UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM N-CSR
 
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-07074

180 DEGREE CAPITAL CORP.
(Exact Name of Registrant as Specified in Its Charter)
  
7 N. Willow Street, Suite 4B, Montclair NJ
 
07042
(Address of Principal Executive Offices)
 
(Zip Code)

Daniel B. Wolfe
President and Chief Financial Officer
180 Degree Capital Corp.
7 N. Willow Street, Suite 4B
Montclair, NJ 07042
(Name and address of agent for service)
 
Copy to:
John J. Mahon, Esq.
Schulte Roth & Zabel, LLP
1152 Fifteenth Street, NW
Suite 850
Washington, DC 20005
(202) 729-7477 

Registrant's telephone number, including area code: (973) 746-4500

Date of fiscal year end: December 31

Date of reporting period: June 30, 2017




1



Item 1. Report to Shareholders.

Fellow Shareholders:

Andy Grove was the iconic Chief Executive Officer of Intel Corporation. He once said, “Success breeds complacency. Complacency breeds failure. Only the paranoid survive.” In my early days as a value analyst at Merrill Lynch Asset Management, my first boss, Paul Hoffman, often said, “In thinking about investments, always remember that cash is more important than your mother.” With apologies and all due respect to mothers, especially mine, I have never forgotten Paul’s commentary on the importance of cash and cash flow when making investments. Putting the two quotes together, 180 Degree Capital Corp. (“180”) is paranoid about its cash. It became obvious to all of us on the Board of Directors (the “Board”) and to members of management that we could no longer effectively run a publicly traded business development company focused on early-stage, privately held, equity investments. Our cost structure was entirely too high. We were not increasing net asset value, nor returning sufficient capital to shareholders due to the infrequent nature of monetization events from our private portfolio. A successful investment management business allows portfolio decisions to be made on the merits of the investment, not because of cash considerations to run the business. Left alone, our former company, Harris & Harris Group, may have been forced to liquidate investments for the sole purpose of funding its cost structure. This year, 2017, is the year where your Board, coupled with overwhelming support from you, our patient shareholders, changed the direction of our company towards a different path. 180’s strategy is specifically designed to: 1) reduce our cost structure, 2) grow our net asset value per share (“NAV”); and 3) narrow the discount our stock trades at relative to NAV. In short, we had to change, and we did change.

We have greatly reduced our operating expenses, which will make it far easier to grow our NAV than in years past. Over the last five years our quarterly on-going operating expenses averaged approximately $1.6 million per quarter. In 2016, our operating expenses averaged $1.3 million per quarter. In the first quarter of this year, our operating expenses, excluding a non-cash benefit for forfeited restricted stock, were approximately $1.05 million. In the second quarter of this year, the first quarter into our transition, our on-going operating expenses, net of sublet income, were approximately $735,000. Put another way, we have significantly reduced our burn rate from approximately 7.3 percent of net assets in 2016 to a run-rate of approximately 4 percent of net assets. It is much easier for us to grow NAV when the expense hurdle rate is where it is today. We aim to decrease this expense ratio further, however these decreases will likely come from an increase in net assets rather than further reductions in operating expenses.

Cash flow is the blood that keeps the heart of 180 pumping. It is the lifeline of our business. It will be managed with paranoia. We believe we are now in good shape on that front. At the end of the second quarter of 2017, our cash plus liquid securities totaled $22.6 million, or $0.73 per share. Our cash and liquid securities increased 18 percent from last quarter's $19.1 million or $0.61 per share. The more cash we have, the better positioned we will be to make new investments and/or return cash to you, our shareholders, through stock repurchases and/or dividends. We also may use some of our cash to make investments designed to grow our business.

Our new strategy is centered on making investments in micro-capitalization publicly traded companies with a constructive activist approach. We are bottoms-up, Graham and Dodd investors. Our overall investment philosophy is centered around the following theses:

The price we pay relative to the business we buy is the most important driver of investment returns.
The public markets continuously overreact to near-term or environmental challenges in certain stocks, thus creating attractive valuations and buying opportunities.
Out-of-favor companies and industries create opportunities to identify investments that offer asymmetric return to risk potential.
Companies with strong franchises, managements, and balance sheets are best positioned for turnarounds, increased market share, and improved profitability.
A portfolio of strong business franchises, purchased at the right price, outperforms over a market cycle.

Our ultimate goal is to constructively engage with existing management teams and boards to help unlock value. Some companies may need to realign their financial performance to achieve growth in cash flows, not just focusing on increasing revenues. Others need to improve their investor relations strategies and outreach. Others may need to evaluate strategic options including mergers, acquisitions, sales, and divestitures. Some may need access to management talent. The constructive part is entering into a collegial dialogue with our investee companies to work together on what is required to increase the value of the company’s stock. To 180, activism means that when and if required, we will not be averse to pursuing change through other routes, including proxy solicitations. Rather than just talking about our new investment strategy, we spent the second quarter of 2017 implementing it through establishing new portfolio positions in three publicly traded companies: Synacor, Inc. (NASDAQ:SYNC), USA Truck, Inc. (NASDAQ:USAK), and TheStreet, Inc. (NASDAQ:TST).

