Q2 2024 Rand Capital Corp Earnings Call

Greetings and welcome to Rand Capital Corporation second quarter fiscal year, 'twenty 'twenty four financial results.

Operator: Greetings and welcome to Rand Capital Corporation's second quarter fiscal year 2024 financial results. At this time, all participants are on a listen-only mode. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Craig Mychajluk, Investor Relations. Thank you.

Operator: Greetings and welcome to Rand Capital Corporation, second quarter fiscal year 2024 financial results. At this time, all participants are in a listen-only mode. If anyone should require operator assistance during the conference, please press star zone on your telephone keypad. As you're reminded, this conference is being recorded.

Speaker Change: At this time all participants are in a listen only mode. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad.

Speaker Change: This conference is being recorded.

Craig Maholik: I would now like to turn the conference over to your host, Mr. Craig Maholik, Investor Relations. Thank you, you may begin.

Speaker Change: I would now like to turn the conference over to your host Mr. Craig Mihalik Investor Relations. Thank.

Speaker Change: Thank you you may begin.

Craig Maholik: Thank you, and good afternoon, everyone. We appreciate your interest in Rand Capital and for joining us today for our second quarter 2024 financial results conference call. On the line with me, are Dan Penberthy, our President and Chief Executive Officer, and Margaret Brechtel, our Executive Vice President and Chief Financial Officer. A copy of the release and slides of the company our conversation is available at Rand Capital.com.

Craig Mihalik: Thank you and good afternoon, everyone. We appreciate your interest in Rand capital and for joining US today for our second quarter 2024 financial results Conference call on the line with me are Dan Penberthy, Our President and Chief Executive Officer, and Margaret breakdown, our executive Vice President and Chief Financial Officer, a copy.

Craig Mychajluk: Thank you and good afternoon, everyone. We appreciate your interest in Rand Capital and for joining us today for our second quarter 2024 Financial Results Conference call. On the line with me are Dan Penberthy, our President and Chief Executive Officer, and Margaret Brechtel, our Executive Vice President and Chief Financial Officer. A copy of the release and slides that accompany our conversation is available at RandCapital.com. If you're following along in the slide deck, please turn to slide two, where I'd like to point out some important information.

Craig Mihalik: The release and slides that accompany our conversation is available it ran capital dotcom.

Craig Maholik: If you're following along in the slide deck, please turn the slide to where I'd like to point out some important information. As you are likely aware, we may make some forward-looking statements during this presentation. These statements apply to future events that are subject to risk uncertainties, as well as other factors that could cause actual results to differ from where we are today. You can find a summary of these risks, uncertainties, and other factors in yearnings release and other documents filed by the company with the Securities and Exchange Commission. These documents can be found on our website or at SEC.gov.

Speaker Change: Following along in the slide deck, please turn to slide two where I'd like to point out some important information.

Craig Mychajluk: As you are likely aware, we may make some forward-looking statements during this presentation. These statements apply to future events that are subject to risks and uncertainties as well as other factors that could cause actual results to differ from where we are today. You can find a summary of these risks and uncertainties and other factors in the earnings release and other documents filed by the company with the Securities and Exchange Commission. These documents can be found on our website or at sec.gov.

Speaker Change: Are likely aware, we may make some forward looking statements. During this presentation. These statements apply to future events that are subject to risks and uncertainties as well as other factors that could cause actual results to differ from where we are today you can find a summary of these risks and uncertainties and other factors in the earnings release and other documents filed by the company with the Securities and Exchange Commission.

Speaker Change: These documents can be found at our website or SEC Gov. During.

Craig Maholik: During today's call, we'll also discuss some non-GAAP financial measures. We believe these will be useful in evaluating our performance. You should not consider the presentation of this additional information and isolation or as a substitute for results in accordance with generally accepted accounting principles. We have provided recommendations of non-GAAP measures with comparable GAAP measures in the tables that accompany today's earnings release.

Craig Mychajluk: During today's call, we'll also discuss some non-GAAP financial measures. We believe these will be useful in evaluating our performance. However, you should not consider the presentation of this additional information in isolation or as a substitute for results in accordance with generally accepted accounting principles. We have provided reconciliations of non-GAAP measures with comparable GAAP measures in the tables that accompany today's earnings release. With that, please turn to slide three, and I'll hand the discussion over to Dan. Okay Dan? Thank you.

