
that we assume large positions in the securities of a small number of issuers, our net asset value may fluctuate to a greater
extent than that of a diversified investment company as a result of changes in the financial condition or the market's assessment
of the issuer. We may also be more susceptible to any single economic or regulatory occurrence than a diversified investment company.
Beyond our income tax diversification requirements, we do not have fixed guidelines for diversification, and our investments could
be concentrated in relatively few portfolio companies.



WE
WILL NEED TO RAISE ADDITIONAL CAPITAL TO GROW.

We
will need additional capital to fund growth in our investments once we have fully invested the cash (and other liquid assets,
if any) received, we may issue equity securities in order to obtain this additional capital. A reduction in the availability of
new capital could limit our ability to grow or pursue business opportunities. We will be required to distribute at least 90% of
our ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any, to our
stockholders to maintain our RIC status. As a result, if stockholders opt out of reinvesting those distributions back into SVVC,
these earnings will not be available to fund new investments. If we fail to obtain additional capital to fund our investments,
this could limit our ability to grow, which may have an adverse effect on the value of our securities.



MANY
OF OUR PORTFOLIO INVESTMENTS WILL BE RECORDED AT FAIR VALUE AS DETERMINED IN GOOD FAITH BY OUR BOARD OF DIRECTORS. AS A RESULT,
THERE WILL BE UNCERTAINTY AS TO THE VALUE OF OUR PORTFOLIO INVESTMENTS.

A
large percentage of our portfolio investments will be in the form of securities that are not publicly traded. The fair value of
securities and other investments that are not publicly traded may not be readily determinable. We will value these securities
quarterly at fair value according to our written valuation procedures and as determined in good faith by our board of directors.
Our board of directors may use the services of a nationally recognized independent valuation firm to aid it in determining the
fair value of these securities. The methods for valuing these securities may include: fundamental analysis (sales, income, or
earnings multiples, etc.), discounts from market prices of similar securities, purchase price of securities, subsequent private
transactions in the security or related securities, or discounts applied to the nature and duration of restrictions on the disposition
of the securities, as well as a combination of these and other factors. Because such valuations, and particularly valuations of
private securities and private companies, are inherently uncertain, may fluctuate over short periods of time, and may be based
on estimates, our determinations of fair value may differ materially from the values that would have been used if a ready market
for these securities existed. Our net asset value could be adversely affected if our determinations regarding the fair value of
our investments were materially higher than the values that we ultimately realize upon the disposal of such securities.





20







THE
LACK OF LIQUIDITY IN OUR INVESTMENTS MAY ADVERSELY AFFECT OUR BUSINESS.

We
primarily make investments in private companies. Substantially all of these securities will be subject to legal and other restrictions
on resale or will otherwise be less liquid than publicly traded securities. The illiquidity of our investments may make it difficult
for us to sell such investments if the need arises. In addition, if we are required to liquidate all or a portion of our portfolio
quickly, we may realize significantly less than the value at which we have previously recorded our investments. In addition, we
may face other restrictions on our ability to liquidate an investment in a portfolio company to the extent that we have material
non-public information regarding such portfolio company.



WE
MAY EXPERIENCE FLUCTUATIONS IN OUR QUARTERLY RESULTS.

We
could experience fluctuations in our quarterly operating results due to a number of factors, including the performance of the
portfolio securities we hold; the level of our expenses; variations in, and the timing of the recognition of, realized and unrealized
gains or losses; the degree to which we encounter competition in our markets and general economic conditions. As a result of these
factors, results for any period should not be relied upon as being indicative of performance in future periods.



THERE
ARE SIGNIFICANT POTENTIAL CONFLICTS OF INTEREST THAT COULD IMPACT OUR INVESTMENT RETURNS.

Our
executive officers and directors may serve as officers, directors or principals of entities that operate in the same or a related
line of business as we do or of investment funds managed by affiliates of FCM that may be formed in the future. Accordingly, if
this occurs, they may have obligations to investors in those entities, the fulfillment of which might not be in the best interests
of us or our stockholders.



In
the course of our investing activities, we will pay investment management and incentive fees to FCM, and will reimburse FCM for
certain expenses it incurs. As a result, investors in our common stock will invest on a “gross” basis and receive
distributions on a “net” basis after expenses, resulting in a lower rate of return than an investor might achieve
through direct investments. Accordingly, there may be times when the management team of FCM has interests that differ from those
of our stockholders, giving rise to a conflict.



Several
members of the board of directors of the Company are also trustees of the Board of Trustees of Firsthand Funds. Of the five directors
of the Company, Messrs. Landis, Burglin, and Lee all serve as both directors for the Company and trustees for Firsthand Funds.
Messrs. Petredis and Yee are the only directors of the Company who are not also trustees of Firsthand Funds. The Company believes
such a commonality of the board brings continuity of oversight and allows the board of the Company to maintain the institutional
knowledge and experience of overseeing illiquid securities and their pricing methods.



OUR
INCENTIVE FEE MAY INDUCE FCM TO MAKE SPECULATIVE INVESTMENTS AND THESE FEES WILL, IN EFFECT, BE BORNE BY OUR COMMON STOCKHOLDERS.

The
incentive fee payable by us to FCM may create an incentive for FCM to make investments on our behalf that are risky or more speculative
than would be the case in the absence of such compensation arrangement. The incentive fee payable to the Investment Adviser is
calculated based on a percentage of our return on invested capital. This may encourage the Investment Adviser to invest in higher
risk investments in the hope of securing higher returns.



We
may invest, to the extent permitted by law, in the securities and instruments of other investment companies, including private
funds, as well as other special purpose vehicles set up by third parties for investment in a particular private company. To the
extent we so invest, we will bear our ratable share of any such investment company's expenses, including management and incentive
fees. We will also remain obligated to pay investment advisory fees, consisting of a base management fee and incentive fees, to
FCM with respect to the assets invested in the securities and instruments of other investment companies under the Investment Management
Agreement (as defined under “Discussion of Expected Operating Plans—Contractual
Obligations”). With respect to any such investments, each of our stockholders will bear his or her share of the investment
advisory fees of FCM as well as indirectly bearing the investment advisory fees and other expenses of any investment companies
in which we invest.



CHANGES
IN LAWS OR REGULATIONS GOVERNING OUR OPERATIONS MAY ADVERSELY AFFECT OUR BUSINESS.

We
and our portfolio companies will be subject to regulation by laws at the local, state, and federal levels. These laws and regulations,
as well as their interpretation, may be changed from time to time. Accordingly, any change in these laws or regulations could
materially and adversely affect our business.





21







PROVISIONS
OF THE MARYLAND GENERAL CORPORATION LAW AND OF OUR CHARTER AND BYLAWS COULD DETER TAKEOVER ATTEMPTS AND HAVE AN ADVERSE IMPACT
ON THE PRICE OF OUR COMMON STOCK.

The
Maryland General Corporation Law, our charter, and our bylaws contain provisions that may discourage, delay or make more difficult
a change in control of the Company or the removal of the Company's directors. We are subject to the Maryland Business Combination
Act, the application of which is subject to any requirements of the 1940 Act. Our board of directors has adopted a resolution
exempting from the Maryland Business Combination Act any business combination between us and any other person, subject to prior
approval of such business combination by our board, including approval by a majority of our disinterested directors. If the resolution
exempting business combinations is repealed or our board does not approve a business combination, the Maryland Business Combination
Act may discourage third parties from trying to acquire control of us and increase the difficulty of consummating such an offer.
Our bylaws exempt from the Maryland Control Share Acquisition Act acquisitions of our common stock by any person. If we amend
our bylaws to repeal the exemption from the Maryland Control Share Acquisition Act, the Maryland Control Share Acquisition Act
also may make it more difficult for a third party to obtain control of us and increase the difficulty of consummating such an
offer.



We
have also adopted other measures that may make it difficult for a third party to obtain control of us, including provisions of
our charter classifying our board of directors in three classes serving staggered three-year terms and until their successors
are duly elected and qualify, and provisions of our charter authorizing our board of directors (all without stockholder approval)
to classify or reclassify shares of our stock in one or more classes or series, to cause the issuance of additional shares of
our stock, and to amend our charter to increase or decrease the number of shares of stock that we have authority to issue. These
provisions, as well as other provisions of our charter and bylaws, may delay, defer, or prevent a transaction or a change in control
that might otherwise be in the best interests of our stockholders.



OUR
BOARD OF DIRECTORS MAY CHANGE OUR INVESTMENT OBJECTIVE, OPERATING POLICIES, AND STRATEGIES WITHOUT PRIOR NOTICE OR STOCKHOLDER
APPROVAL.

Our
board of directors has the authority to modify or waive certain of our operating policies and strategies without prior notice
and without stockholder approval (except as required by the 1940 Act). However, absent stockholder approval, we may not change
the nature of our business so as to cease to be, or withdraw our election as, a business development company. We cannot predict
the effect any changes to our current operating policies and strategies would have on our business, operating results, and value
of our stock. Nevertheless, the effects may adversely affect our business and impact our ability to make distributions.



RISKS
RELATED TO OUR INVESTMENTS



OUR
INVESTMENTS IN PROSPECTIVE PORTFOLIO COMPANIES MAY BE RISKY, AND YOU COULD LOSE ALL OR PART OF YOUR INVESTMENT.

Equity
Investments. We make equity investments primarily in equity securities and equity derivatives (such as options, warrants, rights,
etc.) of privately placed venture capital stage technology and alternative energy companies as well as publicly traded micro-cap
companies (those with market capitalizations of less than $250 million). Our goal is ultimately to dispose of these equity interests
and realize gains upon our disposition of such interests. However, the equity interests we receive may not appreciate in value
and, in fact, may decline in value or lose all value. Accordingly, we may not be able to realize gains from our equity interests,
and any gains that we do realize on the disposition of any equity interests may not be sufficient to offset any other losses we
experience.



In
addition, investing in privately placed technology and clean tech companies involves a number of significant risks, including
that private companies generally have limited operating history and are not as well capitalized as public companies. In addition,
private company valuations may fluctuate more dramatically than those of public companies and they frequently have less diverse
product lines and smaller market presence than larger competitors. These factors could adversely affect our investment returns
as compared to companies investing primarily in the securities of public companies.



WE
MAY INVEST IN MICRO-CAP PUBLIC COMPANIES AND COMPANIES WE MAY HOPE WILL HAVE SUCCESSFUL INITIAL PUBLIC OFFERINGS.

Although
micro-cap companies may have potential for rapid growth, they are subject to wider price fluctuations due to factors inherent
in their size, such as lack of management experience and financial resources and limited trade volume and frequency. To make a
large sale of securities of micro-cap companies that trade in limited volumes, SVVC may need to sell portfolio holdings at a
discount or make a series of small sales over an extended period of time.



22







We
have invested in, and we expect to continue to invest in, companies that we believe are likely to issue securities in initial
public offerings (“IPOs”). Although there is a potential the pre-IPO securities that we buy may increase in value
if the company does issue securities in an IPO, IPOs are risky and volatile and may cause the value of our securities to fall
dramatically. Also, because securities of pre-IPO companies are generally not freely or publicly tradeable, we may not have access
to purchase securities in these companies in the amounts or at the prices we desire. Securities issued by these privately-held
companies have no trading history, and information about such companies may be available for very limited periods. The companies
that we anticipate holding successful IPOs may not ever issues shares in an IPO and a liquid market for their securities may never
develop, which may negatively affect the price at which we can sell any such securities and make it more difficult to sell such
securities, which could also adversely affect our liquidity.



WE
EXPECT TO PURCHASE SECURITIES IN IPOS, WHICH INVOLVE SIGNIFICANT RISKS FOR US, AND WE MAY NOT BE ABLE TO PARTICIPATE IN OFFERINGS
TO THE EXTENT DESIRED OR AT ALL.

Securities
purchased in IPOs are often subject to the general risk associated with investments in companies with smaller market capitalizations,
and typically to a heightened degree. Securities issued in IPOs have no trading history, and information about companies may be
available for very limited periods. In addition, under certain market conditions, a relatively small number of companies may issue
securities in IPOs. Our investment performance during periods when we are unable to invest significantly or at all in IPOs may
be lower than during periods when we are able to do so.



IPO
securities may be volatile, and we cannot predict whether investments in IPOs will be successful. If the Company grows in size,
the possible positive effects of IPO investments on the Company may decrease.



WE
HAVE NOT YET IDENTIFIED ALL OF THE PORTFOLIO COMPANY INVESTMENTS WE INTEND TO ACQUIRE

The
Investment Adviser will select our investments, and our stockholders will have no input with respect to such investment decisions.
These factors increase the uncertainty, and thus the risk, of investing in our shares.



ECONOMIC
RECESSIONS OR DOWNTURNS COULD IMPAIR OUR PORTFOLIO COMPANIES AND HARM OUR OPERATING RESULTS.

Many
of our portfolio companies are susceptible to economic slowdowns or recessions and may fail or require additional capital investments
from us during those periods. Therefore, our non-performing assets are likely to increase and the value of our portfolio is likely
to decrease during these periods. These events could harm our operating results.



OUR
FAILURE TO MAKE FOLLOW-ON INVESTMENTS IN OUR PORTFOLIO COMPANIES COULD IMPAIR THE VALUE OF OUR PORTFOLIO.

Following
an initial investment in a portfolio company, we may make additional investments in that portfolio company as “follow-on”
investments, in order to:



| | ● | increase
                                         or maintain in whole or in part our equity ownership percentage; or
| | - | ---------------------------------------------------------------------------------------------------------------------



| | ● | exercise
                                         warrants, options, or convertible securities that were acquired in the original or subsequent
                                         financing.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



We
have the discretion to make any follow-on investments, subject to the availability of capital resources and the availability of
securities in the applicable public company. We may elect not to make follow-on investments in a portfolio company and we may
lack sufficient funds to make those investments. The failure to make follow-on investments may, in some circumstances, jeopardize
the continued viability of a portfolio company and our initial investment, or may result in a missed opportunity for us to increase
our participation in a successful operation. Even if we have sufficient capital to make a desired follow-on investment, we may
elect not to make a follow-on investment because we may not want to increase our concentration of risk, because we prefer other
opportunities, or because we are inhibited by compliance with business development company requirements or the desire to maintain
our tax status.



WE
FREQUENTLY DO NOT HOLD CONTROLLING EQUITY INTERESTS IN OUR PORTFOLIO COMPANIES AND WE MAY NOT BE IN A POSITION TO EXERCISE CONTROL
OVER OUR PORTFOLIO COMPANIES OR TO PREVENT DECISIONS BY MANAGEMENT OF OUR PORTFOLIO COMPANIES THAT COULD DECREASE THE VALUE OF
OUR INVESTMENTS.

Although
we may do so occasionally, we do not anticipate routinely taking controlling equity positions in our portfolio companies. As a
result, we will be subject to the risk that a portfolio company may make business decisions with which we disagree, and the stockholders
and management of a portfolio company may take risks or otherwise act in ways that are adverse to our interests. Due to the lack
of liquidity for the equity investments that we will typically hold in our portfolio companies, we may not be able to dispose
of our investments in the event we disagree with the actions of a portfolio company, and may therefore suffer a decrease in the
value of our investments.



23







AN
INVESTMENT STRATEGY FOCUSED PRIMARILY ON PRIVATELY HELD COMPANIES PRESENTS CERTAIN CHALLENGES, INCLUDING THE LACK OF AVAILABLE
INFORMATION ABOUT THESE COMPANIES, A DEPENDENCE ON THE TALENTS AND EFFORTS OF ONLY A FEW KEY PORTFOLIO COMPANY PERSONNEL, AND
A GREATER VULNERABILITY TO ECONOMIC DOWNTURNS.

We
invest primarily in privately held companies. Generally, little public information exists about these companies, and we will be
required to rely on the ability of FCM's investment professionals to obtain adequate information to evaluate the potential returns
from investing in these companies. If we are unable to uncover all material information about these companies, we may not make
a fully informed investment decision, and we may lose money on our investments. Also, privately held companies frequently have
less diverse product lines and a smaller market presence than larger competitors. These factors could adversely affect our investment
returns as compared to companies investing primarily in the securities of public companies.



OUR
PORTFOLIO COMPANIES MAY ISSUE ADDITIONAL SECURITIES OR INCUR DEBT THAT RANKS EQUAL OR SENIOR TO OUR INVESTMENTS IN SUCH COMPANIES.



We
also invest primarily in equity securities issued by our portfolio companies. The portfolio companies may be permitted to issue
additional securities or incur other debt that ranks equally with, or senior to, the equity securities in which we invest. By
their terms, such other securities (especially if they are debt securities) may provide that the holders are entitled to receive
payment of interest or principal before we are entitled to receive any distribution from the portfolio companies. Also, in the
event of insolvency, liquidation, dissolution, reorganization, or bankruptcy of a portfolio company, holders of debt instruments
ranking senior to our equity investment in that portfolio company would typically be entitled to receive payment in full before
equity investors like us may receive any distribution in respect of our investment. After repaying such senior creditors, the
portfolio company may not have any remaining assets to distribute to us.



WE
MAY PURCHASE OR SELL OPTIONS ON SECURITIES AND INDEXES, WHICH MAY EXPOSE US, AND YOUR INVESTMENT IN OUR COMMON STOCK, TO CERTAIN
RISKS.

We
may on a limited basis purchase or sell options on indexes or securities. The use of options has risks and our ability to successfully
use these techniques depends on our ability to predict pertinent market movements, which cannot be assured. The use of options
may result in losses greater than if they had not been used, may require us to sell or purchase portfolio securities at inopportune
times or for prices other than current market values, may limit the amount of appreciation we can realize on an investment or
may cause us to hold a security we might otherwise sell.



OUR
INVESTMENTS IN FOREIGN SECURITIES MAY INVOLVE SIGNIFICANT RISKS IN ADDITION TO THE RISKS INHERENT IN U.S. INVESTMENTS.



Our
investment strategy involves potential investments in equity securities of foreign companies. Investing in foreign companies may
expose us to additional risks not typically associated with investing in U.S. companies. These risks include changes in exchange
control regulations; political and social instability; expropriation; imposition of foreign taxes; less liquid markets and less
available information than is generally the case in the United States; higher transaction costs; less government supervision of
exchanges, brokers and issuers; less developed bankruptcy laws; difficulty in enforcing contractual obligations; lack of uniform
accounting and auditing standards; and greater price volatility.



Although
most of our investments will be U.S. dollar-denominated, any investments denominated in a foreign currency will be subject to
the risk that the value of a particular currency will change in relation to one or more other currencies. Among the factors that
may affect currency values are trade balances, the level of short-term interest rates, differences in relative values of similar
assets in different currencies, long-term opportunities for investment and capital appreciation, and political developments. We
may employ hedging techniques to minimize these risks, but we can offer no assurance that we will, in fact, hedge currency risk,
or, if we do, that such strategies will be effective.



24







Item
2. Properties

Under
the terms of the Investment Management Agreement, Firsthand Capital Management, Inc. is responsible for providing office space to
the Company and for the costs associated with providing such space. Our offices are located at 150 Almaden Blvd., Suite 1250, San
Jose, CA 95113.



Item
3. Legal Proceedings

We
are not currently subject to any material pending legal proceedings.



Item
4. Mine Safety Disclosures

Not
applicable.



PART
II



Item
5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities



MARKET
INFORMATION



Our
common stock is traded on the Nasdaq Global Market under the symbol “SVVC.” The following table sets forth the range
of the high and low closing sales prices of the Company’s shares during each quarter during the last fiscal year, as reported
by Nasdaq Global Market. The quarterly stock prices quoted represent interdealer quotations and do not include markups, markdowns,
or commissions.



|2017 Quarter Ending | Low   | High 
|------------------- | ----- | -----
|March 31            | $7.67 | $8.52
|June 30             | $7.99 | $8.56
|September 30        | $7.33 | $8.37
|December 31         | $7.89 | $8.96



SHAREHOLDERS



As
of February 28, 2018, there were approximately 1,700 shareholders of record and approximately 13,400 beneficial owners of the
Company’s common stock.



DIVIDENDS



There
were no distributions in 2017.



RECENT
SALES OF UNREGISTERED SECURITIES



The
Company did not issue any unregistered securities during the year ended December 31, 2017.



25





PERFORMANCE
GRAPH



The
graph and table below compares the cumulative total return of holders of our common stock with the cumulative total returns of
the S&P 500 Index and the NASDAQ Composite Index. The comparison assumes that the value of the investment in our common stock
and in the index (including reinvestment of dividends) was $10,000 on April 18, 2011 (our inception date), and tracks it through
December 31, 2017.



{grapics}



We,
however, do not believe either the S&P 500 Index or the NASDAQ Composite Index to be appropriate comparable indices of the
Company’s benchmark results. The Company is a publicly traded venture capital fund that invests primarily in private and
micro cap technology companies. The S&P 500 Index and the NASDAQ Composite Index are both indices of publicly traded large
capitalization companies, with performance predominantly driven by the largest companies in the index. Nevertheless, we do not
believe there is currently a widely accessible and generally accepted index that tracks publicly traded venture capital funds.
When compared to the S&P 500 Index and the NASDAQ Composite Index, we have underperformed those broad market indices because
equity securities of the private companies in our portfolio have not appreciated substantially during the recent bull market for
publicly traded stocks.



STOCK
TRANSFER AGENT



BNY
Mellon Shareowner Services, 301 Bellevue Parkway, Wilmington, Delaware 19809 (1.800.331.1710) serves as our transfer agent.



Item
6. Selected Financial Data



The
information below was derived from the audited Consolidated Financial Statements included in this report. This information should
be read in conjunction with those Consolidated Financial Statements and Supplementary Data and the notes thereto. These historical
results are not necessarily indicative of the results to be expected in the future.



26





Firsthand
Technology Value Fund, Inc.

Consolidated
Statements of Assets and Liabilities



|                                                                       |  | AS OF
 DECEMBER 31, 2017 |             |   | AS OF
 DECEMBER 31, 2016 |  
|---------------------------------------------------------------------- |  | ------------------------ | ----------- | - | ------------------------ | -
|ASSETS                                                                 |  |                          |             |   |                          |  
|Investment securities:                                                 |  |                          |             |   |                          |  
|Unaffiliated investments at acquisition cost                           |  | $                        | 33,014,039  | * |                          | $
|Affiliated investments at acquisition cost                             |  |                          | 24,035,159  |   |                          |  
|Controlled investments at acquisition cost                             |  |                          | 117,890,661 |   |                          |  
|Total acquisition cost                                                 |  | $                        | 174,939,859 |   |                          | $
|Unaffiliated investments at market value                               |  | $                        | 40,191,055  | * |                          | $
|Affiliated investments at market value                                 |  |                          | 24,656,252  |   |                          |  
|Controlled investments at market value                                 |  |                          | 109,992,218 |   |                          |  
|Total market value ** (Note 6)                                         |  |                          | 174,839,525 |   |                          |  
|Cash                                                                   |  |                          | 110,077     |   |                          |  
|Receivable from dividends and interest                                 |  |                          | 1,794,003   |   |                          |  
|Other assets                                                           |  |                          | 27,985      |   |                          |  
|Total Assets                                                           |  |                          | 176,771,590 |   |                          |  
|LIABILITIES                                                            |  |                          |             |   |                          |  
|Payable for securities purchased                                       |  |                          | —           |   |                          |  
|Incentive fees payable (Note 4)                                        |  |                          | 1,691,040   |   |                          |  
|Payable to affiliates (Note 4)                                         |  |                          | 879,085     |   |                          |  
|Consulting fee payable                                                 |  |                          | 21,000      |   |                          |  
|Accrued expenses and other payables                                    |  |                          | 186,876     |   |                          |  
|Total Liabilities                                                      |  |                          | 2,778,001   |   |                          |  
|NET ASSETS                                                             |  | $                        | 173,993,589 |   |                          | $
|Net Assets consist of:                                                 |  |                          |             |   |                          |  
|Common Stock, par value $0.001 per share 100,000,000 shares authorized |  | $                        | 7,302       |   |                          | $
|Paid-in-capital                                                        |  |                          | 180,772,769 |   |                          |  
|Accumulated net investment loss                                        |  |                          | (1,691,040  | ) |                          |  
|Accumulated net realized loss from security transactions               |  |                          | (4,995,108  | ) |                          |  
|Net unrealized depreciation on investments and warrants transactions   |  |                          | (100,334    | ) |                          |  
|NET ASSETS                                                             |  | $                        | 173,993,589 |   |                          | $
|Shares of Common Stock outstanding                                     |  |                          | 7,302,146   |   |                          |  
|Net asset value per share (Note 2)                                     |  | $                        | 23.83       |   |                          | $



| | * | Includes
Fidelity Investment Money Market Treasury Portfolio - Class I, which invests primarily in U.S. Treasury securities. The yields
as of 12/31/17 and 12/31/16 were 1.14% and 0.35%, respectively. Please see https://fundresearch.fidelity.com/ mutual-funds/ summary/316175504
for additional information.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ** | Includes
                                         warrants whose primary exposure is equity risk.
| | -- | -------------------------------------------------------------------------------------------------



See
accompanying notes to financial statements



27





Firsthand
Technology Value Fund, Inc.

Consolidated
Statements of Operations



|                                                                                                       |  | FOR THE YEAR ENDED DECEMBER 31, 2017 |            |   | FOR THE YEAR ENDED DECEMBER 31, 2016 |   |             | FOR THE YEAR ENDED DECEMBER 31, 2015 | 
|------------------------------------------------------------------------------------------------------ |  | ------------------------------------ | ---------- | - | ------------------------------------ | - | ----------- | ------------------------------------ | 
|INVESTMENT INCOME                                                                                      |  |                                      |            |   |                                      |   |             |                                      | 
|Unaffiliated dividends                                                                                 |  | $                                    | 24,180     |   |                                      | $ | 28,213      |                                      | 
|Unaffiliated interest                                                                                  |  |                                      | 1,522      |   |                                      |   | 19,133      |                                      | 
|Affiliated/controlled interest                                                                         |  |                                      | 1,540,089  |   |                                      |   | 830,677     |                                      | 
|Royalty income                                                                                         |  |                                      | —          |   |                                      |   | —           |                                      | 
|TOTAL INVESTMENT INCOME                                                                                |  |                                      | 1,565,791  |   |                                      |   | 878,023     |                                      | 
|EXPENSES                                                                                               |  |                                      |            |   |                                      |   |             |                                      | 
|Investment advisory fees (Note 4)                                                                      |  |                                      | 2,975,982  |   |                                      |   | 3,281,617   |                                      | 
|Administration fees                                                                                    |  |                                      | 187,846    |   |                                      |   | 165,024     |                                      | 
|Custody fees                                                                                           |  |                                      | 22,152     |   |                                      |   | 11,334      |                                      | 
|Transfer agent fees                                                                                    |  |                                      | 33,017     |   |                                      |   | 27,283      |                                      | 
|Registration and filing fees                                                                           |  |                                      | 23,100     |   |                                      |   | 23,100      |                                      | 
|Professional fees                                                                                      |  |                                      | 535,293    |   |                                      |   | 779,689     |                                      | 
|Printing fees                                                                                          |  |                                      | 195,892    |   |                                      |   | 40,835      |                                      | 
|Trustees fees                                                                                          |  |                                      | 137,500    |   |                                      |   | 100,000     |                                      | 
|Compliance fees                                                                                        |  |                                      | 107,640    |   |                                      |   | 188,569     |                                      | 
|Miscellaneous fees                                                                                     |  |                                      | 174,670    |   |                                      |   | 96,075      |                                      | 
|TOTAL GROSS EXPENSES                                                                                   |  |                                      | 4,393,092  |   |                                      |   | 4,713,526   |                                      | 
|Incentive fee adjustments (Note 4)                                                                     |  |                                      | 1,691,040  |   |                                      |   | —           |                                      | 
|TOTAL NET EXPENSES                                                                                     |  |                                      | 6,084,132  |   |                                      |   | 4,713,526   |                                      | 
|NET INVESTMENT LOSS                                                                                    |  |                                      | (4,518,341 | ) |                                      |   | (3,835,503  | )                                    | 
|Net Realized and Unrealized Gains (Losses) on Investments:                                             |  |                                      |            |   |                                      |   |             |                                      | 
|Net realized gains (losses) from security transactions                                                 |  |                                      |            |   |                                      |   |             |                                      | 
|Affiliated/controlled                                                                                  |  |                                      | 5,058,105  |   |                                      |   | (3,035,229  | )                                    | 
|Non-affiliated and other assets                                                                        |  |                                      | (1,516,161 | ) |                                      |   | (3,132,110  | )                                    | 
|Net realized gains from written option transactions (1)                                                |  |                                      | —          |   |                                      |   | —           |                                      | 
|Net change in unrealized appreciation (depreciation) on investments                                    |  |                                      | 19,408,570 |   |                                      |   | 1,088,815   |                                      | 
|Net change in unrealized appreciation (depreciation) on affiliated/controlled investments              |  |                                      | 1,138,114  |   |                                      |   | (20,524,969 | )                                    | 
|Net change in unrealized appreciation (depreciation) on affiliated/controlled warrants investments (1) |  |                                      | 6,609,282  |   |                                      |   | 4,777,442   |                                      | 
|Net Realized and Unrealized Gain (Losses) on Investments                                               |  |                                      | 30,697,910 |   |                                      |   | (20,826,051 | )                                    | 
|Net Increase (Decrease) In Net Assets Resulting From Operations                                        |  | $                                    | 26,179,569 |   |                                      | $ | (24,661,554 | )                                    | 
|                                                                                                       |  |                                      |            |   |                                      |   |             |                                      | 
|Net Increase (Decrease) In Net Assets Per Share Resulting From Operations (2)                          |  | $                                    | 3.59       |   |                                      | $ | (3.26       | )                                    | 



| | (1) | Primary
                                         exposure is equity risk.
| | --- | -------------------------------------------------------------------------



| | (2) | Per
                                         share results are calculated based on weighted average shares outstanding for each period.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------



See
accompanying notes to financial statements



28





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



The
information contained in this section should be read in conjunction with our 2017 Consolidated Financial Statements and notes
thereto.



