Document

N-CSRS 1 a2025-6x30nxcsrs.htm N-CSRS Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT 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. Proskauer Rose, LLP 1001 Pennsylvania Avenue, NW Suite 600 South Washington, DC 20004-2533 (202) 416-6828

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

Date of fiscal year end: December 31

Date of reporting period: June 30, 2025

Item 1. Report to Shareholders.

Management's Discussion of Performance for Q2 2025 and the Six Months Ended June 30, 2025


	Quarter	YTD	1 Year	5 Year	Inception to Date
	Q2 2025	Q4 2024- Q2 2025	Q2 2024- Q2 2025	Q2 2020- Q2 2025	Q4 2016- Q2 2025
TURN Public Portfolio Gross Total Return (Excluding SMA Carried Interest)	10.9%	16.0%	24.5%	49.5%	231.3%
TURN Public Portfolio Gross Total Return (Including SMA Carried Interest)	10.9%	16.0%	24.5%	28.7%	253.0%

Change in NAV	8.6%	3.4%	6.7%	(40.7%)	(31.6%)

Change in Stock Price	0.1%	8.3%	4.8%	(23.9%)	(4.0%)

Russell Microcap Index	15.5%	(1.1%)	13.4%	55.8%	66.6%
Russell Microcap Growth Index	21.4%	(0.2%)	24.3%	24.6%	57.2%
Russell Microcap Value Index	12.6%	(0.1%)	12.7%	89.7%	77.6%
Russell 2000 Index	8.5%	(1.8%)	7.7%	61.1%	79.4%
Lipper Peer Group Average	7.9%	(3.1%)	7.4%	83.7%	78.2%

Note: The table above assumes the reinvestment of dividend and capital gain distributions, if any, and does not reflect the deduction of taxes that a shareholder would pay, as applicable, on distributions or the redemption of stock by 180 Degree Capital Corp. Past performance does not guarantee future results.

While 180 Degree Capital's increase in NAV, stock price and gross total return on its public market investments underperformed our public market index comparables in Q2 2025, the performance of each of these metrics for the first half of 2025, significantly outperformed the indices. The outperformance of NAV in the first half of 2025 versus our public market comparable indices included the impact of the front-loading of expenses related to our proposed all-stock merger with Mount Logan Capital Inc. (the "Business Combination"). Aside from these merger-related expenses that are expected to decline materially in the second half of 2025, our performance is driven largely by our holdings of microcapitalization publicly traded companies and our concentrated positions in a small number of companies can lead to substantial differences in performance from indices or funds that invest in a large number of positions. The largest contributors to increases and decreases in our net asset value in Q2 2025 and for the six months ended June 30, 2025, are shown below:

Largest increases and decreases in value for the quarter ended June 30, 2025:


Portfolio Company	Total Q/Q Net Change	Total Q/Q Net Change / Share	% Change
Largest Increases in Q2 2025
Arena Group Holdings, Inc.	$4,743,217	$0.47	276%
Potbelly Corporation	$2,989,905	$0.30	29%
RF Industries, Ltd.	$841,061	$0.08	38%
Lantronix, Inc.	$254,111	$0.03	15%
Potbelly Corporation (Warrants)	$220,858	$0.02	67%
Largest Decreases in Q2 2025
Synchronoss Technologies, Inc.	$(3,448,184)	$(0.34)	(37)%
comScore, Inc.	$(820,924)	$(0.08)	(30)%

Largest increases and decreases in value for the period ended June 30, 2025:


Portfolio Company	Total Y/Y Net Change	Total Y/Y Net Change / Share	% Change
Largest Increases in H1 2025
Arena Group Holdings, Inc.	$5,130,484	$0.51	386%
Potbelly Corporation	$3,088,113	$0.31	30%
RF Industries, Ltd.	$1,209,615	$0.12	66%
Intevac, Inc.	$734,711	$0.07	21%
Ascent Industries Co.	$536,591	$0.05	13%
Largest Decreases in H1 2025
Synchronoss Technologies, Inc.	$(2,345,507)	$(0.23)	(37)%
Lantronix, Inc.	$(819,041)	$(0.08)	(30)%
comScore, Inc.	$(408,460)	$(0.04)	(18)%
Commercial Vehicle Group, Inc.	$(336,200)	$(0.03)	(33)%

We ended Q2 2025 with the following portfolio of holdings. Substantially all of our assets as of the period ended June 30, 2025, were in securities of publicly traded companies and cash.


