SuRo Capital Corp.

Quarter 2024 Earnings Call. My name is Melissa, and I will be your coordinator for today's event. Please note, this conference is being recorded, and for the duration of the call, your lines will be in a listen-only mode. However, you will have the opportunity to ask questions at the end of the presentation. This can be done by pressing star 1 on your telephone keypad to register your question. If you require assistance at any point, please press star 0, and you will be connected to an operator. I'll now turn the call over to Evan Schlossman. Please go ahead.

Thank you for joining us on today's call. I am joined today by the Chairman and Chief Executive Officer of Cero 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.cerocap.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 condition or results and involve a number of risk estimates and uncertainties, including the impact of 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 it. 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 Lyons.

Thank you, Evan. Good afternoon and thank you for joining us. We would like to share the results of Serocapital's second quarter 2024. The second quarter was a broadly positive quarter for the U.S. economy and equity markets as investors became increasingly confident in the prospect of rate cuts later in the year. But as of last week, the market has become volatile. with a VIX spiking to levels not seen since the onset of COVID in March of 2020. A confluence of domestic and global factors led to this sharp change in investor sentiment. Last Thursday's disappointing data on employment, manufacturing, and construction pushed 10-year Treasury yields below 4% for the first time since February. Investor fears were exacerbated on Friday when a weak jobs report showed decelerating U.S. job growth and rising unemployment. We also saw some large-cap technology companies issue weaker-than-expected forward guidance, driving investors' skepticism on monetization timelines for their investments in AI. Outside of the U.S., an unexpected rate hike from the Bank of Japan last week fueled investor uncertainty as the ongoing geopolitical conflict in the Middle East. With that said, in Q2, private technology companies saw increasing interest from investors. According to the pitch book NBCA Q2 2024 Venture Monitor, both venture deal count and value reached their highest quarterly levels since Q2 of 2022. With several multi-billion dollar capital raises, AI continued to see significant investor interest. In fact, according to the same source, XAI's $6 billion Series B financing, along with Coral Weave's $8.6 billion Series C and debt financing, made up over 26% of the second quarter's total dual value. As previously announced, we are pleased to have invested $15 million into the Coral Weave funding round via an SPV, in addition to a $10 million investment in Canva, which continues to integrate AI across its product suite. While volatility has increased, we are encouraged that despite the recent technology sector's struggling performance in the public markets, we have started to see the public markets broaden with a recent positive performance of mid and small cap companies and early indications of potential upcoming IPOs from companies such as Klarna, Sheen, Skims, and Shine, signaling investor increasing appetite for marquee names. For the last several quarters, we have deployed capital into late-stage technology companies such as Corweed, Canva, and Liquid Death at compelling entry prices. We believe that these investments strengthen our already well-positioned existing portfolio for the reopening of the IPO window. I would now like to discuss our note repurchase program approved yesterday by our Board of Directors. Under the program, we are authorized to repurchase in the open market up to $35 million in aggregate principal amount of our 6% notes due in 2026. Alison will discuss the note repurchase program during her prepared remarks. I would also like to announce that we have entered into a note purchase agreement with an institutional investor via a private placement, which allows us to issue up to $75 million an aggregate principal amount of 6.5% convertible notes due in 2029, with an initial issuance of up to $25 million. We believe the convertible notes position us well for a number of reasons. First, the notes are initially convertible at $7.75 per share, approximately 104% premium from today's closing price. signaling significant confidence in our portfolio from our investor. If converted, this would be a meaningfully accretive transaction to our shareholders. Second, the notes will extend the maturity of a portion of our debt by three years, strengthening our ability to deploy capital. Finally, given prevailing interest rates, we believe the interest rate of 6.5% is highly favorable. Allison will discuss the notes of purchase agreement during her fair remarks. Turning to our second quarter results, we ended the quarter with a net asset value of $162.3 million, or $6.94 per share. This net compares to a net asset value of $7.17 per share in Q1 and $7.35 per share in Q2 last year. Please turn to slide four. Turning to our top five positions, I will first want to highlight our cash position. As of core end, our cash available for investment was approximately $54.4 million, representing 22% of our gross assets. Cerro Capital's top five positions as of June 30th were Lernio, Blake Health, the CoreWeave SPV, Service Titan, and Locust Robotics. These positions accounted for approximately 49% of the investment portfolio at fair value. Additionally, as of June 30th, our top 10 positions accounted for approximately 75% of the investment portfolio. I would now like to discuss some of our larger investments in greater detail, starting with Blink Health. Blink Health's QuickSave and Blink's Rx product lines create a significant value proposition for the entire value chain. from pharma manufacturers looking to increase first fill rates all the way to consumers looking to find the best price on their medications. Blink Health continues to increase their customer base and sign additional partnerships with pharmaceutical manufacturers while maintaining relationships with pharmacies around the U.S. to distribute its quick-save product. We remain excited about Blink Health's positioning with the pharmaceutical SaaS market I believe the company is well-positioned to expand significantly in the coming months and years. Next, I would like to discuss our investment in Whoop, one of our 10 largest positions. The Whoop band provides actual insights to 