SuRo Capital Corp.

Good day and welcome to the Sewell Capital Second Quarter 2023 Earnings Call. Today's call is being recorded. Your lines will be on listen only. However, you will have the opportunity to ask questions at the end. This can be done by pressing star 1 on your telephone keypad to register your questions. If you require assistance at any point, please press star 0 and you'll be connected to an operator. I will now hand you over to your host, Adam Bates, to begin today's conference. Thank you.

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, 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.surocap.com. 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 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 any market volatility that may be detrimental to our business, our portfolio companies, our industry, in 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 CERO Capital's latest SEC filings, please visit our website at www.cerocap.com or the SEC's website at sec.gov. Now I'd like to turn the call over to Mark Klein.

Thank you, Adam. Good afternoon and thank you for joining us. We are pleased to share the results of CERO Capital's second quarter 2023. The last four months have been among the most active period Soro has had in the last couple of years. We made five investments, three in new portfolio companies and two in follow-on investments. Additionally, we have had one of our SPAC investments close its previously announced merger and two other SPACs announce agreements to merge. Additionally, on the shareholder initiative front, we completed our $13.5 million modified Dutch tender offer and today announced the extension and increase of our share repurchase program to $60 million. First of all, as to our new investments. In the private markets, we remain steadfast to our thesis that potential investments would become available in the secondary market. We believe this has begun to come to fruition in the second quarter and subsequent to quarter's end as we made investments in three new portfolio companies as well as follow-on investments and two others. During the quarter, we executed a $10 million investment in Service Titan, a software business home in commercial trades through a secondary transaction. Subsequent to quarter's end, we invested $5.8 million in Forkites, a supply chain visibility software company, again through secondary transactions. Also subsequent to quarter's end, we invested $1 million in StakeTrade, a sports betting exchange doing business as profit exchange through a primary transaction as part of the Sorrel Capital Sports Portfolio. We believe our remaining investable capital of over $100 million as of the quarter's end will enable us to continue to act on opportunities such as these. Please turn to slide four. I would now like to provide more detail on our investments starting with our $10 million secondary investment in Service Titan. Service Titan's cloud-based software platform is designed to empower trades, trade businesses in the residential and commercial HVAC, plumbing, electrical, and other sectors. Service Titan's comprehensive end-to-end solution equips contractors with essential tools to efficiently manage and expand their businesses while delivering exceptional customer experiences. Currently serving over 11,800 businesses that have previously been reported to employ 100,000 contractors, Service Titan has established a strong presence in the market. Today, technology remains a vital tool for contractors to stay ahead. According to a recent study conducted by Thrive Analytics on behalf of Service Titan, 66% of contractors see digital transformation as a critical component of their operations, and 59% of surveyed businesses reported using more than four distinct software solutions to manage their operations. As we look ahead, we believe ServiceTitan is well positioned to continue to provide to the trades market. Moving on to our $5.8 million secondary investment in Forkites. Forkites is a leading real-time supply chain visibility solution. While the concept of supply chain visibility has been around for some time, the ability to track freight trucks and shipments in real time has only been available more recently. Fork Heights has been a pioneering force behind the idea that companies should know where their goods are at all time, from the initial onset of being loaded onto a truck when they reach a final delivery destination. Executing against the idea of real-time visibility, Four Kites now tracks more than 3 million shipments daily over 200 countries and territories. The impact of Four Kites technology is evident in its impressive clientele, which includes recognized brands such as nine of the top 10 consumer packaged good companies and 18 of the top 20 food and beverage companies. Today, Four Kites helps over 1,200 of the world's most recognized brands leverage real-time visibility and unlock efficiencies that saved them millions of dollars a year. They also have been named a leader in the Gartner Magic Quadrant for real-time transportation visibility platforms for three years in a row. Since 2021, Forkites has announced strategic investments from Qualcomm Ventures, Volvo Group Venture Capital, Zebra Technologies, FedEx, and Mitsui. We believe these collaborations and potential alliances help drive forward Forkites' position as a leader in automated, interconnected, and collaborative global supply chains. We believe that Fork Heights is in a unique position to capture additional market share as they continue expanding their business and target customers with some of the most complex supply chain needs. Moving on to our $1 million investment in profit exchange through a primary transaction as part of the Suro Capital Sports portfolio. Profit Exchange is a peer-to-peer sports betting exchange focused on providing bettors the best pricing and seamless experience that is different from the incumbent operators. Bettors on the platform have the ability to request their own wagers or pick from outstanding options that are driven by other users and market makers. The company has gone through extensive licensing and regulatory steps and is now live in New Jersey with plans to expand to other legal betting states in the future. We are excited about the exchange wagering opportunity in the US, given the success of Betfair has had in the United Kingdom. And we believe Profit Exchange has both the team and the technology to execute on the large market opportunity. Next, I would like to speak to our follow-on investments. During the quarter, we made a $500,000 follow-on investment in Shogun Enterprise, which is doing business as Hearth. Hearth is a financial technology company that provides over 20,000 home improvement professionals with the tools they need to win more jobs and provide excellent customer