Public Portfolio
Portfolio Company	Shares Owned @ 6/30/25	Value @ 6/30/25	% of Net Assets
Common Stocks
Potbelly Corporation	1,091,206	$13,367,274	27.8%
Synchronoss Technologies, Inc.1	878,788	$6,004,860	12.5%
Arena Group Holdings, Inc.	750,000	$4,650,000	9.7%
Ascent Industries Co.	366,860	$4,626,105	9.6%
RF Industries, Ltd.	472,506	$3,057,114	6.4%
comScore, Inc.	400,451	$1,930,174	4.0%
Lantronix, Inc.	668,711	$1,919,201	4.0%
Commercial Vehicle Group, Inc.	410,000	$680,600	1.4%
Mama's Creations, Inc.	42,245	$350,634	0.7%
Hudson Technologies, Inc.	37,708	$306,189	0.6%
Aviat Networks, Inc.	9,600	$230,880	0.5%
Miscellaneous Holdings		$243,880	0.5%

Derivatives
Potbelly Corporation Warrants for Purchase of Common Stock	80,605	$548,114	1.1%
Synchronoss Technologies, Inc. Options for Purchase of Common Stock	3,334	$15,065	<0.1%
Total Public Portfolio		$37,930,090	79.0%

Total Legacy Private Portfolio		$146,757	0.3%

1 Includes 12,000 shares of restricted stock issued to Kevin Rendino as compensation for being a member of the Board of Directors of Synchronoss Technologies, Inc. All economic and control of these securities has been assigned to 180 Degree Capital Corp.

We ended Q2 2025 with the following percentages of our net assets invested by industry, other than money market investments:


Industry	Value as of June 30, 2025		% of Net Assets
Advertising	$	1,930,174	4.0%



Application Software	6,019,925		12.5%



Communications Equipment	2,150,081		4.5%



Construction Machinery & Heavy Trucks	680,600		1.4%



Electronic Manufacturing Services	3,057,114		6.4%



Health Care Equipment	75,000		0.2%



Health Care Technology	0		0.0%



Interactive Media & Services	4,650,000		9.7%



Miscellaneous Holdings	243,880		0.5%



Packaged Foods & Meats	350,634		0.7%



Pharmaceuticals	71,757		0.2%



Restaurants	13,915,388		29.0%



Specialty Chemicals	4,626,105		9.6%







Trading Companies & Distributors	306,189		0.6%

































Total	$	38,076,847

Our investment income for the period ended June 30, 2025, increased by approximately $290,000, or 237%, from the period ended June 30, 2024, due to increases in fees received in conjunction with the service of Kevin M. Rendino on the board of directors of Synchronoss Technologies, Inc., a portfolio company of 180 Degree Capital, increase in dividend income from portfolio companies, and an increase in interest income from our holdings of money-market securities.

Our operating expenses for the period ended June 30, 2025, increased by approximately $3,900,000, or 192%, from the period ended June 30, 2024, due to approximately $4,500,000 of expenses related to our proposed business combination with Mount Logan Capital Inc., offset in part by fewer employees and other reduced expenses period over period.

The Company does not have a distribution policy and does not make regular distributions to its shareholders, therefore fund performance did not have any effect on maintaining a specified level of distributions on the Company's investment strategies and per share net asset value during the period ended June 30, 2025.

Investment Objective

Our investment objective is to generate capital appreciation and current income from investments and investment-related activities such as managed funds and accounts.

Investment Strategy

Our investment strategy on future new investments is focused on generating capital appreciation and current income from investments in what we believe are deeply undervalued, small publicly traded companies where we believe we can positively impact the business and valuation through constructive activism. Historically, our investment strategy was to achieve long-term capital appreciation investing in venture capital investments. While we continue to provide such resources to our existing legacy portfolio companies, we no longer make venture capital investments. We classify our legacy portfolio companies as Legacy Privately Held Equity and Equity-Related Securities.

We believe we combine new perspectives with the historical knowledge and experience of managing the current portfolio. Our investment approach is comprised of a patient examination of available opportunities through due diligence and close involvement with management of our portfolio companies. We invest our capital directly into portfolio companies or through purchases of securities of publicly traded companies directly and through open-market purchases. We may seek to invest our capital alongside capital from other investors through that we control.

We have discretion in the investment of our capital to achieve our objectives by investing in various types of assets, and we do not currently limit our investments to any security type. Our investments may include, among other asset types: equity, equity-related securities (including warrants and options) and debt with equity features from either private or public issuers; 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.

Investment Policies

Fundamental policies may not be changed without the approval of the holders of a majority of our voting securities, as defined in the 1940 Act. As a matter of fundamental policy, the Company will not:

(1) Issue senior securities, borrow money from banks, brokers or other lenders, or engage in transactions involving the issuance by us of "senior securities" representing indebtedness, except to the extent permitted under the 1940 Act or the rules, regulations or interpretations thereof.

(2) Underwrite securities of other issuers, except insofar as we may be deemed an underwriter under the Securities Act of 1933, as amended (the "Securities Act"), in connection with the disposition of our portfolio securities. We may invest in restricted securities (those that must be registered under the Securities Act before they may be offered or sold to the public) to the extent permitted by the 1940 Act or the rules, regulations or interpretations thereof.

(3) Invest more than 25% of our total assets in the securities of companies or entities engaged in any one industry, or group of industries. This limitation does not apply to investment in the securities of the U.S. Government, its agencies or instrumentalities.

(4) Purchase or sell real estate or interests in real estate (except that we may (a) purchase and sell real estate or interests in real estate in connection with the orderly liquidation of investments, or in connection with foreclosure on collateral, or (b) own the securities of companies that are in the business of buying, selling or developing real estate).

