SuRo Capital Corp.

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Suro Capital's second quarter 2022 earnings call. During today's presentation, all parties will be in a listen-only mode. Following this presentation, the conference will be open for questions. This call is being recorded today, Wednesday, August 3, 2022. I will now turn the conference over to Mr. Jackson Stone of Suro Capital. Please go ahead, sir.

Thank you for joining us on today's call. I am joined today by the Chairman and Chief Executive Officer of Suro Capital, Mark Klein, and Chief Financial Officer, Alison 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.surocap.com. Replay information is included in our press release issued today. This call is the property of Suro 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 condition or results. and involve a number of risks, estimates, and uncertainties, including the impact of the 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 Serocapital's latest SEC filings, please visit our website at www.serocap.com or the SEC's website at sec.gov. Now, I would like to turn the call over to Mark Klein.

Thank you, Jackson. Good afternoon, and thank you for joining us. We are pleased to share the results of Cerro Capital's second quarter 2022. As we previously mentioned, public equity market performance in the first half of 2022 was the worst first half performance in over 50 years. This decline occurs simultaneously with inflation hitting a four-decade high of 9.1% and over a 40% year-over-year decrease in the Consumer Sentiment Index to its lowest level since the inception in the 1940s. Private markets suffered as well, as numerous late-stage unicorns experienced turbulent market conditions. This turbulence has forced new financing rounds at valuations below previous capital raises, secondary trades at significant discounts, and companies lowering their internal valuations. Originally, reports of companies like Instacart cutting their internal valuation by 38% back in March were surprising. Now reports of companies like Klarna completing financing at an 85% discount to their last financing round and Stripe marking down their internal valuation by 28% have become increasingly prevalent. While we exited a significant portion of our portfolio in 2021, and have maintained over 40% of our investable assets in cash, we also experienced a challenging quarter. At the end of the second quarter, Ciro Capital had a net asset value of approximately $280 million, or $9.24 per share, down from $381 million, or $12.22 per share, at March 31st, 2022. These market dynamics, while impactful in short-term valuations, have provided us with compelling long-term investment opportunities. With over $150 million in cash at quarter's end, we remain confident and optimistic in seeking out compelling high-growth companies. Given current conditions, we believe being judicious on price when assessing potential investment opportunities is paramount to creating shareholder value. Currently, we are seeing private companies seeking primary financing at flat or discounted prices and private shareholders offering secondary sales at significantly discounted rates. Please turn to slide four. To that extent, during the second quarter, we invested $10 million in WHOOP, a wearable health device company. We were able to acquire Series C preferred shares through a secondary transaction at a significant discount to Whoop's last financing. The Whoop band provides actionable insights for users to optimize performance by offering metrics like heart rate variability and resting heart rate. The combination of Whoop's best in class software and wearable band allows the user to understand how specific lifestyle, and training behaviors may affect their recovery and ability to perform on a given day. As consumers continue to become more health conscious, we believe WHOOP sits in the heart of the broader fitness ecosystem and has a significant opportunity to become a dominant player in the health and wellness sector. Please turn to slide five. Xero Capital's top five positions as of June 30th were Course Hero, Forge Global, Blink Health, Aspiration, and Stormwind. These positions accounted for approximately 58% of the investment portfolio at fair value. Additionally, as of June 30, our top 10 positions accounted for approximately 79% of the portfolio. As previously discussed, on December 14, our largest position Course Hero announced that they raised $380 million at a $3.6 billion valuation in their Series C financing. In 2021, Course Hero completed acquisitions of LitCharts, Quillbot, CliffNotes, and Symbolab, positioning them to grow their subscriber base. Course Hero continues to make strategic acquisitions, and so far in 2022, they have acquired Netherlands-based company Scribbr. We believe Coursera's recent fundraising gives them a significant advantage to continue to acquire companies and assets at attractive valuations, particularly against the backdrop of a challenging education technology market, as reported by public companies Chegg, Coursera, and 2U. 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 debut, the stock has experienced extreme volatility, reaching a high of 47.5 and a low of near $4.50. Serial Capital's position is locked up until mid-September. As previously stated in our It is our objective to sell all our public positions when lockup restrictions expire and there is relative stability in a given public positions trading. We have not strayed from this approach. As customary lockup restrictions expire and markets stabilize, we will continue our active and methodical approach to liquidating these unrestricted public positions. As always, It is our intent to be as transparent as possible with respect to our dividend distributions. As a BDC, our dividends are based on net long-term realized capital gains. Presently, substantial market volatility has significantly impacted the opportunity to monetize our public positions. As a result, we intend to provide additional clarity on the timing and amount if any, of future distributions this year. As we've consistently demonstrated, Cerro Capital's Board of Directors and management are committed to initiatives that enhance shareholder value, and we believe the market is currently undervaluing our portfolio. Accordingly, on August 1, 2022, our Board of Directors authorized a modified Dutch tender offer to purchase up to $2 million shares of our common stock at a price per share between $6 and $7. This modified Dutch tender offer comes in addition to the $15 million expansion of our now $55 million share purchase program authorized by our Board of Directors in March. Assuming 2 million shares tendered, Soro Capital will have repurchased over 3 million shares or approximately 10% of our outstanding shares since the expansion of the share repurchase program in mid-March of this year. Given our stock is trading at a significant discount to net asset value, coupled with the extreme market volatility, we believe the modified Dutch auction tender to be an efficient and accretive deployment of capital. Allison will discuss the tender offer and share and purchase program in more detail later in the call. Given both public and private market volatility, we believe being patient with the public markets upon exits and the private markets upon investing, remaining prudent on price, and staying true to our investment thesis will ensure Searle Capital is well-positioned take advantage of this instability and dislocation to make compelling new investments in high-growth companies and industries and to strategically liquidate public positions to drive the greatest shareholder value. We will continue to focus on judiciously deploying our healthy cash balance to invest in great companies and deliver value for our shareholders. Thank you for your attention and And with that, I will turn it over to our Chief Financial Officer, Alison Green.