SuRo Capital Corp.

Hello and welcome to CERO Capital's fourth quarter and fiscal year 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 on listen only. 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 keypad to register your question at any time. If you require assistance, please press star 0 to be connected to an operator. I'll now turn the call over to Jackson Stone. Please go ahead.

Thank you for joining us on today's call. I'm joined today by the Chairman and Chief Executive Officer of Serocapital, 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, 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 risks, 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 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. I would like to thank everyone for joining the call and thank our investors for their continued support. We are excited to share the results of Suro Capital's fourth quarter and fiscal year 2024. We're especially excited to welcome the many new participants on the call. With that in mind, we'll start with a quick history of Suro before diving into why we believe our portfolio is at a major inflection point. Based on the thesis that companies would stay private longer, we started this firm 14 years ago with the objective of providing access to market-leading private companies before they go public. That thesis has played out. When CERA was founded, there were fewer than 100 unicorns. Today, there are roughly 1,500 unicorns, 50 decacorns, and a handful of centicorns. Over this time period, We have owned a number of marquee technology companies, including Facebook, Twitter, Snap, Spotify, Lyft, Dropbox, Palantir, and Coursera, just to name a few. We've enjoyed many robust market cycles, including mid-2020 to early-22, when we monetized over $250 million of our portfolio assets and declared and paid a total of approximately $9.00 in per share and distributions. As with all BDCs, we are required to distribute functionally all of our net realized gains. Consistent with our past practices, we will be transparent and communicative about our dividend strategy. Today, we believe we are looking at another one of those highly compelling moments in the market. The next wave of anticipated IPOs in our portfolio include CoreWeave, Canva, Whoop, Liquid Death, Lime, Bass Data, and at some point in time, OpenAI. This is as large of a pipeline of pre-IPO businesses as we can recall in the fund's history. We believe the IPO window is reopening, and this is an incredibly exciting time for our portfolio as we approach potential monetizations. We are already seeing the exciting IPO activity build in our portfolio. On March 3rd, Corweave filed its S-1 ahead of what has been widely reported as one of the most highly anticipated IPOs of the year. According to a Bloomberg report, Corweave's IPO is expected to target a valuation greater than $35 billion and is seeking to raise approximately $4 billion. Corweave's perspectives indicates the company generated $1.9 billion in 2024 revenue, over eight times greater than in 2023. According to a report from the information, CoreWeave expects that tremendous growth to continue, forecasting $8 billion in 2025 revenue. Subsequent to CoreWeave's IPO filing, the company announced that it signed a significant contract with OpenAI. According to a company press release, CoreWeave signed a five-year contract with OpenAI worth up to $11.9 billion, a deal that would also give OpenAI a $350 million equity stake in CoreWeave. Additionally, the company announced it reached an agreement to acquire Weights & Biases, a leading AI developer platform. The acquisition extends CoreWeave's cloud platform by enabling an end-to-end experience for customers, enhancing functionality, for the world's leading AI labs and enterprises to build, tune, and deploy AI applications. According to a report from the information, CoreWeave is acquiring weights and biases at a $1.7 billion valuation. As previously announced, during the fourth quarter, we made an additional $5 million follow-on investment in CoreWeave Series A shares via secondary transaction. That investment brought our total basis in CoreWeave to $25 million, making CoreWeave the single largest investment in our fund's history. With its best-in-class cloud infrastructure, we believe CoreWeave will continue its exponential growth and capitalize on accelerated AI adoption. We are pleased to see the company's tremendous success to date and look forward to the company's imminent IPO. This is exactly the type of pre-IPO access we seek to provide our shareholders. I will now discuss our other AI infrastructure investments, OpenAI and VAST data, starting with OpenAI. As previously announced, during the third quarter, we made a $17.5 million investment in OpenAI through the Class A interest of ARC Type 1 Deep Ventures Fund. According to a Wall Street Journal report last month, as well as many other news sources, OpenAI is in talks to raise $40 billion at