Document

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: December 31, 2018

Beginning on January 1, 2021, and as permitted by a rule adopted by the Securities and Exchange Commission, paper copies of the Company's shareholder reports like this one will no longer be sent to you by mail, unless you specifically request that the Company or your financial intermediary (i.e., the broker-dealer or bank through which you own your shares) send you paper copies of these reports. Instead, shareholder reports will be made available on a website, and you will be notified by mail each time a report is posted and will be provided with a website link to access the report.

If you already have elected to receive shareholder reports electronically, you will not be affected by this change and need not take any action. You may elect to receive electronic delivery of shareholder reports and other communications from the Company by contacting the Company at 833-293-1769 or, if you own your shares through a financial intermediary, by contacting your financial intermediary.

You may elect to receive all future shareholder reports of the Company in paper free of charge. You can inform the Company that you wish to continue receiving paper copies of your shareholder reports by contacting the Company at 833-293-1769. If you own shares through a financial intermediary, you may contact your financial intermediary or follow instructions included with this document to elect to continue to receive paper copies of your shareholder reports.

Item 1. Report to Shareholders.

Fellow Shareholders,

Creating long-term wealth centers around two key factors: 1. Making hay when the sun shines, and 2. Preserving capital during years where there is significant market duress. Over the course of the last two years, the United States stock market has given us two very different backdrops. As a matter of fact, the two years were an almost exact polar opposite of each other. In 2018, the Russell Microcap Index was down 13.0%. In 2017, the Russell Microcap Index was up 13.2%.

Our investment strategy is centered on providing value-added assistance through constructive activism to small public companies. To that end, over the course of the last two years, we have delivered a gross total return in our public holdings of 53.5% in 2017 and 19.5% in 2018.¹ Our public market investing gross total return would place us in the top decile in the comparable Lipper category for microcap focused funds. As you know, we inherited the 61% of our current net assets that are in private companies, and our returns for that category have been more muted versus our public holdings. After taking into consideration our private portfolio and our reduced expense structure, 180 Degree Capital Corp. ("180" or the "Fund") delivered an 11.1% growth in our net asset value per share (“NAV”) in 2017 and 1.5% growth in 2018.

In 2017, we generated a nearly 4x gross total return in our public holdings versus the comparable indices. That was fun. 2018 was equally important. It was a lot less fun for sure, but almost more important. If you told me in the beginning of the year that the market would be down 13%, I would have signed on to our Fund’s nearly 20% gross total return in our public holdings and a 1.5% gain in our NAV. In some ways, I may be more satisfied with our 2018 performance than I was in 2017. Now don’t get me wrong, there were plenty of lessons to have been learned from 2018, and we gave back nearly 600 basis points of NAV in the fourth quarter. Interest rate fears, global trade tensions between the United States and China, and slowing global growth led to a market sell-off in the fourth quarter. The S&P 500 was down 13.5% in the quarter and the Russell Microcap Index declined by 22.2%. For the first time ever, the S&P 500 ended the year with a loss after being positive for the first three quarters. The December 9% decline in the S&P 500 was the second worst December ever and the worst since 1931, during the Great Depression. As always, selling begets selling begets selling. In the fourth quarter, according to HFR Global Hedge Fund Report, investors redeemed $22.5 billion from hedge funds, while Lipper reported $57 billion in redemptions from equity funds. These massive withdrawals exacerbated an already weakened market. In fact, despite legitimate macro concerns, the biggest surprise to market participants was the timing and suddenness in what is usually the strongest quarter of the year.

To be clear, we believe there are real concerns to be mindful of; the most worrisome for us being the dislocation of the technology supply chain resulting primarily from the continued trade war with China. But we believe the market overshot the concerns. We used the 20% correction and market dislocation to add to both current and new names, investing approximately 27% of our starting cash in the quarter. Additionally important for our success in 2019, is that in order to make money, you need to have money. We started 2019 with more cash and public holdings than we had starting in 2018.

NET ASSET VALUE PER SHARE

Our NAV decreased this quarter from $2.81 to $2.64, a 6.0% decrease. With this decrease in NAV, our year-to-date increase in NAV stands at 1.5% or $0.04 per share. Our Fund has three principal components to the variance in our NAV: our public portfolio, our private portfolio, and our expenses. For the quarter, our public portfolio companies reduced our NAV by $0.16 while our private portfolio companies subtracted $0.01. Operating expenses, exclusive of bonus accruals and net of income, negatively impacted NAV by $0.02. We had a $0.02 gain from a reversal of an accrual we established earlier in the year for a potential bonus pool in 2018. Remember what we have said in the past about compensation; if our shareholders benefit from achieving meaningful NAV growth, our management team will share in that reward, and if not, there will be no bonus for our management team. In the prior two quarters, we began to accrue for a potential bonus pool based on multiple metrics assessed by the Compensation Committee of our Board, including the strength in our NAV growth for the first three quarters. With most of the 2018 gains in NAV reversed in Q4, we recommended, and the Compensation Committee agreed, that there will be no bonus pool for 2018. As such, we reversed the accrual.

______________________

¹ Past performance is not an indication or guarantee of future performance. Amounts gross unrealized and realized total returns compounded on a quarterly basis. 180 Degree Capital Corp. is an internally managed registered closed end fund and does not have an external manager that is paid fees based on assets and/or returns. 180 also has more than 50 percent of its investment portfolio in legacy privately held investments. Please see its filings with the SEC, including its 2018 Annual Report filed on Form N-CSR for information on its expenses and expense ratios.

