Rand Capital(US:RAND)2024-08-06 11:30Financial Performance - Total assets increased by 12.1% to $90,789,069 as of June 30, 2024, compared to $81,021,982 at December 31, 2023[142] - Net assets rose by 12.7% to $68,558,616 at June 30, 2024, up from $60,815,213 at the end of 2023[142] - The net asset value per share (NAV) was $26.56 at June 30, 2024, compared to $23.56 at December 31, 2023[142] - Total investments at fair value increased by 12.9% to $87,070,967 as of June 30, 2024, from $77,125,712 at December 31, 2023[145] - Unrealized appreciation, net, surged by 55.8% to $13,648,836 at June 30, 2024, compared to $8,760,106 at the end of 2023[145] - Total investment income for the three months ended June 30, 2024, was $2,136,149, representing a 17.7% increase from $1,815,432 in the same period of 2023[149] - Total investment income for the six months ended June 30, 2024, was $4,203,368, representing a 14.6% increase from $3,666,930 in the same period of 2023[168] - Net investment income for the six months ended June 30, 2024, was $322,390, a significant decrease from $1,207,546 in the same period of 2023[175] Investment Activities - New investments totaled $10,945,497 during the six months ended June 30, 2024[148] - The company liquidated investments in Ares, Carlyle, Knoa, and Pennantpark during the three months ended June 30, 2024[161] - The company funded approximately $10,945,000 in new or follow-on portfolio company investments during the same period[190] Dividends and Expenses - The company declared quarterly cash dividends of $0.25 and $0.29 for the first and second quarters of 2024, respectively[139] - Total expenses rose significantly by 103.0% to $2,652,782 in Q2 2024, up from $1,306,741 in Q2 2023, primarily driven by a $1,150,000 increase in capital gains incentive fee expense[152] - Total expenses rose by 64.8% to $3,879,638 for the six months ended June 30, 2024, up from $2,354,586 in 2023, primarily due to increased capital gains fee expenses and interest expenses[172] Cash Flow and Liquidity - As of June 30, 2024, total liquidity consisted of approximately $2,293,000 in cash and $7,800,000 available on the Credit Facility[186] - The company entered into a $25 million Credit Facility with an outstanding balance of $17.2 million as of June 30, 2024, leaving an unused line of credit of $7.8 million[187] - For the six months ended June 30, 2024, the company experienced a net decrease in cash of approximately $1,002,000, primarily due to $558,000 used in operating activities and $444,000 in financing activities[190] Financial Risks and Management - The company is subject to financial market risks, including interest rate changes that may affect its interest expense on the debt outstanding under the Credit Facility[192] - A hypothetical 1% increase in interest rates could decrease net investment income by approximately $172,000, while a 1% decrease could increase it by the same amount[194] - The company does not currently engage in hedging activities but may consider them in the future to manage interest rate fluctuations[195] Future Outlook - SciAps announced a definitive purchase agreement for acquisition with total consideration of up to $260 million, expected to close later in 2024[162] - SciAps announced a definitive purchase agreement for up to $260 million, with closing expected later in 2024, which may impact future valuations[181] Investment Strategy - The company’s investment objective focuses on generating current income and capital appreciation through investments in lower middle market companies[146] - The company has co-investment opportunities with affiliates under an SEC exemptive order, enhancing investment diversification[140] Performance Metrics - Interest from portfolio companies increased by 35.4% to $1,995,227 in Q2 2024, compared to $1,473,540 in Q2 2023, due to additional interest-yielding investments[150] - Interest from portfolio companies increased by 37.5% to $3,808,875 for the six months ended June 30, 2024, compared to $2,770,443 in 2023, due to additional interest-yielding investments[169] - The net increase in net assets from operations for the three months ended June 30, 2024, was $7,737,773, compared to $2,671,890 in the same period of 2023[164] - The net increase in net assets from operations for the six months ended June 30, 2024, was $9,137,154, compared to $4,842,167 in 2023[185] - The change in unrealized appreciation of investments was $7,779,026 for Q2 2024, a significant improvement from a depreciation of ($1,367,270) in Q2 2023[159] - The change in unrealized appreciation of investments before income taxes for the six months ended June 30, 2024, was $4,888,730, compared to $34,703 in 2023, indicating a substantial increase[179]