UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from _____ to _______

 

Commission File Number: 814-00235

 

 

Rand Capital Corporation

(Exact Name of Registrant as specified in its Charter)

 

 

New York		16-0961359
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)
14 Lafayette Square, Suite 1405, Buffalo, NY		14203
(Address of Principal executive offices)		(Zip Code)

 

(716) 853-0802

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.10 par value		RAND		Nasdaq Capital Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer	☐		Accelerated filer	☐
Non-accelerated filer	☑		Smaller reporting company	☐
			Emerging growth company	☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes  No ☑

 

As of August 6, 2024, there were 2,581,021 shares of the registrant’s common stock outstanding.

 

 

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RAND CAPITAL CORPORATION AND SUBSIDIARIES

TABLE OF CONTENTS FOR FORM 10-Q

 

PART I. – FINANCIAL INFORMATION
Item 1.	Financial Statements and Supplementary Data	1
	Consolidated Statements of Financial Position as of June 30, 2024 (Unaudited) and December 31, 2023	1
	Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2024 and 2023 (Unaudited)	2
	Consolidated Statements of Changes in Net Assets for the Three and Six Months Ended June 30, 2024 and 2023 (Unaudited)	3
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023 (Unaudited)	4
	Consolidated Schedule of Portfolio Investments as of June 30, 2024 (Unaudited)	5
	Consolidated Schedule of Portfolio Investments as of December 31, 2023	13
	Notes to the Consolidated Financial Statements (Unaudited)	21
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	48
Item 4.	Controls and Procedures	49
PART II. – OTHER INFORMATION
Item 1.	Legal Proceedings	50
Item 1A.	Risk Factors	50
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	50
Item 3.	Defaults upon Senior Securities	50
Item 4.	Mine Safety Disclosures	50
Item 5.	Other Information	50
Item 6.	Exhibits	51

 

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PART I. FINANCIAL INFORMATION

 

Item 1. Financial Statements and Supplementary Data

 

RAND CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

 

		June 30, 2024 (Unaudited)				December 31, 2023
ASSETS
Investments at fair value:
Control investments (cost of $5,721,856 and $5,272,770, respectively)		$	4,598,046			$	4,148,960
Affiliate investments (cost of $45,250,676 and $45,720,974, respectively)			61,779,019				53,499,372
Non-Control/Non-Affiliate investments (cost of $22,449,599 and $17,371,862, respectively)			20,693,902				19,477,380
Total investments, at fair value (cost of $73,422,131 and $68,365,606, respectively)			87,070,967				77,125,712
Cash			2,293,226				3,295,321
Interest receivable			516,617				244,600
Prepaid income taxes			149,863				127,869
Deferred tax asset, net			174,053				39,179
Other assets			584,343				189,301
Total assets		$	90,789,069			$	81,021,982
LIABILITIES AND STOCKHOLDERS’ EQUITY (NET ASSETS)
Liabilities:
Due to investment adviser		$	322,672			$	979,297
Accounts payable and accrued expenses			108,358				145,516
Line of credit (see Note 6)			17,200,000				16,250,000
Capital gains incentive fees			4,033,000				2,279,700
Deferred revenue			566,423				552,256
Total liabilities			22,230,453				20,206,769
Commitments and contingencies (see Note 5)
Stockholders’ equity (net assets):
Common stock, $0.10 par; shares authorized 100,000,000; shares issued:    2,648,916; shares outstanding: 2,581,021 at 6/30/24 and 12/31/23			264,892				264,892
Capital in excess of par value			55,801,170				55,801,170
Treasury stock, at cost: 67,895 shares at 6/30/24 and 12/31/23			(1,566,605	)			(1,566,605	)
Total distributable earnings			14,059,159				6,315,756
Total stockholders’ equity (net assets) (per share – 6/30/24: $26.56;    12/31/23: $23.56)			68,558,616				60,815,213
Total liabilities and stockholders’ equity (net assets)		$	90,789,069			$	81,021,982

 

See accompanying notes