New York
|
13-3119827
|
(State
or Other Jurisdiction of
Incorporation
or Organization)
|
(I.R.S.
Employer Identification No.)
|
1450 Broadway, New York, New
York
|
10018
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
Large
accelerated filer ¨
|
Accelerated
filer x
|
|
Non-accelerated
filer ¨
|
Smaller
reporting company ¨
|
Class
|
Outstanding at May 10,
2010
|
|
Common
Stock, $0.01 par value per share
|
30,864,899
shares
|
PART
I. FINANCIAL INFORMATION
|
|
Item
1. Consolidated Financial Statements
|
1
|
Consolidated
Statements of Assets and Liabilities
|
2
|
Consolidated
Statements of Operations
|
3
|
Consolidated
Statements of Cash Flows
|
4
|
Consolidated
Statements of Changes in Net Assets
|
5
|
Consolidated
Schedule of Investments
|
6
|
Notes
to Consolidated Financial Statements
|
33
|
Financial
Highlights
|
42
|
Item
2. Management's Discussion and Analysis of Financial
Condition
and
Results of Operations
|
43
|
Background
and Overview
|
43
|
Historical
Investments
|
44
|
Investment
Pace
|
44
|
Importance
of Availability of Liquid Capital
|
46
|
Involvement
with Portfolio Companies
|
48
|
Commercialization
of Nanotechnology by Our Portfolio Companies
|
48
|
Maturity
of Current Venture Capital Portfolio
|
51
|
Current
Business Environment
|
53
|
Valuation
of Investments
|
54
|
Investment
Objective
|
57
|
Results
of Operations
|
58
|
Financial
Condition
|
61
|
Liquidity
|
63
|
Capital
Resources
|
63
|
Critical
Accounting Policies
|
64
|
Recent
Developments – Portfolio Companies
|
66
|
Forward-Looking
Statements
|
67
|
Item
3. Quantitative and Qualitative Disclosures About Market
Risk
|
67
|
Item
4. Controls and Procedures
|
69
|
PART
II. OTHER INFORMATION
|
|
Item
1A. Risk Factors
|
70
|
Item
5. Exhibits
|
71
|
Signatures
|
72
|
Exhibit
Index
|
73
|
HARRIS
& HARRIS GROUP, INC.
CONSOLIDATED
STATEMENTS OF ASSETS AND
LIABILITIES
|
March
31, 2010
|
December
31, 2009
|
|||||||
(Unaudited)
|
||||||||
Investments,
in portfolio securities at value:
|
||||||||
Unaffiliated
privately held companies
|
||||||||
(cost:
$31,002,395 and $26,977,200, respectively)
|
$ | 29,752,075 | $ | 21,656,436 | ||||
Unaffiliated
publicly traded securities
|
||||||||
(cost:
$547,304 and $298,827, respectively)
|
552,454 | 226,395 | ||||||
Non-controlled
affiliated privately held companies
|
||||||||
(cost:
$51,546,166 and $54,864,948, respectively)
|
45,559,645 | 50,297,220 | ||||||
Controlled
affiliated privately held companies (cost: $11,032,574
|
||||||||
and
$10,248,932, respectively)
|
7,703,226 | 5,843,430 | ||||||
Total,
investments in privately held and publicly
|
||||||||
traded
securities at value
|
||||||||
(cost:
$94,128,439 and $92,389,907, respectively)
|
$ | 83,567,400 | $ | 78,023,481 | ||||
Investments,
in U.S. Treasury obligations at value
|
||||||||
(cost: $53,163,696 and $55,960,024, respectively)
