What changed in this filing

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Item 1. Business

2024-03-14 compared with 2023-03-16 · 115 added, 117 removed, 737 unchanged (24% of the section changed)

Capital Corp.

(“we”, “us”, “our”, “Company” or “SuRo Capital”), formerly

known as Sutter Rock Capital Corp.

(“we”, “us”, “our”, the “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

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 initial public offering (“IPO”) in May

2011 and began our investment operations during the second quarter of 2011.

See “Management’s Dicussion and Analysis of Financial

Condition and Results of Operations” in Part II, Item 7 of this Form 10-K.

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 (“Board of Directors”)

approved internalizing our operating structure (“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 the Company’s stockholders with its management.

As an internally managed

BDC, the Company is managed by its employees, rather than the employees of an external investment adviser, thereby allowing for greater

transparency to stockholders through robust disclosure regarding the Company’s compensation structure.

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.

and formed in September 2010 as a Maryland corporation, is an

internally managed, non-diversified closed-end management investment company.

We have elected to be regulated as a business

development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”), and have

elected to be treated, and intend to qualify annually, as a regulated investment company (“RIC”) under Subchapter M of

the Internal Revenue Code of 1986, as amended (the “Code”).

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 initial public offering (“IPO”) in May 2011 and began our investment operations during the second

quarter of 2011.

See “Management’s Dicussion and Analysis of Financial Condition and Results of Operations” in Part

II, Item 7 of this Form 10-K.

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 (“Board of Directors”) approved internalizing our operating

structure (“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 our 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.

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

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

investment philosophy is based on a disciplined approach of identifying promising investments in high-growth, venture-backed companies

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a BDC, we are subject to certain regulatory requirements.

See “—Regulation as a Business Development Company.” Also,

See “—Regulation as a BDC.” Also,

while we are permitted to finance investments using debt, our ability to use debt is limited in certain significant aspects.

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related to leverage.

The Company currently does not intend to seek stockholder approval or Board of Directors approval to increase its leverage

capacity as set forth above.

See “Risk Factors” in Part I, Item 1A for more information.

We currently do not intend to seek stockholder approval or approval from our Board of Directors to

increase our leverage capacity as set forth above.

See “Risk Factors” in Part I, Item 1A of this Form 10-K for more

have elected to be treated as a RIC under Subchapter M of the Code and expect to continue to operate in a manner so as to qualify for

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Accounting Policies—U.S.

Federal and State Income Taxes” and “Note 9—Income Taxes” to our consolidated

financial statements for the year ended December 31, 2022 for more information.

Federal and State Income Taxes” and “Note 9—Income Taxes” to our Consolidated Financial Statements for the year ended December 31, 2023 for more information.

Capital Resources

of December 31, 2022, we had ten employees, each of whom was directly employed by us.

of December 31, 2023, we had eleven employees, each of whom was directly employed by us.

These employees include our executive officers,

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be adversely affected.

See “Item 1A.

Risk Factors.”

See “Risk Factors” in Part I, Item 1A of this Form 10-K.

strive to attract, develop and retain our employees by offering unique employment opportunities, advancement and promotion opportunities,

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in order to evaluate a wide range of investment opportunities in companies that demonstrate strong operating fundamentals.

We are targeting

businesses that have been shown to provide scaled valuation growth before a potential IPO or strategic exit.

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pipeline, and we review and update these companies on a regular basis.

due diligence process will vary depending on whether we are investing through a private secondary transaction on a marketplace or with

due diligence process will vary depending on whether we are investing through a private secondary transaction with

a selling stockholder or by direct equity investment.

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of companies within our target segments.

enter into purchase agreements for substantially all of our private company portfolio investments.

enter into purchase agreements for all of our private company portfolio investments.

