Earnings release
Page 1
NEWS RELEASE 14 Lafayette Square, Suite 1405 • Buffalo, New York 14203 FOR IMMEDIATE RELEASE Rand Capital Reports Third Quarter Fiscal Year 2026 Results • Interest income from portfolio companies rose 4% sequentially to $1.2 million, supported by contributions from investments made earlier in 2026 • Third quarter total investment income was $1.3 million compared with $1.6 million in the prior-year period, primarily reflecting the impact of certain investments being on non- accrual status • Net investment income was $669,000, or $0.23 per share, in the third quarter • Net asset value (NAV) per share was $17.36 at September 30, 2026 • Portfolio fair value was $56.7 million, up 17.0% from year-end 2025 BUFFALO, NY, November 4, 2026 – 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 third quarter ended September 30, 2026. “Interest income from our portfolio companies increased sequentially in the third quarter, supported by contributions from investments made earlier in the year and building on a relatively stable income base during 2026,” said Daniel P. Penberthy, President and Chief Executive Officer of Rand. “Improved operating performance at several portfolio companies also supported valuation gains, helping offset declines elsewhere and contributing to a modest sequential increase in net asset value per share.” “Our focus remains on strengthening the portfolio’s income producing base, actively managing challenged investments and preserving financial flexibility. With a predominantly debt-oriented portfolio and available borrowing capacity, we intend to remain selective in committing capital, balancing new investment opportunities with the needs of our existing portfolio and long-term shareholder returns.” Third Quarter Review (compared with the prior-year period unless otherwise noted) • Total investment income of $1.3 million decreased $268,000, or 17%, from $1.6 million in the third quarter of 2025, primarily reflecting lower interest income from portfolio companies due to certain investments being placed on non-accrual status over the last year, along with lower interest from other investments and fee income. Dividend income of $28,000 in the third quarter of 2026 partially offset this decline. • On a sequential basis, interest income from portfolio companies increased 4% to $1.2 million, reflecting income generated by new investments made during the year. • Non-cash payment-in-kind (PIK) interest totaled $99,000, representing 8% of interest income from portfolio companies, compared with 43% in the prior-year period. The decline in PIK as a percentage of interest income reflects the impact of four portfolio companies being on non-accrual status, which reduced the amount of PIK interest recognized in the quarter. • Total expenses were $769,000 compared with $596,000 in the same period last year. The increase primarily reflected higher professional fees, interest expense due to higher average
Page 2
Rand Capital Reports Third Quarter Fiscal Year 2026 Results November 4, 2026 Page 2 of 7 borrowings and base management fees, partly offset by lower income-based incentive fees. Neither period included a capital gains incentive fee expense or benefit. • Net investment income was $669,000, or $0.23 per share, compared with $993,000, or $0.33 per share, in the third quarter of 2025. • Net assets were $51.5 million, or $17.36 per share, at September 30, 2026, compared with $17.33 per share, at June 30, 2026. Net investment income of $669,000 and net realized and unrealized gains of $275,000 more than offset $861,000 of dividends declared during the third quarter. At December 31, 2025, net assets were $17.57 per share. Portfolio and Investment Activity As of September 30, 2026, Rand's investment portfolio had a fair value of $56.7 million, up 17.0% from $48.5 million at December 31, 2025. The portfolio consisted of investments in 20 portfolio businesses and was comprised of approximately 