2




Synacor provides technology development, offers multi-platform services and is a revenue partner for video, internet and communications providers, device manufacturers, and enterprises. The company reaches over 100 million monthly visitors, over 100 service providers, over 3000 enterprises, over 500 million email boxes and more than 1000 web publishers. Most recently, AT&T selected Synacor to provide portal services to its customers. Synacor has publicly estimated that this engagement will generate approximately $100 million in revenues per year after full deployment. The company has also publicly stated its operating goals are to reach $300 million in revenues and $30 million in EBITDA in 2019. At our initial entry price, Synacor was trading at a multiple of 0.9x enterprise value to 2016 revenues. At its current multiple, we believe the stock has growth potential of over 100 percent from our cost basis if Synacor is able to achieve its $300 million in revenue goal in 2019.1 

USA Truck provides a broad range of truckload and logistics services to customers in a variety of industries. Following poor performance over the last two years, an entirely new management team joined the company and is presently implementing a turnaround plan focused on profitable revenue growth and improved operational efficiency. At our average cost of $6.59, the company’s multiple of enterprise value to its prior peak EBITDA in 2014 was 3x. For perspective, the company’s median multiple of enterprise value to EBITDA during the prior eight years was 5.4x. We believe a reversion to the median multiple may occur if the company is able to improve its EBITDA. The combination of these two factors could result in the potential increase of the company’s stock price of more than 150 percent, without requiring the company to reach its prior peak level of EBITDA. We currently believe any of USA Truck’s operational issues were the result of poor execution by former management teams rather than a systemic problem with its business or its segment of the trucking industry. We are excited about the potential for the new management team to turn around the business.1 

TheStreet is a financial news and information provider to consumers and businesses. The company’s brands and businesses include TheStreet.com, The Deal, BoardEx, and RateWatch. An entirely new senior management team and Chairman of the Board joined the company in the last two years. We like teams that have worked together successfully in prior companies. Many members of this team, including the CEO and the Chairman of the Board, worked together to build and sell MarketWatch. Following MarketWatch, they successfully turned around USA Today. This management team has been focused on fixing TheStreet’s businesses and returning it to profitability. We believe there are two major near-term issues that create an overhang on the stock and limit its ability to increase in value: 1) resolution of an expiring agreement with Jim Cramer; and 2) a $55 million convertible preferred security that has senior liquidation preference to the common stock. We believe both of these issues need to be resolved for the stock to trade to its full potential. We believe this potential could lead to a greater than 130 percent increase in value of the company’s common stock when valuing the business on market multiples for comparable financial data subscription companies (recurring revenue) and advertising-based media companies (non-recurring revenue).1 

While we are making progress implementing our new investment strategy, we note that a majority of our assets continue to be in private investments. To be clear, we are not running away from our private portfolio companies. We continue to believe there is considerable value in those companies. In fact, given our reduced operating expenses, we are in a much better position to determine when to realize value; rather than being forced to sell our positions just to survive. We continue to believe in the potential for our most mature companies, D-Wave Systems, Inc., AgBiome LLC, HZO, Inc. and Nanosys, Inc. to return more capital than we currently value these positions. There are other companies in the portfolio that also hold promise, however these companies generally are very early in stage and the timelines and potential exit values for these companies are highly uncertain.

Our current stock price translates to our existing business being worth approximately [65] percent of our NAV as of June 30, 2017. We note that during the prior quarter one of our privately held positions, Mersana Therapeutics, Inc., successfully completed an initial public offering. Our holdings of Mersana Therapeutics at its IPO price of $15 per share were valued at $4.4 million, or an increase of $1.6 million from the value of our holdings at March 31, 2017. We understand it is hard for investors to value our private holdings. We expect that not every one of our private holdings will end up returning their current values or more. As in the example of Mersana Therapeutics, however, we believe the potential return from some of our investments is greater than their current values. We stand ready to make decisions that we believe are in the best interests of our shareholders and position the business as a whole to be successful in the future. These decisions include taking advantage of near-term opportunities to transition capital out of privately held securities when such opportunities present themselves and where we believe the terms are appropriate from a risk/return perspective.

                           
1 We note that the discussions of potential appreciation of stock prices above are illustrations of what we currently believe are possible based on our financial models and historical performance of certain stocks or comparable companies. Past performance may not be indicative of future results and actual results may be materially different than those discussed above. We are not responsible for the accuracy of estimates provided by portfolio companies or analysts.



3



I hope this letter provides a clear sense for what we are driving towards. At its most maximized level, and as soon as we can, we seek to convert our private portfolio to cash. We seek to use the cash for either making new investments in publicly traded companies or for distribution to shareholders in the form of dividends or share repurchases. We are focused on growing our NAV. We can now do so against the backdrop of lower expenses. We also note that the first and second quarters of 2017 were the first time in nearly five years where NAV increased in two successive quarters.

180 Degree Capital Corp. is the result of the recognition that our old model was not working and that a different strategy held the potential to generate value and a higher stock price for shareholders. We think we are on our way towards delivering on this goal. We believe the future for you, our shareholders, is bright, and we appreciate your support.


Best Regards,

sig2.jpg

Kevin M. Rendino
Chairman and Chief Executive Officer
180 Degree Capital Corp.



4


180 DEGREE CAPITAL CORP.
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)
 
June 30, 2017

ASSETS
 

Investments, in portfolio securities at value:
 

Unaffiliated privately held companies (cost: $13,413,900)
$
16,061,037

Unaffiliated rights to milestone payments (adjusted cost basis: $548,998)
2,239,142

Unaffiliated publicly traded securities (cost: $10,278,446)
9,389,135

Non-controlled affiliated privately held companies (cost: $47,544,536)
32,060,980

Non-controlled affiliated publicly traded companies (cost: $16,843,447)
8,311,524

Controlled affiliated privately held companies (cost: $19,349,898)
4,371,659

Equity method privately held company (adjusted cost basis: $158,283)
158,283

Total, investments in private portfolio companies, rights to milestone payments and public securities at value (cost: $108,137,508)
$
72,591,760

Cash
4,877,878

Restricted funds
46,151

Receivable from funds in escrow from sales of investments at value
13,203

Receivable from portfolio companies
11,306

Interest receivable
490,906

Prepaid expenses
168,581

Other assets
103,762

Total assets
$
78,303,547

LIABILITIES & NET ASSETS
 

Post retirement plan liabilities
$
1,284,474

Accrued severance
404,066

Accounts payable and accrued liabilities
368,573

Deferred rent
118,136

Payable for purchases of investments
116,425

Total liabilities
$
2,291,674

Commitments and contingencies (Note 11)
 

Net assets
$
76,011,873

Net assets are comprised of:
 

Preferred stock, $0.10 par value, 2,000,000 shares authorized; none issued
$
0

Common stock, $0.01 par value, 45,000,000 shares authorized at 6/30/17; 34,623,341 issued at 6/30/17
334,594

Additional paid in capital
215,159,282

Accumulated net operating and realized loss
(99,526,475
)
Accumulated unrealized depreciation of investments
(35,545,748
)
Accumulated other comprehensive income
195,745

Treasury stock, at cost (3,501,779 shares at 6/30/17)
(4,605,525
)
Net assets
$
76,011,873

Shares outstanding
31,121,562

Net asset value per outstanding share
$
2.44

 
The accompanying unaudited notes are an integral part of these consolidated financial statements.