a $300 billion valuation. To put this into the context of our portfolio, if a financing were completed at this valuation, we anticipate the value of our OpenAI investment would be approximately double. In addition to this financing, it was announced that OpenAI is a lead partner in the Stargate project. According to the company's website, the Stargate project intends to invest $500 billion over the next four years building new AI infrastructure for OpenAI in the United States. Turning to the business itself since our last update, OpenAI has made significant strides in both its consumer and enterprise offerings. The company recently launched GPT-4.5, an advanced multimodal model that enhances speed, accuracy, and reasoning capabilities across text, image, and audio inputs. OpenAI's growth has been remarkable. According to a report from the information, OpenAI expects revenue to more than triple this year from $3.7 million this year to more than $12.5 million and expects 2026 revenue to reach $28 billion. According to a Reuters report, last month OpenAI had more than 400 million active users. For comparison, according to a report from the information in January 2024, OpenAI had approximately 110 million active users. According to a Reuters report on the enterprise side, OpenAI has more than 2 million paying business customers, more than double the number of business customers it had in September. As previously announced, during the quarter we made a $12 million investment in Vast Data through the membership interests of IH10 LLC and SBV, whose sole portfolio asset is an interest in Vast Data's Series B preferred shares. VAST data is a data management solution for leading AI companies. VAST has emerged due to an inability of legacy data management solutions to serve customers building complex AI applications. For several decades, enterprise data software was built around the concept of tiers. Tiered storage is the idea that data is segmented based on its importance to daily operations. However, AI applications need access to all data at once, rendering the tiered storage system increasingly obsolete. FAST collapses the tiered storage model by offering all-flash storage. All-flash storage allows all data in a pipeline as opposed to data in a specific tier to be accessed instantly. This is especially valuable for companies that train AI models to produce outputs. Since our last update, VAST has continued to expand its presence in the AI infrastructure space through key partnerships and new product innovations. Recently, the NHL selected VAST Data as its data infrastructure partner to support NHL Edge, the league's advanced analytics platform. The NHL will leverage VAST Data to power real-time tracking of players and the puck generating new insights for teams, broadcasters, and fans. Additionally, Vast Data recently announced Insight Engine, a next-generation AI-powered analytics platform built in collaboration with NVIDIA. Insight Engine enables organizations to analyze large data sets instantly, leveraging accelerated computing power to power real-time decision-making. BassData has quickly cemented itself as a dominant AI infrastructure provider. According to a company press release at the end of 2023, BassData has reached over $200 million in ARR. Additionally, the company had been cash flow positive for the last three years. According to PitchBook, BassData has raised almost $400 million in equity financing from such investors as NEA, General Atlantic, TPG, and others. We believe vast data is poised for growth as a leading data management provider for the AI universe. Before highlighting additional updates in our portfolio, I'd like to turn to our fourth quarter results. We ended the quarter with a net asset value of $157.6 million, or $6.68 per share. Please turn to slide 10. Cerro Capital's top five positions as of December 31st were CoreWeave, which includes our $15 million investment in CW Opportunity 2LP and our aggregate $10 million follow-on secondary investments in CoreWeave. OpenAI threw our investment in ARK Type 1 Deep Ventures Fund, Learnio, Blink Health, and Whoop. These positions accounted for approximately 44% of the investment portfolio at fair value. Additionally, as of December 31st, our top 10 positions accounted for approximately 74% of the investment portfolio. As of your end, our liquid assets totaled approximately $23.6 million, representing 10% of our gross assets. Continuing with our broader portfolio, in December, Service tightened prices IPO at $71 per share above the anticipated raise range, raising approximately $625 million. It closed the first day of trading at $101 per share, reflecting a 42% increase. As of today, Service Titan stock closed above $85 per share, well above our cost basis. We are pleased with Service Titan's strong public market debut, which we expect to be the first of several IPOs in our current portfolio. As is typical, we have a 180-day lockup period from the IPO date on