(5) Purchase or sell commodities or commodity contracts, but we may purchase and sell foreign currency and enter into foreign currency forward contracts, and may engage in other transactions in financial instruments, in each case to the extent permitted under the Company's investment policies as in effect from time to time.

(6) Make loans of money or securities to other persons, except through purchasing fixed-income securities or other debt instruments, lending portfolio securities or entering into repurchase agreements in a manner consistent with our investment policies. With respect to these investment restrictions, if a percentage restriction is adhered to at the time of entering into the investment or transaction, a later change in percentage resulting from a change in the values of investments or the value of our total assets, unless otherwise stated or required by law, will not constitute a violation of the restriction or policy.

Valuation Risk

We historically invested in privately held companies, the securities of which are inherently illiquid. We are currently focused on investing in what we believe are deeply undervalued microcapitalization publicly traded companies. Our publicly traded and public company-related securities account for approximately 100 percent of the value of our portfolio of investments. Although these companies are publicly traded, their stock may not trade at high volumes and/or we may own a significant portion of a company's outstanding stock, which may restrict our ability to sell our positions in an orderly fashion and prices at which sales can be made may be volatile and materially different than the closing prices of such positions at each financial statement date. We may also be subject to restrictions on transfer and/or other lock-up provisions after these companies complete public offerings and/or if we invest in unregistered securities of public companies. Many of our legacy privately held and publicly traded companies tend to not have attained profitability, and many of these companies also lack management depth and have limited or no history of operations. Because of the speculative nature of our investments and the lack of a liquid market for and restrictions on transfers of privately held investments, there is greater risk of loss relative to traditional marketable investment securities.

Approximately 2 percent of our portfolio, excluding money market investments, was fair valued and comprised of securities of legacy privately held companies and rights to potential future milestone payments, as well as our warrants of Potbelly Corporation and options of Synchronoss Technologies, Inc. (Level 3 investments) which are securities of publicly traded companies. Because there is typically no public or readily ascertainable market for our securities of our legacy privately held companies, the valuation of the securities in that portion of our portfolio is determined in good faith by our Valuation Committee, which is comprised of all of the independent members of our Board of Directors. The values are determined in accordance with our Valuation Procedures and are subject to significant estimates and judgments. The fair value of the securities in our portfolio may differ significantly from the values that would be placed on these securities if a ready market for the securities existed. Additionally, inputs may become available after a financial statement date that could result in a material change in value at a future financial statement date from the value reported in the current financial statements. Any changes in valuation are recorded in the Company's Consolidated Statement of Operations as "Change in unrealized appreciation (depreciation) on investments." Changes in valuation of any of our investments in privately held companies from one period to another may be significant.

Diversification Risk

While we are subject to certain diversification requirements regarding the concentration of investments in any one industry or group of industries at the time of each investment, we do not choose investments based on a strategy of diversification. We also do not rebalance the portfolio should one of our portfolio companies increase or decrease in value substantially relative to the rest of the portfolio. Therefore, the value of our portfolio may be more vulnerable to microeconomic events affecting a single sector, industry or portfolio company and to general macroeconomic events that may be unrelated to our portfolio companies. These factors may subject the value of our portfolio to greater volatility than a company that follows a diversification strategy. As of June 30, 2025, our largest 10 investments by value, excluding money market investments, accounted for approximately 84 percent of the value of our investment portfolio. Our largest three investments, by value, excluding money market investments, Potbelly Corporation, Synchronoss Technologies, Inc., and Arena Group Holdings, Inc., accounted for approximately 35 percent, 16 percent and 12 percent, respectively, of our investment portfolio at June 30, 2025. Potbelly Corporation, Synchronoss Technologies, Inc. and Arena Group Holdings, Inc. are publicly traded companies.

Interest Rate Risk

Interest rate sensitivity refers to the change in earnings that may result from changes in the level of interest rates. We may invest in both short- and long-term U.S. government and agency securities. To the extent that we invest in short- and long-term U.S. government and agency securities, changes in interest rates result in changes in the value of these obligations that result in an increase or decrease of our net asset value. The level of interest rate risk exposure at any given point in time depends on the market environment, the expectations of future price and market movements, and the quantity and duration of long-term U.S. government and agency securities held by the Company, and it will vary from period to period.

In addition, market interest rates for high-yield corporate debt may be an input in determining value of our investments in debt securities of privately held and publicly traded companies. Significant changes in these market rates could affect the value of our debt securities as of the valuation date of measurement of value. While we do not currently have any investments in debt securities with floating interest rates, investment income in such securities should we acquire them in the future could be adversely affected by changes in interest rates.

Foreign Currency Risk

We may from time to time invest in securities that are denominated in foreign currencies. As of June 30, 2025, our investments were not subject to foreign currency risk as they were all denominated in U.S. dollars.

Changes in Investment Objective, Investment Policies, Principal Risks or Persons Responsible for Day-to-Day Management of the Company's Investment Portfolio

Since our last annual report to shareholders, there have been no changes in our investment objective, investment policies, principal risks or persons responsible for day-to-day management of our investment portfolio through June 30, 2025.

