Rand Capital Reports Third Quarter 2025 Results

BUFFALO, N.Y.--( BUSINESS WIRE)-- Rand Capital Corporation (Nasdaq: RAND) (“Rand” or the “Company”), a business development company providing alternative financing for lower middle market companies, announced its results for the third quarter ended September 30, 2025.

“Our third quarter results highlight both the headwinds we are navigating and the resilience of our business model. While investment income was pressured by loan repayments, we delivered higher net investment income and maintained disciplined expense control,” said Daniel P. Penberthy, President and Chief Executive Officer of Rand. “We remain patient and consistent in evaluating opportunities and executing on our strategy, even as new deal origination remains slow. Importantly, we have preserved a strong liquidity position with no outstanding borrowings, which provides the flexibility to deploy capital when market conditions improve. Looking ahead, we believe anticipated interest rate reductions could help stimulate deal originations, and we believe we are well positioned to capitalize with a lower cost of capital once we put our cash balance to work. We remain confident in our ability to drive long-term value for shareholders through prudent investment and active portfolio management.”

Third Quarter Highlights (compared with the prior-year period unless otherwise noted)

Portfolio and Investment Activity

As of September 30, 2025, Rand’s investment portfolio had a fair value of $44.3 million across 19 portfolio companies, representing a decrease of $26.5 million, or 37%, from December 31, 2024. The decline was driven primarily by portfolio company loan repayments and valuation adjustments across multiple holdings. At quarter-end, the portfolio was comprised of approximately 83% debt investments and 17% equity investments. The annualized weighted average yield on debt investments, including PIK interest, was 12.2% compared with 13.8% at year-end 2024.

Third Quarter 2025:

Liquidity and Capital Resources

Rand closed the quarter with $9.5 million in cash, a significant increase from $835,000 at year-end 2024. As of September 30, 2025, the Company had no outstanding borrowings under its senior secured revolving credit facility, leaving $18.3 million of available capacity. The facility, which matures in 2027, permits up to $25 million in borrowings subject to compliance with borrowing conditions and portfolio eligibility requirements.

The Company did not repurchase any outstanding common stock during the third quarter of 2025.

Dividends

On July 28, 2025, Rand declared its regular quarterly cash dividend distribution of $0.29 per share. The cash dividend was paid during the third quarter to shareholders of record as of August 29, 2025. Rand’s fourth quarter dividend announcement is expected in early December.

Webcast and Conference Call

Rand will host a conference call and webcast on Friday, November 7, 2025, at 10:00 a.m. Eastern Time, to review its financial results. The review will be accompanied by a slide presentation, which will be available on Rand’s website at www.randcapital.com in the “Investor Relations” section. Rand’s conference call can be accessed by calling (201) 689-8263. Alternatively, the webcast can be monitored on Rand’s website at www.randcapital.com under “Investors” where the replay will also be available.

A telephonic replay will be available from 2:00 p.m. ET on the day of the call through Friday, November 21, 2025. To listen to the archived call, dial (412) 317-6671 and enter replay pin 13755928. A transcript of the call will also be posted once available.

ABOUT RAND CAPITAL

Rand Capital Corporation (Nasdaq: RAND) is an externally managed business development company (BDC). The Company’s investment objective is to maximize total return to its shareholders with current income and capital appreciation by focusing its debt and related equity investments in privately-held, lower middle market companies with committed and experienced managements in a broad variety of industries. Rand primarily invests in businesses that have sustainable, differentiated and market-proven products, revenue of more than $10 million and EBITDA in excess of $1.5 million. The Company’s investment activities are managed by its external investment adviser, Rand Capital Management, LLC. Additional information can be found at the Company’s website where it regularly posts information: randcapital.com.

Safe Harbor Statement

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than historical facts, including but not limited to statements regarding the strategy of the Company and its outlook; statements regarding the implementation of the Company’s strategy and the growth of its dividend; and any assumptions underlying any of the foregoing, are forward-looking statements. Forward-looking statements concern future circumstances and results and other statements that are not historical facts and are sometimes identified by the words “may,” “will,” “should,” “potential,” “intend,” “expect,” “endeavor,” “seek,” “anticipate,” “estimate,” “overestimate,” “underestimate,” “believe,” “could,” “project,” “predict,” “continue,” “target” or other similar words or expressions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove to be incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be achieved. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others, (1) evolving legal, regulatory and tax regimes; (2) changes in general economic and/or industry specific conditions; and (3) other risk factors as detailed from time to time in Rand’s reports filed with the Securities and Exchange Commission (“SEC”), including Rand’s annual report on Form 10-K for the year ended December 31, 2024, quarterly reports on Form 10-Q, and other documents filed with the SEC. Consequently, such forward-looking statements should be regarded as Rand’s current plans, estimates and beliefs. Except as required by applicable law, Rand assumes no obligation to update the forward-looking information contained in this release.

