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Rand Capital(RAND) - 2025 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Net investment income was $2,500,000 or $0.83 per share, driven primarily by a non-cash reversal of a capital gains incentive fee tied to unrealized depreciation [5][18] - Total investment income was $1,600,000, reflecting a 25% decrease compared to the prior year period, primarily due to reduced interest income and lower dividend income [17] - Net asset value at quarter end was $56,700,000, down from $65,300,000 at the end of Q1 2025, reflecting a $9,500,000 unrealized loss on Tilson [19][20] Business Line Data and Key Metrics Changes - The portfolio was valued at $52,400,000, down sequentially and from year-end, driven by repayments and valuation adjustments, particularly related to Tilson Technologies [8][9] - The portfolio mix remains tilted towards income-generating debt investments, accounting for 86% of the portfolio by fair value, while equity investments represented 14% [10] Market Data and Key Metrics Changes - The overall investment environment remained muted with limited new deal flow and stalled M&A transactions, leading to a more conservative posture across the portfolio [4][22] - Approximately $1,200,000 of interest income was PIK (payment in kind), representing about one-third of total investment income [5] Company Strategy and Development Direction - The company continues to execute its long-term strategy focused on income generation and capital preservation, prioritizing yield-focused debt investments [22] - The company aims to maintain dividend stability while navigating through a cautious investment environment [22] Management's Comments on Operating Environment and Future Outlook - Management noted that while Q2 did not include meaningful new investment activity, there are early signs of stronger deal activity in the second half of the year [22] - The company remains committed to creating value for shareholders through proactive oversight and prudent capital allocation [22] Other Important Information - The company declared three quarterly dividends of $0.29 per share in 2025, with total dollar amounts paid to shareholders increasing due to a higher number of shares outstanding [6][7] - The company ended the quarter with $4,400,000 in cash, significantly up from $835,000 at year-end 2024, with no outstanding bank debt [20] Q&A Session Summary - No specific questions or answers were provided in the content regarding the Q&A session.