SuRo Capital Corp. (SSSS) Q3 2021 Earnings Call Transcript

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SuRo Capital Corp. (NASDAQ:SSSS)Q3 2021 Earnings CallNov 03, 2021, 5:00 p.m. ETContents: Prepared Remarks Questions and Answers Call Participants Prepared Remarks: OperatorGood day, girls and gents, and thanks for standing by. Welcome to SuRo Capital’s third quarter 2021 earnings convention name. [Operator instructions] Following the presentation, the convention can be open for questions. This name is being recorded in the present day, Wednesday, November 3, 2021. I might now flip the convention over to in the present day’s speaker, Jackson Stone of SuRo Capital. Please go forward, sir.Jackson Stone — Investor Relations Thank you for becoming a member of us on in the present day’s name. I’m joined in the present day by the chairman and chief government officer of SuRo Capital, Mark Klein; and chief monetary officer, Allison Green. Please word {that a} slide presentation equivalent to in the present day’s ready remarks by administration is offered on our web site at www.surocap.com below investor relations’ occasions and shows. Today’s name is being recorded and broadcast stay on our web site, www.surocap.com. Replay info is included in our press launch issued in the present day. This name is a property of SuRo Capital. Any unauthorized replica of this name in any kind is strictly prohibited. I might additionally want to name your consideration to buyer disclosures in in the present day’s earnings name — in in the present day’s earnings press launch relating to forward-looking info.Statements made in in the present day’s convention name and webcast could represent forward-looking statements, which relate to future occasions or future efficiency or monetary situation. These statements will not be ensures of our future efficiency or future monetary situation or outcomes and contain various dangers, estimates, and uncertainties, together with the influence of COVID-19 pandemic and any market volatility that could be detrimental to our enterprise, our portfolio corporations, our industries, and the worldwide economic system that would trigger precise outcomes to vary materially from the plans, intentions, and expectations mirrored in or prompt by the forward-looking statements. Actual outcomes could differ materially from these within the forward-looking statements because of various elements, together with however not restricted to these described occasionally within the firm’s filings with the SEC. Management doesn’t undertake to replace such forward-looking statements until required to take action by regulation. To acquire copies of SuRo Capital’s newest SEC filings, please go to our web site at www.surocap.com or the SEC’s web site as — at sec.gov. Now, I’d like to show the decision over to Mark Klein. Mark Klein — Chief Executive Officer Thank you, Jackson. Good afternoon and thanks for becoming a member of us. We are happy to share the outcomes of SuRo Capital’s third quarter 2021. This has been probably the most thrilling quarters thus far for our agency, together with notable exits and thrilling funding alternatives in a number of completely different verticals. This quarter, three further portfolio corporations introduced their intentions to grow to be publicly traded to a SPAC merger, making a complete of 5 SPAC merger bulletins in 2021. In addition to the SPAC mergers, three of our portfolio corporations introduced intentions to be acquired and two had accomplished acquisitions as of quarter-end. As we make notable exits, we’re excited to deploy capital in compelling, new, high-growth alternatives and have added seven new corporations to our portfolio on this quarter alone. I’m excited to share extra particulars on these occasions earlier than handing the decision over to Allison Green for a short monetary overview. At the conclusion of our remarks, we are going to open the decision for questions. Let’s begin with Slide 3. This quarter, SuRo Capital once more reached our highest dividend-adjusted web asset helpful — worth per share since inception, surpassing the information we set in each Q2 of 2021 and Q1 of 2021. At the tip of the quarter, SuRo Capital had a web asset worth of roughly $426 million, or $14.79 per share, which was close to the highest of the anticipated vary that we posted in our prerelease. The $14.79 per share web asset worth is inclusive of a $2.25 per share dividend declared and paid in the course of the quarter. This web asset worth per share represents a $0.48 enhance from the $14.31 dividend-adjusted web asset worth on the finish of the second quarter. Consistent with our want to be shareholder-friendly and our continued follow of distributing realized features, on November 2, 2021, SuRo Capital’s board of administrators declared a $2 per share dividend to shareholders and permitted an extension of the share repurchase program to October 31, 