Core Insights - 2025 was characterized by disciplined execution and capital allocation, focusing on balance sheet strength and liquidity rather than aggressive growth [1] - The company ended the year with over $23 million in total liquidity and no outstanding debt, positioning itself for future opportunities as market conditions improve [1][5] Financial Performance - Total investment income for 2025 was $6.5 million, a decrease of 24% from $8.6 million in 2024, primarily due to a 46% reduction in interest income from debt repayments [19][20] - Net investment income for the year was $5.3 million, or $1.80 per share, reflecting a 35% increase over the prior year [21] - Total expenses declined by 75% to $1.2 million, driven by a decrease in capital gains incentive fees and lower interest expenses [21] Dividend Strategy - The company paid total cash dividends of $1.72 per share in 2025, including a special dividend of $0.56 per share in the fourth quarter [6][7] - The regular dividend for the first quarter of 2026 was announced at $0.29 per share, reflecting confidence in the portfolio's earnings power and anticipated deal origination [7][8] Portfolio Composition - At year-end, the portfolio had a fair value of $48.5 million across 20 companies, with debt investments representing 79% of the portfolio, up from 75% in 2024 [9][12] - The annualized weighted average yield on debt investments was 11.3% at year-end, indicating a shift towards yield-oriented structures [12] Market Environment - The M&A environment was uneven in 2025, with repayments outpacing new deal origination, a trend observed across the BDC sector [5][14] - The company remains optimistic about future opportunities as market conditions are expected to improve, allowing for selective and disciplined capital deployment [25][26]

Core Viewpoint - Rand Capital Corporation held a conference call to discuss its fourth quarter and full year 2025 financial results, highlighting key financial metrics and future outlook [2]. Group 1: Financial Results - The conference call included presentations from the President and CEO, Dan Penberthy, and the Executive Vice President and CFO, Margaret Brechtel, indicating a structured approach to financial reporting [2]. - A copy of the financial release and accompanying slides is available on the company's website, emphasizing transparency and accessibility of information [3]. Group 2: Forward-Looking Statements - The company may make forward-looking statements during the presentation, which are subject to risks and uncertainties that could lead to actual results differing from expectations [3][4]. - A summary of risks and uncertainties is available in the earnings release and other SEC filings, indicating the company's commitment to informing stakeholders about potential challenges [4]. Group 3: Non-GAAP Financial Measures - The discussion will include non-GAAP financial measures, which the company believes will be useful for evaluating performance, suggesting a focus on comprehensive financial analysis [4].

Financial Data and Key Metrics Changes - Total investment income for Q4 2025 was $1.3 million, a decrease of 40% compared to the prior year, primarily due to a 46% reduction in interest income from the repayment of five debt instruments [31] - For the full year 2025, total investment income was $6.5 million, down from $8.6 million in 2024, reflecting similar dynamics as the fourth quarter [34] - Net investment income for Q4 was $600,000 or $0.20 per share, while for the full year it was $5.3 million or $1.80 per share, a 35% increase over the prior year [33][35] - Net asset value per share at year-end was $17.57, with total net assets of $52.2 million [36][39] Business Line Data and Key Metrics Changes - The portfolio had a fair value of $48.5 million across 20 companies at year-end, a decline from prior year levels due to loan repayments and valuation adjustments [15] - Debt investments represented 79% of the portfolio, up from 75% at year-end 2024, indicating a shift towards more income generation [20] - The annualized weighted average yield on debt investments was 11.3% at year-end, reflecting changes in portfolio mix and increased non-accrual activity [20][21] Market Data and Key Metrics Changes - The company experienced a challenging market environment with uneven M&A activity and selective senior lenders, impacting new deal origination [6] - The industry mix included professional and business services as the largest allocation, followed by manufacturing, distribution, and consumer products, which helps mitigate exposure to any single sector [26] Company Strategy and Development Direction - The company emphasized disciplined execution and capital allocation, prioritizing balance sheet strength and liquidity over growth for growth's sake [6] - The strategy includes maintaining a resilient, income-oriented portfolio to support sustainable dividends while pursuing long-term capital appreciation [23][42] - The focus for 2026 is on prudent capital deployment, active portfolio oversight, disciplined underwriting, and long-term shareholder value creation [43] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improving market conditions and potential deployment opportunities in 2026, highlighting the company's flexibility due to the absence of leverage [40][41] - The company aims to be selective and patient in its investment approach, focusing on risk-adjusted return objectives rather than volume [41][42] Other Important Information - The company paid out total cash dividends of $1.72 per share in 2025, including a special dividend of $0.56 per share in Q4 [11] - The company ended the year with over $23 million in total liquidity and no debt outstanding, providing significant flexibility for future opportunities [7] Q&A Session Summary - No specific questions or answers were provided in the content, thus this section is not applicable.

