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 |
• | TheStreet rallied 34% in the quarter and increased our NAV by $0.04 per share. We note that the value of our unregistered shares of TheStreet included a discount for lack of marketability of 6.4% to the closing price of TST’s stock at the end of the year. |
• | Synacor (NASDAQ:SYNC) declined 15% in the quarter after the company lowered expectations for the ramp up of revenues from the AT&T portal. Synacor trades at what we believe is an incomprehensible 0.35x enterprise value to estimated 2018 revenue. The company also has growing EBITDA. So, what is the problem? The issue is the company’s credibility with Wall Street; it currently has none. The company did a secondary offering in the spring of 2017 and made bold predictions for its revenue growth. Quite simply, they over-promised and under-delivered. Financial analysts reduced their financial expectations for 2018 and the share price has reset at lower levels. With lowered and more reasonable assumptions for forecasted revenues in 2018, we are hopeful the current trend in its stock price can be reversed. If the company focuses on cost control, we believe they should have double-digit EBITDA margins on current revenues. If they achieve double-digit EBITDA margins, the stock should be meaningfully higher. |
• | Finally, Mersana (NASDAQ:MRSN) declined 5% in the quarter against general weakness in the biotech sector. |
• | AgBiome increased by $527,206 ($0.017 per share) due to an increase in the value of publicly traded comparable companies used to derive valuation. |
• | Essential Health Solutions increased $418,735 (shade over $0.013 per share) for the same reason. |
• | Produced Water Absorbents, our biggest decrease in value, declined by $839,343 ($0.027 per share.) This decrease resulted primarily from the terms of additional capital the company needed to fund operations. |
180 DEGREE CAPITAL CORP. CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES |
December 31, 2017 | |||
ASSETS | |||
Investments in portfolio securities, at value: | |||
Unaffiliated privately held companies (cost: $13,142,865) | $ | 16,020,749 | |
Unaffiliated publicly traded securities (cost: $9,338,744) | 7,901,351 | ||
Non-controlled affiliated privately held companies (cost: $40,602,027) | 32,491,545 | ||
Non-controlled affiliated publicly traded securities (cost: $14,882,779) | 16,363,789 | ||
Controlled affiliated privately held companies (cost: $19,404,908) | 4,215,689 | ||
Equity method privately held company (adjusted cost basis: $256,622) | 256,622 | ||
Unaffiliated rights to payments (adjusted cost basis: $548,998) | 2,211,867 | ||
Cash | 3,452,389 | ||
Restricted cash | 46,151 | ||
Receivable from funds in escrow from sales of investments, at value | 12,955 | ||
Receivable from portfolio companies and managed fund | 40,752 | ||
Interest receivable | 711,240 | ||
Prepaid expenses | 236,451 | ||
Other assets | 166,196 | ||
Total assets | $ | 84,127,746 | |
LIABILITIES & NET ASSETS | |||
Post-retirement plan liabilities | $ | 1,339,346 | |
Accounts payable and accrued liabilities | 1,447,545 | ||
Accrued severance | 140,923 | ||
Deferred rent | 98,818 | ||
Directors' fee payable | 58,125 | ||
Total liabilities | $ | 3,084,757 | |
Commitments and contingencies (Note 11) | |||
Net assets | $ | 81,042,989 | |
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; 34,623,341 issued | 334,594 | ||
Additional paid in capital | 134,038,475 | ||
Accumulated net investment loss | (5,211,751 | ) | |
Accumulated net realized loss | (24,797,473 | ) | |
Accumulated net unrealized depreciation of investments | (18,715,331 | ) | |