Private company securities are typically

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of Net Asset Value

determine the net asset value of our investment portfolio after the conclusion of each fiscal quarter in connection with the preparation

of our annual and quarterly reports filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or

more frequently if required under the 1940 Act.

determine the net asset value (“NAV”) of our investment portfolio after the conclusion of each fiscal quarter in

connection with the preparation of our annual and quarterly reports filed under the Securities Exchange Act of 1934, as amended (the

“Exchange Act”), or more frequently if required under the 1940 Act.

that are publicly traded are generally valued at the close price on the valuation date;

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recorded in the Consolidated Statement of Operations as the net change in unrealized appreciation or depreciation.

generally determine the fair value of our investments by considering a number of factors.

Our Board of Directors

generally determines the fair value of our investments by considering a number of factors.

The following represent factors that, among

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in good faith by our Board of Directors, with the assistance of our Valuation Committee.

Furthermore, when calculating net asset value,

Furthermore, when calculating NAV,

we also consider our recognition of a deferred tax liability for unrealized gains on investments for those investments held in our taxable

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31, 2023 for a list of our taxable subsidiaries.

as a Business Development Company

BDC is regulated by the 1940 Act.

A BDC must be organized in the United States for the purpose of investing in, or lending to, primarily

private companies and making significant managerial assistance available to them.

A BDC may use capital provided by public stockholders

and from other sources to make long-term, private investments in businesses.

A BDC provides stockholders the ability to retain the liquidity

of a publicly traded stock while sharing in the possible benefits, if any, of investing in primarily privately owned companies.

A BDC must be organized in the United States for the purpose of investing in, or lending to,

primarily private companies and making significant managerial assistance available to them.

A BDC may use capital provided by public

stockholders and from other sources to make long-term, private investments in businesses.

A BDC provides stockholders the ability to

retain the liquidity of a publicly traded stock while sharing in the possible benefits, if any, of investing primarily in privately

owned companies.

may not change the nature of our business so as to cease to be, or withdraw our election as, a BDC unless authorized by vote of a majority

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our affiliates without the prior approval of our directors who are not interested persons and, in some cases, prior approval by the SEC.

The SBCAA modified the asset coverage percentage for BDCs, reducing the

required coverage percentage for senior securities from 200% to 150%, subject to certain conditions.

Under the SBCAA, we are allowed to

increase our leverage capacity if stockholders representing at least a majority of the votes cast, when a quorum is present, approve a

proposal to do so.

If we receive stockholder approval, we would be allowed to increase our leverage capacity on the first day after such

Alternatively, the SBCAA allows the majority of our independent directors to approve an increase in our leverage capacity, and

such approval would become effective on the one-year anniversary of such approval.

In either case, we would be required to make certain

disclosures on our website and in SEC filings regarding, among other things, the receipt of approval to increase our leverage, our leverage

capacity and usage, and risks related to leverage.

SBCAA modified the asset coverage percentage for BDCs, reducing the required coverage percentage for senior securities from 200% to 150%,

subject to certain conditions.

Under the SBCAA, we are allowed to increase our leverage capacity if stockholders representing at least

a majority of the votes cast, when a quorum is present, approve a proposal to do so.

If we receive stockholder approval, we would be

allowed to increase our leverage capacity on the first day after such approval.

Alternatively, the SBCAA allows the majority of our independent

directors to approve an increase in our leverage capacity, and such approval would become effective on the one-year anniversary of such

In either case, we would be required to make certain disclosures on our website and in SEC filings regarding, among other things,

the receipt of approval to increase our leverage, our leverage capacity and usage, and risks related to leverage.

to the SBCAA, the SEC issued rules or amendments to rules allowing BDCs to use the same securities offering and proxy rules that are

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these restrictions.

are generally not able to issue and sell our common stock at a price below net asset value per share.

are generally not able to issue and sell our common stock at a price below NAV per share.

See “Risk Factors—Risks

Related to Our Business and Structure—Regulations governing our operation as a business development company affect our ability

to, and the way in which we, raise additional capital, which may expose us to risks, including the typical risks associated with leverage”

in Part I, Item 1A of this Form 10-K.

