Tekla Healthcare Opportunities Fund

SCHEDULE OF INVESTMENTS

December 31, 2020

(Unaudited)

 

SHARES

    VALUE 
   CONVERTIBLE PREFERRED AND WARRANTS (Restricted)(a) (b) - 1.9% of Net Assets    
   Biotechnology – 1.8%     
911,127  Decipher Biosciences, Inc. Series II, 8.00%    $4,254,963 
905,797  Decipher Biosciences, Inc. Series III, 8.00%     4,230,072 
70,050  Decipher Biosciences, Inc. Series IV, 8.00%     327,134 
294,259  Oculis SA, Series B2, 6.00%  (c)   2,767,424 
2,538,462  Rainier Therapeutics, Inc. Series A, 6.00%     254 
1,470,588  Rainier Therapeutics, Inc. Series B, 6.00%     147 
3,596,396  Rallybio Holdings, LLC Series B     5,000,069 
       16,580,063 
   Health Care Equipment & Supplies – 0.1%     
163,405  IO Light Holdings, Inc. Series A2     629,223 
   TOTAL CONVERTIBLE PREFERRED AND WARRANTS 
(Cost $16,193,741)
   17,209,286 

 

 

PRINCIPAL
AMOUNT
      
   CONVERTIBLE AND NON-CONVERTIBLE NOTES - 17.5% of Net Assets    
    Convertible Notes (Restricted)(a)  – 0.1%     
    Biotechnology – 0.1%     
$1,435,801  Rainier Therapeutics, Inc. Promissory Notes, 8.00% due 03/31/21      642,054 
    Total Convertible Notes   642,054 
          
    Non-Convertible Notes – 17.4%     
    Biotechnology – 3.9%     
 3,245,000  AbbVie, Inc., 3.20% due 05/14/26     3,595,103 
 5,303,000  AbbVie, Inc., 4.25% due 11/14/28     6,357,832 
 10,000,000  Amgen, Inc., 3.63% due 05/15/22     10,360,799 
 2,200,000  Amgen, Inc., 3.20% due 11/02/27     2,470,010 
 840,000  Biogen, Inc., 3.63% due 09/15/22     885,566 
 10,000,000  Gilead Sciences, Inc., 2.95% due 03/01/27     10,986,886 
        34,656,196 
    Health Care Equipment & Supplies  – 2.0%     
 2,100,000  Abbott Laboratories, 3.40% due 11/30/23     2,276,998 
 2,413,000  Becton, Dickinson and Co., 3.70% due 06/06/27     2,769,186 
 1,558,000  Medtronic, Inc., 3.50% due 03/15/25     1,748,408 
 3,500,000  Stryker Corp., 3.65% due 03/07/28     4,047,861 
 6,000,000  Zimmer Biomet Holdings, Inc., 4.25% due 08/15/35     6,776,689 
        17,619,142 
    Health Care Providers & Services – 6.4%     
 10,500,000  Anthem, Inc., 3.50% due 08/15/24     11,520,918 
 2,975,000  Anthem, Inc., 4.10% due 03/01/28     3,516,988 
 2,325,000  Anthem, Inc., 4.65% due 08/15/44     3,058,073 

 

The accompanying notes are an integral part of this Schedule of Investments.

 

 

 

 

Tekla Healthcare Opportunities Fund

SCHEDULE OF INVESTMENTS

December 31, 2020

(Unaudited, continued)

 