Treasury stock, at cost 3,501,779 shares | (4,605,525 | ) | |
Net assets | $ | 81,042,989 | |
Shares outstanding | 31,121,562 | ||
Net asset value per outstanding share | $ | 2.60 |
180 DEGREE CAPITAL CORP. CONSOLIDATED STATEMENT OF OPERATIONS |
Year Ended December 31, 2017 | |||
Income: | |||
Interest from: | |||
Unaffiliated companies-cash | $ | 28,455 | |
Unaffiliated companies-PIK | 10,500 | ||
Non-controlled affiliated companies-cash | 423,017 | ||
Non-controlled affiliated companies-PIK | 57,223 | ||
Controlled affiliated companies-cash | 30,457 | ||
Controlled affiliated companies-PIK | 126,044 | ||
Cash and U.S. Treasury securities and other | 9,012 | ||
Fees for providing managerial assistance to portfolio companies | 241,306 | ||
Yield-enhancing fees on debt securities | 158,856 | ||
Sub-lease income | 134,892 | ||
Other income | 10,161 | ||
Total income | 1,229,923 | ||
Operating expenses: | |||
Salaries and benefits | 2,375,977 | ||
Administration and operations | 306,662 | ||
Professional fees | 547,940 | ||
Rent | 257,003 | ||
Directors' fees and expenses | 240,107 | ||
Insurance expense | 237,309 | ||
Custody fees | 31,571 | ||
Depreciation | 23,391 | ||
Total operating expenses | 4,019,960 | ||
Expenses related to restructure: | |||
Severance | 512,772 | ||
Loss on abandoned lease (Note 2) | 144,138 | ||
Stock-based compensation (Note 7) | (190,347 | ) | |
Professional fees | 138,402 | ||
Disposal of fixed assets | 94,592 | ||
Administration and operations | 82,235 | ||
Directors' fees and expenses | 60,833 | ||
Total expenses related to restructure | 842,625 | ||
Total expenses | 4,862,585 | ||
Income tax expense | 12,853 | ||
Net investment loss | (3,645,515 | ) | |
Net realized (loss) gain from investments: | |||
Realized (loss) gain from investments: | |||
Unaffiliated privately held companies | (184,653 | ) | |
Unaffiliated publicly traded securities | 1,955,611 | ||
Non-controlled affiliated privately held companies | (7,769,743 | ) | |
Non-controlled affiliated publicly traded securities | (5,084,687 | ) | |
Controlled affiliated privately held companies | (569,116 | ) | |
Unaffiliated rights to payments | (232,865 | ) | |
Net realized loss from investments | (11,885,453 | ) | |
Realized gain from funds held in escrow | 130,274 | ||
Net realized loss | (11,755,179 | ) | |
Change in unrealized appreciation (depreciation) on investments: | |||
Unaffiliated privately held companies | 1,388,972 | ||
Unaffiliated publicly traded securities | 1,043,706 | ||
Non-controlled affiliated privately held companies | 8,020,420 | ||
Non-controlled affiliated publicly traded securities | 14,035,935 | ||
Controlled affiliated privately held companies | 483,283 | ||
180 DEGREE CAPITAL CORP. CONSOLIDATED STATEMENT OF OPERATIONS (CONTINUED) | |||
Year Ended December 31, 2017 | |||
Unaffiliated rights to payments | (94,621 | ) | |
Net change in unrealized appreciation on investments | $ | 24,877,695 | |
Net realized loss and change in unrealized appreciation on investments | 13,122,516 | ||
Share of loss on equity method investment | (59,258 | ) | |
Net increase in net assets resulting from operations | $ | 9,417,743 | |
180 DEGREE CAPITAL CORP. CONSOLIDATED STATEMENT OF CASH FLOWS |
Year Ended December 31, 2017 | |||
Cash flows used in operating activities: | |||
Net increase in net assets resulting from operations | $ | 9,417,743 | |
Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities: | |||
Net realized loss from investments | 11,885,453 | ||
Realized gain from funds held in escrow | (130,274 | ) | |
Net change in unrealized appreciation on investments | (24,877,695 | ) | |
