PART I. FINANCIAL INFORMATION

Item 1. Financial Statements and Supplementary Data

RAND CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION


	March 31, 2025 (Unaudited)			December 31, 2024
ASSETS
Investments at fair value:
Control investments (cost of $6,563,940 and $6,188,940, respectively)	$	2,000,000		$	2,500,000
Affiliate investments (cost of $44,450,751 and $42,488,804, respectively)		52,490,162			51,668,144
Non-Control/Non-Affiliate investments (cost of $9,743,250 and $19,442,491, respectively)		7,667,201			16,649,897
Total investments, at fair value (cost of $60,757,941 and $68,120,235, respectively)		62,157,363			70,818,041
Cash		4,933,269			834,805
Interest receivable (net of allowance of $25,337 and $0, respectively)		223,273			357,530
Prepaid income taxes		339,237			329,365
Deferred tax asset, net		4,886			2,161
Other assets		163,402			115,531
Total assets	$	67,821,430		$	72,457,433
LIABILITIES AND STOCKHOLDERS’ EQUITY (NET ASSETS)
Liabilities:
Due to investment adviser	$	545,838		$	2,182,846
Accounts payable and accrued expenses		45,676			92,568
Line of credit (see Note 6)		—			600,000
Capital gains incentive fees		1,490,000			1,565,000
Deferred revenue		428,663			516,441
Dividend payable		—			2,168,058
Total liabilities		2,510,177			7,124,913
Commitments and contingencies (see Note 5)
Stockholders’ equity (net assets):
Common stock, $0.10 par; shares authorized 100,000,000; shares issued: 3,037,709 at 3/31/25 and 2,648,916 at 12/31/24; shares outstanding: 2,969,814 at 3/31/25 and 2,581,021 at 12/31/24 (see Note 1)		303,771			264,892
Capital in excess of par value		64,051,504			55,419,620
Stock dividends distributable: 0 shares at 3/31/25 and 388,793 shares at 12/31/24		—			8,672,231
Treasury stock, at cost: 67,895 shares at 3/31/25 and 12/31/24		(1,566,605	)		(1,566,605	)
Total distributable earnings		2,522,583			2,542,382
Total stockholders’ equity (net assets) (per share – 3/31/25: $21.99; 12/31/24: $25.31)		65,311,253			65,332,520
Total liabilities and stockholders’ equity (net assets)	$	67,821,430		$	72,457,433

See accompanying notes

RAND CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three months ended March 31, 2025			Three months ended March 31, 2024
Investment income:
Interest from portfolio companies:
Control investments	$	—		$	187,483
Affiliate investments		1,282,859			1,166,085
Non-Control/Non-Affiliate investments		394,307			460,080
Total interest from portfolio companies		1,677,166			1,813,648
Interest from other investments:
Non-Control/Non-Affiliate investments		10,383			1,914
Total interest from other investments		10,383			1,914
Dividend and other investment income:
Affiliate investments		13,125			13,125
Non-Control/Non-Affiliate investments		—			138,710
Total dividend and other investment income		13,125			151,835
Fee income:
Control investments		4,516			4,516
Affiliate investments		131,755			73,720
Non-Control/Non-Affiliate investments		170,959			21,586
Total fee income		307,230			99,822
Total investment income		2,007,904			2,067,219
Expenses:
Base management fee (see Note 8)		252,208			302,595
Income based incentive fees (see Note 8)		119,673			—
Capital gains incentive fees (see Note 8)		(75,000	)		112,300
Interest expense		36,486			390,020
Professional fees		208,842			232,307
Stockholders and office operating		90,763			69,028
Directors' fees		63,850			63,850
Administrative fees		48,750			38,167
Insurance		13,162			13,044
Corporate development		6,994			5,545
Bad debt expense		25,337			—
Total expenses		791,065			1,226,856
Net investment income before income taxes:		1,216,839			840,363
Income tax (benefit) expense		(1,276	)		778
Net investment income		1,218,115			839,585
Net realized gain on sales and dispositions of investments:
Affiliate investments		925,357			—
Non-Control/Non-Affiliate investments		(25	)		3,450,092
Net realized gain on sales and dispositions of investments		925,332			3,450,092
Net change in unrealized appreciation/depreciation on investments:
Control investments		(875,000	)		—
Affiliate investments		(423,384	)		(100,000	)
Non-Control/Non-Affiliate investments		—			(2,790,296	)
Change in unrealized appreciation/depreciation before income taxes		(1,298,384	)		(2,890,296	)
Deferred income tax expense		3,616			—
Net change in unrealized appreciation/depreciation on investments		(1,302,000	)		(2,890,296	)
Net realized and unrealized (loss) gain on investments		(376,668	)		559,796
Net increase in net assets from operations	$	841,447		$	1,399,381
Weighted average shares outstanding		2,869,339			2,581,021
Basic and diluted net increase in net assets from operations per share	$	0.29		$	0.54

See accompanying notes

RAND CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

(Unaudited)


	Three months ended March 31, 2025			Three months ended March 31, 2024
Net assets at beginning of period	$	65,332,520		$	60,815,213
Net investment income		1,218,115			839,585
Net realized gain on sales and dispositions of investments		925,332			3,450,092
Net change in unrealized appreciation/depreciation on investments		(1,302,000	)		(2,890,296	)
Net increase in net assets from operations		841,447			1,399,381
Declaration of dividend		(862,714	)		(645,255	)
Net assets at end of period	$	65,311,253		$	61,569,339

See accompanying notes

RAND CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Three months ended March 31, 2025			Three months ended March 31, 2024
Cash flows from operating activities:
Net increase in net assets from operations	$	841,447		$	1,399,381
Adjustments to reconcile net increase in net assets to net cash provided by (used in) operating activities:
Investments in portfolio companies		(375,000	)		(10,837,878	)
Proceeds from sale of portfolio investments		955,357			3,503,186
Proceeds from loan repayments		8,369,876			2,581,906
Net realized gain on sales and dispositions of portfolio investments		(925,332	)		(3,450,092	)
Change in unrealized appreciation/depreciation on investments		1,298,384			2,890,296
Deferred income tax benefit		(2,725	)		(26,636	)
Amortization		6,250			6,250
Original issue discount amortization		(23,502	)		(7,002	)
Non-cash conversion of debenture interest		(624,105	)		(328,829	)
Non-cash conversion of loan modification fee		(15,000	)		—
Change in interest receivable allowance		25,337			—
Changes in operating assets and liabilities:
Decrease (increase) in interest receivable		108,920			(103,155	)
Increase in other assets		(54,121	)		(70,797	)
Increase in prepaid income taxes		(9,872	)		(26,535	)
(Decrease) increase in accounts payable and accrued expenses		(46,892	)		126,570
Decrease in due to investment adviser		(1,637,008	)		(676,817	)
(Decrease) increase in capital gains incentive fees payable		(75,000	)		112,300
(Decrease) increase in deferred revenue		(87,778	)		66,969
Total adjustments		6,887,789			(6,240,264	)
Net cash provided by (used in) operating activities		7,729,236			(4,840,883	)
Cash flows from financing activities:
Net (repayment of) proceeds from line of credit		(600,000	)		2,950,000
Payment of cash dividend		(3,030,772	)		(645,255	)
Net cash (used in) provided by financing activities		(3,630,772	)		2,304,745
Net increase (decrease) in cash		4,098,464			(2,536,138	)
Cash:
Beginning of period		834,805			3,295,321
End of period	$	4,933,269		$	759,183

See accompanying notes

RAND CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF PORTFOLIO INVESTMENTS

March 31, 2025

(Unaudited)


Company, Geographic Location, Business Description, (Industry) and Website	(a) Type of Investment	(b) Date Acquired	(c) Equity	Cost		(d)(f) Fair Value		Percent of Net Assets
Non-Control/Non-Affiliate Investments – 11.7% of net assets: (g) (j)
Caitec, Inc. (e)(l)(p) Halethorpe, MD. Pet product manufacturer and distributor. (Consumer Goods) www.caitec.com	$1,750,000 Subordinated Secured Promissory Note modified to 14% PIK through June 30, 2026, thereafter 12% (+2% PIK), due June 1, 2026.	11/6/20	4%		2,316,683		2,316,683	7.1%
	36,261 Series A Preferred.	12/28/23			36,261		—
	150 Class A Units.	11/6/20			150,000		—
	$1,750,000 Subordinated Secured Promissory Note modified to 14% PIK through June 30, 2026, thereafter 12% (+2% PIK), due June 1, 2026.	11/6/20			2,316,683		2,316,683
	150 Class A Units.	11/6/20			150,000		—
	36,261 Series A Preferred.	12/28/23			36,261		—
	Total Caitec				5,005,888		4,633,366
GoNoodle, Inc. (l)(p) Nashville, TN. Student engagement education	$1,500,000 Secured Note at 12% (1% PIK) due September 30, 2025.	11/1/19	<1%		1,443,853		1,443,853	2.2%
software providing core aligned physical	Warrant for 21,948 Series D Preferred.	11/1/19			38		38
activity breaks. (Software)	Total GoNoodle				1,443,891		1,443,891
www.gonoodle.com
Lumious (Tech 2000, Inc.) (p) Herndon, VA. Develops and delivers IT	$850,000 Replacement Term Note at 14% due December 1, 2025.	11/16/18	0%		789,944		789,944	1.2%
training. (Software)
www.t2000inc.com
OnCore Golf Technology, Inc. (e)(p) Buffalo, NY. Patented and proprietary golf balls utilizing technology and innovation. (Consumer Product) www.oncoregolf.com	300,483 Preferred AA.	11/30/18	3%		752,712		100,000	0.2%
Open Exchange, Inc. (e)(p)	397,899 Series C Preferred.	11/13/13	3%		1,193,697		700,000	1.1%
Lincoln, MA. Online presentation and	397,899 Common.	10/22/19			208,243		—
training software. (Software)	Total Open Exchange				1,401,940		700,000
www.openexc.com
PostProcess Technologies, Inc. (e)(p) Buffalo, NY. Provides innovative solutions for the post-processing of additive manufactured 3D parts. (Manufacturing) www.postprocess.com	137,054 Series A Preferred.	11/1/19	<1%		348,875		—	0.0%
Subtotal Non-Control/Non-Affiliate Investments				$	9,743,250	$	7,667,201
Affiliate Investments – 80.4% of net assets (g) (k)
Applied Image, Inc. (p) Rochester, NY. Global supplier of precision	$1,750,000 Term Note at 10%, due February 1, 2029.	12/31/21	12%		1,750,000		1,750,000	2.7%
imaged optical components and calibration	Warrant for 1,167 shares.	12/31/21			—		—
standards for a wide range of industries and	Total Applied Image				1,750,000		1,750,000
applications. (Manufacturing)
www.appliedimage.com
Autotality (formerly Filterworks Acquisition USA, LLC) (l)(m)(p) Deerfield Beach, FL. Provides spray booth equipment, frame repair machines and paint	$2,283,702 Amended Term Note at 6% (+8% PIK) through March 31, 2025, thereafter 12% (+2% PIK), due March 31, 2026.	11/18/19	8%		2,987,221		2,987,221	4.6%
booth filter services for collision shops.	626.2 shares Class A-1 Units.	6/3/22			626,243		—
(Automotive)	417.7 shares Class A-0 Units.	9/30/22			139,232		—
www.autotality.com	Total Autotality				3,752,696		2,987,221

See accompanying notes


Company, Geographic Location, Business Description, (Industry) and Website	(a) Type of Investment	(b) Date Acquired	(c) Equity	Cost		(d)(f) Fair Value		Percent of Net Assets
BMP Food Service Supply Holdco, LLC (e)(l)(m)(p) Salt Lake City, UT. Provides design, distribution, and installation services for commercial kitchen renovations and new builds. (Professional and Business Services) www.foodservicesupply.com	$7,035,000 Second Amended and Restated Term Note: $4,820,000 in principal amount at 12% PIK through December 31, 2025, thereafter 12%, and $2,215,000 in principal amount at 16% PIK through December 31, 2025, thereafter 16%, due November 22, 2027.	11/22/22	15%		6,750,796		6,750,796	10.7%
	15.4% Preferred Interest.	11/22/22			497,619		250,000
	Total BMP Food Service Supply				7,248,415		7,000,796

BMP Swanson Holdco, LLC (m)(p) Plano, TX. Designs, installs, and maintains	$1,600,000 Term Note at 12% due May 31, 2028.	3/4/21	9%		1,700,115		1,700,115	3.8%
a variety of fire protection systems. (Professional and Business Services)	Preferred Membership Interest for 9.24%.	3/4/21			233,333		750,000
www.swansonfire.com	Total BMP Swanson				1,933,448		2,450,115
Carolina Skiff LLC (e)(m)(p) Waycross, GA. Manufacturer of ocean	6.0825% Class A Common Membership Interest.	1/30/04	7%		15,000		1,208,000	1.8%
fishing and pleasure boats. (Manufacturing) www.carolinaskiff.com
FCM Industries Holdco LLC (l)(p) Jacksonville, FL. Commercial mulch	$3,380,000 Term Note at 13% due July 31, 2028.	7/31/23	12%		3,380,000		3,380,000	5.2%
installation company that serves a range of end markets.	$420,000 Convertible Note at 10% PIK, due July 31, 2033.	7/31/23			497,059		12,222
(Professional and Business Services)	Total FCM Industries				3,877,059		3,392,222
www.firstcoastmulch.com
Highland All About People Holdings, Inc. (l)(p)	$3,000,000 Term Note at 12% (+4% PIK) due August 7, 2028.	8/7/23	12%		3,206,842		3,206,842	5.8%
Phoenix, AZ. Full-service staffing and	1,000,000 Class A Units.	8/7/23			1,000,000		600,000
executive search firm with a focus on the	Total Highland All About People				4,206,842		3,806,842
healthcare industry. (Professional and Business Services) www.allaboutpeople.net
Inter-National Electronic Alloys LLC d/b/a EFINEA (m)(p)	$3,288,235 Term Note at 12% due April 4, 2028.	4/4/23	6%		3,372,069		3,372,069	7.2%
Oakland, NJ. Stocking distributor of	75.3 Class B Preferred Units.	4/4/23			1,011,765		1,300,000
controlled expansion alloys, electronic grade	Total EFINEA				4,383,834		4,672,069
nickels, refractory grade metals and alloys, and soft magnetic alloys. (Distribution) www.nealloys.com
Mobile RN Holdings LLC d/b/a Mobile IV Nurses (l)(m)(p)	$2,500,000 Term Note at 14% (+1% PIK) due October 2, 2029.	10/2/24	6%		2,512,585		2,512,585	4.4%
Phoenix, AZ. IV hydration therapy service	6,375 Class A Common Units.	10/2/24			375,000		375,000
provider. (Health and Wellness)	Total Mobile IV Nurses				2,887,585		2,887,585
www.mobileivnurses.com
Mountain Regional Equipment Solutions (e)(l)(m)(p) Salt Lake City, UT. Provider of maintenance,	$3,000,000 Term Note at 14% PIK through June 30, 2025, thereafter 14%, due January 16, 2029.	1/16/24	7%		3,076,575		2,624,575	4.0%
safety, fluid transfer, and custom fabrication	37,991 Common Units.	1/16/24			204,545		—
products. (Distribution)	Warrant for 4% Membership Interest.	1/16/24			60,000		—
www.mountainregionaleq.com	Total Mountain Regional Equipment Solutions				3,341,120		2,624,575
Seybert’s Billiards Corporation d/b/a The Rack Group (l)(p) Coldwater, MI. Billiard supplies.	$6,099,131 Third Amended and Restated Term Note at 12% (+2% PIK) due January 19, 2026.	11/22/21	8%		6,190,840		6,190,840	12.6%
(Consumer Product)	Warrant for 4% Membership Interest.	1/19/21			25,000		50,000
www.seyberts.com	$1,435,435 Term Note at 12% (+2% PIK) due January 19, 2026.	1/19/21			1,519,897		1,519,897
	Warrant for 4% Membership Interest.	1/19/21			25,000		50,000
	5.82 Common shares.	10/24/22			194,000		400,000
	Total Seybert’s				7,954,737		8,210,737

