PRINCETON CAPITAL CORP Annual Report - How They Did This Year

I’ve put together this guide to help you understand Princeton Capital Corp’s performance. My goal is to cut through the corporate jargon so you can decide if this company belongs in your portfolio.

1. What does this company do?

Princeton Capital is a business development company that historically provided loans to small and mid-sized private businesses.

The company is currently in "run-off" mode. Since 2019, they have ceased new lending activities. They are operating as a holding company focused on liquidating remaining assets to return cash to shareholders. They are no longer growing; they are simply managing a shrinking list of legacy loans.

2. Financial performance

As of mid-2025, the stock traded at approximately $0.066 per share, with a total market capitalization of roughly $330,000.

The net asset value continues to decline because operating expenses currently exceed the income generated by the remaining loan portfolio. Furthermore, the company no longer qualifies for "Regulated Investment Company" tax status and is now taxed as a standard corporation. This tax structure is expected to remain in place until the company completes its liquidation process.

3. Operational challenges

The company is currently navigating a difficult period. They have been seeking a buyer or merger partner for over six years. During this time, they must continue to pay for essential administrative costs, including audit fees, legal bills, insurance, and SEC filing requirements. Because these fixed costs are high relative to the remaining assets, the company is effectively losing money by remaining public.

4. The "Advisor" relationship

Princeton Capital operates without direct employees, relying instead on House Hanover, an investment advisor owned by the company’s Interim CEO, Mark DiSalvo.

• Management Fees: The company pays House Hanover an annual management fee equal to 1% of total assets.
• Expense Reimbursements: The company also reimburses House Hanover for operational costs, including investment monitoring and officer salaries. Recent administrative expenses have ranged between $250,000 and $300,000 annually, which currently exceeds the interest income generated by the remaining loan portfolio.

5. Key risks

The primary risk is the company’s ongoing viability. The business is consuming its remaining cash to cover mandatory administrative and regulatory expenses. If a buyer is not found, there is a significant risk that these fixed costs will deplete the remaining assets, leaving little to no value for shareholders.

6. Future outlook

The company’s future depends entirely on the successful sale or liquidation of its remaining assets. There is no strategy for growth or business expansion. The board continues to seek a buyer, but the lack of a successful transaction over the past six years highlights the difficulty of finding a path forward that preserves value for shareholders.

Bottom Line for Investors: Princeton Capital is a "shell" company in a long-term liquidation process. Given that administrative costs are currently outpacing the income from their remaining assets, this is a high-risk situation where the primary concern is whether any value will remain for shareholders by the time a final exit is achieved.