Financial Data and Key Metrics Changes - Total investment income for Q4 2025 was $1.3 million, a decrease of 40% compared to the prior year, primarily due to a 46% reduction in interest income from the repayment of five debt instruments [28] - For the full year 2025, total investment income was $6.5 million, down from $8.6 million in 2024, reflecting similar dynamics as the fourth quarter [31] - Net investment income for Q4 was $600,000 or $0.20 per share, while for the full year it was $5.3 million or $1.80 per share, a 35% increase over the prior year [32] Business Line Data and Key Metrics Changes - The portfolio had a fair value of $48.5 million across 20 companies at year-end, with a shift towards more income generation as debt investments represented 79% of the portfolio, up from 75% at year-end 2024 [14][18] - The annualized weighted average yield on debt investments was 11.3% at year-end, reflecting changes in portfolio mix and increased non-accrual activity [18] Market Data and Key Metrics Changes - The company experienced a challenging M&A environment with uneven activity and selective senior lenders, impacting new deal origination across the BDC sector [6] - The industry mix included professional and business services as the largest allocation, followed by manufacturing, distribution, and consumer products, which helps mitigate exposure to any single sector [23] Company Strategy and Development Direction - The company emphasized disciplined execution and capital allocation, prioritizing balance sheet strength and liquidity over growth for growth's sake [6] - The strategy focuses on building a resilient, income-oriented portfolio to support sustainable dividends while maintaining long-term capital appreciation potential [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improving market conditions and potential deployment opportunities in 2026, highlighting the company's flexibility due to no leverage [37] - The focus for 2026 includes prudent capital deployment, active portfolio oversight, and disciplined underwriting to enhance shareholder returns [40] Other Important Information - The company ended the year with over $23 million in total liquidity and no debt outstanding, providing significant flexibility for future opportunities [7] - A special dividend of $0.56 per share was declared in Q4 2025, reflecting the success of capital recycling efforts [10] Q&A Session Summary - No specific questions or answers were provided in the content, thus this section is not applicable.

Financial Data and Key Metrics Changes - Total investment income for Q4 2025 was $1.3 million, a decrease of 40% compared to the prior year period, primarily due to a 46% reduction in interest income from the repayment of five debt instruments [16] - For the full year 2025, total investment income was $6.5 million, down from $8.6 million in 2024, reflecting similar dynamics as the fourth quarter [17] - Net investment income for Q4 2025 was $600,000 or $0.20 per share, while for the full year it was $5.3 million or $1.80 per share, a 35% increase over the prior year [17][18] - Net asset value per share at year-end was $17.57, with total net assets of $52.2 million [19] Business Line Data and Key Metrics Changes - The portfolio had a fair value of $48.5 million across 20 companies at year-end, with a shift towards more income generation as debt investments represented 79% of the portfolio, up from 75% at year-end 2024 [8][10] - The annualized weighted average yield on debt investments was 11.3% at year-end, reflecting a change due to portfolio mix shifts and increased non-accrual activity [10][11] Market Data and Key Metrics Changes - The professional and business services sector represented the largest allocation in the portfolio, followed by manufacturing, distribution, and consumer products, which helps mitigate exposure to any single sector [13] - The broader lower middle market environment and tighter credit conditions influenced the valuation changes across the portfolio [9] Company Strategy and Development Direction - The company emphasized disciplined execution and capital allocation in 2025, prioritizing balance sheet strength and liquidity over growth [4] - The strategy includes delivering meaningful cash returns to shareholders, with total cash dividends of $1.72 per share in 2025, including a special dividend in Q4 [6] - The focus for 2026 is on prudent capital deployment, active portfolio oversight, and long-term shareholder value creation [22] Management's Comments on Operating Environment and Future Outlook - Management noted that 2025 was a transition year that strengthened the company's foundation, navigating a challenging environment and addressing significant portfolio events [21] - There is optimism regarding improving sponsor activity and a gradual reopening of M&A markets, which could present attractive deployment opportunities in 2026 [21] Other Important Information - The company ended the year with over $23 million in total liquidity and no debt outstanding, providing significant flexibility for future opportunities [4] - The investment in Tilson Technology significantly impacted the portfolio's valuation, but management remains optimistic about its former spinoff, Virta [9] Q&A Session Summary Question: What is the outlook for the M&A market? - Management expressed hope for improving sponsor activity and a gradual reopening of M&A markets, which could lead to more attractive deployment opportunities in 2026 [21] Question: How does the company plan to manage its portfolio moving forward? - The company plans to focus on prudent capital deployment, active portfolio oversight, and maintaining a disciplined approach to underwriting [22]

