HARRIS & HARRIS GROUP,
INC.
|
New York
|
13-3119827
|
(State
or Other Jurisdiction of
|
(I.R.S.
Employer Identification No.)
|
Incorporation
or Organization)
|
1450 Broadway, New York, New
York
|
10018
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
(212)
582-0900
|
Yes
|
x
|
No
|
¨
|
Yes
|
x
|
No
|
¨
|
Large
accelerated filer ¨
|
Accelerated
filer x
|
|
Non-accelerated
filer ¨
|
Smaller
reporting company ¨
|
Yes
|
¨
|
No
|
x
|
Class
|
Outstanding at November 8,
2010
|
|
Common
Stock, $0.01 par value per share
|
30,872,858
shares
|
Page
Number
|
|
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
|
32
|
Financial
Highlights
|
43
|
Item
2. Management's Discussion and Analysis of Financial
Condition
|
|
and
Results of Operations
|
44
|
Background
and Overview
|
44
|
Investment
Strategy
|
45
|
Historical
Investments
|
45
|
Investment
Pace
|
46
|
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
|
54
|
Valuation
of Investments
|
55
|
Investment
Objective
|
59
|
Results
of Operations
|
60
|
Financial
Condition
|
68
|
Liquidity
|
70
|
Capital
Resources
|
71
|
Critical
Accounting Policies
|
71
|
Recent
Developments – Portfolio Companies
|
74
|
Forward-Looking
Statements
|
74
|
Item
3. Quantitative and Qualitative Disclosures About Market
Risk
|
75
|
Item
4. Controls and Procedures
|
77
|
PART
II. OTHER INFORMATION
|
|
Item
1A. Risk Factors
|
78
|
Item
5. Exhibits
|
79
|
Signatures
|
80
|
Exhibit
Index
|
81
|
HARRIS
& HARRIS GROUP, INC.
CONSOLIDATED
STATEMENTS OF ASSETS AND
LIABILITIES
|
ASSETS
|
||||||||
September
30, 2010
|
December
31, 2009
|
|||||||
(Unaudited)
|
||||||||
Investments,
in portfolio securities at value:
|
||||||||
Unaffiliated
privately held companies
|
||||||||
(cost:
$37,470,081 and $26,977,200, respectively)
|
$ | 47,369,210 | $ | 21,656,436 | ||||
Unaffiliated
publicly traded securities
|
||||||||
(cost:
$0 and $298,827, respectively)
|
0 | 226,395 | ||||||
Non-controlled
affiliated privately held companies
|
||||||||
(cost:
$51,536,674 and $54,864,948, respectively)
|
40,978,655 | 50,297,220 | ||||||
Controlled
affiliated privately held companies
|
||||||||
(cost: $9,380,567 and $10,248,932, respectively)
|
8,431,564 | 5,843,430 | ||||||
Total,
investments in privately held and publicly
|
||||||||
traded
securities at value
|
||||||||
(cost:
$98,387,322 and $92,389,907, respectively)
|
$ | 96,779,429 | $ | 78,023,481 | ||||
Investments,
in U.S. Treasury obligations at value
|
||||||||
(cost:
$43,861,592 and $55,960,024, respectively)
|
43,860,344 | 55,947,581 | ||||||
Cash
|
256,103 | 1,611,465 | ||||||
Restricted
funds
|
2,001 | 2,000 | ||||||
Receivable
from portfolio company
|
10,000 | 28,247 | ||||||
Interest
receivable
|
2,104 | 25,832 | ||||||
Prepaid
expenses
|
97,996 | 94,129 | ||||||
Other
assets
|
622,244 | 376,366 | ||||||
Total
assets
|
$ | 141,630,221 | $ | 136,109,101 | ||||
LIABILITIES & NET
ASSETS
|
||||||||
Post
retirement plan liabilities
|
$ | 1,471,159 | $ | 1,369,843 | ||||
Accounts
payable and accrued liabilities
|
532,717 | 579,162 | ||||||
Deferred
rent
|
345,835 | 1,838 | ||||||
Total
liabilities
|
2,349,711 | 1,950,843 | ||||||
Net
assets
|
$ | 139,280,510 | $ | 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
|
||||||||
09/30/10
and 12/31/09; 32,698,945 issued at 09/30/10
|
||||||||
and
32,688,333 issued at 12/31/09
|
326,990 | 326,884 | ||||||
Additional
paid in capital (Note 8)
|
207,714,612 | 205,977,117 | ||||||
Accumulated
net operating and realized loss
|
(63,746,420 | ) | (54,361,343 | ) | ||||
Accumulated
unrealized depreciation of investments
|
(1,609,141 | ) | (14,378,869 | ) | ||||
Treasury
stock, at cost (1,828,740 shares at 09/30/10 and 12/31/09)
|
(3,405,531 | ) | (3,405,531 | ) | ||||
Net
assets
|
$ | 139,280,510 | $ | 134,158,258 | ||||
Shares
outstanding
|
30,870,205 | 30,859,593 | ||||||
Net
asset value per outstanding share
|
$ | 4.51 | $ | 4.35 |
HARRIS
& HARRIS GROUP, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
|
Three Months Ended Sept.