77% debt investments and 23% equity investments at fair value. Portfolio fair value increased $235,000 from June 30, 2026. Rand deployed $12.0 million into new and follow-on investments during the first nine months of 2026, with all of that deployment occurring in the first half of the year. No new or follow-on cash investments were made during the third quarter of 2026. The annualized weighted average yield of debt investments, including PIK interest, was 8.97% at September 30, 2026, compared with 11.3% at December 31, 2025. This change in the annualized weighted average yield primarily reflects the timing of placing certain portfolio investments on non-accrual status. Third Quarter 2026 portfolio activity included: • BMP Swanson Holdco LLC: Rand recognized a $2.0 million realized loss on its debt and equity investments, which had previously been written down to zero. Recognition of the realized loss was accompanied by an equivalent reversal of previously recorded unrealized depreciation and therefore did not result in an additional reduction in NAV during the quarter. • BlackJet Direct Marketing LLC: Rand received a $250,000 principal repayment on its debt investment and recognized a $7,500 prepayment fee. • Feature Healthcare LLC, doing business as 4 Seasons Home Care: Rand received a $16,250 principal repayment. • Valuation increases in Bauer Sheet Metal and Fabricating, Inter-National Electronic Alloys and Open Exchange were partly offset by decreases in Autotality, ITA Acquisition and OnCore Golf. Liquidity and Capital Resources Rand ended the quarter with $223,000 in cash and cash equivalents on hand, compared with $4.2 million at December 31, 2025. The Company had $5.0 million outstanding on its line of credit as of September 30, 2026, with estimated remaining availability of approximately $12.4 million. The applicable borrowing rate at quarter-end was 7.4%. The Company did not repurchase any outstanding common stock during the third quarter of 2026. Dividends Rand paid its regular quarterly cash dividend of $0.29 per share on September 9, 2026, to shareholders of record as of August 26, 2026. The dividend totaled approximately $861,000.
Page 3
Rand Capital Reports Third Quarter Fiscal Year 2026 Results November 4, 2026 Page 3 of 7 Webcast and Conference Call Rand will host a conference call and webcast on Wednesday, November 4, 2026, 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 “Investors” where the replay will also be available. A telephonic replay will be available from 4:30 p.m. Eastern Time on the day of the call through Wednesday, November 18, 2026. To listen to the archived call, dial (412) 317-6671 and enter replay pin 13762865. A transcript of the call will also be posted once available. ABOUT RAND CAPITAL Rand Capital Corporation (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 primarily 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: randcapital.com. Safe Harbor Statement This press 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 limited to statements regarding the strategy of the Company and its outlook; statements regarding the implementation of the Company’s strategy and the growth of its dividend; and any assumptions underlying any of the foregoing, are forward-looking statements. Forward-looking statements concern future circumstances and results and 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 these risks or uncertainties materialize, or should underlying assumptions prove to be incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be achieved. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others, (1) evolving legal, regulatory and tax regimes; (2) changes in general economic and/or industry specific conditions; and (3) other risk factors as detailed from time to time in Rand’s reports filed with the Securities and Exchange Commission (“SEC”), including Rand’s annual report on Form 10-K for the year ended December 31, 2025, quarterly reports on Form 10-Q, and other documents filed with the SEC. Consequently, such forward-looking statements should be regarded as Rand’s current plans, estimates and beliefs. Except as required by applicable law, Rand assumes no obligation to update the forward- looking information contained in this release. Contacts: Company: Investors: Daniel P. Penberthy Craig P. Mychajluk President and CEO Alliance Advisors IR 716.853.0802 716-843-3832 invest@randcapital.com cmychajluk@allianceadvisors.com FINANCIAL TABLES FOLLOW
