FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ending March 31, 1999
[ ] 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 0-22618
Venture Lending & Leasing, Inc.
(Exact Name of Registrant as specified in its charter)
Maryland 13-3775187
- ------------------------------------------------- -------------------
(State or other jurisdiction of incorporation or (I.R.S. Employer
or organization) Identification No.)
2010 North First Street, Suite 310, San Jose, CA 95131
------------------------------------------------------
(Address of principal executive offices)
(Zip Code)
(408) 436-8577
------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant has (i) filed all reports
required to be filed by Section 13 or 15(d) of the Securities and Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (ii) has been subject to such
filing requirements for the past 90 days.
Yes [X] No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:
Class Outstanding as of May 15, 1999
- ------------------------------------------- ------------------------------
Common Stock, $.001 par value 48,318.58
Page 1 of 17; Exhibit Index appears on Page 16
1
<PAGE>
VENTURE LENDING & LEASING, INC.
INDEX
Page Number
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements
Statement of Financial Position 3
March 31, 1999 (Unaudited) and June 30, 1998 (Audited)
Statement of Operations (Unaudited) 4
Nine Months ended March 31, 1999 and
March 31, 1998
Statement of Operations (Unaudited) 5
Three months ended March 31, 1999 and
March 31, 1998
Statement of Changes in Shareholders Equity 6
Nine Months ended March 31, 1999 (Unaudited)
and the Year Ended June 30, 1998 (Audited)
Statement of Cash Flows (Unaudited) 7
Nine Months ended March 31, 1999 and
March 31, 1998
Notes to Financial Statements 8 - 12
Item 2. Management's Discussion and Analysis of Financial 13 - 15
Condition and Results of Operations
PART II -- OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 16
Item 6. Exhibits 16
SIGNATURES 17
2
<PAGE>
VENTURE LENDING & LEASING, INC.
Statement of Financial Position
- --------------------------------------------------------------------------------
(Unaudited) (Audited)
March 31, 1999 June 30, 1998
Assets -------------- ------------
Loans and leases, at estimated fair value
(cost of $60,348,846 and $81,421,224) $ 60,335,030 $ 79,821,224
Investments in warrants, at estimated fair value
(cost of $1,125,350 and $1,208,550) 1,180,019 1,289,713
Investments in stocks, at estimated fair value
(cost of $192,330 and $650,263) 437,367 4,276,393
Cash and cash equivalents 3,801,163 2,301,753
Past due loans receivable 495,145 584,577
Other assets 147,791 215,423
------------ ------------
Total assets 66,396,515 88,489,083
------------ ------------
Liabilities & Shareholders' Equity
Liabilities
Bank loans 28,993,882 36,114,059
Management fees payable 412,305 560,821
Accounts payable and other accrued liabilities 581,168 750,953
------------ ------------
Total liabilities 29,987,355 37,425,833
------------ ------------
Shareholders' Equity
Common stock, $.001 par value;
100,000,000 shares authorized;
issued and outstanding, 48,318.58 shares 49 49
Capital in excess of par value 46,641,051 46,641,051
Distributions (37,591,048) (16,871,073)
Accumulated earnings 27,359,108 21,293,223
------------ ------------
Total shareholders' equity 36,409,160 51,063,250
------------ ------------
Total liabilities & shareholders' equity $ 66,396,515 $ 88,489,083
============ ============
The accompanying notes are an integral part of these statements.
3
<PAGE>
VENTURE LENDING & LEASING, INC.
Statement of Operations (Unaudited)
- --------------------------------------------------------------------------------
For the Nine
Months Ended March 31,
1999 1998
----------- ----------
Investment income:
Interest on loans and leases $ 9,088,170 $ 9,369,552
Interest on short-term investments 160,076 302,567
----------- ----------
Total investment income 9,248,246 9,672,119
----------- ----------
Expenses:
Interest expense 1,681,850 2,294,947
Management fee 1,388,002 1,748,193
Bank loan facility fee 237,432 114,556
Professional fees 124,398 148,360
Other operating expenses 96,515 115,919
----------- ----------
Total expenses 3,528,197 4,421,975
----------- ----------
Net investment income 5,720,049 5,250,144
Net change in unrealized (loss) gain
from investment transactions (1,821,404) 40,333
Net realized gain from investment transactions 3,753,423 4,207,596
Realized loss on loans (1,586,183) --
----------- ----------
Net income $ 6,065,885 $ 9,498,073
=========== ==========
Basic earnings per share $ 125.54 $ 201.94
=========== ===========
Weighted average shares outstanding 48,319 47,034
=========== ===========
The accompanying notes are an integral part of these statements.
