UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM N-Q
 
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS 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)

Registrant's telephone number, including area code: (973) 746-4500

Date of fiscal year end: December 31

Date of reporting period: September 30 , 2017


Item 1. Consolidated Schedule of Investments and Schedule 12-14


1
180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2017 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Cost
 
Shares/
Principal
 
Value


Investments in Unaffiliated Companies (2) -
 
 
 
 
 
 
 
 
 
37.6% of net assets at value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private Placement Portfolio (Illiquid) (3) -
 
 
 
 
 
 
 
 
 
19.2% of net assets at value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
D-Wave Systems, Inc. (4)(5)(6)
 
 
Technology Hardware, Storage & Peripherals
 
 
 
 
 
 
Developing high-performance quantum computing systems
 
 
 
 
 
 
 
 
 
Series 1 Class B Convertible Preferred Stock (acquired 9/30/08)
(M)
 
 
 
$
1,002,074

 
1,144,869

 
$
2,071,959

Series 1 Class C Convertible Preferred Stock (acquired 9/30/08)
(M)
 
 
 
487,804

 
450,450

 
832,384

Series 1 Class D Convertible Preferred Stock (acquired 9/30/08)
(M)
 
 
 
748,473

 
855,131

 
1,580,191

Series 1 Class E Convertible Preferred Stock (acquired 11/24/10)
(M)
 
 
 
248,049

 
269,280

 
519,061

Series 1 Class F Convertible Preferred Stock (acquired 11/24/10)
(M)
 
 
 
238,323

 
258,721

 
498,708

Series 1 Class H Convertible Preferred Stock (acquired 6/27/14)
(M)
 
 
 
909,088

 
460,866

 
1,207,745

Series 2 Class D Convertible Preferred Stock (acquired 9/30/08)
(M)
 
 
 
736,019

 
678,264

 
1,253,360

Series 2 Class E Convertible Preferred Stock (acquired 6/1/12-3/22/13)
(M)
 
 
 
659,493

 
513,900

 
1,036,886

Series 2 Class F Convertible Preferred Stock (acquired 6/1/12-3/22/13)
(M)
 
 
 
633,631

 
493,747

 
996,224

Warrants for Common Stock expiring 5/12/19 (acquired 5/12/14)
(M)
 
 
 
26,357

 
20,415

 
10,504

 
 
 
 
 
5,689,311

 
 
 
10,007,022

 
 
 
 
 
 
 
 
 
 
Fleet Health Alliance, LLC (4)(5)
 
 
Health Care Technology
 
 
 
 
 
 
Developing software for information transfer amongst healthcare providers and consumers
 
 
 
 
 
 
 
 
 
Unsecured Convertible Bridge Note, 0%, (acquired 4/22/16)
(M)
 
 
 
225,000

 
$
225,000

 
225,000

 
 
 
 
 
 
 
 
 
 
Genome Profiling, LLC (4)
 
 
Life Sciences Tools & Services
 
 
 
 
 
 
Developing a platform to analyze and understand the epigenome
 
 
 
 
 
 
 
 
 
Unsecured Convertible Bridge Note, 8%, (acquired 8/4/16)
(M)
 
 
 
230,000

 
$
230,000

 
230,000

 
 
 
 
 
 
 
 
 
 


2
180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2017 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Cost
 
Shares/
Principal
 
Value


Investments in Unaffiliated Companies (2) -
 
 
 
 
 
 
 
 
 
37.6% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private Placement Portfolio (Illiquid) (3) -
 
 
 
 
 
 
 
 
 
19.2% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Muses Labs, Inc. (4)
 
 
Life Sciences Tools & Services
 
 
 
 
 
 
Developing a data analytics platform for precision medicine
 
 
 
 
 
 
 
 
 
Unsecured Convertible Bridge Note, 5%, (acquired 5/25/16)
(I)
 
 
 
$
162,000

 
$
162,000

 
$
162,000

 
 
 
 
 
 
 
 
 
 
Nanosys, Inc. (4)(5)
 
 
Specialty Chemicals
 
 
 
 
 
 
Developing inorganic nanowires and quantum dots for use in LED-backlit devices
 
 
 
 
 
 
 
 
 
Series C Convertible Preferred Stock (acquired 4/10/03)
(I)
 
 
 
1,500,000

 
803,428

 
854,010

Series D Convertible Preferred Stock (acquired 11/7/05)
(I)
 
 
 
3,000,003

 
1,016,950

 
1,773,386

Series E Convertible Preferred Stock (acquired 8/13/10)
(I)
 
 
 
496,573

 
433,688

 
787,120

 
 
 
 
 
4,996,576

 
 
 
3,414,516

 
 
 
 
 
 
 
 
 
 
NanoTerra, Inc. (4)(5)
 
 
Research & Consulting Services
 
 
 
 
 
 
Developing surface chemistry and nano-manufacturing solutions
 
 
 
 
 
 
 
 
 
Warrants for Common Stock expiring on 2/22/21 (acquired 2/22/11)
(I)
 
 
 
69,168

 
4,462

 
1,121

Warrants for Series A-3 Preferred Stock expiring on 11/15/22 (acquired 11/15/12)
(I)
 
 
 
35,403

 
47,508

 
124,660

 
 
 
 
 
104,571

 
 
 
125,781

 
 
 
 
 
 
 
 
 
 
