Quarterly Schedule of Portfolio Holdings of Registered Management Investment Company (n-q)

Date : 11/07/2019 @ 9:01PM
Source : Edgar (US Regulatory)
Stock : 180 Degree Capital Corporation (TURN)
Quote : 1.31  0.01 (0.77%) @ 6:46PM

Quarterly Schedule of Portfolio Holdings of Registered Management Investment Company (n-q)





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)
 
Copy to:
John J. Mahon, Esq.
Schulte Roth & Zabel, LLP
1152 Fifteenth Street, NW
Suite 850
Washington, DC 20005
(202) 729-7477 

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

Date of fiscal year end: December 31

Date of reporting period: September 30, 2019



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


1

180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2019 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Shares/Principal
 
Cost
 
Value


Investments in Unaffiliated Companies (2) -
 
 
 
 
 
 
 
 
 
26.0% of net assets at value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Privately Held Companies (Illiquid) -
 
 
 
 
 
 
 
 
 
16.2% of net assets at value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AutoTech Ventures Management I, LLC (3)(4)(5)
 
 
Asset Management & Custody Banks
 
 
 
 
 
 
Venture capital investing in automotive-related companies
 
 
 
 
 
 
 
 
 
LLC Interests (acquired 12/1/17)
(M) (L3)
 
 
 
0

 
$
0

 
$
147,330

 
 
 
 
 
 
 
 
 
 
D-Wave Systems, Inc. (3)(4)(6)
 
 
Technology Hardware, Storage & Peripherals
 
 
 
 
 
 
Developing high-performance quantum computing systems
 
 
 
 
 
 
 
 
 
Series 1 Class B Convertible Preferred Stock (acquired 9/30/08)
(M) (L3)
 
 
 
1,144,869

 
1,002,074

 
1,671,138

Series 1 Class C Convertible Preferred Stock (acquired 9/30/08)
(M) (L3)
 
 
 
450,450

 
487,804

 
671,359

Series 1 Class D Convertible Preferred Stock (acquired 9/30/08)
(M) (L3)
 
 
 
855,131

 
748,473

 
1,274,503

Series 1 Class E Convertible Preferred Stock (acquired 11/24/10)
(M) (L3)
 
 
 
269,280

 
248,049

 
418,649

Series 1 Class F Convertible Preferred Stock (acquired 11/24/10)
(M) (L3)
 
 
 
258,721

 
238,323

 
402,233

Series 1 Class H Convertible Preferred Stock (acquired 6/27/14)
(M) (L3)
 
 
 
460,866

 
909,088

 
974,106

Series 2 Class D Convertible Preferred Stock (acquired 9/30/08)
(M) (L3)
 
 
 
678,264

 
736,019

 
1,010,897

Series 2 Class E Convertible Preferred Stock (acquired 6/1/12-3/22/13)
(M) (L3)
 
 
 
513,900

 
659,493

 
836,300

Series 2 Class F Convertible Preferred Stock (acquired 6/1/12-3/22/13)
(M) (L3)
 
 
 
493,747

 
633,631

 
803,504

 
 
 
 
 
 
 
5,662,954

 
8,062,689

 
 
 
 
 
 
 
 
 
 
Fleet Health Alliance, LLC (3)(4)
 
 
Health Care Technology
 
 
 
 
 
 
Developing software for information transfer amongst healthcare providers and consumers
 
 
 
 
 
 
 
 
 
Unsecured Convertible Bridge Note, 0%, (acquired 4/22/16, no maturity date)
(I) (L3)
 
 
 
$
225,000

 
225,000

 
56,250

 
 
 
 
 
 
 
 
 
 

The accompanying unaudited notes are an integral part of this unaudited consolidated schedule of investments.
2

180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2019 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Shares/Principal
 
Cost
 
Value


Investments in Unaffiliated Companies (2) -
 
 
 
 
 
 
 
 
 
26.0% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Privately Held Companies (Illiquid) -
 
 
 
 
 
 
 
 
 
16.2% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Lodo Therapeutics Corporation (3)
 
 
Pharmaceuticals
 
 
 
 
 
 
Developing and commercializing novel therapeutics derived from a metagenome-based Natural Product Discovery Platform
 
 
 
 
 
 
 
 
 
Series A Convertible Preferred Stock (acquired 12/21/15-4/22/16)
(I) (L3)
 
 
 
658,190

 
$
658,190

 
$
779,644

Secured Convertible Bridge Note, 6% PIK, (acquired 6/27/19, maturing 5/7/21)
(M) (L3)
 
 
 
$
474,019

 
481,499

 
481,499

 
 
 
 
 
 
 
1,139,689

 
1,261,143

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

 
862,872

 
870,992

 
 