|
53,160,430 | 55,947,581 | ||||||
Cash
|
197,294 | 1,611,465 | ||||||
Restricted
funds
|
2,000 | 2,000 | ||||||
Receivable
from portfolio company
|
0 | 28,247 | ||||||
Interest
receivable
|
6 | 25,832 | ||||||
Prepaid
expenses
|
338,542 | 94,129 | ||||||
Receivable
from unsettled trade
|
799,925 | 0 | ||||||
Other
assets
|
691,853 | 376,366 | ||||||
Total
assets
|
$ | 138,757,450 | $ | 136,109,101 |
LIABILITIES & NET
ASSETS
|
||||||||
Post
retirement plan liabilities
|
$ | 1,402,894 | $ | 1,369,843 | ||||
Accounts
payable and accrued liabilities
|
672,902 | 579,162 | ||||||
Deferred
rent
|
321,372 | 1,838 | ||||||
Total
liabilities
|
2,397,168 | 1,950,843 | ||||||
Net
assets
|
$ | 136,360,282 | $ | 134,158,258 | ||||
Net
assets are comprised of:
|
||||||||
Preferred
stock, $0.10 par value,
|
||||||||
2,000,000
shares authorized; none issued
|
$ | 0 | $ | 0 | ||||
Common
stock, $0.01 par value, 45,000,000 shares authorized at
|
||||||||
03/31/10
and 12/31/09; 32,690,986 issued at 03/31/10
|
||||||||
and
32,688,333 issued at 12/31/09
|
326,911 | 326,884 | ||||||
Additional
paid in capital (Note 8)
|
206,491,383 | 205,977,117 | ||||||
Accumulated
net operating and realized loss
|
(56,488,176 | ) | (54,361,343 | ) | ||||
Accumulated
unrealized depreciation of investments
|
(10,564,305 | ) | (14,378,869 | ) | ||||
Treasury
stock, at cost (1,828,740 shares at 03/31/10 and 12/31/09)
|
(3,405,531 | ) | (3,405,531 | ) | ||||
Net
assets
|
$ | 136,360,282 | $ | 134,158,258 | ||||
Shares
outstanding
|
30,862,246 | 30,859,593 | ||||||
Net
asset value per outstanding share
|
$ | 4.42 | $ | 4.35 |
HARRIS
& HARRIS GROUP, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
|
Three
Months Ended
|
Three
Months Ended
|
|||||||
March
31, 2010
|
March
31, 2009
|
|||||||
Investment
income:
|
||||||||
Interest
from:
|
||||||||
Fixed-income
securities and bridge notes (Note 3)
|
$ | 73,073 | $ | (35,899 | ) | |||
Miscellaneous
income
|
6,000 | 12,338 | ||||||
Total
investment income (loss)
|
79,073 | (23,561 | ) | |||||
Expenses:
|
||||||||
Salaries,
benefits and stock-based
|
||||||||
compensation
(Note 6)
|
1,389,277 | 1,387,340 | ||||||
Administration
and operations
|
282,522 | 290,435 | ||||||
Professional
fees
|
243,369 | 215,250 | ||||||
Rent
(Note 3)
|
77,215 | 78,063 | ||||||
Directors'
fees and expenses
|
95,361 | 84,509 | ||||||
Depreciation
|
11,969 | 12,859 | ||||||
Custody
fees
|
24,000 | 6,862 | ||||||
Lease
termination costs (Note 3)
|
68,038 | 0 | ||||||
Total
expenses
|
2,191,751 | 2,075,318 | ||||||
Net
operating loss
|
(2,112,678 | ) | (2,098,879 | ) | ||||
Net
realized loss:
|
||||||||
Realized
loss from investments:
|
||||||||
Unaffiliated
companies
|
0 | (3,288 | ) | |||||
Non-controlled
affiliated companies
|
0 | 0 | ||||||
Controlled
affiliated companies
|
0 | 0 | ||||||
U.S.
