RAND CAPITAL CORP

Previous wording

On January 24, 2024, the Board, including a “required majority” (as such term is defined in Section 57(o) of the 1940 Act) of the Board, approved the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act. As a result, our asset coverage requirement under the 1940 Act for senior securities was changed from 200% to 150%, effective January 24, 2025. We monitor our compliance with this coverage ratio on a regular basis. As of June 30, 2026, our asset coverage ratio for senior securities was 1,109%. For a discussion of the risks associated with our adoption of a modified asset coverage requirement of 150%, please see the discussion of risks under the caption “Risk Factors – Risks related to our Indebtedness” contained in Part I, Item 1A of the 2025 10-K. Notwithstanding the reduction of our asset coverage requirement under the 1940 Act from 200% to 150% effective January 24, 2025, under the terms of the Credit Agreement, we are required to maintain an Asset Coverage Ratio (defined in the Credit Agreement as the ratio of the fair market value of all of the Corporation’s assets to the sum of all of the Corporation’s obligations for borrowed money plus all capital lease obligations) of not less than 300%.

Current wording

On January 24, 2024, the Board, including a “required majority” (as such term is defined in Section 57(o) of the 1940 Act) of the Board, approved the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act. As a result, our asset coverage requirement under the 1940 Act for senior securities was changed from 200% to 150%, effective January 24, 2025. We monitor our compliance with this coverage ratio on a regular basis. As of September 30, 2026, our asset coverage ratio for senior securities was 1,131%. For a discussion of the risks associated with our adoption of a modified asset coverage requirement of 150%, please see the discussion of risks under the caption “Risk Factors – Risks related to our Indebtedness” contained in Part I, Item 1A of the 2025 10-K. Notwithstanding the reduction of our asset coverage requirement under the 1940 Act from 200% to 150% effective January 24, 2025, under the terms of the Credit Agreement, we are required to maintain an Asset Coverage Ratio (defined in the Credit Agreement as the ratio of the fair market value of all of the Corporation’s assets to the sum of all of the Corporation’s obligations for borrowed money plus all capital lease obligations) of not less than 300%.

Previous wording

Our Board declared the following dividends during thesix months ended June 30, 2026:

Current wording

Our Board declared the following dividends during thenine months ended September 30, 2026:

Previous wording

Net asset value per share (NAV) was$17.33 at June 30, 2026 and$17.57 at December 31, 2025.

Current wording

Net asset value per share (NAV) was$17.36 at September 30, 2026 and$17.57 at December 31, 2025.

Previous wording

Cash and cash equivalents approximated 0.8% of net assets at June 30, 2026, as compared to 8.1% of net assets at December 31, 2025.

Current wording

Cash and cash equivalents approximated 0.4% of net assets at September 30, 2026, as compared to 8.1% of net assets at December 31, 2025.

Previous wording

During 2022, we entered into a $25 million senior secured revolving credit facility (the “Credit Facility”) with M&T Bank, as lender (the “Lender”), with the amount that we can borrow thereunder, at any given time, determined based upon a borrowing base formula. The Credit Facility has a 5-year term with a maturity date of June 27, 2027. Our borrowings under the Credit Facility bear interest at a variable rate per annum equal to 3.50 percentage points above the greater of (i) the applicable daily simple secured overnight financing rate (SOFR) or (ii) 0.25%. At June 30, 2026, there was $5,100,000 drawn on the Credit Facility and the applicable interest rate was 7.18%. See Note 6—Senior Secured Revolving Credit Facility to the Consolidated Financial Statements in Item 1, Financial Statements, of this Form 10-Q for additional information regarding the terms of our Credit Facility.

Current wording

During 2022, we entered into a $25 million senior secured revolving credit facility (the “Credit Facility”) with M&T Bank, as lender (the “Lender”), with the amount that we can borrow thereunder, at any given time, determined based upon a borrowing base formula. The Credit Facility has a 5-year term with a maturity date of June 27, 2027. Our borrowings under the Credit Facility bear interest at a variable rate per annum equal to 3.50 percentage points above the greater of (i) the applicable daily simple secured overnight financing rate (SOFR) or (ii) 0.25%. At September 30, 2026, there was $5,000,000 drawn on the Credit Facility and the applicable interest rate was 7.40%. See Note 6—Senior Secured Revolving Credit Facility to the Consolidated Financial Statements in Item 1, Financial Statements, of this Form 10-Q for additional information regarding the terms of our Credit Facility.