See accompanying notes


Company, Geographic Location, Business Description, (Industry) and Website	(a) Type of Investment	(b) Date Acquired	(c) Equity	Cost		(d)(f) Fair Value		Percent of Net Assets
Tilson Technology Management, Inc. (p)	*120,000 Series B Preferred.	1/20/15	8%		600,000		4,560,000	17.6%
Portland, ME. Provides network deployment	*21,391 Series C Preferred.	9/28/16			200,000		813,000
construction and information system services	*70,176 Series D Preferred.	9/29/17			800,000		2,666,000
management for cellular, fiber optic and	*15,385 Series E Preferred.	3/15/19			500,012		584,000
wireless systems providers. Its affiliated	23,077 Series F Preferred.	6/15/20			750,003		877,000
entity, SQF, LLC is a CLEC supporting	211,567 A-1 Units of SQF Holdco LLC.	3/15/19			—		1,000,000
small cell 5G deployment. (Professional and Business Services)	250 Class D-1 Units of SQF Holdco LLC.	2/16/23			250,000		1,000,000
www.tilsontech.com	Total Tilson				3,100,015		11,500,000
	*2.5% dividend payable quarterly.
Subtotal Affiliate Investments				$	44,450,751	$	52,490,162
Control Investments - 3.1% of net assets (g) (o)
ITA Acquisition, LLC (e)(l)(m)(p) Ormond Beach, FL. Blind and shade manufacturing. (Manufacturing) www.itawindowfashions.com	$2,672,808 Fifth Amended and Restated Term Note at 14% PIK through March 31, 2026, thereafter 12% (+2% PIK), due June 21, 2026.	6/22/21	37%		3,619,220		1,415,814	3.1%
	$1,500,000 Term Note at 14% PIK through March 31, 2026, thereafter 12% (+2% PIK), due June 21, 2026.	6/22/21			1,820,910		584,186
	1,124 Class A Preferred Units and 1,924 Class B Common Units.	6/22/21			1,123,810		—
	Total ITA				6,563,940		2,000,000
Subtotal Control Investments				$	6,563,940	$	2,000,000
TOTAL INVESTMENTS – 95.2%				$	60,757,941	$	62,157,363
OTHER ASSETS IN EXCESS OF LIABILITIES - 4.8%							3,153,890
NET ASSETS – 100%						$	65,311,253

See accompanying notes

Notes to the Consolidated Schedule of Portfolio Investments

(a)

At March 31, 2025, restricted securities represented 100% of the fair value of the investment portfolio. Restricted securities are subject to one or more restrictions on resale and are not freely marketable. Type of investment for equity position is in the form of shares unless otherwise noted as units or interests, i.e., preferred shares, common shares.

(b)

The Date Acquired column indicates the date on which the Corporation first acquired an investment.

(c)

Each equity percentage estimates the Corporation’s ownership interest in the applicable portfolio investment. The estimated ownership is calculated based on the percent of outstanding voting securities held by the Corporation or the potential percentage of voting securities held by the Corporation upon exercise of warrants or conversion of debentures, or other available data. If applicable, the symbol “<1%” indicates that the Corporation holds an equity interest of less than one percent.

(d)

The Corporation’s investments are carried at fair value in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820 “Fair Value Measurements and Disclosures,” which defines fair value and establishes guidelines for measuring fair value. At March 31, 2025, ASC 820 designates 100% of the Corporation’s investments as “Level 3” assets. Under the valuation policy of the Corporation, unrestricted publicly traded securities are valued at the closing price for these securities on the last trading day of the reporting period. Restricted securities are subject to restrictions on resale and are valued at fair value as determined in good faith by our external investment advisor Rand Capital Management, LLC (“RCM”) and approved by the Board of Directors. Fair value is considered to be the amount that the Corporation may reasonably expect to receive for portfolio securities when sold on the valuation date. Valuations as of any particular date, however, are not necessarily indicative of amounts which may ultimately be realized as a result of future sales or other dispositions of securities and these favorable or unfavorable differences could be material. Among the factors considered in determining the fair value of restricted securities are the financial condition and operating results, projected operations, and other analytical data relating to the investment. Also considered are the market prices for unrestricted securities of the same class (if applicable) and other matters which may have an impact on the value of the portfolio company (see Note 3. “Investments” to the Consolidated Financial Statements).

(e)

These investments are non-income producing. All other investments are income producing. Non-income producing investments have not generated cash payments of interest or dividends including LLC tax-related distributions within the last twelve months or are not expected to do so going forward. If a debt or a preferred equity investment fails to make its most recent payment, then the investment will also be classified as non-income producing.

(f)

As of March 31, 2025, the total cost of investment securities was approximately $60.8 million. Net unrealized appreciation was approximately $1.4 million, which was comprised of $10.7 million of unrealized appreciation of investment securities and ($9.3) million of unrealized depreciation of investment securities. At March 31, 2025, the aggregate gross unrealized gain for federal income tax purposes was $8.7 million and the aggregate gross unrealized loss for federal income tax purposes was ($7.3) million. The net unrealized gain for federal income tax purposes was $1.4 million based on a tax cost of $61.1 million.

(g)

All of the Corporation’s portfolio assets are pledged as collateral for purposes of securing the Corporation’s senior secured revolving credit facility pursuant to a general security agreement, dated June 27, 2022, between the Corporation, the subsidiaries listed therein, and the Lender (as defined herein).

(h)

Reduction in cost and fair value from previously reported balances reflects current principal repayment.

(i)

Represents interest due (amounts over $100,000) from investments included as interest receivable on the Corporation’s Consolidated Statements of Financial Position. None at March 31, 2025.

(j)

Non-Control/Non-Affiliate Investments are investments that are neither Control Investments nor Affiliate Investments.

(k)

Affiliate Investments are defined by the Investment Company Act of 1940, as amended (“1940 Act”), as those Non-Control investments in companies in which between 5% and 25% of the voting securities of such company are owned by the Corporation.

(l)

Payment in kind (PIK) represents earned interest that is added to the cost basis of the investment and due at maturity. The amount of PIK earned is included in the interest rate detailed in the “Type of Investment” column, unless it has been noted with a (+), in which case the PIK is in addition to the face amount of interest due on the security.

(m)

Equity holdings are held in a wholly owned (100%) “blocker corporation” subsidiary of Rand Capital Corporation for federal income tax and Regulated Investment Company (RIC) compliance purposes.

(n)

Indicates assets that the Corporation believes do not represent “qualifying assets” under Section 55(a) of the 1940 Act. Qualifying assets must represent at least 70% of the Corporation’s total assets at the time of acquisition of any additional non-qualifying assets. The Corporation had no investments in non-qualifying assets as of March 31, 2025.

(o)

Control Investments are defined by the 1940 Act as investments in companies in which more than 25% of the voting securities of such companies are owned by the Corporation or where the Corporation maintains greater than 50% representation on its board of directors or other similar governing body.

(p)

Investments classified as Level 3 for purposes of the fair value determination by RCM and approved by the Board of Directors.

Investments in and Advances to Affiliates


Company	Type of Investment	January 1, 2025, Fair Value		Net Change in Unrealized Appreciation (Depreciation)			Gross Additions (1)		Gross Reductions (2)		March 31, 2025, Fair Value		Net Realized Gains (Losses)		Interest/ Dividend/ Fee Income (3)
Control Investments:
ITA Acquisition, LLC	$2,672,808 Fifth Amended and Restated Term Note at 14% PIK through March 31, 2026, thereafter 12% (+2% PIK), due June 21, 2026.	$	1,642,968	$	(602,154	)	$	375,000	$	—	$	1,415,814	$	—	$	2,516
	$1,500,000 Term Note at 14% PIK through March 31, 2026, thereafter 12% (+2% PIK), due June 21, 2026.		857,032		(272,846	)		—		—		584,186		—		2,000
	1,124 Class A Preferred Units and 1,924 Class B Common Units.		—		—			—		—		—		—		—
	Total ITA		2,500,000		(875,000	)		375,000		—		2,000,000		—		4,516
	Total Control Investments	$	2,500,000	$	(875,000	)	$	375,000	$	—	$	2,000,000	$	—	$	4,516
Affiliate Investments:
Applied Image, Inc.	$1,750,000 Term Note at 10%, due February 1, 2029.	$	1,750,000	$	—		$	—	$	—	$	1,750,000	$	—	$	45,276
	Warrant for 1,167 shares.		—		—			—		—		—		—		—
	Total Applied Image		1,750,000		—			—		—		1,750,000		—		45,276
Autotality (formerly Filterworks Acquisition USA, LLC)	$2,283,702 Amended Term Note at 6% (+8% PIK) through March 31, 2025, thereafter 12% (+2% PIK), due March 31, 2026.		2,928,648		—			58,573		—		2,987,221		—		102,503
	626.2 shares Class A-1 Units.		—		—			—		—		—		—		—
	417.7 shares Class A-0 Units.		—		—			—		—		—		—		—
	Total Autotality		2,928,648		—			58,573		—		2,987,221		—		102,503
BMP Food Service Supply Holdco, LLC	$7,035,000 Second Amended and Restated Term Note: $4,820,000 in principal amount at 12% PIK through December 31, 2025, thereafter 12%, and $2,215,000 in principal amount at 16% PIK through December 31, 2025, thereafter 16%, due November 22, 2027.		6,538,026		—			212,770		—		6,750,796		—		220,095
	15.4% Preferred Interest.		497,619		(247,619	)		—		—		250,000		—		—
	Total FSS		7,035,645		(247,619	)		212,770		—		7,000,796		—		220,095
BMP Swanson Holdco, LLC	$1,600,000 Term Note at 12% due May 31, 2028.		1,700,115		—			—		—		1,700,115		—		52,670
	Preferred Membership Interest for 9.24%.		750,000		—			—		—		750,000		—		—
	Total BMP Swanson		2,450,115		—			—		—		2,450,115		—		52,670
Carolina Skiff LLC	6.0825% Class A Common Membership Interest.		1,208,000		—			—		—		1,208,000		—		—
FCM Industries Holdco LLC	$3,380,000 Term Note at 13% due July 31, 2028.		3,380,000		—			—		—		3,380,000		—		113,650
	$420,000 Convertible Note at 10% PIK, due July 31, 2033.		—		—			12,222		—		12,222		—		12,222
	Total FCM		3,380,000		—			12,222		—		3,392,222		—		125,872
Highland All About People Holdings, Inc.	$3,000,000 Term Note at 12% (+4% PIK) due August 7, 2028.		3,175,091		—			31,751		—		3,206,842		—		130,004
	1,000,000 Class A Units.		600,000		—			—		—		600,000		—		—
	Total All About People		3,775,091		—			31,751		—		3,806,842		—		130,004
Inter-National Electronic Alloys	$3,288,235 Term Note at 12% due April 4, 2028.		3,372,069		—			—		—		3,372,069		—		104,450
LLC	75.3 Class B Preferred Units.		1,011,765		288,235			—		—		1,300,000		—		—
	Total EFINEA		4,383,834		288,235			—		—		4,672,069		—		104,450
Microcision LLC	Membership Interest Purchase Warrant for 5%		—		—			—		—		—		55,357		—

See accompanying notes


Company	Type of Investment	January 1, 2025, Fair Value		Net Change in Unrealized Appreciation (Depreciation)			Gross Additions (1)		Gross Reductions (2)			March 31, 2025, Fair Value		Net Realized Gains (Losses)		Interest/ Dividend/ Fee Income (3)
Mobile RN Holdings LLC	$2,500,000 Term Note at 14% (+1% PIK) due October 2, 2029.		2,506,319		—			6,266		—			2,512,585		—		96,862
	6,375 Class A Common Units.		375,000		—			—		—			375,000		—		—
	Total Mobile IV Nurses		2,881,319		—			6,266		—			2,887,585		—		96,862
Mountain Regional Equipment Solutions	$3,000,000 Term Note at 14% PIK through June 30, 2025, thereafter 14%, due January 16, 2029.		—		—			2,624,575		—			2,624,575		—		127,575
	37,991 Common Units.
	Warrant for 4% Membership Interest.		—		—			—		—			—		—		—
	Total MRES		—		—			2,624,575		—			2,624,575		—		127,575
Pressure Pro, Inc.	$3,000,000 Term Note at 12% (+3% PIK) due January, 19, 2028.		1,702,705		—			22,445		(1,725,150	)		—		—		121,261
	Warrant for 10% Membership Interest.		750,000		(720,000	)		—		(30,000	)		—		870,000		—
	Total Pressure Pro		2,452,705		(720,000	)		22,445		(1,755,150	)		—		870,000		121,261
Seybert’s Billiards Corporation	$6,099,131 Third Amended and Restated Term Note at 12% (+2% PIK) due January 19, 2026.		6,167,723		—			23,117		—			6,190,840		—		231,819
	Warrant for 4% Membership Interest.		25,000		25,000			—		—			50,000		—		—
	$1,435,435 Term Note at 12% (+2% PIK) due January 19, 2026.		1,511,064		—			8,833		—			1,519,897		—		56,227
	Warrant for 4% Membership Interest.		25,000		25,000			—		—			50,000		—		—
	5.82 Common shares.		194,000		206,000			—		—			400,000		—		—
	Total Seybert’s		7,922,787		256,000			31,950		—			8,210,737		—		288,046
Tilson Technology	120,000 Series B Preferred.		4,560,000		—			—		—			4,560,000		—		13,125
Management, Inc.	21,391 Series C Preferred.		813,000		—			—		—			813,000		—		—
	70,176 Series D Preferred.		2,666,000		—			—		—			2,666,000		—		—
	15,385 Series E Preferred.		584,000		—			—		—			584,000		—		—
	23,077 Series F Preferred.		877,000		—			—		—			877,000		—		—
	211,567 A-1 Units of SQF Holdco LLC.		1,000,000		—			—		—			1,000,000		—		—
	250 Class D-1 Units of SQF Holdco LLC.		1,000,000		—			—		—			1,000,000		—		—
	Total Tilson		11,500,000		—			—		—			11,500,000		—		13,125
	Total Affiliate Investments	$	51,668,144	$	(423,384	)	$	3,000,552	$	(1,755,150	)	$	52,490,162	$	925,357	$	1,427,739
	Total Control and Affiliate Investments	$	54,168,144	$	(1,298,384	)	$	3,375,552	$	(1,755,150	)	$	54,490,162	$	925,357	$	1,432,255

This schedule should be read in conjunction with the Corporation’s Consolidated Financial Statements, including the Notes to the Consolidated Financial Statements and the Consolidated Schedule of Portfolio Investments.

(1)

Gross additions include increases in the cost basis of investments resulting from new portfolio investments, follow on investments, capitalized interest and the accretion of discounts. Gross additions also include the movement of an existing portfolio company into this category and out of another category.

(2)

Gross reductions include decreases in the cost basis of investments resulting from principal repayments, sales, note conversions, the exchange of existing securities for new securities and the movement of an existing portfolio company out of this category and into another category.

(3)

Represents the total amount of interest, fees or dividends credited to income for the portion of the period an investment was included in “Control or Affiliate” categories, respectively.