 
 
 
 
 
 
 
 
Nanosys, Inc. (3)(4)
 
 
Specialty Chemicals
 
 
 
 
 
 
Developing inorganic nanowires and quantum dots for use in LED-backlit devices
 
 
 
 
 
 
 
 
 
Series C Convertible Preferred Stock (acquired 4/10/03)
(I) (L3)
 
 
 
803,428

 
1,500,000

 
946,178

Series D Convertible Preferred Stock (acquired 11/7/05)
(I) (L3)
 
 
 
1,016,950

 
3,000,003

 
1,755,219

Series E Convertible Preferred Stock (acquired 8/13/10)
(I) (L3)
 
 
 
433,688

 
496,573

 
802,276

 
 
 
 
 
 
 
4,996,576

 
3,503,673

 
 
 
 
 
 
 
 
 
 
NanoTerra, Inc. (3)(4)
 
 
Research & Consulting Services
 
 
 
 
 
 
Developing surface chemistry and nano-manufacturing solutions
 
 
 
 
 
 
 
 
 
Warrants for Common Stock expiring on 2/22/21 (acquired 2/22/11)
(I) (L3)
 
 
 
4,462

 
69,168

 
0

Warrants for Series A-3 Preferred Stock expiring on 11/15/22 (acquired 11/15/12)
(I) (L3)
 
 
 
47,508

 
35,403

 
0

 
 
 
 
 
 
 
104,571

 
0

 
 
 
 
 
 
 
 
 
 

The accompanying unaudited notes are an integral part of this unaudited consolidated schedule of investments.
3

180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2019 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Shares/Principal
 
Cost
 
Value


Investments in Unaffiliated Companies (2) -
 
 
 
 
 
 
 
 
 
26.0% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Privately Held Companies (Illiquid) -
 
 
 
 
 
 
 
 
 
16.2% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Petra Pharma Corporation (3)(7)
 
 
Pharmaceuticals
 
 
 
 
 
 
Developing small molecule inhibitors for treatment of cancer and metabolic diseases
 
 
 
 
 
 
 
 
 
Series A Convertible Preferred Stock (acquired 12/23/15-1/8/18)
(I) (L3)
 
 
 
1,894,798

 
$
1,894,798

 
$
478,070

Secured Convertible Bridge Note, 7% PIK, (acquired 8/30/18, maturing 12/31/19)
(M) (L3)
 
 
 
$
369,748

 
397,899

 
397,899

Secured Convertible Bridge Note, 7% PIK, (acquired 4/11/19, maturing 12/31/19)
(M) (L3)
 
 
 
$
116,601

 
120,470

 
120,470

Secured Convertible Bridge Note, 7% PIK, (acquired 7/18/19, maturing 12/31/19)
(M) (L3)
 
 
 
$
143,903

 
145,973

 
145,973

 
 
 
 
 
 
 
2,559,140

 
1,142,412

 
 
 
 
 
 
 
 
 
 
Phylagen, Inc. (3)
 
 
Research & Consulting Services
 
 
 
 
 
 
Developing technology to improve human health and business productivity
 
 
 
 
 
 
 
 
 
Series A Convertible Preferred Stock (acquired 11/14/18)
(M) (L3)
 
 
 
548,031

 
233,845

 
374,689

 
 
 
 
 
 
 
 
 
 
Total Unaffiliated Privately Held Companies (cost: $15,784,647)
 
 
 
 
 
 
 
 
$
15,419,178

 
 
 
 
 
 
 
 
 
 
Unaffiliated Publicly Traded Securities -
 
 
 
 
 
 
 
 
 
9.8% of net assets at value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adesto Technologies Corporation (4)
 
 
Semiconductors
 
 
 
 
 
 
Developing low-power, high-performance solutions for the Internet of Things (IoT)
 
 
 
 
 
 
 
 
 
Common Stock (acquired 10/27/15-12/31/18)
(M) (L1)
 
 
 
197,492

 
$
1,161,055

 
$
1,690,532

 
 
 
 
 
 
 
 
 
 
Emcore Corporation (4)
 
 
Communications Equipment
 
 
 
 
 
 
Providing mixed-signal optical products
 
 
 
 
 
 
 
 
 
Common Stock (acquired 5/3/18-3/29/19)
(M) (L1)
 
 
 
652,508

 
3,011,886

 
2,003,200

 
 
 
 
 
 
 
 
 
 
Iteris, Inc. (4)
 
 
Electronic Equipment & Instruments
 
 
 
 
 
 
Providing applied informatics for transportation and agriculture
 
 
 
 
 
 
 
 
 
Common Stock (acquired 1/18/19-6/14/19)
(M) (L1)
 
 
 