Depreciation of fixed assets, amortization of premium or discount on U.S. government securities and prepaid assets and accretion of bridge note interest | (242,537 | ) | |
Share of loss on equity method investee | 59,258 | ||
Stock-based compensation expense | (190,347 | ) | |
Amortization of prior service cost | (300,237 | ) | |
Purchase of unaffiliated publicly traded securities | (5,737,212 | ) | |
Purchase of non-controlled affiliated privately held portfolio companies | (949,804 | ) | |
Purchase of non-controlled affiliated publicly traded securities | (4,891,794 | ) | |
Purchase of controlled affiliated privately held portfolio companies | (2,425,000 | ) | |
Purchase of equity method privately held company | (137,520 | ) | |
Proceeds from sale of unaffiliated privately held companies | 94,317 | ||
Proceeds from sale of unaffiliated publicly traded securities | 3,705,597 | ||
Proceeds from sale of non-controlled affiliated privately held companies | 528,813 | ||
Proceeds from sale of non-controlled affiliated publicly traded securities | 1,817,917 | ||
Proceeds from sale of controlled affiliated privately held companies | 160,885 | ||
Proceeds from funds held in escrow | 234,295 | ||
Changes in assets and liabilities: | |||
Increase in restricted cash | (46,151 | ) | |
Increase in receivable from portfolio companies and managed fund | (40,752 | ) | |
Increase in interest receivable | (420,654 | ) | |
Decrease on prepaid expenses | 7,600 | ||
Increase in other assets | (78,716 | ) | |
Increase in post-retirement plan liabilities | 70,323 | ||
Increase in accounts payable and accrued liabilities | 570,413 | ||
Increase in accrued severance | 140,923 | ||
Decrease in deferred rent | (121,485 | ) | |
Increase in directors' fee payable | 58,125 | ||
Net cash used in operating activities | (11,838,516 | ) | |
Cash flows from investing activities: | |||
Purchase of fixed assets | (5,390 | ) | |
Proceeds from sale of fixed assets | 2,156 | ||
Net cash used in investing activities | (3,234 | ) | |
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 | (11,981,530 | ) | |
Cash at beginning of the year | 15,433,919 | ||
Cash at end of the year | $ | 3,452,389 | |
Supplemental disclosures of cash flow information: | |||
Income taxes paid | $ | 12,853 | |
Restricted cash | 46,151 |
180 DEGREE CAPITAL CORP. CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS |
Year Ended December 31, 2017 | Year Ended December 31, 2016 | ||||||
Changes in net assets from operations: | |||||||
Net investment loss | $ | (3,645,515 | ) | $ | (4,516,108 | ) | |
Net realized loss | (11,755,179 | ) | (8,075,175 | ) | |||
Net change in unrealized appreciation (depreciation) on investments | 24,877,695 | (3,683,822 | ) | ||||
Share of loss on equity method investment | (59,258 | ) | (91,255 | ) | |||
Net increase (decrease) in net assets resulting from operations | 9,417,743 | (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 | (190,347 | ) | 158,973 | ||||
Net (decrease) increase in net assets resulting from capital stock transactions | (330,127 | ) | 119,282 | ||||
Changes in net assets from accumulated other comprehensive loss: | |||||||
Other comprehensive loss | (300,237 | ) | (208,983 | ) | |||
Net decrease in net assets resulting from accumulated other comprehensive loss | (300,237 | ) | (208,983 | ) | |||
Net increase (decrease) in net assets | 8,787,379 | (16,456,061 | ) | ||||
Net Assets: | |||||||
Beginning of the year | 72,255,610 | 88,711,671 | |||||
End of the year | $ | 81,042,989 | $ | 72,255,610 | |||
Accumulated net investment loss | $ | (5,211,751 | ) | $ | (5,139,783 | ) |
