Neostellar Capital Corp. 10-K

Item 8. Financial Statements and Supplementary Data Index to Financial Statements Page Report of Independent Registered Public Accounting Firm 72 Consolidated Statements of Assets and Liabilities as of December 31, 2020 and 2019 75 Consolidated Statements of Operations for the years ended December 31, 2020, 2019 and 2018 76 Consolidated Statements of Changes in Net Assets for the years ended December 31, 2020, 2019 and 2018 78 Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018 79 Consolidated Schedule of Investments as of December 31, 2020 81 Consolidated Schedule of Investments as of December 31, 2019 85 Notes to Consolidated Financial Statements 89 71 TABLE OF CONTENTS REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and Board of Directors of SuRo Capital Corp. Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated statements of assets and liabilities of SuRo Capital Corp. and subsidiaries (the “Company”) including the consolidated schedule of investments as of December 31, 2020 and 2019, the related consolidated statements of operations, cash flows, and changes in net assets for the years ended December 31, 2020 and 2019, the financial highlights (presented in Note 8) for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations, changes in net assets, and cash flows for the years ended December 31, 2020 and 2019, and the financial highlights for the years then ended in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our procedures included confirmation of investments owned as of December 31, 2020 and 2019, by correspondence with the custodian, loan agents, and borrowers; when replies were not received, we performed other auditing procedures. We believe that our audits provides a reasonable basis for our opinion. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) related to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which they relate. Valuation of Investments – Level 3 Investments in Preferred Stock and Common Stock As described in Note 4 to the consolidated financial statements, approximately 41% of the Company’s $431 million total investments in securities as of December 31, 2020 represents investments in level 3 common stock and preferred stock issued by private companies whose fair value, as disclosed by management, is determined in good faith by the Board of Directors. Management applied significant judgment in determining the fair value of these level 3 investments, which involved the use of significant unobservable inputs with respect to the revenue and/or other multiples utilized, discounts rates and precedent transactions. 72 TABLE OF CONTENTS The principal considerations for our determination that performing procedures relating to the valuation of level 3 investments in preferred stock and common stock is a critical audit matter are the significant judgment involved by management in determining the fair value of these level 3 investments, including the use of various valuation techniques and significant unobservable inputs, which in turn led to a high degree of auditor judgment, subjectivity, and effort in performing audit procedures and evaluating the audit evidence obtained relating to the valuation techniques and significant unobservable inputs. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements and financial highlights. Our principle audit procedures included, among others, (i) testing the completeness and accuracy of management’s valuations, including evaluating the appropriateness of management’s methodologies, evaluating the reasonableness of assumptions and significant unobservable inputs; including revenue and/or other multiples utilized, discounts rates and precedent transactions and; (ii) the involvement of professionals with specialized skills and knowledge to assist in the assessment of the fair values for a sample of investments, including reviewing the valuation methodologies, assessing the assumptions utilized in developing the estimates, and evaluating the reasonableness of management’s conclusions in deriving the valuations. /s/ Marcum LLP San Francisco, CA March 12, 2021 We have served as the Company’s auditor since 2019. 73 TABLE OF CONTENTS REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of SuRo Capital Corp. Opinion on the Consolidated Financial Statements and Financial Highlights We have audited the SuRo Capital Corp. (formerly known as "Sutter Rock Capital Corp." and "GSV Capital Corp.") and subsidiaries (the "Company"), statements of operations, cash flows, and changes in net assets for the year ended December 31, 2018, the financial highlights (presented in Note 8) for the three years then ended, and the related notes. In our opinion, the consolidated financial statements and financial highlights present fairly, in all material respects, the results of its operations, changes in net assets, and cash flows for the year ended December 31, 2018, and the financial highlights for the three years then ended in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements and financial highlights are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements and financial highlights based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statement and financial highlights. We believe that our audits provide a reasonable basis for our opinion. /s/ Deloitte & Touche LLP San Francisco, California April 17, 2019 We began serving as the Company's auditor in 2015. In 2019 we became the predecessor auditor. 74 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES December 31, 2020 December 31, 2019 ASSETS Investments at fair value: Non-controlled/non-affiliate investments (cost of $105,339,169 and $90,567,041, respectively) $ 249,804,803 $ 152,866,112 Non-controlled/affiliate investments (cost of $53,865,346 and $52,857,243, respectively) 30,165,773 37,944,268 Controlled investments (cost of $7,161,412 and $7,161,412, respectively) 809,198 775,198 Total Portfolio Investments 280,779,774 191,585,578 Investments in U.S. Treasury bills (cost of $150,000,000 and $49,996,667, respectively) 150,000,000 50,000,000 Total Investments (cost of $316,365,927 and $200,582,363, respectively) 430,779,774 241,585,578 Cash 45,793,724 44,861,263 Escrow proceeds receivable 852,462 265,303 Interest and dividends receivable 166,998 84,630 Deferred financing costs 297,196 11,382 Prepaid expenses and other assets (1) 985,550 1,755,933 Total Assets 478,875,704 288,564,089 LIABILITIES Accounts payable and accrued expenses (1) 762,312 1,143,923 Payable to executive officers — 1,369,873 Accrued interest payable 453,803 475,000 Dividends payable 4,395,229 2,107,709 Payable for securities purchased 134,250,000 44,746,660 Income tax payable 35,850 — 4.75% Convertible Senior Notes due March 28, 2023 (2) 37,395,437 38,803,635 Total Liabilities 177,292,631 88,646,800 Commitments and contingencies (Notes 7 and 10) Net Assets $ 301,583,073 $ 199,917,289 NET ASSETS Common stock, par value $0.01 per share (100,000,000 authorized; 19,914,023 and 17,564,244 issued and outstanding, respectively) $ 199,140 $ 175,642 Paid-in capital in excess of par 222,002,592 178,550,374 Unearned deferred compensation (200,000) — Accumulated net investment loss (40,193,778) (25,679,362) Accumulated net realized gain on investments, net of distributions 5,361,270 5,867,417 Accumulated net unrealized appreciation/(depreciation) of investments 114,413,849 41,003,218 Net Assets $ 301,583,073 $ 199,917,289 Net Asset Value Per Share $ 15.14 $ 11.38 See accompanying notes to consolidated financial statements. __________________________________________________ (1) This balance includes a right of use asset and corresponding operating lease liability, respectively. Refer to "Note 7—Commitments and Contingencies— Operating Leases and Related Deposits " for more detail. (2) As of December 31, 2020 and December 31, 2019, the 4.75% Convertible Senior Notes due March 28, 2023 had a face value of $38,215,000 and $40,000,000, respectively. Refer to “Note 10—Debt Capital Activities” for a reconciliation of the carrying value to the face value. 