Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures
As of December 31, 2020, 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 Control 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, 2020. 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, 2020 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, 2020.
This annual report does not include an attestation report of the Company’s registered public accounting firm pursuant to the rules of the Securities and Exchange Commission.
(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 quarter ended December 31, 2020 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
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 2021 Proxy Statement, to be filed with the SEC within 120 days after December 31, 2020, 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 2021 Proxy Statement, to be filed with the SEC within 120 days after December 31, 2020, 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 2021 Proxy Statement, to be filed with the SEC within 120 days after December 31, 2020, 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 2021 Proxy Statement, to be filed with the SEC within 120 days after December 31, 2020, and is incorporated herein by reference.
Item 14. Principal Accountant Fees and Services
The information required by Item 14 will be contained in the 2021 Proxy Statement, to be filed with the SEC within 120 days after December 31, 2020, and is incorporated herein by reference.
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PART IV
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
72
Consolidated Statements of Assets and Liabilities as of December 31, 20 20 and 20 19
75
Consolidated Statements of Operations for the years ended December 31, 20 20 , 201 9 and 20 18
76
Consolidated Statements of Changes in Net Assets for the years ended December 31, 2020, 2019 and 2018
78
Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018
79
Consolidated Schedule of Investments as of December 31, 2020
81
Consolidated Schedule of Investments as of December 31, 2019
85
Notes to Consolidated Financial Statements
89
(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 First Supplemental Indenture, dated March 28, 2018, relating to the 4.75% Convertible Senior Notes due 2023, by and between the Company and U.S. Bank National Association, as trustee (7)
4.4 Form of 4.75% Convertible Senior Note due 2023 (incorporated by reference to Exhibit 4. 3 ) (7)
4.5 Description of Securities *
10.1 Dividend Reinvestment Plan (1)
10.2 SuRo Capital Corp. Amended and Restated 2019 Equity Incentive Plan (8)
10.3 F orm of SuRo Capital Corp. Restricted Stock Agreement (Non-Employee Directors) (8)
10.4 F orm of SuRo Capital Corp. Restricted Stock Agreement (Employees and Officers) (8)
10.5 F orm of SuRo Capital Corp. Non-Qualified Stock Option Award (8)
10.6 Custody Agreement by and between the Company and U.S. Bank National Association (9)
10.7 Form of Indemnification Agreement by and between the Company and each of its directors (1)
10.8 Amended and Restated Employment Agreement, dated April 28, 2020, by and between Sutter Rock Capital Corp. and Mark D. Klein (10)
10.9 Amended and Restated Employment Agreement, dated April 28, 2020, by and between Sutter Rock Capital Corp. and Allison Green (10)
10.10 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)
10.11 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)
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14.1 Code of Ethics (13)
14.2 Code of Business Conduct and Ethics (13)
21.1 List of Subsidiaries (Included in the notes to the consolidated financial statements contained in this report)*
23.1 Consent of Marcum LLP *
23.2 Consent of Deloitte & Touche 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*
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 Post-Effective Amendment No. 3 to the Registrant’s Registration Statement on Form N-2 (File No. 333-191307), filed on March 28, 2018, and incorporated herein by reference.
(8) 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.
(9) Previously filed in connection with Pre-Effective Amendment No. 3 to the Registrant’s Registration Statement on Form N-2 (File No. 333-171578), filed on April 15, 2011, 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 8, 2020 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 Annual Report on Form 10-K (File No. 814-00852), filed on March 13, 2020 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, 2021 By: /s/ Mark D. Klein
Mark D. Klein
Chairman, President and Chief Executive Officer
(Principal Executive Officer)
Date: March 12, 2021 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, 2021
By: /s/ Mark D. Klein
Mark D. Klein
Chairman, President and Chief Executive Officer
(Principal Executive Officer)
Date: March 12, 2021 By: /s/ Allison Green
Allison Green
Chief Financial Officer, Chief Compliance Officer, Treasurer, and Corporate Secretary
Date: March 12, 2021 By: /s/ Leonard A. Potter
Leonard A. Potter
Director
Date: March 12, 2021 By: /s/ Ronald M. Lott
Ronald M. Lott
Director
Date: March 12, 2021 By: /s/ Marc Mazur
Marc Mazur
Director
Date: March 12, 2021 By: /s/ Lisa Westley
Lisa Westley
Director
142