350,000

 
1,522,745

 
2,010,750

 
 
 
 
 
 
 
 
 
 

The accompanying unaudited notes are an integral part of this unaudited consolidated schedule of investments.
4

180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2019 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Shares/Principal
 
Cost
 
Value


Investments in Unaffiliated Companies (2) -
 
 
 
 
 
 
 
 
 
26.0% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unaffiliated Publicly Traded Securities -
 
 
 
 
 
 
 
 
 
9.8% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Lantronix, Inc. (4)
 
 
Communications Equipment
 
 
 
 
 
 
Providing secure data access and management solutions
 
 
 
 
 
 
 
 
 
Common Stock (acquired 9/18/18-9/30/19)
(M) (L1)
 
 
 
885,828

 
$
3,039,982

 
$
2,967,524

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

 
4,414,817

 
475,738

 
 
 
 
 
 
 
 
 
 
OpGen, Inc. (4)(8)
 
 
Biotechnology
 
 
 
 
 
 
Developing tools for genomic sequence assembly and analysis
 
 
 
 
 
 
 
 
 
Warrants for the Purchase of Common Stock expiring 5/8/20 (acquired 5/5/15)
(M) (L2)
 
 
 
602

 
425,579

 
2,413

Warrants for the Purchase of Common Stock expiring 2/17/25 (acquired 5/5/15)
(I) (L3)
 
 
 
62

 
785

 
10

 
 
 
 
 
 
 
426,364

 
2,423

 
 
 
 
 
 
 
 
 
 
Miscellaneous Common Stocks (4)(9)
 
 
 
 
 
 
124,730

 
126,811

 
 
 
 
 
 
 
 
 
 
Total Unaffiliated Publicly Traded Securities (cost: $13,701,579)
 
 
 
 
 
 
 
 
$
9,276,978

 
 
 
 
 
 
 
 
 
 
Total Investments in Unaffiliated Companies (cost: $29,486,226)
 
 
 
 
 
 
 
 
$
24,696,156

 
 
 
 
 
 
 
 
 
 

The accompanying unaudited notes are an integral part of this unaudited consolidated schedule of investments.
5

180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2019 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Shares/Principal
 
Cost
 
Value


Investments in Non-Controlled Affiliated Companies (2) -
 
 
 
 
 
 
 
 
 
53.9% of net assets at value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Privately Held Companies (Illiquid) -
 
 
 
 
 
 
 
 
 
29.7% of net assets at value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ABSMaterials, Inc. (3)
 
 
Specialty Chemicals
 
 
 
 
 
 
Developing nano-structured absorbent materials for water remediation and consumer applications
 
 
 
 
 
 
 
 
 
Series A Convertible Preferred Stock (acquired 2/17/10-10/24/11)
(I) (L3)
 
 
 
390,000

 
$
435,000

 
$
9,378

Series B Convertible Preferred Stock (acquired 11/8/13-6/25/14)
(I) (L3)
 
 
 
1,037,751

 
1,217,644

 
174,032

Secured Convertible Bridge Note, 8% PIK, (acquired 1/20/16, maturing 12/31/19)
(M) (L3)
 
 
 
$
100,000

 
129,589

 
97,192

Secured Convertible Bridge Note, 8% PIK, (acquired 3/28/17, maturing 12/31/19)
(M) (L3)
 
 
 
$
25,000

 
30,025

 
22,518

 
 
 
 
 
 
 
1,812,258

 
303,120

 
 
 
 
 
 
 
 
 
 
AgBiome, LLC (3)(4)
 
 
Fertilizers & Agricultural Chemicals
 
 
 
 
 
 
Providing early-stage research and discovery for agriculture and utilizing the crop microbiome to identify products that reduce risk and improve yield
 
 
 
 
 
 
 
 
 
Series A-1 Convertible Preferred Units (acquired 1/30/13)
(I) (L3)
 
 
 
2,000,000

 
2,000,000

 
11,717,945

Series A-2 Convertible Preferred Units (acquired 4/9/13-10/15/13)
(I) (L3)
 
 
 
417,392

 
521,740

 
2,484,862

Series B Convertible Preferred Units (acquired 8/7/15)
(I) (L3)
 
 
 
160,526

 
500,006

 
1,068,601

 
 
 
 
 
 
 
3,021,746

 
15,271,408

 
 
 
 
 
 
 
 
 
 

The accompanying unaudited notes are an integral part of this unaudited consolidated schedule of investments.
6

180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2019 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Shares/Principal
 
Cost
 
Value


Investments in Non-Controlled Affiliated Companies (2) -
 
 
 
 
 
 
 
 
 
53.9% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Privately Held Companies (Illiquid) -
 
 
 
 
 
 
 
 
 
