UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
SCHEDULE
14A
(RULE
14a-101)
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
Filed
by the Registrant
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[X]
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Filed
by a Party other than the Registrant
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[ ]
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Check
the appropriate box:
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive
Proxy Statement
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[X]
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Definitive
Additional Materials
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Soliciting
Material Pursuant to §240.14a-12
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RAND
CAPITAL CORPORATION
(Name
of Registrant as Specified In Its Charter)
N/A
(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
[X]
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No
fee required.
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[ ]
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title
of each class of securities to which transaction applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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Per
unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4)
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Proposed
maximum aggregate value of transaction:
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(5)
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Total
fee paid:
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Fee
paid previously with preliminary materials.
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Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date
of its filing.
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(1)
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Amount
Previously Paid:
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(2)
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Form,
Schedule or Registration Statement No.:
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(3)
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Filing
Party:
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(4)
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Date
Filed:
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Rand
Capital Corporation issued the following press release on April 18, 2019:
FOR
IMMEDIATE RELEASE
Rand
Capital Files Definitive Proxy Statement and
Responds
to Public Letter from Shareholder
Board
of Directors unanimously recommends shareholders support
the
transformational transactions related to
East
Asset Management’s $25 million investment
BUFFALO,
New York, April 18, 2019 –
Rand Capital Corporation
(NASDAQ: RAND) (“Rand” or “Rand Capital”),
a business development company, today filed its definitive proxy statement with the Securities and Exchange Commission and recommends
to its shareholders to vote “FOR” all five proposals set forth in the proxy statement. Rand also announced today that
its special meeting of shareholders to seek approval of the five proposals set forth in the proxy statement will be held on May
16, 2019.
Rand
shareholders who have questions about the definitive proxy statement or voting their shares should contact Alliance Advisors,
LLC, which is assisting Rand with the solicitation of proxies, toll-free at 1-844-853-0931.
In
addition, the Board of Directors published this letter:
April
18, 2019
Mr.
Bruce Howard
Chief
Executive Officer
User–Friendly
Phone Book, LLC
10200
Grogans Mill Road, Suite 440
The
Woodlands, TX 77380-1134
Re:
Rand Capital Corporation’s Proposed Transactions
Dear
Mr. Howard:
The
Board of Directors of Rand has diligently evaluated the transactions we are proposing to shareholders, including the $25 million
investment by East Asset Management (“East”). We have carefully reviewed your comments and, while we very much appreciate
the input of shareholders, we strongly disagree with your conclusions. We believe the transaction is in the best interest of all
shareholders and enables a future that we expect will be demonstrably better than if we were to maintain the status quo.
Rand’s
management and our financial advisor had several meetings and calls with you or your representatives over the last eight months.
During that period, you or your representatives have been unable or unwilling to suggest alternatives to the East transaction
that would create more value for our shareholders. By default, you are suggesting to maintain the status quo.
Rand
Capital Files Definitive Proxy Statement and Responds to Public Letter from Shareholder
April
18, 2019
Page
2 of 3
You
are incorrect in your understanding regarding the termination fee. It only applies in the event of a superior proposal, not in
the event of a failed shareholders’ vote. Additionally, a more thorough review of the proxy statement provides understanding
on the process regarding the fair value of the contributed assets.
The
transactions are transformational for Rand, expected to create both near- and long-term value for shareholders, and best position
Rand for future growth.
We
believe shareholders benefit from the following:
●
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Market
Value Appreciation:
The $3.00 per share purchase price by East was a 33% premium to the market price on the day prior
to the announcement of the transaction.
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●
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Initial
Cash and Stock Dividend:
The planned Special Dividend of $1.50 per share and the ability to receive a portion of the dividend
in cash.
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●
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Total
Return Potential:
The opportunity to receive an ongoing dividend consistent with the election of regulated investment
company (“RIC”) filing status with the IRS.
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More
Efficient Financial Platform:
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○
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Elimination
of corporate-level income tax as a RIC.
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○
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Expected
reduction in operating expense ratio by externalizing management.
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○
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More
income producing investments with the contributed assets.
