UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of The
Securities Exchange Act of 1934
Filed by the Registrant ☐
Filed by a Party other than the Registrant ☒
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Under § 240.14a-12
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Firsthand Technology Value Fund, Inc.
(Name of Registrant as Specified in Its Charter)
SCOTT KLARQUIST
(Name of Persons(s) Filing Proxy Statement, if Other Than the
Registrant)
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Check box if any part of the fee is offset as provided by
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(1)
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Form, Schedule or Registration Statement No.:
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Date Filed:
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PRELIMINARY COPY SUBJECT TO COMPLETION
DATED MARCH [__], 2022
SCOTT KLARQUIST
[ ], 2022
Dear Fellow SVVC Stockholders:
Scott Klarquist (the "Nominee", "Mr Klarquist" or "I") is a beneficial
owner of an aggregate of 3,000 shares of the outstanding common stock, par
value $0.001 per share (the "Common Stock") of Firsthand Technology Value
Fund, Inc., a Maryland corporation ("SVVC" or the "Company"). For the
reasons set forth in the attached Proxy Statement, I believe a change to
the composition of the Board of Directors of the Company (the "Board") is
necessary to ensure that SVVC is managed and overseen in a manner
consistent with your best interests. I have nominated myself as a director
candidate for election to the Board at the Company's upcoming 2022 Annual
Meeting of Stockholders (the "Annual Meeting"), to replace septuagenarian
incumbent director Nicholas Petredis. (Please note that this is the only
SVVC directorship expected to be on the ballot at this year's annual
meeting.) As you may be aware, I filed two investor presentations critical
of company leadership and SVVC's third-party management fee structure on
EDGAR in January 2022. If you have not reviewed these yet, please do so at
your earliest convenience.
My goal is to create value for the benefit of all stockholders. I believe a
critical step towards achieving this objective is to elect a director to
the Board who has a strong and relevant skill set and who will provide
renewed accountability and will serve in the best interests of all
stockholders. Mr Petredis is a stale director, having served on SVVC's
board since 2014. According to company SEC filings, he also currently owns
ZERO SHARES of SVVC stock, meaning he refuses to invest his own money
alongside the shareholders. Moreover, Mr Petredis does not appear to have
sufficient "true independence" (as opposed to technically meeting the
definition of "independent" in form, but not substance) from Kevin Landis,
SVVC's Board Chairman and CEO and the Chief Investment Officer of SVVC's
external investment manager Firsthand Capital Management, LLC ("FCM"), to
properly represent the interests of SVVC's unaffiliated shareholders.
Notably, Mr Petredis served as the Chief Compliance Officer for Firsthand
Funds from 2008 to 2013 and the Chief Compliance Officer of SVVC from 2010
to 2013. He also appears to have opposed any significant change to the
status quo at SVVC despite the resounding anti-Landis and anti-FCM (and
pro-change) mandates rendered by the shareholders at the 2020 and 2021
annual meetings (which have been totally ignored by our board). Replacing
Mr Petredis on SVVC's board would finally allow a shareholder-friendly
advocate, as opposed to a seemingly Landis-friendly rubber stamp director,
into the boardroom, without which I do not believe any REAL LONG-TERM
POSITIVE CHANGE at SVVC will be possible.
The Company has a classified Board, which is currently divided into three
classes. The term of the sole Class II director will expire at the Annual
Meeting. Through the attached Proxy Statement and enclosed WHITE proxy
card, I am soliciting proxies to elect only the Nominee. Accordingly, the
enclosed WHITE proxy card may only be voted for the Nominee and does not
confer voting power with respect to the Company's director nominee. You can
only vote for the Company's director nominee by signing and returning a
proxy card provided by the Company. Stockholders should refer to the
Company's proxy statement for the name, background, qualifications and
other information concerning the Company's nominee.
I will also support and solicit proxies through the attached Proxy
Statement and the enclosed WHITE proxy card in favor of the [termination of
the external investment advisory and management agreement between the
Company and FCM, should a proposal to that effect (whether mandatory or
precatory) be included on the Company's proxy statement]. At last year's
annual meeting, independent shareholder Donald Chambers submitted such a
proposal, which fell slightly short of achieving the 66 2/3% vote required
for passage. My understanding is that a similar proposal will be on the
ballot this year and hopefully, with your support, it will finally pass and
liberate the shareholders from the FCM management agreement's punishing and
irrational fee structure.
I look forward to continuing to engage with you as we approach the Annual
Meeting. I urge you to carefully consider the information contained in the
attached Proxy Statement and then support my efforts by signing, dating,
and returning the enclosed WHITE proxy card today. If you have already
voted for the Company's nominee, you have every right to change your vote
by signing, dating, and returning a later dated proxy or by voting in
person at the Annual Meeting.
If you have any questions or require any assistance with your vote, please
contact me at the address listed below.
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Thank you for your support.
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/s/ Scott Klarquist
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Scott Klarquist
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i
If you have any questions, require assistance in voting your
WHITE proxy card, or need additional copies ofMr Klarquist's proxy materials, please contact Mr Klarquist
at the phone number, physical address or email address listed below.
Scott Klarquist
[85 Broad Street, 18th Floor]
New York, NY 10005
(646) 592-0498
Email: info@sevencornerscapital.com
ii
2022 ANNUAL MEETING OF STOCKHOLDERS
OF
FIRSTHAND TECHNOLOGY VALUE FUND, INC.
PROXY STATEMENT
OF
SCOTT KLARQUIST
PLEASE SIGN, DATE AND MAIL THE ENCLOSED WHITE PROXY CARD TODAY
Scott Klarquist (the "Nominee", "Mr Klarquist", "I" or "me") beneficially
owns 3,000 shares of Common Stock, par value $0.001 per share (the "Common
Stock"), of Firsthand Technology Value Fund, Inc., a Maryland corporation
("SVVC" or the "Company"). I have nominated myself to the Company's Board
of Directors (the "Board") because I believe the Board would benefit from
the insight of a new and independent member to ensure that the interests of
the common stockholders, the true owners of SVVC, are appropriately
represented in the boardroom. I believe I have a strong, relevant
background and am committed to demanding accountability by our Board to all
stockholders and to fully exploring all opportunities to unlock stockholder
value. IMPORTANTLY, I HAVE NO TIES (DIRECT OR INDIRECT) WHATSOEVER TO
SVVC's CHAIRMAN AND CEO KEVIN LANDIS OR SVVC'S EXTERNAL INVESTMENT MANAGER,
FIRSTHAND CAPITAL MANAGEMENT, LLC ("FCM"), of which Mr Landis is the Chief
Investment Officer. I am seeking your support at the Company's 2022 Annual
Meeting of Stockholders, scheduled to be held on [ ], 2022, at [ ] [ ].m.
(Eastern Time) (including any adjournments or postponements thereof and any
meeting which may be called in lieu thereof, the "Annual Meeting"), which
will be held for the following purposes1:
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To elect Scott Klarquist as a Class II director to hold
office until the 2025 Annual Meeting of Stockholders and
until his successor has been duly elected and qualified;
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To ratify the appointment of Tait, Weller & Baker LLP
as the Company's independent registered public accounting
firm for the fiscal year ending December 31, 2022;
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To [approve a binding proposal to terminate the Company's
external investment advisory and management agreement with
FCM]; and
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To transact such other business as may properly come before
the Annual Meeting.
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This Proxy Statement and the enclosed WHITE proxy card are first being
furnished to stockholders on or about [ ], 2022.