29.7% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Black Silicon Holdings, Inc. (3)(4)(10)(11)
 
 
Semiconductors
 
 
 
 
 
 
Holding company for interest in a company that develops silicon-based optoelectronic products
 
 
 
 
 
 
 
 
 
Series A Convertible Preferred Stock (acquired 8/4/15)
(M) (L3)
 
 
 
233,499

 
$
750,000

 
$
0

Series A-1 Convertible Preferred Stock (acquired 8/4/15)
(M) (L3)
 
 
 
2,966,667

 
890,000

 
0

Series A-2 Convertible Preferred Stock (acquired 8/4/15)
(M) (L3)
 
 
 
4,207,537

 
2,445,000

 
0

Series B-1 Convertible Preferred Stock (acquired 8/4/15)
(M) (L3)
 
 
 
1,892,836

 
1,169,561

 
0

Series C Convertible Preferred Stock (acquired 8/4/15)
(M) (L3)
 
 
 
1,674,030

 
1,171,316

 
0

Secured Convertible Bridge Note, 8% PIK, (acquired 8/25/16, maturing 8/4/21)
(M) (L3)
 
 
 
$
1,278,453

 
1,444,368

 
460,470

 
 
 
 
 
 
 
7,870,245

 
460,470

 
 
 
 
 
 
 
 
 
 
EchoPixel, Inc. (3)(4)
 
 
Health Care Equipment
 
 
 
 
 
 
Developing virtual reality 3-D visualization software for life sciences and health care applications
 
 
 
 
 
 
 
 
 
Series Seed Convertible Preferred Stock (acquired 6/21/13-6/30/14)
(I) (L3)
 
 
 
4,194,630

 
1,250,000

 
1,331,996

Series Seed-2 Convertible Preferred Stock (acquired 1/22/16)
(I) (L3)
 
 
 
1,476,668

 
500,000

 
475,362

Series A-2 Convertible Preferred Stock (acquired 3/23/17)
(I) (L3)
 
 
 
1,471,577

 
350,000

 
545,180

 
 
 
 
 
 
 
2,100,000

 
2,352,538

 
 
 
 
 
 
 
 
 
 
Essential Health Solutions, Inc. (3)
 
 
Health Care Technology
 
 
 
 
 
 
Developing software for information transfer amongst healthcare providers and consumers
 
 
 
 
 
 
 
 
 
Common Stock (acquired 11/18/16)
(I) (L3)
 
 
 
200,000

 
20

 
141,589

Series A Convertible Preferred Stock (acquired 11/18/16)
(I) (L3)
 
 
 
2,750,000

 
2,750,000

 
2,840,993

Unsecured Convertible Bridge Note, 8% PIK, (acquired 12/19/18, maturing 12/19/19)
(M) (L3)
 
 
 
$
50,000

 
53,134

 
53,134

 
 
 
 
 
 
 
2,803,154

 
3,035,716

 
 
 
 
 
 
 
 
 
 

The accompanying unaudited notes are an integral part of this unaudited consolidated schedule of investments.
7

180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2019 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Shares/Principal
 
Cost
 
Value


Investments in Non-Controlled Affiliated Companies (2) -
 
 
 
 
 
 
 
 
 
53.9% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Privately Held Companies (Illiquid) -
 
 
 
 
 
 
 
 
 
29.7% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ORIG3N, Inc. (3)(4)
 
 
Health Care Technology
 
 
 
 
 
 
Developing consumer focused genetic tests
 
 
 
 
 
 
 
 
 
Series 1 Convertible Preferred Stock (acquired 2/5/15-8/5/15)
(H) (L3)
 
 
 
1,195,315

 
$
500,000

 
$
1,176,910

Series A Convertible Preferred Stock (acquired 11/25/15-9/7/16)
(H) (L3)
 
 
 
1,364,666

 
1,500,000

 
1,381,681

Series A-2 Convertible Preferred Stock (acquired 5/11/17-2/8/18)
(H) (L3)
 
 
 
176,386

 
200,002

 
185,945

 
 
 
 
 
 
 
2,200,002

 
2,744,536

 
 
 
 
 
 
 
 
 
 
Produced Water Absorbents, Inc. (3)(12)
 
 
Oil & Gas Equipment & Services
 
 
 
 
 
 
Providing integrated process separation solutions to the global oil and gas industries, enabling onsite treatment of produced and flowback water
 
 
 
 
 
 
 
 
 
Common Stock (acquired 4/30/16)
(M) (L3)
 
 
 
50,243,350

 
7,670,281

 
0

Warrants for Common Stock expiring upon liquidation event (acquired 4/30/16)
(M) (L3)
 
 
 