OVERVIEW



We
are an externally managed, closed-end, non-diversified management investment company organized as a Maryland corporation that
has elected to be treated as a BDC under the 1940 Act. As such, we are required to comply with certain regulatory requirements.
For instance, we generally have to invest at least 70% of our total assets in “qualifying assets,” including securities
of private or micro-cap public U.S. companies, cash, cash equivalents, U.S. government securities and high-quality debt investments
that mature in one year or less. In addition, for tax purposes we have elected to be treated as a RIC under Subchapter M of the
Code. FCM serves as our investment adviser and manages the investment process on a daily basis.



Our
investment objective is to seek long-term growth of capital, principally by seeking capital gains on our equity and equity-related
investments. There can be no assurance that we will achieve our investment objective. Under normal circumstances, we invest at
least 80% of our net assets for investment purposes in technology companies. We consider technology companies to be those companies
that derive at least 50% of their revenues from products and/or services within the information technology sector or in the “cleantech”
sector. Information technology companies include, but are not limited to, those focused on computer hardware, software, telecommunications,
networking, Internet, and consumer electronics. While there is no standard definition of cleantech, it is generally regarded as
including goods and services designed to harness renewable energy and materials, eliminate emissions and waste, and reduce the
use of natural resources. In addition, under normal circumstances we invest at least 70% of our total assets in privately held
companies and public companies with market capitalizations of less than $250 million. Our portfolio is primarily composed of equity
and equity derivative securities of technology and cleantech companies (as defined above). These investments generally range between
$1 million and $10 million each, although the investment size will vary proportionately with the size of our capital base. We
acquire our investments through direct investments in private companies, negotiations with selling shareholders, and in organized
secondary marketplaces for private securities.



While
our primary focus is to invest in illiquid private technology and cleantech companies, we also may invest in micro-cap publicly
traded companies. In addition, we may invest up to 30 percent of the portfolio in opportunistic investments that do not constitute
the private companies and micro-cap public companies described above. These other investments may include investments in securities
of public companies that are actively traded or in actively traded derivative securities such as options on securities or security
indices. These other investments may also include investments in high-yield bonds, distressed debt, or securities of public companies
that are actively traded and securities of companies located outside of the United States. Our investment activities are managed
by FCM.



The
following table summarizes the fair value of our investment portfolio by industry sector as of December 31, 2017 and December
31, 2016.



|                        | December
    31, 2017 | December
    31, 2016
|----------------------- | --------------------- | ---------------------
|Semiconductor Equipment | 29.6%                 | 18.1%                
|Advanced Materials      | 13.9%                 | 9.1%                 
|Medical Devices         | 12.1%                 | 19.2%                
|Networking              | 9.3%                  | 7.4%                 
|Consumer Electronics    | 8.4%                  | 6.5%                 
|Mobile Computing        | 6.9%                  | 4.9%                 
|Automotive              | 6.2%                  | 7.0%                 
|Cloud Computing         | 4.9%                  | 5.7%                 
|Intellectusl Property   | 3.5%                  | 4.1%                 
|Equipment Leasing       | 2.3%                  | 2.7%                 
|Aerospace               | 1.2%                  | 0.4%                 



29





|continued                          | December
    31, 2017 | December
    31, 2016
|---------------------------------- | --------------------- | ---------------------
|Semiconductor                      | 1.2%                  | 0.3%                 
|Renewable Energys                  | 0.0%                  | 2.4%                 
|Advertising Technology             | 0.0%                  | 6.9%                 
|Other Electronics                  | 0.0%                  | 0.9%                 
|Computer Storage                   | 0.0%                  | 0.1%                 
|Water Purification                 | 0.0%                  | 0.0%                 
|Software                           | 0.0%                  | 0.2%                 
|Exchange-Traded/Money Market Funds | 1.0%                  | 3.2%                 
|(Liabilities)/Other Assets         | (0.5%)                | 0.9%                 
|Net Assets                         | 100.0%                | 100.0%               



Certain
trends in the technology industry may have an impact on the portfolio in coming quarters. In particular, the semiconductor industry,
which has historically been a highly cyclical industry, has enjoyed a period of strong growth over the past several years. Given
the substantial weighting of semiconductor investments in the current portfolio, the Fund will be sensitive to changes in this
industry. Fund performance may also be impacted by the speed of adoption of certain new technologies, including, but not limited
to: electric drivetrains for trucks, electron intra-operative radiation for cancer treatment, micro-LEDs, hyperconverged networking
equipment, and streaming video.



MATURITY
OF PRIVATE COMPANIES IN THE CURRENT PORTFOLIO

The
Fund invests in private companies at various stages of maturity. As our portfolio companies mature, they move from the “early
(development) stage” to the “middle (revenue) stage” and then to the “late stage.” We expect that
this continuous progression may create a pipeline of potential exit opportunities through initial public offerings (IPOs) or acquisitions.
Of course, some companies do not progress.



The
illustration below describes typical characteristics of companies at each stage of maturity and where we believe our current portfolio
companies fit within these categories. We expect some of our portfolio companies to transition between stages of maturity over
time. The transition may be forward if the company is maturing and is successfully executing its business plan or may be backward
if the company is not successfully executing its business plan or decides to change its business plan substantially from its original
plan.

30





|EARLY
    STAGE                                                                                             | MIDDLE
    STAGE                                                       | LATE
    STAGE                                                                           
|----------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------- | -----------------------------------------------------------------------------------------
|                                                                                                            |                                                                        |                                                                                          
|Developing product
    or service for market,
high level of research and development,
little or no revenue. | Established product,
    customers, 
business model; limited revenues. | Appreciable revenue;
    may be break-even
 or profitable; IPO or acquisition 
candidate.



{grapics}



RESULTS
OF OPERATIONS



The
following information is a comparison for the year ended December 31, 2017, December 31, 2016, and December 31, 2015.



INVESTMENT
INCOME

For
the year ended December 31, 2017, we had investment income of $1,565,791 primarily attributable to interest accrued on convertible/term
note investments with IntraOp Medical Corp, QMAT, and Telepathy Investors.



For
the year ended December 31, 2016, we had investment income of $878,023 primarily attributable to interest accrued on convertible/term
note investments with Telepathy Investors, Pivotal Systems, Vufine, and IntraOp Medical Corp.



For
the year ended December 31, 2015, we had investment income of $2,100,742 primarily attributable to interest accrued on convertible/term
note investments with Silicon Genesis Corporation, Pivotal Systems and IntraOp Medical Corp.



The
higher level of investment income in the year ended December 31, 2017 compared to the year ended December 31, 2016 was due to
increasing principal amounts on notes issued by IntraOp, QMAT, Revasum and SVXR.



31





The
lower level of investment income in the year ended December 31, 2016 compared to the year ended December 31, 2015 was due to notes
with Silicon Genesis being converted into equity in 2016.



OPERATING
EXPENSES

Operating
expenses totaled approximately $6,084,132 during the year ended December 31, 2017, $4,713,526 during the year ended December 31,
2016 and $2,549,291 during the year ended December 31, 2015.



Significant
components of operating expenses for the year ended December 31, 2017, were a management fee expense of $2,975,982, professional
fees (audit, legal, accounting, and consulting) of $535,293, and incentive fees (which was accrued but is not payable until gains
in the portfolio are realized) of $1,691,040. Significant components of operating expenses for the year ended December 31, 2016,
were a management fee expense of $3,281,617 and professional fees (audit, legal, accounting, and consulting) of $779,689. Significant
components of operating expenses for the year ended December 31, 2015, were an incentive fee adjustment (which was accrued but
is not payable until gains in the portfolio are realized) of $(2,478,204), management fee expense of $3,826,904 and professional
fees (audit, legal, accounting, and consulting) of $668,836.



The
higher level of operating expenses for the year ended December 31, 2017 compared to the year ended December 31, 2016 is primarily
attributable to the incentive fee accrual in 2017, which is a quarterly accrual based on what the incentive fee would be if the
entire portfolio were liquidated at fair market value.



The
higher level of operating expenses for the year ended December 31, 2016 compared to the year ended December 31, 2015 is primarily
attributable to the incentive fee adjustment in 2015, which is a quarterly adjustment based on what the incentive fee would be
if the entire portfolio were liquidated at fair market value.



NET
INVESTMENT LOSS

The
net investment loss was $4,518,341 for the year ended December 31, 2017, $3,835,503 for the year ended December 31, 2016 and $448,549
for the year ended December 31, 2015.



The
greater net investment loss in the year ended December 31, 2017 compared to the year ended December 31, 2016 is primarily due
to the accrual of an incentive fee in 2017 which was accrued but is not payable until gains in the portfolio are realized.



The
greater net investment loss in the year ended December 31, 2016 compared to the year ended December 31, 2015 is primarily due
to the adjustment in an incentive fee in 2015 which was accrued but is not payable until gains in the portfolio are realized.



NET
INVESTMENT REALIZED GAINS AND LOSSES AND UNREALIZED APPRECIATION AND DEPRECIATION

A
summary of the net realized and unrealized gains and loss on investments for the years ended December 31, 2017, December 31, 2016,
and December 31, 2015, is shown below.



|                                                                                 |  | Year Ended
 December 31, 2017 |                         
|-------------------------------------------------------------------------------- |  | ----------------------------- | ------------------------
|Realized gains                                                                   |  | $                             | 3,541,944               
|Net change in unrealized depreciation on investments                             |  | $                             | 27,155,966              
|Net realized and unrealized gain on investments                                  |  | $                             | 30,697,910              
|                                                                                 |  |                               |                         
|                                                                                 |  |                               | As of
 December 31, 2017
|Gross unrealized appreciation on portfolio investments                           |  | $                             | 44,878,771              
|Gross unrealized depreciation on portfolio investments                           |  | $                             | (44,979,105             
|Net unrealized depreciation on portfolio investments, warrants, and other assets |  | $                             | (100,334                



32





|                                                                                 |  |   | Year Ended
 December 31, 2016 |  
|-------------------------------------------------------------------------------- |  | - | ----------------------------- | -
|Realized losses                                                                  |  | $ | (6,167,339                    | )
|Net change in unrealized depreciation on investments                             |  | $ | (14,658,712                   | )
|Net realized and unrealized loss on investments                                  |  | $ | (20,826,051                   | )
|                                                                                 |  |   |                               |  
|                                                                                 |  |   | As of 
December 31, 2016      |  
|Gross unrealized appreciation on portfolio investments                           |  | $ | 13,265,628                    |  
|Gross unrealized depreciation on portfolio investments                           |  | $ | (40,521,928                   | )
|Net unrealized depreciation on portfolio investments, warrants, and other assets |  | $ | (27,256,300                   | )
|                                                                                 |  |   |                               |  
|                                                                                 |  |   | Year Ended 
December 31, 2015 |  
|Realized losses                                                                  |  | $ | (2,197,728                    | )
|Net change in unrealized depreciation on investments                             |  | $ | (11,504,423                   | )
|Net realized and unrealized loss on investments                                  |  | $ | (13,702,151                   | )
|                                                                                 |  |   |                               |  
|                                                                                 |  |   | As of
 December 31, 2015      |  
|Gross unrealized appreciation on portfolio investments                           |  | $ | 16,224,066                    |  
|Gross unrealized depreciation on portfolio investments                           |  | $ | (28,821,654                   | )
|Net unrealized depreciation on portfolio investments, warrants, and other assets |  | $ | (12,597,588                   | )



During
the year ended December 31, 2017, we recognized net realized gains of approximately $3,541,944 from the sale of investments. Realized
gains were higher compared to the loss in 2016 due to the buyout of our Gilt Groupe position and the sale of our Invensense common
stock in 2016 which created realized losses in 2016.



During
the year ended December 31, 2017, net unrealized depreciation on total investments decreased by $27,155,966. The change in net
unrealized appreciation and depreciation of our private investments is based on portfolio asset valuations determined in good
faith by our Board of Directors. The decrease in unrealized depreciation on total investments during the year is due primarily
to the increase in value of our investments, most notably, Pivotal, QMAT, Revasum, Nutanix, Roku and Phunware.



During
the year ended December 31, 2016, we recognized net realized losses of approximately $6,167,339 from the sale of investments.
Realized losses were substantially higher compared to the loss in 2015 due to the buyout of our Gilt Groupe position and the sale
of our Invensense common stock in 2016.



During
the year ended December 31, 2016, net unrealized depreciation on total investments increased by $14,658,712. The change in net
unrealized appreciation and depreciation of our private investments is based on portfolio asset valuations determined in good
faith by our Board of Directors. The increase in unrealized depreciation on total investments during the year is due primarily
to the decline in value of our investments, most notably, Turn, Aliphcom, Sunrun, QMAT and Telepathy Investors.



During
the year ended December 31, 2015, we recognized net realized losses of approximately $2,197,728 from the sale of investments.



During
the year ended December 31, 2015, net unrealized depreciation on total investments increased by $11,504,423. The change in net
unrealized appreciation and depreciation of our private investments is based on portfolio asset valuations determined in good
faith by our Board of Directors. The increase in unrealized depreciation on total investments during the year is due primarily
to the decline in value of our investments, most notably, Gilt Groupe, Aliphcom, Sunrun and Phunware.



33





INCOME
AND EXCISE TAXES

It
is our intent to continue to qualify as a RIC under Subchapter M of the Code; accordingly, the Company does not provide for income
taxes. The Company does, however, recognize interest and penalties in income tax expense.



NET
INCREASE/(DECREASE) IN ASSETS RESULTING FROM OPERATIONS AND CHANGE IN NET ASSETS PER SHARE

For
the year ended December 31, 2017, net increase in net assets resulting from operations totaled $26,179,569 and basic and fully
diluted net change in net assets per share for the year ended December 31, 2017 was $3.59.



For
the year ended December 31, 2016, net decrease in net assets resulting from operations totaled $24,661,554 and basic and fully
diluted net change in net assets per share for the year ended December 31, 2016 was $(3.26).



For
the year ended December 31, 2015, net decrease in net assets resulting from operations totaled $14,150,700 and basic and fully
diluted net change in net assets per share for the year ended December 31, 2015 was $(1.82).



The
greater increase in net assets resulting from operations for the year ended December 31, 2017 as compared to the year ended December
31, 2016, is due primarily to increases in security valuations, most notably, Pivotal, QMAT, Revasum, Nutanix, Roku and Phunware.



The
greater decline in net assets resulting from operations for the year ended December 31, 2016 as compared to the year ended December
31, 2015, is due primarily to decreases in security valuations, most notably, Turn, Aliphcom, Sunrun, QMAT and Telepathy Investors.



FINANCIAL
CONDITION, LIQUIDITY AND CAPITAL RESOURCES



Our
liquidity and capital resources are generated primarily from sales or liquidation proceeds of our investments. In management’s
view, we have sufficient liquidity and capital resources to pay our operating expenses and conduct investment activities over
the next twelve months.



Our
primary uses of cash are to make investments, pay our operating expenses, and make distributions to our stockholders. For the
years ended December 31, 2017, 2016, and 2015, our operating expenses were $4,393,092, $4,713,526, and $5,027,495, respectively.



For
the year ended December 31, 2017, our total cash reserves and liquid securities increased approximately 65%, primarily due to
the restriction being removed from one of the portfolio investments. We believe that our current liquid assets are sufficient
to meet the Company’s short-term financing needs.



During
the year ended December 31, 2017, cash and cash equivalents decreased to $1,815,452 at the end of the year, from $6,682,097 at
the beginning of the year. The decrease in cash and cash equivalents primarily resulted from our operating expenses and the stock
buyback we initiated in November 2017.



At
December 31, 2017, we had investments in public and private securities totaling approximately $174.8 million. Also, at December
31, 2017, we had approximately $0.1 million in cash. We primarily invest cash on hand in money market treasury portfolios. We
expect the portion of our portfolio consisting of cash and cash equivalents to decrease as we become fully invested.



As
of December 31, 2017, net assets totaled approximately $174.0 million, with an NAV per share of $23.83. Our primary use of funds
will be investments in portfolio companies and payments of fees and other operating expenses we incur. Additionally, we expect
to raise additional capital to support our future growth through future equity offerings. To the extent we determine to raise
additional equity through an offering of our common stock at a price below NAV, existing investors will experience dilution.



34





PORTFOLIO
INVESTMENTS



PRIVATE
INVESTMENTS



We
make investments in securities of both public and private companies. December 31, 2017, we had investments in the following private
companies:



Aliphcom,
Inc.

Aliphcom,
Inc. (“Aliphcom”), San Francisco, California, designs and markets consumer electronics products under the Jawbone
brand.



At
December 31, 2017, our investment in Aliphcom consisted of 2,128,005 shares of common stock with an aggregate fair value of approximately
$0.



EQX
Capital, Inc.

EQX
Capital, Inc. (“EQX”), San Francisco, California, is an equipment leasing company.



At
December 31, 2017, our investment in EQX consisted of 4,000,000 shares of Series A preferred stock and 100,000 shares of common
stock with an aggregate fair value of approximately $4.0 million.



Hera
Systems, Inc.

Hera
Systems, Inc. (“Hera”), San Jose, CA, is currently developing a constellation of micro satellites to launch into low
Earth orbit with imaging and communications capabilities.



At
December 31, 2017, our investment in Hera consisted of 3,642,324 shares of Series A preferred stock, 2,039,203 shares of Series
B preferred stock and 6,914,922 shares of Series B warrants with an aggregate fair value of approximately $2.1 million.



Hightail,
Inc.

Hightail,
Inc. (“Hightail”), Campbell, California, provides services that enable users to share large files via “the cloud”
— offsite data storage that users access remotely.



At
December 31, 2017, our investments in Hightail consisted of 2,268,602 shares of Series E preferred stock with an aggregate fair
value of approximately $8.6 million.



IntraOp
Medical Corp.

IntraOp
Medical Corporation (“IntraOp”), Sunnyvale, California, manufactures and markets the Mobetron, a medical device for
delivering Intra Operative Electron Radiation Therapy to cancer patients.



At
December 31, 2017, our investment in IntraOp consisted of 26,856,187 shares of Series C preferred stock, $3,000,000 par value
term note, $2,000,000 par value term note, $1,000,000 par value convertible note, $1,000,000 par value convertible note, $1,500,000
par value convertible note and a $1,000,000 par value convertible note with a combined aggregate fair value of approximately $21.0
million.



Phunware,
Inc.

Phunware,
Inc. (“Phunware”), Austin, Texas, is a software company that develops tools and services to enable mobile computing
applications.



At
December 31, 2017, our investments in Phunware consisted of 3,257,328 shares of Series E preferred stock with an aggregate fair
value of approximately $12.0 million.



Pivotal
Systems Corp.

Pivotal
Systems, Corporation (“Pivotal Systems”), Fremont, California, provides monitoring and process control technologies
for the semiconductor manufacturing industry.



35





At
December 31, 2017, our investment in Pivotal Systems consisted of 11,914,217 shares of Series A preferred stock, 13,065,236 shares
of Series B preferred stock, 2,291,260 shares of Series C preferred stock, 6,237,978 shares of Series D preferred stock, a warrant
to purchase 18,180,475 shares of Class B common stock and a warrant to purchase 4,158,654 shares of Series D preferred stock with
a combined fair value of approximately $34.7 million.



QMAT,
Inc.

QMAT,
Inc. (“QMAT”), Santa Clara, California, is developing advanced materials technologies for applications in the electronics
industry.



At
December 31, 2017, our investment in QMAT consisted of 16,000,240 shares of Series A preferred stock, 2,000,000 shares of Series
B preferred stock, warrants to purchase up to 2,000,000 shares of Series A preferred stock, and $2,745,485 par value convertible
note with a combined fair value of approximately $23.4 million.



Revasum,
Inc.

Revasum,
(“Revasum”), San Luis Obispo, California, designs CMP and grinding technology for the semiconductor equipment industry.



At
December 31, 2017, our investment in Revasum consisted of 10,000 shares of common stock, 2,200,000 shares of Series Seed preferred
stock, 441,998 shares of Series A preferred stock, 313,719 shares of Series B preferred stock and a $1,000,000 par value term
note with an aggregate fair value of approximately $14.8 million



Rorus,
Inc.

Rorus,
Inc., (“Rorus”),Pittsburgh, Pennsylvania, designs portable and household water filters designed to disinfect and purify
water.



At
December 31, 2017, our investment in Rorus consisted of a $50,000 par value convertible note with an aggregate fair value of approximately
$0.



Silicon
Genesis Corp.

Silicon
Genesis Corporation (“SiGen”), San Jose, CA, provides engineered substrate process technology for the semiconductor,
display, optoelectronics, and solar markets.



At
December 31, 2017, our investments in SiGen consisted of 82,914 shares of Series 1-C preferred stock, 850,830 shares of Series
1-D preferred stock, 5,704,480 shares of Series 1-E preferred stock, 912,453 shares of Series 1-F preferred stock, 48,370,793
shares of Series 1-G preferred stock, 837,942 shares of Series 1-H preferred stock, 921,892 shares of common stock, and warrants
for 8,037,982 shares of common stock with a combined fair value of approximately $6.1 million.



SVXR,
Inc.

SVXR,
Inc. (“SVXR”), San Jose, California, is an X-ray inspection tool manufacturer whose products are used for inline product
monitoring, defect detection, and metrology.



At
December 31, 2017, our investment in SVXR consisted of 2,013,491 shares of Series A preferred stock, and a $1,000,000 par value
convertible note with a combined fair value of approximately $2.0 million.



Telepathy
Investors, Inc.

Telepathy
Investors, Inc. (“Telepathy”), Sunnyvale, California, is developing wearable consumer electronics products.



At
December 31, 2017, our investment in Telepathy consisted of 15,238,000 shares of Series A preferred stock, a $2,000,000 par value
convertible note, a $500,000 par value convertible note, a $500,000 par value convertible note, a $300,000 par value convertible
note, a $300,000 par value convertible note and a $150,000 par value convertible note with a combined fair value of approximately
$1.5 million.



36





UCT
Coatings, Inc.

UCT
Coatings, Inc. (“UCT”), Stuart, Florida, is a leader in the development of metal coatings that reduce friction and
improve efficiency in mechanical systems.



At
December 31, 2017, our investments in UCT consisted of 1,500,000 shares of common stock and warrants to purchase 2,283 shares
of common stock, with a combined fair value of approximately $922 thousand.



Vufine,
Inc.

Vufine,
Inc. (“Vufine”), Sunnyvale, CA, is developing a wearable high-definition display that clips on to existing eyewear.



At
December 31, 2017, our investment in Vufine consisted of 22,500,000 shares of Series A preferred stock, 750,000 shares of common
stock, a $250,000 par value convertible note and a $1,500,000 par value convertible note with a combined aggregate fair value
of approximately $1.4 million.



Wrightspeed,
Inc.

Wrightspeed,
Inc. (“Wrightspeed”), San Jose, California, is a supplier of electric drivetrains for medium-duty trucks.



At
December 31, 2017, our investments in Wrightspeed consisted of 2,267,659 shares of Series C preferred stock, 1,100,978 shares
of Series D preferred stock, 450,814 shares of Series E preferred stock, 90,707 shares of Series F preferred stock, and a warrant
to purchase 18,141 shares of Series F preferred stock with a combined fair value of approximately $10.7 million.



PUBLIC
INVESTMENTS



At
December 31, 2017, we had investments in the following public securities:



Nutanix,
Inc.

Nutanix,
Inc. (“Nutanix”), San Jose, CA, provides “hyperconverged” data center equipment that merges computing,
storage, and networking capabilities in a single piece of equipment.



At
December 31, 2017, our investment in Nutanix consisted of 458,772 shares of common stock with an aggregate market value of approximately
$16.2 million.



Quicklogic
Corp.

QuickLogic
Corp. (“QuickLogic”) (NASDAQ: QUIK), Sunnyvale, CA, designs and markets system-on-a-chip (“SOC”) semiconductor
solutions for smartphones, wearable and “Internet-of-things” devices, and other applications.



At
December 31, 2017, our investment in Quicklogic consisted of 1,200,000 shares of common stock with a market value of approximately
$2.1 million.



Roku,
Inc.

Roku,
Inc. (“Roku”), Saratoga, CA, makes Internet streaming devices and software that enable consumers to access streaming
content on their televisions.



At
December 31, 2017, our investment in Roku consisted of 250,000 shares of restricted common stock with an aggregate fair value
of approximately $11.7 million.



Fidelity
Investments Money Market Treasury Portfolio - Class I

Fidelity
Investments Money Market Treasury Portfolio - Class I (“Money Market”) is a money market portfolio that invests primarily
in U.S. treasury securities.



At
December 31, 2017, our investment in Money Market consisted of 1,705,375 shares of the money market fund with a market value of
approximately $1.7 million.



37





DISTRIBUTION
POLICY

Our
board of directors will determine the timing and amount, if any, of our distributions. We intend to pay distributions on an annual
basis out of assets legally available therefore. In order to qualify as a RIC and to avoid corporate-level tax on our income,
we must distribute to our stockholders at least 90% of our ordinary income and realized net short-term capital gains in excess
of realized net long-term capital losses, if any, on an annual basis. In addition, we also intend to distribute any realized net
capital gains (i.e., realized net long-term capital gains in excess of realized net short-term capital losses) at least
annually.



CONTRACTUAL
OBLIGATIONS

The
Fund does not have any Contractual Obligations that meet the requirements for disclosure under Item 303 of Regulation S-K.



OFF-BALANCE
SHEET ARRANGEMENTS

The
Fund does not have any Off-Balance Sheet Arrangements.



CRITICAL
ACCOUNTING POLICIES

This
discussion of our financial condition and results of operations is based upon our financial statements, which are prepared in
accordance with accounting principles generally accepted in the United States of America, or GAAP. The preparation of these financial
statements will require management to make estimates and assumptions that affect the reported amounts of assets, liabilities,
revenues, and expenses. Changes in the economic environment, financial markets, and any other parameters used in determining such
estimates could cause actual results to differ. In addition to the discussion below, we will describe our critical accounting
policies in the notes to our future financial statements.



Valuation
of Portfolio Investments

As
a business development company, we generally invest in illiquid equity and equity derivatives of securities of venture capital
stage technology companies. Under written procedures established by our board of directors, securities traded on stock exchanges,
or quoted by NASDAQ, are valued according to the NASDAQ Stock Market, Inc. (“NASDAQ”) official closing price, if applicable,
or at their last reported sale price as of the close of trading on the New York Stock Exchange (“NYSE”) (normally
4:00 P.M. Eastern Time). If a security is not traded that day, the security will be valued at its most recent bid price. Securities
traded in the over-the-counter market, but not quoted by NASDAQ, are valued at the last sale price (or, if the last sale price
is not readily available, at the most recent closing bid price as quoted by brokers that make markets in the securities) at the
close of trading on the NYSE. Securities traded both in the over-the-counter market and on a stock exchange are valued according
to the broadest and most representative market. We obtain these market values from an independent pricing service or at the mean
between the bid and ask prices obtained from at least two brokers or dealers (if available, otherwise by a principal market maker
or a primary market dealer). In addition, a large percentage of our portfolio investments are in the form of securities that are
not publicly traded. The fair value of securities and other investments that are not publicly traded may not be readily determinable.
We value these securities quarterly at fair value as determined in good faith by our board of directors. Our board of directors
may use the services of a nationally recognized independent valuation firm to aid it in determining the fair value of these securities.
The methods for valuing these securities may include: fundamental analysis (sales, income, or earnings multiples, etc.), discounts
from market prices of similar securities, purchase price of securities, subsequent private transactions in the security or related
securities, or discounts applied to the nature and duration of restrictions on the disposition of the securities, as well as a
combination of these and other factors. Because such valuations, and particularly valuations of private securities and private
companies, are inherently uncertain, may fluctuate over short periods of time, and may be based on estimates, our determinations
of fair value may differ materially from the values that would have been used if a ready market for these securities existed.
Our net asset value could be adversely affected if our determinations regarding the fair value of our investments were materially
higher than the values that we ultimately realize upon the disposal of such securities.



Revenue
Recognition

We
record interest income on an accrual basis and dividend income on the ex-dividend date to the extent that we expect to collect
such amounts. We do not accrue as a receivable interest on loans and debt securities if we have reason to doubt our ability to
collect such interest. Loan origination fees, original issue discount, and market discount are capitalized, and we amortize any
such amounts as interest income. Upon the prepayment of a loan or debt security, any unamortized loan origination is recorded
as interest income. We will record prepayment premiums on loans and debt securities as interest income when we receive such amounts.



38





Net
Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation

We
measure realized gains or losses by the difference between the net proceeds from the repayment or sale and the cost basis of the
investment, without regard to unrealized appreciation or depreciation previously recognized. Net change in unrealized appreciation
or depreciation reflects the change in portfolio investment values during the reporting period, including any reversal of previously
recorded unrealized appreciation or depreciation, when gains or losses are realized.



Recently
Issued Accounting Standards

From
time to time, new accounting pronouncements are issued by the FASB or other standards setting bodies that are adopted by us as
of the specified effective date. We believe that the impact of recently issued standards that are not yet effective will not have
a material impact on our financial statements upon effectiveness.



Inflation

Inflation
has not had a significant effect on our results of operations in any of the reporting periods presented herein. However, our portfolio
companies have experienced, and may in the future experience, the impacts of inflation on their operating results.



SUBSEQUENT
EVENTS

Subsequent
to the close of the year on December 31, 2017, and through the date of the issuance of the financial statements included herein,
a number of material events related to our portfolio of investments occurred, consisting primarily of purchased and sold securities.
Since that date, we have purchased private securities with an aggregate cost of approximately $5.0 million. Since that date, we
have sold public securities with an aggregate value of approximately $1.5 million and private securities with an aggregate value
of approximately $3.2 million.



On
February 14, 2018, OpenText Corp. announced that it had purchased Hightail, Inc., a portfolio holding since 2014. We currently
anticipate receiving between $5 and $6 million in proceeds from this transaction.



On
March 12, 2018, Pivotal Systems announced it has engaged two investment banks for the purpose of exploring a 2018 listing on the
Australian Securities Exchange.



