8-K

UNITED

STATES

SECURITIES

AND EXCHANGE COMMISSION

Washington,

D.C. 20549

FORM

8-K

CURRENT

REPORT

Pursuant

to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): March 5, 2024

RAND

CAPITAL CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

New York	814-00235	16-0961359
(State<br> or Other Jurisdiction<br><br> of Incorporation)	(Commission<br> <br><br> File Number)	(I.R.S.<br> Employer<br><br> Identification Number)

1405Rand Building, Buffalo, NY 14203

(Address of Principal Executive Offices) (Zip Code)

(716)853-0802

(Registrant’s Telephone Number, Including Area Code)

NotApplicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written<br> communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting<br> material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement<br> communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement<br> communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securitiesregistered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common<br> Stock, $0.10 par value	RAND	Nasdaq<br> Capital Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Item 2.02. Results of Operations and Financial Condition.

On March 5, 2024, Rand Capital Corporation (the “Company”) issued a press release announcing its results for the fourth quarter and fiscal year ended December 31, 2023. A copy of the release is furnished with this report as Exhibit 99.1 and is incorporated by reference into this Item 2.02.

The information contained in this report under Item 2.02 is being furnished and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. The information contained in this report under Item 2.02 shall not be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

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Item 7.01. Regulation FD Disclosure.

The Company has updated its earnings conference call slide presentation for the fourth quarter and fiscal year ended December 31, 2023, and will make it available on the Company’s website at www.randcapital.com, under “Investors”. The slide presentation will be referenced during the Company’s earnings conference call. The information found on, or otherwise accessible through, the Company’s website is not incorporated by reference herein.

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Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit<br><br> <br>Number	Description of Exhibit
99.1	Press Release, dated March 5, 2024.
104	Cover<br> Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	RAND CAPITAL CORPORATION
Date:<br> March 5, 2024
	By:	/s/ Margaret Brechtel
	Name:	Margaret Brechtel
	Title:	Chief Financial Officer

Exhibit99.1

NEWS<br><br> <br>RELEASE

14 Lafayette Square, Suite 1405 ● Buffalo, New York 14203

FOR IMMEDIATE RELEASE

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Rand Capital Reports 27% Increase in Total Investment Income for 2023

●	Portfolio expansion centered on debt investments drives total investment income growth of 11% to $1.9 million for the fourth quarter and 27% to $7.3 million for full year 2023

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●	Rand’s portfolio was comprised of 64% interest yielding debt instruments at year-end compared with 56% at the end of 2022, which improved the portfolio yield and net interest income

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●	Paid total dividends of $1.33 per share in 2023, up 60% from 2022

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●	Net asset value per share (“NAV”) was $23.56 at December 31, 2023, up 5% from year-end 2022
●	$2.3 million in follow on investments during the fourth quarter; Full year 2023 investments totaled $20.3 million
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BUFFALO,NY, March 5, 2024 – 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, 2023.

Daniel P. Penberthy, President and Chief Executive Officer of Rand, commented, “We delivered another strong year of results as we continued to scale the business through the successful execution of our strategy. We put more than $20 million to work during 2023, primarily in income producing investments which drove higher investment income that enabled us to increase our return to shareholders during the year. In total, dividends increased 60% to $1.33 per share in 2023, which included an increase of our regular quarterly dividend earlier in the year and a special dividend paid out during the fourth quarter.

“We entered 2024 with a strong and flexible balance sheet that is supported by multiple sources of capital. We have a solid pipeline of investment opportunities and believe we can continue to execute our strategy by increasing our portfolio composition with new debt investments.”

FourthQuarter Highlights (compared with the prior-year period unless otherwise noted)

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●	Total<br> investment income grew $197,000, or 11%, to $1.9 million, which reflected a 47% increase<br> in interest from portfolio companies, partially offset by lower dividend income. The decrease<br> in dividend income was largely due to a large prior-year dividend from a portfolio company,<br> which did not occur, and the sale of the Company’s investment in Dealer Solutions and<br> Design (DSD) during the second quarter of 2023.
●	Total<br> expenses were $1.0 million compared with $371,000 in the prior-year fourth quarter. The change<br> reflects a $293,000 increase in interest expense on borrowings under the senior revolving<br> credit facility, along with a change in accrued capital gains incentive fees to the Company’s<br> external investment adviser. The current period included an expense of $64,000 in capital<br> gains incentive fees compared with a credit of $168,000 for the fourth quarter of 2022.
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RandCapital Reports 27% Increase in Total Investment Income for 2023