450,000

 
65,250

 
0

Senior Secured Debt, 15% commencing on 4/1/16, maturing on 12/31/19 (acquired 4/1/16)
(M) (L3)
 
 
 
$
2,533,766

 
2,479,053

 
0

 
 
 
 
 
 
 
10,214,584

 
0

 
 
 
 
 
 
 
 
 
 
TARA Biosystems, Inc. (3)(4)
 
 
Life Sciences Tools & Services
 
 
 
 
 
 
Developing human tissue models for toxicology and drug discovery applications
 
 
 
 
 
 
 
 
 
Common Stock (acquired 8/20/14)
(I) (L3)
 
 
 
2,000,000

 
20

 
755,121

Series A Convertible Preferred Stock (acquired 3/31/17)
(I) (L3)
 
 
 
6,878,572

 
2,545,493

 
3,192,445

Series A-2 Convertible Preferred Stock (acquired 4/18/19)
(I) (L3)
 
 
 
208,577

 
100,000

 
100,978

 
 
 
 
 
 
 
2,645,513

 
4,048,544

 
 
 
 
 
 
 
 
 
 
Total Non-Controlled Affiliated Privately Held Companies (cost: $32,667,502)
 
 
 
 
 
 
 
 
$
28,216,332

 
 
 
 
 
 
 
 
 
 

The accompanying unaudited notes are an integral part of this unaudited consolidated schedule of investments.
8

180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2019 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Shares/Principal
 
Cost
 
Value


Investments in Non-Controlled Affiliated Companies (2) -
 
 
 
 
 
 
 
 
 
53.9% of net assets at value (cont.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-Controlled Affiliated Publicly Traded Securities -
 
 
 
 
 
 
 
 
 
24.2% of net assets at value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quantum Corporation (4)
 
 
Technology Hardware, Storage & Peripherals
 
 
 
 
 
 
Providing high-density data storage and high-speed data processing solutions
 
 
 
 
 
 
 
 
 
Common Stock (acquired 2/4/19-6/25/19)
(M) (L1)
 
 
 
1,900,000

 
$
4,980,882

 
$
10,830,000

 
 
 
 
 
 
 
 
 
 
Synacor, Inc. (4)(13)
 
 
Application Software
 
 
 
 
 
 
Providing technology development, multiplatform services and revenue partner for video, internet and communications providers, device manufacturers, and enterprises
 
 
 
 
 
 
 
 
 
Common Stock (acquired 4/6/17-5/14/19)
(M) (L1)
 
 
 
1,602,420

 
4,349,510

 
2,243,388

Stock Options for Common Stock Expiring 2/28/29 (acquired 3/1/19) (3)(14)
(I) (L3)
 
 
 
50,000

 
0

 
37,250

Stock Options for Common Stock Expiring 5/16/29 (acquired 5/16/19) (3)(14)
(I) (L3)
 
 
 
15,000

 
0

 
11,299

Restricted Stock Units (acquired 9/10/19) (3)(14)
(M) (L2)
 
 
 
18,925

 
0

 
25,872

 
 
 
 
 
 
 
4,349,510

 
2,317,809

 
 
 
 
 
 
 
 
 
 
TheMaven, Inc. (3)(4)
 
 
Interactive Media & Services
 
 
 
 
 
 
Providing a shared digital publishing, advertising and distribution platform
 
 
 
 
 
 
 
 
 
Series H Convertible Preferred Stock (acquired 6/27/19)
(M) (L2)
 
 
 
1,320

 
2,000,000

 
2,800,000

Series I Convertible Preferred Stock (acquired 6/28/19)
(M) (L2)
 
 
 
5,000

 
5,000,000

 
7,000,000

 
 
 
 
 
 
 
7,000,000

 
9,800,000

 
 
 
 
 
 
 
 
 
 
Total Non-Controlled Affiliated Publicly Traded Securities (cost: $16,330,392)
 
 
 
 
 
 
 
 
$
22,947,809

 
 
 
 
 
 
 
 
 
 
Total Investments in Non-Controlled Affiliated Companies (cost: $48,997,894)
 
 
 
 
 
 
 
 
$
51,164,141

 
 
 
 
 
 
 
 
 
 

The accompanying unaudited notes are an integral part of this unaudited consolidated schedule of investments.
9

180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2019 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Shares/Principal
 
Cost
 
Value


Investments in Controlled Affiliated Companies (2) -
 
 
 
 
 
 
 
 
 
3.8% of net assets at value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Privately Held Companies (Illiquid) -
 
 
 
 
 
 
 
 
 
3.8% of net assets at value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
HALE.life Corporation (3)(4)
 
 
Health Care Technology
 
 
 
 
 
 
Developing a platform to facilitate precision health and medicine
 
 
 
 
 
 
 