2022. This dividend can be payable on December 30, 2021, to shareholders of document on November 17, 2021. Our board is once more providing shareholders the choice to elect to take as a lot as 100% of their dividend in inventory and has capped the combination money dividend to 50% of the full dividend payable. This brings the combination dividends declared or paid in 2021 to $7.25 per share. Later within the name, Allison will stroll via intimately the election technique of this money and inventory dividend. Depending on the portfolio exercise for the rest of the yr, the board will consider declaring an extra dividend payable in January of 2022. Please flip to Slide 4 for a assessment of our Top 5 positions. SuRo Capital’s Top 5 positions as of September 30 have been Course Hero, Coursera, Forge, Nextdoor, and Blink Health. These positions accounted for roughly 54% of the funding portfolio at truthful worth. Additionally, as of September 30, our Top 10 positions accounted for roughly 73% of our portfolio. First, I need to spotlight our funding in Course Hero, now our largest place. Over the final yr, Course Hero has centered on rising their platform’s neighborhood and pursuing acquisitions that broaden their already complete catalog of scholars’ examine supplies. This initiative started in October 2020 with their acquisition of Symbolab, a platform that helps college students resolve complicated mathematical equations; and continued in June 2021 with their acquisition of LitCharts, a platform that helps make studying literature extra accessible. Since then, Course Hero has grown their choices by buying QuillBot, an AI writing instrument that helps individuals reconstruct their writing to be extra concise; and CliffNotes, a library of literature examine guides. Before the 2 most acquisitions, TechCrunch estimated Course Hero would hit between 2 million and three million paid subscribers in 2021, up from 1 million subscribers final yr. We consider these acquisitions will additional bolster paid subscriptions and assist present Course Hero’s objective of changing into the main complete platform for examine supplies. As beforehand mentioned, on March 31, our second-largest place, Coursera, executed an preliminary public providing and commenced buying and selling on the New York Stock Exchange. Coursera priced at $33 per share on the high of their vary. In the third quarter alone, gross sales of our public shares of Coursera had generated almost $33 million of web proceeds and roughly $28.5 million in realized features. To date, monetization of our place in Coursera has generated almost $112 million in web proceeds and over $96.3 million in realized features. We have offered considerably all of our Coursera funding. We anticipate promoting the de minimis the rest of our Coursera place within the coming days. In addition to Course Hero and Coursera, we now have additionally seen sturdy efficiency from our general portfolio. During the third quarter, three portfolio corporations introduced pending SPAC mergers, one firm accomplished a SPAC merger, two corporations introduced or accomplished an IPO, and two corporations have been acquired. During the third quarter, Forge, Aspiration, and Nextdoor introduced plans to merge with SPACs. On September 13, Forge introduced a plan to merge with Motive Capital, a fintech-focused SPAC, at a mixed fairness worth of as much as $2 billion. Earlier this yr, Forge was valued at $700 million post-money, making this deal their unicorn debut. This pending transaction resulted in a $10.5 million write-up or over a 100% enhance in our valuation of Forge in comparison with final quarter. The Forge-Motive Capital SPAC merger is anticipated to shut within the fourth quarter of 2021 or as late as the primary quarter of 2022 and ensuing gross proceeds of $532.5 million for the mixed firm. Between January 1 of 2018 and June 30 of 2021, Forge has seen a 225% enhance in its buyer base and a 114% enhance in distinctive personal corporations traded. With almost 400,000 registered customers and 123,000 buyers, Forge has pushed over $10 billion in quantity throughout 19,000 transactions. We are excited by Forge’s success through the years and look ahead to the profitable conclusion of their enterprise mixture. On August 18, Aspiration additionally introduced a plan to merge with InterPrivate III Financial Partners, a fintech-focused SPAC, at an fairness worth of $2.3 billion. Aspiration raised a $200 million PIPE related to this transaction. The pending transaction is anticipated to shut within the fourth quarter of 2021 or as late as the primary quarter of 2022. Aspiration gives a spread of sustainable banking providers, bank cards, and funding challenge — merchandise and boasts greater than 5 million collaborating members. As of June 2021, the corporate had a income run charge in extra of $100 million and noticed a 7x development within the — for the reason that previous yr. We