|                                                        |
|--------------------------------------------------------|
|                                                        |
| HARRIS & HARRIS GROUP, INC.                        |
| (Exact Name of Registrant as Specified in Its Charter) |

|                                 |
|---------------------------------|
|                                 |  |
| New York                        | 13-3119827 |
| (State or Other Jurisdiction of | (I.R.S. Employer Identification No.) |
| Incorporation or Organization)  |   |

|                                          |
|------------------------------------------|
|                                          |  |
| 1450 Broadway, New York, New York        | 10018 |
| (Address of Principal Executive Offices) | (Zip Code) |

|                                                      |
|------------------------------------------------------|
|                                                      |
| (212) 582-0900                                       |
| (Registrant's Telephone Number, Including Area Code) |

|                                               |
|-----------------------------------------------|
|                                               |  |  |
| Large accelerated filer   ̈     |   | Accelerated filer  x |
| Non-accelerated filer   ̈       |   | Smaller reporting company   ̈ |
| (Do not check if a smaller reporting company) |   |   |

|                                                |
|------------------------------------------------|
|                                                |  |
| Class                                          | Shares outstanding at November 8, 2016 |
|   Common Stock, $0.01 par value per share | 30,880,829 shares |

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|                                                                                                                |
|----------------------------------------------------------------------------------------------------------------|
|                                                                                                                |  |
|                                                                                                           | Page Number |
|                                                                                                           |   |
| PART I. FINANCIAL INFORMATION                                                                                  |   |
|                                                                                                           |   |
| Item 1. Consolidated Financial Statements                                                                      | 1 |
| Consolidated Statements of Assets and Liabilities                                                              | 2 |
| Consolidated Statements of Operations                                                                          | 3 |
| Consolidated Statements of Comprehensive Loss                                                                  | 4 |
| Consolidated Statements of Cash Flows                                                                          | 5 |
| Consolidated Statements of Changes in Net Assets                                                               | 6 |
| Consolidated Schedule of Investments                                                                           | 7 |
| Notes to Consolidated Financial Statements                                                                     | 41 |
| Financial Highlights                                                                                           | 67 |
| Item 2.  Management's Discussion and Analysis of Financial Condition  and Results of Operations | 68 |
| Cautionary Statement Regarding Forward-Looking Statements                                                      | 68 |
| Background                                                                                                     | 69 |
| Overview                                                                                                       | 69 |
| Current Business Environment                                                                                   | 79 |
| Valuation of Investments                                                                                       | 80 |
| Results of Operations                                                                                          | 83 |
| Financial Condition                                                                                            | 91 |
| Cash Flow                                                                                                      | 92 |
| Liquidity and Capital Resources                                                                                | 93 |
| Borrowings                                                                                                     | 94 |
| Contractual Obligations                                                                                        | 94 |
| Critical Accounting Policies                                                                                   | 95 |
| Recent Developments – Portfolio Companies                                                                | 97 |
| Item 3.  Quantitative and Qualitative Disclosures About Market Risk                                  | 99 |
| Item 4.  Controls and Procedures                                                                     | 100 |
| PART II.  OTHER INFORMATION                                                                          | 101 |
| Item 1. Legal Proceedings                                                                                      | 101 |
| Item 1A. Risk Factors                                                                                          | 101 |
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                                            | 101 |
| Sales of Unregistered Equity Securities                                                                        | 101 |
| Issuer Purchases of Equity Securities                                                                          | 101 |
| Item 3. Defaults Upon Senior Securities                                                                        | 102 |
| Item 4. Mine Safety Disclosures                                                                                | 102 |
| Item 5. Other Information                                                                                      | 102 |
| Item 6. Exhibits                                                                                               | 102 |
| Signatures                                                                                                     | 103 |
| Exhibit Index                                                                                                  | 104 |
| Financial Statements Schedule 12-14                                                                            | i-v |

----

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|                                                                                             |
|---------------------------------------------------------------------------------------------|
|                                                                                             |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES(Unaudited) |

|                                                                                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                    |  |  |  |  |  |  |  |
|                                                                                                                                                               | September 30, 2016 |   | December 31, 2015 |
| ASSETS                                                                                                                                                             |   |   |
| Investments, in portfolio securities at value:                                                                                                                     |   |   |   |
| Unaffiliated privately held companies(cost: $10,878,510 and $18,857,235, respectively)                                                                             | $ | 4,715,016 |  |   | $ | 5,376,472 |  |
| Unaffiliated rights to milestone payments(adjusted cost basis: $781,863 and $781,863, respectively)                                                                | 3,442,745 |  |   | 3,362,051 |  |
| Unaffiliated publicly traded securities(cost: $2,664,644 and $1,623,029, respectively)                                                                             | 922,605 |  |   | 957,544 |  |
| Non-controlled affiliated privately held companies(cost: $51,750,473 and $49,262,921, respectively)                                                                | 45,985,741 |  |   | 41,909,262 |  |
| Non-controlled affiliated publicly traded companies(cost: $17,073,716 and $23,165,788, respectively)                                                               | 5,431,815 |  |   | 18,371,105 |  |
| Controlled affiliated privately held companies(cost: $24,382,537 and $23,205,336, respectively)                                                                    | 7,247,421 |  |   | 7,010,534 |  |
| Equity method privately held companies(adjusted cost basis: $251,244 and $165,936, respectively)                                                                   | 251,244 |  |   | 165,936 |  |
| Total, investments in private portfolio companies, rights to milestone payments and public securities at value (cost: $107,782,987 and $117,062,108, respectively) | 67,996,587 |  |   | 77,152,904 |  |
| Cash                                                                                                                                                               | 13,384,820 |  |   | 17,922,630 |  |
| Funds held in escrow from sales of investments at value (Note 3)                                                                                                   | 116,872 |  |   | 374,565 |  |
| Receivable from portfolio companies                                                                                                                                | 26,081 |  |   | 13,032 |  |
| Receivable from sale of investments (Note 3)                                                                                                                       | 53,162 |  |   | 0 |  |
| Interest receivable                                                                                                                                                | 189,512 |  |   | 10,333 |  |
| Prepaid expenses                                                                                                                                                   | 274,586 |  |   | 563,699 |  |
| Other assets                                                                                                                                                       | 381,054 |  |   | 424,123 |  |
| Total assets                                                                                                                                                       | $ | 82,422,674 |  |   | $ | 96,461,286 |  |
| LIABILITIES & NET ASSETS                                                                                                                                       |   |   |
| Term loan credit facility (Note 5)                                                                                                                                 | $ | 5,000,000 |  |   | $ | 5,000,000 |  |
| Post retirement plan liabilities (Note 8)                                                                                                                          | 1,231,910 |  |   | 1,202,148 |  |
| Accounts payable and accrued liabilities                                                                                                                           | 632,715 |  |   | 1,268,355 |  |
| Deferred rent                                                                                                                                                      | 235,100 |  |   | 279,112 |  |
| Total liabilities                                                                                                                                                  | $ | 7,099,725 |  |   | $ | 7,749,615 |  |
| Commitments and contingencies (Note 11)                                                                                                                            |   |   |   |
| Net assets                                                                                                                                                         | $ | 75,322,949 |  |   | $ | 88,711,671 |  |
| Net assets are comprised of:                                                                                                                                       |   |   |   |
| Preferred stock, $0.10 par value, 2,000,000 shares authorized; none issued                                                                                         | $ | 0 |  |   | $ | 0 |  |
| Common stock, $0.01 par value, 45,000,000 shares authorized at 9/30/16 and 12/31/15; 33,218,651 and 33,183,576 issued at 9/30/16 and 12/31/15, respectively        | 332,186 |  |   | 331,836 |  |
| Additional paid in capital (Note 9)                                                                                                                                | 215,787,335 |  |   | 215,762,973 |  |
| Accumulated net operating and realized loss                                                                                                                        | (96,757,129 | ) |   | (83,377,629 | ) |
| Accumulated unrealized depreciation of investments                                                                                                                 | (39,786,400 | ) |   | (39,909,204 | ) |
| Accumulated other comprehensive income (Note 8)                                                                                                                    | 352,482 |  |   | 509,220 |  |
| Treasury stock, at cost (2,337,822 shares at 9/30/16 and 12/31/15) (Note 12)                                                                                       | (4,605,525 | ) |   | (4,605,525 | ) |
| Net assets                                                                                                                                                         | $ | 75,322,949 |  |   | $ | 88,711,671 |  |
| Shares outstanding                                                                                                                                                 | 30,880,829 |  |   | 30,845,754 |  |
| Net asset value per outstanding share                                                                                                                              | $ | 2.44 |  |   | $ | 2.88 |  |

----

|                                                                                 |
|---------------------------------------------------------------------------------|
|                                                                                 |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited) |

|                                                                           |
|---------------------------------------------------------------------------|
|                                                                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                      | Three Months Ended |   | Nine Months Ended |
|                                                                      | September 30, 2016 |   | September 30, 2015 |   | September 30, 2016 |   | September 30, 2015 |
| Investment income:                                                        |   |   |   |   |   |   |   |
| Interest from:                                                            |   |   |   |   |   |   |   |
| Unaffiliated companies                                                    | $ | 5,319 |  |   | $ | 6,785 |  |   | $ | 11,629 |  |   | $ | 27,561 |  |
| Non-controlled affiliated companies                                       | 105,572 |  |   | 44,886 |  |   | 258,444 |  |   | 299,208 |  |
| Controlled affiliated companies                                           | 103,558 |  |   | 72,759 |  |   | 289,700 |  |   | 164,392 |  |
| Cash and U.S. Treasury securities and other                               | 478 |  |   | 4,599 |  |   | 2,827 |  |   | 9,347 |  |
| Fees for providing managerial assistance to portfolio companies (Note 14) | 315,250 |  |   | 71,359 |  |   | 685,103 |  |   | 84,859 |  |
| Yield-enhancing fees on debt securities                                   | 35,975 |  |   | 44,014 |  |   | 80,533 |  |   | 90,062 |  |
| Total investment income                                                   | 566,152 |  |   | 244,402 |  |   | 1,328,236 |  |   | 675,429 |  |
| Expenses:                                                                 |   |   |   |   |   |   |   |
| Salaries, benefits and stock-based compensation (Note 9)                  | 618,070 |  |   | 955,900 |  |   | 1,839,577 |  |   | 3,012,078 |  |
| Administration and operations                                             | 65,763 |  |   | 105,120 |  |   | 318,175 |  |   | 341,214 |  |
| Professional fees                                                         | 286,930 |  |   | 278,654 |  |   | 935,495 |  |   | 1,165,673 |  |
| Rent (Note 3)                                                             | 75,266 |  |   | 83,308 |  |   | 189,707 |  |   | 218,772 |  |
| Insurance expense                                                         | 66,184 |  |   | 73,768 |  |   | 193,297 |  |   | 215,103 |  |
| Directors' fees and expenses                                              | 79,519 |  |   | 98,218 |  |   | 224,279 |  |   | 286,743 |  |
| Interest and other debt expenses                                          | 209,831 |  |   | 209,831 |  |   | 625,882 |  |   | 561,577 |  |
| Custody fees                                                              | 10,008 |  |   | 15,701 |  |   | 34,698 |  |   | 47,317 |  |
| Depreciation                                                              | 11,346 |  |   | 11,710 |  |   | 34,123 |  |   | 36,412 |  |
| Total expenses                                                            | 1,422,917 |  |   | 1,832,210 |  |   | 4,395,233 |  |   | 5,884,889 |  |
| Net operating loss                                                        | (856,765 | ) |   | (1,587,808 | ) |   | (3,066,997 | ) |   | (5,209,460 | ) |
| Net realized (loss) gain:                                                 |   |   |   |   |   |   |   |
| Realized (loss) gain  from investments:                                   |   |   |   |   |   |   |   |
| Unaffiliated companies                                                    | (2,926,711 | ) |   | (294,797 | ) |   | (5,852,173 | ) |   | 3,005,039 |  |
| Controlled affiliated companies                                           | 0 |  |   | 1,559,235 |  |   | 0 |  |   | 1,559,235 |  |
| Non-controlled affiliated companies                                       | 0 |  |   | 0 |  |   | (1,244,955 | ) |   | (392,430 | ) |
| Publicly traded companies                                                 | (3,042,478 | ) |   | 11,158 |  |   | (3,042,463 | ) |   | 52,569 |  |
| Realized (loss) gain  from investments                                    | (5,969,189 | ) |   | 1,275,596 |  |   | (10,139,591 | ) |   | 4,224,413 |  |
| Income tax expense  (Note 10)                                             | 50 |  |   | 376 |  |   | 4,541 |  |   | 2,081 |  |
| Net realized (loss) gain from investments                                 | (5,969,239 | ) |   | 1,275,220 |  |   | (10,144,132 | ) |   | 4,222,332 |  |
| Net decrease (increase)  in unrealizeddepreciation on investments:        |   |   |   |   |   |   |   |
| Unaffiliated companies                                                    | 2,947,500 |  |   | (1,371,570 | ) |   | 7,317,270 |  |   | (5,777,416 | ) |
| Controlled affiliated companies                                           | 249,748 |  |   | (2,057,974 | ) |   | (940,313 | ) |   | 951,492 |  |
| Unaffiliated rights to milestone payments                                 | 448,888 |  |   | 1,876,900 |  |   | 80,694 |  |   | 1,864,218 |  |
| Non-controlled affiliated companies                                       | (3,923,811 | ) |   | (11,672,922 | ) |   | 1,588,925 |  |   | (14,472,165 | ) |
| Publicly traded non-controlled affiliated companies                       | (2,027,026 | ) |   | (3,409,275 | ) |   | (10,710,083 | ) |   | (4,011,079 | ) |
| Publicly traded unaffiliated companies                                    | 3,191,640 |  |   | 102,816 |  |   | 2,786,311 |  |   | 325,767 |  |
| Net decrease (increase) in unrealized depreciation on investments         | 886,939 |  |   | (16,532,025 | ) |   | 122,804 |  |   | (21,119,183 | ) |
| Net realized and unrealized (loss) gain on investments                    | (5,082,300 | ) |   | (15,256,805 | ) |   | (10,021,328 | ) |   | (16,896,851 | ) |
| Share of loss on equity method investments                                | (82,972 | ) |   | (60,012 | ) |   | (168,371 | ) |   | (249,848 | ) |
| Net decrease in net assets resulting from operations:                     |   |   |   |   |   |   |   |
| Total                                                                     | $ | (6,022,037 | ) |   | $ | (16,904,625 | ) |   | $ | (13,256,696 | ) |   | $ | (22,356,159 | ) |
| Per average basic and diluted outstanding share                           | $ | (0.20 | ) |   | $ | (0.54 | ) |   | $ | (0.43 | ) |   | $ | (0.71 | ) |
| Average outstanding shares - basic and diluted                            | 30,880,829 |  |   | 31,251,950 |  |   | 30,859,267 |  |   | 31,272,790 |  |

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|                                                                                         |
|-----------------------------------------------------------------------------------------|
|                                                                                         |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS(Unaudited) |

|                                                      |
|------------------------------------------------------|
|                                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                 | Three Months EndedSeptember 30, 2016 |   | Three Months EndedSeptember 30, 2015 |   | Nine Months EndedSeptember 30, 2016 |   | Nine Months EndedSeptember 30, 2015 |
| Net decrease in net assets resulting from operations | $ | (6,022,037 | ) |   | $ | (16,904,625 | ) |   | $ | (13,256,696 | ) |   | $ | (22,356,159 | ) |
| Other comprehensive loss:                            |   |   |   |   |   |   |   |
| Amortization of prior service (benefit)              | (52,246 | ) |   | (52,246 | ) |   | (156,738 | ) |   | (156,738 | ) |
| Other comprehensive loss                             | (52,246 | ) |   | (52,246 | ) |   | (156,738 | ) |   | (156,738 | ) |
| Comprehensive loss                                   | $ | (6,074,283 | ) |   | $ | (16,956,871 | ) |   | $ | (13,413,434 | ) |   | $ | (22,512,897 | ) |

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|                                                                                 |
|---------------------------------------------------------------------------------|
|                                                                                 |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited) |

|                                                                                                                         |
|-------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                         |  |  |  |  |  |  |  |
|                                                                                                                    | Nine Months EndedSeptember 30, 2016 |   | Nine Months EndedSeptember 30, 2015 |
| Cash flows used in operating activities:                                                                                |   |   |   |
| Net decrease in net assets resulting from operations                                                                    | $ | (13,256,696 | ) |   | $ | (22,356,159 | ) |
| Adjustments to reconcile net decrease in net assets resulting from operations to net cash used in operating activities: |   |   |   |
| Net realized loss and change in unrealizeddepreciation on investments                                                   | 10,016,787 |  |   | 16,894,770 |  |
| Depreciation of fixed assets, amortization of prepaidassets and accretion of bridge note interest                       | (353,331 | ) |   | (381,204 | ) |
| Share of loss on equity method investments                                                                              | 168,371 |  |   | 249,848 |  |
| Stock-based compensation expense                                                                                        | 47,027 |  |   | 617,972 |  |
| Amortization of prior service (benefit)                                                                                 | (156,738 | ) |   | (156,738 | ) |
| Funding of operating commitment to equity method investments                                                            | (253,680 | ) |   | (262,215 | ) |
| Purchase of affiliated portfolio companies                                                                              | (5,517,052 | ) |   | (6,690,532 | ) |
| Purchase of unaffiliated portfolio companies                                                                            | (698,300 | ) |   | (509,824 | ) |
| Payments received on debt investments                                                                                   | 0 |  |   | 783,418 |  |
| Proceeds from repayment of bridge notes of affiliated portfolio companies                                               | 113,950 |  |   | 39,757 |  |
| Proceeds from repayment of bridge notes of controlled affiliated portfolio companies                                    | 869,242 |  |   | 0 |  |
| Proceeds from repayment of bridge notes of non-controlled affiliated portfolio companies                                | 0 |  |   | 2,415,188 |  |
| Proceeds from sale of investments of unaffiliated portfolio companies                                                   | 3,094,171 |  |   | 5,557,846 |  |
| Proceeds from sale of investments of publicly traded unaffiliated portfolio companies                                   | 2,007,980 |  |   | 170,662 |  |
| Changes in assets and liabilities:                                                                                      |   |   |   |
| Receivable from portfolio companies                                                                                     | (13,049 | ) |   | 160,877 |  |
| Receivable from sale of investments                                                                                     | (53,162 | ) |   | 0 |  |
| Interest receivable                                                                                                     | (179,179 | ) |   | 51,462 |  |
| Prepaid expenses                                                                                                        | 289,113 |  |   | 334,202 |  |
| Other assets                                                                                                            | 10,379 |  |   | (191,891 | ) |
| Post retirement plan liabilities                                                                                        | 29,762 |  |   | 40,065 |  |
| Accounts payable and accrued liabilities                                                                                | (635,640 | ) |   | (257,935 | ) |
| Deferred rent                                                                                                           | (44,012 | ) |   | (38,752 | ) |
| Net cash used in operating activities                                                                                   | (4,514,057 | ) |   | (3,529,183 | ) |
| Cash flows from investing activities:                                                                                   |   |   |   |
| Purchase of fixed assets                                                                                                | (1,438 | ) |   | (6,806 | ) |
| Net cash used in investing activities                                                                                   | (1,438 | ) |   | (6,806 | ) |
| Cash flows from financing activities:                                                                                   |   |   |   |
| Proceeds from drawdown of loan facility                                                                                 | 0 |  |   | 5,000,000 |  |
| Purchase of treasury stock                                                                                              | 0 |  |   | (737,662 | ) |
| Payment of withholdings related to net settlement of restricted stock                                                   | (22,315 | ) |   | (47,644 | ) |
| Net cash (used in) provided by financing activities                                                                     | (22,315 | ) |   | 4,214,694 |  |
| Net (decrease) increase in cash                                                                                         | $ | (4,537,810 | ) |   | $ | 678,705 |  |
| Cash at beginning of the period                                                                                         | 17,922,630 |  |   | 20,748,314 |  |
| Cash at end of the period                                                                                               | $ | 13,384,820 |  |   | $ | 21,427,019 |  |
| Supplemental disclosures of cash flow information:                                                                      |   |   |   |
| Income taxes paid                                                                                                       | $ | 4,541 |  |   | $ | 2,081 |  |
| Interest paid                                                                                                           | $ | 380,556 |  |   | $ | 304,167 |  |

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|                                                                                            |
|--------------------------------------------------------------------------------------------|
|                                                                                            |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS(Unaudited) |

|                                                                                        |
|----------------------------------------------------------------------------------------|
|                                                                                        |  |  |  |  |  |  |  |
|                                                                                   | Nine Months EndedSeptember 30, 2016 |   | Year Ended December 31, 2015 |
| Changes in net assets from operations:                                                 |   |   |   |
| Net operating loss                                                                     | $ | (3,066,997 | ) |   | $ | (7,162,510 | ) |
| Net realized (loss) gain on investments                                                | (10,144,132 | ) |   | 4,531,700 |  |
| Net decrease (increase) in unrealized depreciation on investments                      | 122,804 |  |   | (17,302,729 | ) |
| Share of loss on equity method investments                                             | (168,371 | ) |   | (312,291 | ) |
| Net decrease in net assets resulting from operations                                   | (13,256,696 | ) |   | (20,245,830 | ) |
| Changes in net assets from capital stock transactions:                                 |   |   |   |
| Purchase of treasury stock                                                             | 0 |  |   | (1,199,994 | ) |
| Acquisition of vested restricted stock awards to pay required employee withholding tax | (22,315 | ) |   | (86,914 | ) |
| Stock-based compensation expense                                                       | 47,027 |  |   | 798,965 |  |
| Net increase (decrease) in net assets resulting  from capital stock transactions       | 24,712 |  |   | (487,943 | ) |
| Changes in net assets from accumulated other comprehensive loss:                       |   |   |   |
| Other comprehensive loss                                                               | (156,738 | ) |   | (208,983 | ) |
| Net decrease in net assets resulting from accumulated other comprehensive loss         | (156,738 | ) |   | (208,983 | ) |
| Net decrease in net assets:                                                            | (13,388,722 | ) |   | (20,942,756 | ) |
| Net Assets:                                                                            |   |   |   |
| Beginning of the period                                                                | 88,711,671 |  |   | 109,654,427 |  |
| End of the period                                                                      | $ | 75,322,949 |  |   | $ | 88,711,671 |  |

----

|                                                                                                         |
|---------------------------------------------------------------------------------------------------------|
|                                                                                                         |  |  |  |  |  |  |  |  |  |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2016(Unaudited) |
|                                                                                                    |   |   |   |   |   |   |   |   |   |
|                                                                                                    | Method ofValuation (1) |   | PrimaryIndustry (2) |   | Cost |   | Shares/Principal |   | Value |

|                                                                                         |
|-----------------------------------------------------------------------------------------|
|                                                                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Investments in Unaffiliated Companies (3) -                                             |   |   |   |   |   |   |   |   |   |
| 12.1% of net assets at value                                                            |   |   |   |   |   |   |   |   |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |
| Private Placement Portfolio (Illiquid) (4) -                                            |   |   |   |   |   |   |   |   |   |
| 6.3% of net assets at value                                                             |   |   |   |   |   |   |   |   |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |
| Fleet Health Alliance, LLC (5)(8)(9)(10)                                                |   |   | Life Sciences |   |   |   |   |   |   |
| Developing software for information transfer amongst healthcare providers and consumers |   |   |   |   |   |   |   |   |   |
| Unsecured Convertible Bridge Note, 0%, (acquired 4/22/16)                               | (M) |   |   |   | $ | 225,000 |  |   | $ | 225,000 |  |   | $ | 225,000 |  |
|                                                                                    |   |   |   |   |   |   |   |   |   |
| Mersana Therapeutics, Inc. (5)(8)(9)                                                    |   |   | Life Sciences |   |   |   |   |   |   |
| Developing antibody drug conjugates for cancer therapy                                  |   |   |   |   |   |   |   |   |   |
| Common Stock (acquired 7/27/12)                                                         | (H) |   |   |   | 3,875,395 |  |   | 350,539 |  |   | 717,186 |  |
| Series A-1 Convertible Preferred Stock (acquired 7/27/12-4/2/14)                        | (H) |   |   |   | 683,538 |  |   | 635,081 |  |   | 1,336,199 |  |
| Series B-1 Convertible Preferred Stock (acquired 2/20/15-6/14/16)                       | (H) |   |   |   | 365,820 |  |   | 339,887 |  |   | 731,555 |  |
|                                                                                    |   |   |   |   | 4,924,753 |  |   |   |   | 2,784,940 |  |
|                                                                                    |   |   |   |   |   |   |   |   |   |
| Muses Labs, Inc. (5)(8)(10)                                                             |   |   | Life Sciences |   |   |   |   |   |   |
| Developing a data analytics platform for precision medicine                             |   |   |   |   |   |   |   |   |   |
| Unsecured Convertible Bridge Note, 5%, (acquired 5/25/16)                               | (M) |   |   |   | 215,746 |  |   | $ | 212,000 |  |   | 215,746 |  |
|                                                                                    |   |   |   |   |   |   |   |   |   |
| Nanosys, Inc. (5)(8)(9)                                                                 |   |   | Energy |   |   |   |   |   |   |
| Developing inorganic nanowires and quantum dots for use in LED-backlit devices          |   |   |   |   |   |   |   |   |   |
| Series C Convertible Preferred Stock (acquired 4/10/03)                                 | (M) |   |   |   | 1,500,000 |  |   | 803,428 |  |   | 128,149 |  |
| Series D Convertible Preferred Stock (acquired 11/7/05)                                 | (M) |   |   |   | 3,000,003 |  |   | 1,016,950 |  |   | 436,897 |  |
| Series E Convertible Preferred Stock (acquired 8/13/10)                                 | (M) |   |   |   | 496,573 |  |   | 433,688 |  |   | 323,784 |  |
|                                                                                    |   |   |   |   | 4,996,576 |  |   |   |   | 888,830 |  |
|                                                                                    |   |   |   |   |   |   |   |   |   |
| Nano Terra, Inc. (5)(8)                                                                 |   |   | Energy |   |   |   |   |   |   |
| Developing surface chemistry and nano-manufacturing solutions                           |   |   |   |   |   |   |   |   |   |
| Warrants for Common Stock expiring on 2/22/21 (acquired 2/22/11)                        | (I) |   |   |   | 69,168 |  |   | 4,462 |  |   | 407 |  |
| Warrants for Series A-3 Preferred Stock expiring on 11/15/22 (acquired 11/15/12)        | (I) |   |   |   | 35,403 |  |   | 47,508 |  |   | 97,345 |  |
|                                                                                    |   |   |   |   | 104,571 |  |   |   |   | 97,752 |  |
|                                                                                    |   |   |   |   |   |   |   |   |   |

----

|                                                                                                         |
|---------------------------------------------------------------------------------------------------------|
|                                                                                                         |  |  |  |  |  |  |  |  |  |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2016(Unaudited) |
|                                                                                                    |   |   |   |   |   |   |   |   |   |
|                                                                                                    | Method ofValuation (1) |   | PrimaryIndustry (2) |   | Cost |   | Shares/Principal |   | Value |

|                                                                                                                   |
|-------------------------------------------------------------------------------------------------------------------|
|                                                                                                                   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Investments in Unaffiliated Companies (3) -                                                                       |   |   |   |   |   |   |   |   |   |
| 12.1% of net assets at value (Cont.)                                                                              |   |   |   |   |   |   |   |   |   |
|                                                                                                              |   |   |   |   |   |   |   |   |   |
| Private Placement Portfolio (Illiquid) (4) -                                                                      |   |   |   |   |   |   |   |   |   |
| 6.3% of net assets at value (Cont.)                                                                               |   |   |   |   |   |   |   |   |   |
|                                                                                                              |   |   |   |   |   |   |   |   |   |
| Phylagen, Inc. (5)(8)                                                                                             |   |   | Life Sciences |   |   |   |   |   |   |
| Developing technology to improve human health and business productivity                                           |   |   |   |   |   |   |   |   |   |
| Secured Convertible Bridge Note, 5%, (acquired 2/5/15)                                                            | (M) |   |   |   | $ | 216,548 |  |   | $ | 200,000 |  |   | $ | 303,167 |  |
| Secured Convertible Bridge Note, 5%, (acquired 6/5/15)                                                            | (M) |   |   |   | 10,663 |  |   | $ | 10,000 |  |   | 14,928 |  |
|                                                                                                              |   |   |   |   | 227,211 |  |   |   |   | 318,095 |  |
|                                                                                                              |   |   |   |   |   |   |   |   |   |
| Xenio Corp. (5)(8)(11)                                                                                            |   |   | Electronics |   |   |   |   |   |   |
| Developing a smart platform for LED lighting that enables local intelligence and communication capabilities       |   |   |   |   |   |   |   |   |   |
| Common Stock (acquired 8/1/16)                                                                                    | (M) |   |   |   | 184,653 |  |   | 221,938 |  |   | 184,653 |  |
|                                                                                                              |   |   |   |   |   |   |   |   |   |
| Total Unaffiliated Private Portfolio (cost: $10,878,510)                                                          |   |   |   |   |   |   |   |   | $ | 4,715,016 |  |
|                                                                                                              |   |   |   |   |   |   |   |   |   |
| Rights to Milestone Payments (Illiquid) (6) -                                                                     |   |   |   |   |   |   |   |   |   |
| 4.6% of net assets at value                                                                                       |   |   |   |   |   |   |   |   |   |
|                                                                                                              |   |   |   |   |   |   |   |   |   |
| Amgen, Inc. (8)(9)                                                                                                |   |   | Life Sciences |   |   |   |   |   |   |
| Rights to Milestone Payments from Acquisition of BioVex Group, Inc. (acquired 3/4/11)                             | (I) |   |   |   | $ | 548,998 |  |   | $ | 548,998 |  |   | $ | 2,975,353 |  |
|                                                                                                              |   |   |   |   |   |   |   |   |   |
| Canon, Inc. (8)(9)                                                                                                |   |   | Electronics |   |   |   |   |   |   |
| Rights to Milestone Payments from Acquisition of Molecular Imprints, Inc. (acquired 4/18/14)                      | (I) |   |   |   | 232,865 |  |   | $ | 232,865 |  |   | 467,392 |  |
|                                                                                                              |   |   |   |   |   |   |   |   |   |
| Laird Technologies, Inc. (8)(9)                                                                                   |   |   | Energy |   |   |   |   |   |   |
| Rights to Milestone Payments from Merger & Acquisition of Nextreme Thermal Solutions, Inc. (acquired 2/13/13) | (I) |   |   |   | 0 |  |   | $ | 0 |  |   | 0 |  |
|                                                                                                              |   |   |   |   |   |   |   |   |   |
| Total Unaffiliated Rights to Milestone Payments (cost: $781,863)                                                  |   |   |   |   |   |   |   |   | $ | 3,442,745 |  |
|                                                                                                              |   |   |   |   |   |   |   |   |   |

