Here are 1-3 brief analogies to describe Rand Capital:

• A publicly traded venture capital fund for small, private businesses in Upstate New York.

• Like a public version of a private equity firm, but focused on promising local companies in the Western New York region.

• Equity Investments: Provides capital to private companies by acquiring ownership stakes, typically as a minority investor.
• Debt Investments: Offers loans and other debt instruments to privately held companies, generally to more mature businesses.
• Follow-on Investments: Supplies additional capital to existing portfolio companies to support their continued growth, often participating in multiple investment rounds.

Rand Capital Corporation (symbol: RAND) is a business development company and regulated investment company that specializes in private equity investments. Its business model involves providing capital (through equity or debt instruments) to other companies.

Therefore, Rand Capital's "customers" are the companies in which it invests, often referred to as its portfolio companies. Based on the provided background information, Rand Capital primarily "sells" (provides capital to) other companies. The specific names of these customer companies are not provided in the background description. However, the background does describe the categories of companies it targets for investment:

• Lower middle market and small to medium-sized privately held companies: These are companies with annual revenue up to $10 million and EBITDA up to $5 million.
• Companies engaged in the exploitation of new or unique products, technologies, or services.
• Companies in specific sectors: Healthcare, consumer products, manufacturing, software, and professional services.
• Geographic focus: Companies based in the Western and Upstate New York region and its surrounding states (with a focus on Buffalo and Niagara region), and within a three to five-hour drive from Western New York, including Canada.

Since Rand Capital invests in privately held companies, these "customer" companies do not have public stock symbols.

Daniel P. Penberthy
President and Chief Executive Officer

Mr. Penberthy was appointed President and Chief Executive Officer of Rand Capital in December 2021. Prior to this role, he served as Treasurer and Chief Financial Officer of Rand since 1997. He oversees the company's investment activities and is actively involved in the investment process from deal sourcing to fund marketing. Before joining Rand, Mr. Penberthy held the position of Chief Financial Officer for both the Greater Buffalo Partnership (formerly the Chamber of Commerce) and the Greater Buffalo Convention and Visitors Bureau. He also gained experience working with the Greater Buffalo Development Foundation and KPMG.

Margaret W. Brechtel
Executive Vice President, Treasurer, Chief Financial Officer and Secretary

Ms. Brechtel was appointed Executive Vice President, Treasurer, Chief Financial Officer, and Secretary in December 2021. Previously, she served as Vice President of Finance for Rand Capital since 2002. She is responsible for overseeing all financial operations, regulatory compliance, and financial reporting for the company. Before her tenure at Rand, Ms. Brechtel was the Director of Business Operations and Controller at Cellular One, and she held financial positions at Comptek Research, Union Carbide, and KPMG.

Brendan Fox
Assistant Controller, Rand Capital Management, LLC

Mr. Fox joined Rand Capital Management, LLC, the company's external investment adviser, as Assistant Controller in September 2022. In this role, he is responsible for financial reporting and preparing Rand's consolidated financial statements. Prior to joining Rand, he worked as a Senior Accountant in the tax and audit departments at Brock, Schechter & Polakoff LLP.

