Rand Capital Corp 10-Q, filed Aug 8, 2022

About this 10-Q

Rand Capital Corp (RAND)

10-Q 2022-08-08 For: 2022-06-30

View Original

Added on April 10, 2026

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

Rand Capital Corp filed this 10-Q on August 8, 2022, covering the quarter ended June 30, 2022.

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →


New York		16-0961359
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)

1405 Rand Building, Buffalo, NY		14203
(Address of Principal executive offices)		(Zip Code)


PART I. – FINANCIAL INFORMATION

Item 1.	Financial Statements and Supplementary Data	1

	Consolidated Statements of Financial Position as of June 30, 2022 (Unaudited) and December 31, 2021	1

	Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2022 and 2021 (Unaudited)	2

	Consolidated Statements of Changes in Net Assets for the Three and Six Months Ended June 30, 2022 and 2021 (Unaudited)	4

	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021 (Unaudited)	5

	Consolidated Schedule of Portfolio Investments as of June 30, 2022 (Unaudited)	6

	Consolidated Schedule of Portfolio Investments as of December 31, 2021	14

	Notes to the Consolidated Financial Statements (Unaudited)	22

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	39

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	52

Item 4.	Controls and Procedures	52

PART II. – OTHER INFORMATION

Item 1.	Legal Proceedings	53

Item 1A.	Risk Factors	53

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	53

Item 3.	Defaults upon Senior Securities	53

Item 4.	Mine Safety Disclosures	53

Item 5.	Other Information	53

Item 6.	Exhibits	54


	June 30, 2022			December 31,
	(Unaudited)			2021
ASSETS
Investments at fair value:
Affiliate investments (cost of $30,195,392 and $27,357,797, respectively)	$	33,165,309		$	30,279,873
Non-Control/Non-Affiliate investments (cost of $22,291,325 and $25,012,871, respectively)		25,833,464			33,788,589

Total investments, at fair value (cost of $52,486,717 and $52,370,668, respectively)		58,998,773			64,068,462
Cash		1,189,146			833,875
Interest receivable		193,807			128,047
Prepaid income taxes		6,360			252,010
Deferred tax asset		239,158			181,003
Other assets		360,091			181,457

Total assets	$	60,987,335		$	65,644,854

LIABILITIES AND STOCKHOLDERS’ EQUITY (NET ASSETS)
Liabilities:
Due to investment adviser	$	230,781		$	891,102
Accounts payable and accrued expenses		55,933			51,689
Capital gains incentive fees		2,645,000			3,547,760
Deferred revenue		391,437			408,887

Total liabilities		3,323,151			4,899,438
Commitments and contingencies (See Note 5)
Stockholders’ equity (net assets):
Common stock, $0.10 par; shares authorized 100,000,000; shares issued: 2,648,916; shares outstanding: 2,581,021 at 6/30/22 and 12/31/21		264,892			264,892
Capital in excess of par value		51,679,809			51,679,809
Treasury stock, at cost: 67,895 shares at 6/30/22 and 12/31/21		(1,566,605	)		(1,566,605	)
Total distributable earnings		7,286,088			10,367,320

Total stockholders’ equity (net assets) (per share – 6/30/22: $22.34; 12/31/21: $23.54)		57,664,184			60,745,416

Total liabilities and stockholders’ equity (net assets)	$	60,987,335		$	65,644,854


	Three months ended June 30, 2022			Three months ended June 30, 2021			Six months ended June 30, 2022			Six months ended June 30, 2021
Investment income:
Interest from portfolio companies:
Control investment	$	—		$	2,867		$	—		$	2,867
Affiliate investments		614,997			295,085			1,185,113			614,501
Non-Control/Non-Affiliate investments		389,835			344,254			731,858			735,600

Total interest from portfolio companies		1,004,832			642,206			1,916,971			1,352,968

Interest from other investments:
Non-Control/Non-Affiliate investments		1			243			1			12,870

Total interest from other investments		1			243			1			12,870

Dividend and other investment income:
Affiliate investments		202,785			13,125			246,510			108,051
Non-Control/Non-Affiliate investments		113,735			123,922			243,000			275,665

Total dividend and other investment income		316,520			137,047			489,510			383,716

Fee income:
Affiliate investments		22,515			24,562			52,820			63,918
Non-Control/Non-Affiliate investments		9,314			6,979			18,628			13,957

Total fee income		31,829			31,541			71,448			77,875

Total investment income		1,353,182			811,037			2,477,930			1,827,429

Expenses:
Base management fee (see Note 8)		230,767			212,907			471,042			388,516
Capital gains incentive fees (see Note 8)		(663,000	)		1,060,000			(902,760	)		3,660,000
Interest on SBA obligations		—			104,190			—			208,380
Professional fees		212,138			123,991			443,221			284,124
Stockholders and office operating		64,890			69,661			121,588			141,083
Directors’ fees		44,883			38,900			89,983			75,400
Insurance		13,353			9,380			22,263			19,707
Corporate development		726			821			3,753			8,303
Other operating		45			108			90			108

Total expenses		(96,198	)		1,619,958			249,180			4,785,621

Net investment income (loss) before income taxes		1,449,380			(808,921	)		2,228,750			(2,958,192	)
Income tax expense		31,243			1,966			38,610			19,723