Petra Pharma Corporation (4)(5)(7)
 
 
Pharmaceuticals
 
 
 
 
 
 
Developing small molecule inhibitors for treatment of cancer and metabolic diseases
 
 
 
 
 
 
 
 
 
Series A Convertible Preferred Stock (acquired 12/23/15-10/27/16)
(I)
 
 
 
1,525,050

 
1,525,050

 
1,534,366

 
 
 
 
 
 
 
 
 
 
Phylagen, Inc. (4)
 
 
Research & Consulting Services
 
 
 
 
 
 
Developing technology to improve human health and business productivity
 
 
 
 
 
 
 
 
 
Secured Convertible Bridge Note, 5%, (acquired 2/5/15)
(M)
 
 
 
226,548

 
$
200,000

 
317,167

Secured Convertible Bridge Note, 5%, (acquired 6/5/15)
(M)
 
 
 
11,163

 
$
10,000

 
15,628

 
 
 
 
 
237,711

 
 
 
332,795

 
 
 
 
 
 
 
 
 
 


3
180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2017 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Cost
 
Shares/
Principal
 
Value


Investments in Unaffiliated Companies (2) -
 
 
 
 
 
 
 
 
 
37.6% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private Placement Portfolio (Illiquid) (3) -
 
 
 
 
 
 
 
 
 
19.2% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Xenio Corp.(4)(5)(8)
 
 
Technology Hardware, Storage & Peripherals
 
 
 
 
 
 
Developing a smart platform for LED lighting that enables local intelligence and communication capabilities
 
 
 
 
 
 
 
 
 
Common Stock (acquired 8/1/16)
(M)
 
 
 
$
184,653

 
221,938

 
$
0

 
 
 
 
 
 
 
 
 
 
Total Unaffiliated Private Portfolio (cost: $13,354,872)
 
 
 
 
 
 
 
 
$
16,031,480

 
 
 
 
 
 
 
 
 
 
Rights to Milestone Payments (Illiquid) (9) -
 
 
 
 
 
 
 
 
 
2.7% of net assets at value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amgen, Inc. (4)(10)
 
 
Biotechnology
 
 
 
 
 
 
Rights to Milestone Payments from Acquisition of BioVex Group, Inc. (acquired 3/4/11)
(I)
 
 
 
$
548,998

 
$
548,998

 
$
2,247,705

 
 
 
 
 
 
 
 
 
 
Laird Technologies, Inc. (4)(11)
 
 
Electronic Components
 
 
 
 
 
 
Rights to Milestone Payments from Merger & Acquisition of Nextreme Thermal Solutions, Inc. (acquired 2/13/13)
(I)
 
 
 
0

 
$
0

 
0

 
 
 
 
 
 
 
 
 
 
Total Unaffiliated Rights to Milestone Payments (cost: $548,998)
 
 
 
 
 
 
 
 
$
2,247,705

 
 
 
 
 
 
 
 
 
 
Publicly Traded Portfolio (12) -
 
 
 
 
 
 
 
 
 
15.7% of net assets at value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Champions Oncology, Inc. (5)
 
 
Life Sciences Tools & Services
 
 
 
 
 
 
Developing its TumorGraftTM platform for personalized medicine and drug development
 
 
 
 
 
 
 
 
 
Warrants for Common Stock expiring 1/28/19 (acquired 1/28/13)
(I)
 
 
 
$
400

 
5,500

 
$
5,719

 
 
 
 
 
 
 
 
 
 
Mersana Therapeutics, Inc. (5)(13)
 
 
Biotechnology
 
 
 
 
 
 
Developing antibody drug conjugates for cancer therapy
 
 
 
 
 
 
 
 
 
Common Stock (acquired 7/27/12-6/28/17)
(M)
 
 
 
4,924,753

 
294,554

 
5,092,839

 
 
 
 
 
 
 
 
 
 


4
180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2017 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Cost
 
Shares/
Principal
 
Value


Publicly Traded Portfolio (12) -
 
 
 
 
 
 
 
 
 
15.7% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OpGen, Inc. (5)
 
 
Biotechnology
 
 
 
 
 
 
Developing tools for genomic sequence assembly and analysis
 
 
 
 
 
 
 
 
 
Warrants for the Purchase of Common Stock expiring 5/8/20 (acquired 5/5/15)
(M)
 
 
 
$
425,579

 
300,833

 
$
21,389

Warrants for the Purchase of Common Stock expiring 2/17/25 (acquired 5/5/15)
(I)
 
 
 
785

 
31,206

 
6,644

 
 
 
 
 
426,364

 
 
 
28,033

 
 
 
 
 
 
 
 
 
 
Synacor, Inc. (5)(14)
 
 
Internet Software & Services
 
 
 
 
 
 
Providing technology development, multiplatform services and revenue partner for video, internet and communications providers, device manufacturers, and enterprises
 
 
 
 
 
 
 
 
 
Common Stock (acquired 4/6/17-9/19/17)
(M)
 
 
 
3,672,646

 
1,180,200

 
3,186,540

 
 
 
 
 
 
 
 
 
 
TheStreet, Inc. (5)(14)
 
 
Financial Exchanges & Data
 
 
 
 
 
 
Providing financial news and proprietary data to consumers and businesses
 
 
 
 
 
 
 
 
 
Common Stock (acquired 4/19/17-7/17/17)
(M)
 
