Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
(a)
Evaluation of Disclosure Controls and Procedures
As
of December 31, 2022, our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness
of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange
Act). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures
were effective and provided reasonable assurance that information required to be disclosed in our periodic SEC filings is recorded, processed,
summarized and reported within the time periods specified by the SEC and that such information is accumulated and communicated to our
management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding
required disclosure. However, in evaluating the disclosure controls and procedures, management recognizes that any controls and procedures,
no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management
necessarily is required to apply its judgment in evaluating the cost-benefit relationship of such possible controls and procedures.
(b)
Management’s Report on Internal Control Over Financial Reporting
Our
management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined
in Rule 13a-15(f) of the Exchange Act, and for performing an assessment of the effectiveness of internal control over financial reporting
as of December 31, 2022. Internal control over financial reporting is a process designed by, or under the supervision of, our principal
executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted
accounting principles. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance
of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of our management
and directors, as applicable; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use, or disposition of our assets that could have a material effect on the consolidated financial statements.
Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those
systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management
performed an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2022 based upon criteria
in Internal Control— Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission
(“COSO”). Based on this assessment, management determined that our internal control over financial reporting was effective
as of December 31, 2022.
This
annual report does not include an attestation report of the Company’s registered public accounting firm pursuant to the rules of
the Securities and Exchange Commission.
(c)
Changes in Internal Control Over Financial Reporting
There
have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange
Act) that occurred during the fiscal year ended December 31, 2022 that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.
Item 9B. Other Information
Item
1.02 Termination of Material Definitive Agreement
On March 10, 2023, the Company and U.S. Bank Trust Company, National Association
(the “Custodian”) and U.S. Bank National Association (the “Document Custodian” and, together with the Custodian,
the “U.S. Bank Entities”) agreed to terminate, effective as of May 9, 2023 or such later date as the parties mutually agree,
the Custody Agreement, dated as of October 28, 2022, between the Company and the Custodian (the “Securities Custody Agreement”),
and the Document Custody Agreement, dated as of October 28, 2022, between the Company and the Document Custodian (the “Document
Custody Agreement” and, together with the Securities Custody Agreement, the “Custody Agreements”). We have commenced
a transition process with the U.S. Bank Entities, and we are currently in discussions with a number of reputable qualified custodians
that we expect will be able to fulfill the Company’s needs in providing the custodial services currently provided by the U.S. Bank
Entities without disruption. The termination of the Custody Agreements followed a determination by the parties that the arrangements set
forth by the Custody Agreements were no longer mutually beneficial. We do not believe that such termination will have a material adverse
impact on our operations or financial condition.
Under the Custody Agreement, the Securities Custodian holds all of our
portfolio securities and cash and transfers such securities or cash pursuant to Proper Instructions (as such term is defined under the
Custody Agreement). Under the Document Custody Agreement, the Document Custodian holds all of our documents evidencing certain investments
and transfer such documents pursuant to Proper Instructions (as such term is defined under the Document Custody Agreement). No termination
or other fees are payable in connection with the termination of the Custody Agreements.
The foregoing description of the Custody Agreements is a summary only and
is qualified in all respects by the provisions of the Securities Custody Agreement and the Document Custody Agreement, copies of which
are filed as Exhibit 10.1 and 10.2, respectively, to our Current Report on Form 8-K (File No. 814-00852), filed with the SEC on November
1, 2022.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not
applicable.
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PART
III
Item 10. Directors, Executive Officers and Corporate Governance
The
information required by Item 10 will be contained in the 2023 Proxy Statement, to be filed with the SEC within 120 days after December
31, 2022, and is incorporated herein by reference. There have been no material changes to the procedures by which stockholders may recommend
nominees to our Board of Directors.
We
have adopted a Code of Business Conduct and Ethics for our employees and directors, including, specifically, our Chief Executive Officer,
our Chief Financial Officer, and our other executive officers. Our Code of Business Conduct and Ethics satisfies the requirements for
a “code of ethics” within the meaning of SEC rules. A copy of the Code of Business Conduct and Ethics is posted on our website
at https://investors.surocap.com/corporate-governance . We intend to disclose any changes in, or waivers from, the Code of Business
Conduct and Ethics by posting such information on the same website or by filing a Form 8-K, in each case to the extent such disclosure
is required by rules of the SEC or NASDAQ.