Source: Bloomberg

Note: The graph and table above assumes the reinvestment of dividend and capital gain distributions, if any, and does not reflect the deduction of taxes that a shareholder would pay, as applicable, on distributions or the redemption of stock by 180 Degree Capital Corp. Past performance does not guarantee future results.


180 DEGREE CAPITAL CORP. CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)


	June 30, 2025
ASSETS
Investments in securities and other financial instruments, at value:
Unaffiliated publicly traded equity and equity-related securities (cost: $24,815,009)	$	29,431,877
Unaffiliated money market fund securities (cost: $12,000,000)	12,000,000
Non-controlled affiliated publicly traded equity and equity-related securities (cost: $26,451,633)	7,935,034
Non-controlled affiliated legacy privately held equity and equity-related securities (cost: $6,496,930)	75,000
Unaffiliated derivative securities (cost: $224,849)	548,114
Non-controlled affiliated derivative securities (cost: $0)	15,065
Unaffiliated rights to milestone payments (cost: $0)	71,757
Cash	577,300
Prepaid expenses	117,323
Other assets	105,352
Total assets	$	50,876,822
LIABILITIES & NET ASSETS

Professional fees payable	$	2,285,227
Accounts payable and accrued liabilities	227,189
Post-retirement plan liabilities	337,674
Total liabilities	$	2,850,090
Commitments and contingencies (Note 10)
Net assets	$	48,026,732
Net assets are comprised of:
Preferred stock, $0.10 par value, 2,000,000 shares authorized; none issued	$	0
Common stock, $0.03 par value, 15,000,000 shares authorized; 11,541,079 issued	334,594
Additional paid in capital	101,578,029
Total accumulated distributable loss	(47,624,968)
Treasury stock, at cost 1,540,938 shares	(6,260,923)
Net assets	$	48,026,732
Shares outstanding	10,000,141
Net asset value per outstanding share	$	4.80

The accompanying notes are an integral part of these unaudited consolidated financial statements.


180 DEGREE CAPITAL CORP. CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)


	Six Months Ended June 30, 2025
Income:
Interest - unaffiliated money market fund securities	$	181,290
Dividend income	110,006
Board fees from portfolio companies	32,500
Board fees from portfolio companies - stock grant	92,953
Total income	416,749
Operating fees and expenses:
Professional	4,324,271
Salaries, bonuses and benefits	1,146,089
Software	151,851
Directors	133,542
Insurance	104,805
Administration and operations	55,779
Rent	19,975
Custody	9,984
Other	1,442
Total operating expenses	5,947,738


Net investment loss	(5,530,989)
Net realized gain from investments:
Unaffiliated publicly traded equity and equity-related securities	1,178,096
Unaffiliated legacy privately held equity and equity-related securities	100,000


Net realized gain from investments	1,278,096
Change in unrealized appreciation (depreciation) on investments:
Unaffiliated publicly traded equity and equity-related securities	8,839,590
Unaffiliated legacy privately held equity and equity-related securities	(100,000)
Non-controlled affiliated publicly traded equity and equity-related securities	(2,813,268)

Unaffiliated rights to milestone payments	1,301
Net change in unrealized appreciation on investments	5,927,623
Net realized gain and change in unrealized appreciation on investments	7,205,719
Net increase in net assets resulting from operations	$	1,674,730

The accompanying notes are an integral part of these unaudited consolidated financial statements.


180 DEGREE CAPITAL CORP. CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)


	Six Months Ended June 30, 2025
Cash flows provided by operating activities:
Net increase in net assets resulting from operations	$	1,674,730
Adjustments to reconcile net decrease in net assets resulting from operations to net cash provided by operating activities:
Net realized gain from investments	(1,278,096)
Net change in unrealized appreciation on investments	(5,927,623)
Board fees from portfolio companies - stock grant	(92,953)
Depreciation of fixed assets	1,442
Purchase of unaffiliated publicly traded equity and equity-related securities	(1,969,210)
Purchase of unaffiliated money market fund securities, net	(6,000,000)
Proceeds from sale of unaffiliated publicly traded equity and equity-related securities	11,900,572
Proceeds from sale of unaffiliated legacy privately held equity and equity-related securities	100,000

Changes in assets and liabilities:
Decrease in prepaid expenses	99,245
Increase in other assets	(74,939)
Increase in professional fees payables	2,285,227
Decrease in accounts payable and accrued liabilities	(678,389)
Decrease in post-retirement plan liabilities	(14,806)
Net cash provided by operating activities	25,200
Net increase in cash	25,200
Cash at beginning of the year/period	552,100
Cash at end of the period*	$	577,300

* The Company had $12,000,000 held in money market securities as of June 30, 2025, that is not treated as cash or a cash equivalent for reporting purposes.

The accompanying notes are an integral part of these unaudited consolidated financial statements.