See accompanying notes


Industry Classification	Percentage of Total Investments (at fair value) as of March 31, 2025
Professional and Business Services		45.3	%
Consumer Product		20.8
Distribution		11.7
Manufacturing		8.0
Automotive		4.8
Software		4.7
Health and Wellness		4.7
Total Investments		100	%

See accompanying notes

RAND CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF PORTFOLIO INVESTMENTS

December 31, 2024


Company, Geographic Location, Business Description, (Industry) and Website	(a) Type of Investment	(b) Date Acquired	(c) Equity	Cost		(d)(f) Fair Value		Percent of Net Assets
Non-Control/Non-Affiliate Investments – 25.5% of net assets: (g) (j)
Caitec, Inc. (e)(l)(p) Halethorpe, MD. Pet product manufacturer and distributor. (Consumer Goods) www.caitec.com	$1,750,000 Subordinated Secured Promissory Note modified to 14% PIK through December 31, 2024, thereafter 12% (+2% PIK), due June 1, 2026.	11/6/20	4%		2,237,456		2,237,456	6.8%
	36,261 Series A Preferred.	12/28/23			36,261		—
	150 Class A Units.	11/6/20			150,000		—
	$1,750,000 Subordinated Secured Promissory Note modified to 14% PIK through December 31, 2024, thereafter 12% (+2% PIK), due June 1, 2026.	11/6/20			2,237,456		2,237,456
	150 Class A Units.	11/6/20			150,000		—
	36,261 Series A Preferred.	12/28/23			36,261		—
	Total Caitec				4,847,434		4,474,912
GoNoodle, Inc. (l)(p) Nashville, TN. Student engagement education	$1,500,000 Secured Note at 12% (1% PIK) due September 30, 2025.	11/1/19	<1%		1,440,252		1,440,252	2.2%
software providing core aligned physical	Warrant for 47,324 Series C Preferred.	3/1/15			25		25
activity breaks. (Software)	Warrant for 21,948 Series D Preferred.	11/1/19			38		38
www.gonoodle.com	Total GoNoodle				1,440,315		1,440,315
HDI Acquisition LLC d/b/a Hilton Displays (l)(p) Greenville, SC. Manufacturing, installation	$1,245,119 Term Loan at 12% (+2% PIK) due June 30, 2025.	11/8/19	0%		1,071,824		1,071,824	1.6%
and maintenance of signage and brands. (Manufacturing)
www.hiltondisplays.com
Lumious (Tech 2000, Inc.) (p) Herndon, VA. Develops and delivers IT	$850,000 Replacement Term Note at 14% due December 1, 2025.	11/16/18	0%		789,944		789,944	1.2%
training. (Software)
www.t2000inc.com
Mattison Avenue Holdings LLC (p) Dallas, TX. Provider of upscale salon spaces for lease. (Professional and Business Services) www.mattisonsalonsuites.com	$5,500,000 Term Note at 14% due June 25, 2027.	3/28/24	0%		5,572,902		5,572,902	8.5%
Mountain Regional Equipment Solutions (m)(p)	$3,000,000 Term Note at 14% due January 16, 2029.	1/16/24	4%		2,952,000		2,500,000	3.8%
Salt Lake City, UT. Provider of maintenance,	37,991 Common Units.	1/16/24			204,545		—
safety, fluid transfer, and custom fabrication	Warrant for 1% Membership Interest.	1/16/24			60,000		—
products. (Distribution) www.mountainregionaleq.com	Total Mountain Regional Equipment Solutions				3,216,545		2,500,000
OnCore Golf Technology, Inc. (e)(p) Buffalo, NY. Patented and proprietary golf balls utilizing technology and innovation. (Consumer Product) www.oncoregolf.com	300,483 Preferred AA.	11/30/18	3%		752,712		100,000	0.2%
Open Exchange, Inc. (e)(p)	397,899 Series C Preferred.	11/13/13	3%		1,193,697		700,000	1.1%
Lincoln, MA. Online presentation and	397,899 Common.	10/22/19			208,243		—
training software. (Software)	Total Open Exchange				1,401,940		700,000
www.openexc.com

See accompanying notes


Company, Geographic Location, Business Description, (Industry) and Website	(a) Type of Investment	(b) Date Acquired	(c) Equity	Cost		(d)(f) Fair Value		Percent of Net Assets
PostProcess Technologies, Inc. (e)(p) Buffalo, NY. Provides innovative solutions for the post-processing of additive manufactured 3D parts. (Manufacturing) www.postprocess.com	360,002 Series A1 Preferred.	11/1/19	<1%		348,875		—	0.0%
Subtotal Non-Control/Non-Affiliate Investments				$	19,442,491	$	16,649,897
Affiliate Investments – 79.1% of net assets (g) (k)
Applied Image, Inc. (l)(p) Rochester, NY. Global supplier of precision imaged optical components and calibration	$1,750,000 Term Note at 10% (+2% PIK) through February 1, 2025, thereafter 10%, due February 1, 2029.	12/31/21	12%		1,750,000		1,750,000	2.7%
standards for a wide range of industries and	Warrant for 1,167 shares.	12/31/21			—		—
applications. (Manufacturing)	Total Applied Image				1,750,000		1,750,000
www.appliedimage.com
BMP Food Service Supply Holdco, LLC (h)(l)(m)(p) Salt Lake City, UT. Provides design, distribution, and installation services for	$7,035,000 Second Amended and Restated Term Note; $4,820,000 at 12% and $2,215,000 at 13% (+3% PIK), due November 22, 2027.	11/22/22	15%		6,538,026		6,538,026	10.8%
commercial kitchen renovations and new	15.4% Preferred Interest.	11/22/22			497,619		497,619
builds. (Professional and Business Services)	Total BMP Food Service Supply				7,035,645		7,035,645
www.foodservicesupply.com
BMP Swanson Holdco, LLC (m)(p) Plano, TX. Designs, installs, and maintains	$1,600,000 Term Note at 12% due May 31, 2028.	3/4/21	9%		1,700,115		1,700,115	3.8%
a variety of fire protection systems. (Professional and Business Services)	Preferred Membership Interest for 9.24%.	3/4/21			233,333		750,000
www.swansonfire.com	Total BMP Swanson				1,933,448		2,450,115
Carolina Skiff LLC (e)(m)(p) Waycross, GA. Manufacturer of ocean	6.0825% Class A Common Membership Interest.	1/30/04	7%		15,000		1,208,000	1.8%
fishing and pleasure boats. (Manufacturing) www.carolinaskiff.com
FCM Industries Holdco LLC (l)(p) Jacksonville, FL. Commercial mulch	$3,380,000 Term Note at 13% due July 31, 2028.	7/31/23	12%		3,380,000		3,380,000	5.2%
installation company that serves a range of end markets.	$420,000 Convertible Note at 10% PIK, due July 31, 2033.	7/31/23			484,837		—
(Professional and Business Services)	Total FCM Industries				3,864,837		3,380,000
www.firstcoastmulch.com
Filterworks Acquisition USA, LLC d/b/a Autotality (h)(l)(m)(p) Deerfield Beach, FL. Provides spray booth equipment, frame repair machines and paint	$2,283,702 Amended Term Note at 6% (+8% PIK) through March 31, 2025, thereafter 12% (+2% PIK), due March 31, 2026.	11/18/19	8%		2,928,648		2,928,648	4.5%
booth filter services for collision shops.	626.2 shares Class A-1 Units.	6/3/22			626,243		—
(Automotive)	417.7 shares Class A-0 Units.	9/30/22			139,232		—
www.autotality.com	Total Filterworks				3,694,123		2,928,648
Highland All About People Holdings, Inc. (l)(p)	$3,000,000 Term Note at 12% (+4% PIK) due August 7, 2028.	8/7/23	12%		3,175,091		3,175,091	5.8%
Phoenix, AZ. Full-service staffing and	1,000,000 Class A Units.	8/7/23			1,000,000		600,000
executive search firm with a focus on the	Total Highland All About People				4,175,091		3,775,091
healthcare industry. (Professional and Business Services) www.allaboutpeople.net
Inter-National Electronic Alloys LLC d/b/a EFINEA (l)(m)(p)	$3,288,235 Term Note at 12% (+2% PIK) due April 4, 2028.	4/4/23	6%		3,372,069		3,372,069	6.7%
Oakland, NJ. Stocking distributor of	75.3 Class B Preferred Units.	4/4/23			1,011,765		1,011,765
controlled expansion alloys, electronic grade	Total EFINEA				4,383,834		4,383,834
nickels, refractory grade metals and alloys, and soft magnetic alloys. (Distribution) www.nealloys.com

See accompanying notes


Company, Geographic Location, Business Description, (Industry) and Website	(a) Type of Investment	(b) Date Acquired	(c) Equity	Cost		(d)(f) Fair Value			Percent of Net Assets
Mobile RN Holdings LLC d/b/a Mobile IV Nurses (l)(m)(p)	$2,500,000 Term Note at 14% (+1% PIK) due October 2, 2029.	10/2/24	6%		2,506,319		2,506,319		4.4%
Phoenix, AZ. IV hydration therapy service	6,375 Class A Common Units.	10/2/24			375,000		375,000
provider. (Health and Wellness)	Total Mobile IV Nurses				2,881,319		2,881,319
www.mobileivnurses.com
Pressure Pro, Inc. (h)(l)(p) Harrisonville, MO. A provider of branded	$3,000,000 Term Note at 12% (+3% PIK) due January 19, 2028.	1/19/23	10%		1,702,705		1,702,705		3.8%
tire pressure monitoring systems consisting	Warrant for 10% Membership Interest.	1/19/23			30,000		750,000
of a suite of proprietary hardware	Total Pressure Pro				1,732,705		2,452,705
and software. (Manufacturing)
www.pressurepro.us
Seybert’s Billiards Corporation d/b/a The Rack Group (l)(p) Coldwater, MI. Billiard supplies.	$6,099,131 Third Amended and Restated Term Note at 12% (+2% PIK) due January 19, 2026.	11/22/21	8%		6,167,723		6,167,723		12.1%
(Consumer Product)	Warrant for 4% Membership Interest.	1/19/21			25,000		25,000
www.seyberts.com	$1,435,435 Term Note at 12% (+2% PIK) due January 19, 2026.	1/19/21			1,511,064		1,511,064
	Warrant for 4% Membership Interest.	1/19/21			25,000		25,000
	5.82 Common shares.	10/24/22			194,000		194,000
	Total Seybert’s				7,922,787		7,922,787
Tilson Technology Management, Inc. (p)	*120,000 Series B Preferred.	1/20/15	8%		600,000		4,560,000		17.6%
Portland, ME. Provides network deployment	*21,391 Series C Preferred.	9/28/16			200,000		813,000
construction and information system services	*70,176 Series D Preferred.	9/29/17			800,000		2,666,000
management for cellular, fiber optic and	*15,385 Series E Preferred.	3/15/19			500,012		584,000
wireless systems providers. Its affiliated	23,077 Series F Preferred.	6/15/20			750,003		877,000
entity, SQF, LLC is a CLEC supporting	211,567 A-1 Units of SQF Holdco LLC.	3/15/19			—		1,000,000
small cell 5G deployment. (Professional and Business Services)	250 Class D-1 Units of SQF Holdco LLC.	2/16/23			250,000		1,000,000
www.tilsontech.com	Total Tilson				3,100,015		11,500,000
	*2.5% dividend payable quarterly.
Subtotal Affiliate Investments				$	42,488,804	$	51,668,144
Control Investments - 3.8% of net assets (g) (o)
ITA Acquisition, LLC (l)(m)(p) Ormond Beach, FL. Blind and shade manufacturing. (Manufacturing) www.itawindowfashions.com	$2,297,808 Fourth Amended and Restated Term Note at 3% (+11% PIK) through December 31, 2024, thereafter 12% (+2% PIK), due June 21, 2026.	6/22/21	37%		3,244,220		1,642,968		3.8%
	$1,500,000 Term Note at 3% (+11% PIK) through December 31, 2024, thereafter 12% (+2% PIK), due June 21, 2026.	6/22/21			1,820,910		857,032
	1,124 Class A Preferred Units and 1,924 Class B Common Units.	6/22/21			1,123,810		—
	Total ITA				6,188,940		2,500,000
Subtotal Control Investments				$	6,188,940	$	2,500,000
TOTAL INVESTMENTS – 108.4%				$	68,120,235	$	70,818,041
LIABILITIES IN EXCESS OF OTHER ASSETS - (8.4%)							(5,485,521	)
NET ASSETS – 100%						$	65,332,520

See accompanying notes

Notes to the Consolidated Schedule of Portfolio Investments

(a)

At December 31, 2024, restricted securities represented 100% of the fair value of the investment portfolio. Restricted securities are subject to one or more restrictions on resale and are not freely marketable. Type of investment for equity position is in the form of shares unless otherwise noted as units or interests, i.e., preferred shares, common shares.

(b)

The Date Acquired column indicates the date on which the Corporation first acquired an investment.

(c)

(d)

The Corporation’s investments are carried at fair value in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820 “Fair Value Measurements and Disclosures,” which defines fair value and establishes guidelines for measuring fair value. At December 31, 2024, ASC 820 designates 100% of the Corporation’s investments as “Level 3” assets. Under the valuation policy of the Corporation, unrestricted publicly traded securities are valued at the closing price for these securities on the last trading day of the reporting period. Restricted securities are subject to restrictions on resale and are valued at fair value as determined in good faith by our external investment advisor Rand Capital Management, LLC (“RCM”) and approved by the Board of Directors. Fair value is considered to be the amount that the Corporation may reasonably expect to receive for portfolio securities when sold on the valuation date. Valuations as of any particular date, however, are not necessarily indicative of amounts which may ultimately be realized as a result of future sales or other dispositions of securities and these favorable or unfavorable differences could be material. Among the factors considered in determining the fair value of restricted securities are the financial condition and operating results, projected operations, and other analytical data relating to the investment. Also considered are the market prices for unrestricted securities of the same class (if applicable) and other matters which may have an impact on the value of the portfolio company (see Note 3. “Investments” to the Consolidated Financial Statements).

(e)

(f)

As of December 31, 2024, the total cost of investment securities was approximately $68.1 million. Net unrealized appreciation was approximately $2.7 million, which was comprised of $10.8 million of unrealized appreciation of investment securities and ($8.1) million of unrealized depreciation of investment securities. At December 31, 2024, the aggregate gross unrealized gain for federal income tax purposes was approximately $10.8 million and the aggregate gross unrealized loss for federal income tax purposes was ($7.0) million. The net unrealized gain for federal income tax purposes was $3.8 million based on a tax cost of $65.9 million.

(g)

(h)

Reduction in cost and fair value from previously reported balances reflects current principal repayment.

(i)

Represents interest due (amounts over $100,000) from investments included as interest receivable on the Corporation’s Consolidated Statements of Financial Position. None at December 31, 2024.

(j)

Non-Control/Non-Affiliate Investments are investments that are neither Control Investments nor Affiliate Investments.

(k)

(l)

(m)

Equity holdings are held in a wholly owned (100%) “blocker corporation” subsidiary of Rand Capital Corporation for federal income tax and Regulated Investment Company (RIC) compliance purposes.

(n)

(o)

Control Investments are defined by the 1940 Act as investments in companies in which more than 25% of the voting securities are owned by the Corporation or where greater than 50% of the board representation is maintained.

(p)

Investments classified as Level 3 for purposes of the fair value determination by RCM and approved by the Board of Directors.