our service-tightened public shares. Turning to Canva. As previously discussed, Canva is an online productivity design software and collaboration platform with a mission to empower everyone in the world to design. According to the company's website, as of December, Canva had more than 220 million monthly users in over 190 different countries, up from 200 million monthly users in October. According to the same source, Canva hit the milestone of 30 billion designs created by the Canva community. That is over 38.5 million designs now created per day. On the enterprise side, the company announced that more than 95% of the Fortune 500 is using Canva to create, collaborate, and communicate. According to a CNBC report, Canva is now generating approximately $2.5 billion in annualized revenue. As previously discussed, the company reported having completed several secondary transactions at a $32 billion valuation up from the $26 billion valuation it received in its larger company tender in April. We made our $10 million investment in Canva on similar terms as the reported April company tender. Moving on to WHOOP. Subsequent to year end, we executed a $1 billion follow-on investment in WHOOP via a safe note, bringing our total cost basis to $11 million. We made our initial $10 million investment in WHOOP in Q2 2022 via a secondary transaction. Since our initial investment, WHOOP has solidified its position as a leader in the wearable fitness and performance tracking space. Last year, WHOOP expanded into several key international markets, including the Middle East, where it has seen strong consumer adoption and growing brand recognition. WHOOP has also continued to distinguish itself as the go-to wearable for elite athletes and high performance individuals. In a testament to its credibility at the highest level of sports, Cristiano Ronaldo became a global brand partner, elevating WHOOP's presence in elite performance training. Additionally, Patrick Mahomes wore a WHOOP during the Super Bowl. showcasing the device in tracking and optimizing real-time athletic performance on the biggest stage in sports. I would now like to provide an update on our portfolio company, Liquid Death. Last month, Liquid Death aired its first national Super Bowl advertisement, marking a significant milestone in the company's marketing strategy. In addition to this major marketing initiative, since our investment Liquid Death has expanded its product line with the introduction of soda-inspired sparkling waters. The new flavors Killer Cola, Dr. Death, and Root Beer Wrath offers consumers a unique twist on soda flavors, aligning with the media brand's edgy strategy. The addition of soda-flavored sparkling water adds to the ever-growing portfolio of teas, sparkling waters, and still waters. These developments reflect Liquid Death's commitment to innovative market and product diversification, reinforcing its position as a disruptive force in the beverage industry. We are excited about Liquid Death's trajectory and remain confident in its potential to further disrupt the beverage market. The company's commitment to creating marketing and product innovation reflects its ability to stand out in a competitive market, and we look forward to supporting its continued success Please turn to slide 15. Turning to our SPAC investments. We are excited to report the full exit of our position in Oklo during the fourth quarter, achieving a significant return of over 20 times our initially invested capital in Alt-C Sponsor LLC, the sponsor of Alt-C Acquisition Corp. Additionally, we exited all of our public square common shares at a significant profit. Subsequent to year end, Columbia Acquisition II announced it entered into a definitive business combination agreement. The transaction is expected to close this summer. These examples are all testaments to the success of our SPAC sponsor strategy we established several years ago. Alison will provide additional detail on our public positions and investment monetizations in her remarks. Before I turn the call over to Allison, I would like to reiterate how excited we are about the positions of our portfolio. Across AI infrastructure and applications and consumer goods and services, our portfolio is packed with market-leading companies on the verge of IPOs. Within AI infrastructure, CoreWeave, OpenAI, and Vast Data represent a quarter of gross assets and 37% of our net assets. 2024 alone, we invested nearly $55 million in AI infrastructure. Within AI adjacent companies, Canva, ServiceTitan, Whoop, Blink Health, and Locust Robotics, representing another 29% of our gross assets. Within our consumer vertical, Liquid Death and Lime are two dynamic leading brands with businesses at scale for IPOs. Altogether, these investments give our investors access to some of the most highly anticipated pre-IPO names in the private markets. Thank you for your attention, and with that, I will hand it over to Allison Green, our Chief Financial Officer.