[According to the Company's proxy statement, the Company has disclosed that
the Annual Meeting will be held exclusively online via a live interactive
webcast on the internet. You will not be able to attend the Annual Meeting
in person at a physical location.]2 In order to attend the
Annual Meeting, you must pre-register by visiting [ ] by [ ] [ ].m. Eastern
Time on [ ], 2022. Stockholders of record may vote at the virtual Annual
Meeting or vote by proxy. Please see the "Voting and Proxy
Procedures-[Virtual Meeting]" beginning on Page 15 for additional
information.
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As of the date of this Proxy Statement, the Company's proxy
statement has not been filed with the Securities and
Exchange Commission (the "SEC"). The proposal numbers in
this Proxy Statement may not correspond to the proposal
number that will be used in the Company's proxy statement.
Certain information in this Proxy Statement will be updated
after the Company's proxy statement is filed.
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This Proxy Statement will be updated with the details of
the format of the Company's Annual Meeting after the
Company's proxy statement is filed.
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1
The Company has set the close of business on [ ], 2022 as the record date
for determining stockholders entitled to notice of, and to vote at, the
Annual Meeting (the "Record Date"). The mailing address of the principal
executive offices of the Company is 150 Almaden Boulevard, Suite 1250, San
Jose, California 95113.
According to the Company's proxy statement, anyone who is a holder of
record of Common Stock at the close of business on the Record Date, or
holds a valid proxy for the Annual Meeting, is entitled to vote at the
Annual Meeting or any postponement or adjournment of the Annual Meeting.
Every stockholder is entitled to one vote for each share of Common Stock
held on the Record Date.
The Company has a classified Board, which is currently divided into three
classes. The term of the sole current Class II director will expire at the
Annual Meeting. Through the attached Proxy Statement and enclosed WHITE
proxy card, I am soliciting proxies to elect only the Nominee. Accordingly,
the enclosed WHITE proxy card may only be voted for the Nominee and does
not confer voting power with respect to the Company's director nominee. You
can only vote for the Company's director nominee by signing and returning a
proxy card provided by the Company. Stockholders should refer to the
Company's proxy statement for the name, background, qualifications and
other information concerning the Company's nominee. If elected, the Nominee
will constitute a minority on the Board and there can be no guarantee that
the Nominee will be able to implement any actions that he may believe are
necessary to unlock stockholder value.
As of the date hereof, Mr Klarquist beneficially owns 3,000 shares of
Common Stock (the "Nominee's Shares"). I intend to vote all of the
Nominee's Shares FOR my election, FOR the
ratification of the appointment of Tait, Weller & Baker LLP as the
Company's independent registered public accounting firm, and FOR the [binding shareholder proposal to terminate the
Company's external management agreement with FCM].
According to the Company's proxy statement, on the Record Date, there were
[ ] shares of Common Stock issued and outstanding.
THIS SOLICITATION IS BEING MADE BY MR KLARQUIST AND NOT ON BEHALF OF THE
BOARD OR MANAGEMENT OF THE COMPANY. I AM NOT AWARE OF ANY OTHER MATTERS TO
BE BROUGHT BEFORE THE ANNUAL MEETING OTHER THAN AS SET FORTH IN THIS PROXY
STATEMENT. SHOULD OTHER MATTERS, WHICH MR KLARQUIST
IS NOT AWARE OF A REASONABLE TIME BEFORE THIS SOLICITATION, BE BROUGHT
BEFORE THE ANNUAL MEETING, I WILL VOTE ON SUCH MATTERS IN MY DISCRETION.
MR KLARQUIST URGES YOU TO SIGN, DATE AND RETURN THE WHITE PROXY CARD IN
FAVOR OF THE ELECTION OF THE NOMINEE.
IF YOU HAVE ALREADY SENT A PROXY CARD FURNISHED BY COMPANY MANAGEMENT OR
THE BOARD, YOU MAY REVOKE THAT PROXY AND VOTE ON EACH OF THE PROPOSALS
DESCRIBED IN THIS PROXY STATEMENT BY SIGNING, DATING, AND RETURNING THE
ENCLOSED WHITE PROXY CARD. THE LATEST DATED PROXY IS THE ONLY ONE THAT
COUNTS. ANY PROXY MAY BE REVOKED AT ANY TIME PRIOR TO THE ANNUAL MEETING BY
DELIVERING A WRITTEN NOTICE OF REVOCATION OR A LATER DATED PROXY FOR THE
ANNUAL MEETING OR BY VOTING AT THE ANNUAL MEETING.
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IMPORTANT
Your vote is important, no matter how few shares of Common Stock you
own. Mr Klarquist urges you to sign, date, and return the enclosed
WHITE proxy card today to vote FOR the election of the Nominee and in
accordance with Mr Klarquist's recommendations on the other proposals
on the agenda for the Annual Meeting.
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If your shares of Common Stock are registered in your own
name, please sign and date the enclosed WHITE proxy card
and return it to Mr Klarquist, in the enclosed postage-paid
envelope today.
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If your shares of Common Stock are held in a brokerage
account or bank, you are considered the beneficial owner of
the shares of Common Stock, and your broker or bank will be
forwarding these proxy materials, a WHITE proxy card, and a
voting form. As a beneficial owner, you must instruct your
broker, trustee or other representative how to vote. Your
broker cannot vote your shares of Common Stock on your
behalf without your instructions. As a beneficial owner,
you may vote the shares at the Annual Meeting only if you
obtain a legal proxy from the broker or bank giving you the
rights to vote the shares.
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Depending upon your broker or custodian, you may be able to
vote either by toll-free telephone or by the Internet.
Please refer to the voting form provided by your broker or
bank for instructions on how to vote electronically. You
may also vote by signing, dating and returning the enclosed
WHITE proxy card.
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You may vote your shares at the Annual Meeting. Even if you
plan to attend the Annual Meeting, I recommend that you
submit your WHITE proxy card by mail by the applicable
deadline so that your vote will be counted if you later
decide not to attend the Annual Meeting.
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Since only your latest dated proxy card will count, I urge you
not to return any proxy card you receive from the Company.
Remember, you can vote for the Nominee only on the WHITE proxy
card. So please make certain that the latest dated proxy card
you return is the WHITE proxy card.
If you have any questions, require assistance in voting your
WHITE proxy card, or need additional copies of Mr Klarquist's
proxy materials, please reach out to me via the contact information
listed below.
Scott Klarquist
[85 Broad Street, 18th Floor]
New York, NY 10005
(646) 592-0498
Email: info@sevencornerscapital.com
Important Notice Regarding the Availability of Proxy Materials for the
Annual Meeting-This Proxy Statement and the WHITE proxy card are
available at
www.sevencornerscapital.com
3
BACKGROUND TO THE SOLICITATION
The following is a chronology of material events leading up to this proxy
solicitation:
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During 2020 and 2021, Mr Klarquist followed the Company's
annual meeting results and noted in particular the
Company's poor corporate governance practices and lack of
responsiveness to unambiguous shareholder votes for change.
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In early November 2021, Mr Klarquist acquired 100 shares of
the Company's common stock and subsequently transferred
these shares into record ownership.
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On December 14, 2021, Mr Klarquist submitted a letter to
the company nominating himself to the board of directors of
the Company.
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On January 12, 2022, the Company unilaterally rejected Mr
Klarquist's nomination as containing insufficient
information under the Company's bylaws and, moreover,
claimed that he did not have the right to nominate himself
"or any other candidate" as a director at the Annual
Meeting, notwithstanding the Company's bylaw requirement
that shareholders be given five (5) business days to update
information in a director nomination letter if such
information is deemed "inaccurate" by the Company. The
Company did not send Mr Klarquist a Director questionnaire
(as he had requested), nor did the company identify any
specific item of information that was missing from the
nomination letter.
