SSSSL SuRo Capital Corporation

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):

May 8, 2024

 

SURO CAPITAL CORP.

(Exact name of registrant as specified in its charter)

 

Maryland	1-35156	27-4443543
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

 

640 Fifth Avenue

12th Floor

New York, NY 10019

(Address of principal executive offices and zip code)

 

Registrant’s telephone number, including area code: (212) 931-6331

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class:	Trading symbol:	Name of each exchange on which registered:
Common Stock, par value $0.01 per share	SSSS	Nasdaq Global Select Market
6.00% Notes due 2026	SSSSL	Nasdaq Global Select Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨

 

 

Item 2.02.

Results of Operations and Financial Condition.

 

On May 8, 2024, SuRo Capital Corp. (the “Company”) issued a press release announcing its financial results for the fiscal quarter ended March 31, 2024 (the “Press Release”). A copy of the Press Release is included as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated into this Item 2.02 by reference.

 

The information disclosed under this Item 2.02, including the information set forth in Exhibit 99.1 hereto, is being “furnished” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise. The information in this Item 2.02 shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, or into any filing or other document pursuant to the Exchange Act, except as otherwise expressly stated in any such filing.

 

Item 9.01.

Financial Statements and Exhibits.

 

Exhibit No.	Description
Exhibit 99.1	Press Release dated May 8, 2024*
Exhibit 104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

  

* The press release attached hereto as Exhibit 99.1 is “furnished” and not “filed,” as described in Item 2.02 of this Current Report on Form 8-K. 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: May 8, 2024	SURO CAPITAL CORP.
	By:	/s/ Allison Green
		Allison Green Chief Financial Officer, Chief Compliance Officer, Treasurer and Corporate Secretary

 

 

Exhibit 99.1

 

 

SuRo Capital Corp. Reports First Quarter 2024 Financial Results

 

Net Asset Value of $7.17 Per Share as of March 31, 2024

 

Completed $35 Million in New Investments Year-to-Date 

 

NEW YORK, NY, May 8, 2024 (GLOBE NEWSWIRE) – SuRo Capital Corp. (“SuRo Capital”, the “Company”, “we”, “us”, and “our”) (Nasdaq: SSSS) today announced its financial results for the quarter ended March 31, 2024. Net assets totaled approximately $181.7 million, or $7.17 per share, at March 31, 2024, as compared to $7.99 per share at December 31, 2023 and $7.59 per share at March 31, 2023.

 

“We are pleased to share that we have deployed more capital in the last four months than in any period in the last two years. During the first quarter, we added one new portfolio company through a $10.0 million primary investment in Supplying Demand, Inc. (d/b/a Liquid Death), a CPG lifestyle beverage brand focused on still water, sparkling water, and teas. Subsequent to quarter-end, we completed a $10.0 million investment in Canva, Inc., a leading design software and collaboration platform with over 170 million monthly users. We also made a $15.0 million investment in CW Opportunity 2 LP, an SPV that will invest in CoreWeave, Inc., an AI cloud computing provider offering a suite of NVIDIA GPUs on top of its fast and flexible infrastructure,” said Mark Klein, Chairman and Chief Executive Officer of SuRo Capital.

 

“With these exciting new additions to our portfolio, and over $45.0 million in investable capital, we remain steadfast in our belief that there continue to be high-quality opportunities available at attractive prices that allow us to be both opportunistic and judicious with the deployment of capital,” Mr. Klein continued.

 

“As we have consistently demonstrated, SuRo Capital is committed to initiatives that enhance shareholder value, and we believe the market is currently undervaluing our portfolio. 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. As announced in the first quarter and executed subsequent to quarter-end, the modified Dutch Auction tender offer resulted in the purchase of 2.0 million shares of common stock for $4.70 per share. Further, we continue to monitor leveraging the remaining $20.7 million authorized under our active Share Repurchase Program,” concluded Mr. Klein.

 

Investment Portfolio as of March 31, 2024

 

At March 31, 2024, SuRo Capital held positions in 38 portfolio companies – 35 privately held and 3 publicly held, some of which may be subject to certain lock-up provisions – with an aggregate fair value of approximately $175.0 million, excluding short-term US treasuries. The Company’s top five portfolio company investments accounted for approximately 51% of the total portfolio at fair value as of March 31, 2024.

 

 

 

Top Five Investments as of March 31, 2024

 

Portfolio Company ($ in millions)	Cost Basis		Fair Value		% of Total Portfolio
Learneo, Inc.	$	15.0	$	43.0	24.6	%
ServiceTitan, Inc.		10.0		13.4	7.7
Blink Health, Inc.		15.0		11.6	6.6
Locus Robotics Corp.		10.0		10.9	6.2
StormWind, LLC		6.4		10.6	6.1
Total	$	56.4	$	89.5	51.1	%

 __________________

Note: Total may not sum due to rounding.

