March 2019

Dear Partners and Friends:

The single most important venture capital investment criterion is the quality of the entrepreneurial talent managing human enterprise. The size of the market opportunity and the uniqueness of the approach to that market are also important criteria. In the present economic environment, companies competing freely and managed carefully with entrepreneurial enthusiasm create unique future value and serve mankind.

To date, eight companies have been founded: APPEX, Command Credit Corporation, Greystone, Lightbridge, MicroFinancial, PlasTech Innovations, RentGrow and Rentometer and eight companies have been ventured: Business Research Corporation, Copley Pharmaceutical, Dent-A-Med, GWA Information Systems, Leader Bank, MindEdge, Oxxford Information Technologies and UpToDate in medicine. At year-end 2018, including valuations for companies sold and current market valuations for companies currently held, the sixteen companies were valued at approximately $3.0 billion.

Companies Currently Held

Rentometer

Apr 2012
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Rentometer, Inc. (“www.rentometer.com“) assets were purchased from Investment Instruments Corporation’s bankruptcy on April 7, 2012. Michael J. Lapsley agreed to leave Yardi Systems, the largest property management software company in the world, and be our partner in this new start-up. Please visit www.rentometer.com to see the real time apartment area study you can receive free from Rentometer. After four years of inattention before our purchase, the site has been stabilized, draws 3,000,000 visitors annually and is growing. Are you paying too much? Charging too little? Rentometer's property report now provides year built, property size, tax information, deed information and sale information on most properties in its 80 million listing database.

Oxxford Information Technology – business information database

May 2009
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In May 2009, Oxxford Information Technology also became a Harder venture. Led by Raymond Greenhill, Oxxford offers its clients a suite of services to help their Business to Business marketing and sales efforts. Oxxford’s database has information on 35 million active businesses and another 120 million historic businesses. Oxxford analyzes business financial strength without using a credit score component. Oxxford uses overall market size, industry composition, concentration and fragmentation, historic and future growth potential, regional analysis and life cycle and risk analysis. For example, if you wanted to check out an electrical contractor in Chestertown, MD, Oxxford would provide not only demographic and public record data, but would also provide multi-year comparative financial data for the typical, similarly sized electrical contractor in Kent County, MD.

MindEdge – online learning

Feb 2008
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MindEdge, Inc. (“www.mindedge.com“) premier online information and learning company, provides leadership, management, communication, and education solutions to help organizations meet their objectives. Founded by Harvard and MIT educators and led by Jefferson Flanders, MindEdge develops content and courses that balance academic excellence with real world practice. While MindEdge’s content primarily addresses business and management topics, the company has developed solutions for a wide variety of other subject areas. In 2018, MindEdge served over 400,000 learners offering fully-online, blended-online, and on-site programs in either self-paced or instructor-led formats. 2018 Revenues increased 19% over 2017. The Company is profitable. MindEdge became a Harder venture in February 2008.

Leader Bank – community bank

May 2002
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Leader Bank (“www.leaderbank.com“) opened its doors in May 2002. Sushil Tuli, President successfully raised over $6.5 million in seed capital after the September 11th Trade Center collapse and without the help of an underwriter. Over the previous ten years, Sushil’s Leader Mortgage had loaned over $2.5 billion to approximately 17,000 customers. Our LBNA Limited Partnership contributed to the new venture. At year-end 2017, Leader Bank reported Assets of $1.2 billion, Net Income of $14.4 million and Return on Equity of 13.9%.

Command Credit – business credit services

Jul 1996
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Command Credit Corporation (“www.commandcredit.net“) has been providing credit-reporting services to companies throughout the northeast region since 1993. Initially focusing on the retail building supplies industry, the company expanded its efforts in 1996 to include all material goods companies. CCC business credit reports from its own in-house database and from Experian Inc. and Trans Union over the Internet. Under the leadership of James Hegstetter, CCC has evolved into a virtual corporate employer serving over 1800 clients. The Company is profitable.

Companies Sold

MicroFinancial – micro ticket leasing

Oct 1989
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MicroFinancial Inc.’s (“www.microfinancial.com“) President, Richard Latour, joined the company in 1989. MicroFinancial became profitable on a monthly basis in June of that year. On February 5, 1999, MicroFinancial completed an Initial Public Offering and was listed on the New York Stock Exchange as “MFI”. In October 2002 the Company ceased funding new originations as a result of its Lenders’ decision not to renew the revolving credit facility. Lease funding resumed in 2005. At year-end 2014, Assets totaled $186 million, Cash Flow from customers was $141.5 million and Revenues were $64.5 million. MicroFinancial is now listed on NASDAQ. On December 15, 2014, Fortress Investment Group LLC agreed to acquire MicroFinancial for about $147 million.

82Go – purely portable water

Aug 2011
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PlasTech Innovations, Inc. (“www.82gowater.com“) was started August 5, 2011 went Hobart Ventures LP was formed to back Hobart Buppert’s water venture: “82GO”. One year later the Company failed to position product on retail store shelves as promised and the venture was terminated with an approximately $1,000,000 loss.