 
 
891,794

 
1,000,000

 
1,080,000

 
 
 
 
 
 
 
 
 
 
USA Truck, Inc. (5)(14)
 
 
Trucking
 
 
 
 
 
 
Providing over-the-road trucking and freight logistics
 
 
 
 
 
 
 
 
 
Common Stock (acquired 5/19/17-8/10/17)
(M)
 
 
 
1,749,985

 
262,165

 
3,683,418

 
 
 
 
 
 
 
 
 
 
Total Unaffiliated Publicly Traded Portfolio (cost: $11,665,942)
 
 
 
 
 
 
 
 
$
13,076,549

 
 
 
 
 
 
 
 
 
 
Total Investments in Unaffiliated Companies (cost: $25,569,812)
 
 
 
 
 
 
 
 
$
31,355,734

 
 
 
 
 
 
 
 
 
 


5
180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2017 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Cost
 
Shares/
Principal
 
Value


Investments in Non-Controlled Affiliated Companies (2) -
 
 
 
 
 
 
 
 
 
54.6% of net assets at value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private Placement Portfolio (Illiquid) (15) -
 
 
 
 
 
 
 
 
 
39.0% of net assets at value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ABSMaterials, Inc. (4)
 
 
Specialty Chemicals
 
 
 
 
 
 
Developing nano-structured absorbent materials for water remediation and consumer applications
 
 
 
 
 
 
 
 
 
Series A Convertible Preferred Stock (acquired 2/17/10-10/24/11)
(I)
 
 
 
$
435,000

 
390,000

 
$
154,802

Series B Convertible Preferred Stock (acquired 11/8/13-6/25/14)
(I)
 
 
 
1,217,644

 
1,037,751

 
800,526

Secured Convertible Bridge Note, 8%, (acquired 1/20/16)
(M)
 
 
 
113,589

 
$
100,000

 
113,589

Secured Convertible Bridge Note, 8%, (acquired 3/28/17)
(M)
 
 
 
26,025

 
$
25,000

 
26,025

 
 
 
 
 
1,792,258

 
 
 
1,094,942

 
 
 
 
 
 
 
 
 
 
AgBiome, LLC (4)(5)
 
 
Fertilizers & Agricultural Chemicals
 
 
 
 
 
 
Providing early-stage research and discovery for agriculture and utilizing the crop microbiome to identify products that reduce risk and improve yield
 
 
 
 
 
 
 
 
 
Series A-1 Convertible Preferred Stock (acquired 1/30/13)
(I)
 
 
 
2,000,000

 
2,000,000

 
8,168,618

Series A-2 Convertible Preferred Stock (acquired 4/9/13-10/15/13)
(I)
 
 
 
521,740

 
417,392

 
1,753,859

Series B Convertible Preferred Stock (acquired 8/7/15)
(I)
 
 
 
500,006

 
160,526

 
857,894

 
 
 
 
 
3,021,746

 
 
 
10,780,371

 
 
 
 
 
 
 
 
 
 
EchoPixel, Inc. (4)(5)
 
 
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)
 
 
 
1,250,000

 
4,194,630

 
943,921

Series Seed-2 Convertible Preferred Stock (acquired 1/22/16)
(I)
 
 
 
500,000

 
1,476,668

 
337,109

Series A-2 Convertible Preferred Stock (acquired 3/23/17)
(I)
 
 
 
350,000

 
1,471,577

 
412,539

 
 
 
 
 
2,100,000

 
 
 
1,693,569

 
 
 
 
 
 
 
 
 
 


6
180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2017 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Cost
 
Shares/
Principal
 
Value


Investments in Non-Controlled Affiliated Companies (2) -
 
 
 
 
 
 
 
 
 
54.6% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private Placement Portfolio (Illiquid) (15) -
 
 
 
 
 
 
 
 
 
39.0% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ensemble Therapeutics Corporation (4)(5)(16)
 
 
Pharmaceuticals
 
 
 
 
 
 
Developed DNA-Programmed ChemistryTM for the discovery of new classes of therapeutics
 
 
 
 
 
 
 
 
 
Series B Convertible Preferred Stock (acquired 6/6/07)
(I)
 
 
 
$
2,000,000

 
1,449,275

 
$
0

Series B-1 Convertible Preferred Stock (acquired 4/21/14)
(I)
 
 
 
574,079

 
492,575

 
173,524

 
 
 
 
 
2,574,079

 
 
 
173,524

 
 
 
 
 
 
 
 
 
 
Essential Health Solutions, Inc. (4)(5)
 
 
Health Care Technology
 
 
 
 
 
 
Developing software for information transfer amongst healthcare providers and consumers
 
 
 
 
 
 
 
 
 
Common Stock (acquired 11/18/16)
(I)
 
 
 
20

 
200,000

 
112,095

Series A Convertible Preferred Stock (acquired 11/18/16)
(I)
 
 
 
2,750,000

 
2,750,000

 
2,784,050

 
 
 
 
 
2,750,020

 
 
 
2,896,145

 
 
 
 
 
 
 
 
 
 
HZO, Inc. (4)(5)
 
 
Semiconductor Equipment
 
 
 
 
 
 
Developing novel industrial coatings that protect electronics against damage from liquids
 
 
 
 
 
 
 
 
 
Common Stock (acquired 6/23/14)
(I)
 