----

|                                                                                                         |
|---------------------------------------------------------------------------------------------------------|
|                                                                                                         |  |  |  |  |  |  |  |  |  |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2016(Unaudited) |
|                                                                                                    |   |   |   |   |   |   |   |   |   |
|                                                                                                    | Method ofValuation (1) |   | PrimaryIndustry (2) |   | Cost |   | Shares/Principal |   | Value |

|                                                                                                |
|------------------------------------------------------------------------------------------------|
|                                                                                                |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Publicly Traded Portfolio (7) -                                                                |   |   |   |   |   |   |   |   |   |
| 1.2% of net assets at value                                                                    |   |   |   |   |   |   |   |   |   |
|                                                                                           |   |   |   |   |   |   |   |   |   |
| Champions Oncology, Inc. (5)(9)                                                                |   |   | Life Sciences |   |   |   |   |   |   |
| Developing its TumorGraftTM platform for personalized medicine and drug development       |   |   |   |   |   |   |   |   |   |
| Common Stock (acquired 3/24/11-3/11/15)                                                        | (M) |   |   |   | $ | 966,588 |  |   | 145,075 |  |   | $ | 243,726 |  |
| Warrants for Common Stock expiring 1/28/19 (acquired 1/28/13)                                  | (I) |   |   |   | 400 |  |   | 5,500 |  |   | 2,281 |  |
|                                                                                           |   |   |   |   | 966,988 |  |   |   |   | 246,007 |  |
|                                                                                           |   |   |   |   |   |   |   |   |   |
| OpGen, Inc. (5)(9)(12)                                                                         |   |   | Life Sciences |   |   |   |   |   |   |
| Developing tools for genomic sequence assembly and analysis                                    |   |   |   |   |   |   |   |   |   |
| Common Stock (acquired 5/5/15)                                                                 | (M) |   |   |   | 1,271,292 |  |   | 316,335 |  |   | 518,789 |  |
| Warrants for the Purchase of Common Stock expiring 5/8/20 (acquired 5/5/15)                    | (M) |   |   |   | 425,579 |  |   | 300,833 |  |   | 118,197 |  |
| Warrants for the Purchase of Common Stock expiring 2/17/25 (acquired 5/5/15)                   | (I) |   |   |   | 785 |  |   | 31,206 |  |   | 39,612 |  |
|                                                                                           |   |   |   |   | 1,697,656 |  |   |   |   | 676,598 |  |
|                                                                                           |   |   |   |   |   |   |   |   |   |
| Total Unaffiliated Publicly Traded Portfolio (cost: $2,664,644)                                |   |   |   |   |   |   |   |   | $ | 922,605 |  |
|                                                                                           |   |   |   |   |   |   |   |   |   |
| Total Investments in Unaffiliated Companies (cost: $14,325,017)                                |   |   |   |   |   |   |   |   | $ | 9,080,366 |  |
|                                                                                           |   |   |   |   |   |   |   |   |   |
| Investments in Non-Controlled Affiliated Companies (3) -                                       |   |   |   |   |   |   |   |   |   |
| 68.3% of net assets at value                                                                   |   |   |   |   |   |   |   |   |   |
|                                                                                           |   |   |   |   |   |   |   |   |   |
| Private Placement Portfolio (Illiquid) (13) -                                                  |   |   |   |   |   |   |   |   |   |
| 61.1% of net assets at value                                                                   |   |   |   |   |   |   |   |   |   |
|                                                                                           |   |   |   |   |   |   |   |   |   |
| ABSMaterials, Inc. (5)(8)                                                                      |   |   | Energy |   |   |   |   |   |   |
| Developing nano-structured absorbent materials for water remediation and consumer applications |   |   |   |   |   |   |   |   |   |
| Series A Convertible Preferred Stock (acquired 2/17/10-10/24/11)                               | (I) |   |   |   | $ | 435,000 |  |   | 390,000 |  |   | $ | 240,482 |  |
| Series B Convertible Preferred Stock (acquired 11/8/13-6/25/14)                                | (I) |   |   |   | 1,217,644 |  |   | 1,037,751 |  |   | 852,557 |  |
| Secured Convertible Bridge Note, 8%, (acquired 1/20/16)                                        | (M) |   |   |   | 105,589 |  |   | $ | 100,000 |  |   | 105,589 |  |
|                                                                                           |   |   |   |   | 1,758,233 |  |   |   |   | 1,198,628 |  |
|                                                                                           |   |   |   |   |   |   |   |   |   |

----

|                                                                                                         |
|---------------------------------------------------------------------------------------------------------|
|                                                                                                         |  |  |  |  |  |  |  |  |  |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2016(Unaudited) |
|                                                                                                    |   |   |   |   |   |   |   |   |   |
|                                                                                                    | Method ofValuation (1) |   | PrimaryIndustry (2) |   | Cost |   | Shares/Principal |   | Value |

|                                                                                                                                                        |
|--------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Investments in Non-Controlled Affiliated Companies (3) -                                                                                               |   |   |   |   |   |   |   |   |   |
| 68.3% of net assets at value (Cont.)                                                                                                                   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                   |   |   |   |   |   |   |   |   |   |
| Private Placement Portfolio (Illiquid) (13) -                                                                                                          |   |   |   |   |   |   |   |   |   |
| 61.1% of net assets at value (Cont.)                                                                                                                   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                   |   |   |   |   |   |   |   |   |   |
| AgBiome, LLC (5)(8)(9)                                                                                                                                 |   |   | Life Sciences |   |   |   |   |   |   |
| Providing early-stage research and discovery for agriculture and utilizing the crop microbiome to identify products that reduce risk and improve yield |   |   |   |   |   |   |   |   |   |
| Series A-1 Convertible Preferred Stock (acquired 1/30/13)                                                                                              | (I) |   |   |   | $ | 2,000,000 |  |   | 2,000,000 |  |   | $ | 5,877,743 |  |
| Series A-2 Convertible Preferred Stock (acquired 4/9/13-10/15/13)                                                                                      | (I) |   |   |   | 521,740 |  |   | 417,392 |  |   | 1,273,672 |  |
| Series B Convertible Preferred Stock (acquired 8/7/15)                                                                                                 | (I) |   |   |   | 500,006 |  |   | 160,526 |  |   | 686,576 |  |
|                                                                                                                                                   |   |   |   |   | 3,021,746 |  |   |   |   | 7,837,991 |  |
|                                                                                                                                                   |   |   |   |   |   |   |   |   |   |
| D-Wave Systems, Inc. (5)(8)(9)(14)                                                                                                                     |   |   | Electronics |   |   |   |   |   |   |
| Developing high-performance quantum computing systems                                                                                                  |   |   |   |   |   |   |   |   |   |
| Series 1 Class B Convertible Preferred Stock (acquired 9/30/08)                                                                                        | (H) |   |   |   | 1,002,074 |  |   | 1,144,869 |  |   | 2,520,573 |  |
| Series 1 Class C Convertible Preferred Stock (acquired 9/30/08)                                                                                        | (H) |   |   |   | 487,804 |  |   | 450,450 |  |   | 995,955 |  |
| Series 1 Class D Convertible Preferred Stock (acquired 9/30/08)                                                                                        | (H) |   |   |   | 748,473 |  |   | 855,131 |  |   | 1,890,714 |  |
| Series 1 Class E Convertible Preferred Stock (acquired 11/24/10)                                                                                       | (H) |   |   |   | 248,049 |  |   | 269,280 |  |   | 603,580 |  |
| Series 1 Class F Convertible Preferred Stock (acquired 11/24/10)                                                                                       | (H) |   |   |   | 238,323 |  |   | 258,721 |  |   | 579,913 |  |
| Series 1 Class H Convertible Preferred Stock (acquired 6/27/14)                                                                                        | (H) |   |   |   | 909,088 |  |   | 460,866 |  |   | 1,119,022 |  |
| Series 2 Class D Convertible Preferred Stock (acquired 9/30/08)                                                                                        | (H) |   |   |   | 736,019 |  |   | 678,264 |  |   | 1,499,657 |  |
| Series 2 Class E Convertible Preferred Stock (acquired 6/1/12-3/22/13)                                                                                 | (H) |   |   |   | 659,493 |  |   | 513,900 |  |   | 1,159,038 |  |
| Series 2 Class F Convertible Preferred Stock (acquired 6/1/12-3/22/13)                                                                                 | (H) |   |   |   | 633,631 |  |   | 493,747 |  |   | 1,113,585 |  |
| Warrants for Common Stock expiring 5/12/19 (acquired 5/12/14)                                                                                          | (I) |   |   |   | 26,357 |  |   | 20,415 |  |   | 16,154 |  |
|                                                                                                                                                   |   |   |   |   | 5,689,311 |  |   |   |   | 11,498,191 |  |
|                                                                                                                                                   |   |   |   |   |   |   |   |   |   |

----

|                                                                                                         |
|---------------------------------------------------------------------------------------------------------|
|                                                                                                         |  |  |  |  |  |  |  |  |  |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2016(Unaudited) |
|                                                                                                    |   |   |   |   |   |   |   |   |   |
|                                                                                                    | Method ofValuation (1) |   | PrimaryIndustry (2) |   | Cost |   | Shares/Principal |   | Value |

|                                                                                                      |
|------------------------------------------------------------------------------------------------------|
|                                                                                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Investments in Non-Controlled Affiliated Companies (3) -                                             |   |   |   |   |   |   |   |   |   |
| 68.3% of net assets at value (Cont.)                                                                 |   |   |   |   |   |   |   |   |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |
| Private Placement Portfolio (Illiquid) (13) -                                                        |   |   |   |   |   |   |   |   |   |
| 61.1% of net assets at value (Cont.)                                                                 |   |   |   |   |   |   |   |   |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |
| EchoPixel, Inc. (5)(8)                                                                               |   |   | Life Sciences |   |   |   |   |   |   |
| Developing virtual reality 3-D visualization software for life sciences and health care applications |   |   |   |   |   |   |   |   |   |
| Series Seed Convertible Preferred Stock (acquired 6/21/13-6/30/14)                                   | (I) |   |   |   | $ | 1,250,000 |  |   | 4,194,630 |  |   | $ | 920,842 |  |
| Series Seed-2 Convertible Preferred Stock (acquired 1/22/16)                                         | (I) |   |   |   | 500,000 |  |   | 1,476,668 |  |   | 329,089 |  |
| Unsecured Convertible Bridge Note, 0%, (acquired 7/12/16)                                            | (M) |   |   |   | 350,000 |  |   | $ | 350,000 |  |   | 437,500 |  |
|                                                                                                 |   |   |   |   | 2,100,000 |  |   |   |   | 1,687,431 |  |
|                                                                                                 |   |   |   |   |   |   |   |   |   |
| Ensemble Therapeutics Corporation (5)(8)(9)                                                          |   |   | Life Sciences |   |   |   |   |   |   |
| Developing DNA-Programmed ChemistryTM for the discovery of new classes of therapeutics          |   |   |   |   |   |   |   |   |   |
| Series B Convertible Preferred Stock (acquired 6/6/07)                                               | (I) |   |   |   | 2,000,000 |  |   | 1,449,275 |  |   | 0 |  |
| Series B-1 Convertible Preferred Stock (acquired 4/21/14)                                            | (I) |   |   |   | 679,754 |  |   | 492,575 |  |   | 1,201,610 |  |
|                                                                                                 |   |   |   |   | 2,679,754 |  |   |   |   | 1,201,610 |  |
|                                                                                                 |   |   |   |   |   |   |   |   |   |
| Genome Profiling, LLC (5)(8)(10)                                                                     |   |   | Life Sciences |   |   |   |   |   |   |
| Developing a platform to analyze and understand the epigenome                                        |   |   |   |   |   |   |   |   |   |
| Unsecured Convertible Bridge Note, 8%, (acquired 8/4/16)                                             | (M) |   |   |   | 230,000 |  |   | $ | 230,000 |  |   | 230,000 |  |
|                                                                                                 |   |   |   |   |   |   |   |   |   |
| HZO, Inc. (5)(8)                                                                                     |   |   | Electronics |   |   |   |   |   |   |
| Developing novel industrial coatings that protect electronics against damage from liquids            |   |   |   |   |   |   |   |   |   |
| Common Stock (acquired 6/23/14)                                                                      | (M) |   |   |   | 666,667 |  |   | 405,729 |  |   | 378,952 |  |
| Series I Convertible Preferred Stock (acquired 6/23/14)                                              | (M) |   |   |   | 5,709,835 |  |   | 2,266,894 |  |   | 3,538,876 |  |
| Series II Convertible Preferred Stock (acquired 6/23/14-8/3/15)                                      | (M) |   |   |   | 2,500,006 |  |   | 674,638 |  |   | 1,568,988 |  |
| Series II-A Convertible Preferred Stock (acquired 9/9/16)                                            | (M) |   |   |   | 226,070 |  |   | 69,053 |  |   | 245,009 |  |
| Warrants for Series II-A Convertible Preferred Stock expiring 7/15/23 (acquired 7/15/16)             | (I) |   |   |   | 29,820 |  |   | 6,577 |  |   | 23,274 |  |
|                                                                                                 |   |   |   |   | 9,132,398 |  |   |   |   | 5,755,099 |  |
|                                                                                                 |   |   |   |   |   |   |   |   |   |

----

|                                                                                                         |
|---------------------------------------------------------------------------------------------------------|
|                                                                                                         |  |  |  |  |  |  |  |  |  |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2016(Unaudited) |
|                                                                                                    |   |   |   |   |   |   |   |   |   |
|                                                                                                    | Method ofValuation (1) |   | PrimaryIndustry (2) |   | Cost |   | Shares/Principal |   | Value |

|                                                                                                                      |
|----------------------------------------------------------------------------------------------------------------------|
|                                                                                                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Investments in Non-Controlled Affiliated Companies (3) -                                                             |   |   |   |   |   |   |   |   |   |
| 68.3% of net assets at value (Cont.)                                                                                 |   |   |   |   |   |   |   |   |   |
|                                                                                                                 |   |   |   |   |   |   |   |   |   |
| Private Placement Portfolio (Illiquid) (13) -                                                                        |   |   |   |   |   |   |   |   |   |
| 61.1% of net assets at value (Cont.)                                                                                 |   |   |   |   |   |   |   |   |   |
|                                                                                                                 |   |   |   |   |   |   |   |   |   |
| Laser Light Engines, Inc. (8)(9)(15)                                                                                 |   |   | Energy |   |   |   |   |   |   |
| Manufactured solid-state light sources for digital cinema and large-venue projection displays                        |   |   |   |   |   |   |   |   |   |
| Series A Convertible Preferred Stock (acquired 5/6/08)                                                               | (M) |   |   |   | $ | 2,000,000 |  |   | 7,499,062 |  |   | $ | 0 |  |
| Series B Convertible Preferred Stock (acquired 9/17/10)                                                              | (M) |   |   |   | 3,095,802 |  |   | 13,571,848 |  |   | 0 |  |
| Secured Convertible Bridge Note, 12%, (acquired 10/7/2011)                                                           | (M) |   |   |   | 200,000 |  |   | $ | 200,000 |  |   | 0 |  |
| Secured Convertible Bridge Note, 12%, (acquired 11/17/2011)                                                          | (M) |   |   |   | 95,652 |  |   | $ | 95,652 |  |   | 0 |  |
| Secured Convertible Bridge Note, 12%, (acquired 12/21/2011)                                                          | (M) |   |   |   | 82,609 |  |   | $ | 82,609 |  |   | 0 |  |
| Secured Convertible Bridge Note, 12%, (acquired 3/5/2012)                                                            | (M) |   |   |   | 434,784 |  |   | $ | 434,784 |  |   | 0 |  |
| Secured Convertible Bridge Note, 12%, (acquired 7/26/2012)                                                           | (M) |   |   |   | 186,955 |  |   | $ | 186,955 |  |   | 0 |  |
| Secured Convertible Bridge Note, 20%, (acquired 4/29/2013)                                                           | (M) |   |   |   | 166,667 |  |   | $ | 166,667 |  |   | 0 |  |
| Secured Convertible Bridge Note, 20%, (acquired 7/22/2013)                                                           | (M) |   |   |   | 166,667 |  |   | $ | 166,667 |  |   | 0 |  |
| Secured Convertible Bridge Note, 10%, (acquired 10/30/2013)                                                          | (M) |   |   |   | 80,669 |  |   | $ | 80,669 |  |   | 0 |  |
| Secured Convertible Bridge Note, 10%, (acquired 2/5/2014)                                                            | (M) |   |   |   | 19,331 |  |   | $ | 19,331 |  |   | 0 |  |
| Secured Convertible Bridge Note, 10%, (acquired 6/24/2014)                                                           | (M) |   |   |   | 13,745 |  |   | $ | 13,745 |  |   | 0 |  |
|                                                                                                                 |   |   |   |   | 6,542,881 |  |   |   |   | 0 |  |
|                                                                                                                 |   |   |   |   |   |   |   |   |   |
| Lodo Therapeutics Corporation (5)(8)(9)                                                                              |   |   | Life Sciences |   |   |   |   |   |   |
| Developing and commercializing novel therapeutics derived from a metagenome-based Natural Product Discovery Platform |   |   |   |   |   |   |   |   |   |
| Series A Convertible Preferred Stock (acquired 12/21/15-4/22/16)                                                     | (I) |   |   |   | 658,190 |  |   | 658,190 |  |   | 658,993 |  |
|                                                                                                                 |   |   |   |   |   |   |   |   |   |

----

|                                                                                                         |
|---------------------------------------------------------------------------------------------------------|
|                                                                                                         |  |  |  |  |  |  |  |  |  |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2016(Unaudited) |
|                                                                                                    |   |   |   |   |   |   |   |   |   |
|                                                                                                    | Method ofValuation (1) |   | PrimaryIndustry (2) |   | Cost |   | Shares/Principal |   | Value |

|                                                                                     |
|-------------------------------------------------------------------------------------|
|                                                                                     |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Investments in Non-Controlled Affiliated Companies (3) -                            |   |   |   |   |   |   |   |   |   |
| 68.3% of net assets at value (Cont.)                                                |   |   |   |   |   |   |   |   |   |
|                                                                                |   |   |   |   |   |   |   |   |   |
| Private Placement Portfolio (Illiquid) (13) -                                       |   |   |   |   |   |   |   |   |   |
| 61.1% of net assets at value (Cont.)                                                |   |   |   |   |   |   |   |   |   |
|                                                                                |   |   |   |   |   |   |   |   |   |
| Metabolon, Inc. (5)(8)(9)                                                           |   |   | Life Sciences |   |   |   |   |   |   |
| Developing a biochemical profiling platform for precision medicine                  |   |   |   |   |   |   |   |   |   |
| Series B Convertible Preferred Stock (acquired 6/29/09)                             | (M) |   |   |   | $ | 2,500,000 |  |   | 371,739 |  |   | $ | 2,924,040 |  |
| Series B-1 Convertible Preferred Stock (acquired 6/29/09)                           | (M) |   |   |   | 706,214 |  |   | 148,696 |  |   | 1,169,615 |  |
| Series C Convertible Preferred Stock (acquired 4/30/09)                             | (M) |   |   |   | 1,000,000 |  |   | 1,000,000 |  |   | 2,678,510 |  |
| Series D Convertible Preferred Stock (acquired 8/25/11)                             | (M) |   |   |   | 1,499,999 |  |   | 835,882 |  |   | 2,272,335 |  |
| Series E-1 Convertible Preferred Stock (acquired 3/2/15)                            | (M) |   |   |   | 1,225,000 |  |   | 444,404 |  |   | 1,439,068 |  |
| Series E-2 Convertible Preferred Stock (acquired 3/2/15)                            | (M) |   |   |   | 299,999 |  |   | 103,277 |  |   | 312,755 |  |
|                                                                                |   |   |   |   | 7,231,212 |  |   |   |   | 10,796,323 |  |
|                                                                                |   |   |   |   |   |   |   |   |   |
| ORIG3N, Inc. (5)(8)(9)                                                              |   |   | Life Sciences |   |   |   |   |   |   |
| Developing precision medicine applications for induced pluripotent stems cells      |   |   |   |   |   |   |   |   |   |
| Series 1 Convertible Preferred Stock (acquired 2/5/15-8/5/15)                       | (I) |   |   |   | 500,000 |  |   | 1,195,315 |  |   | 1,165,150 |  |
| Series A Convertible Preferred Stock (acquired 11/25/15-9/7/16)                     | (I) |   |   |   | 1,500,000 |  |   | 1,364,666 |  |   | 1,504,222 |  |
|                                                                                |   |   |   |   | 2,000,000 |  |   |   |   | 2,669,372 |  |
|                                                                                |   |   |   |   |   |   |   |   |   |
| Petra Pharma Corporation (5)(8)(9)                                                  |   |   | Life Sciences |   |   |   |   |   |   |
| Developing small molecule inhibitors for treatment of cancer and metabolic diseases |   |   |   |   |   |   |   |   |   |
| Series A Convertible Preferred Stock (acquired 12/23/15)                            | (I) |   |   |   | 1,025,050 |  |   | 1,025,050 |  |   | 1,027,353 |  |
|                                                                                |   |   |   |   |   |   |   |   |   |

----

|                                                                                                         |
|---------------------------------------------------------------------------------------------------------|
|                                                                                                         |  |  |  |  |  |  |  |  |  |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2016(Unaudited) |
|                                                                                                    |   |   |   |   |   |   |   |   |   |
|                                                                                                    | Method ofValuation (1) |   | PrimaryIndustry (2) |   | Cost |   | Shares/Principal |   | Value |

|                                                                                                                                                  |
|--------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Investments in Non-Controlled Affiliated Companies (3) -                                                                                         |   |   |   |   |   |   |   |   |   |
| 68.3% of net assets at value (Cont.)                                                                                                             |   |   |   |   |   |   |   |   |   |
|                                                                                                                                             |   |   |   |   |   |   |   |   |   |
| Private Placement Portfolio (Illiquid) (13) -                                                                                                    |   |   |   |   |   |   |   |   |   |
| 61.1% of net assets at value (Cont.)                                                                                                             |   |   |   |   |   |   |   |   |   |
|                                                                                                                                             |   |   |   |   |   |   |   |   |   |
| Produced Water Absorbents, Inc. (5)(8)(16)                                                                                                       |   |   | Energy |   |   |   |   |   |   |
| Providing integrated process separation solutions to the global oil and gas industries, enabling onsite treatment of produced and flowback water |   |   |   |   |   |   |   |   |   |
| Common Stock (acquired 4/30/16)                                                                                                                  | (M) |   |   |   | $ | 7,670,281 |  |   | 50,243,350 |  |   | $ | 0 |  |
| Warrants for Common Stock expiring upon liquidation event (acquired 4/30/16)                                                                     | (I) |   |   |   | 65,250 |  |   | 450,000 |  |   | 0 |  |
| Senior Secured Debt, 15% commencing on 4/1/16, maturing on 12/31/19 (acquired 4/1/16)                                                            | (I) |   |   |   | 1,946,167 |  |   | $ | 2,533,766 |  |   | 1,424,750 |  |
|                                                                                                                                             |   |   |   |   | 9,681,698 |  |   |   |   | 1,424,750 |  |
|                                                                                                                                             |   |   |   |   |   |   |   |   |   |
| Total Non-Controlled Affiliated Private Portfolio (cost: $51,750,473)                                                                            |   |   |   |   |   |   |   |   | $ | 45,985,741 |  |
|                                                                                                                                             |   |   |   |   |   |   |   |   |   |
| Publicly Traded Portfolio (17) -                                                                                                                 |   |   |   |   |   |   |   |   |   |
| 7.2% of net assets at value                                                                                                                      |   |   |   |   |   |   |   |   |   |
|                                                                                                                                             |   |   |   |   |   |   |   |   |   |
| Adesto Technologies Corporation (5)(9)(18)                                                                                                       |   |   | Electronics |   |   |   |   |   |   |
| Developing low-power, high-performance  memory devices                                                                                           |   |   |   |   |   |   |   |   |   |
| Common Stock (acquired 10/27/15)                                                                                                                 | (M) |   |   |   | $ | 11,482,417 |  |   | 1,769,868 |  |   | $ | 3,929,107 |  |
|                                                                                                                                             |   |   |   |   |   |   |   |   |   |
| Enumeral Biomedical Holdings, Inc. (5)(9)                                                                                                        |   |   | Life Sciences |   |   |   |   |   |   |
| Developing therapeutics and diagnostics through functional assaying of single cells                                                              |   |   |   |   |   |   |   |   |   |
| Common Stock (acquired 7/31/14)                                                                                                                  | (M) |   |   |   | 4,993,357 |  |   | 7,966,368 |  |   | 1,441,913 |  |
| Warrants to purchase Common Stock expiring 2/2/2024 (acquired 7/31/14)                                                                           | (I) |   |   |   | 57,567 |  |   | 255,120 |  |   | 34,631 |  |
| Warrants to purchase Common Stock expiring 7/30/2019 (acquired 7/31/14)                                                                          | (I) |   |   |   | 540,375 |  |   | 1,500,000 |  |   | 26,164 |  |
|                                                                                                                                             |   |   |   |   | 5,591,299 |  |   |   |   | 1,502,708 |  |
|                                                                                                                                             |   |   |   |   |   |   |   |   |   |
| Total Non-Controlled Affiliated Publicly Traded Portfolio (cost: $17,073,716)                                                                    |   |   |   |   |   |   |   |   | $ | 5,431,815 |  |
|                                                                                                                                             |   |   |   |   |   |   |   |   |   |
| Total Investments in Non-Controlled Affiliated Companies (cost: $68,824,189)                                                                     |   |   |   |   |   |   |   |   | $ | 51,417,556 |  |
|                                                                                                                                             |   |   |   |   |   |   |   |   |   |