30,
|
Nine Months Ended Sept. 30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Investment
income:
|
||||||||||||||||
Interest
from:
|
||||||||||||||||
Fixed-income
securities and
|
||||||||||||||||
bridge
notes (Note 3)
|
$ | 134,097 | $ | 99,677 | $ | 330,378 | $ | 138,862 | ||||||||
Miscellaneous
income
|
6,348 | 6,000 | 18,348 | 27,088 | ||||||||||||
Total investment
income
|
140,445 | 105,677 | 348,726 | 165,950 | ||||||||||||
Expenses:
|
||||||||||||||||
Salaries,
benefits and stock-based
|
||||||||||||||||
compensation
(Note 6)
|
1,327,055 | 1,727,743 | 4,181,852 | 4,621,680 | ||||||||||||
Administration
and operations
|
201,222 | 225,044 | 711,990 | 746,640 | ||||||||||||
Professional
fees
|
136,643 | 190,942 | 556,878 | 558,483 | ||||||||||||
Rent
(Note 3)
|
136,879 | 79,617 | 303,239 | 236,678 | ||||||||||||
Directors’
fees and expenses
|
70,359 | 79,136 | 251,280 | 252,745 | ||||||||||||
Custody
fees
|
24,000 | 33,515 | 72,000 | 51,457 | ||||||||||||
Depreciation
|
13,151 | 12,633 | 38,940 | 38,370 | ||||||||||||
Lease
termination costs (Note 3)
|
0 | 0 | 68,038 | 0 | ||||||||||||
Total
expenses
|
1,909,309 | 2,348,630 | 6,184,217 | 6,506,053 | ||||||||||||
Net
operating loss
|
(1,768,864 | ) | (2,242,953 | ) | (5,835,491 | ) | (6,340,103 | ) | ||||||||
Net
realized gain (loss):
|
||||||||||||||||
Realized
gain (loss) from investments:
|
||||||||||||||||
Unaffiliated
companies
|
0 | 0 | 13,218 | (1,514,330 | ) | |||||||||||
Non-Controlled
affiliated companies
|
(3,136,552 | ) | (3,176,125 | ) | (3,393,559 | ) | (3,176,125 | ) | ||||||||
Publicly
traded companies
|
0 | 0 | (152,980 | ) | 0 | |||||||||||
U.S.
