Venture Lending & Leasing IX Net Assets Plunge 18% Amid Loan Losses

Venture Lending & Leasing Ix, Inc. 10-Q Filing Summary
FieldDetail
CompanyVenture Lending & Leasing Ix, Inc.
Form Type10-Q
Filed DateNov 13, 2025
Risk Levelhigh
Pages15
Reading Time18 min
Key Dollar Amounts$0.001
Sentimentbearish

Sentiment: bearish

Topics: Venture Lending, Loan Portfolio, Net Asset Decline, Non-Accrual Loans, Investment Income Drop, Financial Performance, Credit Risk

TL;DR

**Venture Lending & Leasing IX is bleeding cash and its loan portfolio is deteriorating, making it a clear sell.**

AI Summary

Venture Lending & Leasing IX, Inc. experienced a significant decline in financial performance for the nine months ended September 30, 2025, reporting a net decrease in net assets from operations of $6,006,254, a stark contrast to the net increase of $3,889,631 for the same period in 2024. Total investment income plummeted from $27,289,923 in 2024 to $7,973,000 in 2025, primarily due to a substantial drop in interest on loans from $26,588,056 to $7,777,790. The company's total assets decreased by 38.5% from $159,966,478 as of December 31, 2024, to $98,519,018 as of September 30, 2025. Loans at estimated fair value, the largest asset component, fell from $151,064,673 to $90,914,710. Total liabilities also saw a dramatic reduction, from $40,620,267 to $495,792, largely due to the repayment of $39,500,000 in borrowings under its debt facility. Net assets decreased by 17.9% from $119,346,211 to $98,023,226. The company also reported a net realized loss from loans of $1,413,732 and a net change in unrealized loss from loans of $8,267,056 for the nine months ended September 30, 2025.

Why It Matters

This significant decline in Venture Lending & Leasing IX, Inc.'s net assets and investment income signals a challenging period for the company, directly impacting its ability to generate returns for investors. The substantial reduction in loan fair value and the increase in non-accrual loans indicate potential credit quality issues within its portfolio, which could lead to further write-downs. For employees, this financial contraction might signal a period of austerity or restructuring. In the broader market, this performance reflects potential headwinds in the venture lending space, possibly due to a tougher funding environment for startups, impacting other lenders and the companies they support. Competitively, this could weaken Venture Lending & Leasing IX's position against more stable or diversified lenders.

Risk Assessment

Risk Level: high — The company's risk level is high due to a net decrease in net assets from operations of $6,006,254 for the nine months ended September 30, 2025, compared to a net increase of $3,889,631 in the prior year. Furthermore, loans with a cost basis of $104.4 million and a fair value of $54.0 million were classified as non-accrual as of September 30, 2025, indicating significant credit quality deterioration.

Analyst Insight

Investors should consider divesting from Venture Lending & Leasing IX, Inc. given the substantial decline in net assets, plummeting investment income, and significant increase in non-accrual loans. The company's financial health appears to be deteriorating rapidly, suggesting further downside risk.

Financial Highlights

debt To Equity
0.01
revenue
$7,973,000
operating Margin
46.1%
total Assets
$98,519,018
total Debt
$0
net Income
-$6,006,254
eps
-$60.06
gross Margin
N/A
cash Position
$6,353,678
revenue Growth
-70.8%

Revenue Breakdown

SegmentRevenueGrowth
Interest on loans$7,973,000-70.7%
Other income$195,210-72.2%
Total investment income$7,973,000-70.8%

Key Numbers

  • $6.01M — Net decrease in net assets from operations (For the nine months ended September 30, 2025, a significant reversal from a $3.89M increase in the prior year.)
  • $7.97M — Total investment income (For the nine months ended September 30, 2025, down sharply from $27.29M in the prior year.)
  • $90.91M — Loans, at estimated fair value (As of September 30, 2025, a decrease from $151.06M as of December 31, 2024.)
  • $98.02M — Net assets (As of September 30, 2025, a decrease from $119.35M as of December 31, 2024.)
  • $104.4M — Cost basis of non-accrual loans (As of September 30, 2025, indicating significant credit risk.)
  • $54.0M — Fair value of non-accrual loans (As of September 30, 2025, representing a substantial impairment from cost basis.)
  • $39.5M — Repayments of borrowings under debt facility (For the nine months ended September 30, 2025, reducing total liabilities.)
  • 17.9% — Decrease in Net Assets (From $119,346,211 on December 31, 2024, to $98,023,226 on September 30, 2025.)
  • 70.06 — Net decrease in net assets per share (For the nine months ended September 30, 2025, compared to an increase of $38.90 per share in 2024.)

