| INVESTMENTS AT FAIR VALUE | NOTE
4— INVESTMENTS AT FAIR VALUE Investment
Portfolio Composition The
Company’s investments in portfolio companies consist primarily of equity securities (such as common stock, preferred stock and
options to purchase common and preferred stock) and to a lesser extent, debt securities, issued by private and publicly traded companies.
The Company may also, from time to time, invest in U.S. Treasury securities. Non-portfolio investments represent investments in U.S.
Treasury securities. As of September 30, 2022, the Company had 64 positions in 39 portfolio companies. As of December 31, 2021, the Company
had 64 positions in 38 portfolio companies. The
following tables summarize the composition of the Company’s investment portfolio by security type at cost and fair value as of
September 30, 2022 and December 31, 2021: SCHEDULE OF COMPOSITION OF INVESTMENT PORTFOLIO
September
30, 2022 December
31, 2021
Cost Fair
Value Percentage
of Net
Assets Cost Fair
Value Percentage
of Net
Assets
Private
Portfolio Companies
Preferred
Stock $ 108,217,121 $ 115,350,743 52.1 % $ 99,964,047 $ 163,801,798 44.9 %
Common
Stock 50,601,512 18,850,531 8.5 % 51,581,524 42,860,156 11.7 %
Debt
Investments 6,566,466 4,708,284 2.1 % 5,807,373 3,011,438 0.8 %
Options 11,415,787 3,447,105 1.6 % 10,982,983 4,959,112 1.4 %
Total
Private Portfolio Companies 176,800,886 142,356,663 64.3 % 168,335,927 214,632,504 58.8 %
Publicly
Traded Portfolio Companies
Common
Stock 32,248,667 15,391,229 6.9 % 39,119,450 44,573,225 12.2 %
Options — — — % — 930,524 0.3 %
Total
Publicly Traded Portfolio Companies 32,248,667 15,391,229 6.9 % 39,119,450 45,503,749 12.5 %
Total
Portfolio Investments 209,049,553 157,747,892 71.2 % 207,455,377 260,136,253 71.3 %
Non-Portfolio Investments
U.S. Treasury Bills 99,173,075 99,226,000 44.7 % — — — %
Total Investments $ 308,222,628 $ 256,973,892 115.9 % $ 207,455,377 $ 260,136,253 71.3 % The
geographic and industrial compositions of the Company’s portfolio at fair value as of September 30, 2022 and December 31, 2021
were as follows:
As
of September 30, 2022 As
of December 31, 2021
Fair
Value Percentage
of
Portfolio Percentage
of Net
Assets Fair
Value Percentage
of
Portfolio Percentage
of Net
Assets
Geographic
Region
West $ 103,006,693 65.3 % 46.3 % $ 188,304,542 72.4 % 51.6 %
Northeast 38,937,240 24.7 % 17.6 % 47,666,629 18.3 % 13.1 %
Midwest 8,328,181 5.3 % 3.8 % 12,722,423 4.9 % 3.5 %
International 7,475,778 4.7 % 3.4 % 11,442,659 4.4 % 3.1 %
Total $ 157,747,892 100.0 % 71.1 % $ 260,136,253 100.0 % 71.3 %
As
of September 30, 2022 As
of December 31, 2021
Fair
Value Percentage
of
Portfolio Percentage
of Net
Assets Fair
Value Percentage
of
Portfolio Percentage
of Net
Assets
Industry
Education
Technology $ 68,408,734 43.4 % 30.8 % $ 109,048,688 41.9 % 29.9 %
Financial
Technology 37,887,456 24.0 % 17.1 % 71,954,012 27.7 % 19.7 %
Marketplaces 27,920,230 17.7 % 12.6 % 49,346,174 19.0 % 13.5 %
Social/Mobile 17,315,224 11.0 % 7.8 % 16,439,523 6.3 % 4.5 %
Big
Data/Cloud 5,230,743 3.3 % 2.4 % 12,300,823 4.7 % 3.4 %
Sustainability 985,505 0.6 % 0.4 % 1,047,033 0.4 % 0.3 %
Total $ 157,747,892 100.0 % 71.1 % $ 260,136,253 100.0 % 71.3 % SURO
CAPITAL CORP. AND SUBSIDIARIES NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September
30, 2022 The
table below details the composition of the Company’s industrial themes presented in the preceding tables:
Industry
Theme Industry
Education
Technology Business
Education
Education
Software
Interactive
Learning
Online
Education
Big
Data/Cloud Data Analysis
Gaming Licensing
Retail
Technology
Geolocation
Technology
Marketplaces Global
Innovation Platform
Knowledge
Networks
Micromobility
On-Demand Commerce
Peer-to-Peer
Pet Services
Pharmaceutical
Technology
Real
Estate Platform
Subscription
Fashion Rental
Financial
Technology Cannabis
REIT
Financial
Services
Home
Improvement Finance
Mobile
Finance Technology
Online
Marketplace Finance
Gaming
Technology
Special
Purpose Acquisition Company
Venture
Investment Fund
Social/Mobile Digital
Media Platform
Digital
Media Technology
Interactive
Media & Services
Mobile
Access Technology
Social
Data Platform
Fitness
Technology
Social
Networking