Net investment income (loss)		1,418,137			(810,887	)		2,190,140			(2,977,915	)

Net realized gain on sales and dispositions of investments:
Affiliate investments		167,159			—			167,159			135,430
Non-Control/Non-Affiliate investments		1,372,984			1,817,350			521,513			1,992,675

Net realized gain on sales and dispositions of investments		1,540,143			1,817,350			688,672			2,128,105


Net change in unrealized appreciation/ depreciation on investments:
Affiliate investments		47,841			—		47,841			—
Non-Control/Non-Affiliate investments		(4,902,510	)		3,495,322		(5,233,579	)		13,382,354

Change in unrealized appreciation/ depreciation before income taxes		(4,854,669	)		3,495,322		(5,185,738	)		13,382,354
Deferred income tax expense		—			951		—			951

Net change in unrealized appreciation/ depreciation on investments		(4,854,669	)		3,494,371		(5,185,738	)		13,381,403

Net realized and unrealized (loss) gain on investments		(3,314,526	)		5,311,721		(4,497,066	)		15,509,508

Net (decrease) increase in net assets from operations	($	1,896,389	)	$	4,500,834	($	2,306,926	)	$	12,531,593

Weighted average shares outstanding		2,581,021			2,582,169		2,581,021			2,582,169
Basic and diluted net (decrease) increase in net assets from operations per share	($	0.73	)	$	1.74	($	0.89	)	$	4.85


	Six months ended June 30, 2022			Six months ended June 30, 2021
Cash flows from operating activities:
Net (decrease) increase in net assets from operations	($	2,306,926	)	$	12,531,593
Adjustments to reconcile net (decrease) increase in net assets to net cash provided by (used in) operating activities:
Investments in portfolio companies		(2,742,086	)		(11,273,836	)
Proceeds from sale of portfolio investments		3,527,630			3,491,060
Proceeds from loan repayments		90,175			3,750,430
Net realized gain on sales and dispositions of portfolio investments		(688,672	)		(2,128,105	)
Change in unrealized (appreciation) depreciation on investments before income taxes		5,185,738			(13,382,354	)
Deferred income tax benefit		(58,155	)		(12,085	)
Depreciation and amortization		—			18,838
Original issue discount amortization		(12,504	)		(99,671	)
Non-cash conversion of debenture interest		(290,591	)		(116,418	)
Changes in operating assets and liabilities:
Increase in interest receivable		(65,760	)		(29,516	)
Increase in other assets		(178,635	)		(108,463	)
Decrease in prepaid income taxes		245,650			4,857
Increase (decrease) in accounts payable and accrued expenses		4,244			(10,280	)
(Decrease) increase in due to investment adviser		(660,321	)		55,908
(Decrease) increase in capital gains incentive fees payable		(902,760	)		3,660,000
(Decrease) increase in deferred revenue		(17,450	)		178,230

Total adjustments		3,436,503			(16,001,405	)

Net cash provided by (used in) operating activities		1,129,577			(3,469,812	)

Cash flows from financing activities:
Payment of cash dividend		(774,306	)		(3,950,718	)

Net cash used in financing activities		(774,306	)		(3,950,718	)

Net increase (decrease) in cash and cash equivalents		355,271			(7,420,530	)
Cash and cash equivalents:
Beginning of period		833,875			20,365,415

End of period	$	1,189,146		$	12,944,885


Company, Geographic Location, Business Description, (Industry) and Website	(a) Type of Investment	(b) Date Acquired		(c) Equity			Cost		(d)(f) Fair Value		Percent of Net Assets
Non-Control/Non-Affiliate Investments – 44.8% of net assets: (g) (j)

ACV Auctions, Inc. (e)(n)(p) NASDAQ: ACVA Buffalo, NY. Live mobile wholesale auctions for new and used car dealers. (Software) www.acvauctions.com	319,934 Class A Common stock valued at $6.54 per share.		8/12/16		<1	%	$	87,219	$	2,092,368		3.6	%

Ares Capital Corporation (n) NASDAQ: ARCC New York, NY. (BDC Investment Fund)	21,000 shares.		3/16/20		<1	%		267,140		377,090		0.7	%

Barings BDC, Inc. (n) NYSE: BBDC New York, NY. (BDC Investment Fund)	40,000 shares.		8/13/20		<1	%		333,352		375,467		0.7	%

Caitec, Inc. (l) Halethorpe, MD. Pet product manufacturer and distributor. (Consumer Goods) www.caitec.com	$1,750,000 Subordinated Secured Promissory Note at 12% (+2% PIK) due June 1, 2026.		11/6/20		2	%		1,809,367		1,809,367		6.8	%
	150 Class A Units.		11/6/20					150,000		150,000
	$1,750,000 Subordinated Secured Promissory Note at 12% (+2% PIK) due June 1, 2026.		11/6/20		2	%		1,809,367		1,809,367
	150 Class A Units.		11/6/20					150,000		150,000

	Total Caitec							3,918,734		3,918,734


Carlyle Secured Lending Inc. (formerly TCG BDC, Inc.) (n) NASDAQ: CGBD New York, NY. (BDC Investment Fund)	86,000 shares.		8/13/20		<1	%		899,749		1,104,814		1.9	%