180 DEGREE CAPITAL CORP. CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS


	Period Ended June 30, 2025		Year Ended December 31, 2024
	(UNAUDITED)		(AUDITED)
Changes in net assets from operations:
Net investment loss	$	(5,530,989)	$	(4,019,686)
Net realized gain (loss) on investments	1,278,096		(3,670,653)
Net change in unrealized appreciation on investments	5,927,623		3,824,181
Net increase (decrease) in net assets resulting from operations	1,674,730		(3,866,158)




Net increase (decrease) in net assets	1,674,730		(3,866,158)
Net Assets:
Beginning of the period/year	46,352,002		50,218,160
End of the period/year	$	48,026,732	$	46,352,002

The accompanying notes are an integral part of these unaudited consolidated financial statements.


180 DEGREE CAPITAL CORP. CONSOLIDATED FINANCIAL HIGHLIGHTS


	Six Months Ended Jun 30, 2025			Year Ended Dec. 31, 2024			Year Ended Dec. 31, 2023			Year Ended Dec. 31, 2022				Year Ended Dec. 31, 2021				Year Ended Dec. 31 2020#
	(UNAUDITED)			(AUDITED)			(AUDITED)			(AUDITED)				(AUDITED)				(AUDITED)
Per Share Operating Performance:
Net asset value per share, beginning of the period/year	$	4.64		$	5.02		$	6.32		$	10.66			$	9.28			$	9.18
Net investment loss*	(0.55)			(0.40)			(0.38)			(0.25)				(0.33)				(0.05)
Net realized gain (loss)*	0.12			(0.37)			(0.56)			0.21				0.20				(0.11)
Net change in unrealized appreciation (depreciation) on investments and options*1	0.59			0.39			(0.42)			(4.30)				1.51				0.26
Total from investment operations*	0.16			(0.38)			(1.36)			(4.34)				1.38				0.10

Net increase as a result of purchase of treasury stock	0.00			0.00			0.06			0.00				0.00				0.00
Net increase (decrease) in net asset value	0.16			(0.38)			(1.30)			(4.34)				1.38				0.10
Net asset value per share, end of the period/year	$	4.80		$	4.64		$	5.02		$	6.32			$	10.66			$	9.28

Stock price per share, end of the period/year	$	3.974		$	3.67		$	4.10		$	5.28			$	7.35			$	6.66
Total return based on stock price	8.28		%	(10.49)		%	(22.35)		%	(28.16)		%		10.36		%		3.26		%
Supplemental Data:
Net assets, end of the period/year	$	48,026,732		$	46,352,002		$	50,218,160		$	65,545,149			$	110,575,952			$	96,317,794
Ratio of expenses to average net assets	12.91		%	8.88		%	6.39		%	3.20		%	^	5.87		%	^	4.61		%	^
Ratio of net investment loss to average net assets	(11.97)		%	(8.47)		%	(6.30)		%	(2.88)		%		(3.26)		%		(0.59)		%
Portfolio turnover	4.27		%	26.61		%	31.56		%	30.95		%		44.46		%		35.16		%
Number of shares outstanding, end of the period/year	10,000,141			10,000,141			10,000,141			10,373,820				10,373,820				10,373,820

# Reflect a 1-for-3 reverse stock split that became effective on January 4, 2021.

* Based on average shares outstanding.

^ The Company has entered into an expense offsetting arrangement with one of its unaffiliated brokers relating to broker fees paid. The total broker fee charged to the Company was applied as a credit to fees charged by an affiliate of the unaffiliated broker who the Company subscribes to for data services billed during the year. The Company received an offset to expense totaling approximately $20,600, $84,800, and $31,900, with that broker for the years ended December 31, 2022-2020, respectively.

1 Net unrealized losses include rounding adjustments to reconcile change in net asset value per share.

The accompanying notes are an integral part of these unaudited consolidated financial statements.

180 DEGREE CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2025 (UNAUDITED)

Method of
Valuation (1)

Industry

Shares/Units

Cost

Value

Investments in Unaffiliated Equity and Equity-Related Securities (2) -

86.3% of net assets at value

Unaffiliated Publicly Traded Equity and Equity-Related Securities -

61.3% of net assets at value

Arena Group Holdings, Inc. (3)

Interactive Media & Services

Provides a shared digital publishing, advertising and distribution platform

Common Stock

(L1)

750,000

6,985,914

4,650,000

Ascent Industries Co. (3)

Specialty Chemicals

Manufactures chemicals

Common Stock

(L1)

366,860

3,841,387

4,626,105

Aviat Networks, Inc. (3)

Communications Equipment

Provides IP solutions to wireless public and private telecommunication operators.

Common Stock

(L1)

9,600

198,157

230,880

Commercial Vehicle Group, Inc. (3)

Construction Machinery & Heavy Trucks

Supplier of vehicle components

Common Stock

(L1)

410,000

2,259,403

680,600

Hudson Technologies, Inc. (3)

Trading Companies & Distributors

Provides HVAC-related products and services

Common Stock

(L1)

37,708

246,327

306,189

Lantronix, Inc. (3)

Communications Equipment

Provides secure data access and management solutions

Common Stock

(L1)

668,711

2,198,457

1,919,201

Mama's Creations, Inc. (3)

Packaged Foods & Meats

Provides packaged food products

Common Stock

(L1)

42,245

264,247

350,634

The accompanying notes are an integral part of these unaudited consolidated financial statements.