5


180 DEGREE CAPITAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
 
Six Months Ended
June 30, 2017

Income:
 

Interest from:
 

Unaffiliated companies
$
10,463

Non-controlled affiliated companies
264,116

Controlled affiliated companies
101,490

Cash and U.S. Treasury securities and other
5,333

Fees for providing managerial assistance to portfolio companies
218,306

Yield-enhancing fees on debt securities
76,114

Other income
12,060

Total income
687,882

Operating expenses:
 

Salaries, benefits and stock-based compensation (Note 7)
337,358

Administration and operations
184,845

Professional fees
279,287

Rent
139,361

Insurance expense
120,623

Directors' fees and expenses
128,172

Custody fees
15,945

Depreciation
19,856

Total operating expenses
1,225,447

Expenses related to restructure:
 
Severance
520,619

Loss on abandoned lease
139,778

Professional fees
138,402

Disposal of fixed assets
94,592

Administration and operations
82,235

Directors' fees and expenses
60,833

Other
(69,361
)
Total expenses related to restructure
967,098

Total expenses
2,192,545

Net operating loss
(1,504,663
)
Net realized loss
 

Realized gain (loss) from investments:
 

Unaffiliated companies
130,522

Controlled affiliated companies
(1,788,463
)
Unaffiliated rights to milestone payments
(232,865
)
Publicly traded companies
(45,489
)
Realized loss from investments
(1,936,295
)
Income tax expense
5,273

Net realized loss from investments
(1,941,568
)
Net decrease (increase) in unrealized depreciation on investments:
 

Unaffiliated companies
1,036,723

Controlled affiliated companies
694,263

Unaffiliated rights to milestone payments
(67,346
)
Non-controlled affiliated companies
774,299

Publicly traded non-controlled affiliated companies
4,023,003

Publicly traded unaffiliated companies
1,586,336

Net decrease in unrealized depreciation on investments
8,047,278

Net realized and unrealized gain on investments
6,105,710

Share of loss on equity method investment
(20,077
)
Net increase in net assets resulting from operations:
 

Total
$
4,580,970

Per average basic and diluted outstanding share
$
0.15

Average outstanding shares – basic and diluted
31,021,892

The accompanying unaudited notes are an integral part of these consolidated financial statements.

6


180 DEGREE CAPITAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
 (UNAUDITED)
 
Six Months Ended
June 30, 2017

Cash flows used in operating activities:
 

Net increase in net assets resulting from operations
$
4,580,970

Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:
 

Net realized loss and change in unrealized depreciation on investments
(6,110,983
)
Depreciation of fixed assets, amortization of premium or discount on U.S. government securities and prepaid assets and accretion of bridge note interest
(95,341
)
Share of loss on equity method investee
20,077

Stock-based compensation expense
(580,435
)
Amortization of prior service cost
(104,492
)
Purchase of affiliated portfolio companies
(3,325,001
)
Purchase of publicly traded portfolio companies
(4,926,929
)
Proceeds from sale of investments of affiliated portfolio companies
160,000

Proceeds from sale of publicly traded portfolio companies
4,655

Proceeds from unaffiliated portfolio companies
234,294

Changes in assets and liabilities:
 

Restricted funds
(46,151
)
Receivable from portfolio companies
(11,306
)
Interest receivable
(200,320
)
Prepaid expenses
75,470

Other assets
(16,163
)
Post retirement plan liabilities
15,451

Accrued severance
404,066

Accounts payable and accrued liabilities
(508,559
)
Deferred rent
(102,167
)
Payable for purchases of investments
116,425

Net cash used in operating activities
(10,416,439
)
Cash flows from investing activities:
 

Purchase of fixed assets
(1,978
)
Proceeds from fixed assets
2,156

Net cash provided by investing activities
178

Cash flows from financing activities:
 

Payment of withholdings related to net settlement of restricted stock
(139,780
)
Net cash used in financing activities
(139,780
)
Net decrease in cash
(10,556,041
)
Cash at beginning of the period
15,433,919

Cash at end of the period
$
4,877,878

Supplemental disclosures of cash flow information:
 

Income taxes paid
$
5,273


The accompanying unaudited notes are an integral part of these consolidated financial statements.

7


180 DEGREE CAPITAL CORP.
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
 
UNAUDITED

 
 
 
Six Months Ended
June 30, 2017

 
Year Ended
December 31, 2016

Changes in net assets from operations:
 

 
 

Net operating loss
$
(1,504,663
)
 
$
(4,516,108
)
Net realized loss on investments
(1,941,568
)
 
(8,075,175
)
Net decrease (increase) in unrealized depreciation on investments
8,047,278

 
(3,683,822
)
Share of loss on equity method investment
(20,077
)
 
(91,255
)
Net increase (decrease) in net assets resulting from operations
4,580,970

 
(16,366,360
)
Changes in net assets from capital stock transactions:
 

 
 

Acquisition of vested restricted stock awards to pay required employee withholding tax
(139,780
)
 
(39,691
)
Stock-based compensation (benefit) expense
(580,435
)
 
158,973

Net decrease in net assets resulting from capital stock transactions
(720,215
)
 
119,282

Changes in net assets from accumulated other comprehensive loss:
 

 
 

Other comprehensive loss
(104,492
)
 
(208,983
)
Net decrease in net assets resulting from accumulated other comprehensive loss
(104,492
)
 
(208,983
)
Net increase (decrease) in net assets
3,756,263

 
(16,456,061
)
Net Assets:
 

 
 

Beginning of the period/year
72,255,610

 
88,711,671

End of the period/year
$
76,011,873

 
$
72,255,610

 
The accompanying unaudited notes are an integral part of these consolidated financial statements.