March5, 2024

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●	Adjusted<br> expenses, which exclude capital gains incentive fees and is a non-GAAP financial measure,<br> were $950,000 compared with $539,000 in the fourth quarter of 2022. See the attached description of this non-GAAP financial measure and reconciliation table for adjusted expenses.
●	Net<br> investment income was $962,000, or $0.37 per share, compared with $1.2 million, or $0.48<br> per share, in the fourth quarter of 2022. Adjusted net investment income per share, a non-GAAP<br> financial measure, which excludes the capital gains incentive fee accrual expense, was $0.40<br> per share compared with $0.41 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.
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2023Highlights

●	Total<br> investment income of $7.3 million increased $1.6 million, or 27%, from the prior year.
●	Total<br> expenses were $4.2 million compared with $1.1 million in<br> the prior year. The increase reflected $805,000 of accrued capital gains incentive fees during<br> 2023 compared with a $1.0 million reduction of accrued fees during 2022. Rand entered into<br> a senior revolving credit facility in June 2022 to drive growth. As a result, interest expense<br> increased $975,000 in 2023 compared with the prior year.
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●	Excluding<br> the capital gains incentive fee accrual, adjusted expenses, which is a non-GAAP financial<br> measure, increased $1.2 million to $3.4 million in 2023. See the attached description of this non-GAAP financial measure and reconciliation table for adjusted expenses.
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●	Net<br> investment income per share was $1.15 for 2023 compared with $1.72 per share in the prior<br> year. Excluding the capital gains incentive fee accrual, adjusted net investment income per<br> share for 2023 was $1.46, up 11%, from $1.31 in 2022. See the attached description of this non-GAAP financial measure and reconciliation table for adjusted net investment income per share.
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●	Net<br> assets at December 31, 2023 were $60.8 million, up 5% from year-end 2022.
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Portfolioand Investment Activity

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As of December 31, 2023, Rand’s portfolio included investments with a fair value of $77.1 million across 30 portfolio businesses. This was up $15.6 million, or 25%, from December 31, 2022, and reflected new and follow on investments and valuation adjustments in multiple portfolio companies. This was partially offset by equity sales and loan repayments. At December 31, 2023, the portfolio was comprised of approximately 64% in debt investments, 27% in equity investments in private companies, and 9% in publicly traded equities consisting of other BDCs and ACV Auctions. The annualized weighted average yield of debt investments, which includes PIK interest, was 13.6% compared with 12.6% at the end of 2022.

Fourthquarter 2023:

●	Funded<br> a follow-on debt investment of $2.2 million to BMP Food Service Supply Holdco, LLC (FSS).<br> Subsequently FSS made a loan principal payment of $0.6 million during the quarter. Rand’s<br> total debt and equity investment in FSS had a fair value of $7.4 million at year-end.
●	Follow-on<br> equity investment of $73,000 to Caitec, Inc.
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Fullyear 2023:

●	Invested<br> a total of $20.3 million across nine transactions, which largely consisted of interest yielding<br> assets.

RandCapital Reports 27% Increase in Total Investment Income for 2023

March5, 2024

Page3 of 8

●	Portfolio<br> investment company DSD was sold during the second quarter of 2023, which resulted in the<br> full repayment of Rand’s subordinated debt and sale of its preferred equity investments.<br> In total, Rand received $6.7 million of proceeds, which included a net gain of $2.5 million.
●	Sold<br> ACV Auctions public securities for $1.7 million in gains.
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Liquidityand Capital Resources

Cash at year-end was $3.3 million, which reflected the proceeds received from exiting DSD and ACV Auctions share sales in the second quarter of 2023. As of December 31, 2023, the Company held shares valued at approximately $4.4 million in other publicly traded BDCs and $3.0 million in ACV Auctions, all of which are available for future liquidity needs including dividends and portfolio investments.

At December 31, 2023, Rand had outstanding borrowings of $16.3 million on its existing $25.0 million senior secured revolving credit facility. The outstanding borrowings carried an interest rate of 8.9% at year-end.