180 DEGREE CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2025 (UNAUDITED)

Method of
Valuation (1)

Industry

Shares/Units

Cost

Value


Investments in Unaffiliated Equity and Equity-Related Securities (2) -
86.3% of net assets at value (cont.)

Unaffiliated Publicly Traded Equity and Equity-Related Securities -
61.3% of net assets at value (cont.)

Potbelly Corporation (3)		Restaurants
Operates a chain of sandwich shops
Common Stock	(L1)		1,091,206	$	5,622,618	$	13,367,274

RF Industries, Ltd. (3)		Electronic Manufacturing Services
Provides products that enable wired and wireless communications
Common Stock	(L1)		472,506	2,924,335		3,057,114

Miscellaneous Holdings (3)(4)
Common Stock	(L1)			274,164		243,880

Total Unaffiliated Publicly Traded Equity and Equity-Related Securities (cost: $24,815,009)						$	29,431,877

Unaffiliated Money Market Fund Securities -
25.0% of net assets at value

JPMorgan 100% U.S. Treasury Securities Money Market Fund - Premier
(Yield 3.89%)	(L1)		6,000,000	$	6,000,000	$	6,000,000

JPMorgan 100% U.S. Treasury Securities Money Market Fund - Capital
(Yield 4.14%)	(L1)		6,000,000	6,000,000		6,000,000

Total Unaffiliated Money Market Fund Securities (cost: $12,000,000)						$	12,000,000

Total Investments in Unaffiliated Equity and Equity-Related Securities (cost: $36,815,009)						$	41,431,877

The accompanying notes are an integral part of these unaudited consolidated financial statements.

180 DEGREE CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2025 (UNAUDITED)

Method of
Valuation (1)

Industry

Shares/Units

Cost

Value


Investments in Non-Controlled Affiliated Equity and Equity-Related Securities (2) -
16.7% of net assets at value

Non-Controlled Affiliated Publicly Traded Equity and Equity-Related Securities -
16.5% of net assets at value

comScore, Inc. (3)(5)		Advertising
Provides technology and services that measure audiences, brands and consumer behavior
Common Stock	(L1)		400,451	$	13,348,438	$	1,930,174

Synchronoss Technologies, Inc. (3)(5)		Application Software
Provides white-label cloud storage, messaging and other digital analytic services
Common Stock	(L1)		866,788	13,010,242		5,937,498
Common Stock (6)(7)	(M) (L2)		12,000	92,953		67,362
				13,103,195		6,004,860

Total Non-Controlled Affiliated Publicly Traded Equity and Equity-Related Securities (cost: $26,451,633)						$	7,935,034

Non-Controlled Affiliated Legacy Privately Held Equity and Equity-Related Securities -
0.2% of net assets at value

EchoPixel, Inc. (3)(6)(8)		Health Care Equipment
Develops 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)	(M) (L3)		4,194,630	$	1,250,000	$	44,044
Series Seed-2 Convertible Preferred Stock (acquired 1/22/16)	(M) (L3)		1,476,668	500,000		15,505
Series A-2 Convertible Preferred Stock (acquired 3/23/17)	(M) (L3)		1,471,577	350,000		15,451
				2,100,000		75,000

HALE.life Corporation (3)(6)(8)		Health Care Technology
Develops a platform to facilitate precision health and medicine
Common Stock (acquired 3/1/16)	(I) (L3)		1,000,000	10		0
Series Seed-1 Convertible Preferred Stock (acquired 3/28/17)	(I) (L3)		11,000,000	1,896,920		0
Series Seed-2 Convertible Preferred Stock (acquired 12/28/18)	(I) (L3)		12,083,132	2,500,000		0
				4,396,930		0

The accompanying notes are an integral part of these unaudited consolidated financial statements.

180 DEGREE CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2025 (UNAUDITED)

Method of
Valuation (1)

Industry

Shares/Units

Cost

Value


Total Non-Controlled Affiliated Legacy Privately Held Equity and Equity-Related Securities (cost: $6,496,930)						$	75,000

Total Investments in Non-Controlled Affiliated Equity and Equity-Related Securities (cost: $32,948,563)						$	8,010,034

Total Investments in Publicly Traded Equity and Equity-Related Securities, Money Market Funds, and Legacy Privately Held Equity and Equity-Related Securities (cost: $69,763,572)						$	49,441,911

Derivative Securities -
1.2% of net assets at value
Unaffiliated Derivative Securities (2) -
1.2% of net assets at value

Potbelly Corporation (3)		Restaurants
Operates a chain of sandwich shops
Warrants for the Purchase of Common Stock expiring 2/12/26 (acquired 2/10/21)	(M) (L2)		80,605	$	224,849	$	548,114

Total Unaffiliated Derivative Securities (cost: $224,849)						$	548,114

Non-Controlled Affiliated Derivative Securities (2) -
0.0% of net assets at value

Synchronoss Technologies, Inc. (3)(5)(6)(7)		Application Software
Provides white-label cloud storage, messaging and other digital analytic services
Stock Options for Common Stock Expiring 12/4/30 (acquired 12/4/23)	(I) (L3)		3,334	$	0	$	15,065

Total Non-Controlled Affiliated Derivative Securities (cost: $0)						$	15,065

Total Derivative Securities (cost: $224,849)						$	563,179

Total Investments (cost: $69,988,421)						$	50,005,090

The accompanying notes are an integral part of these unaudited consolidated financial statements.