 
 
Common Stock (acquired 3/1/16)
(I) (L3)
 
 
 
1,000,000

 
$
10

 
$
116,585

Series Seed-1 Convertible Preferred Stock (acquired 3/28/17)
(I) (L3)
 
 
 
11,000,000

 
1,896,920

 
1,609,820

Series Seed-2 Convertible Preferred Stock (acquired 12/28/18)
(I) (L3)
 
 
 
12,083,132

 
2,500,000

 
1,849,979

 
 
 
 
 
 
 
4,396,930

 
3,576,384

 
 
 
 
 
 
 
 
 
 
Total Controlled Affiliated Privately Held Companies (cost: $4,396,930)
 
 
 
 
 
 
 
 
$
3,576,384

 
 
 
 
 
 
 
 
 
 
Total Investments in Controlled Affiliated Privately Held Companies (cost: $4,396,930)
 
 
 
 
 
 
 
 
$
3,576,384

 
 
 
 
 
 
 
 
 
 
Total Investments in Privately Held Companies and Publicly Traded Securities (cost: $82,881,050)
 
 
 
 
 
 
 
 
$
79,436,681

 
 
 
 
 
 
 
 
 
 
Investment in Equity Method Privately Held Company (2) -
 
 
 
 
 
 
 
 
 
0.2% of net assets at value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Privately Held Company (Illiquid) -
 
 
 
 
 
 
 
 
 
0.2% of net assets at value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accelerator IV-New York Corporation (3)(4)(7)(15)
 
 
Research & Consulting Services
 
 
 
 
 
 
Identifying and managing emerging biotechnology companies
 
 
 
 
 
 
 
 
 
Series A Common Stock (acquired 7/21/14-12/12/18)
(E)
 
 
 
833,333

 
$
224,973

 
$
224,973

 
 
 
 
 
 
 
 
 
 
Total Investment in Equity Method Privately Held Company (cost: $224,973)
 
 
 
 
 
 
 
 
$
224,973

 
 
 
 
 
 
 
 
 
 
Total Investments (cost: $83,106,023)
 
 
 
 
 
 
 
 
$
79,661,654

 
 
 
 
 
 
 
 
 
 

The accompanying unaudited notes are an integral part of this unaudited consolidated schedule of investments.
10

180 DEGREE CAPITAL CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2019 (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Method of
Valuation (1)
 
Industry
 
Shares/Principal
 
Cost
 
Value


Derivative Investments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unaffiliated Rights to Payments (Illiquid) -
 
 
 
 
 
 
 
 
 
2.0% of net assets at value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amgen, Inc. (3)(4)(16)
 
 
Biotechnology
 
 
 
 
 
 
Rights to Milestone Payments from Acquisition of BioVex Group, Inc. (acquired 3/4/11)
(I) (L3)
 
 
 
$
548,998

 
$
548,998

 
$
1,895,518

 
 
 
 
 
 
 
 
 
 
TheStreet, Inc. (3)(4)(17)
 
 
Financial Exchanges & Data
 
 
 
 
 
 
Contingent Value Right (acquired 8/7/19)
(I) (L3)
 
 
 
471,521

 
21,218

 
21,218

 
 
 
 
 
 
 
 
 
 
Xenio Holdings, Inc. (3)(4)(18)
 
 
Technology Hardware, Storage & Peripherals
 
 
 
 
 
 
Rights to Payments from the Merger with Xenio Systems, Inc. (acquired 10/20/17)
(I) (L3)
 
 
 
$
0

 
0

 
0

 
 
 
 
 
 
 
 
 
 
Total Unaffiliated Rights to Payments (cost: $570,216)
 
 
 
 
 
 
 
 
$
1,916,736

 
 
 
 
 
 
 
 
 
 
Total Derivative Investments (cost: $570,216)
 
 
 
 
 
 
 
 
$
1,916,736

 
 
 
 
 
 
 
 
 
 
Total Investments and Derivatives (cost: $83,676,239)
 
 
 
 
 
 
 
 
$
81,578,390

 
 
 
 
 
 
 
 
 
 
OTHER ASSETS (INCLUDING CASH) MINUS LIABILITIES
 
 
 
 
 
 
 
 
$
13,436,787

 
 
 
 
 
 
 
 
 
 
NET ASSETS (equivalent to $3.05 per share based on 31,121,562 shares of common stock outstanding)
 
 
 
 
 
 
 
 
$
95,015,177



The accompanying unaudited notes are an integral part of this unaudited consolidated schedule of investments.
11


