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150 Class A Units One2024-01-012024-12-310000081955Mobile RN Holdings LLC2024-12-310000081955Filterworks Acquisition USA, LLC d/b/a Autotality - $2,283,702 Amended Term Note2024-01-012024-12-3100000819552025-03-310000081955Seybert’s Billiards Corporation - 5.82 Common shares2024-12-310000081955FCM Industries Holdco, LLC - $3,380,000 Term Note at 13%2024-12-310000081955us-gaap:CommonStockMember2024-12-310000081955srt:MinimumMember2025-03-310000081955Autotality formerly Filterworks Acquisition USA, LLC - 626.2 shares Class A-1 Units2025-03-310000081955us-gaap:FairValueInputsLevel3Memberrand:LoanInvestmentsMember2024-01-012024-03-310000081955Highland All About People Holdings, Inc. - $3,000,000 Term Note at 12%2025-01-012025-03-310000081955ITA Acquisition, LLC - $1,500,000 Term Note at 14% PIK through March 31, 20262025-03-310000081955us-gaap:RetainedEarningsMember2024-12-310000081955Control and Affiliate Investments2024-12-310000081955us-gaap:InvestmentAffiliatedIssuerControlledMember2024-01-012024-03-310000081955Pressure Pro, Inc. - 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250 Class D-1 Units of SQF Holdco LLC2024-12-310000081955Mountain Regional Equipment Solutions2025-03-310000081955ITA Acquisition, LLC - $2,672,808 Fifth Amended and Restated Term Note at 14% PIK through March 31, 20262025-03-310000081955us-gaap:InvestmentAffiliatedIssuerControlledMember2024-12-310000081955Filterworks Acquisition USA, LLC - $2,283,702 Amended Term Note2023-12-310000081955us-gaap:FairValueInputsLevel3Memberrand:PressureProIncMember2025-01-012025-03-310000081955Non-Control/Non-Affiliate Investments - Net assets2025-03-310000081955Seybert’s Billiards Corporation - Warrant for 4% Membership Interest2024-01-012024-12-310000081955Applied Image, Inc.2023-12-310000081955GoNoodle, Inc. - Warrant for 21,948 Series D Preferred2024-12-310000081955rand:ScenarioThreeMember2025-01-012025-03-310000081955Autotality (formerly Filterworks Acquisition USA, LLC)2025-01-012025-03-310000081955Filterworks Acquisition USA, LLC - 417.7 shares Class A-0 Units2023-12-310000081955us-gaap:FairValueInputsLevel3Memberrand:AutotalityMemberus-gaap:DebtSecuritiesMember2025-01-012025-03-310000081955Autotality (formerly Filterworks Acquisition USA, LLC) - $2,283,702 Amended Term Note2024-12-310000081955ITA Acquisition, LLC $1,500,000 Term Note at 12%2024-12-310000081955Tilson Technology Management, Inc. - 23,077 Series F Preferred2025-01-012025-03-310000081955us-gaap:FairValueInputsLevel3Memberrand:InterNationalElectronicAlloysLlcMember2024-01-012024-03-310000081955Carolina Skiff LLC - 6.0825% Class A Common2025-01-012025-03-310000081955Filterworks Acquisition USA, LLC - $2,283,702 Amended Term Note2024-12-310000081955Caitec, Inc. - $1,750,000 Subordinated Secured Promissory Note2024-01-012024-12-3100000819552024-01-012024-12-310000081955Tilson Technology Management, Inc. - 250 Class D-1 Units of SQF Holdco LLC2024-01-012024-12-310000081955Filterworks Acquisition USA, LLC - 417.7 shares Class A-0 Units2024-01-012024-12-310000081955Tilson Technology Management, Inc. - 211,567 A-1 Units of SQF Holdco LLC.2025-01-012025-03-310000081955us-gaap:FairValueInputsLevel3Memberrand:HdiAcquisitionLlcMemberus-gaap:DebtSecuritiesMember2025-01-012025-03-310000081955Seybert’s2024-12-310000081955Affiliate Investments2024-01-012024-12-310000081955us-gaap:FairValueInputsLevel3Memberrand:HighlandAllAboutPeopleHoldingsIncMember2024-01-012024-03-310000081955Mobile RN Holdings LLC - 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$2,283,702 Amended Term Note Thereafter2025-03-310000081955Mountain Regional Equipment Solutions - $3,000,000 Term Note Thereafter 14%2025-03-310000081955us-gaap:FairValueInputsLevel3Memberrand:HdiAcquisitionLlcMemberus-gaap:DebtSecuritiesMember2024-01-012024-03-310000081955us-gaap:FairValueInputsLevel3Memberrand:ItaAcquisitionLlcMember2025-01-012025-03-310000081955OnCore Golf Technology, Inc. - 300,483 Preferred AA2024-12-310000081955Tilson Technology Management, Inc.2025-03-310000081955us-gaap:FairValueInputsLevel3Memberus-gaap:EquitySecuritiesMember2024-12-310000081955Tilson Technology Management, Inc. - 15,385 Series E Preferred2024-01-012024-12-310000081955Mountain Regional Equipment Solutions - $3,000,000 Term Note at 14% PIK through June 30, 20252025-03-310000081955ITA Acquisition, LLC - $2,297,808 Fourth Amended and Restated Term Note at 3% (+11% PIK) through December 30, 20242024-12-310000081955BMP Food Service Supply Holdco, LLC - $7,035,000 Second Amended and Restated Term Note, $4,820,000 at 12%, $2,215,000 at 13%2023-12-310000081955BMP Food Service Supply Holdco, LLC - $7,035,000 Second Amended and Restated Term Note2025-03-310000081955rand:InvestmentManagementAgreementMember2025-01-012025-03-310000081955Applied Image, Inc. - $1,750,000 Term Note at 10%2024-01-012024-12-310000081955us-gaap:FairValueInputsLevel3Memberus-gaap:DebtSecuritiesMemberrand:FcmIndustriesHoldcoLlcMember2024-01-012024-03-310000081955BMP Food Service Supply Holdco, LLC - 15.4% Preferred Interest2023-12-310000081955ITA Acquisition, LLC - $1,500,000 Term Note2024-01-012024-12-310000081955us-gaap:TreasuryStockCommonMember2024-03-310000081955Autotality (formerly Filterworks Acquisition USA, LLC) - 626.2 shares Class A-1 Units2025-03-310000081955rand:MAndTBankMemberrand:CreditAgreementMemberus-gaap:RevolvingCreditFacilityMember2022-06-272022-06-270000081955Caitec, Inc. - 36,261 Series A Preferred One2024-12-310000081955Investments, NET ASSETS - 100%2025-03-310000081955Tilson Technology Management, Inc. - *21,391 Series C Preferred2024-12-310000081955PostProcess Technologies, Inc. - 360,002 Series A1 Preferred2024-01-012024-12-310000081955rand:CaitecIncMember2024-01-012024-12-310000081955Applied Image, Inc. - $1,750,000 Term Note2024-12-310000081955Caitec, Inc. - $1,750,000 Subordinated Secured Promissory Note to 12%2024-12-310000081955ITA Acquisition, LLC2024-01-012024-12-310000081955rand:ConsumerProductMember2024-12-310000081955ITA Acquisition, LLC - $1,500,000 Term Note2024-12-310000081955us-gaap:EstimateOfFairValueFairValueDisclosureMember2024-12-310000081955SciAps, Inc. - 187,500 Series A Preferred2023-12-3100000819552024-01-012024-03-310000081955Tilson Technology Management, Inc. - 120,000 Series B Preferred2025-01-012025-03-310000081955us-gaap:FairValueInputsLevel3Memberrand:MountainRegionalEquipmentSolutionsMemberus-gaap:EquitySecuritiesMember2024-01-012024-03-310000081955rand:EastAssetManagementMember2025-01-012025-03-310000081955ITA Acquisition, LLC - $1,500,000 Term Note at Thereafter 12%2025-03-310000081955Seybert’s Billiards Corporation - 6,099,131 Third Amended and Restated Term Note at 