Previous wording

The change in investments during the six months ended June 30, 2026, at cost, is comprised of the following:

Current wording

The change in investments during the nine months ended September 30, 2026, at cost, is comprised of the following:

Previous wording

The total investment income during the three months ended June 30, 2026 was received from 16 portfolio companies. For the three months ended June 30, 2025, total investment income was received from 14 portfolio companies.

Current wording

The total investment income during the three months ended September 30, 2026 was received from 13 portfolio companies. For the three months ended September 30, 2025, total investment income was received from 15 portfolio companies.

Previous wording

Interest from portfolio companies – Interest from portfolio companies was approximately 23% lower during the three months ended June 30, 2026 versus the same period in 2025 due to several interest-yielding investments being placed on non-accrual status during the last year. Debt instruments in Autotality, FSS, ITA Acquisition, LLC (ITA), MRES, and Swanson were placed on non-accrual status.

Current wording

Interest from portfolio companies – Interest from portfolio companies was approximately 14% lower during the three months ended September 30, 2026 versus the same period in 2025 due to several interest-yielding investments being placed on non-accrual status during the last year. Debt instruments in Autotality, FSS, ITA Acquisition, LLC (ITA), and MRES have all been placed on non-accrual status.

Previous wording

We hold debt securities in our investment portfolio that contain payment-in-kind (“PIK”) interest provisions. PIK interest, computed at the contractual rate specified in each debt agreement, is added to the principal balance of the debt and is recorded as interest income. Thus, the actual collection of this interest may be deferred until the time of debt principal repayment. Interest can also be shifted from current cash payment to PIK as part of a loan modification. For the three months ended June 30, 2026 and 2025, 8.3% and 37.4%, respectively, of our total investment income was attributable to non-cash PIK interest income.

Current wording

We hold debt securities in our investment portfolio that contain payment-in-kind (“PIK”) interest provisions. PIK interest, computed at the contractual rate specified in each debt agreement, is added to the principal balance of the debt and is recorded as interest income. Thus, the actual collection of this interest may be deferred until the time of debt principal repayment. Interest can also be shifted from current cash payment to PIK as part of a loan modification. For the three months ended September 30, 2026 and 2025, 7.5% and 39.1%, respectively, of our total investment income was attributable to non-cash PIK interest income. This decrease is primarily due to debt instruments in Autotality, FSS, ITA, and MRES being placed on non-accrual status.

Previous wording

Dividend and other investment income - Dividend income is comprised of cash distributions from limited liability companies (LLCs) and corporations in which we have invested. Our investment agreements with certain LLCs require those LLCs to distribute funds to us for payment of income taxes on our allocable share of the LLC’s profits. These portfolio companies may also elect to make additional discretionary distributions or dividends. Dividend income will fluctuate based upon the profitability of these LLCs and corporations and the timing of the distributions. During the three months ended June 30, 2026, we recognized $141,206 in dividend income from EFINEA and $11,307 in dividend income from Carolina Skiff LLC (Carolina Skiff). No dividend income was recognized during the three months ended June 30, 2025.

Current wording

Dividend and other investment income - Dividend income is comprised of cash distributions from limited liability companies (LLCs) and corporations in which we have invested. Our investment agreements with certain LLCs require those LLCs to distribute funds to us for payment of income taxes on our allocable share of the LLC’s profits. These portfolio companies may also elect to make additional discretionary distributions or dividends. Dividend income will fluctuate based upon the profitability of these LLCs and corporations and the timing of the distributions. During the three months ended September 30, 2026, we recognized $28,241 in dividend income from EFINEA. No dividend income was recognized during the three months ended September 30, 2025.

Previous wording

The income associated with the amortization of financing fees was $63,152 and $51,179 for the three months ended June 30, 2026 and 2025, respectively. During the three months ended June 30, 2026, we recognized a loan modification fee of $5,000 from our debt investment in GoNoodle. No similar fees were received during the three months ended June 30, 2025.