Sustainability Clean
Technology SURO
CAPITAL CORP. AND SUBSIDIARIES NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September
30, 2022 Investment
Valuation Inputs The
fair values of the Company’s investments disaggregated into the three levels of the fair value hierarchy based upon the lowest
level of significant input used in the valuation as of September 30, 2022 and December 31, 2021 are as follows: SCHEDULE
OF FAIR VALUE OF INVESTMENT VALUATION INPUTS
As
of September 30, 2022
Quoted
Prices in Active
Markets for Identical
Securities (Level
1) Significant Other Observable Inputs (Level
2) Significant Unobservable Inputs (Level
3) Total
Investments
at Fair Value
Private
Portfolio Companies
Preferred
Stock $ — $ — $ 115,350,743 $ 115,350,743
Common
Stock — — 18,850,531 18,850,531
Debt
Investments — — 4,708,284 4,708,284
Options — — 3,447,105 3,447,105
Private
Portfolio Companies — — 142,356,663 142,356,663
Publicly
Traded Portfolio Companies
Common
Stock 15,321,409 69,820 — 15,391,229
Non-Portfolio
Investments - - - -
U.S. Treasury bills 99,226,000 — — 99,226,000
Total
Investments at Fair Value $ 114,547,409 $ 69,820 $ 142,356,663 $ 256,973,892
As
of December 31, 2021
Quoted
Prices in Active
Markets for Identical
Securities (Level
1) Significant
Other Observable Inputs (Level
2) Significant Unobservable Inputs (Level
3) Total
Investments
at Fair Value
Private
Portfolio Companies
Preferred
Stock $ — $ — $ 163,801,798 $ 163,801,798
Common
Stock — — 42,860,156 42,860,156
Debt
Investments — — 3,011,438 3,011,438
Options — — 4,959,112 4,959,112
Private
Portfolio Companies — — 214,632,504 214,632,504
Publicly
Traded Portfolio Companies
Common
Stock 16,970,411 27,602,814 — 44,573,225
Options — 930,524 — 930,524
Publicly
Traded Portfolio Companies 16,970,411 28,533,338 — 45,503,749
Total
Investments at Fair Value $ 16,970,411 $ 28,533,338 $ 214,632,504 $ 260,136,253 SURO
CAPITAL CORP. AND SUBSIDIARIES NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September
30, 2022 Significant
Unobservable Inputs for Level 3 Assets and Liabilities In
accordance with FASB ASC 820, Fair Value Measurement Investments at Fair Value SCHEDULE
OF FAIR VALUE OF ASSETS ON UNOBSERVABLE INPUT
As
of September 30, 2022
Asset Fair
Value Valuation (1) Unobservable
Inputs (2) Range (3)
Common
stock in private companies $ 18,850,531 Market
approach Revenue
multiples 1.11 3.63 1.88x)
Liquidation Value N/A
PWERM (5) AFFO
(4) 7.01 10.99 9.38
Preferred
stock in private companies $ 115,350,743 Market
approach Revenue
multiples 0.55 5.49 1.41
Liquidation Value N/A
Discounted
cash flow Discount
rate 15.0 15.0
PWERM (5) Revenue
multiples 0.63 5.49 2.25
DLOM 8.0 10.0 10.0
Financing
Risk 10.0 10.0
Debt
investments $ 4,708,284 Market
approach Revenue
multiples 0.55 5.49 3.8
Options $ 3,447,105 Option
pricing model Term to expiration (Years) 1.25 5.54 1.9
Discounted
cash flow Discount
Rate 15.0 15.0
(1) As
of September 30, 2022, the Board used a hybrid market and income approach to value certain
common and preferred stock investments as the Board felt this approach better reflected
the fair value of these investments. In considering multiple valuation approaches (and consequently,
multiple valuation techniques), the valuation approaches and techniques are not likely to
change from one period of measurement to the next; however, the weighting of each in determining
the final fair value of a Level 3 investment may change based on recent events or transactions.
The hybrid approach may also consider certain risk weightings to account for the uncertainty
of future events. Refer to “Note 2—Significant Accounting Policies— Investments
at Fair Value
(2) The
Board considers all relevant information that can reasonably be obtained when determining
the fair value of Level 3 investments. Due to any given portfolio company’s information
rights, changes in capital structure, recent events, transactions, or liquidity events, the
type and availability of unobservable inputs may change. Increases/(decreases) in revenue
multiples, earnings before interest and taxes (“EBIT”) multiples, time to expiration,
and stock price/strike price would result in higher (lower) fair values, all else equal.
Decreases/(increases) in discount rates, volatility, and annual risk rates, would result
in higher (lower) fair values, all else equal. The market approach utilizes market value
(revenue and EBIT) multiples of publicly traded comparable companies and available precedent
sales transactions of comparable companies. The Company carefully considers numerous factors
when selecting the appropriate companies whose multiples are used to value its portfolio
companies. These factors include, but are not limited to, the type of organization, similarity
to the business being valued, relevant risk factors, as well as size, profitability and growth
expectations. In general, precedent transactions include recent rounds of financing, recent
purchases made by the Company, and tender offers. Refer to “Note 2—Significant
Accounting Policies— Investments at Fair Value
(3) The
weighted averages are calculated based on the fair market value of each investment.
(4) Adjusted
Funds From Operations, or “AFFO”
(5) Probability-Weighted
Expected Return Method, or “PWERM” SURO
CAPITAL CORP. AND SUBSIDIARIES NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September
30, 2022
As
of December 31, 2021
Asset Fair
Value Valuation (1) Unobservable
Inputs (2) Range (3)
Common
stock in private companies $ 42,860,156 Market
approach Revenue
multiples 1.80 9.62 6.00
Discounted
cash flow Discount
rate 15.0 15.0
DLOM (6) 10.0 10.0
PWERM (5) AFFO(4)
multiple 23.03 36.28 23.03
Financing
Risk 10.0 10.0
$ 163,801,798 Market
approach Revenue
multiples 0.53 9.62 6.63
Discounted
cash flow Discount
rate 15.0 15.0
Preferred
stock in private companies Revenue
multiples 1.05 9.62 3.04
PWERM (5) DLOM 10.0 10.0
Financing
Risk 10.0 10.0
Debt
investments $ 3,011,438 Market
approach Revenue
multiples 1.74 2.91 1.95
Options $ 4,959,112 Option
pricing model Term
to expiration (Years) 0.17 6.61 3.08
Discounted
cash flow Volatility 37.7 56.5 37.7
Discount
Rate 15.0 15.0
(1) As
of December 31, 2021, the Company used a hybrid market and income approach to value certain
common and preferred stock investments as the Company felt this approach better reflected
the fair value of these investments. In considering multiple valuation approaches (and consequently,
multiple valuation techniques), the valuation approaches and techniques are not likely to
change from one period of measurement to the next; however, the weighting of each in determining
the final fair value of a Level 3 investment may change based on recent events or transactions.
The hybrid approach may also consider certain risk weightings to account for the uncertainty
of future events. Refer to “Note 2—Significant Accounting Policies— Investments
at Fair Value
(2) The
Company considers all relevant information that can reasonably be obtained when determining
the fair value of Level 3 investments. Due to any given portfolio company’s information
rights, changes in capital structure, recent events, transactions, or liquidity events, the
type and availability of unobservable inputs may change. Increases/(decreases) in revenue
multiples, earnings before interest and taxes (“EBIT”) multiples, time to expiration,
and stock price/strike price would result in higher (lower) fair values, all else equal.
Decreases/(increases) in discount rates, volatility, and annual risk rates, would result
in higher (lower) fair values, all else equal. The market approach utilizes market value
(revenue and EBIT) multiples of publicly traded comparable companies and available precedent
sales transactions of comparable companies. The Company carefully considers numerous factors
when selecting the appropriate companies whose multiples are used to value its portfolio
companies. These factors include, but are not limited to, the type of organization, similarity
to the business being valued, relevant risk factors, as well as size, profitability and growth
expectations. In general, precedent transactions include recent rounds of financing, recent
purchases made by the Company, and tender offers. Refer to “Note 2—Significant
Accounting Policies— Investments at Fair Value
(3) The
weighted averages are calculated based on the fair market value of each investment.