 
 
666,667

 
405,729

 
472,310

Series I Convertible Preferred Stock (acquired 6/23/14)
(I)
 
 
 
5,709,835

 
2,266,894

 
4,045,519

Series II Convertible Preferred Stock (acquired 6/23/14-8/3/15)
(I)
 
 
 
2,500,006

 
674,638

 
1,560,290

Series II-A Convertible Preferred Stock (acquired 9/9/16)
(I)
 
 
 
226,070

 
69,053

 
187,906

Warrants for Series II-A Convertible Preferred Stock expiring 7/15/23 (acquired 7/15/16)
(I)
 
 
 
29,820

 
6,577

 
17,865

 
 
 
 
 
9,132,398

 
 
 
6,283,890

 
 
 
 
 
 
 
 
 
 


7
180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2017 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Cost
 
Shares/
Principal
 
Value


Investments in Non-Controlled Affiliated Companies (2) -
 
 
 
 
 
 
 
 
 
54.6% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private Placement Portfolio (Illiquid) (15) -
 
 
 
 
 
 
 
 
 
39.0% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Laser Light Engines, Inc. (4)(5)(16)
 
 
Technology Hardware, Storage & Peripherals
 
 
 
 
 
 
Manufactured solid-state light sources for digital cinema and large-venue projection displays
 
 
 
 
 
 
 
 
 
Series A Convertible Preferred Stock (acquired 5/6/08)
(M)
 
 
 
$
2,000,000

 
7,499,062

 
$
0

Series B Convertible Preferred Stock (acquired 9/17/10)
(M)
 
 
 
3,095,802

 
13,571,848

 
0

Secured Convertible Bridge Note, 12%, (acquired 10/7/2011)
(M)
 
 
 
200,000

 
$
200,000

 
0

Secured Convertible Bridge Note, 12%, (acquired 11/17/2011)
(M)
 
 
 
95,652

 
$
95,652

 
0

Secured Convertible Bridge Note, 12%, (acquired 12/21/2011)
(M)
 
 
 
82,609

 
$
82,609

 
0

Secured Convertible Bridge Note, 12%, (acquired 3/5/2012)
(M)
 
 
 
434,784

 
$
434,784

 
0

Secured Convertible Bridge Note, 12%, (acquired 7/26/2012)
(M)
 
 
 
186,955

 
$
186,955

 
0

Secured Convertible Bridge Note, 20%, (acquired 4/29/2013)
(M)
 
 
 
166,667

 
$
166,667

 
0

Secured Convertible Bridge Note, 20%, (acquired 7/22/2013)
(M)
 
 
 
166,667

 
$
166,667

 
0

Secured Convertible Bridge Note, 10%, (acquired 10/30/2013)
(M)
 
 
 
80,669

 
$
80,669

 
0

Secured Convertible Bridge Note, 10%, (acquired 2/5/2014)
(M)
 
 
 
19,331

 
$
19,331

 
0

Secured Convertible Bridge Note, 10%, (acquired 6/24/2014)
(M)
 
 
 
13,745

 
$
13,745

 
0

 
 
 
 
 
6,542,881

 
 
 
0

 
 
 
 
 
 
 
 
 
 
Lodo Therapeutics Corporation (4)(5)(7)
 
 
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)
 
 
 
658,190

 
658,190

 
660,696

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


8
180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2017 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Cost
 
Shares/
Principal
 
Value


Investments in Non-Controlled Affiliated Companies (2) -
 
 
 
 
 
 
 
 
 
54.6% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private Placement Portfolio (Illiquid) (15) -
 
 
 
 
 
 
 
 
 
39.0% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NGX Bio, Inc. (4)(17)
 
 
Research & Consulting Services
 
 
 
 
 
 
Developing translational genomics solutions
 
 
 
 
 
 
 
 
 
Series Seed Convertible Preferred Stock (acquired 6/6/14-1/10/16)
(I)
 
 
 
$
500,002

 
666,667

 
$
710,230

Series Seed 2 Convertible Preferred Stock (acquired 8/20/15-9/30/15)
(I)
 
 
 
499,999

 
329,989

 
466,194

Series Seed 3 Convertible Preferred Stock (acquired 6/24/17)
(I)
 
 
 
686,329

 
666,001

 
755,128

 
 
 
 
 
1,686,330

 
 
 
1,931,552

 
 
 
 
 
 
 
 
 
 
ORIG3N, Inc. (4)
 
 
Health Care Technology
 
 
 
 
 
 
Developing precision medicine applications for induced pluripotent stems cells
 
 
 
 
 
 
 
 
 
Series 1 Convertible Preferred Stock (acquired 2/5/15-8/5/15)
(I)
 
 
 
500,000

 
1,195,315

 
920,779

Series A Convertible Preferred Stock (acquired 11/25/15-9/7/16)
(I)
 
 
 
1,500,000

 
1,364,666

 
1,303,920

Series A-2 Convertible Preferred Stock (acquired 5/11/17-8/18/17)
(I)
 
 
 
150,198

 
134,783

 
168,181

 
 
 
 
 
2,150,198

 
 
 
2,392,880

 
 
 
 
 
 
 
 
 
 
Produced Water Absorbents, Inc. (4)(18)
 
 
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)
 
 
 
7,670,281

 
50,243,350

 
0

Warrants for Common Stock expiring upon liquidation event (acquired 4/30/16)
(I)
 
