What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-08-04 compared with 2022-05-05 · 325 added, 288 removed, 1769 unchanged (26% of the section changed)

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CONDENSED CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Investments at fair value:

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Dividends payable 349,929 23,390,048

Payable for securities purchased 460,048 —

6.00% Notes due December 30, 2026 (2)

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Accumulated net realized gain on investments, net of distributions 9,587,968 11,899,742

Accumulated net unrealized appreciation of investments 74,265,770 52,680,885

Accumulated net unrealized appreciation/(depreciation) of investments (14,296,805) 52,680,885

Net Assets $ 280,172,472 $ 364,846,624

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Refer to "Note 7—Commitments and Contingencies— Operating Leases and Related Deposits " for more detail.

(2) As of March 31, 2022, the 6.00% Notes due December 30, 2026 (effective interest rate of 6.53%) had a face value $75,000,000.

(2) As of June 30, 2022, 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, 2021, the 6.00% Notes due December 30, 2026 (effective interest rate of 6.13%) had a face value $75,000,000.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

INVESTMENT INCOME

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Directors’ fees (2)

191,829 111,250 352,394 222,500

Professional fees 1,078,459 529,524 2,351,172 1,502,683

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Net Investment Loss (3,810,888) (2,043,000) (8,035,593) (4,877,318)

Realized Gain on Investments:

Realized Gain/(Loss) on Investments:

Non-controlled/non-affiliated investments (1,895,846) 27,658,812 1,200,429 139,811,330

Net Realized Gain on Investments 3,096,275 112,152,518

Non-controlled/affiliate investments (70,379) — (70,379) —

Net Realized Gain/(Loss) on Investments (1,966,225) 27,658,812 1,130,050 139,811,330

Change in Unrealized Appreciation/(Depreciation) of Investments:

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____________________________________________________________________________________________________________________________

(1) As of March 31, 2022, there were no potentially dilutive securities outstanding.

(1) For the three and six months ended June 30, 2022 and June 30, 2021, 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) Refer to "Note 11—Stock-Based Compensation" for more detail.

SURO CAPITAL CORP.

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)

Three Months Ended March 31,

Six Months Ended June 30,

Net Assets at Beginning of Year $ 364,846,624 $ 301,583,073

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Net Assets at March 31 $ 380,701,528 $ 435,961,621

Change in Net Assets Resulting from Operations

Net investment loss (3,810,888) (2,043,000)

Net realized gain/(loss) on investments (1,966,225) 27,658,812

Net change in unrealized appreciation/(depreciation) of investments (88,562,575) 7,741,252

Net Change in Net Assets Resulting from Operations (94,339,688) 33,357,064

Distributions

Dividends declared — (60,513,038)

Total Distributions — (60,513,038)

Change in Net Assets Resulting from Capital Transactions

Issuance of common stock from stock dividend — 30,525,336

Stock-based compensation 703,566 261,746

Repurchases of common stock (6,892,934) —

Net Change in Net Assets Resulting from Capital Transactions (6,189,368) 30,787,082

Total Change in Net Assets (100,529,056) 3,631,108

Net Assets at June 30 $ 280,172,472 $ 439,592,729

Capital Share Activity

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Issuance of common stock from conversion of 4.75% Convertible Notes due 2023 — 4,097,808

Issuance of common stock from stock dividend — 2,335,527

Shares repurchased (1,008,676) —

4 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Three Months Ended March 31,

Six Months Ended June 30,

Cash Flows from Operating Activities

18 unchanged sentences

Escrow proceeds receivable 41,626 29

Deposits — (50,000)

Payable for securities purchased — (134,250,000)

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CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED)

March 31, 2022

June 30, 2022

Portfolio Investments* Headquarters/

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Total 1,283,005 11,398,548 4.07 %

Preferred shares, Series C Fitness Technology 6/30/2022 13,293,450 10,007,185 10,000,000 3.57 %

Orchard Technologies, Inc.

Preferred shares, Series D Real Estate Platform 8/9/2021 1,488,139 10,004,034 9,999,996 3.57 %

Shogun Enterprises, Inc.

Preferred shares, Series B-1 Home Improvement Finance 2/26/2021 436,844 3,501,657 3,499,994 1.25 %

Preferred shares, Series B-2 2/26/2021 301,750 3,501,661 3,499,998 1.25 %

Convertible Note 0.5%, Due 4/18/2024*** 5/2/2022 $ 500,000 500,000 500,000 0.18 %

Total 7,503,318 7,499,992 2.68 %

Nextdoor Holdings, Inc.

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Social Networking 9/27/2018 1,802,416 10,002,666 5,965,997 2.13 %

Singapore, Singapore

Common shares Retail Technology 6/9/2021 55,591 2,781,148 2,437,699 0.64 %

Preferred shares, Investec series 6/9/2021 144,409 7,224,600 6,332,422 1.66 %

Total 10,005,748 8,770,121 2.30 %

Varo Money, Inc.

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Common shares Financial Services 8/11/2021 1,079,266 10,005,548 5,546,953 1.98 %

Shogun Enterprises, Inc.

Preferred shares, Series B-1 Home Improvement Finance 2/26/2021 436,844 3,501,657 3,499,994 0.92 %

Preferred shares, Series B-2 2/26/2021 301,750 3,501,661 3,499,998 0.92 %

Total 7,003,318 6,999,992 1.84 %

NewLake Capital Partners, Inc.

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Online Education 6/8/2021 981,843 9,818,430 3,456,087 1.23 %

Rover Group, Inc.

Common shares (3)

Peer-to-Peer Pet Services 11/3/2014 795,637 2,360,342 4,590,825 1.21 %

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 3,485,014 0.92 %

Junior Preferred Convertible Note 4% Due 5/11/2027*** 5/11/2020 $ 506,339 506,339 506,339 0.13 %

Common Warrants, Strike Price $0.01, Expiration Date 5/11/2027 5/11/2020 2,032,967 — — — %

Total 10,513,661 3,991,353 1.05 %

Enjoy Technology, Inc.

Menlo Park, CA

Common shares (3)

On-Demand Commerce 10/16/2014 1,070,919 5,526,777 3,947,407 1.04 %

See accompanying notes to condensed consolidated financial statements.

SURO CAPITAL CORP.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED) - continued

March 31, 2022

Portfolio Investments* Headquarters/

Industry Date of Initial Investment Shares/

Principal Cost Fair Value % of Net

True Global Ventures 4 Plus Pte Ltd ** (8)

Singapore, Singapore

Limited Partner Fund Investment Venture Investment Fund 8/27/2021 1 $ 713,505 $ 3,937,828 1.03 %

Residential Homes for Rent, LLC (d/b/a Second Avenue) Chicago, IL

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Total 3,000,000 3,227,602 1.15 %

Singapore, Singapore

Common shares Retail Technology 6/9/2021 55,591 2,781,148 534,710 0.19 %

Preferred shares, Investec Series 6/9/2021 144,409 7,224,600 2,647,017 0.94 %

Total 10,005,748 3,181,727 1.14 %

True Global Ventures 4 Plus Pte Ltd ** (8)

Singapore, Singapore

Limited Partner Fund Investment Venture Investment Fund 8/27/2021 1 — 3,063,358 1.09 %

San Francisco, CA

Preferred shares Mobile Access Technology 7/23/2021 244,117 2,501,570 2,500,002 0.89 %

See accompanying notes to condensed consolidated financial statements.

