BERAL, INC.
Andrew Racz
Director of Research
300 East 54 Street, Suite 26C
New York, NY 10022
Phone: (212) 319-6949
Fax: (212) 753-1944
E-mail: mlikar@aol.com

Harris & Harris

October 13, 2009

(TINY - NASDAQ)

Price:

$5.00

2009 Price Range:

$7 - $3

CAPITALIZATION

(As of September 30, 2005) 

Authorized to issue 45,000,000 shares of Common Stock, par value $0.01 per share, and 2,000,000 shares of preferred stock, par value $0.10 per share. Each share within a particular class or series thereof has equal voting, dividend, distribution and liquidation rights.

Title of Class

Number
Authorized

Number held by
company for
its own account

Number
outstanding

Common stock

45,000,000

1,828,740

25,966,758 (1)

Preferred stock

2,000,000

- 0 -

 0   

(1)  The number of shares of our Common Stock outstanding excludes:

  • Option to purchase approximately 1,345,836 shares of Common Stock at an exercise price of $10.11 outstanding as of October 5, 2009;

  • Option to purchase approximately 1,302,409 shares of Common Stock

FINANCIAL SUMMARY

 

December 31,
2008

December 31,
2007

December 31,
2006

Financial Position

 

 

 

Total Assets

$ 111,627,601

$ 142,893,332

$ 118,328,590

Total Liabilities

$ 2,096,488

$ 4,529,988

$ 4,398,287

Net Assets

$ 109,531,113

$ 138,363,344

$ 113,930,303

Net Asset Value per
outstanding share

$ 4.24

$ 5.93

$ 5.42

Shares outstanding

25,859,573

23,314,573

21,015,017

 

 

 

 

Classes of Assets

Value

% of
Total

Value

% of
Total

Value

% of
Total

Cash

$ 692,309

0.6

$ 330,009

0.2

$ 2,071,788

1.7

U.S. Government obligations

$ 52,983,940

47.5

$ 60,193,593

42.1

$ 58,656,147

49.6

Receivables

$ 56

0.0

$ 647,861

0.5

$ 1,445,277

1.2

Private Placements

$ 56,965,153

51.0

$ 78,110,384

54.7

$ 53,667,831

45.4

Other Assets

$ 986,143

0.9

$ 3,611,485

2.5

$ 2,487,547

2.1

Total Assets

$111,627,601

100.00

$142,893,332

100.0

$118,325,590

100.0

INTERVIEW WITH DOUGLAS W. JAMISON

By
Andrew G. Racz
Beral, Inc.

DOUG JAMISON (A):   Good morning, this is Doug Jamison from Harris and Harris Group.

ANDREW RACZ (Q):   Hi, how are you?

A:   I'm doing well, how are you?

Q:    Mr. Jamison, let me come to the pont. Ten years of fifteen ago, everybody talked about Silicon Valley or hi-tech investments. Since then, venture capital technically disappeared except part of Prime Equities like Fortress Investment Group (FIG) and Blackstone (BX). Now, does Harris and Harris represent the post-Obama world? Where would you put Harris & Harris in the big picture?

A:   We hope that President Obama in 2009, like President Clinton in 1992, will visit Palo Alto. I think Harris & Harris Group is a small venture capital firm, so it's between $100 and $200 million in assets. So we are small by venture capital standards. We're early stage, so we tend to spin companies and ideas out of research institutions so we get them at their earliest stages. We're focused on, as you know, an area of science and that scale, we at least believe is an exciting area of science that is really created some of the breakthroughs.

Q:   Let me know whom you consider independent companies and your competitors in the marketplace.

A:   Well, in the public realm, there is nobody because there is not another publicly-traded venture capital company.

The following tables summarize the values of our portfolios of venture capital investments and U.S. government obligations, as compared with their cost, at June 30, 2009, and December 31, 2008:

 

June 30, 2009

Dec. 31, 2008

Venture capital investments at cost

$ 92,989,567

$ 91,090,001

Net unrealized depreciation

$ 29,029,756

$ 34,124,848

Venture capital investments, at value

$ 63,959,811

$ 56,965,153

At December 31, 2008, our total assets and net assets were $111,627,601 and $109,531,113 respectively. Our net asset value per share at that date was $4.24 and our shares outstanding increased to 25,859,573 at December 31, 2008.