 
 
65,250

 
450,000

 
0

Senior Secured Debt, 15% commencing on 4/1/16, maturing on 12/31/19 (acquired 4/1/16)
(I)
 
 
 
2,099,626

 
$
2,533,766

 
1,196,750

 
 
 
 
 
9,835,157

 
 
 
1,196,750

 
 
 
 
 
 
 
 
 
 


9
180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2017 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Cost
 
Shares/
Principal
 
Value


Investments in Non-Controlled Affiliated Companies (2) -
 
 
 
 
 
 
 
 
 
54.6% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private Placement Portfolio (Illiquid) (15) -
 
 
 
 
 
 
 
 
 
39.0% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Senova Systems, Inc. (4)(16)
 
 
Life Sciences Tools & Services
 
 
 
 
 
 
Developed next-generation sensors to measure pH
 
 
 
 
 
 
 
 
 
Series B-1 Convertible Preferred Stock (acquired 8/1/13-1/15/14)
(I)
 
 
 
$
1,083,960

 
2,759,902

 
$
0

Series C Convertible Preferred Stock (acquired 10/24/14-4/1/15)
(I)
 
 
 
1,208,287

 
1,611,049

 
0

Warrants for Series B Preferred Stock expiring 10/15/17 (acquired 10/15/12)
(I)
 
 
 
131,538

 
164,423

 
0

Warrants for Series B Preferred Stock expiring 4/24/18 (acquired 4/24/13)
(I)
 
 
 
20,000

 
25,000

 
0

 
 
 
 
 
2,443,785

 
 
 
0

 
 
 
 
 
 
 
 
 
 
TARA Biosystems, Inc. (4)
 
 
Specialty Chemicals
 
 
 
 
 
 
Developing human tissue models for toxicology and drug discovery applications
 
 
 
 
 
 
 
 
 
Common Stock (acquired 8/20/14)
(I)
 
 
 
20

 
2,000,000

 
648,707

Series A Convertible Preferred Stock (acquired 3/31/17)
(I)
 
 
 
2,545,493

 
6,878,572

 
2,797,742

 
 
 
 
 
2,545,513

 
 
 
3,446,449

 
 
 
 
 
 
 
 
 
 
Total Non-Controlled Affiliated Private Portfolio (cost: $47,232,555)
 
 
 
 
 
 
 
 
$
32,550,768

 
 
 
 
 
 
 
 
 
 
Publicly Traded Portfolio (19) -
 
 
 
 
 
 
 
 
 
15.6% of net assets at value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adesto Technologies Corporation
 
 
Semiconductors
 
 
 
 
 
 
Developing low-power, high-performance memory devices
 
 
 
 
 
 
 
 
 
Common Stock (acquired 10/27/15)
(M)
 
 
 
$
10,789,048

 
1,662,994

 
$
13,054,503

 
 
 
 
 
 
 
 
 
 
Total Non-Controlled Affiliated Publicly Traded Portfolio (cost: $10,789,048)
 
 
 
 
 
 
 
 
$
13,054,503

 
 
 
 
 
 
 
 
 
 
Total Investments in Non-Controlled Affiliated Companies (cost: $58,021,603)
 
 
 
 
 
 
 
 
$
45,605,271

 
 
 
 
 
 
 
 
 
 


10
180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2017 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Cost
 
Shares/
Principal
 
Value


Investments in Controlled Affiliated Companies (2) -
 
 
 
 
 
 
 
 
 
5.2% of net assets at value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private Placement Portfolio (Illiquid) (20) -
 
 
 
 
 
 
 
 
 
5.2% of net assets at value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Black Silicon Holdings, Inc. (4)(16)(21)
 
 
Semiconductors
 
 
 
 
 
 
Holding company for interest in a company that develops silicon-based optoelectronic products
 
 
 
 
 
 
 
 
 
Series A Convertible Preferred Stock (acquired 8/4/15)
(I)
 
 
 
$
750,000

 
233,499

 
$
0

Series A-1 Convertible Preferred Stock (acquired 8/4/15)
(I)
 
 
 
890,000

 
2,966,667

 
0

Series A-2 Convertible Preferred Stock (acquired 8/4/15)
(I)
 
 
 
2,445,000

 
4,207,537

 
0

Series B-1 Convertible Preferred Stock (acquired 8/4/15)
(I)
 
 
 
1,169,561

 
1,892,836

 
0

Series C Convertible Preferred Stock (acquired 8/4/15)
(I)
 
 
 
1,171,316

 
1,674,030

 
0

Secured Convertible Bridge Note, 8%, (acquired 8/25/16)
(I)
 
 
 
1,392,662

 
$
1,278,453

 
435,208

 
 
 
 
 
7,818,539

 
 
 
435,208

 
 
 
 
 
 
 
 
 
 
HALE.life Corporation (4)(22)
 
 
Health Care Technology
 
 
 
 
 
 
Developing a platform to facilitate precision health and medicine
 
 
 
 
 
 
 
 
 
Common Stock (acquired 3/1/16)
(M)
 
 
 
10

 
1,000,000

 
10

Series Seed Convertible Preferred Stock (acquired 3/28/17)
(M)
 
 
 
1,896,920

 
11,000,000

 
1,896,920

Unsecured Convertible Bridge Note, 0%, (acquired 3/28/17)
(M)
 