Item 11. Executive Compensation
The
information required by Item 11 will be contained in the 2023 Proxy Statement, to be filed with the SEC within 120 days after December
31, 2022, and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The
information required by Item 12 will be contained in the 2023 Proxy Statement, to be filed with the SEC within 120 days after December
31, 2022, and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The
information required by Item 13 will be contained in the 2023 Proxy Statement, to be filed with the SEC within 120 days after December
31, 2022, and is incorporated herein by reference.
Item 14. Principal Accountant Fees and Services
The
information required by Item 14 will be contained in the 2023 Proxy Statement, to be filed with the SEC within 120 days after December
31, 2022, and is incorporated herein by reference.
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Item 15. Exhibits and Financial Statement Schedules
The
following documents are filed or incorporated by reference as part of this annual report on Form 10-K:
(1) Financial
Statements—Refer to Part II, Item 8 of this Form 10-K, which are incorporated herein
by reference.
Page
Report of Independent Registered Public Accounting Firm
72
Consolidated Statements of Assets and Liabilities as of December 31, 2022 and 2021
73
Consolidated Statements of Operations for the years ended December 31, 2022, 2021 and 2020
74
Consolidated Statements of Changes in Net Assets for the years ended December 31, 2022, 2021 and 2020
75
Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020
76
Consolidated Schedule of Investments as of December 31, 2022
77
Consolidated Schedule of Investments as of December 31, 2021
82
Notes to Consolidated Financial Statements
87
(2) Financial
Statement Schedules—None. We have omitted financial statement schedules because they
are not required or are not applicable, or the required information is shown in the financial
statements or notes to the financial statements.
(3) Exhibits
The
following exhibits are filed as part of this report or hereby incorporated by reference to exhibits previously filed with the SEC:
3.1
Articles of Amendment and Restatement (1)
3.2
Articles of Amendment (2)
3.3
Articles of Amendment (3)
3.4
Articles of Amendment (4)
3.5
Second Amended and Restated Bylaws (4)
4.1
Form of Common Stock Certificate (5)
4.2
Base Indenture, dated March 28, 2018, by and between the Registrant and U.S. Bank National Association, as trustee (6)
4.3
Second Supplemental Indenture, dated December 17, 2021, relating to the 6.00% Notes due 2026, by and between the Company and U.S. Bank National Association, as trustee (7)
4.4
Form of 6.00% Notes due 2026 (incorporated by reference to Exhibit 4.3) (7)
4.5
Description of Securities (8)
10.1
Dividend Reinvestment Plan (1)
10.2
SuRo Capital Corp. Amended and Restated 2019 Equity Incentive Plan (9)
10.3
Form of SuRo Capital Corp. Restricted Stock Agreement (Non-Employee Directors) (9)
10.4
Form of SuRo Capital Corp. Restricted Stock Agreement (Employees and Officers) (9)
10.5
Form of SuRo Capital Corp. Non-Qualified Stock Option Award (9)
10.6
Custody Agreement dated April 14, 2011 by and between the Registrant and U.S. Bank National Association (10)
10.7
Custody Agreement, dated October 28, 2022, by and between the Registrant and U.S. Bank Trust Company, National Association, as Custodian. (11)
10.8
Document Custody Agreement, dated October 28, 2022, by and between the Registrant and U.S. Bank Trust Company, National Association, as Document Custodian. (11)
10.9
Form of Indemnification Agreement by and between the Company and each of its directors (1)
10.10
Second Amended and Restated Employment Agreement, dated April 26, 2021, by and between Sutter Rock Capital Corp. and Mark D. Klein (12)
10.11
Second Amended and Restated Employment Agreement, dated April 26, 2021, by and between Sutter Rock Capital Corp. and Allison Green (12)
10.12
Amendment No. 1 to Second Amended and Restated Employment Agreement, dated March 10, 2022, by and between SuRo Capital Corp. and Allison Green (8)
10.13
At-the-Market Sales Agreement dated as of July 29, 2020, by and among SuRo Capital Corp., BTIG LLC, JMP Securities LLC, and Ladenburg Thalmann & Co., Inc. (13)
10.14
Amendment No.1 to the At-the-Market Sales Agreement, dated as of September 23, 2020, by and among SuRo Capital Corp., BTIG LLC, JMP Securities LLC, and Ladenburg Thalmann & Co., Inc. (14)
14.1
Code of Ethics*
14.2
Code of Business Conduct and Ethics (15)
21.1
List of Subsidiaries (Included in the notes to the consolidated financial statements contained in this report)*
23.1
Consent of Marcum LLP*
31.1
Certification of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended*
31.2
Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended*
32.1
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
32.2
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
99.1
Report of Marcum LLP regarding the Senior Securities table*
99.2
Report of Deloitte & Touche LLP regarding the Senior Securities table (6)
101.INS
Inline
XBRL Instance Document
101.SCH
Inline
XBRL Taxonomy Extension Schema Document
101.CAL
Inline
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
Inline
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
Inline
XBRL Taxonomy Extension Label Linkbase Document
101.PRE
Inline
XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover
Page Interactive Data File (embedded within the Inline XBRL document)
(1)
Previously
filed in connection with Pre-Effective Amendment No. 2 to the Registrant’s Registration Statement on Form N-2 (File No. 333-171578),
filed on March 30, 2011, and incorporated by reference herein.