Investments in and Advances to Affiliates


Company	Type of Investment	January 1, 2024, Fair Value		Net Change in Unrealized Appreciation (Depreciation)			Gross Additions (1)		Gross Reductions (2)			December 31, 2024, Fair Value		Net Realized Gains (Losses)		Interest/ Dividend/ Fee Income (3)
Control Investments:
ITA Acquisition, LLC	$2,297,808 Fourth Amended and Restated Term Note at 3% (+11% PIK) through December 31, 2024, thereafter 12% (+2% PIK), due June 21, 2026.	$	2,496,708	$	(1,601,252	)	$	747,512	$	—		$	1,642,968	$	—	$	472,494
	$1,500,000 Term Note at 3% (+11% PIK) through December 31, 2024, thereafter 12% (+2% PIK), due June 21, 2026.		1,652,252		(963,878	)		168,658		—			857,032		—		279,343
	1,124 Class A Preferred Units and 1,924 Class B Common Units.		—		—			—		—			—		—		—
	Total ITA		4,148,960		(2,565,130	)		916,170		—			2,500,000		—		751,837
	Total Control Investments	$	4,148,960	$	(2,565,130	)	$	916,170	$	—		$	2,500,000	$	—	$	751,837
Affiliate Investments:
Applied Image, Inc.	$1,750,000 Term Note at 10% (+2% PIK) through February 1, 2025, thereafter 10%, due February 1, 2029.	$	1,750,000	$	—		$	—	$	—		$	1,750,000	$	—	$	219,605
	Warrant for 1,167 shares.		—		—			—		—			—		—		—
	Total Applied Image		1,750,000		—			—		—			1,750,000		—		219,605
BMP Food Service Supply Holdco, LLC	$7,035,000 Second Amended and Restated Term Note; $4,820,000 at 12% and $2,215,000 at 13% (+3% PIK), due November 22, 2027.		6,394,953		—			177,911		(34,838	)		6,538,026		—		892,470
	15.4% Preferred Interest.		1,000,000		(610,000	)		107,619		—			497,619		—		—
	Total FSS		7,394,953		(610,000	)		285,530		(34,838	)		7,035,645		—		892,470
BMP Swanson Holdco, LLC	$1,600,000 Term Note at 12% due May 31, 2028.		1,700,115		—			—		—			1,700,115		—		214,611
	Preferred Membership Interest for 9.24%.		500,000		250,000			—		—			750,000		—		—
	Total BMP Swanson		2,200,115		250,000			—		—			2,450,115		—		214,611
Carolina Skiff LLC	6.0825% Class A Common Membership Interest.		1,708,000		(500,000	)		—		—			1,208,000		—		—
DSD Operating, LLC	$3,063,276 Term Note at 12% (+2% PIK) due September 30, 2026.		—		—			—		—			—		—		—
	1,067 Class A Preferred shares.		—		—			—		—			—		23,699		—
	1,067 Class B Common shares.		—		—			—		—			—		—		—
	Total DSD		—		—			—		—			—		23,699		—
FCM Industries Holdco LLC	$3,380,000 Term Note at 13% due July 31, 2028.		3,380,000		—			—		—			3,380,000		—		473,513
	$420,000 Convertible Note at 10% PIK, due July 31, 2033.		438,156		(484,837	)		46,681		—			—		—		46,681
	Total FCM		3,818,156		(484,837	)		46,681		—			3,380,000		—		520,194
Filterworks Acquisition USA, LLC	$2,283,702 Amended Term Note at 6% (+8% PIK) through March 31, 2025, thereafter 12% (+2% PIK), due March 31, 2026.		2,880,946		—			253,952		(206,250	)		2,928,648		—		428,268
	626.2 shares Class A-1 Units.		256,994		(256,994	)		—		—			—		—		—
	417.7 shares Class A-0 Units.		139,232		(139,232	)		—		—			—		—		—
	Total Filterworks		3,277,172		(396,226	)		253,952		(206,250	)		2,928,648		—		428,268
Highland All About People Holdings, Inc.	$3,000,000 Term Note at 12% (+4% PIK) due August 7, 2028.		3,049,187		—			125,904		—			3,175,091		—		515,616
	1,000,000 Class A Units.		1,000,000		(400,000	)		—		—			600,000		—		—
	Total All About People		4,049,187		(400,000	)		125,904		—			3,775,091		—		515,616
Inter-National Electronic Alloys	$3,288,235 Term Note at 12% (+2% PIK) due April 4, 2028.		3,338,074		—			33,995		—			3,372,069		—		457,071
LLC	75.3 Class B Preferred Units.		1,011,765		—			—		—			1,011,765		—		—
	Total INEA		4,349,839		—			33,995		—			4,383,834		—		457,071

See accompanying notes


Company	Type of Investment	January 1, 2024, Fair Value		Net Change in Unrealized Appreciation (Depreciation)			Gross Additions (1)		Gross Reductions (2)			December 31, 2024, Fair Value		Net Realized Gains (Losses)			Interest/ Dividend/ Fee Income (3)
Knoa Software, Inc.	973,533 Series A-1 Convertible Preferred.		—		—			—		—			—		—			—
	1,876,922 Series B Preferred.		100,000		1,129,155			—		(1,229,155	)		—		(1,229,155	)		—
	Total Knoa		100,000		1,129,155			—		(1,229,155	)		—		(1,229,155	)		—
Mezmeriz, Inc.	1,554,565 Series Seed Preferred.		—		742,850			—		(742,850	)		—		(742,850	)		—
Mobile RN Holdings LLC	$2,500,000 Term Note at 14% (+1% PIK) due October 2, 2029.		—		—			2,506,319		—			2,506,319		—			97,667
	6,375 Class A Common Units.		—		—			375,000		—			375,000		—			—
	Total Mobile IV Nurses		—		—			2,881,319		—			2,881,319		—			97,667
Pressure Pro, Inc.	$3,000,000 Term Note at 12% (+3% PIK) due January 19, 2028.		3,063,436		—			66,721		(1,427,452	)		1,702,705		—			367,382
	Warrant for 10% Membership Interest.		30,000		720,000			—		—			750,000		—			50,000
	Total Pressure Pro		3,093,436		720,000			66,721		(1,427,452	)		2,452,705		—			417,382
SciAps, Inc.	187,500 Series A Preferred.		1,500,000		—			—		(1,500,000	)		—		3,705,106			—
	274,299 Series A1 Convertible Preferred.		504,710		—			—		(504,710	)		—		1,246,669			—
	117,371 Series B Convertible Preferred.		250,000		—			—		(250,000	)		—		617,518			—
	113,636 Series C Convertible Preferred.		175,000		—			—		(175,000	)		—		432,262			—
	369,698 Series C1 Convertible Preferred.		399,274		—			—		(399,274	)		—		986,235			—
	147,059 Series D Convertible Preferred.		250,000		—			—		(250,000	)		—		617,518			—
	Warrant to purchase Series D-1 Preferred.		45,000		—			—		(45,000	)		—		111,153			—
	$2,090,000 Second Amended and Restated Secured Subordinated Promissory Note at 12% due August 20, 2024.		2,090,000		—			—		(2,090,000	)		—		—			311,462
	Total SciAps		5,213,984		—			—		(5,213,984	)		—		7,716,461			311,462
Seybert’s Billiards Corporation	$6,099,131 Third Amended and Restated Term Note at 12% (+2% PIK) due January 19, 2026.		4,274,917		—			1,892,806		—			6,167,723		—			889,979
	Warrant for 4% Membership Interest.		25,000		—			—		—			25,000		—			—
	$1,435,435 Term Note at 12% (+2% PIK) due January 19, 2026.		1,475,613		—			35,451		—			1,511,064		—			225,732
	Warrant for 4% Membership Interest.		25,000		—			—		—			25,000		—			—
	5.82 Common shares.		194,000		—			—		—			194,000		—			—
	Total Seybert’s		5,994,530		—			1,928,257		—			7,922,787		—			1,115,711
Tilson Technology	120,000 Series B Preferred.		4,559,500		500			—		—			4,560,000		—			52,500
Management, Inc.	21,391 Series C Preferred.		812,800		200			—		—			813,000		—			—
	70,176 Series D Preferred.		2,666,400		(400	)		—		—			2,666,000		—			—
	15,385 Series E Preferred.		584,500		(500	)		—		—			584,000		—			—
	23,077 Series F Preferred.		876,800		200			—		—			877,000		—			—
	211,567 A-1 Units of SQF Holdco LLC.		800,000		200,000			—		—			1,000,000		302,677			—
	250 Class D-1 Units of SQF Holdco LLC.		250,000		750,000			—		—			1,000,000		94,587			—
	Total Tilson		10,550,000		950,000			—		—			11,500,000		397,264			52,500
	Total Affiliate Investments	$	53,499,372	$	1,400,942		$	5,622,359	$	(8,854,529	)	$	51,668,144	$	6,165,419		$	5,242,557
	Total Control and Affiliate Investments	$	57,648,332	$	(1,164,188	)	$	6,538,529	$	(8,854,529	)	$	54,168,144	$	6,165,419		$	5,994,394

See accompanying notes

(1)

(2)

(3)

Represents the total amount of interest, fees or dividends credited to income for the portion of the period an investment was included in “Control or Affiliate” categories, respectively.

See accompanying notes


Industry Classification	Percentage of Total Investments (at fair value) as of December 31, 2024
Professional and Business Services		47.6	%
Consumer Product		17.7
Manufacturing		12.7
Distribution		9.7
Software		4.1
Automotive		4.1
Health and Wellness		4.1
Total Investments		100	%

See accompanying notes

RAND CAPITAL CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. ORGANIZATION

Rand Capital Corporation (“Rand”, the "Corporation", “we”, “us” and “our”) was incorporated under the laws of New York in February 1969. We completed our initial public offering in 1971 and operated as an internally managed, closed end, management investment company from that time until November 2019.

In November 2019, Rand completed a stock sale transaction (the “Closing”) with East Asset Management (“East”). The transaction consisted of a $25 million investment in Rand by East, in the form of cash and contributed portfolio assets, in exchange for approximately 8.3 million shares of Rand common stock. East owns approximately 64% of Rand Capital’s outstanding common stock at March 31, 2025. Concurrent with the Closing, Rand Capital Management, LLC (“RCM”), a registered investment adviser, was retained by Rand as its external investment adviser and administrator (the Closing and the retention of RCM as our investment adviser and administrator are collectively referred to herein as the “Transaction”). The term of the Corporation’s investment advisory and management agreement (the “Investment Management Agreement”) with RCM was extended after approval of its renewal by our Board of Directors (the “Board”) in October 2024 and is currently scheduled to expire on December 31, 2025. In addition, the term of the Corporation’s administration agreement (the “Administration Agreement”) with RCM was extended after approval of its renewal by the Board in October 2024 and is currently scheduled to expire on December 31, 2025. The Investment Management Agreement and Administration Agreement can continue for successive annual periods after December 31, 2025 provided that such continuance is specifically approved at least annually by (i)(A) the affirmative vote of a majority of the Board or (B) the affirmative vote of a majority of our outstanding voting securities, and (ii) the affirmative vote of a majority of our directors who are not “interested persons,” as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended (the "1940 Act"), of us, RCM or our respective affiliates. Pursuant to the terms of the Investment Management Agreement, Rand pays RCM a base management fee and may pay an incentive fee, if specified benchmarks are met.

In connection with the Closing, we also entered into a shareholder agreement with East (the “Shareholder Agreement”). Pursuant to the terms of the Shareholder Agreement, East has the right to designate two or three persons, depending upon the size of the Board, for nomination for election to the Board. East has the right to designate (i) up to two persons if the size of the Board is composed of fewer than seven directors or (ii) up to three persons if the size of the Board is composed of seven or more directors. East’s right to designate persons for nomination for election to the Board under the Shareholder Agreement is the exclusive means by which East may designate or nominate persons for election to the Board. The Board currently consists of five directors, and Adam S. Gusky and Benjamin E. Godley are East’s designees on the Board.

We currently operate as an externally managed, closed-end, non-diversified management investment company. We have elected to be regulated as a business development company (“BDC”) under the 1940 Act. As a BDC, we are required to comply with certain regulatory requirements specified in the 1940 Act. For instance, we generally have to invest at least 70% of our total assets in “qualifying assets” and provide managerial assistance to the portfolio companies in which we invest. See “Item 1. Business - Regulations, Business Development Company Regulations” in our Annual Report on Form 10-K for the year ended December 31, 2024.

In connection with the completion of the Transaction, we have shifted to an investment strategy focused on higher yielding debt investments and elected U.S. Federal tax treatment as a regulated investment company (“RIC”).

The Board declared the following quarterly cash dividend during the three months ended March 31, 2025:


Quarter	Dividend/Share Amount		Record Date	Payment Date
1st	$	0.29	March 14, 2025	March 28, 2025

On December 5, 2024, the Board declared a dividend in the amount of $4.20 per share. The dividend was paid in the aggregate combination of 20% in cash and 80% in newly issued shares of our common stock on January 24, 2025 to shareholders of record as of December 16, 2024. The portion of the dividend paid using our common stock increased the number of issued and outstanding shares of our common stock from 2,581,021 shares to 2,969,814 shares as of January 24, 2025.

In order to continue to qualify as a RIC, Rand holds several of its equity investments in wholly-owned subsidiaries that facilitate a tax structure that is advantageous to the RIC election. Rand has the following wholly-owned blocker subsidiaries in place at March 31, 2025: Rand BMP Swanson Holdings Corp., Rand Carolina Skiff Holdings Corp., Rand DSD Holdings Corp., Rand Filterworks Holdings Corp., Rand FSS Holdings Corp., Rand INEA Holdings Corp., and Rand ITA Holdings Corp. (collectively the “Blocker Corps”). These subsidiaries are consolidated using United States generally accepted accounting principles (“GAAP”) for financial reporting purposes.

On October 7, 2020, Rand, RCM and certain of their affiliates received an exemptive order from the Securities and Exchange Commission (“SEC”) to permit Rand to co-invest in portfolio companies with certain affiliates, including other BDCs and registered investment companies managed by RCM and certain of its affiliates in a manner consistent with Rand’s investment objective, policies, strategies and restrictions as well as regulatory requirements, subject to compliance with certain conditions (the “Order”). On March 29, 2021, the SEC granted Rand, Callodine Group, LLC (“Callodine”), which holds a controlling interest in RCM, and certain of their affiliates a new exemptive order (the “New Order”) that superseded the Order and permits Rand to co-invest with affiliates managed by RCM and Callodine. Callodine is a yield focused asset management platform. Pursuant to the New Order, Rand is generally permitted to co-invest with affiliates covered by the New Order if a “required majority” (as defined in Section 57(o) of the 1940 Act) of Rand’s independent directors make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the transaction, including the consideration to be paid, are reasonable and fair to Rand and its shareholders and do not involve overreaching in respect of Rand or its shareholders on the part of any person concerned, (2) the transaction is consistent with the interests of Rand’s shareholders and is consistent with Rand’s investment objective and strategies and (3) the investment by Rand’s affiliates would not disadvantage Rand, and Rand’s participation would not be on a basis different from or less advantageous than that on which Rand’s affiliates are investing. In addition, on September 6, 2022, the SEC granted an amendment to the New Order to permit Rand to participate in follow-on investments in our existing portfolio companies with certain Affiliated Funds (as defined in the New Order) that do not hold any investments in such existing portfolio companies.

The accompanying consolidated financial statements describe the operations of Rand and its wholly-owned subsidiaries, Rand Capital Sub, LLC ("Rand Sub") and the Blocker Corps (collectively, the “Corporation”).

Our corporate office is located in Buffalo, NY and our website address is www.randcapital.com. We make available on our website our annual and quarterly reports, proxy statements and other information as soon as reasonably practicable after such material is filed with the SEC. Our shares are traded on the Nasdaq Capital Market under the symbol “RAND.”

Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation – It is our opinion that the accompanying consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair presentation in accordance with GAAP of the consolidated financial position, results of operations, cash flows and statement of changes in net assets for the interim periods presented. The Corporation is an investment company following accounting and reporting guidance in Accounting Standards Codification (“ASC”) 946, Financial Services—Investment Companies. Certain information and note disclosures normally included in audited annual consolidated financial statements prepared in accordance with GAAP have been omitted; however, we believe that the disclosures made are adequate to make the information presented herein not misleading. The interim results for the three months ended March 31, 2025 are not necessarily indicative of the results to be expected for the full year.

These statements should be read in conjunction with the consolidated financial statements and the notes included in our Annual Report on Form 10-K for the year ended December 31, 2024. Information contained in this filing should also be reviewed in conjunction with our related filings with the SEC prior to the date of this report.

Principles of Consolidation - The consolidated financial statements include the accounts of Rand and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Fair Value of Financial Instruments – The carrying amounts reported in the consolidated statement of financial position of cash, interest receivable, accounts payable and accrued expenses approximate fair value because of the immediate or short-term nature of these financial instruments.

Investment Classification – In accordance with the provisions of the 1940 Act, the Corporation classifies its investments by level of control. Under the 1940 Act, “Control Investments” are investments in companies that the Corporation is deemed to “Control” if it owns more than 25% of the voting securities of the company or has greater than 50% representation on the company’s board of directors or other similar governing body. “Affiliate Investments” are companies in which the Corporation owns between 5% and 25% of the voting securities of the company. “Non-Control/Non-Affiliate Investments” are those companies that are neither Control Investments nor Affiliate Investments.

