User-Friendly Phone Book, LLC Reiterates Its Opposition to the Proposed Transaction Between Rand Capital Corporation (NASDAQ

RAND) and East Asset Management, LLC

User-Friendly Phone Book, LLC (“User-Friendly”), the largest stockholder of Rand Capital Corporation (the “Company” or “Rand”) (NASDAQ:RAND), announced today that it continues to oppose the proposed transaction between Rand and East Asset Management, LLC (“East”) that was announced on January 25, 2019. In a letter to the Company’s Board of Directors on March 27, 2019, User-Friendly detailed the reasons for its opposition, which are highlighted below. To date, User-Friendly has not received a response to its letter from the Board of Directors.

User-Friendly intends to vote AGAINST the proposed transaction for the following reasons:

• the $3.00 per share acquisition price is inadequate and represents an approximate 40% discount to the Company’s NAV per share of $4.99 as of December 31, 2018;
• in a transaction in which the Company is selling a 57% controlling interest, the Company should receive a premium for its shares, not an approximate 40% discount to NAV per share;
• current Rand shareholders will suffer substantial dilution as a result of the sale of shares at a price that is below the Company’s current NAV and as a result of a planned Special Dividend of which East will be entitled to receive 57%;
• the financial analyses performed by the Company’s financial advisor were premised on outdated financial information which lead to an undervaluing of the Company’s NAV per share and skews the Adviser’s conclusion on which the Board relied;
• the Adviser’s fee structure under the proposed Investment Management Agreement, including the incentive fee of 20% of the Company’s net capital gains and 20% of the Company’s cumulative net return in excess of 8.75%, creates serious conflicts and misaligns the interest of the Adviser and the Company’s shareholders, and the incentive fees are substantially dilutive to current shareholders’ up-side participation in any of the Company’s investment returns;
• there is no credible support that the value of the assets to be contributed by East, which comprise 52.4% of the aggregate consideration to be received by the Company in the proposed transaction, has been accurately measured;
• East is incentivized to over-value the assets to be contributed, and the Company has failed to provide adequate information regarding the nature of these contributed assets or the process by which the Company and East have agreed on their value;
• there is no assurance that the Company will declare the Special Dividend or any other dividends in the future; and
• the $750,000 termination fee payable by the Company if the proposed transaction were not to be consummated, and the $500,000 fee payable to the Company’s financial advisor are excessive and potentially debilitating to the Company and its shareholders.

Without the Company or the Board of Directors seeking to address any of User-Friendly’s concerns, User-Friendly feels constrained to oppose the transaction, and intends to vote AGAINST the proposed transaction.

About User-Friendly Phone Book

Operating since 1999, User Friendly Media boasts a portfolio of print, digital and mobile marketing solutions for small business. The company’s product suite includes 35 print directories, User Friendly Apps, a mobile app builder, User Friendly Mobile ads, a platform for serving locally-targeted mobile ad impressions and GoLocal247.com, one of the fastest growing local business directory websites in the country.

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