Current wording

The income associated with the amortization of financing fees was $40,070 and $69,412 for the three months ended September 30, 2026 and 2025, respectively. During the three months ended September 30, 2026, we recognized a loan monitoring fee of $11,589 from our investment in First Coast Mulch and a prepayment fee of $7,500 from our investment in BlackJet. During the three months ended September 30, 2025, we recognized a loan monitoring fee of $11,589 from our investment in First Coast Mulch.

Previous wording

The increase in total expenses during the three months ended June 30, 2026 versus the same period in 2025 was primarily due to a $1,490,000 increase in the capital gains incentive fee expense and a $47,059 increase in interest expense.

Current wording

The increase in total expenses during the three months ended September 30, 2026 versus the same period in 2025 was primarily due to a $107,123 increase in professional fees, a $87,748 increase in interest expense, and a $30,587 increase in base management fee expense.

Previous wording

The increase in interest expense resulted from higher average outstanding debt balances during the three months ended June 30, 2026 versus the same period in 2025 under the Credit Facility. Interest expense for the three months ended June 30, 2026 and 2025 was $72,476 and $25,417, respectively.

Current wording

The increase in interest expense resulted from higher average outstanding debt balances during the three months ended September 30, 2026 versus the same period in 2025 under the Credit Facility. Interest expense for the three months ended September 30, 2026 and 2025 was $113,164 and $25,416, respectively.

Previous wording

The base management fee payable to RCM under the Investment Management Agreement is calculated based upon total assets less cash, and, as investments are exited or repaid or the fair value of our investments decline, the base management fee payable to RCM will decrease accordingly. The base management fee expense for the six months ended June 30, 2026 and 2025 was $394,848 and $469,857, respectively.

Current wording

The base management fee payable to RCM is calculated based upon total assets less cash, and, as we deploy more capital into investments or the fair value of our investments increases, the base management fee payable to RCM will increase accordingly. The base management fee for the three months ended September 30, 2026 and 2025 was $214,969 and $184,382, respectively.

Previous wording

The excess of investment income over total expenses, including income taxes, represents net investment income. The net investment income for the three months ended June 30, 2026 and 2025 was $709,661 and $2,478,234, respectively.

Current wording

The excess of investment income over total expenses, including income taxes, represents net investment income. The net investment income for the three months ended September 30, 2026 and 2025 was $668,941 and $992,579, respectively.

Previous wording

The valuation of our investment in Tilson was reduced to zero after it filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court, District of Delaware.

Current wording

During the three months ended September 30, 2025, we recognized a net realized loss of ($2,850,015) on the liquidation of our investment in Tilson Technology Management, Inc. (Tilson). Tilson filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court, District of Delaware, and subsequently sold all of its assets.

Previous wording

In accordance with the Corporation’s valuation policy, we increased the value of our investments in Verta, EFINEA, Open Exchange, BlackJet, 4 Seasons, and Caitec during the three months ended June 30, 2026 after a financial analysis of each of the portfolio companies indicated continued improved performance.

Current wording

In accordance with the Corporation’s valuation policy, we increased the value of our investments in Bauer, Open Exchange, and EFINEA during the three months ended September 30, 2026 after a financial analysis of each of the portfolio companies indicated continued improvement in performance.

Previous wording

We account for our operations under GAAP for investment companies. The principal measure of our financial performance is “Net increase (decrease) in net assets from operations” on our consolidated statements of operations. The net increase (decrease) in net assets from operations for the three months ended June 30, 2026 and 2025 was $1,366,278 and ($7,736,154), respectively.

Current wording

We account for our operations under GAAP for investment companies. The principal measure of our financial performance is “Net increase (decrease) in net assets from operations” on our consolidated statements of operations. The net increase (decrease) in net assets from operations for the three months ended September 30, 2026 and 2025 was $944,398 and ($2,231,194), respectively.

Previous wording

Comparison of the six months ended June 30, 2026 to the six months ended June 30, 2025:

Current wording

Comparison of the nine months ended September 30, 2026 to the nine months ended September 30, 2025:

Previous wording

The total investment income during the six months ended June 30, 2026 was received from 18 portfolio companies. For the six months ended June 30, 2025, total investment income was received from 17 portfolio companies.