180 DEGREE CAPITAL CORP. FINANCIAL HIGHLIGHTS |
Year Ended Dec. 31, 2017 | Year Ended Dec. 31, 2016 | Year Ended Dec. 31, 2015 | Year Ended Dec. 31, 2014 | Year Ended Dec. 31, 2013 | ||||||||||||||||
Per Share Operating Performance | ||||||||||||||||||||
Net asset value per share, beginning of year | $ | 2.34 | $ | 2.88 | $ | 3.51 | $ | 3.93 | $ | 4.13 | ||||||||||
Net investment loss* | (0.12 | ) | (0.15 | ) | (0.23 | ) | (0.25 | ) | (0.26 | ) | ||||||||||
Net realized (loss) gain from investments* | (0.38 | ) | (0.26 | ) | 0.15 | (0.16 | ) | 0.59 | ||||||||||||
Net change in unrealized appreciation (depreciation) on investments and written call options*1 | 0.80 | (0.12 | ) | (0.56 | ) | (0.02 | ) | (0.58 | ) | |||||||||||
Share of loss on equity method investment*2 | 0.00 | 0.00 | (0.01 | ) | 0.00 | 0.00 | ||||||||||||||
Total* | 0.30 | (0.53 | ) | (0.65 | ) | (0.43 | ) | (0.25 | ) | |||||||||||
Net (decrease) increase as a result of stock-based compensation expense*2 | (0.01 | ) | 0.01 | 0.03 | 0.03 | 0.04 | ||||||||||||||
Net increase as a result of purchase of treasury stock | 0.00 | 0.00 | 0.01 | 0.00 | 0.00 | |||||||||||||||
Net decrease as a result of acquisition of vested restricted stock awards related to employee withholding2 | (0.02 | ) | (0.01 | ) | (0.01 | ) | (0.01 | ) | (0.01 | ) | ||||||||||
Total (decrease) increase from capital stock transactions | (0.03 | ) | 0.00 | 0.03 | 0.02 | 0.03 | ||||||||||||||
Net (decrease) increase as a result of other comprehensive (loss) income*2 | (0.01 | ) | (0.01 | ) | (0.01 | ) | (0.01 | ) | 0.02 | |||||||||||
Net increase (decrease) in net asset value | 0.26 | (0.54 | ) | (0.63 | ) | (0.42 | ) | (0.20 | ) | |||||||||||
Net asset value per share, end of year | $ | 2.60 | $ | 2.34 | $ | 2.88 | $ | 3.51 | $ | 3.93 | ||||||||||
Stock price per share, end of year | $ | 1.97 | $ | 1.38 | $ | 2.20 | $ | 2.95 | $ | 2.98 | ||||||||||
Total return based on stock price | 42.75 | % | (37.27 | )% | (25.42 | )% | (1.01 | )% | (9.70 | )% | ||||||||||
Supplemental Data: | ||||||||||||||||||||
Net assets, end of year | $ | 81,042,989 | $ | 72,255,610 | $ | 88,711,671 | $ | 109,654,427 | $ | 122,701,575 | ||||||||||
Ratio of expenses, excluding taxes, to average net assets** | 6.26 | % | 7.88 | % | 8.15 | % | 7.14 | % | 6.62 | % | ||||||||||
Ratio of expenses, including taxes, to average net assets** | 6.28 | % | 3 | 7.89 | % | 8.15 | % | 7.15 | % | 6.65 | % | |||||||||
Ratio of net investment loss to average net assets | (4.68 | )% | (5.64 | )% | (7.22 | )% | (6.70 | )% | (6.26 | )% | ||||||||||
Average debt outstanding | $ | 0 | $ | 4,590,164 | $ | 3,780,822 | $ | 0 | $ | 0 | ||||||||||
Average debt per share | $ | 0.00 | $ | 0.15 | $ | 0.12 | $ | 0.00 | $ | 0.00 | ||||||||||
Portfolio turnover | 8.83 | % | *** | *** | *** | *** | ||||||||||||||
Number of shares outstanding, end of year | 31,121,562 | 30,904,209 | 30,845,754 | 31,280,843 | 31,197,438 |
180 DEGREE CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2017 | |||||||||
Method of Valuation (1) | Industry | Cost | Shares/ Principal | Value |
Investments in Unaffiliated Companies (2) - | |||||||||||||||
29.5% of net assets at value | |||||||||||||||
Privately Held Companies (Illiquid) (3) - | |||||||||||||||
19.8% of net assets at value | |||||||||||||||
AutoTech Ventures Management I, LLC (4)(5)(6) | |||||||||||||||
Venture capital investing in automotive-related companies | Asset Management & Custody Banks | ||||||||||||||
LLC Interests (acquired 12/1/17) | (M) (L3) | $ | 0 | 0 | $ | 0 | |||||||||
D-Wave Systems, Inc. (4)(5)(7) | Technology Hardware, Storage & Peripherals | ||||||||||||||
