SuRo Capital Corp.

Please stand by. We're about to begin. Good day, ladies and gentlemen, and thank you for standing by. Welcome to the SURO Capital Fourth Quarter and Fiscal Year 2022 Earnings Conference Call. During the presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. During that time, we ask that you please limit yourself to one question. To signal for a question, it is star 1 during the Q&A period. This call is being recorded today, Wednesday, March 15, 2023. I'll turn the call over to Sindhu Kotha of Suro Capital. Please go ahead.

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.serocap.com under Investor Relations, Events, and Presentations. Today's call is being recorded and broadcast live on our website at www.serocap.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 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 its 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 statement. 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 compliant filings with the SEC. Management does not undertake to update such statements unless required to do so by law. To obtain copies of Serocapital's latest SEC filings, 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, Sindhu. Good afternoon, and thank you for joining us today during these tumultuous times. We would like to share the results of Cerro Capital's fourth quarter and fiscal 2022. Over the weekend, the second and third largest bank failures in U.S. history occurred when Silicon Valley Bank and Signature Bank closed. The residual impact of these events is still rippling through the broader markets. In particular, the global financial system is experiencing instability that is despite the actions taken by the Federal Reserve. While Silicon Valley Bank and Signature Bank may be the only financial institutions to fail, uncertainty may cause significant further dislocation. Additionally, the SVB closure has highlighted the concentration of interdependencies that exist within and between the startup and venture capital ecosystems. As such, we expect the unfortunate collapse of SVB, which was densely integrated within the startup funding ecosystem, to potentially have longer tail impacts and possibly shift the way companies think about liquidity solutions. Amid these events, our team moved quickly to both assess and mitigate, where possible, exposure to SVB, as well as reach out to our portfolio companies to determine what support Cerro Capital might be able to provide. Cerro Capital's direct exposure to the affected banks was limited to less than a $2,000 business checking account at SVB. Cerro Capital's cash and securities are held at our custodian, U.S. Bank, and in its short-term U.S. Treasuries. Additionally, stemming from actions by the Fed, all of our portfolio companies that held cash at SVB are expected to regain access to those funds. It is important to also contextualize these recent events, which have taken place against the backdrop of 2022. As has been well documented, 2002 was one of the worst years for equity markets in decades. The year saw the NASDAQ composite index decline by over 30%. While technology stocks, as measured by the Morningstar U.S. Technology Index, declined 31.5%, their largest single year lost since 2008. NASDAQ market intelligence reports that growth-heavy communications consumer discretionary, and technology sectors were the largest with 2022 declines by approximately 40%, 37%, and 28% respectively. Given the overall market conditions, we have seen and continue to see a repricing of private securities and opportunities for us to take advantage of the market's volatility. While we have been cautious about deploying capital into the turbulent markets, we are seeing increasingly compelling opportunities as the pricing of private companies adjust to the movements in the public markets. To that end, we made investments totaling $24 million over the course of the year, with $10.3 million of that being deployed in Q4. The Q4 investments comprise of one new portfolio company, Locus Robotics, and a follow-on investment made in Fanpower via Serocapital Sports. Moving further into the new year with over $225 million of investable capital, we remain poised to continue investing in both primary and secondary opportunities, later stage high growth companies at which we believe will be compelling valuations. We believe current market conditions present an opportunity to explore prospects as businesses opt to remain private for longer to avoid going public in volatile market conditions. Additionally, while there is still a divergence between pricing in the private and public markets, we believe valuations will continue to converge, creating advantageous conditions for us to deploy capital. Despite significant slowdowns in SPAC transactions, we are pleased to share the following recent updates of our SPAC positions. On February 27, 2020, the Columbia acquisition announced their intention to merge with Public Square and e-commerce marketplace at a valuation of more than $200 million. Assuming the combination between Columbia and PSQ Holdings is completed, Cerro Capital's