180 DEGREE CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2025 (UNAUDITED)

Method of
Valuation (1)

Industry

Shares/Units

Cost

Value


Other Financial Instruments (9) -

Unaffiliated Rights to Payments (Illiquid) (2) -
0.2% of net assets at value

Rights to Milestone Payments from Acquisition of TARA Biosystems, Inc. (acquired 4/1/22) (3)(6)(8)(10)	(I) (L3)	Pharmaceuticals	$	0	$	0	$	71,757

Total Unaffiliated Rights to Payments (cost: $0)							$	71,757

Total Investments in Publicly Traded and Privately Held Equity, Money Market Fund and Equity-Related Securities, Derivative Securities and Other Financial Instruments (cost: $69,988,421)							$	50,076,847

The accompanying notes are an integral part of these unaudited consolidated financial statements.

180 DEGREE CAPITAL CORP.

NOTES TO CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2025

(UNAUDITED)

Notes to Consolidated Schedule of Investments

(1)See Note 2. Summary of Significant Accounting Policies: Portfolio Investment Valuation.

(2)Investments in unaffiliated securities consist of investments in which the Company owns less than five percent of the voting shares of the portfolio company. Investments in non-controlled affiliated securities consist of investments in which the Company owns five percent or more, but less than 25 percent, of the voting shares of the portfolio company, or where the Company controls one or more seats on the portfolio company’s board of directors but does not control the company. Investments in controlled affiliated securities consist of investments in which the Company owns 25 percent or more of the outstanding voting rights of the portfolio company or otherwise controls 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)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.

(4)The identity/identities of these investments have been concealed while the Company completes a purchase or selling program for these securities.

(5)The Company is the investment manager of a separately managed account ("SMA") that owns shares of these portfolio companies. Under our investment management agreement for the SMA, the Company has the right to control the votes of the securities held by the SMA. The Company has voting ownership between 5 percent and 25 percent in these companies directly or when the shares held by us and our SMA are aggregated.

(6)The Company is subject to legal restrictions on the sale of all or a portion of our investment(s) in this company. The total amount of restricted securities held is $229,184, or 0.5 percent of net assets.

(7)These restricted shares of common stock and stock options for the purchase of common stock were granted to Kevin Rendino in connection with his service as a member of the board of directors of Synchronoss Technologies, Inc. Mr. Rendino entered into an assignment and assumption agreement with the Company that transfers all beneficial and voting interest to the Company.

(8)These securities are held by the Company's wholly owned subsidiary, 180 Degree Private Holdings, LLC ("180PH"), and were transferred from the Company to 180PH in the fourth quarter of 2020. The acquisition dates of the securities reflect the dates such securities were obtained by the Company rather than the transfer date.

(9)Other financial instruments are holdings of the Company that do not meet the definition of a security or a derivative.

(10)If all the remaining milestones are met, the Company would receive approximately $2.7 million. There can be no assurance as to how much of the remaining approximately $2.7 million in potential milestone-based payments will ultimately be realized or when they will be realized, if at all.

The accompanying notes are an integral part of these unaudited consolidated financial statements.

180 DEGREE CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1. THE COMPANY

180 Degree Capital Corp. (including its wholly owned subsidiaries, the "Company," "us," "our" and "we"), withdrew its election to be treated as a business development company on March 30, 2017, and subsequently returned to its prior status as a registered non-diversified closed-end management investment company ("Closed-End Fund" or "CEF") under the Investment Company Act of 1940, as amended (the "1940 Act"). We operate as an internally managed investment company whereby our officers and employees, under the general supervision of our Board of Directors, conduct our operations. From May 22, 2020 to December 24, 2024, we were also registered with the Securities and Exchange Commission ("SEC") as a Registered Investment Adviser under the Investment Advisers Act of 1940, as amended (the "Advisers Act").

180 Degree Private Holdings, LLC ("180PH"), is a wholly owned limited liability company that was created in October 2020 to hold certain of the Company's securities of privately held companies. 180PH is consolidated for financial reporting purposes and is a disregarded entity for tax purposes under the Internal Revenue Code ("Code").

As of June 30, 2025, the Company manages approximately $0.8 million in net assets in a separately managed account ("SMA").

The Company may, in certain cases, receive management fees and carried interest on profits generated on invested capital from any capital under management, if and when capital is raised and if and when profits are realized, respectively. The Company does not consolidate its separately managed account.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies followed in the preparation of the consolidated financial statements:

Principles of Consolidation. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the US ("GAAP") and Articles 6 and 12 of Regulation S-X of the SEC and include the accounts of the Company and its wholly owned subsidiaries. The Company is an investment company following accounting and reporting guidance in Accounting Standards Codification 946. In accordance with GAAP and Regulation S-X under 17 C.F.R. Part 210, the Company may only consolidate its interests in investment company subsidiaries and controlled operating companies whose business consists of providing services to the Company. 180PH is a controlled operating company that provides services to us and is, therefore, consolidated. All significant intercompany accounts and transactions were eliminated in the consolidated financial statements.