4
<PAGE>
VENTURE LENDING & LEASING, INC.
Statement of Operations (Unaudited)
- --------------------------------------------------------------------------------
For the Three
Months Ended March 31,
1999 1998
---------- ----------
Investment income:
Interest on loans and leases $ 2,570,686 $ 3,395,265
Interest on short-term investments 60,516 97,869
----------- ----------
Total investment income 2,631,202 3,493,134
----------- ----------
Expenses:
Interest expense 486,415 694,774
Management fee 412,305 578,605
Other operating expenses 154,945 204,753
----------- ----------
Total expenses 1,053,665 1,478,132
----------- ----------
Net investment income 1,577,537 2,015,002
Net change in unrealized (loss) gain
from investment transactions (100,672) 908,301
Net realized (loss) gain from
investment transactions (20,000) 1,822,117
----------- ----------
Net income $ 1,456,865 $ 4,745,420
=========== ==========
Basic earnings per share $ 30.15 $ 98.21
=========== ===========
Weighted average shares outstanding 48,318 48,319
=========== ===========
The accompanying notes are an integral part of these statements.
5
<PAGE>
VENTURE LENDING & LEASING, INC.
Statement of Changes in Shareholders' Equity (Unaudited)
- --------------------------------------------------------------------------------
For the Year Ended June 30, 1998 and
the Nine Months Ended March 31, 1999
------------------------------------
Common Stock Capital
---------------- in
Excess of Accumulated
Shares Amount Par Value Distributions Earnings Total
-------------------------------------------------------------------
Balance,
June 30, 1997 39,054.38 $40 $37,317,282 ($5,828,791) $8,967,021 $40,455,552
Shares sold 9,264.20 9 9,323,769 ---- ---- 9,323,778
Distributions ---- ---- ---- (11,042,282) ---- (11,042,282)
Net income ---- ---- ---- ---- 12,326,202 12,326,202
------------------------------------------------------------------
Balance,
June 30, 1998 48,318.58 49 46,641,051 (16,871,073) 21,293,223 51,063,250
Distributions ---- ---- ---- (20,719,975) ---- (20,719,975)
Net income ---- ---- ---- ---- 6,065,885 6,065,885
------------------------------------------------------------------
Balance,
March 31,1999 48,318.58 $49 $46,641,051 ($37,591,048) $27,359,108 $36,409,160
==================================================================
The accompanying notes are an integral part of these statements.
6
<PAGE>
VENTURE LENDING & LEASING, INC.
Statement of Cash Flows (Unaudited)
- --------------------------------------------------------------------------------
For the Nine For the Nine
Months Ended Months Ended
March 31, 1999 March 31, 1998
-------------- --------------
Cash flows from operating activities:
Net income $ 6,065,885 $ 9,498,073
Adjustments to reconcile net income
to net cash provided by operating activities:
Amortization of organizational expenses 22,437 15,033
Amortization of bank loan expenses 49,813 38,997
Gain on sale of securities (3,753,423) (4,207,596)
Realized loss on loans 1,586,183 --
Increase (Decrease) in unrealized gain
from investment transactions 1,821,404 (40,333)
Increase in past due loans receivable 89,432 (192,323)
Decrease in other assets (4,618) (171,248)
Increase (decrease) in management fees payable (148,516) (152,310)
Decrease in accounts payable and other
accrued liabilities (169,785) (331,826)
------------ ------------
Net cash provided by operating activities 5,558,812 4,456,467
------------ ------------
Cash flows from investing activities:
Acquisition of loans and leases (8,366,718) (39,642,239)
Principal payments on loans and leases 27,852,912 19,557,375
Acquisition of warrants and common stock (73,309) (403,475)
Proceeds from sale of securities 4,367,865 4,189,539
------------ ------------
Cash provided by (used in) investing activities 23,780,750 (16,298,800)
------------ ------------
Cash flows from financing activities:
Sales of common stock, net -- 9,323,778
Distributions to shareholders (20,719,975) (7,203,371)
Loan from bank 7,500,000 15,000,000
Principal payments on bank loan (14,620,177) (4,790,025)
------------ ------------
Net cash provided by (used in)
financing activities (27,840,152) 12,330,382
------------ ------------
Net increase in cash and cash equivalents 1,499,410 488,049
------------ ------------
Cash and cash equivalents -- beginning of period 2,301,753 3,946,955
------------ ------------
Cash and cash equivalents -- end of period $ 3,801,163 $ 4,435,004
============ ============
The accompanying notes are an integral part of these statements.