We may, however, sell our common stock, or warrants, options or rights to acquire our common stock,

at a price below the then-current net asset value of our common stock if our Board of Directors determines that such sale is in our best

interests and the best interests of our stockholders, and our stockholders approve such sale.

In addition, we may generally issue new

shares of our common stock at a price below net asset value in rights offerings to existing stockholders, in payment of dividends and

in certain other limited circumstances.

Related to Our Business and Structure— Regulations governing our operation as a BDC affect our ability to, and the way in which

we, raise additional capital, which may expose us to risks, including the typical risks associated with leverage .” in Part I,

Item 1A of this Form 10-K.

We may, however, sell our common stock, or warrants, options or rights to acquire our common stock, at a price

below the then-current NAV of our common stock if our Board of Directors determines that such sale is in our best interests

and the best interests of our stockholders, and our stockholders approve such sale.

In addition, we may generally issue new shares of

our common stock at a price below NAV in rights offerings to existing stockholders, in payment of dividends and in certain

other limited circumstances.

a BDC, we are also prohibited under the 1940 Act from knowingly participating in certain transactions with our affiliates without the

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non-qualifying assets, other than office furniture and equipment, interests in real estate and leasehold improvements and facilities

maintained to conduct the business operations of the BDC, deferred organization and operating expenses, and other noninvestment assets

necessary and appropriate to its operations as a BDC, until such time as 70% of our then-current gross assets were comprised of qualifying

maintained to conduct our business operations, deferred organization and operating expenses, and other non-investment assets

necessary and appropriate to our operations as a BDC, until such time as 70% of our then-current gross assets were comprised of qualifying

We would not be required, however, to dispose of any non-qualifying assets in such circumstances.

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objectives and policies of a portfolio company.

See “Business — Managerial Assistance” in Part I, Item 1 of this Form 10-K for more information.

investment in other types of “qualifying assets,” as described above, our investments may consist of cash, cash equivalents,

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For a discussion of the risks associated with leverage, see “Risk Factors — Risks Related

to Our Business and Structure — Borrowings, such as our 6.00% Notes due 2026 (the “6.00% Notes due 2026”), can magnify

the potential for gain or loss on amounts invested and may increase the risk of investing in us.” in Part I, Item 1A of this Form

to Our Business and Structure — Borrowings, such as the 6.00% Notes due 2026, can magnify

the potential for gain or loss on amounts invested and may increase the risk of investing in us.

” in Part I, Item 1A of this

have adopted a code of ethics pursuant to Rule 17j-1 under the 1940 Act.

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Sarbanes-Oxley Act and will take actions necessary to ensure that we are in compliance therewith.

addition, the Nasdaq Global Select Market has adopted various corporate governance requirements as part of its listing standards.

addition, Nasdaq has adopted various corporate governance requirements as part of its listing standards.

believe we are in compliance with such corporate governance listing standards.

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Federal Income Tax Considerations

in our consolidated financial statements are GSV Capital Lending, LLC, SuRo Capital Sports, LLC, and the following wholly-owned subsidiaries,

which are taxable subsidiaries (collectively, the “Taxable Subsidiaries”) regardless of whether we qualify for tax treatment

in our consolidated financial statements are GSV Capital Lending, LLC, SuRo Capital Sports, LLC, and the following wholly owned

subsidiaries, which are taxable subsidiaries (collectively, the “Taxable Subsidiaries”) regardless of whether we qualify

for tax treatment as a RIC:

GSVC AE Holdings, Inc., GSVC AV Holdings, Inc., GSVC SW Holdings, Inc., and GSVC SVDS Holdings, Inc.

The Taxable Subsidiaries

are C corporations for U.S.

Taxable Subsidiaries are C corporations for U.S.

federal and state income tax purposes.

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 consolidated financial statements.