Treasury obligations/other
|
(311 | ) | 0 | (11,834 | ) | (325 | ) | |||||||||
Realized loss from
investments
|
(3,136,863 | ) | (3,176,125 | ) | (3,545,155 | ) | (4,690,780 | ) | ||||||||
Income
tax expense (benefit) (Note 7)
|
1,799 | (2,862 | ) | 4,431 | (753 | ) | ||||||||||
Net realized
loss
|
(3,138,662 | ) | (3,173,263 | ) | (3,549,586 | ) | (4,690,027 | ) | ||||||||
Net
decrease in unrealized
|
||||||||||||||||
depreciation
on investments:
|
||||||||||||||||
Change
as a result of investment sales
|
3,136,552 | 3,180,240 | 3,358,871 | 4,691,282 | ||||||||||||
Change
on investments held
|
1,316,942 | 1,939,657 | 9,410,857 | 5,512,472 | ||||||||||||
Net decrease in
unrealized
|
||||||||||||||||
depreciation
on investments
|
4,453,494 | 5,119,897 | 12,769,728 | 10,203,754 | ||||||||||||
Net
(decrease) increase in net assets
|
||||||||||||||||
resulting
from operations
|
$ | (454,032 | ) | $ | (296,319 | ) | $ | 3,384,651 | $ | (826,376 | ) | |||||
Per
average basic outstanding share
|
$ | (0.01 | ) | $ | (0.01 | ) | $ | 0.11 | $ | (0.03 | ) | |||||
Average
outstanding shares
|
30,866,399 | 25,866,983 | 30,863,616 | 25,862,070 |
HARRIS
& HARRIS GROUP, INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
|
Nine
Months Ended
|
Nine
Months Ended
|
|||||||
September
30, 2010
|
September
30, 2009
|
|||||||
Cash
flows used in operating activities:
|
||||||||
Net
increase (decrease) in net assets resulting from
operations
|
$ | 3,384,651 | $ | (826,376 | ) | |||
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
|
(9,224,573 | ) | (5,512,974 | ) | ||||
Depreciation
of fixed assets, amortization of premiums or
|
||||||||
discounts
and bridge note interest
|
(260,793 | ) | 39,784 | |||||
Stock-based
compensation expense
|
1,746,734 | 2,425,525 | ||||||
Changes in assets and liabilities:
|
||||||||
Restricted
funds
|
(1 | ) | 189,970 | |||||
Receivable
from portfolio company
|
18,247 | 0 | ||||||
Other
receivables
|
7,187 | (217 | ) | |||||
Return
of security deposits on leased properties
|
44,376 | 0 | ||||||
Interest
receivable
|
11,513 | 2,044 | ||||||
Income
tax receivable
|
0 | (3,353 | ) | |||||
Prepaid
expenses
|
(3,867 | ) | 335,914 | |||||
Other
assets
|
(227,512 | ) | (186,116 | ) | ||||
Post
retirement plan liabilities
|
101,316 | (60,403 | ) | |||||
Accounts
payable and accrued liabilities
|
(46,445 | ) | (147,329 | ) | ||||
Deferred
rent
|
343,997 | (4,727 | ) | |||||
Net
cash used in operating activities
|
(4,105,170 | ) | (3,748,258 | ) | ||||
Cash
flows from investing activities:
|
||||||||
Purchase
of U.S. government securities
|
(58,644,919 | ) | (112,308,457 | ) | ||||
Sale
of U.S. government securities
|
70,746,244 | 123,988,254 | ||||||
Investments
in affiliated portfolio companies
|
(7,489,948 | ) | (6,561,959 | ) | ||||
Investments
in unaffiliated portfolio companies
|
(2,177,123 | ) | (973,915 | ) | ||||
Proceeds
from conversion of bridge note
|
1,356 | 0 | ||||||
Proceeds
from sale of investments
|
407,543 | 7,365 | ||||||
Purchase
of fixed assets
|
(84,212 | ) | (1,313 | ) | ||||
Net
cash provided by investing activities
|
2,758,941 | 4,149,975 | ||||||
Cash
flows from financing activities:
|
||||||||
Proceeds
from stock option exercises
|
39,795 | 401,944 | ||||||
Payment
of offering costs
|
(48,928 | ) | 0 | |||||
Net
cash (used in) provided by financing activities
|
(9,133 | ) | 401,944 | |||||
Net
decrease in cash:
|
||||||||
Cash
at beginning of the period
|
1,611,465 | 692,309 | ||||||
Cash
at end of the period.
|
256,103 | 1,495,970 | ||||||
Net
(decrease) increase in cash
|
$ | (1,355,362 | ) | $ | 803,661 | |||
Supplemental
disclosures of cash flow information:
|
||||||||
Income
taxes paid
|
$ | 4,431 | $ | 2,179 |
HARRIS
& HARRIS GROUP, INC.
