Rand Capital Corporation is a registered closed-end investment company investing
in securities of businesses, which offer unique opportunities for growth. Since
its formation in 1969, Rand Capital has provided venture capital to support the
growth and development of businesses in varied industries, primarily in the
Western New York and Upstate New York Region. Rand's portfolio is comprised of
such investments, which include debt and/or equity holdings in primarily
privately owned companies. Rand Capital is traded on The NASDAQ SmallCap Market
tier under the symbol: RAND.
<PAGE>
To Our Shareholders,
As I enter my fifth year as President of Rand Capital, I am pleased that
the long-term nature of our investments has been reflected in the appreciation
of the Stock. It is a tribute to the support of our Directors and shareholders
during the past four years.
We continued to execute on the tenants of the Business Plan that we
developed and was adopted by the Board of Directors in 1996. Our commitment to
expense control was reflected in another reduction in expenses and a commitment
to reduce them in the coming year. We also continued to increase our investment
portfolio by investing $1.8 million in eleven companies.
We believe that the upcoming year will be a watershed year for Rand. Our
companies are just beginning to mature and demonstrate the promise that we
anticipated when we made the investments. Almost all of our investments have
strengthened their outlooks in 1999.
We look forward to sharing these successes with you in the coming quarters
and appreciate your continued support.
Sincerely,
Reginald B. Newman II
Chairman
Allen F. Grum
President
<PAGE>
Portfolio of Investments December 31, 1999
American Tactile Corporation**
Medina, NY. Develops equipment and systems to produce
commercial signage.
www.americantactile.com
Type of Investment:
Convertible Debentures at 8% due June 2000 and April 2001 with detachable
warrants
Year Acquired: 1995 Cost: $ 150,000
Percent Equity: <1% Value: $ 50,000
ARIA Wireless Systems, Inc. (OTC:AWSI)* **
Buffalo, NY. Markets wireless radio transmission communication equipment.
www.ariawireless.com
Type of Investment:
Common Stock - 488,000 shares
$105,840 Demand Notes at 15%
Year Acquired: 1997 Cost: $ 543,840
Percent Equity: 5% Value: $ 288,840
BioVector, Inc.**
Buffalo, NY. Medical technological sales force company.
Merged with MINRAD, Inc. December 1999.
BioWorks, Inc.
Geneva, NY. Develops and manufactures biological alternative
to chemical pesticides.
www.bioworksbiocontrol.com
Type of Investment:
Series A Convertible Preferred Stock - 32,000 shares
Year Acquired: 1995 Cost: $ 56,000
Percent Equity: <1% Value: $ 56,000
Clearview Cable TV, Inc.
New Providence, NJ. Wireless Cable television system operator.
Type of Investment:
Common Stock - 400 shares
Year Acquired: 1996 Cost: $ 55,541
Percent Equity: 5% Value: $ 55,541
Contract Staffing
Buffalo, NY. PEO providing human resource administration for small businesses.
www.contract-staffing.com
Type of Investment:
Series A 8% Cumulative Preferred Stock - 10,000 Shares
Year Acquired: 1999 Cost: $ 100,000
Percent Equity: 10% Value: $ 100,000
DataView, LLC
Mt. Kisco, NY. Designs, develops and markets browser based software for
investment professionals.
www.dataviewllc.com/marketgauge/
Type of Investment:
5% Membership Interest
Year Acquired: 1998 Cost: $ 310,357
Percent Equity: 5% Value: $ 343,357
<PAGE>
Fertility Acoustics, Inc.
Buffalo, NY. Developer of proprietary methods to diagnose onset of ovulation.
Type of Investment:
Common Stock - 600,000 shares. Option to purchase 180,000 shares
Year Acquired: 1997 Cost: $ 50,000
Percent Equity: 8% Value: $ 125,000
G-TEC Natural Gas Systems
Buffalo, NY. Manufactures and distributes systems that allow
natural gas to be used as an alternative fuel to gases.
www.gas-tec.com
Type of Investment:
42% Class A Membership Interest. 8% Cumulative Dividend
Year Acquired: 1999 Cost: $ 300,000
Percent Equity: 42% Value: $ 300,000
Hammertime Kitchen & Bath Works, Inc.**
Clarence, NY. Exclusive Sears licensed installer of kitchens
and baths.
