-- Ended the year with more than $23 million in total liquidity and no
debt outstanding , providing substantial balance sheet flexibility for
future investments
-- Total investment income was $1.3 million for the fourth quarter and
$6.5 million for full year 2025, reflecting the impact of portfolio
repayments and pace of deal origination
-- Net asset value $(NAV)$ per share was $17.57 at December 31, 2025
-- Received $17.8 million from loan repayments and select equity
realizations while deploying $6.6 million into new and follow-on
investments during 2025
-- Debt investments represented 79% of the portfolio at year-end, up from
75% at year-end 2024, reflecting continued emphasis on income-generating
assets
-- Paid total dividends of $1.72 per share in 2025
BUFFALO, N.Y.--(BUSINESS WIRE)--March 05, 2026--
Rand Capital Corporation (Nasdaq: RAND) ("Rand" or the "Company"), a business development company providing alternative financing for lower middle market companies, announced its results for the fourth quarter and full year ended December 31, 2025.
"2025 was a year of disciplined execution and deliberate capital allocation for Rand," said Daniel P. Penberthy, President and Chief Executive Officer of Rand. "We monetized a meaningful portion of our portfolio, strengthened the balance sheet, and entered 2026 with robust liquidity and no debt outstanding. While certain portfolio repayments moderated near-term investment income, our continued focus on disciplined underwriting, selective portfolio construction, and expanding our base of income-producing assets has positioned Rand with the flexibility to pursue attractive risk-adjusted opportunities as M&A market conditions continue to evolve favorably. We remain committed to prudently scaling the portfolio and delivering sustainable long-term shareholder value through active portfolio management and consistent capital deployment."
Fourth Quarter Review (compared with the prior-year period unless otherwise noted)
-- Total investment income was $1.3 million, a decrease of $852,000, or
40%, compared with the same period last year. The change was primarily
driven by a 46% reduction in interest income from portfolio companies,
reflecting the repayment of five debt instruments over the past year.
Lower fee income also contributed to the year-over-year decrease.
Payment-in-kind $(PIK)$ interest remained a component of investment income
during the quarter, as certain portfolio companies continued to utilize
this feature. For the fourth quarter of 2025, non-cash PIK interest
totaled $308,000, representing 24% of total investment income, compared
with 30% in the prior-year period.
-- Total expenses were $666,000 for the fourth quarter, compared with a
net credit of $376,000 in the prior-year period. The variance was driven
primarily by capital gains incentive fees, as the fourth quarter of the
prior year included a $1.1 million credit related to portfolio valuation
changes, whereas no capital gains incentive fee was recorded in the
fourth quarter of 2025.
-- Adjusted expenses, which exclude capital gains incentive fees, and is a
non-GAAP financial measure, were down slightly to $666,000 compared with
$678,000 in the fourth quarter of 2024. See the attached description of
this non-GAAP financial measure and reconciliation table for adjusted
expenses.
-- Net investment income was $600,000, or $0.20 per share, compared with
$2.2 million, or $0.86 per share, in the fourth quarter of 2024. The
per-share amount for the fourth quarter of 2025 was calculated based on
2,969,814 weighted average shares outstanding, reflecting the increase in
shares outstanding following the fourth quarter 2024 dividend, which was
distributed in the first quarter of 2025 and partially paid in common
stock. This compared with 2,581,021 weighted average shares outstanding
for the fourth quarter of 2024. Adjusted net investment income per share,
a non-GAAP financial measure, which excludes the capital gains incentive
fee, was $0.20 per share, compared with $0.45 per share in last year's
fourth quarter. See the attached description of this non-GAAP financial
measure and reconciliation table for adjusted net investment income per
share.
2025 Review
-- Total investment income was $6.5 million compared with $8.6 million in
the prior year. The change was largely due to several interest-yielding
investments that were repaid during the last year and a slowdown in deal
originations.
-- Total expenses declined $3.6 million, or 75%, to $1.2 million, which
reflected a $2.6 million decrease in the capital gains incentive fee
expense, a $977,000 decrease in interest expense, and a $382,000 decrease
in base management fees payable to the Company's external investment
advisor.
-- Excluding the capital gains incentive fee accrual, adjusted expenses,
which is a non-GAAP financial measure, decreased $1.1 million to $2.8
million in 2025. See the attached description of this non-GAAP financial
measure and reconciliation table for adjusted expenses.
-- Net investment income per share of $1.80 for 2025 increased 35% over
$1.33 per share in the prior year. Excluding the capital gains incentive
fee accrual, adjusted net investment income per share was $1.26 compared
with $1.72 in 2024. See the attached description of this non-GAAP
financial measure and reconciliation table for adjusted net investment
income per share.
-- Net assets at December 31, 2025 were $52.2 million.