Public Portfolio

Nearly two year ago, we embarked on a new strategy to invest in small public companies. Over the course of the last two years, we have added $0.45 of NAV from our investments in public companies. Over that same period of time, we generated $0.08 of NAV growth from our private portfolio. 180’s shareholders have clearly benefited from our strategy change. That said, Q4 saw a pullback in the value of our public market holdings. Let’s dig into the sources of this pullback:

–

Adesto Technologies Corporation (NASDAQ: IOTS) had been on an uptrend through Q2 2018. As the stock reached a price that we believed made it fully valued, we sold 62% of our position during Q2 at an average price of $8.81. As we mentioned in last quarter’s letter, the company announced two separate acquisitions. In May of 2018, IOTS acquired S3 Semiconductors, a mixed-signal ASIC company. This acquisition materially increases the total addressable market for IOTS and provides additional geographies for IOTS's products in industrial Internet of Things (“IoT”) applications. IOTS followed up that acquisition with the purchase of Echelon, a company focused on developing open-standard control networking platforms. These two deals have completely transformed IOTS from a specialty memory company into a leading provider of innovative, application-specific semiconductors and embedded systems that comprise the essential building blocks of IoT edge devices. Unfortunately, IOTS coupled these announcements with a disappointing Q2 2018 financial report followed by a $40 million equity raise at $6.00 per share. The fourth quarter saw significant deterioration in the entire semiconductor space due to excess inventory and concerns of a continued trade war with China. We have nearly doubled our position since exiting Q2 2018 at an average cost of $5.21. We believe the inventory overhang will dissipate as 2019 unfolds and expect IOTS to achieve notable revenue and cost synergies from its recent two acquisitions. For the quarter, IOTS reduced our NAV by $0.05.

–

Mersana Therapeutics, Inc. (NASDAQ: MRSN) is biotech company that produces novel drug conjugates. It specializes in oncology agents for the treatment of tumors and cancer. As everyone knows, there is tremendous volatility for a biotech company that is currently in the middle of clinical trials. In Q3 2018, one patient in one of MRSN's trials died, possibly from side effects of the drug, and the stock collapsed to $10 per share when the trial was put on partial clinical hold. Although MRSN announced that the U.S. Food and Drug Administration lifted the partial clinical hold, the stock continued its decline in Q4 2018. We note that the NASDAQ Biotechnology Index declined 21% in Q4 2018. Most early stage biotech companies either burn cash or are in need of raising cash to fund expensive clinical trials. During a bear market, like the one we saw in Q4 2018, investors flee from the speculative biotech sector. In the case of MRSN, there was no significant news during the quarter. For the quarter, MRSN reduced our NAV by $0.05.

–

TheStreet, Inc. (NASDAQ: TST) has been a successful investment for our shareholders. A year ago, we helped TST retire its preferred stock at a significant discount, and we joined the board of directors. In the first half of 2018, TST sold its deposit and loan data collection subsidiary, RateWatch, to S&P Global for $33.5 million. In this last quarter, TST sold the rest of its institutional businesses, BoardEx and The Deal, to Euromoney Institutional Investor for $87.3 million.TST stated it plans to return a significant portion of the proceeds from these sales and its available cash in the form of a special distribution. Additionally, TST continues to look at strategic alternatives for its remaining consumer businesses. Since the announcement of our significant investment in the fall of 2017, the stock is up 100%. In the fourth quarter, the stock trended down with the overall market, only to rally significantly following the sale announcement. TST's year-end close of $2.03 was less than the projected cash per share of $2.14 to $2.23. TST is our signature investment for how we define constructive activism. For the quarter, TST reduced our NAV by $0.03.

–

Airgain, Inc. (NASDAQ: AIRG) is a provider of advanced antenna technologies used to enable high performance wireless networking across a broad range of devices and markets, including connected home, enterprise, automotive, and IoT. We bought the stock following a CEO change and a new commitment to move quickly on not only product refresh cycles, but also on operating expense reductions and a focus on profitable growth. Unfortunately, this past quarter, AIRG came under pressure against the backdrop of very weak technology sector performance. Despite this pressure, the underlying secular uptrend of increased rollouts of technologies that enable high-speed wireless communications is gaining momentum and plays to the strengths of AIRG; that is, increasing speeds require high-quality, complex antennas. For the quarter, AIRG reduced our NAV by $0.02.

–

Emcore Corporation (NASDAQ: EMKR) is a provider of advanced mixed-signal optics products that provide the foundation for today’s high-speed communication network infrastructures and leading-edge defense systems. EMKR had a myriad of recent revenue challenges in its CATV (community access television, or cable) business, including inventory corrections at one of its largest customers. Essentially, this customer over-ordered in 2017, and as a result, had a dramatic decline in its ordering pattern in 2018. It has been our view this inventory correction would dissipate by fiscal year 2018 fourth quarter (September 30) and EMKR's visibility to future revenues and growth would resume. That view proved accurate. At the same time, EMKR's state-of-the-art Fiber Optic Gyroscope (“FOG”) products are designed for fast, accurate navigation and gyrocompassing, and low noise, line of sight stabilization. These FOG products are critical components of high-performance drones and other systems where highly accurate navigation is critical. Like AIRG and IOTS, EMKR suffered with the rest of the market and technology meltdown. With an enterprise value of less than 1x revenues and with approximately half the market capitalization of EMKR in cash, we believe the stock has a favorable risk-reward profile. For the quarter, EMKR reduced our NAV by $0.01.

–

Lantronix, Inc. (NASDAQ: LTRX) is a global provider of secure data access and management solutions for IoT assets. The IoT gateway market (75% of LTRX sales) is experiencing strong growth as businesses are becoming increasingly connected. Following years of declining revenues and net losses, a new management team took over in 2015 and embarked on a dramatic turnaround of the business. In its most recent earnings report, LTRX pointed to the expectation of nearly double-digit revenue growth in the upcoming quarters. We participated in a secondary offering in Q3 2018 that strengthened LTRX’s balance sheet and gave it firepower to make strategic and accretive acquisitions. Unfortunately, like almost every other technology stock, and despite no negative company specific news, the stock sold off in Q4 2018. For the quarter, LTRX reduced our NAV by $0.01.