(4) Adjusted
Funds From Operations, or “AFFO”
(5) Probability-Weighted
Expected Return Method, or “PWERM”
(6) Discount for Lack of Marketability, or “DLOM” SURO
CAPITAL CORP. AND SUBSIDIARIES NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September
30, 2022 The
aggregate values of Level 3 assets and liabilities changed during the nine months ended September 30, 2022 as follows: SCHEDULE
OF AGGREGATE VALUE OF ASSETS AND LIABILITIES
Common Stock Preferred Stock Debt Investments Options Total
Nine
Months Ended September 30, 2022
Common Stock Preferred Stock Debt Investments Options Total
Assets:
Fair
Value as of December 31, 2021 $ 42,860,156 $ 163,801,798 $ 3,011,438 $ 4,959,112 $ 214,632,504
Transfers
out of Level 3 (1) (6,918,251 ) (1,775,506 ) — (48,639 ) (8,742,396 )
Purchases,
capitalized fees and interest — 10,512,790 1,509,093 503,183 12,525,066
Sales/Maturity of
investments (874,470 ) — (750,000 ) — (1,624,470 )
Realized
gains/(losses) 160,965 — — (70,379 ) 90,586
Net
change in unrealized appreciation/(depreciation) included in earnings (16,377,869 ) (57,188,339 ) 937,753 (1,896,172 ) (74,524,627 )
Fair
Value as of September 30, 2022 $ 18,850,531 $ 115,350,743 $ 4,708,284 $ 3,447,105 $ 142,356,663
Net
change in unrealized appreciation/ (depreciation) of Level 3 investments still held as of September 30, 2022 $ (6,865,565 ) $ (54,747,097 ) $ 937,754 $ (1,646,717 ) $ (62,321,625 )
(1) During
the nine months ended September 30, 2022, the Company’s portfolio investments had the
following corporate actions which are reflected above:
Portfolio
Company Conversion
from Conversion
to
Forge
Global, Inc. Common
Shares, Class AA 12.42 11/9/2025 Public
Common shares (Level 2) 3.98 11/9/2025 The
aggregate values of Level 3 assets and liabilities changed during the year ended December 31, 2021 as follows:
Common Stock Preferred Stock Debt Investments Options Total
Year
Ended December 31, 2021
Common Stock Preferred Stock Debt Investments Options Total
Assets:
Fair
Value as of December 31, 2020 $ 34,190,839 $ 141,235,987 $ 4,845,340 $ 5,872,210 $ 186,144,376
Fair Value, Beginnng $ 34,190,839 $ 141,235,987 $ 4,845,340 $ 5,872,210 $ 186,144,376
Transfers
out of Level 3 (1) (31,652,675 ) (155,414,652 ) (5,211,120 ) (1,619,463 ) (193,897,910 )
Purchases,
capitalized fees and interest 36,154,823 43,239,463 — 2,321,752 81,716,038
Sales/Maturity of
investments (61,675 ) (10,646,457 ) (2,344,979 ) — (13,053,111 )
Realized
gains/(losses) 204,195 5,551,864 88,788 (103,655 ) 5,741,192
Net
change in unrealized appreciation/(depreciation) included in earnings 4,024,649 139,835,593 5,633,409 (1,511,732 ) 147,981,919
Fair
Value as of December 31, 2021 $ 42,860,156 $ 163,801,798 $ 3,011,438 $ 4,959,112 $ 214,632,504
Fair Value, Ending $ 42,860,156 $ 163,801,798 $ 3,011,438 $ 4,959,112 $ 214,632,504
Net
change in unrealized appreciation/ (depreciation) of Level 3 investments still held as of December 31, 2021 $ 6,117,069 $ 46,943,434 $ — $ (586,899 ) $ 52,473,604
Net change in unrealized appreciation/ (depreciation) of Level 3 investments still held $ 6,117,069 $ 46,943,434 $ — $ (586,899 ) $ 52,473,604
(1) During
the year ended December 31, 2021, the Company’s portfolio investments had the following corporate actions which are reflected above:
Portfolio
Company Conversion
from Conversion
to
Coursera,
Inc. Preferred
shares, Series F 8 Preferred
shares, Series B 8 Public
Common shares (Level 2)
Churchill
Capital Corp. II Common
shares, Class A Skillsoft
Corp. Public Common shares (Level 2)
NewLake
Capital Partners, Inc. (f/k/a GreenAcreage Real Estate Corp.) Common
shares Public
Common shares (Level 2)
A
Place for Rover, Inc. (f/k/a DogVacay, Inc.) Common
shares Rover
Group, Inc. Public Common shares (Level
2)
Enjoy
Technology, Inc. Preferred
shares, Series B 6 Preferred
shares, Series A 6 Convertible
Promissory Note 14 1/30/2024 Public