Investments - Investments are valued at fair value as determined in good faith by RCM and approved by the Board. The Corporation generally invests in loan, debt, and equity instruments and there is no single standard for determining fair value of these investments. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio company while employing a consistent valuation process. Due to the inherent uncertainty of determining the fair value of portfolio investments, there may be material risks associated with this determination including that estimated fair values may differ from the values that would have been used had a readily available market value for the investments existed and these differences could be material if the Corporation's assumptions and judgments differ from results of actual liquidation events. The Corporation analyzes and values each investment quarterly and records unrealized depreciation for an investment that it believes has become impaired, including where collection of a loan or debt security or realization of the recorded value of an equity security is doubtful. Conversely, the Corporation will record unrealized appreciation if it believes that an underlying portfolio company has appreciated in value and, therefore, the Corporation's equity securities in the underlying portfolio company have also appreciated in value. Additionally, the Corporation continues to assess any material risks associated with this fair value determination, including risks associated with material conflicts of interest. Under the valuation policy of the Corporation, unrestricted publicly traded securities are valued at the closing price for these securities on the last trading day of the reporting period.

Qualifying Assets - As of March 31, 2025, the Corporation’s portfolio of investments only includes qualifying assets as defined in Section 55(a) of the 1940 Act. The Corporation’s qualifying assets consist of qualifying investments in privately held businesses, principally based in the United States.

Revenue Recognition - Interest Income - Interest income is recognized on the accrual basis except where the investment is in default or where receipt of such interest is otherwise presumed to be in doubt. In such cases, interest is recognized at the time of receipt. A reserve for possible losses on interest receivable is maintained when appropriate. The reserve for possible losses of interest receivable was $25,337 as of March 31, 2025. There was no reserve for possible losses of interest receivable as of December 31, 2024.

The Corporation holds debt securities in its investment portfolio that contain payment-in-kind (“PIK”) interest provisions. PIK interest, computed at the contractual rate specified in each debt agreement, is added to the principal balance of the debt and is recorded as interest income. Thus, the actual collection of this interest may be deferred until the time of debt principal repayment. For investments with PIK interest, the Corporation will not accrue PIK interest if the portfolio company valuation indicates that the PIK interest is not collectible. Loans which are on non-accrual status remain in such status until the borrower has demonstrated the ability and intent to pay contractual amounts due or such loans become current. As of March 31, 2025, one of the Corporation's debt investments was on non-accrual status with a cost of $5.4 million and fair value of $2.0 million, which represented 9.0% and 3.2% of the investment portfolio, respectively. As of December 31, 2024, none of the Corporation's investments were on non-accrual status. For the three months ended March 31, 2025 and 2024, 31.1% and 15.9%, respectively, of the Corporation's total investment income was attributable to non-cash PIK interest income.

Revenue Recognition - Dividend Income – The Corporation may receive cash distributions from portfolio companies that are limited liability companies or corporations, and these distributions are classified as dividend income on the consolidated statement of operations. Dividend income is recognized on an accrual basis when it can be reasonably estimated for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies.

The Corporation may hold preferred equity securities that contain cumulative dividend provisions. Cumulative dividends are recorded as dividend income, if declared and deemed collectible, and any dividends in arrears are recognized into income and added to the balance of the preferred equity investment. The actual collection of these dividends in arrears may be deferred until such time as the preferred equity is redeemed.

Revenue Recognition - Fee Income - Consists of the revenue associated with the amortization of financing fees charged to the portfolio companies upon successful closing of financings, income associated with portfolio company monitoring fees, income associated with early repayment fees and income associated with portfolio company loan modification fees.

Realized Gain or Loss and Unrealized Appreciation or Depreciation of Investments - Amounts reported as realized gains and losses are measured by the difference between the proceeds from the sale or exchange and the cost basis of the investment without regard to unrealized gains or losses recorded in prior periods. The cost of securities that have, in management’s judgment, become worthless are written off and reported as realized losses when appropriate. Unrealized appreciation or depreciation reflects the difference between the fair value of the investments and the cost basis of the investments.

Original Issue Discount – Investments may include “original issue discount”, or OID. This occurs when the Corporation purchases a warrant and a note from a portfolio company simultaneously, which requires an allocation of a portion of the purchase price to the warrant and reduces the purchase price allocated to the note by an equal amount in the form of a note discount or OID. The note is reported net of the OID and the OID is accreted into interest income over the life of the loan.

Net Assets per Share - Net assets per share are based on the number of shares of common stock outstanding. There are no common stock equivalents outstanding.

Supplemental Cash Flow Information - Net income taxes paid during the three months ended March 31, 2025 and 2024 were $14,937 and $53,949, respectively. Interest paid during the three months ended March 31, 2025 and 2024 was $30,743 and $377,857, respectively. The Corporation converted $624,105 and $328,829 of interest receivable into investments during the three months ended March 31, 2025 and 2024, respectively.

Accounting Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Stockholders’ Equity (Net Assets) - At March 31, 2025 and December 31, 2024, there were 500,000 shares of $10.00 par value preferred stock authorized and unissued.

On April 23, 2025, the Board approved a share repurchase plan which authorizes the Corporation to repurchase shares of Rand’s outstanding common stock with an aggregate cost of up to $1,500,000 at prices per share of common stock no greater than the then current net asset value. This share repurchase authorization is in effect through April 23, 2026, and replaces the share repurchase authorization that was previously approved by the Board in May 2024. No shares of Rand's common stock were repurchased by the Corporation during the three months ended March 31, 2025 or the three months ended March 31, 2024.

Income Taxes – The Corporation elected to be treated, for U.S. federal income tax purposes, as a RIC under Subchapter M of the Code. The Corporation must distribute substantially all of its investment company taxable income each tax year as dividends to its shareholders to maintain its RIC status. If the Corporation continues to qualify as a RIC and continues to satisfy the annual distribution requirement, the Corporation will not have to pay corporate level U.S. federal income taxes on any income that the Corporation distributes to its stockholders.

The Blocker Corps, which are consolidated under U.S. GAAP for financial reporting purposes, are subject to U.S. federal and state income taxes. Therefore, the Corporation accounts for income taxes pursuant to FASB ASC Topic 740, Income Taxes. Under FASB ASC Topic 740, deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The Corporation records a valuation allowance against the deferred tax assets if and to the extent it is more likely than not that the Corporation will not recover the deferred tax assets. In evaluating the need for a valuation allowance, the Corporation weights all relevant positive and negative evidence, and considers among other factors, historical financial performance, projected future taxable income, scheduled reversals of deferred tax liabilities, the overall business environment, and tax planning strategies. Changes in circumstances, including the Blocker Corps generating significant taxable income and tax planning strategies, could cause a change in judgment about the need for a valuation allowance of the related deferred tax assets. Any change in the valuation allowance will be included in income in the period of the change in estimate.

Accordingly, as of March 31, 2025 and December 31, 2024, the valuation allowance against the Corporation's U.S. federal deferred tax assets was $363,471.

The Corporation reviews the tax positions it has taken to determine if they meet a "more likely than not threshold" for the benefit of the tax position to be recognized in the consolidated financial statements. A tax position that fails to meet the more likely than not recognition threshold will result in either a reduction of a current or deferred tax asset or receivable, or the recording of a current or deferred tax liability. There were no uncertain tax positions recorded at March 31, 2025 or December 31, 2024.

Depending on the level of taxable income earned in a tax year, the Corporation may choose to carry forward taxable income in excess of current year dividend distributions from such current year taxable income into the next tax year and pay a 4% excise tax on such income, as required. To the extent that the Corporation determines that its estimated current year taxable income will be in excess of estimated dividend distributions for the current year from such income, the Corporation accrues excise tax, if any, on estimated excess taxable income as such taxable income is earned. The Corporation did not incur any federal excise tax expense during the three months ended March 31, 2025 or 2024.

Distributions from net investment income and distributions from net realized capital gains are determined in accordance with U.S. federal tax regulations, which may differ from amounts determined in accordance with GAAP and those differences could be material. These book-to-tax differences are either temporary or permanent in nature. Reclassifications due to permanent book-tax

differences, including the offset of net operating losses against short-term gains and nondeductible meals and entertainment, have no impact on net assets.

The Corporation is currently open to audit under the statute of limitations by the Internal Revenue Service for the years ended December 31, 2021 through 2024. In general, the Corporation’s state income tax returns are open to audit under the statute of limitations for the years ended December 31, 2021 through 2024.

It is the Corporation’s policy to include interest and penalties related to income tax liabilities in income tax expense on the Consolidated Statement of Operations. There were no amounts recognized for the three months ended March 31, 2025. The Corporation incurred $720 in interest expense related to income tax liabilities during the three months ended March 31, 2024.

Concentration of Credit and Market Risk – The Corporation’s financial instruments potentially subject it to concentrations of credit risk. Cash is invested with banks in amounts which, at times, exceed insured limits. The Corporation does not anticipate non-performance by such banks.

The following are the concentrations of the top five portfolio company values compared to the fair value of the Corporation’s total investment portfolio:


	March 31, 2025
Tilson Technology Management, Inc. (Tilson)		19	%
Seybert’s Billiards Corporation (Seybert’s)		13	%
BMP Food Service Supply Holdco, LLC (FSS)		11	%
Inter-National Alloys LLC (EFINEA)		8	%
Caitec, Inc. (Caitec)		7	%


	December 31, 2024
Tilson		16	%
Seybert's		11	%
FSS		10	%
Mattison Avenue Holdings LLC (Mattison)		8	%
Caitec		6	%

Recently Issued or Adopted Accounting Standards – In December 2023, the FASB issued Accounting Standards Update No. 2023-09, Income Taxes (Topic 740) (“ASU 2023-09”). The amendments in ASU 2023-09 are intended to improve income tax disclosures, primarily related to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for the Corporation’s fiscal year beginning after December 15, 2024, however, these disclosures are not required for interim periods. The amendments are to be applied on a prospective basis, although retrospective adoption is permitted. The Corporation does not believe the adoption of ASU 2023-09 will have a material impact on its consolidated financial statements or disclosures.

Note 3. INVESTMENTS

The Corporation’s investments are carried at fair value in accordance with FASB Accounting Standards Codification (ASC) 820, “Fair Value Measurements and Disclosures”, which defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair value measurements.

Loan investments are defined as traditional loan financings typically with no equity features or required equity co-investment. Debt investments are defined as debt financings that include one or more equity features such as conversion rights, stock purchase warrants, and/or stock purchase options. Equity investments are direct investments into a portfolio company and may include preferred stock, common stock, warrants and limited liability company membership interests.

The Corporation uses several approaches to determine the fair value of an investment. The main approaches are:

•

Loan and debt securities are generally valued at cost when representative of the fair value of the investment or sufficient assets or liquidation proceeds are expected to exist from a sale of a portfolio company at its estimated fair value. The valuation may also consider the carrying interest rate versus the related inherent portfolio risk of the investment. A loan or debt instrument may be reduced in value if it is judged to be of poor quality, collection is in doubt or insufficient liquidation proceeds exist.

•

Equity securities may be valued using the:

▪

Cost approach - The cost approach uses estimates of the liquidation value of the portfolio company’ assets in relation to the cost of the respective security. This approach values the equity at the value remaining after the portfolio company pays off its debt and loan balances and its outstanding liabilities.

▪

Market approach - The market approach uses observable prices and other relevant information generated by similar market transactions. It may include both private and public M&A transactions where the traded price is a multiple of EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) or another relevant operating metric. It may also include the market value of comparable public companies that are trading in an active market, or the use of market multiples derived from a set of comparables to assist in pricing the investment. Additionally, the Corporation adjusts valuations if a subsequent significant equity financing has occurred that includes a meaningful portion of the financing by a sophisticated, unrelated new investor.

▪

Income approach - The income approach employs valuation techniques to convert future benefits or costs, usually in the form of cash flows, into a present value amount. The measurement is based on value indicated by current market expectations about those future amounts.

ASC 820 classifies the inputs used to measure fair value into the following hierarchy:

Level 1: Quoted prices in active markets for identical assets or liabilities, used in the Corporation’s valuation at the measurement date. Under the valuation policy, the Corporation values unrestricted publicly traded companies, categorized as Level 1 investments, at the closing price on the last trading day of the reporting period.

Level 2: Quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or other observable inputs other than quoted prices.

Level 3: Unobservable and significant inputs to determining the fair value.

Financial assets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Any changes in estimated fair value are recorded in the statement of operations.

At March 31, 2025 and December 31, 2024, all of the Corporation’s investments were Level 3 investments. There were no Level 1 or Level 2 investments at March 31, 2025 or December 31, 2024.

In the valuation process, the Corporation values restricted securities categorized as Level 3 investments, using information from these portfolio companies, which may include:

•

Audited and unaudited statements of operations, balance sheets and operating budgets;

•

Current and projected financial, operational and technological developments of the portfolio company;

•

Current and projected ability of the portfolio company to service its debt obligations;

•

The current capital structure of the business and the seniority of the various classes of equity if a deemed liquidation event were to occur;

•

Pending debt or capital restructuring of the portfolio company;

•

Current information regarding any offers to purchase the investment, or recent financing transactions;

•

Current ability of the portfolio company to raise additional financing if needed;

•

Changes in the economic environment which may have a material impact on the operating results of the portfolio company;

•

Internal circumstances and events that may have an impact (both positive and negative) on the operating performance of the portfolio company;

•

Qualitative assessment of key management;

•

Contractual rights, obligations or restrictions associated with the investment; and

•

Other factors deemed relevant to assess valuation.

The valuation may be reduced if a portfolio company’s performance and potential have deteriorated significantly. If the factors that led to a reduction in valuation are overcome, the valuation may be readjusted.

Equity Securities

Equity securities may include preferred stock, common stock, warrants and limited liability company membership interests.

The significant unobservable inputs used in the fair value measurement of the Corporation’s equity investments are EBITDA and revenue multiples, where applicable, the financial and operational performance of the business, and the debt and senior equity preferences that may exist in a deemed liquidation event. Standard industry multiples may be used when available; however, the Corporation’s portfolio companies are typically privately-held, lower middle market companies and these industry standards may be adjusted to more closely match the specific financial and operational characteristics of the portfolio company. Due to the nature of certain investments, fair value measurements may be based on other criteria, which may include third party appraisals. Significant changes in any of these unobservable inputs may result in a significantly higher or lower fair value estimate.

Another key factor used in valuing equity investments is a significant recent arms-length equity transaction entered into by the portfolio company with a sophisticated, non-strategic, unrelated, new investor. The terms of these equity transactions may not be identical to the equity transactions between the portfolio company and the Corporation, and the impact of the difference in transaction terms on the market value of the portfolio company may be difficult or impossible to quantify.

When appropriate the Black-Scholes pricing model is used to estimate the fair value of warrants for accounting purposes. This model requires the use of highly subjective inputs including expected volatility and expected life, in addition to variables for the valuation of minority equity positions in small private and early stage companies. Significant changes in any of these unobservable inputs may result in a significantly higher or lower fair value estimate.

For investments made within the last year, the Corporation generally relies on the cost basis, which is deemed to represent the fair value, unless other fair value inputs are identified causing the Corporation to depart from this basis.

Loan and Debt Securities

The significant unobservable inputs used in the fair value measurement of the Corporation’s loan and debt securities are the financial and operational performance of the portfolio company, similar debt with similar terms with other portfolio companies, as well as the market acceptance for the portfolio company’s products or services. These inputs will likely provide an indicator as to the probability of principal recovery of the investment. The Corporation’s loan and debt investments are often junior secured or unsecured securities. Fair value may also be determined based on other criteria where appropriate. Significant changes to the unobservable inputs may result in a change in fair value. For recent investments, the Corporation generally relies on the cost basis, which is deemed to represent the fair value, unless other fair value inputs are identified causing the Corporation to depart from this basis.