Treasury obligations/other
|
(11,523 | ) | (325 | ) | ||||
Realized loss from
investments
|
(11,523 | ) | (3,613 | ) | ||||
Income
tax expense (Note 7)
|
2,632 | 380 | ||||||
Net realized
loss
|
(14,155 | ) | (3,993 | ) | ||||
Net
decrease in unrealized
|
||||||||
depreciation
on investments:
|
||||||||
Change
on investments held
|
3,814,564 | 1,151,448 | ||||||
Net decrease in
unrealized
|
||||||||
depreciation
on investments
|
3,814,564 | 1,151,448 | ||||||
Net
increase (decrease) in net assets resulting from
operations:
|
||||||||
Total
|
$ | 1,687,731 | $ | (951,424 | ) | |||
Per average basic and diluted
outstanding share
|
$ | 0.05 | $ | (0.04 | ) | |||
Average
outstanding shares
|
30,859,888 | 25,859,573 |
HARRIS
& HARRIS GROUP, INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
|
Three
Months Ended
|
Three
Months Ended
|
|||||||
March
31, 2010
|
March
31, 2009
|
|||||||
Cash
flows (used in) provided by operating activities:
|
||||||||
Net
increase (decrease) in net assets resulting from
operations
|
$ | 1,687,731 | $ | (951,424 | ) | |||
Adjustments
to reconcile net increase (decrease) in net assets
|
||||||||
resulting
from operations to net cash used in
|
||||||||
operating
activities:
|
||||||||
Net
realized and unrealized (gain) on investments
|
(3,803,041 | ) | (1,147,835 | ) | ||||
Depreciation
of fixed assets, amortization of premium or
|
||||||||
discount
on U.S. government securities, and bridge note interest
|
(41,107 | ) | 86,269 | |||||
Stock-based
compensation expense
|
553,272 | 635,638 | ||||||
Changes
in assets and liabilities:
|
||||||||
Restricted
funds
|
0 | (618 | ) | |||||
Receivable
from portfolio company
|
28,247 | 0 | ||||||
Interest
receivable
|
12,589 | 54,660 | ||||||
Receivable
from investments sold
|
(799,925 | ) | 0 | |||||
Prepaid
expenses
|
(244,413 | ) | 137,680 | |||||
Other
assets
|
(260,892 | ) | 3,312 | |||||
Post
retirement plan liabilities
|
33,051 | 30,981 | ||||||
Accounts
payable and accrued liabilities
|
93,740 | (131,084 | ) | |||||
Deferred
rent
|
319,534 | (1,576 | ) | |||||
Net
cash used in operating activities
|
(2,421,214 | ) | (1,283,997 | ) | ||||
Cash
flows from investing activities:
|
||||||||
Purchase
of U.S. government securities
|
(2,399,293 | ) | (52,334,768 | ) | ||||
Sale
of U.S. government securities
|
5,199,533 | 53,892,347 | ||||||
Investment
in venture capital investments
|
(1,675,058 | ) | (723,176 | ) | ||||
Proceeds
from conversion of bridge note
|
1,356 | 0 | ||||||
Purchase
of fixed assets
|
(80,516 | ) | (1,313 | ) | ||||
Net
cash provided by investing activities
|
1,046,022 | 833,090 | ||||||
Cash
flows from financing activities:
|
||||||||
Proceeds
from stock option exercises
|
9,949 | 0 | ||||||
Payment
of offering costs
|
(48,928 | ) | 0 | |||||
Net
cash used in financing activities
|
(38,979 | ) | 0 | |||||
Net
decrease in cash:
|
||||||||
Cash
at beginning of the period
|
1,611,465 | 692,309 | ||||||
Cash
at end of the period
|
197,294 | 241,402 | ||||||
Net
decrease in cash
|
$ | (1,414,171 | ) | $ | (450,907 | ) | ||
Supplemental
disclosures of cash flow information:
|
||||||||
Income
taxes paid
|
$ | 2,632 | $ | 380 |
HARRIS
& HARRIS GROUP, INC.
CONSOLIDATED
STATEMENTS OF CHANGES IN NET ASSETS
|
Three
Months Ended
|
Year
Ended
|
|||||||
March
31, 2010
|
December
31, 2009
|
|||||||
(Unaudited)
|
||||||||
Changes
in net assets from operations:
|
||||||||
Net
operating loss
|
$ | (2,112,678 | ) | $ | (8,761,215 | ) | ||
Net
realized loss on investments
|
(14,155 | ) | (11,105,577 | ) | ||||
Net
decrease in unrealized depreciation
|
||||||||
on
investments as a result of sales
|
0 | 11,090,579 | ||||||
Net
decrease in unrealized depreciation
|
||||||||
on
investments held
|
3,814,564 | 8,627,748 | ||||||
Net
increase (decrease) in net assets resulting
|
||||||||
from
operations
|
1,687,731 | (148,465 | ) | |||||
Changes
in net assets from capital
|
||||||||
stock
transactions:
|
||||||||
Issuance
of common stock upon the
|
||||||||
exercise
of stock options
|
27 | 1,125 | ||||||
Issuance
of common stock on offering
|
0 | 48,875 | ||||||
Additional
paid-in capital on common
|
||||||||
stock
issued and options exercised
|
(39,006 | ) | 21,636,090 | |||||
Stock-based
compensation expense
|
553,272 | 3,089,520 | ||||||
Net
increase in net assets resulting from
|
||||||||
capital
stock transactions
|
514,293 | 24,775,610 | ||||||
Net
increase in net assets
|
2,202,024 | 24,627,145 | ||||||
Net
assets:
|
||||||||
Beginning
of the period
|
134,158,258 | 109,531,113 | ||||||
End
of the period
|
$ | 136,360,282 | $ | 134,158,258 |
HARRIS & HARRIS GROUP,
INC.