 
 
2,000,000

 
$
2,000,000

 
2,000,000

 
 
 
 
 
3,896,930

 
 
 
3,896,930

 
 
 
 
 
 
 
 
 
 
SynGlyco, Inc. (4)(16)
 
 
Specialty Chemicals
 
 
 
 
 
 
Developed synthetic carbohydrates for pharmaceutical applications
 
 
 
 
 
 
 
 
 
Common Stock (acquired 12/13/11)
(I)
 
 
 
2,729,817

 
57,463

 
0

Series A' Convertible Preferred Stock (acquired 12/13/11-6/7/12)
(I)
 
 
 
4,855,627

 
4,855,627

 
0

Secured Convertible Bridge Note, 8%, (acquired 2/26/16)
(I)
 
 
 
76,490

 
$
67,823

 
30,000

 
 
 
 
 
7,661,934

 
 
 
30,000

 
 
 
 
 
 
 
 
 
 
Total Controlled Private Placement Portfolio (cost: $19,377,403)
 
 
 
 
 
 
 
 
$
4,362,138

 
 
 
 
 
 
 
 
 
 


11
180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2017 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Cost
 
Shares/
Principal
 
Value


Total Investments in Controlled Affiliated Companies (cost: $19,377,403)
 
 
 
 
 
 
 
 
$
4,362,138

 
 
 
 
 
 
 
 
 
 
Total Investments in Private Placement and Publicly Traded Portfolio (cost: $102,968,818)
 
 
 
 
 
 
 
 
$
81,323,143

 
 
 
 
 
 
 
 
 
 
Equity Method Investments (23) -
 
 
 
 
 
 
 
 
 
0.2% of net assets at value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private Placement Portfolio (Illiquid) (23) -
 
 
 
 
 
 
 
 
 
0.2% of net assets at value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accelerator IV-New York Corporation (4)(5)(24)
 
 
Research & Consulting Services
 
 
 
 
 
 
Identifying and managing emerging biotechnology companies
 
 
 
 
 
 
 
 
 
Series A Common Stock (acquired 7/21/14-1/29/16)
(E)
 
 
 
$
133,669

 
581,907

 
$
133,669

 
 
 
 
 
 
 
 
 
 
Total Equity Method Investments (cost: $133,669)
 
 
 
 
 
 
 
 
$
133,669

 
 
 
 
 
 
 
 
 
 
Total Investments (cost: $103,102,487)
 
 
 
 
 
 
 
 
$
81,456,812

 
 
 
 
 
 
 
 
 
 
OTHER ASSETS (INCLUDING CASH) MINUS LIABILITIES
 
 
 
 
 
 
 
 
$
2,012,313

NET ASSETS (equivalent to $2.68 per share based on 31,121,562 shares of common stock outstanding)
 
 
 
 
 
 
 
 
$
83,469,125




12
180 DEGREE CAPITAL CORP.
NOTES TO CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2017
(UNAUDITED)

Notes to Consolidated Schedule of Investments

(1)
See "Note 1. Investment Valuation Procedures."
(2)
Investments in unaffiliated companies consist of investments in which we own less than five percent of the voting shares of the portfolio company. Investments in non-controlled affiliated companies consist of investments in which we own five percent or more, but less than 25 percent, of the voting shares of the portfolio company, or where we control one or more seats on the portfolio company’s board of directors but do not control the company. Investments in controlled affiliated companies consist of investments in which we own 25 percent or more of the outstanding voting rights of the portfolio company or otherwise control the company, including control of a majority of the seats on the board of directors, or more than 25 percent of the seats on the board of directors, with no other entity or person in control of more director seats than us.
(3)
The aggregate cost for federal income tax purposes of investments in unaffiliated privately held companies is $13,354,872. The gross unrealized appreciation based on the tax cost for these securities is $4,443,321. The gross unrealized depreciation based on the tax cost for these securities is $1,766,713.
(4)
We are subject to legal restrictions on the sale of our investment(s) in this company.
(5)
Represents a non-income producing investment. Investments that have not paid dividends or interest within the last 12 months are considered to be non-income producing.
(6)
D-Wave Systems, Inc., is located and is doing business primarily in Canada. We invested in D-Wave Systems through Parallel Universes, Inc., a Delaware company. A portion of our investment is denominated in Canadian dollars and is subject to foreign currency translation.
(7)
Petra Pharma Corporation and Lodo Therapeutics Corporation are tenant companies of Accelerator IV-New York Corporation (the "Accelerator"). As is discussed in more detail in Note 3. Portfolio Commitments and Contingencies, should the Company decide to withdraw from the Accelerator, the remaining investors in Accelerator would have the option to purchase the Company's shares of Petra Pharma and Lodo Therapeutics at $0.001 per share.
(8)
We received shares of Xenio Corporation as part of the consideration distributed to shareholders of Bridgelux, Inc., for the sale of Bridgelux, Inc., to a an investment group led by China Electronics Corporation and ChongQing Linkong Development Investment Company. The close of this transaction occurred on August 1, 2016.
(9)
The aggregate cost for federal income tax purposes of investments in unaffiliated rights to milestone payments is $548,998. The gross unrealized appreciation based on the tax cost for these securities is $1,698,707. The gross unrealized depreciation based on the tax cost for these securities is $0.
(10)
If all the remaining milestones are met, we would receive $5,384,482. There can be no assurance as to how much of these amounts we will ultimately realize or when they will be realized, if at all.
(11)
If all the remaining milestones are met, we would receive approximately $400,000. There can be no assurance as to how much of these amounts we will ultimately realize or when they will be realized, if at all.
(12)
The aggregate cost for federal income tax purposes of investments in unaffiliated publicly traded companies is $11,665,942. The gross unrealized appreciation based on the tax cost for these securities is $2,295,044. The gross unrealized depreciation based on the tax cost for these securities is $884,437.
(13)
Mersana Therapeutics, Inc., completed an initial public offering on June 28, 2017. The shares of Mersana Therapeutics owned by the Company became freely tradable under securities regulations on September 26, 2017. Separate from this designation with respect to these shares, the Company, along with all of the pre-IPO investors in Mersana Therapeutics, entered into a lockup agreement with the underwriters of the IPO that restricts the ability of the Company to trade or hedge its shares of Mersana Therapeutics until December 25, 2017.
(14)
Initial investment was made in 2017.


