Table of Contents 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 June 30, 2022 ☐ 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) New York 16-0961359 (State or Other Ju ...

Rand Capital Corp. (NASDAQ:RAND) Q1 2022 Results Conference Call May 9, 2022 1:30 PM ET Company Participants Craig Mychajluk - IR Dan Penberthy - President, CEO Margaret Brechtel - EVP, CFO Operator Greetings. Welcome to the Rand Capital Corporation First Quarter 2022 Financial Results Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to Craig Mychajluk, Investor Relations. Thank you. You may begin. Craig Mychajluk Thank you, and go ...

FIRST QUARTER 2022 FINANCIAL RESULTS May 9, 2022 Daniel P. Penberthy President & CEO Margaret W. Brechtel EVP & CFO © 2022 Rand Capital Corporation Nasdaq: RAND FORWARD LOOKING STATEMENTS 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 expectations of Rand Cap ...

Table of Contents 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, 2022 ☐ 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 Indicate by check mark whether the registrant has submitted electronically every Interactive ...

Financial Data and Key Metrics Changes - Total investment income for Q4 2021 was $1.2 million, a 17% increase compared to the previous year, driven by higher interest and dividend income from portfolio companies [23] - For the full year, total investment income increased 31% to $4.1 million [25] - Net investment income for Q4 2021 was $320,000 or $0.12 per share, with an adjusted net investment income of $0.16 per share [25] - Net assets at year-end 2021 were $60.7 million, up 32% year-over-year [28] Business Line Data and Key Metrics Changes - The fair value of the portfolio increased 60% to $64.1 million, with a significant shift towards income-producing investments [10] - The portfolio composition included 46% in fixed-rate debt investments, 32% in equity investments, and 22% in dividend-paying publicly traded BDCs and ACV Auctions stock [12] - The company made $19.7 million in investments during 2021, with $17.6 million in eight transactions, averaging about $2.5 million per investment [13] Market Data and Key Metrics Changes - The company exited five equity holdings in private companies, netting $2.7 million, and sold public equities for an additional $3.1 million in gains, totaling $5.8 million in gains for the year [14] - The company still holds 442,934 shares of ACV, valued at $18.81 per share at year-end [18] Company Strategy and Development Direction - The company aims to transition into a dividend-paying business development company with a focus on income-producing instruments [9] - The strategy includes making larger investments into portfolio companies to enhance scaling opportunities [12] - The company plans to continue expanding its portfolio and actively invest in income-producing assets while monitoring its equity portfolio mix for potential capital gains [32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting the successful transformation and positioning for financial flexibility [32] - The company expects actions taken to contribute to increasing net investment income and support growing dividends [32] Other Important Information - The company paid a total of $4.6 million in dividends in 2021, including a 50% increase in the regular quarterly cash dividend to $0.15 per share for Q1 2022 [30] - The company simplified its reporting and regulatory requirements by paying off the $11 million SBA loan and surrendering its SBA license [11] Q&A Session Summary - The Q&A session concluded without specific questions or answers being documented in the provided content [34]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Rand Capital Corporation (Exact name of registrant as specified in its charter) Washington, D.C. 20549 (State or Other Jurisdiction of Incorporation or organization) FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from to Commission Fi ...

THIRD QUARTER 2021 | --- | --- | --- | |-------|-------|-----------------------| | | | | | | | F INANCIAL R ESULTS | | | | | | | | November 5, 2021 | | | | Allen F. "Pete" Grum | | | | President & CEO | Daniel P. Penberthy Executive Vice President & CFO © 2021 Rand Capital Corporation Nasdaq: RAND FORWARD LOOKING STATEMENTS 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 193 ...

Rand Capital (NASDAQ:RAND) Q3 2021 Earnings Conference Call November 5, 2021 12:30 PM ET Company Participants Craig Mychajluk - IR Pete Grum - CEO Dan Penberthy - EVP & CFO Conference Call Participants Disclaimer*: This transcript is designed to be used alongside the freely available audio recording on this page. Timestamps within the transcript are designed to help you navigate the audio should the corresponding text be unclear. The machine-assisted output provided is partly edited and is designed as a gui ...

[PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20%E2%80%93%20FINANCIAL%20INFORMATION) [Financial Statements and Supplementary Data](index=4&type=section&id=Item%201.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Rand Capital Corporation's unaudited consolidated financial statements for Q3 2021 and comparative 2020 data, highlighting increased assets and net assets from investment appreciation [Consolidated Statements of Financial Position](index=4&type=section&id=Consolidated%20Statements%20of%20Financial%20Position) As of September 30, 2021, total assets increased to $75.9 million from $61.0 million, driven by a $22.1 million rise in investment fair value, leading to total stockholders' equity of $60.2 million and NAV per share of $23.31 Consolidated Balance Sheet Summary (in thousands) | Account | Sep 30, 2021 (Unaudited) | Dec 31, 2020 | | :--- | :--- | :--- | | **Total Investments, at fair value** | $62,102 | $40,049 | | Cash and cash equivalents | $13,300 | $20,365 | | **Total Assets** | **$75,882** | **$60,967** | | Total Liabilities | $15,720 | $14,862 | | **Total Stockholders' Equity (Net Assets)** | **$60,162** | **$46,105** | | NAV per share | $23.31 | $17.86 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) For the nine months ended September 30, 2021, net assets from operations increased significantly to $14.9 million, primarily due to a $17.8 million net realized and unrealized gain on investments, despite a $2.9 million net investment loss Operating Results for the Nine Months Ended September 30 (in thousands) | Metric | 2021 (Unaudited) | 2020 (Unaudited) | | :--- | :--- | :--- | | Total Investment Income | $2,840 | $2,047 | | Total Expenses | $5,748 | $1,449 | | Net Investment (Loss) Income | ($2,925) | $1,018 | | Net Realized and Unrealized Gains on Investments | $17,778 | $99 | | **Net Increase in Net Assets from Operations** | **$14,853** | **$1,116** | | Basic and Diluted EPS | $5.75 | $0.52 | - Total expenses for the nine months ended Sep 30, 2021, included a significant **$4.114 million accrual for capital gains incentive fees**, which was not present in the 2020 period[12](index=12&type=chunk) [Consolidated Statements of Changes in Net Assets](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Net%20Assets) Net assets grew from $46.1 million at the start of 2021 to $60.2 million by Q3 2021, primarily driven by a $14.9 million net increase from operations, partially offset by dividends and treasury share purchases Changes in Net Assets for the Nine Months Ended Sep 30, 2021 (in thousands) | Description | Amount | | :--- | :--- | | Net Assets at beginning of period | $46,105 | | Net increase in net assets from operations | $14,853 | | Declaration of dividend | ($775) | | Purchase of treasury shares | ($21) | | **Net Assets at end of period** | **$60,162** | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2021, net cash used in operating activities was $2.8 million, primarily due to $15.1 million in new investments, resulting in a $7.1 million net decrease in cash and a period-end balance of $13.3 million Cash Flow Summary for the Nine Months Ended Sep 30 (in thousands) | Activity | 2021 (Unaudited) | 2020 (Unaudited) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | ($2,836) | ($1,947) | | Net Cash Used in Financing Activities | ($4,230) | ($4,795) | | **Net Decrease in Cash** | **($7,066)** | **($6,741)** | | Cash at Beginning of Period | $20,365 | $25,816 | | **Cash at End of Period** | **$13,300** | **$19,074** | [Consolidated Schedule of Portfolio Investments](index=9&type=section&id=Consolidated%20Schedule%20of%20Portfolio%20Investments) As of September 30, 2021, the investment portfolio's fair value reached $62.1 million, with 55.5% in Non-Control/Non-Affiliate investments and Software as the largest industry concentration at 29.9% Portfolio Composition by Investment Type (Sep 30, 2021) | Investment Type | Fair Value | % of Net Assets | | :--- | :--- | :--- | | Non-Control/Non-Affiliate | $33,414,928 | 55.5% | | Affiliate Investments | $28,084,871 | 46.7% | | Control Investments | $602,570 | 1.0% | | **Total Investments** | **$62,102,369** | **103.2%** | Top 5 Portfolio Company Investments by Fair Value (Sep 30, 2021) | Company | Fair Value | % of Net Assets | | :--- | :--- | :--- | | ACV Auctions, Inc. | $9,795,310 | 16.3% | | Tilson Technology Management, Inc. | $8,925,015 | 14.8% | | Open Exchange, Inc. | $5,570,000 | 9.3% | | ITA Acquisition, LLC | $3,919,103 | 6.5% | | Caitec, Inc. | $3,864,306 | 6.4% | Portfolio Industry Classification (Sep 30, 2021) | Industry | % of Total Investments | | :--- | :--- | | Software | 29.9% | | Professional Services | 21.8% | | Manufacturing | 14.3% | | Consumer Product | 11.3% | | Automotive | 10.9% | [Notes to the Consolidated Financial Statements](index=25&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) These notes detail the company's BDC and RIC status, fair value measurement of Level 3 investments, SBA debentures, related party transactions with RCM, and financial highlights - The company is an externally managed BDC that elected to be treated as a RIC starting January 1, 2020, with investment activities managed by Rand Capital Management, LLC (RCM)[77](index=77&type=chunk)[79](index=79&type=chunk)[80](index=80&type=chunk) - As of September 30, 2021, **75% of the investment portfolio's fair value was classified as Level 3 assets**, valued using significant unobservable inputs determined by RCM and approved by the Board[31](index=31&type=chunk)[128](index=128&type=chunk) - The company pays RCM a base management fee of **1.50% of total assets (excluding cash)** and a two-part incentive fee (Income Based and Capital Gains), accruing a **$4,114,000 Capital Gains Incentive Fee** for the nine months ended Sep 30, 2021, based on both realized and unrealized gains[152](index=152&type=chunk)[162](index=162&type=chunk)[165](index=165&type=chunk) - Subsequent to the quarter-end, the company repaid its entire **$11 million of outstanding SBA debentures** and submitted a request to surrender its SBIC