Type of Investment:
Convertible Preferred Stock - 1,000 Shares, Senior Subordinated Note
at 12% due October 2000, Promissory Note at 15% due August 1999
Year Acquired: 1998 Cost: $ 300,000
Percent Equity: 13% Value: $ 300,000
HCI Systems
Kennebunk, ME. Facilities management software solution.
www.hcisystems.com.
Type of Investment:
Series B Preferred Stock - 67,000 Shares. 5% Cumulative Dividend.
Year Acquired: 1999 Cost: $ 100,500
Percent Equity: <1% Value: $ 100,500
InfoMiners.com
Amherst, NY. Data warehousing and decision support software for healthcare
industries.
www.infominers.com
Type of Investment:
Bridge loan at 10% due June 1999. 147,360 warrants for shares of stock.
Year Acquired: 1998 Cost: $ 420,000
Percent Equity: <1% Value: $ 420,000
MemberWare Technologies, Inc.
Pittsford, NY. Internet company engaged in web related
consulting services.
www.memberware.com.
Type of Investment:
Promissory Note at Prime Rate +4.5% due September 2004.
Common Stock - 40,000 Shares. 34,000 warrants for shares of stock.
Year Acquired: 1999 Cost: $ 100,000
Percent Equity: 2% Value: $ 150,000
<PAGE>
MINRAD, Inc.**
Buffalo, NY. Developer of laser guided surgical devices.
Merged with BioVector, Inc. December 1999.
Type of Investment:
595,507 Common Shares, 53,628 Preferred Shares.
Year Acquired: 1997 Cost: $ 874,030
Percent Equity: 10% Value: $ 1,111,000
Pathlight Technology, Inc.
Ithaca, NY. Develops SAN technology for computer industry.
www.pathlight.com
Type of Investment:
Class A Series Convertible Preferred Stock - 200,000 shares with 6% cumulative
dividend. Preferred Class B - 117,187 shares, 67,578 warrants for shares of
stock.
Year Acquired: 1997 Cost: $ 425,000
Percent Equity: 3% Value: $ 610,000
Platform Technology Holdings, LLC **
Charlottesville, VA. Provides sales support and management for unique device
and diagnostic businesses.
Type of Investment:
Two units with option for two additional units
Year Acquired: 1997 Cost: $ 8,045
Percent Equity: <1% Value: $ 60,000
UStec, Inc.
Victor, NY. Manufacturers and markets digital wiring systems for residential
new home construction.
www.ustecnet.com
Type of Investment:
Promissory Note at 12% due December 2003 50,000 warrants for common stock.
Year Acquired: 1998 Cost: $ 100,000
Percent Equity: <1% Value: $ 100,000
Vanguard Modular Building Systems
Philadelphia, PA. Leases and sells high-end modular space
solutions.
Type of Investment:
Preferred Units - 2,673 Units with Warrants
Year Acquired: 1999 Cost: $ 270,000
Percent Equity: <1% Value: $ 270,000
<PAGE>
Preferred Stock Portfolio* **
Merrill Lynch (MER-F), Motorola (MOT-A), Citicorp (CIH-A), Texaco (TXC-A) Type
of Investment:
Merrill Lynch - 12,000 Shares, Motorola - 10,000 Shares,
Citicorp - 10,000 Shares, Texaco - 12,000 Shares
Year Acquired: 1999 Cost: $ 1,047,888
Percent Equity: <1% Value: $ 879,000
Other 971,395 160
Total portfolio investments 6,182,596 5,319,399
(Cost Basis)(Valuation)
* Publicly-owned Company
** Indicates those companies which Rand has a Board Seat.
Notes to Portfolio of Investments
(a) Unrestricted securities are freely marketable securities having readily
available market quotations. All other securities are restricted securities
which are subject to one or more restrictions on resale and are not freely
marketable. At December 31, 1999, restricted securities represented 84% of
the value of the investment portfolio. Deloitte & Touche, LLP has not
examined the business descriptions of the portfolio companies.