SURO CAPITAL CORP.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED) - continued

June 30, 2022

Portfolio Investments* Headquarters/

Industry Date of Initial Investment Shares/

Principal Cost Fair Value % of Net

Aventine Property Group, Inc.

Common shares*** Cannabis REIT 9/11/2019 312,500 2,580,750 2,231,610 0.80 %

Rent the Runway, Inc.

Rover Group, Inc.

Common shares (3)

Subscription Fashion Rental 6/17/2020 339,191 5,153,945 2,196,804 0.58 %

Peer-to-Peer Pet Services 11/3/2014 364,046 1,088,220 1,368,813 0.49 %

Commercial Streaming Solutions Inc.

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Preferred shares, Series Seed-4 Gaming Licensing 10/12/2021 2,064,409 1,002,755 1,000,000 0.36 %

Rent the Runway, Inc.

Common shares (3)

Subscription Fashion Rental 6/17/2020 289,191 4,394,205 887,816 0.32 %

EDGE Markets, Inc.

San Diego, CA

Preferred Shares, Series Seed Gaming Technology 5/18/2022 456,704 501,330 500,000 0.18 %

YouBet Technology, Inc.

(d/b/a PickUp) (7)

Preferred shares, Series Seed-2 Digital Media Technology 8/26/2021 385,353 502,232 499,999 0.18 %

Palantir Lending Trust SPV I ** ( 11)

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Data Analysis 6/19/2020 — — 367,952 0.13 %

YouBet Technology, Inc.

(d/b/a PickUp) (7)

Preferred shares, Series Seed-2 Digital Media Technology 8/26/2021 385,353 502,232 499,999 0.13 %

Churchill Sponsor VII LLC ** (15)

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Total 300,000 300,000 0.11 %

Common shares (3)

Education Software 12/5/2014 99,672 458,138 287,205 0.08 %

AltC Sponsor LLC ** (15)

Share units Special Purpose Acquisition Company 7/21/2021 239,300 250,855 250,000 0.09 %

Enjoy Technology, Inc.

Palo Alto, CA

Common shares (3)

On-Demand Commerce 10/16/2014 947,297 5,526,777 205,563 0.07 %

Churchill Sponsor VI LLC ** (15)

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Total 200,000 200,000 0.07 %

Common shares (3)

Education Software 12/5/2014 99,672 458,138 164,484 0.06 %

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*** 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.

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CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED) - continued

March 31, 2022

June 30, 2022

Portfolio Investments* Headquarters/

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Preferred Warrant Series B, Strike Price $2.31, Expiration Date 12/31/2023 12/31/2018 250,000 5,080 3,750 0.00 %

Preferred Warrant Series B, Strike Price $2.31, Expiration Date 12/31/2023 12/31/2018 250,000 5,080 5,000 0.00 %

Total 9,590,380 2,941,296 1.05 %

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CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED) - continued

March 31, 2022

June 30, 2022

__________________________________________

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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 March 31, 2022, 43.76% of its total investments are non-qualifying assets.

Of the Company’s total investments as of June 30, 2022, 31.74% of its total investments are non-qualifying assets.

*** Investment is income-producing.

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Refer to “Note 4—Investments at Fair Value”.

(4) As of March 31, 2022, the investments noted had been placed on non-accrual status.

(4) As of June 30, 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 in Residential Homes for Rent, LLC (d/b/a Second Avenue) are held through SuRo Capital Corp.'s wholly owned subsidiary, GSVC AV 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 PickUp), and Rebric Inc.

(d/b/a Compliable) are held through SuRo Capital Corp.'s wholly owned subsidiary, SuRo Capital Sports, LLC ("SuRo Sports").

(d/b/a PickUp), Rebric Inc.

(d/b/a Compliable), and EDGE Markets, Inc.

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 March 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.

As of June 30, 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.

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(f/k/a NestGSV, Inc.) at the end of the five year period.

(11) As of March 31, 2022, 512,290 Class A common shares remain in Palantir Lending Trust SPV I, none of which are subject to lock-up restrictions.

(11) As of June 30, 2022, 512,290 Class A common shares remain in Palantir Lending Trust SPV I, none of which are subject to lock-up restrictions.

(12) On January 1, 2021, Treehouse Real Estate Investment Trust, Inc.

completed its spin off of 34.4% of its assets into Aventine Property Group, Inc.

During the three months ended March 31, 2022, Aventine Property Group, Inc.

During the six months ended June 30, 2022, Aventine Property Group, Inc.

declared an aggregate of less than $0.1 million in dividend distributions.

During the three months ended March 31, 2022, Treehouse Real Estate Investment Trust, Inc.

During the six months ended June 30, 2022, Treehouse Real Estate Investment Trust, Inc.

declared an aggregate of less than $0.1 million in dividend distributions.

(13) During the three months ended March 31, 2022, approximately $0.3 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.

(13) During the six months ended June 30, 2022, approximately $0.6 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 $0.5 million repaid a portion of the outstanding principal and the remaining was attributed to interest.

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CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED)- continued

March 31, 2022

(14) During the three months ended March 31, 2022, NewLake Capital Partners, Inc.

(f/k/a GreenAcreage Real Estate Corp.) declared an aggregate of approximately $0.1 million in dividend distributions.

June 30, 2022

(14) During the six months ended June 30, 2022, NewLake Capital Partners, Inc.

(f/k/a GreenAcreage Real Estate Corp.) declared an aggregate of $0.2 million in dividend distributions.

(15) 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.

(16) As of March 31, 2022, Fullbridge, Inc.'s obligations under its financing arrangements with the Company became past due.

(16) As of June 30, 2022, Fullbridge, Inc.'s obligations under its financing arrangements with the Company became past due.

(17) On March 22, 2022, Forge Global Holdings, Inc., completed its business combination with Motive Capital Corp.

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See accompanying notes to condensed consolidated financial statements.

__________________________________________

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AND SUBSIDIARIES

### SCHEDULE OF INVESTMENTS - continued

CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS - continued

December 31, 2021

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

NOTE 1—NATURE OF OPERATIONS

6 unchanged sentences

Prior to March 12, 2019, we were externally managed by our former investment adviser, GSV Asset Management, LLC (“GSV Asset Management”), pursuant to an investment advisory agreement (the “Investment Advisory Agreement”), and our former administrator, GSV Capital Service Company, LLC (“GSV Capital Service Company”), provided the administrative services necessary for our operations pursuant to an administration agreement (the “Administration Agreement”).

The Company’s date of inception was January 6, 2011, which is the date it commenced its development stage activities.

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").

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The Company began its investment operations during the second quarter of 2011.

The table below displays the Company’s subsidiaries as of March 31, 2022, 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 portfolio investments.

The table below displays the Company’s subsidiaries as of June 30, 2022, 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.