7
<PAGE>
VENTURE LENDING & LEASING, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 1999
- --------------------------------------------------------------------------------
1. BASIS OF PRESENTATION:
The accompanying condensed financial statements have been prepared pursuant to
the rules and regulations of the Securities and Exchange Commission (SEC) and in
Management's opinion, include all adjustments (consisting only of normal
recurring adjustments) necessary for a fair presentation of results for such
interim periods. Certain information and note disclosures normally included in
annual financial statements prepared in accordance with generally accepted
accounting principles have been omitted pursuant to SEC rules or regulations;
however, the Fund believes that the disclosures made are adequate to make the
information presented not misleading. The interim results for the nine months
ended March 31, 1999 and 1998, are not necessarily indicative of results for the
full year. It is suggested that these financial statements be read in
conjunction with the financial Statements and the notes included in the Fund's
Annual Report for the year ended June 30, 1998.
2. SUMMARY OF INVESTMENTS:
Loans and leases generally are made to borrowers pursuant to commitments whereby
the Fund commits to finance assets up to a specified amount for the term of the
commitments, upon the terms and subject to the conditions specified by such
commitment. The Fund's investments in loans and leases are entirely within the
United States and are diversified among the following industries.
The percentage of shareholders' equity that each industry group represents is
shown with the industry totals:
Outstanding
Borrower March 31, 1999
Biotechnology:
Biosys, Inc. $1,411,463
Ceres, Inc. 1,146,125
Desmos, Inc. 99,718
Advanced Therapies, Inc. 128,000
Gene Logic, Inc. 690,039
Protien Delivery, Inc. 131,314
Regen Biologics, Inc. 679,545
Telek, Inc. 665,905
Therics, Inc. 365,143
---------------------
Total biotechnology (14.6%) 5,317,252
---------------------
8
<PAGE>
Communications:
AUnet Corporation $400,344
Brocade Communications, Inc. 990,222
Cerent Corporation 3,738,175
Digital Generation Systems, Inc. 3,271,462
Exodus Communications, Inc. 2,874,686
Fabrik Communications, Inc. 1,728,354
Juniper Networks, Inc. 1,872,459
Optimal Networks Corporation 273,418
Optivision, Inc. 357,081
Silicon Wireless, Inc. 1,276,299
Socket Communications, Inc. 17,634
Wink Communications, Inc. 667,706
Yago Systems, Inc. 206,644
---------------------
Total communications (48.5%) 17,674,484
---------------------
Computers and peripherals:
Das Devices, Inc. 3,491,580
Headway Technologies, Inc. 4,363,748
Aptix Corporation 568,623
Neomagic Corporation 300,082
SVision, Inc. 594,626
---------------------
Total computers and peripherals (25.6%) 9,318,659
---------------------
Internet:
Active Software, Inc. 187,787
Adforce, Inc. 1,362,158
Intermedia Communications 123,167
Inverse Network Technology 252,340
Keynote Systems Incorporated 326,094
Netratings, Inc. 155,703
---------------------
Total Internet (6.6%) 2,407,249
---------------------
Medical devices:
Ciphergen Biosystems 191,433
eMed 134,917
Encelle, Inc. 226,410
Heartstent Corporation 125,620
Integ Incorporated 3,789,604
Aerogen, Inc. 233,588
Intratherapeutics, Inc. 803,749
Myelotec, Inc. 224,269
Oratec Interventions, Inc. 175,589
Spinal Concepts, Inc. 214,133
Survivalink Corporation 476,153
---------------------
Total medical devices (18.1%) 6,595,465
---------------------
9
<PAGE>
Software:
Calico Technology, Inc. $416,083
Commerce One, Inc. 245,056
Comps Infosystems, Inc. 1,730,475
Datamind Corporation 396,821
Documentum 219,207
Mineshare Corpration 315,769
Personic Software Inc. 359,185
Persistence Software, Inc. 174,822
Perspecta, Inc. 285,041
Release Software Corporation 266,551
Solopoint, Inc. 74,590
Tenth Planet Exploration, Inc. 112,560
---------------------
Total software (12.6%) 4,596,160
---------------------
Semiconductors and equipment:
Abpac, Inc. 854,550
Apache, Inc. 66,124
Dynachip Corporation 1,125,449
Equator Technologies, Inc. 1,679,089