Current wording

The total investment income during both the nine months ended September 30, 2026 and 2025 was received from 18 portfolio companies.

Previous wording

Interest from portfolio companies – Interest from portfolio companies was approximately 26% lower during the six months ended June 30, 2026 versus the same period in 2025 due to several interest-yielding investments being placed on non-accrual status during the last year. Debt instruments in Autotality, FSS, ITA, MRES, and Swanson were placed on non-accrual status.

Current wording

Interest from portfolio companies – Interest from portfolio companies was approximately 22% lower during the nine months ended September 30, 2026 versus the same period in 2025 due to several interest-yielding investments being placed on non-accrual status during the last year. Debt instruments in Autotality, FSS, ITA, and MRES have all been placed on non-accrual status.

Previous wording

We hold debt securities in our investment portfolio that contain payment-in-kind (“PIK”) interest provisions. PIK interest, computed at the contractual rate specified in each debt agreement, is added to the principal balance of the debt and is recorded as interest income. Thus, the actual collection of this interest may be deferred until the time of debt principal repayment. Interest can also be shifted from current cash payment to PIK as part of a loan modification. For the six months ended June 30, 2026 and 2025, 13.7% and 33.9%, respectively, of our total investment income was attributable to non-cash PIK interest income.

Current wording

We hold debt securities in our investment portfolio that contain payment-in-kind (“PIK”) interest provisions. PIK interest, computed at the contractual rate specified in each debt agreement, is added to the principal balance of the debt and is recorded as interest income. Thus, the actual collection of this interest may be deferred until the time of debt principal repayment. Interest can also be shifted from current cash payment to PIK as part of a loan modification. For the nine months ended September 30, 2026 and 2025, 11.6% and 35.5%, respectively, of our total investment income was attributable to non-cash PIK interest income. This decrease is primarily due to debt instruments in Autotality, FSS, ITA, and MRES being placed on non-accrual status.

Previous wording

Interest from other investments - The decrease in interest from other investments is primarily due to lower average cash balances during the six months ended June 30, 2026 versus the same period in 2025.

Current wording

Interest from other investments - The decrease in interest from other investments is primarily due to lower average cash balances during the nine months ended September 30, 2026 versus the same period in 2025.

Previous wording

Dividend and other investment income - Dividend income is comprised of cash distributions from limited liability companies (LLCs) and corporations in which we have invested. Our investment agreements with certain LLCs require those LLCs to distribute funds to us for payment of income taxes on our allocable share of the LLC’s profits. These portfolio companies may also elect to make additional discretionary distributions and dividends. Dividend income will fluctuate based upon the profitability of these LLCs and corporations and the timing of the distributions. During the six months ended June 30, 2026, we recognized $141,206 in dividend income from EFINEA and $11,307 in dividend income from Carolina Skiff. During the six months ended June 30, 2025, we recognized $13,125 in dividend income from Tilson.

Current wording

Dividend and other investment income - Dividend income is comprised of cash distributions from limited liability companies (LLCs) and corporations in which we have invested. Our investment agreements with certain LLCs require those LLCs to distribute funds to us for payment of income taxes on our allocable share of the LLC’s profits. These portfolio companies may also elect to make additional discretionary distributions and dividends. Dividend income will fluctuate based upon the profitability of these LLCs and corporations and the timing of the distributions. During the nine months ended September 30, 2026, we recognized $169,447 in dividend income from EFINEA and $11,307 in dividend income from Carolina Skiff LLC (Carolina Skiff). During the nine months ended September 30, 2025, we recognized $13,125 in dividend income from Tilson.

Previous wording

The income associated with the amortization of financing fees was $106,441 and $138,956 for the six months ended June 30, 2026 and 2025, respectively. During the six months ended June 30, 2026, we recognized a loan modification fee of $5,000 from our debt investment in GoNoodle. During the six months ended June 30, 2025, we recognized a prepayment fee of $167,187 from our debt investment in Mattison Avenue Holdings LLC (Mattison), a loan monitoring fee of $20,000 from our debt investment in Pressure Pro, Inc. (Pressure Pro), a prepayment fee of $17,266 from our debt investment in Pressure Pro, and a loan modification fee of $15,000 from our investment in MRES.