(b) The Year Acquired line indicates the year in which the Corporation acquired
its first investment in the company or a predecessor company.
(c) The equity percentages express the percent of outstanding voting securities
held by the Corporation or the potential percentage of voting securities
held by the Corporation or the potential percentage of voting securities
held by the Corporation upon exercise of its warrants or conversion of
debentures. The symbol "<1%" indicates that the Corporation holds equity
interest of less than one percent.
(d) Under the valuation policy of the Corporation, unrestricted securities are
valued at the average closing price for publicly held securities for the
last three days of the month. Restricted securities, including securities
of publicly-owned companies which are subject to restrictions on resale,
are valued at fair value as determined by the Board of Directors. Fair
value is considered to be the amount which the Corporation may reasonably
expect to receive for portfolio securities if such securities were sold on
the valuation date. Valuations as of any particular date, however, are not
necessarily indicative of amounts which may ultimately be realized as a
result of future sales or other dispositions of securities. Among the
factors considered by the Board of Directors in determining the fair value
of restricted securities are the financial condition and operating results,
projected operations, and other analytical data relating to the investment.
Also considered are the market prices for unrestricted securities of the
same class (if applicable) and other matters which may have an impact on
the value of the portfolio company.
<PAGE>
Changes in Investments at Cost and Realized Loss
Year Ended December 31,1999
<TABLE>
<CAPTION>
Cost Increase (Decrease) Realized Gain (Loss)
----------------------- -------------------
<S> <C> <C>
New and Additions to Previous Investments: $ 155,840
Aria Wireless Systems, Inc. 35,030
Biovector, Inc. 100,000
Contract Staffing, Inc. 210,357
DataView, Inc. 145,000
Ellicottville Energy, Inc. 300,000
G-TEC Natural Gas Systems 100,000
Hammertime, Inc. 100,500
HCI Systems, Inc. 100,000
MemberWare Technologies, Inc. 225,000
Pathlight Technologies, Inc. 270,000
Vanguard Modular Building Systems, LLC 1,047,888
Preferred Stocks (Merrill Lynch; Motorola;
Citicorp; Texaco) 100
--------------
Other 2,789,715
--------------
Investments Sold/Exchanged:
Lightbridge, Inc. (218,271) (42,625)
----------------------------------------
(218,271) (42,625)
----------------------------------------
Other Changes:
Debenture repayments and distributions (436,647) 0
----------------------------------------
Net Change in Investments at Cost $ 2,134,797 $ (42,625)
and Realized Gain ============ ==========
</TABLE>
<PAGE>
Statements of Financial Position
Years Ended December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Assets
Investments at Directors' valuation (identified cost: $5,319,399 $3,387,170
1999 - $6,182,596; 1998 - $4,047,800) (Note 1)
Cash and cash equivalents 1,139,708 3,757,399
Interest receivable (net of allowance of $13,167 in 1999 83,524 65,616
and $13,167 in 1998)
Deferred tax asset (Note 2) 1,071,880 1,071,880
Other assets 34,436 23,973
-----------------------------
Total Assets $7,648,947 $8,306,038
========= =========
Liabilities and Stockholders' Equity (Net Assets)
Liabilities
Accounts payable and accrued expenses (Notes 4 and 5) $ 44,174 67,306
Income taxes payable 30 1,700
----------------------------
Total Liabilities 44,204 69,006
----------------------------
Stockholders' Equity (Net Assets) (Note 3)
Common stock, $.10 par - shares authorized 10,000,000; 570,804 570,804
issued and outstanding 5,708,034 shares in 1999 and 1998
Capital in excess of par value 6,889,379 6,889,379
Undistributed net investment (loss) (1,955,808) (1,568,711)
Undistributed net realized gain on investments 2,696,531 2,739,156
Net unrealized (depreciation) on investments (596,163) (393,596)
----------------------------
Net assets (per share 1999 - $1.33; 1998 - $1.44) 7,604,743 8,237,032