Q:   Let us go back into the past. There have been very successful public companies, mainly in Silicon Valley, that made not even a million or hundreds of millions -- some people even made billions. Now that ten years have past, the financial world has changed and I hope you don't mind, but the totally unknown company, Harris & Harris, comes along and says, well, this is a good concept. And over and above, let's say we are a well-regarded companies. We know how to raise money, and we are very conservative with our efforts. Correct?

A:   That is correct. I mean, we haven't "come along". We've been around since 1984, so we've been through multiple venture capital cycles before.

Q:   But at the moment, let's say in the public arena, you are unique.

A:   We are as unique as a venture capital firm, yes.

Q:   No, you have, if I'm correct from just reading stated assets, about $110 million.

A:   Correct.

Q:   Now, it's between cash, between advanced companies and non-advanced companies. How would you break it down?

A:   Of the $100 million in net assets, $64 million is the value of the venture capital portfolio, $47 million is the case as of June 30th. Of that $64 million in value that's in the venture capital portfolio, 70% of it is in the top 10 holdings of that venture capital portfolio.

Q:   More advanced, you would say?

A:   Some of our 34 companies are advanced. Our venture capital portfoli we put in three baskets. You know our early-stage companies that are long on promise but they have both technology risk and market risk and there's probably 12 companies in that basket. We then have a basket for the companies that have overcome their technology risk but they have market risk, so they're just putting their products on the market. We have 11 companies in that basket. And then we have the companies that have shown their ability to get to revenue. And that revenue would vary -- call it between $10 million plus -- but there are six companies in that basket, and those are what we call the execution risk basket. Neophotonics does over $100 million a year in revenue. Molecular Imprints does over $20 million in revenue.

New Investments

Amount

Cobalt Technologies, Inc.

$ 240,000

Laser Light Engines, Inc.

$ 2,000,000

PolyRemedy, Inc.

$ 244,500

Tetra Vitae Biosciences, Inc.

$ 250,000

Follow-on Investments
Total

$ 17,779,462

The following tables summarize the value of our portfolios of venture capital investments and U.S. government obligations as compared with their costs, at December 31, 2008, and December 31, 2007:

 

December
  2008                     2007

Venture capital investments, at cost

$ 91,090,001

$ 82,677,528

Net unrealized depreciation

$ 31,124,848

$ 4,567,144

Venture capital investments, at value

$ 56,965,153

$ 8,110,384

Q:   You have about $45-47 million cash.

A:   At June 30th, we did.

Q:   And do you roughly intend to keep 30-40% of your money in liquid assets? At all times?

Q:   Yes. I think that's a good thing. We always have follow-on investments, so we always have to have liquid assets reserved for those follow-on investments. However, on October 5, 2009, we have raised about $20M new equity.

Q:   Now then, you have a whole variety of early-stage companies which require cash, development and marketing. Let's say you get a telephone call from Fortress Investment Group, which is a $30 billion private equity company, and said, look, we come across with such-and-such a company, too small for us. Would you like to take an equity interest? This is the way you accumulate new ideas?

A:   Yes. I mean we also get calls from research institutions.

Q:   Anybody calls you and then . . .

A:   But other companies as well.

Q:   Then you develop some companies and then let's go to the very end, six, eleven, or I don't know how many companies, which are producing decent revenues and have an increased valuation other than the price you paid when you acquired them. Correct?

A:   Correct.

Q:   Now, some of these companies you are trying to bring public. You have already brought the one solar company public, if I'm correct.

A:   Yes. Actually, all the companies in our portfolio now are private. We brought them forward. We sold any public positions we have and they are all private currently. And yes, we would be looking to either bring them public or sell them in an M&A transaction.

Q:   Now I would like to select one at random, this solar company. You have a company called JA Solar?

A:   We have a company in Novalight that has partnered with JA Solar. JA Solar is a public company. We are not invested in them. We are invested in Novalight. They recently announced the partnership.

Q:   Briefly, what is Novalight? How much did it cost you? What's the value?

A:   Novalight is a Silicon Valley-based silicon nano particle or silicon ink photovoltaic company. We have invested multiple times in it. I believe our cost is approximately $3 to $4 million. It's currently valued at $5 million.

Q:   And if they make this transaction with the solar company, the solar company is already public and Novalight's value may increase substantially.

A:   I can't speak to that directly.

Q:   It could, because it is associated with the high-flying company.

JA SOLAR DEVELOPING PRODUCTS USING INNOVALIGHT'S SILICON INK TECHNOLOGY

JA Solar Holdings Co. Ltd. is working to commercialize a new generation of high-performance solar products using silicon ink technology from Innovalight Inc. JA Solar is currently developing silicon ink-based high-efficiency solar cells at its R&D pilot line in Yangzhou, China with plans for initial commercialization in 2010.

"Innovalight's silicon ink, in conjunction with JA Solar's leadership in high-volume solar cell manufacturing with demonstrated yield, conversion efficiency, and how production costs, provides a very promising solution to enhance the conversion efficiency of solar cells utilizing our existing solar cell manufacturing lines," said Qingtang Jiang, JA Solar's chief technology office. "JA Solar will continue to invest in new technologies to stay at the forefront of the solar sector.

A:   It is also selling products. So I would think that Novalight's value could potentially increase because their revenue increases dramatically from this partnership, and they will also associate themselves with other firms.

Q:   Just for the sake of argument, let's say your market value of Novalight could be $10, more than double what you paid for it.

A:   Well, from the way we make money as a venture capital firm, that is correct thinking. I mean, what we do is we like to get more than 2x return. We're looking for 5x to 10x returns in our best companies. But yes, the idea is we invest at wholesale, but private market transactions, and then when we sell them, we like to sell them at multiples of what our cost is.

Disclaimer

Information contained herein is based on data obtained from recognized statistical services, issuers reports or communications or other sources believed to be reliable. However, such information has not been verified by us and we do not make any representation to its accuracy or completeness. Any statement non-factual in nature constitutes only current opinions which are subject to change. BERAL INC. or their officers, directors, analysts or employees may have positions in the securities or commodities referred to herein, and may as principal or agent buy and sell such securities or commodities. An employee, analyst, officer or a director of BERAL INC. may serve as a director for companies mentioned in this report. Neither the information nor any comment expressed shall constitute an offer to sell or a solicitation of an offer to buy any securities or commodities mentioned herein. There may be instances when fundamental, technical and competitive opinions may not be in concert. This firm may from time to time perform investment banking or other services for or which investment banking or other businesses from any company mentioned in this report.

 