Current wording

During the nine months ended September 30, 2025, we recognized a prepayment fee of $167,187 from our investment in Mattison Avenue Holdings LLC (Mattison), a loan monitoring fee of $20,000 from our investment in Pressure Pro, Inc. (Pressure Pro), a prepayment fee of $17,266 from our investment in Pressure Pro, a loan modification fee of $15,000 from our investment in MRES, and a loan monitoring fee of $11,589 from our investment in First Coast Mulch.

Previous wording

The increase in total expenses during the six months ended June 30, 2026 versus the same period in 2025 was primarily due to a $1,565,000 increase in the capital gains incentive fee expense. The increase was partially offset by a $119,673 decrease in the income based incentive fee expense and a $75,009 decrease in base management fee expense.

Current wording

The increase in total expenses during the nine months ended September 30, 2026 versus the same period in 2025 was primarily due to a $1,565,000 capital gains incentive fee benefit that did not repeat during the current year period as explained in greater detail in the paragraph below, a $127,931 increase in interest expense, and a $104,077 increase in professional fees. The increase was partially offset by a $188,478 decrease in the income based incentive fee expense.

Previous wording

The capital gains incentive fee expense during the six months ended June 30, 2026 is due to the calculation of the capital gains fee as required by GAAP. We are required under GAAP to accrue capital gains incentive fees on the basis of net realized capital gains and losses and net unrealized gains and losses. Our capital gains incentive fee accrual reflects the capital gains incentive fees that would be payable to RCM if our entire investment portfolio was liquidated at its fair value as of the balance sheet date, even though RCM is not entitled to this capital gains incentive fee under the Investment Management Agreement with respect to unrealized gains unless and until such gains are realized. At June 30, 2026, no fee would be due based on net portfolio depreciation, and accordingly no capital gains incentive fee expense was recognized during the six months ended June 30, 2026. For the six months ended June 30, 2025, the capital gains incentive fee benefit was ($1,565,000), which represented a reversal of a previously accrued capital gains incentive fee based on the calculation as required by GAAP.

Current wording

Based on the calculation of the capital gains fee as required by GAAP, there was no capital gains incentive fee expense during the nine months ended September 30, 2026. We are required under GAAP to accrue capital gains incentive fees on the basis of net realized capital gains and losses and net unrealized gains and losses. Our capital gains incentive fee accrual reflects the capital gains incentive fees that would be payable to RCM if our entire investment portfolio was liquidated at its fair value as of the balance sheet date, even though RCM is not entitled to this capital gains incentive fee under the Investment Management Agreement with respect to unrealized gains unless and until such gains are realized. At September 30, 2026, no fee would be due based on net portfolio depreciation, and accordingly no capital gains incentive fee expense was recognized during the nine months ended September 30, 2026. For the nine months ended September 30, 2025, the capital gains incentive fee benefit was ($1,565,000), which represented a reversal of a previously accrued capital gains incentive fee based on the calculation as required by GAAP.

Previous wording

The income based incentive fee is calculated quarterly in accordance with the Investment Management Agreement. There was no income based incentive fee accrual during the six months ended June 30, 2026. The income based incentive fee accrued during the six months ended June 30, 2025 was $119,673, and was a result of Pre-Incentive Fee Net Investment Income being above the applicable hurdle rate during the applicable quarter, as set forth and described in the Investment Management Agreement. “Pre-Incentive Fee Net Investment Income” means interest income, dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that we receive from portfolio companies) accrued during such calendar quarter, minus our operating expenses for such calendar quarter (including the Base Management Fee, expenses payable under the Administration Agreement, and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding any portion of the Incentive Fee). Pre-Incentive Fee Net Investment Income includes any accretion of original issue discount, market discount, payment-in-kind interest, payment-in-kind dividends or other types of deferred or accrued income, including in connection with zero coupon securities, that we have recognized in accordance with GAAP, but have not yet received in cash (collectively, “Accrued Unpaid Income”). Pre-Incentive Fee Net

