Neostellar Capital Corp. 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ​ FOR THE QUARTERLY PERIOD ENDED September 30, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ​ COMMISSION FILE NUMBER: 814-00852 SuRo Capital Corp. (Exact name of registrant as specified in its charter) Maryland 27-4443543 (State of incorporation) (I.R.S. Employer Identification No.) 640 Fifth Avenue , 12th Floor , New York , NY 10019 (Address of principal executive offices) (Zip Code) (212) 931-6331 (Registrant’s telephone number, including area code) Securities Registered Pursuant to Section 12(b) of the Act: Title of Each Class Trading Symbol Name of Each Exchange on Which Registered Common Stock, par value $0.01 per share SSSS Nasdaq Global Select Market 6.00% Notes due 2026 SSSSL Nasdaq Global Select Market Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods as the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ☒ NO ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ (Do not check if a smaller reporting company) Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ☐ NO ☒ The issuer had 25,209,108 shares of common stock, $0.01 par value per share, outstanding as of November 8, 2023. SURO CAPITAL CORP. TABLE OF CONTENTS PAGE PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements 1 Condensed Consolidated Statements of Assets and Liabilities as of September 30, 2023 (Unaudited) and December 31, 2022 1 Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2023 and 2022 (Unaudited) 2 Condensed Consolidated Statements of Changes in Net Assets for the Nine Months Ended September 30, 2023 and 2022 (Unaudited) 3 Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022 (Unaudited) 5 Condensed Consolidated Schedule of Investments as of September 30, 2023 (Unaudited) 6 Condensed Consolidated Schedule of Investments as of December 31, 2022 10 Notes to Condensed Consolidated Financial Statements as of September 30, 2023 (Unaudited) 14 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 44 Item 3. Quantitative and Qualitative Disclosures About Market Risk 56 Item 4. Controls and Procedures 56 PART II. OTHER INFORMATION Item 1. Legal Proceedings 57 Item 1A. Risk Factors 57 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 57 Item 3. Defaults Upon Senior Securities 58 Item 4. Mine Safety Disclosures 58 Item 5. Other Information 58 Item 6. Exhibits 58 Signatures 59 i TABLE OF CONTENTS PART I Item 1. Financial Statements and Supplementary Data SURO CAPITAL CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) September 30, 2023 December 31, 2022 ASSETS Investments at fair value: Non-controlled/non-affiliate investments (cost of $ 162,899,416 and $ 155,103,810 , respectively) $ 152,267,563 $ 130,901,546 Non-controlled/affiliate investments (cost of $ 32,911,517 and $ 41,140,804 , respectively) 30,297,127 12,591,162 Controlled investments (cost of $ 17,168,157 and $ 19,883,894 , respectively) 10,928,028 13,695,870 Total Portfolio Investments 193,492,718 157,188,578 Investments in U.S. Treasury bills (cost of $ 19,990,216 and $ 84,999,598 , respectively) 20,265,064 85,056,817 Total Investments (cost of $ 232,969,306 and $ 301,128,106 , respectively) 213,757,782 242,245,395 Cash 73,503,279 40,117,598 Escrow proceeds receivable 309,484 628,332 Interest and dividends receivable 100,860 138,766 Deferred financing costs 611,736 555,761 Prepaid expenses and other assets (1) 693,687 727,006 Total Assets 288,976,828 284,412,858 LIABILITIES Accounts payable and accrued expenses (1) 3,162,468 708,827 Dividends payable 188,357 296,170 6.00% Notes due December 30, 2026 (2) 73,654,960 73,387,159 Total Liabilities 77,005,785 74,392,156 Commitments and contingencies (Notes 7 and 10) Net Assets $ 211,971,043 $ 210,020,702 NET ASSETS Common stock, par value $ 0.01 per share ( 100,000,000 authorized; 25,209,108 and 28,429,499 issued and outstanding, respectively) $ 252,091 $ 284,295 Paid-in capital in excess of par 318,691,954 330,899,254 Accumulated net investment loss ( 75,528,136 ) ( 64,832,605 ) Accumulated net realized gain/(loss) on investments, net of distributions ( 11,989,672 ) 2,552,465 Accumulated net unrealized appreciation/(depreciation) of investments ( 19,455,194 ) ( 58,882,707 ) Net Assets $ 211,971,043 $ 210,020,702 Net Asset Value Per Share $ 8.41 $ 7.39 See accompanying notes to condensed consolidated financial statements. (1) This balance includes a right of use asset and corresponding operating lease liability, respectively. Refer to “Note 7—Commitments and Contingencies— Operating Leases and Related Deposits ” for more detail. (2) As of September 30, 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 . Refer to “Note 10—Debt Capital Activities” for a reconciliation of the carrying value to the face value. 1 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) 2023 2022 2023 2022 Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 INVESTMENT INCOME Non-controlled/non-affiliate investments: Interest income $ 28,070 $ 26,747 $ 117,939 $ 338,484 Dividend income 63,145 107,764 189,435 429,758 Controlled investments: Interest income 400,000 385,000 954,425 1,225,000 Interest income from U.S. Treasury bills 974,531 — 2,875,247 — Total Investment Income 1,465,746 519,511 4,137,046 1,993,242 OPERATING EXPENSES Compensation expense 2,123,704 1,836,808 6,378,330 5,456,771 Directors’ fees (1) 161,661 161,661 483,887 514,055 Professional fees 277,075 565,411 2,184,488 2,916,583 Interest expense 1,215,248 1,202,748 3,642,801 3,630,301 Income tax expense — 74,497 620,606 82,238 Other expenses 356,484 487,619 1,522,465 1,238,120 Total Operating Expenses 4,134,172 4,328,744 14,832,577 13,838,068 Net Investment Loss ( 2,668,426 ) ( 3,809,233 ) ( 10,695,531 ) ( 11,844,826 ) Realized Loss on Investments: Non-controlled/non-affiliated investments ( 1,461,281 ) ( 5,141,097 ) ( 3,597,113 ) ( 3,940,668 ) Non-controlled/affiliate investments — — ( 10,945,024 ) ( 70,379 ) Net Realized Loss on Investments ( 1,461,281 ) ( 5,141,097 ) ( 14,542,137 ) ( 4,011,047 ) Change in Unrealized Appreciation/(Depreciation) of Investments: Non-controlled/non-affiliated investments 27,760,743 ( 34,763,904 ) 13,544,366 ( 101,639,973 ) Non-controlled/affiliate investments 1,568,324 ( 1,866,488 ) 25,939,147 ( 2,228,109 ) Controlled investments ( 6,000 ) ( 321,528 ) ( 56,000 ) ( 61,528 ) Net Change in Unrealized Appreciation/(Depreciation) of Investments 29,323,067 ( 36,951,920 ) 39,427,513 ( 103,929,610 ) Net Change in Net Assets Resulting from Operations $ 25,193,360 $ ( 45,902,250 ) $ 14,189,845 $ ( 119,785,483 ) Net Change in Net Assets Resulting from Operations per Common Share: Basic $ 0.99 $ ( 1.54 ) $ 0.53 $ ( 3.92 ) Diluted (2) $ 0.99 $ ( 1.54 ) $ 0.53 $ ( 3.92 ) Weighted-Average Common Shares Outstanding Basic 25,351,306 29,781,801 26,549,672 30,542,611 Diluted (2) 25,351,306 29,781,801 26,549,672 30,542,611 See accompanying notes to condensed consolidated financial statements. (1) Refer to “Note 11 — Stock-Based Compensation” for more detail. (2) For the three and nine months ended September 30, 2023 and September 30, 2022, there were no potentially dilutive securities outstanding. Refer to “Note 6 — Net Change in Net Assets Resulting from Operations per Common Share — Basic and Diluted”. 2 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED) - Nine Months Ended September 30, 2023 2022 Net Assets at Beginning of Year $ 210,020,702 $ 364,846,624 Change in Net Assets Resulting from Operations Net investment loss ( 4,221,765 ) ( 4,224,705 ) Net realized gain on investments 189,343 3,096,275 Net change in unrealized appreciation/(depreciation) of investments 8,648,931 21,584,885 Net Change in Net Assets Resulting from Operations 4,616,509 20,456,455 Distributions Dividends declared — ( 3,441,824 ) Total Distributions — ( 3,441,824 ) Change in Net Assets Resulting from Capital Transactions Issuance of common stock from public offering — 229,896 Stock-based compensation 405,858 ( 30,016 ) Repurchases of common stock — ( 1,359,607 ) Net Change in Net Assets Resulting from Capital Transactions 405,858 ( 1,159,727 ) Total Change in Net Assets 5,022,367 15,854,904 Net Assets at March 31 $ 215,043,069 $ 380,701,528 Change in Net Assets Resulting from Operations Net investment loss ( 3,805,340 ) ( 3,810,888 ) Net realized loss on investments ( 13,270,199 ) ( 1,966,225 ) Net change in unrealized appreciation/(depreciation) of investments 1,455,515 ( 88,562,575 ) Net Change in Net Assets Resulting from Operations ( 15,620,024 ) ( 94,339,688 ) Change in Net Assets Resulting from Capital Transactions Stock-based compensation 769,679 703,566 Repurchases of common stock ( 13,500,000 ) ( 6,892,934 ) Net Change in Net Assets Resulting from Capital Transactions ( 12,730,321 ) ( 6,189,368 ) Total Change in Net Assets ( 28,350,345 ) ( 100,529,056 ) Net Assets at June 30 $ 186,692,724 $ 280,172,472 See accompanying notes to condensed consolidated financial statements. 3 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED) - continued Nine Months Ended September 30, 2023 2022 Change in Net Assets Resulting from Operations Net investment loss $ ( 2,668,426 ) $ ( 3,809,233 ) Net realized loss on investments ( 1,461,281 ) ( 5,141,097 ) Net change in unrealized appreciation/(depreciation) of investments 29,323,067 ( 36,951,920 ) Net Change in Net Assets Resulting from Operations 25,193,360 ( 45,902,250 ) Change in Net Assets Resulting from Capital Transactions Stock-based compensation 763,644 713,389 Repurchases of common stock ( 678,685 ) ( 13,200,000 ) Net Change in Net Assets Resulting from Capital Transactions 84,959 ( 12,486,611 ) Total Change in Net Assets 25,278,319 ( 58,388,861 ) Net Assets at September 30 $ 211,971,043 $ 221,783,611 Capital Share Activity Shares outstanding at beginning of year 28,429,499 31,118,556 Issuance of common stock from public offering — 17,807 Issuance of common stock under restricted stock plan, net (1) ( 33,898 ) 205,974 Shares repurchased ( 3,186,493 ) ( 3,008,676 ) Shares Outstanding at End of Period 25,209,108 28,333,661 See accompanying notes to condensed consolidated financial statements. (1) Refer to “Note 11 — Stock-Based Compensation” for more detail. 4 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) 2023 2022 Nine Months Ended September 30, 2023 2022 Cash Flows from Operating Activities Net change in net assets resulting from operations $ 14,189,845 $ ( 119,785,483 ) Adjustments to reconcile net change in net assets resulting from operations to net cash used in operating activities: Net realized loss on investments 14,542,137 4,011,047 Net change in unrealized (appreciation)/depreciation of investments ( 39,427,513 ) 103,929,610 Amortization of discount on 6.00 % Notes due 2026 211,835 318,289 Stock-based compensation 1,939,181 1,386,939 Adjustments to escrow proceeds receivable 116,052 ( 855,758 ) Accrued interest on U.S. Treasury bills ( 243,674 ) — Purchases of investments in: Portfolio investments ( 19,836,933 ) ( 12,526,206 ) U.S. Treasury bills ( 141,793,045 ) ( 99,173,075 ) Proceeds from sales or maturity of investments in: Portfolio investments 8,328,163 7,776,744 U.S. Treasury bills 206,802,427 — Change in operating assets and liabilities: Prepaid expenses and other assets 33,319 48,810 Interest and dividends receivable 37,906 ( 35,953 ) Proceeds receivable — 52,493 Escrow proceeds receivable 318,848 1,392,854 Accounts payable and accrued expenses 2,453,641 2,556,347 Accrued interest payable — ( 175,000 ) Net Cash Used in Operating Activities 47,672,189 ( 111,078,342 ) Cash Flows from Financing Activities Proceeds from the issuance of common stock, net — 229,896 Repurchases of common stock ( 14,178,685 ) ( 21,452,541 ) Cash dividends paid ( 107,823 ) ( 26,481,943 ) Deferred financing costs — ( 1,540 ) Net Cash Used in Financing Activities ( 14,286,508 ) ( 47,706,128 ) Total Decrease in Cash Balance 33,385,681 ( 158,784,470 ) Cash Balance at Beginning of Year 40,117,598 198,437,078 Cash Balance at End of Period $ 73,503,279 $ 39,652,608 Supplemental Information: 2023 2022 Interest paid $ 3,375,000 $ 3,537,500 Taxes paid 530,556 7,569 See accompanying notes to condensed consolidated financial statements. 5 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2023 Portfolio Investments * Headquarters/ Industry Date of Initial Investment Shares/ Principal Cost Fair Value % of Net Assets NON-CONTROLLED/NON-AFFILIATE Learneo, Inc. (f/k/a Course Hero, Inc.) Redwood City, CA Preferred shares, Series A 8% Online Education 9/18/2014 2,145,509 $ 5,000,001 $ 55,402,498 26.14 % Preferred shares, Series C 8% 11/5/2021 275,659 9,999,971 9,999,971 4.72 % Total 14,999,972 65,402,469 30.85 % ServiceTitan, Inc. Glendale, CA Common shares Contractor Management Software 6/30/2023 151,515 10,008,233 11,948,583 5.64 % Blink Health, Inc. New York, NY Preferred shares, Series A Pharmaceutical Technology 10/27/2020 238,095 5,000,423 1,649,024 0.78 % Preferred shares, Series C 10/27/2020 261,944 10,003,917 9,999,975 4.72 % Total 15,004,340 11,648,999 5.50 % Locus Robotics Corp. Wilmington, MA Preferred shares, Series F 6% Warehouse Automation 11/30/2022 232,568 10,004,286 10,000,005 4.72 % Shogun Enterprises, Inc. (d/b/a Hearth) (14) Austin, TX Preferred shares, Series B-1 (14) Home Improvement Finance 2/26/2021 436,844 3,501,657 3,499,994 1.65 % Preferred shares, Series B-2 (14) 2/26/2021 301,750 3,501,661 3,499,998 1.65 % Preferred shares, Series B-3 (14) 5/2/2022 56,936 530,822 530,820 0.25 % Preferred shares, Series B-4 (14) 7/12/2023 48,267 366,606 359,938 0.17 % Common Warrants, Strike Price $0.01, Expiration Date 7/12/2026 (14) 7/12/2023 86,076 140,060 140,060 0.07 % Total (14) 8,040,806 8,030,810 3.79 % Orchard Technologies, Inc. (13) New York, NY Preferred shares, Series D 8% (13) Real Estate Platform 8/9/2021 558,053 3,751,518 — — % Senior Preferred shares, Series 2 (13) 8/9/2021 58,771 587,951 — — % Senior Preferred shares, Series 1 7% (13) 1/13/2023 441,228 4,418,406 7,728,148 3.65 % Common shares (13) 8/9/2021 558,053 3,751,518 — — % Total (13) 12,509,393 7,728,148 3.65 % FourKites, Inc. Chicago, IL Common shares Supply Chain Technology 7/7/2023 851,443 5,813,716 5,803,269 2.74 % Forge Global, Inc. ** San Francisco, CA Common shares (3) **(3) Online Marketplace Finance 7/20/2011 2,508,074 3,443,483 5,091,390 2.40 % True Global Ventures 4 Plus Pte Ltd ** Singapore, Singapore Limited Partner Fund Investment (8) **(8) Venture Investment Fund 8/27/2021 1 1,077,371 4,081,077 1.93 % Whoop, Inc. Boston, MA Preferred shares, Series C Fitness Technology 6/30/2022 13,293,450 10,011,460 3,694,462 1.74 % PayJoy, Inc. San Francisco, CA Preferred shares Mobile Access Technology 7/23/2021 244,117 2,501,570 2,500,002 1.18 % Simple Agreement for Future Equity 5/25/2023 1 501,470 500,000 0.24 % Total 3,003,040 3,000,002 1.42 % Varo Money, Inc. ** San Francisco, CA Common shares ** Financial Services 8/11/2021 1,079,266 10,005,548 2,975,826 1.40 % Residential Homes for Rent, LLC (d/b/a Second Avenue) Chicago, IL Preferred shares, Series A (6) (6) Real Estate Platform 12/23/2020 150,000 1,500,000 2,668,120 1.26 % Term loan 15%, Due 12/23/2023*** (10) ***(10) 12/23/2020 $ 250,000 250,000 250,000 0.12 % Total 1,750,000 2,918,120 1.38 % NewLake Capital Partners, Inc. (f/k/a GreenAcreage Real Estate Corp.) ** New Canaan, CT Common shares*** (3) ***(3) ** Cannabis REIT 8/12/2019 105,820 2,198,836 1,441,268 0.68 % Aventine Property Group, Inc. Chicago, IL Common shares *** *** Cannabis REIT 9/11/2019 312,500 2,580,750 1,157,953 0.55 % See accompanying notes to condensed consolidated financial statements. 6 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED) - continued September 30, 2023 Portfolio Investments * Headquarters/ Industry Date of Initial Investment Shares/ Principal Cost Fair Value % of Net Assets Commercial Streaming Solutions Inc. (d/b/a BettorView) (7) Las Vegas, NV Simple Agreement for Future Equity (7) Interactive Media & Services 3/26/2021 1 1,004,240 1,000,000 0.47 % Stake Trade, Inc. (d/b/a Prophet Exchange) (7) New York, NY Simple Agreement for Future Equity (7) Sports Betting 7/26/2023 1 1,002,153 1,000,000 0.47 % Xgroup Holdings Limited (d/b/a Xpoint)** (7) Dubai, UAE Convertible Note 6%, Due 10/17/2024 (4) (4)**(7) Geolocation Technology 8/17/2022 $ 1,000,000 1,010,091 1,000,000 0.47 % AltC Sponsor LLC ** (11)(15) New York, NY Common shares, Class B **(11)(15) Special Purpose Acquisition Company 7/21/2021 214,400 224,753 724,243 0.34 % Common shares, Class A **(11)(15) Special Purpose Acquisition Company 7/21/2021 24,900 26,102 168,224 0.08 % Total **(11)(15) 250,855 892,467 0.42 % Skillsoft Corp. ** Nashua, NH Common shares (3) **(3) Online Education 6/8/2021 981,843 9,818,430 873,840 0.41 % Rebric, Inc. (d/b/a Compliable) (7) Denver, CO Preferred shares, Series Seed-4 (7) Gaming Licensing 10/12/2021 2,406,492 1,002,755 799,323 0.38 % EDGE Markets, Inc. (7) San Diego, CA Preferred shares, Series Seed (7) Gaming Technology 5/18/2022 456,704 501,330 500,000 0.24 % Nextdoor Holdings, Inc. ** San Francisco, CA Common shares, Class B (3) **(3) Social Networking 9/27/2018 262,420 1,462,357 477,604 0.23 % Churchill Sponsor VII LLC ** (11) New York, NY Common share units **(11) Special Purpose Acquisition Company 2/25/2021 292,100 205,820 356,332 0.17 % Warrant units **(11) 2/25/2021 277,000 94,180 30,884 0.01 % Total **(11) 300,000 387,216 0.18 % Churchill Sponsor VI LLC ** (11) New York, NY Common share units **(11) Special Purpose Acquisition Company 2/25/2021 195,000 134,297 134,297 0.06 % Warrant units **(11) 2/25/2021 199,100 65,703 65,703 0.03 % Total **(11) 200,000 200,000 0.09 % YouBet Technology, Inc. (d/b/a FanPower) (7) New York, NY Preferred shares, Series Seed-2 (7) Digital Media Technology 8/26/2021 578,029 752,943 187,500 0.09 % Kinetiq Holdings, LLC Philadelphia, PA Common shares, Class A Social Data Platform 3/30/2012 112,374 — 27,232 0.01 % Trax Ltd. ** Singapore, Singapore Common shares ** Retail Technology 6/9/2021 55,591 2,781,148 — — % Preferred shares, Investec Series ** 6/9/2021 144,409 7,224,600 — — % Total ** 10,005,748 — — % Aspiration Partners, Inc. Marina Del Rey, CA Preferred shares, Series A Financial Services 8/11/2015 540,270 1,001,815 — — % Preferred shares, Series C-3 8/12/2019 24,912 281,190 — — % Total 1,283,005 — — % Neutron Holdings, Inc. (d/b/a/ Lime) San Francisco, CA Junior Preferred shares, Series 1-D Micromobility 1/25/2019 41,237,113 10,007,322 — — % Junior Preferred Convertible Note 4% Due 5/11/2027 (4) (4) 5/11/2020 $ 506,339 506,339 — — % Common Warrants, Strike Price $0.01, Expiration Date 5/11/2027 5/11/2020 2,032,967 — — — % Total 10,513,661 — — % Fullbridge, Inc. Cambridge, MA Common shares Business Education 5/13/2012 517,917 6,150,506 — — % Promissory Note 1.47%, Due 11/9/2021 (4)(12) (4)(12) 3/3/2016 $ 2,270,458 2,270,858 — — % Total 8,421,364 — — % See accompanying notes to condensed consolidated financial statements. 7 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED) - continued September 30, 2023 Portfolio Investments * Headquarters/ Industry Date of Initial Investment Shares/ Principal Cost Fair Value % of Net Assets Treehouse Real Estate Investment Trust, Inc. Chicago, IL Common shares Cannabis REIT 9/11/2019 312,500 4,919,250 — — % Total Non-controlled/Non-affiliate $ 162,899,416 $ 152,267,563 71.83 % NON-CONTROLLED/AFFILIATE (1) PSQ Holdings, Inc. (d/b/a PublicSq.)** (3)(16) West Palm Beach, FL Common shares, Class A (1)**(3)(16) E-Commerce Marketplace 4/1/2021 1,976,032 1,556,587 14,353,896 6.77 % Warrants, Strike Price $11.50, Expiration Date 7/19/2028 (1)**(3)(16) 4/1/2021 2,700,000 1,159,150 3,753,000 1.77 % Total (1)**(3)(16) 2,715,737 18,106,896 8.54 % StormWind, LLC (5) Scottsdale, AZ Preferred shares, Series D 8% (1)(5) Interactive Learning 11/26/2019 329,337 $ 257,267 $ 549,801 0.26 % Preferred shares, Series C 8% (1)(5) 1/7/2014 2,779,134 4,000,787 5,828,526 2.75 % Preferred shares, Series B 8% (1)(5) 12/16/2011 3,279,629 2,019,687 3,713,661 1.75 % Preferred shares, Series A 8% (1)(5) 2/25/2014 366,666 110,000 209,921 0.10 % Total (1)(5) 6,387,741 10,301,909 4.86 % OneValley, Inc. (f/k/a NestGSV, Inc.) San Mateo, CA Derivative Security, Expiration Date 8/23/2024 (9) (1)(9) Global Innovation Platform 8/23/2019 1 8,555,124 676,286 0.32 % Convertible Promissory Note 8% Due 8/23/2024 (4) (1)(4) 2/17/2016 $ 1,010,198 1,030,176 1,212,036 0.57 % Preferred Warrant Series B, Strike Price $2.31, Expiration Date 12/31/2023 (1) 12/31/2018 250,000 5,080 — — % Total (1) 9,590,380 1,888,322 0.89 % Maven Research, Inc. San Francisco, CA Preferred shares, Series C (1) Knowledge Networks 7/2/2012 318,979 2,000,447 — — % Preferred shares, Series B (1) 2/28/2012 49,505 217,206 — — % Total (1) 2,217,653 — — % Curious.com, Inc. (12) Menlo Park, CA Common shares (1) Online Education 11/22/2013 1,135,944 12,000,006 — — % Total Non-controlled/Affiliate (1) $ 32,911,517 $ 30,297,127 14.29 % CONTROLLED (2) Architect Capital PayJoy SPV, LLC ** ** San Francisco, CA Membership Interest in Lending SPV*** **(2)*** Mobile Finance Technology 3/24/2021 $ 10,000,000 $ 10,006,745 $ 10,000,000 4.72 % SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.) Cupertino, CA Preferred shares, Class A (2) Clean Technology 4/15/2014 14,300,000 7,151,412 928,028 0.44 % Common shares (2) 4/15/2014 100,000 10,000 — — % Total (2) 7,161,412 928,028 0.44 % Total Controlled (2) $ 17,168,157 $ 10,928,028 5.16 % Total Portfolio Investments $ 212,979,090 $ 193,492,718 91.28 % U.S. Treasury (3) U.S. Treasury bill, 0%, due 12/28/2023*** (3)*** 6/30/2023 $ 20,529,000 19,990,216 20,265,064 9.56 % Total (3)*** 19,990,216 20,265,064 9.56 % TOTAL INVESTMENTS $ 232,969,306 $ 213,757,782 100.84 % See accompanying notes to condensed consolidated financial statements. * All portfolio investments are non-control/non-affiliated and non-income-producing, unless otherwise identified. Equity investments are subject to lock-up restrictions upon their initial public offering (“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 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 ”). 8 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED) - continued September 30, 2023 ** 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, 2023, 21.30 % of its total investments are non-qualifying assets. *** 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. , securities with the right to elect directors) of such company. For the Schedule of Investments In, and Advances To, Affiliates, as required by SEC Regulation S-X, Rule 12-14, refer to “Note 4—Investments at Fair Value”. (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. For the Schedule of Investments In, and Advances To, Affiliates, as required by SEC Regulation S-X, Rule 12-14, refer to “Note 4—Investments at Fair Value”. (3) Denotes an investment considered Level 1 or Level 2 and valued using observable inputs. Refer to “Note 4—Investments at Fair Value”. (4) As of September 30, 2023, the investments noted had been placed on non-accrual status. (5) SuRo Capital Corp.’s investments in StormWind, LLC are held through SuRo Capital Corp.’s wholly owned subsidiary, GSVC SW Holdings, Inc. (6) SuRo Capital Corp.’s investments in preferred shares of Residential Homes for Rent, LLC (d/b/a Second Avenue) are held through SuRo Capital Corp.’s wholly owned subsidiary, GSVC AV Holdings, Inc. (7) SuRo Capital Corp.’s investments in Commercial Streaming Solutions Inc. (d/b/a BettorView), YouBet Technology, Inc. (d/b/a FanPower), Rebric, Inc. (d/b/a Compliable), EDGE Markets, Inc., Xgroup Holdings Limited (d/b/a Xpoint), and Stake Trade, Inc. (d/b/a Prophet Exchange) are held through SuRo Capital Corp.’s wholly owned subsidiary, SuRo Capital Sports, LLC (“SuRo Sports”). (8) SuRo Capital Corp.’s investments in True Global Ventures 4 Plus Pte Ltd are held through SuRo Capital Corp.’s wholly owned subsidiary, GSVC SVDS Holdings, Inc. On March 31, 2023, the previously unfunded capital commitment of $ 1.3 million was deemed fully contributed in lieu of cash distributions. On March 31, 2023, the full $ 2.0 million capital commitment to True Global Ventures 4 Plus Fund LP had been called and funded. (9) 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, ending August 23, 2024, while SuRo Capital Corp. can put the shares to OneValley, Inc. (f/k/a NestGSV, Inc.) at the end of the five year period. (10) During the nine months ended September 30, 2023, approximately $ 0.9 million has been received from Residential Homes for Rent, LLC (d/b/a Second Avenue) related to the 15 % term loan due December 23, 2023. Of the proceeds received, approximately $ 0.8 million repaid a portion of the outstanding principal and the remaining was attributed to interest. (11) Denotes an investment that is the sponsor of 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. (12) On November 9, 2021, Fullbridge, Inc.’s obligations under its financing arrangements with the Company became past due. (13) On January 13, 2023, SuRo Capital Corp. invested $ 2.0 million in Orchard Technologies, Inc.’s Series 1 Senior Preferred financing round. As part of the transaction, SuRo Capital Corp. exchanged a portion of its existing Series D Preferred shares investment for Series 1 Senior Preferred shares, Series 2 Senior Preferred shares, and Common shares. Additionally, SuRo Capital Corp.’s previous investment in the Simple Agreement for Future Equity was converted into additional Series 1 Senior Preferred shares. (14) On July 12, 2023, SuRo Capital Corp. invested $ 0.5 million in Shogun Enterprises, Inc (d/b/a Hearth)’s Series B-4 Preferred financing round. As part of the transaction, the previous investment in the Convertible Note was converted into Series B-3 Preferred shares. Additionally, SuRo Capital Corp. received Common Warrants as part of the transaction. (15) On July 11, 2023, AltC Acquisition Corp. announced it signed a definitive agreement to merge with Oklo, Inc. As part of the transaction, SuRo Capital Corp.’s Share units converted to 24,900 Class A Common shares and 214,400 Class B Common shares. (16) On July 19, 2023, Colombier Acquisition Corp. (“Colombier”) stockholders approved a business combination with PSQ Holdings, Inc. (d/b/a PublicSq.) and related proposals at a special meeting. Also on July 19, 2023, PSQ Holdings, Inc. announced that it had consummated the business combination with Colombier pursuant to a merger agreement between the parties, creating the resultant combined company PSQ Holdings, Inc. (d/b/a PublicSq). SuRo Capital Corp.’s shares of PSQ Holdings, Inc. (d/b/a PublicSq.) Class A Common shares are subject to certain restrictions on transfer, while the Company’s PSQ Holdings, Inc. warrants are freely tradable. 