13
180 DEGREE CAPITAL CORP.
NOTES TO CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2017
(UNAUDITED)

(15)
The aggregate cost for federal income tax purposes of investments in non-controlled affiliated privately held companies is $47,232,555. The gross unrealized appreciation based on the tax cost for these securities is $9,296,096. The gross unrealized depreciation based on the tax cost for these securities is $23,977,883.
(16)
Represents a non-operating entity that exists to collect future payments from licenses or other engagements and/or monetize assets for future distributions to investors and debt holders.
(17)
On August 19, 2015, UberSeq, Inc., changed its name to NGX Bio, Inc.
(18)
Produced Water Absorbents, Inc., also does business as ProSep, Inc.
(19)
The aggregate cost for federal income tax purposes of investments in non-controlled affiliated publicly traded companies is $10,789,048. The gross unrealized appreciation based on the tax cost for these securities is $2,265,455. The gross unrealized depreciation based on the tax cost for these securities is $0.
(20)
The aggregate cost for federal income tax purposes of investments in controlled affiliated companies is $19,377,403. The gross unrealized appreciation based on the tax cost for these securities is $0. The gross unrealized depreciation based on the tax cost for these securities is $15,015,265.
(21)
On August 4, 2015, SiOnyx, Inc., reorganized its corporate structure to become a subsidiary of a new company, Black Silicon Holdings, Inc.  Our security holdings of SiOnyx converted into securities of Black Silicon Holdings.  SiOnyx was then acquired by an undisclosed buyer.  Black Silicon Holdings owns a profit interest in the undisclosed buyer.
(22)
In 2017, Interome, Inc., changed its name to HALE.life Corporation.
(23)
The aggregate cost for federal income tax purposes of investments in privately held equity method investments is $133,669. Under the equity method, investments are carried at cost, plus or minus the Company's equity in the increases and decreases in the investee's net assets after the date of acquisition and certain other adjustments. The Company owns approximately 9 percent of Accelerator IV-New York Corporation.
(24)
See "Note 3. Portfolio Commitments and Contingencies."



14


NOTE 1. INVESTMENT VALUATION PROCEDURES
 
Investments are stated at "value" as defined in the 1940 Act and in the applicable regulations of the Securities and Exchange Commission ("SEC") and in accordance with GAAP. Value, as defined in Section 2(a)(41) of the 1940 Act, is (i) the market price for those securities for which a market quotation is readily available and (ii) the fair value as determined in good faith by, or under the direction of, the Board of Directors for all other assets. The Valuation Committee, comprised of all of the independent Board members, is responsible for determining the valuation of the Company’s assets within the guidelines established by the Board of Directors. The Valuation Committee receives information and recommendations from management. An independent valuation firm also reviews select portfolio company valuations. The independent valuation firm does not provide proposed valuations. The fair values assigned to these investments are based on available information and do not necessarily represent amounts that might ultimately be realized when that investment is sold, as such amounts depend on future circumstances and cannot reasonably be determined until the individual investments are actually liquidated or become readily marketable. The Valuation Committee values the Company's investment assets as of the end of each calendar quarter and as of any other time requested by the Board of Directors.

Accounting Standards Codification Topic 820, "Fair Value Measurements and Disclosures," ("ASC 820") defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). It applies fair value terminology to all valuations whereas the 1940 Act applies market value terminology to readily marketable assets and fair value terminology to other assets.
 
The main approaches to measuring fair value utilized are the market approach, the income approach and the hybrid approach.
 
•
Market Approach (M): The market approach may use quantitative inputs such as prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities and the values of market multiples derived from a set of comparable companies. The market approach may also use qualitative inputs such as progress toward milestones, the long-term potential of the business, current and future financing requirements and the rights and preferences of certain securities versus those of other securities. The selection of the relevant inputs used to derive value under the market approach requires judgment considering factors specific to the significance and relevance of each input to deriving value.
•
Income Approach (I): The income approach uses valuation techniques to convert future amounts (for example, revenue, cash flows or earnings) to a single present value amount (discounted). The measurement is based on the value indicated by current market expectations about those future amounts. Those valuation techniques include present value techniques; option-pricing models, such as the Black-Scholes-Merton formula (a closed-form model) and a binomial model (a lattice model), which incorporate present value techniques; and the multi-period excess earnings method, which is used to measure the fair value of certain assets.
•
Hybrid Approach (H): The hybrid approach uses elements of both the market approach and the income approach. The hybrid approach calculates values using the market and income approach, individually. The resulting values are then distributed among the share classes based on probability of exit outcomes.

