Net Asset Value of $11.84 per Share as of June 30, 2020
SAN FRANCISCO, Aug. 05, 2020 (GLOBE NEWSWIRE) -- SuRo Capital Corp. (“SuRo Capital” or the “Company”) (Nasdaq:SSSS) today announced its financial results for the quarter ended June 30, 2020. Net assets totaled approximately $192.7 million, or $11.84 per share, at June 30, 2020, compared to $10.22 per share at March 31, 2020 and $10.75 per share at June 30, 2019.
“This quarter, SuRo Capital reported the highest dividend-adjusted net asset value per share in five years. On July 29, 2020, we were pleased to declare a $0.15 per share dividend. The quarter was highlighted by several significant financings for existing portfolio companies and investments in new opportunities,” said Mark Klein, President and Chief Executive Officer of SuRo Capital. “The companies in our portfolio demonstrated strong growth and resilience this quarter despite the ongoing impact of the COVID-19 outbreak. We believe our portfolio is well-positioned given the current market conditions.”
“We are also excited to announce the closing of two new investments during the second quarter: a $5.0 million equity investment in Rent the Runway, Inc. and a $6.9 million collateralized loan to Palantir Lending Trust. SuRo Capital also made follow-on, pro rata investments in Lime during the second quarter and Coursera subsequent to quarter-end. We continue to see more opportunities to deploy capital in credit investments. We have also been exploring opportunities in pre-business combination private investments in public equity (“PIPEs”) associated with the special-purpose acquisition company (“SPAC”) asset class.”
Investment Portfolio as of June 30, 2020
At June 30, 2020, SuRo Capital held positions in 24 portfolio companies with an aggregate fair value of approximately $199.0 million. As a result of the Company’s continued strategy to increase the size of its investments in individual portfolio companies, SuRo Capital has consolidated its investment portfolio around its top positions. The Company’s top five portfolio company investments accounted for approximately 68% of the total portfolio at fair value as of June 30, 2020.
Top Five Investments as of June 30, 2020
| $ in millions | Cost Basis | Fair Value | % of Total Portfolio | ||||||
| Coursera, Inc. | $ | 14.5 | $ | 49.9 | 25.1 | % | |||
| Course Hero, Inc. | 5.0 | 33.2 | 16.7 | ||||||
| Palantir Technologies, Inc. | 16.2 | 30.5 | 15.3 | ||||||
| Ozy Media, Inc. | 10.9 | 11.3 | 5.7 | ||||||
| Nextdoor.com, Inc. | 10.0 | 10.5 | 5.3 | ||||||
| Total (rounded) | $ | 56.6 | $ | 135.4 | 68.1 | % | |||
Second Quarter 2020 Investment Portfolio Activity
During the three months ended June 30, 2020, SuRo Capital funded the following new and follow-on investments, excluding capitalized transaction costs:
| Portfolio Company | Investment | Transaction Date | Investment |
| Neutron Holdings, Inc. (d/b/a Lime) | Junior Preferred Convertible Note | 5/11/2020 | $0.5 million |
| Rent the Runway, Inc. | Preferred Stock | 6/17/2020 | $5.0 million |
| Palantir Lending Trust | Collateralized Loan | 6/19/2020 | $6.9 million |
Subsequent to quarter-end, through August 5, 2020, SuRo Capital funded the following follow-on investment:
| Portfolio Company | Investment | Transaction Date | Investment |
| Coursera, Inc. | Preferred Shares, Series F | 7/15/2020 | $2.8 million |
Second Quarter 2020 Financial Results
| Quarter EndedJune 30, 2020 | Quarter EndedJune 30, 2019 | |||||||||||
| $ in millions | per share(1) | $ in millions | per share(1) | |||||||||
| Net investment loss (2) | $ | (4.7 | ) | $ | (0.28 | ) | $ | (2.8 | ) | $ | (0.14 | ) |
| Net realized gain/(loss) on investments | (0.0 | ) | - | 13.6 | 0.69 | |||||||
| Net change in unrealized appreciation/(depreciation) of investments, net of tax effects | 26.5 | 1.62 | (11.4 | ) | (0.58 | ) | ||||||
| Net increase/(decrease) in net assets resulting from operations – basic(3) | $ | 21.8 | $ | 1.34 | $ | (0.7 | ) | $ | (0.03 | ) | ||
| Repurchase of common stock(4) | (3.6 | ) | 0.16 | (0.7 | ) | 0.03 | ||||||
| Stock-based compensation(2) | 2.0 | 0.12 | - | - | ||||||||
| Increase/(decrease) in net asset value | $ | 20.2 | $ | 1.62 | $ | (1.4 | ) | $ | 0.00 | |||
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- Based on weighted-average number of shares outstanding for the relevant period
- For the quarter ended June 30, 2020, this balance includes $2.0 million of accelerated recognition of compensation cost related to the cancellation of all vested and unvested options on April 28, 2020.