The Company did not repurchase any outstanding common stock during 2023.

Dividends

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On December 5, 2023, the Board declared an aggregate of $0.63 per share cash dividend distribution, which was paid during the fourth quarter, to shareholders of record as of December 18, 2023. The dividend consisted of a regular quarterly dividend of $0.25 per share and a special dividend of $0.38 per share.

During 2023, Rand paid a total of $3.4 million in dividends, which included the four regular quarterly dividends, and the year-end 2023 special dividend.

On February 26, 2024, Rand declared its regular quarterly cash dividend distribution of $0.25 per share. The cash dividend will be distributed on or about March 29, 2024, to shareholders of record as of

March 13, 2024.

Webcastand Conference Call

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Rand will host a conference call and webcast on Tuesday, March 5, 2024, 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 “Investor Relations” where the replay will also be available.

A telephonic replay will be available from 5:30 p.m. ET on the day of the call through Tuesday, March 19, 2024. To listen to the archived call, dial (412) 317-6671 and enter replay pin number 13743458. A transcript of the call will also be posted once available.

ABOUTRAND CAPITAL

Rand Capital (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 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: https://www.randcapital.com/.

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Rand Capital Reports 27% Increase in Total Investment Income for 2023

March5, 2024

Page4 of 8

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SafeHarbor Statement

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Thispress 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 limitedto statements regarding the strategy of the Company and its outlook; statements regarding the implementation of the Company’s strategy,its ability to continue to increase the number and aggregate size of its debt investments and its growth trajectory; and any assumptionsunderlying any of the foregoing, are forward-looking statements. Forward-looking statements concern future circumstances and resultsand 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 theserisks or uncertainties materialize, or should underlying assumptions prove to be incorrect, actual results may vary materially from thoseindicated or anticipated by such forward-looking statements. The inclusion of such statements should not be regarded as a representationthat such plans, estimates or expectations will be achieved. Important factors that could cause actual results to differ materially fromsuch plans, estimates or expectations include, among others, (1) evolving legal, regulatory and tax regimes; (2) changes in general economicand/or industry specific conditions; and (3) other risk factors as detailed from time to time in Rand ‘s reports filed with theSecurities and Exchange Commission (“SEC”), including Rand’s annual report on Form 10-K for the year ended December31, 2023, quarterly reports on Form 10-Q, and other documents filed with the SEC. Consequently, such forward-looking statements shouldbe regarded as Rand’s current plans, estimates and beliefs. Except as required by applicable law, Rand assumes no obligation toupdate the forward-looking information contained in this release.

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Contacts:

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Company:	Investors:
Daniel<br> P. Penberthy	Deborah<br> K. Pawlowski / Craig P. Mychajluk
President<br> and CEO	Kei<br> Advisors LLC
716.853.0802	716-843-3908<br> / 716-843-3832
dpenberthy@randcapital.com	dpawlowski@keiadvisors.com<br> / cmychajluk@keiadvisors.com

FINANCIAL TABLES FOLLOW

Rand Capital Reports 27% Increase in Total Investment Income for 2023

March5, 2024

Page5 of 8

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RandCapital Corporation and Subsidiaries

ConsolidatedStatements of Financial Position*(Audited)*

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			2022
ASSETS
Investments<br> at fair value:
Control<br> investments (cost of 5,272,770 and 4,660,017, respectively)	4,148,960		$	3,536,207
Affiliate<br> investments (cost of 45,720,974 and 30,204,160, respectively)	53,499,372			38,241,589
Non-Control/Non-Affiliate<br> investments (cost of 17,371,862 and 20,852,060, respectively)	19,477,380			19,726,463
Total<br> investments, at fair value (cost of 68,365,606 and 55,716,237, respectively)	77,125,712			61,504,259
Cash	3,295,321			1,368,996
Interest<br> receivable	244,600			208,338
Prepaid<br> income taxes	127,869			76,396
Deferred<br> tax asset, net	39,179			28,160
Other<br> assets	189,301			295,043
Total<br> assets	81,021,982		$	63,481,192
LIABILITIES<br> AND STOCKHOLDERS’ EQUITY (NET ASSETS)
Liabilities:
Due<br> to investment adviser	979,297		$	562,221
Accounts<br> payable and accrued expenses	145,516			66,680
Line<br> of credit	16,250,000			2,550,000
Capital<br> gains incentive fees	2,279,700			2,167,000
Deferred<br> revenue	552,256			413,971
Total<br> liabilities	20,206,769			5,759,872
Stockholders’<br> equity (net assets):
Common<br> stock, 0.10 par; shares authorized 100,000,000; shares issued: 2,648,916; shares outstanding: 2,581,021 at 12/31/23 and 12/31/22	264,892			264,892
Capital<br> in excess of par value	55,801,170			51,464,267
Treasury<br> stock, at cost: 67,895 shares at 12/31/23 and 12/31/22	(1,566,605	)		(1,566,605	)
Total<br> distributable earnings	6,315,756			7,558,766
Total<br> stockholders’ equity (net assets) (per share - 2023: 23.56, 2022: 22.36)	60,815,213			57,721,320
Total<br> liabilities and stockholders’ equity (net assets)	81,021,982		$	63,481,192