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On January 12, 2022, Mr Klarquist responded to the
Company's rejection notice via an email response as
follows: "
I am not sure what information 'required by Regulation
14A' [SVVC's corporate secretary] thinks is missing
(why hasn't he specified in his letter what he believes
is missing?), however to be clear I disagree with his
contention. [SVVC's corporate secretary's] letter is
conclusory and void of any real substance, and frankly
unprofessional in its dismissive tone. Given SVVC's
pathetically poor track record, the company needs to do
better than this. PLEASE ADVISE ASAP WHAT ADDITIONAL
INFORMATION YOU NEED (WITH SPECIFICITY)
."
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On January 13, 2022, Mr Klarquist sent the following email
communication to the Company: "
I would like to emphasize for the record that to the
extent any of the statements in [SVVC's corporate
secretary's] letter were made in bad faith (i.e.,
knowingly false or intentionally disingenuous), he is
in violation of SVVC's Code of Ethics, which states as
follows:
1. Fiduciary Duty: Employees, officers and
directors/trustees of an investment company and its
investment adviser owe a fiduciary duty to fund
shareholders. This means a duty of loyalty, fairness
and good faith toward the shareholders, and a
corresponding duty not to do anything prejudicial to or
in conflict with the interests of the shareholders.
This is a higher standard than that applicable to
ordinary arm's-length business transactions between
persons who do not owe a fiduciary duty to the other
parties.
Does SVVC take its Code of Ethics seriously, or is it
simply window-dressing? I would appreciate it if you
could please forward this email, as well as my
nomination letter & [SVVC's corporate secretary's]
response, to the Board of Directors so they can
determine for themselves whether the Code of Ethics
will be enforced at SVVC (or not). IN OTHER WORDS,
PLEASE CONSIDER THIS AN OFFICIAL COMMUNICATION TO THE
BOARD FROM A CONCERNED SHAREHOLDER. Thank you very much
."
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Eleven days later, on January 24, 2022, Mr Klarquist
received a communication from SVVC's corporate secretary
claiming that "
the Company and management are aware of, and take
seriously, their duties and responsibilities to the
Company and its stockholders
" and reiterated the Company's contention that Mr Klarquist
"
failed to provide all of the information required by
the advance notice provisions
" including "
your involvement in various legal proceedings during
the past ten years as required by Regulation 14A of the
Securities Exchange Act of 1934, as amended
."
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On January 24, 2022, Mr Klarquist responded to the
Company's communication (from earlier that day) that he had
nothing to disclose regarding "various legal proceedings
during the past ten years" under Regulation 14A and again
asked the Company to inform him, with specificity, what
information was missing from his original nomination
letter.
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In late January 2022, Mr Klarquist purchased additional
shares of SVVC on the open market.
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On February 2, 2022, SVVC's corporate secretary sent Mr
Klarquist a letter claiming that Mr Klarquist asserted that
it was "
incumbent upon [the Company] to guide [Mr Klarquist]
through the director nomination process by 'cit[ing]
chapter & verse' the information required by the
Company's publicly-available advance notice bylaw
provisions
" and, furthermore, that "
[SVVC] consider[s] this matter closed and will not
continue to engage on this particular topic
".
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On February 24, 2022, Mr Klarquist notified the Company by
email of a Reuters article, dated February 19, 2022,
entitled "U.S. judge rules for Saba Capital in closed-end
fund voting litigation" and advised the Company in the
email as follows: "
A judge has ruled that a bylaw change of the type SVVC
enacted in August 2020 (and which SVVC [deliberately?]
hid from shareholders in its 2020 10-K filing) is
ILLEGAL and a VIOLATION OF THE INVESTMENT COMPANY ACT
OF 1940. Given the company's purported desire to
operate strictly in accordance with statutes &
regulations, I'm sure you and [SVVC's corporate
secretary] will now want to advise the company's
leadership to reverse this illegal bylaw (which
exempted Landis and his "associates" - but nobody
else(!) - from the Maryland Control Statute). Illegal
bylaws, of course, need to be overturned ASAP (duh). I
believe that the failure to do so could expose SVVC to
potential legal liability, which I would not want as a
shareholder
."
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On March 1, 2022, the Company acknowledged receipt of Mr
Klarquist's February 24th email.
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On March 5, 2022, Mr Klarquist emailed the Company
requesting the date of the 2022 annual meeting. Two days
later, on March 7, 2022, the Company replied that the
details regarding the 2022 annual meeting "
will be included in the proxy statement when it goes
out
".
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On March 9, 2022, Mr Klarquist notified the Company that "
I plan on soliciting proxies from certain SVVC
shareholders in favor of (1) my director candidacy and
(2) any proposal in the proxy which advocates or
mandates the termination of FCM's external management
agreement with SVVC (i.e., a proposal similar to that
contained in the proxies for the prior two years).
Thus, the 2022 election will qualify as a "contested
election" under SVVC's bylaws
." To date, Mr Klarquist has received no response from the
Company regarding this communication.
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On March 11, 2022, Mr Klarquist filed a Form DFAN14A with
the SEC containing an open letter to SVVC's shareholders
(which he amended on March 15, 2022).
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On March 28, 2022, Mr Klarquist purchased additional shares
of SVVC on the open market and filed his preliminary proxy
statement with the SEC.
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7
REASONS FOR THE SOLICITATION
Mr Klarquist has significant concerns regarding the Company's poor
corporate governance, chronic underperformance and the resulting
unprecedented trading price discount to its net asset value ("NAV") of
76%(!) [calculated as follows: $3.44 closing market price as of March 25,
2022 versus $14.50/share NAV as of January 31, 2022, as disclosed by the
Company in it press release of February 18, 2022]. Since the Company's
initial listing of shares on NASDAQ in April 2011, I believe that our Board
has overseen poor operational and financial performance and failed to take
meaningful actions to change the status quo despite clear evidence of
shareholder discontent therewith, as evidenced by the annual meeting vote
results for 2020 and 2021.
I believe immediate boardroom change is needed to help ensure objective and
independent oversight of the Company's operations, strategy and governance.
I have nominated myself as an independent candidate for election to the
Board at the Company's upcoming Annual Meeting.
Unfortunately, despite my efforts to engage constructively with the
Board, my director nomination has been unilaterally rebuffed by SVVC
without adequate explanation (although I was informed that "information
was missing" from my nomination notice, the Company has refused to
identify with specificity what exactly is missing and now claims the
matter is permanently "closed").
Moreover, against standard public-company practice, SVVC did not sent me a
Director questionnaire to fill out (despite my affirmative request for such
a questionnaire in my nomination letter), nor did any member of the Board's
Nominating Committee contact or attempt to interview me. I believe that I
possesses significant and relevant expertise regarding proper corporate
governance practices and the alignment of incentives of insiders with those
of Company shareholders (as evidenced by the two investor presentations
regarding the Company that I filed with the SEC on EDGAR in January 2022,
as well as the various investment writeups on my website,
www.sevencornerscapital.com). These skills appear to be sorely lacking at
our Company. If elected, I will not only push the Board to explore all
paths to maximizing stockholder value and addressing the Company's steep
trading price discount relative to its NAV, but also try to restore SVVC's
credibility with market participants, demand accountability from its
executives, and ensure an overall results-driven culture.