12%2025-03-310000081955Inter-National Electronic Alloys LLC d/b/a EFINEA - $3,288,235 Term Note2025-01-012025-03-310000081955BMP Food Service Supply Holdco, LLC - 7,035,000 Second Amended and Restated Term Note, $2,215,000, thereafter 16%, due November 22, 20272025-03-310000081955Tilson Technology Management, Inc. - 250 Class D-1 Units of SQF Holdco LLC2025-01-012025-03-310000081955srt:MinimumMemberrand:ScenarioTwoMember2025-01-012025-03-3100000819552025-01-240000081955Tilson Technology Management, Inc.2024-12-310000081955SciAps, Inc. - 117,371 Series B Convertible Preferred2023-12-310000081955us-gaap:InvestmentAffiliatedIssuerControlledMember2025-03-310000081955Caitec, Inc. - 150 Class A Units One2025-03-310000081955ITA Acquisition, LLC 1,124 ITA Acquisition, LLC - 1,924 Class B Common Units.2025-03-310000081955Tilson Technology Management, Inc. - 120,000 Series B Preferred2024-01-012024-12-310000081955Autotality formerly Filterworks Acquisition USA, LLC - 417.7 shares Class A-0 Units2025-01-012025-03-310000081955Seybert’s Billiards Corporation - Warrant for 4% Membership Interest One2023-12-310000081955Highland All About People Holdings, Inc. - 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75.3 Class B Preferred Units2024-01-012024-12-310000081955FCM Industries Holdco, LLC - $420,000 Convertible Note at 10%2024-01-012024-12-310000081955Tilson Technology Management, Inc.2025-01-012025-03-310000081955Control Investments2024-12-310000081955Autotality (formerly Filterworks Acquisition USA, LLC) - $2,283,702 Amended Term Note at 6% (+8% PIK) through March 31, 20252025-03-310000081955Tilson Technology Management, Inc. - *70,176 Series D Preferred2024-12-310000081955Tilson Technology Management, Inc. - *15,385 Series E Preferred2024-01-012024-12-310000081955Tilson Technology Management, Inc. - *21,391 Series C Preferred2025-01-012025-03-310000081955Seybert’s Billiards Corporation - 5.82 Common shares2025-01-012025-03-310000081955us-gaap:FairValueInputsLevel3Memberrand:AutotalityMember2025-01-012025-03-310000081955us-gaap:FairValueInputsLevel3Memberrand:LoanInvestmentsMember2024-03-310000081955us-gaap:InvestmentAffiliatedIssuerNoncontrolledMember2024-12-310000081955GoNoodle, Inc. - Warrant for 21,948 Series D Preferred2024-01-012024-12-310000081955srt:MinimumMember2024-01-012024-12-310000081955BMP Food Service Supply Holdco, LLC - 15.4% Preferred Interest2025-03-310000081955us-gaap:FairValueInputsLevel3Member2024-03-310000081955rand:StockDividendsDistributableMember2024-12-310000081955us-gaap:DebtSecuritiesMember2025-03-310000081955PostProcess Technologies, Inc. - 360,002 Series A1 Preferred2024-12-310000081955FCM Industries Holdco LLC2024-01-012024-12-310000081955BMP Swanson Holdco, LLC2025-01-012025-03-310000081955Inter-National Electronic Alloys LLC2025-01-012025-03-310000081955Mobile RN Holdings LLC - $2,500,000 Term Note at 14%2025-01-012025-03-310000081955Caitec, Inc. - $1,750,000 Subordinated Secured Promissory Note Modified to 14%2025-03-310000081955us-gaap:FairValueInputsLevel3Memberrand:FcmIndustriesHoldcoLlcMember2024-01-012024-03-310000081955rand:HealthAndWellnessMember2024-12-310000081955us-gaap:CommonStockMember2023-12-310000081955BMP Swanson Holdco, LLC - $1,600,000 Term Note at 12%2024-12-310000081955FCM Industries Holdco, LLC - $3,380,000 Term Note at 13%2024-01-012024-12-310000081955Caitec, Inc. - 150 Class A Units2025-01-012025-03-310000081955SciAps, Inc.2023-12-310000081955ITA Acquisition, LLC 1,124 Class A Preferred Units and 1,924 Class B Common Units2024-01-012024-12-310000081955Highland All About People Holdings, Inc.2025-03-310000081955BMP Food Service Supply Holdco, LLC - $7,035,000 Second Amended and Restated Term Note, $4,820,000 at 12%, $2,215,000 at 13%2024-12-310000081955us-gaap:FairValueInputsLevel3Member2025-01-012025-03-310000081955ITA Acquisition, LLC - $1,500,000 Term Note2023-12-310000081955DSD Operating, LLC - 1,067 Class A Preferred shares2024-12-310000081955Tilson Technology Management, Inc. - *21,391 Series C Preferred2025-03-310000081955us-gaap:FairValueInputsLevel3Member2024-01-012024-03-310000081955rand:ScenarioOneMember2025-01-012025-03-310000081955Seybert’s Billiards Corporation - $4,139,444 Term Note at 12%2023-12-310000081955Pressure Pro, Inc. - Warrant for 10% Membership Interest2025-01-012025-03-310000081955rand:InterNationalElectronicAlloysLlcMember2025-01-012025-03-310000081955Applied Image, Inc. - Warrant for 1,167 shares2025-01-012025-03-310000081955rand:EastAssetManagementMember2019-11-012019-11-300000081955rand:CreditAgreementMemberus-gaap:RevolvingCreditFacilityMember2025-03-310000081955FCM Industries Holdco LLC $3,380,000 Term Note at 13%2024-01-012024-12-310000081955Seybert’s Billiards Corporation2025-03-310000081955Tilson Technology Management, Inc. - *120,000 Series B Preferred2025-03-310000081955us-gaap:FairValueInputsLevel3Memberus-gaap:DebtSecuritiesMemberrand:PressureProIncMember2024-01-012024-03-310000081955Tilson Technology Management, Inc. - 23,077 Series F Preferred2023-12-310000081955us-gaap:FairValueInputsLevel3Memberrand:NonControlAndNonAffiliateEquityInvestmentsMember2025-03-310000081955Inter-National Electronic Alloys LLC - 75.3 Class B Preferred Units2025-03-310000081955rand:SeybertsBilliardsCorporationMember2025-01-012025-03-310000081955Inter-National Electronic Alloys LLC d/b/a EFINEA - $3,288,235 Term Note2025-03-310000081955Subtotal Non-Control/Non-Affiliate Investments2024-12-310000081955BMP Swanson Holdco, LLC - Preferred Membership Interest for 9.24%2024-12-310000081955Caitec, Inc. - 36,261 Series A Preferred2025-01-012025-03-310000081955SciAps, Inc. - 274,299 Series A1 Convertible Preferred2023-12-310000081955rand:NetRealizedGainLossOnSalesAndDispositionsOfInvestmentsMember2025-01-012025-03-310000081955rand:MAndTBankMemberrand:CreditAgreementMemberus-gaap:RevolvingCreditFacilityMembersrt:MinimumMember2022-06-272022-06-270000081955Inter-National Electronic Alloys LLC $3,288,235 Term Note at 12%2024-01-012024-12-310000081955Tilson Technology Management, Inc. - *120,000 Series B Preferred2024-12-310000081955Highland All About People Holdings, Inc.2024-12-310000081955us-gaap:FairValueInputsLevel3Memberrand:MountainRegionalEquipmentSolutionsMember2024-01-012024-03-310000081955us-gaap:RetainedEarningsMember2025-01-012025-03-310000081955Seybert’s Billiards Corporation - 5.82 Common shares2023-12-310000081955srt:MaximumMember2025-01-012025-03-310000081955us-gaap:TreasuryStockCommonMember2025-03-3100000819552025-01-012025-03-310000081955Pressure Pro, Inc.2023-12-310000081955Highland All About People Holdings, Inc. - 1,000,000 Class A Units2025-01-012025-03-310000081955ITA Acquisition, LLC - $1,500,000 Term Note2025-03-310000081955Carolina Skiff