8

180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2017 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Cost
 
Shares/
Principal
 
Value


Investments in Unaffiliated Companies (2) -
 
 
 
 
 
 
 
 
 
36.4% of net assets at value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private Placement Portfolio (Illiquid) (3) -
 
 
 
 
 
 
 
 
 
21.1% of net assets at value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
D-Wave Systems, Inc. (4)(5)(6)
 
 
Technology Hardware, Storage & Peripherals
 
 
 
 
 
 
Developing high-performance quantum computing systems
 
 
 
 
 
 
 
 
 
Series 1 Class B Convertible Preferred Stock (acquired 9/30/08)
(H)
 
 
 
$
1,002,074

 
1,144,869

 
$
2,178,499

Series 1 Class C Convertible Preferred Stock (acquired 9/30/08)
(H)
 
 
 
487,804

 
450,450

 
859,923

Series 1 Class D Convertible Preferred Stock (acquired 9/30/08)
(H)
 
 
 
748,473

 
855,131

 
1,632,472

Series 1 Class E Convertible Preferred Stock (acquired 11/24/10)
(H)
 
 
 
248,049

 
269,280

 
520,632

Series 1 Class F Convertible Preferred Stock (acquired 11/24/10)
(H)
 
 
 
238,323

 
258,721

 
500,216

Series 1 Class H Convertible Preferred Stock (acquired 6/27/14)
(H)
 
 
 
909,088

 
460,866

 
957,608

Series 2 Class D Convertible Preferred Stock (acquired 9/30/08)
(H)
 
 
 
736,019

 
678,264

 
1,294,827

Series 2 Class E Convertible Preferred Stock (acquired 6/1/12-3/22/13)
(H)
 
 
 
659,493

 
513,900

 
998,547

Series 2 Class F Convertible Preferred Stock (acquired 6/1/12-3/22/13)
(H)
 
 
 
633,631

 
493,747

 
959,388

Warrants for Common Stock expiring 5/12/19 (acquired 5/12/14)
(I)
 
 
 
26,357

 
20,415

 
11,262

 
 
 
 
 
5,689,311

 
 
 
9,913,374

 
 
 
 
 
 
 
 
 
 
Fleet Health Alliance, LLC (4)(5)
 
 
Health Care Technology
 
 
 
 
 
 
Developing software for information transfer amongst healthcare providers and consumers
 
 
 
 
 
 
 
 
 
Unsecured Convertible Bridge Note, 0%, (acquired 4/22/16)
(M)
 
 
 
225,000

 
$
225,000

 
225,000

 
 
 
 
 
 
 
 
 
 
Genome Profiling, LLC (4)
 
 
Life Sciences Tools & Services
 
 
 
 
 
 
Developing a platform to analyze and understand the epigenome
 
 
 
 
 
 
 
 
 
Unsecured Convertible Bridge Note, 8%, (acquired 8/4/16)
(M)
 
 
 
230,000

 
$
230,000

 
230,000

 
 
 
 
 
 
 
 
 
 

The accompanying unaudited notes are an integral part of these consolidated financial statements.
9

180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2017 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Cost
 
Shares/
Principal
 
Value


Investments in Unaffiliated Companies (2) -
 
 
 
 
 
 
 
 
 
36.4% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private Placement Portfolio (Illiquid) (3) -
 
 
 
 
 
 
 
 
 
21.1% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Muses Labs, Inc. (4)
 
 
Life Sciences Tools & Services
 
 
 
 
 
 
Developing a data analytics platform for precision medicine
 
 
 
 
 
 
 
 
 
Unsecured Convertible Bridge Note, 5%, (acquired 5/25/16)
(I)
 
 
 
$
223,675

 
$
212,000

 
$
223,425

 
 
 
 
 
 
 
 
 
 
Nanosys, Inc. (4)(5)
 
 
Specialty Chemicals
 
 
 
 
 
 
Developing inorganic nanowires and quantum dots for use in LED-backlit devices
 
 
 
 
 
 
 
 
 
Series C Convertible Preferred Stock (acquired 4/10/03)
(I)
 
 
 
1,500,000

 
803,428

 
843,368

Series D Convertible Preferred Stock (acquired 11/7/05)
(I)
 
 
 
3,000,003

 
1,016,950

 
1,813,242

Series E Convertible Preferred Stock (acquired 8/13/10)
(I)
 
 
 
496,573

 
433,688

 
792,861

 
 
 
 
 
4,996,576

 
 
 
3,449,471

 
 
 
 
 
 
 
 
 
 
NanoTerra, Inc. (4)(5)
 
 
Research & Consulting Services
 
 
 
 
 
 
Developing surface chemistry and nano-manufacturing solutions
 
 
 
 
 
 
 
 
 
Warrants for Common Stock expiring on 2/22/21 (acquired 2/22/11)
(I)
 
 
 
69,168

 
4,462

 
1,172

Warrants for Series A-3 Preferred Stock expiring on 11/15/22 (acquired 11/15/12)
(I)
 
 
 
35,403

 
47,508

 
125,776

 
 
 
 
 
104,571

 
 
 
126,948

 
 
 
 
 
 
 
 
 
 
Petra Pharma Corporation (4)(5)
 
 
Pharmaceuticals
 
 
 
 
 
 
Developing small molecule inhibitors for treatment of cancer and metabolic diseases
 
 
 
 
 
 
 
 
 
Series A Convertible Preferred Stock (acquired 12/23/15-10/27/16)
(I)
 
 
 
1,525,050

 
1,525,050

 
1,540,426

 
 
 
 
 
 
 
 
 
 

The accompanying unaudited notes are an integral part of these consolidated financial statements.
10

180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2017 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Cost
 
Shares/
Principal
 
Value


Investments in Unaffiliated Companies (2) -
 
 
 
 
 
 
 
 
 
36.4% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private Placement Portfolio (Illiquid) (3) -
 
 
 
 
 
 
 