–

Synacor, Inc. (NASDAQ: SYNC) is a holding we have discussed extensively in our communications with shareholders. The issue at SYNC isn’t fundamental problems with its overall business; it is rather a management credibility issue resulting from the company historically and consistently over-promising and under-delivering. Approximately 40% of SYNC's revenues are recurring and fee-based from its email and Cloud ID businesses. Investors typically pay a minimum of 1x recurring revenues, and in many cases, significantly higher multiples if such revenues are coupled with high margins and growth rates. SYNC's management team has made considerable strides in improving its business. For instance, EBITDA is expected to increase from $2.3 million in 2017 to $7.7 million in 2018. Unfortunately, last August, AT&T (SYNC's largest individual customer), delivered notice to SYNC that it would not automatically renew an expiring contract and sought to initiate renewal negotiations on a potential new definitive agreement. While it is not certain how this will turn out, investors viewed this announcement as negative, with many assuming SYNC would lose the AT&T business in its entirety. As such, the stock has traded off 38% following the announcement. Going forward, if SYNC can resolve the AT&T contract renewal uncertainty and execute on its business, we think the stock has meaningful upside. For the quarter, SYNC reduced our NAV by $0.01.

New position

–

Intermolecular, Inc. (NASDAQ: IMI) provides customers with a platform and multi-disciplinary development team for the research and development of advanced materials in the semiconductor, display, and glass and coatings industries. Coincident with the downturn of the semiconductor sector, we purchased approximately 1.4 million shares at an average cost of $0.94. At that valuation, the stock was trading at approximately 2x the cash on its balance sheet and an enterprise value of 0.67x revenues. IMI announced a slowdown in revenue for Q4 2018 due to the timing of certain program completions as well as a temporary delay in the scheduled commencement of a new program. IMI also announced a new program with a leading semiconductor manufacturer. We believe this new relationship, as well as improved operational efficiencies, will lead to a better 2019. We also note that the sell-off in Q4 2018 was not 100% fundamentally driven. As we noted earlier in this letter, Q4 2018 forced liquidations exacerbated the decline in the overall stock market. In the particular case of IMI, we became aware that its fourth largest shareholder was liquidating its entire IMI holdings. We took advantage of this liquidation. For the quarter, IMI did not materially impact our NAV.

Deletion

–

PDL BioPharma, Inc. (NASDAQ: PDLI) was a new holding last quarter. We sold our position in PDLI in Q4 2018 for a realized gain of 26.2% in a total holding period of less than 100 days. Our investment thesis centered on our expectation that PDLI's Board and management would use a meaningful portion of the its cash on hand to buy back stock. Subsequent to our investment, the company authorized a $100 million stock repurchase program. As the stock moved directly to our short-term price target, we exited the position.

Private Portfolio

For the quarter, our private portfolio subtracted $0.01 from our NAV. Positive contributors to NAV were HALE.life, which increased our NAV by $0.01 due to a recent financing, and Black Silicon Holdings and EchoPixel, which increased by a $0.01 each, against the backdrop of improved fundamentals respective to each company. Conversely, D-Wave Systems decreased by $0.02 due to a weakening of the Canadian dollar and NGX Bio decreased by $0.01 as business fundamentals worsened.

We continue to believe in the potential for our most mature companies to build value including, AgBiome, D-Wave Systems, ORIG3N, and Nanosys. There are other companies in the portfolio that also hold promise, however these companies are in early stages of development and the timelines and potential exit values for these companies are highly uncertain. We have often talked about our desire to actively shepherd our existing private portfolio to exits or opportunities to sell our positions in those companies at what we believe are reasonable valuations. As a reminder, on July 5, 2018, we sold our entire position in HZO to undisclosed buyers for $7 million, an 8% premium to its value as of March 31, 2018, but lower than our cost basis of $9.1 million. This significant event both helped us de-risk our private portfolio while also giving us more cash to invest in our core strategy of investing in small public companies. We also note that in January 2019, we sold our convertible bridge note in Genome Profiling for $230,000 realizing a 20% gain on the investment through payment of interest over our holding period.

Expenses

As we have noted, we have dramatically reduced our cost structure under our new strategy. In 2016, before our Fund’s change in investment focus and management, our operating expenses, excluding stock-based compensation and interest on outstanding debt, averaged $1.3 million per quarter. For Q4 2018, our operating expenses excluding 2017 deferred bonus accruals equaled approximately $587,000. Our total operating expenses excluding 2017-related bonus accruals declined approximately $200,000 from $3.1 million in 2017 to $2.9 million in 2018. Including sub-lease income, our operating expenses net of such income declined $300,000 year-over-year. We remain committed to treating every dollar of shareholder money with the utmost care and consideration.

In Q2 2018, given an assessment of individual and company-related metrics, the Compensation Committee determined that it was appropriate for us to accrue for the probable payment of a bonus to management at year-end. This expense accrual of $0.017 per share, or approximately $540,000, was derived using the same framework and considerations used to determine the bonus compensation in 2017. It also included the concept of the deferral of a meaningful portion of the bonus to future years to encourage and reward persistent performance. Given the decline in our NAV this quarter, management recommended, and our Compensation Committee agreed, that it was appropriate to reverse this accrual. As such, there will be no bonus pool for management in 2018. This reversal increased NAV by $0.017 in the quarter.