are excited by this milestone for Aspiration and consider they’ve emerged as a pacesetter of ESG-focused fintech. Finally, on July 6, Nextdoor introduced plan to merge with Khosla Ventures Acquisition II at an fairness worth of $4.3 billion. Nextdoor raised a $270 million greenback PIPE related to this transaction. Yesterday, stockholders permitted the transaction. The merger is anticipated to shut on November 5, with the mixed entity buying and selling on the New York Stock Exchange below the image KIND starting November 8. In addition to the SPAC mergers introduced this quarter, we noticed one portfolio full their merger and grow to be publicly traded. As beforehand mentioned, on February 11, SuRo Capital portfolio firm, Rover, introduced plans to merge with Nebula Caravel Acquisition Corp., a SPAC sponsored by True Wind Capital. Stockholders permitted the enterprise mixture, and the transaction was closed on July 30. The mixed entity now trades on the Nasdaq below the ticker image ROVR. The transaction worth of the corporate at an enterprise worth of $1.35 billion and offered roughly $240 million in gross proceeds to the corporate. Our shares of the general public frequent inventory of Rover are presently topic to sure lock-up provisions. We anticipate they are going to expire in the course of the first quarter of 2022. We are excited by this transaction and congratulate Rover on the profitable course of their SPAC merger. In addition to SPAC mergers, we noticed one firm announce and one other firm execute their preliminary public providing this quarter. On August 20, NewLake Capital Partners accomplished an IPO and commenced buying and selling below the image NLCP on the OTCQX. The IPO raised $102 million at a share value of $26 a share. As of September 30, SuRo Capital shares of NewLake will not be topic to any lock-up restrictions. We will liquidate this place in keeping with prior practices as market circumstances enable. On October 4, Rent the Runway introduced that it filed for an IPO at a spread of $18 to $21 per share. On October 27, they priced their IPO at $21 per share and commenced buying and selling on the Nasdaq below the image RENT at a value of $23 a share. The IPO was led by Goldman Sachs, Morgan Stanley, and Barclays and elevated the worth of Rent the Runway to $1.5 billion. We count on our shares of Rent the Runway to grow to be freely tradeable in early Q2 of 2022 when the lockup expires. In addition to those main milestones, two of our portfolio corporations have been acquired in the course of the third quarter. On August 30, 2021, Udemy, a not too long ago minted public studying and on-line instructing platform, introduced that it acquired CorpU for an undisclosed quantity. On September 2, Kahoot!, a publicly traded international training know-how firm, introduced that it acquired Clever. As beforehand talked about in our prerelease in late September, reviews from a number of sources alleged important improprieties by Ozy Media. Given these critical allegations, as of September 30, we valued our funding in Ozy Media at zero. The many profitable portfolio firm transactions accomplished in third quarter and anticipated to be accomplished within the close to future have offered important money flows to fund excessive development, well-scrutinized, and promising new investments. During the third quarter, we judiciously added seven new portfolio corporations. On August 9, we invested $10 million in Orchard Technologies Series D most well-liked shares. Orchard is a vertically built-in property know-how firm competing within the trade-in and money gives market. Orchard’s Move First product permits householders the flexibility to purchase their dwelling earlier than promoting their very own dwelling whereas nonetheless unlocking the fairness they’ve constructed up of their current dwelling. In the present actual property local weather, it is extra vital than ever to have as few contingencies hooked up with gives as doable, and Orchard is a market chief in eradicating these obstacles for homebuyers. Orchard plans to broaden to overseas markets in 2022, in addition to launch new providers to supply tens of millions extra consumers a greater strategy to buy their very own dream dwelling. Over the previous yr, Orchard has doubled their footprint; launched Orchard Insurance; and launched concierge, a service that repairs and updates properties on the behalf of house owners earlier than sale and no upfront prices. In September, Orchard introduced it has raised $100 million at a valuation of over $1 billion in a spherical led by Accomplice, with participation with current buyers as effectively. We have evaluated a number of enterprise fashions within the property know-how sector and consider Orchard’s mannequin solves lots of the ache factors for shoppers with a extra capital-efficient and fewer dangerous mannequin than iBuyers and different comparable corporations within