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The Company invests principally in the equity securities of what it believes to be rapidly growing venture-capital-backed emerging companies.

The Company may acquire its investments in these portfolio companies through offerings of the prospective portfolio companies, transactions on secondary marketplaces for private companies, or negotiations with selling stockholders.

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.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

NOTE 2—SIGNIFICANT ACCOUNTING POLICIES

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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, 2022.

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, 2021.

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 fiscal year ending December 31, 2022.

Basis of Consolidation

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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:

The level in the fair value hierarchy within which the fair value

SURO CAPITAL CORP.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

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.

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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, our 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:

The quarterly valuation process begins with each portfolio company or investment being initially valued by the investment professionals responsible for the portfolio investment;

The quarterly valuation process begins with each portfolio company or investment being initially valued by the internal investment professionals responsible for the portfolio investment;

Preliminary valuation conclusions are then documented and discussed with senior management;

An independent third-party valuation firm is engaged by the Valuation Committee to conduct independent appraisals and review management’s preliminary valuations and make its own independent assessment, for all investments for which there are no readily available market quotations;

The Valuation Committee discusses the valuations and recommends to the Company’s Board of Directors a fair value for each investment in the portfolio based on the input of management and the independent third-party valuation firm;

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;

SURO CAPITAL CORP.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

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.

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.

In making a good faith determination of the fair value of investments, the Company considers valuation methodologies consistent with industry practice.

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purchase or sales transactions;

as well as analysis of financial ratios and valuation metrics of the portfolio companies that issued such private equity securities to peer companies that are public, analysis of the portfolio companies’ most recent financial statements and forecasts, and the markets in which the portfolio company does business, and other relevant factors.

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 determine the fair value of each investment.

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To determine the fair value of a portfolio company for which market quotations are not readily available, the Company may analyze the relevant portfolio company’s most recently available historical and projected financial results, public market comparables, and other factors.

The Company 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 Company 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 value of equity or equity-linked securities (including warrants to purchase common or preferred stock) in a portfolio company, the Company 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

The Company may also consider other events, including the transaction in which the Company acquired its securities, subsequent equity sales by the portfolio

SURO CAPITAL CORP.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

recognized as a realized loss on investments in the Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows.

June 30, 2022

company, and mergers or acquisitions affecting the portfolio company.

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.

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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 by the Company’s Board of Directors.

The Company’s debt investments are valued at estimated fair value as determined in good faith by the Company’s Board of Directors.

The Company’s Board of Directors will ascribe value to options based on fair value analyses that can include discounted cash flow analyses, option pricing models, comparable analyses and other techniques as deemed appropriate.

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After a SPAC transaction is announced, the Company's Board of Directors will ascribe value to 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 Company utilizes the public share price of the entity, less a discount for lack of marketability if there are restrictions on selling.

The Company's SPAC investments are valued at estimated fair value as determined by the Company's Board of Directors.

Upon completion of the SPAC transaction, the Company 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.

Portfolio Company Investment Classification

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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 March 31, 2022 and December 31, 2021, for details regarding the nature and composition of the Company’s investment portfolio.

Refer to the Consolidated Schedules of Investments as of June 30, 2022 and December 31, 2021, for details regarding the nature and composition of the Company’s investment portfolio.

SURO CAPITAL CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2022

Levelling Policy

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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.

SURO CAPITAL CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

Securities Transactions

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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.

The Company places its cash with U.S.

Bank, N.A., Bridge Bank (a subsidiary of Western Alliance Bank), and Silicon Valley Bank, and at times, cash held in these accounts may exceed the Federal Deposit Insurance Corporation insured limit.

The Company places its cash primarily with U.S.

Bank, N.A., and may place cash with Bridge Bank (a subsidiary of Western Alliance Bank) and Silicon Valley Bank in amounts that will not exceed, in the aggregate, the total value of the Company's fidelity bond.

The cash held in these accounts may exceed the Federal Deposit Insurance Corporation insured limit.

The Company believes that U.S.

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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 is to be recognized when the amount of the contingent consideration becomes realized or realizable.

As of March 31, 2022 and December 31, 2021, the Company had $4,577,518 and $2,046,645, respectively, in 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 June 30, 2022 and December 31, 2021, the Company had $2,005,019 and $2,046,645, respectively, in escrow proceeds receivable.

Deferred Financing Costs

6 unchanged sentences

For debt capital raised, the associated offering costs are amortized over the life of the debt instrument.

As of March 31, 2022 and December 31, 2021, the Company had deferred financing costs of $606,607 and $2,592,611, respectively, on the Condensed Consolidated Statement of Assets and Liabilities.

March 31, 2022 December 31, 2021

As of June 30, 2022 and December 31, 2021, the Company had

SURO CAPITAL CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2022

deferred financing costs of $589,781 and $2,592,611, respectively, on the Condensed Consolidated Statement of Assets and Liabilities.

June 30, 2022 December 31, 2021

Deferred debt issuance costs $ — $ 1,970,892

3 unchanged sentences

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

SURO CAPITAL CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

amortized on a straight-line basis over the life of the lease.

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.

17 unchanged sentences

Such transactions would be reflected on the Condensed Consolidated Statement of Assets and Liabilities as escrow deposits.

As of March 31, 2022 and December 31, 2021, the Company had no material escrow deposits.

As of June 30, 2022 and December 31, 2021, the Company had no material escrow deposits.

Unrealized Appreciation or Depreciation of Investments

1 unchanged sentence

Federal and State Income Taxes

The Company elected to be treated as a regulated investment company (a “RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (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 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

SURO CAPITAL CORP.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

the amount by which the Excise Tax Avoidance Requirement exceeds the distributions for the year.

June 30, 2022

manner so as to qualify for the tax treatment applicable to RICs.

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.

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.

20 unchanged sentences

As a result, the Company was required to pay a corporate-level U.S.

federal income tax on the amount of the net built-in gains in its assets (the amount by which the net fair market value of the Company’s assets exceeds the net adjusted basis in its assets) either (1) as of the date it converted to a RIC (i.e., the beginning of the first taxable year that the Company qualifies as a RIC, which would be January 1, 2014), or (2) to the extent that the Company recognized such net built-in gains during the five-year recognition period beginning on the date of conversion.

SURO CAPITAL CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2022

during the five-year recognition period beginning on the date of conversion.

As of January 1, 2014, the Company had net unrealized built-in gains, but did not incur a built-in-gains tax for the 2014 tax year due to the fact that there were sufficient net capital loss carryforwards to completely offset recognized built-in gains as well as available net operating losses.

3 unchanged sentences

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

SURO CAPITAL CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

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 or Adopted Accounting Standards

In April 2020, as part of the Securities Offering Reform for Closed-End Investment Companies final rule, the SEC adopted certain structured data reporting requirements for BDCs to submit financial statement information using Inline eXtensible Business Reporting Language (XBRL) format to the extent required of operating companies.

In April 2020, as part of the Securities Offering Reform for Closed-End Investment Companies final rule, the Securities and Exchange Commission ("SEC") adopted certain structured data reporting requirements for BDCs to submit financial statement information using Inline eXtensible Business Reporting Language (XBRL) format to the extent required of operating companies.