LLC - 6.0825% Class A Common Membership Interest2024-12-310000081955Subtotal Control Investments2024-12-3100000819552022-12-310000081955Seybert’s Billiards Corporation2025-01-012025-03-310000081955PostProcess Technologies, Inc. - 137,054 Series A Preferred2025-01-012025-03-310000081955Subtotal Control Investments2025-03-310000081955BMP Food Service Supply Holdco, LLC - 15.4% Preferred Interest2024-01-012024-12-310000081955us-gaap:FairValueInputsLevel3Memberus-gaap:DebtSecuritiesMemberrand:SeybertBilliardsCorporationMember2024-01-012024-03-310000081955rand:NetChangeInUnrealizedAppreciationDepreciationOnInvestmentsMember2024-01-012024-03-310000081955BMP Food Service Supply Holdco, LLC - $7,035,000 Second Amended and Restated Term Note, $4,820,000 at 12%, $2,215,000 at 16%2024-12-310000081955Seybert’s Billiards Corporation - Warrant for 4% Membership Interest One2025-01-012025-03-310000081955Tilson Technology Management, Inc. - 70,176 Series D Preferred2024-12-310000081955SciAps, Inc. - 187,500 Series A Preferred2024-01-012024-12-310000081955Pressure Pro, Inc. - $3,000,000 Term Note at 12%2024-12-310000081955Mountain Regional Equipment Solutions - Warrant for 4% Membership Interest2025-01-012025-03-310000081955Inter-National Electronic Alloys LLC d/b/a EFINEA - $3,288,235 Term Note2024-01-012024-12-310000081955Tilson Technology Management, Inc.2023-12-310000081955Applied Image, Inc. - $1,750,000 Term Note at 10% (+2% PIK) through February 1, 20252024-12-310000081955us-gaap:AdditionalPaidInCapitalMember2024-03-310000081955ITA Acquisition, LLC - $2,297,808 Fourth Amended and Restated Term Note at 3% (+11% PIK) through December 31, 20242024-12-310000081955LIABILITIES IN EXCESS OF OTHER ASSETS - (8.4%)2024-12-310000081955us-gaap:RetainedEarningsMember2023-12-310000081955FCM Industries Holdco LLC $420,000 Convertible Note at 10%2024-01-012024-12-310000081955Mobile RN Holdings LLC d/b/a Mobile IV Nurses - 6,375 Class A Common Units2024-12-310000081955rand:DistributionMember2024-12-310000081955us-gaap:FairValueInputsLevel3Memberrand:ControlInvestmentsMember2025-03-310000081955ITA Acquisition, LLC2024-12-310000081955us-gaap:FairValueInputsLevel3Memberrand:CaitecIncMemberrand:LoanInvestmentsMember2024-01-012024-03-310000081955rand:LoanInvestmentsMember2024-12-310000081955Caitec, Inc. - 36,261 Series A Preferred One2025-03-310000081955us-gaap:FairValueInputsLevel3Memberus-gaap:EquitySecuritiesMember2025-03-310000081955SciAps, Inc. - $2,090,000 Second Amended and Restated Secured Subordinated Promissory Note at 12%2023-12-310000081955us-gaap:FairValueInputsLevel3Memberrand:MountainRegionalEquipmentSolutionsMemberus-gaap:DebtSecuritiesMember2024-01-012024-03-310000081955Autotality formerly Filterworks Acquisition USA, LLC - $2,283,702 Amended Term Note2025-03-310000081955HDI Acquisition LLC. - $1,245,119 Term Loan2024-12-310000081955us-gaap:FairValueInputsLevel3Memberrand:ControlLoanAndDebtInvestmentsMember2025-03-310000081955us-gaap:FairValueInputsLevel3Member2025-03-310000081955Knoa Software, Inc. - 973,533 Series A-1 Convertible Preferred2024-12-310000081955us-gaap:FairValueInputsLevel3Memberrand:ItaAcquisitionLlcMember2024-01-012024-03-310000081955us-gaap:InvestmentAffiliatedIssuerControlledMember2025-01-012025-03-310000081955Open Exchange, Inc. - 397,899 Series C Preferred2024-12-310000081955rand:BlockerCorporationMember2025-03-310000081955Control Investments - 3.8% of net assets2024-12-310000081955rand:CreditAgreementMemberus-gaap:RevolvingCreditFacilityMember2024-01-012024-03-310000081955rand:AutomotiveMember2025-03-310000081955Mobile RN Holdings LLC d/b/a Mobile IV Nurses - 6,375 Class A Common Units2025-03-310000081955us-gaap:FairValueInputsLevel3Memberrand:ItaAcquisitionLlcMemberrand:LoanInvestmentsMember2024-01-012024-03-310000081955Highland All About People Holdings, Inc.2024-01-012024-12-310000081955FCM Industries Holdco, LLC2025-03-310000081955SciAps, Inc. - 147,059 Series D Convertible Preferred2024-01-012024-12-310000081955GoNoodle, Inc. - Warrant for 21,948 Series D Preferred2025-01-012025-03-310000081955Seybert’s Billiards Corporation2023-12-310000081955us-gaap:FairValueInputsLevel3Memberrand:GonoodleIncMemberus-gaap:EquitySecuritiesMember2025-01-012025-03-310000081955Mountain Regional Equipment Solutions - $3,000,000 Term Note2025-03-310000081955BMP Swanson Holdco, LLC - $1,600,000 Term Note2024-12-310000081955Applied Image, Inc.2025-03-310000081955rand:AutomotiveMember2024-12-310000081955Filterworks Acquisition USA, LLC d/b/a Autotality - $2,283,702 Amended Term Note Thereafter2024-12-310000081955FCM Industries Holdco, LLC - $420,000 Convertible Note at 10%2025-03-310000081955Microcision LLC - Membership Interest Purchase Warrant for 5%2025-01-012025-03-310000081955rand:CreditAgreementMemberus-gaap:RevolvingCreditFacilityMember2024-12-310000081955Autotality (formerly Filterworks Acquisition USA, LLC)2025-03-310000081955us-gaap:FairValueInputsLevel3Memberus-gaap:DebtSecuritiesMember2025-01-012025-03-310000081955Autotality (formerly Filterworks Acquisition USA, LLC) - thereafter 12% (+2% PIK) due March 31, 20262025-03-310000081955Caitec, Inc. - 36,261 Series A Preferred2024-01-012024-12-310000081955rand:BmpFoodServiceSupplyHoldcoLlcMember2025-01-012025-03-310000081955us-gaap:FairValueInputsLevel3Memberus-gaap:EquitySecuritiesMember2024-03-310000081955SciAps, Inc. - 113,636 Series C Convertible Preferred2023-12-310000081955Control Investments2024-01-012024-12-310000081955ITA Acquisition, LLC 1,124 ITA Acquisition, LLC - 1,924 Class B Common Units.2024-12-310000081955rand:InvestmentManagementAgreementMember2025-03-310000081955SciAps, Inc. - 147,059 Series D Convertible Preferred2024-12-310000081955Mobile RN Holdings LLC2024-01-012024-12-310000081955Inter-National Electronic Alloys LLC - 75.3 Class B Preferred Units2023-12-310000081955us-gaap:FairValueInputsLevel3Memberrand:BmpFoodServiceSupplyHoldcoLlcMemberus-gaap:DebtSecuritiesMember2025-01-012025-03-310000081955us-gaap:FairValueInputsLevel3Memberrand:MountainRegionalEquipmentSolutionsMemberus-gaap:DebtSecuritiesMember2025-01-012025-03-310000081955Control and Affiliate Investments2024-01-012024-12-310000081955BMP Swanson Holdco, LLC - $1,600,000 Term Note2025-01-012025-03-310000081955BMP Swanson Holdco, LLC - $1,600,000 Term Note at 12%2024-01-012024-12-310000081955rand:TilsonTechnologyManagementIncMember2024-01-012024-12-310000081955us-gaap:RetainedEarningsMember2025-03-310000081955us-gaap:FairValueInputsLevel3Memberrand:HdiAcquisitionLlcMember2025-01-012025-03-310000081955Mountain Regional Equipment Solutions - 37,991 Common Units2025-03-310000081955Seybert’s Billiards Corporation - 5.82 Common shares2024-01-012024-12-310000081955BMP Swanson Holdco, LLC - Preferred Membership Interest for 9.24%2025-01-012025-03-310000081955Open Exchange, Inc - 397,899 Common2025-03-310000081955OnCore Golf Technology, Inc. - 300,483 Preferred AA2025-03-310000081955Tilson Technology Management, Inc. - 120,000 Series B Preferred2025-03-310000081955Seybert’s Billiards Corporation - 5.82 Common shares2025-03-310000081955Carolina Skiff LLC - 6.0825% Class A Common Membership Interest2024-01-012024-12-310000081955Seybert’s Billiards Corporation - 6,099,131 Third Amended and Restated Term Note at 12%2025-01-012025-03-310000081955Applied Image, Inc. - $1,750,000 Term Note at 10% through February 1, 20292024-12-310000081955BMP Food Service Supply Holdco, LLC - 7,035,000 Second Amended and Restated Term Note, $4,820,0002025-03-310000081955Seybert’s Billiards Corporation - 6,099,131 Third Amended and Restated Term Note at 12%2024-12-310000081955BMP Swanson Holdco, LLC - Preferred Membership Interest for 9.29%2024-12-310000081955Inter-National Electronic Alloys LLC2024-12-310000081955BMP Food Service Supply Holdco, LLC2024-01-012024-12-310000081955us-gaap:CommonStockMember2024-03-310000081955Highland All About People Holdings, Inc. - 1,000,000 Class A Units2024-01-012024-12-310000081955SciAps, Inc. - 369,698 Series C1 Convertible Preferred2024-01-012024-12-310000081955Tilson Technology Management, Inc. - 70,176 Series D Preferred2023-12-310000081955Seybert’s Billiards Corporation - 6,099,131 Third Amended and Restated Term Note at 12%2024-01-012024-12-310000081955FCM Industries Holdco, LLC2024-12-310000081955us-gaap:FairValueInputsLevel3Memberrand:LoanInvestmentsMember2025-03-310000081955SciAps, Inc. - $2,090,000 Second Amended and Restated Secured Subordinated Promissory Note at 12%2024-01-012024-12-310000081955us-gaap:FairValueInputsLevel3Memberrand:CaitecIncMember2024-01-012024-03-310000081955Tilson Technology Management, Inc. - 211,567 A-1 Units of SQF Holdco LLC2023-12-310000081955Pressure Pro, Inc. - $3,000,000 Term Note2024-12-310000081955us-gaap:InvestmentUnaffiliatedIssuerMember2025-01-012025-03-310000081955Caitec, Inc. - $1,750,000 Subordinated Secured Promissory Note2025-01-012025-03-310000081955us-gaap:FairValueInputsLevel3Memberrand:GonoodleIncMember2025-01-012025-03-310000081955Applied Image, Inc. - $1,750,000 Term Note2025-03-310000081955Tilson Technology Management, Inc. - *120,000 Series B Preferred2024-01-012024-12-310000081955Seybert’s Billiards Corporation - $6,099,131 Third Amended and Restated Term Note at 12%2025-01-012025-03-310000081955ITA Acquisition, LLC - $1,500,000 Term Note at 12%2025-03-310000081955BMP Food Service Supply Holdco, LLC - $7,035,000 Second Amended and Restated Term Note, $4,820,000 at 12%, $2,215,000 at 13%2024-01-012024-12-310000081955FCM Industries Holdco LLC - $420,000 Convertible Note at 10%2025-01-012025-03-310000081955BMP Food Service Supply Holdco, LLC - 7,035,000 Second Amended and Restated Term Note, $4,820,0002024-01-012024-12-310000081955BMP Food Service Supply Holdco, LLC2024-12-310000081955BMP Food Service Supply Holdco, LLC - 15.4% Preferred Interest2024-12-310000081955us-gaap:InvestmentAffiliatedIssuerNoncontrolledMember2025-01-012025-03-310000081955Open Exchange, Inc - 397,899 Series C Preferred2025-03-310000081955us-gaap:FairValueInputsLevel3Memberus-gaap:EquitySecuritiesMember2025-01-012025-03-310000081955BMP Food Service Supply Holdco, LLC - 7,035,000 Second Amended and Restated Term Note2024-12-310000081955Applied Image, Inc. - $1,750,000 Term Note2024-01-012024-12-310000081955us-gaap:FairValueInputsLevel3Memberus-gaap:DebtSecuritiesMemberrand:SeybertBilliardsCorporationMember2025-01-012025-03-310000081955Caitec, Inc. - $1,750,000 Subordinated Secured Promissory Note One2025-01-012025-03-310000081955FCM Industries Holdco LLC - $3,380,000 Term Note at 13%2024-12-310000081955ITA Acquisition, LLC - $1,500,000 Term Note2025-01-012025-03-310000081955SciAps, Inc. - 147,059 Series D Convertible Preferred2023-12-310000081955Mobile RN Holdings LLC d/b/a Mobile IV Nurses - $2,500,000 Term Note2025-01-012025-03-310000081955Knoa Software, Inc. - 1,876,922 Series B Preferred2023-12-310000081955Applied Image, Inc. - $1,750,000 Term Note2025-01-012025-03-310000081955BMP Food Service Supply Holdco, LLC - $4,820,000 at 12% Second Amended and Restated Term Note2024-12-310000081955rand:MattisonAvenueHoldingsLlcMember2024-01-012024-12-310000081955Seybert’s Billiards Corporation - $1,435,435 Term Note2024-12-310000081955Applied Image, Inc. - Warrant for 1,167 shares2024-01-012024-12-310000081955us-gaap:FairValueInputsLevel3Memberrand:FilterworksAcquisitionUsaLlcMember2024-01-012024-03-310000081955Mobile RN Holdings LLC - $2,500,000 Term Note at 14%2025-03-310000081955Pressure Pro, Inc. - $3,000,000 Term Note at 12%2025-03-310000081955Caitec, Inc. - $1,750,000 Subordinated Secured Promissory Note One2024-12-310000081955Tilson Technology Management, Inc. - 23,077 Series F Preferred2024-12-310000081955GoNoodle, Inc. - 1,500,000 Secured Note2024-12-310000081955Inter-National Electronic Alloys LLC d/b/a EFINEA - $3,288,235 Term Note2024-12-310000081955BMP Swanson Holdco, LLC - $1,600,000 Term Note2025-03-310000081955Mountain Regional Equipment Solutions - 37,991 Common Units2024-12-310000081955Tilson Technology Management, Inc. - *15,385 Series E Preferred2025-03-310000081955Control and Affiliate Investments2025-03-310000081955rand:HealthAndWellnessMember2025-03-310000081955us-gaap:InvestmentAffiliatedIssuerNoncontrolledMember2024-01-012024-03-310000081955Mountain Regional Equipment Solutions - 37,991 Common Units2025-01-012025-03-310000081955FCM Industries Holdco LLC - $420,000 Convertible Note at 10%2024-12-310000081955Tilson Technology Management, Inc. - 21,391 Series C Preferred2025-03-310000081955ITA Acquisition, LLC - $2,297,808 Fourth Amended and Restated Term Note2023-12-310000081955Tilson Technology Management, Inc. - *15,385 Series E Preferred2025-01-012025-03-310000081955HDI Acquisition LLC. - $1,245,119 Term Loan2024-01-012024-12-310000081955us-gaap:FairValueInputsLevel3Memberrand:CaitecIncMember2025-01-012025-03-310000081955BMP Swanson Holdco, LLC - Preferred Membership Interest for 9.24%2025-03-310000081955Mobile RN Holdings LLC d/b/a Mobile IV Nurses - 6,375 Class A Common Units2025-01-012025-03-310000081955BMP Swanson Holdco, LLC2024-12-310000081955Carolina Skiff LLC - 6.0825% Class A Common Membership Interest2025-03-310000081955us-gaap:InvestmentUnaffiliatedIssuerMember2024-12-310000081955SciAps, Inc. - 369,698 Series C1 Convertible Preferred2023-12-310000081955BMP Swanson Holdco, LLC2025-03-310000081955BMP Food Service Supply Holdco, LLC - 7,035,000 Second Amended and Restated Term Note, $2,215,0002024-12-310000081955DSD Operating, LLC - 1,067 Class B Common shares2024-12-310000081955GoNoodle, Inc. - Warrant for 21,948 Series D Preferred2025-03-310000081955Control and Affiliate Investments2025-01-012025-03-310000081955us-gaap:FairValueInputsLevel3Memberrand:PressureProIncMember2024-01-012024-03-310000081955Caitec, Inc. - 36,261 Series A Preferred2024-12-310000081955Highland All About People Holdings, Inc. - 1,000,000 Class A Units2025-03-310000081955SciAps, Inc. - $2,090,000 Second Amended and Restated Secured Subordinated Promissory Note at 12%2024-12-310000081955Mobile RN Holdings LLC d/b/a Mobile IV Nurses - 6,375 Class A Common Units2024-01-012024-12-310000081955BMP Swanson Holdco, LLC - Preferred Membership Interest for 9.24%2024-01-012024-12-310000081955Seybert’s2025-03-310000081955us-gaap:FairValueInputsLevel3Memberrand:LoanInvestmentsMemberrand:MattisonAvenueHoldingsLlcMember2024-01-012024-03-310000081955Autotality (formerly Filterworks Acquisition USA, LLC) - $2,283,702 Amended Term Note2025-01-012025-03-310000081955Caitec, Inc. - 150 Class A Units2024-01-012024-12-310000081955ITA Acquisition, LLC - $2,297,808 Fourth Amended and Restated Term Note at 3%2024-01-012024-12-310000081955Highland All About People Holdings, Inc. - $3,000,000 Term Note at 12%2024-12-310000081955Mobile RN Holdings LLC d/b/a Mobile IV Nurses - $2,500,000 Term Note2024-12-310000081955Seybert’s Billiards Corporation - $1,435,435 Term Note at 12%2025-01-012025-03-310000081955us-gaap:InvestmentUnaffiliatedIssuerMember2025-03-310000081955us-gaap:FairValueInputsLevel3Memberrand:MicrocisionLlcMember2025-01-012025-03-310000081955Investments, NET ASSETS - 100%2024-12-310000081955rand:StockDividendsDistributableMember2025-01-012025-03-310000081955Applied Image, Inc. - $1,750,000 Term Note at 10%2025-01-012025-03-310000081955rand:O2025Q1DividendsMember2025-03-282025-03-280000081955rand:O2025Q2RegularDividendsMemberus-gaap:SubsequentEventMember2025-04-302025-04-300000081955Open Exchange, Inc - 397,899 Common2024-01-012024-12-310000081955Seybert’s Billiards Corporation - Warrant for 4% Membership Interest One2025-03-310000081955DSD Operating, LLC - 1,067 Class A Preferred shares2024-01-012024-12-310000081955Mattison Avenue Holdings LLC - $5,500,000 Term Note2024-12-310000081955rand:O2025Q2RegularDividendsMemberus-gaap:SubsequentEventMember2025-04-300000081955Seybert’s Billiards Corporation - $1,435,435 Term Note at 12%2023-12-310000081955BMP Food Service Supply Holdco, LLC2025-01-012025-03-310000081955Seybert’s Billiards Corporation - $6,099,131 Third Amended and Restated Term Note at 12%2025-03-310000081955Tilson Technology Management, Inc. - 250 Class D-1 Units of SQF Holdco LLC2023-12-310000081955ITA Acquisition, LLC - 1,124 Class A Preferred Units2024-12-310000081955Seybert’s Billiards Corporation - $1,435,435 Term Note at 12%2024-12-310000081955SciAps, Inc. - 113,636 Series C Convertible Preferred2024-01-012024-12-310000081955Filterworks Acquisition USA, LLC - $2,283,702 Amended Term Note2024-01-012024-12-310000081955us-gaap:FairValueInputsLevel3Memberrand:MattisonAvenueHoldingsLlcMember2025-01-012025-03-310000081955ITA Acquisition, LLC - 1,124 Class A Preferred Units2025-03-310000081955Mountain Regional Equipment Solutions - Warrant for 4% Membership Interest2025-03-310000081955us-gaap:FairValueInputsLevel3Memberrand:HdiAcquisitionLlcMember2024-01-012024-03-310000081955us-gaap:FairValueInputsLevel3Memberrand:LoanInvestmentsMember2024-12-310000081955Tilson Technology Management, Inc. - *70,176 Series D Preferred2024-01-012024-12-310000081955Mobile RN Holdings LLC2025-03-310000081955Tilson Technology Management, Inc. - *15,385 Series E Preferred2024-12-310000081955Applied Image, Inc. - Warrant for 1,167 shares2024-12-310000081955Tilson Technology Management, Inc.2024-01-012024-12-310000081955rand:SeybertsBilliardsCorporationMember2024-01-012024-12-310000081955OnCore Golf Technology, Inc. - 300,483 Preferred AA2024-01-012024-12-310000081955Applied Image, Inc.2024-01-012024-12-310000081955rand:InvestmentManagementAgreementMember2024-12-310000081955us-gaap:FairValueInputsLevel3Memberrand:InterNationalElectronicAlloysLlcMemberus-gaap:DebtSecuritiesMember2024-01-012024-03-310000081955us-gaap:FairValueInputsLevel3Memberrand:BmpFoodServiceSupplyHoldcoLlcMemberus-gaap:EquitySecuritiesMember2025-01-012025-03-310000081955Applied Image, Inc. - $1,750,000 Term Note at 10%, due February 1, 20292025-03-310000081955us-gaap:FairValueInputsLevel3Member2024-12-310000081955us-gaap:FairValueInputsLevel3Memberrand:HighlandAllAboutPeopleHoldingsIncMemberus-gaap:DebtSecuritiesMember2025-01-012025-03-310000081955Caitec, Inc. - 150 Class A Units One2024-12-310000081955Tilson Technology Management, Inc. - 211,567 A-1 Units of SQF Holdco LLC2024-01-012024-12-310000081955srt:MaximumMember2024-01-012024-12-310000081955Caitec, Inc.2024-12-310000081955Applied Image, Inc. - Warrant for 1,167 shares2025-03-310000081955Filterworks Acquisition USA, LLC d/b/a Autotality - 626.2 shares Class A-1 Units2024-12-310000081955Pressure Pro, Inc. - $3,000,000 Term Note at 12%2024-01-012024-12-310000081955Autotality formerly Filterworks Acquisition USA, LLC - $2,283,702 Amended Term Note2025-01-012025-03-310000081955Filterworks Acquisition USA, LLC2024-01-012024-12-310000081955Caitec, Inc. - $1,750,000 Subordinated Secured Promissory Note One2024-01-012024-12-310000081955Affiliate Investments – Net assets2025-03-310000081955BMP Food Service Supply Holdco, LLC - $7,035,000 Second Amended and Restated Term Note2025-01-012025-03-310000081955us-gaap:FairValueInputsLevel3Memberrand:PressureProIncMemberus-gaap:EquitySecuritiesMember2025-01-012025-03-310000081955rand:TilsonTechnologyManagementIncMember2025-01-012025-03-310000081955Applied Image, Inc.2025-01-012025-03-3100000819552024-03-310000081955us-gaap:FairValueInputsLevel3Memberrand:NonControlAndNonAffiliateLoanAndDebtInvestmentsMember2025-03-310000081955Inter-National Electronic Alloys LLC d/b/a EFINEA - 75.3 Class B Preferred Units2025-03-310000081955ITA Acquisition, LLC - $2,672,808 Fifth Amended and Restated Term Note2025-01-012025-03-310000081955Inter-National Electronic Alloys LLC2024-01-012024-12-310000081955Applied Image, Inc.2024-12-310000081955Carolina Skiff LLC - 6.0825% Class A Common Membership Interest2023-12-310000081955rand:O2024Q4DividendsMember2024-12-050000081955us-gaap:InvestmentUnaffiliatedIssuerMember2024-01-012024-03-310000081955Tilson Technology Management, Inc. - 23,077 Series F Preferred2025-03-310000081955Highland All About People Holdings, Inc. - $3,000,000 Term Note at 12%2024-01-012024-12-310000081955Mezmeriz, Inc. - 1,554,565 Series Seed Preferred2024-12-310000081955BMP Food Service Supply Holdco, LLC - $7,035,000 Second Amended and