Page 4
Rand Capital Reports Third Quarter Fiscal Year 2026 Results November 4, 2026 Page 4 of 7 Rand Capital Corporation and Subsidiaries Consolidated Statements of Financial Position September 30, 2026 (Unaudited) December 31, 2025 ASSETS Investments at fair value: Control investments (cost of $6,563,940 and $6,563,940, respectively) $ 1,000,000 $ 1,400,000 Affiliate investments (cost of $44,436,906 and $40,867,599, respectively) 38,938,209 36,775,685 Non-Control/Non-Affiliate investments (cost of $14,271,955 and $9,630,860, respectively) 16,797,846 10,304,811 Total investments, at fair value (cost of $65,272,801 and $57,062,399, respectively) 56,736,055 48,480,496 Cash and cash equivalents 222,920 4,208,948 Interest receivable (net of allowance of $25,337 at September 30, 2026 and December 31, 2025) 241,387 168,039 Prepaid income taxes 309,395 283,581 Other assets 132,337 54,248 Total assets $ 57,642,094 $ 53,195,312 LIABILITIES AND STOCKHOLDERS’ EQUITY (NET ASSETS) Liabilities: Due to investment adviser $ 555,565 $ 519,287 Accounts payable and accrued expenses 116,404 101,975 Line of credit 5,000,000 — Deferred revenue 427,086 390,597 Total liabilities 6,099,055 1,011,859 Stockholders’ equity (net assets): Common stock, $0.10 par; shares authorized 100,000,000; shares issued: 3,037,709; shares outstanding: 2,969,814 at September 30, 2026 and December 31, 2025 303,771 303,771 Capital in excess of par value 64,063,157 64,063,157 Treasury stock, at cost: 67,895 shares at September 30, 2026 and December 31, 2025 (1,566,605 ) (1,566,605 ) Total distributable earnings (11,257,284 ) (10,616,870 ) Total stockholders’ equity (net assets) (per share – September 30, 2026: $17.36; December 31, 2025: $17.57) 51,543,039 52,183,453 Total liabilities and stockholders’ equity (net assets) $ 57,642,094 $ 53,195,312
Page 5
Rand Capital Reports Third Quarter Fiscal Year 2026 Results November 4, 2026 Page 5 of 7 Rand Capital Corporation and Subsidiaries Consolidated Statements of Operations (Unaudited) Three months ended September 30, 2026 Three months ended September 30, 2025 Nine months ended September 30, 2026 Nine months ended September 30, 2025 Investment income: Interest from portfolio companies: Control investments $ — $ 13,417 $ 16,517 $ 26,396 Affiliate investments 836,258 1,177,248 2,618,122 3,724,896 Non-Control/Non-Affiliate investments 388,065 234,469 946,170 865,570 Total interest from portfolio companies 1,224,323 1,425,134 3,580,809 4,616,862 Interest from other investments: Non-Control/Non-Affiliate investments 45 73,488 13,873 120,427 Total interest from other investments 45 73,488 13,873 120,427 Dividend and other investment income: Affiliate investments 28,241 — 180,754 13,125 Total dividend and other investment income 28,241 — 180,754 13,125 Fee income: Control investments — 4,515 9,032 13,547 Affiliate investments 55,784 72,714 144,656 247,360 Non-Control/Non-Affiliate investments 3,375 3,772 16,912 178,503 Total fee income 59,159 81,001 170,600 439,410 Total investment income 1,311,768 1,579,623 3,946,036 5,189,824 Expenses: Base management fee 214,969 184,382 609,817 654,239 Income based incentive fees (2,300 ) 66,505 (2,300 ) 186,178 Capital gains incentive fees — — — (1,565,000 ) Interest expense 113,164 25,416 215,250 87,319 Professional fees 240,538 133,415 588,354 484,277 Stockholders and office operating 61,488 59,398 227,316 253,510 Directors' fees 76,375 66,550 226,125 196,950 