x
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF
1934
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
New
York
|
13-3119827
|
|
(State
or Other Jurisdiction
|
(I.R.S.
Employer
|
|
of
Incorporation or Organization)
|
Identification
No.)
|
111
West 57th Street, New York, New York
|
10019
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
Title
of Each Class
|
Name
of Each Exchange on Which Registered
|
|
Common
Stock, $.01 par value
|
Nasdaq
Global Market
|
Large
Accelerated Filer ¨
|
Accelerated
Filer x
|
Non-Accelerated
Filer ¨
|
DOCUMENTS
INCORPORATED BY REFERENCE
|
INCORPORATED
AT
|
|
Harris
& Harris Group, Inc. Proxy Statement for the
|
Part
III, Items 10, 11,
|
|
2008
Annual Meeting of Shareholders
|
12,
13 and 14
|
Page
|
||
PART
I
|
||
Item
1.
|
Business
|
1
|
Item
1A.
|
Risk
Factors
|
15
|
Item
1B.
|
Unresolved
Staff Comments
|
27
|
Item
2.
|
Properties
|
28
|
Item
3.
|
Legal
Proceedings
|
28
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
28
|
PART
II
|
||
Item
5.
|
Market
For Registrant's Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
|
29
|
Item
6.
|
Selected
Financial Data
|
32
|
Item
7.
|
Management's
Discussion and Analysis of Financial
|
|
Condition
and Results of Operations
|
33
|
|
Item
7A.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
49
|
Item
8.
|
Consolidated
Financial Statements and
Supplementary Data
|
51
|
Item
9.
|
Changes
in and Disagreements With Accountants on Accounting and Financial
Disclosure
|
104
|
Item
9A.
|
Controls
and Procedures
|
104
|
Item
9B.
|
Other
Information
|
104
|
PART
III
|
||
Item
10.
|
Directors
and Executive Officers of the Registrant
|
105
|
Item
11.
|
Executive
Compensation
|
105
|
Item
12.
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
105
|
Item
13.
|
Certain
Relationships and Related Transactions, and Director
Independence
|
105
|
Item
14.
|
Principal
Accountant Fees and Services
|
106
|
PART
IV
|
||
Item
15.
|
Exhibits
and Financial Statements Schedules
|
107
|
Signatures
|
110
|
|
Exhibit Index
|
112
|
· |
Equity,
equity-related securities (including warrants) and debt with equity
features from either private or public
issuers;
|
· |
Venture
capital investments, whether in corporate, partnership or other form,
including development stage or start-up
entities;
|
· |
Intellectual
property or patents or research and development in technology or
product
development that may lead to patents or other marketable
technology;
|
· |
Debt
obligations of all types having varying terms with respect to security
or
credit support, subordination, purchase price, interest payments
and
maturity;
|
· |
Foreign
securities; and
|
· |
Miscellaneous
investments.
|
· |
recruiting
management;
|
· |
formulating
operating strategies;
|
· |
formulating
intellectual property strategies;
|
· |
assisting
in financial planning;
|
· |
providing
management in the initial start-up stages; and
|
· |
establishing
corporate goals.
|
· |
funding
research and development in the development of a technology;
|
· |
obtaining
licensing rights to intellectual property or patents;
|
· |
acquiring
intellectual property or patents;
or
|
· |
forming
and funding companies or joint ventures to commercialize further
intellectual property.
|
• |
stock
market and capital markets
conditions;
|
• |
internal
developments in our Company with respect to our personnel, financial
condition
and compliance with all applicable
regulations;
|
• |
announcements
regarding any of our portfolio
companies;
|
• |
announcements
regarding developments in the nanotechnology field in
general;
|
• |
environmental
and health concerns regarding nanotechnology, whether real or perceptual;
|
• |
announcements
regarding government funding and initiatives related to the development
of nanotechnology;
|
• |
general
economic conditions and trends;
and/or
|
• |
departures
of key personnel.
|
Item 5. |
Market
for Registrant's Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity
Securities.