CONSOLIDATED
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2010
(Unaudited)
|
Method
of
|
Shares/
|
||||||||
Valuation
(1)
|
Principal
|
Value
|
|||||||
Investments
in Unaffiliated Companies (2)(3)(4) – 22.2% of
|
|||||||||
net
assets at value
|
|||||||||
Private
Placement Portfolio (Illiquid) – 21.8% of net assets
|
|||||||||
at
value
|
|||||||||
BioVex
Group, Inc. (5)(6)(7)(8) -- Developing novel biologics
|
|||||||||
for
treatment of cancer and infectious disease
|
|||||||||
Series
E Convertible Preferred Stock
|
(M)
|
2,799,552 | $ | 1,042,862 | |||||
Series
G Convertible Preferred Stock
|
(M)
|
3,738,004 | 627,985 | ||||||
Warrants
at $0.21 expiring 11/5/16
|
( I
)
|
285,427 | 18,838 | ||||||
1,689,685 | |||||||||
Bridgelux,
Inc. (5)(6) -- Manufacturing high-power light
|
|||||||||
emitting
diodes (LEDs) and arrays
|
|||||||||
Series
B Convertible Preferred Stock
|
(M)
|
1,861,504 | 2,345,495 | ||||||
Series
C Convertible Preferred Stock
|
(M)
|
2,130,699 | 2,684,681 | ||||||
Series
D Convertible Preferred Stock
|
(M)
|
999,999 | 1,259,999 | ||||||
Warrants
at $0.7136 expiring 12/31/14
|
( I
)
|
163,900 | 135,218 | ||||||
Warrants
at $1.50 expiring 8/26/14
|
( I
)
|
166,665 | 101,332 | ||||||
6,526,725 | |||||||||
Cobalt
Technologies, Inc. (5)(6)(7)(9) -- Developing processes
for
|
|||||||||
making
biobutanol through biomass fermentation
|
|||||||||
Series
C Convertible Preferred Stock
|
(M)
|
352,112 | 375,000 | ||||||
D-Wave
Systems, Inc. (5)(6)(7)(10) -- Developing high-
|
|||||||||
performance
quantum computing systems
|
|||||||||
Series
B Convertible Preferred Stock
|
(M)
|
1,144,869 | 938,620 | ||||||
Series
C Convertible Preferred Stock
|
(M)
|
450,450 | 369,301 | ||||||
Series
D Convertible Preferred Stock
|
(M)
|
1,533,395 | 1,257,153 | ||||||
2,565,074 | |||||||||
Molecular
Imprints, Inc. (5)(6) -- Manufacturing nanoimprint
|
|||||||||
lithography
capital equipment
|
|||||||||
Series
B Convertible Preferred Stock
|
(M)
|
1,333,333 | 2,999,999 | ||||||
Series
C Convertible Preferred Stock
|
(M)
|
1,250,000 | 2,812,500 | ||||||
Warrants
at $2.00 expiring 12/31/11
|
( I
)
|
125,000 | 155,375 | ||||||
5,967,874 |
|
The
accompanying notes are an integral part of these consolidated financial
statements.
|
HARRIS & HARRIS GROUP,
INC.