Key Players & Entities

  • Venture Lending & Leasing IX, Inc. (company) — Registrant
  • $6,006,254 (dollar_amount) — Net decrease in net assets from operations for nine months ended September 30, 2025
  • $3,889,631 (dollar_amount) — Net increase in net assets from operations for nine months ended September 30, 2024
  • $7,973,000 (dollar_amount) — Total investment income for nine months ended September 30, 2025
  • $27,289,923 (dollar_amount) — Total investment income for nine months ended September 30, 2024
  • $159,966,478 (dollar_amount) — Total assets as of December 31, 2024
  • $98,519,018 (dollar_amount) — Total assets as of September 30, 2025
  • $104.4 million (dollar_amount) — Cost basis of non-accrual loans as of September 30, 2025
  • $54.0 million (dollar_amount) — Fair value of non-accrual loans as of September 30, 2025
  • $39,500,000 (dollar_amount) — Repayments of borrowings under debt facility for nine months ended September 30, 2025

FAQ

What caused the significant drop in Venture Lending & Leasing IX's investment income?

The significant drop in Venture Lending & Leasing IX's investment income was primarily due to a substantial decrease in interest on loans, which fell from $26,588,056 for the nine months ended September 30, 2024, to $7,777,790 for the same period in 2025.

How did Venture Lending & Leasing IX's total assets change from December 31, 2024, to September 30, 2025?

Venture Lending & Leasing IX's total assets decreased by 38.5%, from $159,966,478 as of December 31, 2024, to $98,519,018 as of September 30, 2025.

What is the status of Venture Lending & Leasing IX's loan portfolio regarding non-accrual loans?

As of September 30, 2025, Venture Lending & Leasing IX had loans with a cost basis of $104.4 million and a fair value of $54.0 million classified as non-accrual, indicating significant credit deterioration.

What was the net change in net assets resulting from operations for Venture Lending & Leasing IX for the nine months ended September 30, 2025?

For the nine months ended September 30, 2025, Venture Lending & Leasing IX reported a net decrease in net assets resulting from operations of $6,006,254.

How much did Venture Lending & Leasing IX repay under its debt facility?

Venture Lending & Leasing IX repaid $39,500,000 in borrowings under its debt facility for the nine months ended September 30, 2025.

What was the net change in unrealized loss from loans for Venture Lending & Leasing IX?

For the nine months ended September 30, 2025, Venture Lending & Leasing IX reported a net change in unrealized loss from loans of $8,267,056.

What is the percentage of non-qualifying assets for Venture Lending & Leasing IX?

As of September 30, 2025, 7.9% of Venture Lending & Leasing IX's total assets represented non-qualifying assets, which restricts the acquisition of additional non-qualifying assets under Section 55(a) of the 1940 Act.

What was the total distributable losses for Venture Lending & Leasing IX as of September 30, 2025?

As of September 30, 2025, Venture Lending & Leasing IX reported total distributable losses of $52,084,936.

How many shares of common stock were outstanding for Venture Lending & Leasing IX as of November 13, 2025?

As of November 13, 2025, Venture Lending & Leasing IX had 100,000 shares of common stock, $0.001 par value, outstanding.

What is the primary collateral type for Venture Lending & Leasing IX's loan investments?

The primary collateral type for Venture Lending & Leasing IX's loan investments is Senior Secured, as indicated across various industry categories in the Condensed Schedule of Investments.