Current wording

The income based incentive fee is calculated quarterly in accordance with the Investment Management Agreement. There was a ($2,300) income based incentive fee benefit during the nine months ended September 30, 2026, which represented a reversal of a previously accrued income based incentive fee associated with our investment in Swanson. During the three months ended September 30, 2026, we recognized a realized loss on our investment in Swanson. The income based incentive fee accrued during the nine months ended September 30, 2025 was $186,178, and was a result of Pre-Incentive Fee Net Investment Income being above the applicable hurdle rate during the applicable quarter, as set forth and described in the Investment Management Agreement. See Note 8—Related Party Transactions to the Consolidated Financial Statements in Item 1, Financial Statements, of this Form 10-Q for additional information regarding the Income Based Fee.

Previous wording

The excess of investment income over total expenses, including income taxes, represents net investment income. The net investment income for the six months ended June 30, 2026 and 2025 was $1,254,688 and $3,696,349, respectively.

Current wording

The excess of investment income over total expenses, including income taxes, represents net investment income. The net investment income for the nine months ended September 30, 2026 and 2025 was $1,923,629 and $4,688,928, respectively.

Previous wording

During the six months ended June 30, 2026, we sold our equity and warrant investments in Seybert’s and recognized a realized gain of $1,072,459. In addition, during the six months ended June 30, 2026, we recognized a realized gain of $958,948 from the sale of our warrant investment in Applied Image. We also recognized a realized gain of $3,112 from additional proceeds received from the sale of our preferred equity investment in Carolina Skiff.

Current wording

During the nine months ended September 30, 2026, we sold our equity and warrant investments in Seybert’s and recognized a realized gain of $1,072,459. In addition, during the nine months ended September 30, 2026, we recognized a realized gain of $958,948 from the sale of our warrant investment in Applied Image. We also recognized a realized gain of $3,112 from additional proceeds received from the sale of our preferred equity investment in Carolina Skiff.

Previous wording

The valuation of our investment in Tilson was reduced to zero after it filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court, District of Delaware.

Current wording

During the nine months ended September 30, 2025, we recognized a net realized loss of ($2,850,015) on the liquidation of our investment in Tilson. Tilson filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court, District of Delaware, and subsequently sold all of its assets.

Previous wording

During the six months ended June 30, 2025, we sold our warrant investment in Pressure Pro and recognized a realized gain of $870,000. In addition, during the six months ended June 30, 2025, we recognized a gain of $55,357 from additional proceeds received from Microcision LLC (Microcision), an investment we exited in 2022. We also recognized a realized loss of ($25) on GoNoodle when the Series C warrant expired without exercise.

Current wording

During the nine months ended September 30, 2025, we sold our warrant investment in Pressure Pro and recognized a realized gain of $870,000. In addition, during the nine months ended September 30, 2025, we recognized a gain of $55,357 from additional proceeds received from Microcision LLC (Microcision), an investment we exited in 2022. We also recognized a net realized loss of

Previous wording

In accordance with the Corporation’s valuation policy, we increased the value of our investments in Verta, All About People, EFINEA, Open Exchange, Bauer, 4 Seasons, and Caitec after a financial analysis of each of the portfolio companies indicating continued improved performance.

Current wording

In accordance with the Corporation’s valuation policy, we increased the value of our investments in Verta, Bauer, Open Exchange, EFINEA, All About People, 4 Seasons, and Caitec after a financial analysis of each of the portfolio companies indicating continued improvement in performance.

Previous wording

During the six months ended June 30, 2026, the valuation of our investments in MRES and Autotality were decreased after a review of their operations and financial condition. The valuation of our investment in Swanson decreased as the company has ceased operations.

Current wording

During the nine months ended September 30, 2026, the valuation of our investments in OnCore, ITA, MRES, and Autotality were decreased after a review of their operations and financial condition.

Previous wording

We sold our warrant investment in Pressure Pro during the six months ended June 30, 2025.

Current wording

We exited our investments Tilson and Pressure Pro during the nine months ended September 30, 2025.

