Rand Capital Corp. Files 2023 Annual Report (10-K)

TL;DR

<b>Rand Capital Corp. has filed its 2023 10-K, detailing its investment portfolio and financial activities.</b>

AI Summary

RAND CAPITAL CORP (RAND) filed a Annual Report (10-K) with the SEC on March 5, 2024. Rand Capital Corp. filed its 10-K report for the fiscal year ending December 31, 2023. The filing details various investments and debt instruments held by the company. Notable investments include Series D Preferred stock in Tilson Technology Management, Inc. and a Term Note for DSD Operating, LLC. The company also holds a Secured Subordinated Promissory Note with SciAps, Inc. and a Term Note with ITA Acquisition, LLC. Rand Capital Corp. made regular quarterly dividend payments during the reporting period.

Why It Matters

For investors and stakeholders tracking RAND CAPITAL CORP, this filing contains several important signals. This filing provides a comprehensive overview of Rand Capital's financial health and investment strategy for the past fiscal year. Investors can assess the company's performance, risk exposure, and future outlook based on the disclosed investment details and financial instruments.

Risk Assessment

Risk Level: medium — RAND CAPITAL CORP shows moderate risk based on this filing. The company's investment portfolio includes various debt and equity instruments, some of which may carry inherent risks related to the performance of the underlying companies and market conditions.

Analyst Insight

Review the specific details of Rand Capital's investment portfolio and any changes from the previous year to understand its current financial standing and risk profile.

Key Numbers

• 20231231 — Fiscal Year End (Conformed Period of Report)
• 20240305 — Filing Date (Filed as of Date)
• 70,176 — Series D Preferred Shares (Tilson Technology Management, Inc.)
• 3,063,276 — Term Note (DSD Operating, LLC)
• $2,090,000 — Secured Subordinated Promissory Note (SciAps, Inc.)
• $1,500,000 — Term Note (ITA Acquisition, LLC)
• 12% — Interest Rate (SciAps, Inc. Note)
• 12% — Interest Rate (ITA Acquisition, LLC Note)

Key Players & Entities

• RAND CAPITAL CORP (company) — Filer
• Tilson Technology Management, Inc. (company) — Investment
• DSD Operating, LLC (company) — Investment
• SciAps, Inc. (company) — Investment
• ITA Acquisition, LLC (company) — Investment
• FCM Industries Holdco LLC (company) — Investment
• Barings BDC, Inc. (company) — Investment
• NY (location) — State of Incorporation

FAQ

Industry Context

Rand Capital Corp. operates as a business development company (BDC), providing capital to lower middle market companies.

Regulatory Implications

The filing is made under the Securities Exchange Act of 1934, requiring public companies to disclose financial information annually.

What Investors Should Do

1. Analyze the specific investment holdings and their valuations as detailed in the 10-K.
2. Examine any disclosed changes in the company's debt or equity structure.
3. Review the company's operational and financial risks as outlined in the filing.

Key Dates

• 2023-12-31: Fiscal Year End — Reporting period for the 10-K filing.
• 2024-03-05: Filing Date — Date the 10-K was officially filed with the SEC.

Year-Over-Year Comparison

This 10-K filing provides the annual financial overview for Rand Capital Corp. for the fiscal year ending December 31, 2023.

Key Financial Figures

• $0.10 — e on which registered Common Stock, $0.10 par value RAND Nasdaq Capital Marke
• $25 million — "East"). The transaction consisted of a $25 million investment in Rand by East, in the form
• $10 million — oducts and have revenue of greater than $10 million and a path to free cash flow or are alr
• $1.5 million — or are already generating greater than $1.5 million in EBITDA. 2 Table of Contents We
• $2 million — mpany is expected to be in the range of $2 million to $4 million . The debt instruments we
• $4 million — ted to be in the range of $2 million to $4 million . The debt instruments we invest in are

Filing Documents

• rand-20231231.htm (10-K) — 6581KB
• rand-ex21_1.htm (EX-21.1) — 23KB
• rand-ex31_1.htm (EX-31.1) — 14KB
• rand-ex31_2.htm (EX-31.2) — 14KB
• rand-ex32_1.htm (EX-32.1) — 9KB
• img84080230_0.jpg (GRAPHIC) — 286KB
• 0000950170-24-025396.txt (&nbsp;) — 22031KB
• rand-20231231.xsd (EX-101.SCH) — 1524KB
• rand-20231231_htm.xml (XML) — 5619KB

Business

Business 1 Item 1A.

Risk Factors

Risk Factors 14 Item 1B. Unresolved Staff Comments 27 Item 1C. Cybersecurity 27 Item 2.

Properties

Properties 28 Item 3.

Legal Proceedings

Legal Proceedings 28 Item 4. Mine Safety Disclosures 28 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 29 Item 6. (Reserved.) 32 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 33 Item 7A.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 47 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 49 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 95 Item 9A.

Controls and Procedures

Controls and Procedures 95 Item 9B. Other Information 95 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 95 PART III Item 10. Directors, Executive Officers and Corporate Governance 96 Item 11.

Executive Compensation

Executive Compensation 96 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 96 Item 13. Certain Relationships and Related Transactions, and Director Independence 96 Item 14. Principal Accountant Fees and Services 96 PART IV Item 15. Exhibits and Financial Statement Schedules 97 Item 16. Form 10-K Summary 98 Table of Contents PA RT I

Bus iness

Item 1. Bus iness Rand Capital Corporation ("Rand", "we", "us" and "our") was incorporated under the laws of New York in February 1969. We completed our initial public offering in 1971 and operated as an internally managed, closed-end, management investment company from that time until November 2019. In November 2019, Rand completed a stock sale transaction (the "Closing") with East Asset Management ("East"). The transaction consisted of a $25 million investment in Rand by East, in the form of cash and contributed portfolio assets, in exchange for approximately 8.3 million shares of Rand common stock. East owns approximately 64% of Rand Capital's outstanding common stock at December 31, 2023. Concurrent with the Closing, Rand Capital Management, LLC ("RCM"), a registered investment adviser, was retained by Rand as its external investment adviser and administrator (the Closing and the retention of RCM as our investment adviser and administrator are collectively referred to herein as the "Transaction"). The term of the new investment advisory and management agreement (the "Investment Management Agreement") with RCM was extended after its renewal was approved by our Board of Directors (the "Board") in October 2023 and is now set to expire on December 31, 2024. In addition, the term of the administration agreement (the "Administration Agreement") with RCM was extended after its renewal was approved by the Board in October 2023 and is now set to expire on December 31, 2024. The Investment Management Agreement and Administration Agreement can continue for successive annual periods after December 31, 2024 provided that such continuance is specifically approved at least annually by (i)(A) the affirmative vote of a majority of the Board or (B) the affirmative vote of a majority of our outstanding voting securities, and (ii) the affirmative vote of a majority of our directors who are not "interested persons," as defined in Section 2(a)(19) of the Investment Company Act of

View Full Filing

View this 10-K filing on SEC EDGAR