PRINCIPAL
AMOUNT
    VALUE 
   Health Care Providers & Services – continued    
$2,100,000  Cigna Corp., 3.50% due 06/15/24 (d)   $2,294,481 
 1,504,000  Cigna Corp., 4.38% due 10/15/28     1,817,865 
 8,250,000  Cigna Corp., 6.13% due 11/15/41 (d)    12,180,444 
 286,000  CVS Health Corp., 3.70% due 03/09/23     305,968 
 2,031,000  CVS Health Corp., 4.30% due 03/25/28     2,416,810 
 2,100,000  CVS Health Corp., 4.78% due 03/25/38     2,660,659 
 3,700,000  CVS Health Corp., 5.05% due 03/25/48     5,014,530 
 2,750,000  Tenet Healthcare Corp., 4.63% due 07/15/24     2,818,805 
 2,100,000  UnitedHealth Group, Inc., 2.88% due 12/15/21     2,150,718 
 1,460,000  UnitedHealth Group, Inc., 3.85% due 06/15/28     1,735,902 
 4,970,000  UnitedHealth Group, Inc., 3.88% due 12/15/28     5,960,221 
        57,452,382 
    Healthcare Services – 0.2%     
 2,100,000  Laboratory Corporation of America Holdings, 3.60% due 02/01/25      2,320,414 
    Life Sciences Tools & Services – 0.3%     
 2,100,000  Thermo Fisher Scientific, Inc., 3.20% due 08/15/27      2,360,522 
    Pharmaceuticals – 4.6%     
 4,750,000  AstraZeneca plc, 6.45% due 09/15/37 (c)    7,330,996 
 7,500,000  Bristol-Myers Squibb Co., 3.20% due 06/15/26 (d)    8,438,495 
 2,100,000  Bristol-Myers Squibb Co., 3.40% due 07/26/29 (d)    2,444,738 
 2,200,000  Johnson & Johnson, 2.90% due 01/15/28     2,482,234 
 4,200,000  Merck & Co., Inc., 2.80% due 05/18/23     4,453,997 
 2,100,000  Merck & Co., Inc., 2.75% due 02/10/25     2,281,267 
 4,000,000  Merck & Co., Inc., 3.40% due 03/07/29     4,653,490 
 8,100,000  Pfizer, Inc., 3.45% due 03/15/29     9,467,063 
        41,552,280 
    Total Non-Convertible Notes   155,960,936 
    TOTAL CONVERTIBLE AND NON-CONVERTIBLE NOTES  
(Cost $139,732,992)
   156,602,990 

 

SHARES 
   COMMON STOCKS AND WARRANTS - 101.8% of Net Assets
    
    Biotechnology – 14.6%     
 356,969  AbbVie, Inc.   38,249,228 
 86,245  Alexion Pharmaceuticals, Inc. (b) (e)    13,474,919 
 72,998  Amgen, Inc.   16,783,700 
 123,052  Atreca, Inc. (b)   1,987,290 
 34,813  Biogen, Inc. (b)    8,524,311 
 601  Esperion Therapeutics, Inc. (b)   15,626 
 348,417  Exelixis, Inc. (b) (e)   6,992,729 
 364,646  Galera Therapeutics, Inc. (b)   3,730,329 
 222,389  Gilead Sciences, Inc. (e)   12,956,383 
 31,649  Incyte Corp. (b)   2,752,830 
 25,000  Intercept Pharmaceuticals, Inc. (b)   617,500 

 

The accompanying notes are an integral part of this Schedule of Investments.

 

 

 

 

Tekla Healthcare Opportunities Fund

SCHEDULE OF INVESTMENTS

December 31, 2020

(Unaudited, continued)

 