- Total may not sum, due to rounding.
- During the quarters ended June 30, 2020 and 2019, the Company repurchased 594,637 and 115,801 shares of SuRo Capital common stock, for approximately $3.6 million and $0.7 million in cash, respectively, under its Share Repurchase Program. The use of cash in connection with the repurchases decreased net asset value as of period end; however, the reduction in shares outstanding as of period end resulted in an increase in the net asset value per share.
Weighted-average common basic shares outstanding were approximately 16.4 million and 19.7 million for the quarters ended June 30, 2020 and 2019, respectively.
SuRo Capital’s liquid assets were approximately $23.3 million as of June 30, 2020, consisting of cash and restricted cash.
Dividend Declaration for Second Quarter 2020
On July 29, 2020, SuRo Capital’s Board of Directors declared a dividend of $0.15 per share payable on August 25, 2020 to the Company’s common stockholders of record as of the close of business on August 11, 2020. The dividend will be paid in cash.
Share Repurchase Program
During the quarter ended June 30, 2020, SuRo Capital repurchased 594,637 shares under its Share Repurchase Program for an aggregate purchase price of $3.6 million. The dollar value of shares that may yet be purchased by the Company under the Share Repurchase Program is approximately $2.7 million.
Under the publicly announced Share Repurchase Program and the Modified Dutch Auction Tender Offer, as of August 5, 2020, the Company has repurchased 5,901,324 shares of its common stock for approximately $37.3 million since the Share Repurchase Program was announced in August 2017.
Conference Call and Webcast
Management will hold a conference call and webcast for investors on August 5, 2020 at 2:00 p.m. PT (5:00 p.m. ET). The conference call access number for U.S. participants is 323-794-2093, and the conference call access number for participants outside the U.S. is 866-548-4713. The conference ID number for both access numbers is 3811592. 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 August 12, 2020 by dialing 888-203-1112 (U.S.) or +1 719-457-0820 (International) and using conference ID number 3811592.
Certain Information Regarding the Dividend
The date of declaration and amount of the dividend are subject to the sole discretion of SuRo Capital’s Board of Directors. The aggregate amount of the dividend declared and paid by SuRo Capital will be fully taxable to stockholders. The tax character of SuRo Capital’s dividends cannot be finally determined until the close of SuRo Capital’s taxable year (December 31). SuRo Capital will report the actual tax characteristics of each year’s dividends annually to stockholders and the IRS on Form 1099-DIV subsequent to year-end.
Registered stockholders with questions regarding declared dividends may call American Stock Transfer at 800-937-5449.
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 the COVID-19 pandemic and 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 San Francisco, CA. Connect with the company on Twitter, LinkedIn, and at www.surocap.com ContactSuRo Capital Corp.(650) 235-4769[email protected]
Media ContactBill DouglassGotham Communications, LLC[email protected]
SURO CAPITAL CORP. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)
| June 30, 2020 | December 31, 2019 | ||||||
| ASSETS | |||||||
| Investments at fair value: | |||||||
| Non-controlled/non-affiliate investments (cost of $99,121,577 and $90,567,041, respectively) | $ | 168,700,422 | $ | 152,866,112 | |||
| Non-controlled/affiliate investments (cost of $52,857,243 and $52,857,243, respectively) | 29,438,698 | 37,944,268 | |||||
| Controlled investments (cost of $7,161,412 and $7,161,412, respectively) | 860,198 | 775,198 | |||||
| Total Portfolio Investments | 198,999,318 | 191,585,578 | |||||
| Investments in U.S. Treasury bills (cost of $99,999,611 and $49,996,667, respectively) | 100,000,000 | 50,000,000 | |||||
| Total Investments (cost of $259,139,843 and $200,582,363, respectively) | 298,999,318 | 241,585,578 | |||||
| Cash | 22,385,073 | 44,861,263 | |||||
| Restricted cash | 900,000 | — | |||||
| Escrow proceeds receivable | 67,135 | 265,303 | |||||
| Interest and dividends receivable | 70,274 | 84,630 | |||||
| Deferred financing costs | 11,382 | 11,382 | |||||
| Prepaid expenses and other assets(1) | 1,197,711 | 1,755,933 | |||||
| Total Assets | 323,630,893 | 288,564,089 | |||||
| LIABILITIES | |||||||
| Accounts payable and accrued expenses(1) | 1,933,219 | 1,143,923 | |||||
| Payable to executive officers | — | 1,369,873 | |||||
| Accrued interest payable | 475,000 | 475,000 | |||||
| Dividends payable | — | 2,107,709 | |||||
| Payable for securities purchased | 89,499,611 | 44,746,660 | |||||
| Income tax payable | 38,965 | — | |||||
| 4.75% Convertible Senior Notes due March 28, 2023(2) | 38,991,657 | 38,803,635 | |||||
| Total Liabilities | 130,938,452 | 88,646,800 | |||||
| Net Assets | $ | 192,692,441 | $ | 199,917,289 | |||
| NET ASSETS | |||||||
| Common stock, par value $0.01 per share (100,000,000 authorized; 16,279,679 and 17,564,244 issued and outstanding, respectively) | $ | 162,797 | $ | 175,642 | |||
| Paid-in capital in excess of par | 173,199,798 | 178,550,374 | |||||
| Accumulated net investment loss | (33,351,303 | ) | (25,679,362 | ) | |||
| Accumulated net realized gain on investments | 12,821,670 | 5,867,417 | |||||
| Accumulated net unrealized appreciation/(depreciation) of investments | 39,859,479 | 41,003,218 | |||||
| Net Assets | $ | 192,692,441 | $ | 199,917,289 | |||
| Net Asset Value Per Share | $ | 11.84 | $ | 11.38 | |||
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- This balance includes a right of use asset and corresponding operating lease liability, respectively.