Archive

Bunker Hunt Article
Posted October 27, 2014

Lamb Realty.
Posted October 15, 2014

Chiquita Brands International
Posted August 20, 2014

Emerson Radio
Posted August 24, 2014

Evercore Partners Inc.
Posted August 5, 2014

Moelis & Co.
Posted July 22, 2014

Torchlight Energy Resources, Inc.
Posted May 21, 2014

Andrew Racz
Posted May 19, 2014

Royal Nickel Corporation
Posted May 02, 2014

Recorded Interview Robert Schermer, CEO
Posted March 15, 2014

Cowen Group, Inc.
Posted March 5, 2014

Pacific Booker Minerals Inc.
Posted February 4, 2014

Sandstorm Gold Ltd
Posted January 24, 2014

Global X Gold Explorer ETF
Posted January 16, 2014

Bring Back Mr. Giuliani
Posted December 24, 2013

Gold Reserve Inc.
Posted October 15, 2013

Premier Diagnostics Health Services Inc.
Posted September 25, 2013

Almaden Minerals
Posted September 3, 2013

Electric Cars In New York City
Posted August 27, 2013

The World Without Gold
Posted July 2, 2013

Remembering Mr. Churchill
Posted June 10, 2013

Financial Transactions in the Digital Age
Posted May 15, 2013

Senator Chester Crandell ( R ) Arizona
Posted May 7, 2013

Explor Resources Exs V
Posted April 14, 2013

The Gathering Storm
Posted April 9, 2013

Vietnam - West of Hong Kong
Posted March 11, 2013

Vietnam – In Peace!
Posted February 26, 2013

Wisdomtree Investments Inc
Posted January 28, 2013

Explor Resources Inc.
Posted November 28, 2012

Oremex Silver Inc.
Posted September 18, 2012

Alphamin Resources Corp.
Posted July 26, 2012

Harvest Natural Resources
Posted July 20, 2012

The Man Who Was Created by Gold
Posted July 06, 2012

Recorded Interview With Zach Erdem, President
Posted June 20, 2012

Nortec Minerals Corp.
Posted May 01, 2012

The Fundamentals of Chesapeake Gold Corporation
Posted April 16, 2012

Jourdan Resources Inc. (JOR.V)
Posted March 20, 2012

THE IMF
Posted February 27, 2012

Gold Index Bonds - To Avoid the Money Traps
Posted February 2, 2012

Monarch Casino & Resort, Inc.
Posted February 01, 2012

QMC Quantum Minerals
Posted january 19, 2012

African Metals Corp.
Posted December 21, 2011

The Crisis That Almost Wasn’t
Posted December 7, 2011

DNI METALS, INC
Posted November 18, 2011

The Crisis That Almost Wasn't
Posted November 15, 2011

Ocean Power Technologies, Inc
Posted October 19, 2011

The Mongolian Economic Miracle
Posted October 12, 2011

H. Hunt
The Son of Bunker Hunt
 
Posted August 24,2011

Sandstorm Gold
(SNDXF - NASDAQ)
Posted August 15, 2011

"Silver At $200
Posted July 29, 2011

"First Majestic Silver Corp
 Posted July 26, 2011

"Interview with Brian Kirwin,
President
American Bonanza Gold Corp"

Posted July 21, 2011

"Interview with Ian Foreman
President
Yale Resources Ltd."

Posted June 16,2011

"Interview with Brandon Mckee
Callinan Mines
By Andrew Racz "

Posted June 1, 2011

"Andrew Thompson Interview Soltoro Ltd."
Posted May 15, 2011

"Great Panther Silver Limited"
Posted March 29, 2011

"The 21st Century's Marshall Plan"
Posted March 17, 2011

"Interview With
Houston Hunt"

Posted February 23, 2011

"Esperanza Resources Corp."
Posted February 23, 2011 

"Douglas Lake Minerals"
Posted January 11, 2011 

"Do not bet against Casablanca"
Posted December 10, 2010 

"Palladium"
Posted December 8, 2010 

"Full Circle"
Posted November 19, 2010 

"REMX - NYSE ARCA - MV.RARE EARTH/STRATEGIC METALS"
Posted November 8, 2010 

SilverCrest Mines, Inc.
Posted October 26, 2010

Cache Exploration, Inc.
Posted October 22, 2010 

Silvore Fox Minerals Corp.
Posted September 29, 2010 

Almaden Minerals, Ltd.
Posted August 16, 2010 

"The Path Of A Hungarian Immigrant"
Posted August 12, 2010 

"Interview With
Mark Hazout -
Silver Dragon Resources
"

Posted June 24, 2010

"Who Owns Whom At The Final Tally"
Posted June 15, 2010 

"The World Needs
Bunker Hunt.
"

Posted May 24, 2010 

"Arafura Resources "
Posted April 15, 2010 

"MF Holdings LTD"
Posted April 7, 2010 

"Quest Uranium Corporation"
Posted April 5, 2010 

"Lynas Corporation, LTD"
Posted March 19, 2010 

"Rare Element Resources LTD"
Posted February 9, 2010 

"Mexco Energy Corporation"
Posted January 4, 2010 

"Claude Resources"
Posted December 16, 2009

"The Silver Spirit"
Posted November 25, 2009 

"... from Casablanca to Monte Carlo."
Posted November 20, 2009 

"Sutter Gold Mining, Inc."
Posted November 16, 2009 

"Whose Friends Are They Anyway?"
Posted November 4, 2009

"U.S. Energy Corporation"
Posted October 28, 2009 

"Harris & Harris"
Posted October 13, 2009


"They Made A Difference"
Posted September 30, 2009 

"Bridge Bancorp, Inc"
Posted September 22, 2009 

"Entree Gold - September 2009"
Posted September 3, 2009 

"Who Lost Mongolia"
Posted August 16, 2009 

"Mongolian Prime Minister Sanj Bayar -
A politician of the 21st century"