SHARES    VALUE 
   Biotechnology – continued    
 34,093  Nektar Therapeutics (b)  $579,581 
 226,241  Pieris Pharmaceuticals, Inc. (b)   565,602 
 40,496  Pieris Pharmaceuticals, Inc., Series A Warrants (expiration 06/08/21, exercise price $3.00) (a) (b)   12,959 
 20,248  Pieris Pharmaceuticals, Inc., Series B Warrants (expiration 06/08/21, exercise price $2.00) (a) (b)   13,769 
 24,874  Regeneron Pharmaceuticals, Inc. (b) (e)    12,016,878 
 21,700  REGENXBIO, Inc. (b)   984,312 
 40,054  Vertex Pharmaceuticals, Inc. (b)   9,466,362 
 27,479  Xencor, Inc. (b)   1,198,909 
        130,923,217 
    Health Care Equipment & Supplies  – 22.3%     
 319,880  Abbott Laboratories (e)    35,023,661 
 8,196  ABIOMED, Inc. (b)    2,657,143 
 83,358  Becton, Dickinson and Co. (e)   20,857,839 
 203,537  DENTSPLY Sirona, Inc.   10,657,197 
 36,864  DexCom, Inc. (b) (e)   13,629,358 
 198,658  Edwards Lifesciences Corp. (b) (e)   18,123,569 
 17,402  Hologic, Inc. (b)   1,267,388 
 14,106  IDEXX Laboratories, Inc. (b)   7,051,166 
 34,888  Inogen, Inc. (b)   1,558,796 
 321,093  Medtronic plc (e)   37,612,834 
 55,587  STERIS plc   10,535,960 
 86,868  Stryker Corp.   21,286,135 
 10,955  Teleflex, Inc.   4,508,750 
 99,934  Zimmer Biomet Holdings, Inc. (e)   15,398,830 
        200,168,626 
    Health Care Providers & Services – 17.3%     
 19,808  Addus HomeCare Corp. (b)   2,319,319 
 14,989  Amedisys, Inc. (b)   4,396,723 
 31,690  Anthem, Inc.   10,175,342 
 24,627  Charles River Laboratories International, Inc. (b) (e)   6,153,302 
 85,600  Cigna Corp.   17,820,208 
 109,035  Community Health Systems, Inc. (b)   810,130 
 171,121  CVS Health Corp.   11,687,564 
 19,912  Five Star Senior Living, Inc. (b)   137,393 
 97,717  HCA Healthcare, Inc. (e)   16,070,538 
 46,179  Humana, Inc. (e)   18,945,858 
 27,264  Molina Healthcare, Inc. (b) (e)   5,798,508 
 117,522  Owens & Minor Inc   3,178,970 
 82,736  Tenet Healthcare Corp. (b) (e)   3,303,649 
 156,647  UnitedHealth Group, Inc.(e)   54,932,970 
        155,730,474 

 

The accompanying notes are an integral part of this Schedule of Investments.

 

 

 

 

Tekla Healthcare Opportunities Fund

SCHEDULE OF INVESTMENTS

December 31, 2020

(Unaudited, continued)

 

SHARES    VALUE 
   Health Care Technology – 0.5%    
 22,388  Teladoc Health, Inc. (b)  $4,476,705 
    Healthcare Services – 1.1%     
 67,290  Centene Corp. (b)    4,039,418 
 30,505  Laboratory Corporation of America Holdings (b)    6,209,293 
        10,248,711 
    Life Sciences Tools & Services – 9.8%     
 39,625  Agilent Technologies, Inc.   4,695,166 
 7,600  Bio-Techne Corp.   2,413,380 
 39,588  Illumina, Inc. (b) (e)   14,647,560 
 6,650  Mettler-Toledo International, Inc. (b)   7,578,872 
 18,335  PerkinElmer, Inc.   2,631,073 
 25,068  PRA Health Sciences, Inc. (b)   3,144,530 
 86,199  Thermo Fisher Scientific, Inc. (e)    40,149,770 
 53,060  Waters Corp. (b) (e)   13,128,105 
        88,388,456 
    Medical Devices and Diagnostics – 8.0%     
 6,886  Align Technology, Inc. (b)   3,679,740 
 167,512  Boston Scientific Corp. (b) (e)   6,022,056 
 149,591  Danaher Corp. (e)   33,230,145 
 13,277  Intuitive Surgical, Inc. (b)   10,861,914 
 41,557  Quest Diagnostics, Inc.   4,952,348 
 60,787  ResMed, Inc. (e)   12,920,885 
        71,667,088 
    Pharmaceuticals – 21.9%     
 1,642,302  Assertio Holdings, Inc. (b)   587,287 
 529,437  Bristol-Myers Squibb Co. (e)   32,840,977 
 204,109  Bristol-Myers Squibb Co., CVR 03/31/21 (b) (f)   140,856 
 141,201  Eli Lilly & Co.   23,840,377 
 85,743  Horizon Therapeutics plc (b) (e)   6,272,100 
 38,687  IQVIA Holdings, Inc. (b) (e)   6,931,550 
 367,521  Johnson & Johnson   57,840,455 
 67,031  McKesson Corp.   11,658,032 
 356,818  Merck & Co., Inc. (e)   29,187,712 
 28,292  Perrigo Co. plc   1,265,218 
 510,963  Pfizer, Inc. (e)   18,808,548 
 312,904  Teva Pharmaceutical Industries Ltd. (b) (e) (g)   3,019,524 
 25,361  Zoetis, Inc.   4,197,245 
        196,589,881 
    Real Estate Investment Trusts – 6.3%     
 293,879  Diversified Healthcare Trust REIT   1,210,782 
 31,668  Global Medical REIT, Inc.   413,584 
 11,370  Healthcare Realty Trust Inc.   336,552 
 13,749  Healthcare Trust of America, Inc.   378,647 
 66,791  Healthpeak Properties, Inc.   2,019,092 

