Item 9A. Controls and Procedures
Item 9A.
Controls and Procedures
(a)
Evaluation of Disclosure Controls and Procedures
As
of December 31, 2024, 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.
(b)
Management’s Report on Internal Controls Over Financial Reporting
Our
management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined
in Rule 13a-15(f) of the Exchange Act, and for performing an assessment of the effectiveness of internal control over financial reporting
as of December 31, 2024. Internal control over financial reporting is a process designed by, or under the supervision of, our principal
executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted
accounting principles. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance
of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of our management
and directors, as applicable; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use, or disposition of our assets that could have a material effect on the consolidated financial statements.
Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those
systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management
performed an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2024 based upon criteria
in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
Based on this assessment, management determined that our internal control over financial reporting was effective as of December 31, 2024.
This
annual report does not include an attestation report of our registered public accounting firm pursuant to the rules of the SEC.
(c)
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 year ended December 31, 2024 that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.
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Item
9B. Other Information
Fees
and Expenses
The
following table is intended to assist you in understanding the costs and expenses that an investor will bear directly or indirectly.
We caution you that some of the percentages indicated in the table below are estimates and may vary. The following table should not be
considered a representation of our future expenses. Actual expenses may be greater or less than shown. Except where the context suggests
otherwise, whenever this Annual Report on Form 10-K contains a reference to fees or expenses paid by “us” or “SuRo
Capital,” or that “we” will pay fees or expenses, you will indirectly bear such fees or expenses as an investor in
SuRo Capital Corp., however, your responsibility for such fees or expenses is limited to your investment in SuRo Capital Corp. The fee
table and example below include all fees and expenses of our consolidated subsidiaries.
Stockholder transaction expenses:
Sales load (as a percentage of offering price)
— % (1)
Offering expenses (as a percentage of offering price)
— % (2)
Dividend reinvestment plan expenses
— % (3)
Total stockholder transaction expenses (as a percentage of offering price)
— % (4)
Annual expenses (as a percentage of net assets attributable to common stock) (8) :
Operating expenses
7.71 % (5)
Interest payments on borrowed funds
3.25 % (6)
Other expenses
1.00 % (7)
Total annual expenses
11.96 %
(1) In
the event that our securities are sold to or through underwriters, a corresponding prospectus
or prospectus supplement will disclose the applicable sales load.
(2) In
the event that we conduct an offering of our securities, a corresponding prospectus or prospectus
supplement will disclose the estimated offering expenses. Our common stockholders will bear,
directly or indirectly, the expenses of any offering of our securities, including debt securities.
(3) Under
our DRIP, the plan administrator’s fees will be paid by us. There will be no brokerage
charges or other charges to stockholders who participate in the plan except that, if a participant
elects by his or its written or telephonic notice to the plan administrator in advance of
termination to have the plan administrator sell part or all of his or its shares and remit
the proceeds to the participant, the plan administrator is authorized to deduct a $15 transaction
fee plus brokerage commission from the proceeds. The expenses of our DRIP are included in
“Other expenses.”
(4) The
total stockholder transaction expenses may include sales load and will be disclosed in a
future prospectus or prospectus supplement, if any.
(5) Operating
expenses in this table represent estimated annual operating expenses based upon the actual
annual operating expenses of the Company and its consolidated subsidiaries for the year ended
December 31, 2024. We do not have an investment adviser and are internally managed by our
executive officers under the supervision of our Board of Directors. As a result, we do not
pay investment advisory fees, but instead we pay the operating costs associated with employing
investment management professionals including, without limitation, compensation expenses
related to salaries, discretionary bonuses and restricted stock grants.
(6) We
are exposed to the risks of leverage, which may be considered a speculative investment technique.
The use of leverage magnifies the potential for gain and loss on amounts invested and, therefore,
increases the risks associated with an investment in us. Interest payments on borrowed funds
represents our estimated annual interest payments based on actual interest rate terms under
our outstanding 6.00% Notes due 2026 and 6.50% Convertible Notes due 2029 as of December 31, 2024.
(7) “Other
expenses,” which we calculate to equal approximately $1.6 million, are estimated based
upon actual “Other expenses” for the year ended December 31, 2024.
(8) “Net
assets attributable to common stock,” which we calculate to equal approximately $157.6
million, reflect our net assets for the year ended December 31, 2024.
Example
The
following example demonstrates the projected dollar amount of total cumulative expenses that would be incurred over various periods with
respect to a hypothetical investment in our common stock. In calculating the following expense amounts, we have assumed that our annual
operating expenses would remain at the levels set forth in the table above. See footnote 6 above for additional information regarding
certain assumptions regarding our level of leverage.