|
2007
Quarter Ending
|
Low
|
|
High
|
|
|||
March
31
|
$
|
11.00
|
$
|
13.58
|
|||
June
30
|
$
|
11.01
|
$
|
14.32
|
|||
September
30
|
$
|
9.51
|
$
|
11.79
|
|||
December
31
|
$
|
8.00
|
$
|
11.10
|
2006
Quarter Ending
|
|
Low
|
High
|
||||
March
31
|
$
|
12.75
|
$
|
16.10
|
|||
June
30
|
$
|
9.57
|
$
|
14.26
|
|||
September
30
|
$
|
9.38
|
$
|
12.99
|
|||
December
31
|
$
|
11.80
|
$
|
15.16
|
EQUITY
COMPENSATION PLAN INFORMATION
As
of December 31, 2007
|
|
Number
of securities
to
be issued upon
exercise
of out-
standing
options,
warrants
and rights
|
Weighted-average
exercise
price of
outstanding
options,
warrants
and rights
|
Number
of securities
remaining available for
future
issuance under
equity
compensation
plans
(excluding
securities
reflected in
Column
(a))
|
|||||||
Plan
category
|
(a)
|
|
(b)
|
|
(c)
|
|
||||
Equity
compensation plans approved by security holders
|
3,967,744
|
$
|
10.54
|
(1)
|
|
|||||
Equity
compensation plans not approved by security holders
|
||||||||||
TOTAL
|
3,967,744
|
$
|
10.54
|
(1)
|
|
|
12/02
|
12/03
|
12/04
|
12/05
|
12/06
|
12/07
|
|||||||||||||
Harris
& Harris Group, Inc.
|
100.00
|
468.70
|
665.85
|
565.04
|
491.46
|
357.32
|
|||||||||||||
NASDAQ
Composite
|
100.00
|
149.75
|
164.64
|
168.60
|
187.83
|
205.22
|
|||||||||||||
NASDAQ
Financial
|
100.00
|
133.86
|
149.89
|
156.52
|
178.54
|
157.20
|
2007
|
2006
|
2005
|
2004
|
2003
|
||||||||||||
Total
assets
|
$
|
142,893,332
|
$
|
118,328,590
|
$
|
132,938,120
|
$
|
79,361,451
|
$
|
44,115,128
|
||||||
Total
liabilities
|
$
|
4,529,988
|
$
|
4,398,287
|
$
|
14,950,378
|
$
|
4,616,652
|
$
|
3,432,390
|
||||||
Net
assets
|
$
|
138,363,344
|
$
|
113,930,303
|
$
|
117,987,742
|
$
|
74,744,799
|
$
|
40,682,738
|
||||||
Net
asset value per outstanding share
|
$
|
5.93
|
$
|
5.42
|
$
|
5.68
|
$
|
4.33
|
$
|
2.95
|
||||||
Cash
dividends paid
|
$
|
0.00
|
$
|
0.00
|
$
|
0.00
|
$
|
0.00
|
$
|
0.00
|
||||||
Cash
dividends paid per outstanding share
|
$
|
0.00
|
$
|
0.00
|
$
|
0.00
|
$
|
0.00
|
$
|
0.00
|
||||||
Shares
outstanding, end of year
|
23,314,573
|
21,015,017
|
20,756,345
|
17,248,845
|
13,798,845
|
2007
|
2006
|
2005
|
2004
|
2003
|
||||||||||||
Total
investment income
|
$
|
2,705,636
|
$
|
3,028,761
|
$
|
1,540,862
|
$
|
637,562
|
$
|
167,785
|
||||||
Total
expenses1
|
$
|
14,533,179
|
$
|
10,641,696
|
$
|
7,006,623
|
$
|
4,046,341
|
$
|
2,731,527
|
||||||
Net
operating (loss) income
|
$
|
(11,827,543
|
)
|
$
|
(7,612,935
|
)
|
$
|
(5,465,761
|
)
|
$
|
(3,408,779
|
)
|
$
|
(2,563,742
|
) | |
Total
tax (benefit) expense2
|
$
|
87,975
|
$
|
(227,355
|
)