----------------------------
Total Liabilities and Stockholders' Equity $7,648,947 8,306,038
========= =========
</TABLE>
<PAGE>
Statements of Operations
Years Ended December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Investment Income:
Interest from portfolio companies $ 152,548 $ 327,592
Interest from other investments 153,988 156,920
Other income 56,558 108,574
------------ ------------
363,094 593,086
------------ ------------
Expenses:
Salaries 334,463 341,886
Employee benefits 60,189 45,460
Directors' fees 33,500 37,500
Legal fees 28,885 35,648
Professional fees 27,740 17,953
Shareholders and office 131,858 97,033
Insurance 37,336 49,180
Corporate development 60,064 92,473
Other operating 24,768 41,497
------------ ------------
738,803 758,630
------------ ------------
Investment (loss) before income taxes (375,709) (165,544)
Income tax provision (Note 2) 11,388 11,600
Deferred income tax (benefit) (Note 2) - (120,805)
------------ ------------
Investment (loss) - net (387,097) (56,339)
----------- ------------
Realized and unrealized gain (loss) on investments:
Net (loss) gain on sales and dispositions (42,625) (316,559)
----------- ------------
Net realized (loss) (42,625) (316,559)
----------- ------------
Unrealized appreciation (depreciation) on investments:
Beginning of period (660,630) (1,006,665)
End of period (863,197) (660,630)
----------- ------------
(Change) in unrealized appreciation before income taxes (202,567) 346,035
Deferred income tax (benefit) (Note 2) - 77,325
----------- ------------
Net increase (decrease) in unrealized appreciation (202,567) 268,710
Net realized and unrealized (loss) on investments (245,192) (47,849)
----------- ------------
Net (decrease) in net assets from operations $ (632,289) $ (104,188)
=========== ============
</TABLE>
See Notes to Financial Statements
<PAGE>
Statements of Changes in Net Assets Years Ended
December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Net assets at beginning of period (includes undistributed net
investment loss of $1,568,711 and $1,512,372 respectively) $ 8,237,032 $ 8,341,220
----------- -----------
Operations:
Net investment loss (387,097) (56,339)
Net realized (loss) gain on investments (42,625) (316,559)
Net increase (decrease) in unrealized appreciation of investments (202,567) 268,710
----------- -----------
Net (decrease) in net assets from operations (632,289) (104,188)
----------- -----------
Net assets at end of period (including undistributed net
investment loss of $1,955,808 and $1,568,711 respectively) $ 7,604,743 $ 8,237,032
=========== ===========
</TABLE>
<PAGE>
Notes to Financial Statements Years Ended December 31, 1999 and 1998
1. Summary of Significant Accounting Policies
The Corporation operates as a closed-end investment company registered
under the Investment Company Act of 1940. It is a publicly held venture capital
Corporation listed on the NASDAQ Small Cap Market under the symbol "RAND." The
Corporation was founded in 1969 and is headquartered in Buffalo, New York. The
Corporation's investment strategy is to provide expansion capital and
investment, as well as investment banking and financial advisory services, to
companies both inside and outside of the Western New York community.
Investments are stated at fair value as determined in good faith by the
Board of Directors, as described in the Notes to Schedule of Portfolio
Investments on page 5. Certain investments have been determined by the Board of
Directors in the absence of readily ascertainable fair values. The estimated
valuations are not necessarily indicative of amounts which may ultimately be
realized as a result of future sales or other dispositions of securities, and
these favorable or unfavorable differences could be material.
Amounts reported as realized gains and losses are measured by the
difference between the proceeds of sale or exchange and the cost basis of the
investment without regard to unrealized gains or losses reported in prior
periods. The cost of securities that have, in the Directors' judgment, become
worthless, are written off and reported as realized losses.