1 Year
3 Years
5 Years
10 Years
You would pay the following expenses on a $1,000 investment, assuming a 5% annual return
$ 115
$ 308
$ 465
$ 759
The
example and the expenses in the tables above should not be considered a representation of our future expenses, and actual expenses may
be greater or less than those shown. While the example assumes, as required by the SEC, a 5.0% annual return, our performance will vary
and may result in a return greater or less than 5.0%. In addition, while the example assumes reinvestment of all dividends at net asset
value participants in our DRIP will receive a number of shares of our common stock, determined by dividing the total dollar amount of
the dividend payable to a participant by the market price per share of our common stock at the close of trading on the dividend payment
date, which may be at, above or below net asset value. See “Market for Registrant’s Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities - Distributions” for additional information regarding our DRIP.
Insider
Trading Arrangements
During
the fiscal quarter ended December 31, 2024, no director or officer of the Company entered into or terminated 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 non-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 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent
Inspections
Not
applicable.
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PART
III
Item
10. Directors,
Executive Officers and Corporate Governance
The
information required by Item 10 will be contained in the 2025 Proxy Statement, to be filed with the SEC within 120 days after December
31, 2024, and is incorporated herein by reference. There have been no material changes to the procedures by which stockholders may recommend
nominees to our Board of Directors.
We
have adopted a Code of Business Conduct and Ethics for our employees and directors, including, specifically, our Chief Executive Officer,
our Chief Financial Officer, and our other executive officers. Our Code of Business Conduct and Ethics satisfies the requirements for
a “code of ethics” within the meaning of SEC rules. A copy of the Code of Business Conduct and Ethics is posted on our website
at https://investors.surocap.com/corporate-governance . We intend to disclose any changes in, or waivers from, the Code of Business
Conduct and Ethics by posting such information on the same website or by filing a Form 8-K, in each case to the extent such disclosure
is required by rules of the SEC or NASDAQ.
Item
11. Executive
Compensation
The
information required by Item 11 will be contained in the 2025 Proxy Statement, to be filed with the SEC within 120 days after December
31, 2024, and is incorporated herein by reference.
Item
12. Security
Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The
information required by Item 12 will be contained in the 2025 Proxy Statement, to be filed with the SEC within 120 days after December
31, 2024, and is incorporated herein by reference.
Item
13. Certain
Relationships and Related Transactions, and Director Independence
The
information required by Item 13 will be contained in the 2025 Proxy Statement, to be filed with the SEC within 120 days after December
31, 2024, and is incorporated herein by reference.
Item
14. Principal
Accountant Fees and Services
The
information required by Item 14 will be contained in the 2025 Proxy Statement, to be filed with the SEC within 120 days after December
31, 2024, and is incorporated herein by reference.
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Item 15.
Exhibits and Financial Statement Schedules
The
following documents are filed or incorporated by reference as part of this annual report on Form 10-K:
(1) Financial
Statements—Refer to Part II, Item 8 of this Form 10-K, which are incorporated herein
by reference.
Page
Report of Independent Registered Public Accounting Firm
69
Consolidated Statements of Assets and Liabilities as of December 31, 2024 and 2023
70
Consolidated Statements of Operations for the years ended December 31, 2024, 2023 and 2022
71
Consolidated Statements of Changes in Net Assets for the years ended December 31, 2024, 2023 and 2022
72
Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022
73
Consolidated Schedule of Investments as of December 31, 2024
74
Consolidated Schedule of Investments as of December 31, 2023
78
Notes to Consolidated Financial Statements
82
(2) Financial
Statement Schedules—None. We have omitted financial statement schedules because they
are not required or are not applicable, or the required information is shown in the financial
statements or notes to the financial statements.
(3) 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
Form of Common Stock Certificate (5)
4.2
Base Indenture, dated March 28, 2018, by and between the Registrant and U.S. Bank National Association, as trustee (6)
4.3
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 (7)
4.4
Form of 6.00% Notes due 2026 (incorporated by reference to Exhibit 4.3) (7)
4.5
Description of Securities (8)
10.1
Dividend Reinvestment Plan (1)
10.2
SuRo Capital Corp. Amended and Restated 2019 Equity Incentive Plan (9)
10.3
Form of SuRo Capital Corp. Restricted Stock Agreement (Non-Employee Directors) (9)
10.4
Form of SuRo Capital Corp. Restricted Stock Agreement (Employees and Officers) (9)
10.5
Form of SuRo Capital Corp. Non-Qualified Stock Option Award (9)
10.6
