SuRo Capital Corp.

Good day, everyone, and welcome, excuse me, to the Suro Capital first quarter 2022 earnings conference call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. This call is being recorded today, Wednesday, May 4th, 2022. I will now turn the conference over to Willie Lee of Suro Capital. Please go ahead, sir.

Thank you for joining us on today's call. I'm joined today by the Chairman and Chief Executive Officer of Suro Capital, Mark Klein, and Chief Financial Officer, Allison Green. Please note that a slide presentation corresponding to today's prepared remarks by management is available on our website at www.surocap.com under Investor Relations, Events, and Presentations. Today's call is being recorded and broadcast live on our website, www.serocap.com. Replay information is included in our press release issued today. This call is the property of Sero Capital, and the unauthorized reproduction of this call in any form is strictly prohibited. I would also like to call your attention to customary disclosures in today's earnings press release regarding forward-looking information. Statements made in today's conference call and webcast may constitute forward-looking statements which relate to future events or our future performance or financial condition. These statements are not guarantees of our future performance or future financial conditions or results and involve a number of risks, estimates, and uncertainties, including the impact of COVID-19 pandemic and any market volatility that may be detrimental to our business, our portfolio companies, our industry, and the global economy that could cause actual results to differ materially from the plans, intentions, and expectations reflected in or suggested by the forward-looking statements. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including but not limited to those described from time to time in the company's filings with the SEC. Management does not undertake to update such forward-looking statements unless required to do so by law. To obtain copies of Suro Capital's latest SEC filings, please visit our website at www.surocap.com or the SEC's website at sec.gov. Now, I would like to turn the call over to Mark Klein.

Thank you, Willie. Good afternoon, and thank you for joining us. We are pleased to share the results of Suro Capital's first quarter 2022. Volatile public markets coupled with a slowdown across the board and late stage venture capital and IPO activity have resulted in a quiet quarter for the firm. We did not make any new investments during the quarter. However, we continue to have a strong pipeline of opportunities available to us. Given current conditions, We believe that being judicious on price and conviction when assessing a potential investment opportunity is paramount in our mission to create shareholder value. As of yesterday, on a year-to-date basis, the NASDAQ is down roughly 20% and the S&P 500 approximately 13%. Roughly 45% of the companies in the NASDAQ are down 50% or more. and more than 22% of companies in the NASDAQ are down 75% or more. We believe there will be opportunities for the firm to capitalize on as valuations resettle across various industry groups, and we remain excited about the prospects of our existing portfolio companies. With over $170 million of investable capital on hand as of quarter end, we are prepared to take advantage of our robust pipeline and execute on opportunities throughout the late stage private venture environment. Despite significant declines and volatility in the public markets during the quarter, Cerro Capital achieved its highest dividend adjusted NAV per share. At the end of the quarter, Cerro Capital had a net asset value of approximately $381 million or $12.22 per share. The $12.22 per share net asset value is inclusive of an 11 cent per share dividend declared during the quarter and paid in April. This net asset value per share represents a 61 cent increase from the $11.61 dividend adjusted net asset value per share at the end of 2021. As we have consistently demonstrated, Cerro Capital is committed to initiatives that enhance shareholder value, and we believe the market is currently undervaluing our portfolio. Accordingly, in March, our Board of Directors authorized an additional $15 million for share repurchases, bringing the total authorized under the Share Repurchase Program to $55 million. Since that increase, we have repurchased over 580,000 shares for approximately $5 million. Given the significant discount at which our stock is trading compared to net asset value, coupled with the extreme market volatility, we determined the current continuation of the share repurchase program to be an efficient and a creative deployment of capital. Please turn to slide four. Serocapital's top five positions as of March 31st were Course Hero, Forge Global, Blink Health, Aspiration, and Stormwind. These positions accounted for approximately 63% of the investment portfolio at fair value. Additionally, as of March 31st, our top 10 positions accounted for approximately 80% of the portfolio. As previously discussed, Course Hero Our largest position announced on December 14 that they had raised $380 million at a $3.6 billion valuation in their Series C financing, one which we participated in. The company has used these funds to accelerate its goal of building a learning ecosystem that meets the evolving range of study needs for today's learners. We believe Course Hero's recent fundraise gives them a significant advantage as they now have an ability to acquire companies and assets at attractive valuations. In 2021 alone, the company completed acquisitions of LitCharts, Quillbot, CliffNotes, and Symbolab, which positions them to grow their subscriber base. In 2022, they've continued this strategy with the acquisition of the Netherlands-based company Scribbr. Given the inquisitive nature of the company, and the degradation of values in both the public and private markets for education technology companies, combined with a significant amount of capital to deploy, Course Hero has a great opportunity to grow and to thrive. In February, Forge Global released its full-year 2021 financial results, showcasing both record revenue and trading volumes. The company's net revenue grew 75% year over year in 2021 to $125 million. Forge's success was driven by its trading volume, which grew 71% in 2021 to $3.2 billion. In addition, the company continues to gain traction with Forge Intelligence, its private market data platform subscription service. On March 22nd, Forge Global was officially listed on the New York Stock Exchange under the symbol FRGE via a SPAC merger. The merger, completed with Motive Capital Corp., brought in gross proceeds of $215 million. Since Forge's public market debut, the stock has experienced extreme volatility, reaching a high of $47.50 and a low of $11.06. As we mentioned in our press release and presentation today, as of March 31st, we valued our position at $62.7 million. Given the significant declines in all major stock indices, we thought it would be prudent to provide shareholders with a high-level overview of how this volatility can potentially impact our future NAV per share. holding our private portfolio company valuation static as of quarter end, and using share prices of our public companies as of yesterday, May 3rd, inclusive of all applicable discount accounts for liquidity. We estimate the potential current impact of the volatility of the overall decline to be in the range of approximately 55% of 55% per share decrease. This decrease is primarily driven by the volatility of the forged global public share price. As always, it is our intent to be as transparent as possible in respect to our dividend distributions. Given our dividends are based on our net realized gains, present market conditions coupled with customary lockup restrictions on our public investments have generally impacted the opportunity to monetize our positions. Due to these constraints, we anticipate providing additional clarity on the timing and amount of any future distributions later this year. As we have previously stated, it is our intent to sell our public positions when lockups expire and there is relative stability in the marketplace. We have not strayed from this approach. As restrictions are lifted and markets stabilize, we will continue our active and methodical approach to liquidating these unrestricted public positions. Given the volatility occurring in both public and private markets, we believe being patient, remaining prudent on price, and staying true to our investment thesis gives us significant opportunities to make compelling new investments in high-growth companies and industries and to strategically liquidate our public positions in order to drive the most shareholder value. We will continue to focus on democratizing access to the venture capital ecosystem and, as always, will maintain our key philosophy of investing in great companies to deliver value for our shareholders. Thank you for your attention, and with that, I will hand it over to Alice.