BDCs that are eligible to file a short-form registration statement will be subject to the above structuring requirements with respect to Forms filed on or after August 1, 2022.

1 unchanged sentence

The Company is currently assessing the impact of this standard on our financial condition and results of operations.

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.

In October 2020, the FASB issued ASU 2020-10, Codification Improvements , which made various technical changes and corrections intended to provide clarifications to existing guidance, as well as simplifications to wording or structure of existing guidance.

12 unchanged sentences

The Company does not expect the impact of SAB 120 to be material to the condensed consolidated financial statements and the notes thereto.

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.

SURO CAPITAL CORP.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

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

10 unchanged sentences

On September 12, 2020, the Consulting Agreement expired in accordance with its terms and was not renewed or extended.

For the three months ended March 31, 2022 and 2021, the Company did not incur a consulting expense related to the Consulting Agreement as it was no longer in effect.

For the three and six months ended June 30, 2022 and 2021, the Company did not incur a consulting expense related to the Consulting Agreement as it was no longer in effect.

Amended and Restated Trademark License Agreement

6 unchanged sentences

On September 12, 2020, the Amended and Restated License Agreement expired in accordance with its terms and was not renewed or extended.

For the three months ended March 31, 2022 and 2021, the Company did not incur a licensing expense related to the Amended and Restated License Agreement as it was no longer in effect.

For the three and six months ended June 30, 2022 and 2021, the Company did not incur a licensing expense related to the Amended and Restated License Agreement as it was no longer in effect.

Other Arrangements

1 unchanged sentence

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

SURO CAPITAL CORP.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

transacting include its officers, directors, and employees and any person controlling or under common control with the Company, subject to certain exceptions.

June 30, 2022

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.

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.

6 unchanged sentences

Klein's brother, Michael Klein, is a control person of such Churchill entities.

As of March 31, 2022, the fair values of the Company’s investments in Churchill Sponsor VI LLC and Churchill Sponsor VII LLC were $200,000 and $300,000, respectively.

As of June 30, 2022, the fair values of the Company’s investments in Churchill Sponsor VI LLC and Churchill Sponsor VII LLC were $200,000 and $300,000, respectively.

The Company's investment in Skillsoft Corp.

3 unchanged sentences

Klein's brother, Michael Klein, is a control person of such Churchill entities.

As of March 31, 2022, the fair value of the Company’s investment in Skillsoft Corp.

As of June 30, 2022, the fair value of the Company’s investment in Skillsoft Corp.

was $3,456,087.

Keri Findley, a former senior managing director of the Company until her departure on March 9, 2022, is a non-controlling member of the board of directors of Shogun Enterprises, Inc., one of the Company’s portfolio companies, and holds a minority equity interest in such portfolio company.

Findley also is a non-controlling member of the board of directors of the investment manager to Architect Capital PayJoy SPV, LLC, one of the Company’s portfolio companies, and holds a minority equity interest in such investment manager.

As of March 31, 2022, the fair values of the Company’s investments in Shogun Enterprises, Inc.

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, is a non-controlling member of the board of directors of Shogun Enterprises, Inc., and holds 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 is a non-controlling member of the board of directors of the investment manager to Architect Capital PayJoy SPV, LLC, and holds a minority equity interest in such investment manager.

As of June 30, 2022, the fair values of the Company’s remote-affiliate investments in Shogun Enterprises, Inc.

and Architect Capital PayJoy SPV, LLC were $7,499,992 and $10,000,000, respectively.

In addition, Keri Findley and Claire Councill, a former investment professional of the Company until her departure on April 15, 2022, are non-controlling members of the board of directors of Colombier Acquisition Corp., a special purpose acquisition company, which is sponsored by Colombier Sponsor LLC, one of the Company's portfolio companies.

The Company's investment in AltC Sponsor LLC, the sponsor of AltC Acquisition Corp, a special purpose acquisition company, 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 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 March 31, 2022, the fair values of the Company’s investments in Colombier Sponsor LLC and AltC Sponsor LLC were $2,711,841 and $250,000, respectively.

In addition, Ms.Findley and Claire Councill, a former investment professional of the Company until her departure on April 15, 2022, are non-controlling members of the board of directors of Colombier Acquisition Corp., a special purpose acquisition company, which is sponsored by Colombier Sponsor LLC, one of the Company's portfolio companies.

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 June 30, 2022, the fair values of the Company’s aggregate investments in each of Colombier Sponsor LLC and AltC Sponsor LLC were $2,711,841 and $250,000, respectively.

SURO CAPITAL CORP.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

NOTE 4—INVESTMENTS AT FAIR VALUE

5 unchanged sentences

Treasury securities.

As of March 31, 2022, the Company had 63 positions in 38 portfolio companies.

As of June 30, 2022, the Company had 65 positions in 40 portfolio companies.

As of December 31, 2021, the Company had 64 positions in 38 portfolio companies.

The following tables summarize the composition of the Company’s investment portfolio by security type at cost and fair value as of March 31, 2022 and December 31, 2021:

March 31, 2022 December 31, 2021

The following tables summarize the composition of the Company’s investment portfolio by security type at cost and fair value as of June 30, 2022 and December 31, 2021:

June 30, 2022 December 31, 2021

Cost Fair Value Percentage of

14 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

The geographic and industrial compositions of the Company’s portfolio at fair value as of March 31, 2022 and December 31, 2021 were as follows:

As of March 31, 2022 As of December 31, 2021

June 30, 2022

The geographic and industrial compositions of the Company’s portfolio at fair value as of June 30, 2022 and December 31, 2021 were as follows:

As of June 30, 2022 As of December 31, 2021

Fair Value Percentage of

8 unchanged sentences

Total $ 200,066,714 100.0 % 71.4 % $ 260,136,253 100.0 % 71.3 %

As of March 31, 2022 As of December 31, 2021

As of June 30, 2022 As of December 31, 2021

Fair Value Percentage of

12 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

The table below details the composition of the Company’s industrial themes presented in the preceding tables:

20 unchanged sentences

Online Marketplace Finance

Retail Technology

Gaming Technology

Special Purpose Acquisition Company

5 unchanged sentences

Social Data Platform

Fitness Technology

Social Networking

3 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

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 March 31, 2022 and December 31, 2021 are as follows:

As of March 31, 2022

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 June 30, 2022 and December 31, 2021 are as follows:

As of June 30, 2022

Quoted Prices in

34 unchanged sentences

Publicly Traded Portfolio Companies 16,970,411 28,533,338 — 45,503,749

Total Portfolio Investments 16,970,411 28,533,338 214,632,504 260,136,253

Total Investments at Fair Value $ 16,970,411 $ 28,533,338 $ 214,632,504 $ 260,136,253

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

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 Company’s fair value measurements of its Level 3 assets as of March 31, 2022 and December 31, 2021.

In addition to the techniques and inputs noted in the tables below, according to the Company’s valuation policy, the Company may also use other valuation techniques and methodologies when determining the Company’s fair value measurements.

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 Company’s fair value measurements.