Restated Term Note, $2,215,000 at 13% (+3% PIK), due November 22, 20272024-12-310000081955us-gaap:FairValueInputsLevel3Memberus-gaap:DebtSecuritiesMemberrand:MobileRNHoldingsLLCMember2025-01-012025-03-310000081955us-gaap:AdditionalPaidInCapitalMember2025-01-012025-03-310000081955us-gaap:FairValueInputsLevel3Memberrand:CaitecIncMemberrand:LoanInvestmentsMember2025-01-012025-03-310000081955Pressure Pro, Inc. - $3,000,000 Term Note at 12%2025-01-012025-03-310000081955SciAps, Inc. - 274,299 Series A1 Convertible Preferred2024-12-310000081955TOTAL INVESTMENTS – 95.2%2025-03-310000081955ITA Acquisition, LLC2023-12-310000081955Applied Image, Inc. - $1,750,000 Term Note at 10%2025-03-310000081955Autotality (formerly Filterworks Acquisition USA, LLC)2024-12-310000081955us-gaap:FairValueInputsLevel3Memberus-gaap:DebtSecuritiesMember2024-03-310000081955rand:ProfessionalAndBusinessServicesMember2024-12-310000081955Mattison Avenue Holdings LLC. - $1,794,944 Third Amended, Restated and Consolidated Promissory Note2024-01-012024-12-310000081955FCM Industries Holdco LLC $3,380,000 Term Note at 13%2023-12-310000081955Seybert’s Billiards Corporation - Warrant for 4% Membership Interest2025-01-012025-03-310000081955ITA Acquisition, LLC - $2,297,808 Fourth Amended and Restated Term Note2024-12-310000081955BMP Swanson Holdco, LLC - $1,600,000 Term Note at 12%2025-01-012025-03-310000081955Inter-National Electronic Alloys LLC d/b/a EFINEA - 75.3 Class B Preferred Units2025-01-012025-03-310000081955us-gaap:CommonStockMember2025-01-012025-03-310000081955us-gaap:FairValueInputsLevel3Memberrand:GonoodleIncMemberus-gaap:DebtSecuritiesMember2024-01-012024-03-310000081955SciAps, Inc. - 117,371 Series B Convertible Preferred2024-01-012024-12-310000081955Affiliate Investments2024-12-310000081955ITA Acquisition, LLC - $2,297,808 Fourth Amended and Restated Term Note at 12%2024-12-310000081955Tilson Technology Management, Inc. - 15,385 Series E Preferred2023-12-310000081955Mezmeriz, Inc. - 1,554,565 Series Seed Preferred2024-01-012024-12-310000081955us-gaap:FairValueInputsLevel3Memberus-gaap:DebtSecuritiesMember2023-12-310000081955Seybert’s Billiards Corporation - $4,139,444 Term Note at 12%2024-01-012024-12-310000081955us-gaap:FairValueInputsLevel3Memberrand:FilterworksAcquisitionUsaLlcMemberus-gaap:DebtSecuritiesMember2024-01-012024-03-310000081955Highland All About People Holdings, Inc.2023-12-310000081955us-gaap:FairValueInputsLevel3Memberrand:LoanInvestmentsMember2023-12-310000081955Autotality formerly Filterworks Acquisition USA, LLC - 417.7 shares Class A-0 Units2025-03-310000081955Inter-National Electronic Alloys LLC d/b/a EFINEA - 75.3 Class B Preferred Units2024-12-310000081955Control Investments2023-12-310000081955rand:SoftwareMember2024-12-310000081955Filterworks Acquisition USA, LLC d/b/a Autotality -417.7 shares Class A-0 Units2024-01-012024-12-310000081955us-gaap:DebtSecuritiesMember2024-12-310000081955BMP Food Service Supply Holdco, LLC - 7,035,000 Second Amended and Restated Term Note, $2,215,0002025-03-310000081955Subtotal Affiliate Investments2025-03-310000081955Tilson Technology Management, Inc. - 21,391 Series C Preferred2024-12-310000081955ITA Acquisition, LLC 1,124 Class A Preferred Units and 1,924 Class B Common Units2025-03-310000081955Inter-National Electronic Alloys LLC - $3,288,235 Term Note at 12%2025-01-012025-03-310000081955BMP Swanson Holdco, LLC - $1,600,000 Term Note at 12%2025-03-310000081955ITA Acquisition, LLC - $1,500,000 Term Note at 3% (+11% PIK) Through December 31, 20242024-01-012024-12-310000081955Tilson Technology Management, Inc. - 211,567 A-1 Units of SQF Holdco LLC2024-12-310000081955us-gaap:FairValueInputsLevel3Memberus-gaap:DebtSecuritiesMember2025-03-310000081955GoNoodle, Inc. - 1,500,000 Secured Note2024-01-012024-12-310000081955us-gaap:FairValueInputsLevel3Memberrand:SeybertBilliardsCorporationMember2024-01-012024-03-310000081955BMP Food Service Supply Holdco, LLC - $7,035,000 Second Amended and Restated Term Note, $2,215,000 at 16% PIK through December 31, 20252025-03-310000081955us-gaap:FairValueInputsLevel3Memberus-gaap:DebtSecuritiesMemberrand:PressureProIncMember2025-01-012025-03-310000081955Lumious - $850,000 Replacement Term Note2025-03-310000081955rand:AdministrationAgreementMember2025-01-012025-03-310000081955DSD Operating, LLC2024-01-012024-12-310000081955BMP Food Service Supply Holdco, LLC - 7,035,000 Second Amended and Restated Term Note, $4,820,0002024-12-310000081955Mobile RN Holdings LLC - 37,991 Common Units2025-03-310000081955Mobile RN Holdings LLC d/b/a Mobile IV Nurses2025-03-310000081955Knoa Software, Inc.2023-12-310000081955Filterworks Acquisition USA, LLC - 417.7 shares Class A-0 Units2024-12-310000081955BMP Swanson Holdco, LLC - $1,600,000 Term Note2024-01-012024-12-310000081955GoNoodle, Inc.2025-03-310000081955BMP Food Service Supply Holdco, LLC - $7,035,000 Second Amended and Restated Term Note, $4,820,000 at 12%, PIK through December 31, 20252025-03-310000081955Caitec, Inc. - 36,261 Series A Preferred One2024-01-012024-12-310000081955rand:MAndTBankMemberrand:CreditAgreementMemberus-gaap:RevolvingCreditFacilityMember2022-06-270000081955BMP Food Service Supply Holdco, LLC - $7,035,000 Second Amended and Restated Term Note, $4,820,000 at 12%, $2,215,000 at 16%2025-01-012025-03-310000081955FCM Industries Holdco LLC2023-12-310000081955us-gaap:FairValueInputsLevel3Memberrand:KnoaSoftwareIncMember2024-01-012024-03-310000081955us-gaap:EstimateOfFairValueFairValueDisclosureMember2025-03-310000081955Autotality (formerly Filterworks Acquisition USA, LLC) - $2,283,702 Amended Term Note2025-03-310000081955Seybert’s Billiards Corporation - $1,435,435 Term Note at 12%2024-01-012024-12-310000081955Lumious - $850,000 Replacement Term Note2024-01-012024-12-310000081955Tilson Technology Management, Inc. - *2.5% dividend payable quarterly2024-12-310000081955Lumious - $850,000 Replacement Term Note2025-01-012025-03-310000081955PostProcess Technologies, Inc. - 137,054 Series A Preferred2025-03-310000081955BMP Swanson Holdco, LLC - Preferred Membership Interest for 9.29%2024-01-012024-12-310000081955FCM Industries Holdco LLC2025-01-012025-03-310000081955ITA Acquisition, LLC - $1,500,000 Term Note at 14% PIK Through March 31, 20262025-03-310000081955rand:NetChangeInUnrealizedAppreciationDepreciationOnInvestmentsMember2025-01-012025-03-310000081955Tilson Technology Management, Inc. - 120,000 Series B Preferred2024-12-310000081955Mountain Regional Equipment Solutions2024-12-310000081955Open Exchange, Inc - 397,899 Common2024-12-310000081955Mobile RN Holdings LLC2025-01-012025-03-310000081955Mobile RN Holdings LLC - $2,500,000 Term Note at 14%2024-12-310000081955Seybert’s Billiards Corporation - $1,435,435 Term Note2024-01-012024-12-310000081955rand:ConsumerProductMember2025-03-310000081955rand:ScenarioThreeMembersrt:MinimumMember2025-01-012025-03-310000081955Mobile RN Holdings LLC d/b/a Mobile IV Nurses2024-12-310000081955Tilson Technology Management, Inc. - 21,391 Series C Preferred2024-01-012024-12-310000081955FCM Industries Holdco, LLC - $3,380,000 Term Note at 13%2025-01-012025-03-310000081955ITA Acquisition, LLC2025-01-012025-03-310000081955BMP Food Service Supply Holdco, LLC2023-12-310000081955BMP Food Service Supply Holdco, LLC - 15.4% Preferred Interest2025-01-012025-03-310000081955SciAps, Inc.2024-01-012024-12-310000081955BMP Swanson Holdco, LLC - Preferred Membership Interest for 9.24%2023-12-310000081955Pressure Pro, Inc.2025-01-012025-03-310000081955Filterworks Acquisition USA, LLC - thereafter 12% (+2% PIK) due March 31, 20262024-12-310000081955ITA Acquisition, LLC - $1,500,000 Term Note at Thereafter 12%2024-12-310000081955Seybert’s Billiards Corporation - Warrant for 4% Membership Interest One2024-12-310000081955Pressure Pro, Inc. - Warrant for 10% Membership Interest2025-03-310000081955Mobile RN Holdings LLC - 6,375 Class A Common Units2025-03-310000081955FCM Industries Holdco LLC - $3,380,000 Term Note at 13%2025-01-012025-03-310000081955Affiliate Investments2025-01-012025-03-310000081955Tilson Technology Management, Inc. - 211,567 A-1 Units of SQF Holdco LLC.2024-01-012024-12-310000081955rand:BmpFoodServiceSupplyHoldcoLlcMember2024-01-012024-12-310000081955Caitec, Inc. - 150 Class A Units2024-12-310000081955Highland All About People Holdings, Inc.2025-01-012025-03-310000081955us-gaap:TreasuryStockCommonMember2024-12-310000081955Caitec, Inc. - 150 Class A Units One2025-01-012025-03-310000081955GoNoodle, Inc.2024-12-310000081955Filterworks Acquisition USA, LLC2024-12-310000081955Tilson Technology Management, Inc. - 250 Class D-1 Units of SQF Holdco LLC2025-03-310000081955SciAps, Inc. - 117,371 Series B Convertible Preferred2024-12-310000081955us-gaap:EquitySecuritiesMember2024-12-310000081955Lumious - $850,000 Replacement Term Note2024-12-310000081955OnCore Golf Technology, Inc. - 300,483 Preferred AA2025-01-012025-03-310000081955us-gaap:RetainedEarningsMember2024-03-310000081955us-gaap:EquitySecuritiesMember2025-03-310000081955us-gaap:FairValueInputsLevel3Memberus-gaap:EquitySecuritiesMember2024-01-012024-03-310000081955rand:DistributionMember2025-03-310000081955us-gaap:CommonStockMember2024-01-012024-03-310000081955us-gaap:FairValueInputsLevel3Memberrand:NonControlAndNonAffiliateInvestmentsMember2025-03-310000081955ITA Acquisition, LLC - $2,297,808 Fourth Amended and Restated Term Note2024-01-012024-12-310000081955SciAps, Inc. - Warrant to purchase Series D-1 Preferred2023-12-310000081955Seybert’s Billiards Corporation - Warrant for 4% Membership Interest2023-12-310000081955Open Exchange, Inc - 397,899 Common2025-01-012025-03-310000081955Filterworks Acquisition USA, LLC - 626.2 shares Class A-1 Units.2024-01-012024-12-310000081955Tilson Technology Management, Inc. - 120,000 Series B Preferred2023-12-310000081955srt:MaximumMemberrand:ScenarioTwoMember2025-01-012025-03-310000081955us-gaap:FairValueInputsLevel3Memberus-gaap:EquitySecuritiesMember2023-12-310000081955GoNoodle, Inc. - Warrant for 47,324 Series C Preferred2024-12-310000081955BMP Food Service Supply Holdco, LLC - $7,035,000 Second Amended and Restated Term Note, $4,820,000 at 12%, $2,215,000 at 16%2025-03-310000081955us-gaap:AdditionalPaidInCapitalMember2025-03-310000081955Tilson Technology Management, Inc. - 21,391 Series C Preferred2023-12-310000081955ITA Acquisition, LLC - $2,672,808 Fifth Amended and Restated Term Note2025-03-310000081955us-gaap:TreasuryStockCommonMember2023-12-310000081955BMP Swanson Holdco, LLC - $1,600,000 Term Note at 12%2023-12-310000081955Mountain Regional Equipment Solutions - 37,991 Common Units2024-01-012024-12-310000081955Mobile RN Holdings LLC - 6,375 Class A Common Units2024-12-310000081955Open Exchange, Inc.2025-03-310000081955ITA Acquisition, LLC - $1,500,000 Term Note at 3% (+11% PIK) through December 31, 20242024-12-310000081955Tilson Technology Management, Inc. - 211,567 A-1 Units of SQF Holdco LLC.2024-12-310000081955FCM Industries Holdco LLC - $420,000 Convertible Note at 10%2025-03-310000081955us-gaap:FairValueInputsLevel3Member2023-12-310000081955Seybert’s Billiards Corporation - $1,435,435 Term Note at 12%2025-03-310000081955Affiliate Investments – Net assets2024-12-310000081955FCM Industries Holdco LLC - $3,380,000 Term Note at 13%2025-03-310000081955Highland All About People Holdings, Inc. - $3,000,000 Term Note at 12%2025-03-310000081955us-gaap:FairValueInputsLevel3Memberrand:KnoaSoftwareIncMemberus-gaap:EquitySecuritiesMember2024-01-012024-03-310000081955Subtotal Affiliate Investments2024-12-310000081955us-gaap:FairValueInputsLevel3Memberrand:SeybertBilliardsCorporationMemberus-gaap:EquitySecuritiesMember2025-01-012025-03-310000081955TOTAL INVESTMENTS – 108.4%2024-12-310000081955us-gaap:FairValueInputsLevel3Memberrand:MountainRegionalEquipmentSolutionsMember2025-01-012025-03-310000081955us-gaap:FairValueInputsLevel3Memberrand:InterNationalElectronicAlloysLlcMember2025-01-012025-03-310000081955us-gaap:FairValueInputsLevel3Memberrand:LoanInvestmentsMember2025-01-012025-03-310000081955Tilson Technology Management, Inc. - 70,176 Series D Preferred2024-01-012024-12-31rand:Unitsxbrli:purexbrli:sharesiso4217:USD
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2025
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from _____ to _______
Commission File Number: 814-00235
Rand Capital Corporation
(Exact Name of Registrant as specified in its Charter)
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New York |
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16-0961359 |
(State or Other Jurisdiction of Incorporation or Organization) |
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(IRS Employer Identification No.) |
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14 Lafayette Square, Suite 1405, Buffalo, NY |
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14203 |
(Address of Principal executive offices) |
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(Zip Code) |
(716) 853-0802
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
Common Stock, $0.10 par value |
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RAND |
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Nasdaq Capital Market |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer |
☐ |
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Accelerated filer |
☐ |
Non-accelerated filer |
☑ |
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Smaller reporting company |
☐ |
