SuRo Capital Corp. Reports First Quarter 2024 Financial Results

SuRo Capital Corp.
SuRo Capital Corp.

In This Article:

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

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

NEW YORK, May 08, 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
[email protected]


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.