Posted July 16, 2009 

"Romios Gold"
Posted July 7, 2009 

"The Grand Alliance"
Posted July 6, 2009 

"Sandstorm Resources, Inc."
Posted June 22, 2009 

"Ireland, Inc."
Posted June 16, 2009 

"The Brave New World! - Gold at $1000"
Posted June 5, 2009 

"Claude Resources, Inc."
Posted May 28, 2009 

"Bullion Management Group"
Posted May 11, 2009

"Golden Hope Mines, Inc. - Retraction"
Posted May 4, 2009 

"Silvercrest Mines, Inc."
Posted April 1, 2009 

"Silver Dragon Resources"
Posted February 27, 2009

"In Gold We Trust"
Posted February 26, 2009

"Entree Gold: An Unusual Asset Accumulation"
Posted February 20, 2009 

"The Ultimate Colorful Fate of Edmond Safra, Bernie Madoff, and Governor Bill Richardson"
Posted January 12, 2009

"Silvermex Resources, LTD"
Posted December 13, 2008 

"Prime Minister of Mongolia"
Posted December 11, 2008 

"US Gold Corporation"
Posted December 1, 2008 

"Rubicon Minerals"
Posted November 5, 2008 

"Gold Coins & The Money Game"
Posted October 29, 2008 

"Gold and the Chinese Millennium"
Posted October 20, 2008

"JNR Resources, Inc."
Posted September 30, 2008

"Three Immigrants In Front Of The Court"
Posted September 24, 2008 

"Governor
Walter J. Hickel Interview"

Posted September 11, 2008

"The Alaskan Queen"
Posted September 9, 2008 

"Evercore Partners, Inc."
Posted September 3, 2008 

"Stalin In The
White House"

Posted September 2, 2008 

"Cal-Maine Foods Inc."
Posted August 4, 2008 

"The Mongolian Revolution"
Posted July 10, 2008 

"Mongolian Newsletter, First Edition"
Posted July 2, 2008 

"Goldsource Mines, Inc."
Posted July 1, 2008

"The Douglas Lake Story In The Age Of Fear"
Posted June 25, 2008 

"Mongolia: The 10th Richest Country in the World"
Posted June 10, 2008 

"North American Gem, Inc."
Posted June 5, 2008 

"The Emergence of Tanzania"
Posted June 4, 2008

"Tanzania - An Up & Coming Mineral & Agricultural Producer In Africa"
Posted June 2, 2008

"Western Potash Corp.
(WPX-VSE) "

Posted May 12, 2008 

"Judy Garland &
The Subprime Crisis"

Posted April 29, 2008 

"Altek Power Corp."
Posted April 27, 2008 

"Letter to Prime Minister of Mongolia"
Posted April 24, 2008 

"The Mongolian Manifesto"
Posted April 4, 2008 

"Prime Minister Sanj Bayar of Mongolia Receives The Nobel Peace Prize"
Posted March 17, 2008 

"Olympus Pacific Minerals, Inc."
Posted February 28, 2008 

"Tanzania Gold - Douglas Lake Minerals - Harp Sangha"
Posted February 21, 2008

"Warren Buffett Receives A Call From Franklin Roosevelt"
Posted February 19, 2008

"Gold At 2000!!"
Posted February 14, 2008

"Entrée Gold, Inc"
Posted February 11, 2008

"The Unexpected
Mongolian Dilemma"

Posted February 2, 2008 

"Mongolian Gold"
Posted January 8, 2008

"Sir, Do Not Abdicate"
Posted December 27, 2007

"No More Munich -
The Mongolian Version of 1938"

Posted December 11, 2007

"Watergate Saved Nixon's Life"
Posted November 28, 2007

"The Mongolian Wakeup Call"
Posted November 16, 2007 

"Sanj Bayar -
The Prime Minister of Mongolia"

Posted November 15, 2007 

"Stalin & Chavez"
Posted November 9, 2007 

"Tagish Lake Gold Corp."
Posted November 1, 2007 

"Gold Indexed Bonds"
Posted October 11, 2007

"Jasper Mining Corporation"
Posted September 27, 2007

"Ghengis Kahn Returns"
Posted September 27, 2007

"Interview with Professor William Pfaffenberger - Torch River Resources"
Posted September 22, 2007 

"Interview with
Jim Davis - President of Leeward Capital Corporation"

Posted September 4, 2007 

"Interview with
David Hjerpe - Newmac Resources, Inc."