CONSOLIDATED SCHEDULE OF
INVESTMENTS AS OF MARCH 31,
2010
(Unaudited)
|
Method
of
|
Shares/
|
||||||||
Valuation
(1)
|
Principal
|
Value
|
|||||||
Investments
in Unaffiliated Companies (2)(3)(4) – 22.2% of
|
|||||||||
net
assets at value (Cont.)
|
|||||||||
Private
Placement Portfolio (Illiquid) – 21.8% of net assets
|
|||||||||
at
value (Cont.)
|
|||||||||
Nanosys,
Inc. (5)(6) -- Developing inorganic materials
|
|||||||||
and
devices based on nanowires and quantum dots
|
|||||||||
Series
C Convertible Preferred Stock
|
(M)
|
803,428 | $ | 1,185,056 | |||||
Series
D Convertible Preferred Stock
|
(M)
|
1,016,950 | 1,500,001 | ||||||
2,685,057 | |||||||||
Nantero,
Inc. (5)(6)(7) -- Developing a high-density, nonvolatile,
|
|||||||||
random
access memory chip, enabled by carbon nanotubes
|
|||||||||
Series
A Convertible Preferred Stock
|
(M)
|
345,070 | 1,046,908 | ||||||
Series
B Convertible Preferred Stock
|
(M)
|
207,051 | 628,172 | ||||||
Series
C Convertible Preferred Stock
|
(M)
|
188,315 | 571,329 | ||||||
2,246,409 | |||||||||
NeoPhotonics
Corporation (5)(6) -- Developing and manufacturing
|
|||||||||
optical
devices and components
|
|||||||||
Common
Stock
|
(M)
|
1,130,440 | 1,030,961 | ||||||
Series
1 Convertible Preferred Stock
|
(M)
|
1,831,256 | 1,670,105 | ||||||
Series
2 Convertible Preferred Stock
|
(M)
|
741,898 | 676,611 | ||||||
Series
3 Convertible Preferred Stock
|
(M)
|
2,750,000 | 2,508,000 | ||||||
Series
X Convertible Preferred Stock
|
(M)
|
8,923 | 1,427,680 | ||||||
7,313,357 | |||||||||
Polatis,
Inc. (5)(6)(7) -- Developing MEMS-based optical
|
|||||||||
networking
components
|
|||||||||
Series
A-1 Convertible Preferred Stock
|
(M)
|
16,775 | 0 | ||||||
Series
A-2 Convertible Preferred Stock
|
(M)
|
71,611 | 0 | ||||||
Series
A-4 Convertible Preferred Stock
|
(M)
|
4,774 | 0 | ||||||
Series
A-5 Convertible Preferred Stock
|
(M)
|
16,438 | 0 | ||||||
0 | |||||||||
PolyRemedy,
Inc. (5)(6)(7) -- Developing a robotic
|
|||||||||
manufacturing
platform for wound treatment patches
|
|||||||||
Series
B-1 Convertible Preferred Stock
|
(M)
|
287,647 | 23,467 | ||||||
Series
B-2 Convertible Preferred Stock
|
(M)
|
676,147 | 30,427 | ||||||
53,894 |
|
The
accompanying notes are an integral part of these consolidated financial
statements.
|
HARRIS & HARRIS GROUP,
INC.
CONSOLIDATED SCHEDULE OF
INVESTMENTS AS OF MARCH 31,
2010
(Unaudited)
|
Method
of
|
Shares/
|
||||||||
Valuation
(1)
|
Principal
|
Value
|
|||||||
Investments
in Unaffiliated Companies (2)(3)(4) – 22.2% of
|
|||||||||
net
assets at value (Cont.)
|
|||||||||
Private
Placement Portfolio (Illiquid) – 21.8% of net assets
|
|||||||||
at
value (Cont.)
|
|||||||||
Siluria
Technologies, Inc. (5)(6)(7) -- Developing nanomaterials
|
|||||||||
for
manufacturing of chemicals
|
|||||||||
Series
S-2 Convertible Preferred Stock
|
(M)
|
612,061 | $ | 204,000 | |||||
TetraVitae
Bioscience, Inc. (5)(6)(7)(11) -- Developing methods
|
|||||||||
of
producing alternative chemicals and fuels through biomass
|
|||||||||
fermentation
|
|||||||||
Series
B Convertible Preferred Stock
|
(M)
|
118,804 | 125,000 | ||||||
Total
Unaffiliated Private Placement Portfolio (cost:
$31,002,395)
|
$ | 29,752,075 |
|
The
accompanying notes are an integral part of these consolidated financial
statements.
|
HARRIS & HARRIS GROUP,
INC.