CONSOLIDATED
STATEMENTS OF CHANGES IN NET
ASSETS
|
Nine
Months Ended
|
Year
Ended
|
|||||||
September
30, 2010
|
December
31, 2009
|
|||||||
(Unaudited)
|
||||||||
Changes
in net assets from operations:
|
||||||||
Net
operating loss
|
$ | (5,835,491 | ) | $ | (8,761,215 | ) | ||
Net
realized loss on investments
|
(3,549,586 | ) | (11,105,577 | ) | ||||
Net
decrease in unrealized depreciation
|
||||||||
on
investments as a result of sales
|
3,358,871 | 11,090,579 | ||||||
Net
decrease in unrealized depreciation
|
||||||||
on
investments held
|
9,410,857 | 8,627,748 | ||||||
Net
increase (decrease) in net assets resulting
|
||||||||
from
operations
|
3,384,651 | (148,465 | ) | |||||
Changes
in net assets from capital
|
||||||||
stock
transactions:
|
||||||||
Issuance
of common stock upon the
|
||||||||
exercise
of stock options
|
106 | 1,125 | ||||||
Issuance
of common stock on offering
|
0 | 48,875 | ||||||
Additional
paid-in capital on common
|
||||||||
stock
issued and options exercised
|
(9,239 | ) | 21,636,090 | |||||
Stock-based
compensation expense
|
1,746,734 | 3,089,520 | ||||||
Net
increase in net assets resulting from
|
||||||||
capital
stock transactions
|
1,737,601 | 24,775,610 | ||||||
Net
increase in net assets
|
5,122,252 | 24,627,145 | ||||||
Net
assets:
|
||||||||
Beginning
of the period
|
134,158,258 | 109,531,113 | ||||||
End
of the period
|
$ | 139,280,510 | $ | 134,158,258 |
HARRIS & HARRIS GROUP,
INC.
CONSOLIDATED
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2010
(Unaudited)
|
Method
of
|
Shares/
|
|||||||||
Valuation (1)
|
Industry (2)
|
Principal
|
Value
|
|||||||
Investments
in Unaffiliated Companies (3)(4) – 34.0% of
|
||||||||||
net
assets at value
|
||||||||||
Private
Placement Portfolio (Illiquid) – 34.0% of net assets
|
||||||||||
at
value
|
||||||||||
BioVex
Group, Inc. (5)(6)(7)(8) -- Developing novel
|
Healthcare/
|
|||||||||
biologics
for treatment of cancer and infectious disease
|
Biotech
|
|||||||||
Series
E Convertible Preferred Stock
|
(M)
|
2,799,552 | $ | 1,303,583 | ||||||
Series
G Convertible Preferred Stock
|
(M)
|
6,964,034 | 1,462,448 | |||||||
Warrants
for Series G Convertible Preferred
|
||||||||||
Stock
expiring 11/5/16
|
( I
)
|
285,427 | 21,407 | |||||||
2,787,438 | ||||||||||
Bridgelux,
Inc. (5)(6) -- Manufacturing high-power light
|
Cleantech
|
|||||||||
emitting
diodes (LEDs) and arrays
|
||||||||||
Series
B Convertible Preferred Stock
|
(M)
|
1,861,504 | 1,759,121 | |||||||
Series
C Convertible Preferred Stock
|
(M)
|
2,130,699 | 2,013,511 | |||||||
Series
D Convertible Preferred Stock
|
(M)
|
999,999 | 944,998 | |||||||
Warrants
for Series C Convertible Preferred
|
||||||||||
Stock
expiring 12/31/14
|
( I
)
|
163,900 | 91,128 | |||||||
Warrants
for Series D Convertible Preferred
|
||||||||||
Stock
expiring 8/26/14
|
( I
)
|
166,665 | 64,833 | |||||||
4,873,591 | ||||||||||
Cobalt
Technologies, Inc. (5)(6)(7)(9) -- Developing processes
for
|
Cleantech
|
|||||||||
making
biobutanol through biomass fermentation
|
||||||||||
Series
C Convertible Preferred Stock
|
(M)
|
352,112 | 375,000 | |||||||
Ensemble
Therapeutics Corporation (5)(6)(10) -- Developing
DNA-
|
Healthcare/