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TABLE OF CONTENTS
(2)
Previously
filed in connection with the Registrant’s Current Report on Form 8-K (File No. 814-00852), filed on June 1, 2011, and incorporated
by reference herein.
(3)
Previously
filed in connection with the Registrant’s Current Report on Form 8-K (File No. 814-00852) filed on August 1, 2019, and incorporated
by reference herein.
(4)
Previously
filed in connection with the Registrant’s Current Report on Form 8-K (File No. 814-00852) filed on June 16, 2020, and incorporated
by reference herein.
(5)
Previously
filed in connection with Pre-Effective Amendment No. 3 to the Registrant’s Registration Statement on Form N-2 (File No. 333-175655),
filed on September 20, 2011, and incorporated by reference herein.
(6)
Previously
filed in connection with the Registrant’s Registration Statement on Form N-2 (File No. 333-239681), filed on July 2, 2020 and
incorporated by reference herein.
(7)
Previously
filed in connection with the Registrant’s Current Report on Form 8-K (File No. 814-00852) filed on December 17, 2021 and incorporated
by reference herein.
(8)
Previously filed in connection with the Registrant’s Annual Report on Form 10-K (File No. 814-00852) filed
on March 11, 2022 and incorporated by reference herein.
(9)
Previously
filed in connection with the Registrant’s Registration Statement on Form S-8 (File No. 333-239662) filed on July 2, 2020, and
incorporated by reference herein.
(10)
Previously
filed in connection with Pre-Effective Amendment No. 3 to the Registrant’s Registration Statement on Form N-2 (File No. 333-171578),
filed on April 15, 2011, and incorporated by reference herein.
(11)
Previously
filed in connection with the Registrant’s Current Report on Form 8-K (File No. 814-00852) filed on November 1, 2022, and incorporated
by reference herein.
(12)
Previously
filed in connection with the Registrant’s Quarterly Report on Form 10-Q (File No. 814-00852), filed on May 6, 2021 and incorporated
by reference herein.
(13)
Previously filed in connection with the Registrant’s Current Report on Form 8-K (File No. 814-00852) filed on August 3, 2020 and incorporated
by reference herein.
(14)
Previously
filed in connection with the Registrant’s Current Report on Form 8-K (File No. 814-00852) filed on September 23, 2020 and incorporated
by reference herein.
(15)
Previously
filed in connection with the Registrant’s Annual Report on Form 10-K (File No. 814-00852), filed on March 13, 2020 and incorporated
by reference herein.
*
Filed
herewith.
Item 16. Form 10-K Summary
Not
applicable.
129
TABLE OF CONTENTS
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
SURO CAPITAL CORP.
Date:
March
16, 2023
By:
/s/
Mark D. Klein
Mark
D. Klein
Chairman,
President and Chief Executive Officer
(Principal
Executive Officer)
Date:
March
16, 2023
By:
/s/
Allison Green
Allison
Green
Chief
Financial Officer, Chief Compliance Officer, Treasurer, and Corporate Secretary
(Principal
Financial and Accounting Officer)
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Date:
March 16, 2023
By:
/s/
Mark D. Klein
Mark
D. Klein
Chairman, President and Chief Executive Officer
(Principal Executive Officer)
Date:
March 16, 2023
By:
/s/
Allison Green
Allison
Green
Chief Financial
Officer, Chief Compliance Officer,
Treasurer, and Corporate Secretary
(Principal Financial and Accounting Officer)
Date:
March 16, 2023
By:
/s/
Leonard A. Potter
Leonard
A. Potter
Director
Date:
March 16, 2023
By:
/s/
Ronald M. Lott
Ronald
M. Lott
Director
Date:
March 16, 2023
By:
/s/
Marc Mazur
Marc
Mazur
Director
Date:
March 16, 2023
By:
/s/
Lisa Westley
Lisa
Westley
Director
130