Portfolio and Investment Activity
As of December 31, 2025, Rand's investment portfolio had a fair value of $48.5 million across 20 portfolio companies, representing a decrease of $22.3 million, or 32%, from December 31, 2024. The decline was driven primarily by portfolio company loan repayments and valuation adjustments across multiple holdings. At year-end 2025, the portfolio was comprised of approximately 79% debt investments and 21% equity investments. The annualized weighted average yield on debt investments, including PIK interest, decreased to 11.3% from 13.8% at year-end 2024, primarily due to increased non-accrual rates on debt investments during 2025 and changes in portfolio mix following repayments and new investment activity.
Fourth Quarter 2025:
-- New Investment: Committed $3.25 million to Bauer Sheet Metal and
Fabricating Inc. ("Bauer"), consisting of a 13% term loan and warrants
for a 12% ownership interest. Headquartered in Muskegon, MI, Bauer
specializes in the fabrication and installation of sheet metal solutions
serving the mining, marine, engineering, and other industrial sectors.
Full year 2025:
-- Monetized select equity investments and received loan repayments that
generated approximately $17.8 million in aggregate cash proceeds.
-- Invested a total of $6.6 million across five transactions, primarily in
interest-earning assets. Activity included two new portfolio company
investments and three follow-on investments supporting existing
borrowers.
Liquidity and Capital Resources
Rand closed the year with $4.2 million in cash and cash equivalents, a significant increase from $835,000 at year-end 2024. As of December 31, 2025, the Company had no outstanding borrowings under its senior secured revolving credit facility, leaving $19.2 million of available capacity. The facility, which matures in 2027, permits up to $25 million in borrowings subject to compliance with borrowing conditions and portfolio eligibility requirements.
The Company did not repurchase any outstanding common stock during 2025.
Dividends
In 2025, Rand paid total dividends of $1.72 per share in cash.
On February 25, 2026, Rand declared its regular quarterly cash dividend of $0.29 per share, payable on or about March 25, 2026, to shareholders of record as of March 11, 2026.
Webcast and Conference Call
Rand will host a conference call and webcast on Thursday, March 5, 2026, at 1:30 p.m. Eastern Time, to review its financial results. The review will be accompanied by a slide presentation, which will be available on Rand's website at www.randcapital.com in the "Investor Relations" section. Rand's conference call can be accessed by calling (201) 689-8263. Alternatively, the webcast can be monitored on Rand's website at www.randcapital.com under "Investors" where the replay will also be available.
A telephonic replay will be available from 4:30 p.m. ET on the day of the call through Thursday, March 19, 2026. To listen to the archived call, dial (412) 317-6671 and enter replay pin 13758207. A transcript of the call will also be posted once available.
ABOUT RAND CAPITAL
Rand Capital Corporation (Nasdaq: RAND) is an externally managed business development company $(BDC)$. The Company's investment objective is to maximize total return to its shareholders with current income and capital appreciation by focusing its debt and related equity investments in privately-held, lower middle market companies with committed and experienced managements in a broad variety of industries. Rand primarily invests in businesses that have sustainable, differentiated and market-proven products, revenue of more than $10 million and EBITDA in excess of $1.5 million. The Company's investment activities are managed by its external investment adviser, Rand Capital Management, LLC. Additional information can be found at the Company's website where it regularly posts information: randcapital.com.
Safe Harbor Statement
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than historical facts, including but not limited to statements regarding the strategy of the Company and its outlook; statements regarding the implementation of the Company's strategy and the growth of its dividend; and any assumptions underlying any of the foregoing, are forward-looking statements. Forward-looking statements concern future circumstances and results and other statements that are not historical facts and are sometimes identified by the words "may," "will," "should," "potential," "intend," "expect," "endeavor," "seek," "anticipate," "estimate," "overestimate," "underestimate," "believe," "could," "project," "predict," "continue," "target" or other similar words or expressions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove to be incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be achieved. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others, (1) evolving legal, regulatory and tax regimes; (2) changes in general economic and/or industry specific conditions; and (3) other risk factors as detailed from time to time in Rand's reports filed with the Securities and Exchange Commission ("SEC"), including Rand's annual report on Form 10-K for the year ended December 31, 2025, quarterly reports on Form 10-Q, and other documents filed with the SEC. Consequently, such forward-looking statements should be regarded as Rand's current plans, estimates and beliefs. Except as required by applicable law, Rand assumes no obligation to update the forward-looking information contained in this release.