Speaker Change: During today's call. We'll also discuss some non-GAAP financial measures. We believe these will be useful in evaluating our performance you should not consider the presentation of this additional information in isolation or as a substitute for results in accordance with generally accepted accounting principles. We have provided reconciliations of non-GAAP measures with comparable GAAP.

Speaker Change: And the tables that accompany today's earnings release with that please turn to slide three and I'll hand, the discussion over to Dan Dan. Thank.

Craig Maholik: With that, please turn to slide three, and I'll hand in discussion over to Dan.

Daniel Penberthy: Dan? Thank you, Craig, and good afternoon, everyone. We continue to execute our strategy, achieving significant growth and total investment income as a result of our growing portfolio and our capital deployment into debt instruments.

Daniel Penberthy: Thank you, Craig, and good afternoon, everyone. We continue to execute our strategy, achieving significant growth in total investment income as a result of our growing portfolio and our capital deployment into debt instruments. This past quarter, our portfolio optimization efforts included selective asset sales, which generated capital we used to enhance our balance sheet, which will position us rather favorably for future growth opportunities. I'm very excited to highlight and remind you all that last month we announced the acquisition of one of our portfolio investments, SIAPS, which is one of our larger legacy equity and debt holdings by UK-based Spectrus PLC. The transaction, which is expected to be completed later this year, is valued at up to $260 million. This does include a deferred component of $60 million earnout.

Dan: Thank you Craig and good afternoon, everyone.

Dan: We continue to execute our strategy achieving significant growth in total investment income as a result of our growing portfolio and our capital deployment into debt instruments.

Daniel Penberthy: This past quarter, our portfolio optimization efforts did include selective asset sales, which generated capital we use to enhance our balance sheet, which will position us rather favorably for future growth opportunities. I'm very excited to highlight and remind you all that last month, we announced the acquisition of one of our portfolio investments, SIAPS, which is one of our larger legacy equity and debt holdings by UK-based Spectrous PLC. The transaction, which is expected to be completed later this year, is valued at up to $260 million. This does include a deferred component of $60 million earned out. Rand holds approximately 6% of SIAPS equity, with our total investment costing 5.2 million and does include a secured note from 2021.

Speaker Change: This past quarter, our portfolio optimization efforts.

Speaker Change: <unk> selective asset sales, which generated capital we use to enhance our balance sheet.

Speaker Change: Which will position us rather favorably for future growth opportunities.

Speaker Change: I'm very excited to highlight and remind you all that last month, we announced the acquisition of one of our portfolio investments, sorry apps, which is one of our larger legacy equity and debt holdings by U K based spectrum P. L C.

Daniel Penberthy: Rand holds approximately 6% of Saeb's equity, with our total investment costing $5.2 million and including a secured note from 2021. As of June 30th, we have valued this total investment into SIAPS at $10.8 million. We are carefully evaluating the best options for the anticipated capital infusion from this acquisition. We recognize that we need to strategically redeploy these funds to the extent possible through new investments as well as reinvesting in existing portfolio companies which show high potential.

Speaker Change: The transaction, which is expected to be completed later this year is valued at up to $260 million. This does include a deferred component of $60 million earn out.

Branch holds approximately 6% of saps equity with our total investment processing $5 2 million and does include a secured note from 'twenty to 'twenty one.

Daniel Penberthy: As of June 30th, we have valued this total investment into SIAPS at $10.8 million. We are carefully evaluating the best options for the anticipated capital infusion from this acquisition. We recognize that we need to strategically redeploy these funds to the extent possible through new investments, as well as reinvesting in existing portfolio companies which show high potential. This approach aims to drive further value for our shareholders and may also include additional returns in the form of dividends down the road.

Speaker Change: As of June 30th we have valued this total investment into tie ups at $10 8 million.

Speaker Change: We are carefully evaluating the best options for the anticipated capital infusion from this acquisition.

Speaker Change: We recognize that we need to strategically redeploy these funds to the extent possible through new investments as well as reinvesting in existing portfolio companies, which show high potential.

This approach aimed to drive further value for our shareholders and May also include additional returns in the form of dividends down the road.

Daniel Penberthy: This approach aims to drive further value for our shareholders and may also include additional returns in the form of dividends down the road. The achievement of our strategic objectives over the last few years has translated into tangible benefits for our shareholders, as highlighted on slide four.