180 DEGREE CAPITAL CORP.
NOTES TO CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2019
(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)
We are subject to legal restrictions on the sale of our investment(s) in this company. The total amount of restricted securities held is $59,228,024, or 62.3 percent of net assets.
(4)
Represents a non-income producing investment. Investments that have not paid dividends or interest within the last 12 months or are on non-accrual status for at least 12 consecutive months are considered to be non-income producing.
(5)
We received LLC Interests of 1.25 percent in AutoTech Ventures Management I, LLC ("AutoTech") pursuant to an Administrative Services Agreement between us and AutoTech and due to us following the termination of a former employee of the Company. These LLC Interests were separate from the compensation received for providing the administrative services under the agreement that were paid in cash. We are not investors in AutoTech. The LLC interests have a capital percentage of 0 percent.
(6)
D-Wave Systems, Inc., is located and is doing business primarily in Canada. We invested in D-Wave Systems, Inc. through Parallel Universes, Inc., a Delaware company. Our investment is denominated in Canadian dollars and is subject to foreign currency translation.
(7)
See "Note 4. Commitments and Contingencies."
(8)
On August 28, 2019, OpGen, Inc. effectuated a 1:20 reverse stock split of its common stock. The warrants held by the Company are for the purchase of common stock.
(9)
The identities of these securities have been concealed by the Company while it completes a purchase or selling program for these securities.
(10)
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, Inc. were converted into securities of Black Silicon Holdings, Inc.  SiOnyx, Inc. was then acquired by an undisclosed buyer.  Black Silicon Holdings, Inc. owns a profit interest in the undisclosed buyer.
(11)
Represents a non-operating entity that exists to collect future payments from licenses or other engagements, monetize assets for future distributions to investors and debt holders, or is in the process of shutting down and distributing remaining assets according to a liquidation waterfall.
(12)
Produced Water Absorbents, Inc., also does business as ProSep, Inc.
(13)
The Company is the Investment Manager and Managing Member of 180.2 SPV Series - a Series of 180 Degree Capital Management, LLC that owns 1,241,400 shares, or 3.2 percent of the voting securities, of Synacor, Inc. ("SYNC"). When combined with the Company's ownership of 4.1 percent of the voting securities of SYNC, the Company controls 7.3 percent of the voting securities of SYNC, based on 39,061,146 shares reported in SYNC's most recent Securities and Exchange Commission ("SEC") filing, Form 10-Q, as of June 30, 2019.

The accompanying unaudited notes are an integral part of this unaudited consolidated schedule of investments.
12


180 DEGREE CAPITAL CORP.
NOTES TO CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2019
(UNAUDITED)

(14)
The stock options and restricted stock units were issued to Kevin Rendino for service on the Board of Directors of SYNC. Mr. Rendino entered into an assignment and assumption agreement with the Company that transfers all beneficial and voting interest to the Company.
(15)
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 9.6 percent of Accelerator IV-New York Corporation.
(16)
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.
(17)
In conjunction with the sale of TheStreet, Inc. ("TST") to TheMaven, Inc. ("MVEN"), the Company received a contingent value right for its pro rata share of a potential distribution from the release of escrowed funds after January 31, 2020, related to the sale of a portion of TST's business prior to the acquisition by MVEN. The Company could receive up to approximately $0.09 per share, or approximately $42,400 if the escrow is released in full. There can be no assurance as to how much of this amount we will ultimately realize, if any.
(18)
In October 2017, Xenio Systems, Inc., merged with Xenio Holdings, Inc. In conjunction with this merger, all common stock of Xenio Systems, Inc., was canceled and shareholders were granted a right to a future payment in the event of a sale of Xenio Holdings, Inc. The maximum amount we could receive from such payments is approximately $11,000. 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.


The accompanying unaudited notes are an integral part of this unaudited consolidated schedule of investments.
13



NOTE 1. INVESTMENT VALUATION PROCEDURES

Investments are stated at "value" as defined in the 1940 Act and in the applicable regulations of the 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 independent 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," ("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 focuses on inputs and not techniques. 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 focuses on techniques and not inputs. 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 (L1): Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 (L2): 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 (L3): 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.


14


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.

Our investment in Accelerator IV-New York Corporation is accounted for under the equity method of accounting as it represents non-controlling interest in operating entities that provide investment advisory services to the Company. 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. 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, 2019, our financial assets valued at fair value were categorized as follows in the fair value hierarchy:
 
 
Fair Value Measurement at Reporting Date Using:
 
 
Description
 
Unadjusted Quoted Prices in Active Markets for Identical Assets (Level 1)

 
 
Significant Other Observable Inputs (Level 2)

 
 
Significant Unobservable Inputs (Level 3)

 
September 30, 2019

Privately Held Portfolio Companies:
 
 
 
 

 
 

 
 