75 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Year Ended December 31, 2020 2019 2018 INVESTMENT INCOME Non-controlled/non-affiliate investments: Interest income $ 1,035,694 $ 828,392 $ 351,188 Dividend income 50,000 100,000 — Non-controlled/affiliate investments: Interest income/(reversal of interest income accrual) (29,184) 108,395 581,813 Dividend income 317,617 — — Controlled investments: Interest income — 58,937 59,835 Dividend income 450,000 400,000 625,000 Total Investment Income 1,824,127 1,495,724 1,617,836 OPERATING EXPENSES Management fees (1) — 848,723 5,199,900 Incentive fees/(Reversal of incentive fee accrual) (1) — (4,660,472) 382,387 Costs incurred under Administration Agreement (1) — 306,084 1,702,047 Compensation expense (2) 8,801,841 4,286,972 — Directors’ fees 445,000 383,370 345,000 Professional fees 2,962,781 5,290,329 1,587,578 Interest expense 2,247,817 2,372,570 4,545,471 Income tax expense 43,574 33,825 482,994 Other expenses 1,837,530 2,085,391 899,457 Total Operating Expenses 16,338,543 10,946,792 15,144,834 Management fee waiver (1) — — (892,421) Incentive fee waiver (1) — — (5,000,000) Total operating expenses, net of waiver of management and incentive fees 16,338,543 10,946,792 9,252,413 Net Investment Loss (14,514,416) (9,451,068) (7,634,577) Realized Gain/(Loss) on Investments: Non-controlled/non-affiliated investments 16,441,223 32,625,663 (7,432,939) Non-controlled/affiliate investments — (13,446,323) — Controlled investments — — (680) Net Realized Gain/(Loss) on Investments 16,441,223 19,179,340 (7,433,619) Realized loss on partial repurchase of 5.25% Convertible Senior Note due 2018 — — (397,846) Change in Unrealized Appreciation/(Depreciation) of Investments: Non-controlled/non-affiliated investments 82,163,227 (1,907,148) 21,819,883 Non-controlled/affiliate investments (8,786,596) 21,489,014 (10,988,777) Controlled investments 34,000 (6,242,007) (1,190,056) Net Change in Unrealized Appreciation/(Depreciation) of Investments 73,410,631 13,339,859 9,641,050 Benefit from taxes on unrealized depreciation of investments — 885,566 6,716,735 Net Change in Net Assets Resulting from Operations $ 75,337,438 $ 23,953,697 $ 891,743 Net Change in Net Assets Resulting from Operations per Common Share: Basic $ 4.21 $ 1.24 $ 0.04 Diluted (3) $ 3.56 $ 1.14 $ 0.04 Weighted-Average Common Shares Outstanding Basic 17,910,353 19,328,414 20,617,890 Diluted (3) 21,790,898 23,069,622 20,617,890 See accompanying notes to consolidated financial statements. 76 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS –continued ____________________________________________________________________________________________________________________________ (1) This balance references a related-party transaction. Refer to “Note 3—Related-Party Arrangements” for more detail. (2) For the year ended December 31, 2020, this balance includes $1,962,431 of accelerated recognition of compensation cost related to the cancellation of unvested options on April 28, 2020. Refer to "Note 11— Stock-Based Compensation" for more detail. (3) For the years ended December 31, 2020, 2019, and 2018, 0, 0, and 6,079,068 potentially dilutive common shares were excluded from the weighted-average common shares outstanding for diluted net increase in net assets resulting from operations per common share because the effect of these shares would have been anti-dilutive. Refer to “Note 6—Net Change in Net Assets Resulting from Operations per Common Share—Basic and Diluted”. 77 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS Year Ended December 31, 2020 2019 2018 Change in Net Assets Resulting from Operations Net investment loss $ (14,514,416) $ (9,451,068) $ (7,634,577) Net realized gains/(losses) on investments 16,441,223 19,179,340 (7,433,619) Realized loss on partial repurchase of 5.25% Convertible Senior Notes due 2018 — — (397,846) Net change in unrealized appreciation/(depreciation) of investments 73,410,631 13,339,859 9,641,050 Benefit from taxes on unrealized depreciation of investments — 885,566 6,716,735 Net Change in Net Assets Resulting from Operations 75,337,438 23,953,697 891,743 Distributions Dividends declared (16,947,366) (5,620,558) — Total Distributions (16,947,366) (5,620,558) — Change in Net Assets Resulting from Capital Transactions Issuance of common stock from public offering 49,882,319 — — Issuance of common stock from conversion of 4.75% Convertible Notes due 2023 1,810,956 — — Stock-based compensation (1) 1,962,431 998,355 — Repurchases of common stock (10,379,994) (14,792,364) (10,276,450) Net Increase/(Decrease) in Net Assets Resulting from Capital Transactions 43,275,712 (13,794,009) (10,276,450) Total Change in Net Assets 101,665,784 4,539,130 (9,384,707) Net Assets at Beginning of Year 199,917,289 195,378,159 204,762,866 Net Assets at End of Year $ 301,583,073 $ 199,917,289 $ 195,378,159 Capital Share Activity Shares outstanding at beginning of year 17,564,244 19,762,647 21,246,345 Issuance of common stock from public offering 3,808,979 — — Issuance of common stock under restricted stock plan 21,760 — — Issuance of common stock from conversion of 4.75% Convertible Notes due 2023 174,888 — — Shares repurchased (1,655,848) (2,198,403) (1,483,698) Shares Outstanding at End of Year 19,914,023 17,564,244 19,762,647 See accompanying notes to consolidated financial statements. ____________________________________________________________________________________________________________________________ (1) For the year ended December 31, 2020, this balance includes $1,962,431 of accelerated recognition of compensation cost related to the cancellation of unvested options on April 28, 2020. Refer to "Note 11— Stock-Based Compensation" for more detail. 78 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, 2020 2019 2018 Cash Flows from Operating Activities Net change in net assets resulting from operations $ 75,337,438 $ 23,953,697 $ 891,743 Adjustments to reconcile net change in net assets resulting from operations to net cash provided by/(used in) operating activities: Net realized (gain)/loss on investments (16,441,223) (19,179,340) 7,433,619 Net change in unrealized (appreciation)/depreciation of investments (73,410,631) (13,339,859) (9,641,050) Change in deferred tax liability — (885,566) (6,716,735) Amortization of discount on 5.25% Convertible Senior Notes due 2018 — — 492,170 Amortization of discount on 4.75% Convertible Senior Notes due 2023 376,802 369,124 281,130 Amortization of deferred financing costs — — 51,636 Amortization of fixed income security premiums and discounts — (5,066) (30,660) Write-off of deferred offering costs — 267,541 325,248 Stock-based compensation (2) 1,962,431 998,355 — Paid-in-kind interest — (383,980) (386,546) Adjustments to escrow proceeds receivable 844,825 29,178 1,034,704 Forfeited interest on 4.75% Convertible Senior Notes due 2023 25,996 — — Purchases of investments in: Portfolio investments (31,433,027) (25,569,685) (10,669,035) U.S. Treasury bills (450,000,084) (299,930,250) (399,893,952) Proceeds from sales or maturity of investments in: Portfolio investments 31,245,944 65,603,252 33,925,585 U.S. Treasury bills 350,000,000 350,000,000 400,000,000 Change in operating assets and liabilities: Due from controlled investments — — 840 Prepaid expenses and other assets 770,383 (1,548,164) 1,214 Interest and dividends receivable (82,368) 171,040 (220,529) Deferred financing costs — (11,382) — Escrow proceeds receivable (587,154) 2,229,279 (1,891,126) Due to GSV Asset Management (1) — — (231,697) Payable for securities purchased 89,503,340 (44,733,443) (5,722) Accounts payable and accrued expenses (381,611) 653,236 32,484 Payable to executive officers (1,369,873) 1,369,873 — Income tax payable 35,850 — — Accrued incentive fees (1) — (4,660,472) (4,617,613) Accrued management fees (1) — (415,056) (9,391) Accrued interest payable (21,197) — (581,563) Net Cash Provided by/(Used in) Operating Activities (23,624,159) 34,982,312 9,574,753 Cash Flows from Financing Activities Proceeds from the issuance of common stock, net 49,882,319 — — Proceeds from the issuance of 4.75% Convertible Senior Notes due 2023 — — 40,000,000 Deferred debt issuance costs — — (1,846,620) Repurchases of common stock (10,379,995) (14,792,364) (10,276,450) Repayment of 5.25% Convertible Senior Notes due 2018 — — (69,272,565) Dividends paid (14,659,850) (3,512,849) — Realized loss on repurchase of 5.25% Convertible Senior Notes due 2018 — — 397,846 Cash paid for fractional shares (40) — — See accompanying notes to consolidated financial statements. 79 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS - continued Year Ended December 31, 2020 2019 2018 Deferred offering costs (285,814) — (231,401) Net Cash Provided by/(Used in) Financing Activities $ 24,556,620 $ (18,305,213) $ (41,229,190) Total Increase/(Decrease) in Cash Balance $ 932,461 $ 16,677,099 $ (31,654,437) Cash Balance at Beginning of Year 44,861,263 28,184,163 59,838,600 Cash Balance at End of Year $ 45,793,724 $ 44,861,262 $ 28,184,163 Supplemental Information: Interest paid $ 1,874,294 $ 2,018,336 $ 4,127,163 Taxes paid $ 5,859 $ 33,825 $ 496,912 See accompanying notes to consolidated financial statements. _______________________ (1) This balance references a related-party transaction. Refer to “Note 3—Related-Party Arrangements” for more detail. (2) For the year ended December 31, 2020, this balance includes $1,962,431 of accelerated recognition of compensation cost related to the cancellation of unvested options on April 28, 2020. Refer to "Note 11— Stock-Based Compensation" for more detail. 