- We increased our investment income by 132 percent and decreased our net operating loss by 46 percent during the third quarter of 2016 as compared with the third quarter of 2015. We increased our investment income by 97 percent and decreased our net operating loss by 41 percent during the first nine months of 2016 as compared with the first nine months of 2015.
- A number of our portfolio companies announced financings and/or business milestones during the quarter including:
- D-Wave Systems, Inc., announced details of its most advanced quantum computing system, featuring a new 2,000 qubit processor. The company made the announcement at its inaugural users group conference in Santa Fe, New Mexico.
- D-Wave Systems, Inc., also announced the formation of D-Wave Government Inc., a U.S. subsidiary formed to provide D-Wave's quantum computer systems to the U.S. government. The company also announced the members of the subsidiary's independent board, which include prominent executives with extensive experience at U.S. government agencies including the Department of Energy, the Department of Defense, the National Science Board, the Defense Science Board and the Intelligence Community.
- HZO, Inc., announced a collaboration with Rakuten Kobo to protect its latest eReader, the Kobo Aura ONE.
- Mersana Therapeutics, Inc., announced that it has clearance from the FDA to begin a Phase 1 clinical trial for its antibody-drug conjugate therapy for cancer. In conjunction with this clearance, the company received a $20 million milestone payment from Takeda.
- Interome, Inc., announced that it is a co-organizer of the UnDx Consortium™. This organization brings together five precision medicine technology providers and prominent experts from medical centers and universities across the country to collaborate in an effort to produce new hypotheses for a set of seven patients struggling with undiagnosed diseases. The UnDx Consortium met to explore results of cutting-edge tests analyzing samples from these patients and their families. That meeting is the beginning of what is expected to evolve into an ongoing forum to explore the potential of combining precision medicine technologies to diagnose and treat disease.
- Muses Labs, Inc., presented data from a pilot study of its MEND Protocol for the treatment of early Alzheimer's disease at the Alzheimer's Association International Conference 2016. MEND Protocol is a multi-step cognitive evaluation process that uses advanced data processing technology to first assess which risk factors are present in an individual.
- Muses Labs, Inc., and Metabolon, Inc., announced a partnership to study and apply metabolomics in individuals with pre- and early-symptomatic cognitive decline and Alzheimer's disease. The companies stated that they expect to bring new clinical trial services and updated care protocols to the market.
- Metabolon, Inc., announced that it closed a round of financing of $15 million from a new investor, Essex Woodlands.
- EchoPixel, Inc., announced that its medical virtual reality system is ready for clinical implementation. The system is being distributed to customers in collaboration with the HP Zvr Interactive Virtual Reality Display and workstation.
- Net asset value per share decreased from $2.88 as of December 31, 2015, to $2.44 as of September 30, 2016.
- Our price per share decreased from $2.20 as of December 31, 2015, to $1.39 as of September 30, 2016, and $1.25 as of November 8, 2016.
- Senova Systems, Inc., sold substantially all of its assets to an undisclosed buyer for an up-front payment and potential future milestone payments. Even if all of the milestone payments are received in full, we do not expect to recover our cost basis of approximately $4 million.
- The values of public equities, particularly those of microcapitalization companies, are highly volatile. The price per share and market capitalization of Adesto Technologies Corporation decreased in value from $3.28 at June 30, 2016, to $2.22 at September 30, 2016, and closed at $2.05 at November 8, 2016. Champions Oncology, Inc., decreased in value from $2.15 at June 30, 2016, to $1.68 at September 30, 2016, and closed at $1.70 at November 8, 2016. Enumeral Biomedical Holdings, Inc., decreased in value from $0.20 at June 30, 2016, to $0.18 at September 30, 2016, and closed at $0.14 at November 8, 2016. While the price per share and market capitalization of OpGen, Inc., increased in value from $1.52 at June 30, 2016, to $1.64 at September 30, 2016, the price per share of each company's common stock continues to trade significantly below the price per share at the time of each company's initial public listing. Additionally, the values of comparable public market companies that are inputs in determining the values of certain of our portfolio companies also decreased during the quarter. Our own stock price has been under considerable pressure from these and other headwinds.
- Even though the financings of some of our portfolio companies may have occurred at increases in price per share from prior rounds of financing, such increases may not be reflected in full in our values owing to other rights and preferences afforded to investors in those rounds of financing. This challenge, in part, limited the positive potential contribution to our net asset value per share by companies that completed such rounds of financing during the third quarter of 2016.
Please join us for our third quarter of 2016 shareholder update call on Tuesday, November 15, 2016, at 10:00 a.m. Eastern Time.
|SUMMARY OF FINANCIAL POSITION|
|September 30, 2016||December 31, 2015||September 30, 2015|
|Net Asset Value Per Share||$||2.44||$||2.88||$||2.80|
PRESS CONTACT:Douglas W. JamisonHarris & Harris Group, Inc.212-582-0900