Empire Genomics, Corp. Buffalo, NY. Molecular diagnostics company that offers a comprehensive menu of assay services for diagnosing and guiding patient therapeutic treatments. (Health Care) www.empiregenomics.com	$444,915 + $1,000,000 Secured Promissory Notes at 8% due December 31, 2026.		5/3/21		0	%		1, 444,915		1,444,915		2.5	%

FS KKR Capital Corp. (n) NYSE: FSK Philadelphia, PA. (BDC Investment Fund)	48,000 shares.		3/16/20		<1	%		755,058		926,560		1.6	%

GoNoodle, Inc. (h)(l) Nashville, TN. Student engagement education software providing core aligned physical activity breaks. (Software) www.gonoodle.com	$1,500,000 Secured Note at 12% (1% PIK) due September 30, 2024.		11/1/19		<1	%		1,404,736		1,404,736		2.4	%
	Warrant for 47,324 Series C Preferred.		3/1/15					25		25
	Warrant for 21,948 Series D Preferred.		11/1/19					38		38

	Total GoNoodle							1,404,799		1,404,799


HDI Acquisition LLC (Hilton Displays) (l) Greenville, NC. HDI is engaged in manufacturing, installation and maintenance of signage and brands. (Manufacturing) www.hiltondisplays.com	$1,245,119 Term Loan at 12% (+2% PIK) due June 20, 2023.		11/8/19		0	%		1,314,312		1,314,312		2.3	%

Lumious (Tech 2000, Inc.) Herndon, VA. Develops and delivers IT training. (Software) www.t2000inc.com	$850,000 Replacement Term Note at 14% due November 15, 2023.		11/16/18		0	%		860,777		860,777		1.5	%


Investments in and Advances to Affiliates
Company	Type of Investment	January 1, 2022, Fair Value		Net Change in Unrealized Appreciation (Depreciation)		Gross Additions (1)		Gross Reductions (2)			June 30, 2022, Fair Value		Net Realized (Losses) Gains			Amount of Interest/ Dividend/ Fee Income (3)
Affiliate Investments:

Applied Image Inc.	$1,750,000 Term Note at 10% due December 28, 2028.	$	1,750,000	$	—	$	—	$	—		$	1,750,000	$	—		$	91,524
Applied Image Inc.	Warrant for 1,167 shares.		—		—		—		—			—		—			—

	Total Applied Image		1,750,000		—		—		—			1,750,000		—			91,524


BMP Swanson Holdco, LLC	$1,600,000 Term Note at 12% due September 4, 2026.		1,600,000		—		—		—			1,600,000		—			99,866
BMP Swanson Holdco, LLC	Preferred Membership Interest for 9.29%		233,333		—		—		—			233,333		—			—

	Total BMP Swanson		1,833,333		—		—		—			1,833,333		—			99,866


Carolina Skiff LLC	6.0825% Class A Common Membership interest.		1,300,000		—		—		—			1,300,000		—			220,260

DSD Operating, LLC	$2,745,000 Term Note at 12% (+2% PIK) due September 30, 2026.		2,759,183		—		348,748		—			3,107,931		—			220,932
	1,067 Class A Preferred shares.		1,067,500		—		—		—			1,067,500		—			—
	1,067 Class B Common shares.		—		—		—		—			—		—			—

	Total DSD		3,826,683		—		348,748		—			4,175,431		—			220,932


Filterworks Acquisition USA, LLC	$2,283,702 Term Note at 12%.		2,446,617		—		107,559		—			2,554,176		—			140,384
Filterworks Acquisition USA, LLC	562.5 Class A Units.		256,994		—		—		—			256,994		—			—

	Total Filterworks		2,703,611		—		107,559		—			2,811,170		—			140,384


ITA Acquisition	$1,900,000 Term Note at 12% (+2% PIK) due June 22, 2026.		1,920,459		—		19,392		—			1,939,851		—			139,547
	$1,500,000 Term Note at 12% (+2% PIK) due June 22, 2026.		1,516,152		—		15,310		—			1,531,462		—			110,373
	500 Class A Preferred Units		125,000		—		223,810		—			348,810		—			—
	500 Class B Common Units.		—		—		—		—			—		—			—

	Total ITA		3,561,611		—		258,512		—			3,820,123		—			249,920


Knoa Software, Inc.	973,533 Series A-1 Convertible Preferred.		—		—		—		—			—		—			—
	1,876,922 Series B Preferred.		479,155		—		—		—			479,155		—			—

	Total Knoa		479,155		—		—		—			479,155		—			—


Mezmeriz, Inc.	1,554,565 Series Seed Preferred.		—		—		—		—			—		—			—

Microcision	Membership Interest Purchase Warrant for 5%.		85,000		—		—		(85,000	)		—		190,000			—