 

First Quarter 2024 Investment Portfolio Activity

 

During the three months ended March 31, 2024, SuRo Capital made the following investment, excluding short-term US treasuries:

 

Portfolio Company	Investment	Transaction Date	Amount
Supplying Demand, Inc. (d/b/a Liquid Death)	Series F-1 Preferred Shares	1/18/2024	$10.0 million

 

During the three months ended March 31, 2024, SuRo Capital exited the following investments, excluding short-term US treasuries:

 

Portfolio Company	Transaction Date	Quantity Sold	Average Net Share Price(1)	Net Proceeds	Realized Gain/(Loss)
Nextdoor Holdings, Inc.(2)	Various	112,420	$1.92	$0.2 million	$(0.4 million)
PSQ Holdings, Inc. (d/b/a PublicSquare) – Public Warrants(3)	Various	100,000	$1.03	$0.1 million	$0.1 million

__________________

(1)

The average net share price is the net share price realized after deducting all commissions and fees on the sale(s), if applicable.

(2)

As of February 23, 2024, SuRo Capital had sold its remaining Nextdoor Holdings, Inc. public common shares.

(3)

As of March 31, 2024, SuRo Capital held 2,296,037 remaining PSQ Holdings, Inc. (d/b/a PublicSquare) public warrants.

 

Subsequent to quarter-end through May 8, 2024, SuRo Capital made the following investments, excluding short-term US treasuries:

 

Portfolio Company	Investment	Transaction Date	Amount
Canva, Inc.	Common Shares	4/17/2024	$10.0 million
CW Opportunity 2 LP	Class A Interest	5/7/2024	$15.0 million

 

   

First Quarter 2024 Financial Results

 

	Quarter Ended March 31, 2024		Quarter Ended March 31, 2023
	$ in millions	per share(1)	$ in millions	per share(1)
Net investment loss	$(3.2)	$(0.13)	$(4.2)	$(0.15)
Net realized gain/(loss) on investments	(0.4)	(0.02)	0.2	0.01
Net change in unrealized appreciation/(depreciation) of investments	(18.4)	(0.73)	8.6	0.30
Net increase/(decrease) in net assets resulting from operations – basic (2)	$(22.1)	$(0.88)	$4.6	$0.16
Stock-based compensation	0.4	0.06	0.4	0.04
Increase/(decrease) in net asset value(2)	$(21.6)	$(0.82)	$5.0	$0.20

__________________

(1)

Based on basic weighted-average number of shares outstanding for the relevant period.

(2)

Total may not sum due to rounding.

 

Weighted-average common basic shares outstanding were approximately 25.4 million and 28.4 million for the quarters ended March 31, 2024 and 2023, respectively. As of March 31, 2024, there were 25,353,284 shares of the Company’s common stock outstanding.

 

SuRo Capital’s liquid assets were approximately $84.6 million as of March 31, 2024, consisting of cash, short-term US Treasuries, and securities of publicly traded portfolio companies not subject to lock-up restrictions at quarter-end.

 

 

Modified Dutch Auction Tender Offer

 

On February 14, 2024, our Board of Directors authorized a modified Dutch Auction tender offer (the “Tender Offer”) to purchase up to 2.0 million shares of our common stock at a price per share not less than $4.00 and not greater than $5.00 in $0.10 increments, using available cash. In accordance with the Tender Offer, following the expiration of the Tender Offer at 5:00 P.M. Eastern Time on April 1, 2024, the Company repurchased 2,000,000 shares at a price of $4.70 per share, representing 7.9% of its outstanding shares. The per share purchase price of properly tendered shares represents 58.8% of net asset value per share as of December 31, 2023.

 

 

Share Repurchase Program

 

Under the Share Repurchase Program, the Company may repurchase its outstanding common stock in the open market, provided it complies with the prohibitions under its insider trading policies and procedures and the applicable provisions of the Investment Company Act of 1940, as amended, and the Securities Exchange Act of 1934, as amended.

 

Since inception of the Share Repurchase Program in August 2017, SuRo Capital has repurchased over 6.0 million shares of its common stock for an aggregate purchase price of approximately $39.3 million. This does not include repurchases under various tender offers during this time period. The dollar value of shares that may yet be purchased by SuRo Capital under the Share Repurchase Program is approximately $20.7 million. The Share Repurchase Program is authorized through October 31, 2024.

