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Rand Capital Corp. said Monday the value of its portfolio fell by 6 percent during the third quarter as the Buffalo venture capital firm was stung by write-downs at four of its investments.

"It was kind of a disappointing quarter," said Allen F. "Pete" Grum, Rand's president. "We thought we were ready to begin showing our growth" following a tiny increase in the value of its portfolio during the second quarter.

Rand said the value of its net assets slid to $8.11 million, or $1.42 per share, at the end of September, compared with $8.63 million, or $1.51 per share, at the end of June. Rand's net asset value has declined during seven of the last eight quarters.

But Grum said he and other Rand executives are optimistic that the company soon will begin reaping benefits from its cost-cutting efforts and its new strategy, which restructured its portfolio to include fewer stocks and more investments that provide some sort of current return.

Rand still has slightly more than half of its pre-tax assets in cash, which gives the venture capital firm a $3.7 million fund that it can use to make new investments. "We've got a lot of cash. We're looking for a lot of deals," Grum said.

Rand's third-quarter results were hurt by write-downs in the value of four of the company's investments. Rand cut the value of the convertible preferred stock it owns in Coral Systems Inc., a Colorado firm that develops fraud prevention software for the wireless industry, by more than half to $200,000 from $422,222. Coral Systems agreed last month to be acquired by Lightbridge Inc. of Burlington, Mass., for $19.9 million.

Rand also cut the value of its investment in American Tactile Corp., a Medina company that develops equipment and systems used to make signs for the visually-impaired, to $50,000 from $150,000. Rand cut the value of its investment in Commercial Maintenance Organization Inc., a Florida firm that provides maintenance services to retailers, restaurants and vendors, to $20,000 from $100,000. It also lowered the value of its stake in Reflection Technology Inc., a Massachusetts firm that develops virtual display technology, to $150,000 from $500,000.

Partly offsetting those write-downs was an increase in the value of its Comptek Research Inc. common stock to $418,379 from $375,556.

Rand also made three new investments, including a $430,000 working capital loan to BioVector Inc., an Orchard Park medical technology sales firm, and a $50,000 investment in the stock of BioVector's affiliated company, Fertility Acoustics Inc., which is developing ways to determine a woman's period of peak fertility through the use of certain sounds.

After the quarter ended, Rand also invested $100,000 in Pathlight Technology, an Ithaca firm that has developed a data storage system that allows films to be edited by several people at a time.

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