Speaker Change: The achievement of our strategic objectives over the last few years has translated into tangible benefits for our shareholders. This is highlighted on slide four.

Daniel Penberthy: The achievement of our strategic objectives over the last few years has translated into tangible benefits for our shareholders. This is highlighted on Slide 4. Year-to-date, we have declared total dividends of 83 cents per share. This includes a cash dividend of 29 cents per share rather for the second quarter. More recently, on July 31st, we announced that our third quarter 2024 dividend will continue to be held at 29 cents per share. At quarter end, after deploying capital and distributing $748,000 in cash dividends to shareholders, we have maintained total available liquidity of over $11 million. This liquidity includes our line of credit availability, cash on hand, and our remaining highly liquid publicly traded BDC securities.

Speaker Change: Year to date, we have declared total dividends of 83 cents per share.

Daniel Penberthy: Year to date, we have declared total dividends of $0.83 per share. This includes a cash dividend of $0.29 per share for the second quarter. More recently, on July 31st, we announced that our third quarter 2024 dividend will continue to be held at 29 cents per share at quarter end after deploying capital and distributing $748,000 in cash dividends to shareholders.

Speaker Change: This includes a cash dividend of 29 cents per share rather for the second quarter.

Speaker Change: More recently on July 31st we announced that our third quarter 2024 dividend will continue to be held at 29 cents per share.

Speaker Change: At quarter end after deploying capital and distributing $748000 in cash dividends to shareholders.

Daniel Penberthy: We've maintained total available liquidity of over $11 million. This liquidity includes our line of credit availability, cash on hand, and our remaining highly liquid publicly traded BDC securities. If you turn to slide 5, you will see our portfolio mix between debt and equity and the changes during the recent quarter. Our portfolio had a fair value of $87.1 million across 26 businesses. This is up 13% from year end 2023 and 5% sequentially.

Speaker Change: We maintain total available liquidity of over $11 million.

Speaker Change: This liquidity includes our line of credit availability cash on hand, and our remaining highly liquid publicly traded BDC securities.

Speaker Change: If you turn to slide five you'll see our portfolio mix between debt and equity and the changes during the recent quarter.

Daniel Penberthy: If you turn to slide 5, you will see our portfolio mix between debt and equity and the changes during the recent quarter. Our portfolio had a fair value of $87.1 million across 26 businesses. This is up 13% from year-end 2023 and 5% sequentially. The increases reflect investments, evaluation adjustments, and multiple companies, including SIAPS, partially offset by stock sales and portfolio loan repayments. Our portfolio is comprised of approximately 66% debt investments with an annualized weighted average yield of 13.8%, including PIK interest. The remaining mix includes 32% equity investments in private companies, and does primarily consist of SIAPS and TILSEN, as well as 2% in publicly traded BDC investments.

Speaker Change: Our portfolio had a fair value of $87 1 million across 26 businesses.

This is up 13% from year end 2023, and 5% sequentially.

Speaker Change: The increases reflect investments in valuation adjustments in multiple companies, including sign ups, partially offset by stock sales and portfolio loan repayments.

Daniel Penberthy: The increases reflect investments and valuation adjustments in multiple companies, including SIA, partially offset by stock sales and portfolio loan repayment. Our portfolio is comprised of approximately 66% debt investors, with an annualized weighted average yield of 13.8%, including PIK interest. The remaining mix includes 32% equity investments in private companies and does primarily consist of SIAPS and Tilson as well as 2% in publicly traded BDC Investments. During the quarter, we completed a follow-on equity investment, which is highlighted on slide 6.

Speaker Change: Our portfolio is comprised of approximately 66% debt investments with an annualized weighted average yield of 13, 8%, including P. I K interest.

Speaker Change: The remaining next includes 32% equity investments in private companies.

Speaker Change: Does primarily consist of sign ups and tillson.

Speaker Change: As well as 2% and publicly traded BDC investment.

Daniel Penberthy: During the quarter, we completed a follow-on equity investment, which is highlighted on slide 6. We invested $108,000 in food service supply, or FSS, who is a commercial kitchen supply and services company based in Utah. Following this investment, our total debt and equity holdings in FSS reflect a fair value of $7.5 million at quarter-end.