 

The accompanying notes are an integral part of this Schedule of Investments.

 

 

 

 

Tekla Healthcare Opportunities Fund

SCHEDULE OF INVESTMENTS

December 31, 2020

(Unaudited, continued)

 

SHARES    VALUE 
   Real Estate Investment Trusts – continued    
135,390  LTC Properties, Inc.  $5,268,025 
266,557  Medical Properties Trust, Inc.   5,808,277 
5,596  National Health Investors, Inc.   387,075 
160,373  New Senior Investment Group Inc.   830,732 
235,358  Omega Healthcare Investors, Inc.   8,548,203 
326,992  Physicians Realty Trust   5,820,458 
419,879  Sabra Health Care REIT, Inc.   7,293,298 
3,075  Universal Health Realty Income Trust   197,630 
156,416  Ventas, Inc.   7,670,641 
161,599  Welltower, Inc.   10,442,527 
       56,625,523 
   TOTAL COMMON STOCKS AND WARRANTS
(Cost $796,804,450)
   914,818,681 
   EXCHANGE TRADED FUND - 0.1% of Net Assets     
10,055  Health Care Select Sector SPDR Fund   1,140,639 
   TOTAL EXCHANGE TRADED FUND
(Cost $988,500)
   1,140,639 

 

 

PRINCIPAL
AMOUNT
       
    SHORT-TERM INVESTMENT - 3.7% of Net Assets    
$33,601,000   Repurchase Agreement, Fixed Income Clearing Corp., repurchase value $33,601,000, 0.00%, dated , due 01/04/21 (collateralized by U.S. Treasury Notes 2.38%, due 3/15/22, market value$34,273,033)   33,601,000 
     TOTAL SHORT-TERM INVESTMENT 
(Cost $33,601,000)
   33,601,000 

 

NUMBER OF
CONTRACTS
(100 SHARES
EACH)/
NOTIONAL
AMOUNT ($)
     VALUE 
   OPTION CONTRACTS WRITTEN - (0.1)% of Net Assets    
  

Call Option Contracts Written - (0.1)%

393 /(4,323,000)  Abbott Laboratories Jan21 110 Call   (76,635)
148 /(1,924,000)  Alexion Pharmaceuticals, Inc. Jan21 130 Call   (375,920)
41 /(1,025,000)  Becton, Dickinson and Co. Jan21 250 Call   (20,377)
239 /(860,400)  Boston Scientific Corp. Jan21 36 Call   (21,032)
241 /(1,566,500)  Bristol-Myers Squibb Co. Jan21 65 Call   (7,953)
25 /(600,000)  Charles River Laboratories International, Inc. Jan21 240 Call   (31,750)
219 /(5,037,000)  Danaher Corp. Jan21 230 Call   (35,478)
54 /(2,052,000)  DexCom, Inc. Jan21 380 Call   (52,272)
217 /(1,880,739)  Edwards Lifesciences Corp. Jan21 86.67 Call   (108,500)
335 /(737,000)  Exelixis, Inc. Jan21 22 Call   (8,375)
235 /(1,527,500)  Gilead Sciences, Inc. Jan21 65 Call   (7,990)
67 /(1,072,000)  HCA Healthcare, Inc. Jan21 160 Call   (49,580)

 

The accompanying notes are an integral part of this Schedule of Investments.