39





REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



TO
THE SHAREHOLDERS AND BOARD OF DIRECTORS

Firsthand
Technology Value Fund, Inc.
San Jose, California



OPINION
ON THE FINANCIAL STATEMENTS

We
have audited the accompanying consolidated statements of assets and liabilities of Firsthand Technology Value Fund, Inc. (the
“Company”), including the consolidated schedules of investments, as of December 31, 2017 and 2016, and the related
consolidated statements of operations, changes in net assets, and cash flows for each of the years in the three-year period ended
December 31, 2017, and the financial highlights (consolidated for the years ended December 31, 2017, 2016, and 2015) for each
of the years in the five-year period ended December 31, 2017, and the related notes (collectively referred to as the consolidated
financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial
position of the Company as of December 31, 2017 and 2016, the results of its operations, the changes in its net assets, and its
cash flows for each of the years in the three-year period ended December 31, 2017, and the financial highlights for each of the
years in the five-year period ended December 31, 2017, in conformity with accounting principles generally accepted in the United
States of America.



We
also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB),
the Company’s internal control over financial reporting as of December 31, 2017, based on the criteria established in Internal
Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and
our report dated March 15, 2018 expressed an unqualified opinion.



EMPHASIS
OF MATTER

As
explained in Note 6, the financial statements include investments valued at $154,860,674 (89.00% of net assets), whose fair values
have been estimated under procedures established by the Board of Directors in the absence of readily ascertainable fair values.
These estimated values may differ significantly from the values that would have been used had a ready market for the investments
existed, and the differences could be material. Our opinion is not modified with respect to this matter.



BASIS
FOR OPINION

These
consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an
opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered
with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws
and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We have served as the Company’s
auditor since 1997.



We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error
or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining,
on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our procedures included
confirmation of securities owned as of December 31, 2017 by correspondence with the custodian, portfolio companies and brokers;
when replies were not received from brokers, we performed other auditing procedures. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated
financial statements. We believe that our audits provide a reasonable basis for our opinion.



TAIT,
WELLER & BAKER LLP

Philadelphia,
Pennsylvania
March 15, 2018



See
accompanying notes to financial statements



40





REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



TO
THE SHAREHOLDERS AND BOARD OF DIRECTORS

Firsthand
Technology Value Fund, Inc.
San Jose, California



OPINION
ON INTERNAL CONTROL OVER FINANCIAL REPORTING

We
have audited the internal control over financial reporting of Firsthand Technology Value Fund, Inc. (the “Company”)
as of December 31, 2017, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects,
effective internal control over financial reporting as of December 31, 2017, based on the criteria established in Internal Control—Integrated
Framework (2013) issued by COSO.



We
also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB),
the consolidated statements of assets and liabilities, including the consolidated schedules of investments, as of December 31,
2017 and 2016, and the related consolidated statements of operations, changes in net assets, and cash flows for each of the years
in the three-year period ended December 31, 2017, and the financial highlights (consolidated for the years ended December 31,
2017, 2016 and 2015) for each of the years in the five-year period ended December 31, 2017, and the related notes (collectively
referred to as the consolidated financial statements) of the Company, and our report dated March 15, 2018 expressed an unqualified
opinion.



BASIS
FOR OPINION

The
Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment
of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal
Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial
reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with
respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities
and Exchange Commission and the PCAOB. We have served as the Company’s auditor since 1997.



We
conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material
respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness
of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary
in the circumstances. We believe that our audit provides a reasonable basis for our opinion.



DEFINITION
AND LIMITATIONS OF INTERNAL CONTROL OVER FINANCIAL REPORTING

A
company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures
of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.



Because
of the inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes
in conditions, or that the degree of compliance with the policies or procedures may deteriorate.



TAIT,
WELLER & BAKER LLP

Philadelphia,
Pennsylvania
March 15, 2018



See
accompanying notes to financial statements



41





Item
8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

Firsthand
Technology Value Fund, Inc.

Consolidated
Statements of Assets and Liabilities



|                                                                       |  | AS OF  DECEMBER 31, 2017 |             |   | AS OF  DECEMBER 31, 2016 |  
|---------------------------------------------------------------------- |  | ------------------------ | ----------- | - | ------------------------ | -
|ASSETS                                                                 |  |                          |             |   |                          |  
|Investment securities:                                                 |  |                          |             |   |                          |  
|Unaffiliated investments at acquisition cost                           |  | $                        | 33,014,039  | * |                          | $
|Affiliated investments at acquisition cost                             |  |                          | 24,035,159  |   |                          |  
|Controlled investments at acquisition cost                             |  |                          | 117,890,661 |   |                          |  
|Total acquisition cost                                                 |  | $                        | 174,939,859 |   |                          | $
|Unaffiliated investments at market value                               |  | $                        | 40,191,055  | * |                          | $
|Affiliated investments at market value                                 |  |                          | 24,656,252  |   |                          |  
|Controlled investments at market value                                 |  |                          | 109,992,218 |   |                          |  
|Total market value ** (Note 6)                                         |  |                          | 174,839,525 |   |                          |  
|Cash                                                                   |  |                          | 110,077     |   |                          |  
|Receivable from dividends and interest                                 |  |                          | 1,794,003   |   |                          |  
|Other assets                                                           |  |                          | 27,985      |   |                          |  
|Total Assets                                                           |  |                          | 176,771,590 |   |                          |  
|LIABILITIES                                                            |  |                          |             |   |                          |  
|Payable for securities purchased                                       |  |                          | —           |   |                          |  
|Incentive fees payable (Note 4)                                        |  |                          | 1,691,040   |   |                          |  
|Payable to affiliates (Note 4)                                         |  |                          | 879,085     |   |                          |  
|Consulting fee payable                                                 |  |                          | 21,000      |   |                          |  
|Accrued expenses and other payables                                    |  |                          | 186,876     |   |                          |  
|Total Liabilities                                                      |  |                          | 2,778,001   |   |                          |  
|NET ASSETS                                                             |  | $                        | 173,993,589 |   |                          | $
|                                                                       |  |                          |             |   |                          |  
|Net Assets consist of:                                                 |  |                          |             |   |                          |  
|Common Stock, par value $0.001 per share 100,000,000 shares authorized |  | $                        | 7,302       |   |                          | $
|Paid-in-capital                                                        |  |                          | 180,772,769 |   |                          |  
|Accumulated net investment loss                                        |  |                          | (1,691,040  | ) |                          |  
|Accumulated net realized loss from security transactions               |  |                          | (4,995,108  | ) |                          |  
|Net unrealized depreciation on investments and warrants transactions   |  |                          | (100,334    | ) |                          |  
|NET ASSETS                                                             |  | $                        | 173,993,589 |   |                          | $
|Shares of Common Stock outstanding                                     |  |                          | 7,302,146   |   |                          |  
|Net asset value per share (Note 2)                                     |  | $                        | 23.83       |   |                          | $



| | * | Includes Fidelity Investment Money
                                                                                                                                                                         Market Treasury Portfolio - Class I, which invests primarily in U.S. Treasury securities. The yields as of 12/31/17 and
                                                                                                                                                                         12/31/16 were 1.14% and 0.35%, respectively. Please see https://fundresearch.fidelity.com/ mutual-funds/
                                                                                                                                                                         summary/316175504 for additional information.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ** | Includes
                                         warrants whose primary exposure is equity risk.
| | -- | -------------------------------------------------------------------------------------------------



See
accompanying notes to financial statements



42





Firsthand
Technology Value Fund, Inc.Consolidated Schedule of InvestmentsDECEMBER 31, 2017



|PORTFOLIO COMPANY (% OF NET ASSETS) AND INDUSTRY |  | TYPE OF INVESTMENT                                             |  | ACQUISITION DATE    |  | SHARES/PAR VALUE ($) |            |  | COST BASIS |   |            | VALUE | 
|------------------------------------------------ |  | -------------------------------------------------------------- |  | ------------------- |  | -------------------- | ---------- |  | ---------- | - | ---------- | ----- | 
|ALIPHCOM, INC. (0.0%)                            |  | Common Stock*(1)(7)                                            |  | 08/20/13            |  |                      | 2,128,005  |  |            | $ | 10,108,024 |       | 
|Consumer Electronics                             |  |                                                                |  |                     |  |                      |            |  |            |   |            |       | 
|                                                 |  |                                                                |  |                     |  |                      |            |  |            |   |            |       | 
|EQX CAPITAL, INC.                                |  | Common Stock*(1)(2)(7)                                         |  | 06/10/16            |  |                      | 100,000    |  |            |   | 20,000     |       | 
|(2.3%)                                           |  | Preferred Stock - Series A *(1)(2)(7)                          |  | 06/10/16            |  |                      | 4,000,000  |  |            |   | 4,000,000  |       | 
|Equipment Leasing                                |  |                                                                |  |                     |  |                      |            |  |            |   |            |       | 
|                                                 |  |                                                                |  |                     |  |                      |            |  |            |   |            |       | 
|                                                 |  |                                                                |  |                     |  |                      |            |  |            |   |            |       | 
|HERA SYSTEMS, INC.                               |  | Preferred Stock - Series A*(1)(2)(7)                           |  | 09/18/15            |  |                      | 3,642,324  |  |            |   | 2,000,000  |       | 
|(1.2%)                                           |  | Preferred Stock - Series B*(1)(2)(7)                           |  | 08/07/17 - 09/28/17 |  |                      | 2,039,203  |  |            |   | 1,587,102  |       | 
|Aerospace                                        |  | Preferred Stock Warrants - Series B*(1)(2)(7)                  |  | 08/07/17            |  |                      | 6,214,922  |  |            |   | 0          |       | 
|                                                 |  | Preferred Stock Warrants - Series B*(1)(2)(7)                  |  | 09/28/17            |  |                      | 700,000    |  |            |   | 0          |       | 
|                                                 |  |                                                                |  |                     |  |                      |            |  |            |   |            |       | 
|                                                 |  |                                                                |  |                     |  |                      |            |  |            |   |            |       | 
|HIGHTAIL, INC. (4.9%) Cloud Computing            |  | Preferred Stock - Series E *(1)(4)(7)                          |  | 03/27/14            |  |                      | 2,268,602  |  |            |   | 9,620,188  |       | 
|                                                 |  |                                                                |  |                     |  |                      |            |  |            |   |            |       | 
|INTRAOP MEDICAL CORP. (12.1%) Medical Devices    |  | Convertible Note (1)(2)(7) Matures June 2020 Interest Rate 15% |  | 05/31/17            |  |                      | 1,000,000  |  |            |   | 1,000,000  |       | 
|                                                 |  | Convertible Note (1)(2)(7) Matures June 2020 Interest Rate 15% |  | 09/28/17            |  |                      | 1,500,000  |  |            |   | 1,500,000  |       | 
|                                                 |  | Convertible Note (1)(2)(7) Matures June 2020 Interest Rate 15% |  | 07/13/17            |  |                      | 1,000,000  |  |            |   | 1,000,000  |       | 
|                                                 |  | Convertible Note (1)(2)(7) Matures June 2020 Interest Rate 15% |  | 07/08/14            |  |                      | 1,000,000  |  |            |   | 1,000,000  |       | 
|                                                 |  | Preferred Stock - Series C *(1)(2)(7)                          |  | 07/12/13            |  |                      | 26,856,187 |  |            |   | 26,299,938 |       | 
|                                                 |  | Term Note (1)(2) Matures February 2020 Interest Rate 8%        |  | 02/10/17            |  |                      | 2,000,000  |  |            |   | 2,000,000  |       | 
|                                                 |  | Term Note (1)(2)(7) Matures February 2020 Interest Rate 8%     |  | 02/28/14            |  |                      | 3,000,000  |  |            |   | 3,000,000  |       | 
|                                                 |  |                                                                |  |                     |  |                      |            |  |            |   |            |       | 



See
accompanying notes to financial statements



43





Firsthand
Technology Value Fund, Inc.

Consolidated
Schedule of Investments - continued

DECEMBER
31, 2017



|PORTFOLIO COMPANY (% OF NET ASSETS)AND INDUSTRY |  | TYPE OF INVESTMENT                                             |  | ACQUISITION DATE    |  | SHARES/PAR VALUE ($) |            |  | COST BASIS |   |            | VALUE | 
|----------------------------------------------- |  | -------------------------------------------------------------- |  | ------------------- |  | -------------------- | ---------- |  | ---------- | - | ---------- | ----- | 
|NUTANIX, INC. (9.3%) Networking                 |  | Common Stock*                                                  |  | 05/15/15 - 08/23/16 |  |                      | 458,772    |  |            | $ | 7,358,112  |       | 
|PHUNWARE, INC. (6.9%) Mobile Computing          |  | Preferred Stock - Series E*(1)(3)(7)                           |  | 03/14/14            |  |                      | 3,257,328  |  |            |   | 9,999,997  |       | 
|                                                |  |                                                                |  |                     |  |                      |            |  |            |   |            |       | 
|PIVOTAL SYSTEMS CORP. (19.9%)                   |  | Common Stock Warrants - Class B*(1)(2)(7)                      |  | 02/12/16            |  |                      | 18,180,475 |  |            |   | 0          |       | 
|Semiconductor Equipment                         |  | Preferred Stock Warrants - Series D*(1)(2)(7)                  |  | 09/02/16            |  |                      | 4,158,654  |  |            |   | 0          |       | 
|                                                |  | Preferred Stock - Series A*(1)(2)(7)                           |  | 11/28/12 - 04/30/14 |  |                      | 11,914,217 |  |            |   | 6,000,048  |       | 
|                                                |  | Preferred Stock - Series B*(1)(2)(7)                           |  | 04/30/14            |  |                      | 13,065,236 |  |            |   | 6,321,482  |       | 
|                                                |  | Preferred Stock - Series C*(1)(2)(7)                           |  | 12/31/14            |  |                      | 2,291,260  |  |            |   | 2,657,862  |       | 
|                                                |  | Preferred Stock - Series D*(1)(2)(7)                           |  | 09/02/16            |  |                      | 6,237,978  |  |            |   | 3,975,801  |       | 
|                                                |  |                                                                |  |                     |  |                      |            |  |            |   |            |       | 
|                                                |  |                                                                |  |                     |  |                      |            |  |            |   |            |       | 
|QMAT, INC. (13.4%)                              |  | Preferred Stock - Series A*(1)(2)(7)                           |  | 12/14/12 - 04/28/16 |  |                      | 16,000,240 |  |            |   | 16,000,240 |       | 
|Advanced Materials                              |  | Preferred Stock - Series B*(1)(2) (7)                          |  | 09/28/16 - 11/07/16 |  |                      | 2,000,000  |  |            |   | 2,000,000  |       | 
|                                                |  | Preferred Stock Warrants - Series A*(1)(2)                     |  | 12/14/12            |  |                      | 2,000,000  |  |            |   | 0          |       | 
|                                                |  | Convertible Note Matures March 2019 Interest Rate 8% (1)(2)(7) |  | 12/29/17            |  |                      | 2,745,485  |  |            |   | 2,745,485  |       | 
|                                                |  |                                                                |  |                     |  |                      |            |  |            |   |            |       | 
|                                                |  |                                                                |  |                     |  |                      |            |  |            |   |            |       | 
|QUICKLOGIC CORP. (1.2%)                         |  | Common Stock *                                                 |  | 12/27/16 - 11/09/17 |  |                      | 1,200,000  |  |            |   | 1,859,835  |       | 
|Semiconductors                                  |  |                                                                |  |                     |  |                      |            |  |            |   |            |       | 
|REVASUM, INC. (8.5%) Semiconductor              |  | Preferred Stock - Series B (1)(2)(7)(8)                        |  | 10/27/17 - 12/20/17 |  |                      | 313,719    |  |            |   | 2,550,033  |       | 
|Equipment                                       |  | Common Stock*(1)(2)(7)                                         |  | 11/14/16            |  |                      | 10,000     |  |            |   | 1,000      |       | 
|                                                |  | Preferred Stock - Series A*(1)(2)(7)                           |  | 03/01/17            |  |                      | 441,998    |  |            |   | 1,999,997  |       | 
|                                                |  | Term Note (1)(2)(7) Matures February 2020 Interest Rate 5%     |  | 03/01/17            |  |                      | 1,000,000  |  |            |   | 1,000,000  |       | 
|                                                |  | Preferred Stock - Series Seed* (1)(2)(7)                       |  | 11/14/16            |  |                      | 2,200,000  |  |            |   | 7,284,145  |       | 
|                                                |  |                                                                |  |                     |  |                      |            |  |            |   |            |       | 



See
accompanying notes to financial statements



44





Firsthand
Technology Value Fund, Inc.

Consolidated
Schedule of Investments - continued

DECEMBER
31, 2017



|PORTFOLIO COMPANY (% OF NET ASSETS)AND INDUSTRY |  | TYPE OF INVESTMENT                                                           |  | ACQUISITION DATE    |  | SHARES/PAR VALUE ($) |            |  | COST BASIS |   |           | VALUE | 
|----------------------------------------------- |  | ---------------------------------------------------------------------------- |  | ------------------- |  | -------------------- | ---------- |  | ---------- | - | --------- | ----- | 
|ROKU, INC. (6.7%)                               |  | Common Stock*(1)(7)                                                          |  | 05/26/15 - 08/06/15 |  |                      | 250,000    |  |            | $ | 2,312,500 |       | 
|Consumer Electronics                            |  |                                                                              |  |                     |  |                      |            |  |            |   |           |       | 
|                                                |  |                                                                              |  |                     |  |                      |            |  |            |   |           |       | 
|RORUS, INC. (0.0%)Water Purification            |  | Convertible Note (1)(7) Matures June 2021 Interest Rate 2%                   |  | 10/04/16            |  |                      | 50,000     |  |            |   | 50,000    |       | 
|                                                |  |                                                                              |  |                     |  |                      |            |  |            |   |           |       | 
|SILICON GENESIS CORP.                           |  | Common Stock*(1)(2)(7)                                                       |  | 04/18/11            |  |                      | 921,892    |  |            |   | 169,045   |       | 
|(3.5%)                                          |  | Common Stock Warrants*(1)(2)(7)                                              |  | 04/18/11            |  |                      | 5,000,000  |  |            |   | 0         |       | 
|Intellectual Property                           |  | Common Stock Warrants*(1)(2)(7)                                              |  | 10/13/11            |  |                      | 37,982     |  |            |   | 6,678     |       | 
|                                                |  | Common Stock Warrants*(1)(2)(7)                                              |  | 02/06/12            |  |                      | 3,000,000  |  |            |   | 0         |       | 
|                                                |  | Preferred Stock - Series 1-C*(1)(2)(7)                                       |  | 04/18/11            |  |                      | 82,914     |  |            |   | 109,518   |       | 
|                                                |  | Preferred Stock - Series 1-D*(1)(2)(7)                                       |  | 04/18/11            |  |                      | 850,830    |  |            |   | 431,901   |       | 
|                                                |  | Preferred Stock - Series 1-E*(1)(2)(7)                                       |  | 04/18/11            |  |                      | 5,704,480  |  |            |   | 2,459,808 |       | 
|                                                |  | Preferred Stock - Series 1-F*(1)(2)(7)                                       |  | 04/18/11            |  |                      | 912,453    |  |            |   | 475,674   |       | 
|                                                |  | Preferred Stock - Series                                                     |  |                     |  |                      |            |  |            |   |           |       | 
|                                                |  | 1-G*(1)(2)(5)(7)                                                             |  | 03/10/16            |  |                      | 48,370,793 |  |            |   | 4,583,405 |       | 
|                                                |  | Preferred Stock - Series 1-H*(1)(2)(7)                                       |  | 03/10/16            |  |                      | 837,942    |  |            |   | 946,502   |       | 
|                                                |  |                                                                              |  |                     |  |                      |            |  |            |   |           |       | 
|                                                |  |                                                                              |  |                     |  |                      |            |  |            |   |           |       | 
|SVXR, INC. (1.2%)                               |  | Preferred Stock - Series A*(1)(3)(7)                                         |  | 01/11/17            |  |                      | 2,013,491  |  |            |   | 1,000,000 |       | 
|Semiconductor Equipment                         |  | Convertible Note (1)(2)(7) Matures December 2018 Interest Rate 10% (1)(2)(7) |  | 12/21/17            |  |                      | 1,000,000  |  |            |   | 1,000,000 |       | 
|                                                |  |                                                                              |  |                     |  |                      |            |  |            |   |           |       | 



See
accompanying notes to financial statements



45





Firsthand
Technology Value Fund, Inc.

Consolidated
Schedule of Investments - continued

DECEMBER
31, 2017



|PORTFOLIO COMPANY (% OF NET ASSETS)AND INDUSTRY       |  | TYPE OF INVESTMENT                                                    |  | ACQUISITION DATE    |  | SHARES/PAR VALUE ($) |            |  | COST BASIS |   |           | VALUE | 
|----------------------------------------------------- |  | --------------------------------------------------------------------- |  | ------------------- |  | -------------------- | ---------- |  | ---------- | - | --------- | ----- | 
|TELEPATHY INVESTORS, INC. (0.9%) Consumer Electronics |  | Convertible Note (1)(2)(7) Matures
    January 2018 Interest Rate 10% |  | 01/29/16            |  |                      | 300,000    |  |            | $ | 300,000   |       | 
|                                                      |  | Convertible Note (1)(2)(7) Matures January 2018 Interest Rate 10%     |  | 04/20/16            |  |                      | 500,000    |  |            |   | 500,000   |       | 
|                                                      |  | Convertible Note (1)(2)(7) Matures January 2018 Interest Rate 10%     |  | 06/21/16            |  |                      | 150,000    |  |            |   | 150,000   |       | 
|                                                      |  | Convertible Note (1)(2)(7) Matures January 2018 Interest Rate 10%     |  | 12/13/16            |  |                      | 500,000    |  |            |   | 500,000   |       | 
|                                                      |  | Convertible Note (1)(2)(7) Matures January 2018 Interest Rate 10%     |  | 06/23/15            |  |                      | 2,000,000  |  |            |   | 2,000,000 |       | 
|                                                      |  | Convertible Note (1)(2)(7) Matures January 2018 Interest Rate 10%     |  | 05/03/17            |  |                      | 300,000    |  |            |   | 300,000   |       | 
|                                                      |  | Preferred Stock - Series A*(1)(2)(7)                                  |  | 07/29/14            |  |                      | 15,238,000 |  |            |   | 3,999,999 |       | 
|                                                      |  |                                                                       |  |                     |  |                      |            |  |            |   |           |       | 
|                                                      |  |                                                                       |  |                     |  |                      |            |  |            |   |           |       | 
|UCT COATINGS, INC.                                    |  | Common Stock*(1)(3)(7)                                                |  | 04/18/11            |  |                      | 1,500,000  |  |            |   | 662,235   |       | 
|(0.5%)                                                |  | Common Stock Warrants*(1)(3)(7)                                       |  | 04/18/11            |  |                      | 2,283      |  |            |   | 67        |       | 
|Advanced Materials                                    |  |                                                                       |  |                     |  |                      |            |  |            |   |           |       | 
|                                                      |  |                                                                       |  |                     |  |                      |            |  |            |   |           |       | 
|VUFINE, INC. (0.8%)                                   |  | Common Stock*(1)(2)(7)                                                |  | 02/26/15            |  |                      | 750,000    |  |            |   | 15,000    |       | 
|Consumer Electronics                                  |  | Convertible Note (1)(2)(7) Matures July 2019 Interest Rate 6%         |  | 07/10/17            |  |                      | 1,500,000  |  |            |   | 1,500,000 |       | 
|                                                      |  | Preferred Stock - Series A*(1)(2)(7)                                  |  | 03/04/15 - 02/18/16 |  |                      | 22,500,000 |  |            |   | 2,250,000 |       | 
|                                                      |  | Convertible Note (1)(2)(7) Matures October 2019 Interest Rate 12%     |  | 10/16/17            |  |                      | 250,000    |  |            |   | 250,000   |       | 
|                                                      |  |                                                                       |  |                     |  |                      |            |  |            |   |           |       | 
|WRIGHTSPEED, INC.                                     |  | Preferred Stock - Series C*(1)(3)(4)(7)                               |  | 04/11/13            |  |                      | 2,267,659  |  |            |   | 6,837,983 |       | 
|(6.2%)                                                |  | Preferred Stock - Series D *(1)(3)(7)                                 |  | 12/15/14            |  |                      | 1,100,978  |  |            |   | 3,375,887 |       | 
|Automotive                                            |  | Preferred Stock - Series E *(1)(3)(7)                                 |  | 07/10/15            |  |                      | 450,814    |  |            |   | 1,658,996 |       | 
|                                                      |  | Preferred Stock - Series F *(1)(3)(7)                                 |  | 08/31/17            |  |                      | 90,707     |  |            |   | 499,995   |       | 
|                                                      |  | Preferred Stock Warrants -                                            |  | 08/31/17            |  |                      |            |  |            |   |           |       | 
|                                                      |  | Series F*(1)(3)(7)                                                    |  |                     |  |                      | 18,141     |  |            |   | 0         |       | 
|                                                      |  |                                                                       |  |                     |  |                      |            |  |            |   |           |       | 



See
accompanying notes to financial statements



46





Firsthand
Technology Value Fund, Inc.



Consolidated
Schedule of Investments - continued

DECEMBER
31, 2017



|PORTFOLIO COMPANY (% OF NET ASSETS) AND INDUSTRY |  | TYPE OF INVESTMENT                                                 |  | ACQUISITION DATE |  | SHARES/PAR VALUE ($) |           |  | COST BASIS |   |           | VALUE | 
|------------------------------------------------ |  | ------------------------------------------------------------------ |  | ---------------- |  | -------------------- | --------- |  | ---------- | - | --------- | ----- | 
|INVESTMENT COMPANY (1.0%)                        |  | Fidelity Investments Money Market Treasury Portfolio - Class I (6) |  | Various          |  |                      | 1,705,375 |  |            | $ | 1,705,375 |       | 
|                                                 |  |                                                                    |  |                  |  |                      |           |  |            |   |           |       | 
|TOTAL INVESTMENTS (Cost $174,939,859)— 100.5%    |  |                                                                    |  |                  |  |                      |           |  |            |   |           |       | 
|                                                 |  |                                                                    |  |                  |  |                      |           |  |            |   |           |       | 
|LIABILITIES IN EXCESS OF OTHER ASSETS — (0.5)%   |  |                                                                    |  |                  |  |                      |           |  |            |   |           |       | 
|                                                 |  |                                                                    |  |                  |  |                      |           |  |            |   |           |       | 
|NET ASSETS — 100.0%                              |  |                                                                    |  |                  |  |                      |           |  |            |   |           |       | 
|                                                 |  |                                                                    |  |                  |  |                      |           |  |            |   |           |       | 



| | * | Non-income
producing security.
| | - | ------------------------------



| | (1) | Restricted
                                         security. Fair Value is determined by or under the direction of the Company’s Board
                                         of Directors (see Note 3). At December 31, 2017, we held $154,860,674 (or 89.0% of net
                                         assets) in restricted securities (see Note 2).
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Controlled
                                         Investments.
| | --- | ----------------------------------------------------------------

| | (3) | Affiliated issuer.
| | --- | ------------------



| | (4) | A
                                         portion represents position held in Firsthand Holdings, Ltd. (see Note 1).
| | --- | ---------------------------------------------------------------------------------------------------------------------



| | (5) | A
                                         portion represents position held in Firsthand Development, Ltd. (see Note 1).
| | --- | ------------------------------------------------------------------------------------------------------------------------



| | (6) | The
                                         Fidelity Investments Money Market Portfolio invests primarily in U.S. Treasury securities.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------

| | (7) | Fair Value Level 3 Security.
| | --- | ----------------------------



| | (8) | A
                                         portion represents position held in Firsthand Investments, Ltd. (see Note 1).
| | --- | ------------------------------------------------------------------------------------------------------------------------



See
accompanying notes to financial statements



47





Firsthand
Technology Value Fund, Inc.

Schedule
of Investments

DECEMBER
31, 2016



|PORTFOLIO COMPANY (% OF NET ASSETS) AND INDUSTRY |  | TYPE OF INVESTMENT                                           |  | SHARES/PAR VALUE ($) |            |  | COST BASIS |   |            | VALUE | 
|------------------------------------------------ |  | ------------------------------------------------------------ |  | -------------------- | ---------- |  | ---------- | - | ---------- | ----- | 
|ALIPHCOM, INC. (0.9%)                            |  | Common Stock *(1)                                            |  |                      | 2,128,005  |  |            | $ | 10,108,024 |       | 
|Consumer Electronics                             |  |                                                              |  |                      |            |  |            |   |            |       | 
|CLOUDERA, INC. (0.2%)                            |  | Common Stock *(1)                                            |  |                      | 20,000     |  |            |   | 580,000    |       | 
|Software                                         |  |                                                              |  |                      |            |  |            |   |            |       | 
|                                                 |  |                                                              |  |                      |            |  |            |   |            |       | 
|EQX CAPITAL, INC. (2.7%)                         |  | Preferred Stock - Series A *(1)(2)                           |  |                      | 4,000,000  |  |            |   | 4,000,000  |       | 
|Equipment Leasing                                |  | Common Stock *(1)(2)                                         |  |                      | 100,000    |  |            |   | 20,000     |       | 
|                                                 |  |                                                              |  |                      |            |  |            |   |            |       | 
|                                                 |  |                                                              |  |                      |            |  |            |   |            |       | 
|HERA SYSTEMS, INC. (0.4%) Aerospace              |  | Term Note (1)(2) Matures May 2017 Interest Rate 3%           |  |                      | 41,208     |  |            |   | 41,208     |       | 
|                                                 |  | Preferred Stock - Series A (1)(2)                            |  |                      | 3,642,324  |  |            |   | 2,000,000  |       | 
|                                                 |  | Convertible Note (1)(2) Matures August 2017 Interest Rate 6% |  |                      | 30,000     |  |            |   | 30,000     |       | 
|                                                 |  |                                                              |  |                      |            |  |            |   |            |       | 
|                                                 |  |                                                              |  |                      |            |  |            |   |            |       | 
|HIGHTAIL, INC. (5.7%) Cloud Computing            |  | Preferred Stock - Series E *(1)(4)                           |  |                      | 2,268,602  |  |            |   | 9,620,188  |       | 
|INTEVAC, INC. (0.9%) Other Electronics           |  | Common Stock *                                               |  |                      | 163,883    |  |            |   | 1,828,934  |       | 
|                                                 |  |                                                              |  |                      |            |  |            |   |            |       | 
|INTRAOP MEDICAL CORP. (19.2%) Medical Devices    |  | Term Note (1)(2) Matures February 2017 Interest Rate 8%      |  |                      | 3,000,000  |  |            |   | 3,000,000  |       | 
|                                                 |  |                                                              |  |                      |            |  |            |   |            |       | 
|                                                 |  | Convertible Note (1)(2) Matures July 2017 Interest Rate 15%  |  |                      | 1,000,000  |  |            |   | 1,000,000  |       | 
|                                                 |  | Preferred Stock - Series C *(1)(2)                           |  |                      | 26,856,187 |  |            |   | 26,299,938 |       | 
|                                                 |  |                                                              |  |                      |            |  |            |   |            |       | 
|NUTANIX, INC. (7.4%) Networking                  |  | Common Stock *(1)                                            |  |                      | 459,772    |  |            |   | 7,376,112  |       | 
|PHUNWARE, INC. (4.9%) Mobile Computing           |  | Preferred Stock - Series E *(1)                              |  |                      | 3,257,328  |  |            |   | 9,999,997  |       | 



See
accompanying notes to financial statements



48





Firsthand
Technology Value Fund, Inc.