Temporary cash investments having a maturity of three months or less when
purchased are considered to be cash equivalents. Interest income generally is
recorded on the accrual basis except where the investment is valued at less than
cost to reflect risk of loss.
In such cases, interest is recorded at the time of receipt. A reserve for
possible losses on interest receivable is maintained when appropriate.
Net assets per share are based on the number of shares of common stock
outstanding during the respective year.
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reporting amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
<PAGE>
2. Income Taxes
Deferred tax assets and liabilities are recorded for temporary differences
between the financial statement and tax bases of assets and liabilities using
the currently enacted tax rate expected to be in effect when the taxes are
actually paid or recovered.
The net deferred tax assets are presented in the Statements of Financial
Position as follows:
1999 1998
---- ----
Deferred tax asset - current $ 1,071,880 $ 1,143,920
Deferred tax liability - current 0 72,040
----------- -----------
Deferred tax asset, net $ 1,071,880 $ 1,071,880
=========== ===========
The tax effect of the major temporary difference and carryforwards that
give rise to the Corporation's net deferred tax assets at December 31, 1999 and
1998 are as follows:
1999 1998
---- ----
Operations $ (2,830) $ (7,634)
Investments 319,135 244,235
Net operating loss carryforwards 863,475 835,279
Capital loss carryforwards 60,750 0
Subtotal 1,240,530 1,071,880
Valuation Allowance (168,650) 0
Deferred tax asset, net $ 1,071,880 $ 1,071,880
========= =========
The components of income tax expense (benefit) reported in the statements
of operations are as follows:
1999 1998
---- ----
Current:
State $ 11,388 $ 11,600
------------ ------------
Deferred:
(Benefit) on change in unrealized
appreciation:
Federal 0 (25,670)
------------ ------------
State 0 (17,810)
------------ ------------
0 (43,480)
------------ ------------
Total $ 11,388 $ (31,880)
============ ============
<PAGE>
A reconciliation of the benefit for income taxes at the federal statutory
rate to the benefit reported is as follows:
1999 1998
---- ----
Net investment (loss) and realized (loss)
before income taxes (benefit) $ (620,901) $ (136,068)
============ ===========
Expected tax (benefit) at statutory rate (211,106) (34,513)
State - net of federal effect (14,343) (4,099)
Other 68,187 6,732
Valuation Allowance 168,650 0
-------- -----------
Total $ 11,388 $ (31,880)
============ ===========
Deferred income tax (benefit) of approximately $(319,000) and $(308,000) at
December 31, 1999 and 1998, respectively, relate to net unrealized
(depreciation) appreciation of investments. Such (depreciation) appreciation is
not included in taxable income until realized.
Included in deferred taxes on the accompanying statements of financial
position is approximately $0 and $64,000 at December 31, 1999 and 1998,
respectively, applicable to a gain being reported under the installment method
for income tax purposes. This amount will be reduced in future periods as
payments are received.
At December 31, 1999, the Corporation had a federal and state net operating
loss carry forward of approximately $2,160,000 and $2,090,000, respectively,
which expire commencing in 2007.
The Corporation believes it is more likely than not that a portion of the
deferred tax assets will not be realized and, accordingly, a valuation has been
provided. Management of the Corporation considers, among other things, its
estimates of projected taxable income in making this assessment.
<PAGE>
3. Stockholders' Equity
At December 31, 1999 and 1998, there were 500,000 shares of $10 par value
preferred stock authorized and unissued.