UpToDate in medicine – medical database

Feb 1995
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UpToDate, Inc. (“www.uptodate.com“) was founded in 1992, by physician Burton D. Rose, to provide continually updated answers to clinical questions for physicians initially in the specialty of Nephrology. In 1995 the Company was reorganized and attracted outside financing to expand into all the specialties constituting Internal Medicine. Over 3,800 physicians wrote for their fellow physicians a knowledgebase containing the highest quality clinical medical information extant. In 2008, in over one hundred countries, millions of our fellow human beings received better medical care from approximately 320,000 clinicians because of UpToDate in medicine. Under Chief Executive Officer Piet Bleyendaal’s leadership, 2008 revenues increased to $80 million and the Company generated strong positive cash flow. In September 2008, UpToDate was sold to Wolters Kluwer for $435 million.

As a Buddhist, I know pride is not helpful. Even so, I must admit to great pride in the fact that millions of my fellow human beings are given help with their clinical diagnoses each week by UpToDate in medicine.

RentGrow – tenant qualification systems

Nov 1989
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RentGrow, Inc. (“www.rentgrow.com“) was founded in November 1989 to provide revenue enhancement computer services to the residential real estate industry. After many years of expensive failure focusing on dedicated custom computer credit scoring and applicant selection services to the nation’s largest apartment managers, RentGrow has turned its efforts to providing a broader range of generic, Internet based services to the regional apartment marketplace. Michael J. Lapsley, RentGrow’s President, finally brought stability to the management of the Company in 1998. On February 12, 2010, RentGrow was sold to Yardi Systems, Inc. At the time of sale RentGrow clients managed 640,000 apartment units using their internet software and the Company was profitable.

Lightbridge – cellular customer acquisition systems

Jul 1989
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Lightbridge, Inc. (“www.cybersource.com“) developed, marketed and supported a network of integrated products and services that enabled telecommunications carriers to improve their customer acquisition, retention and fraud prevention processes. During the first nine months of 2007, Lightbridge/Authorize.Net sales were approximately $51.7 million. Pamela D. A. Reeve joined Lightbridge as President in 1989, after eleven years with The Boston Consulting Group. On September 27, 1996, Lightbridge completed an Initial Public Offering on NASDAQ listed as “LTBG”. On the day of the offering, six deceased individuals applied for cellular service at one customer carrier within a three-hour period. The fraud was uncovered by Lightbridge’s systems. Over the years, Lightbridge made several acquisitions and changed its name to Authorize.Net. On November 1, 2007, Authorize.Net was acquired by CyberSource at a $662 million valuation.

APPEX – national cellular call forwarding

Jul 1986
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APPEX Corporation served the cellular communications industry with its Cellular Management Information System, Positive Roamer Verification System (“PRV”), Financial Settlement System (FSS”) and national call forwarding RoamAmerica (“RA”) intercarrier products. By 1990, most U.S. markets had wired their central switches into APPEX’S PRV, FSS or RA systems. In July 1988, Shikhar Ghosh joined APPEX as President, leaving a partnership at Boston Consulting Group. In the June 15, 1990 edition of Business Week, APPEX was ranked in terms of revenue and employment growth as the fastest growing start-up in the CorpTech database of 30,000 high-technology companies in America. On October 2, 1990, APPEX was sold to the Electronic Data Systems division of General Motors Corporation.

Copley Pharmaceutical – generic drugs

Jul 1985
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Harder Pharmaceutical Limited Partnership first purchased its Copley Pharmaceutical interest in July 1985. Sales were $2.6 million. By fiscal year ending January 1991, Copley Pharmaceutical, Inc. produced and sold approximately 75 generic drugs including: electrolytes, antihistamines, vitamins anti-inflammatory, antibacterial, cardiac-antiarrythmias, fluorides, central nervous system, laboratory and antipyretic. President Jane Hirsh managed Copley’s growth. On October 12, 1993, Hoechst Celanese Corporation paid $546 million for a 51 percent stake in Copley Pharmaceutical, Inc.

GWA Information Systems – accounts receivables software

Dec 1984
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GWA Information Systems, Inc., founded in 1984, is a software development and Accounts Receivables consulting services company specializing in the debt recovery management market place. The primary application was a mature, feature-rich debt collection product. Led by Janice M. Kelliher, the Company successfully adapted its product for use over the Internet and now offers unusual connectivity to its customers. In 2000 GWA was sold to ABIT AG, a German software concern.

Dent-A-Med – medical receivables

Oct 1984
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Incorporated in 1984, Dent-A-Med, Inc. (“HELPCard.com“) has assets over $150 million in health care credit to cardholders in all states. The Company is very profitable. Through the use of custom credit scoring models and specialized credit card financing programs. In 1993, T. Warren Center, Dent-A-Med’s founder, rejoined the Company as Chairman and CEO. In December 2006, Harbert Private Equity Partners purchased 65% control of the company.

FirstCall – Wall Street research automation

Sep 1983
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Ventured in 1983, Business Research Corporation (“www.firstcall.com“) was sold to International Thomson Organization on October 10, 1986. The Company’s First Call subsidiary delivers Wall Street research electronically via satellite worldwide. Today, you can watch First Call earnings reports daily on MSNBC and other networks. Hired from Boston Consulting Group, Andrew G. Mills managed Business Research’s spectacular