----

|                                                                                                         |
|---------------------------------------------------------------------------------------------------------|
|                                                                                                         |  |  |  |  |  |  |  |  |  |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2016(Unaudited) |
|                                                                                                    |   |   |   |   |   |   |   |   |   |
|                                                                                                    | Method ofValuation (1) |   | PrimaryIndustry (2) |   | Cost |   | Shares/Principal |   | Value |

|                                                                                               |
|-----------------------------------------------------------------------------------------------|
|                                                                                               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Investments in Controlled Affiliated Companies (3) -                                          |   |   |   |   |   |   |   |   |   |
| 9.6% of net assets at value                                                                   |   |   |   |   |   |   |   |   |   |
|                                                                                          |   |   |   |   |   |   |   |   |   |
| Private Placement Portfolio (Illiquid) (19) -                                                 |   |   |   |   |   |   |   |   |   |
| 9.6% of net assets at value                                                                   |   |   |   |   |   |   |   |   |   |
|                                                                                          |   |   |   |   |   |   |   |   |   |
| Black Silicon Holdings, Inc. (5)(8)(15)(20)                                                   |   |   | Electronics |   |   |   |   |   |   |
| Holding company for interest in a company that develops silicon-based optoelectronic products |   |   |   |   |   |   |   |   |   |
| Series A Convertible Preferred Stock (acquired 8/4/15)                                        | (I) |   |   |   | $ | 750,000 |  |   | 233,499 |  |   | $ | 0 |  |
| Series A-1 Convertible Preferred Stock (acquired 8/4/15)                                      | (I) |   |   |   | 890,000 |  |   | 2,966,667 |  |   | 0 |  |
| Series A-2 Convertible Preferred Stock (acquired 8/4/15)                                      | (I) |   |   |   | 2,445,000 |  |   | 4,207,537 |  |   | 0 |  |
| Series B-1 Convertible Preferred Stock (acquired 8/4/15)                                      | (I) |   |   |   | 1,169,561 |  |   | 1,892,836 |  |   | 0 |  |
| Series C Convertible Preferred Stock (acquired 8/4/15)                                        | (I) |   |   |   | 1,171,316 |  |   | 1,674,030 |  |   | 0 |  |
| Secured Convertible Bridge Note, 8%, (acquired 8/25/16)                                       | (I) |   |   |   | 1,279,593 |  |   | $ | 1,269,158 |  |   | 300,690 |  |
|                                                                                          |   |   |   |   | 7,705,470 |  |   |   |   | 300,690 |  |
|                                                                                          |   |   |   |   |   |   |   |   |   |
| Interome, Inc. (5)(8)(10)                                                                     |   |   | Life Sciences |   |   |   |   |   |   |
| Developing a platform to facilitate precision health and medicine                             |   |   |   |   |   |   |   |   |   |
| Common Stock (acquired 3/1/16)                                                                | (M) |   |   |   | 10 |  |   | 1,000,000 |  |   | 10 |  |
| Secured Convertible Bridge Note, 12%, (acquired 3/1/16)                                       | (M) |   |   |   | 300,000 |  |   | $ | 300,000 |  |   | 300,000 |  |
| Secured Convertible Bridge Note, 12%, (acquired 7/12/16)                                      | (M) |   |   |   | 300,000 |  |   | $ | 300,000 |  |   | 300,000 |  |
| Secured Convertible Bridge Note, 12%, (acquired 9/14/16)                                      | (M) |   |   |   | 50,000 |  |   | $ | 50,000 |  |   | 50,000 |  |
| Secured Convertible Bridge Note, 12%, (acquired 9/29/16)                                      | (M) |   |   |   | 350,000 |  |   | $ | 350,000 |  |   | 350,000 |  |
|                                                                                          |   |   |   |   | 1,000,010 |  |   |   |   | 1,000,010 |  |
|                                                                                          |   |   |   |   |   |   |   |   |   |
| NGX Bio, Inc. (5)(8)(21)                                                                      |   |   | Life Sciences |   |   |   |   |   |   |
| Developing translational genomics solutions                                                   |   |   |   |   |   |   |   |   |   |
| Series Seed Convertible Preferred Stock (acquired 6/6/14-1/10/16)                             | (I) |   |   |   | 500,002 |  |   | 666,667 |  |   | 514,217 |  |
| Series A Convertible Preferred Stock (acquired 8/20/15-9/30/15)                               | (I) |   |   |   | 499,999 |  |   | 329,989 |  |   | 343,920 |  |
| Unsecured Convertible Bridge Note, 6% (acquired 4/6/16)                                       | (M) |   |   |   | 514,630 |  |   | $ | 500,000 |  |   | 514,630 |  |
|                                                                                          |   |   |   |   | 1,514,631 |  |   |   |   | 1,372,767 |  |
|                                                                                          |   |   |   |   |   |   |   |   |   |

----

|                                                                                                         |
|---------------------------------------------------------------------------------------------------------|
|                                                                                                         |  |  |  |  |  |  |  |  |  |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2016(Unaudited) |
|                                                                                                    |   |   |   |   |   |   |   |   |   |
|                                                                                                    | Method ofValuation (1) |   | PrimaryIndustry (2) |   | Cost |   | Shares/Principal |   | Value |

|                                                                               |
|-------------------------------------------------------------------------------|
|                                                                               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Investments in Controlled Affiliated Companies (3) -                          |   |   |   |   |   |   |   |   |   |
| 9.6% of net assets at value (Cont.)                                           |   |   |   |   |   |   |   |   |   |
|                                                                          |   |   |   |   |   |   |   |   |   |
| Private Placement Portfolio (Illiquid) (19) -                                 |   |   |   |   |   |   |   |   |   |
| 9.6% of net assets at value (Cont.)                                           |   |   |   |   |   |   |   |   |   |
|                                                                          |   |   |   |   |   |   |   |   |   |
| ProMuc, Inc. (5)(8)                                                           |   |   | Life Sciences |   |   |   |   |   |   |
| Developing synthetic mucins for the nutritional, food and health care markets |   |   |   |   |   |   |   |   |   |
| Common Stock (acquired 12/18/13)                                              | (M) |   |   |   | $ | 1 |  |   | 1,000 |  |   | $ | 1 |  |
| Secured Convertible Bridge Note, 8%, (acquired 12/18/13)                      | (M) |   |   |   | 428,093 |  |   | $ | 350,000 |  |   | 228,093 |  |
| Secured Convertible Bridge Note, 8%, (acquired 8/13/14)                       | (M) |   |   |   | 117,096 |  |   | $ | 100,000 |  |   | 62,390 |  |
| Secured Convertible Bridge Note, 8%, (acquired 8/5/15)                        | (M) |   |   |   | 81,953 |  |   | $ | 75,000 |  |   | 43,666 |  |
| Secured Convertible Bridge Note, 8%, (acquired 12/7/15)                       | (M) |   |   |   | 58,604 |  |   | $ | 55,000 |  |   | 31,225 |  |
|                                                                          |   |   |   |   | 685,747 |  |   |   |   | 365,375 |  |
|                                                                          |   |   |   |   |   |   |   |   |   |
| Senova Systems, Inc. (5)(8)(22)                                               |   |   | Life Sciences |   |   |   |   |   |   |
| Developing next-generation sensors to measure pH                              |   |   |   |   |   |   |   |   |   |
| Series B Convertible Preferred Stock (acquired 9/9/11-7/18/12)                | (I) |   |   |   | 1,218,462 |  |   | 1,350,000 |  |   | 0 |  |
| Series B-1 Convertible Preferred Stock (acquired 8/1/13-1/15/14)              | (I) |   |   |   | 1,083,960 |  |   | 2,759,902 |  |   | 0 |  |
| Series C Convertible Preferred Stock (acquired 10/24/14-4/1/15)               | (I) |   |   |   | 1,208,287 |  |   | 1,611,049 |  |   | 621,188 |  |
| Warrants for Series B Preferred Stock expiring 10/15/17 (acquired 10/15/12)   | (I) |   |   |   | 131,538 |  |   | 164,423 |  |   | 0 |  |
| Warrants for Series B Preferred Stock expiring 4/24/18 (acquired 4/24/13)     | (I) |   |   |   | 20,000 |  |   | 25,000 |  |   | 0 |  |
| Secured Convertible Bridge Note, 10%, (acquired 1/15/16)                      | (I) |   |   |   | 267,808 |  |   | $ | 250,000 |  |   | 267,808 |  |
| Secured Convertible Bridge Note, 10%, (acquired 8/12/16)                      | (I) |   |   |   | 21,541 |  |   | $ | 21,250 |  |   | 21,541 |  |
| Secured Convertible Bridge Note, 10%, (acquired 9/30/16)                      | (I) |   |   |   | 15,504 |  |   | $ | 15,500 |  |   | 15,504 |  |
|                                                                          |   |   |   |   | 3,967,100 |  |   |   |   | 926,041 |  |
|                                                                          |   |   |   |   |   |   |   |   |   |

----

|                                                                                                         |
|---------------------------------------------------------------------------------------------------------|
|                                                                                                         |  |  |  |  |  |  |  |  |  |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2016(Unaudited) |
|                                                                                                    |   |   |   |   |   |   |   |   |   |
|                                                                                                    | Method ofValuation (1) |   | PrimaryIndustry (2) |   | Cost |   | Shares/Principal |   | Value |

|                                                                                           |
|-------------------------------------------------------------------------------------------|
|                                                                                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Investments in Controlled Affiliated Companies (3) -                                      |   |   |   |   |   |   |   |   |   |
| 9.6% of net assets at value (Cont.)                                                       |   |   |   |   |   |   |   |   |   |
|                                                                                      |   |   |   |   |   |   |   |   |   |
| Private Placement Portfolio (Illiquid) (19) -                                             |   |   |   |   |   |   |   |   |   |
| 9.6% of net assets at value (Cont.)                                                       |   |   |   |   |   |   |   |   |   |
|                                                                                      |   |   |   |   |   |   |   |   |   |
| SynGlyco, Inc. (5)(8)(15)                                                                 |   |   | Life Sciences |   |   |   |   |   |   |
| Developed synthetic carbohydrates for pharmaceutical applications                         |   |   |   |   |   |   |   |   |   |
| Common Stock (acquired 12/13/11)                                                          | (I) |   |   |   | $ | 2,729,817 |  |   | 57,463 |  |   | $ | 0 |  |
| Series A' Convertible Preferred Stock (acquired 12/13/11-6/7/12)                          | (I) |   |   |   | 4,855,627 |  |   | 4,855,627 |  |   | 0 |  |
| Secured Convertible Bridge Note, 8%, (acquired 2/26/16)                                   | (I) |   |   |   | 71,064 |  |   | $ | 67,823 |  |   | 59,150 |  |
|                                                                                      |   |   |   |   | 7,656,508 |  |   |   |   | 59,150 |  |
|                                                                                      |   |   |   |   |   |   |   |   |   |
| TARA Biosystems, Inc. (5)(8)                                                              |   |   | Life Sciences |   |   |   |   |   |   |
| Developing human tissue models for toxicology and drug discovery applications             |   |   |   |   |   |   |   |   |   |
| Common Stock (acquired 8/20/14)                                                           | (I) |   |   |   | 20 |  |   | 2,000,000 |  |   | 921,647 |  |
| Secured Convertible Bridge Note, 8%, (acquired 8/20/14)                                   | (M) |   |   |   | 350,827 |  |   | $ | 300,000 |  |   | 487,260 |  |
| Secured Convertible Bridge Note, 8%, (acquired 5/18/15)                                   | (M) |   |   |   | 222,005 |  |   | $ | 200,000 |  |   | 308,341 |  |
| Secured Convertible Bridge Note, 8%, (acquired 12/1/15)                                   | (M) |   |   |   | 1,280,219 |  |   | $ | 1,200,000 |  |   | 1,506,140 |  |
|                                                                                      |   |   |   |   | 1,853,071 |  |   |   |   | 3,223,388 |  |
|                                                                                      |   |   |   |   |   |   |   |   |   |
| Total Controlled Private Placement Portfolio (cost: $24,382,537)                          |   |   |   |   |   |   |   |   | $ | 7,247,421 |  |
|                                                                                      |   |   |   |   |   |   |   |   |   |
| Total Investments in Controlled Affiliated Companies (cost: $24,382,537)                  |   |   |   |   |   |   |   |   | $ | 7,247,421 |  |
|                                                                                      |   |   |   |   |   |   |   |   |   |
| Total Investments in Private Placement and Publicly Traded Portfolio (cost: $107,531,743) |   |   |   |   |   |   |   |   | $ | 67,745,343 |  |
|                                                                                      |   |   |   |   |   |   |   |   |   |
|                                                                                      |   |   |   |   |   |   |   |   |   |

----

|                                                                                                         |
|---------------------------------------------------------------------------------------------------------|
|                                                                                                         |  |  |  |  |  |  |  |  |  |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2016(Unaudited) |
|                                                                                                    |   |   |   |   |   |   |   |   |   |
|                                                                                                    | Method ofValuation (1) |   | PrimaryIndustry (2) |   | Cost |   | Shares/Principal |   | Value |

|                                                                      |
|----------------------------------------------------------------------|
|                                                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Equity Method Investments (23) -                                     |   |   |   |   |   |   |   |   |   |
| 0.3% of net assets at value                                          |   |   |   |   |   |   |   |   |   |
|                                                                 |   |   |   |   |   |   |   |   |   |
| Private Placement Portfolio (Illiquid) (23) -                        |   |   |   |   |   |   |   |   |   |
| 0.3% of net assets at value                                          |   |   |   |   |   |   |   |   |   |
|                                                                 |   |   |   |   |   |   |   |   |   |
| Accelerator IV-New York Corporation (8)(9)(24)                       |   |   | Life Sciences |   |   |   |   |   |   |
| Identifying and managing emerging biotechnology companies            |   |   |   |   |   |   |   |   |   |
| Series A Common Stock (acquired 7/21/14-1/29/16)                     | (E) |   |   |   | $ | 186,736 |  |   | 581,907 |  |   | $ | 186,736 |  |
|                                                                 |   |   |   |   |   |   |   |   |   |
| AgTech Accelerator Corporation (8)(9)(10)(24)                        |   |   | Life Sciences |   |   |   |   |   |   |
| Identifying and managing emerging agriculture technologies companies |   |   |   |   |   |   |   |   |   |
| Common Stock (acquired 5/4/16)                                       | (E) |   |   |   | 64,508 |  |   | 150,000 |  |   | 64,508 |  |
|                                                                 |   |   |   |   |   |   |   |   |   |
| Total Equity Method Investments (cost: $251,244)                     |   |   |   |   |   |   |   |   | $ | 251,244 |  |
|                                                                 |   |   |   |   |   |   |   |   |   |
| Total Investments (cost: $107,782,987)                               |   |   |   |   |   |   |   |   | $ | 67,996,587 |  |

----

|                                                                                                              |
|--------------------------------------------------------------------------------------------------------------|
|                                                                                                              |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2016(Unaudited) |

|     |                                                                                                                    |
|-----|--------------------------------------------------------------------------------------------------------------------|
| (1) | See "Footnote to Consolidated Schedule of Investments" on page 37 for a description of the "Valuation Procedures." |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | We classify "Energy" companies as those that seek to improve performance, productivity or efficiency, and to reduce environmental impact, waste, cost, energy consumption or raw materials. We classify "Electronics" companies as those that address problems in electronics-related industries, including semiconductors and computing. We classify "Life Sciences" companies as those that address problems in life sciences-related industries, including precision health and precision medicine, biotechnology, agriculture, advanced materials and chemicals, health care, bioprocessing, water, industrial biotechnology, food, nutrition and energy. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (3) | 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 hold 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 voting shares 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. Among our controlled affiliated companies, ProMuc, Inc., and Interome, Inc., were 100 percent owned by us at September 30, 2016. |

|     |                                                                                                                                                                                                                                                                                                                 |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (4) | The aggregate cost for federal income tax purposes of investments in unaffiliated privately held companies is $10,878,510. The gross unrealized appreciation based on the tax cost for these securities is $90,884. The gross unrealized depreciation based on the tax cost for these securities is $6,254,378. |

|     |                                                                                                                                        |
|-----|----------------------------------------------------------------------------------------------------------------------------------------|
| (5) | All or a portion of the investments or instruments are pledged as collateral under our Loan Facility with Orix Corporate Capital, Inc. |

|     |                                                                                                                                                                                                                                                                                                              |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (6) | The aggregate cost for federal income tax purposes of investments in unaffiliated rights to milestone payments is $781,863. The gross unrealized appreciation based on the tax cost for these securities is $2,660,882.  The gross unrealized depreciation based on the tax cost for these securities is $0. |

|     |                                                                                                                                                                                                                                                                                                             |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (7) | The aggregate cost for federal income tax purposes of investments in unaffiliated publicly traded companies is $2,664,644. The gross unrealized appreciation based on the tax cost for these securities is $0.  The gross unrealized depreciation based on the tax cost for these securities is $1,742,039. |

|     |                                                                                        |
|-----|----------------------------------------------------------------------------------------|
| (8) | We are subject to legal restrictions on the sale of our investment(s) in this company. |

|     |                                                                                                                                                                          |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (9) | Represents a non-income producing investment.  Investments that have not paid dividends or interest within the last 12 months are considered to be non-income producing. |

|      |                                      |
|------|--------------------------------------|
| (10) | Initial investment was made in 2016. |

|      |                                                                                                                                                                                                                                                                                                                               |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (11) | We received shares of Xenio Corp. as part of the consideration distributed to shareholders of Bridgelux, Inc., for the sale of Bridgelux, Inc., to a an investment group led by China Electronics Corporation and ChongQing Linkong Development Investment Company. The close of this transaction occurred on August 1, 2016. |

|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (12) | The Company's securities of OpGen, Inc., were subject to a lock-up agreement that restricted our ability to trade these securities.  The lock-up agreement expired on August 18, 2016.  A total of 300,833 shares and 300,833 warrants are not qualifying assets under Section 55(a) of the 1940 Act. Under the 1940 Act, we may not acquire non-qualifying assets unless, at the time the acquisition is made, qualifying assets are at least 70 percent of our total assets. |

----

|                                                                                                              |
|--------------------------------------------------------------------------------------------------------------|
|                                                                                                              |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2016(Unaudited) |

|      |                                                                                                                                                                                                                                                                                                                                   |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (13) | The aggregate cost for federal income tax purposes of investments in non-controlled affiliated privately held companies is $51,750,473. The gross unrealized appreciation based on the tax cost for these securities is $14,862,714. The gross unrealized depreciation based on the tax cost for these securities is $20,627,446. |

|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (14) | D-Wave Systems, Inc., is located and is doing business primarily in Canada. We invested in D-Wave through Parallel Universes, Inc., a Delaware company. Our investment is denominated in Canadian dollars and is subject to foreign currency translation. See "Note 3. Summary of Significant Accounting Policies." D-Wave is not a qualifying asset under Section 55(a) of the 1940 Act. Under the 1940 Act, we may not acquire non-qualifying assets unless, at the time the acquisition is made, qualifying assets are at least 70 percent of our total assets. |

|      |                                                                                                                                                                                            |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (15) | Represents a non-operating entity that exists to collect future payments from licenses or other engagements and/or monetize assets for future distributions to investors and debt holders. |

|      |                                                                     |
|------|---------------------------------------------------------------------|
| (16) | Produced Water Absorbents, Inc., also does business as ProSep, Inc. |

|      |                                                                                                                                                                                                                                                                                                                           |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (17) | The aggregate cost for federal income tax purposes of investments in non-controlled affiliated publicly traded companies is $17,073,716. The gross unrealized appreciation based on the tax cost for these securities is $0. The gross unrealized depreciation based on the tax cost for these securities is $11,641,901. |

|      |                                                                                                                                                                                                                                                                                                                      |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (18) | A total of 200,000 shares of our holdings in Adesto Technologies Corporation are not qualifying assets under Section 55(a) of the 1940 Act. Under the 1940 Act, we may not acquire non-qualifying assets unless, at the time the acquisition is made, qualifying assets are at least 70 percent of our total assets. |

|      |                                                                                                                                                                                                                                                                                                              |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (19) | The aggregate cost for federal income tax purposes of investments in controlled affiliated companies is $24,382,537. The gross unrealized appreciation based on the tax cost for these securities is $1,370,317. The gross unrealized depreciation based on the tax cost for these securities is $18,505,433 |

|      |                                                                                                                                                                                                                                                                                                                                                                                  |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (20) | On August 4, 2015, SiOnyx, Inc., reorganized its corporate structure to become a subsidiary of a new company, Black Silicon Holdings, Inc.  Our security holdings of SiOnyx converted into securities of Black Silicon Holdings.  SiOnyx was then acquired by an undisclosed buyer.  Black Silicon Holdings owns a profit interest in the undisclosed buyer. |

|      |                                                                      |
|------|----------------------------------------------------------------------|
| (21) | On August 19, 2015, UberSeq, Inc., changed its name to NGX Bio, Inc. |

|      |                                                                                                                                                                                               |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (22) | On October 19, 2016, Senova Systems, Inc., sold substantially all of its assets to an undisclosed buyer for an up-front payment and potential future payments upon achievement of milestones. |

|      |                                                                                                                                                                                                                                                                                                                                                  |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (23) | The aggregate cost for federal income tax purposes of investments in privately held equity method investments is $251,244. 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. |

|      |                                               |
|------|-----------------------------------------------|
| (24) | See "Note 11. Commitments and Contingencies." |

----

|                                                                                             |
|---------------------------------------------------------------------------------------------|
|                                                                                             |  |  |  |  |  |  |  |  |  |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2015 |
|                                                                                        |   |   |   |   |   |   |   |   |   |
|                                                                                        | Method of Valuation (1) |   | Primary Industry (2) |   | Cost |   | Shares / Principal |   | Value |

|                                                                                        |
|----------------------------------------------------------------------------------------|
|                                                                                        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Investments in Unaffiliated Companies (3) –                                      |   |   |   |   |   |   |   |   |   |
| 11.0% of net assets at value                                                           |   |   |   |   |   |   |   |   |   |
|                                                                                   |   |   |   |   |   |   |   |   |   |
| Private Placement Portfolio (Illiquid) (4) –                                     |   |   |   |   |   |   |   |   |   |
| 6.1% of net assets at value                                                            |   |   |   |   |   |   |   |   |   |
|                                                                                   |   |   |   |   |   |   |   |   |   |
| Bridgelux, Inc. (5)(8)(9)(10)                                                          |   |   | Energy |   |   |   |   |   |   |
| Manufacturing high-power light emitting diodes (LEDs) and arrays                       |   |   |   |   |   |   |   |   |   |
| Series B Convertible Preferred Stock (acquired 11/29/07)                               | (M) |   |   |   | $ | 1,000,000 |  |   | 1,861,504 |  |   | $ | 258,939 |  |
| Series C Convertible Preferred Stock (acquired 7/27/07)                                | (M) |   |   |   | 1,352,196 |  |   | 2,130,699 |  |   | 534,737 |  |
| Series D Convertible Preferred Stock (acquired 2/25/08-3/10/10)                        | (M) |   |   |   | 1,371,622 |  |   | 999,999 |  |   | 737,006 |  |
| Series E Convertible Preferred Stock (acquired 6/1/11)                                 | (M) |   |   |   | 672,599 |  |   | 440,334 |  |   | 607,572 |  |
| Series E-1 Convertible Preferred Stock (acquired 3/16/12)                              | (M) |   |   |   | 386,073 |  |   | 399,579 |  |   | 400,630 |  |
| Warrants for Series E Convertible Preferred Stock expiring 12/31/17 (acquired 1/27/11) | (M) |   |   |   | 93,969 |  |   | 170,823 |  |   | 0 |  |
| Warrants for Common Stock expiring 6/1/16 (acquired 6/1/11)                            | (M) |   |   |   | 72,668 |  |   | 132,100 |  |   | 0 |  |
| Warrants for Common Stock expiring 8/9/18 (acquired 8/9/13)                            | (M) |   |   |   | 148,409 |  |   | 171,183 |  |   | 0 |  |
| Warrants for Common Stock expiring 10/21/18 (acquired 10/21/11)                        | (M) |   |   |   | 18,816 |  |   | 84,846 |  |   | 0 |  |
|                                                                                   |   |   |   |   | 5,116,352 |  |   |   |   | 2,538,884 |  |
|                                                                                   |   |   |   |   |   |   |   |   |   |
| Cambrios Technologies Corporation (5)(8)(9)(11)                                        |   |   | Electronics |   |   |   |   |   |   |
| Developed nanowire-enabled electronic materials for the display industry               |   |   |   |   |   |   |   |   |   |
| Series B Convertible Preferred Stock (acquired 11/9/04-2/16/05)                        | (M) |   |   |   | 1,294,025 |  |   | 1,294,025 |  |   | 0 |  |
| Series C Convertible Preferred Stock (acquired 3/21/07)                                | (M) |   |   |   | 1,300,000 |  |   | 1,300,000 |  |   | 0 |  |
| Series D Convertible Preferred Stock (acquired 8/7/09)                                 | (M) |   |   |   | 515,756 |  |   | 515,756 |  |   | 0 |  |
| Series D-2 Convertible Preferred Stock (acquired 5/31/11)                              | (M) |   |   |   | 92,400 |  |   | 92,400 |  |   | 0 |  |
| Series D-4 Convertible Preferred Stock (acquired 7/12/12)                              | (M) |   |   |   | 216,168 |  |   | 216,168 |  |   | 0 |  |
|                                                                                   |   |   |   |   | 3,418,349 |  |   |   |   | 0 |  |
|                                                                                   |   |   |   |   |   |   |   |   |   |

----

|                                                                                             |
|---------------------------------------------------------------------------------------------|
|                                                                                             |  |  |  |  |  |  |  |  |  |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2015 |
|                                                                                        |   |   |   |   |   |   |   |   |   |
|                                                                                        | Method of Valuation (1) |   | Primary Industry (2) |   | Cost |   | Shares / Principal |   | Value |

|                                                                                  |
|----------------------------------------------------------------------------------|
|                                                                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Investments in Unaffiliated Companies (3) –                                |   |   |   |   |   |   |   |   |   |
| 11.0% of net assets at value (Cont.)                                             |   |   |   |   |   |   |   |   |   |
|                                                                             |   |   |   |   |   |   |   |   |   |
| Private Placement Portfolio (Illiquid) (4) –                               |   |   |   |   |   |   |   |   |   |
| 6.1% of net assets at value (Cont.)                                              |   |   |   |   |   |   |   |   |   |
|                                                                             |   |   |   |   |   |   |   |   |   |
| Magic Leap, Inc. (8)(9)(12)                                                      |   |   | Electronics |   |   |   |   |   |   |
| Developing novel human computing interfaces and software                         |   |   |   |   |   |   |   |   |   |
| Series B Convertible Preferred Stock (acquired 5/1/15)                           | ( I ) |   |   |   | $ | 338,604 |  |   | 29,291 |  |   | $ | 348,994 |  |
|                                                                             |   |   |   |   |   |   |   |   |   |
| Mersana Therapeutics, Inc. (5)(8)(9)                                             |   |   | Life Sciences |   |   |   |   |   |   |
| Developing antibody drug conjugates for cancer therapy                           |   |   |   |   |   |   |   |   |   |
| Series A-1 Convertible Preferred Stock (acquired 7/27/12-4/2/14)                 | (H) |   |   |   | 683,538 |  |   | 635,081 |  |   | 613,892 |  |
| Series B-1 Convertible Preferred Stock (acquired 2/20/15)                        | (H) |   |   |   | 104,521 |  |   | 97,111 |  |   | 104,407 |  |
| Common Stock (acquired 7/27/12)                                                  | (H) |   |   |   | 3,875,395 |  |   | 350,539 |  |   | 309,963 |  |
|                                                                             |   |   |   |   | 4,663,454 |  |   |   |   | 1,028,262 |  |
|                                                                             |   |   |   |   |   |   |   |   |   |
| Nanosys, Inc. (5)(8)(9)                                                          |   |   | Energy |   |   |   |   |   |   |
| Developing inorganic nanowires and quantum dots for use in LED-backlit devices   |   |   |   |   |   |   |   |   |   |
| Series C Convertible Preferred Stock (acquired 4/10/03)                          | (M) |   |   |   | 1,500,000 |  |   | 803,428 |  |   | 128,853 |  |
| Series D Convertible Preferred Stock (acquired 11/7/05)                          | (M) |   |   |   | 3,000,003 |  |   | 1,016,950 |  |   | 597,334 |  |
| Series E Convertible Preferred Stock (acquired 8/13/10)                          | (M) |   |   |   | 496,573 |  |   | 433,688 |  |   | 452,627 |  |
|                                                                             |   |   |   |   | 4,996,576 |  |   |   |   | 1,178,814 |  |
|                                                                             |   |   |   |   |   |   |   |   |   |
| Nano Terra, Inc. (5)(8)                                                          |   |   | Energy |   |   |   |   |   |   |
| Developing surface chemistry and nano- manufacturing solutions                   |   |   |   |   |   |   |   |   |   |
| Warrants for Common Stock expiring on 2/22/21 (acquired 2/22/11)                 | ( I ) |   |   |   | 69,168 |  |   | 4,462 |  |   | 211 |  |
| Warrants for Series A-3 Preferred Stock expiring on 11/15/22 (acquired 11/15/12) | ( I ) |   |   |   | 35,403 |  |   | 47,508 |  |   | 61,978 |  |
|                                                                             |   |   |   |   | 104,571 |  |   |   |   | 62,189 |  |
|                                                                             |   |   |   |   |   |   |   |   |   |