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●
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Expected
Improved Capital Markets Position
: The $25 million investment provides greater scale.
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We
are committed to the future potential of Rand. As a demonstration of our belief, Rand’s board and management, as well as
East, intend to take the proposed Special Dividend in stock. We believe this is a strong indication of our confidence in the future
of Rand and has the effect of increasing the amount of cash available to all other shareholders. We welcome ongoing conversation
with our shareholders and reiterate our support for the transactions.
Sincerely,
/s/
Erland E. Kailbourne
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/s/
Allen F. Grum
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Chairman
of the Board
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President
and Chief Executive Officer
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About
Rand Capital
Rand
Capital (Nasdaq: RAND) is a Business Development Company (BDC) with a wholly-owned subsidiary licensed by the U.S. Small Business
Administration (SBA) as a Small Business Investment Company (SBIC). Rand currently focuses its equity investments in early or
expansion stage companies and generally lends to more mature companies. The Company seeks investment opportunities in businesses
with strong leaders who are bringing to market new or unique products, technologies or services that have a high potential for
growth. Additional information can be found at the Company’s website where it regularly posts information:
http://www.randcapital.com
/.
About
East Asset Management
East
Asset Management (EAM), formed in 2010, is dedicated to investing in private & public market securities and has formed multiple
investment vehicles that provide capital to a variety of industries including energy, media, real estate, hospitality, sports
and entertainment. EAM has developed a unique and proprietary network for sourcing investment opportunities, including opportunities
in the private credit/current yield space, leveraging both its in-house and affiliated investment talent and capabilities. EAM
is an entity owned by Terry and Kim Pegula, owners of Pegula Sports & Entertainment: the management company streamlining key
business areas across all Pegula family-owned sports and entertainment properties including the Buffalo Bills, Buffalo Sabres,
Buffalo Bandits, Rochester Americans, Harborcenter, Black River Entertainment, ADPRO Sports, PicSix Creative agency and numerous
hospitality properties.
Rand
Capital Files Definitive Proxy Statement and Responds to Public Letter from Shareholder
April
18, 2019
Page
3 of 3
Cautionary
Statement Regarding Forward-Looking Statements
This
press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than historical facts, including
but not limited to statements regarding the expected timing of the closing of the proposed transactions; the ability of the parties
to complete the proposed transactions considering the various closing conditions, including receipt of necessary shareholder approvals
and approval from the U.S. Small Business Administration (“SBA”); the intention of Rand Capital and Rand Capital SBIC,
Inc. (“Rand SBIC”) to elect to be taxed as a regulated investment companies for U.S. federal tax purposes; the intention
to declare and pay a special cash and stock dividend after the closing of the proposed transactions; the intention to pay a regular
cash dividend after the completion of the proposed transactions; the expected benefits of the proposed transactions such as a
lower expense-to-asset ratio for Rand Capital, increased net investment income, availability of additional resources, expanded
access to and sourcing platform for new investments and streamlining of operations under the external management structure; the
business strategy of originating additional income producing investments; the competitive ability and position of Rand Capital
following completion of the proposed transactions; and any assumptions underlying any of the foregoing, are forward-looking statements.