FINANCIAL TABLES FOLLOW
Rand Capital Corporation and Subsidiaries
Consolidated Statements of Financial Position
(Audited)
2025 2024
------------ -----------
ASSETS
---------------------------------------
Investments at fair value:
Control investments (cost of
$6,563,940 and $6,188,940,
respectively) $ 1,400,000 $ 2,500,000
Affiliate investments (cost of
$40,867,599 and $42,488,804,
respectively) 36,775,685 51,668,144
Non-Control/Non-Affiliate
investments (cost of $9,630,860
and $19,442,491, respectively) 10,304,811 16,649,897
----------- ----------
Total investments, at fair value
(cost of $57,062,399 and
$68,120,235, respectively) 48,480,496 70,818,041
Cash and cash equivalents 4,208,948 834,805
Interest receivable (net of
allowance of $25,337 and $0,
respectively) 168,039 357,530
Prepaid income taxes 283,581 329,365
Deferred tax asset, net -- 2,161
Other assets 54,248 115,531
----------- ----------
Total assets $ 53,195,312 $72,457,433
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
(NET ASSETS)
---------------------------------------
Liabilities:
Due to investment adviser $ 519,287 $ 2,182,846
Accounts payable and accrued
expenses 101,975 92,568
Line of credit -- 600,000
Capital gains incentive fees -- 1,565,000
Deferred revenue 390,597 516,441
Dividend payable -- 2,168,058
----------- ----------
Total liabilities 1,011,859 7,124,913
Stockholders' equity (net assets):
Common stock, $0.10 par; shares
authorized 100,000,000; shares
issued: 3,037,709 at 12/31/25 and
2,648,916 at 12/31/24; shares
outstanding: 2,969,814 at 12/31/25
and 2,581,021 at 12/31/24 303,771 264,892
Capital in excess of par value 64,063,157 55,419,620
Stock dividends distributable: 0
shares at 12/31/25 and 388,793
shares at 12/31/24 -- 8,672,231
Treasury stock, at cost: 67,895
shares at 12/31/25 and 12/31/24 (1,566,605) (1,566,605)
Total distributable earnings (10,616,870) 2,542,382
----------- ----------
Total stockholders' equity
(net assets) (per share -
2025: $17.57, 2024: $25.31) 52,183,453 65,332,520
----------- ----------
Total liabilities and
stockholders' equity (net
assets) $ 53,195,312 $72,457,433
=========== ==========
Rand Capital Corporation and Subsidiaries
Consolidated Statements of Operations
(Unaudited) (Audited)
For the Quarter Ended For the Year Ended December
December 31, 31,
2025 2024 2025 2024
--------- ---------- ----------- ----------
Investment income:
Interest from portfolio
companies:
Control investments $ 8,896 $ 183,239 $ 35,292 $ 733,774
Affiliate investments 840,772 1,217,076 4,565,668 4,739,802
Non-Control/Non-Affiliate
investments 222,981 573,164 1,088,551 2,254,373
--------- ---------- ----------- ----------
Total interest from
portfolio companies 1,072,649 1,973,479 5,689,511 7,727,949
Interest from other
investments:
Non-Control/Non-Affiliate
investments 56,241 185 176,668 2,356
--------- ---------- ----------- ----------
Total interest from
other investments 56,241 185 176,668 2,356
Dividend and other investment
income:
Affiliate investments 109,707 13,125 122,832 52,500
Non-Control/Non-Affiliate
investments -- -- -- 242,760
--------- ---------- ----------- ----------
Total dividend and
other investment
income 109,707 13,125 122,832 295,260
--------- ---------- ----------- ----------
Fee income:
Control investments 4,516 4,516 18,063 18,063
Affiliate investments 38,183 118,886 285,543 450,255
Non-Control/Non-Affiliate
investments 3,772 27,272 182,275 65,402
--------- ---------- ----------- ----------
Total fee income 46,471 150,674 485,881 533,720
--------- ---------- ----------- ----------
Total investment income 1,285,068 2,137,463 6,474,892 8,559,285
--------- ---------- ----------- ----------
Expenses:
Base management fee 176,391 277,628 830,630 1,212,160
Income based incentive fees -- -- 186,178 178,218
Capital gains incentive fees -- (1,054,000) (1,565,000) 1,012,300
Interest expense 25,209 61,480 112,528 1,089,678
Professional fees 258,162 163,363 742,439 600,298
Stockholders and office
operating 57,628 56,053 311,138 265,617
Directors' fees 66,550 66,550 263,500 263,500
Administrative fees 50,700 40,000 199,950 158,167
Insurance 9,972 10,467 41,358 44,358
Corporate development 950 2,173 7,488 12,986
Bad debt expense 20,000 -- 58,462 --
--------- ---------- ----------- ----------
Total expenses 665,562 (376,286) 1,188,671 4,837,282
--------- ---------- ----------- ----------
Net investment income before income
taxes 619,506 2,513,749 5,286,221 3,722,003
Income tax expense (benefit),
including excise tax expense 19,523 298,097 (2,690) 296,926
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