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Emerging growth company |
☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No ☑
As of May 5, 2025, there were 2,969,814 shares of the registrant’s common stock outstanding.
RAND CAPITAL CORPORATION AND SUBSIDIARIES
TABLE OF CONTENTS FOR FORM 10-Q
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements and Supplementary Data
RAND CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
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March 31, 2025 (Unaudited) |
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December 31, 2024 |
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ASSETS |
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Investments at fair value: |
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|
|
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Control investments (cost of $6,563,940 and $6,188,940, respectively) |
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$ |
2,000,000 |
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$ |
2,500,000 |
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Affiliate investments (cost of $44,450,751 and $42,488,804, respectively) |
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52,490,162 |
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|
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51,668,144 |
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Non-Control/Non-Affiliate investments (cost of $9,743,250 and $19,442,491, respectively) |
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7,667,201 |
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|
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16,649,897 |
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Total investments, at fair value (cost of $60,757,941 and $68,120,235, respectively) |
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62,157,363 |
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|
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70,818,041 |
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Cash |
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4,933,269 |
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|
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834,805 |
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Interest receivable (net of allowance of $25,337 and $0, respectively) |
|
|
223,273 |
|
|
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357,530 |
|
Prepaid income taxes |
|
|
339,237 |
|
|
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329,365 |
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Deferred tax asset, net |
|
|
4,886 |
|
|
|
2,161 |
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Other assets |
|
|
163,402 |
|
|
|
115,531 |
|
Total assets |
|
$ |
67,821,430 |
|
|
$ |
72,457,433 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY (NET ASSETS) |
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Liabilities: |
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|
|
|
|
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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 |
|
|
— |
|
|
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2,168,058 |
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Total liabilities |
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2,510,177 |
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|
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7,124,913 |
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Commitments and contingencies (see Note 5) |
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|
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Stockholders’ equity (net assets): |
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|
|
|
|
|
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
RAND CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF PORTFOLIO INVESTMENTS
March 31, 2025 (Continued)
(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 |
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
RAND CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF PORTFOLIO INVESTMENTS
March 31, 2025 (Continued)
(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 |
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
RAND CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF PORTFOLIO INVESTMENTS
March 31, 2025 (Continued)
(Unaudited)
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.
RAND CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF PORTFOLIO INVESTMENTS
March 31, 2025 (Continued)
(Unaudited)
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
RAND CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF PORTFOLIO INVESTMENTS
March 31, 2025 (Continued)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
RAND CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF PORTFOLIO INVESTMENTS
March 31, 2025 (Continued)
(Unaudited)
|
|
|
|
|
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
RAND CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF PORTFOLIO INVESTMENTS
December 31, 2024 (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
RAND CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF PORTFOLIO INVESTMENTS
December 31, 2024 (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
RAND CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF PORTFOLIO INVESTMENTS
December 31, 2024 (Continued)
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)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 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)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 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)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 December 31, 2024.
(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 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 December 31, 2024.
(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.
RAND CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF PORTFOLIO INVESTMENTS
December 31, 2024 (Continued)
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
RAND CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF PORTFOLIO INVESTMENTS
December 31, 2024 (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
RAND CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF PORTFOLIO INVESTMENTS
December 31, 2024 (Continued)
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
RAND CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF PORTFOLIO INVESTMENTS
December 31, 2024 (Continued)
|
|
|
|
|
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:
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|
|
|
|
|
|
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.