|
|||||||||
Programmed
ChemistryTM for the discovery of new classes
of
|
Biotech
|
|||||||||
therapeutics
|
||||||||||
Series
B Convertible Preferred Stock
|
(M)
|
1,449,275 | 2,000,000 | |||||||
Unsecured
Convertible Bridge Notes (including interest)
|
(M)
|
$ | 299,169 | 343,473 | ||||||
2,343,473 | ||||||||||
GEO
Semiconductor Inc. (7)(13) -- Developing programmable,
|
Electronics/
|
|||||||||
high-performance
video and geometry processing solutions
|
Semi-
|
|||||||||
Participation
Agreement with Montage Capital relating
|
conductors
|
|||||||||
to
the following assets:
|
||||||||||
Senior
Secured Debt, 13.75%, maturing on 06/30/12
|
( I
)
|
$ | 500,000 | 443,600 | ||||||
Warrants
for Series A Preferred Stock expiring on 09/17/17
|
( I
)
|
100,000 | 46,800 | |||||||
490,400 |
|
The
accompanying notes are an integral part of these consolidated financial
statements.
|
HARRIS & HARRIS GROUP,
INC.
CONSOLIDATED SCHEDULE OF
INVESTMENTS AS OF SEPTEMBER 30,
2010
(Unaudited)
|
Method
of
|
Shares/
|
|||||||||
Valuation (1)
|
Industry (2)
|
Principal
|
Value
|
|||||||
Investments
in Unaffiliated Companies (3)(4) – 34.0% of
|
||||||||||
net
assets at value (Cont.)
|
||||||||||
Private
Placement Portfolio (Illiquid) – 34.0% of net assets
|
||||||||||
at
value (Cont.)
|
||||||||||
Electronics/
|
||||||||||
Molecular
Imprints, Inc. (5)(6) -- Manufacturing nanoimprint
|
Semi-
|
|||||||||
lithography
capital equipment
|
conductors
|
|||||||||
Series
B Convertible Preferred Stock
|
(M)
|
1,333,333 | $ | 2,000,000 | ||||||
Series
C Convertible Preferred Stock
|
(M)
|
1,250,000 | 1,875,000 | |||||||
Warrants
for Series C Convertible Preferred
|
||||||||||
Stock
expiring 12/31/11
|
( I
)
|
125,000 | 69,875 | |||||||
3,944,875 | ||||||||||
Nanosys,
Inc. (5)(6) -- Developing inorganic nanowires and
|
Cleantech
|
|||||||||
quantum
dots for use in batteries and LED-backlit devices
|
||||||||||
Series
C Convertible Preferred Stock
|
(M)
|
803,428 | 1,021,835 | |||||||
Series
D Convertible Preferred Stock
|
(M)
|
1,016,950 | 1,382,573 | |||||||
Series
E Convertible Preferred Stock
|
(M)
|
433,688 | 496,573 | |||||||
2,900,981 | ||||||||||
Electronics/
|
||||||||||
Nantero,
Inc. (5)(6)(7) -- Developing a high-density, nonvolatile,
|
Semi-
|
|||||||||
random
access memory chip, enabled by carbon nanotubes
|
conductors
|
|||||||||
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
|
Other
|
|||||||||
optical
devices and components
|
||||||||||
Common
Stock
|
(M)
|
1,130,440 | 931,483 | |||||||
Series
1 Convertible Preferred Stock
|
(M)
|
1,831,256 | 1,508,955 | |||||||
Series
2 Convertible Preferred Stock
|
(M)
|
741,898 | 611,324 | |||||||
Series
3 Convertible Preferred Stock
|
(M)
|
2,750,000 | 2,266,000 | |||||||
Series
X Convertible Preferred Stock
|
(M)
|
8,923 | 1,427,680 | |||||||
6,745,442 | ||||||||||
Polatis,
Inc. (5)(6)(7) -- Developing MEMS-based optical
|
Other
|
|||||||||
networking
components
|
||||||||||
Common
Stock
|
(M)
|
16,438 | 0 | |||||||
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 | |||||||
0 |
|
The
accompanying notes are an integral part of these consolidated financial
statements.
|
HARRIS & HARRIS GROUP,
INC.