Developing high-performance quantum computing systems | |||||||||||||||
Series 1 Class B Convertible Preferred Stock (acquired 9/30/08) | (M) (L3) | 1,002,074 | 1,144,869 | 2,071,959 | |||||||||||
Series 1 Class C Convertible Preferred Stock (acquired 9/30/08) | (M) (L3) | 487,804 | 450,450 | 832,384 | |||||||||||
Series 1 Class D Convertible Preferred Stock (acquired 9/30/08) | (M) (L3) | 748,473 | 855,131 | 1,580,191 | |||||||||||
Series 1 Class E Convertible Preferred Stock (acquired 11/24/10) | (M) (L3) | 248,049 | 269,280 | 519,061 | |||||||||||
Series 1 Class F Convertible Preferred Stock (acquired 11/24/10) | (M) (L3) | 238,323 | 258,721 | 498,708 | |||||||||||
Series 1 Class H Convertible Preferred Stock (acquired 6/27/14) | (M) (L3) | 909,088 | 460,866 | 1,207,745 | |||||||||||
Series 2 Class D Convertible Preferred Stock (acquired 9/30/08) | (M) (L3) | 736,019 | 678,264 | 1,253,360 | |||||||||||
Series 2 Class E Convertible Preferred Stock (acquired 6/1/12-3/22/13) | (M) (L3) | 659,493 | 513,900 | 1,036,886 | |||||||||||
Series 2 Class F Convertible Preferred Stock (acquired 6/1/12-3/22/13) | (M) (L3) | 633,631 | 493,747 | 996,224 | |||||||||||
Warrants for Common Stock expiring 5/12/19 (acquired 5/12/14) | (M) (L3) | 26,357 | 20,415 | 10,504 | |||||||||||
5,689,311 | 10,007,022 | ||||||||||||||
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, no maturity date) | (M) (L3) | 225,000 | $ | 225,000 | 225,000 | ||||||||||
180 DEGREE CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2017 | |||||||||
Method of Valuation (1) | Industry | Cost | Shares/ Principal | Value |
Investments in Unaffiliated Companies (2) - | |||||||||||||||
29.5% of net assets at value (cont.) | |||||||||||||||
Privately Held Companies (Illiquid) (3) - | |||||||||||||||
19.8% of net assets at value (cont.) | |||||||||||||||
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, maturing 8/4/19) | (M) (L3) | $ | 230,000 | $ | 230,000 | $ | 230,000 | ||||||||
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, maturing 3/31/18) | (I) (L3) | 132,000 | $ | 132,000 | 132,000 | ||||||||||
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) (L3) | 1,500,000 | 803,428 | 867,135 | |||||||||||
Series D Convertible Preferred Stock (acquired 11/7/05) | (I) (L3) | 3,000,003 | 1,016,950 | 1,806,882 | |||||||||||
Series E Convertible Preferred Stock (acquired 8/13/10) | (I) (L3) | 496,573 | 433,688 | 791,598 | |||||||||||
4,996,576 | 3,465,615 | ||||||||||||||
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) (L3) | 69,168 | 4,462 | 215 | |||||||||||
Warrants for Series A-3 Preferred Stock expiring on 11/15/22 (acquired 11/15/12) | (I) (L3) | 35,403 | 47,508 | 76,077 | |||||||||||
104,571 | 76,292 | ||||||||||||||
Petra Pharma Corporation (4)(5)(8) | 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) (L3) | 1,525,050 | 1,525,050 | 1,548,319 | |||||||||||
180 DEGREE CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2017 | |||||||||
Method of Valuation (1) | Industry | Cost | Shares/ Principal | Value |
Investments in Unaffiliated Companies (2) - | |||||||||||||||
29.5% of net assets at value (cont.) | |||||||||||||||
Privately Held Companies (Illiquid) (3) - | |||||||||||||||
19.8% 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% PIK, (acquired 2/5/15, maturing 6/12/19) | (M) (L3) | $ | 229,068 | $ | 200,000 | $ | 320,696 | ||||||||
Secured Convertible Bridge Note, 5% PIK, (acquired 6/5/15, maturing 6/12/19) | (M) (L3) | 11,289 | $ | 10,000 | 15,805 | ||||||||||
240,357 | 336,501 | ||||||||||||||
Total Unaffiliated Privately Held Companies (cost: $13,142,865) | $ | 16,020,749 | |||||||||||||