 

 

 

 

Tekla Healthcare Opportunities Fund

SCHEDULE OF INVESTMENTS

December 31, 2020

(Unaudited, continued)

 

NUMBER OF
CONTRACTS
(100 SHARES
EACH)/
NOTIONAL
AMOUNT ($)
    VALUE  
    Call Option Contracts Written– continued      
86 /(645,000)   Horizon Therapeutics plc Jan21 75 Call   $ (21,070 )
22 /(935,000)   Humana, Inc. Jan21 425 Call     (9,570 )
68 /(2,516,000)   Illumina, Inc. Jan21 370 Call     (69,360 )
42 /(735,000)   IQVIA Holdings, Inc. Jan21 175 Call     (27,300 )
312 /(3,588,000)   Medtronic plc Jan21 115 Call     (109,200 )
501 /(4,258,500)   Merck & Co., Inc. Jan21 85 Call     (25,551 )
26 /(598,000)   Molina Healthcare, Inc. Jan21 230 Call     (5,070 )
1,346 /(6,730,000)   Pfizer, Inc. Jan21 50 Call     (2,692 )
24 /(1,296,000)   Regeneron Pharmaceuticals, Inc. Jan21 540 Call     (2,640 )
28 /(616,000)   ResMed, Inc. Jan21 220 Call     (4,900 )
144 /(547,200)   Tenet Healthcare Corp. Jan21 38 Call     (42,840 )
494 /(543,400)   Teva Pharmaceutical Industries Ltd. Jan21 11 Call     (4,446 )
126 /(6,300,000)   Thermo Fisher Scientific, Inc. Jan21 500 Call     (11,970 )
62 /(2,294,000)   UnitedHealth Group, Inc. Jan21 370 Call     (12,400 )
25 /(600,000)   Waters Corp. Jan21 240 Call     (26,750 )
43 /(666,500)   Zimmer Biomet Holdings, Inc. Jan21 155 Call     (12,900 )
    Total Call Option Contracts Written
(Premiums received $(1,077,624))
    (1,184,521 )
  TOTAL INVESTMENTS - 124.9%
(Cost $986,243,059)
    1,122,188,075  
  OTHER LIABILITIES IN EXCESS OF ASSETS - (24.9)%     (224,008,411 )
  NET ASSETS - 100%     $898,179,664  

 

 

(a) Security fair valued using significant unobservable inputs. See Investment Valuation and Fair Value Measurements.
(b) Non-income producing security.
(c) Foreign security.
(d) Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended.  These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
(e) A portion of security is pledged as collateral for call options written.
(f) Contingent Value Right
(g) American Depository Receipt
       

The accompanying notes are an integral part of this Schedule of Investments.

 

 

 

 

Tekla Healthcare Opportunities Fund

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

(Unaudited)

 

Investment Valuation

 

Shares of publicly traded companies listed on national securities exchanges or trading in the over-the-counter market are typically valued at the last sale price, as of the close of trading, generally 4 p.m., Eastern Time. The Board of Trustees of the Fund (the Trustees) has established and approved fair valuation policies and procedures with respect to securities for which quoted prices may not be available or which do not reflect fair value. Convertible, corporate and government bonds are valued using a third-party pricing service. Convertible bonds are valued using this pricing service only on days when there is no sale reported. Puts and calls generally are valued at the close of regular trading on the securities or commodities exchange on which they are primarily traded. Options on securities generally are valued at their last bid price in the case of exchange traded options or, in the case of OTC-traded options, the average of the last bid price as obtained from two or more dealers unless there is only one dealer, in which case that dealer’s price is used. Forward foreign currency contracts are valued on the basis of the value of the underlying currencies at the prevailing currency exchange rate. Restricted securities of companies that are publicly traded are typically valued based on the closing market quote on the valuation date adjusted for the impact of the restriction as determined in good faith by Tekla Capital Management LLC (the Adviser) also using fair valuation policies and procedures approved by the Trustees described below. Non-exchange traded warrants of publicly traded companies are generally valued using the Black-Scholes model, which incorporates both observable and unobservable inputs. Short-term investments with a maturity of 60 days or less are generally valued at amortized cost, which approximates fair value.

 

Convertible preferred shares, warrants or convertible note interests in private companies and other restricted securities, as well as shares of publicly traded companies for which market quotations are not readily available, such as stocks for which trading has been halted or for which there are no current day sales, or which do not reflect fair value, are typically valued in good faith, based upon the recommendations made by the Adviser pursuant to fair valuation policies and procedures approved by the Trustees.