----

|                                                                                             |
|---------------------------------------------------------------------------------------------|
|                                                                                             |  |  |  |  |  |  |  |  |  |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2015 |
|                                                                                        |   |   |   |   |   |   |   |   |   |
|                                                                                        | Method of Valuation (1) |   | Primary Industry (2) |   | Cost |   | Shares / Principal |   | Value |

|                                                                                                                   |
|-------------------------------------------------------------------------------------------------------------------|
|                                                                                                                   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Investments in Unaffiliated Companies (3) –                                                                 |   |   |   |   |   |   |   |   |   |
| 11.0% of net assets at value (Cont.)                                                                              |   |   |   |   |   |   |   |   |   |
|                                                                                                              |   |   |   |   |   |   |   |   |   |
| Private Placement Portfolio (Illiquid) (4) –                                                                |   |   |   |   |   |   |   |   |   |
| 6.1% of net assets at value (Cont.)                                                                               |   |   |   |   |   |   |   |   |   |
|                                                                                                              |   |   |   |   |   |   |   |   |   |
| Phylagen, Inc. (5)(8)(13)                                                                                         |   |   | Life Sciences |   |   |   |   |   |   |
| Developing technology to improve human health and business productivity                                           |   |   |   |   |   |   |   |   |   |
| Secured Convertible Bridge Note, 5%, (acquired 2/5/15)                                                            | (M) |   |   |   | $ | 209,041 |  |   | $ | 200,000 |  |   | $ | 209,041 |  |
| Secured Convertible Bridge Note, 5%, (acquired 6/5/15)                                                            | (M) |   |   |   | 10,288 |  |   | $ | 10,000 |  |   | 10,288 |  |
|                                                                                                              |   |   |   |   | 219,329 |  |   |   |   | 219,329 |  |
|                                                                                                              |   |   |   |   |   |   |   |   |   |
| Total Unaffiliated Private Placement Portfolio (cost: $18,857,235)                                                |   |   |   |   |   |   |   |   | $ | 5,376,472 |  |
|                                                                                                              |   |   |   |   |   |   |   |   |   |
| Rights to Milestone Payments (Illiquid) (6) –                                                               |   |   |   |   |   |   |   |   |   |
| 3.8% of net assets at value                                                                                       |   |   |   |   |   |   |   |   |   |
|                                                                                                              |   |   |   |   |   |   |   |   |   |
| Amgen, Inc. (8)(9)                                                                                                |   |   | Life Sciences |   |   |   |   |   |   |
| Rights to Milestone Payments from Acquisition of BioVex Group, Inc. (acquired 3/4/11)                             | ( I ) |   |   |   | $ | 548,998 |  |   | $ | 548,998 |  |   | $ | 2,900,232 |  |
|                                                                                                              |   |   |   |   |   |   |   |   |   |
| Laird Technologies, Inc. (8)(9)                                                                                   |   |   | Energy |   |   |   |   |   |   |
| Rights to Milestone Payments from Merger & Acquisition of Nextreme Thermal Solutions, Inc. (acquired 2/13/13) | ( I ) |   |   |   | 0 |  |   | $ | 0 |  |   | 0 |  |
|                                                                                                              |   |   |   |   |   |   |   |   |   |
| Canon, Inc. (8)(9)                                                                                                |   |   | Electronics |   |   |   |   |   |   |
| Rights to Milestone Payments from Acquisition of Molecular Imprints, Inc. (acquired 4/18/14)                      | ( I ) |   |   |   | 232,865 |  |   | $ | 232,865 |  |   | 461,819 |  |
|                                                                                                              |   |   |   |   |   |   |   |   |   |
| Total Unaffiliated Rights to Milestone Payments (cost: $781,863)                                                  |   |   |   |   |   |   |   |   | $ | 3,362,051 |  |
|                                                                                                              |   |   |   |   |   |   |   |   |   |

----

|                                                                                             |
|---------------------------------------------------------------------------------------------|
|                                                                                             |  |  |  |  |  |  |  |  |  |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2015 |
|                                                                                        |   |   |   |   |   |   |   |   |   |
|                                                                                        | Method of Valuation (1) |   | Primary Industry (2) |   | Cost |   | Shares / Principal |   | Value |

|                                                                                                                                                        |
|--------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Publicly Traded Portfolio (7) –                                                                                                                  |   |   |   |   |   |   |   |   |   |
| 1.1% of net assets at value                                                                                                                            |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                   |   |   |   |   |   |   |   |   |   |
| Champions Oncology, Inc. (5)(9)                                                                                                                        |   |   | Life Sciences |   |   |   |   |   |   |
| Developing its TumorGraftTM platform for personalized medicine and drug development                                                          |   |   |   |   |   |   |   |   |   |
| Common Stock (acquired 3/24/11-3/11/15)                                                                                                                | (M) |   |   |   | $ | 1,622,629 |  |   | 243,540 |  |   | $ | 944,819 |  |
| Warrants for Common Stock expiring 1/28/19 (acquired 1/28/13)                                                                                          | ( I ) |   |   |   | 400 |  |   | 5,500 |  |   | 12,725 |  |
|                                                                                                                                                   |   |   |   |   | 1,623,029 |  |   |   |   | 957,544 |  |
|                                                                                                                                                   |   |   |   |   |   |   |   |   |   |
| Total Unaffiliated Publicly Traded Portfolio (cost: $1,623,029)                                                                                        |   |   |   |   |   |   |   |   | $ | 957,544 |  |
|                                                                                                                                                   |   |   |   |   |   |   |   |   |   |
| Total Investments in Unaffiliated Companies (cost: $21,262,127)                                                                                        |   |   |   |   |   |   |   |   | $ | 9,696,067 |  |
|                                                                                                                                                   |   |   |   |   |   |   |   |   |   |
| Investments in Non-Controlled Affiliated Companies (3) –                                                                                         |   |   |   |   |   |   |   |   |   |
| 67.9% of net assets at value                                                                                                                           |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                   |   |   |   |   |   |   |   |   |   |
| Private Placement Portfolio (Illiquid) (14) –                                                                                                    |   |   |   |   |   |   |   |   |   |
| 47.2% of net assets at value                                                                                                                           |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                   |   |   |   |   |   |   |   |   |   |
| ABSMaterials, Inc. (5)(8)(9)                                                                                                                           |   |   | Energy |   |   |   |   |   |   |
| Developing nano-structured absorbent materials for water remediation and consumer applications                                                         |   |   |   |   |   |   |   |   |   |
| Series A Convertible Preferred Stock (acquired 2/17/10-10/24/11)                                                                                       | ( I ) |   |   |   | $ | 435,000 |  |   | 390,000 |  |   | $ | 160,303 |  |
| Series B Convertible Preferred Stock (acquired 11/8/13-6/25/14)                                                                                        | ( I ) |   |   |   | 1,217,644 |  |   | 1,037,751 |  |   | 823,319 |  |
|                                                                                                                                                   |   |   |   |   | 1,652,644 |  |   |   |   | 983,622 |  |
|                                                                                                                                                   |   |   |   |   |   |   |   |   |   |
| AgBiome, LLC (5)(8)(9)                                                                                                                                 |   |   | Life Sciences |   |   |   |   |   |   |
| Providing early-stage research and discovery for agriculture and utilizing the crop microbiome to identify products that reduce risk and improve yield |   |   |   |   |   |   |   |   |   |
| Series A-1 Convertible Preferred Stock (acquired 1/30/13)                                                                                              | ( I ) |   |   |   | 2,000,000 |  |   | 2,000,000 |  |   | 4,022,722 |  |
| Series A-2 Convertible Preferred Stock (acquired 4/9/13-10/15/13)                                                                                      | ( I ) |   |   |   | 521,740 |  |   | 417,392 |  |   | 891,588 |  |
| Series B Convertible Preferred Stock (acquired 8/7/15)                                                                                                 | ( I ) |   |   |   | 500,006 |  |   | 160,526 |  |   | 575,979 |  |
|                                                                                                                                                   |   |   |   |   | 3,021,746 |  |   |   |   | 5,490,289 |  |
|                                                                                                                                                   |   |   |   |   |   |   |   |   |   |

----

|                                                                                             |
|---------------------------------------------------------------------------------------------|
|                                                                                             |  |  |  |  |  |  |  |  |  |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2015 |
|                                                                                        |   |   |   |   |   |   |   |   |   |
|                                                                                        | Method of Valuation (1) |   | Primary Industry (2) |   | Cost |   | Shares / Principal |   | Value |

|                                                                                                      |
|------------------------------------------------------------------------------------------------------|
|                                                                                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Investments in Non-Controlled Affiliated Companies (3) –                                       |   |   |   |   |   |   |   |   |   |
| 67.9% of net assets at value (Cont.)                                                                 |   |   |   |   |   |   |   |   |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |
| Private Placement Portfolio (Illiquid) (14) –                                                  |   |   |   |   |   |   |   |   |   |
| 47.2% of net assets at value (Cont.)                                                                 |   |   |   |   |   |   |   |   |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |
| D-Wave Systems, Inc. (8)(9)(15)                                                                      |   |   | Electronics |   |   |   |   |   |   |
| Developing high-performance quantum computing systems                                                |   |   |   |   |   |   |   |   |   |
| Series 1 Class B Convertible Preferred Stock (acquired 9/30/08)                                      | (H) |   |   |   | $ | 1,002,074 |  |   | 1,144,869 |  |   | $ | 1,485,943 |  |
| Series 1 Class C Convertible Preferred Stock (acquired 9/30/08)                                      | (H) |   |   |   | 487,804 |  |   | 450,450 |  |   | 588,844 |  |
| Series 1 Class D Convertible Preferred Stock (acquired 9/30/08)                                      | (H) |   |   |   | 748,473 |  |   | 855,131 |  |   | 1,117,858 |  |
| Series 1 Class E Convertible Preferred Stock (acquired 11/24/10)                                     | (H) |   |   |   | 248,049 |  |   | 269,280 |  |   | 368,385 |  |
| Series 1 Class F Convertible Preferred Stock (acquired 11/24/10)                                     | (H) |   |   |   | 238,323 |  |   | 258,721 |  |   | 353,940 |  |
| Series 1 Class H Convertible Preferred Stock (acquired 6/27/14)                                      | (H) |   |   |   | 909,088 |  |   | 460,866 |  |   | 732,972 |  |
| Series 2 Class D Convertible Preferred Stock (acquired 9/30/08)                                      | (H) |   |   |   | 736,019 |  |   | 678,264 |  |   | 886,651 |  |
| Series 2 Class E Convertible Preferred Stock (acquired 6/1/12-3/22/13)                               | (H) |   |   |   | 659,493 |  |   | 513,900 |  |   | 711,876 |  |
| Series 2 Class F Convertible Preferred Stock (acquired 6/1/12-3/22/13)                               | (H) |   |   |   | 633,631 |  |   | 493,747 |  |   | 683,959 |  |
| Warrants for Common Stock expiring 5/12/19 (acquired 5/12/14)                                        | ( I ) |   |   |   | 26,357 |  |   | 20,415 |  |   | 710 |  |
|                                                                                                 |   |   |   |   | 5,689,311 |  |   |   |   | 6,931,138 |  |
|                                                                                                 |   |   |   |   |   |   |   |   |   |
| EchoPixel, Inc. (5)(8)                                                                               |   |   | Life Sciences |   |   |   |   |   |   |
| Developing virtual reality 3-D visualization software for life sciences and health care applications |   |   |   |   |   |   |   |   |   |
| Series Seed Convertible Preferred Stock (acquired 6/21/13-6/30/14)                                   | ( I ) |   |   |   | 1,250,000 |  |   | 4,194,630 |  |   | 1,327,092 |  |
| Secured Convertible Bridge Note, 8%, (acquired 11/25/15)                                             | (M) |   |   |   | 113,425 |  |   | $ | 112,500 |  |   | 113,425 |  |
|                                                                                                 |   |   |   |   | 1,363,425 |  |   |   |   | 1,440,517 |  |
|                                                                                                 |   |   |   |   |   |   |   |   |   |

----

|                                                                                             |
|---------------------------------------------------------------------------------------------|
|                                                                                             |  |  |  |  |  |  |  |  |  |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2015 |
|                                                                                        |   |   |   |   |   |   |   |   |   |
|                                                                                        | Method of Valuation (1) |   | Primary Industry (2) |   | Cost |   | Shares / Principal |   | Value |

|                                                                                             |
|---------------------------------------------------------------------------------------------|
|                                                                                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Investments in Non-Controlled Affiliated Companies (3) –                              |   |   |   |   |   |   |   |   |   |
| 67.9% of net assets at value (Cont.)                                                        |   |   |   |   |   |   |   |   |   |
|                                                                                        |   |   |   |   |   |   |   |   |   |
| Private Placement Portfolio (Illiquid) (14) –                                         |   |   |   |   |   |   |   |   |   |
| 47.2% of net assets at value (Cont.)                                                        |   |   |   |   |   |   |   |   |   |
|                                                                                        |   |   |   |   |   |   |   |   |   |
| Ensemble Therapeutics Corporation (5)(8)(9)                                                 |   |   | Life Sciences |   |   |   |   |   |   |
| Developing DNA-Programmed ChemistryTM for the discovery of new classes of therapeutics |   |   |   |   |   |   |   |   |   |
| Series B Convertible Preferred Stock (acquired 6/6/07)                                      | ( I ) |   |   |   | $ | 2,000,000 |  |   | 1,449,275 |  |   | $ | 662,607 |  |
| Series B-1 Convertible Preferred Stock (acquired 4/21/14)                                   | ( I ) |   |   |   | 679,754 |  |   | 492,575 |  |   | 1,448,295 |  |
|                                                                                        |   |   |   |   | 2,679,754 |  |   |   |   | 2,110,902 |  |
|                                                                                        |   |   |   |   |   |   |   |   |   |
| HZO, Inc. (5)(8)(9)                                                                         |   |   | Electronics |   |   |   |   |   |   |
| Developing novel industrial coatings that protect electronics against damage from liquids   |   |   |   |   |   |   |   |   |   |
| Common Stock (acquired 6/23/14)                                                             | ( I ) |   |   |   | 666,667 |  |   | 405,729 |  |   | 329,802 |  |
| Series I Convertible Preferred Stock (acquired 6/23/14)                                     | ( I ) |   |   |   | 5,709,835 |  |   | 2,266,894 |  |   | 4,281,820 |  |
| Series II Convertible Preferred Stock (acquired 6/23/14-8/3/15)                             | ( I ) |   |   |   | 2,500,006 |  |   | 674,638 |  |   | 2,515,164 |  |
|                                                                                        |   |   |   |   | 8,876,508 |  |   |   |   | 7,126,786 |  |
|                                                                                        |   |   |   |   |   |   |   |   |   |

----

|                                                                                             |
|---------------------------------------------------------------------------------------------|
|                                                                                             |  |  |  |  |  |  |  |  |  |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2015 |
|                                                                                        |   |   |   |   |   |   |   |   |   |
|                                                                                        | Method of Valuation (1) |   | Primary Industry (2) |   | Cost |   | Shares / Principal |   | Value |

|                                                                                                                      |
|----------------------------------------------------------------------------------------------------------------------|
|                                                                                                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Investments in Non-Controlled Affiliated Companies (3) –                                                       |   |   |   |   |   |   |   |   |   |
| 67.9% of net assets at value (Cont.)                                                                                 |   |   |   |   |   |   |   |   |   |
|                                                                                                                 |   |   |   |   |   |   |   |   |   |
| Private Placement Portfolio (Illiquid) (14) –                                                                  |   |   |   |   |   |   |   |   |   |
| 47.2% of net assets at value (Cont.)                                                                                 |   |   |   |   |   |   |   |   |   |
|                                                                                                                 |   |   |   |   |   |   |   |   |   |
| Laser Light Engines, Inc. (8)(9)                                                                                     |   |   | Energy |   |   |   |   |   |   |
| Manufactured solid-state light sources for digital cinema and large-venue projection displays                        |   |   |   |   |   |   |   |   |   |
| Series A Convertible Preferred Stock (acquired 5/6/08)                                                               | (M) |   |   |   | $ | 2,000,000 |  |   | 7,499,062 |  |   | $ | 0 |  |
| Series B Convertible Preferred Stock (acquired 9/17/10)                                                              | (M) |   |   |   | 3,095,802 |  |   | 13,571,848 |  |   | 0 |  |
| Secured Convertible Bridge Note, 12%, (acquired 10/7/11)                                                             | (M) |   |   |   | 200,000 |  |   | $ | 200,000 |  |   | 0 |  |
| Secured Convertible Bridge Note, 12%, (acquired 11/17/11)                                                            | (M) |   |   |   | 95,652 |  |   | $ | 95,652 |  |   | 0 |  |
| Secured Convertible Bridge Note, 12%, (acquired 12/21/11)                                                            | (M) |   |   |   | 82,609 |  |   | $ | 82,609 |  |   | 0 |  |
| Secured Convertible Bridge Note, 12%, (acquired 3/5/12)                                                              | (M) |   |   |   | 434,784 |  |   | $ | 434,784 |  |   | 0 |  |
| Secured Convertible Bridge Note, 12%, (acquired 7/26/12)                                                             | (M) |   |   |   | 186,955 |  |   | $ | 186,955 |  |   | 0 |  |
| Secured Convertible Bridge Note, 20%, (acquired 4/29/13)                                                             | (M) |   |   |   | 166,667 |  |   | $ | 166,667 |  |   | 0 |  |
| Secured Convertible Bridge Note, 20%, (acquired 7/22/13)                                                             | (M) |   |   |   | 166,667 |  |   | $ | 166,667 |  |   | 0 |  |
| Secured Convertible Bridge Note, 10%, (acquired 10/30/13)                                                            | (M) |   |   |   | 80,669 |  |   | $ | 80,669 |  |   | 0 |  |
| Secured Convertible Bridge Note, 10%, (acquired 2/5/14)                                                              | (M) |   |   |   | 19,331 |  |   | $ | 19,331 |  |   | 0 |  |
| Secured Convertible Bridge Note, 10%, (acquired 6/24/14)                                                             | (M) |   |   |   | 13,745 |  |   | $ | 13,745 |  |   | 0 |  |
|                                                                                                                 |   |   |   |   | 6,542,881 |  |   |   |   | 0 |  |
|                                                                                                                 |   |   |   |   |   |   |   |   |   |
| Lodo Therapeutics Corporation (5)(8)(9)(13)                                                                          |   |   | Life Sciences |   |   |   |   |   |   |
| Developing and commercializing novel therapeutics derived from a metagenome-based Natural Product Discovery Platform |   |   |   |   |   |   |   |   |   |
| Series A Convertible Preferred Stock (acquired 12/21/15)                                                             | ( I ) |   |   |   | 107,900 |  |   | 107,900 |  |   | 107,281 |  |
|                                                                                                                 |   |   |   |   |   |   |   |   |   |

----

|                                                                                             |
|---------------------------------------------------------------------------------------------|
|                                                                                             |  |  |  |  |  |  |  |  |  |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2015 |
|                                                                                        |   |   |   |   |   |   |   |   |   |
|                                                                                        | Method of Valuation (1) |   | Primary Industry (2) |   | Cost |   | Shares / Principal |   | Value |

|                                                                                     |
|-------------------------------------------------------------------------------------|
|                                                                                     |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Investments in Non-Controlled Affiliated Companies (3) –                      |   |   |   |   |   |   |   |   |   |
| 67.9% of net assets at value (Cont.)                                                |   |   |   |   |   |   |   |   |   |
|                                                                                |   |   |   |   |   |   |   |   |   |
| Private Placement Portfolio (Illiquid) (14) –                                 |   |   |   |   |   |   |   |   |   |
| 47.2% of net assets at value (Cont.)                                                |   |   |   |   |   |   |   |   |   |
|                                                                                |   |   |   |   |   |   |   |   |   |
| Metabolon, Inc. (5)(8)(9)                                                           |   |   | Life Sciences |   |   |   |   |   |   |
| Developing a biochemical profiling platform for precision medicine                  |   |   |   |   |   |   |   |   |   |
| Series B Convertible Preferred Stock (acquired 6/29/09)                             | (M) |   |   |   | $ | 2,500,000 |  |   | 371,739 |  |   | $ | 3,699,120 |  |
| Series B-1 Convertible Preferred Stock (acquired 6/29/09)                           | (M) |   |   |   | 706,214 |  |   | 148,696 |  |   | 1,479,647 |  |
| Series C Convertible Preferred Stock (acquired 4/30/09)                             | (M) |   |   |   | 1,000,000 |  |   | 1,000,000 |  |   | 3,388,907 |  |
| Series D Convertible Preferred Stock (acquired 8/25/11)                             | (M) |   |   |   | 1,499,999 |  |   | 835,882 |  |   | 2,887,617 |  |
| Series E-1 Convertible Preferred Stock (acquired 3/2/15)                            | (M) |   |   |   | 1,225,000 |  |   | 444,404 |  |   | 1,776,987 |  |
| Series E-2 Convertible Preferred Stock (acquired 3/2/15)                            | (M) |   |   |   | 299,999 |  |   | 103,277 |  |   | 389,566 |  |
|                                                                                |   |   |   |   | 7,231,212 |  |   |   |   | 13,621,844 |  |
|                                                                                |   |   |   |   |   |   |   |   |   |
| ORIG3N, Inc. (5)(8)(9)(13)                                                          |   |   | Life Sciences |   |   |   |   |   |   |
| Developing precision medicine applications for induced pluripotent stems cells      |   |   |   |   |   |   |   |   |   |
| Series 1 Convertible Preferred Stock (acquired 2/5/15-8/5/15)                       | ( I ) |   |   |   | 500,000 |  |   | 1,195,315 |  |   | 826,563 |  |
| Series A Convertible Preferred Stock (acquired 11/25/15)                            | ( I ) |   |   |   | 750,000 |  |   | 682,333 |  |   | 750,338 |  |
|                                                                                |   |   |   |   | 1,250,000 |  |   |   |   | 1,576,901 |  |
|                                                                                |   |   |   |   |   |   |   |   |   |
| Petra Pharma Corporation (5)(8)(9)(13)                                              |   |   | Life Sciences |   |   |   |   |   |   |
| Developing small molecule inhibitors for treatment of cancer and metabolic diseases |   |   |   |   |   |   |   |   |   |
| Series A Convertible Preferred Stock (acquired 12/23/15)                            | ( I ) |   |   |   | 1,025,050 |  |   | 1,025,050 |  |   | 1,019,755 |  |
|                                                                                |   |   |   |   |   |   |   |   |   |

----

|                                                                                             |
|---------------------------------------------------------------------------------------------|
|                                                                                             |  |  |  |  |  |  |  |  |  |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2015 |
|                                                                                        |   |   |   |   |   |   |   |   |   |
|                                                                                        | Method of Valuation (1) |   | Primary Industry (2) |   | Cost |   | Shares / Principal |   | Value |

|                                                                                                                                                  |
|--------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Investments in Non-Controlled Affiliated Companies (3) –                                                                                   |   |   |   |   |   |   |   |   |   |
| 67.9% of net assets at value (Cont.)                                                                                                             |   |   |   |   |   |   |   |   |   |
|                                                                                                                                             |   |   |   |   |   |   |   |   |   |
| Private Placement Portfolio (Illiquid) (14) –                                                                                              |   |   |   |   |   |   |   |   |   |
| 47.2% of net assets at value (Cont.)                                                                                                             |   |   |   |   |   |   |   |   |   |
|                                                                                                                                             |   |   |   |   |   |   |   |   |   |
| Produced Water Absorbents, Inc. (5)(8)(16)                                                                                                       |   |   | Energy |   |   |   |   |   |   |
| Providing integrated process separation solutions to the global oil and gas industries, enabling onsite treatment of produced and flowback water |   |   |   |   |   |   |   |   |   |
| Series A Convertible Preferred Stock (acquired 6/21/11)                                                                                          | (M) |   |   |   | $ | 1,000,000 |  |   | 1,000,000 |  |   | $ | 77,549 |  |
| Series B Convertible Preferred Stock (acquired 6/20/13-3/31/14)                                                                                  | (M) |   |   |   | 1,496,865 |  |   | 5,987,460 |  |   | 214,302 |  |
| Series B-2 Convertible Preferred Stock (acquired 5/12/14)                                                                                        | (M) |   |   |   | 1,015,427 |  |   | 4,322,709 |  |   | 154,718 |  |
| Series B-3 Convertible Preferred Stock (acquired 11/14/13)                                                                                       | (M) |   |   |   | 978,641 |  |   | 3,914,564 |  |   | 140,109 |  |
| Series C Convertible Preferred Stock (acquired 5/26/14)                                                                                          | (M) |   |   |   | 1,000,268 |  |   | 2,667,380 |  |   | 75,581 |  |
| Series D Convertible Preferred Stock (acquired 2/17/15)                                                                                          | (M) |   |   |   | 986,066 |  |   | 2,629,510 |  |   | 133,330 |  |
| Subordinated Secured Debt, 12%, maturing on 6/30/16 (acquired 10/7/14)                                                                           | (M) |   |   |   | 990,634 |  |   | $ | 1,000,000 |  |   | 560,538 |  |
| Subordinated Convertible Bridge Note, 12%, (acquired 6/3/2015)                                                                                   | (M) |   |   |   | 267,425 |  |   | $ | 250,000 |  |   | 36,854 |  |
| Subordinated Convertible Bridge Note, 12%, (acquired 7/15/2015)                                                                                  | (M) |   |   |   | 263,973 |  |   | $ | 250,000 |  |   | 36,378 |  |
| Subordinated Convertible Bridge Note, 12%, (acquired 9/28/2015)                                                                                  | (M) |   |   |   | 257,808 |  |   | $ | 250,000 |  |   | 35,528 |  |
| Subordinated Convertible Bridge Note, 12%, (acquired 10/30/2015)                                                                                 | (M) |   |   |   | 255,178 |  |   | $ | 250,000 |  |   | 35,166 |  |
| Warrants for Series B-2 Preferred Stock expiring upon liquidation event (acquired 5/12/14)                                                       | ( I ) |   |   |   | 65,250 |  |   | 300,000 |  |   | 174 |  |
|                                                                                                                                             |   |   |   |   | 8,577,535 |  |   |   |   | 1,500,227 |  |
|                                                                                                                                             |   |   |   |   |   |   |   |   |   |

----

|                                                                                             |
|---------------------------------------------------------------------------------------------|
|                                                                                             |  |  |  |  |  |  |  |  |  |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2015 |
|                                                                                        |   |   |   |   |   |   |   |   |   |
|                                                                                        | Method of Valuation (1) |   | Primary Industry (2) |   | Cost |   | Shares / Principal |   | Value |

|                                                                                     |
|-------------------------------------------------------------------------------------|
|                                                                                     |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Investments in Non-Controlled Affiliated Companies (3) –                      |   |   |   |   |   |   |   |   |   |
| 67.9% of net assets at value (Cont.)                                                |   |   |   |   |   |   |   |   |   |
|                                                                                |   |   |   |   |   |   |   |   |   |
| Private Placement Portfolio (Illiquid) (14) –                                 |   |   |   |   |   |   |   |   |   |
| 47.2% of net assets at value (Cont.)                                                |   |   |   |   |   |   |   |   |   |
|                                                                                |   |   |   |   |   |   |   |   |   |
| Ultora, Inc. (5)(8)(17)                                                             |   |   | Energy |   |   |   |   |   |   |
| Developed energy-storage devices enabled by carbon nanotubes                        |   |   |   |   |   |   |   |   |   |
| Series A Convertible Preferred Stock (acquired 12/5/13)                             | (M) |   |   |   | $ | 886,830 |  |   | 17,736 |  |   | $ | 0 |  |
| Series B Convertible Preferred Stock (acquired 12/5/13)                             | (M) |   |   |   | 236,603 |  |   | 2,347,254 |  |   | 0 |  |
| Secured Convertible Bridge Note, 5%, (acquired 5/7/14)                              | (M) |   |   |   | 86,039 |  |   | $ | 86,039 |  |   | 0 |  |
| Secured Convertible Bridge Note, 5%, (acquired 8/20/14)                             | (M) |   |   |   | 17,208 |  |   | $ | 17,208 |  |   | 0 |  |
| Secured Convertible Bridge Note, 5%, (acquired 10/14/14)                            | (M) |   |   |   | 10,750 |  |   | $ | 10,750 |  |   | 0 |  |
| Secured Convertible Bridge Note, 5%, (acquired 3/30/15)                             | (M) |   |   |   | 7,525 |  |   | $ | 7,525 |  |   | 0 |  |
|                                                                                |   |   |   |   | 1,244,955 |  |   |   |   | 0 |  |
|                                                                                |   |   |   |   |   |   |   |   |   |
| Total Non-Controlled Private Placement Portfolio (cost: $49,262,921)                |   |   |   |   |   |   |   |   | $ | 41,909,262 |  |
|                                                                                |   |   |   |   |   |   |   |   |   |
| Publicly Traded Portfolio (18) –                                              |   |   |   |   |   |   |   |   |   |
| 20.7% of net assets at value                                                        |   |   |   |   |   |   |   |   |   |
|                                                                                |   |   |   |   |   |   |   |   |   |
| Adesto Technologies Corporation (5)(8)(9)(19)                                       |   |   | Electronics |   |   |   |   |   |   |
| Developing low-power, high-performance memory devices                               |   |   |   |   |   |   |   |   |   |
| Common Stock (acquired 10/27/15)                                                    | (M) |   |   |   | $ | 11,482,417 |  |   | 1,769,868 |  |   | $ | 13,645,682 |  |
|                                                                                |   |   |   |   |   |   |   |   |   |
| Enumeral Biomedical Holdings, Inc. (5)(8)(9)(20)                                    |   |   | Life Sciences |   |   |   |   |   |   |
| Developing therapeutics and diagnostics through functional assaying of single cells |   |   |   |   |   |   |   |   |   |
| Common Stock (acquired 7/31/14)                                                     | (M) |   |   |   | 4,993,357 |  |   | 7,966,368 |  |   | 1,831,468 |  |
| Warrants for Common Stock expiring 7/30/19 (acquired 7/31/14)                       | ( I ) |   |   |   | 540,375 |  |   | 1,500,000 |  |   | 43,326 |  |
| Warrants for Common Stock expiring 2/2/24 (acquired 7/31/14)                        | ( I ) |   |   |   | 57,567 |  |   | 255,120 |  |   | 44,160 |  |
| Options to Purchase Common Stock at $1.00 expiring 7/30/16 (acquired 8/4/14)        | ( I ) |   |   |   | 0 |  |   | 80,000 |  |   | 54 |  |
|                                                                                |   |   |   |   | 5,591,299 |  |   |   |   | 1,919,008 |  |
|                                                                                |   |   |   |   |   |   |   |   |   |