80 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2020 Portfolio Investments* Headquarters/ Industry Date of Initial Investment Shares/ Principal Cost Fair Value % of Net Assets NON-CONTROLLED/NON-AFFILIATE Palantir Technologies, Inc. ** Palo Alto, CA Common shares, Class A (3)(13) Data Analysis 5/7/2012 4,618,952 $ 12,875,126 $ 94,635,398 31.38 % Coursera, Inc. Mountain View, CA Preferred shares, Series F 8% Online Education 7/15/2020 166,962 2,840,017 2,838,354 0.94 % Preferred shares, Series B 8% 6/9/2013 2,961,399 14,519,519 50,343,783 16.69 % Total 17,359,536 53,182,137 17.63 % Course Hero, Inc. Redwood City, CA Preferred shares, Series A 8% Online Education 9/18/2014 2,145,509 5,000,001 35,079,072 11.63 % Nextdoor.com, Inc. San Francisco, CA Common shares Social Networking 9/27/2018 580,360 10,002,666 12,832,208 4.25 % Blink Health, Inc. New York, NY Preferred shares, Series A Pharmaceutical Technology 10/27/2020 238,095 5,000,423 4,999,995 1.66 % Preferred shares, Series C 10/27/2020 130,972 5,002,932 4,999,987 1.66 % Total 10,003,355 9,999,982 3.32 % Forge Global, Inc. (15) San Francisco, CA Common shares, Class AA Online Marketplace Finance 7/20/2011 614,042 123,987 7,624,437 2.53 % Junior Preferred shares 7/19/2011 160,534 2,259,716 1,993,319 0.66 % Junior Preferred warrants, Strike Price $12.42, Expiration Date 11/9/2025 7/19/2011 73,695 — 279,303 0.09 % Total 2,383,703 9,897,059 3.28 % Enjoy Technology, Inc. Menlo Park, CA Preferred shares, Series B 6% On-Demand Commerce 7/29/2015 1,681,520 4,000,280 5,032,724 1.67 % Preferred shares, Series A 6% 10/16/2014 879,198 1,002,440 1,536,980 0.51 % Convertible Promissory Note 14% Due 1/30/2024*** 11/30/2020 $ 521,112 524,057 521,112 0.17 % Total 5,526,777 7,090,816 2.35 % Rent the Runway, Inc. New York, NY Preferred shares, Series G Subscription Fashion Rental 6/17/2020 339,191 5,153,945 5,000,001 1.66 % Residential Homes for Rent, LLC (d/b/a Second Avenue) (16) Chicago, IL Preferred shares, Series A Real Estate Platform 12/23/2020 150,000 1,500,000 1,500,000 0.50 % Term loan 15%, Due 12/23/2023*** 12/23/2020 $ 3,000,000 3,000,000 3,000,000 0.99 % Total 4,500,000 4,500,000 1.49 % Neutron Holdings, Inc. (d/b/a/ Lime) San Francisco, CA Junior Preferred shares, Series 1-D (11) Micromobility 1/25/2019 41,237,113 10,007,322 3,485,014 1.16 % Junior Preferred Convertible Note 4% Due 5/11/2027*** 5/11/2020 $ 506,339 506,339 506,339 0.17 % Common Warrants, Strike Price $0.01, Expiration Date 5/11/2027 (11) 5/11/2020 2,032,967 — — — % Total 10,513,661 3,991,353 1.33 % Aspiration Partners, Inc. Marina Del Rey, CA Preferred shares, Series A Financial Services 8/11/2015 540,270 1,001,815 3,288,548 1.09 % Preferred shares, Series C-3 (12) 8/12/2019 24,912 281,190 169,599 0.06 % Total 1,283,005 3,458,147 1.15 % Treehouse Real Estate Investment Trust, Inc. Chicago, IL Common shares*** (8) Cannabis REIT 9/11/2019 312,500 7,500,000 3,321,626 1.10 % Palantir Lending Trust SPV I ** (10) Palo Alto, CA Equity Participation in Underlying Collateral Data Analysis 6/19/2020 — — 2,550,764 0.85 % See accompanying notes to consolidated financial statements. 81 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS - continued December 31, 2020 Portfolio Investments* Headquarters/ Industry Date of Initial Investment Shares/ Principal Cost Fair Value % of Net Assets Clever, Inc. San Francisco, CA Preferred shares, Series B 8% Education Software 12/5/2014 1,799,047 $ 2,000,601 $ 2,000,001 0.66 % A Place for Rover Inc. (f/k/a DogVacay, Inc.) Seattle, WA Common shares Peer-to-Peer Pet Services 11/3/2014 707,991 2,506,119 1,474,878 0.49 % Tynker (f/k/a Neuron Fuel, Inc.) Mountain View, CA Preferred shares, Series A 8% Computer Software 8/8/2012 534,162 309,310 791,361 0.26 % Fullbridge, Inc. Cambridge, MA Common shares Business Education 5/13/2012 517,917 6,150,506 — — % Promissory Note 1.47%, Due 11/9/2021 (4) 3/3/2016 $ 2,270,458 2,270,858 — — % Total 8,421,364 — — % SP Holdings Group, Inc. (15) San Francisco, CA Preferred shares, Series B 6% Online Marketplace Finance 7/19/2011 1,771,653 — — — % Common shares 7/20/2011 770,934 — — — % Total — — — % Kinetiq Holdings, LLC (14) Philadelphia, PA Common shares, Class A Social Data Platform 3/30/2012 112,374 — — — % Total Non-controlled/Non-affiliate $ 105,339,169 $ 249,804,803 82.83 % NON-CONTROLLED/AFFILIATE (1) Ozy Media, Inc. Mountain View, CA Preferred shares, Series C-2 6% Digital Media Platform 9/11/2019 683,482 $ 2,414,178 $ 1,865,547 0.62 % Common Warrants, Strike Price $0.01, Expiration Date 4/9/2028 4/9/2018 295,565 30,647 762,558 0.25 % Preferred shares, Series B 6% 10/3/2014 922,509 4,999,999 3,350,952 1.11 % Preferred shares, Series A 6% 12/11/2013 1,090,909 3,000,200 2,824,679 0.94 % Preferred shares, Series Seed 6% 11/2/2012 500,000 500,000 1,294,645 0.43 % Total 10,945,024 10,098,381 3.35 % GreenAcreage Real Estate Corp. New York, NY Common shares*** (9) Cannabis REIT 8/12/2019 422,586 8,509,633 8,937,690 2.96 % StormWind, LLC (5) Scottsdale, AZ Preferred shares, Series D 8% Interactive Learning 11/26/2019 329,337 257,267 440,515 0.15 % Preferred shares, Series C 8% 1/7/2014 2,779,134 4,000,787 4,804,218 1.59 % Preferred shares, Series B 8% 12/16/2011 3,279,629 2,019,687 2,625,365 0.87 % Preferred shares, Series A 8% 2/25/2014 366,666 110,000 88,248 0.03 % Total 6,387,741 7,958,346 2.64 % NestGSV, Inc. (d/b/a OneValley, Inc.) San Mateo, CA Derivative Security, Expiration Date 8/23/2024 (7) Global Innovation Platform 8/23/2019 1 8,555,124 2,173,148 0.72 % Convertible Promissory Note 8% Due 8/23/2024 (4)(7) 2/17/2016 $ 1,010,198 1,030,176 505,099 0.17 % Preferred Warrants Series A-3, Strike Price $1.33, Expiration Date 4/4/2021 4/4/2014 187,500 — 4,687 — % Preferred Warrants Series A-4, Strike Price $1.33, Expiration Date 10/6/2021 10/6/2014 500,000 — 65,000 0.02 % Preferred Warrants Series A-4, Strike Price $1.33, Expiration Date 7/18/2021 7/8/2016 250,000 74,380 27,500 0.01 % Preferred Warrants Series B, Strike Price $2.31, Expiration Date 11/29/2021 11/29/2016 100,000 29,275 — — % Preferred Warrant Series B, Strike Price $2.31, Expiration Date 5/29/2022 5/29/2017 125,000 70,379 — — % Preferred Warrant Series B, Strike Price $2.31, Expiration Date 12/31/2023 12/31/2018 250,000 5,080 9,250 0.00 % Total 9,764,414 2,784,684 0.92 % See accompanying notes to consolidated financial statements. 82 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS - continued December 31, 2020 Portfolio Investments* Headquarters/ Industry Date of Initial Investment Shares/ Principal Cost Fair Value % of Net Assets CUX, Inc. (d/b/a CorpU) Philadelphia, PA Senior Subordinated Convertible Promissory Note 4% Due 2/14/2023 (4) Corporate Education 11/26/2014 $ 1,251,158 $ 1,256,191 $ 312,790 0.10 % Convertible preferred shares, Series D 6% 5/31/2013 169,033 778,607 73,882 0.02 % Convertible preferred shares, Series C 8% 3/29/2012 615,763 2,006,077 — — % Total 4,040,875 386,672 0.12 % Maven Research, Inc. San Francisco, CA Preferred shares, Series C 8% Knowledge Networks 7/2/2012 318,979 2,000,447 — — % Preferred shares, Series B 5% 2/28/2012 49,505 217,206 — — % Total 2,217,653 — — % Curious.com, Inc. Menlo Park, CA Common shares Online Education 11/22/2013 1,135,944 12,000,006 — — % Total Non-controlled/Affiliate $ 53,865,346 $ 30,165,773 10.00 % CONTROLLED (2) SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.) Cupertino, CA Preferred shares, Class A*** (6) Clean Technology 4/15/2014 14,300,000 $ 7,151,412 $ 809,198 0.27 % Common shares 4/15/2014 100,000 10,000 — — % Total 7,161,412 809,198 0.27 % Total Controlled $ 7,161,412 $ 809,198 0.27 % Total Portfolio Investments $ 166,365,927 $ 280,779,774 93.10 % U.S. Treasury U.S. Treasury bill, 0%, due 1/2/2021*** (3) 12/30/2020 $ 150,000,000 150,000,000 150,000,000 49.74 % TOTAL INVESTMENTS $ 316,365,927 $ 430,779,774 142.83 % See accompanying notes to consolidated financial statements. __________________________________________ * All portfolio investments are non-control/non-affiliated and non-income-producing, unless otherwise identified. Equity investments are subject to lock-up restrictions upon their initial public offering (“IPO”). Preferred dividends are generally only payable when declared and paid by the portfolio company's board of directors. The Company’s directors, officers, employees and staff, as applicable, may serve on the board of directors of the Company’s portfolio investments. (Refer to “Note 3—Related-Party Arrangements”). All portfolio investments are considered Level 3 and valued using significant unobservable inputs, unless otherwise noted. (Refer to “Note 4—Investments at Fair Value”). All of the Company's portfolio investments are restricted as to resale, unless otherwise noted, and were valued at fair value as determined in good faith by the Company’s Board of Directors. (Refer to "Note 2—Significant Accounting Policies— Investments at Fair Value "). ** 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”). Of