9 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2022 Portfolio Investments * Headquarters/ Industry Date of Initial Investment Shares/ Principal Cost Fair Value % of Net Assets NON-CONTROLLED/NON-AFFILIATE Learneo, Inc. (f/k/a Course Hero, Inc.) Redwood City, CA Preferred shares, Series A 8% Online Education 9/18/2014 2,145,509 $ 5,000,001 $ 40,541,403 19.30 % Preferred shares, Series C 8% 11/5/2021 275,659 9,999,971 9,999,971 4.76 % Total 14,999,972 50,541,374 24.06 % Blink Health, Inc. New York, NY Preferred shares, Series A Pharmaceutical Technology 10/27/2020 238,095 5,000,423 949,924 0.45 % Preferred shares, Series C 10/27/2020 261,944 10,003,917 9,999,974 4.76 % Total 15,004,340 10,949,898 5.21 % Orchard Technologies, Inc. New York, NY Preferred shares, Series D Real Estate Platform 8/9/2021 1,488,139 10,004,034 9,999,996 4.76 % Simple Agreement for Future Equity 9/2/2022 1 501,663 500,000 0.24 % Total 10,505,697 10,499,996 5.00 % Locus Robotics Corp. Wilmington, MA Preferred shares, Series F Warehouse Automation 11/30/2022 232,568 10,004,286 10,000,005 4.76 % Aspiration Partners, Inc. Marina Del Rey, CA Preferred shares, Series A Financial Services 8/11/2015 540,270 1,001,815 6,229,360 2.97 % Preferred shares, Series C-3 8/12/2019 24,912 281,190 312,151 0.15 % Total 1,283,005 6,541,511 3.11 % Whoop, Inc. Boston, MA Preferred shares, Series C Fitness Technology 6/30/2022 13,293,450 10,011,460 6,084,041 2.90 % Forge Global, Inc. ** San Francisco, CA Common shares (3)(14) **(3)(14) Online Marketplace Finance 7/20/2011 2,508,074 3,443,483 4,338,968 2.07 % Nextdoor Holdings, Inc. ** San Francisco, CA Common shares, Class B (3) **(3) Social Networking 9/27/2018 1,802,416 10,002,666 3,712,977 1.77 % NewLake Capital Partners, Inc. (f/k/a GreenAcreage Real Estate Corp.) ** New Canaan, CT Common shares*** (3) **(3)*** Cannabis REIT 8/12/2019 229,758 4,678,686 3,680,723 1.75 % Shogun Enterprises, Inc. (d/b/a Hearth) Austin, TX Preferred shares, Series B-1 Home Improvement Finance 2/26/2021 436,844 3,501,657 1,403,023 0.67 % Preferred shares, Series B-2 2/26/2021 301,750 3,501,661 1,403,024 0.67 % Convertible Note 0.5%, Due 4/18/2024*** *** 5/2/2022 $ 500,000 500,000 500,000 0.24 % Total 7,503,318 3,306,047 1.57 % True Global Ventures 4 Plus Pte Ltd ** (8) Singapore, Singapore Limited Partner Fund Investment **(8) Venture Investment Fund 8/27/2021 1 — 3,063,358 1.46 % Residential Homes for Rent, LLC (d/b/a Second Avenue) Chicago, IL Preferred shares, Series A (6) (6) Real Estate Platform 12/23/2020 150,000 1,500,000 1,959,713 0.93 % Term loan 15%, Due 12/23/2023*** (11) ***(11) 12/23/2020 $ 1,000,000 1,000,000 1,000,000 0.48 % Total 2,500,000 2,959,713 1.41 % Trax Ltd. ** Singapore, Singapore Common shares ** Retail Technology 6/9/2021 55,591 2,781,148 280,797 0.13 % Preferred shares, Investec Series ** 6/9/2021 144,409 7,224,600 2,647,017 1.26 % Total ** 10,005,748 2,927,814 1.39 % PayJoy, Inc. San Francisco, CA Preferred shares Mobile Access Technology 7/23/2021 244,117 2,501,570 2,500,002 1.19 % Aventine Property Group, Inc. Chicago, IL Common shares*** *** Cannabis REIT 9/11/2019 312,500 2,580,750 1,917,521 0.91 % Varo Money, Inc. ** San Francisco, CA Common shares ** Financial Services 8/11/2021 1,079,266 10,005,548 1,286,783 0.61 % See accompanying notes to condensed consolidated financial statements. 10 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS - continued December 31, 2022 Portfolio Investments * Headquarters/ Industry Date of Initial Investment Shares/ Principal Cost Fair Value % of Net Assets Skillsoft Corp. ** Nashua, NH Common shares (3) **(3) Online Education 6/8/2021 981,843 9,818,430 1,276,396 0.61 % Commercial Streaming Solutions Inc. (d/b/a BettorView) (7) Las Vegas, NV Simple Agreement for Future Equity (7) Interactive Media & Services 3/26/2021 1 1,004,240 1,000,000 0.48 % Rebric, Inc. (d/b/a Compliable) (7) Denver, CO Preferred shares, Series Seed-4 (7) Gaming Licensing 10/12/2021 2,064,409 1,002,755 1,000,000 0.48 % Xgroup Holdings Limited (d/b/a Xpoint) ** (7) Dubai, UAE Convertible Note 6%, Due 8/17/2023*** **(7)*** Geolocation Technology 8/17/2022 $ 1,000,000 1,009,093 1,000,000 0.48 % YouBet Technology, Inc. (d/b/a FanPower) (7) New York, NY Preferred shares, Series Seed-2 (7) Digital Media Technology 8/26/2021 578,029 752,943 749,998 0.36 % EDGE Markets, Inc. (7) San Diego, CA Preferred shares, Series Seed (7) Gaming Technology 5/18/2022 456,704 501,330 500,000 0.24 % Churchill Sponsor VII LLC ** (12) New York, NY Common share units **(12) Special Purpose Acquisition Company 2/25/2021 292,100 205,820 205,820 0.10 % Warrant units **(12) 2/25/2021 277,000 94,180 94,180 0.04 % Total **(12) 300,000 300,000 0.14 % AltC Sponsor LLC ** (12) New York, NY Share units **(12) Special Purpose Acquisition Company 7/21/2021 239,300 250,855 250,000 0.12 % Rent the Runway, Inc. ** New York, NY Common shares (3) **(3) Subscription Fashion Rental 6/17/2020 79,191 1,203,293 241,533 0.12 % Churchill Sponsor VI LLC ** (12) New York, NY Common share units **(12) Special Purpose Acquisition Company 2/25/2021 195,000 134,297 134,297 0.06 % Warrant units **(12) 2/25/2021 199,100 65,703 65,703 0.03 % Total **(12) 200,000 200,000 0.10 % Kahoot! ASA ** Oslo, Norway Common shares (3) **(3) Education Software 12/5/2014 38,305 176,067 72,888 0.03 % Neutron Holdings, Inc. (d/b/a/ Lime) San Francisco, CA Junior Preferred shares, Series 1-D Micromobility 1/25/2019 41,237,113 10,007,322 — — % Junior Preferred Convertible Note 4% Due 5/11/2027 (4) (4) 5/11/2020 $ 506,339 506,339 — — % Common Warrants, Strike Price $0.01, Expiration Date 5/11/2027 5/11/2020 2,032,967 — — — % Total 10,513,661 — — % Fullbridge, Inc. Cambridge, MA Common shares Business Education 5/13/2012 517,917 6,150,506 — — % Promissory Note 1.47%, Due 11/9/2021 (4)(13) (4)(13) 3/3/2016 $ 2,270,458 2,270,858 — — % Total 8,421,364 — — % Treehouse Real Estate Investment Trust, Inc. Chicago, IL Common shares Cannabis REIT 9/11/2019 312,500 4,919,250 — — % Kinetiq Holdings, LLC Philadelphia, PA Common shares, Class A Social Data Platform 3/30/2012 112,374 — — — % Total Non-controlled/Non-affiliate $ 155,103,810 $ 130,901,546 62.33 % See accompanying notes to condensed consolidated financial statements. 11 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS - continued December 31, 2022 Portfolio Investments * Headquarters/ Industry Date of Initial Investment Shares/ Principal Cost Fair Value % of Net Assets NON-CONTROLLED/AFFILIATE (1) StormWind, LLC (5) Scottsdale, AZ Preferred shares, Series D 8% (1)(5) Interactive Learning 11/26/2019 329,337 $ 257,267 $ 533,429 0.25 % Preferred shares, Series C 8% (1)(5) 1/7/2014 2,779,134 4,000,787 5,675,081 2.70 % Preferred shares, Series B 8% (1)(5) 12/16/2011 3,279,629 2,019,687 3,550,631 1.69 % Preferred shares, Series A 8% (1)(5) 2/25/2014 366,666 110,000 191,694 0.09 % Total (1)(5) 6,387,741 9,950,835 4.74 % OneValley, Inc. (f/k/a NestGSV, Inc.) San Mateo, CA Derivative Security, Expiration Date 8/23/2024 (10) (1)(10) Global Innovation Platform 8/23/2019 1 8,555,124 652,127 0.31 % Convertible Promissory Note 8% Due 8/23/2024 (4)(10) (1)(4)(10) 2/17/2016 $ 1,010,198 1,030,176 1,988,200 0.95 % Preferred Warrant Series B, Strike Price $2.31, Expiration Date 12/31/2023 (1) 12/31/2018 250,000 5,080 — — % Total (1) 9,590,380 2,640,327 1.26 % Ozy Media, Inc. Mountain View, CA Preferred shares, Series C-2 6% (1) Digital Media Platform 8/31/2016 683,482 2,414,178 — — % Preferred shares, Series B 6% (1) 10/3/2014 922,509 4,999,999 — — % Preferred shares, Series A 6% (1) 12/11/2013 1,090,909 3,000,200 — — % Preferred shares, Series Seed 6% (1) 11/2/2012 500,000 500,000 — — % Common Warrants, Strike Price $0.01, Expiration Date 4/9/2028 (1) 4/9/2018 295,565 30,647 — — % Total (1) 10,945,024 — — % Maven Research, Inc. San Francisco, CA Preferred shares, Series C (1) Knowledge Networks 7/2/2012 318,979 2,000,447 — — % Preferred shares, Series B (1) 2/28/2012 49,505 217,206 — — % Total (1) 2,217,653 — — % Curious.com, Inc. Menlo Park, CA Common shares (1) Online Education 11/22/2013 1,135,944 12,000,006 — — % Total Non-controlled/Affiliate (1) $ 41,140,804 $ 12,591,162 6.00 % CONTROLLED (2) Architect Capital PayJoy SPV, LLC ** San Francisco, CA Membership Interest in Lending SPV*** **(2)*** Mobile Finance Technology 3/24/2021 $ 10,000,000 $ 10,006,745 $ 10,000,000 4.76 % Colombier Sponsor LLC ** (12) New York, NY Class B Units (2)**(12) Special Purpose Acquisition Company 4/1/2021 1,976,033 1,556,587 1,554,355 0.74 % Class W Units (2)**(12) 4/1/2021 2,700,000 1,159,150 1,157,487 0.55 % Total (2)**(12) 2,715,737 2,711,842 1.29 % SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.) Cupertino, CA Preferred shares, Class A (9) (2)(9) Clean Technology 4/15/2014 14,300,000 7,151,412 984,028 0.47 % Common shares (2) 4/15/2014 100,000 10,000 — — % Total (2) 7,161,412 984,028 0.47 % Total Controlled (2) $ 19,883,894 $ 13,695,870 6.52 % Total Portfolio Investments $ 216,128,508 $ 157,188,578 74.84 % U.S. Treasury U.S. Treasury bill, 0%, due 3/30/2023*** (3) ***(3) 12/29/2022 $ 45,492,000 45,000,118 45,026,162 21.44 % U.S. Treasury bill, 0%, due 6/29/2023*** (3) ***(3) 12/29/2022 $ 40,937,000 39,999,480 40,030,655 19.06 % Total 84,999,598 85,056,817 40.50 % TOTAL INVESTMENTS $ 301,128,106 $ 242,245,395 115.34 % See accompanying notes to condensed consolidated financial statements. * All portfolio investments are non-control/non-affiliated and non-income-producing, unless otherwise identified. Equity investments are subject to lock-up restrictions upon their initial public offering (“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 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 ”). 12 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS - continued December 31, 2022 ** 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 December 31, 2022, 14.47 % of its total investments are non-qualifying assets. *** 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. , securities with the right to elect directors) of such company. For the Schedule of Investments In, and Advances To, Affiliates, as required by SEC Regulation S-X, Rule 12-14, refer to “Note 4—Investments at Fair Value”. (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. For the Schedule of Investments In, and Advances To, Affiliates, as required by SEC Regulation S-X, Rule 12-14, refer to “Note 4—Investments at Fair Value”. (3) Denotes an investment considered Level 1 or Level 2 and valued using observable inputs. Refer to “Note 4—Investments at Fair Value”. (4) As of December 31, 2022, the investments noted had been placed on non-accrual status. (5) SuRo Capital Corp.’s investments in StormWind, LLC are held through SuRo Capital Corp.’s wholly owned subsidiary, GSVC SW Holdings, Inc. (6) SuRo Capital Corp.’s investments in preferred shares of Residential Homes for Rent, LLC (d/b/a Second Avenue) are held through SuRo Capital Corp.’s wholly owned subsidiary, GSVC AV Holdings, Inc. (7) SuRo Capital Corp.’s investments in Commercial Streaming Solutions Inc. (d/b/a BettorView), YouBet Technology, Inc. (d/b/a FanPower), Rebric, Inc. (d/b/a Compliable), EDGE Markets, Inc., and Xgroup Holdings Limited (d/b/a Xpoint) are held through SuRo Capital Corp.’s wholly owned subsidiary, SuRo Capital Sports, LLC (“SuRo Sports”). (8) SuRo Capital Corp.’s investments in True Global Ventures 4 Plus Pte Ltd are held through SuRo Capital Corp.’s wholly owned subsidiary, GSVC SVDS Holdings, Inc. As of December 31, 2022, $ 0.7 million of a $ 2.0 million capital commitment to True Global Ventures 4 Plus Fund LP had been called and funded. (9) 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. 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. (10) 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, ending August 23, 2024, while SuRo Capital Corp. can put the shares to OneValley, Inc. (f/k/a NestGSV, Inc.) at the end of the five year period. (11) During the year ended December 31, 2022, approximately $ 1.2 million has been received from Residential Homes for Rent, LLC (d/b/a Second Avenue) related to the 15 % term loan due December 23, 2023. Of the proceeds received, approximately $ 1.0 million repaid a portion of the outstanding principal and the remaining was attributed to interest. (12) Denotes an investment that is the sponsor of 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. (13) On November 9, 2021, Fullbridge, Inc.’s obligations under its financing arrangements with the Company became past due. (14) On March 22, 2022, Forge Global Holdings, Inc., completed its business combination with Motive Capital Corp. As a result of the transaction, each share of Forge Global, Inc.’s capital stock outstanding prior to the business combination was exchanged at the designated exchange ratio of approximately 3.123 . In addition, each warrant of Forge Global, Inc. was exchanged into warrants exercisable into common stock based on the exchange ratio of 3.123 . The exercise price of each converted warrant was determined by dividing the exercise price of the respective Forge Global, Inc. warrants by the exchange ratio, rounded to the nearest whole cent. On and effective August 5, 2022, SuRo Capital Corp. notified Forge Global, Inc. of its intent to net exercise via cashless settlement its 230,144 common warrants in Forge Global, Inc. into 53,283 shares of Forge Global, Inc.’s public common stock, pursuant to the net exercise formula in the warrant agreement. The exercise was effectuated on September 30, 2022. 13 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 NOTE 1— NATURE OF OPERATIONS SuRo Capital Corp. (“we”, “us”, “our”, “Company” or “SuRo Capital”), formerly known as Sutter Rock Capital Corp. and as GSV Capital Corp. and formed in September 2010 as a Maryland corporation, is an internally-managed, non-diversified closed-end management investment company. The Company has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”), and has elected to be treated, and intends to qualify annually, as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). The Company’s date of inception was January 6, 2011, which is the date we commenced development stage activities. The Company’s common stock is currently listed on the Nasdaq Global Select Market under the symbol “SSSS” (formerly “GSVC”). Prior to November 24, 2021, our common stock traded on the Nasdaq Capital Market under the same symbol (“SSSS”). The Company began its investment operations during the second quarter of 2011. The table below displays the Company’s subsidiaries as of September 30, 2023, which, other than GSV Capital Lending, LLC (“GCL”) and SuRo Capital Sports, LLC, are collectively referred to as the “Taxable Subsidiaries.” The Taxable Subsidiaries were formed to hold certain portfolio investments. The Taxable Subsidiaries, including their associated portfolio investments, are consolidated with the Company for accounting purposes, but have elected to be treated as separate entities for U.S. federal income tax purposes. GCL was formed to originate portfolio loan investments within the state of California and is consolidated with the Company for accounting purposes. Refer to “Note 2—Significant Accounting Policies— Basis of Consolidation ” below for further detail. SCHEDULE OF COMPANY’S SUBSIDIARIES Subsidiary Jurisdiction of Incorporation Formation Date Percentage Owned GCL Delaware April 13, 2012 100 % SuRo Capital Sports, LLC (“SuRo Sports”) Delaware March 19, 2021 100 % Subsidiaries below are referred to collectively as the “Taxable Subsidiaries” GSVC AE Holdings, Inc. (“GAE”) Delaware November 28, 2012 100 % GSVC AV Holdings, Inc. (“GAV”) Delaware November 28, 2012 100 % GSVC SW Holdings, Inc. (“GSW”) Delaware November 28, 2012 100 % GSVC SVDS Holdings, Inc. (“SVDS”) Delaware August 13, 2013 100 % The Company’s investment objective is to maximize its portfolio’s total return, principally by seeking capital gains on its equity and equity-related investments, and to a lesser extent, income from debt investments. The Company invests principally in the equity securities of what it believes to be rapidly growing venture-capital-backed emerging companies. The Company may invest in these portfolio companies through offerings of the prospective portfolio companies, transactions on secondary marketplaces for private companies, or negotiations with selling stockholders. In addition, the Company may invest in private credit and in founders equity, founders warrants, forward purchase agreements, and private investment in public equity transactions of special purpose acquisition companies. The Company may also invest on an opportunistic basis in select publicly traded equity securities or certain non-U.S. companies that otherwise meet its investment criteria, subject to any applicable limitations under the 1940 Act. 14 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 NOTE 2— SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The interim unaudited condensed consolidated financial statements of the Company are prepared on the accrual basis of accounting in conformity with U.S. generally accepted accounting principles (“GAAP”) and pursuant to the requirements for reporting on Form 10-Q and Regulation S-X under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company is an investment company following the specialized accounting and reporting guidance specified in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial Services—Investment Companies . In the opinion of management, all adjustments, all of which were of a normal recurring nature, were considered necessary for the fair presentation of consolidated financial statements for the period have been included. The results of operations for the current interim period are not necessarily indicative of results that ultimately may be achieved for any other interim period or for the year ending December 31, 2023. The interim unaudited condensed consolidated financial statements and notes hereto should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s annual report on Form 10-K for the year ended December 31, 2022. Basis of Consolidation Under Article 6 of Regulation S-X and the American Institute of Certified Public Accountants’ (“AICPA”) Audit and Accounting Guide for Investment Companies, the Company is precluded from consolidating any entity other than another investment company, a controlled operating company that provides substantially all of its services and benefits to the Company, and certain entities established for tax purposes where the Company holds a 100% interest. Accordingly, the Company’s condensed consolidated financial statements include its accounts and the accounts of the Taxable Subsidiaries, GCL, and SuRo Sports, its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of condensed consolidated financial statements in accordance with GAAP requires the Company’s management to make a number of significant estimates. These include estimates of the fair value of certain assets and liabilities and other estimates that affect the reported amounts of certain assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of certain revenues and expenses during the reporting period. It is likely that changes in these estimates may occur in the near term. The Company’s estimates are inherently subjective in nature and actual results could differ materially from such estimates. Uncertainties and Risk Factors The Company is subject to a number of risks and uncertainties in the nature of its operations, as well as vulnerability due to certain concentrations. Refer to “Risk Factors” in Part II, Item 1A of this Form 10-Q for a detailed discussion of the risks and uncertainties inherent in the nature of the Company’s operations. Refer to “Note 4—Investments at Fair Value” for an overview of the Company’s industry and geographic concentrations. Investments at Fair Value The Company applies fair value accounting in accordance with GAAP and the AICPA’s Audit and Accounting Guide for Investment Companies. The Company values its assets on a quarterly basis, or more frequently if required under the 1940 Act. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. GAAP establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows: Level 1 —Valuations based on unadjusted quoted prices for identical assets or liabilities in an active market that the Company has the ability to access at the measurement date. 15 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 Level 2 —Valuations based on observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data at the measurement date for substantially the full term of the assets or liabilities. Level 3 —Valuations based on unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. The majority of the Company’s investments are Level 3 investments and are subject to a high degree of judgment and uncertainty in determining fair value. When the inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety. For example, a Level 3 fair value measurement may include inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Therefore, gains and losses for such assets and liabilities categorized within the Level 3 table set forth in “Note 4—Investments at Fair Value” may include changes in fair value that are attributable to both observable inputs (Levels 1 and 2) and unobservable inputs (Level 3). A review of fair value hierarchy classifications is conducted on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification for certain financial assets or liabilities. Reclassifications impacting Level 3 of the fair value hierarchy are reported as transfers in/out of the Level 3 category as of the beginning of the measurement period in which the reclassifications occur. Refer to “Levelling Policy” below for a detailed discussion of the levelling of the Company’s financial assets or liabilities and events that may cause a reclassification within the fair value hierarchy. Securities for which market quotations are readily available on an exchange are valued at the most recently available closing price of such security as of the valuation date, unless there are legal or contractual restrictions on the sale or use of such security that under ASC 820-10-35 should be incorporated into the security’s fair value measurement as a characteristic of the security that would transfer to market participants who would buy the security. The Company may also obtain quotes with respect to certain of its investments from pricing services, brokers or dealers in order to value assets. When doing so, the Company determines whether the quote obtained is sufficient according to GAAP to determine the fair value of the security. If determined to be adequate, the Company uses the quote obtained. Securities for which reliable market quotations are not readily available or for which the pricing source does not provide a valuation or methodology, or provides a valuation or methodology that, in the judgment of management, the Company’s Board of Directors or the valuation committee of the Company’s Board of Directors (the “Valuation Committee”), does not reliably represent fair value, shall each be valued as follows: 1. The quarterly valuation process begins with each portfolio company or investment being initially valued by the internal investment professionals responsible for the portfolio investment; 2. Preliminary valuation estimates are then documented and discussed with senior management; 3. For all investments for which there are no readily available market quotations, the Valuation Committee engages an independent third-party valuation firm to conduct independent appraisals, review management’s preliminary valuations and make its own independent assessment; 4. The Valuation Committee applies the appropriate valuation methodology to each portfolio asset in a consistent manner, considers the inputs provided by management and the independent third-party valuation firm, discusses the valuations and recommends to the Company’s Board of Directors a fair value for each investment in the portfolio; and 5. The Company’s Board of Directors then discusses the valuations recommended by the Valuation Committee and determines in good faith the fair value of each investment in the portfolio. 