TURN/NAV: SUM OF THE PARTS:

At the end of Q4 2018, TURN traded at 66% of its NAV. Our liquid assets, cash, and other assets net of liabilities were $1.03 per share. Our stock price was $1.75. If we received 100% credit for the value of these assets net of liabilities, the market is ascribing a value of $0.72 per share, or $22.4 million, to our private portfolio. Given our private assets are valued at $50.1 million, the market is discounting the value of our private portfolio assets by 55% as of the end of 2018 versus 40% as of the end of Q3 2018 and 36% as of the end of 2017.

As we grow our cash and liquid securities, the discount our stock trades to NAV should narrow. In September 2016, we had 19% of our cash and investments in cash and liquid securities less outstanding debt. At the beginning of our strategy in 2017, we had 27% of our cash and investments in cash and public companies. Today that number is 40%. We want that trend to continue and accelerate. We have made substantial progress in reinventing ourselves. Our balance sheet reflects just how far we have come.

2018 was an event filled year. Our vision is to be known as a leader in small cap activist investing, with a relentless focus on achieving excellence in our investment performance. Our investment in Turtle Beach Corporation (NASDAQ: HEAR) in the second quarter of 2018 is the second time we have assisted a company in removing an overhang to its stock price. The result was the same: a significant shareholder value creation exercise for HEAR and its shareholders, and most importantly, for our Fund and our shareholders. Of course, our first major “active” investment was TST. We have achieved a 100% unrealized return over the last 13 months on our investment in TST; which is evidence of our ability to help a company increase shareholder value.

A picture tells a thousand words. Take a look at the next two tables.

Our stock picking has been very good, and it has been very good in two entirely different markets (2017 and 2018). We have drastically reduced our expense base, raised money for two special purpose vehicles, and successfully exited two of our private portfolio companies, MRSN and HZO, through an IPO and a cash sale, respectively.

We were bitterly disappointed in how 2018 ended, but we take solace in the notion that we grew our net asset value over the entirety of 2018. We think from that perspective, we were an outlier, as not many funds were up last year. Being amongst the ones that were on the positive side of the ledger is a very positive outcome. The dislocation in Q4 2018 created buying opportunities of both old and new positions. While we don’t know how long the current unwind of technology-related companies due to fears of a trade war with China will last, many stocks have now discounted the bad news. As we look at our portfolio, we have made a conscious decision to be long those companies that we believe will benefit from IoT growth. Many of those names have been hurt in recent months. We think the fundamental underpinnings and secular trends of the IoT market are sound. We also recognize the stock market and economic growth have been rising for 10 years. Simply put, there is less value today than there was, when the bull market started. But given the outright wipeout in Q4 2018, we are very optimistic about what we own as we start 2019.

Kevin Rendino

Chairman and Chief Executive Officer

180 DEGREE CAPITAL CORP.

CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES



	December 31, 2018
ASSETS
Investments in portfolio securities, at value:
Unaffiliated privately held companies (cost: $14,631,117)	$	16,139,296
Unaffiliated publicly traded securities (cost: $18,556,002)	13,032,576
Non-controlled affiliated privately held companies (cost: $27,027,538)	26,429,303
Non-controlled affiliated publicly traded securities (cost: $9,288,130)	11,907,377
Controlled affiliated privately held companies (cost: $12,267,175)	5,271,414
Equity method privately held company (adjusted cost basis: $246,229)	246,229
Unaffiliated rights to payments (adjusted cost basis: $548,998)	2,019,283
Cash	7,801,712
Restricted cash	46,151
Interest receivable	661,677
Prepaid expenses	259,359
Receivable from portfolio companies and managed funds	106,662
Other assets	132,015
Total assets	$	84,053,054
LIABILITIES & NET ASSETS
Post-retirement plan liabilities	$	1,140,406
Accounts payable and accrued liabilities	732,324
Payable for securities purchased	92,371
Deferred rent	53,185
Total liabilities	$	2,018,286
Commitments and contingencies (Note 10)
Net assets	$	82,034,768
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	127,652,787
Total distributable loss	(41,347,088		)
Treasury stock, at cost 3,501,779 shares	(4,605,525		)
Net assets	$	82,034,768
Shares outstanding	31,121,562
Net asset value per outstanding share	$	2.64

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

180 DEGREE CAPITAL CORP.

CONSOLIDATED STATEMENT OF OPERATIONS



	Year Ended December 31, 2018
Income:
Interest from:
Unaffiliated companies-cash	$	19,206
Unaffiliated companies-PIK	17,883
Non-controlled affiliated companies-cash	(49,562		)
Non-controlled affiliated companies-PIK	16,219
Controlled affiliated companies-PIK	25,569
Cash and U.S. government securities	19,018
Yield enhancing fee income on debt securities-non-cash	182,683
Sub-lease income	248,666
Fee income for providing managerial assistance to portfolio companies-cash	75,000
Fee income for providing managerial assistance to portfolio companies-non-cash	57,940
Management fee income	73,214
Total income	685,836
Operating fees and expenses:
Salaries, bonus and benefits	1,464,381
Professional	561,650
Directors	277,500
Rent	252,110
Administration and operations	251,237
Insurance	223,901
Custody	30,188
Other	4,885
Total operating expenses	3,065,852
Net investment loss before income tax expense	(2,380,016		)
Income tax expense	6,003
Net investment loss	(2,386,019		)
Net realized gain (loss) from investments:
Realized gain (loss) from investments:
Unaffiliated publicly traded securities	6,802,818
Non-controlled affiliated privately held companies	(6,882,890		)
Controlled affiliated privately held companies	(7,613,301		)
Net realized loss from investments	(7,693,373		)
Realized loss from funds in escrow	(150		)
Net realized loss	(7,693,523		)
Change in unrealized (depreciation) appreciation on investments:
Unaffiliated privately held companies	(1,369,705		)
Unaffiliated publicly traded securities	(4,986,125		)
Non-controlled affiliated privately held companies	7,512,247
Non-controlled affiliated publicly traded securities	2,038,330
Controlled affiliated privately held companies	8,193,457
Unaffiliated rights to payments	(192,584		)
Net change in unrealized appreciation on investments	11,195,620
Net realized loss and change in unrealized appreciation on investments	3,502,097
Share of loss on equity method investment	(124,299		)
Net increase in net assets resulting from operations	$	991,779

