Rand Capital(US:RAND)2023-11-06 12:30Financial Performance - Investment income for the three months ended September 30, 2023, increased by 12.0% to $1,741,114 compared to $1,554,265 for the same period in 2022[167]. - Total investment income for the three months ended September 30, 2023, was $154,416, a decrease from $421,659 in the same period of 2022[171]. - Total investment income for the nine months ended September 30, 2023, was $5,408,044, a 34.1% increase from $4,032,195 in the same period of 2022[183]. - The net investment income for the nine months ended September 30, 2023, was $2,006,129, a decrease of 37.2% compared to $3,200,306 for the same period in 2022[196]. - The realized gain on investments before income taxes for the nine months ended September 30, 2023, was $1,068,904, an increase of 54.8% from $690,591 in 2022[197]. - The net increase in net assets from operations for the nine months ended September 30, 2023, was $5,437,671, compared to a decrease of $(1,202,024) in 2022[207]. Assets and Liabilities - Total assets increased by 24.5% to $79,039,682 as of September 30, 2023, compared to $63,481,192 at December 31, 2022[160]. - Total liabilities rose significantly by 207.1% to $17,687,405 from $5,759,872[160]. - Cash represented 5.7% of net assets at September 30, 2023, compared to 2.4% at December 31, 2022[161]. - Total investments at fair value increased by 21.4% to $74,684,285 as of September 30, 2023, from $61,504,259 at December 31, 2022[164]. Investment Activities - New investments totaled $18,060,000 during the nine months ended September 30, 2023, with significant contributions from Inter-National Electronic Alloys LLC and Highland All About People Holdings, Inc.[166]. - Interest from portfolio companies rose by 39.6% to $1,535,677 for the three months ended September 30, 2023[167]. - Interest from portfolio companies for the nine months ended September 30, 2023, was $4,306,120, a 42.7% increase from $3,016,976 in the same period of 2022[183]. - The company recognized a net realized gain of $1,718,767 on the sale of 125,000 shares of Class A common stock of ACV Auctions, Inc. during the nine months ended September 30, 2023[199]. Expenses - Total expenses for the three months ended September 30, 2023, were $809,936, representing a 62.3% increase from $498,959 in the same period of 2022[172]. - Total expenses for the nine months ended September 30, 2023, were $3,164,522, a significant increase of 323.0% from $748,139 in the same period of 2022[191]. - The base management fee for the nine months ended September 30, 2023, was $769,869, an increase of 10.5% from $696,772 in 2022[195]. - Administrative fees incurred during the nine months ended September 30, 2023, were $111,750, with no corresponding expense in 2022[194]. Dividends and Cash Flow - The company declared quarterly cash dividends of $0.20, $0.25, and $0.25 for the first, second, and third quarters of 2023, respectively[157]. - As of September 30, 2023, the total liquidity consisted of approximately $3,480,000 in cash, with an unused line of credit balance of $11,250,000 under the $25 million Credit Facility[209][210]. - The outstanding balance drawn on the Credit Facility at September 30, 2023, was $13,750,000, with an applicable interest rate of 8.81%[210][211]. - The company anticipates continuing to fund investment activities through cash generated from operations and the sale of publicly traded liquid investments[214]. Risk Management - The company does not currently engage in any hedging activities but may consider using standard hedging instruments in the future to mitigate interest rate fluctuations[220]. - Investments are carried at fair value, determined by RCM and approved by the Board, with inherent risks in estimating fair values due to market uncertainties[221]. - The company acknowledges that actual results may differ materially from hypothetical analyses regarding interest rate sensitivity under its Credit Facility[219].