iCompression, Inc. 148,835
I-Cube, Inc. 760,882
Lightwave Microsystems Corporation 520,225
Poseidon Technology, Inc. 503,863
Quantum3D, Inc. 98,774
SiRF Technology 623,638
Telecruz Technology, Inc. 462,035
Tessera, Inc. 55,553
Transmeta Corporation 2,764,150
O-In Design Automation 311,964
ZSP Corporation 807,805
---------------------
Total semiconductors and equipment (29.6%) 10,782,936
---------------------
Other:
Intelligent Systems for Retail 1,398,673
Volumetrics Medical Imaging Inc. 262,757
Larex, Inc. 1,084,968
Uniax Corporation 910,243
---------------------
Total other (10.0%) 3,656,641
---------------------
Total $60,348,846
=====================
10
<PAGE>
The Fund provides asset-based financing primarily to start-up and emerging
growth venture-capital-backed companies. As a result, the Fund is subject to
general credit risk associated with such companies. At March 31, 1999, the Fund
has unfunded commitments to borrowers of $38.9 million.
The Fund's investments in warrants are entirely within the United States and are
diversified among the following industries. The percentage of shareholders'
equity that each industry group represents is shown with the industry totals:
Percentage of
Industry Warrant Value Shareholders' Equity
- --------------------------------------------------------------------------
Biotechnology $ 118,210 0.33%
Communications 291,500 0.80%
Computer and peripherals 141,000 0.39%
Internet 43,250 0.12%
Medical devices 162,300 0.45%
Semiconductor 244,059 0.67%
Software 119,700 0.33%
Other 60,000 0.17%
-------------------------------------------
Total warrants $1,180,019 3.26%
==============================================
The Fund's investment in common stock at March 31, 1999 consists of investments
in four securities within the United States and is diversified among the
software, computer and peripherals and communications industries. These
investments have a carrying value of $0.4 million and represents 1.2 percent of
the Fund's shareholders' equity.
At March 31, 1999, the Fund held 0.3 million warrants to purchase the common and
preferred shares of 8 publicly traded companies. Because of the illiquid nature
of these warrants, the Fund is carrying the public companies at a discounted
value of $279,000. The warrants issued by private companies do not have a
readily ascertainable market value and were assigned a minimal value at the time
of acquisition. These warrants had a value of $0.9 million at March 31, 1999.
3. EARNINGS PER SHARE:
The Fund adopted Statement of Financial Accounting Standards (SFAS) No. 128,
"Earnings per Share," effective December 31, 1997. SFAS No. 128 replaces primary
and fully diluted earnings per share with basic and diluted earnings per share
calculations. Basic earnings per share are computed by dividing net income, less
dividends on preferred stock, by the weighted average common shares outstanding.
Diluted earnings
11
<PAGE>
3. EARNINGS PER SHARE (continued):
per share are computed by dividing net income, less dividends on preferred
stock, by the weighted average common shares outstanding, including the dilutive
effects of potential common shares (e.g., stock options). The Fund has no
preferred stock or instruments that would be potential common shares; thus,
reported basic and diluted earnings are the same.
4. FUTURE FINANCIAL ACCOUNTING STANDARDS:
In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities." SFAS No.
133 establishes accounting and reporting standards requiring that every
derivative instrument (including certain derivative instruments embedded in
other contracts) be recorded in the balance sheet as either an asset or
liability measured at its fair value. SFAS No. 133 requires that changes in the
derivative's fair value be recognized currently in earnings unless specific
hedge accounting criteria are met. Special accounting for qualifying hedges
allows a derivative's gains and losses to offset related results on the hedged
item in the income statement and requires that a company formally document,
designate, and assess the effectiveness of transactions that receive hedge
accounting.