© 2026 Rand Capital Corporation Nasdaq: RAND Daniel P. Penberthy President & CEO Margaret W. Brechtel EVP & CFO FOURTH QUARTER AND FULL YEAR 2025 FINANCIAL RESULTS March 5, 2026 This presentation 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 ou ...

Management Fees - The Base Management Fee is set at an annual rate of 1.50% of total assets, excluding cash and cash equivalents[42] - The Incentive Fees consist of two parts: the Income Based Fee and the Capital Gains Fee[43] - The Income Based Fee is calculated quarterly based on Pre-Incentive Fee Net Investment Income, which must exceed a hurdle rate of 1.75% per quarter[48] - The Capital Gains Fee is 20% of the positive difference between cumulative realized capital gains and cumulative realized capital losses at the end of each calendar year[55] - For the Income Based Fee, if Pre-Incentive Fee Net Investment Income exceeds 2.1875%, the fee is calculated as 20% of the amount above this threshold[60] - The annualized hurdle rate is set at 7.00%, with a Base Management Fee of 1.50%[63] Investment Management - The Investment Committee, consisting of experienced members, is responsible for all investment decisions[39] - RCM, the investment adviser, did not use any Sub-Advisers for investment services in calendar year 2025[37] - The company has no employees; operations are managed by RCM[35] - The Investment Management Agreement allows RCM to enter into sub-advisory agreements, although none were utilized in 2025[37] - The company reimburses RCM for overhead and other expenses incurred in performing its obligations under the Administration Agreement[36] - The Investment Management Agreement was executed on December 31, 2020, with an initial term of two years, and is subject to annual renewal[68] Financial Performance - The company reported a Capital Gains Fee of $6.0 million for Year 2, derived from $30.0 million in realized capital gains on the sale of Investment A, representing 20% of the gains[62] - In Year 1, the company made a total investment of $50.0 million in Company A and Company B, with subsequent sales and valuations impacting future capital gains calculations[63] Regulatory Compliance - The company has an asset coverage requirement under the 1940 Act for senior securities, which was modified from 200% to 150%, effective January 24, 2025[80] - As of December 31, 2024, the company's asset coverage ratio was substantially in excess of 150%[81] - The company is required to provide significant managerial assistance to eligible portfolio companies as part of its operations as a BDC[78] - The Adviser is responsible for maintaining financial records and preparing reports required by the SEC, ensuring compliance with regulatory obligations[74] - The Adviser is entitled to indemnification for damages incurred in the performance of its duties under the Investment Management Agreement, barring willful misconduct[67] - As of December 31, 2025, the company believes it was in compliance with the requirement that qualifying assets represent at least 70% of total assets[84] - The company is permitted to invest in non-qualifying assets, but these may not exceed 30% of total asset value at the time of investment[84] - The company must distribute at least 90% of its investment company taxable income to maintain its status as a regulated investment company (RIC)[87] - A 4% nondeductible U.S. federal excise tax applies to certain undistributed income unless timely distributions are made[88] Investment Valuation and Risks - The company carries its investments at fair value, which involves significant judgment and may differ from actual liquidation values[307] - Changes in interest rates can affect the company's interest expense and the value of its investment portfolio[302] - As of December 31, 2025, all debt investments had fixed interest rates and were not directly impacted by changes in market interest rates[302] - The company does not currently engage in hedging activities but may consider them in the future to manage interest rate fluctuations[306] - The company must meet specific asset diversification requirements to maintain its RIC status, including limits on investments in any one issuer[90] - The company is subject to financial market risks primarily from changes in interest rates and the valuation of its investment portfolio[301]