the Company’s total investments as of December 31, 2020, 22.56% of its total investments are non-qualifying assets. *** Investment is income-producing. (1) “Affiliate Investments” are investments in those companies that are “Affiliated Companies” of SuRo Capital Corp., as defined in the 1940 Act. In general, a company is deemed to be an “Affiliate” of SuRo Capital Corp. if SuRo Capital Corp. owns 5% or more of the voting securities ( i.e. , securities with the right to elect directors) of such company. For the Schedule of Investments In, and Advances To, Affiliates, as required by SEC Regulation S-X, Rule 12-14, refer to “Note 4—Investments at Fair Value”. (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 83 TABLE OF CONTENTS such portfolio company. For the Schedule of Investments In, and Advances To, Affiliates, as required by SEC Regulation S-X, Rule 12-14, refer to “Note 4—Investments at Fair Value”. (3) Denotes an investment considered Level 1 or Level 2 and valued using observable inputs. As of December 31, 2020, 1 portfolio investment held by SuRo Capital Corp. was considered Level 1 or Level 2. Refer to “Note 4—Investments at Fair Value”. (4) As of December 31, 2020, 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) The SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.) preferred shares held by SuRo Capital Corp. do not entitle SuRo Capital Corp. to a preferred dividend rate. During the year ended December 31, 2020, SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.) declared, and SuRo Capital Corp. received, an aggregate of $450,000 in dividend distributions. SuRo Capital Corp. does not anticipate that SPBRX, INC. will pay distributions on a quarterly or regular basis or become a predictable distributor of distributions. (7) On August 23, 2019, SuRo Capital Corp. amended the structure of its investment in NestGSV, Inc. (d/b/a OneValley, Inc.). As part of the agreement, SuRo Capital Corp.’s equity holdings (warrants notwithstanding) were restructured into a derivative security. NestGSV, Inc. (d/b/a OneValley,Inc.) has the right to call the position at any time over a five year period, while SuRo Capital Corp. can put the shares to NestGSV, Inc. (d/b/a OneValley, Inc.) at the end of the five year period. (8) During the year ended December 31, 2020, Treehouse Real Estate Investment Trust Inc. declared, and SuRo Capital Corp. received, an aggregate of $50,000 in dividend distributions. SuRo Capital Corp. does not anticipate that Treehouse Real Estate Investment Trust Inc. will pay distributions on a recurring or regular basis or become a predictable distributor of distributions. (9) During the year ended December 31, 2020, GreenAcreage Real Estate Corp. declared an aggregate of $317,617 in dividend distributions. SuRo Capital Corp. does not anticipate that GreenAcreage Real Estate Corp. will pay distributions on a recurring or regular basis or become a predictable distributor of distributions. (10) On June 19, 2020, SuRo Capital Corp. extended a $6,900,000, non-recourse, collateralized loan to Palantir Lending Trust SPV I. The collateralized loan to Palantir Lending Trust SPV I matures on June 19, 2022 and includes a 15% interest rate. Through the collateralized loan, SuRo Capital Corp. participates in additional upside in a future Palantir Technologies, Inc. liquidity event by receiving a percentage of the share price appreciation as captured in the Equity Participation in Underlying Collateral security. As of December 31, 2020, $8,671,618 has been received from Palantir Lending Trust SPV I. Of the proceeds received, $6,900,000 fully repaid the outstanding principal, $782,125 was attributed to the accrued guaranteed interest, and $989,494 was generated by the Equity Participation in Underlying Collateral. As of December 31, 2020, the balance of the loan and all guaranteed interest has been fully repaid, and SuRo Capital Corp. retains the right to upside on 1,312,290 shares as captured in the Equity Participation in Underlying Collateral security. (11) On May 11, 2020, SuRo Capital Corp. made a follow-on investment in a junior preferred convertible note to Neutron Holdings, Inc. (d/b/a Lime) as part of a recapitalization of Neutron Holdings, Inc. (d/b/a Lime), led by Uber Technologies, Inc. On May 11, 2020, SuRo Capital Corp.'s existing Series D Preferred shares were converted to Series 1-D Junior Preferred shares. As part of the transaction, SuRo Capital Corp. was issued, and received on August 24, 2020, 2,032,967 common warrants with a strike price of $0.01 and an expiration date of May 11, 2027. (12) On June 6, 2020, the convertible note SuRo Capital Corp. had extended to Aspiration Partners, Inc. converted into Series C-3 Preferred shares at a 15% discount to Aspiration Partners, Inc.'s most recent financing round. SuRo Capital Corp. received 24,912 Series C-3 Preferred shares as a result of the conversion. (13) On September 30, 2020, Palantir Technologies, Inc. went public via a modified direct listing on the New York Stock Exchange. Under the terms of the modified direct listing, as disclosed in Palantir Technologies, Inc.'s Amendment No. 1 to Form S-1 Registration Statement, 20% of SuRo Capital Corp.'s Class A common shares in Palantir Technologies, Inc. held at the time of the direct public listing were considered unrestricted, while the remaining 80% were subject to sales restrictions and are not eligible for sale until the third business day following the filing of Palantir Technologies, Inc.'s fiscal year 2020 Form 10-K filing in 2021. As of December 31, 2020, SuRo Capital Corp. holds 4,618,952 public shares of Palantir Technologies, Inc. common stock, all of which are subject to certain lock-up restrictions. (14) On July 29, 2020 SuRo Capital Corp. exited its investment in 4C Insights (f/k/a The Echo Systems Corp.). In connection with this exit, SuRo Capital Corp. received 112,374 Class A common shares in Kinetiq Holdings, LLC in addition to cash proceeds and amounts currently held in escrow. (15) On November 9, 2020, SharesPost, Inc. completed its merger with Forge Global, Inc. As part of the merger, SuRo Capital Corp. received Class AA Common Shares, Junior Preferred Stock and Junior Warrants of Forge. In addition, as part of the merger, certain assets held by SharesPost, Inc. that were not acquired by Forge were spun-out into a new entity called SP Holdings Group, Inc. In addition to the shares received from Forge, SuRo Capital Corp. also received Series B Preferred Stock and Common Shares in SP Holdings Group, Inc. (16) SuRo Capital Corp.’s investments 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. 84 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2019 Portfolio Investments* Headquarters/ Industry Date of Initial Investment Shares/ Principal Cost Fair Value % of Net Assets NON-CONTROLLED/NON-AFFILIATE Coursera, Inc. Mountain View, CA Preferred shares, Series B 8% Online Education 6/9/2013 2,961,399 $ 14,519,519 $ 33,569,902 16.79 % Palantir Technologies, Inc. Palo Alto, CA Common shares, Class A Data Analysis 5/7/2012 5,773,690 16,189,935 31,582,084 15.80 % Course Hero, Inc. Redwood City, CA Preferred shares, Series A 8% Online Education 9/18/2014 2,145,509 5,000,001 25,674,019 12.84 % Parchment, Inc. Scottsdale, AZ Preferred shares, Series D 8% E-Transcript Exchange 10/1/2012 3,200,512 4,000,982 10,896,585 5.45 % Nextdoor.com, Inc. San Francisco, CA Common shares Social Networking 9/27/2018 580,360 10,006,578 10,867,365 5.43 % Neutron Holdings, Inc. (d/b/a/ Lime) San Francisco, CA Preferred shares, Series D 6% Micromobility 1/25/2019 41,237,113 10,006,800 10,000,000 5.00 % Treehouse Real Estate Investment Trust, Inc. Chicago, IL Common shares*** (11) Cannabis REIT 9/11/2019 312,500 7,500,000 7,384,738 3.69 % Enjoy Technology, Inc. Menlo Park, CA Preferred shares, Series B 6% On-Demand Commerce 7/29/2015 1,681,520 4,000,280 4,758,702 2.38 % Preferred shares, Series A 6% 10/16/2014 879,198 1,002,440 2,488,130 1.24 % Total 5,002,720 7,246,832 3.62 % SharesPost, Inc. San Francisco, CA Preferred shares, Series B 6% Online Marketplace Finance 7/19/2011 1,771,653 2,259,716 6,186,877 3.09 % Common shares 7/20/2011 770,934 123,987 890,340 0.45 % Total 2,383,703 7,077,217 3.54 % Aspiration Partners, Inc. Marina Del Rey, CA Preferred shares, Series A Financial Services 8/11/2015 540,270 1,001,815 4,471,678 2.24 % Convertible Promissory Note 5%, Due 1/31/2021*** 8/12/2019 $ 280,000 281,190 321,168 0.16 % Total 1,283,005 4,792,846 2.40 % Clever, Inc. San Francisco, CA Preferred shares, Series B 8% Education Software 12/5/2014 1,799,047 2,000,601 2,000,001 1.00 % A Place for Rover Inc. (f/k/a DogVacay, Inc.) Seattle, WA Common shares Peer-to-Peer Pet Services 11/3/2014 707,991 2,506,119 963,533 0.48 % Tynker (f/k/a Neuron Fuel, Inc.) Mountain View, CA Preferred shares, Series A 8% Computer Software 8/8/2012 534,162 309,310 789,491 0.39 % 4C Insights (f/k/a The Echo Systems Corp.) Chicago, IL Common shares Social Data Platform 3/30/2012 436,219 1,436,404 21,499 0.01 % Fullbridge, Inc. Cambridge, MA Common shares Business Education 5/13/2012 517,917 6,150,506 — — % Promissory Note 1.47%, Due 11/9/2021 (4) 3/3/2016 $ 2,270,458 2,270,858 — — % Total 8,421,364 — — % Total Non-controlled/Non-affiliate $ 90,567,041 $ 152,866,112 76.46 % See accompanying notes to consolidated financial statements. 