Consolidated
Schedule of Investments - continued

DECEMBER
31, 2016



|PORTFOLIO COMPANY (% OF NET ASSETS) AND INDUSTRY |  | TYPE OF INVESTMENT                                      |  | SHARES/PAR
                                                                                VALUE ($) |            |  | COST BASIS |   |            | VALUE | 
|------------------------------------------------ |  | ------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------- | ---------- |  | ---------- | - | ---------- | ----- | 
|PIVOTAL SYSTEMS CORP. (16.6%)                    |  | Preferred Stock - Series D *(1)(2)                      |  |                                                                                                      | 6,237,978  |  |            | $ | 3,975,801  |       | 
|Semiconductor Equipment                          |  | Preferred Stock - Series C *(1)(2)                      |  |                                                                                                      | 2,291,260  |  |            |   | 2,657,862  |       | 
|                                                 |  | Preferred Stock - Series B *(1)(2)                      |  |                                                                                                      | 13,065,236 |  |            |   | 6,321,482  |       | 
|                                                 |  | Preferred Stock - Series A *(1)(2)                      |  |                                                                                                      | 11,914,217 |  |            |   | 6,000,048  |       | 
|                                                 |  | Common Stock Warrants - Class B *(1)(2)                 |  |                                                                                                      | 18,180,475 |  |            |   | 0          |       | 
|                                                 |  | Preferred Stock Warrants - Series D *(1)(2)             |  |                                                                                                      | 4,158,654  |  |            |   | 0          |       | 
|                                                 |  |                                                         |  |                                                                                                      |            |  |            |   |            |       | 
|                                                 |  |                                                         |  |                                                                                                      |            |  |            |   |            |       | 
|PURE STORAGE, INC. (0.1%)                        |  | Common Stock *                                          |  |                                                                                                      | 14,000     |  |            |   | 336,000    |       | 
|Computer Storage                                 |  |                                                         |  |                                                                                                      |            |  |            |   |            |       | 
|                                                 |  |                                                         |  |                                                                                                      |            |  |            |   |            |       | 
|QMAT, INC. (8.8%)                                |  | Preferred Stock - Series A *(1)(2)                      |  |                                                                                                      | 16,000,240 |  |            |   | 16,000,240 |       | 
|Advanced Materials                               |  | Preferred Stock Warrants - Series A *(1)(2)             |  |                                                                                                      | 2,000,000  |  |            |   | 0          |       | 
|                                                 |  | Preferred Stock - Series B *(1)(2)                      |  |                                                                                                      | 2,000,000  |  |            |   | 2,000,000  |       | 
|                                                 |  |                                                         |  |                                                                                                      |            |  |            |   |            |       | 
|                                                 |  |                                                         |  |                                                                                                      |            |  |            |   |            |       | 
|QUICKLOGIC CORP. (0.3%)                          |  | Common Stock *                                          |  |                                                                                                      | 270,000    |  |            |   | 395,532    |       | 
|Semiconductors                                   |  |                                                         |  |                                                                                                      |            |  |            |   |            |       | 
|REVASUM, INC. (1.5%)                             |  | Common Stock *(1)(2)                                    |  |                                                                                                      | 10,000     |  |            |   | 1,000      |       | 
|Semiconductor Equipment                          |  | Preferred Stock - Series A *(1)(2)                      |  |                                                                                                      | 2,200,000  |  |            |   | 2,200,000  |       | 
|                                                 |  |                                                         |  |                                                                                                      |            |  |            |   |            |       | 
|                                                 |  |                                                         |  |                                                                                                      |            |  |            |   |            |       | 
|ROKU, INC. (1.1%)                                |  | Common Stock *(1)                                       |  |                                                                                                      | 1,500,000  |  |            |   | 2,312,500  |       | 
|Consumer Electronics                             |  |                                                         |  |                                                                                                      |            |  |            |   |            |       | 
|                                                 |  |                                                         |  |                                                                                                      |            |  |            |   |            |       | 
|RORUS, INC. (0.0%) Water Purification            |  | Convertible Note (1) Matures June 2021 Interest Rate 2% |  |                                                                                                      | 50,000     |  |            |   | 50,000     |       | 
|SILICON GENESIS CORP. (4.1%)                     |  | Preferred Stock - Series 1-E *(1)(2)                    |  |                                                                                                      | 5,704,480  |  |            |   | 2,946,535  |       | 
|Intellectual Property                            |  | Preferred Stock - Series 1-C *(1)(2)                    |  |                                                                                                      | 82,914     |  |            |   | 109,518    |       | 
|                                                 |  | Preferred Stock Series 1-G *(1)(2)(5)                   |  |                                                                                                      | 48,370,793 |  |            |   | 5,042,479  |       | 
|                                                 |  | Preferred Stock - Series 1-H *(1)(2)                    |  |                                                                                                      | 837,942    |  |            |   | 1,000,000  |       | 
|                                                 |  | Preferred Stock -Series 1-D *(1)(2)                     |  |                                                                                                      | 850,830    |  |            |   | 431,901    |       | 
|                                                 |  | Common Stock *(1)(2)                                    |  |                                                                                                      | 921,892    |  |            |   | 169,045    |       | 
|                                                 |  | Common Stock Warrants *(1)(2)                           |  |                                                                                                      | 37,982     |  |            |   | 6,678      |       | 
|                                                 |  | Preferred Stock -Series 1-F *(1)(2)                     |  |                                                                                                      | 912,453    |  |            |   | 583,060    |       | 
|                                                 |  | Common Stock Warrants *(1)(2)                           |  |                                                                                                      | 5,000,000  |  |            |   | 0          |       | 
|                                                 |  | Common Stock Warrants *(1)(2)                           |  |                                                                                                      | 3,000,000  |  |            |   | 0          |       | 
|                                                 |  |                                                         |  |                                                                                                      |            |  |            |   |            |       | 



See
accompanying notes to financial statements



49





Firsthand
Technology Value Fund, Inc.

Consolidated
Schedule of Investments - continued

DECEMBER
31, 2016



|PORTFOLIO COMPANY (% OF NET ASSETS)AND INDUSTRY       |  | TYPE OF INVESTMENT                                              |  | SHARES |            |  | COST BASIS |   |            | VALUE | 
|----------------------------------------------------- |  | --------------------------------------------------------------- |  | ------ | ---------- |  | ---------- | - | ---------- | ----- | 
|SUNRUN, INC. (2.4%)                                   |  | Common Stock *                                                  |  |        | 674,820    |  |            | $ | 6,417,495  |       | 
|Renewable Energy                                      |  |                                                                 |  |        |            |  |            |   |            |       | 
|                                                      |  |                                                                 |  |        |            |  |            |   |            |       | 
|TELEPATHY INVESTORS, INC. (2.7%) Consumer Electronics |  | Convertible Note (1)(2) Matures June 2018 Interest Rate 10%     |  |        | 500,000    |  |            |   | 500,000    |       | 
|                                                      |  | Preferred Stock - Series A *(1)(2)                              |  |        | 15,238,000 |  |            |   | 3,999,999  |       | 
|                                                      |  | Convertible Note (1)(2) Matures June 2017 Interest Rate 10%     |  |        | 2,000,000  |  |            |   | 2,000,000  |       | 
|                                                      |  | Convertible Note (1)(2) Matures January 2018 Interest Rate 10%  |  |        | 300,000    |  |            |   | 300,000    |       | 
|                                                      |  | Convertible Note (1)(2) Matures January 2018 Interest Rate 10%  |  |        | 500,000    |  |            |   | 500,000    |       | 
|                                                      |  | Convertible Note (1)(2) Matures January 2018 Interest Rate 10%  |  |        | 150,000    |  |            |   | 150,000    |       | 
|                                                      |  |                                                                 |  |        |            |  |            |   |            |       | 
|TURN INC. (6.9%)                                      |  | Preferred Stock - Series E *(1)(5)                              |  |        | 1,798,562  |  |            |   | 11,339,911 |       | 
|Advertising Technology                                |  | Convertible Note (1) Matures March 2023 Interest Rate 1.48%     |  |        | 559,360    |  |            |   | 559,360    |       | 
|                                                      |  |                                                                 |  |        |            |  |            |   |            |       | 
|                                                      |  |                                                                 |  |        |            |  |            |   |            |       | 
|UCT COATINGS, INC. (0.3%)                             |  | Common Stock Warrants *(1)                                      |  |        | 2,283      |  |            |   | 67         |       | 
|Advanced Materials                                    |  | Common Stock *(1)                                               |  |        | 1,500,000  |  |            |   | 662,235    |       | 
|                                                      |  |                                                                 |  |        |            |  |            |   |            |       | 
|VUFINE, INC. (1.8%)                                   |  | Common Stock *(1)(2)                                            |  |        | 750,000    |  |            |   | 15,000     |       | 
|Consumer Electronics                                  |  | Preferred Stock - Series A *(1)(2)                              |  |        | 22,500,000 |  |            |   | 2,250,000  |       | 
|                                                      |  | Convertible Note (1)(2) Matures September 2017 Interest Rate 6% |  |        | 1,000,000  |  |            |   | 1,000,000  |       | 
|                                                      |  |                                                                 |  |        |            |  |            |   |            |       | 
|                                                      |  |                                                                 |  |        |            |  |            |   |            |       | 
|WRIGHTSPEED, INC. (7.0%)                              |  | Preferred Stock - Series C *(1)(3)(4)                           |  |        | 2,267,659  |  |            |   | 6,864,023  |       | 
|Automotive                                            |  | Preferred Stock - Series D *(1)(3)                              |  |        | 1,100,978  |  |            |   | 3,375,887  |       | 
|                                                      |  | Preferred Stock - Series E *(1)(3)                              |  |        | 450,814    |  |            |   | 1,658,996  |       | 
|                                                      |  |                                                                 |  |        |            |  |            |   |            |       | 



See
accompanying notes to financial statements



50





Firsthand
Technology Value Fund, Inc.

Consolidated
Schedule of Investments - continued

DECEMBER
31, 2016



|PORTFOLIO COMPANY (% OF NET ASSETS)AND INDUSTRY |  | TYPE OF INVESTMENT                           |  | SHARES/PAR VALUE ($) |        |  | COST BASIS |   |           | VALUE | 
|----------------------------------------------- |  | -------------------------------------------- |  | -------------------- | ------ |  | ---------- | - | --------- | ----- | 
|EXCHANGE TRADED FUNDS (3.2%)                    |  | iShares Short Treasury Bond ETF              |  |                      | 21,500 |  |            | $ | 2,371,613 |       | 
|                                                |  | SPDR Bloomberg Barclays 1-3 Month T-Bill ETF |  |                      | 52,000 |  |            |   | 2,378,480 |       | 
|                                                |  |                                              |  |                      |        |  |            |   |           |       | 
|                                                |  |                                              |  |                      |        |  |            |   |           |       | 
|TOTAL INVESTMENTS (Cost $174,787,149) —99.1%    |  |                                              |  |                      |        |  |            |   |           |       | 
|OTHER ASSETS IN EXCESS OF LIABILITIES — 0.9%    |  |                                              |  |                      |        |  |            |   |           |       | 
|                                                |  |                                              |  |                      |        |  |            |   |           |       | 
|NET ASSETS — 100.0%                             |  |                                              |  |                      |        |  |            |   |           |       | 



| | * | Non-income
producing security.
| | - | ------------------------------



| | (1) | Restricted
                                         security. Fair Value is determined by or under the direction of the Company’s Board
                                         of Directors (see note 3). (2) Controlled investments.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Affiliated
                                         issuer.
| | --- | -----------------------------------------------------------



| | (4) | A
                                         portion represents position held in Firsthand Holdings, Ltd. (See Note 1).
| | --- | ---------------------------------------------------------------------------------------------------------------------



| | (5) | A
                                         portion represents position held in Firsthand Development, Ltd. (See Note 1).
| | --- | ------------------------------------------------------------------------------------------------------------------------



| | ETF | Exchange
                                         Traded Fund
| | --- | -------------------------------------------------------------



| | SPDR | Standard
                                         & Poor’s Depositary Receipt
| | ---- | -----------------------------------------------------------------------------



See
accompanying notes to financial statements



51







Firsthand Technology Value Fund, Inc.

Consolidated Statements of Operations



|                                                                                                       |  | FOR THE YEAR ENDED DECEMBER 31, 2017 |            |   | FOR THE YEAR ENDED DECEMBER 31, 2016 |   |             | FOR THE YEAR ENDED DECEMBER 31, 2015 | 
|------------------------------------------------------------------------------------------------------ |  | ------------------------------------ | ---------- | - | ------------------------------------ | - | ----------- | ------------------------------------ | 
|INVESTMENT INCOME                                                                                      |  |                                      |            |   |                                      |   |             |                                      | 
|Unaffiliated dividends                                                                                 |  | $                                    | 24,180     |   |                                      | $ | 28,213      |                                      | 
|Unaffiliated interest                                                                                  |  |                                      | 1,522      |   |                                      |   | 19,133      |                                      | 
|Affiliated/controlled interest                                                                         |  |                                      | 1,540,089  |   |                                      |   | 830,677     |                                      | 
|Royalty income                                                                                         |  |                                      | —          |   |                                      |   | —           |                                      | 
|TOTAL INVESTMENT INCOME                                                                                |  |                                      | 1,565,791  |   |                                      |   | 878,023     |                                      | 
|EXPENSES                                                                                               |  |                                      |            |   |                                      |   |             |                                      | 
|Investment advisory fees (Note 4)                                                                      |  |                                      | 2,975,982  |   |                                      |   | 3,281,617   |                                      | 
|Administration fees                                                                                    |  |                                      | 187,846    |   |                                      |   | 165,024     |                                      | 
|Custody fees                                                                                           |  |                                      | 22,152     |   |                                      |   | 11,334      |                                      | 
|Transfer agent fees                                                                                    |  |                                      | 33,017     |   |                                      |   | 27,283      |                                      | 
|Registration and filing fees                                                                           |  |                                      | 23,100     |   |                                      |   | 23,100      |                                      | 
|Professional fees                                                                                      |  |                                      | 535,293    |   |                                      |   | 779,689     |                                      | 
|Printing fees                                                                                          |  |                                      | 195,892    |   |                                      |   | 40,835      |                                      | 
|Trustees fees                                                                                          |  |                                      | 137,500    |   |                                      |   | 100,000     |                                      | 
|Compliance fees                                                                                        |  |                                      | 107,640    |   |                                      |   | 188,569     |                                      | 
|Miscellaneous fees                                                                                     |  |                                      | 174,670    |   |                                      |   | 96,075      |                                      | 
|TOTAL GROSS EXPENSES                                                                                   |  |                                      | 4,393,092  |   |                                      |   | 4,713,526   |                                      | 
|Incentive fee adjustments (Note 4)                                                                     |  |                                      | 1,691,040  |   |                                      |   | —           |                                      | 
|TOTAL NET EXPENSES                                                                                     |  |                                      | 6,084,132  |   |                                      |   | 4,713,526   |                                      | 
|NET INVESTMENT LOSS                                                                                    |  |                                      | (4,518,341 | ) |                                      |   | (3,835,503  | )                                    | 
|Net Realized and Unrealized Gains (Losses) on Investments:                                             |  |                                      |            |   |                                      |   |             |                                      | 
|Net realized gains (losses) from security transactions Affiliated/controlled                           |  |                                      | 5,058,105  |   |                                      |   | (3,035,229  | )                                    | 
|Non-affiliated and other assets                                                                        |  |                                      | (1,516,161 | ) |                                      |   | (3,132,110  | )                                    | 
|Net realized gains from written option transactions (1)                                                |  |                                      | —          |   |                                      |   | —           |                                      | 
|Net change in unrealized appreciation (depreciation) on investments                                    |  |                                      | 19,408,570 |   |                                      |   | 1,088,815   |                                      | 
|Net change in unrealized appreciation (depreciation) on affiliated/controlled investments              |  |                                      | 1,138,114  |   |                                      |   | (20,524,969 | )                                    | 
|Net change in unrealized appreciation (depreciation) on affiliated/controlled warrants investments (1) |  |                                      | 6,609,282  |   |                                      |   | 4,777,442   |                                      | 
|Net Realized and Unrealized Gain (Losses) on Investments                                               |  |                                      | 30,697,910 |   |                                      |   | (20,826,051 | )                                    | 
|Net Increase (Decrease) In Net Assets Resulting From Operations                                        |  | $                                    | 26,179,569 |   |                                      | $ | (24,661,554 | )                                    | 
|                                                                                                       |  |                                      |            |   |                                      |   |             |                                      | 
|Net Increase (Decrease) In Net Assets Per Share Resulting From                                         |  |                                      |            |   |                                      |   |             |                                      | 
|Operations (2)                                                                                         |  | $                                    | 3.59       |   |                                      | $ | (3.26       | )                                    | 



| | (1) | Primary exposure is equity risk.
| | --- | --------------------------------

| | (2) | Per share results are calculated based on weighted average shares outstanding for each period.
| | --- | ----------------------------------------------------------------------------------------------

See accompanying notes to financial statements



52





Firsthand Technology Value Fund, Inc.

Consolidated Statements of Cash Flows



|                                                                                                                                               |  | FOR THE YEAR ENDED DECEMBER 31, 2017 |             |   | FOR THE YEAR ENDED DECEMBER 31, 2016 |   |             | FOR THE YEAR ENDED DECEMBER 31, 2015 | 
|---------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------ | ----------- | - | ------------------------------------ | - | ----------- | ------------------------------------ | 
|CASH FLOWS FROM OPERATING ACTIVITIES                                                                                                           |  |                                      |             |   |                                      |   |             |                                      | 
|Net increase (decrease) in Net Assets resulting from operations                                                                                |  | $                                    | 26,179,569  |   |                                      | $ | (24,661,554 | )                                    | 
|Adjustments to reconcile net increase (decrease) in Net Assets derived from operations to net cash provided by (used in) operating activities: |  |                                      |             |   |                                      |   |             |                                      | 
|Purchases of investments                                                                                                                       |  |                                      | (30,958,618 | ) |                                      |   | (76,522,603 | )                                    | 
|Proceeds from disposition of investments                                                                                                       |  |                                      | 34,282,019  |   |                                      |   | 80,015,681  |                                      | 
|Net purchases/sales from short-term investments                                                                                                |  |                                      | 65,833      |   |                                      |   | (1,171,203  | )                                    | 
|Net proceeds from written options                                                                                                              |  |                                      | —           |   |                                      |   | —           |                                      | 
|Proceeds from litigation claim                                                                                                                 |  |                                      | —           |   |                                      |   | —           |                                      | 
|(Decrease) increase in dividends, interest, and reclaims receivable                                                                            |  |                                      | (973,179    | ) |                                      |   | 2,615,902   |                                      | 
|(Decrease) increase in restricted cash                                                                                                         |  |                                      | —           |   |                                      |   | 1,000,000   |                                      | 
|Increase (decrease) in payable for investment purchased                                                                                        |  |                                      | (395,532    | ) |                                      |   | 395,532     |                                      | 
|Increase (decrease) in payable to affiliates                                                                                                   |  |                                      | 82,552      |   |                                      |   | (98,839     | )                                    | 
|Increaes (decrease) in incentive fees payable                                                                                                  |  |                                      | 1,691,040   |   |                                      |   | —           |                                      | 
|(Decrease) increase in other assets                                                                                                            |  |                                      | 528         |   |                                      |   | 757,955     |                                      | 
|Increase (decrease) in accrued expenses and other payables                                                                                     |  |                                      | (2,101      | ) |                                      |   | 15,473      |                                      | 
|Net realized gain (loss) from investments                                                                                                      |  |                                      | (3,541,944  | ) |                                      |   | 6,167,339   |                                      | 
|Net realized gain from written options                                                                                                         |  |                                      | —           |   |                                      |   | —           |                                      | 
|Net unrealized appreciation (depreciation) from investments, other                                                                             |  |                                      |             |   |                                      |   |             |                                      | 
|assets, and warrants transactions                                                                                                              |  |                                      | (27,155,966 | ) |                                      |   | 14,658,712  |                                      | 
|Net cash provided by (used in) operating activities                                                                                            |  |                                      | (725,799    | ) |                                      |   | 3,172,395   |                                      | 
|                                                                                                                                               |  |                                      |             |   |                                      |   |             |                                      | 
|CASH FLOWS FROM FINANCING ACTIVITIES                                                                                                           |  |                                      |             |   |                                      |   |             |                                      | 
|Cost of shares repurchased                                                                                                                     |  |                                      | (1,098,371  | ) |                                      |   | (2,005,434  | )                                    | 
|Net cash (used in) financing activities                                                                                                        |  |                                      | (1,098,371  | ) |                                      |   | (2,005,434  | )                                    | 
|Net increase (decrease) in cash                                                                                                                |  |                                      | (1,824,170  | ) |                                      |   | 1,166,961   |                                      | 
|Cash - beginning of year                                                                                                                       |  |                                      | 1,934,247   |   |                                      |   | 767,286     |                                      | 
|Cash - end of year                                                                                                                             |  | $                                    | 110,077     |   |                                      | $ | 1,934,247   |                                      | 



See accompanying notes to financial statements



53





Firsthand Technology Value Fund, Inc.

Consolidated Statements of Changes in Net Assets



|                                                                                                   |  | FOR THE YEAR ENDED DECEMBER 31, 2017 |             |   | FOR THE YEAR ENDED DECEMBER 31, 2016 |   |             | FOR THE YEAR ENDED DECEMBER 31, 2015 | 
|-------------------------------------------------------------------------------------------------- |  | ------------------------------------ | ----------- | - | ------------------------------------ | - | ----------- | ------------------------------------ | 
|FROM
    OPERATIONS:                                                                               |  |                                      |             |   |                                      |   |             |                                      | 
|Net investment loss                                                                                |  | $                                    | (4,518,341  | ) |                                      | $ | (3,835,503  | )                                    | 
|Net realized gains (losses) from security transactions, written options, and warrants transactions |  |                                      | 3,541,944   |   |                                      |   | (6,167,339  | )                                    | 
|Net change in unrealized appreciation (depreciation) on investments and warrants transactions      |  |                                      | 27,155,966  |   |                                      |   | (14,658,712 | )                                    | 
|Net increase (decrease) in net assets from operations                                              |  |                                      | 26,179,569  |   |                                      |   | (24,661,554 | )                                    | 
|                                                                                                   |  |                                      |             |   |                                      |   |             |                                      | 
|FROM
    CAPITAL SHARE TRANSACTIONS:                                                               |  |                                      |             |   |                                      |   |             |                                      | 
|Value of shares repurchased                                                                        |  |                                      | (1,098,371  | ) |                                      |   | (2,005,434  | )                                    | 
|Net decrease in net assets from capital share transactions                                         |  |                                      | (1,098,371  | ) |                                      |   | (2,005,434  | )                                    | 
|TOTAL
    INCREASE (DECREASE) IN NET ASSETS                                                        |  |                                      | 25,081,198  |   |                                      |   | (26,666,988 | )                                    | 
|                                                                                                   |  |                                      |             |   |                                      |   |             |                                      | 
|NET
    ASSETS:                                                                                    |  |                                      |             |   |                                      |   |             |                                      | 
|Beginning of year                                                                                  |  |                                      | 148,912,391 |   |                                      |   | 175,579,379 |                                      | 
|End of year                                                                                        |  | $                                    | 173,993,589 |   |                                      | $ | 148,912,391 |                                      | 
|Accumulated Net Investment Loss                                                                    |  | $                                    | (1,691,040  | ) |                                      | $ | —           |                                      | 
|                                                                                                   |  |                                      |             |   |                                      |   |             |                                      | 
|COMMON
    STOCK ACTIVITY:                                                                         |  |                                      |             |   |                                      |   |             |                                      | 
|Shares repurchased                                                                                 |  |                                      | (128,551    | ) |                                      |   | (272,008    | )                                    | 
|Net decrease in shares outstanding                                                                 |  |                                      | (128,551    | ) |                                      |   | (272,008    | )                                    | 
|Shares outstanding, beginning of year                                                              |  |                                      | 7,430,697   |   |                                      |   | 7,702,705   |                                      | 
|Shares outstanding, end of year                                                                    |  |                                      | 7,302,146   |   |                                      |   | 7,430,697   |                                      | 



See accompanying notes to financial statements



54





Firsthand Technology Value Fund, Inc.

Financial Highlights

Selected per share data
and ratios for a share outstanding throughout each year



|                                                                        |  | FOR THE YEAR ENDED DECEMBER 31, 2017* |       |      | FOR THE YEAR ENDED DECEMBER 31, 2016* |   |        | FOR THE YEAR ENDED DECEMBER 31, 2015* |  |   | FOR THE YEAR ENDED DECEMBER 31, 2014 |       |  | FOR THE YEAR ENDED DECEMBER 31, 2013 |      
|----------------------------------------------------------------------- |  | ------------------------------------- | ----- | ---- | ------------------------------------- | - | ------ | ------------------------------------- |  | - | ------------------------------------ | ----- |  | ------------------------------------ | -----
|Net asset value at beginning of period                                  |  | $                                     | 20.04 |      |                                       | $ | 22.79  |                                       |  | $ | 24.49                                |       |  | $                                    | 28.32
|Income from investment operations:                                      |  |                                       |       |      |                                       |   |        |                                       |  |   |                                      |       |  |                                      |      
|Net investment loss                                                     |  |                                       | (0.62 | )    |                                       |   | (0.52  | )                                     |  |   | (0.06) (1)                           |       |  |                                      | (1.26
|Net realized and unrealized gains (losses) on investments               |  |                                       | 4.21  |      |                                       |   | (2.76  | )                                     |  |   | (1.78                                | )     |  |                                      | 3.04 
|Total from investment operations                                        |  |                                       | 3.59  |      |                                       |   | (3.28  | )                                     |  |   | (1.84                                | )     |  |                                      | 1.78 
|Distributions from:                                                     |  |                                       |       |      |                                       |   |        |                                       |  |   |                                      |       |  |                                      |      
|Realized capital gains                                                  |  |                                       | —     |      |                                       |   | —      |                                       |  |   | —                                    |       |  |                                      | (5.86
|Premiums from shares sold in offerings                                  |  |                                       | —     |      |                                       |   | —      |                                       |  |   | —                                    |       |  |                                      | —    
|Anti-dilutive effect from capital share transactions                    |  |                                       | 0.20  |      |                                       |   | 0.53   |                                       |  |   | 0.14                                 |       |  |                                      | 0.25 
|Net asset value at end of year                                          |  | $                                     | 23.83 |      |                                       | $ | 20.04  |                                       |  | $ | 22.79                                |       |  | $                                    | 24.49
|Market value at end of year                                             |  | $                                     | 8.96  |      |                                       | $ | 7.67   |                                       |  | $ | 8.17                                 |       |  | $                                    | 18.65
|                                                                        |  |                                       |       |      |                                       |   |        |                                       |  |   |                                      |       |  |                                      |      
|Total return                                                            |  |                                       |       |      |                                       |   |        |                                       |  |   |                                      |       |  |                                      |      
|Based on Net Asset Value                                                |  |                                       | 18.91 | %    |                                       |   | (12.07 | )%                                    |  |   | (6.94                                | )%    |  |                                      | 12.54
|Based on Market Value                                                   |  |                                       | 16.82 | %    |                                       |   | (6.12  | )%                                    |  |   | (56.19                               | )%    |  |                                      | 4.76 
|                                                                        |  |                                       |       |      |                                       |   |        |                                       |  |   |                                      |       |  |                                      |      
|Net assets at end of year (millions)                                    |  | $                                     | 174.0 |      |                                       | $ | 148.9  |                                       |  | $ | 175.6                                |       |  | $                                    | 209.7
|Ratio of total expenses to average net assets                           |  |                                       | 4.13  | %(3) |                                       |   | 2.90   | %                                     |  |   | 1.36                                 | % (3) |  |                                      | 5.29 
|Ratio of total expenses to average net assets, excluding incentive fees |  |                                       | 2.98  | %    |                                       |   | 2.90   | %                                     |  |   | 2.68                                 | %     |  |                                      | 3.12 
|Ratio of net investment loss to average net assets                      |  |                                       | (3.07 | )%   |                                       |   | (2.36  | )%                                    |  |   | (0.24                                | )%    |  |                                      | (4.31
|Portfolio turnover rate                                                 |  |                                       | 22    | %    |                                       |   | 49     | %                                     |  |   | 22                                   | %     |  |                                      | 95   



| | * | Consolidated.
| | - | -------------

| | (1) | Calculated using average shares outstanding.
| | --- | --------------------------------------------

| | (2) | Less than $0.005 per share.
| | --- | ---------------------------

| | (3) | Amount includes the incentive fee. For the year ended December 31, 2017, the year ended December
31, 2015, the year ended December 31, 2014 and the year December 31, 2013, the ratio of the incentive fee to average net assets
was 1.15%, (1.32)%, 2.17% and 3.85%, respectively.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

See accompanying notes to financial statements



55







Firsthand
Technology Value Fund, Inc.