CONSOLIDATED SCHEDULE OF
INVESTMENTS AS OF SEPTEMBER 30,
2010
(Unaudited)
|
Method
of
|
Shares/
|
|||||||||
Valuation (1)
|
Industry (2)
|
Principal
|
Value
|
|||||||
Investments
in Unaffiliated Companies (3)(4) – 34.0% of
|
||||||||||
net
assets at value (Cont.)
|
||||||||||
Private
Placement Portfolio (Illiquid) – 34.0% of net assets
|
||||||||||
at
value (Cont.)
|
||||||||||
PolyRemedy,
Inc. (5)(6)(7) -- Developing a platform for
|
Healthcare/
|
|||||||||
producing
and tracking the use of wound treatment patches
|
Biotech
|
|||||||||
Series
B-1 Convertible Preferred Stock
|
(M)
|
287,647 | $ | 23,466 | ||||||
Series
B-2 Convertible Preferred Stock
|
(M)
|
676,147 | 30,427 | |||||||
53,893 | ||||||||||
Siluria
Technologies, Inc. (5)(6)(7) -- Developing nanomaterials
|
Cleantech
|
|||||||||
for
manufacturing of chemicals
|
||||||||||
Series
S-2 Convertible Preferred Stock
|
(M)
|
612,061 | 204,000 | |||||||
Solazyme,
Inc. (5)(6)(7) -- Developing algal biodiesel, industrial
|
Cleantech
|
|||||||||
chemicals
and specialty ingredients using synthetic biology
|
||||||||||
Series
A Convertible Preferred Stock
|
(M)
|
988,204 | 8,750,744 | |||||||
Series
B Convertible Preferred Stock
|
(M)
|
495,246 | 4,385,502 | |||||||
Series
C Convertible Preferred Stock
|
(M)
|
651,309 | 5,767,471 | |||||||
Series
D Convertible Preferred Stock
|
(M)
|
169,390 | 1,499,991 | |||||||
20,403,708 | ||||||||||
TetraVitae
Bioscience, Inc. (5)(6)(7)(11) -- Developing methods
|
Cleantech
|
|||||||||
of
producing alternative chemicals and fuels through biomass
|
||||||||||
fermentation
|
||||||||||
Series
B Convertible Preferred Stock
|
(M)
|
118,804 | 0 | |||||||
Total
Unaffiliated Private Placement Portfolio (cost:
$37,470,081)
|
$ | 47,369,210 | ||||||||
Total
Investments in Unaffiliated Companies (cost: $37,470,081)
|
$ | 47,369,210 |
|
The
accompanying notes are an integral part of these consolidated financial
statements.
|
HARRIS & HARRIS GROUP,
INC.
CONSOLIDATED SCHEDULE OF
INVESTMENTS AS OF SEPTEMBER 30,
2010
(Unaudited)
|
Method
of
|
Shares/
|
|||||||||
Valuation (1)
|
Industry (2)
|
Principal
|
Value
|
|||||||
Investments
in Non-Controlled Affiliated Companies (3)(12) –
|
||||||||||
29.4%
of net assets at value
|
||||||||||
Private Placement
Portfolio (Illiquid) – 29.4% of net
assets
|
||||||||||
at
value
|
||||||||||
ABS
Materials, Inc. (5)(7)(13) -- Developing nano-structured
|
Cleantech
|
|||||||||
absorbent
materials for environmental remediation and for the
|
||||||||||
petroleum
industry
|
||||||||||
Series
A Convertible Preferred Stock
|
(M)
|
375,000 | $ | 375,000 | ||||||
Electronics/
|
||||||||||
Adesto
Technologies Corporation (5)(6)(7) -- Developing
low-power,
|
Semi-
|
|||||||||
high-performance
memory devices
|
conductors
|
|||||||||
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 | ||||||||||
Electronics/
|
||||||||||
Cambrios
Technologies Corporation (5)(6)(7) – Developing
|
Semi-
|
|||||||||
nanowire-enabled
electronic materials for the display industry
|
conductors
|
|||||||||
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
|
Cleantech
|
|||||||||
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
|
Cleantech
|
|||||||||
aluminum
nitride substrates for light-emitting diodes
|
||||||||||
Common
Stock
|
(M)
|
3,994,468 | 0 | |||||||
Warrants
for Series A-1 Preferred Stock expiring 05/05/13
|
( I
)
|
15,231 | 0 | |||||||
Warrants
for Series A-1 Preferred Stock expiring 05/12/13
|
( I
)
|
2,350 | 0 | |||||||
Warrants
for Series A-1 Preferred Stock expiring 08/08/13
|
( I
)
|
4,396 | 0 | |||||||
0 |
HARRIS & HARRIS GROUP,
INC.