85 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS - continued December 31, 2019 Portfolio Investments* Headquarters/ Industry Date of Initial Investment Shares/ Principal Cost Fair Value % of Net Assets NON-CONTROLLED/AFFILIATE (1) Ozy Media, Inc. Mountain View, CA Preferred shares, Series C-2 6% (7) Digital Media Platform 9/11/2019 683,482 $ 2,414,178 $ 2,970,252 1.49 % Common Warrants, Strike Price $0.01, Expiration Date 4/9/2028 4/9/2018 295,565 30,647 1,182,260 0.59 % Preferred shares, Series B 6% 10/3/2014 922,509 4,999,999 5,001,420 2.50 % Preferred shares, Series A 6% 12/11/2013 1,090,909 3,000,200 4,528,107 2.27 % Preferred shares, Series Seed 6% 11/2/2012 500,000 500,000 2,002,143 1.00 % Total 10,945,024 15,684,182 7.85 % StormWind, LLC (5) Scottsdale, AZ Preferred shares, Series D 8% (10) Interactive Learning 11/26/2019 329,337 257,267 503,120 0.25 % Preferred shares, Series C 8% 1/7/2014 2,779,134 4,000,787 5,391,000 2.70 % Preferred shares, Series B 8% 12/16/2011 3,279,629 2,019,687 3,248,804 1.62 % Preferred shares, Series A 8% 2/25/2014 366,666 110,000 157,949 0.08 % Total 6,387,741 9,300,873 4.65 % GreenAcreage Real Estate Corp. New York, NY Common shares Cannabis REIT 8/12/2019 375,000 7,501,530 7,500,000 3.75 % NestGSV, Inc. (d/b/a OneValley, Inc.) San Mateo, CA Derivative Security, Expiration Date 8/23/2024 (9) Global Innovation Platform 8/23/2019 1 8,555,124 3,880,621 1.94 % Convertible Promissory Note 8% Due 8/23/2024*** (9) 2/17/2016 $ 1,010,198 1,030,176 1,010,198 0.51 % Preferred Warrants Series A-3, Strike Price $1.33, Expiration Date 4/4/2021 4/4/2014 187,500 — 20,625 0.01 % Preferred Warrants Series A-4, Strike Price $1.33, Expiration Date 10/6/2021 10/6/2014 500,000 — 135,000 0.07 % Preferred Warrants Series A-4, Strike Price $1.33, Expiration Date 7/18/2021 7/8/2016 250,000 74,380 62,500 0.03 % Preferred Warrants Series B, Strike Price $2.31, Expiration Date 11/29/2021 11/29/2016 100,000 29,275 — — % Preferred Warrant Series B, Strike Price $2.31, Expiration Date 5/29/2022 5/29/2017 125,000 70,379 — — % Preferred Warrant Series B, Strike Price $2.31, Expiration Date 12/31/2023 12/31/2018 250,000 5,080 2,500 0.00 % Total 9,764,414 5,111,444 2.56 % CUX, Inc. (d/b/a CorpU) Philadelphia, PA Senior Subordinated Convertible Promissory Note 4% Due 2/14/2023 (4)(6) Corporate Education 11/26/2014 $ 1,251,158 1,256,191 312,789 0.15 % Convertible preferred shares, Series D 6% 5/31/2013 169,033 778,607 34,980 0.02 % Convertible preferred shares, Series C 8% 3/29/2012 615,763 2,006,077 — — % Preferred Warrants Series D, Strike Price $4.59, Expiration Date 2/14/2020 5/31/2013 16,903 — — — % Total 4,040,875 347,769 0.17 % Maven Research, Inc. San Francisco, CA Preferred shares, Series C 8% Knowledge Networks 7/2/2012 318,979 2,000,447 — — % Preferred shares, Series B 5% 2/28/2012 49,505 217,206 — — % Total 2,217,653 — — % Curious.com, Inc. Menlo Park, CA Common shares Online Education 11/22/2013 1,135,944 12,000,006 — — % Total Non-controlled/Affiliate $ 52,857,243 $ 37,944,268 18.98 % See accompanying notes to consolidated financial statements. 86 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS - continued December 31, 2019 Portfolio Investments* Headquarters/ Industry Date of Initial Investment Shares/ Principal Cost Fair Value % of Net Assets CONTROLLED (2) SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.) Cupertino, CA Preferred shares, Class A*** (8) Clean Technology 4/15/2014 14,300,000 $ 7,151,412 $ 775,198 0.39 % Common shares 4/15/2014 100,000 10,000 — — % Total 7,161,412 775,198 0.39 % Total Controlled $ 7,161,412 $ 775,198 0.39 % Total Portfolio Investments $ 150,585,696 $ 191,585,578 95.83 % U.S. Treasury U.S. Treasury bill, 0%, due 1/2/2020*** (3) 12/30/2019 $ 50,000,000 49,996,667 50,000,000 25.01 % TOTAL INVESTMENTS $ 200,582,363 $ 241,585,578 120.84 % See accompanying notes to consolidated financial statements. __________________________________________ * All portfolio investments are non-control/non-affiliated and non-income-producing, unless otherwise identified. Equity investments are subject to lock-up restrictions upon their initial public offering (“IPO”). Preferred dividends are generally only payable when declared and paid by the portfolio company's board of directors. The Company’s directors, officers, employees and staff, as applicable, may serve on the board of directors of the Company’s portfolio investments. (Refer to “Note 3—Related-Party Arrangements”). All portfolio investments are considered Level 3 and valued using significant unobservable inputs, unless otherwise noted. (Refer to “Note 4—Investments at Fair Value”). All of the Company's portfolio investments are restricted as to resale, unless otherwise noted, and were valued at fair value as determined in good faith by the Company’s Board of Directors. (Refer to "Note 2—Significant Accounting Policies— Investments at Fair Value "). ** 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”). Of the Company’s total investments as of December 31, 2019, 0.00% of its total investments are non-qualifying assets. *** Investment is income-producing. (1) “Affiliate Investments” are investments in those companies that are “Affiliated Companies” of SuRo Capital Corp., as defined in the 1940 Act. In general, a company is deemed to be an “Affiliate” of SuRo Capital Corp. if SuRo Capital Corp. owns 5% or more of the voting securities ( i.e. , securities with the right to elect directors) of such company. For the Schedule of Investments In, and Advances To, Affiliates, as required by SEC Regulation S-X, Rule 12-14, refer to “Note 4—Investments at Fair Value”. (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. For the Schedule of Investments In, and Advances To, Affiliates, as required by SEC Regulation S-X, Rule 12-14, refer to “Note 4—Investments at Fair Value”. (3) Denotes an investment considered Level 1 or Level 2 and valued using observable inputs. As of December 31, 2019, no portfolio investments held by SuRo Capital Corp. were considered Level 1 or Level 2. Refer to “Note 4—Investments at Fair Value”. (4) As of December 31, 2019, 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) On October 24, 2019, CUX, Inc. (d/b/a CorpU) completed a recapitalization, which amended SuRo Capital Corp.'s investment in the Senior Subordinated Convertible Promissory Note. As a result of the recapitalization, the principal amount of SuRo Capital Corp.'s Senior Subordinated Convertible Promissory Note was reduced by $109,331, the interest rate was reduced to 4%, and the maturity was extended to February 14, 2023. (7) On September 11, 2019, SuRo Capital Corp. agreed to convert its 5% Convertible Promissory Note due 12/31/2018 to Ozy Media, Inc. and all related accrued interest, into 683,482 shares of Ozy Media, Inc.'s Series C-2 preferred shares. 87 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS - continued December 31, 2019 (8) During the year ended December 31, 2019, SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.) declared, and SuRo Capital Corp. received, an aggregate of $400,000 in dividend distributions. (9) On August 23, 2019, SuRo Capital Corp. amended the structure of its investment in NestGSV, Inc. (d/b/a OneValley, Inc.). As part of the agreement, SuRo Capital Corp’s equity holdings (warrants notwithstanding) were restructured into a derivative security. NestGSV, Inc. (d/b/a OneValley,Inc.) has the right to call the position at any time over a five year period, while SuRo Capital Corp. can put the shares to NestGSV, Inc. (d/b/a OneValley, Inc.) at the end of the five year period. As part of the agreement, previously accrued interest under SuRo Capital Corp’s 12% Convertible Promissory Note due 12/31/2019 will be capitalized into the principal of the extended Convertible Promissory Note, and the interest on the Convertible Promissory Note is reduced from 12% to 8%. The Convertible Promissory Note’s maturity was extended to August 23, 2024. Under the amended structure, SuRo Capital Corp.’s fully diluted ownership of voting securities in the company decreased from 50.0% to 8.5%. As such, SuRo Capital Corp.'s investments in NestGSV, Inc. (d/b/a OneValley, Inc.) have been recategorized from controlled investments to non-controlled/affiliated investments. (10) On November 26, 2019, SuRo Capital Corp. invested $250,000 in StormWind, LLC's Series D financing round. As part of the round, SuRo Capital Corp.'s fully diluted ownership of voting securities decreased from 25.6% to 23.4%. As such, SuRo Capital Corp.'s investments in StormWind, LLC have been recategorized from controlled investments to non-controlled/affiliated investments. (11) During year ended December 31, 2019, Treehouse Real Estate Investment Trust Inc. declared, and SuRo Capital Corp. received an aggregate of $100,000 in dividend distributions. 