 
 
21.1% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Phylagen, Inc. (4)
 
 
Research & Consulting Services
 
 
 
 
 
 
Developing technology to improve human health and business productivity
 
 
 
 
 
 
 
 
 
Secured Convertible Bridge Note, 5%, (acquired 2/5/15)
(M)
 
 
 
$
224,027

 
$
200,000

 
$
313,638

Secured Convertible Bridge Note, 5%, (acquired 6/5/15)
(M)
 
 
 
11,037

 
$
10,000

 
15,452

 
 
 
 
 
235,064

 
 
 
329,090

 
 
 
 
 
 
 
 
 
 
Xenio Corp. (4)(5)(7)
 
 
Technology Hardware, Storage & Peripherals
 
 
 
 
 
 
Developing a smart platform for LED lighting that enables local intelligence and communication capabilities
 
 
 
 
 
 
 
 
 
Common Stock (acquired 8/1/16)
(M)
 
 
 
184,653

 
221,938

 
23,303

 
 
 
 
 
 
 
 
 
 
Total Unaffiliated Private Portfolio (cost: $13,413,900)
 
 
 
 
 
 
 
 
$
16,061,037

 
 
 
 
 
 
 
 
 
 
Rights to Milestone Payments (Illiquid) (8) -
 
 
 
 
 
 
 
 
 
2.9% of net assets at value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amgen, Inc. (4)(9)
 
 
Biotechnology
 
 
 
 
 
 
Rights to Milestone Payments from Acquisition of BioVex Group, Inc. (acquired 3/4/11)
(I)
 
 
 
$
548,998

 
$
548,998

 
$
2,239,142

 
 
 
 
 
 
 
 
 
 
Laird Technologies, Inc. (4)(10)
 
 
Electronic Components
 
 
 
 
 
 
Rights to Milestone Payments from Merger & Acquisition of Nextreme Thermal Solutions, Inc. (acquired 2/13/13)
(I)
 
 
 
0

 
$
0

 
0

 
 
 
 
 
 
 
 
 
 
Total Unaffiliated Rights to Milestone Payments (cost: $548,998)
 
 
 
 
 
 
 
 
$
2,239,142

 
 
 
 
 
 
 
 
 
 

The accompanying unaudited notes are an integral part of these consolidated financial statements.
11

180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2017 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Cost
 
Shares/
Principal
 
Value


Publicly Traded Portfolio (11) -
 
 
 
 
 
 
 
 
 
12.4% of net assets at value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Champions Oncology, Inc. (5)
 
 
Life Sciences Tools & Services
 
 
 
 
 
 
Developing its TumorGraftTM platform for personalized medicine and drug development
 
 
 
 
 
 
 
 
 
Warrants for Common Stock expiring 1/28/19 (acquired 1/28/13)
(I)
 
 
 
$
400

 
5,500

 
$
1,849

 
 
 
 
 
 
 
 
 
 
Mersana Therapeutics, Inc. (4)(5)(12)
 
 
Biotechnology
 
 
 
 
 
 
Developing antibody drug conjugates for cancer therapy
 
 
 
 
 
 
 
 
 
Common Stock (acquired 7/27/12-6/28/17)
(M)
 
 
 
4,924,753

 
294,557

 
3,849,162

 
 
 
 
 
 
 
 
 
 
OpGen, Inc. (5)
 
 
Biotechnology
 
 
 
 
 
 
Developing tools for genomic sequence assembly and analysis
 
 
 
 
 
 
 
 
 
Warrants for the Purchase of Common Stock expiring 5/8/20 (acquired 5/5/15)
(M)
 
 
 
425,579

 
300,833

 
35,919

Warrants for the Purchase of Common Stock expiring 2/17/25 (acquired 5/5/15)
(I)
 
 
 
785

 
31,206

 
13,706

 
 
 
 
 
426,364

 
 
 
49,625

 
 
 
 
 
 
 
 
 
 
Synacor, Inc. (5)(13)
 
 
Internet Software & Services
 
 
 
 
 
 
Providing technology development, multiplatform services and revenue partner for video, internet and communications providers, device manufacturers, and enterprises
 
 
 
 
 
 
 
 
 
Common Stock (acquired 4/6/17-6/8/17)
(M)
 
 
 
2,451,446

 
700,000

 
2,555,000

 
 
 
 
 
 
 
 
 
 
TheStreet, Inc. (5)(13)
 
 
Financial Exchanges & Data
 
 
 
 
 
 
Providing financial news and proprietary data to consumers and businesses
 
 
 
 
 
 
 
 
 
Common Stock (acquired 4/20/17-6/30/17)
(M)
 
 
 
827,833

 
925,902

 
768,499

 
 
 
 
 
 
 
 
 
 
USA Truck, Inc. (5)(13)
 
 
Trucking
 
 
 
 
 
 
Providing over-the-road trucking and freight logistics
 
 
 
 
 
 
 
 
 
Common Stock (acquired 5/19/17-6/7/17)
(M)
 
 
 
1,647,650

 
250,000

 
2,165,000

 
 
 
 
 
 
 
 
 
 
Total Unaffiliated Publicly Traded Portfolio (cost: $10,278,446)
 
 
 
 
 
 
 
 
$
9,389,135

 
 
 
 
 
 
 
 
 
 
Total Investments in Unaffiliated Companies (cost: $24,241,344)
 
 
 
 
 
 
 
 
27,689,314

 
 
 
 
 
 
 
 
 
 

The accompanying unaudited notes are an integral part of these consolidated financial statements.
12

180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2017 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Cost
 
Shares/
Principal
 
Value


Investments in Non-Controlled Affiliated Companies (2) -
 
 
 
 
 
 
 
 
 
53.1% of net assets at value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private Placement Portfolio (Illiquid) (14) -
 
 
 
 
 
 
 
 
 
42.2% of net assets at value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ABSMaterials, Inc. (4)
 
 
Specialty Chemicals
 
 
 
 
 
 
Developing nano-structured absorbent materials for water remediation and consumer applications
 
 
 
 
 