Risk Factors

  • Significant Decline in Investment Income and Net Assets [high — financial]: The company experienced a net decrease in net assets from operations of $6,006,254 for the nine months ended September 30, 2025, a sharp reversal from a $3,889,631 increase in the prior year. Total investment income fell from $27,289,923 to $7,973,000, largely due to a substantial drop in interest on loans.
  • Asset Portfolio Impairment and Reduction [high — financial]: Loans at estimated fair value decreased from $151,064,673 to $90,914,710 as of September 30, 2025. The company reported a net realized loss from loans of $1,413,732 and a net change in unrealized loss from loans of $8,267,056 for the nine months ended September 30, 2025.
  • High Concentration of Non-Accrual Loans [high — financial]: As of September 30, 2025, the cost basis of non-accrual loans was $104.4 million, with a fair value of $54.0 million. This indicates a substantial impairment and significant credit risk within the loan portfolio.
  • Reduced Liability and Debt Facility Repayment [medium — financial]: Total liabilities decreased dramatically from $40,620,267 to $495,792, primarily due to the repayment of $39,500,000 in borrowings under its debt facility. While this reduces leverage, it also reflects a significant deleveraging event.
  • Deterioration in Unrealized Values [medium — market]: The company recorded a net change in unrealized loss from loans of $8,267,056 for the nine months ended September 30, 2025. This, combined with realized losses, points to a challenging market environment for its loan portfolio.
  • Decreased Operating Expenses [low — operational]: Total expenses for the nine months ended September 30, 2025, were $4,298,466, down from $9,942,326 in the prior year. This reduction is largely due to lower management fees ($1,782,500 vs $2,760,000) and interest expenses ($1,815,437 vs $6,477,729).

Industry Context

Venture lending and leasing companies typically provide debt financing to early-stage and growth-stage companies, often in the technology and life sciences sectors. The industry is sensitive to economic cycles, interest rate changes, and the success rates of the portfolio companies they fund. Competition can be intense, with firms differentiating on deal size, sector focus, and flexibility.

Regulatory Implications

As a financial entity, Venture Lending & Leasing IX, Inc. is subject to various financial regulations. The significant decline in asset quality and the substantial losses reported could attract scrutiny from regulators regarding risk management practices and capital adequacy, especially if the company is publicly traded or operates under specific lending licenses.

What Investors Should Do

  1. Review the detailed breakdown of non-accrual loans to understand the specific industries and companies contributing to the losses and assess the recovery prospects.
  2. Investigate the reasons behind the drastic reduction in loan origination and interest income to determine if this is a strategic shift or a sign of market exit.
  3. Analyze the company's strategy for managing its remaining assets and liabilities, particularly given the significant deleveraging and the substantial unrealized losses.
  4. Evaluate the management's plan to address the current financial performance and restore profitability, considering the negative net assets from operations.

Key Dates

  • 2025-09-30: Nine months ended September 30, 2025 — Period of significant financial decline, marked by a net decrease in net assets from operations of $6,006,254 and a sharp drop in total investment income to $7,973,000.
  • 2024-12-31: As of December 31, 2024 — Represents the prior year-end balance sheet, showing substantially higher total assets ($159,966,478) and liabilities ($40,620,267) compared to September 30, 2025.
  • 2024-09-30: Nine months ended September 30, 2024 — Prior year period showing positive financial performance with a net increase in net assets from operations of $3,889,631 and total investment income of $27,289,923.

Glossary

Loans, at estimated fair value
The value of loans held by the company, determined by market assessment rather than just their book value. This can fluctuate based on market conditions and borrower performance. (Represents the largest asset component, and its significant decrease and impairment (especially non-accrual loans) are key indicators of the company's financial distress.)
Net decrease in net assets from operations
The total loss incurred by the company from its core business activities during a specific period, after accounting for all revenues and expenses. (A critical measure of profitability; the substantial negative figure for the nine months ended September 30, 2025, highlights severe underperformance.)
Non-accrual loans
Loans for which the borrower has not made scheduled interest or principal payments for a specified period (often 90 days or more), and where the lender has ceased recognizing interest income. (Indicates significant credit risk and potential for future losses. The high cost basis and substantial fair value reduction of these loans are a major concern.)
Amortized cost
The initial cost of a loan, adjusted over time for the amortization of any premium or discount, and for principal repayments. It's a measure of the loan's value on the company's books. (Used to compare the book value of loans against their estimated fair value, particularly relevant for assessing the extent of impairment in non-accrual loans.)
Cumulative return of capital distributions
The total amount of capital that the company has returned to its shareholders over time, reducing the overall net assets. (Part of the calculation of net assets; a large negative figure indicates significant distributions have been made, which, when combined with operational losses, depletes shareholder equity.)