Summary of change in capital accounts:
<TABLE>
<CAPTION>
Undistributed Net Unrealized
Undistributed Realized Gain Appreciation
Investment (Loss) on (Depreciation)
Net Loss Investments on Investments
-------- ----------- --------------
<S> <C> <C> <C>
Balance, December 31, 1997 $ (1,512,372) $ 3,055,715 $ (662,306)
Net (decrease) in net assets
from operations (56,339) (316,559) 268,710
------------- ------------- ------------
Balance, December 31, 1998 $ (1,568,711) $ 2,739,156 $ (393,596)
Net (decrease) in net assets
from operations (387,097) (42,625) (202,567)
------------- ------------- -------------
Balance, December 31, 1999 $ (1,955,808) $ 2,696,531 $ (596,163)
============= ============= =============
Common Stock
------------
Capital in
Excess of Par
Shares Amount Value
------ ------ -----
Balance, December 31, 1999 $ 5,708,034 $ 570,804 $ 6,889,379
============== ============= ============
And December 31, 1998
</TABLE>
<PAGE>
4. Commitments and Contingencies
The Corporation has a deferred compensation agreement which includes health
and dental benefits with a former officer of the Corporation and his spouse.
Payments under this agreement were paid through September 30, 1999. Remaining
payments projected to be paid to the surviving spouse have been fully accrued.
Total accrued deferred compensation under this agreement at December 31, 1999
and 1998 was $32,438 and $59,270, respectively.
5. Pension Expense
The Corporation has a defined contribution 401(k) plan. The Plan provides a
base contribution of 1% for eligible employees and also provides up to 5%
matching contribution. Pension Plan expense was $18,317 and $17,492 in 1999 and
1998 respectively.
Schedules of Selected Per Share Data and Ratios Five Years Ended
December 31, 1999
Selected data for each share of capital stock outstanding throughout the
five most current years is as follows:
<TABLE>
<CAPTION>
Year ended December 31,
-----------------------
1999 1998 1997 1996 1995*
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Investment income $ 0.06 $ 0.10 $ 0.08 $ 0.04 $ 0.09
Expenses 0.13 0.13 0.14 0.18 0.23
----------------------------------------------------------------------------
Investment (loss) before
income taxes (0.07) (0.03) (0.06) (0.14) (0.14)
(Benefit) for income taxes
(Note 2) - 0.02 - (0.05) (0.05)
----------------------------------------------------------------------------
Net investment (loss) (0.07) (0.01) (0.06) (0.09) (0.09)
Net realized and unrealized
gain (loss) on investments (0.04) (0.01) (0.01) (0.59) (0.89)
----------------------------------------------------------------------------
Decrease in net asset value (0.11) (0.02) (0.07) (0.68) (0.98)
Net asset value - beginning
of year 1.44 1.46 1.53 2.21 3.19
----------------------------------------------------------------------------
Net asset value - end of year 1.33 $ 1.44 $ 1.46 $ 1.53 $ 2.21
============================================================================
Ratio of expense to average
net assets 9.33% 9.15% 9.26% 9.75% 8.73%
Ratio of net investment
(loss) to average net assets (4.74)% (1.00)% (3.62)% (5.04)% (3.48)%
Number of shares outstanding
at end of period 5,708,034 5,708,034 5,708,034 4,225,477 4,225,477
</TABLE>
* Per share data presented has been restated from prior years to reflect the
25% stock distributions of the Corporation occurring in 1995.
<PAGE>
Independent Auditors Report Deloitte & Touche LLP
To the Board of Directors and Stockholders
Rand Capital Corporation
Buffalo, New York
We have audited the accompanying statements of financial position of Rand
Capital Corporation (the "Corporation") as of December 31, 1999 and 1998,
including the schedule of portfolio investments as of December 31, 1999, and the
related statements of operations and changes in net assets for the years then
ended, and the selected per share data and ratios for each of the five years in
the period then ended. These financial statements and the selected per share
data and ratios are the responsibility of the Corporation's management. Our
responsibility is to express an opinion on these financial statements and
selected per share data and ratios based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and selected per
share data and ratios are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and selected per share data and ratios. Our procedures
included examination or confirmation of securities owned as of December 31,
1999, and 1998. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and selected per share data and
ratios referred to above present fairly, in all material respects, the financial
position of Rand Capital Corporation as of December 31, 1999, and 1998 the
results of its operations and changes in net assets for the years then ended and
the selected per share data and ratios for each of the five years in the period
then ended, in conformity with generally accepted accounting principles.