license[172](index=172&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=43&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition and operations, highlighting the significant increase in net assets driven by strong portfolio performance, particularly unrealized gains, and detailing investment income, expenses, liquidity, and capital resources [Financial Condition](index=46&type=section&id=Financial%20Condition) The company's financial condition significantly strengthened, with net assets increasing by 30.5% to $60.2 million in the first nine months of 2021, fueled by a 55.1% increase in the investment portfolio's fair value to $62.1 million Financial Condition Summary | Metric | Sep 30, 2021 | Dec 31, 2020 | % Increase | | :--- | :--- | :--- | :--- | | Total Assets | $75,881,658 | $60,966,942 | 24.5% | | Total Liabilities | $15,719,533 | $14,862,112 | 5.8% | | **Net Assets** | **$60,162,125** | **$46,104,830** | **30.5%** | - During the first nine months of 2021, the company made **$15.1 million in new investments**, primarily in ITA Acquisition, DSD Operating, and Seybert's Billiards[199](index=199&type=chunk) - The company exited or received repayments from several investments totaling **$6.4 million at cost**, including Science and Medicine Group, Microcision, and Centivo Corporation[199](index=199&type=chunk)[200](index=200&type=chunk) [Results of Operations](index=48&type=section&id=Results%20of%20Operations) For the nine months ended Sep 30, 2021, total investment income grew 38.7% to $2.8 million, but total expenses surged to $5.7 million due to a $4.1 million capital gains incentive fee accrual, resulting in a net investment loss of $2.9 million despite strong portfolio performance Comparison of Nine Months Ended Sep 30 | Metric (in millions) | 2021 | 2020 | | :--- | :--- | :--- | | Total Investment Income | $2.8 | $2.0 | | Total Expenses | $5.7 | $1.4 | | Net Investment (Loss) Income | ($2.9) | $1.0 | | Net Realized Gain | $4.7 | $2.4 | | Net Change in Unrealized Appreciation | $13.0 | ($0.5) | - The increase in unrealized appreciation was primarily driven by valuation increases in **Open Exchange ($4.9M)**, **Tilson ($4.2M)**, and **ACV ($3.3M)**[231](index=231&type=chunk) - Realized gains were primarily from the sale of investments in **Givegab ($1.8M)**, **Centivo ($1.6M)**, and shares of **ACV ($1.0M)**[228](index=228&type=chunk)[229](index=229&type=chunk) [Liquidity and Capital Resources](index=54&type=section&id=Liquidity%20and%20Capital%20Resources) As of September 30, 2021, the company had $13.3 million in cash and cash equivalents, which management deems sufficient for the next year, and subsequently repaid its $11 million SBA debentures and terminated its SBIC license - Total liquidity as of September 30, 2021, consisted of **$13.3 million in cash and cash equivalents**[239](index=239&type=chunk) - Subsequent to Q3 2021, the company repaid its **$11 million of outstanding SBA debentures** and terminated its SBIC license, which also terminated the availability of **$3 million in additional SBA leverage**[172](index=172&type=chunk)[239](index=239&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=55&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is valuation risk for its private company portfolio, which is valued in good faith due to the absence of a public market, and it holds some marketable securities subject to volatility - The main investment risk is **valuation risk** for the private company securities in the portfolio, as their fair value is determined in good faith in the absence of a ready market[243](index=243&type=chunk) - The company holds some marketable securities which are subject to **market volatility and liquidity risk** in the event of disorderly market conditions[243](index=243&type=chunk) [Controls and Procedures](index=55&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of September 30, 2021, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the Corporation's **disclosure controls and procedures were effective** as of September 30, 2021[245](index=245&type=chunk) - No material changes to internal control over financial reporting occurred during the third quarter of 2021[246](index=246&type=chunk) [PART II – OTHER INFORMATION](index=56&type=section&id=PART%20II.%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=56&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no legal proceedings - None[248](index=248&type=chunk) [Risk Factors](index=56&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the risk factors detailed in the company's Annual Report on Form 10-K for the year ended December 31, 2020 - The report refers readers to the Risk Factors section of the Annual Report on Form 10-K for the year ended December 31, 2020[249](index=249&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=56&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q3 2021, the company repurchased 1,148 shares of common stock at an average price of $18.09 under a plan authorizing up to $1.5 million in repurchases, with $1.48 million remaining available Issuer Purchases of Equity Securities (Q3 2021) | Period | Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Jul 2021 | 0 | N/A | | Aug 2021 | 911 | $18.18 | | Sep 2021 | 237 | $17.75 | | **Total** | **1,148** | **$18.09** | - A share repurchase plan approved on April 22, 2021, authorizes up to **$1,500,000 in share repurchases** until April 22, 2022, with **$1,479,230 remaining available** as of September 30, 2021[252](index=252&type=chunk) [Defaults upon Senior Securities](index=56&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) The company reported no defaults upon senior securities - None[253](index=253&type=chunk) [Other Information](index=56&type=section&id=Item%205.%20Other%20Information) The company reported no other information - None[255](index=255&type=chunk) [Exhibits](index=57&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the report, including certificates of incorporation, by-laws, and officer certifications pursuant to the Sarbanes-Oxley Act - Exhibits filed with the report include corporate governance documents and CEO/CFO certifications (31.1, 31.2, 32.1)[258](index=258&type=chunk)