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 March 31, 2022 and December 31, 2021.

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 June 30, 2022 and December 31, 2021.

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.

As of March 31, 2022

As of June 30, 2022

Asset Fair Value Valuation

5 unchanged sentences

AFFO (4) multiple

19.4 -23.1x (21.3x)

21.90x -21.90x (21.90x)

Preferred stock in private companies $131,036,463 Market approach Revenue multiples 0.22x - 4.60x (1.85x)

1 unchanged sentence

Revenue multiples 0.56x - 4.60x (2.31x)

10.0% (10.0%)

DLOM 10.0% (10.0%)

Financing Risk 10.0% (10.0%)

Debt investments $2,505,099 Market approach Revenue multiples 0.47x - 4.60x (3.36x)

Options $4,671,293 Option pricing model Term to expiration (Years) 0.42 - 6.36 (2.83)

Options $4,753,567 Option pricing model Term to expiration (Years) 1.50x - 5.79x (2.28x)

Volatility 38% - 81% (38%)

1 unchanged sentence

________________________

(1) As of March 31, 2022, the Company used a hybrid market and income approach to value certain common and preferred stock investments as the Company felt this approach better reflected the fair value of these investments.

(1) As of June 30, 2022, the Company used a hybrid market and income approach to value certain common and preferred stock investments as the Company 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;

11 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

when selecting the appropriate companies whose multiples are used to value its portfolio companies.

5 unchanged sentences

(5) Probability-Weighted Expected Return Method, or "PWERM"

(6) Discount for Lack of Marketability, or "DLOM"

As of December 31, 2021

12 unchanged sentences

Revenue multiples 1.05x - 9.62x (3.04x)

10.0% (10.0%)

DLOM 10.0% (10.0%)

Financing Risk 10.0% (10.0%)

14 unchanged sentences

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

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

SURO CAPITAL CORP.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

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.

June 30, 2022

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.

3 unchanged sentences

(5) Probability-Weighted Expected Return Method, or "PWERM"

(6) Discount for Lack of Marketability, or "DLOM"

The aggregate values of Level 3 assets and liabilities changed during the three months ended March 31, 2022 as follows:

Three Months Ended March 31, 2022

The aggregate values of Level 3 assets and liabilities changed during the six months ended June 30, 2022 as follows:

Six Months Ended June 30, 2022

Stock Preferred

3 unchanged sentences

(6,918,251) (1,775,506) — (48,639) (8,742,396)

Purchases, capitalized fees and interest — 10,508,515 500,000 — 11,008,515

Sales/Maturity of investments (874,470) — (500,000) — (1,374,470)

Realized gains/(losses) 160,965 — — (70,379) 90,586

Net change in unrealized appreciation/(depreciation) included in earnings (11,707,298) (41,498,344) (506,339) (86,527) (53,798,508)

Fair Value as of March 31, 2022 $ 28,996,104 $ 147,645,693 $ 2,761,438 $ 4,671,293 $ 184,074,528

Net change in unrealized appreciation/ (depreciation) of Level 3 investments still held as of March 31, 2022 $ 2,566,504 $ (11,939,349) $ — $ 80,655 $ (9,292,190)

Fair Value as of June 30, 2022 $ 23,521,102 $ 131,036,463 $ 2,505,099 $ 4,753,567 $ 161,816,231

Net change in unrealized appreciation/ (depreciation) of Level 3 investments still held as of June 30, 2022 $ 4,456,750 $ (39,541,307) $ (506,339) $ 211,567 $ (35,379,329)

________________________

(1) During the three months ended March 31, 2022, the Company’s portfolio investments had the following corporate actions which are reflected above:

(1) During the six months ended June 30, 2022, the Company’s portfolio investments had the following corporate actions which are reflected above:

Portfolio Company Conversion from Conversion to

21 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

(1) During the year ended December 31, 2021 , the Company’s portfolio investments had the following corporate actions which are reflected above:

22 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

Schedule of Investments In, and Advances to, Affiliates

Transactions during the three months ended March 31, 2022 involving the Company’s controlled investments and non-controlled/affiliate investments were as follows:

Transactions during the six months ended June 30, 2022 involving the Company’s controlled investments and non-controlled/affiliate investments were as follows:

Type/Industry/Portfolio Company/Investment Principal/

5 unchanged sentences

Gains/(Losses) Unrealized

Gains/(Losses) Fair Value at March 31, 2022 Percentage

Gains/(Losses) Fair Value at June 30, 2022 Percentage

CONTROLLED INVESTMENTS * (2)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

Type/Industry/Portfolio Company/Investment Principal/

5 unchanged sentences

Gains/(Losses) Unrealized

Gains/(Losses) Fair Value at March 31, 2022 Percentage

Gains/(Losses) Fair Value at June 30, 2022 Percentage

NON-CONTROLLED/AFFILIATE INVESTMENTS * (1)

11 unchanged sentences

Digital Media Platform

OzyMedia, Inc.–Preferred shares, Series C-2 6% 683,482 — — — — — — — — %

OzyMedia, Inc.–Preferred shares, Series B 6% 922,509 — — — — — — — — — %

OzyMedia, Inc.–Preferred shares, Series A 6% 1,090,909 — — — — — — — — — %

OzyMedia, Inc.–Preferred shares, Series Seed 6% 500,000 — — — — — — — — — %

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 — — — — — — — — — %

13 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

Type/Industry/Portfolio Company/Investment Principal/

5 unchanged sentences

Gains/(Losses) Unrealized

Gains/(Losses) Fair Value at March 31, 2022 Percentage

Gains/(Losses) Fair Value at June 30, 2022 Percentage

Digital Media Platform

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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 March 31, 2022, 43.76% of its total investments are non-qualifying assets.

Of the Company’s total investments as of June 30, 2022, 31.74% of its total investments are non-qualifying assets.

*** Investment is income-producing.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

(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 owned 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 March 31, 2022, the investments noted had been placed on non-accrual status.

(3) As of June 30, 2022, the investments noted had been placed on non-accrual status.

(4) The SPBRX, INC.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

Schedule of Investments In, and Advances to, Affiliates

36 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

Type/Industry/Portfolio Company/Investment Principal/

21 unchanged sentences

Digital Media Platform

OzyMedia, Inc.–Preferred shares, Series C-2 6% 683,482 — 1,865,547 — — — (1,865,547) — — %

OzyMedia, Inc.–Preferred shares, Series B 6% 922,509 — 3,350,952 — — — — (3,350,952) — — %

OzyMedia, Inc.–Preferred shares, Series A 6% 1,090,909 — 2,824,679 — — — — (2,824,679) — — %

OzyMedia, Inc.–Preferred shares, Series Seed 6% 500,000 — 1,294,645 — — — — (1,294,645) — — %

Ozy Media, Inc.–Preferred shares, Series C-2 6% 683,482 — 1,865,547 — — — (1,865,547) — — %

Ozy Media, Inc.–Preferred shares, Series B 6% 922,509 — 3,350,952 — — — — (3,350,952) — — %

Ozy Media, Inc.–Preferred shares, Series A 6% 1,090,909 — 2,824,679 — — — — (2,824,679) — — %

Ozy Media, Inc.–Preferred shares, Series Seed 6% 500,000 — 1,294,645 — — — — (1,294,645) — — %

Total Digital Media Platform — 9,335,823 — — — — (9,335,823) — — %

9 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

Type/Industry/Portfolio Company/Investment Principal/

35 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

Type/Industry/Portfolio Company/Investment Principal/

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** 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”).

believes do not represent “qualifying assets” under Section 55(a) of the 1940 Act.