----

|                                                                                             |
|---------------------------------------------------------------------------------------------|
|                                                                                             |  |  |  |  |  |  |  |  |  |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2015 |
|                                                                                        |   |   |   |   |   |   |   |   |   |
|                                                                                        | Method of Valuation (1) |   | Primary Industry (2) |   | Cost |   | Shares / Principal |   | Value |

|                                                                                               |
|-----------------------------------------------------------------------------------------------|
|                                                                                               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Publicly Traded Portfolio (18) –                                                        |   |   |   |   |   |   |   |   |   |
| 20.7% of net assets at value (Cont.)                                                          |   |   |   |   |   |   |   |   |   |
|                                                                                          |   |   |   |   |   |   |   |   |   |
| OpGen, Inc. (5)(21)                                                                           |   |   | Life Sciences |   |   |   |   |   |   |
| Developing tools for genomic sequence assembly and analysis                                   |   |   |   |   |   |   |   |   |   |
| Common Stock (acquired 5/5/15)                                                                | (M) |   |   |   | $ | 5,665,708 |  |   | 1,409,796 |  |   | $ | 2,678,612 |  |
| Warrants for Common Stock expiring 5/8/20 (acquired 5/5/15)                                   | (M) |   |   |   | 425,579 |  |   | 300,833 |  |   | 101,431 |  |
| Warrants for Common Stock expiring 2/17/25 (acquired 5/5/15)                                  | ( I ) |   |   |   | 785 |  |   | 31,206 |  |   | 26,372 |  |
|                                                                                          |   |   |   |   | 6,092,072 |  |   |   |   | 2,806,415 |  |
|                                                                                          |   |   |   |   |   |   |   |   |   |
| Total Non-Controlled Affiliated Publicly Traded Portfolio (cost: $23,165,788)                 |   |   |   |   |   |   |   |   | $ | 18,371,105 |  |
|                                                                                          |   |   |   |   |   |   |   |   |   |
| Total Investments in Non-Controlled Affiliated Companies (cost: $72,428,709)                  |   |   |   |   |   |   |   |   | $ | 60,280,367 |  |
|                                                                                          |   |   |   |   |   |   |   |   |   |
| Investments in Controlled Affiliated Companies (3) –                                    |   |   |   |   |   |   |   |   |   |
| 7.9% of net assets at value                                                                   |   |   |   |   |   |   |   |   |   |
|                                                                                          |   |   |   |   |   |   |   |   |   |
| Private Placement Portfolio (Illiquid) (22) –                                           |   |   |   |   |   |   |   |   |   |
| 7.9% of net assets at value                                                                   |   |   |   |   |   |   |   |   |   |
|                                                                                          |   |   |   |   |   |   |   |   |   |
| Black Silicon Holdings, Inc. (5)(8)(23)                                                       |   |   | Electronics |   |   |   |   |   |   |
| Holding company for interest in a company that develops silicon-based optoelectronic products |   |   |   |   |   |   |   |   |   |
| Series A Convertible Preferred Stock (acquired 8/4/15)                                        | ( I ) |   |   |   | $ | 750,000 |  |   | 233,499 |  |   | $ | 0 |  |
| Series A-1 Convertible Preferred Stock (acquired 8/4/15)                                      | ( I ) |   |   |   | 890,000 |  |   | 2,966,667 |  |   | 0 |  |
| Series A-2 Convertible Preferred Stock (acquired 8/4/15)                                      | ( I ) |   |   |   | 2,445,000 |  |   | 4,207,537 |  |   | 0 |  |
| Series B-1 Convertible Preferred Stock (acquired 8/4/15)                                      | ( I ) |   |   |   | 1,169,561 |  |   | 1,892,836 |  |   | 0 |  |
| Series C Convertible Preferred Stock (acquired 8/4/15)                                        | ( I ) |   |   |   | 1,171,316 |  |   | 1,674,030 |  |   | 0 |  |
| Secured Convertible Bridge Note, 8%, (acquired 8/4/15)                                        | ( I ) |   |   |   | 1,321,068 |  |   | $ | 1,278,454 |  |   | 316,613 |  |
|                                                                                          |   |   |   |   | 7,746,945 |  |   |   |   | 316,613 |  |
|                                                                                          |   |   |   |   |   |   |   |   |   |

----

|                                                                                             |
|---------------------------------------------------------------------------------------------|
|                                                                                             |  |  |  |  |  |  |  |  |  |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2015 |
|                                                                                        |   |   |   |   |   |   |   |   |   |
|                                                                                        | Method of Valuation (1) |   | Primary Industry (2) |   | Cost |   | Shares / Principal |   | Value |

|                                                                               |
|-------------------------------------------------------------------------------|
|                                                                               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Investments in Controlled Affiliated Companies (3) –                    |   |   |   |   |   |   |   |   |   |
| 7.9% of net assets at value (Cont.)                                           |   |   |   |   |   |   |   |   |   |
|                                                                          |   |   |   |   |   |   |   |   |   |
| Private Placement Portfolio (Illiquid) (22) –                           |   |   |   |   |   |   |   |   |   |
| 7.9% of net assets at value (Cont.)                                           |   |   |   |   |   |   |   |   |   |
|                                                                          |   |   |   |   |   |   |   |   |   |
| NGX Bio, Inc. (5)(8)(9)(24)                                                   |   |   | Life Sciences |   |   |   |   |   |   |
| Developing translational genomics solutions                                   |   |   |   |   |   |   |   |   |   |
| Series Seed Convertible Preferred Stock (acquired 6/6/14)                     | ( I ) |   |   |   | $ | 375,000 |  |   | 500,000 |  |   | $ | 446,878 |  |
| Series A Convertible Preferred Stock (acquired 8/20/15-9/30/15)               | ( I ) |   |   |   | 499,999 |  |   | 329,989 |  |   | 403,538 |  |
| Warrants for Series Seed Preferred Stock expiring 6/6/19 (acquired 6/6/15)    | ( I ) |   |   |   | 125,000 |  |   | 166,667 |  |   | 148,958 |  |
|                                                                          |   |   |   |   | 999,999 |  |   |   |   | 999,374 |  |
|                                                                          |   |   |   |   |   |   |   |   |   |
| ProMuc, Inc. (5)(8)                                                           |   |   | Life Sciences |   |   |   |   |   |   |
| Developing synthetic mucins for the nutritional, food and health care markets |   |   |   |   |   |   |   |   |   |
| Common Stock (acquired 12/18/13)                                              | (M) |   |   |   | 1 |  |   | 1,000 |  |   | 1 |  |
| Secured Convertible Bridge Note, 8%, (acquired 12/18/13)                      | (M) |   |   |   | 407,074 |  |   | $ | 350,000 |  |   | 407,074 |  |
| Secured Convertible Bridge Note, 8%, (acquired 8/13/14)                       | (M) |   |   |   | 111,091 |  |   | $ | 100,000 |  |   | 111,091 |  |
| Secured Convertible Bridge Note, 8%, (acquired 8/5/15)                        | (M) |   |   |   | 77,449 |  |   | $ | 75,000 |  |   | 77,449 |  |
| Secured Convertible Bridge Note, 8%, (acquired 12/7/15)                       | (M) |   |   |   | 55,301 |  |   | $ | 55,000 |  |   | 55,301 |  |
|                                                                          |   |   |   |   | 650,916 |  |   |   |   | 650,916 |  |
|                                                                          |   |   |   |   |   |   |   |   |   |
| Senova Systems, Inc. (5)(8)(9)                                                |   |   | Life Sciences |   |   |   |   |   |   |
| Developing next-generation sensors to measure pH                              |   |   |   |   |   |   |   |   |   |
| Series B Convertible Preferred Stock (acquired 9/9/11-7/18/12)                | ( I ) |   |   |   | 1,218,462 |  |   | 1,350,000 |  |   | 284,938 |  |
| Series B-1 Convertible Preferred Stock (acquired 8/1/13-1/15/14)              | ( I ) |   |   |   | 1,083,960 |  |   | 2,759,902 |  |   | 659,411 |  |
| Series C Convertible Preferred Stock (acquired 10/24/14-4/1/15)               | ( I ) |   |   |   | 1,208,287 |  |   | 1,611,049 |  |   | 1,127,419 |  |
| Warrants for Series B Preferred Stock expiring 10/15/17 (acquired 10/15/12)   | ( I ) |   |   |   | 131,538 |  |   | 164,423 |  |   | 34,703 |  |
| Warrants for Series B Preferred Stock expiring 4/24/18 (acquired 4/24/13)     | ( I ) |   |   |   | 20,000 |  |   | 25,000 |  |   | 5,277 |  |
|                                                                          |   |   |   |   | 3,662,247 |  |   |   |   | 2,111,748 |  |
|                                                                          |   |   |   |   |   |   |   |   |   |

----

|                                                                                             |
|---------------------------------------------------------------------------------------------|
|                                                                                             |  |  |  |  |  |  |  |  |  |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2015 |
|                                                                                        |   |   |   |   |   |   |   |   |   |
|                                                                                        | Method of Valuation (1) |   | Primary Industry (2) |   | Cost |   | Shares / Principal |   | Value |

|                                                                               |
|-------------------------------------------------------------------------------|
|                                                                               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Investments in Controlled Affiliated Companies (3) –                    |   |   |   |   |   |   |   |   |   |
| 7.9% of net assets at value                                                   |   |   |   |   |   |   |   |   |   |
|                                                                          |   |   |   |   |   |   |   |   |   |
| Private Placement Portfolio (Illiquid) (22) –                           |   |   |   |   |   |   |   |   |   |
| 7.9% of net assets at value                                                   |   |   |   |   |   |   |   |   |   |
|                                                                          |   |   |   |   |   |   |   |   |   |
| SynGlyco, Inc. (5)(8)                                                         |   |   | Life Sciences |   |   |   |   |   |   |
| Developed synthetic carbohydrates for pharmaceutical applications             |   |   |   |   |   |   |   |   |   |
| Common Stock (acquired 12/13/11)                                              | ( I ) |   |   |   | $ | 2,729,817 |  |   | 57,463 |  |   | $ | 0 |  |
| Series A' Convertible Preferred Stock (acquired 12/13/11-6/7/12)              | ( I ) |   |   |   | 4,855,627 |  |   | 4,855,627 |  |   | 100,343 |  |
| Secured Convertible Bridge Note, 8%, (acquired 1/23/13)                       | ( I ) |   |   |   | 438,931 |  |   | $ | 350,000 |  |   | 438,931 |  |
| Secured Convertible Bridge Note, 8%, (acquired 4/25/13)                       | ( I ) |   |   |   | 369,170 |  |   | $ | 300,000 |  |   | 369,170 |  |
|                                                                          |   |   |   |   | 8,393,545 |  |   |   |   | 908,444 |  |
|                                                                          |   |   |   |   |   |   |   |   |   |
| TARA Biosystems, Inc. (5)(8)                                                  |   |   | Life Sciences |   |   |   |   |   |   |
| Developing human tissue models for toxicology and drug discovery applications |   |   |   |   |   |   |   |   |   |
| Common Stock (acquired 8/20/14)                                               | (M) |   |   |   | 20 |  |   | 2,000,000 |  |   | 20 |  |
| Secured Convertible Bridge Note, 8%, (acquired 8/20/14)                       | (M) |   |   |   | 333,516 |  |   | $ | 300,000 |  |   | 500,274 |  |
| Secured Convertible Bridge Note, 8%, (acquired 5/18/15)                       | (M) |   |   |   | 209,995 |  |   | $ | 200,000 |  |   | 314,992 |  |
| Secured Convertible Bridge Note, 8%, acquired 12/1/15                         | (M) |   |   |   | 1,208,153 |  |   | $ | 1,200,000 |  |   | 1,208,153 |  |
|                                                                          |   |   |   |   | 1,751,684 |  |   |   |   | 2,023,439 |  |
|                                                                          |   |   |   |   |   |   |   |   |   |
| Total Controlled Private Placement Portfolio (cost: $23,205,336)              |   |   |   |   |   |   |   |   | $ | 7,010,534 |  |
|                                                                          |   |   |   |   |   |   |   |   |   |
| Total Investments in Controlled Affiliated Companies (cost: $23,205,336)      |   |   |   |   |   |   |   |   | $ | 7,010,534 |  |
|                                                                          |   |   |   |   |   |   |   |   |   |
| Total Private Placement and Publicly Traded Portfolio (cost: $116,896,172)    |   |   |   |   |   |   |   |   | $ | 76,986,968 |  |
|                                                                          |   |   |   |   |   |   |   |   |   |

----

|                                                                                             |
|---------------------------------------------------------------------------------------------|
|                                                                                             |  |  |  |  |  |  |  |  |  |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2015 |
|                                                                                        |   |   |   |   |   |   |   |   |   |
|                                                                                        | Method of Valuation (1) |   | Primary Industry (2) |   | Cost |   | Shares / Principal |   | Value |

|                                                           |
|-----------------------------------------------------------|
|                                                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Equity Method Investments (25) –                    |   |   |   |   |   |   |   |   |   |
| 0.2% of net assets at value                               |   |   |   |   |   |   |   |   |   |
|                                                      |   |   |   |   |   |   |   |   |   |
| Private Placement Portfolio (Illiquid) (25) –       |   |   |   |   |   |   |   |   |   |
| 0.2% of net assets at value                               |   |   |   |   |   |   |   |   |   |
|                                                      |   |   |   |   |   |   |   |   |   |
| Accelerator IV-New York Corporation (8)(9)(26)            |   |   | Life Sciences |   |   |   |   |   |   |
| Identifying and managing emerging biotechnology companies |   |   |   |   |   |   |   |   |   |
| Series A Common Stock (acquired 7/21/14-1/30/15)          | (E) |   |   |   | $ | 165,936 |  |   | 478,227 |  |   | $ | 165,936 |  |
|                                                      |   |   |   |   |   |   |   |   |   |
| Total Equity Method Investments (cost: $165,936)          |   |   |   |   |   |   |   |   | $ | 165,936 |  |
|                                                      |   |   |   |   |   |   |   |   |   |
| Total Investments (cost: $117,062,108)                    |   |   |   |   |   |   |   |   | $ | 77,152,904 |  |

----

|                                                                                             |
|---------------------------------------------------------------------------------------------|
|                                                                                             |  |  |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2015 |

|     |                                                                                                                    |
|-----|--------------------------------------------------------------------------------------------------------------------|
| (1) | See "Footnote to Consolidated Schedule of Investments" on page 37 for a description of the "Valuation Procedures." |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | We classify "Energy" companies as those that seek to improve performance, productivity or efficiency, and to reduce environmental impact, waste, cost, energy consumption or raw materials. We classify "Electronics" companies as those that address problems in electronics-related industries, including semiconductors and computing. We classify "Life Sciences" companies as those that address problems in life sciences-related industries, including precision health and precision medicine, biotechnology, agriculture, advanced materials and chemicals, health care, bioprocessing, water, industrial biotechnology, food, nutrition and energy. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (3) | 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 hold 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 voting shares 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. Among our controlled affiliated companies, ProMuc, Inc., was 100 percent owned by us at December 31, 2015. |

|     |                                                                                                                                                                                                                                                                                                                  |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (4) | The aggregate cost for federal income tax purposes of investments in unaffiliated privately held companies is $18,857,235. The gross unrealized appreciation based on the tax cost for these securities is $10,390. The gross unrealized depreciation based on the tax cost for these securities is $13,491,153. |

|     |                                                                                                                                        |
|-----|----------------------------------------------------------------------------------------------------------------------------------------|
| (5) | All or a portion of the investments or instruments are pledged as collateral under our Loan Facility with Orix Corporate Capital, Inc. |

|     |                                                                                                                                                                                                                                                                                                             |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (6) | The aggregate cost for federal income tax purposes of investments in unaffiliated rights to milestone payments is $781,863. The gross unrealized appreciation based on the tax cost for these securities is $2,580,188. The gross unrealized depreciation based on the tax cost for these securities is $0. |

|     |                                                                                                                                                                                                                                                                                                          |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (7) | The aggregate cost for federal income tax purposes of investments in unaffiliated publicly traded companies is $1,623,029. The gross unrealized appreciation based on the tax cost for these securities is $0. The gross unrealized depreciation based on the tax cost for these securities is $665,485. |

|     |                                                                                        |
|-----|----------------------------------------------------------------------------------------|
| (8) | We are subject to legal restrictions on the sale of our investment(s) in this company. |

|     |                                                                                                                                                                         |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (9) | Represents a non-income producing investment. Investments that have not paid dividends or interest within the last 12 months are considered to be non-income producing. |

|      |                                                                                                                                                                                                                                                                               |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (10) | On July 21, 2015, Bridgelux, Inc., signed a definitive agreement to be acquired by an investment group led by China Electronics Corporation and ChongQing Linkong Development Investment Company. The close of this transaction is subject to customary regulatory approvals. |

|      |                                                                                                                                                                         |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (11) | In February of 2016, Cambrios Technologies Corporation ceased operations and began liquidation of its assets through a general assignment for the benefit of creditors. |

|      |                                                                                                                                                                                                                                                                                                              |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (12) | We received our shares of Magic Leap, Inc., as part of the consideration paid for one of our portfolio companies in an acquisition during the second quarter of 2015. A total of 4,394 shares of our 29,291 shares of Magic Leap are held in escrow to satisfy indemnity claims through May 1, 2016. |

|      |                                      |
|------|--------------------------------------|
| (13) | Initial investment was made in 2015. |

|      |                                                                                                                                                                                                                                                                                                                                   |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (14) | The aggregate cost for federal income tax purposes of investments in non-controlled affiliated privately held companies is $49,262,921. The gross unrealized appreciation based on the tax cost for these securities is $10,504,995. The gross unrealized depreciation based on the tax cost for these securities is $17,858,654. |

----

|                                                                                             |
|---------------------------------------------------------------------------------------------|
|                                                                                             |  |  |
| HARRIS & HARRIS GROUP, INC.CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2015 |

|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (15) | D-Wave Systems, Inc., is located and is doing business primarily in Canada. We invested in D-Wave through Parallel Universes, Inc., a Delaware company. Our investment is denominated in Canadian dollars and is subject to foreign currency translation. See "Note 2. Summary of Significant Accounting Policies." D-Wave is not a qualifying asset under Section 55(a) of the 1940 Act. Under the 1940 Act, we may not acquire non-qualifying assets unless, at the time the acquisition is made, qualifying assets are at least 70 percent of our total assets. |

|      |                                                                     |
|------|---------------------------------------------------------------------|
| (16) | Produced Water Absorbents, Inc., also does business as ProSep, Inc. |

|      |                                                                                                                                                  |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------|
| (17) | In March of 2015, Ultora, Inc., ceased operations and began liquidation of its assets through a general assignment for the benefit of creditors. |

|      |                                                                                                                                                                                                                                                                                                                                  |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (18) | The aggregate cost for federal income tax purposes of investments in non-controlled affiliated publicly traded companies is $23,165,788. The gross unrealized appreciation based on the tax cost for these securities is $2,163,265. The gross unrealized depreciation based on the tax cost for these securities is $6,957,948. |

|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (19) | As of December 31, 2015, the Company's shares of Adesto Technologies Corporation were subject to a lock-up agreement that restricts our ability to trade these securities. A total of 200,000 shares are not qualifying assets under Section 55(a) of the 1940 Act. Under the 1940 Act, we may not acquire non-qualifying assets unless, at the time the acquisition is made, qualifying assets are at least 70 percent of our total assets. |

|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (20) | As of December 31, 2015, a portion of the Company's shares and warrants of Enumeral Biomedical Holdings, Inc., were subject to a lock-up agreement that restricts our ability to trade these securities. The lock-up period on our securities of Enumeral Biomedical Holdings expired on January 31, 2016. A portion of our shares were held in escrow as of the end of 2015. This escrow period expired with no claims against the escrowed shares. |

|      |                                                                                                                                                                                                                                                                                                                                                                                      |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (21) | The Company's shares of OpGen, Inc., became freely tradeable on November 2, 2015. A total of 300,833 shares and 300,833 warrants are not qualifying assets under Section 55(a) of the 1940 Act. Under the 1940 Act, we may not acquire non-qualifying assets unless, at the time the acquisition is made, qualifying assets are at least 70 percent of our total assets. |

|      |                                                                                                                                                                                                                                                                                                             |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (22) | The aggregate cost for federal income tax purposes of investments in controlled affiliated companies is $23,205,336. The gross unrealized appreciation based on the tax cost for these securities is $271,755. The gross unrealized depreciation based on the tax cost for these securities is $16,466,557. |

|      |                                                                                                                                                                                                                                                                                                                                                                                  |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (23) | On August 4, 2015, SiOnyx, Inc., reorganized its corporate structure to become a subsidiary of a new company, Black Silicon Holdings, Inc.  Our security holdings of SiOnyx converted into securities of Black Silicon Holdings.  SiOnyx was then acquired by an undisclosed buyer.  Black Silicon Holdings owns a profit interest in the undisclosed buyer. |

|      |                                                                      |
|------|----------------------------------------------------------------------|
| (24) | On August 19, 2015, UberSeq, Inc., changed its name to NGX Bio, Inc. |

|      |                                                                                                                                                                                                                                                                                                                                                  |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (25) | The aggregate cost for federal income tax purposes of investments in privately held equity method investments is $165,936. 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. |

|      |                                                                                                                                                                                             |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (26) | As part of our initial investment in Accelerator IV-New York Corporation, the Company made an additional operating and investment commitment. See "Note 11. Commitments and Contingencies." |

----

|                                                                                 |
|---------------------------------------------------------------------------------|
|                                                                                 |  |  |  |  |
| HARRIS & HARRIS GROUP, INC.FOOTNOTE TO CONSOLIDATED SCHEDULE OF INVESTMENTS |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Market Approach (M): The market approach may use quantitative inputs such as prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities and the values of market multiples derived from a set of comparable companies. The market approach may also use qualitative inputs such as progress toward milestones, the long-term potential of the business, current and future financing requirements and the rights and preferences of certain securities versus those of other securities. The selection of the relevant inputs used to derive value under the market approach requires judgment considering factors specific to the significance and relevance of each input to deriving value. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Income Approach (I): The income approach uses valuation techniques to convert future amounts (for example, revenue, cash flows or earnings) to a single present value amount (discounted). The measurement is based on the value indicated by current market expectations about those future amounts. Those valuation techniques include present value techniques; option-pricing models, such as the Black-Scholes-Merton formula (a closed-form model) and a binomial model (a lattice model), which incorporate present value techniques; and the multi-period excess earnings method, which is used to measure the fair value of certain assets. |

----

|         |                                                                                                                                                                                                                                                                                                                    |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Hybrid Approach (H): The hybrid approach uses elements of both the market approach and the income approach. The hybrid approach calculates values using the market and income approach, individually. The resulting values are then distributed among the share classes based on probability of exit outcomes. |

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

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

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

|         |                            |
|---------|----------------------------|
| • | Equity-related securities; |

|         |                                    |
|---------|------------------------------------|
| • | Long-term fixed-income securities; |

|         |                                     |
|---------|-------------------------------------|
| • | Short-term fixed-income securities; |

|         |                                                                                                                   |
|---------|-------------------------------------------------------------------------------------------------------------------|
| • | Investments in intellectual property, patents, research and development in technology or product development; and |

|         |                       |
|---------|-----------------------|
| • | All other securities. |

|         |                                             |
|---------|---------------------------------------------|
| • | Readily available public market quotations; |

|         |                                             |
|---------|---------------------------------------------|
| • | The cost of the Company’s investment; |

|         |                                                                                                                                  |
|---------|----------------------------------------------------------------------------------------------------------------------------------|
| • | Transactions in a company's securities or unconditional firm offers by responsible parties as a factor in determining valuation; |

|         |                                                               |
|---------|---------------------------------------------------------------|
| • | The financial condition and operating results of the company; |

|         |                                            |
|---------|--------------------------------------------|
| • | The company's progress towards milestones; |

|         |                                                                        |
|---------|------------------------------------------------------------------------|
| • | The long-term potential of the business and technology of the company; |

|         |                                                                             |
|---------|-----------------------------------------------------------------------------|
| • | The values of similar securities issued by companies in similar businesses; |

----

|         |                                                                                                                      |
|---------|----------------------------------------------------------------------------------------------------------------------|
| • | Multiples to revenue, net income or EBITDA that similar securities issued by companies in similar businesses receive |

|         |                         |
|---------|-------------------------|
| • | Estimated time to exit; |

|         |                                                         |
|---------|---------------------------------------------------------|
| • | Volatility of similar securities in similar businesses; |

|         |                                                                                                                                                                               |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | The proportion of the company's securities we own and the nature of any rights to require the company to register restricted securities under applicable securities laws; and |

|         |                                                                                                                                             |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------|
| • | The rights and preferences of the class of securities we own as compared with other classes of securities the portfolio company has issued. |

|         |                                                                                                                                                                                                                                                          |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Equity Method (E): 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. |

|    |                                                                                                                                                                             |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1. | Readily Marketable. Long-term fixed-income securities for which market quotations are readily available are valued using the most recent bid quotations when available. |

|    |                                                                                                                                                                                                                                                                      |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2. | Not Readily Marketable. Long-term fixed-income securities for which market quotations are not readily available are fair valued using the income approach. The factors that may be considered when valuing these types of securities by the income approach include: |

|         |                 |
|---------|-----------------|
| • | Credit quality; |

|         |                         |
|---------|-------------------------|
| • | Interest rate analysis; |

|         |                                 |
|---------|---------------------------------|
| • | Quotations from broker-dealers; |

|         |                                                                                               |
|---------|-----------------------------------------------------------------------------------------------|
| • | Prices from independent pricing services that the Board believes are reasonably reliable; and |

|         |                                                                    |
|---------|--------------------------------------------------------------------|
| • | Reasonable price discovery procedures and data from other sources. |

|         |                                             |
|---------|---------------------------------------------|
| • | The cost of the Company’s investment; |

|         |                                                                                                                                                                                            |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Investments in the same or substantially similar intellectual property or patents or research and development in technology or product development or offers by responsible third parties; |

|         |                                          |
|---------|------------------------------------------|
| • | The results of research and development; |

----

|         |                                             |
|---------|---------------------------------------------|
| • | Product development and milestone progress; |

|         |                       |
|---------|-----------------------|
| • | Commercial prospects; |

|         |                 |
|---------|-----------------|
| • | Term of patent; |

|         |                        |
|---------|------------------------|
| • | Projected markets; and |

|         |                           |
|---------|---------------------------|
| • | Other subjective factors. |

----

|                                                       |
|-------------------------------------------------------|
|                                                       |
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) |

----

----

----

----

----

----

----

|                                                 |
|-------------------------------------------------|
|                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                            | Fair Value Measurement at Reporting Date Using: |
| Description                                     | September 30, 2016 |   | Unadjusted QuotedPrices in ActiveMarkets forIdentical Assets(Level 1) |   | Significant OtherObservable Inputs(Level 2) |   | SignificantUnobservable Inputs(Level 3) |
| Privately Held Portfolio Companies:             |   |   |   |   |   |   |   |
| Preferred Stock                                 | $ | 47,805,431 |  |   | $ | 0 |  |   | $ | 0 |  |   | $ | 47,805,431 |  |
| Bridge Notes                                    | 6,378,368 |  |   | 0 |  |   | 0 |  |   | 6,378,368 |  |
| Warrants                                        | 137,180 |  |   | 0 |  |   | 0 |  |   | 137,180 |  |
| Rights to Milestone Payments                    | 3,442,745 |  |   | 0 |  |   | 0 |  |   | 3,442,745 |  |
| Common Stock                                    | 2,202,449 |  |   | 0 |  |   | 0 |  |   | 2,202,449 |  |
| Senior Secured Debt                             | 1,424,750 |  |   | 0 |  |   | 0 |  |   | 1,424,750 |  |
|                                            |   |   |   |   |   |   |   |
| Publicly Traded Portfolio Companies:            |   |   |   |   |   |   |   |
| Common Stock                                    | $ | 6,133,535 |  |   | $ | 6,133,535 |  |   | $ | 0 |  |   | $ | 0 |  |
| Warrants                                        | 220,885 |  |   | 0 |  |   | 118,197 |  |   | 102,688 |  |
| Total Investments:                              | $ | 67,745,343 |  |   | $ | 6,133,535 |  |   | $ | 118,197 |  |   | $ | 61,493,611 |  |
|                                            |   |   |   |   |   |   |   |
| Funds Held in Escrow From Sales of Investments: | $ | 116,872 |  |   | $ | 0 |  |   | $ | 0 |  |   | $ | 116,872 |  |
| Total Financial Assets:                         | $ | 67,862,215 |  |   | $ | 6,133,535 |  |   | $ | 118,197 |  |   | $ | 61,610,483 |  |

|                             |
|-----------------------------|
|                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Description                 | Carrying Value |   | Fair Value |   | Level 1 |   | Level 2 |   | Level 3 |
| Term Loan CreditFacility(1) | $ | 5,000,000 |  |   | $ | 5,000,000 |  |   | $ | 0 |  |   | $ | 0 |  |   | $ | 5,000,000 |  |
| Total                       | $ | 5,000,000 |  |   | $ | 5,000,000 |  |   | $ | 0 |  |   | $ | 0 |  |   | $ | 5,000,000 |  |

