Greetings ladies and gentlemen and welcome to the Rand Capital’s Second Quarter 2020 Earnings Conference Call. [Operator Instructions] It is now my pleasure to introduce your host, Deb Pawlowski of Investor Relations. Thank you. You may begin.

Thank you, Jan, and good morning, everyone. We appreciate your interest in Rand Capital and taking the time to join us this morning. On the line with me today are Pete Grum, our Chief Executive Officer; and Dan Penberthy, our Executive Vice President and Chief Financial Officer. You should have a copy of the release across the wire this morning as well as the slide that will accompany our conversation today. If not, they are available on our website at www.randcapital.com. Please note that in our discussions today, all per share values in release and slides will reflect the 1 for 9 reverse split that was effective on May 21 this year. If you would turn to Slide 2 on the slide deck, I will like to point out some important information. As you are likely aware, we may make some forward-looking statements during this presentation and during the question-and-answer session. 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 some of these risks and uncertainties and other factors and the earnings release as well as in other documents filed by the Company with Securities and Exchange Commission. These documents can be found on our website or at sec.gov. So if you turn to Slide 3, I’ll hand the discussion over to Pete. Pete?

Good morning, everyone, and thank you for your time today. I sincerely wish that I could say that the COVID-19 pandemic was behind us all. But it looks like that will not be the case for some time. I hope that you and your families are healthy and safe. At Rand, we continue to work remotely and alternate everyone's presence in the office. Even while we operated in the COVID-19, altered working environment we were able to leverage the success of our transformation strategy to deliver solid financial performance. In fact, total investment income increased almost 16% over last year. The effectiveness of the externalization of the administration and management of our portfolio to Rand Capital Management, LLC or RCM contributed to lowering expenses $80,000 compared with last year’s second quarter. The combination of growth and investment income and lower cost drove net income higher to $199,000 or $0.08 per share compared with a $0.20 per share loss in the second quarter last year. In May, we distributed $23.7 million as a special dividend consistent with the intent to like Regulated Investment Company or RIC status with the IRS. As you know the dividend was paid in both cash and shares of stock. The $4.8 million cash portion of the dividend payment was the primary reason of our net asset value was down, a little more than $4 million to $49.7 million at the end of the quarter. The approximately 960,000 additional shares issued as part of the dividend impacted the per share value of NAV. NAV was $19.21 per share compared with $33.2 per share at the end of March 2020. Dan in his presentation will provide a more detailed analysis of the change in NAV per share. Also during May, we executed the 1 for 9 reverse stock…

Thanks, Pete. And good morning, everyone. If you could please turn to Slide 8, you can see that the total investment income in the second quarter of 2020 was $675,000, which is up 16% from last year’s second quarter. This was largely due to an 81% or $255,000 increase in interest income that was a result of the change in our portfolio profile to more debt investments. As Pete mentioned, the externalization of the administration and management of the Rand portfolio contributed to $80,000 in savings. But last year’s second quarter was also heavily impacted with higher professional fees in stockholder costs because of the proxy contest during that period. Second quarter expenses were more than 40% lower than the same period last year. Our strong investment income, and significantly reduced expenses during the quarter, resulted in a net increase in net assets from operations of $424,000 or $0.20 per share. The waterfall graph on Slide 9 visually shows the sequential impact of several items affecting NAV during the second quarter. While we increased net assets from operations by $400,000, this was more than offset by a returning $4.8 million to our shareholders in the form of the cash dividend. Additionally, we repurchased 1,300 shares of stock during the quarter, which also had the impact of NAV. If you turn to Slide 10, you can see our net asset value per share compared with last quarter. As part of a special dividend we paid in the second quarter, we distributed approximately one million shares of Rand stock. This was a 59% increase of shares outstanding, which also impacted NAV on a per share basis by $11.29. These explain the larger decline in the NAV per share. If you would now turn to Slide 11, I will discuss the strong position we remain in during this COVID-19 influenced economy. We continue to have a high level of cash at $22.1 million, of that $10.6 million was available for corporate purposes, providing a significant liquidity for us. And $11.4 million is reserved for investments by the SBIC subsidiary. Our total liquidity also includes $3 million of additional availability of leverage, which is our remaining commitment from the SBA. The $11 million debentures owed to the SBA, mature over a multiyear period that does not begin until 2022. In 2022, we have our first $3 million installment due to the SBA. That completes our prepared remarks. Operator, please open the line for questions.