Unaffiliated Publicly Traded Securities (9) - | |||||||||||||||
9.7% 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) (L3) | $ | 400 | 5,500 | $ | 4,245 | |||||||||
Mersana Therapeutics, Inc. (5) | Biotechnology | ||||||||||||||
Developing antibody drug conjugates for cancer therapy | |||||||||||||||
Common Stock (acquired 7/27/12-6/28/17) | (M) (L1) | 4,924,753 | 294,554 | 4,839,522 | |||||||||||
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) (L2) | 425,579 | 300,833 | 14,410 | |||||||||||
Warrants for the Purchase of Common Stock expiring 2/17/25 (acquired 5/5/15) | (I) (L3) | 785 | 31,206 | 1,699 | |||||||||||
426,364 | 16,109 | ||||||||||||||
180 DEGREE CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2017 | |||||||||
Method of Valuation (1) | Industry | Cost | Shares/ Principal | Value |
Investments in Unaffiliated Companies (2) - | |||||||||||||||
29.5% of net assets at value (cont.) | |||||||||||||||
Unaffiliated Publicly Traded Securities (9) - | |||||||||||||||
9.7% of net assets at value (cont.) | |||||||||||||||
Synacor, Inc. (5)(10) | Internet Software & Services | ||||||||||||||
Providing technology development, multiplatform services and revenue partner for video, internet and communications providers, device manufacturers, and enterprises | |||||||||||||||
Common Stock (acquired 4/6/17-9/19/17) | (M) (L1) | $ | 3,672,646 | 1,180,200 | $ | 2,714,460 | |||||||||
Miscellaneous Common Stocks (10)(11) | 314,581 | 327,015 | |||||||||||||
Total Unaffiliated Publicly Traded Securities (cost: $9,338,744) | $ | 7,901,351 | |||||||||||||
Total Investments in Unaffiliated Companies (cost: $22,481,609) | $ | 23,922,100 | |||||||||||||
Investments in Non-Controlled Affiliated Companies (2) - | |||||||||||||||
60.3% of net assets at value | |||||||||||||||
Privately Held Companies (Illiquid) (12) - | |||||||||||||||
40.1% 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) (L3) | $ | 435,000 | 390,000 | $ | 64,160 | |||||||||
Series B Convertible Preferred Stock (acquired 11/8/13-6/25/14) | (I) (L3) | 1,217,644 | 1,037,751 | 527,055 | |||||||||||
Secured Convertible Bridge Note, 8% PIK, (acquired 1/20/16, maturing 12/31/18) | (M) (L3) | 115,605 | $ | 100,000 | 115,605 | ||||||||||
Secured Convertible Bridge Note, 8% PIK, (acquired 3/28/17, maturing 12/31/19) | (M) (L3) | 26,529 | $ | 25,000 | 26,529 | ||||||||||
1,794,778 | 733,349 | ||||||||||||||
180 DEGREE CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2017 | |||||||||
Method of Valuation (1) | Industry | Cost | Shares/ Principal | Value |
Investments in Non-Controlled Affiliated Companies (2) - | |||||||||||||||
60.3% of net assets at value (cont.) | |||||||||||||||
Privately Held Companies (Illiquid) (12) - | |||||||||||||||
40.1% of net assets at value (cont.) | |||||||||||||||
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) (L3) | $ | 2,000,000 | 2,000,000 | $ | 8,583,935 | |||||||||
Series A-2 Convertible Preferred Stock (acquired 4/9/13-10/15/13) | (I) (L3) | 521,740 | 417,392 | 1,838,865 | |||||||||||
Series B Convertible Preferred Stock (acquired 8/7/15) | (I) (L3) | 500,006 | 160,526 | 884,777 | |||||||||||
3,021,746 | 11,307,577 | ||||||||||||||
EchoPixel, Inc. (4) | 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) (L3) | 1,250,000 | 4,194,630 | 945,726 | |||||||||||
Series Seed-2 Convertible Preferred Stock (acquired 1/22/16) | (I) (L3) | 500,000 | 1,476,668 | 337,930 | |||||||||||
Series A-2 Convertible Preferred Stock (acquired 3/23/17) | (I) (L3) | 350,000 | 1,471,577 | 412,209 | |||||||||||
2,100,000 | 1,695,865 | ||||||||||||||