Speaker Change: During the quarter, we completed a follow on equity investment, which is highlighted on slide six.

We invested 108000 and foodservice supply or F. S S.

Daniel Penberthy: We invested $108,000 in Food Service Supply, or FSS, a commercial kitchen supply and services company based in Utah. Following this investment, our total debt and equity holdings in FSS reflect a fair value of $7.5 million at quarter end. The bottom half of the slide highlights notable exits and repayments for the quarter. We received $3.3 million in total proceeds from liquidating our shareholdings in three BDC investments. This resulted in realized gains of $598,000 from Carlyle.

Speaker Change: Who is a commercial kitchen supply and services company based in Utah.

Speaker Change: Following this investment our total debt and equity holdings in FSS.

Speaker Change: Reflect a fair value of $7 5 million at quarter end.

Speaker Change: The bottom half of the slide highlights notable exits and repayments for the quarter, we received $3 3 million and total proceeds from liquidating our shareholdings in three BDC investments.

Daniel Penberthy: The bottom half of the slide highlights notable exits and repayments for the quarters. We received $3.3 million in total proceeds from liquidating our shareholdings in three BDC investments. This resulted in realized gains of $598,000 from Carlyle, $485,000 from Pen and Park, and $177,000 from Aries. Additionally, we recognized the realized gain of $397,000 from a partial asset sale of a TILSEN-affiliated entity called SQF. We also received $740,000 principal loan repayment from our Pressure Pro debt investment.

Speaker Change: This resulted in realized gains of $598000 from Carlyle.

Daniel Penberthy: $485,000 from Penn and Park and $177,000 from Aries. Additionally, we recognize a realized gain of $397,000 from a partial asset sale of a Tilson-affiliated entity called SQF. We also received $740,000 principal loan repayment from our PressurePro debt investor. Lastly, we exited our equity investment in NOAA, which had been previously valued at zero.

Speaker Change: 485000 from pennant Park and 177000 from Aries.

Speaker Change: Additionally, we recognized a realized gain of 397000 from a partial asset sale of a tilson affiliated entity called SQL.

Speaker Change: We also received 740000 principal loan repayments from our pressure for that investment.

Speaker Change: Lastly, we exited our equity investment in Noah, which had been previously valued at zero.

Daniel Penberthy: Lastly, we exited our equity investment in NOAA, which had been previously valued at zero.

Speaker Change: Yeah.

Daniel Penberthy: Slide seven, if you can kindly turn to that, visually illustrates the diversity within our portfolio and the changes in our industry allocation over the second quarter. Recent investments and adjustments in fair value led to changes in our industry composition. Manufacturing increased from 20 to 25% of our portfolio, while the BDC stocks following their sales decreased from 5% to 2%. We place a high value on the diversity of our industry mix.

Speaker Change: Slide seven if you could kindly turn to that visually illustrates the diversity within our portfolio and the changes in our industry allocation over the second quarter.

Daniel Penberthy: Slide seven, if you kindly turn to that, visually illustrates the diversity within our portfolio and the changes in our industry allocation over the second quarter. Recent investments and adjustments in fair value led to changes in our industry composition. Manufacturing increased from 20% to 25% of our portfolio, while the BDC stocks following their sales decreased from 5% to 2%. We place a high value on the diversity of our industry mix. The broad spectrum of sectors across the portfolio reflects our strategic approach, ensuring resilience in a difficult economy and mitigating risk in our investment efforts.

Speaker Change: Recent investments and adjustments and fair value led to changes in our industry composition.

Speaker Change: Manufacturing increase from 20% to 25% of our portfolio, while the BDC stocks following their sales decreased from 5% to 2%.

Speaker Change: We place a high value on the diversity of our industry mix.

Daniel Penberthy: The broad spectrum of sectors across the portfolio reflects our strategic approach, ensuring resilience in a difficult economy and mitigating risk in our investment efforts.

Speaker Change: Broad spectrum of sectors across the portfolio reflects our strategic approach ensuring resilience in a difficult economy and mitigating risk in our investment efforts.

Daniel Penberthy: Slide eight lists our top five portfolio companies at quarter end, and consistent with my prior comments regarding our larger legacy equity holdings. Tillson remains our largest fair value investment at 12.3 million, marking a 17% increase from the prior quarter, and representing 14% of our total portfolio. SIEFs moved up to the second position, with its value more than doubling to 10.8 million following the announced definitive purchase agreement. Overall, the top five companies represent 50% of our total portfolio at quarter end.

