Also contributing to the decline was the sale of the company’s investment in Dealer Solutions and Design during the second quarter of 2023. Total expenses were approximately $810,000 during the third quarter compared with $499,000 in the prior year third quarter. This increase largely reflects a $264,000 increase in interest expense on borrowings under the senior revolving credit facility entered into in June of 2022 to fund growth. Also contributing to the total expense increase was a $43,000 increase in base management fees, which is calculated on our total assets, less cash. So as we deploy more capital into investments, that fee increases accordingly. Partially offsetting was the change in accrued capital gains incentive fees to the company’s external investment advisor.
The current period did include a credit of $41,000 of capital gains incentive fees compared with an expense of $22,000 for the third quarter of 2022. As a reminder, we are required to accrue capital gain incentive fees on the basis of net realized capital gains and losses and net unrealized capital gains and losses at the close of the period. Excluding the capital gains incentive fees, adjusted expenses, a non-GAAP financial measure, were $851,000 compared with $477,000 in the third quarter of 2022. Third quarter net investment income was $799,000 or $0.31 per share, compared with $1 million or $0.39 per share in last year’s period. On an adjusted basis, which is a non-GAAP financial measure and excludes the capital gains incentive fee accrual expense, net investment income was $0.29 per share compared with $0.40 per share in last year’s period.
Again, this change reflects the expense changes I highlighted largely due to the use of the senior revolving credit facility. I’m going to move on to slide 10, and slide 10 provides a waterfall graph for the change in net asset value for the quarter. Net assets at September 30, 2023, were $61.4 million comparable with the end of the second quarter. Net investment income and the net change in unrealized depreciation offset the net realized loss on sales along with the $645,000 in dividend distributions to shareholders during the quarter. As a result, the net asset value per share at September 30, 2023, was $23.77, compared with $23.79 at June 30, 2023. As highlighted on slide 11, we continue to have a strong balance sheet and significant liquidity that positions us well for future investments.
Cash at quarter end was approximately $3.5 million. We held approximately $7.2 million in the liquid BDC and ACV Auction shares which can provide near term funding capital for investments as we have demonstrated in past periods. In addition, based on our borrowing base formula, Rand had $11.3 million in availability under the senior secured revolving credit facility at September 30, 2023. So in total, our liquidity counting these three sources is approximately $22 million. Our outstanding borrowings of $13.8 million at quarter end carry an interest rate of 8.8%. With that, I will turn the discussion back to Dan.
Dan Penberthy: Thanks, Margaret. We have delivered another quarter of strong performance. Looking forward, we believe we can continue to execute on the strategy and do remain focused on generating strong and consistent returns for our shareholders. The expansion of the portion of our portfolio investment into these debt instruments has proven to be a cornerstone of our success, and we do expect to continue this trajectory of this growth in order to drive our earnings potential and support a growing dividend well into the future. Thank you for joining us today and for your continued interest in Rand Capital. We look forward to updating all of you on our fourth quarter 2023 results which will be reported in March. We hope you have a great day.
Operator: Ladies and gentlemen, this does conclude today’s teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day.
End of Q&A:
