Rand Capital(US:RAND)2025-11-07 13:45Financial Position - Total assets decreased by 24.7% from $72,457,433 on December 31, 2024, to $54,579,788 on September 30, 2025[157]. - Total liabilities decreased by 86.6% from $7,124,913 to $958,274 during the same period[157]. - Net asset value per share (NAV) was $18.06 at September 30, 2025, down from $25.31 at December 31, 2024[157]. - Cash represented 17.7% of net assets at September 30, 2025, compared to 1.3% at December 31, 2024[158]. - Investments at fair value decreased by 37.4% from $70,818,041 on December 31, 2024, to $44,330,872 on September 30, 2025[160]. - Unrealized depreciation increased significantly, resulting in a net value of $(9,204,495) as of September 30, 2025, compared to $2,697,806 at December 31, 2024[160]. Credit Facility - The company has a $25 million senior secured revolving credit facility with M&T Bank, with no outstanding balance as of September 30, 2025[159]. - The Credit Facility, established in 2022, has a borrowing limit of $25 million, with no outstanding balance drawn as of September 30, 2025[212]. - The applicable interest rate on the Credit Facility was 7.74% as of September 30, 2025, calculated as 3.50 percentage points above the greater of the daily SOFR or 0.25%[213]. - As of September 30, 2025, total liquidity was approximately $9,491,000 in cash and $18,300,000 of unused availability on the Credit Facility[211]. Investment Income and Expenses - Total investment income for the three months ended September 30, 2025, was $1,579,623, a decrease of 28.8% compared to $2,218,454 in the same period of 2024[165]. - Interest from portfolio companies decreased by 26.8% to $1,425,134 in Q3 2025 from $1,945,595 in Q3 2024, attributed to several interest-yielding investments being repaid[165][166]. - Total expenses for the three months ended September 30, 2025, were $596,203, down 55.3% from $1,333,930 in the same period of 2024[170]. - Net investment income for the three months ended September 30, 2025, was $992,579, compared to $887,035 in Q3 2024[176]. - Total investment income for the nine months ended September 30, 2025, was $5,189,824, a decrease of 19.2% from $6,421,822 in 2024[187]. - Interest from portfolio companies decreased by 19.8% to $4,616,862 for the nine months ended September 30, 2025, due to repayments of several interest-yielding investments[188]. - Total expenses for the nine months ended September 30, 2025, were $523,109, a significant decrease of 90.0% from $5,213,568 in 2024[195]. - Net investment income for the nine months ended September 30, 2025, was $4,688,928, compared to $1,209,425 in 2024[199]. Realized and Unrealized Gains/Losses - The company recognized a net realized loss of $2,927,329 on investments for the three months ended September 30, 2025, compared to a gain of $7,230,082 in the same period of 2024[177]. - The realized loss on investments for the nine months ended September 30, 2025, was ($2,001,997), a decrease of $13,110,279 compared to a gain of $11,108,282 in 2024[200]. - The change in unrealized depreciation for the three months ended September 30, 2025, was $(291,703), significantly improved from $(5,665,541) in Q3 2024[181]. - The change in unrealized depreciation for the nine months ended September 30, 2025, was ($11,902,301), compared to ($776,811) in 2024, indicating a significant decline in investment valuations[205]. Management Fees and Expenses - The capital gains incentive fee expense was $0 for the three months ended September 30, 2025, compared to $313,000 in the same period of 2024[172]. - The base management fee expense decreased to $184,382 in Q3 2025 from $309,265 in Q3 2024, reflecting lower total assets[174]. - The capital gains incentive fee expense decreased by $3,631,300 during the nine months ended September 30, 2025, due to net unrealized depreciation exceeding realized capital gains[196]. - The base management fee expense for the nine months ended September 30, 2025, was $654,239, down from $934,532 in 2024[198]. Future Outlook and Risks - The company anticipates continuing to fund investment activities through cash generated from operations and borrowings under the Credit Facility[218]. - The company is subject to financial market risks, particularly from changes in interest rates and the valuation of its investment portfolio[219]. - All debt investments had fixed interest rates as of September 30, 2025, mitigating direct impacts from market interest rate changes[220]. - The company does not currently engage in hedging activities but may consider them in the future to manage interest rate fluctuations[224]. - Investments are carried at fair value, with material risks associated with the determination of fair value due to inherent uncertainties[225].