CONSOLIDATED SCHEDULE OF
INVESTMENTS AS OF MARCH 31,
2010
(Unaudited)
|
Method
of
|
Shares/
|
||||||||
Valuation
(1)
|
Principal
|
Value
|
|||||||
Publicly
Traded Portfolio – 0.4% of net assets
|
|||||||||
at
value
|
|||||||||
Orthovita,
Inc. (6) -- Developing materials and devices
|
|||||||||
for
orthopedic medical implant applications
|
|||||||||
Common
Stock
|
(M)
|
93,100 | $ | 396,606 | |||||
Satcon
Technology Corporation (6)(12) – Developing power
|
|||||||||
conversion
solutions and providing system design services
|
|||||||||
for
utility-scale renewable energy plants
|
|||||||||
Common
Stock
|
(M)
|
64,400 | 155,848 | ||||||
Total
Unaffiliated Publicly Traded Portfolio (cost: $547,304)
|
$ | 552,454 | |||||||
Total
Investments in Unaffiliated Companies (cost: $31,549,699)
|
$ | 30,304,529 |
|
The
accompanying notes are an integral part of these consolidated financial
statements.
|
HARRIS & HARRIS GROUP,
INC.
CONSOLIDATED SCHEDULE OF
INVESTMENTS AS OF MARCH 31, 2010
(Unaudited)
|
Method
of
|
Shares/
|
||||||||
Valuation (1)
|
Principal
|
Value
|
|||||||
Investments
in Non-Controlled Affiliated Companies (2)(13) –
|
|||||||||
33.4%
of net assets at value
|
|||||||||
Private Placement
Portfolio (Illiquid) – 33.4% of net
assets
|
|||||||||
at
value
|
|||||||||
ABS
Materials, Inc. (5)(6)(7)(12) -- Developing
nano-structured
|
|||||||||
materials
for environmental remediation and the petroleum industry
|
|||||||||
Series
A Convertible Preferred Stock
|
(M)
|
250,000 | $ | 250,000 | |||||
Adesto
Technologies Corporation (5)(6)(7) -- Developing
low-power,
|
|||||||||
high-performance
memory devices
|
|||||||||
Series
A Convertible Preferred Stock
|
(M)
|
6,547,619 | 2,420,000 | ||||||
Series
B Convertible Preferred Stock
|
(M)
|
5,952,381 | 2,200,000 | ||||||
4,620,000 | |||||||||
Cambrios
Technologies Corporation (5)(6)(7) -- Developing
|
|||||||||
nanowire-enabled
electronic materials for the display industry
|
|||||||||
Series
B Convertible Preferred Stock
|
(M)
|
1,294,025 | 647,013 | ||||||
Series
C Convertible Preferred Stock
|
(M)
|
1,300,000 | 650,000 | ||||||
Series
D Convertible Preferred Stock
|
(M)
|
515,756 | 257,878 | ||||||
1,554,891 | |||||||||
Contour
Energy Systems, Inc. (5)(6)(7)(14) -- Developing batteries
using
|
|||||||||
nanostructured
materials
|
|||||||||
Series
A Convertible Preferred Stock
|
(M)
|
2,565,798 | 2,822,378 | ||||||
Series
B Convertible Preferred Stock
|
(M)
|
812,500 | 1,300,000 | ||||||
4,122,378 | |||||||||
Crystal
IS, Inc. (5)(6) -- Developing single-crystal
|
|||||||||
aluminum
nitride substrates for light-emitting diodes
|
|||||||||
Common
Stock
|
(M)
|
3,994,468 | 0 | ||||||
Warrants
at $0.78 expiring 05/05/13
|
( I
)
|
15,231 | 0 | ||||||
Warrants
at $0.78 expiring 05/12/13
|
( I
)
|
2,350 | 0 | ||||||
Warrants
at $0.78 expiring 08/08/13
|
( I
)
|
4,396 | 0 | ||||||
0 |
HARRIS & HARRIS GROUP,
INC.