Of the Company’s total investments as of December 31, 2021, 26.91% of its total investments are non-qualifying assets.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

(7) As of December 31, 2021, the total $10.0 million capital commitment representing SuRo Capital Corp.'s Membership Interest in Architect Capital PayJoy SPV, LLC had been called and funded.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

NOTE 5—COMMON STOCK

12 unchanged sentences

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 Securities Exchange Act of 1934, as amended.

During the three months ended March 31, 2022, the Company repurchased 153,517 shares of the Company's common stock under the Share Repurchase Program.

During the three months ended March 31, 2021, the Company did not repurchase shares of common stock under the Share Repurchase Program.

As of March 31, 2022, the dollar value of shares that remained available to be purchased by the Company under the Share Repurchase Program was approximately $23.3 million.

During the three and six months ended June 30, 2022, the Company repurchased 855,159 and 1,008,676 shares, respectively, of the Company's common stock under the Share Repurchase Program.

During the three and six months ended June 30, 2021, the Company did not repurchase any shares of common stock under the Share Repurchase Program.

As of June 30, 2022, the dollar value of shares that remained available to be purchased by the Company under the Share Repurchase Program was approximately $16.4 million.

Amended and Restated 2019 Equity Incentive Plan

7 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

total dividend amount paid to all stockholders consisted of approximately $30.0 million in cash and 2,335,527 in shares of common stock issued.

8 unchanged sentences

Conversion of 4.75% Convertible Senior Notes due 2023

During the three months ended March 31, 2021, the Company issued 4,097,808 shares of its common stock and cash for fractional shares upon the conversion of approximately $37.9 million in aggregate principal amount of the 4.75% Convertible Senior Notes due 2023.

During the three and six months ended June 30, 2021, the Company issued 0 and 4,097,808 shares, respectively, of its common stock and cash for fractional shares upon the conversion of approximately $37.9 million in aggregate principal amount of the 4.75% Convertible Senior Notes due 2023.

The Company also redeemed approximately $0.3 million of aggregate principal amount for cash plus accrued and unpaid interest on March 29, 2021.

10 unchanged sentences

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 of 1933, as amended, 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.

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.

1 unchanged sentence

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 months ended March 31, 2022, the Company issued and sold 17,807 Shares under the ATM Program at a weighted-average price of $13.01 per share, for gross proceeds of $231,677 and net proceeds of $229,896, after deducting

During the three and six months ended June 30, 2022, the Company issued and sold 0 and 17,807 shares, respectively, under the ATM Program at a weighted-average price of $13.01 per share, for gross proceeds of $231,677 and net proceeds of

SURO CAPITAL CORP.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

commissions to the Agents on Shares sold.

As of March 31, 2022, up to approximately $98.8 million in aggregate amount of the Shares remain available for sale under the ATM Program.

June 30, 2022

$229,896, after deducting commissions to the Agents on Shares sold.

As of June 30, 2022, up to approximately $98.8 million in aggregate amount of the Shares remain available for sale under the ATM Program.

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 increase in net assets resulting from operations per common share, pursuant to ASC 260, for the three months ended March 31, 2022 and 2021.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Earnings per common share–basic:

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Adjustment for interest and amortization on 4.75% Convertible Senior Notes due 2023 (1)

— — — 501,065

Net change in net assets resulting from operations, as adjusted $ (94,339,688) $ 33,357,064 $ (73,883,233) $ 141,860,492

Adjustment for dilutive effect of 4.75% Convertible Senior Notes due 2023 (1)

— — — 1,808,313

Weighted-average common shares outstanding–diluted 30,633,878 25,334,482 30,929,321 24,732,256

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______________________

(1) As of March 31, 2022, there were no potentially dilutive securities outstanding.

(1) For the three and six months ended June 30, 2022 and June 30, 2021, 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.

As of March 31, 2022 and December 31, 2021, the Company had $1,330,000 and $1,330,000, respectively, in non-binding investment agreements that required it to make a future investment in a portfolio company.

As of June 30, 2022 and December 31, 2021, the Company had $1,330,000 and $1,330,000, respectively, in non-binding investment agreements that required it to make a future investment in a portfolio company.

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.

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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 March 31, 2022 and December 31, 2021, the Company booked a right-of-use asset and operating lease liability of $428,383 and $470,508, respectively, on the Condensed Consolidated Statement of Assets and Liabilities.

As of March 31, 2022 and December 31, 2021, 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 March 31, 2022 and 2021, the Company incurred $47,332 and $45,723, 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 March 31, 2022, the remaining lease term was 2.3 years and the discount rate was 3.00%.

As of June 30, 2022 and December 31, 2021, the Company booked a right-of-use asset and operating lease liability of $379,835 and $470,508, respectively, on the Condensed Consolidated Statement of Assets and Liabilities.

As of June 30, 2022 and December 31, 2021, 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 June 30, 2022 and 2021, the Company incurred $47,349 and $46,321, respectively, of operating lease expense.

For the six months ended June 30, 2022 and 2021, the Company

SURO CAPITAL CORP.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

The following table shows future minimum payments under the Company's operating lease as of March 31, 2022:

June 30, 2022

incurred $94,721 and $92,045, 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 June 30, 2022, the remaining lease term was 2.0 years and the discount rate was 3.00%.

The following table shows future minimum payments under the Company's operating lease as of June 30, 2022:

For the Years Ended December 31, Amount

NOTE 8—FINANCIAL HIGHLIGHTS

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Per Basic Share Data

2 unchanged sentences

(0.12) (0.07) (0.26) (0.21)

Net realized gain on investments (1)

Net realized gain/(loss) on investments (1)

(0.06) 0.63 0.04 6.10

Net change in unrealized appreciation/(depreciation) of investments (1)

(2.89) 0.32 (2.17) 0.26

Dividends declared — (2.50) (0.11) (3.00)

Issuance of common stock from stock dividend — 0.16 — 0.16

Issuance of common stock from public offering (1)

1 unchanged sentence

Repurchase of common stock (1)

0.07 (0.01) —

Stock-based compensation (1)

0.02 0.01 0.02 0.02

Net asset value at end of period $ 9.24 $ 16.56 $ 9.24 $ 16.56

8 unchanged sentences

Average net assets $378,428,728 $425,330,123 $371,249,600 $369,373,984

Ratio of gross operating expenses to average net assets (3)

5.39 % 4.05 %

Ratio of incentive fee waiver to average net assets — % — %

Ratio of management fee waiver to average net assets — % — %

Ratio of income tax provision to average net assets — % — %

Ratio of net operating expenses to average net assets (3)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

NOTE 9—INCOME TAXES

8 unchanged sentences

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.