experience, according to the company's website. We're excited to continue to support Harth's goal of bringing the market of home improvement into the digital economy. Additionally, during the quarter, we made a $500,000 follow-on investment in Payjoy. Payjoy is a provider of smartphone locking technology that has raised over $213 million of equity and debt funding to date, according to PitchBook. We're pleased to continue to invest in Payjoy's goal of expanding smartphone access to emerging markets through this technology. Please turn to slide five. Subsequent to Cordura and Combier Acquisition Corp, a SPAC in which we own both stock and warrants, successfully closed its business combination with PSQ Holdings, also known as Public Square. Public Square is a leading marketplace of patriotic businesses and consumers. According to the company's merger closing announcement, the company has seen quick adoption of its platform, with more than 1 million users and 55,000 businesses signing up in less than a year. Public Square began trading on the New York Stock Exchange under the symbol PSQH on July 20th. At quarter end, we valued our investment at approximately $1,700. Our cost basis in Columbia is approximately $2.7 million. As of the business combinations closing on July 19th, our warrants are subject to a lockup period equal to the later of 30 days or the registration statement's effectiveness. The registration statement was filed this afternoon. Our common shares are subject to a one-year lockup period with a pricing condition that would unlock our shares earlier. Allison will provide additional details on our Columbia investment later in the call. In addition, on July 11th, 2023, Altsea Acquisition Corp, a SPAC whose chief executive officer is Sam Altman, and in which we own share units, announced it signed a definitive agreement to merge with Oklo, an advanced fission technology and nuclear fuel recycling company. According to the merger announcement press release, the company has achieved significant deployment and regulatory milestones, including securing a site use permit from the United's Department of Energy and receiving a fuel award from the Idaho National Laboratory for a commercial scale advanced vision power plant in Idaho targeted to go online in either 2026 or 2027. The combined company will be named Oklo and intends to list on the New York Stock Exchange with the ticker symbol OKLO. The merger is expected to provide Oklo with up to $500 million of gross capital from Alt-C's trust account. This assumes no redemptions by Alt-C shareholders. The transaction, which has been approved by the board of directors of Oklo and Alt-C, is expected to close in late 2023 or early 2024. subject to approval by ALTSI shareholders, Oklahoma shareholders, ALTSI having available cash of closing of at least $250 million and other customary closing conditions. And on August 1st, 2023, Churchill Capital 7, a SPAC in which we own and direct shares of our units to the sponsor vehicle, announced it signed a definitive agreement to merge with CORPAC. a corporate compounder specializing in acquiring small and medium-sized enterprises, also known as SMEs, in the United Kingdom. According to the merger announcement press release, Corpac has delivered meaningful financial returns and sustained value over multiple economic cycles. It has achieved a compound annual growth rate for revenue of 16% from 2018 to 2022, with average organic growth outpacing the UK GDP's growth during the same period. Corpac's portfolio consists of 41 businesses in various industries, providing diversification and contributing to the resilience through economic cycles. Upon closing of the transaction, the combined company will be named Corpac, and it tends to be listed on the New York Stock Exchange. The transaction is expected to deliver up to $592 million in gross proceeds from Churchill Seven's trusted account, assuming no redemptions. The transaction has been approved by the Board of Directors of CORPAC and Churchill 7 and is expected to close in late 2023 or early 2024, subject to various approvals. And at least $350 million of dollars delivered net of transaction fees. At quarter end, the value of our investments in ALTSI and Churchill 7 were marked equal to our cost basis of approximately $250,000 and $300,000 respectively. Turning to the second quarter, we ended the quarter with a net asset value of $186.7 million or $7.35 per share. This NAV compares to a net asset of $7.59 per share in Q1 2023 and $9.24 in Q2 2022. Please turn to slide six. Turning to our top five positions, I first want to highlight our cash position. As of quarter end, our cash and short-term U.S. Treasury's available investment were approximately $100 million, representing 38% 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 emerging from current market conditions. Zero Capital's top five positions as of June 30th were Lernio, Columbia, now PSQ Holdings, Blink Health, Stormwind, and Locust Robotics. These positions accounted for approximately 51% of the investment portfolio at fair value. Additionally, as of June 30th, our top 10 positions accounted for 78% of the investment portfolio. Transitioning to our public investments, as previously stated, it is our objective to sell our public positions when restrictions expire and is relative with stability in a given public position's trading. In line with this approach, we've continued to monetize our public unrestricted positions. During this quarter and throughout the last month, we monetized a sizable portion of our position in Nextdoor and plan to continue optimistically monetizing our public positions as market conditions improve. As previously discussed, we continue to focus on shareholder-friendly initiatives. To that end, we completed our modified Dutch tender auction, which resulted in a purchase of 3 million shares of common stock at $4.50 per share. Alison will discuss the results of the tender offer in more detail shortly. In addition to the tender offer, on August 7th, our Board of Directors authorized an additional $5 million share repurchases and an extension of the share repurchase program through October 31, 2024. The expansion brings the total authorized under the share repurchase program to $60 million. Given the significant discount at which our stock is trading compared to net asset value, we determine the current continuation of the share repurchase program to be an efficient and accretive deployment of capital. As public and private market volatility persists, we remain patient and selective as we evaluate new opportunities. We believe our considerable investable capital affords us an opportunity to continue to add high-quality companies to our portfolio. Thank you for your attention, and with that, I will hand it over to Alison Green, our Chief Financial Officer.