Rand
Capital Corporation (Nasdaq:RAND) (“Rand” or “Rand Capital”), a
business development company, announced today that based on the
preliminary voting results provided by the independent inspector of
election, but subject to certification of the final voting results by
the independent inspector of election, all proposals related to the
transformational transactions with East Asset Management, LLC (“East”)
were approved at a special meeting of shareholders (the “Meeting”) held
on May 16, 2019.
At the special meeting, shareholders:
-
Approved the issuance and sale of approximately 8.3 million shares of
common stock to East at a price per share of $3.00 for total
consideration of $25 million in cash and income-producing portfolio
assets pursuant to a Stock Purchase Agreement dated January 24, 2019. - Approved the issuance of shares to East under the Nasdaq listing rules.
-
Approved the Company’s entry into an investment advisory agreement and
the resulting externalization of management. -
Approved the amendment of the Company’s certificate of incorporation
to increase the number of authorized shares of common stock to 100
million shares.
Allen F. “Pete” Grum, President and CEO, noted, “We are pleased that
shareholders confirmed their support for management to advance this
transformational transaction and provide a path for enhanced shareholder
returns. We look forward to a strong future with East Asset Management.”
Rand expects the transaction to close in the second half of 2019,
subject to receipt of required regulatory approvals.
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.
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
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; (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.
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