Use of Estimates. The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and contingent assets and liabilities and the reported amounts of revenues and expenses. Actual results could differ from these estimates, and the differences could be material. The most significant estimates relate to the fair valuations of our investments.

Portfolio Investment Valuations. 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, pursuant with SEC Rule 2a-5. The Valuation Committee receives information and recommendations from management. The Company may from time to time use an independent valuation firm to review select portfolio company valuations on an as needed basis. The independent valuation firm, when engaged by the Company, 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.

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.

As of June 30, 2025, our financial statements include investments fair valued by the Board of Directors of $777,298. The fair values were determined in good faith by, or under the direction of, the Board of Directors. The fair value amount includes the values of our investments in legacy privately held companies and rights to future milestone payments, as well as our warrants for the purchase of common stock of Potbelly Corporation, our options for the purchase of common stock of Synchronoss Technologies, Inc., and our restricted common stock of Synchronoss Technologies, Inc.

Cash. Cash includes demand deposits. Cash is carried at cost, which approximates fair value.

Unaffiliated Rights to Payments. At June 30, 2025, the outstanding potential milestone from the acquisition of TARA Biosystems, Inc., by Valo Health, LLC was valued at $71,757. The milestone payments are valued using the probability-adjusted, present value of proceeds from future payments that would be due upon successful completion of certain regulatory

milestones. There can be no assurance as to how much of the amounts related to milestone payments that we will ultimately realize or when they will be realized, if at all.

Prepaid Expenses. We include prepaid insurance premiums in "Prepaid expenses." Prepaid insurance premiums are recognized over the term of the insurance contract and are included in "Insurance" in the Company's Consolidated Statement of Operations.

Property and Equipment. Property and equipment are included in "Other assets" and were carried at $2,871 at June 30, 2025, representing cost of $229,818, less accumulated depreciation of $226,947. Depreciation is provided using the straight-line method over the estimated useful lives of the property and equipment. We estimate the useful lives to be five to ten years for furniture and fixtures, and three years for computer equipment.

Post-Retirement Plan Liabilities. Until it was terminated on April 27, 2017, the Company provided a Retiree Medical Benefit Plan for employees who met certain eligibility requirements. Until it was terminated on May 5, 2011, the Company also provided an Executive Mandatory Retirement Benefit Plan for certain individuals employed by us in a bona fide executive or high policy-making position. The net periodic post-retirement benefit cost includes service cost and interest cost on the accumulated post-retirement benefit obligation. Unrecognized actuarial gains and losses are recognized as net periodic benefit cost, pursuant to the Company's historical accounting policy in "Salaries, bonus and benefits" in the Company's Consolidated Statement of Operations. The impact of plan amendments was amortized over the employee's average service period as a reduction of net periodic benefit cost. Unamortized prior service cost was fully amortized during 2017 as a result of the termination of the Retiree Medical Benefit Plan.

Interest Income Recognition. Interest income, including amortization of premium and accretion of discount, is recorded on an accrual basis. When accrued interest is determined not to be recoverable, the Company ceases accruing interest and writes off any previously accrued interest. Write-offs are netted in interest income. Securities are deemed to be non-income producing if investments have not paid dividends or interest within the last 12 months or are on non-accrual status for at least 12 consecutive months. When the fair value of a security that includes PIK interest is less than the accrued interest, the Company may place the security on non-accrued status.

Board Fees From Portfolio Companies. The Company recognizes revenues from board fees as those services are provided.

Management Fees and Performance Fees/Carried Interest from Managed Funds. The Company may be entitled to receive management fees and performance fees from clients including separately managed accounts (SMAs) and special purpose vehicles (SPVs). When applicable, the Company accrues management fees on SPVs that are to be paid upon liquidation of the entity regardless of performance. Performance fees or carried interest, if any, is paid annually by SMAs based on a fixed percentage of the increase in net assets during the year. Performance fees on SPVs, if any, are generally paid based on the amount of increase in net assets at the time of any distribution of capital above the amount of initial invested capital plus accrued expenses. The timing and payment terms of management fees and performance fees for future client accounts may be different than those of our current SMAs.

The Company does not include accruals for carried interest in the consolidated financial statements until such carried interest is received and/or the Company concludes that it is probable that a reversal of any accrual will not occur. The Company did not earn or accrue any carried interest in the period ended June 30, 2025.

Other Income. The Company may purchase restricted securities issued by publicly traded companies that include provisions that provide for payment of partial liquidated damages in the event the issuer does not meet obligations specified in the purchase agreement or other ancillary documents associated with the transaction. These obligations most commonly are associated with the filing of registration statements and/or being up to date with the filing of the issuer's financial statements with the SEC.

SEC Form N-CSRS filed by 180 Degree Capital Corp.