New Monarch Machine Tool, Inc.	22.84 Common.		—		—		—		—			—		(22,841	)		—

SciAps, Inc.	187,500 Series A Preferred.		210,000		—		—		—			210,000		—			—
	274,299 Series A-1 Convertible Preferred.		96,000		—		—		—			96,000		—			—
	117,371 Series B Convertible Preferred.		124,000		—		—		—			124,000		—			—
	113,636 Series C Convertible Preferred.		84,000		—		—		—			84,000		—			—
	369,698 Series C-1 Convertible Preferred.		207,000		—		—		—			207,000		—			—
	147,059 Series D Convertible Preferred.		250,000		—		—		—			250,000		—			—
	Warrant to Purchase Series D-1 Preferred.		—		—		—		—			—		—			—
	$1,500,000 Subordinated Promissory Note at 12%.		1,480,000		—		7,500		—			1,487,500		—			107,500

	Total SciAps		2,451,000		—		7,500		—			2,458,500		—			107,500


Seybert’s Billiards Corporation	$1,400,000 Term Note at 12% (+2% PIK) due January 19, 2026.		1,907,774		—		2,231,230		—			4,139,004		—			220,799
	Warrant for 4%.		25,000		—		—		—			25,000		—			—
	$1,400,000 Term Note at 12% (+2% PIK) due January 19, 2026.		1,406,690		—		16,888		—			1,423,578		—			107,008
	Warrant for 4%.		25,000		—		—		—			25,000		—			—

	Total Seybert’s		3,364,464		—		2,248,118		—			5,612,582		—			327,807


Industry Classification		Percentage of Total Investments (at fair value) as of June 30, 2022
Professional Services		25.2%
Manufacturing		18.6
Software		17.7
Consumer Product		16.7
Automotive		11.9
BDC Investment Fund		6.7
Healthcare		2.4
Oil and Gas		0.8

Total Investments		100%


Company, Geographic Location, Business Description, (Industry) and Website	(a) Type of Investment	(b) Date Acquired		(c) Equity			Cost		(d)(f) Fair Value		Percent of Net Assets
Affiliate Investments – 49.9% of net assets (k)

Applied Image, Inc. Rochester, NY. Global supplier of precision imaged optical components and calibration standards for a wide range of industries and applications. (Manufacturing) www.appliedimage.com	$1,750,000 Term Note at 10% due February 1, 2029.		12/31/21		12	%	$	1,750,000	$	1,750,000		2.9	%
	Warrant for 1,167 shares.		12/31/21					—		—

	Total Applied Image							1,750,000		1,750,000


BMP Swanson Holdco, LLC (g)(m) Plano, TX. Designs, installs and maintains a variety of fire protection systems. (Professional Services) www.swansonfire.com	$1,600,000 Term Note at 12% due September 4, 2026.		3/4/21		9	%		1,600,000		1,600,000		3.0	%
	Preferred Membership Interest for 9.29%.		3/4/21					233,333		233,333

	Total BMP Swanson							1,833,333		1,833,333


Carolina Skiff LLC (g)(m)	6.0825% Class A Common Membership Interest.		1/30/04		7	%		15,000		1,300,000		2.2	%
Waycross, GA. Manufacturer of ocean fishing	6.0825% Class A Common Membership Interest.
and pleasure boats. (Manufacturing)
www.carolinaskiff.com

DSD Operating, LLC (l)(m) Duluth, GA. Design and renovate auto dealerships. (Automotive) www.dsdteam.com	$2,745,000 Term Note at 12% (+2% PIK) due September 30, 2026. 1,067 Class A Preferred shares. 1,067 Class B Common shares.		9/30/21		11	%		2,759,183 1,067,500 —		2,759,183 1,067,500 —		6.3	%

	Total DSD							3,826,683		3,826,683


Filterworks Acquisition USA, LLC DBA Autotality (l)(m) Deerfield Beach, FL. Provides spray booth equipment, frame repair machines and paint booth filter services for collision shops. (Automotive) www.autotality.com	$2,283,702 Term Note at 12% (+2% PIK), modified to 4% (+10% PIK) through March 31, 2022, due December 4, 2023.		11/8/19		9	%		2,446,617		2,446,617		4.5	%
	626 Class A Units.		12/28/21					626,243		256,994

	Total Filterworks							3,072,860		2,703,611



ITA Acquisition, LLC (l) (m) Ormond Beach, FL. Blind and shade manufacturing. (Manufacturing)	$1,900,000 Term Note at 12% (+2% PIK) due June 21, 2026.		6/22/21		24	%		1,920,459		1,920,459		5.9	%
	(g) $1,500,000 Term Note at 12% (+2% PIK) due June 21, 2026.		6/22/21					1,516,152		1,516,152
	(g) 500 Class A Preferred Units and 500 Class B Common Units.		6/22/21					500,000		125,000

www.itainc.com	Total ITA							3,936,611		3,561,611


Knoa Software, Inc. (e)(g)	973,533 Series A-1 Convertible Preferred.		11/20/12		7	%		750,000		—		0.8	%
New York, NY. End user experience	1,876,922 Series B Preferred.		6/9/14					479,155		479,155

management and performance (EMP) solutions	Total Knoa							1,229,155		479,155

utilizing enterprise applications. (Software)
www.knoa.com

Mezmeriz, Inc. (e)(g)	1,554,565 Series Seed Preferred.		5/14/15		12	%		742,850		—		0.0	%
Ithaca, NY. Technology company developing novel reality capture tools for 3D mapping, reality modeling, object tracking and classification. (Electronics Developer) www.mezmeriz.com