SFAS No. 133 is effective for fiscal years beginning after June 15, 1999, and
the Fund plans to adopt its provisions effective July 1, 1999. From time to
time, the Fund enters into interest rate swaps to hedge its interest rate.
Additionally, certain of its investments and long-term borrowings may have
embedded options due to call or put features that would be required to be
accounted for differently under SFAS No. 133 as compared to current accounting
principles. The Fund has not yet quantified the impact of adopting SFAS No. 133
on its financial statements; however, SFAS No. 133 could increase the volatility
of future earnings.
12
<PAGE>
PART I -- FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
General
Venture Lending & Leasing, Inc. ("Fund") is a non-diversified
closed-end management investment company electing status as a "business
development company" ("BDC") under the Investment Company Act of 1940 ("1940
Act") whose investment objective is to achieve a high total return. The Fund
provides asset-based financing to carefully selected venture capital-backed
companies, in the form of secured loans, installment sales contracts or
equipment leases. The Fund generally receives warrants to acquire equity
securities in connection with its portfolio investments. There can be no
assurance that the Fund will attain its investment objective.
The Fund's shares of Common Stock, $.001 par value (`Shares") were sold
to subscribers pursuant to capital calls made through August 1998. Total
committed capital of $46.6 million has been fully funded as of March 31, 1999.
The Fund has completed its investment period and will now focus on efficiently
managing the Fund's portfolio. As of March 31, 1999, the Fund has distributed
$37.6 million to its investors, including approximately $9.9 million of
committed capital.
In addition to the historical information contained herein, this
Quarterly Report contains certain forward-looking statements. The reader of this
Quarterly Report should understand that all such forward-looking statements are
subject to various uncertainties and risks that could affect their outcome. The
Fund's actual results could differ materially from those suggested by such
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, variances in the actual versus
projected growth in assets, return on assets, loan losses, expenses, rates
charged on loans and earned on securities investments and competition effects as
well as other factors. This entire Quarterly Report should be read to put such
forward-looking statements in context and to gain a more complete understanding
of the uncertainties and risks involved in the Fund's business.
Results of Operations -- Nine Months Ended March 31, 1999 and 1998
Total investment income for the Nine months ending March 31, 1999 and
1998 were $9.2 million and $9.7 million, respectively, of which $9.1 million and
$9.4 million, respectively, consisted of interest on venture loans outstanding
during the period. Remaining income consisted of interest on the temporary
investment of cash, pending investment in venture loans and leases or
application to the Fund's expenses.
Expenses for the Nine months ending March 31, 1999 and 1998 were $3.5
million and $4.4 million, respectively. Net income for the Nine months ended
March 31, 1999 and 1998 was $6.1 million and $9.5 million and includes net
change in realized and unrealized gains (losses) of $0.3 million and $4.2
million. On a per share basis, for the Nine months ending March 31, 1999 and
1998 net income was $126 and $202.
13
<PAGE>
Net investment income increased to $5.7 million for the nine months
ending March 31, 1999 compared to $5.3 million for the nine months ending March
31, 1998, reflecting the early pay-off of several loans, lower management fees
and interest expense. As the Fund distributes contributed capital to its
investors, management fees based on the Fund's total asset base are expected to
continue to decrease accordingly. The most significant factor effecting net
income for the period was the net change in realized and unrealized gain of $0.3
million for the nine months ending March 31, 1999 compared to the net gain of
$4.2 million for the nine months ending March 31, 1998.
The Fund's policy is to place a loan on non-accrual status when either
principal or interest has become past due for 90 days or more. As of March 31,
1999 and 1998, the Fund had loan balances outstanding of $3.2 million and $2.5
million to borrowers that were carried on a non-accrual basis. The amount that
the Fund will ultimately recover on these loans cannot be determined with
certainty.
Liquidity and Capital Resources -- March 31, 1999 and 1998
Total capital committed to the purchase of shares pursuant to
subscription agreements was approximately $46.6 million at March 31, 1999. As of
March 31, 1999, 100% of committed capital was called to fund investments in
venture loans and leases and to meet the Fund's expenses.