CONSOLIDATED SCHEDULE OF
INVESTMENTS AS OF MARCH 31, 2010
(Unaudited)
|
Method
of
|
Shares/
|
||||||||
Valuation (1)
|
Principal
|
Value
|
|||||||
Investments
in Non-Controlled Affiliated Companies (2)(13) –
|
|||||||||
33.4%
of net assets at value (Cont.)
|
|||||||||
Private Placement
Portfolio (Illiquid) – 33.4% of net
assets
|
|||||||||
at
value (Cont.)
|
|||||||||
Ensemble
Discovery Corporation (5)(6)(15) -- Developing
DNA-
|
|||||||||
Programmed
ChemistryTM for the discovery of new classes
of
|
|||||||||
therapeutics
|
|||||||||
Series
B Convertible Preferred Stock
|
(M)
|
1,449,275 | $ | 2,000,000 | |||||
Unsecured
Convertible Bridge Note (including interest)
|
(M)
|
$ | 299,169 | 331,472 | |||||
2,331,472 | |||||||||
Enumeral
Technologies, Inc. (5)(6)(7) -- Developing therapeutics
|
|||||||||
and
diagnostics through functional assaying of single cells
|
|||||||||
Unsecured
Convertible Bridge Note (including interest)
|
(M)
|
$ | 250,000 | 255,425 | |||||
Innovalight,
Inc. (5)(6)(7) -- Developing solar power
|
|||||||||
products
enabled by silicon-based nanomaterials
|
|||||||||
Series
B Convertible Preferred Stock
|
(M)
|
16,666,666 | 2,969,667 | ||||||
Series
C Convertible Preferred Stock
|
(M)
|
5,810,577 | 1,276,457 | ||||||
Series
D Convertible Preferred Stock
|
(M)
|
4,046,974 | 721,090 | ||||||
4,967,214 | |||||||||
Kovio,
Inc. (5)(6) -- Developing semiconductor products
|
|||||||||
using
printed electronics and thin-film technologies
|
|||||||||
Series
C Convertible Preferred Stock
|
(M)
|
2,500,000 | 640,313 | ||||||
Series
D Convertible Preferred Stock
|
(M)
|
800,000 | 204,900 | ||||||
Series
E Convertible Preferred Stock
|
(M)
|
1,200,000 | 307,350 | ||||||
Warrants
at $1.25 expiring 12/31/12
|
( I
)
|
355,880 | 29,538 | ||||||
1,182,101 | |||||||||
Mersana
Therapeutics, Inc. (5)(6)(7) -- Developing treatments for
|
|||||||||
cancer
based on novel drug delivery polymers
|
|||||||||
Series
A Convertible Preferred Stock
|
(M)
|
68,451 | 136,902 | ||||||
Series
B Convertible Preferred Stock
|
(M)
|
866,500 | 1,733,000 | ||||||
Unsecured
Convertible Bridge Note (including interest)
|
(M)
|
$ | 821,975 | 899,020 | |||||
Warrants
at $2.00 expiring 10/21/10
|
( I
)
|
91,625 | 57,082 | ||||||
|
|||||||||
2,826,004 |
HARRIS & HARRIS GROUP,
INC.
CONSOLIDATED SCHEDULE OF
INVESTMENTS AS OF MARCH 31, 2010
(Unaudited)
|
Method
of
|
Shares/
|
||||||||
Valuation
(1)
|
Principal
|
Value
|
|||||||
Investments
in Non-Controlled Affiliated Companies (2)(13) –
|
|||||||||
33.4%
of net assets at value (Cont.)
|
|||||||||
Private Placement
Portfolio (Illiquid) – 33.4% of net
assets
|
|||||||||
at
value (Cont.)