Investment Performance - Total investment income for Q4 2025 was $1.3 million, a decrease of $852,000, or 40%, compared to the same period last year, primarily due to a 46% reduction in interest income from portfolio companies [6]. - The fair value of Rand's investment portfolio decreased by $22.3 million, or 32%, to $48.5 million as of December 31, 2025, driven by loan repayments and valuation adjustments [9]. - Net investment income for the year ended December 31, 2025, was $5,288,911, compared to $3,425,077 in 2024, reflecting a year-over-year increase of 54.4% [27]. - Net investment income per share for 2025 was $1.80, an increase of 35% over $1.33 per share in the prior year [11]. - Adjusted net investment income per share for the year ended December 31, 2025, was $1.26, compared to $1.72 in 2024, reflecting a decrease of 26.7% [33]. - The net realized loss on sales and dispositions of investments for the year ended December 31, 2025, was $(2,001,313), compared to a gain of $11,124,864 in 2024 [27]. Financial Position - Rand ended 2025 with over $23 million in total liquidity and no debt outstanding, providing substantial balance sheet flexibility for future investments [5]. - The company reported total net assets at the end of the year of $52,183,453, down from $65,332,520 at the end of 2024 [27]. - Net asset value (NAV) per share was $17.57 at year-end 2025, down from $25.31 at year-end 2024 [5]. Dividends and Shareholder Returns - Total dividends paid in 2025 were $1.72 per share, with a regular quarterly cash dividend of $0.29 per share declared on February 25, 2026 [14]. - The company declared dividends totaling $5,109,447 for the year ended December 31, 2025, down from $12,982,536 in 2024 [27]. Expenses and Costs - Total expenses for Q4 2025 were $666,000, compared to a net credit of $376,000 in the prior-year period, primarily due to capital gains incentive fees [6]. - Total expenses for the quarter ended December 31, 2025, were $665,562, significantly higher than the negative expenses of $(376,286) in the same quarter of 2024 [30]. Investment Activity - Rand received $17.8 million from loan repayments and select equity realizations while deploying $6.6 million into new and follow-on investments during 2025 [18]. - Rand committed $3.25 million to Bauer Sheet Metal and Fabricating Inc. in Q4 2025, consisting of a 13% term loan and warrants for a 12% ownership interest [10]. Market Volatility - The net change in unrealized appreciation/depreciation on investments for the year ended December 31, 2025, was $(11,327,218), compared to $(5,722,329) in 2024, indicating increased volatility [27]. Shareholder Metrics - Basic and diluted net increase in net assets from operations per share for the quarter ended December 31, 2025, was $0.37, compared to $(1.14) in the same quarter of 2024 [25]. - The weighted average shares outstanding increased to 2,969,814 for the quarter ended December 31, 2025, from 2,581,021 in the same quarter of 2024 [32].

Group 1 - The core focus of RAND Capital is on debt investments in mid to low-end market companies, aiming for current income and capital appreciation [1] - As of January 7, 2026, the stock price increased significantly by 5.98%, closing at $11.88 per share, although the trading volume was low at only 410 shares [1] - The latest financial report indicates a revenue of -$135,000 and a net loss of -$223,000, with earnings per share at -$0.75 and a price-to-earnings ratio of -2.80 [1] Group 2 - There have been no major upcoming events disclosed recently, such as earnings reports or business announcements [2] - Historical data shows similar stock price fluctuations in December 2025, including a rise of 5.94% on December 24 and a drop of 5.24% on December 17 [2] - No investment recommendations have been provided by institutions for this stock at the current time [1]

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]