the house. As such, we consider Orchard is uniquely poised to develop and obtain success in each bull and bear housing markets in comparison with a lot of its friends within the prop-tech sector. Please flip to Slide 8. During the third quarter, we additionally made a $10 million funding within the frequent shares of Varo Money, Inc. Varo is a nationally chartered financial institution, creating a branchless, digitally native monetary platform to enhance the cellular banking expertise. Varo gives numerous providers, together with monetary insights and evaluation of spending, real-time budgeting and forecasts of money move, direct deposits, on-line invoice cost, and different monetary functions. Varo’s goal market is the 180 million Americans Varo views as underserved and overcharged by conventional monetary establishments. Varo believes conventional banks are unable to profitably serve this huge phase of shoppers who’ve modest or no financial savings. Due to their legacy value construction, Varo believes conventional banks should cost charges to keep away from shedding cash on these specific purchasers, that means prospects with the least cash pay essentially the most in charges relative to their property or their revenue. Varo has no month-to-month account minimal stability, no debit card substitute charge, no overseas transaction charges, no AC financial institution switch charges, and no ATM charges on Varo-approved ATMs. In addition, in contrast to different neobanks who use a sponsor financial institution mannequin by partnering with smaller banks to assist supply banking providers, as a nationally chartered financial institution, Varo can function at a decrease value construction than different neobanks and may go alongside these financial savings to shoppers. In September, Varo introduced that it raised $510 million in its Series E fairness spherical at a $2.5 billion valuation. This is based on TechCrunch. SuRo invested $10 million within the Series E spherical, which was led by Lone Pine Capital, with participation from buyers Warburg Pincus, TPG’s Rise Fund, Gallatin Point Capital, and others, together with new buyers, Declaration Partners and BlackRock. Please flip to Slide 9. As beforehand mentioned, SuRo Capital Sports is a $10 million wholly owned subsidiary of SuRo Capital created to benefit from the numerous [Technical difficulty] on this [Inaudible]. Since inception in March 21, SuRo Capital has been creating a sturdy pipeline of B2B and B2C gamers throughout a number of key verticals, together with associates, compliance know-how, fan engagement, and differentiated companions — operators. In addition to our preliminary funding in BettorView, since June 30, we made two further investments in SuRo Capital first — Sports. The first is PickUp, which permits publishers to embed prop-like predictions inside their context — content material. Users create profiles, permitting them to trace the accuracy of their picks and earn prizes from sportsbooks and different associates. The gamification of content material represents a brand new period of fan engagement the place the expertise is now centered across the fan versus the earlier iteration of fan engagement centered round shares, likes, and feedback in social media. During the third quarter, we invested in PickUp’s Series Seed-2 most well-liked shares as a part of the spherical led by KB Partners and Drive by DraftKings. The second funding, Compliable, supplies a compliant software program answer that makes managing, sustaining, and finishing gaming licenses throughout a number of states and jurisdictions simple. Compliable software program platform and instruments present prospects with each important and value — time and value financial savings, permitting operators to concentrate on getting into new markets and establishing a presence within the rising sports activities betting panorama. As the complexity of licensing with the actual gaming market continues, we consider Compliable can be an important a part of how operators, distributors, and regulators preserve compliance with a continually altering and diverse regulatory setting. In October, we invested in Compliable Series Seed-4 most well-liked shares as a part of their Seed extension led by Bettor Capital. Looking forward, we consider our portfolio is well-positioned as ever to drive long-term worth via each exits and ongoing strategic investments in compelling industries and alternatives not available to public buyers. We consider our wholesome money stability places us in a powerful place to play towards this excessive quantity of enticing alternatives. Thank you to your consideration. And with that, I’ll hand it over to Allison.Allison Green — Chief Financial Officer Thank you, Mark. I wish to observe Mark’s replace with a extra detailed assessment of our third quarter funding exercise and monetary outcomes as of September 30, 2021, together with the not too long