|
$
|
8,288,778
|
$
|
650,617
|
$
|
13,761
|
|||||
Net
realized income (loss) from investments
|
$
|
30,162
|
$
|
258,693
|
$
|
14,208,789
|
$
|
858,503
|
$
|
(984,925
|
)
|
|||||
Net
decrease (increase) in unrealized depreciation on
investments
|
$
|
5,080,936
|
$
|
(4,418,870
|
)
|
$
|
(2,026,652
|
)
|
$
|
484,162
|
$
|
343,397
|
||||
Net
(decrease) increase in net assets resulting from
operations
|
$
|
(6,716,445
|
)
|
$
|
(11,773,112
|
)
|
$
|
6,716,376
|
$
|
(2,066,114
|
)
|
$
|
(3,205,270
|
)
|
||
(Decrease)
increase in net assets resulting from operations per average
outstanding
share
|
$
|
(0.30
|
)
|
$
|
(0.57
|
)
|
$
|
0.36
|
$
|
(0.13
|
)
|
$
|
(0.28
|
)
|
Item 7. |
Management's
Discussion and Analysis of Financial Condition and
Results of Operations.
|
2001
|
2002
|
2003
|
2004
|
2005
|
2006
|
2007
|
||||||||||||||||
Total
Incremental Investments
|
$
|
489,999
|
$
|
6,240,118
|
$
|
3,812,600
|
$
|
14,837,846
|
$
|
16,251,339
|
$
|
24,408,187
|
$
|
20,595,161
|
||||||||
No.
of New Investments
|
1
|
7
|
5
|
8
|
4
|
6
|
7
|
|||||||||||||||
No.
of Follow-On Investment Rounds
|
0
|
1
|
5
|
21
|
13
|
14
|
20
|
|||||||||||||||
No.
of Rounds Led
|
0
|
1
|
0
|
2
|
0
|
7
|
3
|
|||||||||||||||
Average
Dollar Amount –
Initial
|
$
|
489,999
|
$
|
784,303
|
$
|
437,156
|
$
|
911,625
|
$
|
1,575,000
|
$
|
2,383,424
|
$
|
1,086,441
|
||||||||
Average
Dollar Amount – Follow- On
|
N/A
|
$
|
750,000
|
$
|
325,364
|
$
|
359,278
|
$
|
765,488
|
$
|
721,974
|
$
|
649,504
|
2001
|
2002
|
2003
|
2004
|
2005
|
2006
|
2007
|
||||||||||||||||
Net
Asset Value, BOY
|
$
|
31,833,475
|
$
|
24,334,770
|
$
|
27,256,046
|
$
|
40,682,738
|
$
|
74,744,799
|
$
|
117,987,742
|
$
|
113,930,303
|
||||||||
Gross
Write-Downs During Year
|
$
|
(2,532,730
|
)
|
$
|
(5,400,005
|
)
|
$
|
(1,256,102
|
)
|
$
|
(5,711,229
|
)
|
$
|
(3,450,236
|
)
|
$
|
(4,211,323
|
)
|
$
|
(7,810,794
|
)
|
|
Gross
Write-Ups During Year
|
$
|
1,528,866
|
$
|
285
|
$
|
847,578
|
$
|
6,288,397
|
$
|
23,485,176
|
$
|
279,363
|
$
|
11,694,618
|
||||||||
Gross
Write-Downs as a Percentage of Net Asset Value, BOY
|
-7.96
|
%
|
-22.19
|
%
|
-4.61
|
%
|
-14.04
|
%
|
-4.62
|
%
|
-3.57
|
%
|
-6.86
|
%
|
||||||||
Gross
Write-Ups as a Percentage of Net Asset Value, BOY
|
4.80
|
%
|
0
|
%
|
3.11
|
%
|
15.46
|
%
|
31.42
|
%
|
0.24
|
%
|
10.26
|
%
|
||||||||
Net
Write-Downs/Write-Ups as a Percentage of Net Asset Value,
BOY
|
-3.15
|
%
|
-22.19
|
%
|
-1.49
|
%
|
1.42
|
%
|
26.8
|
%
|
-3.33
|
%
|
3.40
|
%
|
New
Investments
|
Cost
|
|||
Adesto
Technologies Corporation
|
$
|
1,147,826
|
||
Ancora
Pharmaceuticals, Inc.