The Fund has in place a $30 million securitization debt facility to
finance the acquisition of asset-based loans and leases. The principal balance
is a 39-month term loan. Additional amounts can be drawn on the credit facility
by a minimum of $5 million and in $1 million increments in excess thereof. At
March 31, 1999, there was $27.9 million outstanding under this facility. The
interest rate on the facility is LIBOR plus .50 percent.
Borrowings under the facility are collateralized by the equipment
financed by the Fund under loans and leases with assignment to the financial
institution, plus other assets of the Fund. The amortization schedule for each
borrowing under the facility is expected to correspond to the amortization of
the loans and leases acquired with the proceeds of each borrowing. The Fund pays
a commitment fee of 0.25 percent annually based on the average daily unused
portion of the commitment with respect to this facility.
Additionally, the Fund has a $10 million warehouse line of credit with
$1.1 million outstanding on March 31, 1999. The interest rate on the warehouse
line is LIBOR plus 1.25 percent.
The Fund enters into interest rate swap transactions to hedge its
interest rate on the debt facility. The net interest received or paid on the
transactions is included in interest expense. At March 31, 1999, the Fund had
interest swap transactions outstanding with a total notional principal amount of
$35.3 million. The effect of the swap is to convert the variable LIBOR rate into
a fixed rate on the contract notional value.
14
<PAGE>
As long as the Fund qualifies as a RIC, it will not pay any federal or
state corporate income tax on income that is distributed to shareholders
(pass-through status). Should the Fund lose its qualification as a RIC, it could
be taxed as an ordinary corporation on its taxable income for that year (even if
that income is distributed to its shareholders), and all distributions out of
its earnings and profits will be taxable to shareholders as ordinary income.
Year 2000 Issue
The Fund utilizes software and related information technologies that
will be affected by the date change in the year 2000. The year 2000 issue exists
because many computer systems and applications currently use two-digit date
fields to designate a year. When the century date change occurs, certain
date-sensitive systems may recognize the year 2000 as 1900, or not at all. This
inability to recognize or properly treat the year 2000 may result in a systems
failure or cause systems to process critical financial and operational
information incorrectly. Additionally, many of the Fund's customers and service
providers use software and information technology that could also be affected by
the date change.
Based on ongoing assessments and testing, the Fund believes that there
is no material risk of business interruption as a result of computer errors or
inefficiencies. Consequently, the Fund does not anticipate that the remediation
costs associated with the year 2000 issue will be material. The Fund is also
working with its vendors and customers to obtain reasonable assurances that they
are taking comparable steps with respect to their year 2000 exposures. However,
in the event that significant vendors or customers do not adequately address the
year 2000 issue, it could have a material adverse effect on the Fund's
operations and financial position. The Fund's contingency plan includes
switching to vendors that are year 2000 compliant and utilizing backup systems
that do not rely on computers. The steps the Fund is taking and intends to take
do not guarantee complete success or eliminate the possibility that the Fund
will not be adversely affected by the matters related to the year 2000.
15
<PAGE>
PART II -- OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 6. Exhibits
Ex 27.1 Financial Data Schedule
16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned duly authorized.
VENTURE LENDING & LEASING, INC.
Registrant
Date: May 15, 1999
Ronald W. Swenson
Chairman
[Chief Executive Officer]
Date: May 15, 1999
Salvador O. Gutierrez
President & Treasurer
[Chief Financial Officer]
17
<PAGE>
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<CIK> 0000913570
<NAME> Venture Lending & Leasing, Inc.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> Mar-31-1999
<INVESTMENTS-AT-COST> 61,580
<INVESTMENTS-AT-VALUE> 61,866
<RECEIVABLES> 495
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<OTHER-ITEMS-LIABILITIES> 907
<TOTAL-LIABILITIES> 29,901
<SENIOR-EQUITY> 0
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<INTEREST-EXPENSE> 1,682
<GROSS-EXPENSE> 3,528
<AVERAGE-NET-ASSETS> 44,270
<PER-SHARE-NAV-BEGIN> 1,056.80
<PER-SHARE-NII> 143.00
<PER-SHARE-GAIN-APPREC> 44.85
<PER-SHARE-DIVIDEND> 432.05
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 244.20
<PER-SHARE-NAV-END> 753.52
<EXPENSE-RATIO> 5.56
<AVG-DEBT-OUTSTANDING> 32,372
<AVG-DEBT-PER-SHARE> 669.96
</TABLE>