ago declared dividend and our present liquidity place. First, I’ll assessment our funding exercise. Please flip to Slide 10. During the quarter, we invested a complete of $31.4 million in new and follow-on investments. New investments in the course of the third quarter embody a $10 million funding within the Series D most well-liked shares of Orchard Technologies, a $10 million funding in frequent shares of Varo Money, an extra $7.4 million in funded capital value to finish our $10 million dedication to Architect Capital PayJoy SPV, a $2.5 million funding in the popular shares of PayJoy, Inc., and roughly $700,000 funding of a complete of $2 million restricted associate dedication in True Global Ventures 4 Plus funding funds, and roughly $500,000 funding within the Series Seed-2 most well-liked shares of YouGuess Technology doing enterprise with PickUp, and a $250,000 funding within the share items of AltC Sponsor LLC, the sponsor automobile for AltC Acquisition Corp. 2021 investments via September 30 totaled roughly $70.1 million. Please flip to Slide 11. This slide highlights our exit made and proceeds acquired in the course of the third quarter. Most notably, in the course of the third quarter, we offered 837,181 of our Coursera frequent shares for roughly $32.8 million of web proceeds, leading to a web realized acquire of roughly $28.6 million. These gross sales in the course of the third quarter are along with the exit of 25% of our unique Coursera place on the time of IPO for web proceeds of $30.7 million and a web realized acquire of roughly $26.9 million made in the course of the second quarter. I’ll assessment our Coursera gross sales subsequent to quarter-end and thus far on the following slide. On August 30, 2021, Udemy, a not too long ago publicly traded international training know-how firm, introduced it will purchase CUX, Inc. or CorpU. As a results of the acquisition, we acquired roughly $6 million for a web realized acquire of roughly $2 million, inclusive of roughly $315,000 held in escrow. On September 2, Kahoot! ASA, one other publicly traded international training know-how firm, introduced it will purchase Clever. Kahoot! acquired Clever for money, inventory, and different consideration contingent on numerous earn-out provisions. As a results of the acquisition, we acquired roughly $3 million in money proceeds and shares of Kahoot!, leading to a present web realized acquire of roughly $1 million, inclusive of roughly $744,000 held in escrow. Anticipated further concerns topic to earn-out provisions and different contingencies has not been included right here. Additionally, in the course of the quarter, we acquired roughly $343,000 in proceeds from Second Avenue associated to the principal compensation and curiosity on the 15% time period mortgage due December 2023. Finally, in the course of the third quarter, we realized roughly $295,000 associated to our June 2020 funding in Palantir Lending Trust SPV. These further proceeds are attributed on to the fairness participation and the underlying collateral. As of in the present day, 512,290 shares of Palantir frequent inventory comprising the underlying collateral to which we retain an fairness curiosity stays to be offered. As of December 31, 2020, the stability of the mortgage and all assured pursuits had been totally repaid. 2021 realizations via September 30 resulted in roughly $199.6 million in web proceeds and $171.7 million in web realized features, or $172.3 million together with changes to quantity presently held in escrow. Please flip to Slide 12. Subsequent to quarter-end, SuRo Capital through SuRo Capital Sports made a $1 million fairness funding within the Series Seed-4 for most well-liked shares of Rebric, Inc., which is doing enterprise as Compliable. This is the third funding SuRo Capital Sports has made since inception in early 2021. In 2021 thus far, we now have invested a complete of $71.7 million in new and follow-on investments. We have additionally made further realizations subsequent to quarter-end. As beforehand alluded to, via yesterday, we offered an extra 1,409,090 of our Coursera frequent shares for roughly $48.5 million of web proceeds, leading to a web realized acquire of roughly $40.8 million. We anticipate monetization of the remaining 100,000 Coursera shares to be accomplished previous to the submitting of our Form 10-Q for the quarter ended September 30, 2021, within the subsequent few days. Through yesterday’s gross sales, we now have acquired a complete of almost $112 million in web proceeds, leading to web realized features of over $96.3 million from our Coursera place. Additionally, we started monetization of our public frequent shares with Skillsoft. Subsequent to quarter-end, via yesterday, we offered 18,157 Skillsoft’s frequent shares for roughly $229,000 in web proceeds, leading to a web realized acquire of roughly $48,000. We plan to monetize the remaining 981,843 Skillsoft shares