Microcision LLC (g) Pennsauken Township, NJ. Manufacturer of precision machined medical implants, components and assemblies. (Manufacturing) www.microcision.com	Membership Interest Purchase Warrant for 5%.		1/10/20		5	%		110,000		85,000		0.1	%

New Monarch Machine Tool, Inc. (e)(g) Cortland, NY. Manufactures and services vertical/horizontal machining centers. (Manufacturing) www.monarchmt.com	22.84 Common.		1/17/08		15	%		22,841		—		0.0	%


Company	Type of Investment	January 1, 2021, Fair Value		Net Change in Unrealized Appreciation (Depreciation)			Gross Additions (1)		Gross Reductions (2)			December 31, 2021 Fair Value		Net Realized (Losses) Gains			Amount of Interest/ Dividend/ Fee Income (3)
Control Investments:
Empire Genomics Corp.	$444,915 Secured Promissory Note at 8% due December 31, 2026.	$	—	$	—		$	444,915	($	444,915	)	$	—	($	308,676	)	$	23,068
Empire Genomics Corp.	1,576,499 common shares.		—		—			157,655		(157,655	)		—		—			—

	Total Empire		—		—			602,570		(602,570	)		—		(308,676	)		23,068

	Total Control Investments	$	—	$	—		$	602,570	($	602,570	)	$	—	($	308,676	)	$	23,068


Affiliate Investments:
Applied Image Inc.	$1,750,000 Term Note at 10% due December 28, 2028.	$	—	$	—		$	1,750,000	$	—		$	1,750,000	$	—		$	17,500
	Warrant for 1,167 shares.		—		—			—		—			—		—			—

	Total Applied Image		—		—			1,750,000		—			1,750,000		—			17,500


BMP Swanson Holdco, LLC	$1,600,000 Term Note at 12% due September 4, 2026.		—		—			1,600,000		—			1,600,000		—			166,623
	Preferred Membership Interest for 9.29%.		—		—			233,333		—			233,333		—			—

	Total BMP Swanson		—		—			1,833,333		—			1,833,333		—			166,623


Carolina Skiff LLC	6.0825% Class A Common Membership interest.		1,500,000		(200,000	)		—		—			1,300,000		—			214,265

ClearView Social, Inc.	312,500 Series Seed Plus Preferred.		200,000		—			—		(200,000	)		—		135,430			—

DSD Operating, LLC	$2,745,000 Term Note at 12% (+2% PIK) due September 30, 2026.		—		—			2,759,183		—			2,759,183		—			103,089
	1,067 Class A Preferred shares.		—		—			1,067,500		—			1,067,500		—			—
	1,067 Class B Common shares.		—		—			—		—			—		—			—

	Total DSD		—		—			3,826,683		—			3,826,683		—			103,089


Filterworks Acquisition USA, LLC	$2,283,702 Term Note at 12%.		2,349,831		—			96,786		—			2,446,617		—			336,090
	562.5 Class A Units.		562,500		(369,249	)		63,743		—			256,994		—			—

	Total Filterworks		2,912,331		(369,249	)		160,529		—			2,703,611		—			336,090


ITA Acquisition LLC	$1,900,000 Term Note at 12% (+2% PIK) due June 22, 2026.		—		—			1,920,459		—			1,920,459		—			147,049
	(g) $1,500,000 Term Note at 12% (+2% PIK) due June 22, 2026.		—		—			1,516,152		—			1,516,152		—			118,220
	(g) 500 Class A Preferred Units and 500 Class B Common Units.		—		(375,000	)		500,000		—			125,000		—			14,096

	Total ITA		—		(375,000	)		3,936,611		—			3,561,611		—			279,365


Knoa Software, Inc.	973,533 Series A-1 Convertible Preferred.		544,860		(544,860	)		—		—			—		—			87,771
	1,876,922 Series B Preferred.		479,155		—			—		—			479,155		—			—

	Total Knoa		1,024,015		(544,860	)		—		—			479,155		—			87,771


Mezmeriz, Inc.	1,554,565 Series Seed Preferred.		—		—			—		—			—		—			—

Microcision LLC	$1,500,000 Subordinated Promissory Note at 10%.		1,411,997		—			88,003		(1,500,000	)		—		57,215			126,711
	Membership Interest Purchase Warrant for 5%.		95,000		(10,000	)		—		—			85,000		—			—

	Total Microcision		1,506,997		(10,000	)		88,003		(1,500,000	)		85,000		57,215			126,711


New Monarch Machine Tool, Inc.	22.84 Common.		22,841		(22,841	)		—		—			—		—			—

OnCore Golf Technology, Inc.	300,483 Series AA Preferred.		300,000		—			—		(300,000	)		—		—			—

SciAps, Inc.	187,500 Series A Preferred.		—		210,000			—		—			210,000		—			—
	274,299 Series A-1 Convertible Preferred.		—		96,000			—		—			96,000		—			—
	117,371 Series B Convertible Preferred.		—		124,000			—		—			124,000		—			—
	113,636 Series C Convertible Preferred.		—		84,000			—		—			84,000		—			—
	369,698 Series C-1 Convertible Preferred.		—		207,000			—		—			207,000		—			—
	147,059 Series D Convertible Preferred.		250,000		—			—		—			250,000		—			—
	Warrant to Purchase Series D-1 Preferred.		—		—			—		—			—		—			—
	$1,500,000 Subordinated Promissory Note at 12%.		1,465,000		—			15,000		—			1,480,000		—			215,000