16 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 In making a good faith determination of the fair value of investments, the Board applies valuation methodologies consistent with industry practice. Valuation methods utilized include, but are not limited to, the following: comparisons to prices from secondary market transactions; venture capital financings; public offerings; purchase or sales transactions; analysis of financial ratios and valuation metrics of portfolio companies that issued such private equity securities to peer companies that are public; analysis of the portfolio company’s most recent financial statements, forecasts and the markets in which the portfolio company does business, and other relevant factors. The Company assigns a weighting based upon the relevance of each method to assist the Board in determining the fair value of each investment. For investments that are not publicly traded or that do not have readily available market quotations, the Valuation Committee generally engages an independent valuation firm to provide an independent valuation, which the Company’s Board of Directors considers, among other factors, in making its fair value determinations for these investments. For the current and prior fiscal year, the Valuation Committee engaged an independent valuation firm to perform valuations of 100% of the Company’s investments for which there were no readily available market quotations. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the investments existed, and it is reasonably possible that the difference could be material. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the realized gains or losses on investments to be different from the net change in unrealized appreciation or depreciation currently reflected in the consolidated financial statements. Equity Investments Equity investments for which market quotations are readily available in an active market are generally valued at the most recently available closing market prices and are classified as Level 1 assets. Equity investments with readily available market quotations that are subject to sales restrictions due to an initial public offering (“IPO”) by the portfolio company will be classified as Level 1. Any other equity investments with readily available market quotations that are subject to sales restrictions that would transfer to market participants who would buy the security may be valued at a discount for a lack of marketability (“DLOM”), to the most recently available closing market prices depending upon the nature of the sales restriction. These investments are generally classified as Level 2 assets. The DLOM used is generally based upon the market value of publicly traded put options with similar terms. The fair values of the Company’s equity investments for which market quotations are not readily available are determined based on various factors and are classified as Level 3 assets. To determine the fair value of a portfolio company for which market quotations are not readily available, the Board applies the appropriate respective valuation methodology for the asset class or portfolio holding, which may involve analyzing the relevant portfolio company’s most recently available historical and projected financial results, public market comparables, and other factors. The Board may also consider other events, including the transaction in which the Company acquired its securities, subsequent equity sales by the portfolio company, and mergers or acquisitions affecting the portfolio company. In addition, the Board may consider the trends of the portfolio company’s basic financial metrics from the time of its original investment until the measurement date, with material improvement of these metrics indicating a possible increase in fair value, while material deterioration of these metrics may indicate a possible reduction in fair value. In determining the fair value of equity or equity-linked securities (including warrants to purchase common or preferred stock) in a portfolio company, the Board considers the rights, preferences and limitations of such securities. In cases where a portfolio company’s capital structure includes multiple classes of preferred and common stock and equity-linked securities with different rights and preferences, the Company may use an option pricing model to allocate value to each equity-linked security, unless it believes a liquidity event such as an acquisition or a dissolution is imminent, or the portfolio company is unlikely to continue as a going concern. When equity-linked securities expire worthless, any cost associated with these positions is recognized as a realized loss on investments in the Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows. In the event these securities are exercised into common or preferred stock, the cost associated with these securities is reassigned to the cost basis of the new common or preferred stock. These conversions are noted as non-cash operating items on the Condensed Consolidated Statements of Cash Flows. 17 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 Debt Investments Given the nature of the Company’s current debt investments (excluding U.S. Treasuries), principally convertible and promissory notes issued by venture-capital-backed portfolio companies, these investments are classified as Level 3 assets because there is no known or accessible market or market indexes for these investment securities to be traded or exchanged. The Company’s debt investments are valued at estimated fair value as determined in good faith by the Company’s Board of Directors. Options The Company’s Board of Directors determines the fair value of options based on methodologies that can include discounted cash flow analyses, option pricing models, comparable analyses and other techniques as deemed appropriate. These investments are classified as Level 3 assets because there is no known or accessible market or market indexes for these investment securities to be traded or exchanged. The Company’s options are valued at estimated fair value as determined in good faith by the Company’s Board of Directors. Special Purpose Acquisition Companies The Company’s Board of Directors measures its Special Purpose Acquisition Company (“SPAC”) investments at fair value, which is equivalent to cost until a SPAC transaction is announced. After a SPAC transaction is announced, the Company’s Board of Directors will determine the fair value of SPAC investments based on fair value analyses that can include option pricing models, probability-weighted expected return method analyses and other techniques as deemed appropriate. Upon completion of the SPAC transaction, the Board utilizes the public share price of the entity, less a DLOM if there are restrictions on selling. The Company’s SPAC investments are valued at estimated fair value as determined in good faith by the Company’s Board of Directors. Venture Investment Funds In valuing the Company’s investments in venture investment funds (“Venture Investment Funds”), the Company applies the practical expedient provided by the ASC Topic 820 relating to investments in certain entities that calculate net asset value (“NAV”) per share (or its equivalent). ASC Topic 820 permits an entity holding investments in certain entities that either are investment companies, or have attributes similar to an investment company, and calculate NAV per share or its equivalent for which the fair value is not readily determinable, to measure the fair value of such investments on the basis of that NAV per share, or its equivalent, without adjustment. Portfolio Company Investment Classification The Company is a non-diversified company within the meaning of the 1940 Act. The Company classifies its investments by level of control. As defined in the 1940 Act, control investments are those where the investor retains the power to exercise a controlling influence over the management or policies of a company. Control is generally deemed to exist when a company or individual directly or indirectly owns beneficially more than 25% of the voting securities of an investee company. Affiliated investments and affiliated companies are defined by a lesser degree of influence and are deemed to exist when a company or individual directly or indirectly owns, controls or holds the power to vote 5% or more of the outstanding voting securities of a portfolio company. Refer to the Consolidated Schedules of Investments as of September 30, 2023 and December 31, 2022 for details regarding the nature and composition of the Company’s investment portfolio. 18 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 Levelling Policy The portfolio companies in which the Company invests may offer their shares in IPOs. The Company’s shares in such portfolio companies are typically subject to lock-up agreements for 180 days following the IPO. Upon the IPO date, the Company transfers its investment from Level 3 to Level 1 due to the presence of an active market, or Level 2 if limited by the lock-up agreement. The Company prices the investment at the closing price on a public exchange as of the measurement date. In situations where there are lock-up restrictions, as well as legal or contractual restrictions on the sale or use of such security that under ASC 820-10-35 should be incorporated into the security’s fair value measurement as a characteristic of the security that would transfer to market participants who would buy the security, the Company will classify the investment as Level 2 subject to an appropriate DLOM to reflect the restrictions upon sale. The Company transfers investments between levels based on the fair value at the beginning of the measurement period in accordance with FASB ASC 820. For investments transferred out of Level 3 due to an IPO, the Company transfers these investments based on their fair value at the IPO date. Securities Transactions Securities transactions are accounted for on the date the transaction for the purchase or sale of the securities is entered into by the Company ( i.e. , trade date). Securities transactions outside conventional channels, such as private transactions, are recorded as of the date the Company obtains the right to demand the securities purchased or to collect the proceeds from a sale and incurs an obligation to pay for securities purchased or to deliver securities sold, respectively. Valuation of Other Financial Instruments The carrying amounts of the Company’s other, non-investment financial instruments, consisting of cash, receivables, accounts payable, and accrued expenses, approximate fair value due to their short-term nature. Cash The Company custodies its cash with Western Alliance Trust Company, N.A., and may place cash in demand deposit accounts with other high-quality financial institutions. The cash held in these accounts may exceed the Federal Deposit Insurance Corporation insured limit. The Company believes the risk of loss associated with any uninsured balance is remote. Escrow Proceeds Receivable A portion of the proceeds from the sale of portfolio investments are held in escrow as a recourse for indemnity claims that may arise under the sale agreement or other related transaction contingencies. Amounts held in escrow are held at estimated realizable value and included in net realized gains (losses) on investments in the Condensed Consolidated Statements of Operations for the period in which they occurred and are adjusted as needed. Any remaining escrow proceeds balances from these transactions reasonably expected to be received are reflected on the Condensed Consolidated Statement of Assets and Liabilities as escrow proceeds receivable. Escrow proceeds receivable resulting from contingent consideration are to be recognized when the amount of the contingent consideration becomes realized or realizable. As of September 30, 2023 and December 31, 2022, the Company had $ 309,484 and $ 628,332 , respectively, in escrow proceeds receivable. 19 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 Deferred Financing Costs The Company records origination costs related to lines of credit as deferred financing costs. These costs are deferred and amortized as part of interest expense using the straight-line method over the respective life of the line of credit. For modifications to a line of credit, any unamortized origination costs are expensed. Included within deferred financing costs are offering costs incurred relating to the Company’s shelf registration statement on Form N-2. The Company defers these offering costs until capital is raised pursuant to the shelf registration statement or until the shelf registration statement expires. For equity capital raised, the offering costs reduce paid-in capital resulting from the offering. For debt capital raised, the associated offering costs are amortized over the life of the debt instrument. As of September 30, 2023 and December 31, 2022, the Company had deferred financing costs of $ 611,736 and $ 555,761 , respectively, on the Condensed Consolidated Statement of Assets and Liabilities. Operating Leases & Related Deposits The Company accounts for its operating leases as prescribed by ASC 842, Leases , which requires lessees to recognize a right-of-use asset on the balance sheet, representing its right to use the underlying asset for the lease term, and a corresponding lease liability for all leases with terms greater than 12 months. The lease expense is presented as a single lease cost that is amortized on a straight-line basis over the life of the lease. Non-lease components (maintenance, property tax, insurance and parking) are not included in the lease cost. On June 3, 2019, the Company entered a 5 -year operating lease for office space for which the Company has recorded a right-of-use asset and a corresponding lease liability for the operating lease obligation. These amounts have been discounted using the rate implicit in the lease. Refer to “Note 7—Commitments and Contingencies— Operating Leases and Related Deposits ” for further detail. Stock-based Compensation Using the fair value recognition provisions as prescribed by ASC 718, Stock Compensation , stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the appropriate service period. Determining the fair value of stock-based awards requires considerable judgment, including estimating the expected term of stock options and the expected volatility of our stock price. Differences between actual results and these estimates could have a material effect on our financial results. Forfeitures are accounted for as they occur. Refer to “Note 11—Stock-Based Compensation” for further detail. Revenue Recognition The Company recognizes gains or losses on the sale of investments using the specific identification method. The Company recognizes interest income, adjusted for amortization of premium and accretion of discount, on an accrual basis. The Company recognizes dividend income on the ex-dividend date. Investment Transaction Costs and Escrow Deposits Commissions and other costs associated with an investment transaction, including legal expenses not reimbursed by the portfolio company, are included in the cost basis of purchases and deducted from the proceeds of sales. The Company makes certain acquisitions on secondary markets, which may involve making deposits to escrow accounts until certain conditions are met, including the underlying private company’s right of first refusal. If the underlying private company does not exercise or assign its right of first refusal and all other conditions are met, then the funds in the escrow account are delivered to the seller and the account is closed. Such transactions would be reflected on the Condensed Consolidated Statement of Assets and Liabilities as escrow deposits. As of September 30, 2023 and December 31, 2022, the Company had no escrow deposits. Unrealized Appreciation or Depreciation of Investments Unrealized appreciation or depreciation is calculated as the difference between the fair value of the investment and the cost basis of such investment. 20 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 U.S. Federal and State Income Taxes The Company elected to be treated as a RIC under Subchapter M of the Code, beginning with its taxable year ended December 31, 2014, has qualified to be treated as a RIC for subsequent taxable years and intends to continue to operate in a manner so as to qualify for the tax treatment applicable to RICs. To qualify for tax treatment as a RIC, among other things, the Company is required to meet certain source of income and asset diversification requirements and timely distribute to its stockholders at least the sum of 90% of our investment company taxable income (“ICTI”), including payment-in-kind interest income, as defined by the Code, and 90% of our net tax-exempt interest income (which is the excess of its gross tax-exempt interest income over certain disallowed deductions) for each taxable year (the “Annual Distribution Requirement”). Depending on the level of ICTI earned in a tax year, the Company may choose to carry forward into the next tax year ICTI in excess of current year dividend distributions. Any such carryforward ICTI must be distributed on or before December 31 of the subsequent tax year to which it was carried forward. If the Company meets the Annual Distribution Requirement, but does not distribute (or is not deemed to have distributed) each calendar year a sum of (1) 98% of its net ordinary income for each calendar year, (2) 98.2% of its capital gain net income for the one-year period ending October 31 in that calendar year and (3) any income recognized, but not distributed, in preceding years (the “Excise Tax Avoidance Requirement”), it generally will be required to pay an excise tax equal to 4% of the amount by which the Excise Tax Avoidance Requirement exceeds the distributions for the year. To the extent that the Company determines that its estimated current year annual taxable income will exceed estimated current year dividend distributions from such taxable income, the Company will accrue excise taxes, if any, on estimated excess taxable income as taxable income is earned using an annual effective excise tax rate. The annual effective excise tax rate is determined by dividing the estimated annual excise tax by the estimated annual taxable income. So long as the Company qualifies and maintains its tax treatment as a RIC, it generally will not be subject to U.S. federal and state income taxes on any ordinary income or capital gains that it distributes at least annually to its stockholders as dividends. Rather, any tax liability related to income earned by the RIC will represent obligations of the Company’s investors and will not be reflected in the consolidated financial statements of the Company. Included in the Company’s consolidated financial statements, the Taxable Subsidiaries are taxable subsidiaries, regardless of whether the Company is a RIC. These Taxable Subsidiaries are not consolidated for income tax purposes and may generate income tax expenses as a result of their ownership of the portfolio companies. Such income tax expenses and deferred taxes, if any, will be reflected in the Company’s condensed consolidated financial statements. If it is not treated as a RIC, the Company will be taxed as a regular corporation (a “C Corporation”) under Subchapter C of the Code for such taxable year. If the Company has previously qualified as a RIC but is subsequently unable to qualify for treatment as a RIC, and certain amelioration provisions are not applicable, the Company would be subject to tax on all of its taxable income (including its net capital gains) at regular corporate rates. The Company would not be able to deduct distributions to stockholders, nor would it be required to make distributions. Distributions, including distributions of net long-term capital gain, would generally be taxable to its stockholders as ordinary dividend income to the extent of the Company’s current and accumulated earnings and profits. Subject to certain limitations under the Code, corporate stockholders would be eligible to claim a dividend received deduction with respect to such dividend; non-corporate stockholders would generally be able to treat such dividends as “qualified dividend income,” which is subject to reduced rates of U.S. federal income tax. Distributions in excess of the Company’s current and accumulated earnings and profits would be treated first as a return of capital to the extent of the stockholder’s adjusted tax basis, and any remaining distributions would be treated as a capital gain. In order to requalify as a RIC, in addition to the other requirements discussed above, the Company would be required to distribute all of its previously undistributed earnings attributable to the period it failed to qualify as a RIC by the end of the first year that it intends to requalify for tax treatment as a RIC. If the Company fails to requalify for tax treatment as a RIC for a period greater than two taxable years, it may be subject to regular corporate tax on any net built-in gains with respect to certain of its assets (i.e., the excess of the aggregate gains, including items of income, over aggregate losses that would have been realized with respect to such assets if the Company had been liquidated) that it elects to recognize on requalification or when recognized over the next five years. Refer to “Note 9—Income Taxes” for further details. 21 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 Per Share Information Net change in net assets resulting from operations per basic common share is computed using the weighted-average number of shares outstanding for the period presented. Diluted net change in net assets resulting from operations per common share is computed by dividing net increase/(decrease) in net assets resulting from operations for the period adjusted to include the pre-tax effects of interest incurred on potentially dilutive securities, by the weighted-average number of common shares outstanding plus any potentially dilutive shares outstanding during the period. The Company used the if-converted method in accordance with FASB ASC 260 , Earnings Per Share (“ASC 260”) to determine the number of potentially dilutive shares outstanding. Refer to “Note 6—Net Increase in Net Assets Resulting from Operations per Common Share—Basic and Diluted” for further detail. Recently Issued Accounting Standards In June 2022, the FASB issued ASU No. 2022-03 “Fair Value Measurements (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.” This change prohibits entities from taking into account contractual restrictions on the sale of equity securities when estimating fair value and introduces required disclosures for such transactions. The standard is effective for annual periods beginning after December 15, 2023, and should be applied prospectively. Early adoption is permitted. The adoption of ASU 2022-03 is not expected to have a material impact on the Company’s future financial statements. From time to time, new accounting pronouncements are issued by the FASB or other standards setting bodies that are adopted by the Company as of the specified effective date. The Company believes that the impact of recently issued standards and any that are not yet effective will not have a material impact on its consolidated financial statements upon adoption. NOTE 3— RELATED-PARTY ARRANGEMENTS The Company’s executive officers and directors serve or may serve as officers, directors, or managers of entities that operate in a line of business similar to the Company’s, including new entities that may be formed in the future. Accordingly, they may have obligations to investors in those entities, the fulfillment of which might not be in the best interests of the Company or the Company’s stockholders. The 1940 Act prohibits the Company from participating in certain negotiated co-investments with certain affiliates unless it receives an order from the SEC permitting it to do so. As a BDC, the Company is prohibited under the 1940 Act from participating in certain transactions with certain of its affiliates without the prior approval of the Board of Directors, including its independent directors, and, in some cases, the SEC. The affiliates with which the Company may be prohibited from transacting include its officers, directors, and employees and any person controlling or under common control with the Company, subject to certain exceptions. In the ordinary course of business, the Company may enter into transactions with portfolio companies that may be considered related-party transactions. To ensure that the Company does not engage in any prohibited transactions with any persons affiliated with the Company, the Company has implemented certain written policies and procedures whereby the Company’s executive officers screen each of the Company’s transactions for any possible affiliations between the proposed portfolio investment, the Company, companies controlled by the Company, and the Company’s executive officers and directors. The Company’s investment in Churchill Sponsor VI LLC, the sponsor of Churchill Capital Corp. VI, a SPAC, constituted a “remote-affiliate” transaction for purposes of the 1940 Act in light of the fact that Mark D. Klein, the Company’s Chairman, Chief Executive Officer and President, has a non-controlling interest in the entity that controls Churchill Sponsor VI LLC, and is a non-controlling member of the board of directors of Churchill Capital Corp VI. The Company’s investment in Churchill Sponsor VII LLC, the sponsor of Churchill Capital Corp. VII, a SPAC, also constituted a “remote-affiliate” transaction for purposes of the 1940 Act in light of the fact that Mr. Klein has a non-controlling interest in the entity that controls Churchill Sponsor VII LLC, and is a non-controlling member of the board of directors of Churchill Capital Corp. VII. In addition, Mr. Klein’s brother, Michael Klein, is a control person of such Churchill entities. As of September 30, 2023, the fair values of the Company’s investments in Churchill Sponsor VI LLC and Churchill Sponsor VII LLC were $ 200,000 and $ 387,216 , respectively. 