The Board Has Overseen Negative Returns and Significant Relative
Underperformance Since Listing
At the time the Company initially listed its shares as a closed-end fund in
April 2011, it reported that its NAV was $27 per share (see Company press
release, dated April 18, 2011). Since listing, the trading price of the
Company's stock has plummeted, subjecting its investors to significant
stock price depreciation and losses while FCM, an affiliate of the
Company's Chairman and CEO, Kevin Landis, extracts exorbitant management
fees. The last closing trading price of the Company's stock (on March 25,
2022) was $3.44 per share, representing an 76% trading price discount
relative to its last reported NAV of $14.50 as of January 31, 2022 (as set
forth in the Company's press release dated February 18, 2022).
Additionally, since its April 2011 listing,
the Company's stock price has massively underperformed the broader
market
(conveniently, the company cannot apparently identify a proper "peer" group
for itself).
[SEE PDF COPY FOR STOCK PRICE CHART]
Source: SVVC 2021 Form 10-K, page 25.
Additionally, according to its fiscal year 2021 financial results, the
Company posted
net realized and unrealized losses on investments of $10.5 million (and
over $100 million of such losses over the past three fiscal years!)
, despite the stock market increasing in value during the relevant periods.
To date, the Board has failed to communicate any credible plan to address
the Company's stock price, balance sheet erosion and financial challenges.
8
The Incumbent Board Has Fostered Exceedingly Poor Corporate
Governance and Severely Limited Stockholders' Rights
I believe the Company's poor corporate governance demonstrates that the
Board is more focused on entrenching itself than unlocking value for
stockholders. I believe stockholders should be concerned about the various
conflicts of interests plaguing our Board, including:
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Directors' Prior Ties to Company Chairman and CEO and
FCM CIO Kevin Landis
-All of the members of the Board, including Nicholas
Petredis (the incumbent director up for reelection at the
2022 Annual Meeting) appear conflicted due to prior ties to
Kevin Landis, SVVC's Chairman and CEO and FCM's CIO, and
his "Firsthand Funds" fund complex. For example, Mr
Petredis was the Chief Compliance Officer for Firsthand
Funds from 2008 to 2013 and Chief Compliance Officer of the
Company from 2010 to 2013. Another Company Director, Greg
Burglin, has also served as Trustee to Firsthand Funds, a
Delaware statutory trust, since November 2008. Meanwhile,
Company Directors Yee and Lee have served on the boards of
other Firsthand funds. [Source: SVVC 2021 Proxy Statement;
press release of Ralweigh Ralls dated May 20, 2021]
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So-Called "Independent Directors" Lack Alignment with
SVVC Shareholders
-None of the four Company "independent directors" (other
than Director Burglin, who purchased 2,250 shares in late
2020) have purchased SVVC stock on the open market during
the past 5 years, despite it trading near all-time lows for
much of that period. Moreover, despite being members of our
board for multiple years each, on a combined basis these
four directors own less than 3,000 shares of SVVC stock, or
just 0.00041% of the outstanding stock [Source: SVVC 2021
Proxy Statement]:
[SEE PDF COPY FOR CHART OF SHARES HELD BY "INDEPENDENT"
DIRECTORS]
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Non-Independent Chairman
-Kevin Landis is both Chairman and Chief Executive Officer
of SVVC, a practice that Institutional Shareholder
Services, Glass Lewis and other independent proxy advisory
firms strongly disfavor.Mr. Landis is also CIO of the Company's
external investment advisor and manager, Firsthand
Capital Management
. Mr. Landis's various roles denies the Company independent
leadership that is not beholden to FCM. [Source: Company
filings, LinkedIn]
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Restrictive Bylaw Amendments
-In recent years, our Board has made amendments to our
Company's bylaws which are materially restrictive and
anti-shareholder friendly, exhibiting worst-in-class
corporate governance practices.
For example, in October 2019, our Board added language
to the bylaws carving out an exception to the normal
plurality voting standard for Director elections,
stating that in contested elections a candidate must
receive a majority of all outstanding shares (not
merely of shares actually voted) to be elected (in
effect, the reverse of good corporate governance).
Given the number of outstanding shares not voted (including
"broker non-votes") for directors at recent annual meetings
for our Company, it seems unlikely that any candidate in a
contested election will surpass the required "majority of
outstanding shares" vote threshold, which would cause a
"failed election" (as a result of which the incumbent
director remains in office,
even if he or she receives less votes than the
challenger
). This situation is even worse given that, unlike most
public companies, SVVC apparently does not have a mandatory
director resignation policy in effect for directors who do
not receive more "FOR" votes than "WITHHOLD" votes. Also, in August 2020,
SVVC's board amended the Company's bylaws to
specifically exempt Kevin Landis and "any associates
thereof" from the Maryland Control Share Acquisition
Act
, which is significant given that Mr Landis is already up
against the 10% ownership threshold cited in the Act. A
federal judge recently ruled that this type of bylaw
amendment is violative of the 1940 Investment Company Act's
requirement that all shares of closed-end funds have equal
voting rights [Source: Company filings; Reuters article
from February 19, 2022, entitled "U.S. judge rules for Saba
Capital in closed-end fund voting litigation"]
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Conflict-Ridden External Investment Management
Agreement
-We question how a fully engaged and truly independent
Board could allow the Company to enter into a generous
advisory deal in favor of FCM, an affiliate of Kevin
Landis, which automatically renews for
successive one-year terms (subject to board, rather
than shareholder, approval) and entitles the advisor to
an annual base management fee equal to 2% of SVVC's
gross (not net) assets REGARDLESS OF INVESTMENT
PERFORMANCE and REGARDLESS OF THE PERFORMANCE OF SVVC'S
STOCK AGAINST ANY BENCHMARK INDEX (SUCH AS THE S&P
500)
. Notwithstanding the huge discount to NAV and the
significant operating losses to date, over the past three
years the Board allowed the Company to pay approximately
$11 million in management fees and other fee
reimbursements to FCM and other third-party service
providers
. [Source: SVVC 2021 10-K filing] I believe the Board has
clearly prioritized the interests of FCM and its affiliates
over creating value for stockholders by wasting the
Company's money on egregious advisory agreements and
operating expenses with affiliates of certain Board members
while investors have been forced to endure negative
returns. In addition, the FCM Investment Management
Agreement's Incentive Fee applies only to net realized gains, thereby
providing FCM with an incentive to "water the weeds and cut
the flowers" in managing SVVC's assets. [Source: Nominee's
Investor Presentation, dated January 19, 2022, filed on
EDGAR]
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Flawed and/or Irrelevant Rationale for Retaining
Conflict-Ridden FCM External Management Agreement
-In last year's proxy statement, the Company claimed that
"FCM believes the Company has one or more portfolio
companies among our top holdings that may be ideal targets
for SPAC transactions. If the Company were to pursue such
opportunities in 2021 and beyond, the SPAC expertise of FCM
would be extremely important." Yet, since then no SPAC
transaction involving any of the Company's portfolio
holdings has been entered into or has even (as far as I am
aware) been publicly mooted. Moreover, SPACs have fallen
out of favor among investors, so it seems as though SVVC's
management team completely missed out on the
previously-raging SPAC bull market despite their claimed
SPAC expertise. Shareholders should ask themselves whether
FCM ever has demonstrated any ability to
consistently compound shareholder capital, as opposed to
generating egregiously large fees for conflicted insiders.
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Classified Board
-The Company has a classified or "staggered" Board, meaning
each director is only up for election every three years as
opposed to every year. This protects incumbent directors
from annual scrutiny and makes it more difficult for
stockholders to enact change.