Custody Agreement, dated April 19, 2023, by and between the Registrant and Western Alliance Trust Company, N.A., as Custodian. (13)
10.7
Form of Indemnification Agreement by and between the Company and each of its directors (1)
10.8
Second Amended and Restated Employment Agreement, dated April 26, 2021, by and between Sutter Rock Capital Corp. and Mark D. Klein (10)
10.9
Second Amended and Restated Employment Agreement, dated April 26, 2021, by and between Sutter Rock Capital Corp. and Allison Green (10)
10.10
Amendment No. 1 to Second Amended and Restated Employment Agreement, dated March 10, 2022, by and between SuRo Capital Corp. and Allison Green (8)
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10.11
Amendment No. 1 to Second Amended and Restated Employment Agreement, dated November 28, 2023, by and between SuRo Capital Corp. and Mark D. Klein (16)
10.12
Amendment No. 2 to Second Amended and Restated Employment Agreement, dated November 28, 2023, by and between SuRo Capital Corp. and Allison Green (16)
10.13
At-the-Market Sales Agreement dated as of July 29, 2020, by and among SuRo Capital Corp., BTIG LLC, JMP Securities LLC, and Ladenburg Thalmann & Co., Inc. (11)
10.14
Amendment No.1 to the At-the-Market Sales Agreement, dated as of September 23, 2020, by and among SuRo Capital Corp., BTIG LLC, JMP Securities LLC, and Ladenburg Thalmann & Co., Inc. (12)
10.15
Amendment No. 2 to the At-the-Market Sales Agreement, dated as of November 8, 2024, by and among SuRo Capital Corp., BTIG, LLC, Citizens JMP Securities, LLC, Ladenburg Thalmann & Co. Inc., and Barrington Research Associates, Inc. (17)
10.16
Notes Purchase Agreement, dated August 6, 2024, by and between the Registrant and the purchaser party thereto (18)
14.1
Code of Ethics (14)
14.2
Code of Business Conduct and Ethics (15)
19.1
Insider Trading Policy*
21.1
List of Subsidiaries (Included in the notes to the consolidated financial statements contained in this report)*
23.1
Consent of Marcum LLP*
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*
97.1
SuRo Capital Corp. Dodd-Frank Compensation Recoupment Policy (16)
99.1
Report of Marcum LLP regarding the Senior Securities table*
99.2
Report of Deloitte & Touche LLP regarding the Senior Securities table (6)
(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 Pre-Effective Amendment
No. 3 to the Registrant’s Registration Statement on Form N-2 (File No. 333-175655), filed on September 20, 2011, and incorporated
by reference herein.
(6)
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.
(7)
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.
(8)
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.
(9)
Previously filed in connection with the Registrant’s
Registration Statement on Form S-8 (File No. 333-239662) filed on July 2, 2020, and incorporated by reference herein.
(10)
Previously filed in connection with the Registrant’s
Quarterly Report on Form 10-Q (File No. 814-00852), filed on May 6, 2021 and incorporated by reference herein.
(11)
Previously filed in connection with the Registrant’s
Current Report on Form 8-K (File No. 814-00852) filed on August 3, 2020 and incorporated by reference herein.
(12)
Previously filed in connection with the Registrant’s
Current Report on Form 8-K (File No. 814-00852) filed on September 23, 2020 and incorporated by reference herein.
(13)
Previously filed in connection with the Registrant’s
Current Report on Form 8-K (File No. 814-00852), filed on April 20, 2023 and incorporated by reference herein.
(14)
Previously filed in connection with the Registrant’s
Annual Report on Form 10-K (File No. 814-00852), filed on March 16, 2023 and incorporated by reference herein.
(15)
Previously filed in connection with the Registrant’s
Annual Report on Form 10-K (File No. 814-00852), filed on March 13, 2020 and incorporated by reference herein.
(16)
Previously filed in connection with the Registrant’s
Annual Report on Form 10-K (File No. 814-00852), filed on March 14, 2024 and incorporated by reference herein.
(17)
Previously filed in connection with the Registrant’s
Current Report on Form 8-K (File No. 814-00852), filed on November 8, 2024 and incorporated by reference herein.
(18)
Previously filed in connection with the Registrant’s
Quarterly Report on Form 10-Q (File No. 814-00852), filed on August 8, 2024 and incorporated by reference herein.
*
Filed herewith.
Item
16. Form
10-K Summary
Not
applicable.
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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:
March
12, 2025
By:
/s/
Mark D. Klein
Mark
D. Klein
Chairman,
President and Chief Executive Officer
(Principal
Executive Officer)
Date:
March
12, 2025
By:
/s/
Allison Green
Allison
Green
Chief
Financial Officer, Chief Compliance Officer, Treasurer, and Corporate Secretary
(Principal
Financial and Accounting Officer)
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Date:
March 12, 2025
By:
/s/
Mark D. Klein
Mark
D. Klein
Chairman,
President and Chief Executive Officer
(Principal
Executive Officer)
Date:
March 12, 2025
By:
/s/
Allison Green
Allison
Green
Chief
Financial Officer, Chief Compliance Officer, Treasurer, and Corporate Secretary
(Principal
Financial and Accounting Officer)
Date: March 12, 2025
By:
/s/ Leonard A. Potter
Leonard A. Potter
Director
Date: March 12, 2025
By:
/s/ Ronald M. Lott
Ronald M. Lott
Director
Date: March 12, 2025
By:
/s/ Marc Mazur
Marc Mazur
Director
Date: March 12, 2025
By:
/s/ Lisa Westley
Lisa Westley
Director
124