During the three months ended March 31, 2022, the Company declared distributions of $0.11 per share.

During the three and six months ended June 30, 2022, the Company declared distributions of $0 and $0.11 per share, respectively.

The determination of the tax attributes of the Company’s distributions is made annually as of the end of the Company’s taxable year generally based upon its taxable income for the full taxable year and distributions paid for the full taxable year.

As a result, a determination made on a by-dividend basis may not be representative of the actual tax attributes of the Company’s distributions for a full taxable year.

If the Company had determined the tax attributes of our distributions taxable year-to-date as of March 31, 2022, 100% would be from net realized investment gains.

If the Company had determined the tax attributes of our distributions taxable year-to-date as of June 30, 2022, 100% would be from net realized investment gains.

However, there can be no certainty to stockholders that this determination is representative of what the actual tax attributes of the Company’s fiscal year of 2022 distributions to stockholders will be.

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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 U.S.

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 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

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

result of their ownership of certain portfolio investments.

10 unchanged sentences

Further, the Company and the Taxable Subsidiaries accrue all interest and penalties related to uncertain tax positions as incurred.

As of March 31, 2022, there were no material interest or penalties incurred related to uncertain tax positions.

As of June 30, 2022, there were no material interest or penalties incurred related to uncertain tax positions.

NOTE 10—DEBT CAPITAL ACTIVITIES

12 unchanged sentences

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 March 31, 2022 and December 31, 2021 was $25.65 and $25.68 per note,

The reported closing market price of SSSSL on June 30, 2022 and December 31, 2021 was $24.93 and $25.68 per note,

SURO CAPITAL CORP.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

respectively.

As of March 31, 2022 and December 31, 2021, the fair value of the 6.00% Notes due 2026 was $77.0 and $77.0 million, respectively.

They are classified as Level 1 of the fair value hierarchy (Refer to “Note 2 — Significant Accounting Policies”).

As of March 31, 2022 and December 31, 2021, the Company was in compliance with the terms of the Indenture.

As of June 30, 2022 and December 31, 2021, the fair value of the 6.00% Notes due 2026 was $74.8 million and $77.0 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 June 30, 2022 and December 31, 2021, the Company was in compliance with the terms of the Indenture.

4.75% Convertible Senior Notes due 2023

2 unchanged sentences

The Company did not have the right to redeem the 4.75% Convertible Senior Notes due 2023 prior to March 27, 2021.

On or after March 27, 2021, the Company could redeem the 4.75% Convertible Senior Notes due 2023 for cash, in whole or from time to time in part, at the Company’s option if (i) the closing sale price of the Company’s common stock for at least 15 trading days (whether or not consecutive) during the period of any 20 consecutive trading days was greater than or equal to 150% of the conversion price on each applicable trading day, (ii) no public announcement of a pending, proposed or intended fundamental change had occurred which had not been abandoned, terminated or consummated, and (iii) no event of default under the indenture governing the 4.75% Convertible Senior Notes due 2023, and no event that with the passage of time or giving of notice would constitute an event of default under such indenture, had occurred or existed.

On or after March 27, 2021, the Company could redeem the 4.75% Convertible Senior Notes due 2023 for cash, in whole or in part, from time to time, at the Company’s option if (i) the closing sale price of the Company’s common stock for at least 15 trading days (whether or not consecutive) during the period of any 20 consecutive trading days was greater than or equal to 150% of the conversion price on each applicable trading day, (ii) no public announcement of a pending, proposed or intended fundamental change had occurred which had not been abandoned, terminated or consummated, and (iii) no event of default under the indenture governing the 4.75% Convertible Senior Notes due 2023, and no event that with the passage of time or giving of notice would constitute an event of default under such indenture, had occurred or existed.

All of these conditions were met and on February 19, 2021, the Company caused notices to be issued to the holders of the 4.75% Convertible Senior Notes due 2023 regarding the Company’s exercise of its option to redeem, in whole, the issued and outstanding 4.75% Convertible Senior Notes due 2023, pursuant to the governing indenture.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

of its common stock and cash for fractional shares upon the conversion of $1,785,000 in aggregate principal amount of the 4.75% Convertible Senior Notes due 2023.

The table below shows a reconciliation from the aggregate principal amount of 4.75% Convertible Senior Notes due 2023 to the balance shown on the Condensed Consolidated Statement of Assets and Liabilities.

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Initial aggregate principal amount of 4.75% Convertible Senior Notes due 2023 $ — $ 38,215,000

4 unchanged sentences

The 4.75% Convertible Senior Notes due 2023 were the Company’s general, unsecured, senior obligations and ranked senior in right of payment to any future indebtedness that was expressly subordinated in right of payment to the 4.75% Convertible Senior Notes due 2023, equal in right of payment to any existing and future unsecured indebtedness that was not so subordinated to the 4.75% Convertible Senior Notes due 2023, effectively junior to any future secured indebtedness to the extent of the value of the assets securing such indebtedness, and structurally junior to all future indebtedness (including trade payables) incurred by the Company’s subsidiaries.

In connection with the issuance of the 4.75% Convertible Senior Notes due 2023, the Company was required under the terms of the Credit Facility with Western Alliance Bank to deposit any proceeds from the 4.75% Convertible Senior Notes due 2023 offering into an account at Western Alliance Bank and was required to maintain at least $65.0 million (or such lesser amount to the extent such funds are used to repay or repurchase a portion of the outstanding 5.25% Convertible Senior Notes due 2018 prior to their maturity and repayment in full) in an account at Western Alliance Bank until such time as the 5.25% Convertible Senior Notes due 2018 were repaid in full.

In connection with the issuance of the 4.75% Convertible Senior Notes due 2023, the Company was required under the terms of its credit facility with Western Alliance Bank (the "Credit Facility") to deposit any proceeds from the 4.75% Convertible Senior Notes due 2023 offering into an account at Western Alliance Bank and was required to maintain at least $65.0 million (or such lesser amount to the extent such funds are used to repay or repurchase a portion of the outstanding 5.25% Convertible Senior Notes due 2018 prior to their maturity and repayment in full) in an account at Western Alliance Bank until such time as the 5.25% Convertible Senior Notes due 2018 were repaid in full.

The 5.25% Convertible Senior Notes due 2018 matured on September 15, 2018, at which time the Company repaid the remaining outstanding aggregate principal amount of the 5.25% Convertible Senior Notes due 2018, including accrued but unpaid interest.

5 unchanged sentences

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 the Nasdaq Global Select Market 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.

3 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

Cancellation of Stock Option Awards Under 2019 Equity Incentive Plan

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Cancelled (1,155,000) $ 6.57 $ 2.57

Outstanding as of March 31, 2022 and December 31, 2021

As of March 31, 2022 and December 31, 2021, 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.

Outstanding as of June 30, 2022 and December 31, 2021

As of June 30, 2022 and December 31, 2021, 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

6 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

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).

4 unchanged sentences

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 three months ended March 31, 2022, the Company granted 241,827 restricted shares to the Company's officers pursuant to the Amended & Restated 2019 Equity Incentive Plan.