|
$
|
800,000
|
||
BioVex
Group, Inc.
|
$
|
2,500,000
|
||
Ensemble
Discovery Corporation
|
$
|
2,000,000
|
||
Lifco,
Inc.
|
$
|
946,528
|
||
Phoenix
Molecular Corporation
|
$
|
50,010
|
||
Siluria
Technologies, Inc.
|
$
|
160,723
|
||
Follow-on
Investments
|
||||
BridgeLux,
Inc.
|
$
|
350,877
|
||
BridgeLux,
Inc.
|
$
|
233,918
|
||
BridgeLux,
Inc.
|
$
|
916,928
|
||
Cambrios
Technologies Corporation
|
$
|
1,300,000
|
||
Chlorogen,
Inc.
|
$
|
7,042
|
||
CSwitch,
Inc.
|
$
|
32,624
|
||
CSwitch,
Inc.
|
$
|
529,852
|
||
Innovalight,
Inc.
|
$
|
1,993,568
|
||
Kereos,
Inc.
|
$
|
540,000
|
||
Kovio,
Inc.
|
$
|
1,000,000
|
||
NanoGram
Corporation
|
$
|
851,393
|
||
Mersana
Therapeutics, Inc.
|
$
|
500,000
|
||
Nanomix,
Inc.
|
$
|
680,240
|
||
NanoOpto
Corporation
|
$
|
268,654
|
||
Nextreme
Thermal Solutions, Inc.
|
$
|
750,000
|
||
Polatis,
Inc.
|
$
|
17,942
|
||
Polatis,
Inc.
|
$
|
13,454
|
||
Polatis,
Inc.
|
$
|
58,582
|
||
SiOnyx,
Inc.
|
$
|
2,445,000
|
||
Solazyme,
Inc.
|
$
|
500,000
|
||
Total
|
$
|
20,595,161
|
December
31,
|
|||||||
2007
|
2006
|
||||||
Venture
capital investments, at cost
|
$
|
82,677,528
|
$
|
62,118,800
|
|||
Net
unrealized depreciation (1)
|
4,567,144
|
8,450,969
|
|||||
Venture
capital investments, at value
|
$
|
78,110,384
|
$
|
53,667,831
|
December
31,
|
|||||||
2007
|
2006
|
||||||
U.S.
government and agency obligations, at cost
|
$
|
59,552,933
|
$
|
59,212,598
|
|||
Net
unrealized appreciation (depreciation) (1)
|
640,660
|
(556,451
|
)
|
||||
U.S.
government and agency obligations, at value
|
$
|
60,193,593
|
$
|
58,656,147
|
December
31,
|
|||||||
Category
|
2007
|
2006
|
|||||
Tiny
Technology
|
99.9
|
%
|
99.9
|
%
|
|||
Other
Venture Capital Investments
|
0.1
|
%
|
0.1
|
%
|
|||
Total
Venture Capital Investments
|
100.0
|
%
|
100.0
|
%
|
New
Investments
|
Cost
|
|||
D-Wave
Systems, Inc.
|
$
|
1,750,547
|
||
Evolved
Nanomaterial Sciences, Inc.
|
2,800,000
|
|||
Innovalight,
Inc.
|
2,500,000
|
|||
Metabolon,
Inc.
|
2,500,000
|
|||
SiOnyx,
Inc.
|
750,000
|
|||
Xradia,
Inc.
|
4,000,000
|
|||
Follow-on
Investments
|
||||
Chlorogen,
Inc.
|
$
|
221,438
|
||
Crystal
IS, Inc.