Thank you. [Operator Instructions] Your first question comes from the line of Sam Rebotsky with SER Management. Please proceed with your question.

Yes. Good morning, Pete and Dan. I'm a little behind because my computer equipment is not working well. But I've heard everything that you've said. And as far as what Rand looks like today. So as far as the dividend, with the $0.08 cents in the covering quarter we would give 90% of the $0.08 assuming that was what the earnings was?

The requirements are that we give a minimum of 90% of our net investment income where we are evaluating that the third quarter, and we'll be able to provide further guidance. But you are correct that’s tax rule.

Okay. Further in addition, you filed the document, which indicated you're looking for more money, this is with the combination with the largest shareholder. What is your progress relative to raising additional funds? And how will this spend benefit the Rand Capital shareholders?

I'm not sure what document you're referring to Sam.

You – as far – I don't have it in front of me, but you speak – well do you have a plan to raise additional funds?

At this point we don't have one. I don’t belie we filed anything regarding that. Deborah are you aware of anything we filed?

No. No, I'm not quite sure what you're talking to Sam.

With the SEC disclosure, when my computer equipment is better working, I'll come back to you on that.

Unless you are talking to – I mean, so we have right now a lot of cash. We have $22 million in cash. We still have $3 million available to draw on the SBA loan. So it's not like we need additional funds at this point. We need to put that money to work.

Okay. I will come back to you after my equipment is better working. At this point with the $22 million what is your plans on investing this money? Are you seeing a lot of opportunities where we earn more than we're currently earning on the $22 million? And what is our time frame for the earnings?

We continue to seek investments, we continue to execute on investments. And the next quarter, I believe, that you will see that we've put some of this money to work. And as we address that's a little bit difficult because part of our due diligence of meeting with the companies, which sometimes is problematic. But now we continue to invest the money and our goal is to increase our investment income through debt instruments. And you'll see more of that as we go forward.

Well, that sounds good. And one part of the question, to get more exposure to potential shareholders, how do you expect to participate? Unfortunately, you have to do it in virtual conferences. Do you have any plans on doing something like that?

We have not signed up for in the near future, but we're certainly going to evaluate that. Part of what we are doing Sam, as you know, we had people that were interested in Rand because of our equity investments. And we are transforming them over to kind of had active conversations, people that are invested and interested in getting a dividend yield.

Well, good luck. Hope you find some new investment because with the stock’s book value 19 plus and with $22 million in cash and the stock currently in the $11 range would appear that with bigger exposure you might be able to trade at a higher level. Okay. Good luck guys.

Thanks Sam. And call me about that filing you had referenced.

Okay. I'll come back to you on that next week.

Thank you. Our next question comes from the line of [indiscernible]. Please proceed with your question.

Yes. Thank you. I was curious if the recent developments with Eastman Kodak would have any beneficial effect on Rand?

Not, that I'm aware of you referring to how that talk spiked up, because of some government contract?

No. The government lent Eastman Kodak $750 million to produce medical ingredients, eventually 25% of the needs of the United States. And I would – I don't know, I thought it would help New York State, Upstate New York. I know you are in Buffalo, but I would think that anything that helps upper New York State would help you. No?

I am not aware of any of our companies that have exposure to Eastman Kodak.

Okay.

And as that money goes deployed it may impact some of our companies.

Okay. Thank you.

[Operator Instructions] There are no further questions at this time. I would like to turn the floor back to management for closing comments,

Thank you for your participation this morning and your interest in Rand Capital. We look forward to [indiscernible].

Thank you ladies and gentlemen. This concludes today’s tele conference you may disconnect your lines at this time.