The following table provides a summary of the significant unobservable inputs used to determine the fair value of the Corporation’s Level 3 portfolio investments as of March 31, 2025:


Investment Type	Market Approach EBITDA Multiple		Market Approach Liquidation Seniority		Market Approach Revenue Multiple		Market Approach Transaction Pricing		Totals
Non-Control/Non-Affiliate Equity	$	—	$	—	$	700,000	$	100,038	$	800,038
Non-Control/Non-Affiliate Loan and Debt		4,633,366		2,233,797		—		—		6,867,163
Total Non-Control/Non-Affiliate	$	4,633,366	$	2,233,797	$	700,000	$	100,038	$	7,667,201
Affiliate Equity	$	6,608,000	$	—	$	—	$	9,875,000	$	16,483,000
Affiliate Loan and Debt		31,744,577		—		—		4,262,585		36,007,162
Total Affiliate	$	38,352,577	$	—	$	—	$	14,137,585	$	52,490,162
Control Equity	$	—	$	—	$	—	$	—	$	—
Control Loan and Debt		2,000,000		—		—		—		2,000,000
Total Control	$	2,000,000	$	—	$	—	$	—	$	2,000,000
Total Level 3 Investments	$	44,985,943	$	2,233,797	$	700,000	$	14,237,623	$	62,157,363

Range	4X - 10X		1X		3.5X		Not Applicable
Unobservable Input	EBITDA Multiple		Asset Value		Revenue Multiple		Transaction Price
Weighted Average	5.6X		1X		3.5X		Not Applicable

The following table provides a summary of the components of Level 1, 2 and 3 Assets Measured at Fair Value at March 31, 2025:


			Fair Value Measurements at Reported Date Using
Description	March 31, 2025		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Other Significant Unobservable Inputs (Level 3)
Loan investments	$	9,123,425	$	—	$	—	$	9,123,425
Debt investments		35,750,900		—		—		35,750,900
Equity investments		17,283,038		—		—		17,283,038
Total	$	62,157,363	$	—	$	—	$	62,157,363

The following table provides a summary of the components of Level 1, 2 and 3 Assets Measured at Fair Value at December 31, 2024:


			Fair Value Measurements at Reported Date Using
Description	December 31, 2024		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Other Significant Unobservable Inputs (Level 3)
Loan investments	$	15,037,873	$	—	$	—	$	15,037,873
Debt investments		38,043,721		—		—		38,043,721
Equity investments		17,736,447		—		—		17,736,447
Total	$	70,818,041	$	—	$	—	$	70,818,041

The following table provides a summary of changes in Assets Measured at Fair Value Using Significant Unobservable Inputs (Level 3) for the three months ended March 31, 2025:


	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Description	Loan Investments			Debt Investments			Equity Investments			Total
Ending balance December 31, 2024, of Level 3 Assets	$	15,037,873		$	38,043,721		$	17,736,447		$	70,818,041
Realized gains (losses) included in net change in net assets from operations:
GoNoodle, Inc. (GoNoodle)		—			—			(25	)		(25	)
Microcision, LLC (Microcision)		—			—			55,357			55,357
Pressure Pro, Inc. (Pressure Pro)		—			—			870,000			870,000
Total realized gains, net		—			—			925,332			925,332
Unrealized gains (losses) included in net change in net assets from operations:
BMP Food Service Supply Holdco, LLC (FSS)		—			—			(247,619	)		(247,619	)
Inter-National Electronic Alloys LLC (EFINEA)		—			—			288,235			288,235
ITA Acquisition, LLC (ITA)		(875,000	)		—			—			(875,000	)
Pressure Pro		—			—			(720,000	)		(720,000	)
Seybert’s Billiards Corporation (Seybert’s)		—			—			256,000			256,000
Total unrealized losses, net		(875,000	)		—			(423,384	)		(1,298,384	)
Purchases of securities/changes to securities/non-cash conversions:
Autotality (formerly Filterworks Acquisition USA, LLC)		—			58,573			—			58,573
Caitec, Inc. (Caitec)		158,454			—			—			158,454
FCM Industries Holdco LLC (First Coast Mulch)		—			12,222			—			12,222
FSS		—			212,770			—			212,770
GoNoodle, Inc. (GoNoodle)		—			3,601			—			3,601
Highland All About People Holdings, Inc. (All About People)		—			31,751			—			31,751
ITA		375,000			—			—			375,000
Mobile RN Holdings LLC (Mobile IV Nurses)		—			6,266			—			6,266
Mountain Regional Equipment Solutions (MRES)		—			124,575			—			124,575
Pressure Pro		—			22,445			—			22,445
Seybert’s		—			31,950			—			31,950
Total purchases of securities/changes to securities/non-cash conversions		533,454			504,153			—			1,037,607
Repayments and sales of securities:
HDI Acquisition LLC (Hilton Displays)		—			(1,071,824	)		—			(1,071,824	)
Mattison Avenue Holdings LLC (Mattison)		(5,572,902	)		—			—			(5,572,902	)
Microcision		—			—			(55,357	)		(55,357	)
Pressure Pro		—			(1,725,150	)		(900,000	)		(2,625,150	)
Total repayments and sales of securities		(5,572,902	)		(2,796,974	)		(955,357	)		(9,325,233	)
Ending balance March 31, 2025, of Level 3 Assets	$	9,123,425		$	35,750,900		$	17,283,038		$	62,157,363
Change in unrealized appreciation/depreciation included in earnings related to Level 3 investments still held at reporting date										$	(578,384	)

The following table provides a summary of changes in Assets Measured at Fair Value Using Significant Unobservable Inputs (Level 3) for the three months ended March 31, 2024:


	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Description	Loan Investments			Debt Investments			Equity Investments			Total
Ending balance December 31, 2023, of Level 3 Assets	$	12,417,977		$	36,861,525		$	20,536,560		$	69,816,062
Unrealized losses included in net change in net assets from operations:
Knoa Software, Inc. (Knoa)		—			—			(100,000	)		(100,000	)
Total unrealized losses		—			—			(100,000	)		(100,000	)
Purchases of securities/changes to securities/non-cash conversions:
Caitec, Inc. (Caitec)		139,094			—			—			139,094
FCM Industries Holdco LLC (First Coast Mulch)		—			11,169			—			11,169
Filterworks Acquisition USA, LLC (Filterworks)		—			14,565			—			14,565
GoNoodle, Inc. (GoNoodle)		—			3,565			—			3,565
HDI Acquisition LLC (Hilton Displays)		—			5,310			—			5,310
Highland All About People Holdings, Inc. (All About People)		—			30,831			—			30,831
Inter-National Electronic Alloys LLC (EFINEA)		—			16,904			—			16,904
ITA Acquisition, LLC (ITA)		388,475			—			—			388,475
Mattison Avenue Holdings LLC (Mattison)		5,503,056			—			—			5,503,056
Mountain Regional Equipment Solutions (MRES)		—			2,943,000			264,545			3,207,545
Pressure Pro, Inc. (Pressure Pro)		—			21,515			—			21,515
Seybert’s Billiards Corporation (Seybert’s)		—			1,831,680			—			1,831,680
Total purchases of securities/changes to securities/non-cash conversions		6,030,625			4,878,539			264,545			11,173,709
Repayments and sales of securities:
Mattison		(1,894,470	)		—			—			(1,894,470	)
Pressure Pro		—			(687,436	)		—			(687,436	)
Total repayments and sales of securities		(1,894,470	)		(687,436	)		—			(2,581,906	)
Ending balance March 31, 2024, of Level 3 Assets	$	16,554,132		$	41,052,628		$	20,701,105		$	78,307,865
Change in unrealized appreciation/depreciation included in earnings related to Level 3 investments still held at reporting date										$	(100,000	)

Note 4. OTHER ASSETS

At March 31, 2025 and December 31, 2024, other assets was comprised of the following:


	March 31, 2025		December 31, 2024
Prepaid expenses	$	74,027	$	16,977
Deferred financing fees, net		56,250		62,500
Accounts receivable		20,000		22,929
Dividends receivable		13,125		13,125
Total other assets	$	163,402	$	115,531

Note 5. COMMITMENTS AND CONTINGENCIES

The Corporation had no commitments at March 31, 2025 or December 31, 2024.

Note 6. SENIOR SECURED REVOLVING CREDIT FACILITY

On June 27, 2022, the Corporation entered into a credit agreement (the “Credit Agreement”) with M&T Bank, as lender (the “Lender”), which provides the Corporation with a senior secured revolving credit facility in a principal amount not to exceed $25.0 million (the “Credit Facility”). The amount the Corporation can borrow, at any given time, under the Credit Facility is tied to a borrowing base, which is measured as (i) 75% of the aggregate sum of the fair market values of the publicly traded equity securities

held (other than shares of ACV Auctions, if any) plus (ii) the least of (a) 75% of the fair market value of the shares of ACV Auctions held, if any, (b) $6.25 million and (c) 25% of the aggregate borrowing base availability for the Credit Facility at any date of determination plus (iii) 50% of the aggregate sum of the fair market values of eligible private loans held that meet specified criteria plus (iv) the lesser of (a) 50% of the aggregate sum of the fair market values of unsecured private loans held that meet specified criteria and (b) $1.25 million minus (v) such reserves as the Lender may establish from time to time in its sole discretion. As of March 31, 2025, the Corporation did not own any publicly traded equity securities or any shares of ACV Auctions. The Credit Facility has a maturity date of June 27, 2027. Under the borrowing base formula described above, the unused line of credit balance for the Credit Facility was $22,437,163 at March 31, 2025.

The Corporation’s borrowings under the Credit Facility bear interest at a variable rate determined as a rate per annum equal to 3.50 percentage points above the greater of (i) the applicable daily simple secured overnight financing rate (SOFR) or (ii) 0.25%. At March 31, 2025, the Corporation's applicable interest rate was 7.91%. In addition, under the terms of the Credit Facility, the Corporation has also agreed to pay the Lender an unused commitment fee on a quarterly basis, computed as 0.30% multiplied by the average daily Unused Commitment Fee Base (which is defined as the difference between (i) $25.0 million and (ii) the sum of the aggregate principal amount of the Corporation’s outstanding borrowings under the Credit Facility) for the preceding quarter.

The Credit Agreement contains representations and warranties and affirmative, negative and financial covenants usual and customary for agreements of this type, including among others, covenants that prohibit, subject to certain specified exceptions, the Corporation’s ability to merge or consolidate with other companies, sell any material part of the Corporation’s assets, incur other indebtedness, incur liens on the Corporation’s assets, make investments or loans to third parties other than permitted investments and permitted loans, and declare any distribution or dividend other than certain permitted distributions. The Credit Agreement includes the following financial covenants: (i) a tangible net worth covenant that requires the Corporation to maintain a Tangible Net Worth (defined in the Credit Agreement as the Corporation’s aggregate assets, excluding intangible assets, less all liabilities) of not less than $50.0 million, which is measured quarterly at the end of each fiscal quarter, (ii) an asset coverage ratio covenant that requires the Corporation to maintain an Asset Coverage Ratio (defined in the Credit Agreement as the ratio of the fair market value of all of the Corporation’s assets to the sum of all of the Corporation’s obligations for borrowed money plus all capital lease obligations) of not less than 3:1, which is measured quarterly at the end of each fiscal quarter and (iii) an interest coverage ratio covenant that requires the Corporation to maintain an Interest Coverage Ratio (defined in the Credit Agreement as the ratio of Cash Flow (as defined in the Credit Agreement) to Interest Expense (as defined in the Credit Agreement)) of not less than 2.5:1, which is measured quarterly on a trailing twelve-months basis. As of March 31, 2025, the Corporation was in compliance with these covenants.

Events of default under the Credit Agreement which permit the Lender to exercise its remedies, including acceleration of the principal and interest on the Credit Facility, include, among others: (i) default in the payment of principal or interest on the Credit Facility, (ii) default by the Corporation on any other obligation, condition, covenant or other provision under the Credit Agreement and related documents, (iii) failure by the Corporation to pay any material indebtedness or obligation owing to any third party or affiliate, or the failure by the Corporation to perform any agreement with any third party or affiliate that would have a material adverse effect on the Corporation and its subsidiaries taken as a whole, (iv) the sale of all or substantially all of the Corporation’s assets to a third party, (v) various bankruptcy and insolvency events, and (vi) any material adverse change in the Corporation and its subsidiaries, taken as a whole, or their business, assets, operations, management, ownership, affairs, condition (financial or otherwise) or the Lender’s collateral that the Lender reasonably determines will have a material adverse effect on the Lender’s collateral, the Corporation and its subsidiaries, taken as a whole, or their business, assets, operation or condition (financial or otherwise) or on the Corporation’s ability to repay its debts.

In connection with entry into the Credit Facility, the Corporation and each of its subsidiaries that guaranty the Credit Facility entered into a general security agreement, dated June 27, 2022, with the Lender (the “Security Agreement”). The Security Agreement secures all of the Corporation’s obligations to the Lender, including, without limitation, principal and interest on the Credit Facility and any fees and charges. The security interest granted under the Security Agreement covers all of the Corporation’s personal property including, among other things, all accounts, chattel paper, investment property, deposit accounts, general intangibles, inventory, and all of the fixtures. The Security Agreement contains various representations, warranties, covenants and agreements customary in security agreements and various events of default with remedies under the New York Uniform Commercial Code and the Security Agreement. Events of default under the Security Agreement, which permit the Lender to exercise its various remedies, are similar to those contained in the Credit Agreement.

The outstanding balance drawn on the Credit Facility at March 31, 2025 and December 31, 2024 was $0 and $600,000, respectively. The unamortized closing fee was $56,250 and $62,500 as of March 31, 2025 and December 31, 2024, respectively, and it is recorded in Other Assets on the Consolidated Statement of Financial Position. Amortization expense related to the Credit Facility during both the three months ended March 31, 2025 and 2024 was $6,250.

For the three months ended March 31, 2025 and 2024, the average debt outstanding under the Credit Facility and weighted average interest rate were as follows:


	Three months ended March 31, 2025			Three months ended March 31, 2024
Average debt outstanding	$	606,667		$	17,276,374
Weighted average interest rate		7.88	%		8.83	%

Note 7. CHANGES IN STOCKHOLDERS’ EQUITY (NET ASSETS)

The following schedule analyzes the changes in stockholders’ equity (net assets) section of the Consolidated Statements of Financial Position for the three months ended March 31, 2025 and 2024, respectively:


	Common Stock		Capital in excess of par value		Stock dividends distributable			Treasury Stock, at cost			Total distributable earnings (losses)			Total Stockholders’ Equity (Net Assets)
January 1, 2025	$	264,892	$	55,419,620	$	8,672,231		$	(1,566,605	)	$	2,542,382		$	65,332,520
Payment of dividend		38,879		8,631,884		(8,672,231	)		—			(861,246	)		(862,714	)
Net increase in net assets from operations		—		—		—			—			841,447			841,447
March 31, 2025	$	303,771	$	64,051,504	$	—		$	(1,566,605	)	$	2,522,583		$	65,311,253


	Common Stock		Capital in excess of par value		Stock dividends distributable		Treasury Stock, at cost			Total distributable earnings (losses)			Total Stockholders’ Equity (Net Assets)
January 1, 2024	$	264,892	$	55,801,170	$	—	$	(1,566,605	)	$	6,315,756		$	60,815,213
Payment of dividend		—		—		—		—			(645,255	)		(645,255	)
Net increase in net assets from operations		—		—		—		—			1,399,381			1,399,381
March 31, 2024	$	264,892	$	55,801,170	$	—	$	(1,566,605	)	$	7,069,882		$	61,569,339

Note 8. RELATED PARTY TRANSACTIONS

Investment Management Agreement

Concurrent with the Closing, RCM, a registered investment adviser, was retained by the Corporation as its external investment adviser and administrator, which resulted in Daniel Penberthy, the Corporation's President and Chief Executive Officer, and Margaret Brechtel, the Corporation's Executive Vice President, Treasurer, Chief Financial Officer and Secretary, serving as officers and employees of RCM. Under the Investment Management Agreement, the Corporation pays RCM, as compensation for the investment advisory and management services, fees consisting of two components: (i) the Base Management Fee and (ii) the Incentive Fee.

At March 31, 2025 and December 31, 2024, amounts payable to RCM were comprised of the following, and are reported on the "Due to investment adviser" line on the Consolidated Statements of Financial Position:


	March 31, 2025		December 31, 2024
Base Management Fee payable	$	252,208	$	277,628
Income Based Incentive Fees payable		293,630		178,218
Capital Gains Fee payable		—		1,727,000
Total due to investment adviser	$	545,838	$	2,182,846

The “Base Management Fee” is calculated at an annual rate of 1.50% of the Corporation’s total assets (other than cash but including assets purchased with borrowed funds). For the three months ended March 31, 2025 and 2024, the Base Management Fee was $252,208 and $302,595, respectively. As of March 31, 2025 and December 31, 2024, the Corporation had $252,208 and $277,628, respectively, payable for the Base Management Fees, and it is included in the "Due to investment adviser" line on the Corporation's Consolidated Statements of Financial Position.

The “Incentive Fee” is comprised of two parts: (1) the “Income Based Fee” and (2) the “Capital Gains Fee”. The Income Based Fee is calculated and payable quarterly in arrears based on the “Pre-Incentive Fee Net Investment Income” (as defined in the Investment Management Agreement) for the immediately preceding calendar quarter, subject to a hurdle rate of 1.75% per quarter

(7% annualized) and is payable promptly following the filing of the Corporation’s financial statements for such quarter, to the extent the Income Based Fee exceeds Accrued Unpaid Income.

The Corporation pays RCM an Incentive Fee with respect to its Pre-Incentive Fee Net Investment Income in each calendar quarter as follows:

(i)

no Income Based Fee in any quarter in which the Pre-Incentive Fee Net Investment Income for such quarter does not exceed the hurdle rate of 1.75% (7.00% annualized);

(ii)

100% of the Pre-Incentive Fee Net Investment Income for any calendar quarter with respect to that portion of the Pre-Incentive Fee Net Investment Income for such calendar quarter, if any, that exceeds the hurdle rate of 1.75% (7.00% annualized) but is less than 2.1875% (8.75% annualized); and

(iii)

20% of the amount of the Pre-Incentive Fee Net Investment Income for any calendar quarter with respect to that portion of the Pre-Incentive Fee Net Investment Income for such calendar quarter, if any, that exceeds 2.1875% (8.75% annualized).

The Income Based Fee paid to RCM for any calendar quarter shall not be in excess of the Incentive Fee Cap. The “Incentive Fee Cap” for any quarter is an amount equal to (1) 20.0% of the Cumulative Net Return (as defined below) during the relevant Income Based Fee Calculation Period (as defined below) minus (2) the aggregate Income Based Fee that was paid in respect of the calendar quarters included in the relevant Income Based Fee Calculation Period.

For purposes of the calculation of the Income Based Fee, “Income Based Fee Calculation Period” is defined as, with reference to a calendar quarter, the period of time consisting of such calendar quarter and the additional quarters that comprise the eleven calendar quarters immediately preceding such calendar quarter.

For purposes of the calculation of the Income Based Fee, “Cumulative Net Return” is defined as (1) the aggregate net investment income in respect of the relevant Income Based Fee Calculation Period minus (2) any Net Capital Loss, if any, in respect of the relevant Income Based Fee Calculation Period. If, in any quarter, the Incentive Fee Cap is zero or a negative value, the Corporation pays no Income Based Fee to RCM for such quarter. If, in any quarter, the Incentive Fee Cap for such quarter is a positive value but is less than the Income Based Fee that is payable to RCM for such quarter (before giving effect to the Incentive Fee Cap) calculated as described above, the Corporation pays an Income Based Fee to RCM equal to the Incentive Fee Cap for such quarter. If, in any quarter, the Incentive Fee Cap for such quarter is equal to or greater than the Income Based Fee that is payable to RCM for such quarter (before giving effect to the Incentive Fee Cap) calculated as described above, the Corporation pays an Income Based Fee to the Adviser equal to the Income Based Fee calculated as described above for such quarter without regard to the Incentive Fee Cap.

For purposes of the calculation of the Income Based Fee, “Net Capital Loss,” in respect of a particular period, means the difference, if positive, between (1) aggregate capital losses, whether realized or unrealized, in such period and (2) aggregate capital gains, whether realized or unrealized, in such period.

Any Income Based Fee otherwise payable under the Investment Management Agreement with respect to Accrued Unpaid Income (as described below) (such fees being the “Accrued Unpaid Income Based Fees”) shall be deferred, on a security by security basis, and shall become payable to RCM only if, as, when and to the extent cash is received in respect of any Accrued Unpaid Income. Any Accrued Unpaid Income that is subsequently reversed in connection with a write-down, write-off, impairment or similar treatment of the investment giving rise to such Accrued Unpaid Income will, in the applicable period of reversal, (1) reduce Pre-Incentive Fee Net Investment Income and (2) reduce the amount of Accrued Unpaid Income Based Fees. For purposes of the Investment Management Agreement, Accrued Unpaid Income is defined as any net investment income that consists of any accretion of original issue discount, market discount, payment-in-kind interest, payment-in-kind dividends or other types of deferred or accrued income, including in connection with zero coupon securities, that the Corporation has recognized in accordance with GAAP, but has not yet received in cash. Subsequent payments of Accrued Unpaid Income Based Fees that are deferred as provided for in the Investment Management Agreement shall not reduce the amounts otherwise payable for any quarter as an Income Based Fee.

For the three months ended March 31, 2025, the Income Based Fees earned under the Investment Management Agreement were $119,673. For the three months ended March 31, 2024, there were no Income Based Fees earned under the Investment Management Agreement. As of March 31, 2025, the cumulative accrued Income Based Fees payable was $293,630, and after calculating Accrued Unpaid Income received in cash during such prior quarter, $1,779 was currently payable to RCM. As of December 31, 2024, cumulative accrued Income Based Fees payable was $178,218.

The second part of the Incentive Fee is the “Capital Gains Fee”. This fee is determined and payable in arrears as of the end of each calendar year. Under the terms of the Investment Management Agreement, the Capital Gains Fee is calculated at the end of each

applicable year by subtracting (1) the sum of the cumulative aggregate realized capital losses and aggregate unrealized capital depreciation from (2) the cumulative aggregate realized capital gains, in each case calculated from November 8, 2019. If this amount is positive at the end of any calendar year, then the Capital Gains Fee for such year is equal to 20.0% of such amount, less the cumulative aggregate amount of Capital Gains Fees paid in all prior years. If such amount is negative, then there is no Capital Gains Fee payable for that calendar year. If the Investment Management Agreement is terminated as of a date that is not a calendar year end, the termination date shall be treated as though it were a calendar year end for purposes of calculating and paying the Capital Gains Fee.

For purposes of the Capital Gains Fee:

•

The cumulative aggregate realized capital gains are calculated as the sum of the differences, if positive, between (a) the net sales price of each investment in the Corporations portfolio when sold minus (b) the accreted or amortized cost basis of such investment.

•

The cumulative aggregate realized capital losses are calculated as the sum of the amounts by which (a) the net sales price of each investment in the portfolio when sold is less than (b) the accreted or amortized cost basis of such investment.

•

The aggregate unrealized capital depreciation is calculated as the sum of the amount, if negative, between (a) the valuation of each investment in the portfolio as of the applicable Capital Gains Fee calculation date minus (b) the accreted or amortized cost basis of such investment.

For purposes of calculating the amount of the capital gains incentive fee accrual to be included as part of a company’s financial statements, GAAP requires a company to consider, as part of such calculation, the amount of cumulative aggregate unrealized capital appreciation that such company has with respect to its investments. As a result, the capital gains incentive fee accrual under GAAP is calculated using both the cumulative aggregate realized capital gains and losses and the aggregate net change in unrealized capital appreciation/depreciation at the close of the period. If the calculated amount is positive, GAAP requires the Corporation to record a capital gains incentive fee accrual equal to 20% of this cumulative amount, less the aggregate amount of actual capital gains incentive fees paid, or capital gains incentive fees accrued under GAAP, for all prior periods. However, unrealized capital appreciation is not used by the Corporation as part of the calculation to determine the amount of the Capital Gains Fee actually payable to RCM under the terms of the Investment Management Agreement. There can be no assurances that such unrealized capital appreciation will be realized in the future.

As of March 31, 2025, there was no Capital Gains Fee currently payable under the terms of the Investment Management Agreement, and the final calculations are determined annually, and subject to change based on subsequent realized gains, losses or unrealized losses during the remainder of 2025.

In accordance with GAAP, the Corporation is required to accrue a capital gains incentive fee on all realized and unrealized gains and losses, resulting in an accrual of $1,490,000 at March 31, 2025, which represents the fee that would be due based on net portfolio appreciation. The $1,490,000 accrued capital gains incentive fee is recorded in the line item “Capital gains incentive fees” on the Consolidated Statement of Financial Position at March 31, 2025. At December 31, 2024, there was an accrual of $3,292,000 for the capital gains incentive fee, which represented both the capital gains fee payable to RCM of $1,727,000 and $1,565,000 that would be due based on net portfolio appreciation at December 31, 2024. The $1,727,000 capital gains fee payable was recorded in the line item "Due to investment adviser" on the Consolidated Statement of Financial Position at December 31, 2024, and was paid to RCM during the three months ended March 31, 2025. For the three months ended March 31, 2025 and 2024, the capital gains incentive fee (benefit) expense was ($75,000) and $112,300, respectively.

Administration Agreement

Under the terms of the Administration Agreement, RCM agreed to perform (or oversee, or arrange for, the performance of) the administrative services necessary for the Corporation’s operations, including, but not limited to, office facilities, equipment, clerical, bookkeeping, finance, accounting, compliance and record keeping services at such office facilities and such other services as RCM, subject to review by the Board, will from time to time determine to be necessary or useful to perform its obligations under the Administration Agreement. RCM shall also arrange for the services of, and oversee, custodians, depositories, transfer agents, dividend disbursing agents, other shareholder servicing agents, accountants, attorneys, underwriters, brokers and dealers, corporate fiduciaries, insurers, banks and such other persons in any such other capacity deemed to be necessary or desirable.

RCM is responsible for the Corporation’s financial and other records that are required to be maintained and prepares all reports and other materials required to be filed with the SEC or any other regulatory authority, including reports to shareholders. In addition, RCM assists the Corporation in determining and publishing the Corporation’s net asset value (NAV), overseeing the preparation and filing of the tax returns, and the printing and dissemination of reports to shareholders, and generally overseeing the payment of

expenses and the performance of administrative and professional services rendered by others. RCM provides, on the Corporation’s behalf, managerial assistance to those portfolio companies that have accepted its offer to provide such assistance.

For the three months ended March 31, 2025 and 2024, the Corporation recorded administrative fees of $48,750 and $38,167, respectively, related to costs incurred by RCM that are reimbursable under the Administration Agreement.

Note 9. FINANCIAL HIGHLIGHTS

The following schedule provides the financial highlights, calculated based on shares outstanding, for the periods indicated:


	Three months ended March 31, 2025 (Unaudited)*			Three months ended March 31, 2024 (Unaudited)*
Per Share Data: (1)
Net asset value, beginning of period		25.31			23.56
Income from operations:
Net investment income		0.41			0.32
Net realized gain on sales and dispositions of investments		0.31			1.34
Net change in unrealized appreciation/depreciation on investments		(0.44	)		(1.12	)
Increase in net assets from operations		0.28			0.54
Payment of cash dividend		(0.29	)		(0.25	)
Effect of stock dividend		(3.31	)		—
(Decrease) increase in net assets per share		(3.32	)		0.29
Net asset value, end of period	$	21.99		$	23.85
Per share market price, end of period	$	18.77		$	13.97
Total return based on market value (2)		(0.99	)%		9.47	%
Total return based on net asset value (3)		(11.97	)%		2.30	%
Supplemental Data:
Ratio of expenses before income taxes to average net assets (4)		4.84	%		8.02	%
Ratio of expenses including income taxes to average net assets (4)		4.84	%		8.02	%
Ratio of net investment income to average net assets (4)		7.46	%		5.49	%
Portfolio turnover		0.56	%		13.56	%
Debt/equity ratio		—	%		31.18	%
Net assets, end of period	$	65,311,253		$	61,569,339
Total amount of senior securities outstanding, exclusive of treasury securities	$	-		$	19,200,000
Asset coverage per unit (5)	N/A				420.7	%

(1)

Per share data is based on shares outstanding and the results are rounded to the nearest cent.

(2)

Total return based on market value is calculated as the change in market value per share during the period plus declared dividends per share, assuming reinvestment of dividends, divided by the beginning market value per share.

(3)

Total return based on net asset value is calculated as the change in net asset value per share during the period plus declared dividends per share, divided by the beginning net asset value per share.

(4)

Percentage is presented on an annualized basis.

(5)

Asset coverage per unit is the ratio of the carrying value of the Corporation's total consolidated assets, less liabilities and indebtedness not represented by senior securities, to the aggregate amount of senior securities representing indebtedness.

* Amounts are rounded.

The Corporation’s interim period results could fluctuate as a result of a number of factors; therefore results for any interim period should not be relied upon as being indicative of performance for the full year or in future periods.

Note 10. SUBSEQUENT EVENT

Subsequent to the quarter end, on April 30, 2025, Rand's Board of Directors declared a quarterly cash dividend of $0.29 per share. The cash dividend will be paid on or about June 13, 2025 to shareholders of record as of May 30, 2025.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the consolidated financial statements and related notes included elsewhere in this report. Historical results and percentage relationships among any amounts in the consolidated financial statements are not necessarily indicative of trends in operating results for any future periods.

FORWARD LOOKING STATEMENTS

Statements included in this Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this report that do not relate to present or historical conditions are “forward-looking statements” within the meaning of that term in Section 27A of the Securities Act of 1933, as amended, and in Section 21E of the Securities Exchange Act of 1934, as amended. Additional oral or written forward-looking statements may be made by us from time to time, and forward-looking statements may be included in documents that are filed with the SEC. Forward-looking statements involve risks and uncertainties that could cause our results or outcomes to differ materially from those expressed in the forward-looking statements. Forward-looking statements may include, without limitation, statements relating to our plans, strategies, objectives, expectations and intentions, including statements related to our investment strategies and our intention to co-invest with certain of our affiliates; the impact of our election as a RIC for U.S. federal tax purposes on the payment of corporate level U.S. federal income taxes by Rand; statements regarding our liquidity and financial resources; statements regarding any capital gains fee that may be due to RCM upon a hypothetical liquidation of our portfolio and the amount of the capital gains fee that may be payable to RCM for 2025; and statements regarding our compliance with the RIC requirements as of March 31, 2025; and statements regarding future dividend payments, and are intended to be made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as “believes,” “forecasts,” “intends,” “possible,” “expects,” “estimates,” “anticipates,” or “plans” and similar expressions are intended to identify forward-looking statements. Among the important factors on which such statements are based are assumptions concerning the state of the United States economy and the local markets in which our portfolio companies operate, the state of the securities markets in which the securities of our portfolio companies could be traded, liquidity within the United States financial markets, and inflation. Forward-looking statements are also subject to the risks and uncertainties described under the caption “Risk Factors” contained in Part II, Item 1A of this report and in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024.

There may be other factors not identified that affect the accuracy of our forward-looking statements. Further, any forward-looking statement speaks only as of the date when it is made and, except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time that may cause our business not to develop as we expect, and we cannot predict all of them.

Overview

We are an externally managed, non-diversified investment company that lends to and invests in lower middle market companies. Our investment objective is to generate current income and when possible, complement this current income with capital appreciation. As a result, our investments are primarily in higher yielding debt instruments. Our investment activities are managed by our investment adviser, Rand Capital Management, LLC (“RCM”).

We have elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). As a BDC, we are required to comply with certain regulatory requirements specified in the 1940 Act.