Administrative fees 52,500 50,250 155,700 149,250 Insurance 10,612 8,250 31,198 31,386 Corporate development 2,050 2,037 7,243 6,538 Bad debt expense — — — 38,462 Total expenses 769,396 596,203 2,058,703 523,109 Net investment income before income taxes: 542,372 983,420 1,887,333 4,666,715 Income tax benefit (126,569 ) (9,159 ) (36,296 ) (22,213 ) Net investment income 668,941 992,579 1,923,629 4,688,928 Net realized (loss) gain on sales and dispositions of investments: Affiliate investments (2,020,884 ) (2,850,015 ) 13,635 (1,924,658 ) Non-Control/Non-Affiliate investments — (77,314 ) — (77,339 ) Net realized (loss) gain on sales and dispositions of investments (2,020,884 ) (2,927,329 ) 13,635 (2,001,997 ) Net change in unrealized appreciation/depreciation on investments: Control investments (400,000 ) — (400,000 ) (875,000 ) Affiliate investments 2,520,884 (481,647 ) (1,406,783 ) (11,027,301 ) Non-Control/Non-Affiliate investments 301,940 189,944 1,851,940 — Change in unrealized appreciation/depreciation before income taxes 2,422,824 (291,703 ) 45,157 (11,902,301 ) Deferred income tax expense (benefit) 126,483 4,741 39,214 (89,469 ) Net change in unrealized appreciation/depreciation on investments 2,296,341 (296,444 ) 5,943 (11,812,832 ) Net realized and unrealized gain (loss) on investments 275,457 (3,223,773 ) 19,578 (13,814,829 ) Net increase (decrease) in net assets from operations $ 944,398 $ (2,231,194 ) $ 1,943,207 $ (9,125,901 ) Weighted average shares outstanding 2,969,814 2,969,814 2,969,814 2,936,938 Basic and diluted net increase (decrease) in net assets from operations per share $ 0.32 $ (0.75 ) $ 0.65 $ (3.11 )
Page 6
Rand Capital Reports Third Quarter Fiscal Year 2026 Results November 4, 2026 Page 6 of 7 Rand Capital Corporation and Subsidiaries Consolidated Statements of Changes in Net Assets (Unaudited) Three months ended September 30, 2026 Three months ended September 30, 2025 Nine months ended September 30, 2026 Nine months ended September 30, 2025 Net assets at beginning of period $ 51,459,887 $ 56,713,954 $ 52,183,453 $ 65,332,520 Net investment income 668,941 992,579 1,923,629 4,688,928 Net realized (loss) gain on sales and dispositions of investments (2,020,884 ) (2,927,329 ) 13,635 (2,001,997 ) Net change in unrealized appreciation/depreciation on investments 2,296,341 (296,444 ) 5,943 (11,812,832 ) Net increase (decrease) in net assets from operations 944,398 (2,231,194 ) 1,943,207 (9,125,901 ) Declaration of dividend (861,246 ) (861,246 ) (2,583,621 ) (2,585,105 ) Net assets at end of period $ 51,543,039 $ 53,621,514 $ 51,543,039 $ 53,621,514
Page 7
Rand Capital Reports Third Quarter Fiscal Year 2026 Results November 4, 2026 Page 7 of 7 Rand Capital Corporation and Subsidiaries Reconciliation of GAAP Total Expense to Non-GAAP Adjusted Expenses (Unaudited) 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 Sept 30, 2026 Three months ended Sept 30, 2025 Nine months ended Sept 30, 2026 Nine months ended Sept 30, 2025 Total expenses $ 769,396 $ 596,203 $ 2,058,703 $ 523,109 Exclude (credits) for capital gains incentive fees - - - (1,565,000) Adjusted total expenses $ 769,396 $ 596,203 $ 2,058,703 $ 2,088,109 Reconciliation of GAAP Net Investment Income per Share to Adjusted 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. The per share amounts for the third quarters of 2026 and 2025 were computed using 2,969,814 weighted average shares outstanding. The per share amounts for the nine months ended September 30, 2026 were computed using 2,969,814 weighted average shares outstanding, compared with 2,936,938 for the nine months ended September 30, 2025. Three months ended Sept 30, 2026 Three months ended Sept 30, 2025 Nine months ended Sept 30, 2026 Nine months ended Sept 30, 2025 Net investment income per share $ 0.23 $ 0.33 $ 0.65 $ 1.60 Exclude (credits) for capital gains incentive fees per share - - - (0.54) Adjusted net investment income per share $ 0.23 $ 0.33 $ 0.65 $ 1.06 ###