Common shares (Level 2)
Nextdoor
Holdings, Inc. Common
shares Public
Common shares (Level 2)
Rent
the Runway, Inc. Preferred
shares, Series G Public
Common shares (Level 2) SURO
CAPITAL CORP. AND SUBSIDIARIES NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September
30, 2022 Schedule
of Investments In, and Advances to, Affiliates Transactions
during the nine months ended September 30, 2022 involving the Company’s controlled investments and non-controlled/affiliate investments
were as follows: SCHEDULE
OF INVESTMENTS IN AND ADVANCES TO AFFILIATES
Type/Industry/Portfolio
Company/Investment Principal/ Quantity Interest,
Fees, or Dividends
Credited in
Income Fair
Value at December 31, 2021 Transfer
In/ (Out) Purchases, Capitalized
Fees, Interest
and Amortization Sales Realized Gains/(Losses) Unrealized Gains/(Losses) Fair
Value at September 30, 2022 Percentage of
Net Assets
CONTROLLED
INVESTMENTS (2)
Options
Special
Purpose Acquisition Company
Colombier
Sponsor LLC**–Class W Units (7) 2,700,000 $ — $ 1,157,487 $ — $ — $ — $ — $ — $ 1,157,487 0.52 %
Total
Options — 1,157,487 — — — — — 1,157,487 0.52 %
Preferred
Stock
Clean
Technology
SPBRX,
INC. (f/k/a GSV Sustainability Partners, Inc.)–Preferred shares, Class A (4) 14,300,000 — 1,047,033 — — — — (61,528 ) 985,505 0.44 %
Total
Preferred Stock — 1,047,033 — — — — (61,528 ) 985,505 0.44 %
Common
Stock
Clean
Technology
SPBRX,
INC. (f/k/a GSV Sustainability Partners, Inc.)–Common shares 100,000 — — — — — — — — — %
Mobile
Finance Technology
Architect
Capital PayJoy SPV, LLC**–Membership Interest in Lending SPV*** (7) $ 10,000,000 1,225,000 10,000,000 — — — — — 10,000,000 4.51 %
Special
Purpose Acquisition Company
Colombier
Sponsor LLC**–Class B Units (7) 1,976,033 — 1,554,354 — — — — — 1,554,354 0.70 %
Total
Common Stock 1,225,000 11,554,354 — — — — — 11,554,354 5.21 %
TOTAL
CONTROLLED INVESTMENTS* (2) $ 1,225,000 $ 13,758,874 $ — $ — $ — $ — $ (61,528 ) $ 13,697,346 6.18 %
NON-CONTROLLED/AFFILIATE
INVESTMENTS (1)
Debt
Investments
Global
Innovation Platform
OneValley,
Inc. (f/k/a NestGSV, Inc.) –Convertible Promissory Note 8%, Due 8/23/2024 (3)(6) $ 1,010,198 $ — $ 505,099 $ — $ — $ — $ — $ 1,453,185 $ 1,958,284 0.88 %
Total
Debt Investments — 505,099 — — — — 1,453,185 1,958,284 0.88 %
Preferred
Stock
Knowledge
Networks
Maven
Research, Inc.–Preferred shares, Series C 318,979 — — — — — — — — — %
Maven
Research, Inc.–Preferred shares, Series B 49,505 — — — — — — — — — %
Total
Knowledge Networks — — — — — — — — — %
Digital
Media Platform
Ozy
Media, Inc.–Preferred shares, Series C-2 6% 683,482 — — — — — — — — %
Ozy
Media, Inc.–Preferred shares, Series B 6% 922,509 — — — — — — — — — %
Ozy
Media, Inc.–Preferred shares, Series A 6% 1,090,909 — — — — — — — — — %
Ozy
Media, Inc.–Preferred shares, Series Seed 6% 500,000 — — — — — — — — — %
Total
Digital Media Platform — — — — — — — — — %
Interactive
Learning
StormWind,
LLC–Preferred shares, Series D 8% (5) 329,337 — 621,093 — — — (98,308 ) 522,785 0.24 %
StormWind,
LLC–Preferred shares, Series C 8% (5) 2,779,134 — 6,496,729 — — — — (921,411 ) 5,575,318 2.51 %
StormWind,
LLC–Preferred shares, Series B 8% (5) 3,279,629 — 4,423,607 — — — — (978,971 ) 3,444,636 1.55 %
StormWind,
LLC–Preferred shares, Series A 8% (5) 366,666 — 289,293 — — — — (109,450 ) 179,843 0.08 %
Total
Interactive Learning — 11,830,722 — — — — (2,108,140 ) 9,722,582 4.38 %
Total
Preferred Stock — 11,830,722 — — — — (2,108,140 ) 9,722,582 4.38 %
Options
Digital
Media Platform
Ozy
Media, Inc.–Common Warrants, Strike Price $ 0.01 4/9/2028 295,565 $ — $ — $ — $ — $ — $ — $ — $ — — %
Global
Innovation Platform
OneValley,
Inc. (f/k/a NestGSV, Inc.)–Preferred Warrant Series B, Strike Price $ 2.31 5/29/2022 — — — — — — (70,379 ) 70,379 — — %
OneValley,
Inc. (f/k/a NestGSV, Inc.)–Preferred Warrant Series B, Strike Price $ 2.31 12/31/2023 250,000 — 5,000 — — — — (5,000 ) — 0.00 %