During the six months ended June 30, 2022, the Company granted 241,827 restricted shares to the Company's officers pursuant to the Amended & Restated 2019 Equity Incentive Plan.

These restricted shares have a vesting period of 3 years.

The Company determined that the fair values, based on the grant date close price of such restricted shares granted under the Amended & Restated 2019 Equity Incentive Plan during the three months ended March 31, 2022 and 2021 were approximately $2,885,000 and $2,878,182, respectively, in the aggregate.

The Company determined that the fair values, based on the grant date close price of such restricted shares granted under the Amended & Restated 2019 Equity Incentive Plan during the six months ended June 30, 2022 and 2021 were approximately $2,885,000 and $3,080,886, respectively, in the aggregate.

On July 2, 2021, 21,760 restricted shares related to the 2020 non-employee director grants vested.

The Company expensed the full value of restricted stock compensation related to annual non-employee director grants on the vesting date.

As of March 31, 2022 and December 31, 2021, there were approximately $7,815,903 and $2,929,830, respectively, of total unrecognized compensation costs related to the restricted share grants.

On June 1, 2022, 15,080 restricted shares related to the 2021 non-employee director grants vested.

As of June 30, 2022 and December 31, 2021, there were approximately $7,385,795 and $2,929,830, respectively, 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.

The following table summarizes the activities for the Company’s restricted share grants for the three months ended March 31, 2022 under the Amended & Restated 2019 Equity Incentive Plan:

The following table summarizes the activities for the Company’s restricted share grants for the six months ended June 30, 2022 under the Amended & Restated 2019 Equity Incentive Plan:

Number of Restricted Shares

2 unchanged sentences

Forfeited (15,000)

Outstanding as of March 31, 2022

Vested as of March 31, 2022

Outstanding as of June 30, 2022

Vested as of June 30, 2022

_________________________________

(1) The balance of vested shares as of March 31, 2022 reflects the total shares vested during the quarter and has not been reduced for those vested shares forfeited at time of vest related to net share settlement.

(1) The balance of vested shares as of June 30, 2022 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.

3 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

NOTE 12—SUBSEQUENT EVENTS

Portfolio Activity

From April 1, 2022 through May 4, 2022, the Company exited or received proceeds from the following investments:

From July 1, 2022 through August 3, 2022, the Company exited or received proceeds from the following investments:

Portfolio Company Transaction Date Shares Sold Average Net Share Price (1)

Net Proceeds Realized Gain (2)

Net Proceeds Realized Gain/(Loss) (2)

Enjoy Technology, Inc.

Various 626,955 $ 0.38 $ 235,195 $ (3,005,238)

Residential Homes for Rent, LLC (d/b/a Second Avenue) 4/22/2022 N/A N/A 83,333 —

$ 1,186,970 $ 565,644

Palantir Lending Trust SPV I 7/14/2022 N/A N/A 611,930 611,930

Rent the Runway, Inc.

Various 15,000 3.43 51,428 (176,494)

Residential Homes For Rent, LLC (d/b/a Second Avenue) (3)

7/22/2022 N/A N/A 83,333 —

Rover Group, Inc.

Various 110,000 4.14 454,883 126,067

Total $ 1,436,769 $ (2,443,735)

_________________________________

1 unchanged sentence

(2) Realized gain does not include adjustments to amounts held in escrow receivable.

(3) Subsequent to March 31, 2022, $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.

(3) Subsequent to June 30, 2022, $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 April 1, 2022 through May 4, 2022, the Company funded investments in an aggregate amount of $500,000 (not including capitalized transaction costs) as shown in the following table:

Portfolio Company Investment Transaction Date Gross Payments

Shogun Enterprises, Inc.

Convertible Note 5/2/2022 $ 500,000

From July 1, 2022 through August 3, 2022, the Company did not purchase any investments.

The Company is frequently in negotiations with various private companies with respect to investments in such companies.

2 unchanged sentences

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.

From April 1, 2022 through May 4, 2022, the Company had $1.3 million in non-binding investment agreements that required it to make a future investment in a portfolio company.

Share Repurchase Program

From April 1, 2022 through May 4, 2022, the Company repurchased 431,134 additional shares under the Share Repurchase Program for an aggregate purchase price of $3.7 million.

From July 1, 2022 through August 3, 2022, the Company had $2.3 million in non-binding investment agreements that required it to make a future investment in a portfolio company.

Modified Dutch Auction Tender Offer

On August 1, 2022, the Company's Board approved a tender offer, which the Company expects will commence on or about August 8, 2022.

The Company will make the requisite tender offer filings and mailings upon commencement.

The Company has been closely monitoring the COVID-19 pandemic, its broader impact on the global economy and the more recent impacts on the U.S.

3 unchanged sentences

Such effects will likely continue for the duration of the pandemic, which is uncertain, and for some period thereafter.

Our portfolio companies and, by extension, our operating results may be adversely impacted by the COVID-19 pandemic and, depending on the duration

Our portfolio companies and, by extension, our operating results may be adversely impacted by the COVID-19 pandemic and, depending on the duration and extent of the disruption to the operations of our portfolio companies, certain portfolio companies may experience financial distress and may possibly default on their financial obligations to us and their other capital providers.

Some of our portfolio companies have significantly curtailed business operations, furloughed or laid off employees and terminated service providers,

SURO CAPITAL CORP.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

and extent of the disruption to the operations of our portfolio companies, certain portfolio companies may experience financial distress and may possibly default on their financial obligations to us and their other capital providers.

Some of our portfolio companies have significantly curtailed business operations, furloughed or laid off employees and terminated service providers, and deferred capital expenditures, which could impair their business on a permanent basis and additional portfolio companies may take similar actions.

June 30, 2022

and deferred capital expenditures, which could impair their business on a permanent basis and additional portfolio companies may take similar actions.

We continue to closely monitor our portfolio companies, which includes assessing each portfolio company’s operational and liquidity exposure and outlook;

3 unchanged sentences

This policy was amended in February 2022 when it was deemed safe to return to our offices.

As of May 4, 2022, there is no indication of a reportable subsequent event impacting the Company’s financial statements for the three months ended March 31, 2022.

As of August 3, 2022, there is no indication of a reportable subsequent event impacting the Company’s financial statements for the six months ended June 30, 2022.

The Company continues to observe and respond to the evolving COVID-19 environment and its potential impact on areas across its business.

3 unchanged sentences

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.

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.

The Company’s three controlled portfolio companies as of March 31, 2022, SPBRX, INC.

The Company’s three controlled portfolio companies as of June 30, 2022, SPBRX, INC.

(f/k/a GSV Sustainability Partners, Inc.), Architect Capital PayJoy SPV, LLC and Colombier Sponsor 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 March 31, 2021 as the Company’s significant subsidiaries would not have been considered significant subsidiaries under the Final Rules.

For comparability purposes, the Company has omitted the previously disclosed summarized financial information of the Company’s significant subsidiaries for the quarter ended June 30, 2021 as the Company’s significant subsidiaries would not have been considered significant subsidiaries under the Final Rules.

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-Q

Item 1. Financial Statements