1. Challenges to portfolio companies due to macroeconomic conditions: Rand Capital's investment performance is highly dependent on the success of its privately held, lower middle market portfolio companies. These companies are particularly susceptible to adverse macroeconomic factors such as high interest rates and labor shortages, which can lead to increased debt service pressure, strained cash flows, and higher default risks. Evidence of this strain includes a notable portion of investment income coming from Payment-in-Kind (PIK) interest, signaling borrower stress. Furthermore, economic uncertainties, including those related to U.S. corporate tax policy, can cause portfolio companies to delay long-term capital expenditure plans, thereby slowing their growth and affecting Rand's ability to realize capital appreciation from its investments.
2. Investment portfolio valuation fluctuations and potential for losses: Rand Capital faces significant risks concerning the valuation of its investment portfolio, which can experience substantial unrealized and realized losses. The company has reported periods of severe portfolio depreciation, including notable losses from specific events like a portfolio company's bankruptcy, leading to a decline in Net Asset Value (NAV) per share and a reduction in shareholder value. The concentration of a significant portion of Rand's total investment value in a limited number of portfolio companies further amplifies this risk, as the underperformance or failure of one or a few key investments can have a disproportionately negative impact on the overall portfolio.
3. Stringent regulatory environment and compliance as a Business Development Company (BDC): As a Business Development Company (BDC) regulated under the Investment Company Act of 1940, Rand Capital is subject to stringent regulatory requirements. These mandates, such as the requirement to invest at least 70% of its assets in "qualifying assets," dictate its investment strategy and operational framework. While this regulatory oversight provides a degree of investor confidence, it also limits the firm's investment flexibility. Failure to comply with these complex and evolving legal, regulatory, and tax regimes, including maintaining its status as a Regulated Investment Company (RIC) for U.S. federal income tax purposes, could lead to significant penalties, operational disruptions, or adverse financial outcomes.

1. Deployment of Capital into New Income-Generating Investments: Rand Capital has emphasized its strong liquidity and debt-free balance sheet, positioning it to actively deploy capital into new income-generating portfolio investments. The company aims to replace repaid investments with new ones to support its future dividend streams and grow its overall portfolio, with a focus on yield-oriented debt structures.
2. Focus on High-Yield Debt Investments with Equity Participation: The company has strategically shifted its portfolio mix towards a higher percentage of debt investments, reaching 79% of its portfolio in 2025. This focus on debt instruments is coupled with an emphasis on yield-oriented structures that often include equity participation, providing both current income and potential capital appreciation. These debt investments typically generate attractive annualized weighted average yields.
3. Capitalizing on an Improving M&A Environment and Deal Origination: Despite a challenging and "uneven" M&A environment in 2025, management expresses optimism about an improving credit cycle and M&A activity in 2026. This anticipated improvement is expected to provide Rand Capital with increased opportunities for new deal origination, allowing the firm to pursue attractive risk-adjusted returns.
4. Leveraging Co-Investment Opportunities with Adviser Affiliates: Rand Capital has adopted an SEC exemptive order that facilitates co-investments with its adviser affiliates under Board oversight. This strategic initiative is designed to expand the company's deal flow and enhance portfolio diversification, ultimately leading to a broader range of investment opportunities and potential revenue growth.
5. Disciplined Capital Recycling and Redeployment: The company actively engages in a "lifecycle strategy" that involves monetizing select equity positions and receiving repayments from existing loans. The proceeds generated from these activities are then strategically redeployed into new income-producing investments, ensuring a continuous flow of capital into opportunities that support sustained yield and dividends.

Share Repurchases

• Rand Capital Corporation did not repurchase any outstanding common stock during 2025.
• The company reported no common stock repurchases for the years 2024, 2023, and 2022, with a minor repurchase of $20.8 thousand in 2021.

Share Issuance

• Shares outstanding increased from 2,648,916 at December 31, 2024, to 3,037,709 at December 31, 2025, with weighted average shares outstanding increasing to 2,969,814 for Q4 2025 from 2,581,021 for Q4 2024.

Inbound Investments

• Rand Capital issued $13.7 million in long-term debt in 2023 and $2.6 million in 2022.

Outbound Investments

• During 2025, Rand Capital deployed $6.6 million into new and follow-on investments across five transactions, primarily in interest-earning assets. This included two new portfolio company investments and three follow-on investments.
• In Q4 2025, a new investment of $3.25 million was made in Bauer Sheet Metal and Fabricating Inc., structured as a term loan with warrants.
• Q3 2025 saw a new investment of $2.5 million in BlackJet Marketing and a $400,000 follow-on debt investment in Food Service Supply.
• The fair value of Rand's investment portfolio decreased by $22.3 million (32%) from December 31, 2024, to $48.5 million at December 31, 2025, mainly due to portfolio company loan repayments and valuation adjustments.

Capital Expenditures

• Rand Capital Corporation reported no capital expenditures for the fiscal years 2024, 2023, 2022, and 2021.