All values are in US Dollars.

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Rand Capital Reports 27% Increase in Total Investment Income for 2023

March5, 2024

Page6 of 8

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RandCapital Corporation and Subsidiaries

ConsolidatedStatements of Operations

	(Unaudited)						(Audited)
	For<br> the Quarter Ended <br><br> December 31,						For<br> the Year Ended<br><br> December 31,
	2023			2022			2023			2022
Investment<br> income:
Interest<br> from portfolio companies:
Control<br> investments	$	192,072		$	154,647		$	698,872		$	279,055
Affiliate<br> investments		1,127,121			599,931			3,858,696			2,366,955
Non-Control/Non-Affiliate<br> investments		354,042			381,248			1,421,787			1,506,792
Total<br> interest from portfolio companies		1,673,235			1,135,826			5,979,355			4,152,802
Interest<br> from other investments:
Non-Control/Non-Affiliate<br> investments		241			82			933			131
Total<br> interest from other investments		241			82			933			131
Dividend<br> and other investment income:
Affiliate<br> investments		86,125			422,200			506,076			974,669
Non-Control/Non-Affiliate<br> investments		129,250			122,965			531,055			481,665
Total<br> dividend and other investment income		215,375			545,165			1,037,131			1,456,334
Fee<br> income:
Control<br> investments		4,516			3,900			17,242			7,800
Affiliate<br> investments		31,245			20,371			278,061			92,531
Non-Control/Non-Affiliate<br> investments		5,507			27,642			25,441			55,583
Total<br> fee income		41,268			51,913			320,744			155,914
Total<br> investment income		1,930,119			1,732,986			7,338,163			5,765,181
Expenses:
Base<br> management fee		287,297			230,454			1,057,166			927,226
Capital<br> gains incentive fees		64,000			(168,000	)		804,700			(1,048,760	)
Interest<br> expense		336,997			43,918			1,044,831			69,960
Professional<br> fees		155,346			160,657			547,456			729,967
Directors’<br> fees		65,709			50,050			263,500			187,833
Stockholders<br> and office operating		55,158			41,756			261,639			205,083
Administrative<br> fees		37,250			-			149,000			-
Insurance		10,380			11,238			44,100			43,026
Corporate<br> development		1,660			-			5,927			3,753
Other<br> operating		-			1,017			-			1,141
Total<br> expenses		1,013,797			371,090			4,178,319			1,119,229
Net<br> investment income before income taxes		916,322			1,361,896			3,159,844			4,645,952
Income<br> tax (benefit) expense, including excise tax expense		(45,282	)		131,792			192,111			215,542
Net<br> investment income		961,604			1,230,104			2,967,733			4,430,410
Net<br> realized (loss) gain on sales and dispositions of investments:
Affiliate<br> investments		(21,265	)		-			2,574,829			167,159
Non-Control/Non-Affiliate<br> investments		3,440			14,902			(1,523,750	)		538,334
Net<br> realized (loss) gain on sales and dispositions, before income taxes		(17,825	)		14,902			1,051,079			705,493
Income<br> tax expense		21,524			-			359,682			-
Net<br> realized (loss) gain on sales and dispositions of investments		(39,349	)		14,902			691,397			705,493
Net<br> change in unrealized appreciation/depreciation on investments:
Control<br> investments		-			(748,810	)		-			(748,810	)
Affiliate<br> investments		627,667			4,692,512			(259,031	)		4,740,353
Non-Control/Non-Affiliate<br> investments		(289,938	)		(4,760,553	)		3,231,115			(9,901,315	)
Change<br> in unrealized appreciation/depreciation before income taxes		337,729			(816,851	)		2,972,084			(5,909,772	)
Deferred<br> income tax expense		171,005			107,980			104,564			107,980
Net<br> change in unrealized appreciation/depreciation on investments		166,724			(924,831	)		2,867,520			(6,017,752	)
Net<br> realized and unrealized gain (loss) on investments		127,375			(909,929	)		3,558,917			(5,312,259	)
Net<br> increase (decrease) in net assets from operations	$	1,088,979		$	320,175		$	6,526,650		$	(881,849	)
Weighted<br> average shares outstanding		2,581,021			2,581,021			2,581,021			2,581,021
Basic<br> and diluted net increase (decrease) in net assets from operations per share	$	0.42		$	0.12		$	2.53		$	(0.34	)