FINANCIAL TABLES FOLLOW

Rand Capital Corporation and Subsidiaries

Consolidated Statements of Financial Position

September 30,

2025

(Unaudited)

December 31,

2024

ASSETS

Investments at fair value:

Control investments (cost of $6,563,940 and $6,188,940, respectively)

2,000,000

2,500,000

Affiliate investments (cost of $37,470,374 and $42,488,804, respectively)

33,155,868

51,668,144

Non-Control/Non-Affiliate investments (cost of $9,501,053 and $19,442,491, respectively)

9,175,004

16,649,897

Total investments, at fair value (cost of $53,535,367 and $68,120,235, respectively)

44,330,872

70,818,041

Cash

9,490,747

834,805

Interest receivable (net of allowance of $25,337 and $0, respectively)

183,737

357,530

Prepaid income taxes

343,689

329,365

Deferred tax asset, net

116,889

2,161

Other assets

113,854

115,531

Total assets

54,579,788

72,457,433

LIABILITIES AND STOCKHOLDERS’ EQUITY (NET ASSETS)

Liabilities:

Due to investment adviser

527,225

2,182,846

Accounts payable and accrued expenses

64,976

92,568

Line of credit

—

600,000

Capital gains incentive fees

—

1,565,000

Deferred revenue

366,073

516,441

Dividend payable

—

2,168,058

Total liabilities

958,274

7,124,913

Stockholders’ equity (net assets):

Common stock, $0.10 par; shares authorized 100,000,000; shares

issued: 3,037,709 at 9/30/25 and 2,648,916 at 12/31/24; shares

outstanding: 2,969,814 at 9/30/25 and 2,581,021 at 12/31/24

303,771

264,892

Capital in excess of par value

64,051,504

55,419,620

Stock dividends distributable: 0 shares at 9/30/25 and 388,793 shares at 12/31/24

—

8,672,231

Treasury stock, at cost: 67,895 shares at 9/30/25 and 12/31/24

(1,566,605

)

(1,566,605

)

Total distributable earnings

(9,167,156

)

2,542,382

Total stockholders’ equity (net assets) (per share – 9/30/25: $18.06; 12/31/24: $25.31)

53,621,514

65,332,520

Total liabilities and stockholders’ equity (net assets)

54,579,788

72,457,433

Rand Capital Corporation and Subsidiaries

Consolidated Statements of Operations

(Unaudited)

Three months ended

September 30, 2025

Three months ended

September 30, 2024

Nine months ended

September 30, 2025

Nine months ended

September 30, 2024

Investment income:

Interest from portfolio companies:

Control investments

13,417

164,167

26,396

550,535

Affiliate investments

1,177,248

1,164,525

3,724,896

3,522,726

Non-Control/Non-Affiliate investments

234,469

616,903

865,570

1,681,209

Total interest from portfolio companies

1,425,134

1,945,595

4,616,862

5,754,470

Interest from other investments:

Non-Control/Non-Affiliate investments

73,488

113

120,427

2,171

Total interest from other investments

73,488

113

120,427

2,171

Dividend and other investment income:

Affiliate investments

—

13,125

39,375

Non-Control/Non-Affiliate investments

—

44,000

—

242,760

Total dividend and other investment income

—

57,125

13,125

282,135

Fee income:

Control investments

4,515

13,547

Affiliate investments

72,714

202,834

247,360

331,369

Non-Control/Non-Affiliate investments

3,772

8,272

178,503

38,130

Total fee income

81,001

215,621

439,410

383,046

Total investment income

1,579,623

2,218,454

5,189,824

6,421,822

Expenses:

Base management fee

184,382

309,265

654,239

934,532

Income based incentive fees

66,505

178,218

186,178

178,218

Capital gains incentive fees

—

313,000

(1,565,000

)

2,066,300

Interest expense

25,416

245,006

87,319

1,028,198

Professional fees

133,415

113,168

484,277

436,935

Stockholders and office operating

59,398

57,869

253,510

209,564

Directors' fees

66,550

196,950

Administrative fees

50,250

40,000

149,250

118,167

Insurance

8,250

10,467

31,386

33,891

Corporate development

2,037

387

6,538

10,813

Bad debt expense

—

38,462

—

Total expenses

596,203

1,333,930

523,109

5,213,568

Net investment income before income taxes:

983,420

884,524

4,666,715

1,208,254

Income tax benefit

(9,159

)

(2,511

)

(22,213

)

(1,171

)

Net investment income

992,579

887,035

4,688,928

1,209,425

Net realized (loss) gain on sales and dispositions of investments:

Affiliate investments

(2,850,015

)

6,980,728

(1,924,658

)

6,148,837

Non-Control/Non-Affiliate investments

(77,314

)