CONSOLIDATED SCHEDULE OF
INVESTMENTS AS OF SEPTEMBER 30,
2010
(Unaudited)
|
Method
of
|
Shares/
|
|||||||||
Valuation (1)
|
Industry (2)
|
Principal
|
Value
|
|||||||
Investments
in Non-Controlled Affiliated Companies (3)(12) –
|
||||||||||
29.4%
of net assets at value (Cont.)
|
||||||||||
Private Placement
Portfolio (Illiquid) – 29.4% of net
assets
|
||||||||||
at
value (Cont.)
|
||||||||||
Electronics/
|
||||||||||
D-Wave
Systems, Inc. (5)(6)(7)(15) -- Developing high-
|
Semi-
|
|||||||||
performance
quantum computing systems
|
conductors
|
|||||||||
Series
B Convertible Preferred Stock
|
(M)
|
1,144,869 | $ | 1,232,451 | ||||||
Series
C Convertible Preferred Stock
|
(M)
|
450,450 | 484,909 | |||||||
Series
D Convertible Preferred Stock
|
(M)
|
1,533,395 | 1,650,700 | |||||||
Unsecured
Convertible Bridge Note (including interest)
|
(M)
|
$ | 580,257 | 612,070 | ||||||
Warrants
for Common Stock expiring 06/30/15
|
( I
)
|
153,890 | 73,713 | |||||||
4,053,843 | ||||||||||
Enumeral
Technologies, Inc. (5)(6)(7) -- Developing therapeutics
|
Healthcare/
|
|||||||||
and
diagnostics through functional assaying of single cells
|
Biotech
|
|||||||||
Unsecured
Convertible Bridge Note (including interest)
|
(M)
|
$ | 250,000 | 265,452 | ||||||
Innovalight,
Inc. (5)(6)(7) -- Developing silicon-based
|
Cleantech
|
|||||||||
nanomaterials
for use in the solar energy industry
|
||||||||||
Series
B Convertible Preferred Stock
|
(M)
|
16,666,666 | 2,227,333 | |||||||
Series
C Convertible Preferred Stock
|
(M)
|
5,810,577 | 957,378 | |||||||
Series
D Convertible Preferred Stock
|
(M)
|
4,046,974 | 540,838 | |||||||
3,725,549 | ||||||||||
Electronics/
|
||||||||||
Kovio,
Inc. (5)(6) -- Developing semiconductor products
|
Semi-
|
|||||||||
using
printed electronics and thin-film technologies
|
conductors
|
|||||||||
Series
A' Convertible Preferred Stock
|
(M)
|
2,686,225 | 1,343,113 | |||||||
Mersana
Therapeutics, Inc. (5)(6)(7)(16) -- Developing treatments
for
|
Healthcare/
|
|||||||||
cancer
based on novel drug delivery polymers
|
Biotech
|
|||||||||
Series
A Convertible Preferred Stock
|
(M)
|
68,451 | 136,902 | |||||||
Series
B Convertible Preferred Stock
|
(M)
|
866,500 | 1,733,000 | |||||||
Unsecured
Convertible Bridge Notes (including interest)
|