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

180 DEGREE CAPITAL CORP.
CONSOLIDATED STATEMENT OF CASH FLOWS



	Year Ended December 31, 2018
Cash flows provided by operating activities:
Net increase in net assets resulting from operations	$	991,779
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:
Net realized loss from investments	7,693,373
Realized loss from funds held in escrow	150
Net change in unrealized appreciation on investments	(11,195,620		)
Share of loss on equity method investee	124,299
Depreciation of fixed assets	4,879
Accretion of bridge note PIK interest income	(59,671		)
Yield enhancing fee income on debt securities-non-cash	(182,683		)
Fee income for providing managerial assistance to portfolio companies-non-cash	(57,940		)
Purchase of U.S. government securities	(7,983,711		)
Maturity of U.S. government securities	7,983,711
Purchase of equity method investee	(113,906		)
Purchase of unaffiliated privately held portfolio companies	(1,602,368		)
Purchase of unaffiliated publicly traded securities	(12,935,685		)
Purchase of non-controlled affiliated privately held portfolio companies	(245,334		)
Purchase of non-controlled affiliated publicly traded securities	(665,750		)
Purchase on controlled affiliated privately held companies	(500,000		)
Proceeds from sale of unaffiliated privately held companies	132,000
Proceeds from sale of unaffiliated publicly traded securities	16,728,458
Proceeds from sale of non-controlled affiliated privately held companies	7,135,834
Proceeds from sale of non-controlled affiliated publicly traded securities	111,131
Proceeds from sale of controlled affiliated privately held companies	50,000
Proceeds from funds held in escrow	12,805
Changes in assets and liabilities:
Decrease in interest receivable	49,563
Increase on prepaid expenses	(22,908		)
Increase in receivable from portfolio companies and managed funds	(65,910		)
Decrease in other assets	31,182
Decrease in post-retirement plan liabilities	(198,940		)
Decrease in accounts payable and accrued liabilities	(715,221		)
Decrease in accrued severance	(140,923		)
Decrease in deferred rent	(45,633		)
Decrease in directors' fee payable	(58,125		)
Increase in payable for securities purchased	92,371
Net cash provided by operating activities	4,351,207
Cash flows from investing activities:
Purchase of fixed assets	(1,884		)
Net cash used in investing activities	(1,884		)
Net increase in cash and restricted cash	4,349,323
Cash and restricted cash at beginning of the year	3,498,540
Cash and restricted cash at end of the year	$	7,847,863

Supplemental disclosures of cash flow information:
Income taxes paid	$	6,003

Cash	$	7,801,712
Restricted cash	46,151
Total cash and restricted cash shown in the consolidated statement of cash flows	$	7,847,863

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

180 DEGREE CAPITAL CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS



	Year Ended December 31, 2018			Year Ended December 31, 2017
Changes in net assets from operations:
Net investment loss	$	(2,386,019	)	$	(3,645,515	)
Net realized loss	(7,693,523		)	(11,755,179		)
Net change in unrealized appreciation on investments	11,195,620			24,877,695
Share of loss on equity method investment	(124,299		)	(59,258		)
Net increase in net assets resulting from operations	991,779			9,417,743
Changes in net assets from capital stock transactions:
Acquisition of vested restricted stock awards to pay required employee withholding tax	0			(139,780		)
Stock-based compensation benefit	0			(190,347		)
Net decrease in net assets resulting from capital stock transactions	0			(330,127		)
Changes in net assets from accumulated other comprehensive loss:
Other comprehensive loss	0			(300,237		)
Net decrease in net assets resulting from accumulated other comprehensive loss	0			(300,237		)
Net increase in net assets	991,779			8,787,379
Net Assets:
Beginning of the year	81,042,989			72,255,610
End of the year¹	$	82,034,768		$	81,042,989

¹ Includes accumulated net investment loss of $5,211,751 as of December 31, 2017. The Securities Exchange Commission ("SEC") eliminated the requirement to disclose accumulated net investment income (loss) in 2018.