in keeping with our prior practices because the market permits. Finally, subsequent to quarter-end, we acquired roughly $111,000 in proceeds via Second Avenue associated to the principal compensation and curiosity on the 15% time period mortgage due December 2023. In 2021 thus far, we acquired a complete of roughly $248.4 million in web proceeds, leading to over $212 million in web realized features. Please flip to Slide 13. Segmented by six common funding themes, the highest allocation of our funding portfolio at quarter-end is the training know-how, representing roughly 46% of the funding portfolio at truthful worth. Financial know-how and providers was the second-largest class, representing roughly 25% of the portfolio. The marketplaces class accounted for roughly 18% of our funding portfolio, and roughly 6% of our portfolio is invested in social and cellular corporations. Big knowledge cloud accounted for roughly 4% of the truthful worth of our portfolio. And sustainability accounted for lower than 1% of the truthful worth of our portfolio as of September 30. Please flip to Slide 15. We are happy to report we ended the third quarter of 2021 with a NAV per share of $14.79. A breakdown of NAV per share on the quarter-end is proven on Slide 15 and is in keeping with our monetary reporting. Most notably, the lower within the NAV per share in the course of the quarter was largely pushed by roughly $2.25 per share attributable to dividends declared and paid in the course of the quarter and $0.07 per share attributable to the issuance of frequent inventory from the inventory dividend. Also contributing to the lower have been an $0.08 per share lower associated to web funding loss and a $0.52 per share lower attributable to the change and unrealized appreciation of investments. However, this web lower is considerably associated to the conclusion of investments in the course of the quarter and offset in web realized acquire. These decreases to NAV per share have been partially offset by a $1.13 per share enhance attributable to web realized features on funding and a $0.02 per share enhance attributable to stock-based compensation. I might additionally wish to take a second to assessment SuRo Capital’s present liquidity. We ended the quarter with roughly $180.8 million of liquid property, together with $108.2 million in money, $72.6 million in unrestricted public securities. This doesn’t embody roughly $9.4 million in public securities topic to sure lock-up provisions as of quarter-end. Our money stability of $108.2 million as of September 30 consisted primarily of the monetization of assorted portfolio positions all through 2020 and 2021 thus far. The $72.6 million of unrestricted public securities held as of September 30 characterize our shares in Coursera, NewLake Capital Partners, and Skillsoft valued on the September 30, 2021 closing costs of $31.65, $29.41, and $11.69 respectively. The $9.4 million of public securities topic to sure lock-up provisions as of September 30 characterize our restricted public shares in Rover and Kahoot! valued on the September 30, 2021 closing costs of $13.59 and $7.08 respectively, plus a reduction for lack of marketability associated to the lock-up provision. On October 27, 2021, the corporate’s board of administrators permitted an extension of the share repurchase program till the sooner of October 31, 2022, or the repurchase of $40 million in mixture quantity of the corporate’s frequent inventory. Since its inception in August 2017, 4,823,332 shares have been repurchased for roughly $30.4 million, not together with the This fall 2019 [Inaudible] supply below the share repurchase program. Under the share repurchase program, the corporate could repurchase its excellent frequent inventory within the open market offered that it complies with the prohibitions below its insider buying and selling insurance policies and procedures and the relevant provisions of the Investment Company Act of 1940 as amended and the Securities Exchange Act of 1934 as amended. As of September 30, there have been 28,781,016 shares of the corporate’s frequent inventory excellent. In addition to the 2 dividends of $0.25 per share every declared within the first quarter and the $2.50 per share dividend declared and subsequently paid in the course of the second quarter, on August 3, SuRo Capital’s board of administrators declared a $2.25 per share dividend to be paid in half inventory and half money on September 30 to shareholders of document as of August 18. As a results of the elections, the full dividend paid to all stockholders consisted of roughly $30 million in money and roughly $2.3 million in shares of frequent inventory. Through September 30, SuRo Capital has declared and paid a dividend attributable to 2021 within the quantity of roughly $131.3 million. All 2021 dividends declared thus far are anticipated to be categorized as web long-term capital features for tax functions. The