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A New, Independent Director is Key to Addressing Our Company's
Perpetual Underperformance
It has become clear to me that true stockholder representation is
desperately needed in the boardroom to instill accountability, help reverse
the Company's prolonged underperformance and ensure the interests of
stockholders always remain paramount. I believe stockholders have a unique
opportunity at the 2022 Annual Meeting to address the issues created by the
Company's insular Board.
10
In order to turn the tide, I have nominated myself as a Director candidate
for our Company's board at the 2022 Annual Meeting of shareholders. I
believe that, with direct access to (and influence on) SVVC's board-level
investment management and other decision-making processes, I can be an
agent for meaningful change and help unlock the significant value trapped
within the Company's underperforming stock. The Nominee's resume appears on
page 12 below under "PROPOSAL NO. 1: ELECTION OF DIRECTOR-THE NOMINEE" .
11
PROPOSAL NO. 1
ELECTION OF DIRECTOR
The Company currently has a classified Board, which is divided into three
classes. The directors in each class are elected for terms of three years
so that the term of office of one class of directors expires at each annual
meeting of stockholders. The term of the sole Class II director expires at
the Annual Meeting. I am seeking your support at the Annual Meeting to
elect me as a Class II director, in opposition to the Company's director
nominee for a three-year term ending in 2025. Your vote to elect me will
have the legal effect of replacing an incumbent director of the Company. If
elected, I will represent just 20% of the Board (the Company currently has
5 directors in total), and therefore it is not guaranteed that I will be
able to implement any actions that I may believe are necessary to enhance
stockholder value. You should refer to the Company's proxy statement for
the name, background, qualifications, and other information concerning the
Company's nominee.
THE NOMINEE
The following information sets forth the age, business address, present
principal occupation, and employment and material occupations, positions,
offices and employments for the past five years of the Nominee. Mr
Klarquist maintains that he made the nomination in a timely manner and in
compliance with the applicable provisions of the Company's governing
instruments. The specific experience, qualifications, attributes and skills
that led me to conclude that I should serve as a director of the Company
are set forth above in the section entitled "Reasons for the Solicitation"
beginning on Page 8 and below. The Nominee is a citizen of the United
States.
SCOTT KLARQUIST
EDUCATION
B.A., English, University of Virginia, 1991-1995
J.D., University of Virginia School of Law, 1998-2001
WORK EXPERIENCE
Legal Assistant, Baach Robinson & Lewis LLP, Washington DC, 1996-1998
Corporate Attorney, Thacher Proffitt & Wood LLP, New York NY, 2001-2008
Corporate Attorney, SNR Denton LLP (and predecessor firms), New York NY,
2008-2013
Private Investor, New York NY, 2013-present
Chief Investment Officer, Seven Corners Capital Management, LLC, New York
NY, 2016-present
INVESTMENT WRITEUPS
Available on Seven Corners Capital website (www.sevencornerscapital.com),
See Blog & Activist Tabs
GENERAL
I am well versed in (1) (A) corporate governance best practices and (B)
optimal senior executive compensation schemes, both of which SVVC is
woefully bad at implementing (in my estimation) and (2) identifying and,
more importantly, proposing actionable mechanisms for correcting the
misalignment in financial incentives between Company insiders and outside
shareholders. I believe that my experience, background and financial
expertise, including 15 years of investing in the public capital markets
(the past 8.5 years full-time), will allow me to bring valuable expertise
to the Board. My principal business address is [85 Broad Street, 18th
Floor], New York, New York 10005.
12
The Nominee may be deemed to beneficially own 3,000 shares of Common Stock
of the Company. I believe that I am, and if elected as a director of the
Company, would be, an "independent director" within the meaning of (i)
applicable NASDAQ listing standards applicable to board composition and
(ii) Section 301 of the Sarbanes-Oxley Act of 2002. Notwithstanding the
foregoing, Mr Klarquist acknowledges that no director of a NASDAQ listed
company qualifies as "independent" under the NASDAQ listing standards
unless the board of directors affirmatively determines that such director
is independent under such standards. Accordingly, Mr Klarquist acknowledges
that if the Nominee is elected, the determination of the Nominee's
independence under the NASDAQ listing standards ultimately rests with the
judgment and discretion of the Board. If I am elected as a director of the
Company, I believe I would be independent under the applicable independence
standards of the Company's audit committee, compensation committee and
nominating and corporate governance committee.
Other than as stated herein, there are no arrangements or understandings
between Mr Klarquist and any other person or persons pursuant to which the
nomination of the Nominee as described herein is to be made, other than the
consent by the Nominee to be named in this Proxy Statement and to serve as
a director of the Company if elected as such at the Annual Meeting. The
Nominee is not an adverse party to the Company or any of its subsidiaries
and does not have a material interest adverse to the Company or any of its
subsidiaries in any material pending legal proceedings.
The Nominee should be able to stand for election, but in the event I am
unable to serve or, for good cause, will not serve as a member of the
Board, the shares of Common Stock represented by the enclosed WHITE proxy
card will be voted for a substitute nominee determined by me. In addition,
I reserve the right to nominate a substitute person if the Company makes or
announces any changes to the Bylaws or takes or announces any other action
that has, or if consummated would have, the effect of disqualifying the
Nominee. In any such case, shares of Common Stock represented by the
enclosed WHITE proxy card will be voted for such substitute nominee. I
reserve the right to nominate additional person(s) if the Company increases
the size of the Board above its existing size or increases the number of
directors whose terms expire at the Annual Meeting. Additional nominations
made pursuant to the preceding sentence are without prejudice to the
position of Mr Klarquist that any attempt to increase the size of the
current Board or to reconstitute or reconfigure the classes on which the
current directors serve, constitutes a manipulation of the Company's
corporate governance.
I URGE YOU TO VOTE FOR MY ELECTION ON THE ENCLOSED WHITE PROXY CARD.
13
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
As discussed in further detail in the Company's proxy statement, the
Company has proposed that stockholders ratify the Audit Committee's
appointment of Tait, Weller & Baker LLP as the Company's independent
registered public accounting firm for the fiscal year ending December 31,
2022. Additional information regarding this proposal is contained in the
Company's proxy statement.
I MAKE NO RECOMMENDATION WITH RESPECT TO THIS PROPOSAL AND INTEND TO
VOTE MY SHARES "FOR" THIS PROPOSAL.
PROPOSAL NO. [3]
[BINDING PROPOSAL TO TERMINATE THE EXTERNAL INVESTMENT ADVISORY AND
MANAGEMENT AGREEMENT BETWEEN THE COMPANY AND FIRSTHAND CAPITAL
MANAGEMENT, LLC]
As discussed in further detail in the Company's proxy statement, a Company
stockholder, [Donald Chambers], submitted the following proposal for
inclusion in the Company's proxy materials:
[RESOLVED: All investment advisory and management agreements between The
Firsthand Technology Value Fund, Inc. and Firsthand Capital Management,
Inc. shall be terminated.]
Additional information regarding this proposal is contained in the
Company's proxy statement.
I URGE YOU TO VOTE FOR "FOR" PROPOSAL NO. [3] ON THE ENCLOSED WHITE
PROXY CARD AND INTEND TO VOTE MY SHARES "FOR" THIS PROPOSAL.
14
VOTING AND PROXY PROCEDURES
According to the Company's proxy statement, only stockholders of record as
of the close of business on the Record Date will be entitled to notice of
and to vote at the Annual Meeting. Stockholders who sell their shares of
Common Stock before the Record Date (or acquire them without voting rights
after the Record Date) may not vote such shares of Common Stock.
Stockholders of record on the Record Date will retain their voting rights
in connection with the Annual Meeting even if they sell such shares of
Common Stock after the Record Date.