----

|                 |
|-----------------|
|                 |  |  |  |  |  |  |
| Description     | Fair Value at September 30, 2016 | Valuation Technique(s) | Unobservable Input(s) | Range(s) (Weighted Average (a)) |
|            |   |   | Price Per Share | $2.26 - $2.62 ($2.56) |
|            |   |   | Non-Performance Risk | 0.0% (0.0%) |
|            |   |   | Volatility | 51.5% - 96.6% (58.4%) |
| Preferred Stock | $ | 13,549,791 |  | Hybrid Approach | Time to Exit / Cash Flows (Years) | 5.0 (5.00) |
|            |   |   | Probability of Achieving Independent Milestones | 12.5% - 100.0% (53.6%) |
|            |   |   | Probability of Achieving Dependent Milestones | 32.0% - 83.0% (63.2%) |
|            |   |   | Price Per Share | $0.30 - $3.11 ($2.05) |
|            |   |   | Non-Performance Risk | -8.6% - 24.0% (19.1%) |
|            |   |   | Volatility | 50.1% - 124.6% (76.8%) |
| Preferred Stock | 17,217,614 |  | Income Approach | Time to Exit / Cash Flows (Years) | 0.3 - 10.8 (5.14) |
|            |   |   | Price Per Share | $2.76 ($2.76) |
|            |   |   | Volatility | 49.4% - 56.1% (55.1%) |
|            |   |   | Revenue Multiples | 4.6 - 4.9 (4.84) |
|            |   |   | Time to Exit (Years) | 0.2 - 5.0 (2.0) |
| Preferred Stock | 17,038,026 |  | Market Approach | Discount for Lack of Marketability | 23.5% - 25.8% (25.5%) |
| Bridge Notes    | 664,693 |  | Income Approach | Estimated Value to Cost Ratio at Payout | 0.23 - 1.00 (0.64) |
| Bridge Notes    | 5,713,675 |  | Market Approach | Estimated Value to Cost Ratio at Conversion | 0.53 - 1.58 (1.11) |
|            |   |   | Price Per Share | $2.26 ($2.26) |
|            |   |   | Volatility | 96.6% (96.6%) |
|            |   |   | Non-Performance Risk | 0.0% (0.0%) |
| Common Stock    | 717,186 |  | Hybrid Approach | Time to Exit (Years) | 5.0 (5.00) |
|            |   |   | Non-Performance Risk | 0.0% (0.0%) |
|            |   |   | Volatility | 124.6% (124.6%) |
|            |   |   | Time to Exit (Years) | 6.0 (6.0) |
| Common Stock    | 921,647 |  | Income Approach | Price Per Share | $0.50 ($0.50) |
|            |   |   | Volatility | 56.1% (56.1%) |
|            |   |   | Revenue Multiples | 4.9 (4.9) |
|            |   |   | Time to Exit (Years) | 5.0 (5.0) |
|            |   |   | Discount for Lack of Marketability | 25.8% (25.8%) |
| Common Stock    | 563,616 |  | Market Approach | Price Per Share | $0.0000 - $0.8320 ($0.8320) |
|            |   |   | Stock Price | $0.18 - $3.55 ($2.09) |
|            |   |   | Volatility | 51.5% - 105.4% (74.8%) |
| Warrants        | 239,868 |  | Income Approach | Time to Exit (Years) | 2.3 - 8.4 (5.56) |
|            |   |   |   |   |

----

|                                                |
|------------------------------------------------|
|                                                |  |  |  |  |  |  |
| Description                                    | Fair Value at September 30, 2016 | Valuation Technique(s) | Unobservable Input(s) | Range(s) (Weighted Average (a)) |
|                                           |   |   | Probability of Achieving Independent Milestones | 25% - 75% (67%) |
|                                           |   |   | Probability of Achieving Dependent Milestones | 50% - 100% (81%) |
| Rights to Milestone Payments                   | $ | 3,442,745 |  | Income Approach | Time to Cash Flows (Years) | 0.5 - 6.3 (3.4) |
| Senior Secured Debt                            | 1,424,750 |  | Income Approach | Discount Rate | 53% (53%) |
|                                           |   |   | Probability of Achieving Independent Milestones | 50% (50%) |
| Funds Held in Escrow from Sales of Investments | 116,872 |  | Income Approach | Time to Cash Flows (Years) | 0.5 (0.5) |
|                                           |   |   |   |   |
| Total                                          | $ | 61,610,483 |  |   |   |   |

----

----

|                                             |
|---------------------------------------------|
|                                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                        | Beginning Balance 7/1/2016 |   | TotalRealized(Losses)GainsIncluded inChanges inNet Assets |   | Transfers |   | Total Unrealized(Depreciation)AppreciationIncluded inChanges in Net Assets |   | Investmentsin PortfolioCompanies,Interest onBridge Notes,andAmortizationof Loan Fees, Net |   |   DisposalsandSettlements |   | Ending Balance 9/30/2016 |   | Amount of Total(Depreciation)Appreciation for the Period Included inChanges in NetAssets Attributableto the Change inUnrealized Lossesor Gains Relating to Assets StillHeld at the Reporting Date |
| Preferred Stock                             | $ | 52,442,790 |  |   | $ | (2,665,608 | ) | 1  | $ | 250,000 |  | 3  | $ | (854,869 | ) |   | $ | 750,000 |  |   | $ | (2,116,882 | ) |   | $ | 47,805,431 |  |   | $ | (3,098,476 | ) |
| Bridge Notes                                | 5,478,889 |  |   | 0 |  |   | (250,000 | ) | 3  | (145,899 | ) |   | 1,398,995 |  |   | (103,617 | ) |   | 6,378,368 |  |   | (281,835 | ) |
| Common Stock                                | 1,935,702 |  |   | 0 |  |   | 0 |  |   | 82,094 |  |   | 184,653 |  |   | 0 |  |   | 2,202,449 |  |   | 82,094 |  |
| Warrants                                    | 210,800 |  |   | (261,194 | ) | 1  | 0 |  |   | 290,262 |  |   | 0 |  |   | 0 |  |   | 239,868 |  |   | 29,068 |  |
| Rights toMilestonePayments                  | 2,993,857 |  |   | 0 |  |   | 0 |  |   | 448,888 |  |   | 0 |  |   | 0 |  |   | 3,442,745 |  |   | 448,888 |  |
| Senior SecuredDebt                          | 1,494,000 |  |   | 0 |  |   | 0 |  |   | (105,225 | ) |   | 35,975 |  |   | 0 |  |   | 1,424,750 |  |   | (105,225 | ) |
| Funds Held inEscrow FromSales ofInvestments | 116,781 |  |   | 91 |  | 2  | 0 |  |   | 0 |  |   | 0 |  |   | 0 |  |   | 116,872 |  |   | 0 |  |
| Total                                       | $ | 64,672,819 |  |   | $ | (2,926,711 | ) |   | $ | 0 |  |   | $ | (284,749 | ) |   | $ | 2,369,623 |  |   | $ | (2,220,499 | ) |   | $ | 61,610,483 |  |   | $ | (2,925,486 | ) |

----

|                                             |
|---------------------------------------------|
|                                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                        | Beginning Balance 1/1/2016 |   | TotalRealized(Losses)GainsIncluded inChanges inNet Assets |   | Transfers |   | Total UnrealizedAppreciation(Depreciation)Included inChanges in Net Assets |   | Investmentsin PortfolioCompanies,Interest onBridge Notes,andAmortizationof Loan Fees, Net |   |   DisposalsandSettlements |   | Ending Balance 9/30/2016 |   | Amount of TotalAppreciation (Depreciation) for the Period Included inChanges in NetAssets Attributableto the Change inUnrealized Lossesor Gains Relating to Assets Still Held at the Reporting Date |
| Preferred Stock                             | $ | 48,568,205 |  |   | $ | (6,905,065 | ) | 1  | $ | (396,631 | ) | 4,5  | $ | 7,235,141 |  |   | $ | 2,061,591 |  |   | $ | (2,757,810 | ) |   | $ | 47,805,431 |  |   | $ | 460,143 |  |
| Bridge Notes                                | 4,275,728 |  |   | (121,522 | ) | 2  | (406,621 | ) | 4  | 28,279 |  |   | 3,570,071 |  |   | (967,567 | ) |   | 6,378,368 |  |   | (93,243 | ) |
| Common Stock                                | 639,786 |  |   | 0 |  |   | 952,210 |  | 4  | 425,790 |  |   | 184,663 |  |   | 0 |  |   | 2,202,449 |  |   | 425,790 |  |
| Warrants                                    | 480,025 |  |   | (333,862 | ) | 2  | (250,389 | ) | 4,5  | 344,094 |  |   | 0 |  |   | 0 |  |   | 239,868 |  |   | 10,232 |  |
| Rights toMilestonePayments                  | 3,362,051 |  |   | 0 |  |   | 0 |  |   | 80,694 |  |   | 0 |  |   | 0 |  |   | 3,442,745 |  |   | 80,694 |  |
| SubordinatedSecured Debt                    | 560,538 |  |   | 0 |  |   | (569,904 | ) | 4  | 0 |  |   | 9,366 |  |   | 0 |  |   | 0 |  |   | 0 |  |
| Senior SecuredDebt                          | 0 |  |   | 0 |  |   | 569,904 |  | 4  | (91,321 | ) |   | 946,167 |  |   | 0 |  |   | 1,424,750 |  |   | (91,321 | ) |
| Funds Held inEscrow FromSales ofInvestments | 374,565 |  |   | 263,321 |  | 3  | 0 |  |   | 0 |  |   | 0 |  |   | (521,014 | ) |   | 116,872 |  |   | 0 |  |
| Options                                     | 54 |  |   | 0 |  |   | 0 |  |   | (54 | ) |   | 0 |  |   | 0 |  |   | 0 |  |   | (54 | ) |
| OTC TradedCommon Stock                      | 29,732 |  |   | 0 |  |   | (29,732 | ) | 6  | 0 |  |   | 0 |  |   | 0 |  |   | 0 |  |   | 0 |  |
| Total                                       | $ | 58,290,684 |  |   | $ | (7,097,128 | ) |   | $ | (131,163 | ) |   | $ | 8,022,623 |  |   | $ | 6,771,858 |  |   | $ | (4,246,391 | ) |   | $ | 61,610,483 |  |   | $ | 792,241 |  |

----

|                                                |
|------------------------------------------------|
|                                                |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                           | Fair Value Measurement at Reporting Date Using: |
| Description                                    | December 31, 2015 |   | Unadjusted QuotedPrices in ActiveMarkets for IdenticalAssets (Level 1) |   | Significant OtherObservable Inputs(Level 2) |   | SignificantUnobservable Inputs(Level 3) |
| Privately Held Portfolio Companies:            |   |  |   |   |  |   |   |  |   |   |  |
| Preferred Stock                                | $ | 48,568,205 |  |   | $ | 0 |  |   | $ | 0 |  |   | $ | 48,568,205 |  |
| Bridge Notes                                   | 4,275,728 |  |   | 0 |  |   | 0 |  |   | 4,275,728 |  |
| Warrants                                       | 480,025 |  |   | 0 |  |   | 0 |  |   | 480,025 |  |
| Rights to Milestone Payments                   | 3,362,051 |  |   | 0 |  |   | 0 |  |   | 3,362,051 |  |
| Common Stock                                   | 639,786 |  |   | 0 |  |   | 0 |  |   | 639,786 |  |
| Subordinated Secured Debt                      | 560,538 |  |   | 0 |  |   | 0 |  |   | 560,538 |  |
| Options                                        | 54 |  |   | 0 |  |   | 0 |  |   | 54 |  |
|                                           |   |   |   |   |   |   |   |
| Publicly Traded PortfolioCompanies:            |   |   |   |   |   |   |   |
| Common Stock                                   | $ | 19,100,581 |  |   | $ | 18,126,030 |  |   | $ | 944,819 |  |   | $ | 29,732 |  |
| Total Investments:                             | $ | 76,986,968 |  |   | $ | 18,126,030 |  |   | $ | 944,819 |  |   | $ | 57,916,119 |  |
|                                           |   |   |   |   |   |   |   |
| Funds Held in Escrow FromSales of Investments: | $ | 374,565 |  |   | $ | 0 |  |   | $ | 0 |  |   | $ | 374,565 |  |
| Total Financial Assets:                        | $ | 77,361,533 |  |   | $ | 18,126,030 |  |   | $ | 944,819 |  |   | $ | 58,290,684 |  |

|                             |
|-----------------------------|
|                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Description                 | Carrying Value |   | Fair Value |   | Level 1 |   | Level 2 |   | Level 3 |
| Term Loan CreditFacility(1) | $ | 5,000,000 |  |   | $ | 5,000,000 |  |   | $ | 0 |  |   | $ | 0 |  |   | $ | 5,000,000 |  |
| Total                       | $ | 5,000,000 |  |   | $ | 5,000,000 |  |   | $ | 0 |  |   | $ | 0 |  |   | $ | 5,000,000 |  |

----

|                                                     |
|-----------------------------------------------------|
|                                                     |  |  |  |  |  |  |  |  |  |
| Description                                         | Fair Value at December 31, 2015 |   | ValuationTechnique(s) |   | Unobservable Input(s) |   | Range(s) (WeightedAverage(a)) |
| Preferred Stock                                     | $ | 7,648,727 |  |   | Hybrid Approach |   | Private Offering PriceVolatilityTime to Exit |   | $1.08 - $2.17 ($2.07)48.8% - 131.2% (56.5%)1.25 - 1.5 Years (1.48) |
| Preferred Stock                                     | 22,784,347 |  |   | Income Approach |   | Private Offering PriceNon-Performance RiskVolatilityTime to Exit |   | $0.02 - $23.03 ($2.65)0% - 48% (4.4%)0% - 112.8% (68.4%)1.0 - 5.0 Years (2.8) |
| Preferred Stock                                     | 18,135,131 |  |   | Market Approach |   | VolatilityRevenue MultiplesTime to ExitDiscount for Lack of Marketability |   | 0% - 54.1% (45.5%)0 - 5.9 (4.76)0.2 - 2 Years (1. 2)0% - 16.7% (12.9%) |
| Bridge Notes                                        | 1,124,714 |  |   | Income Approach |   | Private Offering Price |   | $1.00 ($1.00) |
| Bridge Notes                                        | 3,151,014 |  |   | Market Approach |   | Private Offering Price |   | $0.56 - $1.00 ($0.98) |
| Common Stock                                        | 309,963 |  |   | Hybrid Approach |   | Private Offering PriceVolatilityTime to Exit |   | $1.08 ($1.08)131.2% (131.2%)1.25 Years (1.25) |
| Common Stock                                        | 329,802 |  |   | Income Approach |   | Private Offering PriceVolatilityTime to Exit |   | $0 - $3.71 ($3.71)50.8% (50.8%)3 Years (3) |
| Common Stock                                        | 21 |  |   | Market Approach |   | Private Offering Price |   | $0.0001 - $0.001 ($0.0001) |
| Warrants                                            | 101,431 |  |   | Market Approach |   | Volume Weighted Average Price |   | 0.34 (0.34) |
| Warrants                                            | 378,594 |  |   | Income Approach |   | Stock PriceVolatilityExpected Term |   | $0.21 - $3.88 ($1.04)48.8% - 101.9% (64%)0.03 - 9.14 Years (3.34) |
| Rights to Milestone Payments                        | 3,362,051 |  |   | Probability Weighted Discounted Cash Flow |   | Probability of Achieving Independent MilestonesProbability of Achieving Dependent Milestones |   | 25% - 100% (58%)0% - 75% (36%) |
| SubordinatedSecured Debt                            | 560,538 |  |   | Market Approach |   | Market Price |   | 0.56 (0.56) |
| Funds Held in Escrow From Sales of Investments | 374,565 |  |   | Market Approach |   | Escrow Discount |   | 50% (50%) |
| Options                                             | 54 |  |   | Income Approach |   | Stock PriceVolatilityExpected Term |   | $0.23 ($0.23)79% (79%)0.58 Years (0.58) |
| OTC TradedCommon Stock                              | 29,732 |  |   | Market Approach |   | Stock Price |   | $0.23 ($0.23) |
| Total                                               | $ | 58,290,684 |  |   |   |   |   |   |   |

----

|                                             |
|---------------------------------------------|
|                                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                        | Beginning Balance 7/1/2015 |   | TotalRealized(Losses)Gains Included inChanges inNet Assets |   | Transfers |   | Total UnrealizedAppreciation(Depreciation)Included inChanges in Net Assets |   | Investments inPortfolioCompanies,Interest onBridge Notes,andAmortizationof Loan Fees, Net |   | DisposalsandSettlements |   | Ending Balance 9/30/2015 |   | Amount of Total(Depreciation) Appreciation for the Period Included inChanges in NetAssets Attributableto the Change inUnrealized Gains or Losses Relatingto Assets Still Held at the Reporting Date |
| Preferred Stock                             | $ | 63,882,805 |  |   | $ | 0 |  |   | $ | 0 |  |   | $ | (13,513,549 | ) |   | $ | 1,750,007 |  |   | $ | 0 |  |   | $ | 52,119,263 |  |   | $ | (13,513,549 | ) |
| Bridge Notes                                | 5,194,358 |  |   | 1,790,891 |  |   | 0 |  |   | (2,090,749 | ) |   | 747,427 |  |   | (2,429,202 | ) |   | 3,212,725 |  |   | (3,356,937 | ) |
| Common Stock                                | 452,129 |  |   | 0 |  |   | 0 |  |   | 109,644 |  |   | 0 |  |   | 0 |  |   | 561,773 |  |   | 109,644 |  |
| Warrants                                    | 1,023,104 |  |   | (528,469 | ) |   | 201,558 |  |   | 141,309 |  |   | 0 |  |   | 0 |  |   | 837,502 |  |   | 82,935 |  |
| Rights toMilestonePayments                  | 3,181,183 |  |   | 0 |  |   | 0 |  |   | 1,876,900 |  |   | 0 |  |   | 0 |  |   | 5,058,083 |  |   | 1,876,900 |  |
| Subordinated Secured Debt                   | 987,025 |  |   | 0 |  |   | 0 |  |   | (20,537 | ) |   | 1,562 |  |   | 0 |  |   | 968,050 |  |   | (20,537 | ) |
| Senior SecuredDebt                          | 764,253 |  |   | 0 |  |   | 0 |  |   | (108,422 | ) |   | 42,453 |  |   | (597,309 | ) |   | 100,975 |  |   | (108,422 | ) |
| Funds Held inEscrow FromSales ofInvestments | 372,835 |  |   | 2,016 |  |   | 0 |  |   | 0 |  |   | 0 |  |   | 0 |  |   | 374,851 |  |   | 0 |  |
| Options                                     | 38,536 |  |   | 0 |  |   | 0 |  |   | (36,661 | ) |   | 0 |  |   | 0 |  |   | 1,875 |  |   | (36,661 | ) |
| OTC TradedCommon Stock                      | 7,707,262 |  |   | 0 |  |   | (7,698,444 | ) |   | 17,047 |  |   | 0 |  |   | 0 |  |   | 25,865 |  |   | 521,145 |  |
| Total                                       | $ | 83,603,490 |  |   | $ | 1,264,438 |  |   | $ | (7,496,886 | ) |   | $ | (13,625,018 | ) |   | $ | 2,541,449 |  |   | $ | (3,026,511 | ) |   | $ | 63,260,962 |  |   | $ | (14,445,482 | ) |

----

|                                             |
|---------------------------------------------|
|                                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                        | Beginning Balance 1/1/2015 |   | TotalRealized(Losses)Gains Included inChanges inNet Assets |   | Transfers |   | Total UnrealizedAppreciation(Depreciation)Included inChanges in Net Assets |   | Investments inPortfolioCompanies,Interest onBridge Notes,andAmortizationof Loan Fees, Net |   | DisposalsandSettlements |   | Ending Balance 9/30/2015 |   | Amount of Total(Depreciation)Appreciation for thePeriod Included inChanges in NetAssets Attributableto the Change inUnrealized Gains orLosses Relatingto Assets Still Held at the Reporting Date |
| Preferred Stock                             | $ | 70,969,603 |  |   | $ | 3,351,833 |  |   | $ | (231,361 | ) | 1  | $ | (20,121,000 | ) |   | $ | 3,684,034 |  |   | $ | (5,533,846 | ) |   | $ | 52,119,263 |  |   | $ | (18,211,065 | ) |
| Bridge Notes                                | 2,163,916 |  |   | 1,790,891 |  |   | (1,630,121 | ) |   | 653,728 |  |   | 2,663,513 |  |   | (2,429,202 | ) |   | 3,212,725 |  |   | (612,460 | ) |
| Common Stock                                | 535,280 |  |   | 0 |  |   | (74,379 | ) |   | 100,872 |  |   | 0 |  |   | 0 |  |   | 561,773 |  |   | 100,872 |  |
| Warrants                                    | 2,026,864 |  |   | (911,957 | ) |   | 0 |  |   | (525,754 | ) |   | 272,349 |  |   | (24,000 | ) |   | 837,502 |  |   | (777,815 | ) |
| Rights toMilestonePayments                  | 3,193,865 |  |   | 0 |  |   | 0 |  |   | 1,864,218 |  |   | 0 |  |   | 0 |  |   | 5,058,083 |  |   | 1,864,218 |  |
| Senior SecuredDebt                          | 1,203,299 |  |   | 0 |  |   | 0 |  |   | (394,805 | ) |   | 75,899 |  |   | (783,418 | ) |   | 100,975 |  |   | (394,805 | ) |
| SubordinatedSecured Debt                    | 979,450 |  |   | 0 |  |   | 0 |  |   | (25,563 | ) |   | 14,163 |  |   | 0 |  |   | 968,050 |  |   | (25,563 | ) |
| Funds Held inEscrow FromSales ofInvestments | 306,802 |  |   | (58,923 | ) |   | 126,972 |  | 1  | 0 |  |   | 0 |  |   | 0 |  |   | 374,851 |  |   | 0 |  |
| Options                                     | 50,690 |  |   | 0 |  |   | 0 |  |   | (48,815 | ) |   | 0 |  |   | 0 |  |   | 1,875 |  |   | (48,815 | ) |
| OTC TradedCommon Stock                      | 7,251,178 |  |   | 0 |  |   | (8,020,281 | ) |   | (87,684 | ) |   | 882,652 |  |   | 0 |  |   | 25,865 |  |   | (87,684 | ) |
| Total                                       | $ | 88,680,947 |  |   | $ | 4,171,844 |  |   | $ | (9,829,170 | ) |   | $ | (18,584,803 | ) |   | $ | 7,592,610 |  |   | $ | (8,770,466 | ) |   | $ | 63,260,962 |  |   | $ | (18,193,117 | ) |

|         |                                                                                                                                                         |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1  | There was a $126,972 transfer from "Preferred Stock" into Funds Held in Escrow From Sales of Investments" owing to the sale of Molecular Imprints, Inc. |

----

|                                                                                                         |
|---------------------------------------------------------------------------------------------------------|
|                                                                                                         |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                                    | Assets |   | Liabilities |
| Derivatives                                                                                             | Location |   | Fair Value |   | Location |   | Fair Value |
| Amgen, Inc. Rights to MilestonePayments from Acquisition ofBioVex Group, Inc.                           | Investments |   | $ | 2,975,353 |  |   | — |  |   | — |  |
| Laird Technologies, Inc.Rights to Milestone Paymentsfrom Acquisition of NextremeThermal Solutions, Inc. | Investments |   | $ | 0 |  |   | — |  |   | — |  |
| Canon, Inc. Rights toMilestone Payments fromAcquisition of MolecularImprints, Inc.                      | Investments |   | $ | 467,392 |  |   | — |  |   | — |  |

|                                                                                                        |
|--------------------------------------------------------------------------------------------------------|
|                                                                                                        |  |  |  |  |  |  |  |  |  |
| Derivatives                                                                                            | Location |   | RealizedGain (Loss) |   | (Increase) Decreasein UnrealizedDepreciation |
| Amgen, Inc. Rights toMilestone Payments fromAcquisition of BioVex Group,Inc.                           | Net Realized and Unrealized Gain (Loss) |   | $ | 0 |  |   | $ | 447,724 |  |
| Laird Technologies, Inc.Rights to Milestone Paymentsfrom Acquisition ofNextreme Thermal Solutions,Inc. | Net Realized and Unrealized Gain (Loss) |   | $ | 0 |  |   | $ | 0 |  |
| Canon, Inc. Rights toMilestone Payments fromAcquisition of MolecularImprints, Inc.                     | Net Realized and Unrealized Gain (Loss) |   | $ | 0 |  |   | $ | 1,164 |  |

----

|                                                                                                        |
|--------------------------------------------------------------------------------------------------------|
|                                                                                                        |  |  |  |  |  |  |  |  |  |
| Derivatives                                                                                            | Location |   | RealizedGain (Loss) |   | (Increase) Decreasein UnrealizedDepreciation |
| Amgen, Inc. Rights toMilestone Payments fromAcquisition of BioVex Group,Inc.                           | Net Realized and Unrealized Gain (Loss) |   | $ | 0 |  |   | $ | 75,121 |  |
| Laird Technologies, Inc.Rights to Milestone Paymentsfrom Acquisition ofNextreme Thermal Solutions,Inc. | Net Realized and Unrealized Gain (Loss) |   | $ | 0 |  |   | $ | 0 |  |
| Canon, Inc. Rights toMilestone Payments fromAcquisition of MolecularImprints, Inc.                     | Net Realized and Unrealized Gain (Loss) |   | $ | 0 |  |   | $ | 5,573 |  |

|                                                                                                         |
|---------------------------------------------------------------------------------------------------------|
|                                                                                                         |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                                    | Assets |   | Liabilities |
| Derivatives                                                                                             | Location |   | Fair Value |   | Location |   | Fair Value |
| Amgen, Inc. Rights to MilestonePayments from Acquisition ofBioVex Group, Inc.                           | Investments |   | $ | 2,900,232 |  |   | — |  |   | — |  |
| Laird Technologies, Inc.Rights to Milestone Paymentsfrom Acquisition of NextremeThermal Solutions, Inc. | Investments |   | $ | 0 |  |   | — |  |   | — |  |
| Canon, Inc. Rights toMilestone Payments fromAcquisition of MolecularImprints, Inc.                      | Investments |   | $ | 461,819 |  |   | — |  |   | — |  |

----

|                                                                                                        |
|--------------------------------------------------------------------------------------------------------|
|                                                                                                        |  |  |  |  |  |  |  |  |  |
| Derivatives                                                                                            | Location |   | RealizedGain (Loss) |   | (Increase) Decreasein UnrealizedDepreciation |
| Amgen, Inc. Rights toMilestone Payments fromAcquisition of BioVex Group,Inc.                           | Net Realized and Unrealized Gain (Loss) |   | $ | 0 |  |   | $ | 1,245,279 |  |
| Laird Technologies, Inc.Rights to Milestone Paymentsfrom Acquisition ofNextreme Thermal Solutions,Inc. | Net Realized and Unrealized Gain (Loss) |   | $ | 0 |  |   | $ | 0 |  |
| Canon, Inc. Rights toMilestone Payments fromAcquisition of MolecularImprints, Inc.                     | Net Realized and Unrealized Gain (Loss) |   | $ | 0 |  |   | $ | 631,621 |  |

|                                                                                                        |
|--------------------------------------------------------------------------------------------------------|
|                                                                                                        |  |  |  |  |  |  |  |  |  |
| Derivatives                                                                                            | Location |   | RealizedGain (Loss) |   | (Increase) Decreasein UnrealizedDepreciation |
| Amgen, Inc. Rights toMilestone Payments fromAcquisition of BioVex Group,Inc.                           | Net Realized and Unrealized Gain (Loss) |   | $ | 0 |  |   | $ | 1,229,623 |  |
| Laird Technologies, Inc.Rights to Milestone Paymentsfrom Acquisition ofNextreme Thermal Solutions,Inc. | Net Realized and Unrealized Gain (Loss) |   | $ | 0 |  |   | $ | 0 |  |
| Canon, Inc. Rights toMilestone Payments fromAcquisition of MolecularImprints, Inc.                     | Net Realized and Unrealized Gain (Loss) |   | $ | 0 |  |   | $ | 634,595 |  |

----

|                                                                |
|----------------------------------------------------------------|
|                                                                |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                           | Shares |   | WeightedAverageExercise Price |   | WeightedAverageGrant DateFair Value |   | Weighted AverageRemainingContractualTerm (Years) |   | AggregateIntrinsicValue |
| Options Outstanding at January 1, 2016                         | 1,402,912 |  |   | $ | 9.85 |  |   | $ | 6.34 |  |   | 0.70 |  |   | $ | 0 |  |
| Granted                                                        | 0 |  |   | 0 |  |   | 0 |  |   | 0 |  |   |   |
| Exercised                                                      | 0 |  |   | 0 |  |   | 0 |  |   | 0 |  |   |   |
| Forfeited or Expired                                           | (1,205,060 | ) |   | 10.34 |  |   | 6.85 |  |   | 0 |  |   |   |
| Options Outstanding and Exercisable at September 30, 2016 | 197,852 |  |   | $ | 6.86 |  |   | $ | 3.25 |  |   | 1.26 |  |   | $ | 0 |  |