Notes
to Financial Statements



DECEMBER
31, 2017



NOTE
1. THE COMPANY



Firsthand
Technology Value Fund, Inc. (the “Company,” “us,” “our,” and “we”), is a Maryland
corporation and an externally managed, non-diversified, closed-end management investment company that has elected to be treated
as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”).
The Company acquired its initial portfolio of securities through the reorganization of Firsthand Technology Value Fund, a series
of Firsthand Funds, into the Company. The reorganization was completed on April 15, 2011. The Company commenced operations on April
18th, 2011. Under normal circumstances, the Company will invest at least 80% of its assets for investment purposes in technology
companies, which are considered to be those companies that derive at least 50% of their revenues from products and/ or services
within the information technology sector or the “cleantech” sector. Information technology companies include, but
are not limited to, those focused on computer hardware, software, telecommunications, networking, Internet, and consumer electronics.
While there is no standard definition of cleantech, it is generally regarded as including goods and services designed to harness
renewable energy and materials, eliminate emissions and waste, and reduce the use of natural resources. In addition, under normal
circumstances we will invest at least 70% of our assets in privately held companies and in public companies with market capitalizations
less than $250 million. Our portfolio is primarily composed of equity and equity derivative securities of technology and cleantech
companies (as defined above). These investments generally range between $1 million and $10 million each, although the investment
size will vary proportionately with the size of the Company’s capital base. The Company’s shares are listed on the
NASDAQ Global Market under the symbol “SVVC.”



The
Company is an investment company and follows accounting and reporting guidance in the Financial Accounting Standards Board (“FASB”)
Accounting Standards Codification Topic 946.



CONSOLIDATION
OF SUBSIDIARIES.On May 8, 2015, the Board of Directors of the Company approved the formation of a fully owned and controlled
subsidiary (as defined by the 1940 Act) of the Company named Firsthand Venture Investors (“FVI”), a California general
partnership formed on March 30, 2015. After the closing of business on June 30, 2015, the Company contributed substantially all
of its assets to FVI in return for a controlling general partner ownership interest in FVI. The transaction was completed July
1, 2015. Under this new structure, we will have all or substantially all of our investment activities conducted through our fully
owned subsidiary, FVI.



On
June 10, 2016, the Board of Directors of the Company approved the formation of a fully owned and controlled subsidiary (as defined
by the 1940 Act) of FVI named Firsthand Holdings, Ltd. (“FHL”), a Cayman Islands corporation formed on May 4, 2016.
Under this structure, we may from time to time transfer investments in the Company held in the Company or FVI to FHL in return
for ownership interests in FHL. The net assets of FHL at December 31, 2017, were $5,987,340 or 3.4% of the Company’s consolidated
net assets. On September 27, 2016, the Board of Directors of the Company approved the formation of a fully owned and controlled
subsidiary (as defined by the 1940 Act) of FVI named Firsthand Development, Ltd (“FDL”), a Cayman Islands corporation
formed on September 22, 2016. Under this structure, we may from time to time transfer investments in the Company held in the Company
or FVI to FDL in return for ownership interests in FDL. The net assets of FDL at December 31, 2017, were $2,690,950 or 1.5% of
the Company’s consolidated net assets. On November 10, 2017, the Board of Directors of the Company approved the formation
of a fully owned and controlled subsidary (as defined by the 1940 Act) of FVI named Firsthand Investments, Ltd. (“FIL”),
a Cayman Islands corporation formed on November 15, 2017. The net assets of FIL at December 31, 2017, were $6,725,070 or 3.9% of
the Company’s consolidated net assets. The financial statements of the Company, FVI, FHL, FDL, and FIL are presented in the
report on a consolidated basis.



FHL,
FDL, and FIL are all treated as controlled foreign corporations under the Internal Revenue Code and are not expected to be subject
to U.S. federal income tax. FVI is treated as a U.S. shareholder of each of FHL, FDL, and FIL. As a result, FVI is required to
include in gross income for U.S. federal tax purposes all of FHL, FDL, and FIL’s income, whether or not such income is distributed
by FHL, FDL, or FIL. If a net loss is realized by FHL, FDL, or FIL, such loss is not generally available to offset the income earned
by FVI.



56







Firsthand
Technology Value Fund, Inc.



Notes
to Financial Statements - continued



DECEMBER
31, 2017



NOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



The
following is a summary of significant accounting policies followed in the preparation of the Company’s financial statements
included in this report:



USE
OF ESTIMATES.The preparation of financial statements in conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results
could differ from those estimates.



PORTFOLIO
INVESTMENT VALUATIONS. Investments are stated at “value” as defined in the 1940 Act and in the applicable regulations
of the Securities and Exchange Commission and in accordance with GAAP. Value, as defined in Section 2(a)(41) of the 1940 Act, is
(i) the market value of those securities for which a market quotation is readily available and (ii) the fair value as determined
in good faith by, or under the direction of, the board of directors for all other securities and assets. On December 31, 2017,
our financial statements include venture capital investments valued at approximately $143.2 million. The fair values of our venture
capital investments were determined in good faith by, or under the direction of, the Board. Upon sale of these investments, the
values that are ultimately realized may be different from what is presently estimated. The difference could be material. Also see
note 6 regarding the fair value of the company’s investments.



CASH
AND CASH EQUIVALENTS.The Company considers liquid assets deposited with a bank, investments in money market funds, and certain
short-term debt instruments with maturities of three months or less to be cash equivalents. These investments represent amounts
held with financial institutions that are readily accessible to pay our expenses or purchase investments. Cash and cash equivalents
are valued at cost plus accrued interest, which approximates market value.



RESTRICTED
SECURITIES.At December 31, 2017, we held $154,860,674 in restricted securities. At December 31, 2016, we held $137,264,865
in restricted securities.



INCOME
RECOGNITION. Dividend income is recorded on the ex-dividend date. Interest income is accrued as earned. Discounts and premiums
on securities purchased are amortized over the lives of the respective securities. Other non-cash dividends are recognized as
investment income at the fair value of the property received. When debt securities are determined to be non-income producing,
the Company ceases accruing interest and writes off any previously accrued interest. These write-offs are recorded as a debit to
interest income.



SHARE
VALUATION. The net asset value (“NAV”) per share of the Fund is calculated by dividing the sum of the value of
the securities held by the Fund, plus cash or other assets, minus all liabilities (including estimated accrued expenses) by the
total number of shares outstanding of the Fund, rounded to the nearest cent.



REALIZED
GAIN OR LOSS AND UNREALIZED APPRECIATION OR DEPRECIATION OF PORTFOLIO INVESTMENTS. A realized gain or loss is recognized
when an investment is disposed of and is computed as the difference between the Company’s cost basis in the investment at
the disposition date and the net proceeds received from such disposition. Realized gains and losses are calculated on a specific
identification basis. Unrealized appreciation or depreciation is computed as the difference between the fair value of the investment
and the cost basis of such investment.



INCOME
TAXES.As we intend to continue to qualify as a regulated investment company (“RIC”) under Subchapter M of the
Internal Revenue Code of 1986, as amended (the “Code”), the Company does not provide for income taxes. The Company
recognizes interest and penalties in income tax expense.



57







Firsthand
Technology Value Fund, Inc.



Notes
to Financial Statements - continued



DECEMBER
31, 2017



FOREIGN
CURRENCY TRANSLATION. The accounting records of the Company are maintained in U.S. dollars. All assets and liabilities denominated
in foreign currencies are translated into U.S. dollars based on the rate of exchange of such currencies against U.S. dollars on
the date of valuation.



SECURITIES
TRANSACTIONS. Securities transactions are accounted for on the date the transaction for the purchase or sale of the securities
is entered into by the Company (i.e., trade date).



CONCENTRATION
OF CREDIT RISK. The Company places its cash and cash equivalents with financial institutions and, at times, cash held in checking
accounts may exceed the Federal Deposit Insurance Corporation insured limit.



OPTIONS.The Company is subject to equity price risk in the normal course of pursuing its investment objectives and may enter into options
written to hedge against changes in the value of equities. The Company may purchase put and call options to attempt to provide
protection against adverse price effects from anticipated changes in prevailing prices of securities or stock indices. The Company
may also write put and call options. When the Company writes an option, an amount equal to the premium received by the Company
is recorded as a liability and is subsequently adjusted to the current fair value of the option written.



Premiums
received from writing options that expire unexercised are treated by the Company on the expiration date as realized gains from
investments. The difference between the premium and the amount paid on effecting a closing purchase transaction, including brokerage
commissions, is also treated as a realized gain, or, if the premium is less than the amount paid for the closing purchase transaction,
as a realized loss. If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security
or currency in determining whether the Company has realized a gain or loss. The Company as writer of an option bears the market
risk of an unfavorable change in the price of the security underlying the written option.



The
Company had no option transactions for the years ended December 31, 2017, and December 31, 2016.



The
average volume of the Company’s derivatives during the year ended December 31, 2017 is as follows:



|                                      |  |  | PURCHASED OPTIONS (CONTRACTS) |   |  | WARRANTS (NOTIONAL VALUE) |  |           | WRITTEN OPTIONS (CONTRACTS) | 
|------------------------------------- |  |  | ----------------------------- | - |  | ------------------------- |  | --------- | --------------------------- | 
|Firsthand Technology Value Fund, Inc. |  |  |                               | — |  |                           |  | 7,060,230 |                             | 



The
average volume of the Company’s derivatives during the year ended December 31, 2016 is as follows:



|                                      |  |  | PURCHASED OPTIONS (CONTRACTS) |   |  | WARRANTS (NOTIONAL VALUE) |  |           | WRITTEN OPTIONS (CONTRACTS) | 
|------------------------------------- |  |  | ----------------------------- | - |  | ------------------------- |  | --------- | --------------------------- | 
|Firsthand Technology Value Fund, Inc. |  |  |                               | — |  |                           |  | 4,862,753 |                             | 



NOTE
3. BUSINESS RISKS AND UNCERTAINTIES



We
plan to invest a substantial portion of our assets in privately-held companies, the securities of which are inherently
illiquid. We also seek to invest in small publicly-traded companies that we believe have exceptional growth potential and to
make opportunistic investments in publicly-traded companies, both large and small. In the case of investments in small
publicly-traded companies, although these companies are publicly traded, their stock may not trade at high volumes, and
prices can be volatile, which may restrict
our ability to sell our positions. These privately held and publicly traded businesses tend to lack management depth, have limited
or no history of operations and typically have not attained profitability. Because of the speculative nature of our investments
and the lack of public markets for privately held investments, there is greater risk of loss than is the case with traditional
investment securities.



58







Firsthand
Technology Value Fund, Inc.



Notes
to Financial Statements - continued



DECEMBER
31, 2017



We
do not choose investments based on a strategy of diversification. We also do not rebalance the portfolio should one of our portfolio
companies increase in value substantially relative to the rest of the portfolio. Therefore, the value of our portfolio may be
more vulnerable to events affecting a single sector, industry or portfolio company and, therefore, may be subject to greater volatility
than a company that follows a diversification strategy.



Because
there is typically no public or readily-ascertainable market for our interests in the small privately-held companies in which
we invest, the valuation of those securities is determined in good faith by the Valuation Committee, comprised of all members
of the Board who are not “interested persons” of the Company, as such term is defined in Section 2(a)(19) of the 1940
Act, in accordance with our Valuation Procedures and is subject to significant estimates and judgments. The determined value of
the securities in our portfolio may differ significantly from the values that would be placed on these securities if a ready market
for the securities existed. Any changes in valuation are recorded in our Statement of Operations as “Net increase (decrease)
in unrealized appreciation on investments.” Changes in valuation of any of our investments in privately-held companies from
one period to another may be volatile.



The
Board may, from time to time, engage an independent valuation firm to provide it with valuation assistance with respect to certain
of our portfolio investments. The Company intends to continue to engage an independent valuation firm to provide us with assistance
regarding our determination of the fair value of select portfolio investments each quarter unless directed by the Board to cancel
such valuation services. The scope of the services rendered by an independent valuation firm is at the discretion of the Board.
The Board is ultimately and solely responsible for determining the fair value of the Company’s investments in good faith.



With
respect to investments for which market quotations are not readily available or when such market quotations are deemed not to
represent fair value, the Board has approved a multi-step valuation process to be followed each quarter, as described below:



| | (1) | each
quarter the valuation process begins with each portfolio company or investment being initially valued by the Adviser Valuation
Committee or the independent valuation firm;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | the
Valuation Committee of the Board on a quarterly basis reviews the preliminary valuation of the Adviser Valuation Committee and
that of the independent valuation firms and makes the fair value determination, in good faith, based on the valuation recommendations
of the Adviser Valuation Committee and the independent valuation firms; and
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | at
each quarterly Board meeting, the Board considers the valuations recommended by the Adviser Valuation Committee and the independent
valuation firms that were previously submitted to the Valuation Committee of the Board and ratifies the fair value determinations
made by the Valuation Committee of the Board.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



NOTE
4. INVESTMENT MANAGEMENT FEE



The
Company has entered into an investment management agreement (the “Investment Management Agreement”) with Firsthand
Capital Management, Inc., which was previously known as SiVest Group, Inc. (“FCM” or the “Adviser”), pursuant
to which the Company will pay FCM a fee for providing investment management services consisting of two components—a base
management fee and an incentive fee.





59







Firsthand
Technology Value Fund, Inc.



Notes
to Financial Statements - continued



DECEMBER
31, 2017



The
base management fee will be calculated at an annual rate of 2.00% of our gross assets. For services rendered under the Investment
Management Agreement, the base management fee will be payable quarterly in arrears. The base management fee will be calculated
based on the average of (1) the value of our gross assets at the end of the current calendar quarter and (2) the value of the
Company’s gross assets at the end of the preceding calendar quarter; and will be appropriately adjusted for any share issuances
or repurchases during the current calendar quarter. Base management fees for any partial month or quarter will be pro-rated.



The
incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment
Management Agreement, as of the termination date), commencing on April 15, 2011, and equals 20% of the Company’s realized
capital gains, if any, on a cumulative basis from inception through the end of each calendar year, computed net of all realized
capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid incentive
fees, provided that the incentive fee determined as of December 31, 2016, will be calculated for a period of shorter than twelve
calendar months to take into account any realized gains computed net of all realized capital losses and unrealized capital depreciation
from inception. As of December 31, 2017, there was an incentive fee expensed for $1,691,040. As of December 31, 2016, there was
an incetive fee expensed for $0. As of December 31, 2015, there was an incentive fee expensed for $(2,478,204).



NOTE
5. DEBT



The
Company currently has no plan to use leverage and does not have any significant outstanding debt obligations (other than normal
operating expense accruals).



NOTE
6. FAIR VALUE



Securities
traded on stock exchanges, or quoted by NASDAQ, are valued according to the NASDAQ Stock Market, Inc. (“NASDAQ”) official
closing price, if applicable, or at their last reported sale price as of the close of trading on the New York Stock Exchange (“NYSE”)
(normally 4:00 P.M. Eastern Time). If a security is not traded that day, the security will be valued at its most recent bid price.



Securities
traded in the over-the-counter market, but not quoted by NASDAQ, are valued at the last sale price (or, if the last sale price
is not readily available, at the most recent closing bid price as quoted by brokers that make markets in the securities) at the
close of trading on the NYSE.



Securities
traded both in the over-the-counter market and on a stock exchange are valued according to the broadest and most representative
market.



Securities
and other assets that do not have market quotations readily available are valued at their fair value as determined in good faith
by the Board of Directors of the Company (the “Board”) in accordance with the Valuation Procedures adopted by the
Valuation Committee, a committee of the Board.



In
pricing illiquid, privately placed securities, the Board of Directors is responsible for (1) determining overall valuation guidelines
and (2) ensuring that the investments of the Company are valued within the prescribed guidelines.



The
Valuation Committee, comprised of all of the independent Board members, is responsible for determining the valuation of the Company’s
assets within the guidelines established by the Board of Directors. The Valuation Committee receives information and recommendations
from the Adviser and an independent valuation firm.



60







Firsthand
Technology Value Fund, Inc.



Notes
to Financial Statements - continued



DECEMBER
31, 2017



The
values assigned to these investments are based on available information and do not necessarily represent amounts that might ultimately
be realized when that investment is sold, as such amounts depend on future circumstances and cannot reasonably be determined until
the individual investments are actually liquidated or become readily marketable.



APPROACHES
TO DETERMINING FAIR VALUE.GAAP 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 (exit price). In effect, GAAP applies
fair value terminology to all valuations whereas the 1940 Act applies market value terminology to readily marketable assets and
fair value terminology to other assets.



The
main approaches to measuring fair value utilized are the market approach, the income approach, and the asset-based approach. The
choice of which approach to use in a particular situation depends on the specific facts and circumstances associated with the company,
as well as the purpose for which the valuation analysis is being conducted. Firsthand and the independent valuation firm rely primarily
on the market approach. We also considered the income and asset-based approaches in our analysis because certain of the portfolio
companies do not have substantial operating earnings relative to the value of their underlying assets.



| | - | Market
Approach (M): The market approach uses prices and other relevant information generated by market transactions involving identical
or comparable assets or liabilities. For example, the market approach often uses market multiples derived from a set of comparables.
Multiples might lie in ranges with a different multiple for each comparable. The selection of where within the range each appropriate
multiple falls requires the use of judgment in considering factors specific to the measurement (qualitative and quantitative).
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | Income
Approach (I): The income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) to a
single present value amount (discounted). The measurement is based on the value indicated by current market expectations about
those future amounts. Those valuation techniques include present value techniques; option-pricing models, such as the Black-Scholes-Merton
formula (a closed-form model) and a binomial model (a lattice model), which incorporate present value techniques; and the multi-period
excess earnings method, which is used to measure the fair value of certain assets.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | Asset-Based
Approach (A): The asset-based approach examines the value of a company’s assets net of its liabilities to derive a value
for the equity holders.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------



FAIR
VALUE MEASUREMENT. In accordance with the guidance from the Financial Accounting Standards Board on fair value measurements
and disclosures under GAAP, the Company discloses the fair value of its investments in a hierarchy that prioritizes the inputs
to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based upon unadjusted
quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to valuations
based upon unobservable inputs that are significant to the valuation (Level 3 measurements).



The
guidance establishes three levels of the fair value hierarchy as follows:



| | Level 1- | Unadjusted
quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the date of
measurement.
| | -------- | -----------------------------------------------------------------------------------------------------------------------------------------------------





61









Firsthand Technology Value Fund,
Inc.

Notes to Financial Statements - continued

DECEMBER 31, 2017



| | Level 2 - | Observable
                                         inputs other than quoted prices included in Level 1 that are observable for the asset
                                         or liability, either directly or indirectly. These inputs may include quoted prices for
                                         the identical instrument in an inactive market, prices for similar instruments in an
                                         active or inactive market, interest rates, prepayment speeds, credit risks, yield curves,
                                         default rates, and similar data.
| | --------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Level 3 - | Unobservable
                                         inputs for the asset or liability, to the extent relevant observable inputs are not available,
                                         representing the Company’s own assumptions about the assumptions a market participant
                                         would use in valuing the asset or liability based on the best information available.
| | --------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The availability of observable inputs
can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security,
whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular
to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market,
the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value
is greatest for instruments categorized in Level 3.



The inputs used
to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the
level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest
level input that is significant to the fair value measurement in its entirety.



The inputs or methodology used for
valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following
is a summary of the inputs used to value the Company’s net assets as of December 31, 2017:



|ASSETS                  |  | LEVEL
    1 QUOTED PRICES |            |  | LEVEL
    2 OTHER SIGNIFICANT OBSERVABLE INPUTS |   |   | LEVEL
    3 SIGNIFICANT UNOBSERVABLE INPUTS | 
|----------------------- |  | ------------------------- | ---------- |  | ----------------------------------------------- | - | - | ------------------------------------------- | 
|Common Stocks           |  |                           |            |  |                                                 |   |   |                                             | 
|Advanced Materials      |  | $                         | —          |  |                                                 | $ | — |                                             | 
|Consumer Electronics    |  |                           | —          |  |                                                 |   | — |                                             | 
|Equipment Leasing       |  |                           | —          |  |                                                 |   | — |                                             | 
|Intellectual Property   |  |                           | —          |  |                                                 |   | — |                                             | 
|Networking              |  |                           | 16,185,476 |  |                                                 |   | — |                                             | 
|Semiconductors          |  |                           | 2,088,000  |  |                                                 |   | — |                                             | 
|Semiconductor Equipment |  |                           | —          |  |                                                 |   | — |                                             | 
|Total Common Stocks     |  |                           | 18,273,476 |  |                                                 |   | — |                                             | 
|Preferred Stocks        |  |                           |            |  |                                                 |   |   |                                             | 
|Advanced Materials      |  |                           | —          |  |                                                 |   | — |                                             | 
|Aerospace               |  |                           | —          |  |                                                 |   | — |                                             | 
|Automotive              |  |                           | —          |  |                                                 |   | — |                                             | 
|Cloud Computing         |  |                           | —          |  |                                                 |   | — |                                             | 
|Consumer Electronics    |  |                           | —          |  |                                                 |   | — |                                             | 
|Equipment Leasing       |  |                           | —          |  |                                                 |   | — |                                             | 
|Intellectual Property   |  |                           | —          |  |                                                 |   | — |                                             | 
|Medical Devices         |  |                           | —          |  |                                                 |   | — |                                             | 
|Mobile Computing        |  |                           | —          |  |                                                 |   | — |                                             | 
|Semiconductor Equipment |  |                           | —          |  |                                                 |   | — |                                             | 
|Total Preferred Stocks  |  |                           | —          |  |                                                 |   | — |                                             | 



62





Firsthand Technology Value
Fund, Inc.

Notes to Financial Statements - continued

DECEMBER 31, 2017



|ASSETS                  |  | LEVEL
    1 QUOTED PRICES |            |  | LEVEL
                                         2 OTHER SIGNIFICANT
                                              OBSERVABLE
                                         INPUTS |   |   | LEVEL
                                         3 SIGNIFICANT
                                              UNOBSERVABLE
                                         INPUTS | 
|----------------------- |  | ------------------------- | ---------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|Asset Derivatives *     |  |                           |            |  |                                                                                                                                                                             |   |   |                                                                                                                                                                         | 
|Equity Contracts        |  | $                         | —          |  |                                                                                                                                                                             | $ | — |                                                                                                                                                                         | 
|Total Asset Derivatives |  |                           | —          |  |                                                                                                                                                                             |   | — |                                                                                                                                                                         | 
|Convertible Notes       |  |                           |            |  |                                                                                                                                                                             |   |   |                                                                                                                                                                         | 
|Advanced Materials      |  |                           | —          |  |                                                                                                                                                                             |   | — |                                                                                                                                                                         | 
|Consumer Electronics    |  |                           | —          |  |                                                                                                                                                                             |   | — |                                                                                                                                                                         | 
|Medical Devices         |  |                           | —          |  |                                                                                                                                                                             |   | — |                                                                                                                                                                         | 
|Semiconductor Equipment |  |                           | —          |  |                                                                                                                                                                             |   | — |                                                                                                                                                                         | 
|Total Convertible Notes |  |                           | —          |  |                                                                                                                                                                             |   | — |                                                                                                                                                                         | 
|Mutual Funds            |  |                           | 1,705,375  |  |                                                                                                                                                                             |   | — |                                                                                                                                                                         | 
|Total                   |  | $                         | 19,978,851 |  |                                                                                                                                                                             | $ | — |                                                                                                                                                                         | 



| | * | Asset
                                         derivatives include warrants.
| | - | ----------------------------------------------------------------------------



At the end of
each calendar quarter, management evaluates the Level 2 and Level 3 assets and liabilities for changes in liquidity, including
but not limited to: whether a broker is willing to execute at the quoted price, the depth and consistency of prices from third
party services, and the existence of contemporaneous, observable trades in the market. Additionally, management evaluates the
Level 1 and Level 2 assets and liabilities on a quarterly basis for changes in listings or delistings on national exchanges. Transfers
in and out of the levels are recognized at the value at the end of the period. There were no transfers between Levels 1 and 2
as of December 31, 2017.



The following is a summary of the inputs
used to value the Company’s net assets as of December 31, 2016:



|ASSETS                  |  | LEVEL
    1 QUOTED PRICES |           |  | LEVEL
    2 OTHER SIGNIFICANT OBSERVABLE INPUTS |   |   | LEVEL
    3 SIGNIFICANT UNOBSERVABLE INPUTS | 
|----------------------- |  | ------------------------- | --------- |  | ----------------------------------------------- | - | - | ------------------------------------------- | 
|Common Stocks           |  |                           |           |  |                                                 |   |   |                                             | 
|Advanced Materials      |  | $                         | —         |  |                                                 | $ | — |                                             | 
|Computer Storage        |  |                           | 158,340   |  |                                                 |   | — |                                             | 
|Consumer Electronics    |  |                           | —         |  |                                                 |   | — |                                             | 
|Equipment Leasing       |  |                           | —         |  |                                                 |   | — |                                             | 
|Intellectual Property   |  |                           | —         |  |                                                 |   | — |                                             | 
|Networking              |  |                           | —         |  |                                                 |   | — |                                             | 
|Other Electronics       |  |                           | 1,401,200 |  |                                                 |   | — |                                             | 
|Renewable Energy        |  |                           | 3,583,294 |  |                                                 |   | — |                                             | 
|Semiconductor Equipment |  |                           | —         |  |                                                 |   | — |                                             | 
|Semiconductors          |  |                           | 375,300   |  |                                                 |   | — |                                             | 
|Software                |  |                           | —         |  |                                                 |   | — |                                             | 
|Total Common Stocks     |  |                           | 5,518,134 |  |                                                 |   | — |                                             | 



63





Firsthand Technology Value Fund,
Inc.

Notes to Financial Statements - continued

DECEMBER 31, 2017



|ASSETS                      |  | LEVEL
    1 QUOTED PRICES |            | LEVEL
                                         2 OTHER SIGNIFICANT
                                               OBSERVABLE
                                         INPUTS |   | LEVEL
                                         3 SIGNIFICANT
                                               UNOBSERVABLE
                                         INPUTS | 
|--------------------------- |  | ------------------------- | ---------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 
|Preferred
    Stocks        |  |                           |            |                                                                                                                                                                              |   |                                                                                                                                                                          | 
|Advanced Materials          |  | $                         | —          |                                                                                                                                                                              | $ | —                                                                                                                                                                        | 
|Advertising Technology      |  |                           | —          |                                                                                                                                                                              |   | —                                                                                                                                                                        | 
|Aerospace                   |  |                           | —          |                                                                                                                                                                              |   | —                                                                                                                                                                        | 
|Automotive                  |  |                           | —          |                                                                                                                                                                              |   | —                                                                                                                                                                        | 
|Cloud Computing             |  |                           | —          |                                                                                                                                                                              |   | —                                                                                                                                                                        | 
|Consumer Electronics        |  |                           | —          |                                                                                                                                                                              |   | —                                                                                                                                                                        | 
|Equipment Leasing           |  |                           | —          |                                                                                                                                                                              |   | —                                                                                                                                                                        | 
|Intellectual Property       |  |                           | —          |                                                                                                                                                                              |   | —                                                                                                                                                                        | 
|Medical Devices             |  |                           | —          |                                                                                                                                                                              |   | —                                                                                                                                                                        | 
|Mobile Computing            |  |                           | —          |                                                                                                                                                                              |   | —                                                                                                                                                                        | 
|Semiconductor Equipment     |  |                           | —          |                                                                                                                                                                              |   | —                                                                                                                                                                        | 
|Total Preferred Stocks      |  |                           | —          |                                                                                                                                                                              |   | —                                                                                                                                                                        | 
|Asset Derivatives
    *     |  |                           |            |                                                                                                                                                                              |   |                                                                                                                                                                          | 
|Equity Contracts            |  |                           | —          |                                                                                                                                                                              |   | —                                                                                                                                                                        | 
|Total Asset Derivatives     |  |                           | —          |                                                                                                                                                                              |   | —                                                                                                                                                                        | 
|Convertible Notes           |  |                           |            |                                                                                                                                                                              |   |                                                                                                                                                                          | 
|Advertising Technology      |  |                           | —          |                                                                                                                                                                              |   | —                                                                                                                                                                        | 
|Aerospace                   |  |                           | —          |                                                                                                                                                                              |   | —                                                                                                                                                                        | 
|Consumer Electronics        |  |                           | —          |                                                                                                                                                                              |   | —                                                                                                                                                                        | 
|Medical Devices             |  |                           | —          |                                                                                                                                                                              |   | —                                                                                                                                                                        | 
|Water Purification          |  |                           | —          |                                                                                                                                                                              |   | —                                                                                                                                                                        | 
|Total Convertible
    Notes |  |                           | —          |                                                                                                                                                                              |   | —                                                                                                                                                                        | 
|Exchange-Traded Funds       |  |                           | 4,747,850  |                                                                                                                                                                              |   | —                                                                                                                                                                        | 
|Total                       |  | $                         | 10,265,984 |                                                                                                                                                                              | $ | —                                                                                                                                                                        | 



| | * | Asset
                                         derivatives include warrants.
| | - | ----------------------------------------------------------------------------



At the end of
each calendar quarter, management evaluates the Level 2 and Level 3 assets and liabilities for changes in liquidity, including
but not limited to: whether a broker is willing to execute at the quoted price, the depth and consistency of prices from third
party services, and the existence of contemporaneous, observable trades in the market. Additionally, management evaluates the
Level 1 and Level 2 assets and liabilities on a quarterly basis for changes in listings or delistings on national exchanges. Transfers
in and out of the levels are recognized at the value at the end of the period. There were [no transfers] between Levels 1 and
2 as of December 31, 2016.



Following is a reconciliation of Level
3 assets (at either the beginning or the ending of the period) for which significant unobservable inputs were used to determine
fair value.



64







Firsthand
Technology Value Fund, Inc.