Forward-looking statements concern future circumstances and results and other statements that are not historical facts and are
sometimes identified by the words “may,” “will,” “should,” “potential,” “intend,”
“expect,” “endeavor,” “seek,” “anticipate,” “estimate,” “overestimate,”
“underestimate,” “believe,” “could,” “project,” “predict,” “continue,”
“target” or other similar words or expressions. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove to be incorrect, actual results may vary materially from those indicated or anticipated by
such forward-looking statements. The inclusion of such statements should not be regarded as a representation that such plans,
estimates or expectations will be achieved. Important factors that could cause actual results to differ materially from such plans,
estimates or expectations include, among others, (1) that one or more closing conditions to the stock purchase may not be satisfied
or waived, on a timely basis or otherwise, including that the SBA may not approve the proposed transactions or that the required
approvals by the shareholders of Rand Capital may not be obtained; (2) the risk that the proposed transactions may not be completed
in the time frame expected by parties, or at all; (3) the risk that Rand Capital and/or Rand SBIC may be unable to fulfill the
conditions required in order to elect to be treated as a regulated investment company for U.S. tax purposes; (4) uncertainty of
the expected financial performance of Rand Capital following completion of the proposed transactions; (5) failure to realize the
anticipated benefits of the proposed transactions, including as a result of delay in completing the proposed transactions; (6)
the risk that the board of directors of Rand Capital is unable or unwilling to declare and pay the special cash and stock dividend
or pay quarterly dividends on a going forward basis; (7) the occurrence of any event that could give rise to termination of the
stock purchase agreement; (8) the risk that shareholder litigation in connection with the proposed transactions may affect the
timing or occurrence of the contemplated transactions or result in significant costs of defense, indemnification and liability;
(9) evolving legal, regulatory and tax regimes; (10) changes in general economic and/or industry specific conditions; and (11)
other risk factors as detailed from time to time in Rand Capital’s reports filed with the Securities and Exchange Commission
(“SEC”), including Rand Capital’s annual report on Form 10-K for the year ended December 31, 2018, later filed
quarterly reports on Form 10-Q, the definitive proxy statement for the proposed transactions and other documents filed with the
SEC. Consequently, such forward-looking statements should be regarded as Rand Capital’s current plans, estimates and beliefs.
Except as required by applicable law, Rand Capital assumes no obligation to update the forward-looking information contained in
this release.
Additional
Information and Where to Find It
This
communication may be deemed to be solicitation material in respect of solicitation of proxies from shareholders of Rand Capital
in respect of the proposed transactions. Rand Capital has filed the definitive proxy statement in respect of the proposed transactions,
which was first sent or made available to shareholders on or about April 18, 2019. INVESTORS OF RAND CAPITAL ARE URGED TO READ
THE DEFINITIVE PROXY STATEMENT AND OTHER RELEVANT DOCUMENTS CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION
ABOUT THE PROPOSED TRANSACTIONS AND RELATED MATTERS. Investors may obtain the definitive proxy statement and other documents filed
by Rand Capital with the SEC from the SEC’s website at www.sec.gov or from Rand Capital’s website at www.randcapital.com.
Investors and security holders may also obtain free copies of the definitive proxy statement and other documents filed with the
SEC from Rand Capital by calling Investor Relations at 716-843-3908.
Participants
in the Solicitation
Rand
Capital and its directors, executive officers, employees and other persons may be deemed to be participants in the solicitation
of proxies from the shareholders of Rand Capital in respect of the proposed transactions. Information regarding the persons who
may, under the rules of the SEC, be considered participants in the solicitation of Rand Capital shareholders in connection with
the proposed transactions is set forth in the definitive proxy statement filed with the SEC, which can be obtained free of charge
from the sources indicated above
Contacts:
Company:
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Investors:
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Allen
F. (“Pete”) Grum
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Deborah
K. Pawlowski / Karen L. Howard
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President
and CEO
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Kei
Advisors LLC
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Phone:
716.853.0802
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Phone:
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716.843.3908
/ 716.843.3942
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Email:
pgrum@randcapital.com
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Email:
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dpawlowski@keiadvisors.com
/
khoward@keiadvisors.com
|
Rand
Capital Corporation posted the following presentation to its website and mailed a copy of the presentation to its shareholders
on April 18, 2019:
The
following letter was mailed to shareholders of Rand Capital Corporation on April 18, 2019:
Cautionary
Statement Regarding Forward-Looking Statements
This
letter contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than historical facts, including but
not limited to statements regarding the expected timing of the closing of the proposed transactions; the ability of the parties
to complete the proposed transactions considering the various closing conditions, including receipt of necessary shareholder approvals
and approval from the U.S. Small Business Administration (“SBA”); the intention of Rand Capital Corporation (“Rand
Capital”, “Rand” or the “Company”) and Rand Capital SBIC, Inc. (“Rand SBIC”) to elect
to be taxed as a regulated investment companies for U.S. federal tax purposes; the intention to declare and pay a special cash
and stock dividend after the closing of the proposed transactions; the intention to pay a regular cash dividend after the completion
of the proposed transactions; the expected benefits of the proposed transactions such as a lower expense-to-asset ratio for Rand
Capital, increased net investment income, availability of additional resources, expanded access to and sourcing platform for new
investments and streamlining of operations under the external management structure; the business strategy of originating additional
income producing investments; the competitive ability and position of Rand Capital following completion of the proposed transactions;
and any assumptions underlying any of the foregoing, are forward-looking statements. Forward-looking statements concern future
circumstances and results and other statements that are not historical facts and are sometimes identified by the words “may,”
“will,” “should,” “potential,” “intend,” “expect,” “endeavor,”
“seek,” “anticipate,” “estimate,” “overestimate,” “underestimate,”
“believe,” “could,” “project,” “predict,” “continue,” “target”
or other similar words or expressions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions
prove to be incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements.