 
 
 
 
Series A Convertible Preferred Stock (acquired 2/17/10-10/24/11)
(I)
 
 
 
$
435,000

 
390,000

 
$
253,587

Series B Convertible Preferred Stock (acquired 11/8/13-6/25/14)
(I)
 
 
 
1,217,644

 
1,037,751

 
1,067,285

Secured Convertible Bridge Note, 8%, (acquired 1/20/16)
(M)
 
 
 
111,573

 
$
100,000

 
111,573

Secured Convertible Bridge Note, 8%, (acquired 3/28/17)
(M)
 
 
 
25,521

 
$
25,000

 
25,521

 
 
 
 
 
1,789,738

 
 
 
1,457,966

 
 
 
 
 
 
 
 
 
 
AgBiome, LLC (4)(5)
 
 
Fertilizers & Agricultural Chemicals
 
 
 
 
 
 
Providing early-stage research and discovery for agriculture and utilizing the crop microbiome to identify products that reduce risk and improve yield
 
 
 
 
 
 
 
 
 
Series A-1 Convertible Preferred Stock (acquired 1/30/13)
(I)
 
 
 
2,000,000

 
2,000,000

 
6,833,127

Series A-2 Convertible Preferred Stock (acquired 4/9/13-10/15/13)
(I)
 
 
 
521,740

 
417,392

 
1,475,755

Series B Convertible Preferred Stock (acquired 8/7/15)
(I)
 
 
 
500,006

 
160,526

 
759,567

 
 
 
 
 
3,021,746

 
 
 
9,068,449

 
 
 
 
 
 
 
 
 
 
AgTech Accelerator Corporation (4)(5)(15)
 
 
Research & Consulting Services
 
 
 
 
 
 
Identifying and managing emerging agriculture technologies companies
 
 
 
 
 
 
 
 
 
Common Stock (acquired 5/4/16-11/17/16)
(M)
 
 
 
300,000

 
300,000

 
300

Class B Common Stock (acquired 11/17/16)
(M)
 
 
 
0

 
138,000

 
138

 
 
 
 
 
300,000

 
 
 
438

 
 
 
 
 
 
 
 
 
 

The accompanying unaudited notes are an integral part of these consolidated financial statements.
13

180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2017 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Cost
 
Shares/
Principal
 
Value


Investments in Non-Controlled Affiliated Companies (2) -
 
 
 
 
 
 
 
 
 
53.1% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private Placement Portfolio (Illiquid) (14) -
 
 
 
 
 
 
 
 
 
42.2% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EchoPixel, Inc. (4)(5)
 
 
Health Care Equipment
 
 
 
 
 
 
Developing virtual reality 3-D visualization software for life sciences and health care applications
 
 
 
 
 
 
 
 
 
Series Seed Convertible Preferred Stock (acquired 6/21/13-6/30/14)
(I)
 
 
 
$
1,250,000

 
4,194,630

 
$
935,395

Series Seed-2 Convertible Preferred Stock (acquired 1/22/16)
(I)
 
 
 
500,000

 
1,476,668

 
334,209

Series A-2 Convertible Preferred Stock (acquired 3/23/17)
(I)
 
 
 
350,000

 
1,471,577

 
411,869

 
 
 
 
 
2,100,000

 
 
 
1,681,473

 
 
 
 
 
 
 
 
 
 
Ensemble Therapeutics Corporation (4)(5)(16)
 
 
Pharmaceuticals
 
 
 
 
 
 
Developed new classes of therapeutics
 
 
 
 
 
 
 
 
 
Series B Convertible Preferred Stock (acquired 6/6/07)
(I)
 
 
 
2,000,000

 
1,449,275

 
0

Series B-1 Convertible Preferred Stock (acquired 4/21/14)
(I)
 
 
 
679,754

 
492,575

 
779,511

 
 
 
 
 
2,679,754

 
 
 
779,511

 
 
 
 
 
 
 
 
 
 
Essential Health Solutions, Inc. (4)(5)
 
 
Health Care Technology
 
 
 
 
 
 
Developing software for information transfer amongst healthcare providers and consumers
 
 
 
 
 
 
 
 
 
Common Stock (acquired 11/18/16)
(I)
 
 
 
20

 
200,000

 
111,581

Series A Convertible Preferred Stock (acquired 11/18/16)
(I)
 
 
 
2,750,000

 
2,750,000

 
2,772,929

 
 
 
 
 
2,750,020

 
 
 
2,884,510

 
 
 
 
 
 
 
 
 
 
HZO, Inc. (4)
 
 
Semiconductor Equipment
 
 
 
 
 
 
Developing novel industrial coatings that protect electronics against damage from liquids
 
 
 
 
 
 
 
 
 
Common Stock (acquired 6/23/14)
(I)
 
 
 
666,667

 
405,729

 
448,764

Series I Convertible Preferred Stock (acquired 6/23/14)
(I)
 
 
 
5,709,835

 
2,266,894

 
4,034,473

Series II Convertible Preferred Stock (acquired 6/23/14-8/3/15)
(I)
 
 
 
2,500,006

 
674,638

 
1,728,107

Series II-A Convertible Preferred Stock (acquired 9/9/16)
(I)
 
 
 
226,070

 
69,053

 
255,727

Warrants for Series II-A Convertible Preferred Stock expiring 7/15/23 (acquired 7/15/16)
(I)
 
 
 
29,820

 
6,577

 
24,297

 
 
 
 
 
9,132,398

 
 
 
6,491,368

 
 
 
 
 
 
 
 
 
 

The accompanying unaudited notes are an integral part of these consolidated financial statements.
14

180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2017 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Cost
 
Shares/
Principal
 
Value


Investments in Non-Controlled Affiliated Companies (2) -
 
 
 
 
 
 
 
 
 
53.1% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private Placement Portfolio (Illiquid) (14) -
 
 
 
 
 
 
 
 
 
42.2% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Laser Light Engines, Inc. (4)(5)(16)
 
 
Technology Hardware, Storage & Peripherals
 
 
 
 
 