Ensemble Therapeutics Corporation (4)(5)(13) | Pharmaceuticals | ||||||||||||||
Developed DNA-Programmed ChemistryTM for the discovery of new classes of therapeutics | |||||||||||||||
Series B Convertible Preferred Stock (acquired 6/6/07) | (I) (L3) | 2,000,000 | 1,449,275 | 0 | |||||||||||
Series B-1 Convertible Preferred Stock (acquired 4/21/14) | (I) (L3) | 574,079 | 492,575 | 173,143 | |||||||||||
2,574,079 | 173,143 | ||||||||||||||
180 DEGREE CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2017 | |||||||||
Method of Valuation (1) | Industry | Cost | Shares/ Principal | Value |
Investments in Non-Controlled Affiliated Companies (2) - | |||||||||||||||
60.3% of net assets at value (cont.) | |||||||||||||||
Privately Held Companies (Illiquid) (12) - | |||||||||||||||
40.1% of net assets at value (cont.) | |||||||||||||||
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) (L3) | $ | 20 | 200,000 | $ | 145,218 | |||||||||
Series A Convertible Preferred Stock (acquired 11/18/16) | (I) (L3) | 2,750,000 | 2,750,000 | 3,169,662 | |||||||||||
2,750,020 | 3,314,880 | ||||||||||||||
HZO, Inc. (4)(5) | Semiconductor Equipment | ||||||||||||||
Developing novel industrial coatings that protect electronics against damage from liquids | |||||||||||||||
Common Stock (acquired 6/23/14) | (I) (L3) | 666,667 | 405,729 | 473,896 | |||||||||||
Series I Convertible Preferred Stock (acquired 6/23/14) | (I) (L3) | 5,709,835 | 2,266,894 | 4,074,569 | |||||||||||
Series II Convertible Preferred Stock (acquired 6/23/14-8/3/15) | (I) (L3) | 2,500,006 | 674,638 | 1,571,541 | |||||||||||
Series II-A Convertible Preferred Stock (acquired 9/9/16) | (I) (L3) | 226,070 | 69,053 | 188,810 | |||||||||||
Warrants for Series II-A Convertible Preferred Stock expiring 7/15/23 (acquired 7/15/16) | (I) (L3) | 29,820 | 6,577 | 17,925 | |||||||||||
9,132,398 | 6,326,741 | ||||||||||||||
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) (L3) | 658,190 | 658,190 | 777,896 | |||||||||||
180 DEGREE CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2017 | |||||||||
Method of Valuation (1) | Industry | Cost | Shares/ Principal | Value |
Investments in Non-Controlled Affiliated Companies (2) - | |||||||||||||||
60.3% of net assets at value (cont.) | |||||||||||||||
Privately Held Companies (Illiquid) (12) - | |||||||||||||||
40.1% of net assets at value (cont.) | |||||||||||||||
NGX Bio, Inc. (4) | Research & Consulting Services | ||||||||||||||
Developing translational genomics solutions | |||||||||||||||
Series Seed Convertible Preferred Stock (acquired 6/6/14-1/10/16) | (I) (L3) | $ | 500,002 | 666,667 | $ | 721,539 | |||||||||
Series Seed 2 Convertible Preferred Stock (acquired 8/20/15-9/30/15) | (I) (L3) | 499,999 | 329,989 | 477,157 | |||||||||||
Series Seed 3 Convertible Preferred Stock (acquired 6/26/17) | (I) (L3) | 686,329 | 666,001 | 769,258 | |||||||||||
1,686,330 | 1,967,954 | ||||||||||||||
ORIG3N, Inc. (4)(8) | 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) (L3) | 500,000 | 1,195,315 | 907,129 | |||||||||||
Series A Convertible Preferred Stock (acquired 11/25/15-9/7/16) | (I) (L3) | 1,500,000 | 1,364,666 | 1,305,499 | |||||||||||
Series A-2 Convertible Preferred Stock (acquired 5/11/17-8/18/17) | (I) (L3) | 150,198 | 134,783 | 169,890 | |||||||||||
2,150,198 | 2,382,518 | ||||||||||||||
Produced Water Absorbents, Inc. (4)(14) | 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) (L3) | 7,670,281 | 50,243,350 | 0 | |||||||||||
Warrants for Common Stock expiring upon liquidation event (acquired 4/30/16) | (M) (L3) | 65,250 | 450,000 | 0 | |||||||||||