Financial Data and Key Metrics Changes - Total investment income for Q2 2021 increased by 20% to $811,000 compared to the previous year [6][18] - Net asset value (NAV) per share rose to $22.51, reflecting a 7% increase from the previous quarter and a 26% increase from year-end [6] - GAAP net investment loss was reported at $0.31 per share, while adjusted net investment income was $0.10 per share, up from $0.08 per share in the prior year [9][21] Business Line Data and Key Metrics Changes - The portfolio transitioned from equity investments to income-producing investments, with 55% in equity, 36% in fixed-rate debt, and 9% in dividend-paying publicly traded BDCs [10] - The fair value of investments increased by $7.5 million, with Open Exchange's fair value rising to $5.6 million, an increase of $4.9 million during the year [10] Market Data and Key Metrics Changes - 23 portfolio companies generated income in the quarter, compared to 13 in the prior year [18] - Dividend income increased by 45% to approximately $137,000, primarily from the BDC investment portfolio [18] Company Strategy and Development Direction - The company is focusing on evolving its portfolio to drive investment income and higher cash distributions [6] - The strategy includes transforming equity investments into debt to enhance ongoing dividends [63] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to execute the strategy to grow the portfolio and support a growing dividend, backed by a strong liquidity position of approximately $16 million [24][26] - The company will continue to monitor and adjust its dividend based on actual year-to-date GAAP and estimated tax results [24][46] Other Important Information - The company accrued $1.1 million in noncash expenses related to capital gains incentive fees, primarily due to realized gains from the sale of GiveGab [8][19] - The company has a share repurchase program authorized for up to $1.5 million, which expires in April 2022 [25] Q&A Session Summary Question: What was the value of ACVA on June 30? - The Class A at June 30 was $24.85 and the Class B was $23.61 [30] Question: How much of the accrued capital gains is attributable to ACVA? - The response indicated that the specific amount could not be provided immediately but would be followed up [32][34] Question: Is there an exit strategy for ACV? - The company aims to liquefy equity investments like ACV over time, converting cash into interest-paying debentures or loans [61][63] Question: How will adjustments to dividends be handled? - Adjustments will be made based on projected results, with capital gains potentially resulting in one-time dividends [45][49] Question: What precipitated the sale of the GiveGab position? - The company sold its proportional investment as part of a total acquisition of GiveGab, which was influenced by market conditions [69]