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 a user to understand how specific lifestyle and training behaviors may affect their recovery and ability to perform on a given day. Whoop announced a global partnership with an investment from soccer star Cristiano Ronaldo, according to a press release in May. Ronaldo is one of several of Whoop's internationally recognized ambassador investors, including Patrick Holmes, Michael Phelps, Eli Manning, Rory McIlroy, Scotty Scheffler, and more. Whoop continues to cement itself as a leader in the health and wellness space, most recently announcing the launch of its body composition and weight trends feature in partnerships with Withings, another leader in connected health. These features create an even greater value proposition for Whoop as consumers continue to find more fitness and sleep wearables to choose from. We remain incredibly excited about Whoop's success and path to becoming the dominant wearable in the category. Please turn to slide five. As previously discussed during the second quarter, we made a $10 million investment in Canva on similar terms as the reporting company, Tender. According to Bloomberg, the valuation of the Tender came at a significant discount to Canva's last primary financing Canva is an online productivity design software collaboration platform with a mission to empower everyone in the world to design. Since our initial investment in Canva, the company has made significant strides to further integrate itself into the broader design ecosystem. For example, in May, the company announced a partnership with HP to expand its design-to-print services worldwide through localized printing options. In July, the company announced a partnership with Artlist, allowing creators to integrate royalty-free digital assets from Artlist's collection directly into the Canva platform. According to Bloomberg, Canva has surpassed $2.3 billion in annualized revenue, with sales growing at a rate of 50% year-over-year. According to PitchBook, Canva has raised over $581 billion in equity financing. from investors including Bessemer Venture Partners, General Catalyst, Iconic, and more. We are excited about Canva's traction and positioning in the market as it expands its enterprise footprint and further captures international markets. Please turn to slide six. Additionally, during the second quarter, we made a $15 million investment in CW Opportunity 2LP and SPV that is invested in CoreWeave's Series C preferred shares. CoreWeave is a specialized cloud provider delivering access to a suite of NVIDIA GPUs coupled with its fast and flexible cloud computing infrastructure. CoreWeave is a critical foundation for AI and machine learning use cases from the initial stages of training a model to ultimately providing a model's output for end users. To serve the training phase, CoreWeave offers distributed clusters for connected computers using NVIDIA's groundbreaking Quantum InfiniBand networking solution. Additionally, with spin-up times as short as five seconds, CoreWeave offers one of the most powerful inference solutions using NVIDIA GPUs. In fact, according to a company blog post, CoreWeave's inference service platform is eight to ten times faster than a major generalized cloud provider. Since our investment in early May, CoralWeave has continued its impressive momentum. Later that month, according to a company press release, CoralWeave announced an agreement for a $7.5 billion debt facility led by funds managed by Blackstone with participation from Magnetar and CodeTwo. This debt financing will be used to further grow CoralWeave's capacity to serve large enterprises at the forefront of AI, both in the U.S. and internationally. In early June, according to a company press release, CoreWeave announced its plans to invest $2.2 billion to expand and open three new data centers in Norway, Sweden, and Spain by the end of 2025. This EU expansion is in addition to their $1.3 billion UK expansion in May. According to PitchBook, CoralWeave has raised over $9 billion in debt and equity financing from investors such as Kotu, Fidelity, Magnetar, and others. With its best-in-class cloud inference, we believe CoralWeave will continue its exponential growth and capitalize on accelerated AI adoption. Please turn to page, slide seven. One additional portfolio company we'd like to highlight again is our investment in Alt-C Sponsor LLC, the sponsor of the SPAC led by Sam Altman. As previously discussed, during Q2, Alt-C acquisition shareholders approved the business combination with Oclo, a fast vision, clean power company. While we are always happy with our SPAC sponsors complete a business combination, this one is particularly exciting for a few reasons. Oclo is on the cutting edge of nuclear fuel recycling. which has many uses, including the potential to add clean power to AI-related data centers. In late May, according to a company press release, Oklo announced its partnership with Wyoming Hyperscale to supply 100 megawatts of clean energy to a state-of-the-art data center campus as part of a 20-year power purchase agreement. Last month, according to a company press release, Oklo announced the successful demonstration of its advanced fuel recycling process marking a significant step forward in enhancing fuel cost effectiveness and sustainability. Our investment thesis around AI has been deliberate, first focusing specifically on the infrastructure of AI. Our new investment in Coral Weave through the CW Opportunity LP, plus the business combination between Altsea and Oklahoma, Now it gives us further exposure to the structural foundations of the AI universe. Transitioning to our public investments. As previously stated, it is our objective to sell our public positions when lockup restrictions expire and there is relative stability in a given public's positions trading. In line with this approach, we began to monetize our position in public square holding shares as their lockup restrictions expire subsequent to quarter's end. I would like to also further reiterate CERO's commitment to initiatives that enhance shareholder value. Given the discount our stock has traded at compared to net asset value per share, we believe our recent modified Dutch auction tender offer was an efficient and accretive deployment of capital. Alison will discuss the results of the tender offer in her prepared remarks. Given our recent investments and broader portfolio, we believe we are well-positioned to drive shareholder return. Thank you for your attention, and with that, I will hand it over to Allison, our Chief Financial Officer.