Previous wording

In accordance with the Corporation’s valuation policy, we increased the value of our investments in EFINEA, First Coast Mulch, Mobile IV Nurses, and Seybert’s after a financial analysis of each of the portfolio companies indicating continued improved performance.

Current wording

In accordance with the Corporation’s valuation policy, we increased the value of our investments in EFINEA, First Coast Mulch, Mobile IV Nurses, and Seybert’s after a financial analysis of each of the portfolio companies indicating continued improvement in performance.

Previous wording

During the six months ended June 30, 2025, the valuation of our investments in Carolina Skiff, FSS, ITA, Lumious, and MRES were decreased after a review of their operations and financial condition.

Current wording

During the nine months ended September 30, 2025, the valuation of our investments in Carolina Skiff, FSS, ITA, and MRES were decreased after a review of their operations and financial condition.

Previous wording

We account for our operations under GAAP for investment companies. The principal measure of our financial performance is “Net increase (decrease) in net assets from operations” on our consolidated statements of operations. The net increase (decrease) in net assets from operations for the six months ended June 30, 2026 and 2025 was $998,809 and ($6,894,707), respectively.

Current wording

We account for our operations under GAAP for investment companies. The principal measure of our financial performance is “Net increase (decrease) in net assets from operations” on our consolidated statements of operations. The net increase (decrease) in net assets from operations for the nine months ended September 30, 2026 and 2025 was $1,943,207 and ($9,125,901), respectively.

Previous wording

Liquidity is a measure of our ability to meet anticipated cash requirements, fund new and follow-on portfolio investments, pay distributions to our shareholders and respond to other general business demands. As of June 30, 2026, our total liquidity consisted of approximately $430,000 in cash and approximately $12,400,000 of unused availability on our Credit Facility.

Current wording

Liquidity is a measure of our ability to meet anticipated cash requirements, fund new and follow-on portfolio investments, pay distributions to our shareholders and respond to other general business demands. As of September 30, 2026, our total liquidity consisted of approximately $223,000 in cash and approximately $12,400,000 of unused availability on our Credit Facility.

Previous wording

During 2022, we entered into a $25 million Credit Facility. The amount we can borrow, at any given time, under the Credit Facility is tied to a borrowing base, which is measured as (i) 75% of the aggregate sum of the fair market values of the publicly traded equity securities we hold (other than shares of ACV Auctions, if any) plus (ii) the least of (a) 75% of the fair market value of the shares of ACV Auctions we hold, if any, (b) $6.25 million and (c) 25% of the aggregate borrowing base availability for the Credit Facility at any date of determination plus (iii) 50% of the aggregate sum of the fair market values of eligible private loans we hold that meet specified criteria plus (iv) the lesser of (a) 50% of the aggregate sum of the fair market values of unsecured private loans we hold that meet specified criteria and (b) $1.25 million minus (v) such reserves as the Lender may establish from time to time in its sole discretion. The Credit Facility has a maturity date of June 27, 2027. The outstanding balance drawn on the Credit Facility at June 30, 2026 was $5,100,000. Under the borrowing base formula described above, the unused line of credit balance for the Credit Facility was approximately $12,400,000 at June 30, 2026.

Current wording

During 2022, we entered into a $25 million Credit Facility. The amount we can borrow, at any given time, under the Credit Facility is tied to a borrowing base, which is measured as (i) 75% of the aggregate sum of the fair market values of the publicly traded equity securities we hold (other than shares of ACV Auctions, if any) plus (ii) the least of (a) 75% of the fair market value of the shares of ACV Auctions we hold, if any, (b) $6.25 million and (c) 25% of the aggregate borrowing base availability for the Credit Facility at any date of determination plus (iii) 50% of the aggregate sum of the fair market values of eligible private loans we hold that meet specified criteria plus (iv) the lesser of (a) 50% of the aggregate sum of the fair market values of unsecured private loans we hold that meet specified criteria and (b) $1.25 million minus (v) such reserves as the Lender may establish from time to time in its sole discretion. The Credit Facility has a maturity date of June 27, 2027. The outstanding balance drawn on the Credit Facility at September 30, 2026 was $5,000,000. Under the borrowing base formula described above, the unused line of credit balance for the Credit Facility was approximately $12,400,000 at September 30, 2026.