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

180 DEGREE CAPITAL CORP.

FINANCIAL HIGHLIGHTS



	Year Ended Dec. 31, 2018				Year Ended Dec. 31, 2017				Year Ended Dec. 31, 2016			Year Ended Dec. 31, 2015			Year Ended Dec. 31, 2014
Per Share Operating Performance
Net asset value per share, beginning of the year	$	2.60			$	2.34			$	2.88		$	3.51		$	3.93
Net investment loss*	(0.07		)		(0.12		)		(0.15		)	(0.23		)	(0.25		)
Net realized (loss) gain from investments*	(0.25		)		(0.38		)		(0.26		)	0.15			(0.16		)
Net change in unrealized appreciation (depreciation) on investments and written call options*¹	0.36				0.80				(0.12		)	(0.56		)	(0.02		)
Share of loss on equity method investment*²	0.00				0.00				0.00			(0.01		)	0.00
Total*	0.04				0.30				(0.53		)	(0.65		)	(0.43		)
Net (decrease) increase as a result of stock-based compensation expense*²	0.00				(0.01		)		0.01			0.03			0.03
Net increase as a result of purchase of treasury stock	0.00				0.00				0.00			0.01			0.00
Net decrease as a result of acquisition of vested restricted stock awards related to employee withholding²	0.00				(0.02		)		(0.01		)	(0.01		)	(0.01		)
Total (decrease) increase from capital stock transactions	0.00				(0.03		)		0.00			0.03			0.02
Net (decrease) increase as a result of other comprehensive (loss) income*²	0.00				(0.01		)		(0.01		)	(0.01		)	(0.01		)
Net increase (decrease) in net asset value	0.04				0.26				(0.54		)	(0.63		)	(0.42		)
Net asset value per share, end of the year	$	2.64			$	2.60			$	2.34		$	2.88		$	3.51
Stock price per share, end of the year	$	1.75			$	1.97			$	1.38		$	2.20		$	2.95
Total return based on stock price	(11.17		)%		42.75		%		(37.27		)%	(25.42		)%	(1.01		)%
Supplemental Data:
Net assets, end of the year	$	82,034,768			$	81,042,989			$	72,255,610		$	88,711,671		$	109,654,427
Ratio of expenses, excluding taxes, to quarterly average net assets	3.62		%	^**	6.26		%	^**	7.88		%	8.15		%	7.14		%
Ratio of expenses, including taxes, to quarterly average net assets	3.63		%	^**	6.28		%	³^**	7.89		%	8.15		%	7.15		%
Ratio of net investment loss to quarterly average net assets	(2.82		)%		(4.68		)%		(5.64		)%	(7.22		)%	(6.70		)%
Average debt outstanding	$	0			$	0			$	4,590,164		$	3,780,822		$	0
Average debt per share	$	0.00			$	0.00			$	0.15		$	0.12		$	0.00
Portfolio turnover	20.43		%		8.83		%		***			***			***
Number of shares outstanding, end of the year	31,121,562				31,121,562				30,904,209			30,845,754			31,280,843

*Based on average shares outstanding.

**The Company has entered into an expense offsetting arrangement with one of its unaffiliated brokers relating to broker fees paid. The total broker fee charged to the Company was applied as a credit to fees charged by an affiliate of the unaffiliated broker who the Company subscribes to for data services billed during the year. The Company received an offset to expense totaling approximately $17,509 and $5,700 with that broker for the year ended December 31, 2018 and the year ended December 31, 2017.

***Prior to March 2017, the Company was a business development company investing primarily in privately held securities. Portfolio turnover was not a relevant indicator for such investments given that the Company did not generally pay brokerage fees on such investments.

¹ Net unrealized losses include rounding adjustments to reconcile change in net asset value per share.

² Amounts listed as zero are amounts calculated as less than $0.005.

³Ratio of expenses, including taxes and excluding expenses related to restructuring, to quarterly average net assets for the year ended December 31, 2017 was 5.19%.

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



180 DEGREE CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2018

	Method of Valuation (1)	Industry	Cost	Shares/ Principal	Value



Investments in Unaffiliated Companies (2) -
35.6% of net assets at value

Privately Held Companies (Illiquid) -
19.7% of net assets at value

AutoTech Ventures Management I, LLC (3)(4)(5)
Venture capital investing in automotive-related companies		Asset Management & Custody Banks
LLC Interests (acquired 12/1/17)	(M) (L3)		$	0	0		$	150,000

D-Wave Systems, Inc. (3)(4)(6)		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		1,958,033
Series 1 Class C Convertible Preferred Stock (acquired 9/30/08)	(M) (L3)		487,804		450,450		786,616
Series 1 Class D Convertible Preferred Stock (acquired 9/30/08)	(M) (L3)		748,473		855,131		1,493,305
Series 1 Class E Convertible Preferred Stock (acquired 11/24/10)	(M) (L3)		248,049		269,280		490,521
Series 1 Class F Convertible Preferred Stock (acquired 11/24/10)	(M) (L3)		238,323		258,721		471,287
Series 1 Class H Convertible Preferred Stock (acquired 6/27/14)	(M) (L3)		909,088		460,866		1,141,337
Series 2 Class D Convertible Preferred Stock (acquired 9/30/08)	(M) (L3)		736,019		678,264		1,184,445
Series 2 Class E Convertible Preferred Stock (acquired 6/1/12-3/22/13)	(M) (L3)		659,493		513,900		979,874
Series 2 Class F Convertible Preferred Stock (acquired 6/1/12-3/22/13)	(M) (L3)		633,631		493,747		941,447
Warrants for Common Stock expiring 5/12/19 (acquired 5/12/14)	(I) (L3)		26,357		20,415		242
			5,689,311				9,447,107

Fleet Health Alliance, LLC (3)(4)		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)	(I) (L3)		225,000		$	225,000	112,500

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



180 DEGREE CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2018

	Method of Valuation (1)	Industry	Cost	Shares/ Principal	Value



Investments in Unaffiliated Companies (2) -
35.6% of net assets at value (cont.)

Privately Held Companies (Illiquid) -
19.7% of net assets at value (cont.)

Genome Profiling, LLC (3)(7)		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

Magnolia Neurosciences Corporation (3)(4)		Pharmaceuticals
Developing and commercializing novel therapeutics for treatment of neurodegeneration
Series A Convertible Preferred Stock (acquired 8/3/18)	(I) (L3)		862,872		862,872		867,417

Nanosys, Inc. (3)(4)		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		926,994
Series D Convertible Preferred Stock (acquired 11/7/05)	(I) (L3)		3,000,003		1,016,950		1,779,526
Series E Convertible Preferred Stock (acquired 8/13/10)	(I) (L3)		496,573		433,688		795,737
			4,996,576				3,502,257

NanoTerra, Inc. (3)(4)		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		0
Warrants for Series A-3 Preferred Stock expiring on 11/15/22 (acquired 11/15/12)	(I) (L3)		35,403		47,508		31,645
			104,571				31,645

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



180 DEGREE CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2018

	Method of Valuation (1)	Industry	Cost	Shares/ Principal	Value



Investments in Unaffiliated Companies (2) -
35.6% of net assets at value (cont.)