|
1,098,240
|
|||
CSwitch
Corporation
|
2,850,000
|
|||
NanoGram
Corporation
|
1,262,764
|
|||
NanoOpto
Corporation
|
433,138
|
|||
NeoPhotonics
Corporation
|
2,750,000
|
|||
Nextreme
|
500,000
|
|||
Polatis,
Inc.
|
89,310
|
|||
Questech
Corporation
|
12,750
|
|||
SiOnyx,
Inc.
|
890,000
|
|||
Total
|
$
|
24,408,187
|
Documents
|
Page
|
|
52
|
||
Report
of Independent Registered Public Accounting Firm
|
53
|
|
Consolidated
Financial Statements
|
||
Consolidated
Statements of Assets and Liabilities as of December 31, 2007, and
2006
|
55
|
|
Consolidated
Statements of Operations for the years ended December 31, 2007,
2006,
2005
|
56
|
|
Consolidated
Statements of Cash Flows for the years ended December 31, 2007,
2006, and
2005
|
57
|
|
Consolidated
Statements of Changes in Net Assets for the years ended December
31, 2007,
2006, and 2005
|
58
|
|
|
||
Consolidated
Schedule of Investments as of December 31, 2007
|
59-69
|
|
Consolidated
Schedule of Investments as of December 31, 2006
|
70-77
|
|
Footnote
to Consolidated Schedule of Investments
|
78-82
|
|
Notes
to Consolidated Financial Statements
|
83-102
|
|
103
|
•
|
pertain
to the maintenance of records that in reasonable detail accurately
and
fairly reflect the transactions and dispositions of the assets of
the
Company;
|
•
|
provide
reasonable assurance that transactions are recorded as necessary
to permit
preparation of financial statements in accordance with generally
accepted
accounting principles, and that receipts and expenditures of the
company
are being made only in accordance with authorizations of management
and
directors of the Company; and
|
•
|
provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Company's assets
that
could have a material effect on the financial
statements.
|
HARRIS
& HARRIS GROUP, INC.
CONSOLIDATED
STATEMENTS OF ASSETS AND
LIABILITIES
|
December 31, 2007
|
December 31, 2006
|
||||||
ASSETS
|
|||||||
Investments,
at value (Cost: $142,230,461 at 12/31/07, $121,331,398 at
12/31/06)
|
$
|
138,303,977
|
$
|
112,323,978
|
|||
Cash
and cash equivalents
|
330,009
|
2,071,788
|
|||||
Restricted
funds (Note 7)
|
2,667,020
|
2,149,785
|
|||||
Receivable
from portfolio company
|
524
|
0
|
|||||
Receivable
from broker (Note 4)
|
0
|
819,905
|
|||||
Interest
receivable
|
647,337
|
625,372
|
|||||
Prepaid
expenses
|
488,667
|
10,945
|
|||||
Other
assets
|
455,798
|
326,817
|
|||||
Total
assets
|
$
|
142,893,332
|
$
|
118,328,590
|
|||
LIABILITIES
& NET ASSETS
|
|||||||
Accounts
payable and accrued liabilities (Note 7)
|
$
|
4,515,463
|
$
|
4,115,300
|
|||
Accrued
profit sharing (Note 5)
|
0
|
261,661
|
|||||
Deferred
rent
|
14,525
|
21,326
|
|||||
Total
liabilities
|
4,529,988
|
4,398,287
|
|||||
Net
assets
|
$
|
138,363,344
|
$
|
113,930,303
|
|||
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 12/31/07
and
12/31/06; 25,143,313 issued at 12/31/07 and 22,843,757 issued at
12/31/06
|
|
|
251,434
|
|
|
228,438
|
|
Additional
paid in capital (Note 10)
|
160,927,691
|