- As of June 30, 2020 and December 31, 2019, the 4.75% Convertible Senior Notes due March 28, 2023 had a face value of $40,000,000.
SURO CAPITAL CORP. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||
| INVESTMENT INCOME | |||||||||||||||
| Non-controlled/non-affiliate investments: | |||||||||||||||
| Interest income | $ | 61,126 | $ | 198,175 | $ | 216,211 | $ | 336,672 | |||||||
| Dividend income | — | — | 50,000 | — | |||||||||||
| Non-controlled/affiliate investments: | |||||||||||||||
| Interest income/(reversal of interest income accrual) | (49,612 | ) | 60,127 | (29,184 | ) | 119,593 | |||||||||
| Dividend income | 30,000 | — | 56,250 | — | |||||||||||
| Controlled investments: | |||||||||||||||
| Interest income | — | 29,650 | — | 58,937 | |||||||||||
| Dividend income | 200,000 | 200,000 | 200,000 | 200,000 | |||||||||||
| Total Investment Income | 241,514 | 487,952 | 493,277 | 715,202 | |||||||||||
| OPERATING EXPENSES | |||||||||||||||
| Management fees(1) | — | — | — | 848,723 | |||||||||||
| Reversal of incentive fee accrual(1) | — | — | — | (4,660,472 | ) | ||||||||||
| Costs incurred under Administration Agreement(1) | — | — | — | 306,084 | |||||||||||
| Compensation expense(2) | 3,005,524 | 469,944 | 3,930,440 | 632,108 | |||||||||||
| Directors’ fees | 111,250 | 86,250 | 222,500 | 172,500 | |||||||||||
| Professional fees | 678,472 | 1,310,028 | 1,817,838 | 3,371,950 | |||||||||||
| Interest expense | 568,627 | 600,205 | 1,142,027 | 1,204,373 | |||||||||||
| Income tax expense | 39,590 | 29,949 | 48,255 | 33,712 | |||||||||||
| Other expenses | 505,439 | 796,807 | 1,004,158 | 991,753 | |||||||||||
| Total Operating Expenses | 4,908,902 | 3,293,183 | 8,165,218 | 2,900,731 | |||||||||||
| Net Investment Loss | (4,667,388 | ) | (2,805,231 | ) | (7,671,941 | ) | (2,185,529 | ) | |||||||
| Realized Gains/(Losses) on Investments: | |||||||||||||||
| Non-controlled/non-affiliated investments | (23,987 | ) | 13,590,233 | 6,954,253 | 21,859,371 | ||||||||||
| Non-controlled/affiliate investments | — | — | — | (12,334,831 | ) | ||||||||||
| Net Realized Gain/(Loss) on Investments | (23,987 | ) | 13,590,233 | 6,954,253 | 9,524,540 | ||||||||||
| Change in Unrealized Appreciation/(Depreciation) of Investments: | |||||||||||||||
| Non-controlled/non-affiliated investments | 24,821,654 | (6,751,196 | ) | 7,276,832 | 10,277,147 | ||||||||||
| Non-controlled/affiliate investments | 1,569,843 | (1,220,012 | ) | (8,505,571 | ) | 7,802,636 | |||||||||
| Controlled investments | 130,698 | (4,469,112 | ) | 85,000 | (9,820,352 | ) | |||||||||
| Net Change in Unrealized Appreciation/(Depreciation) of Investments | 26,522,195 | (12,440,320 | ) | (1,143,739 | ) | 8,259,431 | |||||||||
| Provision for taxes on unrealized appreciation of investments | — | 979,713 | — | 885,566 | |||||||||||
| Net Change in Net Assets Resulting from Operations | $ | 21,830,820 | $ | (675,605 | ) | $ | (1,861,427 | ) | $ | 16,484,008 | |||||
| Net Change in Net Assets Resulting from Operations per Common Share: | |||||||||||||||
| Basic | $ | 1.33 | $ | (0.03 | ) | $ | (0.11 | ) | $ | 0.84 | |||||
| Diluted(3) | $ | 1.10 | $ | (0.03 | ) | $ | (0.11 | ) | $ | 0.70 | |||||
| Weighted-Average Common Shares Outstanding | |||||||||||||||
| Basic | 16,383,188 | 19,719,706 | 16,912,091 | 19,741,058 | |||||||||||
| Diluted(3) | 20,300,980 | 19,719,706 | 16,912,091 | 23,472,402 | |||||||||||
____________________________________________________________________________________________________________________________
- This balance references a related-party transaction.
