Greetings, and welcome to Rand Capital Corporation Fourth Quarter Fiscal Year 2024 Financial Results. At this time, all participants are in a listen only mode [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce Craig Mychajluk, Investor Relations for Rand Capital. Thank you. You may begin.

Thank you. And good afternoon, everyone. We appreciate your interest in Rand Capital and for joining us today for our fourth quarter and full year 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 with the slide deck, please turn to Slide 2, where I'd like to point out some important information. As you are likely aware, we may make 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 Web site or at sec.gov. 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 measures in the tables that accompany today's earnings release. With that, please turn to Slide 3 and I'll hand the discussion over to Dan. Dan?

Thank you, Craig. And good afternoon, everyone. This past year was marked by significant progress in our strategy. We delivered strong results, enhanced our portfolio composition, strengthened our balance sheet and increased returns to shareholders. I believe that our disciplined execution and strategic capital deployment have both positioned Rand for sustained long term growth. I want to take a moment to recognize and thank our team for their hard work and dedication in executing our strategy and helping to deliver these strong results. In the fourth quarter, total investment income rose 11% to $2.1 million, bringing full year investment income to $8.6 million, an increase of 17% from the prior year. This growth was driven by our focus on expanding our debt investment portfolio, which not only enhanced income but also improved earnings stability and predictability. Although, we will always have some portfolio risk of churn or rather that is unexpected or early repayments. Our net asset value per share increased 7% year-over-year reaching $25.31 at year end. These results reflect our commitment to our investment strategy and careful management of a $71 million portfolio. A key component of this strategy has been the ongoing shift over the past few years towards a more income generating portfolio. Debt investments now comprise 75% of our portfolio, up from 64% in 2023, contributing to improved yields and a more consistent earnings profile. We also strategically monetize select equity investments, including the sale of SciAps. We've exited our remaining publicly traded securities and received some loan repayments. These have generated approximately $27 million in cash proceeds. A portion of these funds were redeployed into approximately $14 million of income generating assets. We also took deliberate steps to fortify our financial position by reducing outstanding bank debt by $15.7 million during the year. As…

Thanks, Dan. And good afternoon, everyone. I will start on Slide 10 and 11, which provide an overview of our financial summary and operational highlights for the 2024 fourth quarter and full year period. Total investment income for the quarter was $2.1 million, up 11% over last year's fourth quarter, driven by an 18% increase in interest income. For the full year, total investment income grew 17% or $8.6 million when compared to 2023, which reflects five new debt investments that we originated over the last year. Additionally, we experienced higher fee income, which is due in part to the collection of certain fees from our SciAps exit. Overall, the number of portfolio companies contributing to investment income was $25 million during 2024 compared with 26 companies during 2023. Total expenses were a credit of $376,000 compared with an expense of $1 million in last year's fourth quarter. The change was primarily due to a decrease in capital gains incentive fee expense as the recent period included a credit of $1.1 million in capital gains incentive fees compared with an expense of $64,000 for the fourth quarter of 2023. Adjusted expenses, which exclude capital gains incentive fees and is a non-GAAP financial measure were $678,000 in the fourth quarter of 2024 compared with $950,000 in the fourth quarter of 2023. The lower quarterly expense level reflected reduced interest expense of $276,000 given lower debt levels throughout 2024 compared with 2023. Full year total expenses were $4.8 million compared with $4.2 million in 2023. The change largely reflects an increase in incentive fee expense. Incentive fees are comprised of two components, an income based fee and a capital gain fee, both of which are contingent on meeting specified benchmarks. The income based fee is calculated quarterly based on a pre-incentive fee…

Thanks, Margaret. Moving on to Slide 14 please. As we conclude today's discussion, I want to take a moment to reflect on what has been a year of significant achievement and strategic progress for Rand Capital. Throughout 2024, we strengthened our financial foundation by monetizing select equity investments, reducing outstanding bank debt and improving overall liquidity. These actions not only reinforce our ability to navigate evolving market conditions but also position us to capitalize on new high quality investment opportunities that align with our long term objectives. Looking ahead, we remain focused on executing this strategy to drive long term shareholder value. Our investment thesis remains grounded in disciplined capital deployment, proactive risk management and a clear commitment to income expansion. The lower middle market continues to offer compelling opportunities, including family owned businesses undergoing generational transitions. Many of these companies face succession challenges and our ability to provide flexible customized financing solutions alongside with equity sponsors positions us as a strong and reliable investment partner. Rand's strategic investment, our sweet spot rather, typically is deploying $3.5 million to $4 million in transactions, which generally are in the $15 million to $20 million total transaction size. This does set us apart in this market. We believe this focus on small leverage buyouts and private debt investments gives us a competitive edge as traditional banks rather pull back from lending in this space. Additionally, by leveraging syndication and co-investment strategies, we can mitigate risk while optimizing Rand's returns. From a financial standpoint, our outlook remains positive and strong. With our existing credit facility and a disciplined approach to capital allocation, we are well positioned to sustain our investment pace while maintaining flexibility to take advantage of new opportunities. Recent reductions in interest rates have already lowered our borrowing costs, which enhances…

Thank you. This will conclude today's conference. You may disconnect your lines at this time. And thank you for your participation. End of Q&A: