Rand Capital(RAND) - 2024 Q1 - Quarterly Report

Financial Position - Total assets increased by $3,333,148, or 4.1$81,021,982 on December 31, 2023, to $84,355,130 on March 31, 2024[157]. - Total liabilities rose by$2,579,022, or 12.8%, from $20,206,769 to$22,785,791 during the same period[157]. - Net asset value per share (NAV) was $23.85 at March 31, 2024, compared to$23.56 at December 31, 2023[157]. Investment Income - Total investment income for the three months ended March 31, 2024, was $2,067,219, an increase of$215,721, or 11.7%, from $1,851,498 in the same period of 2023[165]. - Interest from portfolio companies increased by$516,745, or 39.8%, from $1,296,903 to$1,813,648 year-over-year[165]. - Interest from portfolio companies increased by approximately 40% during the three months ended March 31, 2024, compared to the same period in 2023, due to more interest-yielding investments originated[166]. - Total dividend and other investment income for the three months ended March 31, 2024, was $151,835, a decrease from$474,743 in the same period in 2023[168]. - Net investment income for the three months ended March 31, 2024, was $839,585, compared to$714,916 for the same period in 2023[175]. Expenses and Liabilities - Total expenses for the three months ended March 31, 2024, were $1,226,856, representing a 17.1$1,047,845 in the same period in 2023[169]. - Interest expense rose to $390,020 for the three months ended March 31, 2024, from$158,400 in the same period in 2023, reflecting higher average outstanding debt balances[170]. - The company has a $25 million senior secured revolving credit facility with$19,200,000 drawn as of March 31, 2024, with an applicable interest rate of 8.84%[159]. - The outstanding balance drawn on the Credit Facility at March 31, 2024, was $19,200,000, with an applicable interest rate of 8.84$2,890,296, or 33.0%, from $8,760,106 to$5,869,810 during the same period[161]. - The change in unrealized depreciation of investments for the three months ended March 31, 2024, was $(2,890,296), compared to an appreciation of$1,401,973 in the same period in 2023[178]. - The company recognized a net realized gain of $3,450,092 on the sale of 194,934 shares of Class A common stock of ACV during the three months ended March 31, 2024[176]. Cash and Liquidity - As of March 31, 2024, cash approximated 1.2$759,000 in cash and $5,800,000 remaining availability on the Credit Facility[183]. Interest Rate Sensitivity - As of March 31, 2024, all debt investments had fixed interest rates, insulating them from market interest rate changes[193]. - A 1$192,000, while a 1% decrease could increase net investment income by $192,000[195]. - The company’s net investment income is dependent on the difference between borrowing rates and the rates earned on invested proceeds[194]. - Changes in interest rates can impact the company's ability to acquire loans and securities, as well as the value of its investment portfolio[194]. - The analysis of interest rate sensitivity does not account for changes in credit quality or other business developments that could affect net investment income[195]. - Future interest rate fluctuations may limit the company's ability to benefit from lower interest rates if hedging is implemented[196]. - The company does not currently engage in any hedging activities but may consider using standard hedging instruments in the future[196]. - The company is currently not engaged in any hedging activities to mitigate interest rate risks[196]. Fair Value Determination - Fair value of investments is determined by RCM and approved by the Board, with inherent risks in valuation due to market uncertainties[197]. - The company may face material risks associated with fair value determinations, which could differ significantly from actual liquidation values[197].