----

|                                                                               |
|-------------------------------------------------------------------------------|
|                                                                               |  |  |  |  |  |  |
|                                                                          | Shares |   | Weighted-Average Grant Date Fair Value Per Share |
| Outstanding at January 1, 2016                                                | 1,062,329 |  |   | $ | 2.66 |  |
| Granted                                                                       | 12,000 |  |   | 1.74 |  |
| Vested based on service                                                       | (35,074 | ) |   | 3.31 |  |
| Shares withheld  related to net share settlementof restricted stock | (13,860 | ) |   | 3.37 |  |
| Forfeited                                                                     | (283,370 | ) |   | 2.65 |  |
| Outstanding at September 30, 2016                                        | 742,025 |  |   | $ | 2.61 |  |

|                                                                                |
|--------------------------------------------------------------------------------|
|                                                                                |  |  |  |  |  |  |
|                                                                           | Shares |   | Weighted-Average Grant Date Fair Value Per Share |
| Outstanding at January 1, 2015                                                 | 1,165,495 |  |   | $ | 2.73 |  |
| Granted                                                                        | 10,000 |  |   | 2.72 |  |
| Vested based on service                                                        | (40,842 | ) |   | 3.39 |  |
| Shares withheld  related to net share settlement of restricted stock | (17,325 | ) |   | 3.37 |  |
| Forfeited                                                                      | (3,999 | ) |   | 3.44 |  |
| Outstanding at September 30, 2015                                         | 1,113,329 |  |   | $ | 2.69 |  |

----

----

----

|                                                                          |
|--------------------------------------------------------------------------|
|                                                                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                     | For the Three Months Ended September 30, |   | For the Nine Months Ended September 30, |
|                                                                     | 2016 |   | 2015 |   | 2016 |   | 2015 |
| Numerator for decrease in net assets per share resulting from operations | $ | (6,022,037 | ) |   | $ | (16,904,625 | ) |   | $ | (13,256,696 | ) |   | $ | (22,356,159 | ) |
| Denominator for basic weighted average shares                            | 30,880,829 |  |   | 31,251,950 |  |   | 30,859,267 |  |   | 31,272,790 |  |
| Basic net decrease in net assets per shareresulting from operations      | $ | (0.20 | ) |   | $ | (0.54 | ) |   | $ | (0.43 | ) |   | $ | (0.71 | ) |
| Denominator for diluted weighted average shares                          | 30,880,829 |  |   | 31,251,950 |  |   | 30,859,267 |  |   | 31,272,790 |  |
| Diluted net decrease in net assets pershare resulting from operations    | $ | (0.20 | ) |   | $ | (0.54 | ) |   | $ | (0.43 | ) |   | $ | (0.71 | ) |
| Anti-dilutive shares by type:                                            |   |   |   |   |   |   |   |
| Stock Options                                                            | 197,852 |  |   | 1,402,912 |  |   | 197,852 |  |   | 1,402,912 |  |
| Restricted Stock1                                                        | 95,025 |  |   | 220,329 |  |   | 95,025 |  |   | 220,329 |  |
| Total anti-dilutive shares                                               | 292,877 |  |   | 1,623,241 |  |   | 292,877 |  |   | 1,623,241 |  |

----

|                    |
|--------------------|
|                    |  |  |  |  |  |  |
|               | Nine Months Ended September 30, |
|               | 2016 | 2015 |
| Net revenue        | $ | 18,990 |  | $ | 31,500 |  |
| Net operating loss | (769,504 | ) | (1,103,636 | ) |
| Loss before taxes  | (769,504 | ) | (1,103,636 | ) |
| Net loss           | (840,186 | ) | (1,145,723 | ) |

----

|                                                                |
|----------------------------------------------------------------|
|                                                                |
| HARRIS & HARRIS GROUP, INC.FINANCIAL HIGHLIGHTS(Unaudited) |

|                                                                                                              |
|--------------------------------------------------------------------------------------------------------------|
|                                                                                                              |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                                         | Three Months Ended September 30, |   | Nine Months Ended September 30, |
|                                                                                                         | 2016 |   | 2015 |   | 2016 |   | 2015 |
| Per Share Operating Performance                                                                              |   |   |   |   |   |   |   |
| Net asset value per share, beginning of period                                                               | $ | 2.63 |  |   | $ | 3.34 |  |   | $ | 2.88 |  |   | $ | 3.51 |  |
| Net operating loss*                                                                                          | (0.03 | ) |   | (0.05 | ) |   | (0.10 | ) |   | (0.17 | ) |
| Net realized (loss) gain on investments*                                                                     | (0.19 | ) |   | 0.04 |  |   | (0.33 | ) |   | 0.14 |  |
| Net decrease (increase) in unrealized depreciation on investments and written call options*(1)               | 0.02 |  |   | (0.53 | ) |   | 0.01 |  |   | (0.67 | ) |
| Share of loss on equity method investment*(2)                                                                | 0.00 |  |   | 0.00 |  |   | (0.01 | ) |   | (0.01 | ) |
| Total from investment operations*                                                                            | (0.20 | ) |   | (0.54 | ) |   | (0.43 | ) |   | (0.71 | ) |
| Net increase as a result of stock-based compensation expense*(2)                                             | 0.01 |  |   | 0.01 |  |   | 0.00 |  |   | 0.02 |  |
| Net decrease as a result of acquisition of vested restricted stock awards related to employee withholding(2) | 0.00 |  |   | (0.01 | ) |   | 0.00 |  |   | (0.01 | ) |
| Total (decrease) increase from capitalstock transactions                                                     | 0.01 |  |   | 0.00 |  |   | 0.00 |  |   | 0.01 |  |
| Net decrease as a result of othercomprehensive income*(2)                                                    | 0.00 |  |   | 0.00 |  |   | (0.01 | ) |   | (0.01 | ) |
| Net (decrease) in net asset value                                                                            | (0.19 | ) |   | (0.54 | ) |   | (0.44 | ) |   | (0.71 | ) |
| Net asset value per share, end of period                                                                     | $ | 2.44 |  |   | $ | 2.80 |  |   | $ | 2.44 |  |   | $ | 2.80 |  |
| Stock price per share, end of period                                                                         | $ | 1.39 |  |   | $ | 2.14 |  |   | $ | 1.39 |  |   | $ | 2.14 |  |
| Total return based on stock price                                                                            | (13.66 | )% |   | (22.18 | )% |   | (36.82 | )% |   | (27.46 | )% |
| Supplemental Data:                                                                                           |  |  |   |  |  |   |  |  |   |  |  |
| Net assets, end of period                                                                                    | $ | 75,322,949 |  |   | $ | 86,974,196 |  |   | $ | 75,322,949 |  |   | $ | 86,974,196 |  |
| Ratio of expenses, excluding taxes, to average net assets(3)                                                 | 1.82 |  % |   | 1.91 |  % |   | 5.36 |  % |   | 5.78 |  % |
| Ratio of expenses, including taxes, to average net assets(3)                                                 | 1.82 |  % |   | 1.91 |  % |   | 5.37 |  % |   | 5.79 |  % |
| Ratio of net operating loss to average net assets(3)                                                    | (1.09 | )% |   | (1.66 | )% |   | (3.74 | )% |   | (5.12 | )% |
| Average debt outstanding                                                                                     | $ | 5,000,000 |  |   | $ | 5,000,000 |  |   | $ | 5,000,000 |  |   | $ | 3,369,963 |  |
| Average debt per share                                                                                       | $ | 0.16 |  |   | $ | 0.16 |  |   | $ | 0.16 |  |   | $ | 0.11 |  |
| Number of shares outstanding, end of period                                                                  | 30,880,829 |  |   | 31,022,866 |  |   | 30,880,829 |  |   | 31,022,866 |  |

|     |                                                                                                                                                                                                                                                                          |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1) | Net unrealized gains (losses) includes rounding adjustments to reconcile change in net asset value per share. See "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" for a description of unrealized losses on investments. |

|     |                                                                    |
|-----|--------------------------------------------------------------------|
| (2) | Amounts listed as zero are amounts calculated as less than $0.005. |

|     |                 |
|-----|-----------------|
| (3) | Not annualized. |

----

|         |                               |
|---------|-------------------------------|
| • | our future operating results; |

|         |                                                                      |
|---------|----------------------------------------------------------------------|
| • | our business prospects and the prospects of our portfolio companies; |

|         |                                                   |
|---------|---------------------------------------------------|
| • | the impact of investments that we expect to make; |

|         |                                                                    |
|---------|--------------------------------------------------------------------|
| • | our contractual arrangements and relationships with third parties; |

|         |                                                                                                                  |
|---------|------------------------------------------------------------------------------------------------------------------|
| • | the dependence of our future success on the general economy and its impact on the industries in which we invest; |

|         |                                                                     |
|---------|---------------------------------------------------------------------|
| • | the ability of our portfolio companies to achieve their objectives; |

|         |                                          |
|---------|------------------------------------------|
| • | our expected financings and investments; |

|         |                                                             |
|---------|-------------------------------------------------------------|
| • | the adequacy of our cash resources and working capital; and |

|         |                                                                                                                        |
|---------|------------------------------------------------------------------------------------------------------------------------|
| • | the timing of cash flows, if any, from the operations and/or monetization of our positions in our portfolio companies. |

|         |                                                                                                                                                                                              |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | an economic downturn could impair our portfolio companies’ ability to continue to operate, which could lead to the loss of some or all of our investments in such portfolio companies; |

|         |                                                                                                                            |
|---------|----------------------------------------------------------------------------------------------------------------------------|
| • | a contraction of available credit and/or an inability to access the equity markets could impair our investment activities; |

|         |                                                                                                                                                      |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | interest rate volatility could adversely affect our results, particularly if we elect to use leverage as a material part of our investment strategy; |

|         |                                                                                                                                                                                                                               |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | currency fluctuations could adversely affect the results of our investments in foreign companies, particularly to the extent that we receive payments denominated in foreign currency rather than U.S. dollars; and |

|         |                                                                                                                                                                                                                                                                                                |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | the risks, uncertainties and other factors we identify in "Risk Factors" and elsewhere in this Quarterly Report on Form 10-Q and in our other filings with the Securities and Exchange Commission ("SEC"), including our Annual Report on Form 10-K for the year ended December 31, 2015. |

----

----

|         |                                                                                                                                                                                                                                                                                                                                                                                                         |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | 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., which 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., which announced a collaboration with Rakuten Kobo to protect its latest eReader, the Kobo Aura ONE. |

|         |                                                                                                                                                                                                                                                                             |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ◦ | Mersana Therapeutics, Inc., which 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 ConsortiumTM.  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. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ◦ | Interome, Inc., announced that collaborators and organizers of the UnDx Consortium met again at the 14th annual Future in Review (FiRe) conference in Park City, UT, from September 27-30, 2016.  The conversation included a summary of the UnDx Consortium, a discussion of hypotheses resulting from the analysis of data from the Consortium on August 16, 2016, in San Diego, CA, and the proposed next steps for the Consortium. |

|         |                                                                                                                                                                                                                                                                                                                                                                              |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ◦ | 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. |

|         |                                                                                                                     |
|---------|---------------------------------------------------------------------------------------------------------------------|
| ◦ | Metabolon, Inc., announced that it launched its Meta IMDTM test for diagnosis of inherited metabolic disorders. |

|         |                                                                                                                                                                                                                                              |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ◦ | 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. |

|         |                                                                                                       |
|---------|-------------------------------------------------------------------------------------------------------|
| ◦ | EchoPixel, Inc.’s 3D visualization technology was profiled in an article and video by ABC News. |

|         |                                                                                                                                  |
|---------|----------------------------------------------------------------------------------------------------------------------------------|
| • | 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. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We sold 1,093,461 shares of  OpGen, Inc., a publicly traded portfolio company, in open market transactions for net proceeds, after commission, of $1,843,175, or an average sale price of $1.69 per share.  At September 30, 2016, we held 316,335 shares of OpGen, which we valued at $518,789.  We sold the remaining 316,335 shares subsequent to the end of the third quarter of 2016 at an average sale price per share of $1.70 for net proceeds, after commission, of $538,833.  Our average cost basis in OpGen was $4.02 per share. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We sold 98,465 shares of Champions Oncology, Inc., a publicly traded portfolio company, in open market transactions for net proceeds, after commission, of $164,805, or an average sale price of $1.67 per share.  At September 30, 2016, we held 145,075 shares of Champions Oncology, which we valued at $243,726.  We sold an additional 111,618 shares subsequent to the end of the third quarter of 2016 at an average sale price per share of $1.67 for net proceeds, after commission, of $186,478.  Our average cost basis in Champions Oncology is $6.66 per share. |

|         |                                                                                                                                                                                                                                                                                          |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | 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 stock prices of comparable public market companies that impact the market's valuation 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. |

----

|         |                                                                 |
|---------|-----------------------------------------------------------------|
| • | Realized gain of $302,324 on our investment in Magic Leap, Inc. |

|         |                                                                                     |
|---------|-------------------------------------------------------------------------------------|
| • | Realized loss of $3,418,349 on our investment in Cambrios Technologies Corporation. |

|         |                                                               |
|---------|---------------------------------------------------------------|
| • | Realized loss of $1,244,955 on our investment in Ultora, Inc. |

|         |                                                                  |
|---------|------------------------------------------------------------------|
| • | Realized loss of $2,999,470 on our investment in Bridgelux, Inc. |

|         |                                                              |
|---------|--------------------------------------------------------------|
| • | Realized loss of $2,551,242 on our investment in OpGen, Inc. |

|         |                                                                         |
|---------|-------------------------------------------------------------------------|
| • | Realized loss of $491,236 on our investment in Champions Oncology, Inc. |

----

----

----

|                                     |
|-------------------------------------|
|                                     |  |
| Portfolio Company                   | Voting Ownership Range |
| Interome, Inc.*                     | >=20% |
| ProMuc, Inc.*                       |
| NGX Bio, Inc.*                      |
| EchoPixel, Inc.                     |
| Produced Water Absorbents, Inc.     |
| TARA Biosystems, Inc.*              |
| ABSMaterials, Inc.                  | 15-20% |
| HZO, Inc.                           | 10-15% |
| AgTech Accelerator Corporation      |
| ORIG3N, Inc.                        |
| Metabolon, Inc.                     | 5-10% |
| Accelerator IV-New York Corporation |
| AgBiome, LLC                        |
| Petra Pharma Corporation            |
| Lodo Therapeutics Corporation       | 2.5-5% |
| Nanosys, Inc.                       | 0-2.5% |
| D-Wave Systems, Inc.**              |
| Mersana Therapeutics, Inc.          |
| Xenio Corp.                         |
| Fleet Health Alliance, LLC***       |
| Genome Profiling, LLC***            |
| Muses Labs, Inc.***                 |
| Phylagen, Inc.***                   |

|   |                                          |
|---|------------------------------------------|
| * | Denotes a controlled affiliated company. |

|    |                                                                                                                                                                                                            |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** | We own voting and non-voting classes of preferred equity of D-Wave Systems, Inc. If the non-voting preferred equity was included in the calculation, our ownership of D-Wave would be in the 2.5-5% range. |

|     |                                                                                                                                                                                                                                                                                                                                                                  |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *** | We own convertible bridge notes in Fleet Health Alliance, LLC, Genome Profiling, LLC, Muses Labs, Inc., and Phylagen, Inc.  While these convertible bridge notes have certain rights and preferences, they are not voting securities.  We currently expect that these securities will convert into voting equity securities in each company at some future date. |

----

|                               |
|-------------------------------|
|                               |  |  |  |  |  |  |  |  |  |  |  |
| Portfolio Company             | Price Per Share of Round of Financing | Classes of Equity Owned By H&H | No. of Shares of Each Security Owned by H&H | H&H Ownership on As Converted Basis | Fair Value as of 9/30/16 |
| ABSMaterials, Inc.            | $ | 1.0000 |  | Series A Convertible Preferred Stock | 390,000 |  | 390,000 |  | $ | 240,482 |  |
|                          | $ | 1.2073 |  | Series B Convertible Preferred Stock | 1,037,751 |  | 1,037,751 |  | $ | 852,557 |  |
| AgBiome, LLC                  | $ | 1.0000 |  | Series A-1 Convertible Preferred Stock | 2,000,000 |  | 2,000,000 |  | $ | 5,877,743 |  |
|                          | $ | 1.2500 |  | Series A-2 Convertible Preferred Stock | 417,392 |  | 417,392 |  | $ | 1,273,672 |  |
|                          | $ | 3.1148 |  | Series B Convertible Preferred Stock | 160,526 |  | 160,526 |  | $ | 686,576 |  |
| D-Wave Systems, Inc.          | $ | 0.8753 |  | Series 1 Class B Convertible Preferred Stock | 1,144,869 |  | 1,144,869 |  | $ | 2,520,573 |  |
|                          | $ | 1.0829 |  | Series 1 Class C Convertible Preferred Stock | 450,450 |  | 450,450 |  | $ | 995,955 |  |
|                          | $ | 0.8753 |  | Series 1 Class D Convertible Preferred Stock | 855,131 |  | 855,131 |  | $ | 1,890,714 |  |
|                          | $ | 0.9212 |  | Series 1 Class E Convertible Preferred Stock | 269,280 |  | 269,280 |  | $ | 603,580 |  |
|                          | $ | 0.9212 |  | Series 1 Class F Convertible Preferred Stock | 258,721 |  | 258,721 |  | $ | 579,913 |  |
|                          | $ | 1.9726 |  | Series 1 Class H Convertible Preferred Stock | 460,866 |  | 460,866 |  | $ | 1,119,022 |  |
|                          | $ | 1.0852 |  | Series 2 Class D Convertible Preferred Stock | 678,264 |  | 678,264 |  | $ | 1,499,657 |  |
|                          | $ | 1.2833 |  | Series 2 Class E Convertible Preferred Stock | 513,900 |  | 513,900 |  | $ | 1,159,038 |  |
|                          | $ | 1.2833 |  | Series 2 Class F Convertible Preferred Stock | 493,747 |  | 493,747 |  | $ | 1,113,585 |  |
|                          | $ | 2.6200 |  | Series 1 Class I Convertible Preferred Stock(1) | — |  | — |  |   |
| EchoPixel, Inc.               | $ | 0.2980 |  | Series Seed Convertible Preferred Stock | 4,194,630 |  | 4,194,630 |  | $ | 920,842 |  |
|                          | $ | 0.3386 |  | Series Seed-2 Convertible Preferred Stock | 1,476,668 |  | 1,476,668 |  | $ | 329,089 |  |
| HZO, Inc.(2)                  | $ | 1.6431 |  | Common Stock | 405,729 |  | 405,729 |  | $ | 378,952 |  |
|                          | $ | 2.5188 |  | Series I Convertible Preferred Stock | 2,266,894 |  | 2,266,894 |  | $ | 3,538,876 |  |
|                          | $ | 3.7057 |  | Series II Convertible Preferred Stock | 674,638 |  | 674,638 |  | $ | 1,568,988 |  |
| Lodo Therapeutics Corporation | $ | 1.0000 |  | Series A Convertible Preferred Stock | 658,190 |  | 658,190 |  | $ | 658,993 |  |
| Mersana Therapeutics, Inc.(3) | $ | 11.0555 |  | Common Stock | 350,539 |  | 350,539 |  | $ | 717,186 |  |
|                          | $ | 1.0763 |  | Series A-1 Convertible Preferred Stock | 635,081 |  | 635,081 |  | $ | 1,336,199 |  |
|                          | $ | 1.0763 |  | Series B-1 Convertible Preferred Stock | 339,887 |  | 339,887 |  | $ | 731,555 |  |
|                          | $ | 2.2557 |  | Series C-1 Convertible Preferred Stock (1) | — |  | — |  |   |
|                          |   |   |   |   |   |

----

|                          |
|--------------------------|
|                          |  |  |  |  |  |  |  |  |  |  |  |
|                     |   |   |   |   |   |
| Portfolio Company        | Price Per Share of Round of Financing | Classes of Equity Owned By H&H | No. of Shares of Each Security Owned by H&H | H&H Ownership on As Converted Basis | Fair Value as of 9/30/16 |
| Metabolon, Inc.          | $ | 6.7251 |  | Series B Convertible Preferred Stock | 371,739 |  | 1,087,608 |  | $ | 2,924,040 |  |
|                     | $ | 4.7494 |  | Series B-1 Convertible Preferred Stock | 148,696 |  | 435,043 |  | $ | 1,169,615 |  |
|                     | $ | 1.0000 |  | Series C Convertible Preferred Stock | 1,000,000 |  | 1,000,000 |  | $ | 2,678,510 |  |
|                     | $ | 1.7945 |  | Series D Convertible Preferred Stock | 835,882 |  | 835,882 |  | $ | 2,272,335 |  |
|                     | $ | 2.7565 |  | Series E-1 Convertible Preferred Stock | 444,404 |  | 444,404 |  | $ | 1,439,068 |  |
|                     | $ | 2.9048 |  | Series E-2 Convertible Preferred Stock | 103,277 |  | 103,277 |  | $ | 312,755 |  |
| Nanosys, Inc.            | $ | 1.8670 |  | Series C Convertible Preferred Stock | 803,428 |  | 892,432 |  | $ | 128,149 |  |
|                     | $ | 2.9500 |  | Series D Convertible Preferred Stock | 1,016,950 |  | 1,207,487 |  | $ | 436,897 |  |
|                     | $ | 1.1450 |  | Series E Convertible Preferred Stock | 433,688 |  | 433,688 |  | $ | 323,784 |  |
|                     | $ | 1.2219 |  | Series F Convertible Preferred Stock(1) | — |  | — |  |   |
|                     | $ | 1.1696 |  | Series G Convertible Preferred Stock(1) | — |  | — |  |   |
| NGX Bio, Inc.            | $ | 0.7500 |  | Series Seed Convertible Preferred Stock | 666,667 |  | 666,667 |  | $ | 514,217 |  |
|                     | $ | 1.5152 |  | Series A Convertible Preferred Stock | 329,989 |  | 329,989 |  | $ | 343,920 |  |
| ORIG3N, Inc.             | $ | 0.4183 |  | Series 1 Convertible Preferred Stock | 1,195,315 |  | 1,195,315 |  | $ | 1,165,150 |  |
|                     | $ | 1.0992 |  | Series A Convertible Preferred Stock | 1,364,666 |  | 1,364,666 |  | $ | 1,504,222 |  |
| Petra Pharma Corporation | $ | 1.0000 |  | Series A Convertible Preferred Stock | 1,025,050 |  | 1,025,050 |  | $ | 1,027,353 |  |

----

|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |
|                                    | 2012 | 2013 | 2014 | 2015 | Nine Months EndedSeptember 30, 2016 |
| Total Incremental Investments           | $15,141,941 | $18,076,288 | $14,276,808 | $11,963,021 | $6,469,032 |
| No. of New Investments                  | 2 | 2 | 3 | 4 | 5 |
| No. of Follow-On Investment Rounds      | 26 | 37 | 33 | 31 | 17 |
| No. of Rounds Led                       | 3 | 9 | 8 | 8 | 8 |
| Average Dollar Amount – Initial   | $1,407,500 | $550,001 | $338,677 | $395,738 | $223,402 |
| Average Dollar Amount – Follow-On | $474,113 | $449,359 | $401,842 | $334,841 | $314,825 |

|         |                                                                                      |
|---------|--------------------------------------------------------------------------------------|
| • | $685,103 in fees for providing managerial assistance to certain portfolio companies; |

|         |                                                                |
|---------|----------------------------------------------------------------|
| • | $1,932,229 from the sale of our investment in Bridgelux, Inc.; |

|         |                                                                        |
|---------|------------------------------------------------------------------------|
| • | $750,000 from the repayment of certain bridge notes in SynGlyco, Inc.; |

|         |                                                           |
|---------|-----------------------------------------------------------|
| • | $640,928 from the sale of our shares of Magic Leap, Inc.; |

|         |                                                                                                                                                                             |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | $390,492 from the release of a portion of the funds held in escrow from the sale of Molecular Imprints, Inc.'s semiconductor lithography equipment business to Canon, Inc.; |

|         |                                                                                                                                      |
|---------|--------------------------------------------------------------------------------------------------------------------------------------|
| • | $130,522 from the release of the funds held in escrow from the sale of Molecular Imprints' non-semiconductor business to Magic Leap; |

|         |                                                                                                            |
|---------|------------------------------------------------------------------------------------------------------------|
| • | $119,242 from the repayment of certain bridge note principal and interest of Black Silicon Holdings, Inc.; |

|         |                                                                  |
|---------|------------------------------------------------------------------|
| • | $113,950 from the repayment of a bridge note in EchoPixel, Inc.; |

|         |                                                                                                                                      |
|---------|--------------------------------------------------------------------------------------------------------------------------------------|
| • | $1,843,175, net of commissions, from the sale of 1,093,461 shares of our investment in OpGen, Inc., in open market transactions; and |

|         |                                                                                                                                          |
|---------|------------------------------------------------------------------------------------------------------------------------------------------|
| • | $164,805, net of commissions, from the sale of 98,465 shares of our investment in Champions Oncology, Inc., in open market transactions. |

----

----

|         |                            |
|---------|----------------------------|
| • | Last Round Price per Share |

|         |                                                                       |
|---------|-----------------------------------------------------------------------|
| • | Liquidation Preferences (including dividends and redemptions, if any) |

|         |                        |
|---------|------------------------|
| • | Estimated Time to Exit |

|         |                      |
|---------|----------------------|
| • | Estimated Volatility |

|         |                         |
|---------|-------------------------|
| • | Risk-Free Interest Rate |

|         |                                           |
|---------|-------------------------------------------|
| • | Outstanding Capitalization of the Company |

----

|                                    |
|------------------------------------|
|                                    |  |  |  |  |  |
|                               | Price Per Share on November 8, 2016 | Q3 2016 Trading Range | H&H Ownership Value in Q3 2016 Trading Range(1) | 52 Week Trading Range | H&H Ownership Value in 52 Week Trading Range(1) |
| Adesto Technologies Corporation    | $2.05 | $1.98 - $3.98 | $3.5 - $7.0 million | $1.98-$8.50 | $3.5 - $15.0 million |
| Champions Oncology, Inc.(2)        | $1.70 | $1.11 - $2.41 | $0.2 - $0.3 million | $1.11-$5.49 | $0.2 - $0.8 million |
| Enumeral Biomedical Holdings, Inc. | $0.14 | $0.11 - $0.22 | $0.9 - $1.8 million | $0.11-$0.42 | $0.9 - $3.3 million |
| OpGen, Inc.                        | N/A(3) | $1.36 - $4.65 | $0.4 - $1.5 million | $1.02-$4.65 | $0.3 - $1.5 million |
|                               |   |   |   |   |   |
| Total:                             |   |   | $5.0 - $10.6 million |   | $4.9 - $20.6 million |

----

|                                                          |
|----------------------------------------------------------|
|                                                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                     | 2012 |   | 2013 |   | 2014 |   | 2015 |   | Nine Months EndedSeptember 30, 2016 |
| Net Asset Value, BOY                                     | $ | 145,698,407 |  |   | $ | 128,436,774 |  |   | $ | 122,701,575 |  |   | $ | 109,654,427 |  |   | $ | 88,711,671 |  |
| Gross Write-Downs During Year                            | $ | (19,604,046 | ) |   | $ | (19,089,816 | ) |   | $ | (14,050,501 | ) |   | $ | (15,710,180 | ) |   | $ | (9,386,105 | ) |
| Gross Write-Ups During Year                              | $ | 14,099,904 |  |   | $ | 10,218,994 |  |   | $ | 4,587,923 |  |   | $ | 6,628,025 |  |   | $ | 10,121,604 |  |
| Gross Write-Downs as a Percentage ofNet Asset Value, BOY | (13.50 | )% |   | (14.9 | )% |   | (11.5 | )% |   | (14.3 | )% |   | (10.6 | )% |
| Gross Write-Ups as a Percentage of NetAsset Value, BOY   | 9.7 |  % |   | 8.0 |  % |   | 3.8 |  % |   | 6.0 |  % |   | 11.4 |  % |
| Net Change as a Percentage of Net AssetValue, BOY        | (3.8 | )% |   | (6.9 | )% |   | (7.7 | )% |   | (8.3 | )% |   | 0.8 |  % |

----

|                                     |
|-------------------------------------|
|                                     |  |  |
| Portfolio Company                   | Value as of 09/30/2016 | Cumulative % of Equity Focused Venture Capital Portfolio |
| D-Wave Systems, Inc.                | $11,498,191 | 18% |
| Metabolon, Inc.                     | $10,796,323 | 35% |
| AgBiome, LLC                        | $7,837,991 | 47% |
| HZO, Inc.                           | $5,755,099 | 56% |
| Adesto Technologies Corporation*    | $3,929,107 | 62% |
| TARA BIosystems, Inc.               | $3,223,388 | 67% |
| Mersana Therapeutics, Inc.          | $2,784,940 | 71% |
| ORIG3N, Inc.                        | $2,669,372 | 75% |
| EchoPixel, Inc.                     | $1,687,431 | 78% |
| Enumeral Biomedical Holdings, Inc.* | $1,502,708 | 80% |