88 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 NOTE 1—NATURE OF OPERATIONS SuRo Capital Corp. ("we", "us", "our", “Company” or “SuRo Capital”), formerly known as Sutter Rock Capital Corp. and as GSV Capital Corp. and formed in September 2010 as a Maryland corporation, is an internally-managed, non-diversified closed-end management investment company. The Company has elected to be regulated as a business development company ("BDC") under the Investment Company Act of 1940, as amended (the “1940 Act”), and has elected to be treated, and intends to qualify annually, as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). On and effective March 12, 2019, our Board of Directors approved internalizing our operating structure ("Internalization") and we began operating as an internally-managed non-diversified closed-end management investment company that has elected to be regulated as a BDC under the 1940 Act. 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”). Refer to "Note 3 — Related-Party Arrangements" for further detail. The Company’s date of inception was January 6, 2011, which is the date it commenced its development stage activities. The Company’s common stock is currently listed on the Nasdaq Capital Market under the symbol “SSSS” (formerly "GSVC"). The Company began its investment operations during the second quarter of 2011. The table below displays the Company’s subsidiaries as of December 31, 2020, which, other than GSV Capital Lending, LLC (“GCL”), are collectively referred to as the “Taxable Subsidiaries.” The Taxable Subsidiaries were formed to hold 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. federal income tax purposes. GCL was formed to originate portfolio loan investments within the state of California and is consolidated with the Company for accounting purposes. Refer to “Note 2—Significant Accounting Policies— Basis of Consolidation ” below for further detail. Subsidiary Jurisdiction of Incorporation Formation Date Percentage Owned GCL Delaware April 13, 2012 100% Subsidiaries below are referred to collectively, as the “Taxable Subsidiaries” GSVC AE Holdings, Inc. (“GAE”) Delaware November 28, 2012 100% GSVC AV Holdings, Inc. (“GAV”) Delaware November 28, 2012 100% GSVC NG Holdings, Inc. (“GNG”) (1) Delaware November 28, 2012 100% GSVC SW Holdings, Inc. (“GSW”) Delaware November 28, 2012 100% GSVC WS Holdings, Inc. (“GWS”) (1) Delaware November 28, 2012 100% GSVC SVDS Holdings, Inc. (“SVDS”) Delaware August 13, 2013 100% __________________________________ (1) This Taxable Subsidiary was dissolved on April 16, 2020. The Company’s investment objective is to maximize its portfolio’s total return, principally by seeking capital gains on its equity and equity-related investments, and to a lesser extent, income from debt investments. 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. In addition, we may invest in private credit and in the founders equity, founders warrants, forward purchase agreements, and private investment in public equity transactions of special purpose acquisition companies. The Company may also invest on an opportunistic basis in select publicly traded equity securities or certain non-U.S. companies that otherwise meet its investment criteria, subject to any applicable limitations under the 1940 Act. 89 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 NOTE 2—SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The consolidated financial statements of the Company are prepared on the accrual basis of accounting in conformity with U.S. generally accepted accounting principles (“GAAP”) and pursuant to the requirements for reporting on Form 10-K and Regulation S-X under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company is an investment company following the specialized accounting and reporting guidance specified in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial Services—Investment Companies . 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. Basis of Consolidation Under Article 6 of Regulation S-X and the American Institute of Certified Public Accountants’ (“AICPA”) Audit and Accounting Guide for Investment Companies, the Company is precluded from consolidating any entity other than another investment company, a controlled operating company that provides substantially all of its services and benefits to the Company, and certain entities established for tax purposes where the Company holds a 100% interest. Accordingly, the Company’s consolidated financial statements include its accounts and the accounts of the Taxable Subsidiaries and GCL, its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in accordance with GAAP requires the Company’s management to make a number of significant estimates. These include estimates of the fair value of certain assets and liabilities and other estimates that affect the reported amounts of certain assets and liabilities as of the date of the consolidated financial statements and the reported amounts of certain revenues and expenses during the reporting period. It is likely that changes in these estimates will occur in the near term. The Company’s estimates are inherently subjective in nature and actual results could differ materially from such estimates. Uncertainties and Risk Factors The Company is subject to a number of risks and uncertainties in the nature of its operations, as well as vulnerability due to certain concentrations. Refer to "Risk Factors” in Part I, Item 1A of this Form 10-K for a detailed discussion of the risks and uncertainties inherent in the nature of the Company’s operations. Refer to “Note 4—Investments at Fair Value” for an overview of the Company’s industry and geographic concentrations. Investments at Fair Value The Company applies fair value accounting in accordance with GAAP and the AICPA’s Audit and Accounting Guide for Investment Companies. The Company values its assets on a quarterly basis, or more frequently if required under the 1940 Act. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. GAAP establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. 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: 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. 90 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Level 2 —Valuations based on observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data at the measurement date for substantially the full term of the assets or liabilities. Level 3 —Valuations based on unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. The majority of the Company’s investments are Level 3 investments and are subject to a high degree of judgment and uncertainty in determining fair value. When the inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety. For example, a Level 3 fair value measurement may include inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Therefore, gains and losses for such assets and liabilities categorized within the Level 3 table set forth in “Note 4—Investments at Fair Value” may include changes in fair value that are attributable to both observable inputs (Levels 1 and 2) and unobservable inputs (Level 3). A review of fair value hierarchy classifications is conducted on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification for certain financial assets or liabilities. Reclassifications impacting Level 3 of the fair value hierarchy are reported as transfers in/out of the Level 3 category as of the beginning of the measurement period in which the reclassifications occur. Refer to “Levelling Policy” below for a detailed discussion of the levelling of the Company’s financial assets or liabilities and events that may cause a reclassification within the fair value hierarchy. Securities for which market quotations are readily available on an exchange are valued at the most recently available closing price of such security as of the valuation date, unless there are legal or contractual restrictions on the sale or use of such security that under ASC 820-10-35 should be incorporated into the security’s fair value measurement as a characteristic of the security that would transfer to market participants who would buy the security. The Company may also obtain quotes with respect to certain of its investments from pricing services, brokers or dealers in order to value assets. When doing so, the Company determines whether the quote obtained is sufficient according to GAAP to determine the fair value of the security. If determined to be adequate, the Company uses the quote obtained. 