22 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 The Company’s investment in Skillsoft Corp. (f/k/a Software Luxembourg Holding S.A.) (“Skillsoft”) constituted a “remote-affiliate” transaction for purposes of the 1940 Act in light of the fact that Mr. Klein has a non-controlling interest in the entity that controls Churchill Sponsor II LLC, the sponsor of Churchill Capital Corp. II, a SPAC, and was a non-controlling member of the board of directors of Churchill Capital Corp. II, through which the Company executed a private investment in public equity transaction in order to acquire common shares of Skillsoft alongside the merger of Skillsoft and Churchill Capital Corp II. In addition, Mr. Klein’s brother, Michael Klein, is a control person of such Churchill entities. As of September 30, 2023, the fair value of the Company’s investment in Skillsoft Corp. was $ 873,840 . The Company’s initial investment in Shogun Enterprises, Inc. on February 26, 2021 constituted a “remote-affiliate” transaction for purposes of the 1940 Act in light of the fact that Keri Findley, a former senior managing director of the Company until her departure on March 9, 2022, was at the time of investment a non-controlling member of the board of directors of Shogun Enterprises, Inc., and held a minority equity interest in such portfolio company. The Company’s investment in Architect Capital PayJoy SPV, LLC also constituted a “remote-affiliate” transaction for purposes of the 1940 Act in light of the fact that Ms. Findley, at the time of investment, was a non-controlling member of the board of directors of the investment manager to Architect Capital PayJoy SPV, LLC, and held a minority equity interest in such investment manager. As of September 30, 2023, the fair values of the Company’s remote-affiliate investments in Shogun Enterprises, Inc. (d/b/a Hearth) and Architect Capital PayJoy SPV, LLC were $ 8,030,810 and $ 10,000,000 , respectively. In addition, Ms. Findley and Claire Councill, a former investment professional of the Company until her departure on April 15, 2022, were non-controlling members of the board of directors of Colombier Acquisition Corp., a SPAC, which was sponsored by Colombier Sponsor LLC, one of the Company’s portfolio companies until its dissolution upon completion of Colombier Acquisition Corp.’s business combination into PSQ Holdings, Inc. The Company’s investment in AltC Sponsor LLC, the sponsor of AltC Acquisition Corp, a SPAC, constituted a “remote-affiliate” transaction for purposes of the 1940 Act in light of the fact that Mr. Klein has a non-controlling interest in one of the entities that controls AltC Sponsor LLC, and Allison Green, the Company’s Chief Financial Officer, Chief Compliance Officer, Treasurer and Secretary, is a non-controlling member of the board of directors of AltC Acquisition Corp. As of September 30, 2023, the fair values of the Company’s aggregate investments in each of PSQ Holdings, Inc. and AltC Sponsor LLC were $ 18,106,896 and $ 892,467 , respectively. 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, 2023, the Company had 66 positions in 39 portfolio companies. As of December 31, 2022, the Company had 64 positions in 39 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, 2023 and December 31, 2022: SCHEDULE OF COMPOSITION OF INVESTMENT PORTFOLIO September 30, 2023 December 31, 2022 Cost Fair Value Percentage of Net Assets Cost Fair Value Percentage of Net Assets Private Portfolio Companies Preferred Stock $ 107,209,010 $ 124,249,715 58.5 % $ 118,472,118 $ 117,214,465 55.8 % Common Stock 69,695,763 37,377,036 17.6 % 50,601,512 18,692,931 8.9 % Debt Investments 5,067,464 2,462,036 1.2 % 6,316,466 4,488,200 2.1 % Options 11,368,010 3,412,933 1.6 % 11,415,787 3,469,497 1.7 % Total Private Portfolio Companies 193,340,247 167,501,720 78.9 % 186,805,883 143,865,093 68.5 % Publicly Traded Portfolio Companies Common Stock 18,479,693 22,237,998 10.5 % 29,322,625 13,323,485 6.3 % Options 1,159,150 3,753,000 1.8 % — — — % Total Publicly Traded Portfolio Companies 19,638,843 25,990,998 12.3 % 29,322,625 13,323,485 6.3 % Total Portfolio Investments 212,979,090 193,492,718 91.2 % 216,128,508 157,188,578 74.8 % Non-Portfolio Investments U.S. Treasury Bills 19,990,216 20,265,064 9.6 % 84,999,598 85,056,817 40.5 % Total Investments $ 232,969,306 $ 213,757,782 100.8 % $ 301,128,106 $ 242,245,395 115.3 % 23 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 The geographic and industrial compositions of the Company’s portfolio at fair value as of September 30, 2023 and December 31, 2022 were as follows: As of September 30, 2023 As of December 31, 2022 Fair Value Percentage of Portfolio Percentage of Net Assets Fair Value Percentage of Portfolio Percentage of Net Assets Geographic Region West $ 114,313,456 59.0 % 53.9 % $ 94,996,805 60.4 % 45.1 % Northeast 38,081,137 19.7 % 18.0 % 46,944,432 29.9 % 22.4 % Southeast 18,106,896 9.4 % 8.5 % — — % — % Midwest 17,910,152 9.3 % 8.4 % 8,183,281 5.2 % 3.9 % International 5,081,077 2.6 % 2.4 % 7,064,060 4.5 % 3.4 % Total $ 193,492,718 100.0 % 91.2 % $ 157,188,578 100.0 % 74.8 % As of September 30, 2023 As of December 31, 2022 Fair Value Percentage of Portfolio Percentage of Net Assets Fair Value Percentage of Portfolio Percentage of Net Assets Industry Education Technology $ 76,578,218 39.6 % 36.1 % $ 61,841,493 39.4 % 29.4 % Marketplaces 43,290,485 22.4 % 20.4 % 27,291,467 17.4 % 13.0 % Financial Technology 34,758,007 17.9 % 16.4 % 38,096,753 24.2 % 18.1 % Big Data/Cloud 29,551,180 15.3 % 13.9 % 14,927,819 9.5 % 7.1 % Social/Mobile 8,386,800 4.3 % 4.0 % 14,047,018 8.9 % 6.7 % Sustainability 928,028 0.5 % 0.4 % 984,028 0.6 % 0.5 % Total $ 193,492,718 100.0 % 91.2 % $ 157,188,578 100.0 % 74.8 % 24 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 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 Contractor Management Software Gaming Licensing Geolocation Technology Retail Technology Supply Chain Technology Warehouse Automation Marketplaces E-Commerce Marketplace Global Innovation Platform Knowledge Networks Micromobility Pharmaceutical Technology Real Estate Platform Sports Betting Subscription Fashion Rental Financial Technology Cannabis REIT Financial Services Gaming Technology Home Improvement Finance Mobile Finance Technology Online Marketplace Finance Special Purpose Acquisition Company Venture Investment Fund Social/Mobile Digital Media Platform Digital Media Technology Fitness Technology Interactive Media & Services Mobile Access Technology Social Data Platform Social Networking Sustainability Clean Technology 25 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 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, 2023 and December 31, 2022 are as follows: SCHEDULE OF FAIR VALUE OF INVESTMENT VALUATION INPUTS As of September 30, 2023 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 $ — $ — $ 124,249,715 $ 124,249,715 Common Stock — — 37,377,036 37,377,036 Debt Investments — — 2,462,036 2,462,036 Options — — 3,412,933 3,412,933 Private Portfolio Companies — — 167,501,720 167,501,720 Publicly Traded Portfolio Companies Common Stock 7,884,102 14,353,896 — 22,237,998 Options 3,753,000 — — 3,753,000 Publicly Traded Portfolio Companies 11,637,102 14,353,896 — 25,990,998 Total Portfolio Investments 11,637,102 14,353,896 167,501,720 193,492,718 Non-Portfolio Investments U.S. Treasury bills 20,265,064 — — 20,265,064 Total Investments at Fair Value $ 31,902,166 $ 14,353,896 $ 167,501,720 $ 213,757,782 As of December 31, 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 $ — $ — $ 117,214,465 $ 117,214,465 Common Stock — — 18,692,931 18,692,931 Debt Investments — — 4,488,200 4,488,200 Options — — 3,469,497 3,469,497 Private Portfolio Companies — — 143,865,093 143,865,093 Publicly Traded Portfolio Companies Common Stock 13,298,992 24,493 — 13,323,485 Non-Portfolio Investments U.S. Treasury bills 85,056,817 — — 85,056,817 Total Investments at Fair Value $ 98,355,809 $ 24,493 $ 143,865,093 $ 242,245,395 26 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 Significant Unobservable Inputs for Level 3 Assets and Liabilities In accordance with FASB ASC 820, Fair Value Measurement , the tables below provide quantitative information about the fair value measurements of the Company’s Level 3 assets as of September 30, 2023 and December 31, 2022. In addition to the techniques and inputs noted in the tables below, according to the Company’s valuation policy, the Board may also use other valuation techniques and methodologies when determining the fair value measurements of the Company’s assets. The tables below are not intended to be all-inclusive, but rather provide information on the significant Level 3 inputs as they relate to the fair value measurements of the Company’s assets. To the extent an unobservable input is not reflected in the tables below, such input is deemed insignificant with respect to the Company’s Level 3 fair value measurements as of September 30, 2023 and December 31, 2022. Significant changes in the inputs in isolation would result in a significant change in the fair value measurement, depending on the input and the materiality of the investment. Refer to “Note 2—Significant Accounting Policies— Investments at Fair Value ” for more detail. SCHEDULE OF FAIR VALUE OF ASSETS ON UNOBSERVABLE INPUT As of September 30, 2023 Asset Fair Value Valuation Approach/ Technique (1) Unobservable Inputs (2) Range (Weighted Average) (3) Common stock in private companies $ 37,377,036 Market approach Revenue multiples 0.11 x - 8.97 x ( 3.41 x) PWERM (5) AFFO (4) multiple 8.97 x Preferred stock in private companies $ 124,249,715 Market approach Revenue multiples 0.11 x - 8.99 x ( 2.51 x) PWERM (5) Discount rate 15.0 % Debt investments $ 2,462,036 Market approach Revenue multiples 0.50 x - 5.43 x ( 4.97 x) Options $ 3,412,933 Option pricing model Term to expiration (Years) 0.25 - 3.61 ( 2.78 ) Volatility 55 % (1) As of September 30, 2023, 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 ” for more detail. (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 Board 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 ” for more detail. (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”. 27 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 As of December 31, 2022 Asset Fair Value Valuation Approach/ Technique (1) Unobservable Inputs (2) Range (Weighted Average) (3) Market approach Revenue multiples 1.06 x - 4.42 x ( 1.74 x) Liquidation Value N/A Common stock in private companies $ 18,692,931 PWERM (5) AFFO (4) multiple 8.62 x - 12.62 x ( 10.94 x) Market approach Revenue multiples 0.47 x - 5.45 x ( 2.38 x) Liquidation Value N/A Discounted cash flow Discount rate 15.0 % ( 15.0 %) Preferred stock in private companies $ 117,214,465 PWERM (5) Revenue multiples 1.17 x - 1.26 x DLOM 10.0 % ( 10.0 %) Financing Risk 10.0 % ( 10.0 %) Debt investments $ 4,488,200 Market approach Revenue multiples 0.47 x - 5.45 x ( 3.6 x) Options $ 3,469,497 Option pricing model Term to expiration (Years) 1.00 x - 5.29 x ( 1.65 x) Discounted cash flow Discount Rate 15.0 % ( 15.0 %) (1) As of December 31, 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 ” for more detail. (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 ” for more detail. (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”. 28 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 The aggregate values of Level 3 assets and liabilities changed during the nine months ended September 30, 2023 as follows: SCHEDULE OF AGGREGATE VALUE OF ASSETS AND LIABILITIES Nine Months Ended September 30, 2023 Common Stock Preferred Stock Debt Investments Options Total Assets: Fair Value as of December 31, 2022 $ 18,692,931 $ 117,214,465 $ 4,488,200 $ 3,469,497 $ 143,865,093 Transfers out of Level 3 ( 1,554,355 ) — — ( 1,157,487 ) ( 2,711,842 ) Purchases, capitalized fees and interest 15,821,949 2,510,363 998 1,503,623 19,836,933 Sales/Maturity of investments ( 252,629 ) — ( 750,000 ) — ( 1,002,629 ) Exercises and conversions (1) 3,751,518 ( 2,859,095 ) ( 500,000 ) ( 361,603 ) 30,820 Realized gains/(losses) 1,330,000 ( 10,914,376 ) — ( 30,647 ) ( 9,615,023 ) Net change in unrealized appreciation/(depreciation) included in earnings ( 412,378 ) 18,298,358 ( 777,162 ) ( 10,450 ) 17,098,368 Transfers out of Level 3 (1) Fair Value as of September 30, 2023 $ 37,377,036 $ 124,249,715 $ 2,462,036 $ 3,412,933 $ 167,501,720 Net change in unrealized appreciation/ (depreciation) of Level 3 investments still held as of September 30, 2023 $ ( 412,380 ) $ 7,383,980 $ ( 777,162 ) $ ( 42,760 ) $ 6,151,678 (1) During the nine months ended September 30, 2023, the Company’s portfolio investments had the following corporate actions which are reflected above: Portfolio Company Conversion from Conversion to Orchard Technologies, Inc. Preferred shares, Series D Simple Agreement for Future Equity Senior Preferred shares, Series 1 Senior Preferred shares, Series 2 Class A Common Shares Shogun Enterprises, Inc. (d/b/a Hearth) Convertible Note 0.5 % B-3 Preferred Shares Colombier Sponsor LLC Class B Units Class W Units PSQ Holdings, Inc. Class A Common Shares (Level 2) PSQ Holdings, Inc. Warrants (Level 1) AltC Sponsor LLC Share units Common shares, Class A Common shares, Class B The aggregate values of Level 3 assets and liabilities changed during the year ended December 31, 2022 as follows: Year Ended December 31, 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 Fair value beginning balance $ 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 — 20,767,788 1,509,093 503,183 22,780,064 Sales/Maturity of investments ( 874,470 ) — ( 1,000,000 ) — ( 1,874,470 ) Realized gains/(losses) 160,965 — — ( 70,379 ) 90,586 Net change in unrealized appreciation/(depreciation) included in earnings ( 16,535,469 ) ( 65,579,615 ) 967,669 ( 1,873,780 ) ( 83,021,195 ) Fair Value as of December 31, 2022 $ 18,692,931 $ 117,214,465 $ 4,488,200 $ 3,469,497 $ 143,865,093 Fair value ending balance $ 18,692,931 $ 117,214,465 $ 4,488,200 $ 3,469,497 $ 143,865,093 Net change in unrealized appreciation/ (depreciation) of Level 3 investments still held as of December 31, 2022 $ ( 7,023,165 ) $ ( 63,138,372 ) $ 967,669 $ ( 1,624,324 ) $ ( 70,818,192 ) (1) During the year ended December 31, 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 Junior Preferred Shares Junior Preferred Warrants, Strike Price $ 12.42 , Expiration Date 11/9/2025 Public Common shares (Level 2) Common warrants, Strike Price $ 3.98 , Expiration Date 11/9/2025 (Level 2) 29 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 Schedule of Investments In, and Advances to, Affiliates Transactions during the nine months ended September 30, 2023 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, 2022 Transfer In/ (Out) Realized Gains/(Losses) Unrealized Gains/(Losses) Fair Value at September 30, 2023 Percentage of Net Assets CONTROLLED INVESTMENTS * (2) Options Special Purpose Acquisition Company Colombier Sponsor LLC**–Class W Units (6) — $ — $ 1,157,487 $ ( 1,157,487 ) $ — $ — $ — — % Total Options — 1,157,487 ( 1,157,487 ) — — — — % Preferred Stock Clean Technology SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.)–Preferred shares, Class A 14,300,000 — 984,028 — — ( 56,000 ) 928,028 0.44 % Total Preferred Stock — 984,028 — — ( 56,000 ) 928,028 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*** $ 10,000,000 954,425 10,000,000 — — — 10,000,000 4.72 % Special Purpose Acquisition Company Colombier Sponsor LLC**–Class B Units (6) — — 1,554,355 ( 1,554,355 ) — — — — % Total Common Stock 954,425 11,554,355 ( 1,554,355 ) — — 10,000,000 4.72 % TOTAL CONTROLLED INVESTMENTS* (2) *(2) $ 954,425 $ 13,695,870 $ ( 2,711,842 ) $ — $ ( 56,000 ) $ 10,928,028 5.16 % 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) $ 1,010,198 $ — $ 1,988,200 $ — $ — $ ( 776,164 ) $ 1,212,036 0.57 % Total Debt Investments — 1,988,200 — — ( 776,164 ) 1,212,036 0.57 % 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% (7) — — — — ( 2,414,178 ) 2,414,178 — — % Ozy Media, Inc.–Preferred shares, Series B 6% (7) — — — — ( 4,999,999 ) 4,999,999 — — % Ozy Media, Inc.–Preferred shares, Series A 6% (7) — — — — ( 3,000,200 ) 3,000,200 — — % Ozy Media, Inc.–Preferred shares, Series Seed 6% (7) (7) — — — — ( 500,000 ) 500,000 — — % Total Digital Media Platform — — — ( 10,914,377 ) 10,914,377 — — % Interactive Learning StormWind, LLC–Preferred shares, Series D 8% (4) 329,337 — 533,429 — — 16,372 549,801 0.26 % StormWind, LLC–Preferred shares, Series C 8% (4) 2,779,134 — 5,675,081 — — 153,445 5,828,526 2.75 % StormWind, LLC–Preferred shares, Series B 8% (4) 3,279,629 — 3,550,631 — — 163,030 3,713,661 1.75 % StormWind, LLC–Preferred shares, Series A 8% (4) 366,666 — 191,694 — — 18,227 209,921 0.10 % Total Interactive Learning — 9,950,835 — — 351,074 10,301,909 4.86 % Total Preferred Stock — 9,950,835 — ( 10,914,377 ) 11,265,451 10,301,909 4.86 % Options Digital Media Platform Ozy Media, Inc.–Common Warrants, Strike Price $ 0.01 , Expiration Date 4/9/2028 (7) — $ — $ — $ — $ ( 30,647 ) $ 30,647 $ — — % Global Innovation Platform OneValley, Inc. (f/k/a NestGSV, Inc.)–Preferred Warrant Series B, Strike Price $ 2.31 , Expiration Date 12/31/2023 250,000 — — — — — — — % OneValley, Inc. (f/k/a NestGSV, Inc.)–Derivative Security, Expiration Date 8/23/2024 (5) 1 — 652,127 — — 24,159 676,286 0.32 % Total Global Innovation Platform — 652,127 — — 24,159 676,286 0.32 % E-Commerce Marketplace PSQ Holdings, Inc. (d/b/a PublicSq.)**–Warrants (6) 2,700,000 — — 1,157,487 — 2,595,513 3,753,000 1.77 % Total Options — 652,127 1,157,487 ( 30,647 ) 2,650,319 4,429,286 2.09 % Common Stock Online Education Curious.com, Inc.–Common shares 1,135,944 — — — — — — — % E-Commerce Marketplace PSQ Holdings, Inc. (d/b/a PublicSq.)**–Class A Common shares (6) 1,976,032 — — 1,554,355 — 12,799,541 14,353,896 6.77 % Total Common Stock — — 1,554,355 — 12,799,541 14,353,896 6.77 % TOTAL NON-CONTROLLED/AFFILIATE INVESTMENTS* (1) $ — $ 12,591,162 $ 2,711,842 $ ( 10,945,025 ) $ 25,939,148 $ 30,297,127 14.29 % * 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”). 30 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 ** 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 September 30, 2023, 21.30 % of its total investments are non-qualifying assets. *** 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. , securities with the right to elect directors) of such company. (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, 2023, the investments noted had been placed on non-accrual status. (4) SuRo Capital Corp.’s investments in StormWind, LLC are held through SuRo Capital Corp.’s wholly owned subsidiary, GSVC SW Holdings, Inc. (5) 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, ending August 23, 2024, while SuRo Capital Corp. can put the shares to OneValley, Inc. (f/k/a NestGSV, Inc.) at the end of the five year period. (6) On July 19, 2023, Colombier Acquisition Corp. (“Colombier”) stockholders approved a business combination with PSQ Holdings, Inc. (d/b/a PublicSq.) and related proposals at a special meeting. Also on July 19, 2023, PSQ Holdings, Inc. announced that it had consummated the business combination with Colombier pursuant to a merger agreement between the parties, creating the resultant combined company PSQ Holdings, Inc. (d/b/a PublicSq). SuRo Capital Corp.'s shares of PSQ Holdings, Inc. (d/b/a PublicSq.) Class A Common shares are subject to certain restrictions on transfer, while the Company’s PSQ Holdings, Inc. warrants are freely tradable. (7) On March 1, 2023, Ozy Media, Inc. suspended operations. On May 4, 2023, SuRo Capital Corp. abandoned its investment in Ozy Media, Inc. 31 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 Schedule of Investments In, and Advances to, Affiliates Transactions during the year ended December 31, 2022 involving the Company’s controlled investments and non-controlled/affiliate investments were as follows: 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 December 31, 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 0.55 % Total Options — 1,157,487 — — — — — 1,157,487 0.55 % Preferred Stock Clean Technology SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.)–Preferred shares, Class A (4) 14,300,000 — 1,047,033 — — — — ( 63,005 ) 984,028 0.47 % Total Preferred Stock — 1,047,033 — — — — ( 63,005 ) 984,028 0.47 % 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*** $ 10,000,000 1,685,000 10,000,000 — — — — — 10,000,000 4.76 % Special Purpose Acquisition Company Colombier Sponsor LLC**–Class B Units (7) 1,976,033 — 1,554,354 — — — — 1 1,554,355 0.74 % Total Common Stock 1,685,000 11,554,354 — — — — 1 11,554,355 5.50 % TOTAL CONTROLLED INVESTMENTS* (2) *(2) $ 1,685,000 $ 13,758,874 $ — $ — $ — $ — $ ( 63,004 ) $ 13,695,870 6.52 % 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) $ 1,010,198 $ — $ 505,099 $ — $ — $ — $ — $ 1,483,101 $ 1,988,200 0.95 % Total Debt Investments — 505,099 — — — — 1,483,101 1,988,200 0.95 % 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 — — — ( 87,664 ) 533,429 0.25 % StormWind, LLC–Preferred shares, Series C 8% (5) 2,779,134 — 6,496,729 — — — — ( 821,648 ) 5,675,081 2.70 % StormWind, LLC–Preferred shares, Series B 8% (5) 3,279,629 — 4,423,607 — — — — ( 872,976 ) 3,550,631 1.69 % StormWind, LLC–Preferred shares, Series A 8% (5) 366,666 — 289,293 — — — — ( 97,599 ) 191,694 0.09 % Total Interactive Learning — 11,830,722 — — — — ( 1,879,887 ) 9,950,835 4.74 % Total Preferred Stock — 11,830,722 — — — — ( 1,879,887 ) 9,950,835 4.74 % Options Digital Media Platform Ozy Media, Inc.–Common Warrants, Strike Price $ 0.01 , Expiration Date 4/9/2028 295,565 $ — $ — $ — $ — $ — $ — $ — $ — — % Global Innovation Platform OneValley, Inc. (f/k/a NestGSV, Inc.)–Preferred Warrant Series B, Strike Price $ 2.31 , Expiration Date 5/29/2022 — — — — — — ( 70,379 ) 70,379 — — % OneValley, Inc. (f/k/a NestGSV, Inc.)–Preferred Warrant Series B, Strike Price $ 2.31 , Expiration Date 12/31/2023 250,000 — 5,000 — — — — ( 5,000 ) — — % OneValley, Inc. (f/k/a NestGSV, Inc.)–Derivative Security, Expiration Date 8/23/2024 (6) 1 — 2,268,268 — — — — ( 1,616,141 ) 652,127 0.31 % Total Global Innovation Platform — 2,273,268 — — ( 70,379 ) ( 1,550,762 ) 652,127 0.31 % Total Options — 2,273,268 — — — ( 70,379 ) ( 1,550,762 ) 652,127 0.31 % 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 ) $ ( 1,947,548 ) $ 12,591,162 6.00 % * 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”). 