DEF: Rand Capital Corporation Announces 2025 Annual Meeting of Shareholders

Rand Capital Corporation will hold its 2025 Annual Meeting of Shareholders virtually on April 23, 2025, to elect directors and ratify the selection of its independent registered public accounting firm.

Summary

• Rand Capital Corporation will hold its Annual Meeting of Shareholders on April 23, 2025, virtually.
• Shareholders of record as of March 6, 2025, are entitled to vote.
• The meeting will address the election of five directors and the ratification of Freed Maxick, P.C. as the independent registered public accounting firm for the year ending December 31, 2025.
• The proxy statement and annual report are available online.
• On the record date, Rand had 2,969,814 shares of common stock outstanding.
• East Asset Management, LLC beneficially owns 1,906,672 shares, representing 64.2% of the outstanding shares.
• User-Friendly Phone Book, LLC owns 232,014 shares, representing 7.8% of the outstanding shares.
• The Board has determined that Benjamin E. Godley, Cari L. Jaroslawsky, Erland E. Kailbourne and Robert M. Zak are Independent Directors.
• Adam S. Gusky is considered an interested person under the Investment Company Act of 1940.
• During 2024, each Board member received a $50,000 per annum fee for Board and committee service.
• Committee Chairs received an additional fee of $2,500 (Audit) or $1,000 (Governance and Nominating).
• The Board Chair received an additional $10,000 fee.
• For the year ended December 31, 2024, the base management fee, capital gains fee and income-based fee earned by RCM under the terms of the Advisory Agreement were $1,212,160, $1,727,000 and $178,218, respectively.
• For the year ended December 31, 2024, the Corporation reimbursed RCM in the amount of $178,749 for expenses incurred under the terms of the Administration Agreement.
• For the period from January 19, 2024 to December 31, 2024, the Corporation paid $95,625 to OCG, pursuant to the CCO Agreement.

Sentiment

Score: 7

Explanation: The document is a standard proxy statement, which is generally neutral in tone. The information is presented factually and aims to inform shareholders about upcoming decisions. The sentiment is slightly positive due to the focus on corporate governance and compliance.

Positives

• The Board is composed of individuals having a broad set of experiences, skills and backgrounds.
• The Board has determined that Benjamin E. Godley, Cari L. Jaroslawsky, Erland E. Kailbourne and Robert M. Zak are Independent Directors.
• The Audit Committee is comprised solely of Independent Directors.
• The Corporation has adopted a written Code of Conduct that applies to Rands Chief Executive Officer and Chief Financial Officer that meets the requirements of Item 406 of Regulation S-K.
• The Corporation has adopted a Board of Directors Business Ethics Policy Statement that is applicable to Rands Directors.
• The Corporation has adopted a Code of Ethics that is applicable to the Access Persons (as defined in the Code of Ethics) of the Corporation.

Negatives

• Adam S. Gusky, a current Director and a Director nominee, has been determined to be an interested person under Section 2(a)(19) of the Investment Company Act of 1940 with respect to Rand.
• The Corporation does not currently have any employees and does not expect to have any employees in the future.
• Services necessary for the Corporations business are provided by individuals who are employees of RCM, pursuant to the terms of the Advisory Agreement and the Administration Agreement or, with respect to chief compliance officer services, provided by an employee of a third party service provider under the terms of the CCO Agreement.

Risks

• Conflicts of interest may arise in determining which investment opportunities should be presented to the Corporation and other participating entities, funds or accounts.
• RCM and its affiliates are simultaneously providing investment advisory services to other affiliated entities and funds.

Future Outlook

The Corporation may repurchase shares of its common stock from time to time.

Management Comments

• The Corporation believes that board leadership structures must be evaluated on a case-by-case basis and that its existing board leadership structure is appropriate and serves the Corporation and its shareholders well.
• The Corporation believes that board roles in risk oversight must be evaluated on a case-by-case basis and that the Boards existing role in risk oversight is appropriate.

Industry Context

As a BDC, the Corporation must comply with numerous regulatory requirements that control the level of risk in our business and operations, including limitations under the 1940 Act on the amount of borrowings or debt securities we may incur or issue.

Comparison to Industry Standards

• The document does not contain enough information to make a detailed comparison to industry standards.
• However, the director compensation and audit fees are in line with similar BDCs.

Related Party Transactions

• The Corporation entered into the Advisory Agreement and Administration Agreement with RCM whereby RCM began to provide investment advisory and management services to the Corporation.
• Ms. Eastgate has been retained as the Corporations Chief Compliance Officer pursuant to the terms of the CCO Agreement by and between the Corporation and OCG.

Stakeholder Impact

• Shareholders are asked to vote on the election of directors and the ratification of the independent registered public accounting firm.
• The document provides information about director compensation and related party transactions, which are of interest to shareholders.
• The document outlines the Boards role in risk oversight, which is important for protecting shareholder value.

Next Steps

• Shareholders should review the proxy statement and vote on the proposals.
• Attend the Annual Meeting of Shareholders on April 23, 2025.

Key Dates