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RandCapital Reports 27% Increase in Total Investment Income for 2023

March5, 2024

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RandCapital Corporation and Subsidiaries

ConsolidatedStatements of Changes in Net Assets*(Audited)*

	2023			2022
Net<br> assets at beginning of year	$	57,721,320		$	60,745,416
Net<br> investment income		2,967,733			4,430,410
Net<br> realized gain on sales and dispositions of investments		691,397			705,493
Net<br> change in unrealized appreciation/depreciation on investments		2,867,520			(6,017,752	)
Net<br> increase (decrease) in net assets from operations		6,526,650			(881,849	)
Declaration<br> of dividends		(3,432,757	)		(2,142,247	)
Net<br> assets at end of year	$	60,815,213		$	57,721,320

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Rand Capital Reports 27% Increase in Total Investment Income for 2023

March5, 2024

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RandCapital Corporation and Subsidiaries

Reconciliationof GAAP Total Expense to Non-GAAP Adjusted Expenses

(Unaudited)

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In addition to reporting total expenses, which is a U.S. generally accepted accounting principle (“GAAP”) financial measure, Rand presents adjusted expenses, which is a non-GAAP financial measure. Adjusted expenses is defined as GAAP total expenses removing the effect of any expenses/(credits) for capital gains incentive fees accrual. GAAP total expenses is the most directly comparable GAAP financial measure. Rand believes that adjusted expenses provides useful information to investors regarding financial performance because it is a method the Company uses to measure its financial and business trends related to its results of operations. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP.

	Three months ended<br> <br>December 31, 2023		Three months ended<br> <br>December 31, 2022			Year ended<br> <br>December 31, 2023		Year ended<br> <br>December 31, 2022
Total<br> expenses	$	1,013,797	$	371,090		$	4,178,319	$	1,119,229
Exclude<br> expenses/(credits) for capital gains incentive fees		64,000		(168,000	)		804,700		(1,048,760	)
Adjusted<br> total expenses	$	949,797	$	539,090		$	3,373,619	$	2,167,989

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Reconciliationof GAAP Net Investment Income per Share toAdjusted Net Investment Income per Share

(Unaudited)

In addition to reporting Net Investment Income per Share, which is a GAAP financial measure, the Company presents Adjusted Net Investment Income per Share, which is a non-GAAP financial measure. Adjusted Net Investment Income per Share is defined as GAAP Net Investment Income per Share removing the effect of any expenses/(credits) for capital gains incentive fees. GAAP Net Investment Income per Share is the most directly comparable GAAP financial measure. Rand believes that Adjusted Net Investment Income per Share provides useful information to investors regarding financial performance because it is a method the Company uses to measure its financial and business trends related to its results of operations. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP.

	Three months ended<br> <br>December 31, 2023		Three months ended<br> <br>December 31, 2022			Year ended<br> <br>December 31, 2023		Year ended<br> <br>December 31, 2022
Net<br> investment income per share	$	0.37	$	0.48		$	1.15	$	1.72
Exclude<br> expenses/(credits) for capital gains incentive fees per share		0.02		(0.07	)		0.31		(0.41	)
Adjusted<br> net investment income per share	$	0.40	$	0.41		$	1.46	$	1.31

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