32 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 ** 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, 2022, 14.47 % of its total investments are non-qualifying assets. *** 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. , securities with the right to elect directors) of such company. (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 December 31, 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, ending August 23, 2024, 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. 33 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 NOTE 5— COMMON STOCK Share Repurchase Program On August 8, 2017, the Company announced a $ 5.0 million discretionary open-market share repurchase program of shares of the Company’s common stock, $ 0.01 par value per share, of up to $ 5.0 million until the earlier of (i) August 6, 2018 or (ii) the repurchase of $ 5.0 million in aggregate amount of the Company’s common stock (the “Share Repurchase Program”). On November 7, 2017, the Company’s Board of Directors authorized an extension of, and an increase in the amount of shares of the Company’s common stock that may be repurchased under the discretionary Share Repurchase Program until the earlier of (i) November 6, 2018 or (ii) the repurchase of $ 10.0 million in aggregate amount of the Company’s common stock. On May 3, 2018, the Company’s Board of Directors authorized a $ 5.0 million increase in the amount of shares of the Company’s common stock that may be repurchased under the discretionary Share Repurchase Program until the earlier of (i) November 6, 2018 or (ii) the repurchase of $ 15.0 million in aggregate amount of the Company’s common stock. On November 1, 2018, our Board of Directors authorized a $ 5.0 million increase in the amount of shares of our common stock that may be repurchased under the discretionary Share Repurchase Program until the earlier of (i) October 31, 2019 or (ii) the repurchase of $ 20.0 million in aggregate amount of our common stock. On August 5, 2019, our Board of Directors authorized a $ 5.0 million increase in the amount of shares of our common stock that may be repurchased under the discretionary Share Repurchase Program until the earlier of (i) August 4, 2020 or (ii) the repurchase of $ 25.0 million in aggregate amount of our common stock. On March 9, 2020, our Board of Directors authorized a $ 5.0 million increase in the amount of shares of our common stock that may be repurchased under the discretionary Share Repurchase Program until the earlier of (i) March 8, 2021 or (ii) the repurchase of $ 30.0 million in aggregate amount of our common stock. On October 28, 2020, our Board of Directors authorized a $ 10.0 million increase in the amount of shares of our common stock that may be repurchased under the discretionary Share Repurchase Program until the earlier of (i) October 31, 2021 or (ii) the repurchase of $ 40.0 million in aggregate amount of our common stock. On October 27, 2021, our Board of Directors approved an extension of the Share Repurchase Program until the earlier of (i) October 31, 2022 or (ii) the repurchase of $ 40.0 million in aggregate amount of our common stock. On March 13, 2022, our Board of Directors authorized a $ 15.0 million increase in the amount of shares of our common stock that may be repurchased under the discretionary Share Repurchase Program until the earlier of (i) October 31, 2022 or (ii) the repurchase of $ 55.0 million in aggregate amount of our common stock. On October 19, 2022, the Company’s Board of Directors approved an extension of the Share Repurchase Program until the earlier of (i) October 31, 2023 or (ii) the repurchase of $ 55.0 million in aggregate amount of the Company’s common stock. On August 7, 2023, the Company’s Board of Directors authorized an extension of, and an increase in the amount of shares of the Company’s common stock that may be repurchased under, the discretionary Share Repurchase Program until the earlier of (i) October 31, 2024 or (ii) the repurchase of $ 60.0 million in aggregate amount of the Company’s common stock. The timing and number of shares to be repurchased will depend on a number of factors, including market conditions and alternative investment opportunities. The Share Repurchase Program may be suspended, terminated or modified at any time for any reason and does not obligate the Company to acquire any specific number of shares of its common stock. Under the Share Repurchase Program, the Company may repurchase its outstanding common stock in the open market provided that it complies with the prohibitions under its insider trading policies and procedures and the applicable provisions of the 1940 Act and the Exchange Act. During the three and nine months ended September 30, 2023, the Company repurchased 186,493 of the Company’s common stock under the Share Repurchase Program. During the three and nine months ended September 30, 2022, the Company repurchased 0 and 1,008,676 shares, respectively, of the Company’s common stock under the Share Repurchase Program. As of September 30, 2023, the dollar value of shares that remained available to be purchased by the Company under the Share Repurchase Program was approximately $ 20.7 million. Modified Dutch Auction Tender Offer On March 17, 2023, the Company commenced a modified “Dutch Auction” tender offer (the “Modified Dutch Auction Tender Offer”) to purchase up to 3,000,000 shares of its common stock from its stockholders, which expired on April 17, 2023 . In accordance with the terms of the Modified Dutch Auction Tender Offer, the Company selected the lowest price per share of not less than $ 3.00 per share and not greater than $ 4.50 per share. Pursuant to the Modified Dutch Auction Tender Offer, the Company repurchased 3,000,000 shares, representing 10.6 % of its outstanding shares, on or about April 21, 2023 at a price of $ 4.50 per share. The Company used available cash to fund the purchase of its shares of common stock in the Modified Dutch Auction Tender Offer and to pay for all related fees and expenses. 34 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 Amended and Restated 2019 Equity Incentive Plan Refer to “Note 11—Stock-Based Compensation” for a description of the Company’s restricted shares of common stock granted under the Amended & Restated 2019 Equity Incentive Plan (as defined therein). At-the-Market Offering On July 29, 2020, the Company entered into an At-the-Market Sales Agreement, dated July 29, 2020 (the “Initial Sales Agreement”), with BTIG, LLC, JMP Securities LLC and Ladenburg Thalmann & Co., Inc. (collectively, the “Agents”). Under the Initial Sales Agreement, the Company may, but has no obligation to, issue and sell up to $ 50.0 million in aggregate amount of shares of its common stock (the “Shares”) from time to time through the Agents or to them as principal for their own account (the “ATM Program”). On September 23, 2020, the Company increased the maximum amount of Shares to be sold through the ATM Program to $ 150.0 million from $ 50.0 million. In connection with the upsize of the ATM Program to $ 150.0 million, the Company entered into Amendment No. 1 to the At-the-Market Sales Agreement, dated September 23, 2020, with the Agents (the “Amendment No. 1 to the Sales Agreement,” and together with the Initial Sales Agreement, the “Sales Agreement”). The Company intends to use the net proceeds from the ATM Program to make investments in portfolio companies in accordance with its investment objective and strategy and for general corporate purposes. Sales of the Shares, if any, will be made by any method that is deemed to be an “at-the-market” offering as defined in Rule 415 under the Securities Act, including sales made directly on the Nasdaq Global Select Market or sales made to or through a market maker other than on an exchange, at market prices prevailing at the time of sale, at prices related to prevailing market prices or at other negotiated prices. Actual sales in the ATM Program will depend on a variety of factors to be determined by the Company from time to time. The Agents will receive a commission from the Company equal to up to 2.0 % of the gross sales price of any Shares sold through the Agents under the Sales Agreement and reimbursement of certain expenses. The Sales Agreement contains customary representations, warranties and agreements of the Company, conditions to closing, indemnification rights and obligations of the parties and termination provisions. During the three and nine months ended September 30, 2023, the Company did not issue or sell shares under the ATM program. During the three and nine months ended September 30, 2022, the Company issued and sold 0 and 17,807 shares, respectively, under the ATM Program at weighted-average price of $ 13.01 per share, for gross proceeds of $ 231,677 and net proceeds of $ 229,896 , after deducting commissions to the Agents on Shares sold. As of September 30, 2023, up to approximately $ 98.8 million in aggregate amount of the Shares remain available for sale under the ATM Program. 35 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 NOTE 6— NET CHANGE IN NET ASSETS RESULTING FROM OPERATIONS PER COMMON SHARE—BASIC AND DILUTED The following information sets forth the computation of basic and diluted net change in net assets resulting from operations per common share, pursuant to ASC 260, for the three and nine months ended September 30, 2023 and 2022. SCHEDULE OF BASIC AND DILUTED COMMON SHARE Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Earnings per common share–basic: Net change in net assets resulting from operations $ 25,193,360 $ ( 45,902,250 ) $ 14,189,845 $ ( 119,785,483 ) Weighted-average common shares–basic 25,351,306 29,781,801 26,549,672 30,542,611 Earnings per common share–basic $ 0.99 $ ( 1.54 ) $ 0.53 $ ( 3.92 ) Earnings per common share–diluted: Net change in net assets resulting from operations $ 25,193,360 $ ( 45,902,250 ) $ 14,189,845 $ ( 119,785,483 ) Weighted-average common shares outstanding–diluted (1) 25,351,306 29,781,801 26,549,672 30,542,611 Earnings per common share–diluted $ 0.99 $ ( 1.54 ) $ 0.53 $ ( 3.92 ) (1) For the three and nine months ended September 30, 2023 and September 30, 2022, there were no potentially dilutive securities outstanding. NOTE 7— COMMITMENTS AND CONTINGENCIES In the normal course of business, the Company may enter into investment agreements under which it commits to make an investment in a portfolio company at some future date or over a specified period of time. From time to time, the Company may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of its rights under contracts with its portfolio companies. While the outcome of these legal proceedings cannot be predicted with certainty, the Company does not expect that these proceedings will have a material effect upon its business, financial condition or results of operations. The Company is not currently a party to any material legal proceedings. Operating Leases and Related Deposits The Company currently has one operating lease for office space for which the Company has recorded a right-of-use asset and lease liability for the operating lease obligation. The lease commenced June 3, 2019 and expires July 31, 2024 . The lease expense is presented as a single lease cost that is amortized on a straight-line basis over the life of the lease. As of September 30, 2023 and December 31, 2022, the Company booked a right-of-use asset and operating lease liability of $ 159,693 and $ 288,268 , respectively, on the Condensed Consolidated Statement of Assets and Liabilities. As of September 30, 2023 and December 31, 2022, the Company recorded a security deposit of $ 16,574 and $ 16,574 , respectively, on the Condensed Consolidated Statement of Assets and Liabilities. For the three months ended September 30, 2023 and 2022, the Company incurred $ 52,472 and $ 48,738 , respectively, of operating lease expense. For the nine months ended September 30, 2023 and 2022, the Company incurred $ 151,637 and $ 143,459 , respectively, of operating lease expense. The amounts reflected on the Condensed Consolidated Statement of Assets and Liabilities have been discounted using the rate implicit in the lease. As of September 30, 2023, the remaining lease term was 0.8 years and the discount rate was 3.00 %. The following table shows future minimum payments under the Company’s operating lease as of September 30, 2023: SCHEDULE OF FUTURE MINIMUM PAYMENTS OF OPERATION LEASE For the Years Ended December 31, Amount 2023 48,273 2024 113,603 Total $ 161,876 36 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 NOTE 8— FINANCIAL HIGHLIGHTS SCHEDULE OF FINANCIAL HIGHLIGHTS Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Per Basic Share Data Net asset value at beginning of period $ 7.35 $ 9.24 $ 7.39 $ 11.72 Net investment loss (1) ( 0.11 ) ( 0.13 ) ( 0.40 ) ( 0.39 ) Net realized gain/(loss) on investments (1) ( 0.06 ) ( 0.17 ) ( 0.55 ) ( 0.13 ) Net change in unrealized appreciation/(depreciation) of investments (1) 1.16 ( 1.24 ) 1.49 ( 3.40 ) Dividends declared — — — ( 0.11 ) Issuance of common stock from public offering (1) — — — 0.01 Repurchase of common stock (1) 0.04 0.11 0.41 0.08 Stock-based compensation (1) 0.03 0.02 0.07 0.05 Net asset value at end of period $ 8.41 $ 7.83 $ 8.41 $ 7.83 Per share market value at end of period $ 3.62 $ 3.87 $ 3.62 $ 3.87 Total return based on market value (2) 13.13 % ( 39.53 )% ( 4.74 )% ( 68.91 )% Total return based on net asset value (2) 14.42 % ( 15.26 )% 13.80 % ( 32.25 )% Shares outstanding at end of period 25,209,108 28,333,661 25,209,108 28,333,661 Ratios/Supplemental Data: Net assets at end of period $ 211,971,043 $ 221,783,611 $ 211,971,043 $ 221,783,611 Average net assets $ 204,284,971 $ 278,994,914 $ 206,224,853 $ 340,160,110 Ratio of net operating expenses to average net assets (3) 8.03 % 5.14 % 9.62 % 4.89 % Ratio of net investment loss to average net assets (3) ( 5.18 )% ( 4.66 )% ( 6.93 )% ( 4.52 )% Portfolio Turnover Ratio 1.17 % 0.85 % 4.93 % 3.47 % (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. 37 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 NOTE 9— INCOME TAXES The Company elected to be treated as a RIC under Subchapter M of the Code beginning with its taxable year ended December 31, 2014 and has qualified to be treated as a RIC for subsequent taxable years. The Company intends to continue to operate so as to qualify to be subject to tax treatment as a RIC under Subchapter M of the Code and, as such, will not be subject to U.S. federal income tax on the portion of taxable income (including gains) distributed as dividends for U.S. federal income tax purposes to stockholders. Taxable income includes the Company’s taxable interest, dividend and fee income, reduced by certain deductions, as well as taxable net realized investment gains. Taxable income generally differs from net income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses, and generally excludes net unrealized appreciation or depreciation, as such gains or losses are not included in taxable income until they are realized. To qualify and be subject to tax as a RIC, the Company is required to meet certain income and asset diversification tests in addition to distributing dividends of an amount generally at least equal to 90 % of its investment company taxable income, as defined by the Code and determined without regard to any deduction for distributions paid, to its stockholders. The amount to be paid out as a distribution is determined by the Board of Directors each quarter and is based upon the annual earnings estimated by the management of the Company. To the extent that the Company’s earnings fall below the amount of dividend distributions declared, however, a portion of the total amount of the Company’s distributions for the fiscal year may be deemed a return of capital for tax purposes to the Company’s stockholders. As a RIC, the Company will be subject to a 4 % nondeductible U.S. federal excise tax on certain undistributed income unless the Company makes distributions treated as dividends for U.S. federal income tax purposes in a timely manner to its stockholders in respect of each calendar year of an amount at least equal to the sum of (1) 98% of our ordinary income (taking into account certain deferrals and elections) for each calendar year, (2) 98.2% of our capital gain net income (adjusted for certain ordinary losses) for the 1-year period ending October 31 of each such calendar year and (3) any ordinary income and net capital gains for preceding years, but not distributed during such years and on which the Company paid no U.S. federal income tax . The Company will not be subject to this excise tax on any amount on which the Company incurred U.S. federal corporate income tax (such as the tax imposed on a RIC’s retained net capital gains). Depending on the level of taxable income earned in a taxable year, the Company may choose to carry over taxable income in excess of current taxable year distributions from such taxable income into the next taxable year and incur a 4 % excise tax on such taxable income, as required. The maximum amount of excess taxable income that may be carried over for distribution in the next taxable year under the Code is the total amount of distributions paid in the following taxable year, subject to certain declaration and payment guidelines. To the extent the Company chooses to carry over taxable income into the next taxable year, distributions declared and paid by the Company in a taxable year may differ from the Company’s taxable income for that taxable year as such distributions may include the distribution of current taxable year taxable income, the distribution of prior taxable year taxable income carried over into and distributed in the current taxable year, or returns of capital. The Company has taxable subsidiaries which hold certain portfolio investments in an effort to limit potential legal liability and/or comply with source-income type requirements contained in the RIC tax provisions of the Code. These taxable subsidiaries are consolidated for GAAP and the portfolio investments held by the taxable subsidiaries are included in the Company’s consolidated financial statements and are recorded at fair value. These taxable subsidiaries are not consolidated with the Company for income tax purposes and may generate income tax expense, or benefit, and tax assets and liabilities as a result of their ownership of certain portfolio investments. Any income generated by these taxable subsidiaries generally would be subject to tax at normal corporate tax rates based on its taxable income. The Company intends to timely distribute to its stockholders substantially all of its annual taxable income for each year, except that it may retain certain net capital gains for reinvestment and, depending upon the level of taxable income earned in a year, may choose to carry forward taxable income for distribution in the following year and pay any applicable U.S. federal excise tax. 38 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 The Company is required to include net deferred tax provision/benefit in calculating its total expenses even though these net deferred taxes are not currently payable/receivable. Taxable income generally differs from net income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses, and generally excludes net unrealized appreciation or depreciation, as such gains or losses are not included in taxable income until they are realized. For U.S. federal and state income tax purposes, a portion of the Taxable Subsidiaries’ net operating loss carryforwards and basis differences may be subject to limitations on annual utilization in case of a change in ownership, as defined by federal and state law. The amount of such limitations, if any, has not been determined. Accordingly, the amount of such tax attributes available to offset future profits may be significantly less than the actual amounts of the tax attributes. The Company and the Taxable Subsidiaries identified their major tax jurisdictions as U.S. federal, New York, and California and may be subject to the taxing authorities’ examination for the tax years 2020–2023 in New York and 2019–2023 in California, respectively. Further, the Company and the Taxable Subsidiaries accrue all interest and penalties related to uncertain tax positions as incurred. As of September 30, 2023, there were no material interest or penalties incurred related to uncertain tax positions. NOTE 10— DEBT CAPITAL ACTIVITIES 6.00% Notes due 2026 On December 17, 2021, the Company issued $ 70.0 million aggregate principal amount of its 6.00% Notes due 2026 (the “6.00% Notes due 2026”), pursuant to an Indenture, dated as of March 28, 2018 (the “Base Indenture”), between the Company and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), as trustee (the “Trustee”), as supplemented by a second supplemental indenture, dated as of December 17, 2021 (together with the Base Indenture, the “Indenture”), between the Company and the Trustee. On December 21, 2021, the Company issued an additional $ 5.0 million aggregate principal amount of 6.00% Notes due 2026 pursuant to an overallotment option. The 6.00% Notes due 2026 bear interest at a fixed rate of 6.00 % per year, payable quarterly in arrears on March 30, June 30, September 30, and December 30 of each year, commencing on March 30, 2022 . The 6.00% Notes due 2026 have a maturity date of December 30, 2026, unless previously repurchased in accordance with their terms. The Company has the right to redeem the 6.00% Notes due 2026, in whole or in part, at any time or from time to time, on or after December 30, 2024 at a redemption price of 100 % of the outstanding principal amount of the 6.00% Notes due 2026 plus accrued and unpaid interest . The 6.00% Notes due 2026 are direct unsecured obligations of the Company and rank pari passu , or equal in right of payment, with all outstanding and future unsecured, unsubordinated indebtedness of the Company; senior to any of the Company’s future indebtedness that expressly provides it is subordinated to the 6.00% Notes due 2026; effectively subordinated to any of the Company’s future secured indebtedness (including indebtedness that is initially unsecured in respect of which the Company subsequently grants a security interest), to the extent of the value of the assets securing such indebtedness (provided, however, that the Company has agreed under the Indenture to not incur any secured or unsecured indebtedness that would be senior to the 6.00% Notes due 2026 while the 6.00% Notes due 2026 are outstanding, subject to certain exceptions); and structurally subordinated to all existing and future indebtedness and other obligations of any of the Company’s subsidiaries. The 6.00% Notes due 2026 are listed for trading on the Nasdaq Global Select Market under the symbol “SSSSL”. The reported closing market price of SSSSL on September 30, 2023 and December 31, 2022 was $ 23.35 and $ 23.51 per note, respectively. As of September 30, 2023 and December 31, 2022, the fair value of the 6.00% Notes due 2026 was $ 70.1 million and $ 70.5 million, respectively. The 6.00% Notes due 2026 are classified as Level 1 of the fair value hierarchy (Refer to “Note 2 — Significant Accounting Policies”). As of September 30, 2023 and December 31, 2022, the Company was in compliance with the terms of the Indenture. 