 

 

Conference Call and Webcast

 

Management will hold a conference call and webcast for investors at 2:00 p.m. PT (5:00 p.m. ET) on May 8, 2024. The conference call access number for U.S. participants is 866-580-3963, and the conference call access number for participants outside the U.S. is +1 786-697-3501. The conference ID number for both access numbers is 6890583. Additionally, interested parties can listen to a live webcast of the call from the "Investor Relations" section of SuRo Capital’s website at www.surocap.com. An archived replay of the webcast will also be available for 12 months following the live presentation.

 

A replay of the conference call may be accessed until 5:00 p.m. PT (8:00 p.m. ET) on May 15, 2024 by dialing 866-583-1035 (U.S.) or +44 (0) 20 3451 9993 (International) and using conference ID number 6890583.

 

 

Forward-Looking Statements

 

Statements included herein, including statements regarding SuRo Capital's beliefs, expectations, intentions, or strategies for the future, may constitute "forward-looking statements". SuRo Capital cautions you that forward-looking statements are not guarantees of future performance and that actual results or developments may differ materially from those projected or implied in these statements. All forward-looking statements involve a number of risks 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. Risk factors, cautionary statements, and other conditions which could cause SuRo Capital's actual results to differ from management's current expectations are contained in SuRo Capital's filings with the Securities and Exchange Commission. SuRo Capital undertakes no obligation to update any forward-looking statement to reflect events or circumstances that may arise after the date of this press release.

 

 

About SuRo Capital Corp.

 

SuRo Capital Corp. (Nasdaq: SSSS) is a publicly traded investment fund that seeks to invest in high-growth, venture-backed private companies. The fund seeks to create a portfolio of high-growth emerging private companies via a repeatable and disciplined investment approach, as well as to provide investors with access to such companies through its publicly traded common stock. SuRo Capital is headquartered in New York, NY and has offices in San Francisco, CA. Connect with the company on X, LinkedIn, and at www.surocap.com.

 

Contact

SuRo Capital Corp.

(212) 931-6331

IR@surocap.com

 

  

SURO CAPITAL CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)

 

		March 31, 2024				December 31, 2023
ASSETS
Investments at fair value:
Non-controlled/non-affiliate investments (cost of $170,371,625 and $160,994,161, respectively)		$	140,167,986			$	147,167,535
Non-controlled/affiliate investments (cost of $32,733,009 and $32,775,940, respectively)			22,871,704				24,931,333
Controlled investments (cost of $18,771,097 and $18,771,097, respectively)			11,975,881				11,982,381
Total Portfolio Investments			175,015,571				184,081,249
Investments in U.S. Treasury bills (cost of $29,245,079 and $63,792,704, respectively)			29,621,913				63,810,855
Total Investments (cost of $251,120,810 and $276,333,902, respectively)			204,637,484				247,892,104
Cash			50,814,399				28,178,352
Escrow proceeds receivable			236,303				309,293
Interest and dividends receivable			137,657				132,607
Deferred financing costs			577,900				594,726
Prepaid expenses and other assets(1)			467,149				494,602
Total Assets			256,870,892				277,601,684
LIABILITIES
Accounts payable and accrued expenses(1)			1,270,583				346,308
Dividends payable			44,700				152,523
6.00% Notes due December 30, 2026(2)			73,834,474				73,745,207
Total Liabilities			75,149,757				74,244,038
Net Assets		$	181,721,135			$	203,357,646
NET ASSETS
Common stock, par value $0.01 per share (100,000,000 authorized; 25,353,284 and 25,445,805 issued and outstanding, respectively)		$	253,533			$	254,458
Paid-in capital in excess of par			248,883,867				248,454,107
Accumulated net investment loss			(7,527,013	)			(4,304,111	)
Accumulated net realized loss on investments, net of distributions			(12,772,846	)			(12,348,772	)
Accumulated net unrealized appreciation/(depreciation) of investments			(47,116,406	)			(28,698,036	)
Net Assets		$	181,721,135			$	203,357,646
Net Asset Value Per Share		$	7.17			$	7.99

 

(1)

This balance includes a right of use asset and corresponding operating lease liability, respectively.

(2)

As of March 31, 2023, the 6.00% Notes due December 30, 2026 (effective interest rate of 6.53%) had a face value $75,000,000. As of December 31, 2022, the 6.00% Notes due December 30, 2026 (effective interest rate of 6.53%) had a face value $75,000,000.