249,354

(77,339

)

4,959,445

Net realized (loss) gain on sales and dispositions of investments

(2,927,329

)

7,230,082

(2,001,997

)

11,108,282

Net change in unrealized appreciation/depreciation

on investments:

Control investments

—

(875,000

)

—

Affiliate investments

(481,647

)

(5,153,166

)

(11,027,301

)

3,596,779

Non-Control/Non-Affiliate investments

189,944

(512,375

)

—

(4,373,590

)

Change in unrealized appreciation/depreciation before income taxes

(291,703

)

(5,665,541

)

(11,902,301

)

(776,811

)

Deferred income tax expense (benefit)

4,741

(184,940

)

(89,469

)

(232,774

)

Net change in unrealized appreciation/depreciation on investments

(296,444

)

(5,480,601

)

(11,812,832

)

(544,037

)

Net realized and unrealized (loss) gain on investments

(3,223,773

)

1,749,481

(13,814,829

)

10,564,245

Net (decrease) increase in net assets from operations

(2,231,194

)

2,636,516

(9,125,901

)

11,773,670

Weighted average shares outstanding

2,969,814

2,581,021

2,936,938

2,581,021

Basic and diluted net (decrease) increase in net assets from operations per share

(0.75

)

1.02

(3.11

)

4.56

Rand Capital Corporation and Subsidiaries

Consolidated Statements of Changes in Net Assets

(Unaudited)

Three months ended

September 30, 2025

Three months ended

September 30, 2024

Nine months ended

September 30, 2025

Nine months ended

September 30, 2024

Net assets at beginning of period

56,713,954

68,558,616

65,332,520

60,815,213

Net investment income

992,579

887,035

4,688,928

1,209,425

Net realized (loss) gain on sales and dispositions of investments

(2,927,329

)

7,230,082

(2,001,997

)

11,108,282

Net change in unrealized appreciation/depreciation on investments

(296,444

)

(5,480,601

)

(11,812,832

)

(544,037

)

Net (decrease) increase in net assets from operations

(2,231,194

)

2,636,516

(9,125,901

)

11,773,670

Declaration of dividend

(861,246

)

(748,496

)

(2,585,105

)

(2,142,247

)

Net assets at end of period

53,621,514

70,446,636

53,621,514

70,446,636

Rand Capital Corporation and Subsidiaries

Reconciliation of GAAP Total Expense to Non-GAAP Adjusted Expenses

(Unaudited)

In addition to reporting total expenses, which is a U.S. generally accepted accounting principle (“GAAP”) financial measure, Rand presents adjusted expenses, which is a non-GAAP financial measure. Adjusted expenses is defined as GAAP total expenses removing the effect of any expenses/(credits) for capital gains incentive fees accrual. GAAP total expenses is the most directly comparable GAAP financial measure. Rand believes that adjusted expenses provides useful information to investors regarding financial performance because it is a method the Company uses to measure its financial and business trends related to its results of operations. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP.

Three months ended

September 30, 2025

Three months ended

September 30, 2024

Nine months

ended

September 30, 2025

Nine months

ended

September 30, 2024

Total expenses

596,203

1,333,930

523,109

5,213,568

Exclude expenses (credits) for capital gains incentive fees

313,000

(1,565,000

)

2,066,300

Adjusted total expenses

596,203

1,020,930

2,088,109

3,147,268

Reconciliation of GAAP Net Investment Income per Share to

Adjusted Net Investment Income per Share

(Unaudited)

In addition to reporting Net Investment Income per Share, which is a GAAP financial measure, the Company presents Adjusted Net Investment Income per Share, which is a non-GAAP financial measure. Adjusted Net Investment Income per Share is defined as GAAP Net Investment Income per Share removing the effect of any expenses/(credits) for capital gains incentive fees. GAAP Net Investment Income per Share is the most directly comparable GAAP financial measure. Rand believes that Adjusted Net Investment Income per Share provides useful information to investors regarding financial performance because it is a method the Company uses to measure its financial and business trends related to its results of operations. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP.

The per share amounts for the three and nine months ended September 30, 2025 were computed using 2,969,814 and 2,936,938 weighted average shares outstanding, respectively, reflecting a higher number of shares outstanding following the fourth quarter 2024 dividend, which was paid in part using shares of common stock. This compared with 2,581,021 weighted average shares outstanding for the three and nine months ended September 30, 2024.

Three months ended

September 30, 2025

Three months ended

September 30, 2024

Nine months

ended

September 30, 2025

Nine months

ended

September 30, 2024

Net investment income per share

0.33

0.34

1.60

0.47

Exclude expenses (credits) for capital gains incentive fees per share

0.12

(0.54

)

0.80

Adjusted net investment income per share

0.33

0.46

1.06

1.27