Notes
to Financial Statements - continued



DECEMBER
31, 2017



|INVESTMENTS
                                         AT FAIR VALUE USING SIGNIFICANT UNOBSERVABLE INPUTS  (LEVEL
                                         3) |  | BALANCE
    AS OF 12/31/16 |            |  | NET
    PURCHASES/ CONVERSION |   |            | NET
    SALES/ CONVERSION |  |   | NET
    REALIZED GAINS /(LOSSES) |   |  | NET
    UNREALIZED APPRECIATION (DEPRECIATION) (1) |           |   | TRANSFERS
    IN (OUT)OF LEVEL 3 |   |             | BALANCE
    AS OF 12/31/17 | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------------------- | ---------- |  | ----------------------------- | - | ---------- | ------------------------- |  | - | -------------------------------- | - |  | -------------------------------------------------- | --------- | - | -------------------------------- | - | ----------- | -------------------------- | 
|Common
    Stocks                                                                                                                                            |  |                            |            |  |                               |   |            |                           |  |   |                                  |   |  |                                                    |           |   |                                  |   |             |                            | 
|Advanced
    Materials                                                                                                                                       |  | $                          | 394,200    |  |                               | $ | —          |                           |  | $ | —                                |   |  | $                                                  | —         |   |                                  | $ | 527,850     |                            | 
|Consumer
    Electronics                                                                                                                                     |  |                            | 3,037,441  |  |                               |   | —          |                           |  |   | —                                |   |  |                                                    | —         |   |                                  |   | 8,613,059   |                            | 
|Equipment
    Leasing                                                                                                                                        |  |                            | 44,430     |  |                               |   | —          |                           |  |   | —                                |   |  |                                                    | —         |   |                                  |   | 380         |                            | 
|Intellectual
    Property                                                                                                                                    |  |                            | 14,750     |  |                               |   | —          |                           |  |   | —                                |   |  |                                                    | —         |   |                                  |   | 2,121       |                            | 
|Networking                                                                                                                                                   |  |                            | 10,990,390 |  |                               |   | —          |                           |  |   | —                                |   |  |                                                    | —         |   |                                  |   | (696,095    | )                          | 
|Semiconductor
    Equipment                                                                                                                                  |  |                            | 7,524      |  |                               |   | —          |                           |  |   | —                                |   |  |                                                    | —         |   |                                  |   | 22,384      |                            | 
|Software                                                                                                                                                     |  |                            | 245,466    |  |                               |   | —          |                           |  |   | (315,561                         | ) |  |                                                    | (264,439  | ) |                                  |   | 334,534     |                            | 
|Preferred
    Stocks                                                                                                                                         |  |                            |            |  |                               |   |            |                           |  |   |                                  |   |  |                                                    |           |   |                                  |   |             |                            | 
|Advanced
    Materials                                                                                                                                       |  |                            | 12,724,961 |  |                               |   | —          |                           |  |   | —                                |   |  |                                                    | —         |   |                                  |   | 6,801,980   |                            | 
|Advertising
    Technology                                                                                                                                   |  |                            | 9,757,918  |  |                               |   | —          |                           |  |   | (12,355,330                      | ) |  |                                                    | 1,015,419 |   |                                  |   | 1,581,993   |                            | 
|Aerospace                                                                                                                                                    |  |                            | 445,456    |  |                               |   | 1,587,102  |                           |  |   | —                                |   |  |                                                    | —         |   |                                  |   | (1,424,444  | )                          | 
|Automotive                                                                                                                                                   |  |                            | 10,410,045 |  |                               |   | 1,029,175  |                           |  |   | (529,180                         | ) |  |                                                    | —         |   |                                  |   | (223,108    | )                          | 
|Cloud
    Computing                                                                                                                                          |  |                            | 8,550,361  |  |                               |   | —          |                           |  |   | —                                |   |  |                                                    | —         |   |                                  |   | 11,343      |                            | 
|Consumer
    Electronics                                                                                                                                     |  |                            | 3,752,749  |  |                               |   | —          |                           |  |   | —                                |   |  |                                                    | —         |   |                                  |   | (2,815,612  | )                          | 
|Equipment
    Leasing                                                                                                                                        |  |                            | 3,975,600  |  |                               |   | —          |                           |  |   | —                                |   |  |                                                    | —         |   |                                  |   | (400        | )                          | 
|Intellectual
    Property                                                                                                                                    |  |                            | 6,137,917  |  |                               |   | —          |                           |  |   | (1,112,885                       | ) |  |                                                    | —         |   |                                  |   | 1,034,709   |                            | 
|Medical
    Devices                                                                                                                                          |  |                            | 24,511,642 |  |                               |   | —          |                           |  |   | —                                |   |  |                                                    | —         |   |                                  |   | (13,031,965 | )                          | 
|Mobile
    Computing                                                                                                                                         |  |                            | 7,365,796  |  |                               |   | —          |                           |  |   | —                                |   |  |                                                    | —         |   |                                  |   | 4,652,767   |                            | 
|Semiconductor
    Equipment                                                                                                                                  |  |                            | 21,883,997 |  |                               |   | 12,284,175 |                           |  |   | (6,734,146                       | ) |  |                                                    | 5,084,145 |   |                                  |   | 7,548,873   |                            | 







65





Firsthand
Technology Value Fund, Inc.



Notes
to Financial Statements - continued



DECEMBER
31, 2017



|INVESTMENTS
    AT FAIR VALUE USING SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3) |  | BALANCE
    AS OF 12/31/16 |             |  | NET
    PURCHASES/ CONVERSION |   |            | NET
    SALES/ CONVERSION |  |   | NET
    REALIZED GAINS /(LOSSES) |   |  | NET
    UNREALIZED APPRECIATION (DEPRECIATION) (1) |           |  | TRANSFERS
    IN (OUT) OF LEVEL 3 |   |            | BALANCE
    AS OF 12/31/17 | 
|----------------------------------------------------------------------------- |  | -------------------------- | ----------- |  | ----------------------------- | - | ---------- | ------------------------- |  | - | -------------------------------- | - |  | -------------------------------------------------- | --------- |  | --------------------------------- | - | ---------- | -------------------------- | 
|Asset
    Derivatives                                                         |  |                            |             |  |                               |   |            |                           |  |   |                                  |   |  |                                                    |           |  |                                   |   |            |                            | 
|Equity
    Contracts                                                          |  | $                          | 5,420,042   |  |                               | $ | —          |                           |  | $ | —                                |   |  | $                                                  | —         |  |                                   | $ | 6,609,282  |                            | 
|Convertible
    Notes                                                         |  |                            |             |  |                               |   |            |                           |  |   |                                  |   |  |                                                    |           |  |                                   |   |            |                            | 
|Advanced
    Materials                                                        |  |                            | —           |  |                               |   | 4,595,485  |                           |  |   | (1,850,000                       | ) |  |                                                    | —         |  |                                   |   | —          |                            | 
|Advertising
    Technology                                                    |  |                            | 559,360     |  |                               |   | —          |                           |  |   | (1,118,720                       | ) |  |                                                    | 559,360   |  |                                   |   | —          |                            | 
|Aerospace                                                                     |  |                            | 71,208      |  |                               |   | 405,000    |                           |  |   | (476,208                         | ) |  |                                                    | —         |  |                                   |   | —          |                            | 
|Automotive                                                                    |  |                            | —           |  |                               |   | 200,000    |                           |  |   | (200,000                         | ) |  |                                                    | —         |  |                                   |   | —          |                            | 
|Consumer
    Electronics                                                      |  |                            | 2,913,612   |  |                               |   | 2,550,000  |                           |  |   | (1,500,000                       | ) |  |                                                    | —         |  |                                   |   | (1,962,939 | )                          | 
|Medical
    Devices                                                           |  |                            | 4,000,000   |  |                               |   | 5,500,000  |                           |  |   | —                                |   |  |                                                    | —         |  |                                   |   | —          |                            | 
|Semiconductor
    Equipment                                                   |  |                            | —           |  |                               |   | 2,000,000  |                           |  |   | —                                |   |  |                                                    | —         |  |                                   |   | —          |                            | 
|Water
    Purification                                                        |  |                            | 50,000      |  |                               |   | —          |                           |  |   | —                                |   |  |                                                    | —         |  |                                   |   | (50,000    | )                          | 
|Total                                                                         |  | $                          | 137,264,865 |  |                               | $ | 30,150,937 |                           |  | $ | (26,192,030                      | ) |  | $                                                  | 6,394,485 |  |                                   | $ | 17,536,712 |                            | 



| | (1) | The
                                         net change in unrealized depreciation from Level 3 instruments held as of December 31,
                                         2017, was $17,425,619.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Following
is a reconciliation of Level 3 assets (at either the beginning or the ending of the period) for which significant unobservable
inputs were used to determine fair value.



|INVESTMENTS
    AT FAIR VALUE USING SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3) |  | BALANCE
    AS OF 12/31/15 |           |  | NET PURCHASES/
                                         CONVERSION |   |           | NET
    SALES/ CONVERSION |  |   | NET
    REALIZED GAINS /(LOSSES) |   |  | NET
    UNREALIZED APPRECIATION (DEPRECIATION) (1) |            |   | TRANSFERS
    IN (OUT) OF LEVEL 3 |   |            | BALANCE
    AS OF 12/31/16 | 
|----------------------------------------------------------------------------- |  | -------------------------- | --------- |  | ------------------------------------------------------------------ | - | --------- | ------------------------- |  | - | -------------------------------- | - |  | -------------------------------------------------- | ---------- | - | --------------------------------- | - | ---------- | -------------------------- | 
|Common
    Stocks                                                             |  |                            |           |  |                                                                    |   |           |                           |  |   |                                  |   |  |                                                    |            |   |                                   |   |            |                            | 
|Advanced
    Materials                                                        |  | $                          | 203,901   |  |                                                                    | $ | —         |                           |  | $ | —                                |   |  | $                                                  | —          |   |                                   | $ | 190,299    |                            | 
|Computer
    Storage                                                          |  |                            | 185,283   |  |                                                                    |   | —         |                           |  |   | —                                |   |  |                                                    | —          |   |                                   |   | 150,717    |                            | 
|Consumer
    Electronics                                                      |  |                            | 6,171,863 |  |                                                                    |   | 1,000,000 |                           |  |   | —                                |   |  |                                                    | —          |   |                                   |   | (4,134,422 | )                          | 
|Equipment
    Leasing                                                         |  |                            | —         |  |                                                                    |   | 20,000    |                           |  |   | —                                |   |  |                                                    | —          |   |                                   |   | 24,430     |                            | 
|Intellectual
    Property                                                     |  |                            | —         |  |                                                                    |   | —         |                           |  |   | —                                |   |  |                                                    | —          |   |                                   |   | 14,750     |                            | 
|Internet                                                                      |  |                            | 333,317   |  |                                                                    |   | —         |                           |  |   | (689,999                         | ) |  |                                                    | (8,426,224 | ) |                                   |   | 8,782,906  |                            | 
|Networking                                                                    |  |                            | 4,772,712 |  |                                                                    |   | 5,176,125 |                           |  |   | —                                |   |  |                                                    | —          |   |                                   |   | 1,041,553  |                            | 
|Renewable
    Energy                                                          |  |                            | 7,148,368 |  |                                                                    |   | 13,775    |                           |  |   | —                                |   |  |                                                    | —          |   |                                   |   | (7,162,143 | )                          | 
|Semiconductor
    Equipment                                                   |  |                            | —         |  |                                                                    |   | 1,000     |                           |  |   | —                                |   |  |                                                    | —          |   |                                   |   | 6,524      |                            | 
|Software                                                                      |  |                            | 557,216   |  |                                                                    |   | —         |                           |  |   | —                                |   |  |                                                    | —          |   |                                   |   | (311,750   | )                          | 







66





Firsthand
Technology Value Fund, Inc.

Notes
to Financial Statements - continued

DECEMBER
31, 2017



|INVESTMENTS
    AT FAIR VALUE USING SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3) |  | BALANCE AS OF 12/31/15 |             |  | NET PURCHASES/ CONVERSION |   |            | NET SALES/ CONVERSION |  |   | NET REALIZED GAINS /(LOSSES) |   |  | NET
    UNREALIZED APPRECIATION (DEPRECIATION) (1) |            |   | TRANSFERS IN (OUT) OF LEVEL
    3 |   |             | BALANCE AS OF 12/31/16 | 
|----------------------------------------------------------------------------- |  | ---------------------- | ----------- |  | ------------------------- | - | ---------- | --------------------- |  | - | ---------------------------- | - |  | -------------------------------------------------- | ---------- | - | --------------------------------- | - | ----------- | ---------------------- | 
|Preferred
    Stocks                                                          |  |                        |             |  |                           |   |            |                       |  |   |                              |   |  |                                                    |            |   |                                   |   |             |                        | 
|Advanced
    Materials                                                        |  | $                      | 14,000,240  |  |                           | $ | 7,500,000  |                       |  | $ | —                            |   |  | $                                                  | —          |   |                                   | $ | (8,775,279  | )                      | 
|Advertising
    Technology                                                    |  |                        | 24,708,708  |  |                           |   | 4,346,304  |                       |  |   | (40,091,196                  | ) |  |                                                    | 11,784,839 |   |                                   |   | 9,009,263   |                        | 
|Aerospace                                                                     |  |                        | 2,000,000   |  |                           |   | —          |                       |  |   | —                            |   |  |                                                    | —          |   |                                   |   | (1,554,544  | )                      | 
|Automotive                                                                    |  |                        | 12,928,943  |  |                           |   | 4,779,956  |                       |  |   | (4,779,956                   | ) |  |                                                    | 864,024    |   |                                   |   | (3,382,922  | )                      | 
|Cloud
    Computing                                                           |  |                        | 9,999,998   |  |                           |   | 2,705,790  |                       |  |   | (2,264,990                   | ) |  |                                                    | (379,810   | ) |                                   |   | (1,510,627  | )                      | 
|Consumer
    Electronics                                                      |  |                        | 7,438,704   |  |                           |   | 750,000    |                       |  |   | (5                           | ) |  |                                                    | (2,124,069 | ) |                                   |   | (2,311,881  | )                      | 
|Equipment
    Leasing                                                         |  |                        | —           |  |                           |   | 4,000,000  |                       |  |   | —                            |   |  |                                                    | —          |   |                                   |   | (24,400     | )                      | 
|Intellectual
    Property                                                     |  |                        | —           |  |                           |   | 12,251,478 |                       |  |   | (2,670,500                   | ) |  |                                                    | (3,538,500 | ) |                                   |   | 95,439      |                        | 
|Medical
    Devices                                                           |  |                        | 22,655,879  |  |                           |   | —          |                       |  |   | —                            |   |  |                                                    | —          |   |                                   |   | 1,855,763   |                        | 
|Mobile
    Computing                                                          |  |                        | 7,110,747   |  |                           |   | —          |                       |  |   | —                            |   |  |                                                    | —          |   |                                   |   | 255,049     |                        | 
|Semiconductor
    Equipment                                                   |  |                        | 23,370,825  |  |                           |   | 6,175,801  |                       |  |   | —                            |   |  |                                                    | —          |   |                                   |   | (7,662,629  | )                      | 
|Asset
    Derivatives                                                         |  |                        |             |  |                           |   |            |                       |  |   |                              |   |  |                                                    |            |   |                                   |   |             |                        | 
|Equity
    Contracts                                                          |  |                        | 642,600     |  |                           |   | —          |                       |  |   | —                            |   |  |                                                    | —          |   |                                   |   | 4,777,442   |                        | 
|Convertible
    Notes                                                         |  |                        |             |  |                           |   |            |                       |  |   |                              |   |  |                                                    |            |   |                                   |   |             |                        | 
|Advertising
    Technology                                                    |  |                        | —           |  |                           |   | 2,321,564  |                       |  |   | —                            |   |  |                                                    | —          |   |                                   |   | (1,762,204  | )                      | 
|Aerospace                                                                     |  |                        | —           |  |                           |   | 80,500     |                       |  |   | (8,792                       | ) |  |                                                    | —          |   |                                   |   | (500        | )                      | 
|Consumer
    Electronics                                                      |  |                        | 2,000,000   |  |                           |   | 3,560,000  |                       |  |   | (5                           | ) |  |                                                    | (99,995    | ) |                                   |   | (2,546,388  | )                      | 
|Intellectual
    Property                                                     |  |                        | 3,630,383   |  |                           |   | —          |                       |  |   | (5,250,000                   | ) |  |                                                    | (360,753   | ) |                                   |   | 1,980,370   |                        | 
|Medical
    Devices                                                           |  |                        | 4,000,000   |  |                           |   | —          |                       |  |   | —                            |   |  |                                                    | —          |   |                                   |   | —           |                        | 
|                                                                              |  |                        |             |  |                           |   |            |                       |  |   |                              |   |  |                                                    |            |   |                                   |   |             |                        | 
|Semiconductor
    Equipment                                                   |  |                        | —           |  |                           |   | 2,940,462  |                       |  |   | (1,381,102                   | ) |  |                                                    | —          |   |                                   |   | (1,559,360  | )                      | 
|Water Purification                                                            |  |                        | —           |  |                           |   | 50,000     |                       |  |   | —                            |   |  |                                                    | —          |   |                                   |   | —           |                        | 
|Total                                                                         |  | $                      | 153,859,687 |  |                           | $ | 57,672,755 |                       |  | $ | (57,136,545                  | ) |  | $                                                  | (2,280,488 | ) |                                   | $ | (14,514,544 | )                      | 



| | (1) | The
                                         net change in unrealized appreciation from Level 3 instruments held as of December 31,
                                         2016, was $(22,130,823).
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





67







Firsthand
Technology Value Fund, Inc.

Notes
to Financial Statements - continued

DECEMBER
31, 2017



The
below chart represents quantitative disclosure about significant unobservable inputs for Level 3 fair value measurements:



|                                                              |  | FAIR
    VALUE AT 12/31/17 |      |   | VALUATION
    TECHNIQUES |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | UNOBSERVABLE
    INPUTS |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | RANGE
    (WEIGHTED AVG.)
|------------------------------------------------------------- |  | -------------------------- | ---- | - | ------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------
|Direct venture capital investments:
    Advanced Materials    |  | $                          | 24.3 | M |                          | Market Comparable
                                                                                Companies
                                                                                Prior Transaction
                                                                                Analysis
                                                                                Probability-Weighted
                                                                                Expected Return
                                                                                Option Pricing Model |                         | EBITDA Multiple
                                                                                Years to Maturity
                                                                                Volatility Risk-Free Rate
                                                                                Going Concern Probability
                                                                                Discount for Lack of
                                                                                Marketability                                                                            |                          
|                                                              |  |                            |      |   |                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                          
|Direct venture capital investments:
    Aerospace             |  | $                          | 2.1  | M |                          | Prior Transaction
                                                                               Analysis
                                                                               Option Pricing Model                                                                                                                                                                                                                                                                                                                                                                                                    |                         | Years to Maturity
                                                                               Volatility
                                                                               Risk-Free Rate                                                                                                                                                                                                                                                                                                                                                                                                           |                          
|                                                              |  |                            |      |   |                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                          
|Direct venture capital investments:
    Automotive            |  | $                          | 10.7 | M |                          | Prior Transaction
                                                                               Analysis
                                                                               Option Pricing Model                                                                                                                                                                                                                                                                                                                                                                                                    |                         | Years to Maturity
                                                                               Volatility
                                                                               Risk-Free Rate                                                                                                                                                                                                                                                                                                                                                                                                           |                          
|                                                              |  |                            |      |   |                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                          
|Direct venture capital investments:
    Cloud Computing       |  | $                          | 8.6  | M |                          | Market Comparable
                                                                               Companies
                                                                               Option Pricing Model                                                                                                                                                                                                                                                                                                                                                                                                   |                         | Revenue Multiple
                                                                               Years to Maturity
                                                                               Volatility
                                                                               Risk-Free Rate                                                                                                                                                                                                                                                                                                           |                          
|                                                              |  |                            |      |   |                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                          
|Direct venture capital investments:
    Consumer Electronics  |  | $                          | 14.6 | M |                          | Market Comparable
                                                                               Companies
                                                                               Probability-Weighted
                                                                               Expected Return
                                                                               Invested Capital(Cost)
                                                                               Option Pricing Model                                                                                          |                         | Revenue Mulitple
                                                                               Going Concern Probability
                                                                               Years to Maturity
                                                                               Volatility
                                                                               Risk-Free Rate
                                                                               Discount for Lack of
                                                                               Marketability |                          
|                                                              |  |                            |      |   |                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                          
|Direct venture capital investments:
    Equipment Leasing     |  | $                          | 4.0  | M |                          | Prior Transaction
                                                                               Analysis
                                                                               Option Pricing Model                                                                                                                                                                                                                                                                                                                                                                                                    |                         | Years to Maturity
                                                                               Volatility
                                                                               Risk-Free Rate                                                                                                                                                                                                                                                                                                                                                                                                           |                          
|                                                              |  |                            |      |   |                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                          
|Direct venture capital investments:
    Intellectual Property |  | $                          | 6.1  | M |                          | Prior Transaction
                                                                               Analysis
                                                                               Option Pricing Model                                                                                                                                                                                                                                                                                                                                                                                                    |                         | Years to Maturity
                                                                               Volatility
                                                                               Risk-Free Rate
                                                                               Discount for Lack of
                                                                               Marketability
                                                                               Adjustment for Market
                                                                               Movement             |                          





68





Firsthand
Technology Value Fund, Inc.

Notes
to Financial Statements - continued

DECEMBER
31, 2017



|Continued                                                       |  | FAIR VALUE AT
                                                                              12/31/17 |      |   | VALUATION
    TECHNIQUES |                                                                                                                                                                                                                                                                                                                                                                                                                  | UNOBSERVABLE
    INPUTS |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | RANGE
                                                                                (WEIGHTED AVG.)
|--------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------- | ---- | - | ------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------
|Direct venture capital investments:
    Medical Devices         |  | $                                                                                                    | 21.0 | M |                          | Market Comparable
                                                                                Companies
                                                                                Option Pricing Model                                                                                                                                                                                                 |                         | Revenue Multiple
                                                                                Years to Maturity
                                                                                Volatility
                                                                                Risk-Free Rate                                                                                                                                                                                               |                                                                                                      
|Direct venture capital investments:
    Mobile Computing        |  | $                                                                                                    | 12.0 | M |                          | Prior Transaction
                                                                               Analysis
                                                                               Probability-Weighted
                                                                               Expected Return
                                                                               Option Pricing Model |                         | Years to Maturity
                                                                               Volatility
                                                                               Risk-Free Rate
                                                                               Transaction Completion
                                                                               Probability                                                                                                 |                                                                                                      
|Direct venture capital investments:
    Semiconductor Equipment |  | $                                                                                                    | 51.5 | M |                          | Market Comparable
                                                                               Companies
                                                                               Prior Transaction
                                                                               Analysis
                                                                               Option Pricing Model          |                         | Revenue Multiple
                                                                               Years to Maturity
                                                                               Volatility
                                                                               Risk-Free Rate
                                                                               Discount for Lack of
                                                                               Marketability |                                                                                                      



The
below chart represents quantitative disclosure about significant unobservable inputs for Level 3 fair value measurements for 2016:



|                                                               |  | FAIR VALUE AT
                                                                              12/31/16 |        |  | VALUATION
    TECHNIQUES |                                                                                                                                                                                                                                                                                                                                                                                                                  | UNOBSERVABLE
    INPUTS |                                                                                                                                                                                                                                                                                                                                                                                                                                        | RANGE
                                                                              (WEIGHTED AVG.) | 
|-------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------- | ------ |  | ------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------- | 
|Direct venture capital investments:
    Advanced Materials     |  |                                                                                                      | $13.5M |  |                          | Market Comparable
                                                                                Companies
                                                                                Prior Transaction
                                                                                Analysis
                                                                                Option Pricing Model      |                         | Revenue Multiple
                                                                                Years to Expiration
                                                                                Volatility
                                                                                Risk-Free Rate
                                                                                Discount for Lack of Marketability      |                                                                                                     | 
|Direct venture capital investments:
    Advertising Technology |  |                                                                                                      | $10.3M |  |                          | Market Comparable
                                                                               Companies
                                                                               Option Pricing Model                                                                                                                                                                                                   |                         | Revenue Multiple
                                                                               Years to Expiration
                                                                               Volatility
                                                                               Risk-Free Rate                                                                                                                            |                                                                                                     | 
|Direct venture capital investments:
    Aerospace              |  |                                                                                                      | $0.5M  |  |                          | Prior Transaction
                                                                               Analysis
                                                                               Probability-Weighted
                                                                               Expected Return
                                                                               Option Pricing Model |                         | Going Concern Probability
                                                                               Years to Expiration
                                                                               Volatility
                                                                               Risk-Free Rate
                                                                               Discount for Lack of Marketability |                                                                                                     | 
|Direct venture capital investments:
    Automotive             |  |                                                                                                      | $10.4M |  |                          | Prior Transaction
                                                                               Analysis
                                                                               Option Pricing Model                                                                                                                                                                                                    |                         | Years to Expiration
                                                                               Volatility
                                                                               Risk-Free Rate                                                                                                                                                                                                                            |                                                                                                     | 



69







Firsthand
Technology Value Fund, Inc.



Notes
to Financial Statements - continued

DECEMBER
31, 2017



|continued                         |  | FAIR VALUE AT
                                                                                12/31/16 |        | VALUATION
    TECHNIQUES | UNOBSERVABLE
    INPUTS | RANGE
                                                                                (WEIGHTED AVG.)
|--------------------------------- |  | ------------------------------------------------------------------------------------------------------ | ------ | ------------------------ | ----------------------- | -----------------------------------------------------------------------------------------------------
|Direct venture capital            |  |                                                                                                        | $8.6M  |                          | Market Comparable       | Revenue Multiple                                                                                     
|investments: Cloud                |  |                                                                                                        |        |                          | Companies               | Years to Expiration                                                                                  
|Computing                         |  |                                                                                                        |        |                          | Prior Transaction       | Volatility                                                                                           
|                                  |  |                                                                                                        |        |                          | Analysis                | Risk-Free Rate                                                                                       
|                                  |  |                                                                                                        |        |                          | Option Pricing Model    |                                                                                                      
|Direct venture capital            |  |                                                                                                        | $9.7M  |                          | Market Comparable       | Revenue Mulitple                                                                                     
|investments: Consumer Electronics |  |                                                                                                        |        |                          | Companies               | IPO Exit Probability                                                                                 
|                                  |  |                                                                                                        |        |                          | Prior Transaction       | Merger & Acquisition Probability                                                                     
|                                  |  |                                                                                                        |        |                          | Analysis                | Going Concern Probability                                                                            
|                                  |  |                                                                                                        |        |                          | Probability-Weighted    | Years to Expiration                                                                                  
|                                  |  |                                                                                                        |        |                          | Expected
    Return     | Volatility                                                                                           
|                                  |  |                                                                                                        |        |                          | Invested Capital(Cost)  | Risk-Free Rate                                                                                       
|                                  |  |                                                                                                        |        |                          | Option Pricing Model    | Discount for Lack of Marketability                                                                   
|Direct venture capital            |  |                                                                                                        | $4.0M  |                          | Prior Transaction       | Years to Expiration                                                                                  
|investments: Equipment            |  |                                                                                                        |        |                          | Analysis                | Volatility                                                                                           
|Leasing                           |  |                                                                                                        |        |                          |                         | Risk-Free Rate                                                                                       
|Direct venture capital            |  |                                                                                                        | $6.2M  |                          | Prior Transaction       | Years to Expiration                                                                                  
|investments: Intellectual         |  |                                                                                                        |        |                          | Analysis                | Volatility                                                                                           
|Property                          |  |                                                                                                        |        |                          | Option Pricing Model    | Risk-Free Rate                                                                                       
|                                  |  |                                                                                                        |        |                          |                         | Discount for Lack of Marketability                                                                   
|                                  |  |                                                                                                        |        |                          |                         | Adjustment for Market Movement                                                                       
|Direct venture capital            |  |                                                                                                        | $28.5M |                          | Market Comparable       | Revenue Multiple                                                                                     
|investments: Medical              |  |                                                                                                        |        |                          | Companies               | Years to Expiration                                                                                  
|Devices                           |  |                                                                                                        |        |                          | Prior Transaction       | Volatility                                                                                           
|                                  |  |                                                                                                        |        |                          | Analysis                | Risk-Free Rate                                                                                       
|                                  |  |                                                                                                        |        |                          | Option Pricing Model    |                                                                                                      
|Direct venture capital            |  |                                                                                                        | $7.4M  |                          | Prior Transaction       | Years to Expiration                                                                                  
|investments: Mobile               |  |                                                                                                        |        |                          | Analysis                | Volatility                                                                                           
|Computing                         |  |                                                                                                        |        |                          | Option Pricing Model    | Risk-Free Rate                                                                                       
|Direct venture capital            |  |                                                                                                        | $11.0M |                          | Prior Transaction       | Discount for Lack of Marketability                                                                   
|investments: Networking           |  |                                                                                                        |        |                          | Analysis                |                                                                                                      
|Direct venture capital            |  |                                                                                                        | $26.9M |                          | Prior Transaction       | Years to Expiration                                                                                  
|investments: Semiconductor        |  |                                                                                                        |        |                          | Analysis                | Volatility                                                                                           
|Equipment                         |  |                                                                                                        |        |                          | Option Pricing Model    | Risk-Free Rate                                                                                       
|                                  |  |                                                                                                        |        |                          |                         | Discount for Lack of Marketability                                                                   



70







Firsthand
Technology Value Fund, Inc.



Notes
to Financial Statements - continued

DECEMBER
31, 2017



|continued              |  |  | FAIR
VALUE AT 12/31/16 |  | VALUATION
    TECHNIQUES | UNOBSERVABLE
    INPUTS | RANGE
    (WEIGHTED AVG.)
|---------------------- |  |  | ---------------------- |  | ------------------------ | ----------------------- | -------------------------
|Direct venture capital |  |  | $0.2M                  |  | Prior Transaction        | Years to Expiration     | 1 year                   
|investments: Software  |  |  |                        |  | Analysis                 | Volatility              | 55.0%                    
|                       |  |  |                        |  | Option Pricing Model     | Risk-Free Rate          | 0.85%                    
|Direct venture capital |  |  | $0.1M                  |  | Prior Transaction        | Years to Expiration     | 5 years                  
|investments: Water     |  |  |                        |  | Analysis                 | Volatility              | 40.0%                    
|Purification           |  |  |                        |  | Option Pricing Model     | Risk-Free Rate          | 1.93%                    



NOTE
7. FEDERAL INCOME TAXES



The
Company has elected, and intends to qualify annually, for the special tax treatment afforded regulated investment companies under
the Internal Revenue Code of 1986, as amended (the “Code”). As provided in the Code, in any fiscal year in which a
BDC so qualifies and distributes at least 90% of its taxable net income, the BDC (but not the shareholders) will be relieved of
federal income tax on the income distributed. Accordingly, no provision for income taxes has been made. To avoid imposition of
the excise tax applicable to regulated investment companies, the Company intends to declare as dividends in each calendar year
at least 98% of its net investment income (earned during the calendar year) and 98.2% of its net realized capital gains (earned
during the 12 months ended October 31) plus undistributed amounts, if any, from prior years.