Privately Held Companies (Illiquid) -
19.7% of net assets at value (cont.)

Petra Pharma Corporation (3)(4)(8)		Pharmaceuticals
Developing small molecule inhibitors for treatment of cancer and metabolic diseases
Series A Convertible Preferred Stock (acquired 12/23/15-1/8/18)	(I) (L3)		$	1,894,798	1,894,798		$	1,018,718
Secured Convertible Bridge Note, 7% PIK, (acquired 8/30/18, maturing 1/31/19)	(M) (L3)		378,541		$	369,748	378,541
			2,273,339				1,397,259

Phylagen, Inc. (3)		Research & Consulting Services
Developing technology to improve human health and business productivity
Series A Convertible Preferred Stock (acquired 11/14/18)	(I) (L3)		249,448		584,597		401,111

Total Unaffiliated Privately Held Companies (cost: $14,631,117)							$	16,139,296

Unaffiliated Publicly Traded Securities -
15.9% of net assets at value

Adesto Technologies Corporation (4)		Semiconductors
Developing low-power, high-performance solutions for the Internet of Things (IoT)
Common Stock (acquired 10/27/15-12/31/18)	(M) (L1)		$	6,564,931	1,116,675		$	4,913,370

Airgain, Inc. (4)		Electronic Components
Providing advanced antenna technologies for high-performance wireless networking
Common Stock (acquired 6/4/18-12/27/18)	(M) (L1)		1,614,289		188,784		1,870,849

Emcore Corporation (4)		Communications Equipment
Providing mixed-signal optical products
Common Stock (acquired 5/3/18-9/19/18)	(M) (L1)		2,684,497		564,828		2,372,278

Intermolecular, Inc. (4)		Semiconductors
Providing advanced materials innovation services and solutions
Common Stock (acquired 11/9/18-12/20/18)	(M) (L1)		1,328,661		1,411,729		1,425,846

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



180 DEGREE CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2018

	Method of Valuation (1)	Industry	Cost	Shares/ Principal	Value



Investments in Unaffiliated Companies (2) -
35.6% of net assets at value (cont.)

Unaffiliated Publicly Traded Securities -
15.9% of net assets at value (cont.)

Lantronix, Inc. (4)		Communications Equipment
Providing secure data access and management solutions
Common Stock (acquired 9/18/18-12/17/18)	(M) (L1)		$	1,475,580	400,000	$	1,176,000

Mersana Therapeutics, Inc. (4)		Biotechnology
Developing antibody drug conjugates for cancer therapy
Common Stock (acquired 7/27/12-12/31/18)	(M) (L1)		4,414,817		301,100	1,228,488

OpGen, Inc. (4)		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		12,033	989
Warrants for the Purchase of Common Stock expiring 2/17/25 (acquired 5/5/15)	(I) (L3)		785		1,248	202
			426,364			1,191

Miscellaneous Common Stocks (4)(9)	(M) (L1)		46,863			44,554

Total Unaffiliated Publicly Traded Securities (cost: $18,556,002)						$	13,032,576

Total Investments in Unaffiliated Companies (cost: $33,187,119)						$	29,171,872

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



180 DEGREE CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2018

	Method of Valuation (1)	Industry	Cost	Shares/ Principal	Value



Investments in Non-Controlled Affiliated Companies (2) -
46.7% of net assets at value

Privately Held Companies (Illiquid) -
32.2% of net assets at value

ABSMaterials, Inc. (3)		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		$	15,864
Series B Convertible Preferred Stock (acquired 11/8/13-6/25/14)	(I) (L3)		1,217,644		1,037,751		286,562
Secured Convertible Bridge Note, 8% PIK, (acquired 1/20/16, maturing 12/31/19)	(M) (L3)		123,605		$	100,000	123,605
Secured Convertible Bridge Note, 8% PIK, (acquired 3/28/17, maturing 12/31/19)	(M) (L3)		28,529		$	25,000	28,529
			1,804,778				454,560

AgBiome, LLC (3)(4)		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 Units (acquired 1/30/13)	(I) (L3)		2,000,000		2,000,000		10,442,684
Series A-2 Convertible Preferred Units (acquired 4/9/13-10/15/13)	(I) (L3)		521,740		417,392		2,214,058
Series B Convertible Preferred Units (acquired 8/7/15)	(I) (L3)		500,006		160,526		951,079
			3,021,746				13,607,821

Coba Therapeutics Corporation (3)(10)
Developed therapeutics for obesity, diabetes and liver diseases		Pharmaceuticals
Unsecured Convertible Bridge Note, 6% PIK, (acquired 2/27/18, maturing 2/27/19)	(I) (L3)		151,606		$	145,530	21,776

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



180 DEGREE CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2018

	Method of Valuation (1)	Industry	Cost	Shares/ Principal	Value



Investments in Non-Controlled Affiliated Companies (2) -
46.7% of net assets at value (cont.)

Privately Held Companies (Illiquid) -
32.2% of net assets at value (cont.)

