Quarterly report [Sections 13 or 15(d)]

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited)

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CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited) - USD ($)
Jun. 30, 2025
Dec. 31, 2024
ASSETS    
Total Investments at Fair Value $ 52,364,254 [1],[2] $ 70,818,041 [3],[4]
Cash 4,419,813 834,805
Interest receivable 250,263 357,530
Prepaid income taxes 344,695 329,365
Deferred tax asset, net 111,438 2,161
Other assets 149,076 115,531
Total assets 57,639,539 72,457,433
Liabilities:    
Due to investment adviser $ 509,500 $ 2,182,846
Other Liability, Related Party [Extensible Enumeration] us-gaap:RelatedPartyMember us-gaap:RelatedPartyMember
Accounts payable and accrued expenses $ 38,600 $ 92,568
Line of credit (see Note 5)   600,000
Capital gains incentive fees   1,565,000
Deferred revenue 377,485 516,441
Dividend payable   2,168,058
Total liabilities 925,585 7,124,913
Commitments and contingencies (see Note 5)
Stockholders' equity (net assets):    
Common stock, $0.10 par; shares authorized 100,000,000; shares issued: 3,037,709 at 6/30/25 and 2,648,916 at 12/31/24; shares outstanding: 2,969,814 at 6/30/25 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 6/30/25 and 388,793 shares at 12/31/24   8,672,231
Treasury stock, at cost: 67,895 shares at 6/30/25 and 12/31/24 (1,566,605) (1,566,605)
Total distributable earnings (6,074,716) 2,542,382
Total stockholders' equity (net assets) (per share - 6/30/25: $19.10; 12/31/24: $25.31) 56,713,954 65,332,520
Total liabilities and stockholders' equity (net assets) 57,639,539 72,457,433
Control Investments    
ASSETS    
Total Investments at Fair Value 2,000,000 [1],[2],[5],[6] 2,500,000 [3],[4]
Affiliate Investments    
ASSETS    
Total Investments at Fair Value 42,717,475 [1],[2],[5],[7] 51,668,144 [3],[4],[8],[9],[10]
Non-Control/Non-Affiliate Investments    
ASSETS    
Total Investments at Fair Value $ 7,646,779 [1],[2],[5],[11] $ 16,649,897 [3],[4],[9],[10],[12],[13]
[1] As of June 30, 2025, the total cost of investment securities was approximately $61.3 million. Net unrealized depreciation was approximately ($8.9) million, which was comprised of $3.9 million of unrealized appreciation of investment securities and ($12.8) million of unrealized depreciation of investment securities. At June 30, 2025, the aggregate gross unrealized gain for federal income tax purposes was $2.0 million and the aggregate gross unrealized loss for federal income tax purposes was ($10.9) million. The net unrealized loss for federal income tax purposes was ($8.9) million based on a tax cost of $61.7 million.
[2] 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 June 30, 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).
[3] 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.
[4] 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).
[5] 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).
[6] 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.
[7] 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.
[8] Affiliate Investments are defined by the 1940 Act, as those Non-Control investments in companies in which between 5% and 25% of the voting securities are owned by the Corporation.
[9] 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).
[10] Investments classified as Level 3 for purposes of the fair value determination by RCM and approved by the Board of Directors.
[11] Non-Control/Non-Affiliate Investments are investments that are neither Control Investments nor Affiliate Investments.
[12] Non-Control/Non-Affiliate Investments are investments that are neither Control Investments nor Affiliate Investments.
[13] 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.