The
reorganization described in Note 1 (the formation of FVI as a fully owned subsidiary for investment activities) was structured
to avoid any adverse tax consequences for the Company and its shareholders. The Company’s engaging in investment activities
through FVI does not, in our view, jeopardize the Company’s ability to continue to qualify as a RIC under the Code.



TAX
TABLES



Reclassification
of Capital Accounts



Permanent
book and tax differences resulted in reclassifications for the year ended December 31, 2017 as follows:





|                                |  |  | INCREASE (DECREASE) |           
|------------------------------- |  |  | ------------------- | ----------
|                                |  |  | Paid-in-Capital     |           
|Firsthand Technology Value Fund |  |  | $                   | (2,827,302



As
of December 31, 2017, the Fund utilized capital loss carry forwards for federal income tax purposes in the amount of $958,645.



Permanent
book and tax differences resulted in reclassifications for the year ended December 31, 2016 as follows:





|                                |  | INCREASE (DECREASE) |           
|------------------------------- |  | ------------------- | ----------
|                                |  | Paid-in-Capital     |           
|Realized Gain (Loss)            |  |                     |           
|Firsthand Technology Value Fund |  | $                   | (3,835,503



71







Firsthand
Technology Value Fund, Inc.

Notes
to Financial Statements - continued

DECEMBER
31, 2017



As
of December 31, 2016, the Fund had short-term and long-term capital loss carryforwards for federal income tax purposes in the
amounts of $(211,156) and $(747,488), respectively, which do not expire.



As
of December 31, 2016, the Fund utilized capital loss carry forwards for federal income tax purposes in the amount of $2,004,970.



Components
of Distributable Earnings as of 12/31/17



|                                               |  | FIRSTHAND
    TECHNOLOGY VALUE FUND, INC. |           
|---------------------------------------------- |  | ----------------------------------------- | ----------
|Net Unrealized
    Appreciation (Depreciation) |  | $                                         | (5,341,142
|Long-Term Capital Gains                        |  |                                           | 245,701   
|Other
    Temporary Differences                |  |                                           | (1,691,040
|Total
    Distributable Earnings               |  | $                                         | (6,786,481



As
of December 31, 2017, the Fund paid $245,701 of long-term capital gains.



|                                     |  | FIRSTHAND TECHNOLOGY VALUE
    FUND, INC. |            
|------------------------------------ |  | ----------------------------------------- | -----------
|Gross unrealized appreciation        |  | $                                         | 44,878,772 
|Gross unrealized depreciation        |  |                                           | (50,219,914
|Net unrealized depreciation          |  | $                                         | (5,341,142 
|Federal income tax cost, Investments |  | $                                         | 180,180,668



The
Company is subject to tax provisions that establish a minimum threshold for recognizing, and a system for measuring, the benefits
of a tax position taken or expected to be taken in a tax return. Taxable years ending 2014, 2015, and 2016 remain open to federal
and state audit. As of December 31, 2017, management has evaluated the application of these provisions to the Company, and has
determined that no provision for income tax is required in the Company’s financial statements for uncertain tax provisions.



Components
of Distributable Earnings as of 12/31/16



|                                           |  | FIRSTHAND TECHNOLOGY VALUE
    FUND, INC. |            
|------------------------------------------ |  | ----------------------------------------- | -----------
|Net Unrealized Appreciation (Depreciation) |  | $                                         | (34,834,709
|Capital Loss Carryforwards                 |  |                                           | (958,644   
|Total Distributable Earnings               |  | $                                         | (35,793,353



As
of December 31, 2016, the Fund did not pay any long-term capital gains.



|                                     |  | FIRSTHAND TECHNOLOGY VALUE
    FUND, INC. |            
|------------------------------------ |  | ----------------------------------------- | -----------
|Gross unrealized appreciation        |  | $                                         | 13,265,628 
|Gross unrealized depreciation        |  |                                           | (48,100,337
|Net unrealized depreciation          |  | $                                         | (34,834,709
|Federal income tax cost, Investments |  | $                                         | 182,365,558



72







Firsthand
Technology Value Fund, Inc.



Notes
to Financial Statements - continued

DECEMBER
31, 2017



NOTE
8. INVESTMENT TRANSACTIONS



Investment
transactions (excluding short-term investments) were as follows for the year ended December 31, 2017.



|PURCHASES AND SALES                                         |  |   |           
|----------------------------------------------------------- |  | - | ----------
|Purchases of investment securities                          |  | $ | 30,958,618
|Proceeds from sales and maturities of investment securities |  | $ | 34,282,019



NOTE
9. SHARE BUYBACKS



SHARE
BUYBACKS. On April 26, 2016, the Board of Directors of the Fund approved a discretionary share repurchase plan (the “Plan”).
Pursuant to the Plan, the Fund was authorized to purchase in the open market up to $2 million worth of its common stock. The Plan
allowed the Fund to acquire its own shares at certain thresholds below its net asset value (NAV) per share, in accordance with
the guidelines specified in Rule 10b-18 of the Securities Act of 1934, as amended. The intent of the Plan was to increase NAV per
share and thereby enhance shareholder value. The Fund completed the repurchase plan in September 2016, having repurchased and retired
a total of 272,008 shares of stock, at a total cost of approximately $2 million.



On
November 10, 2017, the Board of Directors of the Fund approved a discretionary share purchase plan (the “Plan”). Pursuant
to the Plan, the Fund was authorized to purchase in the open market up to $2 million worth of its common stock. The Plan allowed
the Fund to acquire its own shares in accordance with the guidelines specified in Rule 10b-18 of the Securities Act of 1934, as
amended. The intent of the Plan was to increase NAV per share and thereby enhance shareholder value. As of December 31, 2017, the
Fund had repurchased and retired 128,551 shares of stock at a total cost of approximately $1.1 million. The Fund had 7,302,146
shares outstanding as of December 31, 2017.



TENDER
OFFER. In connection with our agreement with a shareholder, we agreed to commence an issuer tender offer for up to $20 million
of our shares of common stock at a purchase price per share equal to 95% of the Fund’s net asset value per share (“NAV”)
as of the close of ordinary trading on the NASDAQ Global Market on December 31, 2014 (the “Offer”). On December 22,
2014, the Fund commenced a tender offer to purchase up to $20 million of its issued and outstanding common shares for cash at a
price per share equal to 95% of the NAV determined on December 31, 2014 ($23.2702 per share). The tender offer, which expired on
January 22, 2015 at 12:00 midnight, New York City time, was oversubscribed. Because the number of shares tendered exceeded the
maximum amount of its offer, the Fund purchased shares from tendering shareholders on a pro-rata basis based on the number of shares
properly tendered. Of the 5,044,728 shares properly tendered, the Fund purchased 859,468 shares of common stock pursuant to the
tender offer.



NOTE
10. INVESTMENTS IN AFFILIATES AND CONTROLLED INVESTMENTS



Under
the 1940 Act, the Company is required to identify investments where it owns greater than 5% (but less than 25%) of the portfolio
company’s outstanding voting shares as an affiliate of the Company. Also, under the 1940 Act, the Company is required to identify
investments where it owns greater than 25% of the portfolio company’s outstanding voting shares as a controlled investment
of the Company. A summary of the Company’s investments in affiliates and controlled investments for the period from December
31, 2016, through December 31, 2017, is noted below:



73







Firsthand
Technology Value Fund, Inc.

Notes
to Financial Statements - continued



DECEMBER
31, 2017



|AFFILIATE/CONTROLLED
    INVESTMENT*          |  | VALUE
    AT 12/31/16 |            |  | PURCHASES/
    MERGER |   |           | INTEREST |  |   | SALES/
    MATURITY/ EXPIRATION |  |  | REALIZED
    GAIN (LOSS) |        |  | CHANGE
    IN APPRECIATION/ (DEPRECIATION) |   |   | VALUE
    12/31/17 |  |   | SHARES
    HELD AT 12/31/17 |  
|--------------------------------------------- |  | --------------------- | ---------- |  | --------------------- | - | --------- | -------- |  | - | ------------------------------- |  |  | ------------------------ | ------ |  | ------------------------------------------ | - | - | ------------------ |  | - | --------------------------- | -
|EQX,
    Inc. Common Stock*                   |  | $                     | 44,430     |  |                       | $ | -         |          |  | $ | -                               |  |  | $                        | -      |  |                                            | $ | - |                    |  | $ | 380                         |  
|EQX,
    Inc. Preferred Stock - Series A*     |  |                       | 3,975,600  |  |                       |   | -         |          |  |   | -                               |  |  |                          | -      |  |                                            |   | - |                    |  |   | (400                        | )
|Hera
    Systems, Inc.Term Note*              |  |                       | 41,208     |  |                       |   | -         |          |  |   | 70                              |  |  |                          | 41,208 |  |                                            |   | - |                    |  |   | -                           |  
|Hera
    Systems, Inc. Series A Preferred*    |  |                       | 445,456    |  |                       |   | -         |          |  |   | -                               |  |  |                          | -      |  |                                            |   | - |                    |  |   | (290,657                    | )
|Hera
    Systems, Inc. Convertible Note*      |  |                       | 30,000     |  |                       |   | -         |          |  |   | 1,080                           |  |  |                          | 30,000 |  |                                            |   | - |                    |  |   | -                           |  
|Hera
    Systems, Inc. Series B  Preferred*   |  |                       | -          |  |                       |   | 1,587,102 |          |  |   | -                               |  |  |                          | -      |  |                                            |   | - |                    |  |   | (1,133,787                  | )
|Hera
    Systems, Inc. Series B Warrants*     |  |                       | -          |  |                       |   | -         |          |  |   | -                               |  |  |                          | -      |  |                                            |   | - |                    |  |   | 155,540                     |  
|Hera
    Systems, Inc. Series B Warrants*     |  |                       | -          |  |                       |   | -         |          |  |   | -                               |  |  |                          | -      |  |                                            |   | - |                    |  |   | 1,380,956                   |  
|IntraOp
    Medical Corp. Series C Preferred* |  |                       | 24,511,642 |  |                       |   | -         |          |  |   | -                               |  |  |                          | -      |  |                                            |   | - |                    |  |   | (13,031,965                 | )
|IntraOp
    Medical Corp. Convertible Note*   |  |                       | 1,000,000  |  |                       |   | -         |          |  |   | 258,935                         |  |  |                          | -      |  |                                            |   | - |                    |  |   | -                           |  
|IntraOp
    Medical Corp. Convertible Note*   |  |                       | -          |  |                       |   | 1,000,000 |          |  |   | 88,356                          |  |  |                          | -      |  |                                            |   | - |                    |  |   | -                           |  
|IntraOp
    Medical Corp. Convertible Note*   |  |                       | -          |  |                       |   | 1,500,000 |          |  |   | 58,562                          |  |  |                          | -      |  |                                            |   | - |                    |  |   | -                           |  
|IntraOp
    Medical Corp. Convertible Note*   |  |                       | -          |  |                       |   | 1,000,000 |          |  |   | 70,685                          |  |  |                          | -      |  |                                            |   | - |                    |  |   | -                           |  
|IntraOp
    Medical Corp. Term Note*          |  |                       | 3,000,000  |  |                       |   | -         |          |  |   | 240,000                         |  |  |                          | -      |  |                                            |   | - |                    |  |   | -                           |  
|IntraOp
    Medical Corp. Term Note*          |  |                       | -          |  |                       |   | 2,000,000 |          |  |   | 142,466                         |  |  |                          | -      |  |                                            |   | - |                    |  |   | -                           |  
|Phunware,
    Inc., Preferred Stock  Series E |  |                       | 7,365,796  |  |                       |   | -         |          |  |   | -                               |  |  |                          | -      |  |                                            |   | - |                    |  |   | 4,652,767                   |  



74







Firsthand
Technology Value Fund, Inc.

Notes
to Financial Statements - continued

DECEMBER
31, 2017



|AFFILIATE/CONTROLLED
    INVESTMENT*                 |  | VALUE
    AT 12/31/16 |            |  | PURCHASES/
    MERGER |   |           | INTEREST |  |   | SALES/
    MATURITY/ EXPIRATION |  |  | REALIZED
    GAIN (LOSS) |           |  | CHANGE
    IN APPRECIATION/ (DEPRECIATION) |   |           | VALUE
    12/31/17 |  |   | SHARES
    HELD AT 12/31/17 | 
|---------------------------------------------------- |  | --------------------- | ---------- |  | --------------------- | - | --------- | -------- |  | - | ------------------------------- |  |  | ------------------------ | --------- |  | ------------------------------------------ | - | --------- | ------------------ |  | - | --------------------------- | 
|Pivotal
    Systems,Series A Preferred*              |  | $                     | 6,370,532  |  |                       | $ | -         |          |  | $ | -                               |  |  | $                        | -         |  |                                            | $ | -         |                    |  | $ | 2,083,082                   | 
|Pivotal
    Systems,Series B Preferred*              |  |                       | 6,985,982  |  |                       |   | -         |          |  |   | -                               |  |  |                          | -         |  |                                            |   | -         |                    |  |   | 2,284,326                   | 
|Pivotal
    Systems,Series C Preferred*              |  |                       | 2,273,159  |  |                       |   | -         |          |  |   | -                               |  |  |                          | -         |  |                                            |   | -         |                    |  |   | 287,095                     | 
|Pivotal
    Systems,Series D Preferred*              |  |                       | 4,060,924  |  |                       |   | -         |          |  |   | -                               |  |  |                          | -         |  |                                            |   | -         |                    |  |   | 948,796                     | 
|Pivotal
    Systems,Series D Warrants*               |  |                       | 284,036    |  |                       |   | -         |          |  |   | -                               |  |  |                          | -         |  |                                            |   | -         |                    |  |   | 334,356                     | 
|Pivotal
    Systems,Common Stocks Warrants -Class B* |  |                       | 4,743,286  |  |                       |   | -         |          |  |   | -                               |  |  |                          | -         |  |                                            |   | -         |                    |  |   | 3,997,886                   | 
|QMAT,
    Preferred Stock Series A*                  |  |                       | 10,724,961 |  |                       |   | -         |          |  |   | -                               |  |  |                          | -         |  |                                            |   | -         |                    |  |   | 6,669,380                   | 
|QMAT,
    Preferred Stock Series B*                  |  |                       | 2,000,000  |  |                       |   | -         |          |  |   | -                               |  |  |                          | -         |  |                                            |   | -         |                    |  |   | 132,600                     | 
|QMAT,
    Series A Warrant*                          |  |                       | 376,400    |  |                       |   | -         |          |  |   | -                               |  |  |                          | -         |  |                                            |   | -         |                    |  |   | 710,200                     | 
|QMAT,
    Convertible Note*                          |  |                       | -          |  |                       |   | 2,745,485 |          |  |   | 1,805                           |  |  |                          | -         |  |                                            |   | -         |                    |  |   | -                           | 
|Revasum,
    Term Note*                              |  |                       | -          |  |                       |   | 1,000,000 |          |  |   | 41,667                          |  |  |                          | -         |  |                                            |   | -         |                    |  |   | -                           | 
|Revasum,
    Common Stock*                           |  |                       | 7,524      |  |                       |   | -         |          |  |   | -                               |  |  |                          | -         |  |                                            |   | -         |                    |  |   | 22,384                      | 
|Revasum,
    Preferred Stock - Series Seed*          |  |                       | 2,193,400  |  |                       |   | 6,734,145 |          |  |   | -                               |  |  |                          | 6,734,145 |  |                                            |   | 5,084,145 |                    |  |   | 1,689,215                   | 
|Revasum,
    Preferred Stock Series A*               |  |                       | -          |  |                       |   | 1,999,996 |          |  |   | -                               |  |  |                          | -         |  |                                            |   | -         |                    |  |   | 256,359                     | 
|Revasum,
    Preferred Stock Series B*               |  |                       | -          |  |                       |   | 2,550,033 |          |  |   | -                               |  |  |                          | -         |  |                                            |   | -         |                    |  |   | -                           | 
|Silicon
    Genesis Corp., Common *                  |  |                       | 14,750     |  |                       |   | -         |          |  |   | -                               |  |  |                          | -         |  |                                            |   | -         |                    |  |   | 2,121                       | 
|Silicon
    Genesis Corp., Common Warrants*          |  |                       | 319        |  |                       |   | -         |          |  |   | -                               |  |  |                          | -         |  |                                            |   | -         |                    |  |   | 38                          | 
|Silicon
    Genesis Corp., Common Warrants*          |  |                       | 10,000     |  |                       |   | -         |          |  |   | -                               |  |  |                          | -         |  |                                            |   | -         |                    |  |   | 1,000                       | 



75







Firsthand
Technology Value Fund, Inc.

Notes
to Financial Statements - continued

DECEMBER
31, 2017



|AFFILIATE/CONTROLLED INVESTMENT*                 |  | VALUE
    AT 12/31/16 |           |  | PURCHASES/
    MERGER |   |           | INTEREST |  |   | SALES/
    MATURITY/ EXPIRATION |  |  | REALIZED
    GAIN (LOSS) |         |  | CHANGE
    IN APPRECIATION/ (DEPRECIATION) |   |   | VALUE
    12/31/17 |  |   | SHARES
    HELD AT 12/31/17 |  
|------------------------------------------------ |  | --------------------- | --------- |  | --------------------- | - | --------- | -------- |  | - | ------------------------------- |  |  | ------------------------ | ------- |  | ------------------------------------------ | - | - | ------------------ |  | - | --------------------------- | -
|Silicon
    Genesis Corp., Common Warrants*      |  | $                     | 6,000     |  |                       | $ | -         |          |  | $ | -                               |  |  | $                        | -       |  |                                            | $ | - |                    |  | $ | 600                         |  
|Silicon
    Genesis Corp., Series 1-C Preferred* |  |                       | 70,444    |  |                       |   | -         |          |  |   | -                               |  |  |                          | -       |  |                                            |   | - |                    |  |   | 3,814                       |  
|Silicon
    Genesis Corp., Series 1-D Preferred* |  |                       | 195,606   |  |                       |   | -         |          |  |   | -                               |  |  |                          | -       |  |                                            |   | - |                    |  |   | 10,040                      |  
|Silicon
    Genesis Corp., Series 1-E Preferred* |  |                       | 2,134,616 |  |                       |   | -         |          |  |   | -                               |  |  |                          | 486,730 |  |                                            |   | - |                    |  |   | 415,424                     |  
|Silicon
    Genesis Corp., Series 1-F Preferred* |  |                       | 464,165   |  |                       |   | -         |          |  |   | -                               |  |  |                          | 107,386 |  |                                            |   | - |                    |  |   | 99,539                      |  
|Silicon
    Genesis Corp., Series 1-G Preferred* |  |                       | 3,032,848 |  |                       |   | -         |          |  |   | -                               |  |  |                          | 459,073 |  |                                            |   | - |                    |  |   | 449,883                     |  
|Silicon
    Genesis Corp., Series 1-H Preferred* |  |                       | 240,238   |  |                       |   | -         |          |  |   | -                               |  |  |                          | 53,499  |  |                                            |   | - |                    |  |   | 49,812                      |  
|SVXR,
    Inc.Preferred Stock - Series A         |  |                       | -         |  |                       |   | 1,000,000 |          |  |   | -                               |  |  |                          | -       |  |                                            |   | - |                    |  |   | -                           |  
|SVXR,
    Inc., Convertible Note*                |  |                       | -         |  |                       |   | 1,000,000 |          |  |   | 3,014                           |  |  |                          | -       |  |                                            |   | - |                    |  |   | -                           |  
|Telepathy
    Investors, Inc. Convertible Note*  |  |                       | 1,109,340 |  |                       |   | -         |          |  |   | 237,933                         |  |  |                          | -       |  |                                            |   | - |                    |  |   | (807,200                    | )
|Telepathy
    Investors, Inc. Convertible Note*  |  |                       | 83,201    |  |                       |   | -         |          |  |   | 15,797                          |  |  |                          | -       |  |                                            |   | - |                    |  |   | (60,540                     | )
|Telepathy
    Investors, Inc. Convertible Note*  |  |                       | 277,335   |  |                       |   | -         |          |  |   | 50,260                          |  |  |                          | -       |  |                                            |   | - |                    |  |   | (201,800                    | )
|Telepathy
    Investors, Inc. Convertible Note*  |  |                       | 166,401   |  |                       |   | -         |          |  |   | 32,777                          |  |  |                          | -       |  |                                            |   | - |                    |  |   | (121,080                    | )
|Telepathy
    Investors, Inc. Convertible Note*  |  |                       | -         |  |                       |   | 300,000   |          |  |   | 20,250                          |  |  |                          | -       |  |                                            |   | - |                    |  |   | (254,679                    | )



76





Firsthand Technology Value
Fund, Inc.

Notes to Financial Statements - continued

DECEMBER 31, 2017





|AFFILIATE/CONTROLLED
    INVESTMENT*                |  | VALUE
    AT 12/31/16 |             | PURCHASES/
MERGER |  | INTEREST |           | SALES/
MATURITY/ EXPIRATION |  | REALIZED
    GAIN (LOSS) |           | CHANGE
    IN APPRECIATION/ (DEPRECIATION) |  | VALUE
    12/31/17 |           | SHARES
    HELD AT 12/31/17
|--------------------------------------------------- |  | --------------------- | ----------- | ----------------- |  | -------- | --------- | --------------------------- |  | ------------------------ | --------- | ------------------------------------------ |  | ------------------ | --------- | ---------------------------
|Telepathy
    Investors,Inc. Convertible Note*      |  | $                     | 277,335     |                   |  | $        | —         |                             |  | $                        | 53,507    |                                            |  | $                  | —         |                            
|Telepathy
    Investors, Inc. Series A Preferred*   |  |                       | 2,096,749   |                   |  |          | —         |                             |  |                          | —         |                                            |  |                    | —         |                            
|UCT
    Coatings, Inc. Common Stock                 |  |                       | 394,200     |                   |  |          | —         |                             |  |                          | —         |                                            |  |                    | —         |                            
|UCT
    Coatings, Inc. Common Stock Warrants        |  |                       | 1           |                   |  |          | —         |                             |  |                          | —         |                                            |  |                    | —         |                            
|Vufine,
    Inc., Series A Preferred Stock*         |  |                       | 1,656,000   |                   |  |          | —         |                             |  |                          | —         |                                            |  |                    | —         |                            
|Vufine,
    Inc., Convertible Note*Vufine, Inc.,    |  |                       | —           |                   |  |          | 1,500,000 |                             |  |                          | 86,301    |                                            |  |                    | —         |                            
|Common Stock*                                       |  |                       | 14,325      |                   |  |          | —         |                             |  |                          | —         |                                            |  |                    | —         |                            
|Vufine,
    Inc., Convertible Note*                 |  |                       | 1,000,000   |                   |  |          | —         |                             |  |                          | 31,726    |                                            |  |                    | 1,000,000 |                            
|Vufine,
    Inc., Convertible Note*                 |  |                       | —           |                   |  |          | 250,000   |                             |  |                          | 6,329     |                                            |  |                    | —         |                            
|Wrightspeed,
    Inc., Series
    C Preferred Stock |  |                       | 5,811,783   |                   |  |          | 503,140   |                             |  |                          | —         |                                            |  |                    | 503,140   |                            
|Wrightspeed,
    Inc., Series D Preferred Stock     |  |                       | 3,221,792   |                   |  |          | —         |                             |  |                          | —         |                                            |  |                    | —         |                            
|Wrightspeed,
    Inc., Series E Preferred Stock     |  |                       | 1,376,470   |                   |  |          | —         |                             |  |                          | —         |                                            |  |                    | —         |                            
|Wrightspeed,
    Inc., Series F Preferred Stock     |  |                       | —           |                   |  |          | 499,994   |                             |  |                          | —         |                                            |  |                    | —         |                            
|Wrightspeed,
    Inc. Series F Warrants             |  |                       | —           |                   |  |          | —         |                             |  |                          | —         |                                            |  |                    | —         |                            
|Total
    Affiliates and Controlled Investments     |  | $                     | 104,088,254 |                   |  |          |           |                             |  | $                        | 1,441,520 |                                            |  |                    |           |                            
|Total
    Affiliates                                |  | $                     | 18,170,042  |                   |  |          |           |                             |  | $                        | 3,014     |                                            |  |                    |           |                            
|Total
    Controlled Investments                    |  | $                     | 85,918,212  |                   |  |          |           |                             |  | $                        | 1,438,506 |                                            |  |                    |           |                            





| | * | Controlled investment.
| | - | ----------------------



77







Firsthand
Technology Value Fund, Inc.

Notes
to Financial Statements - continued

DECEMBER
31, 2017

As
of December 31, 2017, Kevin Landis represented the Company and sat on the board of directors of Hera Systems, Inc.; IntraOp
Medical, Inc.; Phunware, Inc. (he resigned his dictatorship on February 26, 2018); Pivotal Systems, Inc.; QMAT,
Inc.; Revasum, Inc.; Silicon Genesis Corp.; Telepathy Investors, Inc.; Vufine, Inc.; and Wrightspeed, Inc. Serving on boards
of directors of portfolio companies may cause conflicts of interest. The Adviser has adopted various procedures to ensure
that the Company will not be unfavorably affected by these potential conflicts.

In
accordance with the SEC’s Regulation S-X and GAAP, we are not permitted to consolidate any subsidiary or other entity that
is not an investment company, including those in which we have a controlling interest. We had certain unconsolidated subsidiaries
for the year ended December 31, 2017, that met at least one of the significant conditions of the SEC’s Regulation S-X. Accordingly,
pursuant to Regulation S-X, summarized, comparative financial information is presented below for our unconsolidated significant
subsidiaries as of December 31, 2017 and 2016 and for the years ended December 31, 2017, 2016 and 2015.



INTRAOP
MEDICAL



|BALANCE SHEET DATA AS OF:     |  | 12/31/17 |            |  | 12/31/16 |  |            |  | 
|----------------------------- |  | -------- | ---------- |  | -------- |  | ---------- |  | 
|Total Current Assets          |  |          | 6,500,945  |  |          |  | 5,457,189  |  | 
|Total Non-Current Assets      |  |          | 12,058,410 |  |          |  | 14,941,785 |  | 
|Total Current Liabilities     |  |          | 2,121,546  |  |          |  | 5,063,450  |  | 
|Total Non-Current Liabilities |  |          | 10,718,566 |  |          |  | 3,401,347  |  | 
|Non-controlling interest      |  |          | -          |  |          |  | -          |  | 



|INCOME STATEMENT DATA FOR THE YEARS ENDED:                                                   |  | 12/31/17 |            |   | 12/31/16 |  |            | 12/31/15 | 
|-------------------------------------------------------------------------------------------- |  | -------- | ---------- | - | -------- |  | ---------- | -------- | 
|Revenue                                                                                      |  |          | 4,825,402  |   |          |  | 7,976,800  |          | 
|Gross Profit                                                                                 |  |          | 2,515,074  |   |          |  | 3,818,884  |          | 
|Income/(loss) from operations                                                                |  |          | (6,382,834 | ) |          |  | (6,560,818 | )        | 
|Total net income/(loss) including net income/(loss) attributable to non-controlling interest |  |          | (6,395,400 | ) |          |  | (6,609,744 | )        | 
|Net income/(loss) attibutable to non-controlling interest                                    |  |          | -          |   |          |  | -          |          | 



PIVOTAL
SYSTEMS



|BALANCE SHEET DATA AS OF:     |  |  | 12/31/17  |  |  |  | 12/31/16   |  |  |  | 
|----------------------------- |  |  | --------- |  |  |  | ---------- |  |  |  | 
|Total Current Assets          |  |  | 8,611,281 |  |  |  | 10,188,775 |  |  |  | 
|Total Non-Current Assets      |  |  | 7,364,374 |  |  |  | 7,166,157  |  |  |  | 
|Total Current Liabilities     |  |  | 5,856,123 |  |  |  | 5,870,765  |  |  |  | 
|Total Non-Current Liabilities |  |  | 9,513,252 |  |  |  | 7,429,919  |  |  |  | 
|Non-controlling interest      |  |  | -         |  |  |  | -          |  |  |  | 



|INCOME STATEMENT DATA FOR THE YEARS ENDED:                          |  | 12/31/17 |            |   | 12/31/16 |  |            | 12/31/15 | 
|------------------------------------------------------------------- |  | -------- | ---------- | - | -------- |  | ---------- | -------- | 
|Revenue                                                             |  |          | 15,320,814 |   |          |  | 8,325,619  |          | 
|Gross Profit                                                        |  |          | 3,762,837  |   |          |  | 1,109,514  |          | 
|Income/(loss) from operations                                       |  |          | (3,558,642 | ) |          |  | (5,428,305 | )        | 
|Total net income/(loss) including net income/(loss) attributable to |  |          | (3,734,109 | ) |          |  | (5,833,910 | )        | 
|non-controlling interest                                            |  |          |            |   |          |  |            |          | 
|Net income/(loss) attibutable to non-controlling interest           |  |          | -          |   |          |  | -          |          | 







78







Firsthand
Technology Value Fund, Inc.