position in the new company will be worth more than $25 million. If the price of the new company holds, Cerro will see an over $20 million increase in its position given our current stake in Columbia Acquisition. Our current cost basis for the investment is approximately $2.7 million. On February 17, 2023, both Churchill Capital Six and Churchill Capital Seven filed eight case notifying investors they had signed LOIs with target companies. While we are encouraged they have signed LOIs, this does not ensure that they will reach a definitive agreement or consummate these transactions. Turning to Q4, we ended the year with a net asset value of $210 million or $7.39 per share. That NAV compares to a net asset value of $7.83 a share in Q3 2022 and $11.72 a share at the end of 2021. Turning to our top five positions, I first want to highlight our cash position. As of year end, our cash and short-term treasuries available for investment were approximately $125, representing 44% of our gross assets. As we have previously discussed, we believe having cash in this environment advantageously positions us to continue seeking out new opportunities becoming available due to current market conditions. Cerro Capital's top five positions as of December 31st were Lernio, formerly known as Coursero, Blink Health, Orchard Technologies, Locust Robotics, and Architect Capital Payjoy SPV. These positions accounted for approximately 59% of the investment portfolio fair value. Additionally, as of December 31st, our top 10 positions accounted for approximately 78% of the investment portfolio. In the fourth quarter, Coursera announced the formation of Learnio, a new platform that will house the company's six distinct operating businesses. Cliff Notes, Coursero, Littra, Qobot, Scribbr, and Symbolab. The parent organization will now be under the Lernio name to reflect the company's recent growth in business segments that not only support educational use cases, but also support the development of foundational skills that unlock productivity beyond education. Our most recent investment to the CERV capital investment portfolio is Locust Robotics. Locus is an industry-leading autonomous mobile robotics company that seeks to productivity and accuracy in fulfillment and distribution warehouses. We participated with a $10 million investment in Locus' Series F Preferred Round that was led by Goldman Sachs Asset Management and G2 Venture Partners, and as reported by Business Insider, was oversubscribed. Locus seeks Locus seeks to deliver productivity increases and improvements in warehouse operations by coordinating human labor with their robotic systems. Locus is currently deployed in over 230 sites globally for more than 90 worldwide customers, including DHL, Geotis, and Rider. We believe Locus' innovative solution is well-positioned to enable retailers, third-party logistics companies, 3PLs, and especially warehouses, to effectively manage the increasingly complex and demanding requirements placed on today's fulfillment environments. Since completing the funding round, Locust Robotics has formed partnerships with Berkshire Gray, a leader in AI-enabled robotic solutions that automate supply chain processes, and Opturo, a leading technology platform for retail and returns and reverse logistics. The company's solution picked over 230 million units during the peak holiday shopping period, more than doubling the total number of items in the entire 2021. Transitioning to our public investments, as previously stated, it is our objective to sell our public positions when lockup restrictions expire and there's a relative stability in a given company's public position trading. In line with this approach, we continue to monetize several of our public unrestricted positions over the course of the quarter. During the fourth quarter, we fully exited our position in Rover and reduced our positions in New Lake Capital Partners, Rent the Runway, and Kahoot. Subsequent to year end, we sold our remaining positions in Rent the Runway and what was remaining in Kahoot. I would also like to reiterate Cerro Capital's commitment to initiatives that enhance shareholder value. As such, given the discount our stock is trading at compared to net asset value, we believe our active share repurchase program is an efficient and an accretive deployment of capital. Alison will speak more about our share repurchase program later in the call. As always, it is our intent to be transparent as possible with respect to our dividend distributions. As a BDC that is elected to be treated as a risk, required to distribute our net realized long-term capital gains as dividends. Given we recognize net long-term losses in 2022, we will not be distributing any dividends for 2022. As public and private market volatility persists, we remain patient and selective as we continue to evaluate our new opportunities. This will allow us to leverage our considerable cash position and add high-growth companies to our portfolio and driving shareholder value. Thank you for your attention, and with that, I will hand it over to Alison Green, our Chief Financial Officer.