Senior Secured Debt, 15% commencing on 4/1/16, maturing on 12/31/19 (acquired 4/1/16) | (M) (L3) | 2,140,997 | $ | 2,533,766 | 357,407 | ||||||||||
9,876,528 | 357,407 | ||||||||||||||
180 DEGREE CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2017 | |||||||||
Method of Valuation (1) | Industry | Cost | Shares/ Principal | Value |
Investments in Non-Controlled Affiliated Companies (2) - | |||||||||||||||
60.3% of net assets at value (cont.) | |||||||||||||||
Privately Held Companies (Illiquid) (12) - | |||||||||||||||
40.1% of net assets at value (cont.) | |||||||||||||||
Senova Systems, Inc. (4)(5)(13) | 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) (L3) | $ | 1,083,960 | 2,759,902 | $ | 0 | |||||||||
Series C Convertible Preferred Stock (acquired 10/24/14-4/1/15) | (I) (L3) | 1,208,287 | 1,611,049 | 0 | |||||||||||
Warrants for Series B Preferred Stock expiring 4/24/18 (acquired 4/24/13) | (I) (L3) | 20,000 | 25,000 | 0 | |||||||||||
2,312,247 | 0 | ||||||||||||||
TARA Biosystems, Inc. (4) | Life Sciences Tools & Services | ||||||||||||||
Developing human tissue models for toxicology and drug discovery applications | |||||||||||||||
Common Stock (acquired 8/20/14) | (I) (L3) | 20 | 2,000,000 | 651,642 | |||||||||||
Series A Convertible Preferred Stock (acquired 3/31/17) | (I) (L3) | 2,545,493 | 6,878,572 | 2,802,573 | |||||||||||
2,545,513 | 3,454,215 | ||||||||||||||
Total Non-Controlled Affiliated Privately Held Companies (cost: $40,602,027) | $ | 32,491,545 | |||||||||||||
Non-Controlled Affiliated Publicly Traded Securities (15) - | |||||||||||||||
20.2% of net assets at value | |||||||||||||||
Adesto Technologies Corporation (5) | Semiconductors | ||||||||||||||
Developing low-power, high-performance memory devices | |||||||||||||||
Common Stock (acquired 10/27/15) | (M) (L1) | $ | 9,990,986 | 1,539,983 | $ | 9,932,890 | |||||||||
TheStreet, Inc. (4)(5)(10)(16)(17) | Financial Exchanges & Data | ||||||||||||||
Providing financial news and proprietary data to consumers and businesses | |||||||||||||||
Common Stock (acquired 4/19/17-11/10/17) | (M) (L1)(L3) | 4,891,793 | 4,636,363 | 6,387,423 | |||||||||||
Restricted Stock Units (acquired 11/10/17) | (M) (L3) | 0 | 32,189 | 43,476 | |||||||||||
4,891,793 | 6,430,899 | ||||||||||||||
Total Non-Controlled Affiliated Publicly Traded Securities (cost: $14,882,779) | $ | 16,363,789 | |||||||||||||
180 DEGREE CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2017 | |||||||||
Method of Valuation (1) | Industry | Cost | Shares/ Principal | Value |
Total Investments in Non-Controlled Affiliated Companies (cost: $55,484,806) | $ | 48,855,334 | |||||||||||||
Investments in Controlled Affiliated Companies (2) - | |||||||||||||||
5.2% of net assets at value | |||||||||||||||
Privately Held Companies (Illiquid) (18) - | |||||||||||||||
5.2% of net assets at value | |||||||||||||||
Black Silicon Holdings, Inc. (4)(13)(19) | Semiconductors | ||||||||||||||
Holding company for interest in a company that develops silicon-based optoelectronic products | |||||||||||||||
Series A Convertible Preferred Stock (acquired 8/4/15) | (I) (L3) | $ | 750,000 | 233,499 | $ | 0 | |||||||||
Series A-1 Convertible Preferred Stock (acquired 8/4/15) | (I) (L3) | 890,000 | 2,966,667 | 0 | |||||||||||
Series A-2 Convertible Preferred Stock (acquired 8/4/15) | (I) (L3) | 2,445,000 | 4,207,537 | 0 | |||||||||||
Series B-1 Convertible Preferred Stock (acquired 8/4/15) | (I) (L3) | 1,169,561 | 1,892,836 | 0 | |||||||||||
Series C Convertible Preferred Stock (acquired 8/4/15) | (I) (L3) | 1,171,316 | 1,674,030 | 0 | |||||||||||
Secured Convertible Bridge Note, 8% PIK, (acquired 8/25/16, maturing 8/4/21) | (I) (L3) |