129,801,201
|
|||||
Accumulated
net realized loss
|
(15,483,766
|
)
|
(3,686,385
|
)
|
|||
Accumulated
unrealized depreciation of investments
|
(3,926,484
|
)
|
(9,007,420
|
)
|
|||
Treasury
stock, at cost (1,828,740 shares at 12/31/07 and 12/31/06)
|
(3,405,531
|
)
|
(3,405,531
|
)
|
|||
Net
assets
|
$
|
138,363,344
|
$
|
113,930,303
|
|||
Shares
outstanding
|
23,314,573
|
21,015,017
|
|||||
Net
asset value per outstanding share
|
$
|
5.93
|
$
|
5.42
|
HARRIS
& HARRIS GROUP, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
Year Ended
|
Year Ended
|
Year Ended
|
||||||||
December 31, 2007
|
December 31, 2006
|
December 31, 2005
|
||||||||
Investment
income:
|
||||||||||
Interest
from:
|
||||||||||
Fixed-income
securities
|
$
|
2,705,597
|
$
|
2,991,261
|
$
|
1,409,273
|
||||
Portfolio
companies
|
0
|
0
|
65,620
|
|||||||
Miscellaneous
income
|
39
|
37,500
|
65,969
|
|||||||
Total
investment income
|
2,705,636
|
3,028,761
|
1,540,862
|
|||||||
Expenses:
|
||||||||||
Salaries,
benefits and stock-based compensation (Note 4)
|
11,435,329
|
7,933,276
|
2,459,033
|
|||||||
Administration
and operations
|
1,432,653
|
1,250,080
|
1,319,354
|
|||||||
Profit-sharing
provision (Note 5)
|
0
|
50,875
|
1,796,264
|
|||||||
Professional
fees
|
902,911
|
737,828
|
830,062
|
|||||||
Rent
|
235,998
|
239,846
|
211,582
|
|||||||
Directors'
fees and expenses
|
435,060
|
340,750
|
308,874
|
|||||||
Depreciation
|
63,113
|
64,916
|
64,713
|
|||||||
Custodian
fees
|
28,115
|
24,125
|
16,741
|
|||||||
Total
expenses
|
14,533,179
|
10,641,696
|
7,006,623
|
|||||||
Net
operating loss
|
(11,827,543
|
)
|
(7,612,935
|
)
|
(5,465,761
|
)
|
||||
Net
realized gain from investments:
|
||||||||||
Realized
gain from investments
|
118,137
|
31,338
|
23,862,037
|
|||||||
Income
tax expense (benefit) (Note 8)
|
87,975
|
(227,355
|
)
|
9,653,248
|
||||||
Net
realized gain from investments
|
30,162
|
258,693
|
14,208,789
|
|||||||
Net
decrease (increase) in unrealized depreciation on
investments:
|
||||||||||
Change
as a result of investment sales
|
0
|
0
|
(23,181,420
|
)
|
||||||
Change
on investments held
|
5,080,936
|
(4,418,870
|
)
|
19,790,298
|
||||||
Change
in unrealized depreciation on investments
|
5,080,936
|
(4,418,870
|
)
|
(3,391,122
|
)
|
|||||
Income
tax (benefit) (Note 8)
|
0
|
0
|
(1,364,470
|
)
|
||||||
Net
decrease (increase) in unrealized depreciation on
investments
|
5,080,936
|
(4,418,870
|
)
|
(2,026,652
|
)
|
|||||
Net
(decrease) increase in net assets resulting from
operations:
|
||||||||||
Total
|
$
|
(6,716,445
|
)
|
$
|
(11,773,112
|
)
|
$
|
6,716,376
|
||
Per
average basic and diluted outstanding share
|
$
|
(0.30
|
)
|
$
|
(0.57
|
)
|
$
|
0.36
|
||
Average
outstanding shares
|
22,393,030
|
20,759,547
|
18,471,770
|
HARRIS
& HARRIS GROUP, INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
Year Ended
|
Year Ended
|
Year Ended
|
||||||||
December 31, 2007
|
December 31, 2006
|
December 31, 2005
|
||||||||
Cash
flows used in operating activities:
|