	Total SciAps		1,715,000		721,000			15,000		—			2,451,000		—			215,000


Quarter	Dividend/Share Amount	Record Date		Payment Date

1^st	$0.15		March 14, 2022		March 28, 2022
2^nd	$0.15		June 1, 2022		June 15, 2022


	June 30, 2022
Tilson Technology Management, Inc. (Tilson)		15	%
Seybert’s Billiards Corporation (Seybert’s)		10	%
Open Exchange, Inc. (Open Exchange)		9	%
DSD Operating, LLC (DSD)		7	%
Caitec, Inc. (Caitec)		7	%


	December 31, 2021
Tilson		14	%
ACV Auctions, Inc. (ACV)		13	%
Open Exchange		9	%
Caitec		6	%
DSD		6	%


Company, Geographic Location, Business Description, (Industry) and Website	(a) Type of Investment	(b) Date Acquired		(c) Equity			Cost		(d)(f) Fair Value			Percent of Net Assets
Tilson Technology Management, Inc. Portland, ME. Provides network deployment construction and information system services management for cellular, fiber optic and wireless systems providers. Its affiliated entity, SQF, LLC is a CLEC supporting small cell 5G deployment. (Professional Services) www.tilsontech.com	*120,000 Series B Preferred.		1/20/15		9	%		600,000		3,900,000			15.5	%
	*21,391 Series C Preferred.		9/28/16					200,000		695,000
	*70,176 Series D Preferred.		9/29/17					800,000		2,280,000
	*15,385 Series E Preferred.		3/15/19					500,012		500,012
	211,567 SQF Hold Co. Common.		3/15/19					—		800,000
	23,077 Series F Preferred.		6/15/20					750,003		750,003

	Total Tilson							2,850,015		8,925,015

	*2.5% dividend payable quarterly.

Subtotal Affiliate Investments							$	30,195,392	$	33,165,309

TOTAL INVESTMENTS – 102.3%							$	52,486,717	$	58,998,773

LIABILITIES IN EXCESS OF OTHER ASSETS - (2.3%)										(1,334,589	)

NET ASSETS – 100%									$	57,664,184


Investment Type	Market Approach EBITDA Multiple		Market Approach Liquidation Seniority		Market Approach Revenue Multiple		Market Approach Transaction Pricing		Totals
Non-Control/Non-Affiliate Equity	$	—	$	500,000	$	—	$	6,518,938	$	7,018,938
Non-Control/Non-Affiliate Loan and Debt		3,152,015		2,265,513		1,444,915		5,868,734		12,731,177

Total Non-Control/Non-Affiliate	$	3,152,015	$	2,765,513	$	1,444,915	$	12,387,672	$	19,750,115

Affiliate Equity	$	1,905,804	$	—	$	1,450,155	$	10,275,848	$	13,631,807
Affiliate Loan and Debt		2,554,176		—		1,487,500		15,491,826		19,533,502

Total Affiliate	$	4,459,980	$	—	$	2,937,655	$	25,767,674	$	33,165,309

Total Level 3 Investments	$	7,611,995	$	2,765,513	$	4,382,570	$	38,155,346	$	52,915,424


Range		5X - 6X		1X		1X - 4X		Not Applicable
Unobservable Input		EBITDA Multiple		Asset Value		Revenue Multiple		Transaction Price
Weighted Average		5.8X		1X		1.9X		Not Applicable


			Fair Value Measurements at Reported Date Using
Description	June 30, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Other Significant Unobservable Inputs (Level 3)
Loan investments	$	15,941,372	$	—	$	—	$	15,941,372
Debt investments		16,323,307		—		—		16,323,307
Equity investments		26,734,094		6,083,349		—		20,650,745

Total	$	58,998,773	$	6,083,349	$	—	$	52,915,424


			Fair Value Measurements at Reported Date Using
Description	December 31, 2021		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Other Significant Unobservable Inputs (Level 3)
Loan investments	$	15,503,404	$	—	$	—	$	15,503,404
Debt investments		14,030,078		—		—		14,030,078
Equity investments		34,534,980		13,901,045		—		20,633,935

Total	$	64,068,462	$	13,901,045	$	—	$	50,167,417


	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Description	Loan Investments		Debt Investments		Equity Investments			Total
Ending balance December 31, 2021, of Level 3 Assets	$	15,503,404	$	14,030,078	$	20,633,935		$	50,167,417
Realized gains (losses) included in net change in net assets from operations:
ClearView Social, Inc. (Clearview Social)		—		—		38,881			38,881
Microcision, LLC (Microcision)		—		—		190,000			190,000
New Monarch Machine Tool, Inc. (New Monarch)		—		—		(22,841	)		(22,841	)
SocialFlow, Inc. (Social Flow)		—		—		(1,481,498	)		(1,481,498	)

*Total realized (losses), net*		—		—		(1,275,458	)		(1,275,458	)
Unrealized gains, net included in net change in net assets from operations:
Microcision		—		—		25,000			25,000
New Monarch		—		—		22,841			22,841
Social Flow		—		—		1,628,000			1,628,000