 

The Adviser has a Valuation Sub-Committee comprised of senior management which reports to the Valuation Committee of the Board at least quarterly. Each fair value determination is based on a consideration of relevant factors, including both observable and unobservable inputs. Observable and unobservable inputs the Adviser considers may include (i) the existence of any contractual restrictions on the disposition of securities; (ii) information obtained from the company, which may include an analysis of the company’s financial statements, products, intended markets or technologies; (iii) the price of the same or similar security negotiated at arm’s length in an issuer’s completed subsequent round of financing; (iv) the price and extent of public trading in similar securities of the issuer or of comparable companies; or (v) a probability and time value adjusted analysis of contractual terms. Where available and appropriate, multiple valuation methodologies are applied to confirm fair value. Significant unobservable inputs identified by the Adviser are often used in the fair value determination. A significant change in any of these inputs may result in a significant change in the fair value measurement. Due to the uncertainty inherent in the valuation process, such estimates of fair value may differ significantly from the values that would have been used had a ready market for the investments existed, and differences could be material. Additionally, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different from the valuations used at the date of this schedule of investments.

 

Federal Income Tax Cost

 

At December 31, 2020, the cost of securities for Federal income tax purposes was $987,298,117. The net unrealized gain on securities held by the Fund was $134,889,958, including gross unrealized gain of $185,503,229 and gross unrealized loss of $50,613,271.

 

Fair Value Measurements

 

The Fund uses a three-tier hierarchy to prioritize the assumptions, referred to as inputs, used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels. Level 1 includes quoted prices in active markets for identical investments. Level 2 includes prices determined using other significant observable inputs (including quoted prices for similar investments, interest rates, credit risk, etc.). The independent pricing vendor may value bank loans and debt securities at an evaluated bid price by employing methodologies that utilize actual market transactions, broker-supplied valuations, and/or other methodologies designed to identify the market value for such securities and such securities are considered Level 2 in the fair value hierarchy. Level 3 includes prices determined using significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments). These inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

 

 

 

 

Tekla Healthcare Opportunities Fund

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

(Unaudited, continued)

 

The following is a summary of the levels used as of December 31, 2020 to value the Fund’s net assets.

 

Assets at Value  Level 1   Level 2   Level 3   Total 
Convertible Preferred and Warrants                    
Biotechnology  $-   $-   $16,580,063   $16,580,063 
Health Care Equipment & Supplies   -    -    629,223    629,223 
Convertible Notes                    
Biotechnology   -    -    642,054    642,054 
Non-convertible Notes                    
Biotechnology   -    34,656,196    -    34,656,196 
Health Care Equipment & Supplies   -    17,619,142    -    17,619,142 
Health Care Providers & Services   -    57,452,382    -    57,452,382 
Healthcare Services   -    2,320,414    -    2,320,414 
Life Sciences Tools & Services   -    2,360,522    -    2,360,522 
Pharmaceuticals   -    41,552,280    -    41,552,280 
Common Stocks and Warrants                    
Biotechnology   130,896,489    -    26,728    130,923,217 
Health Care Equipment & Supplies   200,168,626    -    -    200,168,626 
Health Care Providers & Services   155,730,474    -    -    155,730,474 
Health Care Technology   4,476,705    -    -    4,476,705 
Healthcare Services   10,248,711    -    -    10,248,711 
Life Sciences Tools & Services   88,388,456    -    -    88,388,456 
Medical Devices and Diagnostics   71,667,088    -    -    71,667,088 
Pharmaceuticals   196,589,881    -    -    196,589,881 
Real Estate Investment Trusts   56,625,523    -    -    56,625,523 
Exchange Traded Fund   1,140,639    -    -    1,140,639 
Short-term Investment   -    33,601,000    -    33,601,000 
Total  $915,932,592   $189,561,936   $17,878,068   $1,123,372,596 
Other Financial Instruments                    
Liabilities                    
Options Contracts Written  $(1,184,521)   -   $-   $(1,184,521)
Total  $(1,184,521)  $-   $-   $(1,184,521)

 

The following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value.