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 consolidated financial statements.

evaluate tax positions taken, or expected to be taken, in the course of preparing our consolidated financial statements to determine

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elected to be taxed as a RIC under the Code beginning with our taxable year ended December 31, 2014, and qualified for taxation as a

RIC for such taxable year and each of the subsequent taxable years.

We intend to operate in a manner so as to qualify for taxation as

So long as we maintain our qualification for taxation a RIC, we generally will not be required to pay U.S.

federal income tax

at corporate rates on any ordinary income or capital gains that we timely distribute to our stockholders as dividends.

To qualify for

taxation as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements (as described below).

In addition, in order to qualify for the special treatment accorded to RICs, we are required to distribute to our stockholders on a timely

basis each year at least 90% of our “investment company taxable income,” which is generally our net ordinary income plus

the excess of realized net short-term capital gains over realized net long-term capital losses (the “Annual Distribution Requirement”).

RIC for such taxable year and each of the subsequent taxable years, including the fiscal year ended December 31, 2023.

operate in a manner so as to continue to qualify for taxation as a RIC.

So long as we maintain our qualification for taxation a RIC,

we generally will not be required to pay U.S.

federal income tax at corporate rates on any ordinary income or capital gains that we

timely distribute to our stockholders as dividends.

To qualify for taxation as a RIC, we must, among other things, meet certain

source-of-income and asset diversification requirements (as described below).

In addition, in order to qualify for the special

treatment accorded to RICs, we are required to distribute to our stockholders on a timely basis each year at least 90% of our

“investment company taxable income,” which is generally our net ordinary income plus the excess of realized net

short-term capital gains over realized net long-term capital losses (the “Annual Distribution Requirement”).

as a Regulated Investment Company

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that could, under certain circumstances, restrict us from making distributions necessary to satisfy the Annual Distribution Requirement.

See “—Regulation as a Business Development Company—Senior Securities.” Moreover, our ability to dispose of assets

See “—Regulation as a BDC—Senior Securities.” Moreover, our ability to dispose of assets

to meet our distribution requirements may be limited by (1) the illiquid nature of our portfolio and/or (2) other requirements relating

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may make such dispositions at times that, from an investment standpoint, are not advantageous and may result in substantial losses.

may invest in partnerships, including qualified publicly traded partnerships, which may result in our being subject to state, local or

foreign income taxes, franchise taxes, or withholding liabilities.

To the extent that we invest in entities treated as partnerships for

federal income tax purposes (other than a “qualified publicly-traded partnership”), we generally must include the items

of gross income derived by the partnerships for purposes of the 90% Income Test, and the income that is derived from a partnership (other

than a “qualified publicly-traded partnership”) will be treated as qualifying income for purposes of the 90% Income Test

only to the extent that such income is attributable to items of income of the partnership which would be qualifying income if realized

by us directly.

may invest in partnerships, including qualified publicly traded partnerships, which may result in our being subject to state, local

or foreign income taxes, franchise taxes, or withholding liabilities.

To the extent that we invest in entities treated as

partnerships for U.S.

federal income tax purposes (other than a “qualified publicly traded partnership”, as defined in the Code), we generally

must include the items of gross income derived by the partnerships for purposes of the 90% Income Test, and the income that is

derived from a partnership (other than a “qualified publicly traded partnership”) will be treated as qualifying income

for purposes of the 90% Income Test only to the extent that such income is attributable to items of income of the partnership which

would be qualifying income if realized by us directly.

order to meet the 90% Income Test, we may establish one or more special purpose corporations to hold assets from which we do not anticipate

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Accounting Policies— U.S.

Federal and State Income Taxes ” and “Note 9—Income Taxes” to our consolidated

financial statements for the year ended December 31, 2022 for further detail.

Federal and State Income Taxes ” and “Note 9—Income Taxes” to our Consolidated Financial Statements for the year ended December 31, 2023 for further detail.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business