As explained in Note 1, the financial statements include securities valued
at $5,319,399 (70% of net assets) and $3,387,170 (41% of net assets), whose fair
values have been estimated by the Board of Directors in the absence of readily
ascertainable fair values. We have reviewed the procedures used by the Board of
Directors in arriving at its estimate of fair value of such securities and have
inspected underlying documentation.
In our opinion, those procedures are reasonable, and the documentation is
appropriate to determine the securities' estimated fair values. The estimated
valuations, however, are not necessarily indicative of the amounts which may
ultimately be realized as a result of future sales or other dispositions of
securities, and these favorable or unfavorable differences could be material.
Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedule of
changes in investments at cost and realized loss for the year ended December 31,
1999 is presented for the purpose of additional analysis and is not a required
part of the basic financial statements. This schedule is the responsibility of
the Corporation's management. Such schedule has been subjected to the auditing
procedures applied in our audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects when considered in relation
to the basic financial statements taken as a whole.
s/Deloitte & Touche LLP
January 14, 2000
Buffalo, NY
<PAGE>
Shareholder Information Years Ended December 31, 1999 and 1998
Transfer Agent
For information on ownership, lost/missing shares or other information
regarding Rand stock certificates please contact our transfer agent. If you need
additional assistance please contact Rand Capital directly.
Continental Stock Transfer & Trust Company
2 Broadway
New York, NY 10004
Phone: 212-509-4000
www.continentalstock.com
Shareholders
The Corporation had an estimated total of 823 shareholders, which included
approximately 182 record holders of its common stock, and an estimated 641
shareholders with shares held under beneficial ownership in nominee name or
within clearinghouse positions of brokerage firms or banks.
Market Prices
The common stock of Rand Capital is traded on The NASDAQ SmallCap Market
tier of The NASDAQ Stock Market under the symbol: RAND. The following high and
low selling prices for the shares during each quarter of the last two years were
taken from quotations provided to the Corporation by the National Association of
Securities Dealers, Inc.
Stock Selling Price Data
1999 1998
---- ----
Quarter High Low High Low
------- ---- --- ---- ---
1st 1 3/16 3/4 1 1/2 7/8
2nd 3 1/8 7/8 1 3/8 1 1/16
3rd 1 5/16 7/8 1 1/4 1 3/16
4th 2 3/8 3/4 1 1/16 3/4
<PAGE>
Notice of Annual Meeting
The Annual Meeting of Shareholders of Rand Capital Corporation will be held
on Thursday, April 13, 2000 at 10:00 am at the Rand Building, Room 502, 14
LaFayette Square, Buffalo, New York. All shareholders are encouraged to attend.
Directors
- ---------
Reginald B. Newman II President, NOCO Energy Corp.
Buffalo, NY Chairman, Rand Capital Corp.
Allen F. Grum President, Rand Capital Corp.
Buffalo, NY
Luiz F. Kahl President, The Vector Group, LLC
Buffalo, NY
Erland E. Kailbourne Chief Executive Officer & President,
Buffalo, NY John R. Oishei Foundation
Ross B. Kenzie Retired
Buffalo, NY
Willis S. McLeese Chairman, Colmac Holdings Ltd.
Toronto, Canada
Jayne K. Rand Vice President, M&T Bank
Buffalo, NY
Officers
- --------
Allen F. Grum President
Daniel P. Penberthy Treasurer/Secretary
Corporate Counsel
- -----------------
Hodgson, Russ, Andrews,Woods & Goodyear
1800 One M&T Plaza
Buffalo, NY 14203
www.hodgsonruss.com
Independent Accountants
- -----------------------
Deloitte & Touche LLP
KeyBank Tower
50 Fountain Plaza, Suite 250
Buffalo, NY 14202
www.us.deloitte.com
Rand Capital Corporation
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2200 Rand Building
Buffalo, New York 14203
Tel: 716-853-0802
Fax: 716-854-8480
www.randcap.com (spring 2000)
Shareholder Information: [email protected]
Email: [email protected]
[email protected]