Preferred Stock
 
$
0

 
$
0

 
$
44,215,864

 
$
44,215,864

Bridge Notes
 
0

 
0

 
1,835,405

 
1,835,405

Common Stock
 
0

 
0

 
1,013,295

 
1,013,295

Warrants
 
0

 
0

 
0

 
0

Senior Secured Debt
 
0

 
0

 
0

 
0

LLC Interests
 
0

 
0

 
147,330

 
147,330

 
 
 
 
 
 
 
 
 
Publicly Traded Portfolio Companies:
 
 
 
 
 
 
 
 
Common Stock
 
$
22,221,132

 
$
152,683

 
$
0

 
$
22,373,815

Preferred Stock
 
0

 
9,800,000

 
0

 
9,800,000

Warrants
 
0

 
2,413

 
10

 
2,423

Stock Options
 
0

 
0

 
48,549

 
48,549

Total Investments:
 
$
22,221,132

 
$
9,955,096

 
$
47,260,453

 
$
79,436,681

 
 
 
 
 
 
 
 
 
Derivative Investments:
 
 
 
 
 
 
 
 
Rights to Payments
 
$
0

 
$
0

 
$
1,916,736

 
$
1,916,736

Total Financial Assets:
 
$
22,221,132

 
$
9,955,096

 
$
49,177,189

 
$
81,353,417



15


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 as of 9/30/2019
 
Valuation Approach(es)
 
Unobservable Input(s)
 
Range(s) (Weighted Average(a))
 
 
 
 
 
 
 
 
 
 
 
 
 
Public Comparable Adjustment (Including Non-Performance Risk)
 
0.0% (0.0%)
 
 
 
 
 
Price Per Share
 
$1.30 ($1.30)
 
 
 
 
 
Volatility
 
78.4% (78.4%)
Preferred Stock
$
2,744,536

 
Hybrid Approach
 
Time to Exit / Cash Flows (Years)
 
3.7 (3.7)
 
 
 
 
 
Price Per Share
 
$0.02 - $7.23 ($3.77)
 
 
 
 
 
Public Comparable Adjustment (Including Non-Performance Risk)
 
-89.1% - 32.1% (7.9%)
 
 
 
 
 
Volatility
 
61.3% - 95.2% (73.8%)
Preferred Stock
33,033,950

 
Income Approach
 
Time to Exit / Cash Flows (Years)
 
4.8 - 7.0 (5.1)
 
 
 
 
 
Public Comparable Adjustment (Including Non-Performance Risk)
 
-17.2% (-17.2%)
 
 
 
 
 
Revenue Multiples
 
2.7 (2.7)
 
 
 
 
 
Time to Exit (Years)
 
0.5 (0.5)
 
 
 
 
 
Discount for Lack of Marketability
 
14.3% (14.3%)
Preferred Stock
8,437,378

 
Market Approach
 
Price Per Share
 
$0.68 - $1.59 ($1.55)
Bridge Notes
56,250

 
Income Approach
 
Estimated Value to Cost Ratio at Payout
 
0.25 (0.25)
 
 
 
 
 
Revenue Multiples
 
2.7 (2.7)
 
 
 
 
 
Time to Exit (Years)
 
0.5 (0.5)
 
 
 
 
 
Discount for Lack of Marketability
 
14.3% (14.3%)
Bridge Notes
1,779,155

 
Market Approach
 
Estimated Value to Cost Ratio at Conversion
 
0.75 - 1.00 (0.98)
 
 
 
 
 
Discount for Lack of Marketability
 
6.5% (6.5%)
 
 
 
 
 
Public Comparable Adjustment (Including Non-Performance Risk)
 
-25.0% - 6.0% (-14.6%)
 
 
 
 
 
Volatility
 
70.6% - 75.5% (74.2%)
 
 
 
 
 
Time to Exit (Years)
 
4.8 - 5.3 (4.9)
Common Stock
1,013,295

 
Income Approach
 
Price Per Share
 
$0.16 - $1.06 ($0.52)
 
 
 
 
 
Volatility
 
67.0% (67.0%)
 
 
 
 
 
Revenue Multiples
 
1.5 (1.5)
 
 
 
 
 
Time to Exit (Years)
 
0.8 (0.8)
Common Stock
0

 
Market Approach
 
Discount for Lack of Marketability
 
13.7% (13.7%)
 
 
 
 
 
Price Per Share
 
$0.00 - $7.08 ($7.08)
 
 
 
 
 
Volatility
 
94.4% (94.4%)
Warrants
10

 
Income Approach
 
Time to Exit (Years)
 
5.4 (5.4)
Warrants
0

 
Market Approach
 
Price Per Share
 
$0.00 ($0.00)
 
 
 
 
 
Revenue Multiple
 
1.5x (1.5x)
 
 
 
 </