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: 1. The quarterly valuation process begins with each portfolio company or investment being initially valued by the investment professionals responsible for the portfolio investment; 2. Preliminary valuation conclusions are then documented and discussed with senior management; 3. 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; 4. 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; and 5. 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. 91 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 In making a good faith determination of the fair value of investments, the Company considers valuation methodologies consistent with industry practice. Valuation methods utilized include, but are not limited to the following: comparisons to prices from secondary market transactions; venture capital financings; public offerings; 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. The Company assigns a weighting based upon the relevance of each method to determine the fair value of each investment. For investments that are not publicly traded or that do not have readily available market quotations, the Valuation Committee generally engages an independent valuation firm to provide an independent valuation, which the Company’s Board of Directors considers, among other factors, in making its fair value determinations for these investments. For the current and prior fiscal year, the Valuation Committee engaged an independent valuation firm to perform valuations of 100% of the Company’s investments for which there were no readily available market quotations. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the investments existed, and it is reasonably possible that the difference could be material. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the realized gains or losses on investments to be different from the net change in unrealized appreciation or depreciation currently reflected in the consolidated financial statements. Equity Investments Equity investments for which market quotations are readily available in an active market are generally valued at the most recently available closing market prices and are classified as Level 1 assets. Equity investments with readily available market quotations that are subject to sales restrictions due to an initial public offering (“IPO”) by the portfolio company will be classified as Level 1. Any other equity investments with readily available market quotations that are subject to sales restrictions that would transfer to market participants who would buy the security may be valued at a discount for a lack of marketability (“DLOM”), to the most recently available closing market prices depending upon the nature of the sales restriction. These investments are generally classified as Level 2 assets. The DLOM used is generally based upon the market value of publicly traded put options with similar terms. The fair values of the Company’s equity investments for which market quotations are not readily available are determined based on various factors and are classified as Level 3 assets. 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 recognized as a realized loss on investments in the Consolidated Statements of Operations and Consolidated Statements of Cash Flows. In the event these securities are exercised into common or preferred stock, the cost associated with these securities is 92 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 reassigned to the cost basis of the new common or preferred stock. These conversions are noted as non-cash operating items on the Consolidated Statements of Cash Flows. Debt Investments Given the nature of the Company’s current debt investments (excluding U.S. 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. Options 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. 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 options are valued at estimated fair value as determined by the Company’s Board of Directors. Portfolio Company Investment Classification The Company is a non-diversified company within the meaning of the 1940 Act. The Company classifies its investments by level of control. As defined in the 1940 Act, control investments are those where there is the power to exercise a controlling influence over the management or policies of a company. Control is generally deemed to exist when a company or individual directly or indirectly owns beneficially more than 25% of the voting securities of an investee company. 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 December 31, 2020 and December 31, 2019, for details regarding the nature and composition of the Company’s investment portfolio. Levelling Policy The portfolio companies in which the Company invests may offer their shares in IPOs. The Company’s shares in such portfolio companies are typically subject to lock-up agreements for 180 days following the IPO. Upon the IPO date, the Company transfers its investment from Level 3 to Level 1 due to the presence of an active market, or Level 2 if limited by the lock-up agreement. The Company prices the investment at the closing price on a public exchange as of the measurement date. In situations where there are lock-up restrictions, as well as legal or contractual restrictions on the sale or use of such security that under ASC 820-10-35 should be incorporated into the security’s fair value measurement as a characteristic of the security that would transfer to market participants who would buy the security, the Company will classify the investment as Level 2 subject to an appropriate DLOM to reflect the restrictions upon sale. The Company transfers investments between levels based on the fair value at the beginning of the measurement period in accordance with FASB ASC 820. 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. Securities Transactions Securities transactions are accounted for on the date the transaction for the purchase or sale of the securities is entered into by the Company ( i.e. , trade date). Securities transactions outside conventional channels, such as private transactions, are recorded as of the date the Company obtains the right to demand the securities purchased or to collect the proceeds from a sale and incurs an obligation to pay for securities purchased or to deliver securities sold, respectively. Valuation of Other Financial Instruments 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. 93 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Cash 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 believes that U.S. Bank, N.A., Western Alliance Bank, and Silicon Valley Bank are high-quality financial institutions and that the risk of loss associated with any uninsured balance is remote. Escrow Proceeds Receivable A portion of the proceeds from the sale of portfolio investments are held in escrow as a recourse for indemnity claims that may arise under the sale agreement. Amounts held in escrow are held at estimated realizable value and included in net realized gains (losses) on investments in the Consolidated Statements of Operations for the period in which they occurred and are adjusted as needed. Any remaining escrow proceeds balances from these transactions reasonably expected to be received are reflected on the Consolidated Statement of Assets and Liabilities as escrow proceeds receivable. As of December 31, 2020 and December 31, 2019, the Company had $852,462 and $265,303, respectively, in escrow proceeds receivable. Deferred Financing Costs The Company records origination costs related to lines of credit as deferred financing costs. These costs are deferred and amortized as part of interest expense using the straight-line method over the respective life of the line of credit. For modifications to a line of credit, any unamortized origination costs are expensed. Included within deferred financing costs are offering costs incurred relating to the Company’s shelf registration statement on Form N-2. The Company defers these offering costs until capital is raised pursuant to the shelf registration statement or until the shelf registration statement expires. For equity capital raised, the offering costs reduce paid-in capital resulting from the offering. For debt capital raised, the associated offering costs are amortized over the life of the debt instrument. As of December 31, 2020 and December 31, 2019, the Company had deferred financing costs of $297,196 and $11,382, respectively, on the Consolidated Statement of Assets and Liabilities. December 31, 2020 December 31, 2019 Deferred credit facility costs $ 11,382 $ 11,382 Deferred offering costs 285,814 — Deferred Financing Costs $ 297,196 $ 11,382 Operating Leases & Related Deposits 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 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. On June 3, 2019, the Company entered a 5-year operating lease for primary office space for which the Company has recorded a right-of-use asset and a corresponding lease liability for the operating lease obligation. These amounts have been discounted using the rate implicit in the lease. Refer to “Note 7—Commitments and Contingencies— Operating Leases and Related Deposits ” for further detail. Stock-based Compensation Using the fair value recognition provisions as prescribed by ASC 718, Stock Compensation , stock-based compensation cost is measured at the grant date based on the estimated fair value of the award and is recognized as expense over the appropriate service period. Determining the fair value of stock-based awards requires considerable judgment, including estimating the expected term of stock options and the expected volatility of our stock price. Differences between actual results and these estimates could have a material effect on our financial results. Forfeitures are accounted for as they occur. Refer to “Note 11—Stock-Based Compensation” for further detail. 