OneValley,
Inc. (f/k/a NestGSV, Inc.)– Derivative Security, Expiration Date 8/23/2024 (6) 1 — 2,268,268 — — — — (1,638,533 ) 629,735 0.28 %
Total
Global Innovation Platform — 2,273,268 — — (70,379 ) (1,573,154 ) 629,735 0.28 %
Total
Options — 2,273,268 — — — (70,379 ) (1,573,154 ) 629,735 0.28 %
Common
Stock
Online
Education
Curious.com,
Inc.–Common shares 1,135,944 — — — — — — — — — %
Total
Common Stock — — — — — — — — — %
TOTAL
NON-CONTROLLED/AFFILIATE INVESTMENTS* (1) $ — $ 14,609,089 $ — $ — $ — $ (70,379 ) $ (2,228,109 ) $ 12,310,601 5.55 % SURO
CAPITAL CORP. AND SUBSIDIARIES NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September
30, 2022
* All
portfolio investments are non-income-producing, unless otherwise identified. Equity investments
are subject to lock-up restrictions upon their IPO. Preferred dividends are generally only
payable when declared and paid by the portfolio company’s board of directors. The Company’s
directors, officers, employees and staff, as applicable, may serve on the board of directors
of the Company’s portfolio investments. (Refer to “Note 3—Related-Party
Arrangements”). All portfolio investments are considered Level 3 and valued using significant
unobservable inputs, unless otherwise noted. (Refer to “Note 4—Investments at
Fair Value”). All portfolio investments are considered Level 3 and valued using unobservable
inputs, unless otherwise noted. All of the Company’s portfolio investments are restricted
as to resale, unless otherwise noted, and were valued at fair value as determined in good
faith by the Company’s Board of Directors. (Refer to “Note 2—Significant
Accounting Policies—Investments at Fair Value”).
** Indicates
assets that SuRo Capital Corp. believes do not represent “qualifying assets”
under Section 55(a) of the Investment Company Act of 1940, as amended (the “1940 Act”).
Of the Company’s total investments as of September 30, 2022, 14.63
*** Investment
is income-producing.
(1) “Affiliate
Investments” are investments in those companies that are “Affiliated Companies”
of SuRo Capital Corp., as defined in the 1940 Act. In general, a company is deemed to be
an “Affiliate” of SuRo Capital Corp. if SuRo Capital Corp. beneficially owns, directly or indirectly, between 5% and 25% of
the voting securities ( i.e.
(2) “Control
Investments” are investments in those companies that are “Controlled Companies”
of SuRo Capital Corp., as defined in the 1940 Act. In general, under the 1940 Act, the Company
would “Control” a portfolio company if the Company beneficially owns, directly or indirectly, more than 25% of its
outstanding voting securities (i.e., securities with the right to elect directors) and/or
had the power to exercise control over the management or policies of such portfolio company.
(3) As
of September 30, 2022, the investments noted had been placed on non-accrual status.
(4) The
SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.) preferred shares held by SuRo Capital
Corp. do not entitle SuRo Capital Corp. to a preferred dividend rate. SuRo Capital Corp.
does not anticipate that SPBRX, INC. will pay distributions on a quarterly or regular basis
or become a predictable distributor of distributions.
(5) SuRo
Capital Corp.’s investments in StormWind, LLC are held through SuRo Capital Corp.’s
wholly owned subsidiary, GSVC SW Holdings, Inc.
(6) On
August 23, 2019, SuRo Capital Corp. amended the structure of its investment in OneValley,
Inc. (f/k/a NestGSV, Inc.). As part of the agreement, SuRo Capital Corp.’s equity holdings
(warrants notwithstanding) were restructured into a derivative security. OneValley, Inc.
(f/k/a NestGSV, Inc.) has the right to call the position at any time over a five year period,
while SuRo Capital Corp. can put the shares to OneValley, Inc. (f/k/a NestGSV, Inc.) at the
end of the five year period.