|
|||||||||
Metabolon,
Inc. (5)(6) -- Developing service and diagnostic products
|
|||||||||
through
the use of a metabolomics, or biochemical, profiling
platform
|
|||||||||
Series
B Convertible Preferred Stock
|
(M)
|
371,739 | $ | 1,087,870 | |||||
Series
B-1 Convertible Preferred Stock
|
(M)
|
148,696 | 435,149 | ||||||
Series
C Convertible Preferred Stock
|
(M)
|
1,000,000 | 1,000,000 | ||||||
Warrants
at $1.15 expiring 3/25/15
|
( I
)
|
74,348 | 112,921 | ||||||
2,635,940 | |||||||||
NanoGram
Corporation (5)(6) -- Developing solar power products
|
|||||||||
enabled
by silicon-based nanomaterials
|
|||||||||
Common
Stock
|
(M)
|
2,988,437 | 0 | ||||||
0 | |||||||||
Nextreme
Thermal Solutions, Inc. (5)(6) -- Developing thin-film
|
|||||||||
thermoelectric
devices for cooling and energy conversion
|
|||||||||
Series
A Convertible Preferred Stock
|
(M)
|
17,500 | 1,312,500 | ||||||
Series
B Convertible Preferred Stock
|
(M)
|
4,870,244 | 1,991,443 | ||||||
3,303,943 | |||||||||
Questech
Corporation (5)(6) -- Manufacturing and marketing
|
|||||||||
proprietary
metal and stone decorative tiles
|
|||||||||
Common
Stock
|
(M)
|
655,454 | 432,600 | ||||||
Solazyme,
Inc. (5)(6)(7) -- Developing algal biodiesel, industrial
|
|||||||||
chemicals
and specialty ingredients based on synthetic biology
|
|||||||||
Series
A Convertible Preferred Stock
|
(M)
|
988,204 | 4,978,157 | ||||||
Series
B Convertible Preferred Stock
|
(M)
|
495,246 | 2,494,841 | ||||||
Series
C Convertible Preferred Stock
|
(M)
|
651,309 | 3,281,021 | ||||||
10,754,019 |
|
The
accompanying notes are an integral part of these consolidated financial
statements.
|
HARRIS & HARRIS GROUP,
INC.
CONSOLIDATED
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2010
(Unaudited)
|
Method
of
|
Shares/
|
||||||||
Valuation
(1)
|
Principal
|
Value
|
|||||||
Investments
in Non-Controlled Affiliated Companies (2)(13) –
|
|||||||||
33.4%
of net assets at value (Cont.)
|
|||||||||
Private Placement
Portfolio (Illiquid) – 33.4% of net
assets
|
|||||||||
at
value (Cont.)
|
|||||||||
Xradia,
Inc. (5)(6) -- Designing, manufacturing and selling
ultra-high
|
|||||||||
resolution
3D x-ray microscopes and fluorescence imaging systems
|
|||||||||
Series
D Convertible Preferred Stock
|
(M)
|
3,121,099 | $ | 6,323,658 | |||||
Total
Non-Controlled Private Placement Portfolio (cost:
$51,546,166)
|
$ | 45,559,645 | |||||||
Total
Investments in Non-Controlled Affiliated Companies (cost:
$51,546,166)
|
$ | 45,559,645 |
|
The
accompanying notes are an integral part of these consolidated financial
statements.
|
HARRIS & HARRIS GROUP,
INC.
CONSOLIDATED SCHEDULE OF
INVESTMENTS AS OF MARCH 31, 2010
(Unaudited)
|
Method
of
|
Shares/
|
||||||||
Valuation
(1)
|
Principal
|
Value
|
|||||||
Investments
in Controlled Affiliated Companies (2)(16) –
|
|||||||||
5.6%
of net assets at value
|
|||||||||
Private Placement
Portfolio (Illiquid) – 5.6%
of
|
|||||||||
net
assets at value
|
|||||||||
Ancora
Pharmaceuticals Inc. (5)(6)(7) -- Developing synthetic
|
|||||||||
carbohydrates for pharmaceutical
applications
|
|||||||||
Series
B Convertible Preferred Stock
|
(M)
|
1,663,808 | $ | 17,375 | |||||
Series
C Convertible Preferred Stock
|
(M)
|
2,066,051 | 1,239,631 | ||||||
Secured
Convertible Bridge Note (including interest)
|
(M)
|
$ | 500,000 | 505,479 | |||||
1,762,485 | |||||||||