associated realized features are attributable to the monetization upon sale or exit of the investments in our portfolio. As Mark talked about, on November 2, SuRo Capital’s board of administrators declared a dividend of $2 per share payable on December 30, 2021, to the corporate’s frequent stockholders of document as of the shut of enterprise on November 17, 2021. The mixture dividend can be paid in half inventory and half money. However, the portion of money acquired by particular person shareholders making a money election may very well be better than 50%. Shareholders electing or deemed to have elected to obtain the dividend in inventory will obtain 100% of the dividend in shares of SuRo Capital, not together with de minimis money paid in lieu for factual shares. As described extra totally in in the present day’s press launch, the dividend can be paid in money or shares of the corporate’s frequent inventory on the election of registered shareholders, though the full amount of money to be distributed to all shareholders can be restricted to not more than 50% of the full dividend to be paid in mixture. Shareholders electing money could obtain a money allocation better than 50% relying on the outcomes of all shareholder elections. This dividend is being made in accordance with sure relevant Treasury laws and steerage issued by the IRS that enable a publicly traded regulated funding firm to fulfill their distribution necessities from a distribution paid partly in frequent inventory offered sure different necessities are happy. We strongly encourage all shareholders to proactively attain out to the financial institution, dealer, nominee, or platform via which they maintain their SuRo Capital shares to make their desired election consequence recognized. Only registered shareholders can be straight mailed an election kind by our switch agent, American Stock Transfer. SuRo Capital doesn’t course of any election. Most shareholders will not be registered shareholders and should proactively make their election recognized to the financial institution, dealer, nominee, or platform on which they maintain SuRo Capital shares. Each registered shareholder could have the chance to elect to obtain the dividend in money or shares of the corporate’s frequent inventory. Registered shareholders electing to obtain the dividend in shares of the corporate’s frequent inventory will obtain their total dividend within the type of shares of the corporate’s frequent inventory whatever the elections made by some other shareholders. However, the full amount of money to be distributed to all shareholders electing to obtain their dividends in money can be restricted to not more than 50% of the full quantity to be distributed to all shareholders. In the occasion the amount of money to be distributed to all shareholders electing to obtain the dividend in money would exceed 50% of the full dividend, every registered shareholder electing to obtain money will obtain a pro-rata portion of the full money to be distributed based mostly on the variety of shares held by every such shareholder. The the rest of the dividend in exit of the shareholders’ pro-rata share of the full amount of money to be distributed can be paid within the type of shares of the corporate’s frequent inventory. The variety of shares of our frequent inventory to be issued to shareholders receiving all or a portion of the dividends in shares of our frequent inventory can be based mostly on the volume-weighted common value per share of our frequent inventory on the Nasdaq Capital Market on November 10, 11, and 12, 2021, plus $2 to mirror the declared dividend. The firm will trigger to be mailed an election kind to obtain money or frequent inventory solely to registered shareholders promptly after the November 17, 2021 document date. Registered shareholders are these shareholders who personal their inventory straight and never via a financial institution, dealer, or nominee. The accomplished election kind should be acquired through SuRo Capital Corp.’s switch agent, American Stock Transfer, prior to five:00 p.m. Eastern Time on December 17, 2021. Registered shareholders with questions relating to the dividend could name American Stock Transfer at 800-937-5449. Registered shareholders who don’t make an election can be deemed to have elected to obtain 100% of their dividend in shares of the corporate’s frequent inventory. Registered shareholders collaborating within the firm’s dividend reinvestment plan will even obtain an election kind. The funding way forward for the dividend reinvestment plan can be suspended for this distribution and can be reinstated after this distribution has been accomplished. Shareholders who maintain their shares via a financial institution, dealer, or nominee is not going to obtain an election kind from the corporate and will contact their financial institution, dealer, or nominee for directions on find out how to make an