(7) Colombier
Sponsor LLC is the sponsor of Colombier Acquisition Corp., a special purpose acquisition
company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition,
stock purchase, reorganization or similar business combination with one or more businesses. SURO
CAPITAL CORP. AND SUBSIDIARIES NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September
30, 2022 Schedule
of Investments In, and Advances to, Affiliates Transactions
during the year ended December 31, 2021 involving the Company’s controlled investments and non-controlled/affiliate investments
were as follows: SCHEDULE
OF INVESTMENTS IN AND ADVANCES TO AFFILIATES
Type/Industry/Portfolio
Company/Investment Principal/ Quantity Interest,
Fees, or Dividends
Credited in
Income Fair
Value at December 31, 2020 Transfer
In/ (Out) Purchases, Capitalized
Fees, Interest
and Amortization Sales Realized Gains/(Losses) Unrealized Gains/(Losses) Fair
Value at December 31, 2021 Percentage of
Net Assets
CONTROLLED
INVESTMENTS (2)
Options
Special
Purpose Acquisition Company
Colombier
Sponsor LLC**–Class W Units (9) 2,700,000 $ — $ — $ — $ 1,159,150 $ — $ — $ (1,663 ) $ 1,157,487 0.32 %
Total
Options — — — 1,159,150 — — (1,663 ) 1,157,487 0.32 %
Preferred
Stock
Clean
Technology
SPBRX,
INC. (f/k/a GSV Sustainability Partners, Inc.)–Preferred shares, Class A (4) 14,300,000 — 809,198 — — — — 237,835 1,047,033 0.29 %
Total
Preferred Stock — 809,198 — — — — 237,835 1,047,033 0.29 %
Common
Stock
Clean
Technology
SPBRX,
INC. (f/k/a GSV Sustainability Partners, Inc.)–Common shares 100,000 — — — — — — — — — %
Mobile
Finance Technology
Architect
Capital PayJoy SPV, LLC**–Membership Interest in Lending SPV*** (7) $ 10,000,000 390,000 — — 10,006,745 — — (6,745 ) 10,000,000 2.74 %
Special
Purpose Acquisition Company
Colombier
Sponsor LLC**–Class B Units (9) 1,976,033 — — — 1,556,587 — — (2,233 ) 1,554,354 0.43 %
Total
Common Stock 390,000 — — 11,563,332 — — (8,978 ) 11,554,354 3.17 %
TOTAL
CONTROLLED INVESTMENTS* (2) $ 390,000 $ 809,198 $ — $ 12,722,482 $ — $ — $ 227,194 $ 13,758,874 3.78 %
NON-CONTROLLED/AFFILIATE
INVESTMENTS (1)
Debt
Investments
Corporate
Education
CUX,
Inc. (d/b/a CorpU)–Senior Subordinated Convertible Promissory Note 4% Due 2/14/2023 $ — $ — $ 312,790 $ — $ — $ (1,344,981 ) $ 88,789 $ 943,402 $ — — %
Global
Innovation Platform
OneValley,
Inc. (f/k/a NestGSV, Inc.) –Convertible Promissory Note 8% Due 8/23/2024 (3)(6) $ 1,010,198 $ — $ 505,099 $ — $ — $ — $ — $ — $ 505,099 0.14 %
Total
Debt Investments — 817,889 — — (1,344,981 ) 88,789 943,402 505,099 0.14 %
Preferred
Stock
Corporate
Education
CUX,
Inc. (d/b/a CorpU)–Convertible preferred shares, Series D 6% — — 73,882 — — (1,159,243 ) 380,636 704,725 — — %
CUX,
Inc. (d/b/a CorpU) -Convertible preferred shares, Series C 8% — — — — — (3,504,871 ) 1,498,794 2,006,077 — — %
Total
Corporate Education — 73,882 — — (4,664,114 ) 1,879,430 2,710,802 — — %
Knowledge
Networks
Maven
Research, Inc.–Preferred shares, Series C 318,979 — — — — — — — — — %
Maven
Research, Inc.–Preferred shares, Series B 49,505 — — — — — — — — — %
Total
Knowledge Networks — — — — — — — — — %
Digital
Media Platform
Ozy
Media, Inc.–Preferred shares, Series C-2 6% 683,482 — 1,865,547 — — - — (1,865,547 ) — — %
Ozy
Media, Inc.–Preferred shares, Series B 6% 922,509 — 3,350,952 — — — — (3,350,952 ) — — %
Ozy
Media, Inc.–Preferred shares, Series A 6% 1,090,909 — 2,824,679 — — — — (2,824,679 ) — — %
Ozy
Media, Inc.–Preferred shares, Series Seed 6% 500,000 — 1,294,645 — — — — (1,294,645 ) — — %
Total
Digital Media Platform — 9,335,823 — — — — (9,335,823 ) — — %
Interactive
Learning
StormWind,
LLC–Preferred shares, Series D 8% (5) 329,337 — 440,515 — — - — 180,578 621,093 0.17 %
StormWind,
LLC–Preferred shares, Series C 8% (5) 2,779,134 — 4,804,218 — — — — 1,692,511 6,496,729 1.78 %
StormWind,
LLC–Preferred shares, Series B 8% (5) 3,279,629 — 2,625,365 — — — — 1,798,242 4,423,607 1.21 %
StormWind,
LLC–Preferred shares, Series A 8% (5) 366,666 $ — $ 88,248 $ — $ — $ — $ — $ 201,045 $ 289,293 0.08 %
Total
Interactive Learning — 7,958,346 — — — — 3,872,376 11,830,722 3.24 %
Total
Preferred Stock — 17,368,051 — — (4,664,114 ) 1,879,430 (2,752,645 ) 11,830,722 3.24 %
Options
Digital
Media Platform
Ozy