 
Manufactured solid-state light sources for digital cinema and large-venue projection displays
 
 
 
 
 
 
 
 
 
Series A Convertible Preferred Stock (acquired 5/6/08)
(M)
 
 
 
$
2,000,000

 
7,499,062

 
$
0

Series B Convertible Preferred Stock (acquired 9/17/10)
(M)
 
 
 
3,095,802

 
13,571,848

 
0

Secured Convertible Bridge Note, 12%, (acquired 10/7/2011)
(M)
 
 
 
200,000

 
$
200,000

 
0

Secured Convertible Bridge Note, 12%, (acquired 11/17/2011)
(M)
 
 
 
95,652

 
$
95,652

 
0

Secured Convertible Bridge Note, 12%, (acquired 12/21/2011)
(M)
 
 
 
82,609

 
$
82,609

 
0

Secured Convertible Bridge Note, 12%, (acquired 3/5/2012)
(M)
 
 
 
434,784

 
$
434,784

 
0

Secured Convertible Bridge Note, 12%, (acquired 7/26/2012)
(M)
 
 
 
186,955

 
$
186,955

 
0

Secured Convertible Bridge Note, 20%, (acquired 4/29/2013)
(M)
 
 
 
166,667

 
$
166,667

 
0

Secured Convertible Bridge Note, 20%, (acquired 7/22/2013)
(M)
 
 
 
166,667

 
$
166,667

 
0

Secured Convertible Bridge Note, 10%, (acquired 10/30/2013)
(M)
 
 
 
80,669

 
$
80,669

 
0

Secured Convertible Bridge Note, 10%, (acquired 2/5/2014)
(M)
 
 
 
19,331

 
$
19,331

 
0

Secured Convertible Bridge Note, 10%, (acquired 6/24/2014)
(M)
 
 
 
13,745

 
$
13,745

 
0

 
 
 
 
 
6,542,881

 
 
 
0

 
 
 
 
 
 
 
 
 
 
Lodo Therapeutics Corporation (4)(5)
 
 
Pharmaceuticals
 
 
 
 
 
 
Developing and commercializing novel therapeutics derived from a metagenome-based Natural Product Discovery Platform
 
 
 
 
 
 
 
 
 
Series A Convertible Preferred Stock (acquired 12/21/15-4/22/16)
(I)
 
 
 
658,190

 
658,190

 
663,747

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

The accompanying unaudited notes are an integral part of these consolidated financial statements.
15

180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2017 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Cost
 
Shares/
Principal
 
Value


Investments in Non-Controlled Affiliated Companies (2) -
 
 
 
 
 
 
 
 
 
53.1% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private Placement Portfolio (Illiquid) (14) -
 
 
 
 
 
 
 
 
 
42.2% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NGX Bio, Inc. (4)(17)
 
 
Research & Consulting Services
 
 
 
 
 
 
Developing translational genomics solutions
 
 
 
 
 
 
 
 
 
Series Seed Convertible Preferred Stock (acquired 6/6/14-1/10/16)
(I)
 
 
 
$
500,002

 
666,667

 
$
703,496

Series Seed 2 Convertible Preferred Stock (acquired 8/20/15-9/30/15)
(I)
 
 
 
499,999

 
329,989

 
459,718

Series Seed 3 Convertible Preferred Stock (acquired 6/24/17)
(I)
 
 
 
686,329

 
666,001

 
746,746

 
 
 
 
 
1,686,330

 
 
 
1,909,960

 
 
 
 
 
 
 
 
 
 
ORIG3N, Inc. (4)
 
 
Health Care Technology
 
 
 
 
 
 
Developing precision medicine applications for induced pluripotent stems cells
 
 
 
 
 
 
 
 
 
Series 1 Convertible Preferred Stock (acquired 2/5/15-8/5/15)
(I)
 
 
 
500,000

 
1,195,315

 
949,223

Series A Convertible Preferred Stock (acquired 11/25/15-9/7/16)
(I)
 
Research & Consulting Services
 
1,500,000

 
1,364,666

 
1,308,087

Series A-2 Convertible Preferred Stock (acquired 5/11/17)
(I)
 
 
 
100,395

 
93,180

 
114,161

 
 
 
 
 
2,100,395

 
 
 
2,371,471

 
 
 
 
 
 
 
 
 
 
Produced Water Absorbents, Inc. (4)(18)
 
 
Oil & Gas Equipment & Services
 
 
 
 
 
 
Providing integrated process separation solutions to the global oil and gas industries, enabling onsite treatment of produced and flowback water
 
 
 
 
 
 
 
 
 
Common Stock (acquired 4/30/16)
(M)
 
 
 
7,670,281

 
50,243,350

 
0

Warrants for Common Stock expiring upon liquidation event (acquired 4/30/16)
(I)
 
 
 
65,250

 
450,000

 
0

Senior Secured Debt, 15% commencing on 4/1/16, maturing on 12/31/19 (acquired 4/1/16)
(I)
 
 
 
2,058,255

 
$
2,533,766

 
1,248,600

 
 
 
 
 
9,793,786

 
 
 
1,248,600

 
 
 
 
 
 
 
 
 
 

The accompanying unaudited notes are an integral part of these consolidated financial statements.
16

180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2017 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Cost
 
Shares/
Principal
 
Value


Investments in Non-Controlled Affiliated Companies (2) -
 
 
 
 
 
 
 
 
 
53.1% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private Placement Portfolio (Illiquid) (14) -
 
 
 
 
 
 
 
 
 
42.2% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Senova Systems, Inc. (4)(16)
 
 
Life Sciences Tools & Services
 
 
 
 
 
 
Developed next-generation sensors to measure pH
 
 
 
 
 
 
 
 
 
Series B-1 Convertible Preferred Stock (acquired 8/1/13-1/15/14)
(I)
 
 
 
$
1,083,960

 
2,759,902

 
$
0

Series C Convertible Preferred Stock (acquired 10/24/14-4/1/15)
(I)
 
 
 