ASC Topic 820 classifies the inputs used to measure fair value by these approaches into the following hierarchy:

•
Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities;

•
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices in active markets for similar assets or liabilities, or quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 2 inputs are in those markets for which there are few transactions, the prices are not current, little public information exists or instances where prices vary substantially over time or among brokered market makers; and

•
Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Unobservable inputs are those inputs that reflect our own assumptions that market participants would use to price the asset or liability based upon the best available information.


15

Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement and are not necessarily an indication of risks associated with the investment.    

Upon sale of investments, the values that are ultimately realized may be different from the fair value presented in the Company's consolidated schedule of investments. The difference could be material.

NOTE 2. FAIR VALUE OF INVESTMENTS
 
At September 30, 2017, our financial assets valued at fair value were categorized as follows in the fair value hierarchy:

 
 
Fair Value Measurement at Reporting Date Using:
 
 
Description
 
September 30, 2017

 
Unadjusted Quoted
Prices in Active
Markets for Identical
Assets (Level 1)

 
 
Significant Other
Observable Inputs
(Level 2)

 
 
Significant
Unobservable Inputs
(Level 3)

 
 
 
 
 
 
 
 
 
Privately Held Portfolio Companies:
 
 

 
 

 
 

 
 

 
 
 
 
 
 
 
 
 
Preferred Stock
 
$
46,805,747

 
$
0

 
$
0

 
$
46,805,747

Bridge Notes
 
3,554,617

 
0

 
0

 
3,554,617

Warrants
 
154,150

 
0

 
0

 
154,150

Rights to Milestone Payments
 
2,247,705

 
0

 
0

 
2,247,705

Common Stock
 
1,233,122

 
0

 
0

 
1,233,122

Senior Secured Debt
 
1,196,750

 
0

 
0

 
1,196,750

 
 
 
 
 
 
 
 
 
Publicly Traded Portfolio Companies:
 
 

 
 

 
 

 
 

 
 
 
 
 
 
 
 
 
Common Stock
 
$
26,097,300

 
$
26,097,300

 
$
0

 
$
0

Warrants
 
33,752

 
21,389

 
0

 
12,363

 
 
 
 
 
 
 
 
 
Total Investments:
 
$
81,323,143

 
$
26,118,689

 
$
0

 
$
55,204,454

 
 
 
 
 
 
 
 
 
Total Financial Assets:
 
$
81,323,143

 
$
26,118,689

 
$
0

 
$
55,204,454



16

Significant Unobservable Inputs
 
The table below presents the valuation technique and quantitative information about the significant unobservable inputs utilized by the Company in the fair value measurements of Level 3 assets. Unobservable inputs are those inputs for which little or no market data exists and, therefore, require an entity to develop its own assumptions.
 
Fair Value at
September 30, 2017
 
Valuation 
Approach(es)
 
Unobservable Input(s)
 
Range(s) (Weighted
Average(a))
 
 
 
 
 
 
 
 
 
 
 
 
 
Probability of Achieving Independent Milestones
 
0.0% - 25.0% (25.0%)
 
 
 
 
 
Probability of Achieving Dependent Milestones
 
0.0% - 85.3% (59.4%)
 
 
 
 
 
Price Per Share
 
$0.00 - $3.71 ($2.13)
 
 
 
 
 
Public Comparable Adjustment (Including Non-Performance Risk)
 
-43.4% - 67.0% (58.0%)
 
 
 
 
 
Volatility
 
45.2% - 113.0% (61.1%)
Preferred Stock
$
34,912,309

 
Income Approach
 
Time to Exit / Cash Flows (Years)
 
0.0 - 9.3 (5.24)
Preferred Stock
11,893,438

 
Market Approach
 
Price Per Share
 
$0.000 - $1.945 ($1.662)
Bridge Notes
627,208

 
Income Approach
 
Estimated Value to Cost Ratio at Payout
 
0.31 - 1.00 (0.49)
 
 
 
 
 
Estimated Value to Cost Ratio at Payout
 
0.00 (0.00)
Bridge Notes
2,927,409

 
Market Approach
 
Estimated Value to Cost Ratio at Conversion
 
1.00 - 1.58 (1.05)
 
 
 
 
 
Discount for Lack of Marketability
 
18.3% (18.3%)
 
 
 
 
 
Public Comparable Adjustment (Including Non-Performance Risk)
 
0.0% (0.0%)
 
 
 
 
 
Volatility
 
45.2% - 82.4% (69.1%)
 
 
 
 
 
Time to Exit (Years)
 
5.0 - 7.3 (5.2)
Common Stock
1,233,112

 
Income Approach
 
Price Per Share
 
$0.00 - $3.71 ($1.72)
 
 
 
 
 
Volatility
 
59.5% (59.5%)
 
 
 
 
 
Revenue Multiples
 
1.3 (1.3)
 
 
 
 
 
Time to Exit (Years)
 
1.3 (1.3)
 
 
 
 
 
Discount for Lack of Marketability
 
15.5% (15.5%)
Common Stock
10

 
Market Approach