Shares of Common Stock represented by properly executed WHITE proxy cards
will be voted at the Annual Meeting as marked and, in the absence of
specific instructions, will be voted FOR the election of
the Nominee, FOR the ratification of the appointment of
Tait, Weller & Baker LLP as the Company's independent registered public
accounting firm, FOR the [termination of the Company's
external investment management agreement with FCM], and in the discretion
of the persons named as proxies on all other matters as may properly come
before the Annual Meeting, as described herein.
According to the Company's proxy statement for the Annual Meeting, the
current Board intends to nominate one candidate for election at the Annual
Meeting. This Proxy Statement is soliciting proxies to elect only the
Nominee. Accordingly, the enclosed WHITE proxy card may only be voted for
the Nominee and does not confer voting power with respect to the Company's
nominee. The participants in this solicitation intend to vote the Nominee's
Shares in favor of the Nominee. Stockholders should refer to the Company's
proxy statement for the name, background, qualification and other
information concerning the Company's nominee.
[Virtual Meeting]
9
As discussed in the Company's proxy statement, the Company has implemented
a virtual format for the Annual Meeting, which will be conducted via live
webcast and online stockholder tools. You will not be able to attend the
Annual Meeting in person. As discussed above, you are entitled to
participate in the Annual Meeting only if you were a stockholder of record
as of the close of business on the Record Date or hold a legal proxy for
the meeting provided by your broker, bank or other nominee.
According to the Company's proxy statement, in order to attend the Annual
Meeting virtually, you must pre-register by visiting [ ] and follow the
instructions to complete your registration request by [ ] [ ].m. Eastern
Time on [ ], 2022.
According to the Company's proxy statement, stockholders of record and/or
their designated representatives will need the control number included on
the Company's Notice of Annual Meeting, proxy card or voting instruction
form and should follow the instructions thereon to complete their
registration request.
According to the Company's proxy statement, if you are the beneficial owner
of shares (that is, your shares are held in "street name" through a bank,
broker, or other nominee) as of the Record Date, you have the right to
direct your broker, bank or other nominee as to how to vote your shares.
According to the Company's proxy statement, beneficial owners are also
invited to attend the Annual Meeting; however, since a beneficial owner is
not the stockholder of record, you may not vote your shares live at the
Annual Meeting unless you follow your broker, bank or other nominee's
procedures for obtaining a legal proxy. If you request a printed copy of
the proxy materials by mail, your broker, bank or other nominee will
provide a voting instruction form for you to use.
Although the live webcast will begin at [ ] [ ].m. Eastern Time on [ ],
2022, you are encouraged to access the meeting site prior to the start time
to allow ample time to log into the meeting webcast and test your computer
system. According to the Company's proxy statement, the Annual Meeting site
will first be accessible to registered stockholders beginning at [ ] [ ].m.
Eastern Time on the day of the Annual Meeting.
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Details of the Company's Annual Meeting to be updated after
the Company files its proxy statement with the SEC.
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15
Whether or not you plan to attend the Annual Meeting, please sign, date and
return the enclosed WHITE proxy card in the postage-paid envelope provided,
or vote via the Internet or by telephone as instructed on the WHITE proxy
card. Additional information and proxy materials can also be found at
[www.sevencornerscapital.com under the "Activism" tab]. If you have any
difficulty following the registration process, please email
info@sevencornerscapital.com.
Quorum; Broker Non-Votes; Discretionary Voting
A quorum is the minimum number of shares of Common Stock that must be
represented at a duly called meeting in person or by proxy in order to
legally conduct business at the meeting under the Company's Bylaws and
Maryland law. A majority of the shares of Common Stock outstanding on the
Record Date present at the Annual Meeting, either in person via webcast or
by proxy, is required for a quorum at the Annual Meeting.
Abstentions and "broker non-votes" are counted as shares present and
entitled to vote for purposes of determining a quorum.
However, if you hold your shares in street name and do not provide voting
instructions to your broker, your shares will not be voted on any proposal
on which your broker does not have discretionary authority to vote (a
"broker non-vote"). Under applicable rules, your broker will only have
discretionary authority to vote your shares at the Annual Meeting as to the
ratification of the appointment of Tait, Weller & Baker LLP as the
Company's independent registered accounting firm for the year ending
December 31, 2022. Your broker will not be able to vote your shares with
respect to the Nominee (Proposal 1) or the [termination of the FCM
investment management agreement (Proposal [3])].
If you are a stockholder of record, you must deliver your vote by mail, the
Internet, by telephone or attend the Annual Meeting to be counted in the
determination of a quorum.
If you are a beneficial owner, your broker will vote your shares pursuant
to your instructions from your broker, and those shares will count in the
determination of a quorum. If you are a beneficial holder and do not return
a voting instruction form, your broker, bank or nominee may only vote on
the ratification of the appointment of Tait, Weller & Baker LLP as the
Company's independent registered accounting firm for the year ending
December 31, 2022.
Votes Required For Approval
Election of Director
-According to the Company's proxy statement, [in a "contested election" the
Company's bylaws requires that a director candidate receive the affirmative
vote of a majority of SVVC's outstanding shares at a meeting at which a
quorum is present, in person via webcast or by proxy, in order to be
elected; failure to achieve this result by any candidate will result in a
"failed election", in which case the incumbent Director will remain in
office]. Each share may be voted for as many individuals as there are
directors to be elected and for whose election the share is entitled to be
voted. Abstentions and broker non-votes, if any, will not be counted as
votes cast and will have no effect on the result of the vote, although they
will be considered present for the purpose of determining the presence of a
quorum.
Ratification of the
Appointment of Independent Registered Public Accounting Firm
-According to the Company's proxy statement, the proposal to ratify the
appointment of Tait, Weller & Baker LLP to serve as the Company's
independent registered public accounting firm for the fiscal year ending
December 31, 2022, requires the affirmative vote of a majority of all of
the votes cast at a meeting at which a quorum is present. Abstentions and
broker non-votes, if any, will not be counted as votes cast and will have
no effect on the result of the vote, although they will be considered
present for the purpose of determining the presence of a quorum.
[Termination of the Company's Investment Management Agreement with FCM
-According to the Company's proxy statement, the stockholder proposal to
terminate the investment advisory and management agreement between the
Company and FCM requires the approval of the affirmative vote of the
"majority of the outstanding voting securities" of the Company. Under the
1940 Act, a "majority of the outstanding voting securities" is defined as
the lesser of: (1) 67% or more of the voting securities of the Company
present at the Annual Meeting, if the holders of more than 50% of the
outstanding voting securities of the Company are present or represented by
proxy; or (2) more than 50% of the outstanding voting securities of the
Company.]
Under applicable Maryland law, none of the holders of Common Stock are
entitled to appraisal rights in connection with any matter to be acted on
at the Annual Meeting. If you sign and submit your WHITE proxy card without
specifying how you would like your shares voted, your shares will be voted
in accordance with Mr Klarquist's recommendations specified herein and in
accordance with the discretion of the persons named on the WHITE proxy card
with respect to any other matters that may be voted upon at the Annual
Meeting.
16
How Proxies Will Be Voted
If you complete and return a WHITE proxy card to me, and unless you direct
otherwise, your shares will be voted FOR Proposals 1, 2 and 3. In addition,
if you complete and return a WHITE proxy card to me, and unless you direct
otherwise, I may determine not to attend the Annual Meeting if I believe
that either or both of Proposal 1 (regarding my election to the Board) and
Proposal 3 (regarding termination of the FCM Management Agreement) is less
likely to be defeated if your shares are not represented at the Meeting (by
making it more difficult for more than 50% of the outstanding shares to be
present in person or by proxy, i.e., to achieve the required quorum for the
meeting) than if they are represented at the meeting.