*Total unrealized gains*		—		—		1,675,841			1,675,841
Purchases of securities/changes to securities/non-cash conversions:
Caitec, Inc. (Caitec)		36,178		—		—			36,178
DSD Operating, LLC (DSD)		348,748		—		—			348,748
Filterworks Acquisition USA, LLC (Filterworks)		—		107,559		—			107,559
GoNoodle, Inc. (GoNoodle)		—		7,110		—			7,110
HDI Acquisition LLC (Hilton Displays)		—		13,117		—			13,117
ITA Acquisition, LLC (ITA)		34,701		—		223,810			258,511
Mattison Avenue Holdings LLC (Mattison)		18,341		—		—			18,341
Seybert’s Billiards Corporation (Seybert’s)		—		2,248,118		—			2,248,118
SciAps, Inc. (Sciaps)		—		7,500		—			7,500

*Total purchases of securities/changes to securities/non-cash conversions*		437,968		2,383,404		223,810			3,045,182


Repayments and sales of securities:
Clearview Social		—		—			(38,881	)		(38,881	)
GoNoodle		—		(90,175	)		—			(90,175	)
Microcision		—		—			(300,000	)		(300,000	)
Social Flow		—		—			(268,502	)		(268,502	)

*Total repayments and sales of securities*		—		(90,175	)		(607,383	)		(697,558	)

Ending balance June 30, 2022, of Level 3 Assets	$	15,941,372	$	16,323,307		$	20,650,745		$	52,915,424


Change in unrealized appreciation on investments for the period included in changes in net assets	($	5,185,738	)

Net realized gain on investments for the period included in changes in net assets	$	688,672


Change in unrealized appreciation/depreciation on investments for the period included in changes in net assets	$	13,382,354

Net realized gain on investments for the period included in changes in net assets	$	2,128,105


	June 30, 2022		December 31, 2021
Deferred financing fees	$	125,000	$	—
Dividend receivables		95,315		99,720
Escrow receivables		82,108		71,765
Prepaid expenses		57,668		9,972

Total other assets	$	360,091	$	181,457



	Common Stock		Capital in excess of par value		Treasury Stock, at cost			Total distributable earnings (losses)			Total Stockholders’ Equity (Net Assets)
April 1, 2022	$	264,892	$	51,679,809	($	1,566,605	)	$	9,569,630		$	59,947,726
Payment of dividend		—		—		—			(387,153	)		(387,153	)
Net decrease in net assets from operations		—		—		—			(1,896,389	)		(1,896,389	)

June 30, 2022	$	264,892	$	51,679,809	($	1,566,605	)	$	7,286,088		$	57,664,184


	Six months ended June 30, 2022 (Unaudited) *			Six months ended June 30, 2021 (Unaudited) *
Income (loss) from investment operations (1):
Investment income	$	0.96		$	0.71
Expenses		0.10			1.85

Investment income (loss) before income taxes		0.86			(1.14	)
Income tax expense		0.02			0.01

Net investment income (loss)		0.84			(1.15	)
Net realized and unrealized (loss) gain on investments		(1.74	)		6.00

(Decrease) increase in net assets from operations		(0.90	)		4.85
Payment of cash dividend		(0.30	)		(0.20	)

(Decrease) increase in net assets		(1.20	)		4.65

Net asset value, beginning of period		23.54			17.86

Net asset value, end of period	$	22.34		$	22.51

Per share market price, end of period	$	14.60		$	16.75

Total return based on market price		(14.07	%)		(4.83	%)
Total shareholder return (includes dividends paid)		(12.3	%)		3.86	%
Total return based on net asset value		(5.07	%)		26.06	%
Supplemental data:
Ratio of expenses before income taxes to average net assets		0.42	%		9.18	%
Ratio of expenses including income taxes to average net assets		0.49	%		9.22	%
Ratio of net investment income (loss) to average net assets		3.70	%		(5.71	%)
Debt/Equity ratio		0	%		18.7	%
Portfolio turnover		4.5	%		22.6	%
Net assets, end of period	$	57,664,184		$	58,119,821
Weighted shares outstanding, end of period		2,581,021			2,582,169


	June 30, 2022		December 31, 2021		Decrease			% Decrease
Total assets	$	60,987,335	$	65,644,854	($	4,657,519	)		(7.1	%)
Total liabilities		3,323,151		4,899,438		(1,576,287	)		(32.2	%)

Net assets	$	57,664,184	$	60,745,416	($	3,081,232	)		(5.1	%)


	June 30, 2022		December 31, 2021		Increase (Decrease)			% Increase (Decrease)
Investments, at cost	$	52,486,717	$	52,370,668	$	116,049			0.2	%
Unrealized appreciation, net		6,512,056		11,697,794		(5,185,738	)		(44.3	%)

Investments, at fair value	$	58,998,773	$	64,068,462	($	5,069,689	)		(7.9	%)


	Cost Increase (Decrease)
New investments:
Seybert’s Billiards Corporation (Seybert’s)	$	2,200,000
DSD Operating, LLC (DSD)		318,276
ITA Acquisition, LLC (ITA)		223,810