The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be
achieved. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include,
among others, (1) that one or more closing conditions to the stock purchase may not be satisfied or waived, on a timely basis
or otherwise, including that the SBA may not approve the proposed transactions or that the required approvals by the shareholders
of Rand Capital may not be obtained; (2) the risk that the proposed transactions may not be completed in the time frame expected
by parties, or at all; (3) the risk that Rand Capital and/or Rand SBIC may be unable to fulfill the conditions required in order
to elect to be treated as a regulated investment company for U.S. tax purposes; (4) uncertainty of the expected financial performance
of Rand Capital following completion of the proposed transactions; (5) failure to realize the anticipated benefits of the proposed
transactions, including as a result of delay in completing the proposed transactions; (6) the risk that the board of directors
of Rand Capital is unable or unwilling to declare and pay the special cash and stock dividend or pay quarterly dividends on a
going forward basis; (7) the occurrence of any event that could give rise to termination of the stock purchase agreement; (8)
the risk that shareholder litigation in connection with the proposed transactions may affect the timing or occurrence of the contemplated
transactions or result in significant costs of defense, indemnification and liability; (9) evolving legal, regulatory and tax
regimes; (10) changes in general economic and/or industry specific conditions; and (11) other risk factors as detailed from time
to time in Rand Capital’s reports filed with the Securities and Exchange Commission (“SEC”), including Rand
Capital’s annual report on Form 10-K for the year ended December 31, 2018, later filed quarterly reports on Form 10-Q, the
definitive proxy statement for the proposed transactions and other documents filed with the SEC. Consequently, such forward-looking
statements should be regarded as Rand Capital’s current plans, estimates and beliefs. Except as required by applicable law,
Rand Capital assumes no obligation to update the forward-looking information contained in this presentation.
Additional
Information and Where to Find It
This
communication may be deemed to be solicitation material in respect of solicitation of proxies from shareholders of Rand Capital
in respect of the proposed transactions. Rand Capital has filed the definitive proxy statement in respect of the proposed transactions,
which was first sent or made available to shareholders on or about April 18, 2019. INVESTORS OF RAND CAPITAL ARE URGED TO READ
THE DEFINITIVE PROXY STATEMENT AND OTHER RELEVANT DOCUMENTS CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION
ABOUT THE PROPOSED TRANSACTIONS AND RELATED MATTERS. Investors may obtain the definitive proxy statement and other documents filed
by Rand Capital with the SEC from the SEC’s website at
www.sec.gov
or from Rand Capital’s website at
www.randcapital.com
.
Investors and security holders may also obtain free copies of the definitive proxy statement and other documents filed with the
SEC from Rand Capital by calling Investor Relations at 716-843-3908.
Participants
in the Solicitation
Rand
Capital and its directors, executive officers, employees and other persons may be deemed to be participants in the solicitation
of proxies from the shareholders of Rand Capital in respect of the proposed transactions. Information regarding the persons who
may, under the rules of the SEC, be considered participants in the solicitation of Rand Capital shareholders in connection with
the proposed transactions is set forth in the definitive proxy statement filed with the SEC, which can be obtained free of charge
from the sources indicated above.
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