Year-Over-Year Comparison

Compared to the nine months ended September 30, 2024, Venture Lending & Leasing IX, Inc. has seen a dramatic deterioration in financial performance. Total investment income has plummeted by 70.8% from $27.3 million to $8.0 million, directly leading to a net decrease in net assets from operations of $6.0 million, a stark reversal from a $3.9 million increase in the prior year. Total assets have shrunk by 38.5%, with loans at fair value falling significantly. Liabilities have been drastically reduced by repaying $39.5 million in debt, but this also reflects a contraction in the company's operational scale. New risks related to significant loan impairments, evidenced by substantial unrealized losses and a large portfolio of non-accrual loans, have emerged.

Filing Stats: 4,593 words · 18 min read · ~15 pages · Grade level 6.2 · Accepted 2025-11-13 15:49:47

Key Financial Figures

  • $0.001 — as of November 13, 2025 Common Stock, $0.001 par value 100,000 VENTURE LENDING & L

Filing Documents

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Condensed Statements of Assets and Liabilities (Unaudited) As of September 30, 2025 and December 31, 2024 Condensed Statements of Operations (Unaudited) For the three and nine months ended September 30, 2025 and 2024 Condensed Statements of Changes in Net Assets (Unaudited) For the three and nine months ended September 30, 2025 and 2024 Condensed Statements of Cash Flows (Unaudited) For the nine months ended September 30, 2025 and 2024 Condensed Schedules of Investments (Unaudited) As of September 30, 2025 and December 31, 2024 Notes to Condensed Financial Statements (Unaudited)

Management's Discussion and Analysis of Financial Condition and Results of Operations

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

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Controls and Procedures

Item 4. Controls and Procedures

— OTHER INFORMATION

PART II — OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings

Risk Factors

Item 1A. Risk Factors

Unregistered Sales of Equity Securities and Use of Proceeds

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

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities

Mine Safety Disclosures

Item 4. Mine Safety Disclosures

Other Information

Item 5. Other Information

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements VENTURE LENDING & LEASING IX, INC. CONDENSED STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) AS OF SEPTEMBER 30, 2025 AND DECEMBER 31, 2024 September 30, 2025 December 31, 2024 ASSETS Loans, at estimated fair value (amortized cost of $ 142,650,385 and $ 194,533,292 , respectively) $ 90,914,710 $ 151,064,673 Cash and cash equivalents 6,353,678 5,083,701 Dividend and interest receivables 640,610 1,424,095 Other assets 610,020 2,394,009 Total assets 98,519,018 159,966,478 LIABILITIES Borrowings under debt facility — 39,500,000 Accrued management fees 402,500 690,000 Accounts payable and other accrued liabilities 93,292 430,267 Total liabilities 495,792 40,620,267 NET ASSETS $ 98,023,226 $ 119,346,211 Analysis of Net Assets: Capital paid in on shares of capital stock $ 407,125,000 $ 407,125,000 Cumulative return of capital distributions ( 257,016,838 ) ( 243,161,880 ) Total distributable losses ( 52,084,936 ) ( 44,616,909 ) Net assets (equivalent to $ 980.23 and $ 1,193.46 per share based on 100,000 shares of capital stock outstanding - See Note 5 and Note 12) $ 98,023,226 $ 119,346,211 See notes to condensed financial statements (unaudited). 3 VENTURE LENDING & LEASING IX, INC. CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 For the Three Months Ended September 30, 2025 For the Three Months Ended September 30, 2024 For the Nine Months Ended September 30, 2025 For the Nine Months Ended September 30, 2024 INVESTMENT INCOME: Interest on loans $ 2,067,269 $ 6,070,788 $ 7,777,790 $ 26,588,056 Other income 54,601 128,091 195,210 701,867 Total investment income 2,121,870 6,198,879 7,973,000 27,289,923 EXPENSES: Management fees 402,500 690,000 1,782,500 2,760,000 Interest expense 570,290 1,562,311 1,815,437 6,477,729 Banking and professional fees 173,615 80,023 522,149 401,223 Other operating expenses 68,822 75,798 178,380 303,374

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