Total of new investments		2,742,086
Other changes to investments:
Filterworks Acquisition USA, LLC (Filterworks) interest conversion		107,559
Seybert’s OID amortization and interest conversion		48,118
Caitec, Inc. (Caitec) interest conversion		36,178
ITA interest conversion		34,701
DSD interest conversion		30,472
Mattison Avenue Holdings, LLC (Mattison) interest conversion		18,341
HDI Acquisition LLC (Hilton Displays) interest conversion		13,117
SciAps, Inc. (Sciaps) OID amortization		7,500
GoNoodle, Inc. (GoNoodle) interest conversion		7,110

Total of other changes to investments		303,096
Investments repaid, sold, liquidated or converted:
New Monarch Machine Tool, Inc. (New Monarch) liquidated		(22,841	)
ACV Auctions, Inc. (ACV) sale		(34,440	)
Ares Capital Corporation (Ares) sale		(76,320	)
GoNoodle debt repayment		(90,175	)
FS KKR Capital Corp. (FS KKR) sale		(94,380	)
Microcision LLC (Microcision) sale		(110,000	)
Owl Rock Capital Corporation (Owl Rock) sale		(347,067	)
Golub Capital BDC, Inc. (Golub) sale		(403,910	)
SocialFlow, Inc. (Social Flow) exit		(1,750,000	)

Total of investments repaid, sold, liquidated or converted		(2,929,133	)

Net change in investments, at cost	$	116,049


	Three months ended June 30, 2022		Three months ended June 30, 2021
Carolina Skiff LLC (Carolina Skiff)	$	189,660	$	—
Carlye Secured Lending, Inc. (Carlyle)		34,400		30,960
FS KKR		32,640		32,400
PennantPark Investment Corporation (PennantPark)		28,275		23,400
Tilson Technology Management Inc. (Tilson)		13,125		13,125
Barings BDC, Inc. (Barings)		9,600		8,000
Ares Capital Corporation (Ares)		8,820		10,800
Owl Rock Capital Corporation (Owl Rock)		—		9,300
Golub Capital BDC, Inc. (Golub)		—		9,062

Total dividend and other investment income	$	316,520	$	137,047


	Three months ended June 30, 2022		Three months ended June 30, 2021		Change
Realized gain on investments before income taxes	$	1,540,143	$	1,817,350	($	277,207	)


	Three months ended June 30, 2022
Microcision LLC (Microcision)	$	25,000
New Monarch Machine Tool, Inc. (New Monarch)		22,841
Barings BDC, Inc. (Barings)		(39,200	)
Ares Capital Corporation (Ares)		(62,650	)
Golub Capital BDC, Inc. (Golub)		(71,507	)
Owl Rock Capital Corporation (Owl Rock)		(98,933	)
Carlyle Secured Lending Inc. (Carlyle) (formerly TCG BDC, Inc.)		(144,767	)
FS KKR Capital Corp. (FS KKR)		(168,960	)
PennantPark Investment Corporation (Pennantpark)		(308,750	)
ACV Auctions, Inc. (ACV)		(4,007,743	)

Total change in net unrealized appreciation (depreciation) of investments before income taxes	($	4,854,669	)


	Three months ended June 30, 2021
Open Exchange, Inc. (Open Exchange)	$	4,918,061
PennantPark Investment Corporation (Pennantpark)		215,800
FS KKR Capital Corp. (FS KKR)		89,100
Barings BDC, Inc. (Barings)		27,733
Ares Capital Corporation (Ares)		22,860
Golub Capital BDC, Inc. (Golub)		22,605
Owl Rock Capital Corporation (Owl Rock)		14,100
PostProcess Technologies, Inc. (Post Process)		(122,728	)
ACV Auctions, Inc. (ACV)		(1,692,209	)

Total change in net unrealized appreciation (depreciation) of investments before income taxes	$	3,495,322


	Six months ended June 30, 2022		Six months ended June 30, 2021
Carolina Skiff LLC (Carolina Skiff)	$	220,260	$	81,801
Carlyle		68,800		62,780
FS KKR		62,880		64,800
Pennantpark		55,575		46,800
Tilson		26,250		26,250
Barings		18,800		15,600
Ares		18,270		21,600
Golub		9,375		18,125
Owl Rock		9,300		18,600
Apollo		—		27,360

Total dividend and other investment income	$	489,510	$	383,716


	Six months ended June 30, 2021
ACV	$	7,595,646
Open Exchange		4,918,061
Pennantpark		319,251
FS KKR		231,105
Carlyle		209,240
Ares		77,760
Barings		60,267
Owl Rock		52,200
Golub		49,168
Apollo		(7,616	)
Post Process		(122,728	)

Total change in net unrealized appreciation of investments before income taxes	$	13,382,354


Period	Total number of shares purchased (1)		Average price paid per share (2)		Total number of shares purchased as part of publicly announced plan (3)		Maximum dollar amount of shares that may yet be purchased under the share repurchase program (3)
4/1/2022 – 4/30/2022		—		—		—	$	1,479,230
5/1/2022 – 5/31/2022		—		—		—	$	1,500,000
6/1/2022 – 6/30/2022		—		—		—	$	1,500,000

Total		—		—		—