Speaker Change: Slide eight lists our top five portfolio companies at quarter end.

Daniel Penberthy: Slide eight lists our top five portfolio companies at quarter end, and consistent with my prior comments regarding our larger legacy equity holding, Tilson remains our largest fair value investment at $12.3 million, marking a 17% increase from the prior quarter and representing 14% of our total portfolio. SIAPS moved up to second place, with its value more than doubling to $10.8 million following the announced Definitive Purchase Agreement. Overall, the top five companies represent 50% of our total portfolio at quarter end. With that, I'll turn it over to Margaret to review our financials in greater depth. Thanks.

Speaker Change: Consistent with my prior comments regarding our larger legacy equity holdings.

<unk> remains our largest fair value investment at $12 3 million.

Speaker Change: Marketing, a 17% increase from the prior quarter and representing 14% of our total portfolio.

Speaker Change: Sorry, it's moved up to the second position with its value more than doubling to $10 8 million following the announced definitive purchase agreement.

Speaker Change: Overall, the top five companies represent 50% of our total portfolio at quarter end.

Margaret Brechtel: With that, I'll turn it over to Margaret to review our financials in greater depth. Thanks, Dan, and good afternoon everyone. I will start in slide 10, which provides an overview of our financial summary for the 2024 second quarter. Total investment income for the quarter was 2.1 million, and in that represents an 18% increase over last year's second quarter. This growth was driven by a 35% increase in interest income, reflecting seven new interest-yielding investments made over the past year. Overall, 22 portfolio companies contributed to our investment income.

Speaker Change: With that I'll turn it over to Margaret to review our financials in greater depth.

Margaret Brechtel: Thanks, Dan, and good afternoon, everyone. I will start on slide 10, which provides an overview of our financial summary for the second quarter of 2024. Total investment income for the quarter was $2.1 million, and that represents an 18% increase over last year's second quarter. This growth was driven by a 35% increase in interest income, reflecting seven new interest-yielding investments made over the past year. Overall, 22 portfolio companies contributed to our investment income.

Margaret: Thanks, Dan and good afternoon, everyone.

Margaret: On slide 10.

Margaret: An overview of our financial summary for the 2020 for second quarter.

Margaret: Total investment income for the quarter was $2 1 million and that represented an 18% increase over last year's second quarter. This growth was driven by a 35% increase in interest income, reflecting southern new ingestion lean investments made over the past year.

Margaret: Over our 22 portfolio companies contributed to our investment income.

Margaret Brechtel: Total expenses for the second quarter were approximately 2.7 million, compared with 1.3 million in the same quarter last year. This increase included a 1.2 million rise in capital gain and center fee to our external investment advisor. In accordance with GAP, we must accrue a capital gains and center fee on all our realized and unrealized gains and losses. Due to recent portfolio performance and realized gains, we recognize the higher accrual this quarter. Adjustive expenses, which exclude accrued capital gains and center fees and is a non-GAAP financial measure, were 1 million, compared with 816,000 in the second quarter of 2023.

Margaret Brechtel: Total expenses for the second quarter were approximately $2.7 million, compared with $1.3 million in the same quarter last year. This increase included a $1.2 million rise in the capital gain incentive fee to our external investment advisor. In accordance with GAAP, we must accrue a capital gains incentive fee on all our realized and unrealized gains and losses. Due to recent portfolio performance and realized gains, we recognize a higher accrual this quarter. Adjusted expenses, which exclude accrued capital gains incentive fees and is a non-GAAP financial measure, for $1 million compared with $816,000 in the second quarter of 2023. The increase was largely due to interest expense given the usage of the senior revolving credit facility.

Margaret: Total expenses for the second quarter were approximately $2 7 million compared with $1 3 million in the same quarter last year.

Margaret: The increase included a $1 2 million rise in capital gain incentive fee to our external investment advisor.

Margaret: In accordance with GAAP.

Speaker Change: Must accrue a capital gains incentive fee and all are realized and unrealized gains and losses due to recent portfolio performance and realized gains we recognized a higher accrual this quarter.

Speaker Change: Adjusted expenses, which exclude.