Media, Inc.–Common Warrants, Strike Price $ 0.01 4/9/2028 295,565 — 762,558 — — — — (762,558 ) — — %
Global
Innovation Platform
OneValley,
Inc. (f/k/a NestGSV, Inc.)–Preferred Warrant Series A-3 - Strike Price $ 1.33 4/4/2021 — — 4,687 — — — — (4,687 ) — — %
OneValley,
Inc. (f/k/a NestGSV, Inc.)–Preferred Warrant Series A-4, Strike Price $ 1.33 7/18/2021 — — 27,500 — — — (74,380 ) 46,880 — — %
OneValley,
Inc. (f/k/a NestGSV, Inc.)–Preferred Warrant Series A-4, Strike Price $ 1.33 10/6/2021 — — 65,000 — — — — (65,000 ) — — %
OneValley,
Inc. (f/k/a NestGSV, Inc.)–Preferred Warrant Series B, Strike Price $ 2.31 11/29/2021 — — — — — — (29,275 ) 29,275 — — %
OneValley,
Inc. (f/k/a NestGSV, Inc.)–Preferred Warrant Series B, Strike Price $ 2.31 5/29/2022 125,000 — — — — — — — — — %
OneValley,
Inc. (f/k/a NestGSV, Inc.)–Preferred Warrant Series B, Strike Price $ 2.31 12/31/2023 250,000 — 9,250 — — — — (4,250 ) 5,000 0.01 %
Derivative
Security, Expiration Date 8/23/2024 (6) 1 — 2,173,148 — — — — 95,120 2,268,268 0.62 %
Total
Global Innovation Platform — 2,279,585 — — (103,655 ) 97,338 2,273,268 0.63 %
Total
Options — 3,042,143 — — — (103,655 ) (665,220 ) 2,273,268 0.63 %
Common
Stock
Online
Education
Curious.com,
Inc.–Common shares 1,135,944 — — — — — — — — — %
Cannabis
REIT
NewLake
Capital Partners, Inc. (f/k/a GreenAcreage Real Estate Corp.)**–Common shares*** (8) — $ 102,632 $ 8,937,690 $ (9,009,952 ) $ 500,319 $ — $ — $ (428,057 ) $ — — %
Total
Common Stock 102,632 8,937,690 (9,009,952 ) 500,319 — — (428,057 ) — — %
TOTAL
NON-CONTROLLED/AFFILIATE INVESTMENTS* (1) $ 102,632 $ 30,165,773 $ (9,009,952 ) $ 500,319 $ (6,009,095 ) $ 1,864,564 $ (2,902,520 ) $ 14,609,089 4.01 % SURO
CAPITAL CORP. AND SUBSIDIARIES NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September
30, 2022
* All
portfolio investments are non-income-producing, unless otherwise identified. Equity investments
are subject to lock-up restrictions upon their IPO. Preferred dividends are generally only
payable when declared and paid by the portfolio company’s board of directors. The Company’s
directors, officers, employees and staff, as applicable, may serve on the board of directors
of the Company’s portfolio investments. (Refer to “Note 3—Related-Party
Arrangements”). All portfolio investments are considered Level 3 and valued using significant
unobservable inputs, unless otherwise noted. (Refer to “Note 4—Investments at
Fair Value”). All portfolio investments are considered Level 3 and valued using unobservable
inputs, unless otherwise noted. All of the Company’s portfolio investments are restricted
as to resale, unless otherwise noted, and were valued at fair value as determined in good
faith by the Company’s Board of Directors. (Refer to “Note 2—Significant
Accounting Policies—Investments at Fair Value”).
** Indicates
assets that SuRo Capital Corp. believes do not represent “qualifying assets”
under Section 55(a) of the 1940 Act. Of the Company’s total investments as of December
31, 2021, 26.91
*** Investment
is income-producing.
(1) “Affiliate
Investments” are investments in those companies that are “Affiliated Companies”
of SuRo Capital Corp., as defined in the 1940 Act. In general, a company is deemed to be
an “Affiliate” of SuRo Capital Corp. if SuRo Capital Corp. owns 5% or more of
the voting securities ( i.e.
(2) “Control
Investments” are investments in those companies that are “Controlled Companies”
of SuRo Capital Corp., as defined in the 1940 Act. In general, under the 1940 Act, the Company
would “Control” a portfolio company if the Company owned more than 25% of its
outstanding voting securities (i.e., securities with the right to elect directors) and/or
had the power to exercise control over the management or policies of such portfolio company.
(3) As
of December 31, 2021, the investments noted had been placed on non-accrual status.
(4) The
SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.) preferred shares held by SuRo Capital
Corp. do not entitle SuRo Capital Corp. to a preferred dividend rate. SuRo Capital Corp.
does not anticipate that SPBRX, INC. will pay distributions on a quarterly or regular basis
or become a predictable distributor of distributions.
(5) SuRo
Capital Corp.’s investments in StormWind, LLC are held through SuRo Capital |
