Rand Capital Corporation (NASDAQ:RAND) Q3 2019 Earnings Conference Call - Final Transcript

Nov 07, 2019 • 02:30 pm ET

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Rand Capital Corporation (NASDAQ:RAND) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Greetings, and welcome to the Rand Capital Corporation, Third Quarter 2019 Financial Results. [Operator Instructions]. A question-and-answer session will follow the presentation. [Operator Instructions]. I would now like to turn the conference over to your host Deborah Pawlowski, Investor Relations. Please go ahead.

Executive
Deborah Pawlowski

Thanks, Hector, and good afternoon, everyone. We appreciate your time today for Rand's third quarter 2019 financial results conference call. On the line with me today are Pete Grum, our Chief Executive Officer; and Dan Penberthy, our Executive Vice President and CFO. You should have a copy of the release that crossed the wire this morning, as well as the slides that will accompany our conversation today. If not they are both available on our website at randcapital.com.

If you would turn to the slide deck on slide 2, I will point out some important information. As you are likely aware, we may make some forward-looking statements during this presentation and also during the question-and-answer session. These statements apply to future events that are subject to risks and uncertainties as well as other factors that could cause actual results to differ from where we are today. These risks and uncertainties and other factors are provided in the earnings release as well as in other documents filed by the Company with the Securities and Exchange Commission.

You can find the information on our website or at sec.gov. With that, let me turn over to Pete who is going to first give us an update on the status of the transactions with East Asset Management and then summarize the quarter. Dan will follow with more details regarding financials. Pete?

Executive
Pete Grum

Good afternoon, everyone. Thank you for your time today. We are happy to have this opportunity to update you on Rand's third quarter, including the status of the transactions with East Asset Management, which ongoing I will refer to as East.If you could all turn to slide 3, and the status of the transaction with East. I'm pleased to announce that we are planning to close on the transactions in November.

The closing of this transformational transaction culminates practically two years of work. We will issue approximately 8.3 million of Rand shares to East in exchange for $25 million of assets. That amounts to $3 per share, which represents a 33% premium over the stock price on January 24th, the day before we announced these exciting transactions.

The $25 million, we now believe will consist of approximately $10 million of investment and about $15 million in cash. However, we continue to finalize our legal due diligence on the portfolio of securities, which may affect the final amount of the cash and securities received. The total, however, will not change, and it will be $25 million. The investment assets that we will receive will be added to our portfolio and the cash will be used for investing and other corporate purposes. We will also receive the ongoing cash flow on the investments.

We have established Rand Capital Management or RCM. The current