 

 

SURO CAPITAL CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 

		Three Months Ended March 31,
		2024				2023
INVESTMENT INCOME
Non-controlled/non-affiliate investments:
Interest income(1)		$	242,007			$	49,475
Dividend income			21,875				63,145
Controlled investments:
Interest income			435,000				236,000
Interest income from U.S. Treasury bills			829,209				950,462
Total Investment Income			1,528,091				1,299,082
OPERATING EXPENSES
Compensation expense			2,185,318				2,136,754
Directors’ fees			171,113				160,565
Professional fees			728,559				990,834
Interest expense			1,214,267				1,213,286
Income tax expense			2,100				529,780
Other expenses			449,636				489,628
Total Operating Expenses			4,750,993				5,520,847
Net Investment Loss			(3,222,902	)			(4,221,765	)
Realized Gain/(Loss) on Investments:
Non-controlled/non-affiliated investments			(484,141	)			189,343
Non-controlled/affiliate investments			60,067				—
Net Realized Gain/(Loss) on Investments			(424,074	)			189,343
Change in Unrealized Appreciation/(Depreciation) of Investments:
Non-controlled/non-affiliated investments			(16,395,171	)			(2,063,577	)
Non-controlled/affiliate investments			(2,016,699	)			(1,320,364	)
Controlled investments			(6,500	)			12,032,872
Net Change in Unrealized Appreciation/(Depreciation) of Investments			(18,418,370	)			8,648,931
Net Change in Net Assets Resulting from Operations		$	(22,065,346	)		$	4,616,509
Net Change in Net Assets Resulting from Operations per Common Share:
Basic		$	(0.87	)		$	0.16
Diluted(2)		$	(0.87	)		$	0.16
Weighted-Average Common Shares Outstanding			​
Basic			25,393,490				28,378,529
Diluted(2)			25,393,490				28,378,529

 

(1)

Includes interest income earned on idle cash.

(2)

For the three months ended March 31, 2024 and March 31, 2023, there were no potentially dilutive securities outstanding.

 

  

SURO CAPITAL CORP. AND SUBSIDIARIES

FINANCIAL HIGHLIGHTS (UNAUDITED)

 

​		Three Months Ended March 31,
		2024				2023
Per Basic Share Data
Net asset value at beginning of the year		$	7.99			$	7.39
Net investment loss(1)			(0.13	)			(0.15	)
Net realized gain/(loss) on investments(1)			(0.02	)			0.01
Net change in unrealized appreciation/(depreciation) of investments(1)			(0.73	)			0.30
Stock-based compensation(1)			0.06				0.04
Net asset value at end of period		$	7.17			$	7.59
Per share market value at end of period		$	4.55			$	3.62
Total return based on market value(2)			15.48	%			(4.74	)%
Total return based on net asset value(2)			(10.26	)%			2.71	%
Shares outstanding at end of period			25,353,284				28,338,580
Ratios/Supplemental Data:			​				​
Net assets at end of period		$	181,721,135			$	215,043,069
Average net assets		$	202,519,594			$	209,347,362
Ratio of net operating expenses to average net assets(3)			9.44	%			10.70	%
Ratio of net investment loss to average net assets(3)			(6.40	)%			(8.18	)%
Portfolio Turnover Ratio			0.18	%			1.24	%

 

(1)

Based on weighted-average number of shares outstanding for the relevant period.

(2)

Total return based on market value is based upon the change in market price per share between the opening and ending market values per share in the period, adjusted for dividends and equity issuances. Total return based on net asset value is based upon the change in net asset value per share between the opening and ending net asset values per share in the period, adjusted for dividends and equity issuances.

(3)

Financial highlights for periods of less than one year are annualized and the ratios of operating expenses to average net assets and net investment loss to average net assets are adjusted accordingly. Because the ratios are calculated for the Company’s common stock taken as a whole, an individual investor’s ratios may vary from these ratios.

 

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Cover	May 08, 2024
Document Information [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	May 08, 2024
Entity File Number	1-35156
Entity Registrant Name	SURO CAPITAL CORP.
Entity Central Index Key	0001509470
Entity Tax Identification Number	27-4443543
Entity Incorporation, State or Country Code	MD
Entity Address, Address Line One	640 Fifth Avenue
Entity Address, Address Line Two	12th Floor
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10019
City Area Code	212
Local Phone Number	931-6331
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Common Stock Par Value 0. 01 Per Share [Member]
Document Information [Line Items]
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	SSSS
Security Exchange Name	NASDAQ
Sec 6. 00 Notes Due 2026 [Member]
Document Information [Line Items]
Title of 12(b) Security	6.00% Notes due 2026
Trading Symbol	SSSSL
Security Exchange Name	NASDAQ

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