Speaker Change: Accrued capital gains incentive fees and is a non-GAAP financial measure were 1 million compared with 816000 in the second quarter of 2023.

Margaret Brechtel: The increase largely was due to interest expense, given usage of the senior revolving credit facility. Second quarter, net investment loss was 517,000, or 20 cents per share. That was compared with a net investment income of 493,000, or 19 cents per share in last year's period. On an adjusted basis, which is a non-GAAP financial measure, and excludes the capital gains and center fee accrual expense, net investment income was 44 cents per share, up 16% from 38 cents per share in last year's period.

Speaker Change: The increase largely was due to interest expense given usage of the senior revolving credit facility.

Speaker Change: Second quarter net investment loss was 517000 or <unk> 20 per share.

Margaret Brechtel: The second quarter net investment loss was $517,000, or $0.20 per share. That was compared with a net investment income of $493,000, or $0.19 per share, in last year's period on an adjusted basis, which is a non-GAAP financial measure and excludes the capital gains incentive fee accrual expense. Net investment income was $0.44 per share, up 16% from $0.38 per share in last year's period. On slide 11, you will see a waterfall graph for the change in net asset value for the quarter. Net assets at June 30, 2024 were $68.6 million, up 11%. The change largely reflects unrealized depreciation on investments of $7.8 million.

Speaker Change: That was compared with a net investment income of 493000 or <unk> 19 per share in last year's period.

Speaker Change: On an adjusted basis, which is a non-GAAP financial measure and excludes the capital gains incentive fee accrual expense.

Speaker Change: Net investment income was 44 cents per share up 16% from 38 cents per share in last year's period.

Margaret Brechtel: That was compared with a net investment income of 495,000, or 20 cents per share in last year's period.

Margaret Brechtel: On site 11, you will see a waterfall graph for the change in that asset value for the quarter. Net assets at June 30th, 2024 were 68.6 million, up 11%. The change largely reflects the unrealized appreciation and investments of 7.8 million. As a result, the net asset value per share, June 30th, 2024, increased to $26.56, compared with $23.85 at March 31st, 2024.

Speaker Change: And site 11, you'll see a waterfall graph for the change in net asset value for the quarter net assets at June 30th 'twenty 'twenty four were $68 6 million up 11%.

Speaker Change: The change lives really reflects the unrealized depreciation on investments of $7 8 million as a result and that asset value per share at June 32024 increased to $26.56 compared with $23 85 times at March 31 2024.

Margaret Brechtel: As a result, the net asset value per share for June 30, 2024, increased to $26.56 compared with $23.85 at March 31, 2024. As highlighted on slide 12, we continue to have a strong and flexible balance sheet that positions us well for future investment. Total assets grew 8% to $90.8 million, which included cash at quarter end of approximately $2.3 million. We also held approximately $1.3 million in liquid BDC shares, which are available for future liquidity needs.

Margaret Brechtel: As highlighted on slide 12, we continue to have a strong and flexible balance sheet that positions us well for future investments. Total assets grew 8% to 90.8 million, which included cash at quarter end of approximately 2.3 million. We also held approximately 1.3 million in liquid BDC shares, which are available for future liquidity needs. Based on our borrowing base formula, Rand had 7.8 million of availability and is existing $25 million. Senior Security Volodyne Credit Facility at June 30th, 2024. And our outstanding borrowings of 17.2 million carry an interest rate of 8.8% at quarter end.

Speaker Change: As highlighted on slide 12, we continue to have a strong and flexible balance sheet that positions us well for future investment.

Speaker Change: Total assets grew 8% to $90 8 million, which included cash at quarter end of approximately $2 3 million.

Speaker Change: We also held approximately $1 3 million and liquid BDC shares which are available for future liquidity needs.

Speaker Change: Based on our borrowing base Formula Rand had $7 8 million of availability in its existing $25 million senior.

Margaret Brechtel: Based on our borrowing-based formula, Rand had $7.8 million of availability in its existing $25 million senior secured revolving credit facility at June 30, 2024, and our outstanding borrowings of $17.2 million carried an interest rate of 18.8% at quarter end. We expect that our strategy of transforming the portfolio to include more income-generating investments will enable us to sustain higher dividend levels over time. Recently, Rand announced its regular quarterly cash dividend of $0.29 per share. This dividend will be paid on or around September 13, 2024, to shareholders of record as of August 30, 2024. With that, I will turn the discussion back to Dan. Thanks, Margaret.