----

----

|                            |
|----------------------------|
|                            |  |  |  |
| Investment                 | Amount of Write-Up |
| AgBiome, LLC               | $ | 1,639,832 |  |
| TARA Biosystems, Inc.      | 828,053 |  |
| Champions Oncology, Inc.   | 349,833 |  |
| ORIG3N, Inc.               | 68,030 |  |
| D-Wave Systems, Inc.       | 52,224 |  |
| Nano Terra, Inc.           | 13,168 |  |
| NGX Bio, Inc.              | 11,271 |  |
| Nanosys, Inc.              | 6,253 |  |
| SynGlyco, Inc.             | 5,444 |  |
| Mersana Therapeutics, Inc. | 3,921 |  |
| Phylagen, Inc.             | 1,059 |  |

----

|                                    |
|------------------------------------|
|                                    |  |  |  |
| Investment                         | Amount of Write-Down |
| HZO, Inc.                          | $ | 3,146,545 |  |
| Adesto Technologies Corporation    | 1,876,060 |  |
| Metabolon, Inc.                    | 1,256,463 |  |
| EchoPixel, Inc.                    | 536,614 |  |
| Produced Water Absorbents, Inc.    | 390,895 |  |
| ProMuc, Inc.                       | 320,373 |  |
| Senova Systems, Inc.               | 251,376 |  |
| Enumeral Biomedical Holdings, Inc. | 150,966 |  |
| ABSMaterials, Inc.                 | 117,122 |  |
| Ensemble Therapeutics Corporation  | 88,043 |  |
| Petra Pharma Corporation           | 24,890 |  |
| Black Silicon Holdings, Inc.       | 23,271 |  |
| Lodo Therapeutics Corporation      | 11,063 |  |

|                                    |
|------------------------------------|
|                                    |  |  |  |
| Investment                         | Amount of Write-Down |
| Adesto Technologies Corporation    | $ | 8,308,722 |  |
| Enumeral Biomedical Holdings, Inc. | 1,953,820 |  |
| Black Silicon Holdings, Inc.       | 1,859,236 |  |
| Produced Water Absorbents, Inc.    | 1,696,200 |  |
| Nanosys, Inc.                      | 1,565,039 |  |
| OpGen, Inc.                        | 1,455,455 |  |
| Metabolon, Inc.                    | 808,049 |  |
| Ensemble Therapeutics Corporation  | 580,720 |  |
| Cambrios Technologies Corporation  | 306,121 |  |
| SynGlyco, Inc.                     | 139,510 |  |
| Senova Systems, Inc.               | 66,695 |  |
| Nano Terra, Inc.                   | 2,517 |  |

----

|                            |
|----------------------------|
|                            |  |  |  |
| Investment                 | Amount of Write-Up |
| Bridgelux, Inc.            | $ | 297,188 |  |
| Mersana Therapeutics, Inc. | 200,714 |  |
| AgBiome, LLC               | 160,485 |  |
| Champions Oncology, Inc.   | 122,204 |  |
| HZO, Inc.                  | 45,925 |  |
| D-Wave Systems, Inc.       | 15,943 |  |
| EchoPixel, Inc.            | 14,442 |  |
| NGX Bio, Inc.              | 7,467 |  |
| ABSMaterials, Inc.         | 6,169 |  |
| Magic Leap, Inc.           | 4,205 |  |
| ORIG3N, Inc.               | 2,192 |  |

----

----

|                               |
|-------------------------------|
|                               |  |  |  |
| Investment                    | Amount of Write-Up |
| D-Wave Systems, Inc.          | $ | 4,230,643 |  |
| AgBiome, LLC                  | 2,347,701 |  |
| Mersana Therapeutics, Inc.    | 1,495,379 |  |
| TARA Biosystems, Inc.         | 1,098,563 |  |
| ORIG3N, Inc.                  | 342,471 |  |
| ABSMaterials, Inc.            | 109,417 |  |
| Phylagen, Inc.                | 90,884 |  |
| Nano Terra, Inc.              | 35,563 |  |
| Black Silicon Holdings, Inc.  | 25,553 |  |
| Petra Pharma Corporation      | 7,598 |  |
| Lodo Therapeutics Corporation | 1,422 |  |

|                                    |
|------------------------------------|
|                                    |  |  |  |
| Investment                         | Amount of Write-Down |
| Adesto Technologies Corporation    | $ | 9,716,575 |  |
| Metabolon, Inc.                    | 2,825,521 |  |
| HZO, Inc.                          | 1,627,577 |  |
| Senova Systems, Inc.               | 1,490,560 |  |
| Produced Water Absorbents, Inc.    | 1,179,641 |  |
| Ensemble Therapeutics Corporation  | 909,292 |  |
| EchoPixel, Inc.                    | 489,661 |  |
| Enumeral Biomedical Holdings, Inc. | 416,300 |  |
| ProMuc, Inc.                       | 320,373 |  |
| Nanosys, Inc.                      | 289,984 |  |
| NGX Bio, Inc.                      | 141,239 |  |
| SynGlyco, Inc.                     | 112,257 |  |
| Champions Oncology, Inc.           | 55,496 |  |

----

|                                   |
|-----------------------------------|
|                                   |  |  |  |
| Investment                        | Amount of Write-Down |
| Adesto Technologies Corporation   | $ | 7,473,744 |  |
| Produced Water Absorbents, Inc.   | 6,079,455 |  |
| Enumeral Biomedical Corp.         | 4,939,054 |  |
| Nanosys, Inc.                     | 3,039,996 |  |
| Metabolon, Inc.                   | 972,162 |  |
| Bridgelux, Inc.                   | 751,346 |  |
| Ensemble Therapeutics Corporation | 679,948 |  |
| HZO, Inc.                         | 414,288 |  |
| Cambrios Technologies Corporation | 281,101 |  |
| Magic Leap, Inc.                  | 14,927 |  |
| Ultora, Inc.                      | 7,525 |  |
| Nano Terra, Inc.                  | 2,663 |  |

|                                       |
|---------------------------------------|
|                                       |  |  |  |
| Investment                            | Amount of Write-Up |
| AgBiome, LLC                          | $ | 2,016,636 |  |
| OpGen, Inc.                           | 927,975 |  |
| Black Silicon Holdings, Inc.          | 521,649 |  |
| Champions Oncology, Inc.              | 336,607 |  |
| NGX Bio, Inc.                         | 279,008 |  |
| Mersana Therapeutics, Inc.            | 230,422 |  |
| Accelerator IV - New York Corporation | 164,385 |  |
| SynGlyco, Inc.                        | 98,700 |  |
| Senova Systems, Inc.                  | 52,135 |  |
| D-Wave Systems, Inc.                  | 41,182 |  |
| EchoPixel, Inc.                       | 36,329 |  |
| ABSMaterials, Inc.                    | 7,245 |  |
| ORIG3N, Inc.                          | 5,938 |  |

----

|                                |
|--------------------------------|
|                                |  |  |  |
| New Investments                | Amount of Investment |
| Interome, Inc.                 | $ | 300,010 |  |
| Genome Profiling, LLC          | 230,000 |  |
| Fleet Health Alliance, LLC     | 225,000 |  |
| Muses Labs, Inc.               | 212,000 |  |
| AgTech Accelerator Corporation | 150,000 |  |

----

|                                     |
|-------------------------------------|
|                                     |  |  |  |
| Follow-On Investments               | Amount of Investment |
| Produced Water Absorbents, Inc.     | $ | 875,000 |  |
| ORIG3N, Inc.                        | 750,000 |  |
| Lodo Therapeutics Corporation       | 550,290 |  |
| EchoPixel, Inc.                     | 500,000 |  |
| NGX Bio, Inc.                       | 500,000 |  |
| EchoPixel, Inc.                     | 350,000 |  |
| Interome, Inc.                      | 350,000 |  |
| Interome, Inc.                      | 300,000 |  |
| Interome, Inc.                      | 50,000 |  |
| Mersana Therapeutics, Inc.          | 261,300 |  |
| HZO, Inc.                           | 250,000 |  |
| Senova Systems, Inc.                | 250,000 |  |
| Produced Water Absorbents, Inc.     | 125,000 |  |
| Accelerator IV-New York Corporation | 103,680 |  |
| ABSMaterials, Inc.                  | 100,000 |  |
| Senova Systems, Inc.                | 21,250 |  |
| Senova Systems, Inc.                | 15,500 |  |
| NGX Bio, Inc.                       | 2 |  |
| Total                               | $ | 6,469,032 |  |

|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |
|                                    | September 30, 2016 |   | December 31, 2015 |
| Portfolio company investments, at cost  | $ | 107,782,987 |  |   | $ | 117,062,108 |  |
| Net unrealized (depreciation)           | (39,786,400 | ) |   | (39,909,204 | ) |
| Portfolio company investments, at value | $ | 67,996,587 |  |   | $ | 77,152,904 |  |

----

----

|                             |
|-----------------------------|
|                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                        | Total |   | Less than1 Year |   | 1-3 Years |   | 3-5 Years |   | More Than5 Years |
| Multi-Draw Loan Facility(1) | $ | 5,506,944 |  |   | $ | 5,506,944 |  |   | $ | 0 |  |   | $ | 0 |  |   | $ | 0 |  |
| Operating leases            | 978,964 |  |   | 293,082 |  |   | 608,328 |  |   | 77,554 |  |   | 0 |  |
| Total                       | $ | 6,485,908 |  |   | $ | 5,800,026 |  |   | $ | 608,328 |  |   | $ | 77,554 |  |   | $ | 0 |  |

|           |                                                                                           |
|-----------|-------------------------------------------------------------------------------------------|
| (1)  | As of September 30, 2016, we had $0 of unused borrowing capacity under our Loan Facility. |

----

|         |                                                                                                                                         |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------|
| • | Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 2 inputs are in those markets for which there are few transactions, the prices are not current, little public information exists or instances where prices vary substantially over time or among brokered market makers; and |

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

----

----

----

----

----

----

----

|                      |
|----------------------|
|                      |  |  |  |  |  |  |  |  |  |  |  |
| Period               | (a)Total Numberof SharesPurchased |   | (b)Average PricePaid per Share |   | (c)Total Numberof SharesPurchased asPart of PubliclyAnnouncedProgram |   | (d)Maximum Number(or ApproximateDollar Value) ofShares that MayYet Be PurchasedUnder the Program |
| August 21-31, 2015   | 88,875 |   | $ | 2.54 |  |   | 88,875 |   | $ | 2,274,557 |  |
| September 1-30, 2015 | 209,944 |   | 2.44 |  |   | 298,819 |   | 1,762,338 |  |
| October 1-12, 2015   | 119,365 |   | 2.20 |  |   | 418,184 |   | 1,500,003 |  |
| November 30, 2015    | 11,899 |   | 2.22 |  |   | 430,083 |   | 1,473,643 |  |
| December 1-9, 2015   | 78,999 |   | 2.20 |  |   | 509,082 |   | 1,300,006 |  |

|        |                                                                                 |
|--------|---------------------------------------------------------------------------------|
| 31.01* | Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |

|        |                                                                                 |
|--------|---------------------------------------------------------------------------------|
| 31.02* | Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |

|     |                                                                                                                                       |
|-----|---------------------------------------------------------------------------------------------------------------------------------------|
| 32* | Certification of CEO and CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |

----

|        |
|--------|
|        |  |  |
|   | Harris & Harris Group, Inc. |
|   |   |   |
|   | /s/ | Douglas W. Jamison |
|   | By: | Douglas W. Jamison |
|   |   | Chief Executive Officer |

|        |
|--------|
|        |  |  |
|   | /s/ | Daniel B. Wolfe |
|   | By: | Daniel B. Wolfe |
|   |   | Chief Financial Officer |

----

|             |
|-------------|
|             |  |  |
| Exhibit No. |   | Description |
| 31.01       |   | Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 31.02       |   | Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 32          |   | Certification of CEO and CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |

----

|                                             |
|---------------------------------------------|
|                                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Name of Issuer                              | Title of Issue or Nature of Indebtedness (A) | Amount of Dividends or Interest Credited to Income (B) | Value as of 12/31/15 | Gross Additions (C) | Gross Reductions (D) | Value as of 9/30/16 |
|                                        |   |   |   |   |   |   |
| MAJORITY OWNED CONTROLLED INVESTMENTS:      |   |   |   |   |   |   |
| Black Silicon Holdings, Inc.                | Series A Convertible Preferred Stock | $ | 0 |  | $ | 0 |  | $ | 0 |  | $ | 0 |  | $ | 0 |  |
|                                        | Series A-1 Convertible Preferred Stock | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  |
|                                        | Series A-2 Convertible Preferred Stock | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  |
|                                        | Series B-1 Convertible Preferred Stock | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  |
|                                        | Series C Convertible Preferred Stock | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  |
|                                        | Secured Convertible Bridge Notes | 77,767 |  | 316,613 |  | 0 |  | (15,923 | ) | 300,690 |  |
| Interome, Inc.                              | Common Stock | $ | 0 |  | $ | 0 |  | $ | 10 |  | $ | 0 |  | $ | 10 |  |
|                                        | Secured Convertible Bridge Note | 30,017 |  | 0 |  | 1,000,000 |  | 0 |  | 1,000,000 |  |
| NGX Bio, Inc.                               | Series Seed Convertible Preferred Stock | $ | 0 |  | $ | 446,878 |  | $ | 67,339 |  | $ | 0 |  | $ | 514,217 |  |
|                                        | Series A Convertible Preferred Stock | 0 |  | 403,538 |  | 0 |  | (59,618 | ) | 343,920 |  |
|                                        | Unsecured Convertible Bridge Note | 14,630 |  | 0 |  | 514,630 |  | 0 |  | 514,630 |  |
|                                        | Warrants for Series Seed Preferred Stock | 0 |  | 148,958 |  | 0 |  | (148,958 | ) | 0 |  |
| ProMuc, Inc.                                | Common Stock | $ | 0 |  | $ | 1 |  | $ | 0 |  | $ | 0 |  | $ | 1 |  |
|                                        | Secured Convertible Bridge Note | 34,832 |  | 650,915 |  | 0 |  | (285,541 | ) | 365,374 |  |
| SynGlyco, Inc.                              | Common Stock | $ | 0 |  | $ | 0 |  | $ | 0 |  | $ | 0 |  | $ | 0 |  |
|                                        | Series A' Convertible Preferred Stock | 0 |  | 100,343 |  | 0 |  | (100,343 | ) | 0 |  |
|                                        | Secured Convertible Bridge Notes | 12,963 |  | 808,101 |  | 0 |  | (748,951 | ) | 59,150 |  |
| TARA Biosystems, Inc.                       | Common Stock | $ | 0 |  | $ | 20 |  | $ | 921,627 |  | $ | 0 |  | $ | 921,647 |  |
|                                        | Secured Convertible Bridge Notes | 101,388 |  | 2,023,419 |  | 278,322 |  | 0 |  | 2,301,741 |  |
| Total Majority Owned Controlled Investments |   | $ | 271,597 |  | $ | 4,898,786 |  | $ | 2,781,928 |  | $ | (1,359,334 | ) | $ | 6,321,380 |  |
|                                        |   |   |   |   |   |   |

----

|                                    |
|------------------------------------|
|                                    |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Name of Issuer                     | Title of Issue or Nature of Indebtedness (A) | Amount of Dividends or Interest Credited to Income (B) | Value as of 12/31/15 | Gross Additions (C) | Gross Reductions (D) | Value as of 9/30/16 |
| OTHER CONTROLLED INVESTMENTS:      |   |   |   |   |   |   |
| Senova Systems, Inc. (E)           | Series B Convertible Preferred Stock | $ | 0 |  | $ | 284,938 |  | $ | 0 |  | $ | (284,938 | ) | $ | 0 |  |
|                               | Series B-1 Convertible Preferred Stock | 0 |  | 659,411 |  | 0 |  | (659,411 | ) | 0 |  |
|                               | Series C Convertible Preferred Stock | 0 |  | 1,127,419 |  | 0 |  | (506,231 | ) | 621,188 |  |
|                               | Warrants for Series B Preferred Stock | 0 |  | 39,980 |  | 0 |  | (39,980 | ) | 0 |  |
|                               | Secured Convertible Bridge Note | 18,104 |  | 0 |  | 304,853 |  | 0 |  | 304,853 |  |
| Total Other Controlled Investments |   | $ | 18,104 |  | $ | 2,111,748 |  | $ | 304,853 |  | $ | (1,490,560 | ) | $ | 926,041 |  |
| Total Controlled Investments       |   | $ | 289,701 |  | $ | 7,010,534 |  | $ | 3,086,781 |  | $ | (2,849,894 | ) | $ | 7,247,421 |  |
|                               |   |   |   |   |   |   |
| AFFILIATED INVESTMENTS:            |   |   |   |   |   |   |
| ABSMaterials, Inc.                 | Series A Convertible Preferred Stock | $ | 0 |  | $ | 160,303 |  | $ | 80,179 |  | $ | 0 |  | $ | 240,482 |  |
|                               | Series B Convertible Preferred Stock | 0 |  | 823,319 |  | 29,238 |  | 0 |  | 852,557 |  |
|                               | Secured Convertible Bridge Note | 5,589 |  | 0 |  | 105,589 |  | 0 |  | 105,589 |  |
| AgBiome, LLC                       | Series A-1 Convertible Preferred Stock | $ | 0 |  | $ | 4,022,722 |  | $ | 1,855,021 |  | $ | 0 |  | $ | 5,877,743 |  |
|                               | Series A-2 Convertible Preferred Stock | 0 |  | 891,588 |  | 382,084 |  | 0 |  | 1,273,672 |  |
|                               | Series B Convertible Preferred Stock | 0 |  | 575,979 |  | 110,597 |  | 0 |  | 686,576 |  |
| D-Wave Systems, Inc.               | Series 1 Class B Convertible Preferred Stock | $ | 0 |  | $ | 1,485,943 |  | $ | 1,034,630 |  | $ | 0 |  | $ | 2,520,573 |  |
|                               | Series 1 Class C Convertible Preferred Stock | 0 |  | 588,844 |  | 407,111 |  | 0 |  | 995,955 |  |
|                               | Series 1 Class D Convertible Preferred Stock | 0 |  | 1,117,858 |  | 772,856 |  | 0 |  | 1,890,714 |  |
|                               | Series 1 Class E Convertible Preferred Stock | 0 |  | 368,385 |  | 235,195 |  | 0 |  | 603,580 |  |
|                               | Series 1 Class F Convertible Preferred Stock | 0 |  | 353,940 |  | 225,973 |  | 0 |  | 579,913 |  |
|                               | Series 1 Class H Convertible Preferred Stock | 0 |  | 732,972 |  | 386,050 |  | 0 |  | 1,119,022 |  |
|                               | Series 2 Class D Convertible Preferred Stock | 0 |  | 886,651 |  | 613,006 |  | 0 |  | 1,499,657 |  |
|                               | Series 2 Class E Convertible Preferred Stock | 0 |  | 711,876 |  | 447,162 |  | 0 |  | 1,159,038 |  |
|                               | Series 2 Class F Convertible Preferred Stock | 0 |  | 683,959 |  | 429,626 |  | 0 |  | 1,113,585 |  |
|                               | Warrants for Common Stock | 0 |  | 710 |  | 15,444 |  | 0 |  | 16,154 |  |

----

|                                   |
|-----------------------------------|
|                                   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Name of Issuer                    | Title of Issue or Nature of Indebtedness (A) | Amount of Dividends or Interest Credited to Income (B) | Value as of 12/31/15 | Gross Additions (C) | Gross Reductions (D) | Value as of 9/30/16 |
|                              |   |   |   |   |   |   |
| EchoPixel, Inc.                   | Series Seed Convertible Preferred Stock | $ | 0 |  | $ | 1,327,092 |  | $ | 0 |  | $ | (406,250 | ) | $ | 920,842 |  |
|                              | Series Seed-2 Convertible Preferred Stock | 0 |  | 0 |  | 329,089 |  | 0 |  | 329,089 |  |
|                              | Convertible Bridge Note | 525 |  | 113,425 |  | 324,075 |  | 0 |  | 437,500 |  |
| Ensemble Therapeutics Corporation | Series B Convertible Preferred Stock | $ | 0 |  | $ | 662,607 |  | $ | 0 |  | $ | (662,607 | ) | $ | 0 |  |
|                              | Series B-1 Convertible Preferred Stock | 0 |  | 1,448,295 |  | 0 |  | (246,685 | ) | 1,201,610 |  |
| Genome Profiling, LLC             | Convertible Bridge Note | $ | 2,964 |  | $ | 0 |  | $ | 230,000 |  | $ | 0 |  | $ | 230,000 |  |
| HZO, Inc.                         | Common Stock | $ | 0 |  | $ | 329,802 |  | $ | 49,150 |  | $ | 0 |  | $ | 378,952 |  |
|                              | Series I Convertible Preferred Stock | 0 |  | 4,281,820 |  | 0 |  | (742,944 | ) | 3,538,876 |  |
|                              | Series II Convertible Preferred Stock | 0 |  | 2,515,164 |  | 0 |  | (946,176 | ) | 1,568,988 |  |
|                              | Convertible Bridge Note | 5,890 |  | 0 |  | 255,890 |  | (255,890 | ) | 0 |  |
|                              | Series II-A Convertible Preferred Stock | 0 |  | 0 |  | 245,009 |  | 0 |  | 245,009 |  |
|                              | Warrants for Series II-A Convertible Preferred Stock | 0 |  | 0 |  | 23,274 |  | 0 |  | 23,274 |  |
| Laser Light Engines, Inc.         | Series A Convertible Preferred Stock | $ | 0 |  | $ | 0 |  | $ | 0 |  | $ | 0 |  | $ | 0 |  |
|                              | Series B Convertible Preferred Stock | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  |
|                              | Convertible Bridge Notes(E) | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  |
| Lodo Therapeutics Corporation     | Series A Convertible Preferred Stock | $ | 0 |  | $ | 107,281 |  | $ | 551,712 |  | $ | 0 |  | $ | 658,993 |  |
| Metabolon, Inc.                   | Series B Convertible Preferred Stock | $ | 0 |  | $ | 3,699,120 |  | $ | 0 |  | $ | (775,080 | ) | $ | 2,924,040 |  |
|                              | Series B-1 Convertible Preferred Stock | 0 |  | 1,479,647 |  | 0 |  | (310,032 | ) | 1,169,615 |  |
|                              | Series C Convertible Preferred Stock | 0 |  | 3,388,907 |  | 0 |  | (710,397 | ) | 2,678,510 |  |
|                              | Series D Convertible Preferred Stock | 0 |  | 2,887,617 |  | 0 |  | (615,282 | ) | 2,272,335 |  |
|                              | Series E-1 Convertible Preferred Stock | 0 |  | 1,776,987 |  | 0 |  | (337,919 | ) | 1,439,068 |  |
|                              | Series E-2 Convertible Preferred Stock | 0 |  | 389,566 |  | 0 |  | (76,811 | ) | 312,755 |  |
|                              |   |   |   |   |   |   |

----

|                                                     |
|-----------------------------------------------------|
|                                                     |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Name of Issuer                                      | Title of Issue or Nature of Indebtedness (A) | Amount of Dividends or Interest Credited to Income (B) | Value as of 12/31/15 | Gross Additions (C) | Gross Reductions (D) | Value as of 9/30/16 |
| ORIG3N, Inc.                                        | Series 1 Convertible Preferred Stock | $ | 0 |  | $ | 826,563 |  | $ | 338,587 |  | $ | 0 |  | $ | 1,165,150 |  |
|                                                | Series A Convertible Preferred Stock | 0 |  | 750,338 |  | 753,884 |  | 0 |  | 1,504,222 |  |
| Petra Pharma Corporation                            | Series A Convertible Preferred Stock | $ | 0 |  | $ | 1,019,755 |  | $ | 7,598 |  | $ | 0 |  | $ | 1,027,353 |  |
| Produced Water Absorbents, Inc.                     | Series A Convertible Preferred Stock | $ | 0 |  | $ | 77,549 |  | $ | 0 |  | $ | (77,549 | ) | $ | 0 |  |
|                                                | Series B Convertible Preferred Stock | 0 |  | 214,302 |  | 0 |  | (214,302 | ) | 0 |  |
|                                                | Series B-2 Convertible Preferred Stock | 0 |  | 154,718 |  | 0 |  | (154,718 | ) | 0 |  |
|                                                | Series B-3 Convertible Preferred Stock | 0 |  | 140,109 |  | 0 |  | (140,109 | ) | 0 |  |
|                                                | Series C Convertible Preferred Stock | 0 |  | 75,581 |  | 0 |  | (75,581 | ) | 0 |  |
|                                                | Series D Convertible Preferred Stock | 0 |  | 133,330 |  | 0 |  | (133,330 | ) | 0 |  |
|                                                | Warrants for Series B-2 Convertible Preferred Stock | 0 |  | 174 |  | 0 |  | (174 | ) | 0 |  |
|                                                | Subordinated Secured Non- Convertible Debt | 39,699 |  | 560,538 |  | 0 |  | (560,538 | ) | 0 |  |
|                                                | Secured Convertible Bridge Note | 23,630 |  | 143,926 |  | 0 |  | (143,926 | ) | 0 |  |
|                                                | Common Stock | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  |
|                                                | Senior Secured Debt | 260,679 |  | 0 |  | 1,424,750 |  | 0 |  | 1,424,750 |  |
| Total Affiliated Private Investments                |   | $ | 338,976 |  | $ | 41,909,262 |  | $ | 11,662,779 |  | $ | (7,586,300 | ) | $ | 45,985,741 |  |
|                                                |   |   |   |   |   |   |
| PUBLICLY TRADED AFFILIATED INVESTMENTS:             |   |   |   |   |   |   |
| Adesto Technologies Corporation                     | Common Stock | $ | 0 |  | $ | 13,645,682 |  | $ | 0 |  | $ | (9,716,575 | ) | $ | 3,929,107 |  |
| Enumeral Biomedical Holdings, Inc.                  | Common Stock | $ | 0 |  | $ | 1,831,468 |  | $ | 0 |  | $ | (389,555 | ) | $ | 1,441,913 |  |
|                                                | Warrants for Common Stock | 0 |  | 87,486 |  | 0 |  | (26,691 | ) | 60,795 |  |
|                                                | Options to Purchase Common Stock | 0 |  | 54 |  | 0 |  | (54 | ) | 0 |  |
|                                                |   |   |   |   |   |   |
| Total Non- Controlled Affiliated Public Investments |   | $ | 0 |  | $ | 15,564,690 |  | $ | 0 |  | $ | (10,132,875 | ) | $ | 5,431,815 |  |
| Total Non- Controlled Affiliated Investments        |   | $ | 338,976 |  | $ | 57,473,952 |  | $ | 11,662,779 |  | $ | (17,719,175 | ) | $ | 51,417,556 |  |
|                                                |   |   |   |   |   |   |

----

|                                     |
|-------------------------------------|
|                                     |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Name of Issuer                      | Title of Issue or Nature of Indebtedness (A) | Amount of Dividends or Interest Credited to Income (B) | Value as of 12/31/15 | Gross Additions (C) | Gross Reductions (D) | Value as of 9/30/16 |
| EQUITY METHOD INVESTMENTS:          |   |   |   |   |   |   |
| Accelerator IV-New York Corporation | Series A Common Stock | $ | 0 |  | $ | 165,936 |  | $ | 20,800 |  | $ | 0 |  | $ | 186,736 |  |
| AgTech Accelerator Corporation      | Common Stock | $ | 0 |  | $ | 0 |  | $ | 64,508 |  | $ | 0 |  | $ | 64,508 |  |
| Total Equity Method Investment      |   | $ | 0 |  | $ | 165,936 |  | $ | 85,308 |  | $ | 0 |  | $ | 251,244 |  |

|     |                                                                                                                                                                                                                                                                                                                                                                                                      |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (A) | Common stock, warrants, options, membership units and, in some cases, preferred stock are generally non-income producing and restricted. The principal amount of debt and the number of shares of common and preferred stock and number of membership units are shown in the accompanying Consolidated Schedules of Investments as of September 30, 2016, and December 31, 2015.  |

|     |                                                                                                                                                                                                                                                                                                                                                                                          |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (B) | Represents the total amount of interest or dividends and yield-enhancing fees on debt securities credited to income for the portion of the year an investment was a control or affiliate investment, as appropriate. Amounts credited to preferred or common stock represent accrued bridge note interest related to conversions that occurred during the first nine months of 2016. |

|     |                                                                                                                                                                                                                                                                                             |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (C) | Gross additions include increases in investments resulting from new portfolio investments, paid-in-kind interest or dividends, the amortization of discounts and fees. Gross additions also include net increases in unrealized appreciation or decreases in unrealized depreciation.  |

|     |                                                                                                                                                                                                                                                                                                       |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (D) | Gross reductions include decreases in investments resulting from principal collections related to investment repayments or sales, the amortization of premiums and acquisition costs. Gross reductions also include net increases in unrealized depreciation or decreases in unrealized appreciation. |

|     |                                                                                                                     |
|-----|---------------------------------------------------------------------------------------------------------------------|
| (E) | We own 25 percent of Senova Systems, Inc., but we do not have significant representation on its board of directors. |