- For the three and six months ended June 30, 2020, this balance includes $1,962,431 of accelerated recognition of compensation cost related to the cancellation of unvested options on April 28, 2020.
- For the six months ended June 30, 2020 and the three months ended June 30, 2019, 3,917,792 and 3,731,344 potentially dilutive common shares, respectively, were excluded from the weighted-average common shares outstanding for diluted net increase in net assets resulting from operations per common share because the effect of these shares would have been anti-dilutive.
SURO CAPITAL CORP. AND SUBSIDIARIESFINANCIAL HIGHLIGHTS (UNAUDITED)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||
| Per Basic Share Data | |||||||||||||||
| Net asset value at beginning of the period | $ | 10.22 | $ | 10.75 | $ | 11.38 | $ | 9.89 | |||||||
| Net investment income/(loss)(1) | (0.28 | ) | (0.14 | ) | (0.45 | ) | (0.11 | ) | |||||||
| Net realized gain/(loss) on investments(1) | — | 0.69 | 0.41 | 0.48 | |||||||||||
| Net change in unrealized appreciation/(depreciation) of investments(1) | 1.62 | (0.63 | ) | (0.07 | ) | 0.42 | |||||||||
| Provision for taxes on unrealized appreciation of investments(1) | — | 0.05 | — | 0.05 | |||||||||||
| Repurchases of common stock(1) | 0.16 | 0.03 | 0.45 | 0.02 | |||||||||||
| Stock-based compensation(1) | 0.12 | — | 0.12 | — | |||||||||||
| Net asset value at end of period | $ | 11.84 | $ | 10.75 | $ | 11.84 | $ | 10.75 | |||||||
| Per share market value at end of period | $ | 8.47 | $ | 6.40 | $ | 8.47 | $ | 6.40 | |||||||
| Total return based on market value(2) | 44.54 | % | (15.57 | )% | 29.31 | % | 22.61 | % | |||||||
| Total return based on net asset value(2) | 15.85 | % | — | % | 4.04 | % | 8.70 | % | |||||||
| Shares outstanding at end of period | 16,279,679 | 19,646,846 | 16,279,679 | 19,646,846 | |||||||||||
| Ratios/Supplemental Data: | |||||||||||||||
| Net assets at end of period | $ | 192,692,441 | $ | 211,125,048 | $ | 192,692,441 | $ | 211,125,048 | |||||||
| Average net assets | $ | 169,877,812 | $ | 211,244,233 | $ | 184,435,968 | $ | 203,070,126 | |||||||
| Ratio of gross operating expenses to average net assets(3) | 8.19 | % | 5.14 | % | 7.83 | % | 4.66 | % | |||||||
| Ratio of income tax provision to average net assets | — | % | (0.46 | )% | — | % | (0.44 | )% | |||||||
| Ratio of net operating expenses to average net assets(3) | 8.19 | % | 4.68 | % | 7.83 | % | 4.22 | % | |||||||
| Ratio of net investment income/(loss) to average net assets(3) | (7.61 | )% | (5.39 | )% | (7.29 | )% | (2.18 | )% | |||||||
| Portfolio Turnover Ratio | — | % | — | % | 5.88 | % | 5.04 | % | |||||||
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- Based on weighted-average number of shares outstanding for the relevant period.
- Total return based on market value is based on the change in market price per share between the opening and ending market values per share in the year. 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.
- 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. Significant and material non-recurring expenses are not annualized. For the three and six months ended June 30, 2020, the Company excluded $1,962,431 and $1,962,431, respectively of non-recurring expenses. For the three and six months ended June 30, 2019, the Company excluded $617,536 and $(1,769,820), respectively, of non-recurring expenses and did not annualize the income tax provision. 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.