39 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 NOTE 11— STOCK-BASED COMPENSATION 2019 Equity Incentive Plan On June 5, 2019, our Board of Directors adopted, and our stockholders approved, an equity-based incentive plan (the “2019 Equity Incentive Plan”), which authorized equity awards to be granted for up to 1,976,264 shares of our common stock. Under the 2019 Equity Incentive Plan, the exercise price of awards would be set on the grant date and could not be less than the fair market value per share on such date, however, that in the case of an incentive stock option granted to an employee who, at the time of the grant of such option, owned stock representing more than ten percent ( 10 %) of the voting power of all classes of stock of the Company or the Company’s present or future parent or subsidiary corporations, as defined in Section 424(e) or (f) of the Code, or other Affiliates the employees of which were eligible to receive incentive stock options under the Code (the “10% Shareholders”), the exercise price per share would be no less than one hundred ten percent (110%) of the fair market value per share on the date of grant. The fair market value would be the closing price of the shares on Nasdaq on the date of grant. On July 17, 2019, stock options providing the right to purchase up to 1,165,000 shares were granted under the 2019 Equity Incentive Plan with an exercise price equal to the market price of our common stock at the grant date. These stock options had a vesting period of 3 years with 1/3 vesting immediately on the grant date, 1/3 vesting on July 17, 2020, and the remaining 1/3 vesting on July 17, 2021. Cancellation of Stock Option Awards Under 2019 Equity Incentive Plan On April 28, 2020, all stock option awards granted under the 2019 Equity Incentive Plan were canceled for no payment pursuant to an option cancellation agreement (the “Option Cancellation Agreement”). As a result, there are no stock option awards outstanding under the 2019 Equity Incentive Plan. In accordance with FASB ASC 718, Compensation – Stock Compensation (“ASC 718”) all unrecognized compensation cost related to still unvested shares was recognized as of the date of cancellation. For more information, including a description of the Option Cancellation Agreement, please refer to our current report on Form 8-K filed with the SEC on April 29, 2020. Such description of the Option Cancellation Agreement is qualified in its entirety by reference to the text of such Option Cancellation Agreement filed as Exhibit 10.3 to our quarterly report on Form 10-Q for the period ended March 31, 2020 filed with the SEC on May 8, 2020. The Company follows ASC 718 to account for stock options granted. Under ASC 718, compensation expense associated with stock-based compensation is measured at the grant date based on the fair value of the award and is recognized over the vesting period. Determining the appropriate fair value model and calculating the fair value of stock-based awards at the grant date requires judgment, including estimating stock price volatility, forfeiture rate, and expected option life. The time-based options granted on July 17, 2019 were ascribed a weighted-average fair value of $ 2.57 per share. The fair value of options granted under the 2019 Equity Incentive Plan was based upon a Black Scholes option pricing model using the assumptions in the following table: SCHEDULE OF STOCK OPTIONS, VALUATION ASSUMPTIONS Input Assumptions As of July 17, 2019 Grant Date Term (years) 5.55 Volatility 39.47 % Risk-free rate 1.86 % Dividend yield — % SCHEDULE OF OPTION ACTIVITY Number of Shares Weighted-Average Exercise Price Weighted-Average Grant Date Fair Value Outstanding as of December 31, 2019 1,155,000 $ 6.57 $ 2.57 Vested and Exercisable as of December 31, 2019 385,000 $ 6.57 $ 2.57 Cancelled ( 1,155,000 ) $ 6.57 $ 2.57 Outstanding as of September 30, 2023 and December 31, 2022 — - - 40 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 As of September 30, 2023 and December 31, 2022, there was $ 0 of total unrecognized compensation cost related to non-vested stock options granted under the 2019 Equity Incentive Plan, as the options were cancelled effective April 28, 2020. Amended and Restated 2019 Equity Incentive Plan On June 19, 2020, our Board of Directors adopted, and our stockholders approved, an amendment and restatement of the Company’s 2019 Equity Incentive Plan (the “Amended & Restated 2019 Equity Incentive Plan”) under which the Company is authorized to grant equity awards for up to 1,627,967 shares of its common stock. In accordance with the exemptive relief granted to the Company by the SEC on June 16, 2020 with respect to the Amended & Restated 2019 Equity Incentive Plan, the Company is generally authorized to (i) issue restricted shares as part of the compensation package for certain of its employees, officers and all directors, including non-employee directors (collectively, the “Participants”), (ii) issue options to acquire shares of its common stock (“Options”) to certain employees, officers and employee directors as a part of such compensation packages, (iii) withhold shares of the Company’s common stock or purchase shares of common stock from the Participants to satisfy tax withholding obligations relating to the vesting of restricted shares or the exercise of Options granted to the certain Participants pursuant to the Amended & Restated 2019 Equity Incentive Plan, and (iv) permit the Participants to pay the exercise price of Options granted to them with shares of the Company’s common stock. Under the Amended & Restated 2019 Equity Incentive Plan, each non-employee director will receive an annual grant of $ 50,000 worth of restricted shares of common stock (based on the closing stock price of the common stock on the grant date). Each grant of $ 50,000 in restricted shares will vest, in full, if the non-employee director is in continuous service as a director of the Company through the anniversary of such grant (or, if earlier, the annual meeting of the Company’s stockholders that is closest to the anniversary of such grant). During the nine months ended September 30, 2023, the Company granted 60,060 restricted shares to the Company’s non-employee directors pursuant to the Amended & Restated 2019 Equity Incentive Plan. Additionally, on May 31, 2023, 26,736 restricted shares related to the 2022 non-employee director grants vested. Compensation expense associated with the restricted shares is recognized on a quarterly basis over the respective vesting periods. Other than such restricted shares granted to non-employee directors, the Company’s Compensation Committee may determine the time or times at which Options and restricted shares granted to other Participants will vest or become payable or exercisable, as applicable. The exercise price of each Option will not be less than 100% of the fair market value of the Company’s common stock on the date the option is granted. However, any optionee who owns more than 10% of the combined voting power of all classes of the Company’s outstanding common stock (a “10% Stockholder”), will not be eligible for the grant of an incentive stock option unless the exercise price of the incentive stock option is at least 110% of the fair market value of the Company’s common stock on the date of grant. Generally, no Option will be exercisable after the expiration of ten years from the date of grant. In the case of an Option granted to a 10% Stockholder, the term of an incentive stock option will be for no more than five years from the date of grant. During the nine months ended September 30, 2023, the Company did not grant any restricted shares to the Company’s officers pursuant to the Amended & Restated 2019 Equity Incentive Plan. The Company determined that the fair values, based on the grant date close price of such restricted shares granted to the Company’s officers under the Amended & Restated 2019 Equity Incentive Plan during the nine months ended September 30, 2023 and 2022 were approximately $ 0 and $ 2,885,000 , respectively, in the aggregate. For the three and nine months ended September 30, 2023, the Company recognized stock-based compensation expense of $ 774,978 and $ 2,300,237 , respectively. For the three and nine months ended September 30, 2022, the Company recognized stock-based compensation expense of $ 831,977 and $ 1,976,695 , respectively. As of September 30, 2023 and December 31, 2022, there were approximately $ 4,351,373 and $ 6,451,610 of total unrecognized compensation costs related to the restricted share grants. Compensation expense associated with the restricted shares is recognized on a quarterly basis over the respective vesting periods. 41 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 The following table summarizes the activities for the Company’s restricted share grants for the nine months ended September 30, 2023 under the Amended & Restated 2019 Equity Incentive Plan: SCHEDULE OF EQUITY INCENTIVE PLAN Number of Restricted Shares Outstanding as of December 31, 2022 606,620 Granted 60,060 Vested (1) ( 176,780 ) Forfeited — Outstanding as of September 30, 2023 489,900 Vested as of September 30, 2023 347,580 (1) The balance of vested shares reflects the total shares vested during the period and has not been reduced for those vested shares forfeited at time of vest related to net share settlement. The Amended & Restated 2019 Equity Incentive Plan provides for the concept of “net share settlement.” Specifically, it provides that the Company is authorized to withhold the Common Stock at the time the restricted shares are vested and taxed in satisfaction of the Participant’s tax obligations. On June 16, 2020, the Company received exemptive relief from the SEC to permit such withholding of shares. NOTE 12— SUBSEQUENT EVENTS Portfolio Activity From October 1, 2023 through November 8, 2023, the Company exited or received proceeds from the following investments (excluding short-term U.S. Treasury bills): SCHEDULE OF INVESTMENTS Portfolio Company Transaction Date Quantity Average Net Share Price (1) Net Proceeds Realized Gain (2) PSQ Holdings, Inc. (d/b/a PublicSq.) - Warrants (3) Various 67,931 $ 1.01 $ 68,394 $ 39,231 Residential Homes For Rent, LLC (d/b/a Second Avenue) (4) 10/23/2023 N/A N/A 83,333 — Total $ 151,727 $ 39,231 (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) Realized gain does not include adjustments to amounts held in escrow receivable. (3) As of November 8, 2023, SuRo Capital held 2,632,069 PSQ Holdings, Inc. (d/b/a PublicSq.) warrants. (4) Subsequent to September 30, 2023, $ 0.1 million has been received from Residential Homes for Rent, LLC (d/b/a Second Avenue) related to the 15 % term loan due December 23, 2023 . Of the proceeds received, $ 0.1 million repaid a portion of the outstanding principal and the remaining proceeds were attributed to interest. From October 1, 2023 through November 8, 2023, the Company made the following investments (not including capitalized transaction costs or investments in short-term U.S. Treasury bills). SCHEDULE OF INVESTMENTS BY COMPANY Portfolio Company Investment Transaction Date Amount Xgroup Holdings Limited (d/b/a Xpoint) Convertible Note 10/26/2023 $ 325,000 Total $ 325,000 The Company is frequently in negotiations with various private companies with respect to investments in such companies. Investments in private companies are generally subject to satisfaction of applicable closing conditions. In the case of secondary market transactions, such closing conditions may include approval of the issuer, waiver or failure to exercise rights of first refusal by the issuer and/or its stockholders and termination rights by the seller or the Company. Equity investments made through the secondary market may involve making deposits in escrow accounts until the applicable closing conditions are satisfied, at which time the escrow accounts will close and such equity investments will be effectuated. 42 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 NOTE 13— SUPPLEMENTAL FINANCIAL DATA Summarized Financial Information of Unconsolidated Subsidiaries In accordance with the SEC’s Regulation S-X and GAAP, the Company is not permitted to consolidate any subsidiary or other entity that is not an investment company, including those in which the Company has a controlling interest; however, the Company must disclose certain financial information related to any subsidiaries or other entities that are considered to be “significant subsidiaries” under the applicable rules of Regulation S-X. In May 2020, the SEC adopted rule amendments that impacted the requirement of investment companies, including BDCs, to disclose the financial statements of certain of their portfolio companies or acquired funds (the “Final Rules”). The Final Rules adopted a new definition of “significant subsidiary” set forth in Rule 1-02(w)(2) of Regulation S-X under the Securities Act. Rules 3-09 and 4-08(g) of Regulation S-X require investment companies to include separate financial statements or summary financial information, respectively, in such investment company’s periodic reports for any portfolio company that meets the definition of “significant subsidiary.” The Final Rules amended the definition of “significant subsidiary” in a manner that was intended to more accurately capture those portfolio companies that were more likely to materially impact the financial condition of an investment company. The Company’s two controlled portfolio companies as of September 30, 2023, SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.) and Architect Capital PayJoy SPV, LLC, did not meet the definition of a “significant subsidiary” as set forth in Rule 1-02(w)(2). For comparability purposes, the Company has omitted the previously disclosed summarized financial information of the Company’s significant subsidiaries for the quarter ended September 30, 2022 as the Company’s significant subsidiaries would not have been considered significant subsidiaries under the Final Rules. 43 TABLE OF CONTENTS Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Forward-Looking Statements This quarterly report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about us, our current and prospective portfolio investments, our industry, our beliefs, and our assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “will,” “may,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “targets,” “projects,” and variations of these words and similar expressions are intended to identify forward-looking statements. The forward-looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties, including, without limitation, statements as to: ● our future operating results; ● our dependence upon our management team and key investment professionals; ● our business prospects and the prospects of our portfolio companies; ● our ability to manage our business and future growth; ● the impact of investments that we expect to make; ● risks related to investments in growth-stage companies, other venture capital-backed companies, and generally U.S. companies; ● our contractual arrangements and relationships with third parties; ● our ability to make distributions; ● the dependence of our future success on the general economy and its impact on the industries in which we invest; ● risks related to the uncertainty of the value of our portfolio investments; ● the ability of our portfolio companies to achieve their objectives; ● change in political, economic or industry conditions; ● our expected financings and investments; ● the impact of changes in laws or regulations (including the interpretation thereof), including tax laws, on our operations and/or the operation of our portfolio companies; ● the adequacy of our cash resources and working capital; ● risks related to market volatility, including general price and volume fluctuations in stock markets; and ● the timing of cash flows, if any, from the operations of our portfolio companies. These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including without limitation: ● an economic downturn could impair our portfolio companies’ ability to continue to operate, which could lead to the loss of some or all of our investments in such portfolio companies; ● an economic downturn could disproportionately impact the market sectors in which a significant portion of our portfolio is concentrated, causing us to suffer losses in our portfolio; 44 TABLE OF CONTENTS ● a contraction of available credit and/or an inability to access the equity markets could impair our investment activities; ● increases in inflation or an inflationary economic environment could adversely affect our portfolio companies’ operating results, causing us to suffer losses in our portfolio; ● interest rate volatility could adversely affect our results, particularly because we use leverage as part of our investment strategy; and ● the risks, uncertainties and other factors we identify in the sections entitled “Risk Factors” in our quarterly reports on Form 10-Q, our annual report on Form 10-K, and in our other filings with the SEC. Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be inaccurate. Important assumptions include our ability to originate new investments, certain margins and levels of profitability and the availability of additional capital. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this quarterly report on Form 10-Q should not be regarded as a representation by us that our plans and objectives will be achieved. These risks and uncertainties include those described or identified in our quarterly reports on Form 10-Q and our annual report on Form 10-K, in the “Risk Factors” sections. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this quarterly report on Form 10-Q. The following analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes thereto contained elsewhere in this quarterly report on Form 10-Q. Overview We are an internally-managed, non-diversified closed-end management investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”), and has elected to be treated, and intends to qualify annually, as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). Our investment objective is to maximize our portfolio’s total return, principally by seeking capital gains on our equity and equity-related investments, and to a lesser extent, income from debt investments. We invest principally in the equity securities of what we believe to be rapidly growing venture-capital-backed emerging companies. We acquire our investments through direct investments in prospective portfolio companies, secondary marketplaces for private companies and negotiations with selling stockholders. In addition, we may invest in private credit and in the founders equity, founders warrants, forward purchase agreements, and private investment in public equity (“PIPE”) transactions of special purpose acquisition companies (“SPACs”). We may also invest on an opportunistic basis in select publicly traded equity securities or certain non-U.S. companies that otherwise meet our investment criteria, subject to applicable requirements of the 1940 Act. To the extent we make investments in private equity funds and hedge funds that are excluded from the definition of “investment company” under the 1940 Act by Section 3(c)(1) or 3(c)(7) of the 1940 Act, we will limit such investments to no more than 15% of our net assets. In regard to the regulatory requirements for BDCs under the 1940 Act, some of these investments may not qualify as investments in “eligible portfolio companies,” and thus may not be considered “qualifying assets.” “Eligible portfolio companies” generally include U.S. companies that are not investment companies and that do not have securities listed on a national exchange. If at any time less than 70% of our gross assets are comprised of qualifying assets, including as a result of an increase in the value of any non-qualifying assets or decrease in the value of any qualifying assets, we would generally not be permitted to acquire any additional non-qualifying assets until such time as 70% of our then-current gross assets were comprised of qualifying assets. We would not be required, however, to dispose of any non-qualifying assets in such circumstances. Our investment philosophy is based on a disciplined approach of identifying promising investments in high-growth, venture-backed companies across several key industry themes which may include, among others, social/mobile, cloud computing and big data, internet commerce, financial technology, mobility, and enterprise software. Our investment decisions are based on a disciplined analysis of available information regarding each potential portfolio company’s business operations, focusing on the portfolio company’s growth potential, the quality of recurring revenues, and path to profitability, as well as an understanding of key market fundamentals. Venture capital funds or other institutional investors have invested in the vast majority of companies that we evaluate. 45 TABLE OF CONTENTS We seek to deploy capital primarily in the form of non-controlling equity and equity-related investments, including common stock, warrants, preferred stock and similar forms of senior equity, which may or may not be convertible into a portfolio company’s common equity, and convertible debt securities with a significant equity component. Typically, our preferred stock investments are non-income producing, have different voting rights than our common stock investments and are generally convertible into common stock at our discretion. As our investment strategy is primarily focused on equity positions, our investments generally do not produce current income and therefore we may be dependent on future capital raising to meet our operating needs if no other source of liquidity is available. We seek to create a low-turnover portfolio that includes investments in companies representing a broad range of investment themes. Our History We formed in 2010 as a Maryland corporation and operate as an internally managed, non-diversified closed-end management investment company. Our investment activities are supervised by our Board of Directors and managed by our executive officers and investments professionals, all of which are our employees. Our date of inception was January 6, 2011, which is the date we commenced development stage activities. We commenced operations as a BDC upon completion of our IPO in May 2011 and began our investment operations during the second quarter of 2011. On and effective June 22, 2020, we changed our name to “SuRo Capital Corp.” from “Sutter Rock Capital Corp.” On and effective March 12, 2019, our Board of Directors approved our internalization (the “Internalization”) and we began operating as an internally-managed non-diversified closed-end management investment company that has elected to be regulated as a BDC under the 1940 Act. Our Board of Directors approved the Internalization in order to better align the interests of our stockholders with its management. As an internally managed BDC, we are managed by our employees, rather than the employees of an external investment adviser, thereby allowing for greater transparency to stockholders through robust disclosure regarding our compensation structure. As a result of the Internalization, we no longer pay any fees or expenses under an investment advisory agreement or administration agreement, and instead pay the operating costs associated with employing investment management professionals including, without limitation, compensation expenses related to salaries, discretionary bonuses and restricted stock grants. Except as otherwise disclosed herein, this Form 10-Q discusses our business and operations as an internally-managed BDC during the period covered by this Form 10-Q. 46 TABLE OF CONTENTS Portfolio and Investment Activity Nine Months Ended September 30, 2023 The value of our investment portfolio will change over time due to changes in the fair value of our underlying investments, as well as changes in the composition of our portfolio resulting from purchases of new and follow-on investments and the sales of existing investments. The fair value, as of September 30, 2023, of all of our portfolio investments, excluding short-term U.S. Treasury bills, was $193,492,718. During the nine months ended September 30, 2023, we funded investments in an aggregate amount of $21,133,257 (not including capitalized transaction costs or investments in short-term U.S. Treasury bills) as shown in the following table: Portfolio Company Investment Transaction Date Gross Payments Orchard Technologies, Inc. (1) Preferred shares, Series 1 1/13/2023 $ 2,000,000 True Global Ventures 4 Plus Pte Ltd (2) Limited Partner Fund Investment 3/31/2023 1,330,000 PayJoy, Inc. Simple Agreement for Future Equity (SAFE) 5/25/2023 500,000 ServiceTitan, Inc. Common shares 6/30/2023 9,999,990 FourKites, Inc. Common shares Various 5,803,269 Shogun Enterprises, Inc. (d/b/a Hearth) (3) Preferred shares, Series B-4 7/12/2023 499,998 Stake Trade, Inc. (d/b/a Prophet Exchange) Simple Agreement for Future Equity (SAFE) 7/26/2023 1,000,000 Total $ 21,133,257 (1) On January 13, 2023, we invested $2.0 million in Orchard Technologies, Inc.’s Series 1 Senior Preferred financing round. As part of the transaction, we exchanged a portion of our existing Series D Preferred shares investment for Series 1 Senior Preferred shares, Series 2 Senior Preferred shares, and Common shares. Additionally, our previous investment in the Simple Agreement for Future Equity was converted into additional Series 1 Senior Preferred shares. (2) On March 31, 2023, the previously unfunded capital commitment of $1.3 million was deemed fully contributed in lieu of cash distributions. On March 31, 2023, the full $2.0 million capital commitment to True Global Ventures 4 Plus Fund LP had been called and funded. (3) On July 12, 2023, we invested $0.5 million in Shogun Enterprises, Inc. (d/b/a Hearth)’s Series B-4 Preferred financing round. As part of the transaction, the previous investment in the Convertible Note was converted into Series B-3 Preferred shares. Additionally, we received Common Warrants as part of the transaction. During the nine months ended September 30, 2023, we capitalized fees of $33,676. During the nine months ended September 30, 2023, we exited or received proceeds from investments in the amount of $9,658,163, net of transaction costs, and realized a net loss on investments of $14,542,137 (including adjustments to amounts held in escrow receivable) as shown in following table: Portfolio Company Transaction Date Quantity Average Net Share Price (1) Net Proceeds Realized Gain/(Loss) (2) Kahoot! ASA (3) Various 38,305 $ 1.97 $ 75,601 $ (100,466 ) NewLake Capital Partners, Inc. (f/k/a GreenAcreage Real Estate Corp.) (4) Various 123,938 18.50 2,293,102 (186,748 ) Nextdoor Holdings, Inc. (5) Various 1,539,996 3.06 4,715,375 (3,824,934 ) Rent the Runway, Inc. (6) 1/4/2023 79,191 3.05 241,456 (961,837 ) Residential Homes for Rent, LLC (d/b/a Second Avenue) (7) Various N/A N/A 750,000 — True Global Ventures 4 Plus Pte Ltd (8) Various N/A N/A 1,582,629 1,330,000 Ozy Media, Inc. (9) 5/4/2023 3,492,465 N/A — (10,945,024 ) Total $ 9,658,163 $ (14,689,009 ) (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) Realized gain/(loss) does not include adjustments to amounts held in escrow receivable. (3) As of March 8, 2023, we had sold our remaining Kahoot! ASA public common shares. (4) As of September 30, 2023, we held 105,820 remaining NewLake Capital Partners, Inc. public common shares. (5) As of September 30, 2023, we held 262,420 remaining Nextdoor Holdings, Inc. public common shares. (6) As of January 4, 2023, we had sold our remaining Rent the Runway, Inc. public common shares. (7) During the nine months ended September 30, 2023, approximately $0.9 million was received from Residential Homes for Rent, LLC (d/b/a Second Avenue) related to the 15% term loan due December 23, 2023. Of the proceeds received, approximately $0.8 million repaid a portion of the outstanding principal and the remaining was attributed to interest. (8) The previously unfunded capital commitment of $1.3 million was deemed fully contributed in lieu of cash distributions. (9) On May 4, 2023, we abandoned our investment in Ozy Media, Inc. 47 TABLE OF CONTENTS Nine Months Ended September 30, 2022 The value of our investment portfolio will change over time due to changes in the fair value of our underlying investments, as well as changes in the composition of our portfolio resulting from purchases of new and follow-on investments and the sales of existing investments. The fair value, as of September 30, 2022, of all of our portfolio investments, excluding short-term U.S. Treasury bills, was $157,747,892. During the nine months ended September 30, 2022, we funded investments in an aggregate amount of $13,415,076 (not including capitalized transaction costs) as shown in the following table: Portfolio Company Investment Transaction Date Gross Payments Shogun Enterprises, Inc. Convertible Note 0.5%, Due 4/18/2024 5/2/2022 $ 500,000 EDGE Markets, Inc. Preferred Shares, Series Seed 5/18/2022 500,000 Whoop, Inc. Preferred Shares, Series C 6/30/2022 10,000,000 Xgroup Holdings Limited (d/b/a Xpoint) Convertible Note 6%, Due 8/17/2023 8/17/2022 1,000,000 Orchard Technologies, Inc. Simple Agreement for Future Equity (SAFE) 9/2/2022 500,000 Forge Global, Inc. (1) Common Shares 9/30/2022 915,076 Total $ 13,415,076 (1) On and effective August 5, 2022, SuRo Capital Corp. notified Forge Global, Inc. of its intent to net exercise via cashless settlement its 230,144 common warrants in Forge Global, Inc. into 53,283 shares of Forge Global Inc.’s public common stock, pursuant to the net exercise formula in the warrant agreement. The exercise was effectuated on September 30, 2022. During the nine months ended September 30, 2022, we capitalized fees of $26,206. During the nine months ended September 30, 2022, we exited or received proceeds from investments in the amount of $7,776,744, net of transaction costs, and realized a net loss on investments of $4,011,047 (including adjustments to amounts held in escrow receivable) as shown in following table: Portfolio Company Transaction Date Quantity Average Net Share Price (1) Net Proceeds Realized Gain/(Loss) (2) NewLake Capital Partners, Inc. (f/k/a GreenAcreage Real Estate Corp.) (3) Various 46,338 $ 23.79 $ 1,102,346 $ 175,196 Rover Group, Inc. (4) Various 731,527 5.07 3,710,895 1,524,188 Rent the Runway, Inc. (5) Various 110,000 4.37 480,969 (1,190,461 ) Residential Homes for Rent, LLC (d/b/a Second Avenue) (6) Various N/A N/A 750,000 — True Global Ventures 4 Plus Pte Ltd (7) 5/31/2022 N/A N/A 874,470 160,965 Palantir Lending Trust SPV I (8) 7/14/2022 N/A N/A 611,930 610,790 Enjoy Technology, Inc. (9) Various 947,297 0.26 246,134 (5,280,642 ) Total $ 7,776,744 $ (3,999,964 ) (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) Realized gain/(loss) does not include adjustments to amounts held in escrow receivable. (3) As of September 30, 2022, we held 232,133 remaining NewLake Capital Partners, Inc. public common shares. (4) As of September 30, 2022, we held 106,854 remaining Rover Group, Inc. public common shares. (5) As of September 30, 2022, we held 229,191 remaining Rent the Runway, Inc. public common shares. (6) During the nine months ended September 30, 2022, approximately $0.9 million has been received from Residential Homes for Rent, LLC (d/b/a Second Avenue) related to the 15% term loan due December 23, 2023. Of the proceeds received, approximately $0.8 million repaid a portion of the outstanding principal and the remaining was attributed to interest. (7) On May 31, 2022, we received an $874,470 cash distribution from True Global Ventures 4 Plus Pte Ltd. we expect to receive three additional distributions from True Global Ventures 4 Plus of varying amounts. (8) On July 14, 2022, a final payment was received for the remaining 512,290 Class A common shares of Palantir Technologies, Inc. that comprised the beneficial equity interest in underlying shares. The realized gain from our investment in Palantir Lending Trust SPV I is generated by the proceeds from the sale of shares collateralizing the repaid promissory note to Palantir Lending Trust SPV I and attributable to the Equity Participation in Underlying Collateral. (9) As of August 12, 2022, we had sold all our public common shares of Enjoy Technology, Inc. During the nine months ended September 30, 2022, we did not write-off any investments and our OneValley, Inc. (f/k/a NestGSV, Inc.) Series B preferred warrants with a strike price of $2.31 expired on May 29, 2022. 48 TABLE OF CONTENTS Results of Operations Comparison of the Nine Months Ended September 30, 2023 and 2022 Operating results for the three and nine months ended September 30, 2023 and 2022 are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Total Investment Income $ 1,465,746 $ 519,511 $ 4,137,046 $ 1,993,242 Interest income 1,402,601 411,747 3,947,611 1,563,484 Dividend income 63,145 107,764 189,435 429,758 Total Operating Expenses $ 4,134,172 $ 4,328,744 $ 14,832,577 $ 13,838,068 Compensation expense 2,123,704 1,836,808 6,378,330 5,456,771 Directors’ fees 161,661 161,661 483,887 514,055 Professional fees 277,075 565,411 2,184,488 2,916,583 Interest expense 1,215,248 1,202,748 3,642,801 3,630,301 Income tax expense — 74,497 620,606 82,238 Other expenses 356,484 487,619 1,522,465 1,238,120 Net Investment Loss $ (2,668,426 ) $ (3,809,233 ) $ (10,695,531 ) $ (11,844,826 ) Net realized loss on investments (1,461,281 ) (5,141,097 ) (14,542,137 ) (4,011,047 ) Net change in unrealized appreciation/(depreciation) of investments 29,323,067 (36,951,920 ) 39,427,513 (103,929,610 ) Net Change in Net Assets Resulting from Operations $ 25,193,360 $ (45,902,250 ) $ 14,189,845 $ (119,785,483 ) Investment Income Investment income increased to $1,465,746 for the three months ended September 30, 2023 from $519,511 for the three months ended September 30, 2022. The net increase between periods was due to the addition of interest income from short-term U.S. Treasury bills and an increase in interest income from Architect Capital PayJoy SPV, LLC. The increase was offset by a decrease in interest income from Residential Homes for Rent, LLC (d/b/a Second Avenue), Xgroup Holdings Limited (d/b/a Xpoint), and Shogun Enterprises, Inc. (d/b/a Hearth), plus a decrease in dividend income from NewLake Capital Partners, Inc. (f/k/a GreenAcreage Real Estate Corp.) and a cessation in dividend income from Treehouse Real Estate Investment Trust, Inc. during the three months ended September 30, 2023, relative to the three months ended September 30, 2022. Investment income increased to $4,137,046 for the nine months ended September 30, 2023 from $1,993,242 for the nine months ended September 30, 2022. The net increase between periods was due to the addition of interest income from short-term U.S. Treasury Bills and Xgroup Holdings Limited (d/b/a Xpoint). The increase was offset by a decrease in interest income from Architect Capital PayJoy SPV, LLC, Residential Homes for Rent, LLC (d/b/a Second Avenue), plus a decrease in dividend income from NewLake Capital Partners, Inc. (f/k/a GreenAcreage Real Estate Corp.) and a cessation in dividend income from Treehouse Real Estate Investment Trust, Inc. during the nine months ended September 30, 2023, relative to the nine months ended September 30, 2022. Operating Expenses Total operating expenses decreased to $4,134,172 for the three months ended September 30, 2023 from $4,328,744 for the three months ended September 30, 2022. The decrease in operating expense was primarily due a decrease in professional fees and other expenses, offset by an increase in compensation expense associated with an increased headcount and stock-based compensation expense during the three months ended September 30, 2023, relative to the three months ended September 30, 2022. 49 TABLE OF CONTENTS Total operating expenses increased to $14,832,577 for the nine months ended September 30, 2023 from $13,838,068 for the nine months ended September 30, 2022. The increase in operating expense was primarily due to an increase in compensation expense associated with an increased headcount, stock-based compensation expense and income tax expense related to blocker corporations, offset by a decrease in professional fees during the nine months ended September 30, 2023, relative to the nine months ended September 30, 2022. Net Investment Loss For the three months ended September 30, 2023, we recognized a net investment loss of $2,668,426 , compared to a net investment loss of $3,809,233 for the three months ended September 30, 2022. The change between periods resulted from an increase in total investment income and a decrease in operating expenses during the three months ended September 30, 2023, relative to the three months ended September 30, 2022. For the nine months ended September 30, 2023, we recognized a net investment loss of $10,695,531 , compared to a net investment loss of $11,844,826 for the nine months ended September 30, 2022. The change between periods resulted from an increase in total investment income, offset by an increase in operating expenses during the nine months ended September 30, 2023, relative to the nine months ended September 30, 2022. Net Realized Loss on Investments For the three months ended September 30, 2023, we recognized a net realized loss on our investments of $1,461,281, compared to a net realized loss of $5,141,097 for the three months ended September 30, 2022. For the nine months ended September 30, 2023, we recognized a net realized loss on our investments of $14,542,137, compared to a net realized loss of $4,011,047 for the nine months ended September 30, 2022. The components of our net realized gains on portfolio investments for the nine months ended September 30, 2023 and 2022, excluding short-term U.S. Treasury bills and fluctuations in escrow receivables estimates, are reflected in the tables above, under “—Portfolio and Investment Activity.” Net Change in Unrealized Appreciation/(Depreciation) of Investments For the three months ended September 30, 2023 and 2022, we had a net change in unrealized appreciation/(depreciation) of $29,323,067 and $(36,951,920), respectively. The following tables summarize, by portfolio company, the significant changes in unrealized appreciation/(depreciation) of our investment portfolio for the three months ended September 30, 2023 and 2022. Portfolio Company Net Change in Unrealized Appreciation/(Depreciation) For the Three Months Ended September 30, 2023 Portfolio Company Net Change in Unrealized Appreciation/(Depreciation) For the Three Months Ended September 30, 2022 Learneo, Inc. (f/k/a Course Hero, Inc.) $ 32,856,880 Enjoy Technology, Inc. (1) $ 5,321,214 ServiceTitan, Inc. 1,948,436 NewLake Capital Partners, Inc. (f/k/a GreenAcreage Real Estate Corp.) (1) (1,137,566 ) Forge Global, Inc. (1,003,231 ) StormWind, LLC (1,513,211 ) Orchard Technologies, Inc. (1,286,496 ) Skillsoft Corp. (1,659,315 ) Aspiration Partners, Inc. (3,689,833 ) Whoop, Inc. (1,717,793 ) Course Hero, Inc. (2,819,949 ) Shogun Enterprises, Inc. (3,991,271 ) Varo Money, Inc. (4,090,467 ) Aspiration Partners, Inc. (4,626,914 ) Forge Global Holdings, Inc. (17,782,022 ) Other (2) 497,311 Other (2) (2,934,626 ) Total $ 29,323,067 Total $ (36,951,920 ) (1) The change in unrealized appreciation/(depreciation) reflected for these investments resulted in full or in part from the full or partial exit of the investment, which resulted in the reversal of previously accrued unrealized appreciation/(depreciation), as applicable. (2) “Other” represents investments for which individual changes in unrealized appreciation/(depreciation) was less than $1.0 million for the three months ended September 30, 2023 and 2022. 50 TABLE OF CONTENTS For the nine months ended September 30, 2023 and 2022, we had a net change in unrealized appreciation/(depreciation) of $39,427,513 and $(103,929,610), respectively. The following tables summarize, by portfolio company, the significant changes in unrealized appreciation/(depreciation) of our investment portfolio for the nine months ended September 30, 2023 and 2022. Portfolio Company Net Change in Unrealized Appreciation/(Depreciation) For the Nine Months Ended September 30, 2023 Portfolio Company Net Change in Unrealized Appreciation/(Depreciation) For the Nine Months Ended September 30, 2022 PSQ Holdings, Inc. (d/b/a PublicSq.) $ 15,395,054 True Global Ventures 4 Plus Fund Pte Ltd (1) $ 3,106,863 Learneo, Inc. (f/k/a Course Hero, Inc.) 14,861,095 Whoop, Inc. (1,724,978 ) Ozy Media, Inc. (1) 10,945,024 StormWind, LLC (2,108,140 ) Nextdoor Holdings, Inc. (1) 5,304,938 Blink Health, Inc. (3,561,393 ) Shogun Enterprises, Inc. (d/b/a Hearth) 4,187,278 NewLake Capital Partners, Inc. (f/k/a GreenAcreage Real Estate Corp.) (1) (3,925,585 ) ServiceTitan, Inc. 1,940,351 Neutron Holdings, Inc. (d/b/a/ Lime) (3,991,353 ) Varo Money, Inc. 1,689,042 Shogun Enterprises, Inc. (4,022,725 ) Whoop, Inc. (2,389,579 ) Aspiration Partners, Inc. (4,284,109 ) Trax, Ltd. (2,927,814 ) Rover Group, Inc. (1) (5,221,903 ) Orchard Technologies, Inc. (4,775,546 ) Varo Money, Inc. (7,085,189 ) Aspiration Partners, Inc. (6,541,511 ) Trax Ltd. (7,139,557 ) Skillsoft Corp. (7,187,091 ) Nextdoor Holdings, Inc. (7,410,781 ) Forge Global Holdings, Inc. (17,541,727 ) Course Hero, Inc. (31,124,041 ) Other (2) 1,739,181 Other (2) (707,901 ) Total $ 39,427,513 Total $ (103,929,610 ) (1) The change in unrealized appreciation/(depreciation) reflected for these investments resulted in full or in part from the full or partial exit of the investment, which resulted in the reversal of previously accrued unrealized appreciation/(depreciation), as applicable. (2) “Other” represents investments for which individual changes in unrealized appreciation/(depreciation) was less than $1.0 million for the nine months ended September 30, 2023 and 2022. Recent Developments Portfolio Activity Please refer to “Note 12—Subsequent Events” to our condensed consolidated financial statements as of September 30, 2023 for details regarding activity in our investment portfolio from October 1, 2023 through November 8, 2023. We are frequently in negotiations with various private companies with respect to investments in such companies. Investments in private companies are generally subject to satisfaction of applicable closing conditions. In the case of secondary market transactions, such closing conditions may include approval of the issuer, waiver or failure to exercise rights of first refusal by the issuer and/or its stockholders and termination rights by the seller or us. Equity investments made through the secondary market may involve making deposits in escrow accounts until the applicable closing conditions are satisfied, at which time the escrow accounts will close and such equity investments will be effectuated. 51 TABLE OF CONTENTS Liquidity and Capital Resources Our liquidity and capital resources are generated primarily from the sales of our investments and the net proceeds from public offerings of our equity and debt securities, including pursuant to our continuous at-the-market offering of shares of our common stock as discussed below under “At-the-Market Offering”. In addition, on December 17, 2021, we issued $75.0 million aggregate principal amount of 6.00% Notes due 2026, all of which remain outstanding. For additional information, see below and “Note 10—Debt Capital Activities” to our condensed consolidated financial statements as of September 30, 2023. Our primary uses of cash are to make investments, pay our operating expenses, and make distributions to our stockholders. For the nine months ended September 30, 2023 and 2022, our operating expenses were $14,832,577 and $13,838,068, respectively. Cash Reserves and Liquid Securities September 30, 2023 December 31, 2022 Cash $ 73,503,279 $ 40,117,598 Cash Equivalents: U.S. Treasury bills (1) 20,265,064 85,056,817 Securities of publicly traded portfolio companies: Unrestricted securities (2) 11,637,102 13,298,992 Subject to other sales restrictions (3) 14,353,896 24,493 Securities of publicly traded portfolio companies 25,990,998 13,323,485 Total Cash Reserves and Liquid Securities $ 119,759,341 $ 138,497,900 (1) Consists of short-term U.S. Treasury bills. (2) “Unrestricted securities” represents common stock and warrants of our publicly traded portfolio companies that are not subject to any restrictions upon sale. We may incur losses. (3) Securities of publicly traded portfolio companies “subject to other sales restrictions” represents common stock of our publicly traded companies that are subject to certain lock-up restrictions. During the nine months ended September 30, 2023, cash increased to $73,503,279 from $40,117,598 at the beginning of the year. The increase in cash was primarily due to the exit of short-term U.S. Treasury bills and other portfolio investment exits, and investment income received. These increases were offset by the repurchase of our common stock pursuant to a modified “Dutch Auction” tender offer (the “Modified Dutch Auction Tender Offer”) and Share Repurchase Program, purchase of new and follow-on investments, interest on the 6.00% Notes due 2026, and to pay our operating expenses. For additional information relating to the Modified Dutch Auction Tender Offer or Share Repurchase Program, see “Modified Dutch Auction Tender Offer” below and “Note 5 - Common Stock” to our condensed consolidated financial statements as of September 30, 2023. Currently, we believe we have ample liquidity to support our near-term capital requirements. Consistent with past and current practices, we will continue to evaluate our overall liquidity position and take proactive steps to maintain the appropriate liquidity position based upon the current circumstances. 52 TABLE OF CONTENTS Contractual Obligations A summary of our significant contractual payment obligations as of September 30, 2023 is as follows: Payments Due By Period (in millions) Total Less than 1 year 1–3 years 3–5 years More than 5 years 6.00% Notes due December 30, 2026 (1) $ 75.0 $ — $ — $ 75.0 $ — Operating lease liability 0.2 0.2 — — — Total $ 75.2 $ 0.2 $ — $ 75.0 $ — (1) Reflects the principal balance payable to investors for the 6.00% Notes due 2026 as of September 30, 2023. Refer to “Note 10—Debt Capital Activities” in our condensed consolidated financial statements as of September 30, 2023 for more information. Share Repurchase Program During the three and nine months ended September 30, 2023, we repurchased 186,493 shares of our common stock under the Share Repurchase Program. During the three and nine months ended September 30, 2022, we repurchased 0 and 1,008,676 shares, respectively, of our common stock under the Share Repurchase Program. As of September 30, 2023, the dollar value of shares that remained available to be purchased under the Share Repurchase Program was approximately $20.7 million. On August 7, 2023, our Board of Directors authorized an extension of, and an increase in the amount of shares of our common stock that may be repurchased under, the discretionary Share Repurchase Program until the earlier of (i) October 31, 2024 or (ii) the repurchase of $60.0 million in aggregate amount of our common stock. Under the Share Repurchase Program, we may repurchase our outstanding common stock in the open market provided that we comply with the prohibitions under our insider trading policies and procedures and the applicable provisions of the 1940 Act and the Exchange Act and the rules promulgated thereunder. For more information on the Share Repurchase Program, see “Note 5—Common Stock” to our condensed consolidated financial statements as of September 30, 2023. Modified Dutch Auction Tender Offer On March 17, 2023, we commenced the Modified Dutch Auction Tender Offer to purchase up to 3,000,000 shares of our common stock from our stockholders, which expired on April 17, 2023. In accordance with the terms of the Modified Dutch Auction Tender Offer, we selected the lowest price per share of not less than $3.00 per share and not greater than $4.50 per share. Pursuant to the Modified Dutch Auction Tender Offer, we repurchased 3,000,000 shares, representing 10.6% of our outstanding shares, on or about April 21, 2023 at a price of $4.50 per share. We used available cash to fund the purchase of our shares of common stock in the Modified Dutch Auction Tender Offer and to pay for all related fees and expenses. Off-Balance Sheet Arrangements As of September 30, 2023 and December 31, 2022, we had no off-balance sheet arrangements, including any risk management of commodity pricing or other hedging practices. However, we may employ hedging and other risk management techniques in the future. Equity Issuances & Debt Capital Activities At-the-Market Offering On July 29, 2020, we entered into an At-the-Market Sales Agreement, dated July 29, 2020 (the “Initial Sales Agreement”), with BTIG, LLC, JMP Securities LLC, and Ladenburg Thalmann & Co., Inc. (collectively, the “Agents”). Under the Initial Sales Agreement, we may, but have no obligation to, issue and sell up to $50.0 million in aggregate amount of shares of our common stock (the “Shares”) from time to time through the Agents or to them as principal for their own account (the “ATM Program”). On September 23, 2020, we increased the maximum amount of Shares to be sold through the ATM Program to $150.0 million from $50.0 million. In connection with the upsize of the ATM Program to $150.0 million, we entered into the Amendment No. 1 to the At-the-Market Sales Agreement, dated September 23, 2020, with the Agents. We intend to use the net proceeds from the ATM Program to make investments in portfolio companies in accordance with our investment objective and strategy and for general corporate purposes. During the three and nine months ended September 30, 2023, we did not issue or sell shares under the ATM program. During the three and nine months ended September 30, 2022, we issued and sold 0 and 17,807 shares, respectively, under the ATM Program at weighted-average price of $13.01 per share, for gross proceeds of $231,677 and net proceeds of $229,896, after deducting commissions to the Agents on Shares sold. As of September 30, 2023, up to approximately $98.8 million in aggregate amount of the Shares remain available for sale under the ATM Program. Refer to “Note 5—Common Stock” to our condensed consolidated financial statements as of September 30, 2023 for more information regarding the ATM Program. 6.00% Notes due 2026 On December 17, 2021, we issued $70.0 million aggregate principal amount of 6.00% Notes due 2026, which bear interest at a fixed rate of 6.00% per year, payable quarterly in arrears on March 31, June 30, September 30, and December 30 of each year, commencing on March 30, 2022. On December 21, 2021, we issued an additional $5.0 million aggregate principal amount of 6.00% Notes due 2026. We received approximately $73.0 million in proceeds from the offering, net of underwriting discounts and commissions and other offering expenses. The 6.00% Notes due 2026 have a maturity date of December 30, 2026, unless previously repurchased or redeemed in accordance with their terms. We have the right to redeem the 6.00% Notes due 2026, in whole or in part, at any time or from time to time, on or after December 30, 2024 at a redemption price of 100% of the aggregate principal amount thereof plus accrued and unpaid interest. Refer to “Note 10—Debt Capital Activities” to our condensed consolidated financial statements as of September 30, 2023 for more information regarding the 6.00% Notes due 2026. 