Greetings. Welcome to Rand Capital Corporation Third Quarter Fiscal Year 2025 Financial Results Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to Craig Mychajluk, Investor Relations. Please proceed.

Thank you, and good morning, everyone. We appreciate your interest in Rand Capital and for joining us today for our third quarter 2025 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. 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 website 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 morning. I want to emphasize how we have been navigating a market that continues to present challenges. New deal origination across the BDC landscape does remain sluggish and borrowers are still contending with tighter senior credit conditions and higher financing costs. Thus, we have had to be patient and selective in our deal origination. However, I believe we are seeing some positive turns now in our favor. We've remained somewhat active in the quarter and deployed $2.9 million in new and follow-on investments. We are also seeing, as many peers have noted a greater use of PIK or PIK interest by borrowers as they adapt to today's financing environment. This is something we monitor carefully and will need to reduce over time, but it also reflects the flexibility that our capital can provide and helping companies bridge through tighter credit markets. Most importantly, we finished the quarter with nearly $28 million in liquidity and no debt outstanding under our senior credit facilities. That kind of balance sheet strength is our real differentiator in this environment. It gives us the flexibility to support our dividend, remain patient when deal flow is muted and quickly move when compelling opportunities arise. Even though total investment income declined year-over-year, the steps we have taken to control expenses enabled us to grow net investment income. This quarter really underscored our ability to execute with discipline and maintain a resilience in our dividend for our shareholders. Please now turn to Slide 4. I want to highlight the consistency of that dividend. We declared and paid our regularly quarterly distribution of $0.29 per share, marking the third consecutive quarter at this level. We recognize how important this income stream is for our shareholders, and we are proud that we have been able…

Thanks, Dan, and good morning, everyone. I will start on Slide 10 which provides an overview of our financial summary and operational highlights for the third quarter of 2025. Total investment income was $1.6 million, down from $2.2 million in last year's third quarter. The change reflects both debt repayments and a slowdown in originations, dynamics consistent across the BDC space this year. Of note, 39% of investment income was attributable to noncash PIK interest compared with 24% in the same period last year. Also during the quarter, 15 portfolio companies contributed to investment income versus 21 companies in the prior year period. That said, while income came in lower, we were able to offset that decrease on the expense side. Total expenses decreased to $596,000 from $1.3 million in the prior year period. The improvement was driven by lower incentive fees, reduced interest expense and a decline in base management fees. The result was net investment income of $993,000 which compared favorably with $887,000 in the same quarter last year is a strong example of how expense discipline and conservative balance sheet management can drive earnings resilience even when portfolio activity is muted. It is worth noting that on a per share basis, net investment income for the quarter was down $0.01, which reflected the increase in shares outstanding following the fourth quarter 2024 dividend which was distributed in the first quarter of 2025 and partially paid in common stock. Moving to Slide 11, we can see the quarter's impact on net asset value. At September 30, 2025, our net asset value stood at $53.6 million or $18.06 per share compared with $19.10 per share at the end of the sequential second quarter. This decline was driven primarily by valuation adjustments across the portfolio alongside the dividend we paid in the quarter. While these adjustments are challenging, we believe they reflect a conservative and transparent approach to valuation, one that ensures net asset value fully incorporates the realities of market conditions and company performance. The waterfall chart shows that we generated nearly $1 million of net investment income, which helped partially offset valuation changes. Importantly, the balance sheet remains healthy, liquid and debt-free as noted on Slide 12. We closed the quarter with $9.5 million in cash, and our senior secured credit facility provides up to $25 million in borrowing capacity with $18.3 million available at quarter end. This liquidity gives us significant flexibility to respond quickly when market conditions improve and quality opportunities arise. Turning to the dividend, we declared and paid a regular quarterly distribution of $0.29 per share. This continues the consistent run of dividends throughout 2025, maintaining that payout through a period of repayments and lower originations speaks to both the strength of our portfolio and the discipline with which we are managing expenses. We will announce our fourth quarter dividend in early December. With that, I will turn the discussion back over to Dan.

Thanks, Margaret. Moving to Slide 13. Looking ahead, I want to bring together the themes you have heard throughout today's presentation. We are navigating a cautious market, but we are doing so from a position of strength. We have a portfolio of income-generating assets, a balance sheet with no debt and nearly $28 million in liquidity and an ability, we believe, which can preserve the dividend even in these interim periods, which are slower investment cycles. These are not small achievement given the current lending environment, which is challenging. What stands out to me is our ability to remain both disciplined and flexible. Disciplined in terms of sticking to our underwriting standards, carefully managing expenses, and protecting shareholder value. Flexibility in having the liquidity in capital resources and staffing to move quickly when the right opportunities surface, and they will. We are beginning to see early signs that anticipated interest rate reductions could also help stimulate deal origination in the quarters ahead. If that momentum builds, Rand is well positioned to deploy capital into yield-focused debt investments that can support earnings growth, NAV stability and ongoing dividend coverage. So while Q3 reflected some headwinds, repayments from our portfolio, valuation adjustments and muted origination, we believe these are transitional dynamics. Our job is to keep brand positioned to capitalize when this market turns. We are confident in our ability to continue creating long-term value for our shareholders. Thank you for being a shareholder, and we look forward to updating you on our progress in the fourth quarter. Have a great day.

Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.