Revocation of Proxies
Stockholders of the Company may revoke their proxies at any time prior to
the Annual Meeting by notifying the Company's Secretary in writing,
attending the Annual Meeting and voting in person via webcast, returning
another proxy card dated after such stockholder's first or prior proxy
card, if the Company receives it before the Annual Meeting, or authorizing
a new proxy via the Internet or by telephone to vote such stockholder's
shares of Common Stock. The revocation may be delivered either to Mr
Klarquist at the address set forth on the back cover of this Proxy
Statement or to the Company at 150 Almaden Boulevard, Suite 1250, San Jose,
CA 95113 or any other address provided by the Company. Although a
revocation is effective if delivered to the Company, we request that either
the original or copies of all revocations be mailed to Mr Klarquist at the
address set forth on the back cover of this Proxy Statement so that he will
be aware of all revocations and can more accurately determine if and when
proxies have been received from the holders. Additionally, Mr Klarquist may
use this information to contact stockholders who have revoked their proxies
to solicit later dated proxies for his election.
IF YOU WISH TO VOTE FOR THE ELECTION OF THE NOMINEE TO THE BOARD,
PLEASE SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED
WHITE
PROXY CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED.
17
SOLICITATION OF PROXIES
The solicitation of proxies pursuant to this Proxy Statement is being made
by Mr Klarquist. Proxies may be solicited by mail, facsimile, telephone,
Internet, in person and by advertisements.
Mr Klarquist will solicit proxies from individuals, brokers, banks, bank
nominees and other holders. Mr Klarquist has requested banks, brokerage
houses and other custodians, nominees and fiduciaries to forward all
solicitation materials to the beneficial owners of the shares they hold of
record. Mr Klarquist will reimburse these record holders for their
reasonable out-of-pocket expenses in so doing.
The entire expense of soliciting proxies is being borne by Mr Klarquist.
Costs of this solicitation of proxies are currently estimated to be
approximately (A) in cash, up to $10,000 (including, but not limited to,
costs incidental to the solicitation) and (B) in kind, up to [$150,000 in
value of legal & other solicitation services being performed by Mr
Klarquist in his individual capacity, as opposed to being performed by
third-party service providers such as law firms and proxy solicitors (as is
typical in proxy contests)]. Mr Klarquist estimates that through the date
hereof its expenses in furtherance of, or in connection with, (i) in cash,
negligible and (ii) in kind, [$30,000]. The actual amount could be higher
or lower depending on the facts and circumstances arising in connection
with any solicitation. Mr Klarquist may seek reimbursement from the Company
of some or all expenses he incurs in connection with this solicitation, but
does not intend to submit the question of such reimbursement to a vote of
security holders of the Company.
ADDITIONAL PARTICIPANT INFORMATION
[Not applicable]
18
The shares of Common Stock owned directly by Mr Klarquist were purchased
with working capital (which may, at any given time, include margin loans
made by brokerage firms in the ordinary course of business).
Except as set forth in this Proxy Statement (including the Schedules
hereto), (i) during the past 10 years, no participant in this solicitation
has been convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors); (ii) no participant in this solicitation directly
or indirectly beneficially owns any securities of the Company; (iii) no
participant in this solicitation owns any securities of the Company which
are owned of record but not beneficially; (iv) no participant in this
solicitation has purchased or sold any securities of the Company during the
past two years; (v) no part of the purchase price or market value of the
securities of the Company owned by any participant in this solicitation is
represented by funds borrowed or otherwise obtained for the purpose of
acquiring or holding such securities; (vi) no participant in this
solicitation is, or within the past year was, a party to any contract,
arrangements or understandings with any person with respect to any
securities of the Company, including, but not limited to, joint ventures,
loan or option arrangements, puts or calls, guarantees against loss or
guarantees of profit, division of losses or profits, or the giving or
withholding of proxies; (vii) no associate of any participant in this
solicitation owns beneficially, directly or indirectly, any securities of
the Company; (viii) no participant in this solicitation owns beneficially,
directly or indirectly, any securities of any parent or subsidiary of the
Company; (ix) no participant in this solicitation or any of his or its
associates was a party to any transaction, or series of similar
transactions, since the beginning of the Company's last fiscal year, or is
a party to any currently proposed transaction, or series of similar
transactions, to which the Company or any of its subsidiaries was or is to
be a party, in which the amount involved exceeds $120,000; (x) no
participant in this solicitation or any of his or its associates has any
arrangement or understanding with any person with respect to any future
employment by the Company or its affiliates, or with respect to any future
transactions to which the Company or any of its affiliates will or may be a
party; and (xi) no participant in this solicitation has a substantial
interest, direct or indirect, by securities holdings or otherwise, in any
matter to be acted on at the Annual Meeting.
There are no material proceedings to which any participant in this
solicitation or any of his or her or its associates is a party adverse to
the Company or any of its subsidiaries or has a material interest adverse
to the Company or any of its subsidiaries. With respect to the Nominee,
none of the events enumerated in Item 401(f)(1)-(8) of Regulation S-K of
the Exchange Act occurred during the past 10 years.
OTHER MATTERS AND ADDITIONAL INFORMATION
Mr Klarquist is unaware of any other matters to be considered at the Annual
Meeting. However, should other matters, which Mr Klarquist is not aware of
a reasonable time before this solicitation, be brought before the Annual
Meeting, the persons named as proxies on the enclosed WHITE proxy card will
vote on such matters in their discretion.
STOCKHOLDER PROPOSALS
According to the Company's proxy statement for the Annual Meeting,
stockholders may present proper proposals for inclusion in the Company's
proxy statement and for consideration at the 2023 Annual Meeting of
Stockholders (the "2023 Annual Meeting") by submitting their proposals in
writing to the Company's Secretary in a timely manner. For a stockholder
proposal to be considered for inclusion in the Company's proxy statement
for the 2023 Annual Meeting, the Company's Secretary must receive the
written proposal at the Company's principal executive offices not later
than [ ], 2022. In addition, stockholder proposals must comply with the
requirements of Rule 14a-8 under the Exchange Act regarding the inclusion
of stockholder proposals in company-sponsored proxy material.
19
According to the Company's proxy statement, the Bylaws also establish an
advance notice procedure for stockholders who wish to present a proposal
before an annual meeting of stockholders but do not intend for the proposal
to be included in the Company's proxy statement. To be timely for the 2023
Annual Meeting, the Company's Secretary must receive the written notice at
its principal executive offices not earlier than [ ], 2022 and not later
than [ ] p.m. Eastern Time on [ ], 2022.
The information set forth above regarding the procedures for submitting
stockholder proposals for consideration at the 2023 Annual Meeting is based
on information contained in the Company's proxy statement for the Annual
Meeting. The incorporation of this information in this Proxy Statement
should not be construed as an admission by Mr Klarquist that such
procedures are legal, valid or binding.
ADDITIONAL INFORMATION
Some banks, brokers and other nominee record holders may be participating
in the practice of "householding" proxy statements and annual reports. This
means that only one copy of this Proxy Statement may have been sent to
multiple stockholders in your household. Mr Klarquist will promptly deliver
a separate copy of the document to you if you contact him directly. If you
want to receive separate copies of these proxy materials in the future, or
if you are receiving multiple copies and would like to receive only one
copy for your household, you should contact your bank, broker or other
nominee record holder.
INCORPORATION BY REFERENCE
MR KLARQUIST HAS OMITTED FROM THIS PROXY STATEMENT CERTAIN DISCLOSURE
REQUIRED BY APPLICABLE LAW THAT IS EXPECTED TO BE INCLUDED IN THE COMPANY'S
PROXY STATEMENT RELATING TO THE ANNUAL MEETING BASED ON RELIANCE ON RULE
14A-5(C). THIS DISCLOSURE IS EXPECTED TO INCLUDE, AMONG OTHER THINGS,
CURRENT BIOGRAPHICAL INFORMATION ON THE COMPANY'S DIRECTORS, INFORMATION
CONCERNING EXECUTIVE COMPENSATION, AND OTHER IMPORTANT INFORMATION. SEE
SCHEDULE I FOR INFORMATION REGARDING PERSONS WHO BENEFICIALLY OWN MORE THAN
5% OF THE SHARES AND THE OWNERSHIP OF THE SHARES BY THE DIRECTORS AND
MANAGEMENT OF THE COMPANY.
The information concerning the Company contained in this Proxy Statement
and the Schedules attached hereto has been taken from, or is based upon,
publicly available information.
Scott Klarquist
[ ], 2022
20
SCHEDULE I
The following table is reprinted from the Company's definitive
proxy statement filed with the Securities and Exchange Commission
on [ ], 2022.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
[To be added once the Company's proxy statement is filed.]
IMPORTANT
Tell your Board what you think! Your vote is important. No matter how many
shares of Common Stock you own, please give Mr Klarquist your proxy FOR the election of the Nominee and in accordance with Mr
Klarquist's recommendations on the other proposals on the agenda for the
Annual Meeting by taking three steps:
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SIGNING the enclosed WHITE proxy card;
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DATING the enclosed WHITE proxy card; and
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MAILING the enclosed WHITE proxy card TODAY in the envelope
provided (no postage is required if mailed in the United
States).
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You may vote your shares virtually at the Annual Meeting, however, even
if you plan to attend the Annual Meeting virtually, please submit your
WHITE proxy card by mail by the applicable deadline so that your vote
will still be counted if you later decide not to attend the Annual
Meeting. If any of your shares of Common Stock are held in the name of
a brokerage firm, bank, bank nominee or other institution, only it can
vote such shares of Common Stock and only upon receipt of your specific
instructions.
Depending upon your broker or custodian, you may be able to vote either by
toll-free telephone or by the Internet. Please refer to the voting form
provided by your broker or custodian for instructions on how to vote
electronically. You may also vote by signing, dating and returning the
enclosed WHITE proxy card.
If you have any questions, require assistance in voting your WHITE
proxy card, or need additional copies of Mr Klarquist's proxy
materials, please reach out to him using the contact information listed
below.
Scott Klarquist
[CONFIRM: 85 Broad Street, 18th Floor]
New York, NY 10005
(646) 592-0498
Email: info@sevencornerscapital.com
WHITE PROXY CARD
PRELIMINARY COPY SUBJECT TO COMPLETION
DATED MARCH [__], 2022
FIRSTHAND TECHNOLOGY VALUE FUND, INC.
2022 ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF SCOTT KLARQUIST
THE BOARD OF DIRECTORS OF FIRSTHAND TECHNOLOGY VALUE FUND, INC.
IS NOT SOLICITING THIS PROXY
P R O X Y
The undersigned appoints Scott Klarquist as attorney and agent with full
power of substitution to vote all shares of Common Stock, par value $0.001
per share (the "Common Stock"), which the undersigned would be entitled to
vote if personally present at the 2022 Annual Meeting of Stockholders of
Firsthand Technology Value Fund, Inc., a Maryland corporation (the
"Company"), scheduled to be held [CONFIRM: virtually / in person at
[__________], on [ ], 2022, at [ ] [ ].m. (Pacific Time)] (including
any adjournments or postponements thereof and any meeting called in lieu
thereof, the "Annual Meeting").
The undersigned hereby revokes any other proxy or proxies heretofore given
to vote or act with respect to the shares of Common Stock of the Company
held by the undersigned, and hereby ratifies and confirms all action Scott
Klarquist may lawfully take by virtue hereof. If properly executed, this
Proxy will be voted as directed on the reverse and in the discretion of the
herein named attorneys and proxies or their substitutes with respect to any
other matters as may properly come before the Annual Meeting that are
unknown to Scott Klarquist a reasonable time before this solicitation.
IF NO DIRECTION IS INDICATED WITH RESPECT TO THE PROPOSALS ON THE
REVERSE, THIS PROXY WILL BE VOTED "FOR" PROPOSAL 1, "FOR" PROPOSAL 2
AND "FOR" PROPOSAL 3.
This Proxy will be valid until the completion of the Annual Meeting. This
Proxy will only be valid in connection with Mr Klarquist's solicitation of
proxies for the Annual Meeting.
IMPORTANT: PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY!
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
WHITE PROXY CARD
☒
Please mark vote as in this example
MR KLARQUIST STRONGLY RECOMMENDS THAT STOCKHOLDERS VOTE IN FAVOR OF (A)
THE NOMINEE LISTED BELOW IN PROPOSAL 1 AND (B) BINDING STOCKHOLDER
PROPOSAL 3.
MR KLARQUIST MAKES NO RECOMMENDATION WITH RESPECT TO PROPOSAL 2.
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1.
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Proposal to elect Scott Klarquist as a Class II director of
the Company.
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FOR THE NOMINEE
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WITHHOLD AUTHORITY TO
VOTE FOR THE NOMINEE
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Nominee:
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Scott Klarquist
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[ ]
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[ ]
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Scott Klarquist (the "Nominee") should be able to stand for election, but,
in the event he is unable to serve or for good cause will not serve, the
shares of Common Stock represented by this proxy card will be voted for any
substitute nominee, to the extent this is not prohibited under the
Company's organizational documents and applicable law. In addition, Mr
Klarquist has reserved the right to nominate a substitute person if the
Company makes or announces any changes to its organizational documents or
takes or announces any other action that has, or if consummated would have,
the effect of disqualifying the Nominee, to the extent this is not
prohibited under the Company's organizational documents and applicable law.
In any such case, shares of Common Stock represented by this proxy card
will be voted for such substitute nominee.
MR KLARQUIST INTENDS TO USE THIS PROXY TO VOTE "FOR THE NOMINEE".
THERE IS NO ASSURANCE THAT THE CANDIDATE WHO HAS BEEN NOMINATED BY THE
COMPANY WILL SERVE AS A DIRECTOR IF THE ABOVE NOMINEE IS DULY ELECTED.
2. The Company's proposal to ratify the appointment of Tait, Weller &
Baker LLP as the Company's independent registered public accounting firm
for the fiscal year ending December 31, 2022.
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☐
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FOR
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AGAINST
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☐
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ABSTAIN
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3. A [binding stockholder proposal to terminate the investment advisory and
management agreements between Firsthand Technology Value Fund, Inc. and
Firsthand Capital Management, Inc.]
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☐
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FOR
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AGAINST
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☐
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ABSTAIN
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DATED:
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(Signature)
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(Signature, if held jointly)
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(Title)
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WHEN SHARES ARE HELD JOINTLY, JOINT OWNERS SHOULD EACH SIGN. EXECUTORS,
ADMINISTRATORS, TRUSTEES, ETC., SHOULD INDICATE THE CAPACITY IN WHICH
SIGNING. PLEASE SIGN EXACTLY AS NAME APPEARS ON THIS PROXY.
This regulatory filing also includes additional resources:
svvcproxyklarquist3282022.pdf
Firsthand Technology Value (NASDAQ:SVVC)
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