Notes
to Financial Statements - continued

DECEMBER
31, 2017



QMAT



|BALANCE SHEET DATA AS OF:     |  | 12/31/17 |           |  | 12/31/16 |  |           |  | 
|----------------------------- |  | -------- | --------- |  | -------- |  | --------- |  | 
|Total Current Assets          |  |          | 538,957   |  |          |  | 1,731,176 |  | 
|Total Non-Current Assets      |  |          | 717,641   |  |          |  | 977,246   |  | 
|Total Current Liabilities     |  |          | 600,362   |  |          |  | 317,978   |  | 
|Total Non-Current Liabilities |  |          | 5,327,861 |  |          |  | 2,477,655 |  | 
|Non-controlling interest      |  |          | -         |  |          |  | -         |  | 



|                                                                                                 |  |          |            |   |          |  |            |          |  |  |            |  
|------------------------------------------------------------------------------------------------ |  | -------- | ---------- | - | -------- |  | ---------- | -------- |  |  | ---------- | -
|INCOME STATEMENT DATA FOR THE YEARS ENDED:                                                       |  | 12/31/17 |            |   | 12/31/16 |  |            | 12/31/15 | 
|Revenue                                                                                          |  |          | -          |   |          |  | -          |          |  |  | -          |  
|Gross Profit                                                                                     |  |          | -          |   |          |  | -          |          |  |  | -          |  
|Income/(loss) from operations                                                                    |  |          | (4,467,110 | ) |          |  | (5,214,013 | )        |  |  | (4,353,564 | )
|Total net income/(loss) including net
    income/(loss) attributable to non-controlling interest |  |          | (4,584,413 | ) |          |  | (5,209,776 | )        |  |  | (4,264,787 | )
|Net income/(loss) attibutable to non-controlling interest                                        |  |          | -          |   |          |  | -          |          |  |  | -          |  





A
summary of the Company’s investments in affiliates and controlled investments for the period from December 31, 2015, through
December 31, 2016, is noted below:



|                                              |  |  | SHARES/PAR
                                         ACTIVITY |  |  |  |                  |  |  |  |                           |   |  |  |                                                              |  |  |   |                                                               | 
|--------------------------------------------- |  |  | ------------------------------------------------------------ |  |  |  | ---------------- |  |  |  | ------------------------- | - |  |  | ------------------------------------------------------------ |  |  | - | ------------------------------------------------------------- | 
|AFFILIATE/CONTROLLED
    INVESTMENT*          |  |  | BALANCE
                                         AT 12/31/15 |  |  |  | PURCHASES/MERGER |  |  |  | SALES/MATURITY/EXPIRATION |   |  |  | BALANCE
                                         AT 12/31/16 |  |  |   | REALIZED
                                         GAIN (LOSS) | 
|EQX,
    Inc. Common Stock*                   |  |  | —                                                            |  |  |  | 100,000          |  |  |  | —                         |   |  |  | 100,000                                                      |  |  | $ | —                                                             | 
|EQX,
    Inc. Preferred Stock - Series A*     |  |  | —                                                            |  |  |  | 4,000,000        |  |  |  | —                         |   |  |  | 4,000,000                                                    |  |  |   | —                                                             | 
|Hera
    Systems, Inc. Term Note*             |  |  | —                                                            |  |  |  | 50,000           |  |  |  | (8,792                    | ) |  |  | 41,208                                                       |  |  |   | —                                                             | 
|Hera
    Systems, Inc. Series A Preferred*    |  |  | 3,642,324                                                    |  |  |  | —                |  |  |  | —                         |   |  |  | 3,642,324                                                    |  |  |   | —                                                             | 
|Hera
    Systems, Inc. Convertible Note*      |  |  | —                                                            |  |  |  | 30,000           |  |  |  | —                         |   |  |  | 30,000                                                       |  |  |   | —                                                             | 
|IntraOp
    Medical Corp. Series C Preferred* |  |  | 26,856,187                                                   |  |  |  | —                |  |  |  | —                         |   |  |  | 26,856,187                                                   |  |  |   | —                                                             | 
|IntraOp
    Medical Corp. Convertible Note*   |  |  | 1,000,000                                                    |  |  |  | —                |  |  |  | —                         |   |  |  | 1,000,000                                                    |  |  |   | —                                                             | 
|IntraOp
    Medical Corp. Term Note*          |  |  | 3,000,000                                                    |  |  |  | —                |  |  |  | —                         |   |  |  | 3,000,000                                                    |  |  |   | —                                                             | 
|Pivotal
    Systems, Series A Preferred*      |  |  | 11,914,217                                                   |  |  |  | —                |  |  |  | —                         |   |  |  | 11,914,217                                                   |  |  |   | —                                                             | 
|Pivotal
    Systems, Series B Preferred*      |  |  | 13,065,236                                                   |  |  |  | —                |  |  |  | —                         |   |  |  | 13,065,236                                                   |  |  |   | —                                                             | 



79





Firsthand
Technology Value Fund, Inc.

Notes
to Financial Statements - continued

DECEMBER
31, 2017



|                                                 |  | SHARES/PAR
    ACTIVITY |            |  |                       |  |            |                                 |  |  |                         |   |  |                          |           
|------------------------------------------------ |  | ----------------------- | ---------- |  | --------------------- |  | ---------- | ------------------------------- |  |  | ----------------------- | - |  | ------------------------ | ----------
|AFFILIATE/CONTROLLED
    INVESTMENT*             |  | BALANCE
    AT 12/31/15 |            |  | PURCHASES/
    MERGER |  |            | SALES/
    MATURITY/ EXPIRATION |  |  | BALANCE
    AT 12/31/16 |   |  | REALIZED
    GAIN (LOSS) |           
|Pivotal
    Systems, Series C Preferred*         |  |                         | 2,291,260  |  |                       |  | —          |                                 |  |  | —                       |   |  |                          | 2,291,260 
|Pivotal
    Systems, Series D Preferred*         |  |                         | —          |  |                       |  | 6,237,978  |                                 |  |  | —                       |   |  |                          | 6,237,978 
|Pivotal
    Systems, Convertible Note*           |  |                         | —          |  |                       |  | 500,000    |                                 |  |  | (500,000                | ) |  |                          | —         
|Pivotal
    Systems, Convertible Note*           |  |                         | —          |  |                       |  | 881,102    |                                 |  |  | (881,102                | ) |  |                          | —         
|Pivotal
    Systems, Common Stocks Warrants*     |  |                         | —          |  |                       |  | 4,158,654  |                                 |  |  | —                       |   |  |                          | 4,158,654 
|Pivotal
    Systems, Common Stocks Warrants*     |  |                         | —          |  |                       |  | 18,180,475 |                                 |  |  | —                       |   |  |                          | 18,180,475
|QMAT,
    Preferred Stock Series A*              |  |                         | 14,000,240 |  |                       |  | 2,000,000  |                                 |  |  | —                       |   |  |                          | 16,000,240
|QMAT,
    Preferred Stock Series B*              |  |                         | —          |  |                       |  | 2,000,000  |                                 |  |  | —                       |   |  |                          | 2,000,000 
|QMAT,
    Series A Warrant*                      |  |                         | 2,000,000  |  |                       |  | —          |                                 |  |  | —                       |   |  |                          | 2,000,000 
|Revasum,
    Common Stock*                       |  |                         | —          |  |                       |  | 10,000     |                                 |  |  | —                       |   |  |                          | 10,000    
|Revasum,
    Preferred Stock Series A*           |  |                         | —          |  |                       |  | 2,200,000  |                                 |  |  | —                       |   |  |                          | 2,200,000 
|Silicon
    Genesis Corp., Common *              |  |                         | 921,892    |  |                       |  | —          |                                 |  |  | —                       |   |  |                          | 921,892   
|Silicon
    Genesis Corp., Convertible Note*     |  |                         | 1,250,000  |  |                       |  | —          |                                 |  |  | (1,250,000              | ) |  |                          | —         
|Silicon
    Genesis Corp., Convertible Note*     |  |                         | 1,000,000  |  |                       |  | —          |                                 |  |  | (1,000,000              | ) |  |                          | —         
|Silicon
    Genesis Corp., Term Note*            |  |                         | 3,000,000  |  |                       |  | —          |                                 |  |  | (3,000,000              | ) |  |                          | —         
|Silicon
    Genesis Corp., Common Warrant*       |  |                         | 37,982     |  |                       |  | —          |                                 |  |  | —                       |   |  |                          | 37,982    
|Silicon
    Genesis Corp., Common Warrant*       |  |                         | 5,000,000  |  |                       |  | —          |                                 |  |  | —                       |   |  |                          | 5,000,000 
|Silicon
    Genesis Corp., Common Warrant*       |  |                         | 3,000,000  |  |                       |  | —          |                                 |  |  | —                       |   |  |                          | 3,000,000 
|Silicon
    Genesis Corp., Series 1-C Preferred* |  |                         | 82,914     |  |                       |  | —          |                                 |  |  | —                       |   |  |                          | 82,914    
|Silicon
    Genesis Corp., Series 1-D Preferred* |  |                         | 850,830    |  |                       |  | —          |                                 |  |  | —                       |   |  |                          | 850,830   
|Silicon
    Genesis Corp., Series 1-E Preferred* |  |                         | 5,704,480  |  |                       |  | —          |                                 |  |  | —                       |   |  |                          | 5,704,480 
|Silicon
    Genesis Corp., Series 1-F Preferred* |  |                         | 912,453    |  |                       |  | —          |                                 |  |  | —                       |   |  |                          | 912,453   



80





Firsthand
Technology Value Fund, Inc.

Notes
to Financial Statements - continued

DECEMBER
31, 2017



|                                                  |  | SHARES/PAR
    ACTIVITY |            |  |                       |  |            |                                 |  |  |                         |   |  |                          |           
|------------------------------------------------- |  | ----------------------- | ---------- |  | --------------------- |  | ---------- | ------------------------------- |  |  | ----------------------- | - |  | ------------------------ | ----------
|AFFILIATE/CONTROLLED
    INVESTMENT*              |  | BALANCE
    AT 12/31/15 |            |  | PURCHASES/
    MERGER |  |            | SALES/
    MATURITY/ EXPIRATION |  |  | BALANCE
    AT 12/31/16 |   |  | REALIZED
    GAIN (LOSS) |           
|Silicon
    Genesis Corp., Series 1-G Preferred*  |  |                         | —          |  |                       |  | 83,370,793 |                                 |  |  | (35,000,000             | ) |  |                          | 48,370,793
|Silicon
    Genesis Corp., Series 1-H Preferred*  |  |                         | —          |  |                       |  | 837,942    |                                 |  |  | —                       |   |  |                          | 837,942   
|Telepathy
    Investors, Inc. Convertible Note*   |  |                         | 2,000,000  |  |                       |  | —          |                                 |  |  | —                       |   |  |                          | 2,000,000 
|Telepathy
    Investors, Inc. Convertible Note*   |  |                         | —          |  |                       |  | 150,000    |                                 |  |  | —                       |   |  |                          | 150,000   
|Telepathy
    Investors, Inc. Convertible Note*   |  |                         | —          |  |                       |  | 500,000    |                                 |  |  | —                       |   |  |                          | 500,000   
|Telepathy
    Investors, Inc. Convertible Note*   |  |                         | —          |  |                       |  | 300,000    |                                 |  |  | —                       |   |  |                          | 300,000   
|Telepathy
    Investors, Inc. Convertible Note*   |  |                         | —          |  |                       |  | 500,000    |                                 |  |  | —                       |   |  |                          | 500,000   
|Telepathy
    Investors, Inc. Series A Preferred* |  |                         | 15,238,000 |  |                       |  | —          |                                 |  |  | —                       |   |  |                          | 15,238,000
|Vufine,
    Inc., Series A Preferred*             |  |                         | 15,000,000 |  |                       |  | 7,500,000  |                                 |  |  | —                       |   |  |                          | 22,500,000
|Vufine,
    Inc., Common Stock*                   |  |                         | 750,000    |  |                       |  | —          |                                 |  |  | —                       |   |  |                          | 750,000   
|Vufine,
    Inc., Convertible Note*               |  |                         | —          |  |                       |  | 1,000,000  |                                 |  |  | —                       |   |  |                          | 1,000,000 
|Wrightspeed,
    Inc. Series C Preferred          |  |                         | 2,267,659  |  |                       |  | 1,480,000  |                                 |  |  | (1,480,000              | ) |  |                          | 2,267,659 
|Wrightspeed,
    Inc. Series D Preferred          |  |                         | 1,100,978  |  |                       |  | —          |                                 |  |  | —                       |   |  |                          | 1,100,978 
|Wrightspeed,
    Inc. Series E Preferred          |  |                         | 450,814    |  |                       |  | —          |                                 |  |  | —                       |   |  |                          | 450,814   
|Total
    Affiliates and Controlled Investments   |  |                         |            |  |                       |  |            |                                 |  |  |                         |   |  |                          |           
|Total
    Affiliates                              |  |                         |            |  |                       |  |            |                                 |  |  |                         |   |  |                          |           
|Total
    Controlled                              |  |                         |            |  |                       |  |            |                                 |  |  |                         |   |  |                          |           
|Investments                                       |  |                         |            |  |                       |  |            |                                 |  |  |                         |   |  |                          |           



| | * | Controlled
investment.
| | - | ----------------------



As
of December 31, 2016, Kevin Landis represents the Company and sits on the board of directors of Hera Systems, Inc.; IntraOp Medical,
Inc.; Phunware, Inc.; Pivotal Systems, Inc.; QMAT, Inc.; Revasum, Inc.; Silicon Genesis Corp.; Telepathy Investors, Inc.; Vufine,
Inc.; and Wrightspeed, Inc. Serving on boards of directors of portfolio companies may cause conflicts of interest. The Adviser has
adopted various procedures to ensure that the Company will not be unfavorably affected by these potential conflicts.



81





Firsthand
Technology Value Fund, Inc.

Notes
to Financial Statements - continued

DECEMBER
31, 2017



NOTE
11. SUBSEQUENT EVENTS



On
February 14, 2018, OpenText Corp. announced that it had purchased Hightail, Inc., a portfolio holding since 2014. We currently
anticipate receiving between $5 and $6 million in proceeds from this transaction.



On
March 12, 2018, Pivotal Systems announced it has engaged two investment banks for the purpose of exploring a 2018 listing on the
Australian Securities Exchange.



82







Item
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE



None



Item
9A. CONTROLS AND PROCEDURES



DISCLOSURE
CONTROLS AND PROCEDURES

Our
Chief Executive Officer and Chief Financial Officer performed an evaluation of the effectiveness of our disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of December
31, 2017, and, based on that evaluation, have concluded that the disclosure controls and procedures are effective.



REPORT
OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our
management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules
13a-15(f) and 15d-15(f) of the Exchange Act). Internal control over financial reporting is a process designed by, or under the
supervision of, our principal executive and financial officer, or persons performing similar functions, and effected by our board
of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles
and includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately
and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that the transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles,
and that our receipts and expenditures are being made only in accordance with authorizations of our management and our directors;
and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition
of our assets that could have a material effect on the consolidated financial statements.



Our
management evaluated as of December 31, 2017, the effectiveness of our internal control over financial reporting using the criteria
set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated
Framework. Based on this evaluation, our management concluded that our internal control over financial reporting was effective
as of December 31, 2017. Our independent registered public accounting firm, Tait, Weller & Baker LLP, issued a report on the
effectiveness of our internal control over financial reporting as of December 31, 2017, which appears on page 39 herein.



INHERENT
LIMITATIONS OF EFFECTIVENESS OF CONTROLS

Our
management, including our Chief Executive Officer and Chief Financial Officer, do not expect that our disclosure controls and
procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter
how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system
are met. Further, the benefits of controls must be considered relative to their costs. Because of the inherent limitations in
all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud,
if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty,
and that breakdowns can occur because of simple errors or mistakes. Additionally, controls can be circumvented by the individual
acts of some persons, by collusion of two or more people or by management override of the control. The design of any system of
controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that
any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of
controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in
conditions or deterioration in the degree of compliance with policies or procedures.



CHANGES
IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There
have been no changes in our internal control over financial reporting that occurred during our fourth quarter ended December 31,
2017, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



Item
9B. OTHER INFORMATION



None



83





Part
III



Item
10. DIRECTORS, EXECUTIVES OFFICERS AND CORPORATE GOVERNANCE



Reference
is made to the information with respect to “Directors and Executive officers of the Registrant” to be contained in
the Company’s proxy statement to be filed with the SEC, in connection with the Company’s annual meeting of shareholders
to be held in 2018 (the “2018 Proxy Statement”), which information is incorporated herein by reference.



The
Company has adopted a code of ethics that applies to the Company’s chief executive officer, a copy of which is posted on
our website http://www.firsthandtvf.com.



Our
CEO certifies the accuracy of the financial statements contained in our periodic reports, and so certified in this Form 10-K through
the filing of Section 302 certifications as exhibits to this Form 10-K.



Section
16(a) Beneficial Ownership Reporting Compliance



Section
16(a) of the Securities Exchange Act of 1934 requires the Company’s officers and directors, and persons who own more than
ten percent of a registered class of the Company’s equity securities, to file with the Securities and Exchange Commission
and the Nasdaq Stock Market reports of ownership of the Company’s securities and changes in reported ownership. Officers,
directors and greater than ten percent shareholders are required by SEC rules to furnish the Company with copies of all Section
16(a) reports they file.



Based
solely on a review of the reports furnished to the Company, or written representations from reporting persons that all reportable
transaction were reported, the Company believes that during the fiscal year ended December 31, 2017, the Company’s officers,
directors and greater than ten percent owners timely filed all reports they were required to file under Section 16(a).



Item
11. EXECUTIVE COMPENSATION



Reference
is made to the information with respect to “Compensation of Directors” to be contained in the 2018 Proxy Statement,
which information is incorporated herein by reference.



Item
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS



The
information set forth under the caption “How Many Shares Do the Company’s Principal Shareholders, Directors and Executive
Officers Own?” in the 2018 Proxy Statement is herein incorporated by reference.



Item
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE



The
information set forth under the captions “Nominees” and “Related Party Transactions” in the 2018 Proxy
Statement is herein incorporated by reference.



Item
14. PRINCIPAL ACCOUNTANT FEES AND SERVICES



The
information set forth under the captions “Audit Committee’s Pre-Approval Procedures” and “Fees Paid to
Tait, Weller & Baker LLP for 2017” in the 2018 Proxy Statement is herein incorporated by reference.



84





Part
IV



Item
15. EXHIBITS AND FINANCIAL STATEMENTS SCHEDULES



1.
Financial Statements



The
following financial statements of Firsthand Technology Value Fund, Inc. (the “Company” or the “Registrant”)
are filed herewith:



|AUDITED FINANCIAL STATEMENTS                                    |   
|--------------------------------------------------------------- | --
|Report of Independent Registered Public Accounting
    Firm     | 40
|Statement of Assets and Liabilities as of December
    31, 2017 | 42
|Schedule of Investments as of December 31, 2017                 | 43
|Statement of Operations as of December 31, 2017                 | 52
|Statement of Cash Flows as of December 31, 2017                 | 53
|Statement of Changes in Net Assets as of December
    31, 2017  | 54
|Financial Highlights                                            | 55
|Notes to Financial Statements                                   | 56



2.
The following financial statement schedule is filed herewith:



Schedule
12-14 Investments In and Advances to Affiliates



3.
Exhibits required to be filed by Item 601 of Regulation S-K.



| | Number | Description
| | ------ | -----------
| |        |            



| | 3.1. | Registrant’s
                                         Articles of Amendment and Restatement are incorporated by reference to Exhibit (a)(2)
                                         of Pre-Effective Amendment No. 1 to the Registrant’s Registration Statement on
                                         Form N-2 (File No. 333-168195) as filed with the Securities and Exchange Commission on
                                         September 24, 2010.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3.2 | Certificate
                                         of Correction to Registrant’s Articles of Amendment and Restatement is incorporated
                                         by reference to Exhibit (a)(2) of Registration statement for closed-end investment companies
                                         on Form N-2 (File No. 333-179606) as filed with the Securities and Exchange Commission
                                         on February 21, 2012.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3.3 | Registrant’s
                                         Amended and Restated Bylaws last amended March 16, 2018 — filed herewith.
| | --- | -------------------------------------------------------------------------------------------------------------------------------



| | 10.1 | Registrant’s
                                         Dividend Reinvestment Plan is incorporated by reference to Exhibit (e) of Pre-Effective
                                         Amendment to the Registrant’s Registration Statement on Form N-2 (File No. 333-168195)
                                         as filed with the Securities and Exchange Commission on September 24, 2010.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 10.2 | Form
                                         of Investment Management Agreement between Registrant and SiVest Group, Inc. (now known
                                         as Firsthand Capital Management, Inc.) is incorporated by reference to Exhibit (g) of
                                         Pre-Effective Amendment to the Registrant’s Registration Statement on Form N-2
                                         (File No. 333-168195) as filed with the Securities and Exchange Commission on September
                                         24, 2010.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 10.3 | Form
                                         of Custodian Services Agreement between Registrant and PFPC Trust Company is incorporated
                                         by reference to Exhibit (j) of Pre-Effective Amendment to the Registrant’s Registration
                                         Statement on Form N-2 (File No. 333-168195) as filed with the Securities and Exchange
                                         Commission on September 24, 2010. 10.4 Form of Administration and Accounting Agreement
                                         between Registrant and BNY Mellon Investment Servicing (US), Inc. is incorporated by
                                         reference to Exhibit (k)(1) of Pre-Effective Amendment to the Registrant’s Registration
                                         Statement on Form N-2 (File No. 333-168195) as filed with the Securities and Exchange
                                         Commission on September 24, 2010.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 10.5 | Notice
                                         of Assignment dated February 9, 2011 by PFPC Trust Company assigning Custodian Services
                                         Agreement is incorporated by reference to the Registrant’s Registration Statement
                                         on Form N-2 (File No. 333-179606) as filed with the Securities and Exchange Commission
                                         on February 21, 2012.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



85





| | 10.6 | Form
                                         of Transfer Agency Services Agreement between Registrant and BNY Mellon Investment Servicing
                                         (US), Inc. is incorporated by reference to Exhibit (k)(2) of Pre-Effective Amendment
                                         to the Registrant’s Registration Statement on Form N-2 (File No. 333-168195) as
                                         filed with the Securities and Exchange Commission on September 24, 2010.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 14.1 | Registrant’s
                                         Code of Ethics for Principal Executives and Senior Financial Officers is incorporated
                                         by reference to Exhibit 14.1 to the Registrant’s Form 10-K as filed with the Securities
                                         and Exchange Commission on March 21, 2012.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 14.2 | Registrant’s
                                         Code of Ethics last amended August 4, 2017 — filed herewith.
| | ---- | ------------------------------------------------------------------------------------------------------------------



| | 24.1 | Power
                                         of Attorney is incorporated by reference to exhibit 24.1 to the registrant’s Form
                                         10-K as filed with the Securities and Exchange Commission on March 16, 2015.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 31.1 | Certification
                                         by Chief Executive Officer and Chief Financial Officer pursuant to Exchange Act Rule
                                         13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 —
                                         filed herewith.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 32.1 | Certification
                                         by Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section
                                         1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 — filed
                                         herewith.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.



|                         | FIRSTHAND
    TECHNOLOGY VALUE FUND, INC. |                 
|------------------------ | ----------------------------------------- | ----------------
|                         |                                           |                 
|Date:
    March 16, 2018 | By:                                       | (graphic)       
|                         |                                           | Kevin
    Landis
|                         |                                           | President       



Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf
of the Company and in the capacities and on the dates indicated.



|Signatures            |  | Title                                                 |  | Date              
|--------------------- |  | ----------------------------------------------------- |  | ------------------
|                      |  |                                                       |  |                   
|/s/
    Kevin Landis  |  | Chairman
    of the Board and Chief Executive Officer |  | March
    16, 2018
|Kevin
    Landis      |  | and
    Chief Financial Officer                       |  |                   
|                      |  |                                                       |  |                   
|*                     |  | Director                                              |  | March
    16, 2018
|Greg
    Burglin      |  |                                                       |  |                   
|                      |  |                                                       |  |                   
|*                     |  | Director                                              |  | March
    16, 2018
|Kimun
    Lee         |  |                                                       |  |                   
|                      |  |                                                       |  |                   
|*                     |  | Director                                              |  | March
    16, 2018
|Nicholas
    Petredis |  |                                                       |  |                   
|                      |  |                                                       |  |                   
|*                     |  | Director                                              |  | March
    16, 2018
|Rodney
    Yee        |  |                                                       |  |                   



| | * | Signed
                                         by Kevin Landis pursuant to powers of attorney.
| | - | -----------------------------------------------------------------------------------------------



86





EXHIBIT
INDEX



|Exhibit
    Number |  | Descriptions                                                                                                                                                                         
|------------------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.3                |  | Registrant’s
    Amended and Restated Bylaws last amended March 16, 2018.                                                                                                            
|14.2               |  | Registrant’s
    Code of Ethics last amended August 4, 2017.                                                                                                                         
|31.1               |  | Certification
    by Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002                       
|32.1               |  | Certification
    by Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



87





Privacy
Notice

FIRSTHAND
TECHNOLOGY VALUE FUND, INC.



|FACTS | WHAT DOES FIRSTHAND TECHNOLOGY
    VALUE FUND, INC. DO WITH YOUR PERSONAL INFORMATION?                                                                                                                                                                                                                                                   
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Why?  | Financial companies choose how they share your
    personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us
    to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand
    what we do.             
|What? | The types of personal information we collect
    and share depend on the product or service you have with us. This information can include:                                                                                                                                                                                              
|      | ► Social Security
    number                                                                                                                                                                                                                                                                                                             
|      | ► Banking
information                                                                                                                                                                                                                                                                                                                    
|      | ► Account
transactions                                                                                                                                                                                                                                                                                                                   
|      | ►Retirement
assets                                                                                                                                                                                                                                                                                                                       
|How?  | All financial companies need to share customers’
    personal information to run their everyday business. In the section below, we list the reasons financial companies can share
    their customers’ personal information; the reasons Firsthand Capital management, Inc. chooses to share; and whether
    you can limit this sharing.



|Reasons we can share your
    personal information                                                                                                      | Does
    Firsthand Technology Value Fund, Inc. share? | Can
    you limit this sharing?
|------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------- | -------------------------------
|For our everyday business purposes—such
    as to process your transactions, maintain your account(s), respond to court orders and legal investigations | Yes                                                   | No                             
|For our marketing purposes—to offer
    our products and services to you                                                                                | No                                                    | N/A                            
|For joint marketing with other financial
    companies                                                                                                  | No                                                    | N/A                            
|For our Affiliates’ everyday business
    purposes—information about your transactions and experiences                                                  | No                                                    | N/A                            
|For our Affiliates’ everyday business
    purposes—information about your creditworthiness                                                              | No                                                    | N/A                            
|For our Affiliates to market to you                                                                                                                     | No                                                    | N/A                            
|For nonAffiliates to market to you                                                                                                                      | No                                                    | N/A                            



|Who we are                    |                                                                                                                                                                                             
|----------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Who is providing this notice? | Firsthand Technology Value Fund, Inc. is a publically
    traded venture capital fund, listed on NASDAQ, that is a business development company under the Investment Company Act of
    1940



|What we do                                                                          |                                                                                                                                                                                                                  
|----------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|How does Firsthand Technology Value Fund, Inc.
    protect my personal information? | To protect your personal information from unauthorized
    access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured
    files and buildings.
|How does Firsthand Technology Value Fund, Inc.
    collect my personal information? | We
collect your personal information, for example, when you 
► open an account or deposit money                                                                                                                  
|Why can’t I limit all sharing?                                                      | Federal law gives you the right to limit only                                                                                                                                                                    
|                                                                                    | ►sharing for Affiliates’ everyday business purposes—information about your creditworthiness                                                                                                                      
|                                                                                    | ►Affiliates from using your information to market to you                                                                                                                                                         
|                                                                                    | ► sharing
    for nonAffiliates to market to you                                                                                                                                                                 
|                                                                                    | State laws and individual companies may give
    you additional rights to limit sharing.                                                                                                                         



|Definitions     |                                                                                                                             
|--------------- | ----------------------------------------------------------------------------------------------------------------------------
|Affiliates      | Companies related by common ownership
    or control. They can be financial and nonfinancial companies.                     
|                | ►Firsthand Capital
    Management, Inc. and Firsthand Funds                                                                 
|NonAffiliates   | Companies not related by common
    ownership or control. They can be financial and nonfinancial companies.                 
|                | ►BNY
Mellon Investment Servicing (U.S.) Inc. (Transfer Agent for Firsthand Technology Value Fund, Inc. and Firsthand Funds) 
|Joint marketing | A formal agreement between nonaffiliated
    financial companies that together market financial products or services to you.



|Other important information                                                                                                                                                                                                                                                 | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|This notice applies to individual
    consumers who are customers or former customers. This notice replaces all previous notices of our consumer privacy policy,
    and may be amended at any time. We will keep you informed of changes or amendments as required by law.









LETTER
TO SHAREHOLDERS - CONTINUED FROM INSIDE FRONT COVER



IntraOp
Medical, Phunware, Telepathy, and Vufine, have struggled with developing markets for their new technologies. By and large, we
believe these companies remain on the right track, and we are hopeful that our patience will be rewarded.



FUTURE
CATALYSTS



As
we have stated in the past, our continued success is driven by companies progressing through the various stages of development
(see illustration on page 31). Over the past couple of years, we have witnessed several of our later stage companies, including
Roku, Nutanix, Cloudera, Pure Storage, and Turn, achieve IPOs or M&As. While this temporarily leaves our portfolio tilted
more toward early- and mid-stage companies, several other companies, including Pivotal, Revasum, and Wrightspeed, are poised to
reach a level of maturity normally associated with late-stage companies. We would be surprised if one of the companies from this
group is not the next exit for the Fund.



In
November, our Board approved a plan to repurchase up to $2 million worth of SVVC stock in the open market by March 30, 2018. As
of December 31, 2017, the Fund had repurchased and retired 128,551 shares of stock at a total cost of approximately $1.1 million.
So far, this repurchase plan has added $0.20 per share to the Fund’s NAV. We continue to examine and consider other ways
to deliver value to shareholders and will do what we think is best for long-term investors in the Fund.



On
a personal level, I was again an active buyer of SVVC stock in 2017 and now own more than 260,000 shares of our stock. While our
compliance rules prohibit my purchasing additional stock while the Fund is conducting its open market activities, I am a firm
believer in the future prospects for our current holdings and I intend to continue purchasing shares during 2018.



Finally,
I wish to thank you for entrusting your investment dollars to us. We believe the future is bright, and we are working hard every
day make good investments in some of the most exciting technology companies in the world.



Sincerely,



(graphic)



Kevin
LandisCEO and President

Firsthand
Technology Value Fund, Inc.









(graphic)