election. Shareholders who maintain their shares via a financial institution, dealer, or nominee are inspired to contact their financial institution, dealer, or nominee and inform them of the election that needs to be made on the shareholder’s behalf. If a shareholder’s financial institution, dealer, or nominee on the shareholder’s behalf doesn’t well timed return a correctly accomplished election kind by the election deadline, the shareholder could have been deemed to have elected to obtain 100% of the dividend within the type of shares of our frequent inventory. Regardless of whether or not a shareholder receives the dividend in money, inventory, or some mixture of money and inventory, the complete quantity of this dividend can be totally taxable to shareholders, and SuRo Capital Corp. will report the precise tax traits of every yr’s dividend yearly to shareholders and the IRS on Form 1099. The date of declaration and quantity of any dividend, together with any future dividends, are topic to the only discretion of SuRo Capital’s board of administrators. The mixture quantity of dividends declared and paid by SuRo Capital can be totally taxable to stockholders. The tax character of SuRo Capital’s dividend can’t be lastly decided till the shut of SuRo Capital’s taxable yr. SuRo Capital Group will report the precise tax traits of every yr’s dividend yearly to stockholders and the IRS on Form 1099 subsequent to year-end. Registered stockholders with questions relating to declared dividends could name American Stock Transfer at 800-937-5449. Shareholders who maintain their shares via a financial institution, dealer, or nominee are inspired to contact their financial institution, dealer, or nominee for added particulars on how their financial institution, dealer, or nominee will course of the election on their behalf. Shareholders will discover further info relating to this dividend within the investor relations part of SuRo Capital’s web site at www.surocap.com. Year thus far, SuRo Capital has declared roughly $7.25 per share to shareholders for complete approximate distributions of almost $188.9 million. As Mark famous, the board of administrators will assess declaring further dividends relying on the funding exercise for the rest of the yr. That concludes my feedback. We wish to thanks to your curiosity and assist of SuRo Capital. Now, I’ll flip the decision over to the operator to begin the Q&A session. Operator. Questions & Answers:OperatorThank you. [Operator instructions] And we’ll take our first query from Manik Patel with [Inaudible] Ventures.Unknown speaker Good afternoon. Thank you for taking my name and the query. Our first query is with respect to the grand waves available in the market, that are pertaining to the SPACs and the volatility. How do you propose to handle sure lock-in durations? And then there is a follow-up to that. I’m asking this as a result of a sure share of the portfolio is related to SPACs after which there is a lock-in related to that. Thank you.Mark Klein — Chief Executive Officer Unfortunately, I do not suppose I adopted the primary — the second a part of your query. But in respect to the primary a part of your query, any SPAC that’s topic to lockup is — be both — is topic to lockup, and people lockups are laid out fairly clearly and extremely restrictive. And after all, we abide precisely by the lockups which might be put ahead. Thank you.OperatorThank you. And subsequent, we’ll transfer on to Candy [Inaudible] for [Inaudible] Financial Services.Unknown speaker Hey, thanks for taking my name. Could you inform me what the precise loss or perceived loss at this second of the Ozy Media funding was? Mark Klein — Chief Executive Officer On Ozy Media? It’s someplace barely north of $11 million. Thank you.OperatorThank you. And that does conclude our question-and-answer session in the present day. I wish to flip the convention again over to the audio system for any further or closing remarks.Mark Klein — Chief Executive Officer Well, we at SuRo thank all of you to take — for taking the time for this convention name, for taking — and for supporting us as shareholders. As at all times, we’re accessible for some other follow-up. You can contact us straight via our IR portal. Thank you all very a lot and recognize the time you spent with us in the present day.Operator[Operator signoff] Duration: 47 minutesCall contributors:Jackson Stone — Investor RelationsMark Klein — Chief Executive OfficerAllison Green — Chief Financial OfficerUnknown speaker
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This article represents the opinion of the author, who could disagree with the “official” suggestion place of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even considered one of our personal — helps us all suppose critically about investing and make selections that assist us grow to be smarter, happier, and richer.

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