 

Investments in Securities  Balance as of
September 30,
2020
  Net realized
gain (loss) and
change in
unrealized
appreciation
(depreciation)
   Cost of
purchases
and conversions
  Proceeds
from
sales and
conversions
  Net
transfers
into
(out of)
Level 3
   Balance as of
December
31, 2020
 
Convertible Preferred and Warrants                           
     Biotechnology  $11,757,099  $4,822,848   $116  $              0  $                      0   $16,580,063 
     Health Care Equipment & Supplies   629,223   0    0   0   0    629,223 
Convertible Notes                           
     Biotechnology   649,617   (7,563)   0   0   0    642,054 
Common Stock and Warrants                           
     Biotechnology   18,426   8,302    0   0   0    26,728 
Total  $13,054,365  $4,823,587   $116  $0  $0   $17,878,068 

 

Net change in unrealized appreciation (depreciation) from investments still held as of December 31, 2020 $4,823,587

  

 

 

 

Tekla Healthcare Opportunities Fund

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

(Unaudited, continued)

 

Thefollowing is a quantitative disclosure about significant unobservable inputs used in the determination of the fair value of Level 3 assets.

 

     Fair Value at December 31, 2020   Valuation Technique    Unobservable Input    Range(Weighted Average)  

Common Stock and Warrants

  $ 26,728   Income approach,   Discount for lack of   20.00% (20.00%)  
        Black-Scholes   marketability      

Convertible Preferred and Warrants

  77,733   Probability adjusted value   Probability of events Timing of events  

20.00% (20.00%)

0.50 (0.50) years

 
    2,767,825   Market approach,   (a)   N/A  
    14,363,728 Recent transaction   (b)   N/A  
Convertible Notes       642,054   Probability adjusted value   Probability of events Timing of events  

0.00%-99.00% (35.29%)

0.25-14.50 (2.46) years

 
    $ 17,878,068              

 

(a) There is no quantitative information to provide as this method of measure is investment specific.

(b) The valuation technique used as a basis to approximate fair value of these investments is based on subsequent financing rounds.

 

Private Companies and Other Restricted Securities

 

The Fund may invest in private companies and other restricted securities if these securities would currently comprise 10% or less of Managed Assets. The value of these securities represented 2% of the Fund’s Managed Assets at December 31, 2020.

 

The following table details the acquisition date, cost, carrying value per unit, and value of the Fund’s private companies and other restricted securities at December 31, 2020. The Fund on its own does not have the right to demand that such securities be registered.

 

Security (#)  Acquisition
Date
  Cost   Carrying Value
per Unit
   Value 
Decipher Biosciences, Inc.                  
Series II Cvt. Pfd  03/29/19  $4,220,940   $4.67   $4,254,963 
Series III Cvt. Pfd  03/29/19   955,175    4.67    4,230,072 
Series IV Cvt. Pfd  05/14/20   152,083    4.67    327,134 
IO Light Holdings, Inc.Series A2 Cvt. Pfd  04/30/20   628,047    3.85    629,223 
Oculis SA, Series B2 Cvt. Pfd  01/16/19   2,477,246    9.40    2,767,424 
Rainier Therapeutics, Inc.                  
Series A Cvt. Pfd  01/19/16, 10/24/16   1,651,433    0.00††   254 
Series B Cvt. Pfd  03/03/17   1,100,200    0.00††   147 
Cvt. Promissory Notes  01/30/19   417,284    0.00    0 
Cvt. Promissory Notes  03/28/19   417,285    0.00    0 
Cvt. Promissory Notes  07/16/19   480,998    106.79    513,641 
Cvt. Promissory Notes  10/07/19   120,252    106.79    128,413 
Rallybio Holdings, LLC Series B Cvt. Pfd  03/27/20   5,008,617    1.39    5,000,069 
      $17,629,560        $17,851,340 

 

(#)See Schedule of Investments and corresponding footnotes for more information on each issuer.
Interest received as part of a corporate action for a previously owned security.
††Carrying value per unit is greater than $0.00 but less than $0.01 See Schedule of Investments and corresponding footnotes for more information on each issuer.