||||||||||
Net
(decrease) increase in net assets resulting from
operations
|
$
|
(6,716,445
|
)
|
$
|
(11,773,112
|
)
|
$
|
6,716,376
|
||
Adjustments
to reconcile net increase (decrease) in net assets resulting from
operations to net cash used in operating activities:
|
||||||||||
Net
realized and unrealized (gain) loss on investments
|
(5,199,073
|
)
|
4,420,619
|
(20,470,915
|
)
|
|||||
Deferred
income taxes
|
0
|
0
|
(1,364,470
|
)
|
||||||
Depreciation
and amortization
|
(60,009
|
)
|
(426,168
|
)
|
346,019
|
|||||
Taxes
payable on behalf of shareholders on deemed dividend
|
0
|
0
|
8,122,367
|
|||||||
Stock-based
compensation expense
|
8,050,807
|
5,038,956
|
0
|
|||||||
Changes
in assets and liabilities:
|
||||||||||
Restricted
funds
|
(517,235
|
)
|
(419,351
|
)
|
(138,463
|
)
|
||||
Receivable
from portfolio company
|
(524
|
)
|
75,000
|
(65,000
|
)
|
|||||
Interest
receivable
|
(21,965
|
)
|
(376,808
|
)
|
(189,603
|
)
|
||||
Income
tax receivable
|
0
|
0
|
(7,023
|
)
|
||||||
Prepaid
expenses
|
(477,722
|
)
|
(7,951
|
)
|
539,496
|
|||||
Other
receivables
|
819,905
|
(819,905
|
)
|
0
|
||||||
Other
assets
|
(152,012
|
)
|
(176,325
|
)
|
11,599
|
|||||
Accounts
payable and accrued liabilities
|
400,163
|
1,002,643
|
268,525
|
|||||||
Accrued
profit sharing
|
(261,661
|
)
|
(1,846,197
|
)
|
1,796,264
|
|||||
Deferred
rent
|
(6,801
|
)
|
(9,677
|
)
|
(3,927
|
)
|
||||
Current
income tax liability
|
0
|
(9,637,026
|
)
|
1,524,470
|
||||||
Net
cash used in operating activities
|
(4,142,572
|
)
|
(14,955,302
|
)
|
(2,914,285
|
)
|
||||
Cash
flows from investing activities:
|
||||||||||
Net
(purchase) sale of short-term investments and marketable
securities
|
(235,754
|
)
|
37,593,589
|
(52,144,482
|
)
|
|||||
Investment
in private placements and loans
|
(20,595,161
|
)
|
(24,408,187
|
)
|
(16,251,339
|
)
|
||||
Proceeds
from sale of investments
|
174,669
|
28,295
|
35,392,200
|
|||||||
Purchase
of fixed assets
|
(41,640
|
)
|
(15,086
|
)
|
(45,704
|
)
|
||||
Net
cash (used in) provided by investing activities
|
(20,697,886
|
)
|
13,198,611
|
(33,049,325
|
)
|
|||||
Cash
flows from financing activities:
|
||||||||||
Proceeds
from public offering, net (Note 10)
|
12,993,168
|
0
|
36,526,567
|
|||||||
Proceeds
from stock option exercises (Note 4)
|
10,105,511
|
2,615,190
|
0
|
|||||||
Net
cash provided by financing activities
|
23,098,679
|
2,615,190
|
36,526,567
|
|||||||
Net
(decrease) increase in cash and cash equivalents:
|
||||||||||
Cash
and cash equivalents at beginning of the year
|
2,071,788
|
1,213,289
|
650,332
|
|||||||
Cash
and cash equivalents at end of the year
|
330,009
|
2,071,788
|
1,213,289
|
|||||||
Net
(decrease) increase in cash and cash equivalents
|
$
|
(1,741,779
|
)
|
$
|
858,499
|
$
|
562,957
|
|||
Supplemental
disclosures of cash flow information:
|
||||||||||
Income
taxes paid
|
$
|
80,236
|
$
|
9,425,922
|
$
|
0
|
HARRIS
& HARRIS GROUP, INC.
CONSOLIDATED
STATEMENTS OF CHANGES IN NET ASSETS
|
Year Ended
|
Year Ended
|