1,208,287

 
1,611,049

 
70,465

Warrants for Series B Preferred Stock expiring 10/15/17 (acquired 10/15/12)
(I)
 
 
 
131,538

 
164,423

 
0

Warrants for Series B Preferred Stock expiring 4/24/18 (acquired 4/24/13)
(I)
 
 
 
20,000

 
25,000

 
0

 
 
 
 
 
2,443,785

 
 
 
70,465

 
 
 
 
 
 
 
 
 
 
TARA Biosystems, Inc. (4)
 
 
Specialty Chemicals
 
 
 
 
 
 
Developing human tissue models for toxicology and drug discovery applications
 
 
 
 
 
 
 
 
 
Common Stock (acquired 8/20/14)
(I)
 
 
 
20

 
2,000,000

 
658,013

Series A Convertible Preferred Stock (acquired 3/31/17)
(I)
 
 
 
2,545,493

 
6,878,572

 
2,775,009

 
 
 
 
 
2,545,513

 
 
 
3,433,022

 
 
 
 
 
 
 
 
 
 
Total Non-Controlled Affiliated Private Portfolio (cost: $47,544,536)
 
 
 
 
 
 
 
 
$
32,060,980

 
 
 
 
 
 
 
 
 
 
Publicly Traded Portfolio (19) -
 
 
 
 
 
 
 
 
 
10.9% of net assets at value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adesto Technologies Corporation (5)
 
 
Semiconductors
 
 
 
 
 
 
Developing low-power, high-performance memory devices
 
 
 
 
 
 
 
 
 
Common Stock (acquired 10/27/15)
(M)
 
 
 
$
11,482,417

 
1,769,868

 
$
8,052,899

 
 
 
 
 
 
 
 
 
 

The accompanying unaudited notes are an integral part of these consolidated financial statements.
17

180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2017 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Cost
 
Shares/
Principal
 
Value


Publicly Traded Portfolio (19) -
 
 
 
 
 
 
 
 
 
10.9% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Enumeral Biomedical Holdings, Inc. (5)
 
 
Biotechnology
 
 
 
 
 
 
Developed therapeutics and diagnostics through functional assaying of single cells
 
 
 
 
 
 
 
 
 
Common Stock (acquired 7/31/14)
(M)
 
 
 
$
4,943,213

 
7,886,368

 
$
252,364

Warrants to purchase Common Stock expiring 2/2/2024 (acquired 7/31/14)
(I)
 
 
 
57,567

 
255,120

 
5,588

Warrants to purchase Common Stock expiring 7/30/2019 (acquired 7/31/14)
(I)
 
 
 
360,250

 
1,000,000

 
673

 
 
 
 
 
5,361,030

 
 
 
258,625

 
 
 
 
 
 
 
 
 
 
Total Non-Controlled Affiliated Publicly Traded Portfolio (cost: $16,843,447)
 
 
 
 
 
 
 
 
$
8,311,524

 
 
 
 
 
 
 
 
 
 
Total Investments in Non-Controlled Affiliated Companies (cost: $64,387,983)
 
 
 
 
 
 
 
 
$
40,372,504

 
 
 
 
 
 
 
 
 
 
Investments in Controlled Affiliated Companies (2) -
 
 
 
 
 
 
 
 
 
5.8% of net assets at value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private Placement Portfolio (Illiquid) (20) -
 
 
 
 
 
 
 
 
 
5.8% of net assets at value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Black Silicon Holdings, Inc. (4)(16)(21)
 
 
Semiconductors
 
 
 
 
 
 
Holding company for interest in a company that develops silicon-based optoelectronic products
 
 
 
 
 
 
 
 
 
Series A Convertible Preferred Stock (acquired 8/4/15)
(I)
 
 
 
$
750,000

 
233,499

 
$
0

Series A-1 Convertible Preferred Stock (acquired 8/4/15)
(I)
 
 
 
890,000

 
2,966,667

 
0

Series A-2 Convertible Preferred Stock (acquired 8/4/15)
(I)
 
 
 
2,445,000

 
4,207,537

 
0

Series B-1 Convertible Preferred Stock (acquired 8/4/15)
(I)
 
 
 
1,169,561

 
1,892,836

 
0

Series C Convertible Preferred Stock (acquired 8/4/15)
(I)
 
 
 
1,171,316

 
1,674,030

 
0

Secured Convertible Bridge Note, 8%, (acquired 8/25/16)
(I)
 
 
 
1,366,525

 
$
1,278,453

 
444,729

 
 
 
 
 
7,792,402

 
 
 
444,729

 
 
 
 
 
 
 
 
 
 

The accompanying unaudited notes are an integral part of these consolidated financial statements.
18

180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2017 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Cost
 
Shares/
Principal
 
Value


Investments in Controlled Affiliated Companies (2) -
 
 
 
 
 
 
 
 
 
5.8% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private Placement Portfolio (Illiquid) (20) -
 
 
 
 
 
 
 
 
 
5.8% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
HALE.life Corporation (4)(22)
 
 
Health Care Technology
 
 
 
 
 
 
Developing a platform to facilitate precision health and medicine
 
 
 
 
 
 
 
 
 
Common Stock (acquired 3/1/16)
(M)
 
 
 
$
10

 
1,000,000

 
$
10

Series Seed Convertible Preferred Stock (acquired 3/28/17)
(M)
 
 
 
1,896,920

 
11,000,000

 
1,896,920

Unsecured Convertible Bridge Note, 0%, (acquired 3/28/17)
(M)
 
 
 
2,000,000

 
$
2,000,000

 
2,000,000

 
 
 
 
 
3,896,930

 
 
 
3,896,930

 
 
 
 
 
 
 
 
 
 
SynGlyco, Inc. (4)(16)
 
 
Specialty Chemicals
 
 
 
 
 
 
Developed synthetic carbohydrates for pharmaceutical applications
 
 
 
 
 
 
 
 
 
Common Stock (acquired 12/13/11)
(I)
 
 
 
2,729,817

 
57,463

 
0

Series A' Convertible Preferred Stock (acquired 12/13/11-6/7/12)
(I)