Posted August 27, 2007 

"The Age of Special "Corporate" Relationships"
Posted August 23, 2007

"Entrée Gold Inc."
Follow Up Report #1

Posted July 24, 2007

"Aldershot Resources Ltd."
Posted July 16, 2007 

"Portal Resources"
Posted June 12, 2007 

"Ghengis Kahn Was Hungarian"
Posted May 31, 2007

"Bayswater Uranium Corp."
Posted May 30, 2007 

"Brilliant Mining Corp."
Posted May 22, 2007

"Golden Valley Mines, Ltd"
Posted April 21, 2007

"Warren Buffett - Franklin Roosevelt"
Posted March 15, 2007

"Rubicon Minerals Corp."
Posted March 1, 2007

"Robert Friedland -
The Man of The Year"

Posted February 21, 2007

"Lexam Exploration, Inc."
Posted February 11, 2007

"My Father Died In Auschwitz"
Posted January 19, 2007

"WisdomTree Investments, Inc."
Posted December 26, 2006

"Entrée Gold Inc."
Posted December 13, 2006

"Aero Mechanical Services, Ltd"
Posted November 17, 2006

"This Year I"m Voting For Dick Nixon"
Posted November 7, 2006

"Global Options
Group, Inc."

Posted November 1, 2006

"The Arrival of the
Nickel Billionaires"

Posted October 18, 2006

"The Kennedy-Nixon debate revisited"
Posted October 4, 2006

"Brilliant Mining Corp."
Posted September 17, 2006

"A Matter of Reasonable Doubt"
Ken Lay - Enron

Posted August 30, 2006

"Silver Wheaton - SLW"
Posted August 28, 2006 

"Silver In The
Twenty-First Century"

Posted August 16, 2006

"The Age of Mediocrity"
Posted July 19, 2006

"Let There Be Sunshine"
Kirk Kerkorian

Posted July 12, 2006

"Oil & Gas
Energy Crisis Solution"

Posted July 3, 2006

"I Am An Immigrant!"
Posted June 7, 2006

"Northern Star
Mining Corp."

Posted May 19, 2006 

"Gateway Gold:
It"s A Gold Story"

Posted May 15, 2006

"Ken Lay's Legacy"
Posted May 8, 2006

"The Principal Guest Was Missing"
Posted April 25, 2006

"J.P. Morgan Offers Advice To Ken Lay"
Posted April 11, 2006

"Pocketful Of
Miracles"

Posted April 8, 2006 

"Midway Gold
Corporation
"
Posted March 23, 2006 

"Harvest Gold"
Posted March 2, 2006 
 
"Sparton Resources"
Posted March 1, 2006 

"Interview with
Robert McEwen-
U.S. Gold Corporation
"
Posted February 22, 2006 

 
"A Tribute to
Rudy Giuliani
"
Posted February 15, 2006
 
"Your Money Is Not Yours"
-Enron & Martin Siegel, Esq.

Posted February 9, 2006

"Other People"s Money -Enron & Martin Siegel, Esq."
Posted January 28, 2006

"Northern Star Mining"
Posted January 16, 2006 
 
"Sonesta International Hotels Corporation"
Posted December 29, 2005 

"The Currency of Mass Destruction"
Posted December 5, 2005
 
"Bunker Hunt-Silver-China"
Posted November 28, 2005

"50 Relatives Worse Than Yours"
Posted November 14, 2005

"Then And Now"
Posted November 9, 2005 

"The Business of Hungary is Business!"
Posted October 31, 2005

"Mr. Prime Minister"
Posted October 13, 2005
 
"U.S. Gold Corp."
Posted September 29, 2005

"Orezone"
Posted September 23, 2005

"Mr Clarke -
Call In The Boys"

Posted September 12, 2005
 
"A Letter To
President Bush"

Posted September 8, 2005

"Mr. Smith Goes To Hungary"
Posted September 1, 2005
 
"Orko Gold"
Posted August 18, 2005

 "Near Hit"
Posted August 16, 2005

"An African Queen"
Posted August 11, 2005

"1848 and Beyond"
Posted August 4, 2005

 

 

Andrew Racz. 300 East 54 Street, Suite 26C, New York, NY 10022
Phone: (212) 319-6949 Fax: (212) 753-1944. E-mail: mlikar@aol.com

Copyright © 2011 Andrew Racz. All Rights Reserved.

Disclaimer