EchoPixel, Inc. (3)(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		$	1,201,023
Series Seed-2 Convertible Preferred Stock (acquired 1/22/16)	(I) (L3)		500,000		1,476,668		429,732
Series A-2 Convertible Preferred Stock (acquired 3/23/17)	(I) (L3)		350,000		1,471,577		499,616
			2,100,000				2,130,371

Essential Health Solutions, Inc. (3)		Health Care Technology
Developing software for information transfer amongst healthcare providers and consumers
Common Stock (acquired 11/18/16)	(I) (L3)		20		200,000		128,339
Series A Convertible Preferred Stock (acquired 11/18/16)	(I) (L3)		2,750,000		2,750,000		2,781,300
Unsecured Convertible Bridge Note, 8% PIK, (acquired 12/19/18, maturing 12/19/19)	(M) (L3)		50,142		$	50,000	50,142
			2,800,162				2,959,781

Lodo Therapeutics Corporation (3)(4)		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		779,467

NGX Bio, Inc. (3)(4)(10)		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		17,273
Series Seed 2 Convertible Preferred Stock (acquired 8/20/15-9/30/15)	(I) (L3)		499,999		329,989		8,550
Series Seed 3 Convertible Preferred Stock (acquired 6/26/17)	(I) (L3)		686,329		666,001		17,256
			1,686,330				43,079

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



180 DEGREE CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2018

	Method of Valuation (1)	Industry	Cost	Shares/ Principal	Value



Investments in Non-Controlled Affiliated Companies (2) -
46.7% of net assets at value (cont.)

Privately Held Companies (Illiquid) -
32.2% of net assets at value (cont.)

ORIG3N, Inc. (3)(4)		Health Care Technology
Developing consumer focused genetic tests
Series 1 Convertible Preferred Stock (acquired 2/5/15-8/5/15)	(H) (L3)		$	500,000	1,195,315		$	1,232,502
Series A Convertible Preferred Stock (acquired 11/25/15-9/7/16)	(H) (L3)		1,500,000		1,364,666		1,431,936
Series A-2 Convertible Preferred Stock (acquired 5/11/17-2/8/18)	(H) (L3)		200,002		176,386		189,592
			2,200,002				2,854,030

Produced Water Absorbents, Inc. (3)(4)(11)		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)		2,323,680		$	2,533,766	76,863
			10,059,211				76,863

TARA Biosystems, Inc. (3)(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		659,162
Series A Convertible Preferred Stock (acquired 3/31/17)	(I) (L3)		2,545,493		6,878,572		2,842,393
			2,545,513				3,501,555

Total Non-Controlled Affiliated Privately Held Companies (cost: $27,027,538)							$	26,429,303

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



180 DEGREE CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2018

	Method of Valuation (1)	Industry	Cost	Shares/ Principal	Value



Investments in Non-Controlled Affiliated Companies (2) -
46.7% of net assets at value (cont.)

Non-Controlled Affiliated Publicly Traded Securities -
14.5% of net assets at value

Synacor, Inc. (4)(12)		Application Software
Providing technology development, multiplatform services and revenue partner for video, internet and communications providers, device manufacturers, and enterprises
Common Stock (acquired 4/6/17-12/31/18)	(M) (L1)		$	4,338,396	1,595,306	$	2,361,053

TheStreet, Inc. (4)(13)		Financial Exchanges & Data
Providing financial news and proprietary data to consumers and businesses
Common Stock (acquired 4/19/17-5/18/18)	(M) (L1)		4,949,734		4,668,552	9,477,161
Stock Options for Common Stock Expiring 1/1/25 (acquired 1/1/18)	(I) (L3)		0		3,333	1,995
Stock Options for Common Stock Expiring 5/18/25 (acquired 5/18/18) (3)	(I) (L3)		0		10,000	2,500
Restricted Stock Units (acquired 5/18/18) (3)	(M) (L3)		0		33,333	64,668
			4,949,734			9,546,324

Total Non-Controlled Affiliated Publicly Traded Securities (cost: $9,288,130)						$	11,907,377

Total Investments in Non-Controlled Affiliated Companies (cost: $36,315,668)						$	38,336,680

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



180 DEGREE CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2018

	Method of Valuation (1)	Industry	Cost	Shares/ Principal	Value



Investments in Controlled Affiliated Companies (2) -
6.4% of net assets at value

Privately Held Companies (Illiquid) -
6.4% of net assets at value

Black Silicon Holdings, Inc. (3)(10)(14)		Semiconductors
Holding company for interest in a company that develops silicon-based optoelectronic products
Series A Convertible Preferred Stock (acquired 8/4/15)	(M) (L3)		$	750,000	233,499		$	0
Series A-1 Convertible Preferred Stock (acquired 8/4/15)	(M) (L3)		890,000		2,966,667		0
Series A-2 Convertible Preferred Stock (acquired 8/4/15)	(M) (L3)		2,445,000		4,207,537		0
Series B-1 Convertible Preferred Stock (acquired 8/4/15)	(M) (L3)		1,169,561		1,892,836		0
Series C Convertible Preferred Stock (acquired 8/4/15)	(M) (L3)		1,171,316		1,674,030		0
Secured Convertible Bridge Note, 8% PIK, (acquired 8/25/16, maturing 8/4/21)	(M) (L3)		1,444,368		$	1,278,453	476,187
			7,870,245				476,187

HALE.life Corporation (3)(4)		Health Care Technology
Developing a platform to facilitate precision health and medicine
Common Stock (acquired 3/1/16)	(I) (L3)		10		1,000,000		146,462
Series Seed-1 Convertible Preferred Stock (acquired 3/28/17)	(I) (L3)		1,896,920		11,000,000		2,147,894
Series Seed-2 Convertible Preferred Stock (acquired 12/28/18)	(I) (L3)		2,500,000		12,083,132		2,500,871
			4,396,930				4,795,227

Total Controlled Affiliated Privately Held Companies (cost: $12,267,175)							$	5,271,414

Total Investments in Controlled Affiliated Privately Held Companies (cost: $12,267,175)							$	5,271,414

Total Investments in Privately Held Companies and Publicly Traded Securities (cost: $81,769,962)							$	72,779,966

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



180 DEGREE CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2018

	Method of Valuation (1)	Industry	Cost	Shares/ Principal	Value

Investment in Equity Method Privately Held Company (2) -

0.3% of net assets at value