In November 2019, Rand completed a stock sale transaction (the “Closing”) with East Asset Management (“East”). The transaction consisted of a $25 million investment in Rand by East, in the form of cash and contributed portfolio assets, in exchange for approximately 8.3 million shares of Rand common stock. Concurrent with the Closing, RCM, a registered investment advisor, was retained by Rand as its external investment adviser and administrator (the Closing and the retention of RCM as our investment adviser and administrator are collectively referred to herein as the “Transaction”). The term of the new investment advisory and management agreement (the “Investment Management Agreement”) with RCM was extended after approval of its renewal by our Board of Directors (the “Board”) in October 2024 and is currently scheduled to expire on December 31, 2025. In addition, the term of the administration agreement (the “Administration Agreement”) with RCM was extended after approval of its renewal by the Board in October 2024 and is currently scheduled to expire on December 31, 2025. The Investment Management Agreement and Administration Agreement can continue for successive annual periods after December 31, 2025 provided that such continuance is specifically approved at least annually by (i)(A) the affirmative vote of a majority of the Board or (B) the affirmative vote of a majority of our outstanding voting securities, and (ii) the affirmative vote of a majority of our directors who are not “interested persons,” as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended (the "1940 Act"), of us, RCM or our respective affiliates.

On January 24, 2024, the Board, including a “required majority” (as such term is defined in Section 57(o) of the 1940 Act) of the Board, approved the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act. As a result, our asset coverage requirement under the 1940 Act for senior securities was changed from 200% to 150%, effective January 24, 2025. We monitor our compliance with this coverage ratio on a regular basis. As of March 31, 2025, we had no senior securities outstanding and, as a result, our asset coverage ratio for senior securities as of March 31, 2025 is incalculable. For a discussion of the risks associated with our adoption of a modified asset coverage requirement of 150%, please see the discussion of risks under the caption “Risk Factors – Risks related to our Indebtedness” contained in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024. Notwithstanding the reduction of our asset coverage requirement under the 1940 Act from 200% to 150% effective January 24, 2025, under the terms of the Credit Agreement, we are required to maintain an Asset Coverage Ratio (defined in the Credit Agreement as the ratio of the fair market value of all of the Corporation’s assets to the sum of all of the Corporation’s obligations for borrowed money plus all capital lease obligations) of not less 300%.

Pursuant to the terms of the Investment Management Agreement, Rand pays RCM a base management fee and may pay an incentive fee, comprised of two parts: (1) the "Income Based Fee" and (2) the "Capital Gains Fee", if specified benchmarks are met.

We elected U.S. federal tax treatment as a regulated investment company (“RIC”) under subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). To maintain our qualification as a RIC, we must, among other things, meet certain source of income and asset diversification requirements. As of March 31, 2025, we believe we were in compliance with the RIC requirements. As a RIC, we generally will not be subject to corporate-level U.S. federal income taxes on any net ordinary income or capital gains that we timely distribute to our shareholders as dividends. In addition, as a RIC, we must distribute annually to our shareholders at least 90% of our ordinary net income and realized net short-term capital gains in excess of realized net long-term capital losses, if any. Accordingly, our Board has regularly declared a quarterly cash dividend since our RIC election.

Our Board declared the following quarterly cash dividend during the three months ended March 31, 2025:


Quarter	Dividend/Share Amount		Record Date	Payment Date
1st	$	0.29	March 14, 2025	March 28, 2025

On December 5, 2024, our Board declared a dividend in the amount of $4.20 per share. The dividend was paid in the aggregate combination of 20% in cash and 80% in newly issued shares of our common stock on January 24, 2025 to shareholders of record as of December 16, 2024. The portion of the dividend paid using our common stock increased the number of issued and outstanding shares of our common stock from 2,581,021 shares to 2,969,814 shares as of January 24, 2025.

We may co-invest, subject to the conditions included in the exemptive relief order we received from the SEC, with certain of our affiliates. See “SEC Exemptive Order” below. We believe these types of co-investments are likely to afford us additional investment opportunities and provide an ability to achieve greater diversification in our investment portfolio.

SEC Exemptive Order

On October 7, 2020, Rand, RCM and certain of their affiliates received an exemptive order from the SEC to permit the Corporation to co-invest in portfolio companies with certain affiliates, including other BDCs and registered investment companies managed by RCM and certain of its affiliates, in a manner consistent with our investment objective, positions, policies, strategies and restrictions as well as regulatory requirements, subject to compliance with certain conditions (the “Order”). On March 29, 2021, the SEC granted Rand, RCM, Callodine, which holds a controlling interest in RCM, and certain of their affiliates a new exemptive order (the “New Order”) that superseded the Order and permits Rand to co-invest with affiliates managed by RCM and Callodine. Pursuant to the New Order, we are generally permitted to co-invest with affiliates covered by the New Order if a “required majority” (as defined in Section 57(o) of the 1940 Act) of Rand’s independent directors makes certain conclusions in connection with a co-investment transaction, including that (1) the terms of the transaction, including the consideration to be paid, are reasonable and fair to Rand and its shareholders and do not involve overreaching in respect of Rand or its shareholders on the part of any person concerned, (2) the transaction is consistent with the interests of Rand’s shareholders and is consistent with Rand’s investment objective and strategies and (3) the investment by Rand’s affiliates would not disadvantage Rand, and Rand’s participation would not be on a basis different from or less advantageous than that on which Rand’s affiliates are investing. In addition, on September 6, 2022, the SEC granted an amendment to the New Order to permit us to participate in follow-on investments in our existing portfolio companies with certain Affiliated Funds (as defined in the New Order) that do not hold any investments in such existing portfolio companies.

Critical Accounting Policies

We prepare our consolidated financial statements in accordance with United States generally accepted accounting principles (GAAP), which require the use of estimates and assumptions that affect the reported amounts of assets and liabilities. A summary of our critical accounting policies can be found in our Annual Report on Form 10-K for the year ended December 31, 2024 under Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Financial Condition

Overview:


	March 31, 2025		December 31, 2024		Decrease			% Decrease
Total assets	$	67,821,430	$	72,457,433	$	(4,636,003	)		(6.4	)%
Total liabilities		2,510,177		7,124,913		(4,614,736	)		(64.8	)%
Net assets	$	65,311,253	$	65,332,520	$	(21,267	)		(0.0	)%

Net asset value per share (NAV) was $21.99 at March 31, 2025 and $25.31 at December 31, 2024.

Cash approximated 7.6% of net assets at March 31, 2025, as compared to 1.3% of net assets at December 31, 2024.

During 2022, we entered into a $25 million senior secured revolving credit facility (the “Credit Facility”) with M&T Bank, as lender (the “Lender”), with the amount that we can borrow thereunder, at any given time, determined based upon a borrowing base formula. The Credit Facility has a 5-year term with a maturity date of June 27, 2027. Our borrowings under the Credit Facility bear interest at a variable rate per annum equal to 3.50 percentage points above the greater of (i) the applicable daily simple secured overnight financing rate (SOFR) or (ii) 0.25%. There was no outstanding balance drawn on the Credit Facility at March 31, 2025. See “Note 6. Senior Secured Revolving Credit Facility” in the Notes to the Consolidated Financial Statements for additional information regarding the terms of our Credit Facility.

Composition of Our Investment Portfolio

Our financial condition is dependent on the success of our portfolio holdings. The following summarizes our investment portfolio at the dates indicated:


	March 31, 2025		December 31, 2024		Decrease			% Decrease
Investments, at cost	$	60,757,941	$	68,120,235	$	(7,362,294	)		(10.8	)%
Unrealized appreciation, net		1,399,422		2,697,806		(1,298,384	)		(48.1	)%
Investments, at fair value	$	62,157,363	$	70,818,041	$	(8,660,678	)		(12.2	)%

Our total investments at fair value, as determined by RCM and approved by our Board, approximated 95% of net assets at March 31, 2025 as compared to approximately 108% of net assets at December 31, 2024.

Our investment objective is to generate current income and when possible, complement this current income with capital appreciation. As a result, we are focused on investing in higher yielding debt instruments and related equity investments in privately held, lower middle market companies with a committed and experienced management team in a broad variety of industries. In the past, we have also invested in publicly traded shares of other business development companies that provided income through dividends and had more liquidity than our private company equity investments, but did not own any such shares of other business development companies as of March 31, 2025.

The change in investments during the three months ended March 31, 2025, at cost, is comprised of the following:


	Cost Increase (Decrease)
New investments:
ITA Acquisition, LLC (ITA)	$	375,000
Total of new investments		375,000
Other changes to investments:
BMP Food Service Supply Holdco, LLC (FSS) interest conversion		212,770
Caitec, Inc. (Caitec) interest conversion		158,454
Mountain Regional Equipment Solutions (MRES) interest conversion, fee conversion and OID amortization		124,575
Autotality (formely Filterworks Acquisition USA, LLC) interest conversion		58,573
Seybert’s Billiards Corporation (Seybert's) OID amortization and interest conversion		31,950
Highland All About People Holdings, Inc. (All About People) interest conversion		31,751
Pressure Pro, Inc. (Pressure Pro) OID amortization and interest conversion		22,445
FCM Industries Holdco LLC (First Coast Mulch) interest conversion		12,222
Mobile RN Holdings LLC (Mobile IV Nurses) interest conversion		6,266
GoNoodle, Inc. (GoNoodle) interest conversion		3,601
Total of other changes to investments		662,607
Investments repaid, sold, liquidated or converted:
GoNoodle warrant expiration		(25	)
Pressure Pro warrant sale		(30,000	)
HDI Acquisition LLC (Hilton) debt repayment		(1,071,824	)
Pressure Pro debt repayment		(1,725,150	)
Mattison Avenue Holdings LLC (Mattison) debt repayment		(5,572,902	)
Total of investments repaid, sold, liquidated or converted		(8,399,901	)
Net change in investments, at cost	$	(7,362,294	)

Results of Operations

Comparison of the three months ended March 31, 2025 to the three months ended March 31, 2024

Investment Income


	Three months ended March 31, 2025		Three months ended March 31, 2024		Increase (Decrease)			% Increase (Decrease)
Interest from portfolio companies	$	1,677,166	$	1,813,648	$	(136,482	)		(7.5	)%
Interest from other investments		10,383		1,914		8,469			442.5	%
Dividend and other investment income		13,125		151,835		(138,710	)		(91.4	)%
Fee income		307,230		99,822		207,408			207.8	%
Total investment income	$	2,007,904	$	2,067,219	$	(59,315	)		(2.9	)%

The total investment income during the three months ended March 31, 2025 was received from 18 portfolio companies. For the three months ended March 31, 2024, total investment income was received from 24 portfolio companies.

Interest from portfolio companies – Interest from portfolio companies was approximately 8% lower during the three months ended March 31, 2025 versus the same period in 2024 due to the fact that several interest yielding investments were repaid during the last year and new debt instruments were not originated in replacement, rather such proceeds were used to repay outstanding borrowed amounts under the Credit Facility. Debt instruments were repaid by Hilton, Mattison, Nailbiter, Inc. (Nailbiter), Pressure Pro, and SciAps, Inc. (SciAps).

Interest from other investments - The increase in interest from other investments is primarily due to higher average cash balances during the three months ended March 31, 2025 versus the same period in 2024.


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)


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


PART I. – FINANCIAL INFORMATION
Item 1.	Financial Statements and Supplementary Data	1
	Consolidated Statements of Financial Position as of March 31, 2025 (Unaudited) and December 31, 2024	1
	Consolidated Statements of Operations for the Three Months Ended March 31, 2025 and 2024 (Unaudited)	2
	Consolidated Statements of Changes in Net Assets for the Three Months Ended March 31, 2025 and 2024 (Unaudited)	3
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024 (Unaudited)	4
	Consolidated Schedule of Portfolio Investments as of March 31, 2025 (Unaudited)	5
	Consolidated Schedule of Portfolio Investments as of December 31, 2024	12
	Notes to the Consolidated Financial Statements (Unaudited)	20
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	42
Item 4.	Controls and Procedures	43
PART II. – OTHER INFORMATION
Item 1.	Legal Proceedings	44
Item 1A.	Risk Factors	44
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 3.	Defaults upon Senior Securities	44
Item 4.	Mine Safety Disclosures	44
Item 5.	Other Information	44
Item 6.	Exhibits	45


	Three months ended March 31, 2024
Carlyle	$	113,520
Barings		28,800
Ares		16,590
Pennantpark		(5,850	)
FS KKR		(43,200	)
Knoa Software, Inc. (Knoa)		(100,000	)
ACV		(2,900,156	)
Total change in net unrealized appreciation (depreciation) of investments before income taxes	$	(2,890,296	)


(3.1)(i)	Certificate of Incorporation of the Corporation, incorporated by reference to Exhibit (a)(1) of Form N-2 filed with the SEC on April 22, 1997. (File No. 333-25617).

(3.1)(ii)	Certificate of Amendment to the Certificate of Incorporation, as amended, incorporated by reference to Exhibit 3.1 to the Corporation’s Current Report on Form 8-K filed with the SEC on November 12, 2019.

(3.1)(iii)	Certificate of Amendment to the Certificate of Incorporation, as amended, incorporated by reference to Exhibit 3.1 to the Corporation’s Current Report on Form 8-K filed with the SEC on May 21, 2020.

(3.1)(iv)	By-laws of the Corporation, incorporated by reference to Exhibit 3(ii) to the Corporation’s Quarterly Report on Form 10-Q for the period ended September 30, 2016 filed with the SEC on November 2, 2016. (File No. 814-00235).

(4.1)	Specimen certificate of common stock certificate, incorporated by reference to Exhibit (b) of Form N-2 filed with the SEC on April 22, 1997. (File No. 333-25617).

(31.1)	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934, as amended – filed herewith.

(31.2)	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934, as amended – filed herewith.

(32.1)	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – Rand Capital Corporation – filed herewith.

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101.SCH*	Inline XBRL Taxonomy Extension Schema With Embedded Linkbases Document

104	Cover Page Interactive Data File (embedded within the Inline XBRL document)


	Three months ended March 31, 2025		Three months ended March 31, 2024
Tilson Technology Management Inc. (Tilson)	$	13,125	$	13,125
Carlyle Secured Lending Inc. (Carlyle)		—		41,280
PennantPark Investment Corporation (Pennantpark)		—		40,950
FS KKR Capital Corp. (FS KKR)		—		36,000
Barings BDC, Inc. (Barings)		—		10,400
Ares Capital Corporation (Ares)		—		10,080
Total dividend and other investment income	$	13,125	$	151,835


	Three months ended March 31, 2025		Three months ended March 31, 2024		Change
Realized gain on investments before income taxes	$	925,332	$	3,450,092	$	(2,524,760	)


	Impact on net investment income from a change in interest rates on our Credit Facility at:
	1%		2%		3%
Increase in interest rate	$	—	$	—	$	—
Decrease in interest rate		-		-		-


Period	Total number of shares purchased (1)		Average price paid per share (2)		Total number of shares purchased as part of publicly announced plan (3)		Maximum dollar amount of shares that may yet be purchased under the share repurchase program (3)
1/1/2025 – 1/31/2025		—		—		—	$	1,500,000
2/1/2025 – 2/28/2025		—		—		—	$	1,500,000
3/1/2025 – 3/31/2025		—		—		—	$	1,500,000
Total		—		—		—


Dated: May 5, 2025


	/s/ Daniel P. Penberthy
	Daniel P. Penberthy, Chief Executive
	Officer and President
	(Chief Executive Officer)
Dated: May 5, 2025



	/s/ Margaret W. Brechtel
	Margaret W. Brechtel, Executive Vice
	President, Chief Financial Officer and
	Treasurer
	(Chief Financial Officer)

RAND CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

CONSOLIDATED STATEMENTS OF OPERATIONS

RAND CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

RAND CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

RAND CAPITAL CORPORATION AND SUBSIDIARIES

RAND CAPITAL CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 5. COMMITMENTS AND CONTINGENCIES

Note 6. SENIOR SECURED REVOLVING CREDIT FACILITY

Item 1A. Risk Factors

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Item 3. Defaults upon Senior Securities

Item 4. Mine Safety Disclosures

Item 5. Other Information