53 TABLE OF CONTENTS Distributions The timing and amount of our distributions, if any, will be determined by our Board of Directors and will be declared out of assets legally available for distribution. The following table lists the distributions, including dividends and returns of capital, if any, per share that we have declared since our formation through September 30, 2023. The table is divided by fiscal year according to record date: Date Declared Record Date Payment Date Amount per Share Fiscal 2015: November 4, 2015 (1) November 16, 2015 December 31, 2015 $ 2.76 Fiscal 2016: August 3, 2016 (2) August 16, 2016 August 24, 2016 0.04 Fiscal 2019: November 5, 2019 (3) December 2, 2019 December 12, 2019 0.20 December 20, 2019 (4) December 31, 2019 January 15, 2020 0.12 Fiscal 2020: July 29, 2020 (5) August 11, 2020 August 25, 2020 0.15 September 28, 2020 (6) October 5, 2020 October 20, 2020 0.25 October 28, 2020 (7) November 10, 2020 November 30, 2020 0.25 December 16, 2020 (8) December 30, 2020 January 15, 2021 0.22 Fiscal 2021: January 26, 2021 (9) February 5, 2021 February 19, 2021 0.25 March 8, 2021 (10) March 30, 2021 April 15, 2021 0.25 May 4, 2021 (11) May 18, 2021 June 30, 2021 2.50 August 3, 2021 (12) August 18, 2021 September 30, 2021 2.25 November 2, 2021 (13) November 17, 2021 December 30, 2021 2.00 December 20, 2021 (14) December 31, 2021 January 14, 2022 0.75 Fiscal 2022: March 8, 2022 (15) March 25, 2022 April 15, 2022 0.11 Total $ 12.10 (1) The distribution was paid in cash or shares of our common stock at the election of stockholders, although the total amount of cash distributed to all stockholders was limited to approximately 50% of the total distribution to be paid to all stockholders. As a result of stockholder elections, the distribution consisted of 2,860,903 shares of common stock issued in lieu of cash, or approximately 14.8% of our outstanding shares prior to the distribution, as well as cash of $26,358,885. The number of shares of common stock comprising the stock portion was calculated based on a price of $9.425 per share, which equaled the average of the volume weighted-average trading price per share of our common stock on December 28, 29 and 30, 2015. None of the $2.76 per share distribution represented a return of capital. (2) Of the total distribution of $887,240 on August 24, 2016, $820,753 represented a distribution from realized gains, and $66,487 represented a return of capital. (3) All of the $3,512,849 distribution paid on December 12, 2019 represented a distribution from realized gains. None of the distribution represented a return of capital. (4) All of the $2,107,709 distribution paid on January 15, 2020 represented a distribution from realized gains. None of the distribution represented a return of capital. (5) All of the $2,516,452 distribution paid on August 25, 2020 represented a distribution from realized gains. None of the distribution represented a return of capital. (6) All of the $5,071,326 distribution paid on October 20, 2020 represented a distribution from realized gains. None of the distribution represented a return of capital. (7) All of the $4,978,504 distribution paid on November 30, 2020 represented a distribution from realized gains. None of the distribution represented a return of capital. (8) All of the $4,381,084 distribution paid on January 15, 2021 represented a distribution from realized gains. None of the distribution represented a return of capital. (9) All of the $4,981,131 distribution paid on February 19, 2021 represented a distribution from realized gains. None of the distribution represented a return of capital. (10) All of the $6,051,304 distribution paid on April 15, 2021 represented a distribution from realized gains. None of the distribution represented a return of capital. 54 TABLE OF CONTENTS (11) The distribution was paid in cash or shares of our common stock at the election of stockholders, although the total amount of cash distributed to all stockholders was limited to approximately 50% of the total distribution to be paid to all stockholders. As a result of stockholder elections, the distribution consisted of 2,335,527 shares of common stock issued in lieu of cash, or approximately 9.6% of our outstanding shares prior to the distribution, as well as cash of $29,987,589. The number of shares of common stock comprising the stock portion was calculated based on a price of $13.07 per share, which equaled the average of the volume weighted-average trading price per share of our common stock on May 12, 13, and 14, 2021. None of the $2.50 per share distribution represented a return of capital. (12) The distribution was paid in cash or shares of our common stock at the election of stockholders, although the total amount of cash distributed to all stockholders was limited to approximately 50% of the total distribution to be paid to all stockholders. As a result of stockholder elections, the distribution consisted of 2,225,193 shares of common stock issued in lieu of cash, or approximately 8.4% of our outstanding shares prior to the distribution, as well as cash of $29,599,164. The number of shares of common stock comprising the stock portion was calculated based on a price of $13.55 per share, which equaled the average of the volume weighted-average trading price per share of our common stock on August 11, 12, and 13, 2021. None of the $2.25 per share distribution represented a return of capital. (13) The distribution was paid in cash or shares of our common stock at the election of stockholders, although the total amount of cash distributed to all stockholders was limited to approximately 50% of the total distribution to be paid to all stockholders. As a result of stockholder elections, the distribution consisted of 2,170,807 shares of common stock issued in lieu of cash, or approximately 7.5% of our outstanding shares prior to the distribution, as well as cash of $28,494,812. The number of shares of common stock comprising the stock portion was calculated based on a price of $13.39 per share, which equaled the average of the volume weighted-average trading price per share of our common stock on November 11, 12, and 13, 2021. None of the $2.00 per share distribution represented a return of capital. (14) All of the $23,338,915 distribution paid on January 14, 2022 represented a distribution from realized gains. None of the distribution represented a return of capital. (15) All of the $3,441,824 distribution paid on April 15, 2022 represented a distribution from realized gains. None of the distribution represented a return of capital. We intend to focus on making equity-based investments from which we will derive primarily capital gains. As a consequence, we do not anticipate that we will pay distributions on a quarterly basis or become a predictable distributor of distributions, and we expect that our distributions, if any, will be much less consistent than the distributions of other BDCs that primarily make debt investments. If there are earnings or realized capital gains to be distributed, we intend to declare and pay a distribution at least annually. The amount of realized capital gains available for distribution to stockholders will be impacted by our tax status. Our current intention is to make any future distributions out of assets legally available therefrom in the form of additional shares of our common stock under our dividend reinvestment plan, except in the case of stockholders who elect to receive dividends and/or long-term capital gains distributions in cash. Under the dividend reinvestment plan, if a stockholder owns shares of common stock registered in its own name, the stockholder will have all cash distributions (net of any applicable withholding) automatically reinvested in additional shares of common stock unless the stockholder opts out of our dividend reinvestment plan by delivering a written notice to our dividend paying agent prior to the record date of the next dividend or distribution. Any distributions reinvested under the plan will nevertheless be treated as received by the U.S. stockholder for U.S. federal income tax purposes, although no cash distribution has been made. As a result, if a stockholder does not elect to opt out of the dividend reinvestment plan, it will be required to pay applicable federal, state and local taxes on any reinvested dividends even though such stockholder will not receive a corresponding cash distribution. Stockholders that hold shares in the name of a broker or financial intermediary should contact the broker or financial intermediary regarding any election to receive distributions in cash. So long as we qualify and maintain our tax treatment as a RIC, we generally will not be subject to U.S. federal and state income taxes on any ordinary income or capital gains that we distribute at least annually to our stockholders as dividends. Rather, any tax liability related to income earned by the RIC will represent obligations of our investors and will not be reflected in our consolidated financial statements. See “Note 2—Significant Accounting Policies— U.S. Federal and State Income Taxes ” and “Note 9—Income Taxes” to our condensed consolidated financial statements as of September 30, 2023 for more information. The Taxable Subsidiaries included in our condensed consolidated financial statements are taxable subsidiaries, regardless of whether we are taxed as a RIC. These taxable subsidiaries are not consolidated for income tax purposes and may generate income tax expenses as a result of their ownership of the portfolio companies. Such income tax expenses and deferred taxes, if any, will be reflected in our condensed consolidated financial statements. 55 TABLE OF CONTENTS Critical Accounting Policies Critical accounting policies and practices are the policies that are both most important to the portrayal of our financial condition and results, and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. These include estimates of the fair value of our Level 3 investments and other estimates that affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements and the reported amounts of certain revenues and expenses during the reporting period. It is likely that changes in these estimates will occur in the near term. Our estimates are inherently subjective in nature and actual results could differ materially from such estimates. See “Note 2—Significant Accounting Policies” to our condensed consolidated financial statements as of September 30, 2023 for further detail regarding our critical accounting policies and recently issued or adopted accounting pronouncements. Related-Party Transactions See “Note 3—Related-Party Arrangements” to our condensed consolidated financial statements as of September 30, 2023 for more information. Item 3. Quantitative and Qualitative Disclosures about Market Risk Market Risk Our equity investments are primarily in growth companies that in many cases have short operating histories and are generally illiquid. In addition to the risk that these companies may fail to achieve their objectives, the price we may receive for these companies in private transactions may be significantly impacted by periods of disruption and instability in the capital markets. While these periods of disruption generally have little actual impact on the operating results of our equity investments, these events may significantly impact the prices that market participants will pay for our equity investments in private transactions. This may have a significant impact on the valuation of our equity investments. Valuation Risk Our investments may not have a readily available market quotation, as such term is defined in Rule 2a-5, and we value these investments at fair value as determined in good faith by our Board of Directors in accordance with our valuation policy, as applicable. There is no single standard for determining fair value in good faith. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and it is possible that the difference could be material. In addition, if we were required to liquidate a portfolio investment in a forced or liquidation sale, we may realize amounts that are different from the amounts presented and such differences could be material. Interest Rate Risk We are subject to financial market risks, which could include, to the extent we utilize leverage with variable rate structures, changes in interest rates. As we invest primarily in equity rather than debt instruments, we would not expect fluctuations in interest rates to directly impact the return on our portfolio investments, although any significant change in market interest rates could potentially have an adverse effect on the business, financial condition and results of operations of the portfolio companies in which we invest. As of September 30, 2023, all of our debt investments and outstanding borrowings bore fixed rates of interest. Item 4. Controls and Procedures Evaluation of Disclosure Controls and Procedures As of September 30, 2023, our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective and provided reasonable assurance that information required to be disclosed in our periodic SEC filings is recorded, processed, summarized and reported within the time periods specified by the SEC and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. However, in evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of such possible controls and procedures. Changes in Internal Control Over Financial Reporting There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 56 TABLE OF CONTENTS PART II Item 1. Legal Proceedings We are not currently subject to any material legal proceedings, nor, to our knowledge, are any material legal proceedings threatened against us. From time to time, we may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. Furthermore, third parties may seek to impose liability on us in connection with the activities of our portfolio companies. Our business is also subject to extensive regulation, which may result in regulatory proceedings against us. While the outcome of any future legal or regulatory proceedings cannot be predicted with certainty, we do not expect that any such future proceedings will have a material effect upon our financial condition or results of operations. Item 1A. Risk Factors Investing in our securities involves a number of significant risks. In addition to the other information contained in this report, you should carefully consider the factors discussed in our annual report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 16, 2023, and the factors discussed in our quarterly report on Form 10-Q for the quarter ended March 31, 2023, filed with the SEC on May 10, 2023, which could materially affect our business, financial condition and/or operating results. Although the risks described in our annual report on Form 10-K for the fiscal year ended December 31, 2022 and our quarterly report on Form 10-Q for the quarter ended March 31, 2023 represent the principal risks associated with an investment in us, they are not the only risks we face. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, might materially and adversely affect our business, financial condition and/or operating results. There have been no material changes to the risk factors discussed in “Item 1A. Risk Factors” of Part I of our annual report on Form 10-K for the fiscal year ended December 31, 2022, or the risk factors discussed in “Item 1A. Risk Factors” or Part II of our quarterly report on Form 10-Q for the quarter ended March 31, 2023. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Sales of Unregistered Equity Securities We did not sell any equity securities during the period covered in this report that were not registered under the Securities Act of 1933, as amended. Issuer Purchases of Equity Securities (1) Information relating to our purchases of our common stock during the nine months ended September 30, 2023 is as follows: Period Total Number of Shares Purchased (2) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Share Repurchase Program January 1 through January 31, 2023 — $ — — $ 16,364,771 February 1 through February 28, 2023 — — — 16,364,771 March 1 through March 31, 2023 — — — 16,364,771 April 1 through April 30, 2023 3,000,000 4.50 3,000,000 16,364,771 May 1 through May 31, 2023 — — — 16,364,771 June 1 through June 30, 2023 — — — 16,364,771 July 1 through July 31, 2023 — — — 16,364,771 August 1 through August 31, 2023 69,990 3.62 69,990 21,111,429 September 1 through September 30, 2023 116,503 3.65 116,503 20,686,087 Total 3,186,493 3,186,493 On March 17, 2023, we commenced the Modified Dutch Auction Tender Offer to purchase up to 3,000,000 shares of our common stock from our stockholders, which expired on April 17, 2023. In accordance with the terms of the Modified Dutch Auction Tender Offer, we selected the lowest price per share of not less than $3.00 per share and not greater than $4.50 per share. Pursuant to the Modified Dutch Auction Tender Offer, we repurchased 3,000,000 shares, representing 10.6% of our outstanding shares, on or about April 21, 2023 at a price of $4.50 per share. We used available cash to fund the purchase of our shares of common stock in the Modified Dutch Auction Tender Offer and to pay for all related fees and expenses. (1) On August 8, 2017, we announced the $5.0 million discretionary open-market Share Repurchase Program under which our Board of Directors authorized the repurchase of shares of our common stock in the open market until the earlier of (i) August 6, 2018 or (ii) the repurchase of $5.0 million in aggregate amount of our common stock. On November 7, 2017, our Board of Directors authorized an extension of, and an increase in the amount of shares of our common stock that may be repurchased under, the discretionary Share Repurchase Program until the earlier of (i) November 6, 2018 or (ii) the repurchase of $10.0 million in aggregate amount of our common stock. On May 3, 2018, our Board of Directors authorized an additional $5.0 million increase in the amount of shares of our common stock that may be repurchased under the discretionary Share Repurchase Program until the earlier of (i) November 6, 2018 or (ii) the repurchase of $15.0 million in aggregate amount of our common stock. On November 1, 2018, our Board of Directors authorized a $5.0 million increase in the amount of shares of our common stock that may be repurchased under the discretionary Share Repurchase Program until the earlier of (i) October 31, 2019 or (ii) the repurchase of $20.0 million in aggregate amount of our common stock. On August 5, 2019, our Board of Directors authorized a $5.0 million increase in the amount of shares of our common stock that may be repurchased under the discretionary Share Repurchase Program until the earlier of (i) August 4, 2020 or (ii) the repurchase of $25.0 million in aggregate amount of our common stock. On March 9, 2020, our Board of Directors authorized a $5.0 million increase in the amount of shares of our common stock that may be repurchased under the discretionary Share Repurchase Program until the earlier of (i) March 8, 2021 or (ii) the repurchase of $30.0 million in aggregate amount of our common stock. On October 28, 2020, our Board of Directors authorized a $10.0 million increase in the amount of shares of our common stock that may be repurchased under the discretionary Share Repurchase Program until the earlier of (i) October 31, 2021 or (ii) the repurchase of $40.0 million in aggregate amount of our common stock. On October 27, 2021, our Board of Directors approved an extension of the Share Repurchase Program until the earlier of (i) October 31, 2022 or (ii) the repurchase of $40.0 million in aggregate amount of our common stock. On March 13, 2022, our Board of Directors authorized a $15.0 million increase in the amount of shares of our common stock that may be repurchased under the discretionary Share Repurchase Program until the earlier of (i) October 31, 2022 or (ii) the repurchase of $55.0 million in aggregate amount of our common stock. On October 19, 2022, our Board of Directors approved an extension of the Share Repurchase Program until the earlier of (i) October 31, 2023 or (ii) the repurchase of $55.0 million in aggregate amount of our common stock. On August 7, 2023, our Board of Directors approved an extension of the Share Repurchase Program under the earlier of (i) October 31, 2024 or (ii) the repurchase of $60.0 million in aggregate amount of our common stock. The timing and number of shares to be repurchased will depend on a number of factors, including market conditions and alternative investment opportunities. The Share Repurchase Program may be suspended, terminated or modified at any time for any reason and does not obligate us to acquire any specific number of shares of our common stock. During the three and nine months ended September 30, 2023, we repurchased 186,493 shares of common stock under the Share Repurchase Program. As of September 30, 2023, the dollar value of shares that remained available to be purchased under the Share Repurchase Program was approximately $20.7 million. (2) Includes purchases of our common stock made on the open market by or on behalf of any “affiliated purchaser,” as defined in Exchange Act Rule 10b-18(a)(3), of the Company. 57 TABLE OF CONTENTS Item 3. Defaults Upon Senior Securities None. Item 4. Mine Safety Disclosures Not applicable. Item 5. Other Information For the period covered by this Quarterly Report on Form 10-Q, no director or officer of the Company has entered into any (i) contract, instruction or written plan for the purchase or sale of securities of the registrant intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act or (ii) any no n-Rule 10b5-1 trading arrangement . The Company has adopted insider trading policies and procedures governing the purchase, sale, and disposition of the Company’s securities by officers and directors of the Company that are reasonably designed to promote compliance with insider trading laws, rules and regulations. Item 6. Exhibits The following exhibits are filed as part of this report or hereby incorporated by reference to exhibits previously filed with the SEC: 3.1 Articles of Amendment and Restatement (1) 3.2 Articles of Amendment (2) 3.3 Articles of Amendment (3) 3.4 Articles of Amendment (4) 3.5 Second Amended and Restated Bylaws (4) 4.1 Base Indenture, dated March 28, 2018, by and between the Registrant and U.S. Bank National Association, as trustee (5) 4.2 Second Supplemental Indenture, dated December 17, 2021, relating to the 6.00% Notes due 2026, by and between the Company and U.S. Bank National Association, as trustee (6) 4.3 Form of 6.00% Notes due 2026 (incorporated by reference to Exhibit 4.2) (6) 4.4 Description of Securities (7) 31.1 Certification of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended* 31.2 Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended* 32.1 Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* 32.2 Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* (1) Previously filed in connection with Pre-Effective Amendment No. 2 to the Registrant’s Registration Statement on Form N-2 (File No. 333-171578), filed on March 30, 2011, and incorporated by reference herein. (2) Previously filed in connection with the Registrant’s Current Report on Form 8-K (File No. 814-00852), filed on June 1, 2011, and incorporated by reference herein. (3) Previously filed in connection with the Registrant’s Current Report on Form 8-K (File No. 814-00852) filed on August 1, 2019, and incorporated by reference herein. (4) Previously filed in connection with the Registrant’s Current Report on Form 8-K (File No. 814-00852) filed on June 16, 2020, and incorporated by reference herein. (5) Previously filed in connection with the Registrant’s Registration Statement on Form N-2 (File No. 333-239681), filed on July 2, 2020, and incorporated by reference herein. (6) Previously filed in connection with the Registrant’s Current Report on Form 8-K (File No. 814-00852) filed on December 17, 2021, and incorporated by reference herein. (7) Previously filed in connection with the Registrant’s Annual Report on Form 10-K (File No. 814-00852) filed on March 11, 2022, and incorporated by reference herein. * Filed herewith. 58 TABLE OF CONTENTS SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SURO CAPITAL CORP. Date: November 9, 2023 By: /s/ Mark D. Klein Mark D. Klein Chairman, President and Chief Executive Officer (Principal Executive Officer) Date: November 9, 2023 By: /s/ Allison Green Allison Green Chief Financial Officer, Chief Compliance Officer, Treasurer, and Corporate Secretary (Principal Financial and Accounting Officer) 59