Slide 1: Fourth Quarter and Full Year 2022 Financial Results
FOURTH QUARTER AND FULL YEAR 2022 FINANCIAL RESULTS March 10, 2023 Daniel P. Penberthy President & CEO Margaret W. Brechtel EVP & CFO © 2023 Rand Capital Corporation Nasdaq: RAND
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation 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 t
Slide 3: Fourth Quarter and Full Year 2022 Execution
FOURTH QUARTER AND FULL YEAR 2022 EXECUTION Advanced portfolio transformation to include more debt instruments • Fourth quarter total investment income increased 40% to $1.7 million over the 2021 fourth quarter • Full year 2022 total investment income grew 41% to $5.8 million Fourth quarter net
Slide 4: Portfolio Mix
PORTFOLIO MIX Fair Value Portfolio Mix ($ in millions) $64.1 $61.5 The change in portfolio fair value primarily reflects BDC stock sales $13.9 $6.4 and lower valuations for ACV Auctions and Open Exchange, partially $20.9 $20.6 offset by new and follow-on investments. $29.6 $34.2 Mix at year-end, bas
Slide 5: Q4 2022 Investments & Exits
Q4 2022 INVESTMENTS & EXITS Investments Funded $3.1 million, including $2.5 million senior subordinate Provides design, distribution and installation services debt and $600,000 preferred equity for commercial kitchens, renovations and new builds Follow on debt investment of $590,000 Instrumentation
Slide 6: Diversified Portfolio
DIVERSIFIED PORTFOLIO Investments by Industry Classification December 31, 2022 December 31, 2021 Healthcare Other 1% Public BDC Public BDC 2% stocks stocks 9% Software 6% 10% Professional Automotive Services 10% Software 26% Automotive 31% 13% Consumer Products 12% Professional Consumer Services Man
Slide 7: Top Five Portfolio Investments
TOP FIVE PORTFOLIO INVESTMENTS Investments at Year % of Total Company Industry Investment Type ($ in millions) Fair Value Acquired Portfolio Professional Services – Equity – Tilson $10.3 2015 Cellular info systems, 17% construction, mgmt. paying dividend Term note Consumer Product – Billiard Seybert
Slide 8: Financial Review
FINANCIAL REVIEW © 2023 Rand Capital Corporation Nasdaq: RAND
Slide 9: Fourth Quarter Financial Summary
FOURTH QUARTER FINANCIAL SUMMARY ($ in thousands, except per share data) Q4 2022 Q4 2021 Total investment income $ 1,733 $ 1,237 Total investment income grew 40% • Driven by increased interest income from Total expenses (371) (923) portfolio companies and higher portfolio dividend income Net investm
Slide 10: Full Year Financial Summary
FULL YEAR FINANCIAL SUMMARY ($ in thousands, except per share data) 2022 2021 Total investment income $ 5,765 $ 4,076 Total investment income grew 41% • Driven by increased interest income from Total expenses (1,119) (6,670) portfolio companies and higher portfolio dividend income Net investment inc
Slide 11: 2022 Net Asset Value Change
2022 NET ASSET VALUE CHANGE ($ in thousands) $4,430 $705 $60,745 $57,721 ($6,018) ($2,142) Net assets at Net investment Net realized gain on Net change in Cash dividend Net assets at 12/31/2021 income sales and dispositions unrealized 12/31/2022 $60,745,416 of investments appreciation on $57,721,320
Slide 12: Strong and Flexible Balance Sheet
STRONG AND FLEXIBLE BALANCE SHEET Net Asset Value Composition At December 31, 2022 Publicly-traded equity securities of $6.4 million Per Share Assets and Liabilities available for future liquidity opportunities $0.53 $1.4 million consolidated cash At year-end, $2.6 million in outstanding borrowings
Slide 13: 2023 Objectives
2023 OBJECTIVES Continue to grow and scale the business by focusing on debt and related equity investments in privately-held, lower middle market companies Put capital to work: • Leverage $25 million senior secured revolving credit facility • Opportunistically use our publicly traded equity inve
Slide 14: Supplemental Information
SUPPLEMENTAL INFORMATION © 2023 Rand Capital Corporation Nasdaq: RAND
Slide 15: Adjusted Expenses (Non-GAAP)
ADJUSTED EXPENSES (N -GAAP*) ON Three months Three months Year ended Year ended ended ended December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021 Total expenses $ 371,090 $ 922,795 $ 1,119,229 $ 6,670,315 Exclude (credits)/expenses for capital gains (168,000) 86,000 (1,048,760) 4,2
Slide 16: Adjusted Net Investment Income per Share (Non-GAAP)
ADJUSTED NET INVESTMENT INCOME PER SHARE (NON-GAAP*) Three months Three months Year ended Year ended ended ended December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021 Net Investment Income (Loss) per Share $ 0.48 $ 0.12 $ 1.72 $ (1.01) Exclude (credits)/expenses for capital gains i