Speaker Change: Senior secured revolving credit facility at June 30th 2024, and our outstanding borrowings of $17 2 million carried an interest rate of eight.

Speaker Change: 8% at quarter end.

Margaret Brechtel: We expect that our strategy of transforming the portfolio to include more income generating investments will enable us to sustain higher dividend level over time. Recently, Rand announced its regular quarterly cash dividend of 29 cents per share. This dividend will be paid on or around September 13th, 2024, to shareholders of record as of August 30th, 2024.

Speaker Change: We expect that our strategy of transforming the portfolio to include more income generating investments will enable us to sustain higher dividend level overtime.

Rand: Recently Rand announced its regular quarterly cash dividend of 29 cents per share. This dividend will be paid on or around September 13th 2024 to shareholders of record as of August 32024.

Daniel Penberthy: With that, I will turn the discussion back to Dan. Thanks, Margaret. Moving forward, our strategies to expand our business by pursuing new investments, and we will continue to reinvest in existing portfolio companies with high potential. Our objective is to participate in new, smaller M&A transactions with other co-investors, which will help to support a robust steady income stream through these new debt instruments, while also sharing in the EBITDA growth of these new opportunities through our equity holding. We expect that this will lead to future monetization of for our shareholders. We also believe that this approach will enhance our capacity to increase dividends over the long term, while Rand is currently more focused on debt financing for lower-to-middle-market businesses.

Dan Dan: With that I will turn the discussion back to Dan.

Dan Dan: Thanks Margaret.

Daniel Penberthy: Moving forward, our strategy is to expand our business by pursuing new investments, and we will continue to reinvest in existing portfolio companies with high potential. Our objective is to participate in new, smaller M&A transactions with other co-investors, which will help to support robust, steady income streams through these new debt instruments, while also sharing in the EBITDA growth of these new opportunities through our equity holdings. We expect that this will lead to future monetization for our shareholders.

Dan Dan: Moving forward our strategy is to expand our business by pursuing new investments and we will continue to reinvest in existing portfolio of companies with high potential.

Dan Dan: Our objective is to participate in new smaller M&A transactions with other co investors, which will help to support robust steady income stream through these new debt instruments.

Dan Dan: Also sharing in the EBITDA growth of these new opportunities.

Dan Dan: Through our equity holding.

Dan Dan: We expect that this will lead to future monetization up for our shareholders.

Daniel Penberthy: We also believe that this approach will enhance our capacity to increase dividends over the long term, while Rand is currently more focused on debt financing for lower to middle market businesses. The expected successful exit of SIAPS underscores our commitment to maintaining minority equity investments within our portfolio and how they accompany all of our new investments. These future investments, however, will now be part of a larger initial debt investment, as I noted.

Dan Dan: We also believe that this approach will enhance our capacity to increase dividends over the long term.

Dan Dan: While range is currently more focused on debt financing for lower to middle market businesses.

Daniel Penberthy: The expected successful exit of SIAPs underscores our commitment to maintaining minority equity investments within our portfolio and how they accompany all of our new investments. These future investments, however, will now be part of a larger initial debt investment, as I noted. We believe these equity stakes can contribute to strong returns upon future exits.

Dan Dan: The expected successful exit of sign ups underscores our commitment to maintaining them.

Dan Dan: Minority equity investments within our portfolio and how they accompany all of our new investments.

Dan Dan: These future investments, however will now be part of a larger initial debt investment as I noted.

Daniel Penberthy: We believe these equity stakes can contribute to strong returns upon future exits. Thank you for joining us today and for your continued interest in Rand Capital. We look forward to updating you on our third quarter 2024 results, which will be reported in November.

Dan Dan: We believe these equity stakes can contribute to strong returns upon future exits.

Dan Dan: Thank you for joining us today and for your continued interest in Rand capital.

Daniel Penberthy: Thank you for joining us today and for your continued interest in Rand Capital. We look forward to updating you on our third quarter 2024 results, which will be reported in November. Have a great day.

Dan Dan: We look forward to updating you on our third quarter 2024 results.

Dan Dan: Which will be reported in November.

Dan Dan: Have a great day.

Speaker Change: This concludes today's conference you may disconnect your lines at this time and we thank you for your participation.

Operator: This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.