94 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Revenue Recognition The Company recognizes gains or losses on the sale of investments using the specific identification method. The Company recognizes interest income, adjusted for amortization of premium and accretion of discount, on an accrual basis. The Company recognizes dividend income on the ex-dividend date. Investment Transaction Costs and Escrow Deposits Commissions and other costs associated with an investment transaction, including legal expenses not reimbursed by the portfolio company, are included in the cost basis of purchases and deducted from the proceeds of sales. The Company makes certain acquisitions on secondary markets, which may involve making deposits to escrow accounts until certain conditions are met, including the underlying private company’s right of first refusal. If the underlying private company does not exercise or assign its right of first refusal and all other conditions are met, then the funds in the escrow account are delivered to the seller and the account is closed. Such transactions would be reflected on the Consolidated Statement of Assets and Liabilities as escrow deposits. As of December 31, 2020 and December 31, 2019, the Company had no material escrow deposits. Unrealized Appreciation or Depreciation of Investments Unrealized appreciation or depreciation is calculated as the difference between the fair value of the investment and the cost basis of such investment. U.S. 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 90% of the sum of investment company taxable income (“ICTI”) including payment-in-kind interest income, as defined by the Code, and 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 amount by which the Excise Tax Avoidance Requirement exceeds the distributions for the year. 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. The annual effective excise tax rate is determined by dividing the estimated annual excise tax by the estimated annual taxable income. So long as the Company qualifies and maintains its tax treatment as a RIC, it generally will not pay corporate-level U.S. federal and state income taxes on any ordinary income or capital gains that it distributes at least annually to its stockholders as dividends. Rather, any tax liability related to income earned by the RIC will represent obligations of the Company’s investors and will not be reflected in the consolidated financial statements of the Company. Included in the Company’s consolidated financial statements, the Taxable Subsidiaries are taxable subsidiaries, regardless of whether the Company is a RIC. These taxable subsidiaries are not consolidated for income tax purposes and may generate income tax expenses as a result of their ownership of the portfolio companies. Such income tax expenses and deferred taxes, if any, will be reflected in the Company’s consolidated financial statements. 95 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 If it is not treated as a RIC, the Company will be taxed as a regular corporation (a “C corporation”) under Subchapter C of the Code for such taxable year. If the Company has previously qualified as a RIC but is subsequently unable to qualify for treatment as a RIC, and certain amelioration provisions are not applicable, the Company would be subject to tax on all of its taxable income (including its net capital gains) at regular corporate rates. The Company would not be able to deduct distributions to stockholders, nor would it be required to make distributions. Distributions, including distributions of net long-term capital gain, would generally be taxable to its stockholders as ordinary dividend income to the extent of the Company’s current and accumulated earnings and profits. Subject to certain limitations under the Code, corporate stockholders would be eligible to claim a dividend received deduction with respect to such dividend; non-corporate stockholders would generally be able to treat such dividends as “qualified dividend income,” which is subject to reduced rates of U.S. federal income tax. Distributions in excess of the Company’s current and accumulated earnings and profits would be treated first as a return of capital to the extent of the stockholder’s tax basis, and any remaining distributions would be treated as a capital gain. In order to requalify as a RIC, in addition to the other requirements discussed above, the Company would be required to distribute all of its previously undistributed earnings attributable to the period it failed to qualify as a RIC by the end of the first year that it intends to requalify for tax treatment as a RIC. If the Company fails to requalify for tax treatment as a RIC for a period greater than two taxable years, it may be subject to regular corporate tax on any net built-in gains with respect to certain of its assets (i.e., the excess of the aggregate gains, including items of income, over aggregate losses that would have been realized with respect to such assets if the Company had been liquidated) that it elects to recognize on requalification or when recognized over the next five years. The Company was taxed as a C Corporation for its 2012 and 2013 taxable years. Refer to “Note 9—Income Taxes” for further details. The Company elected to be treated as a RIC for the taxable year ended December 31, 2014 in connection with the filing of its 2014 tax return. 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. 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. The five-year recognition period ended on December 31, 2018. Per Share Information Net change in net assets resulting from operations per basic common share is computed using the weighted-average number of shares outstanding for the period presented. 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 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 August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) , which is intended to improve fair value and defined benefit disclosure requirements by removing disclosures that are not cost beneficial, clarifying disclosures' specific requirements, and adding relevant disclosure requirements. The amendments took effect for all organizations for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company adopted the eliminated and modified disclosure requirements during the year ended December 31, 2020. No significant changes to the fair value disclosures were necessary in the notes to the consolidated financial statements in order to comply with ASU 2018-13. In August 2018, the SEC issued Final Rule Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements intended to eliminate redundant, duplicative, overlapping, outdated or superseded, in light of other SEC 96 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 disclosure requirements, U.S. GAAP requirements, or changes in the information environment. In part, this final rule requires an investment company to present distributable earnings in total on the consolidated balance sheet, rather than showing the three components of distributable earnings as previously required. The Company decided not to adopt this change as the current, more detailed and expanded disclosure presentation was deemed to be most helpful, useful, and transparent for users of our consolidated financial statements. The impact of the adoption of this amendment on the Company's consolidated financial statements would not be material. Additionally, the final rule requires disclosure of changes in net assets within a registrant's Form 10-Q filing on a quarter-to-date and year-to-date basis for both the current year and prior year comparative periods. In March 2020, the SEC adopted a final rule under SEC Release No. 34-88365 ("SEC Rule 12b-2 Update"), amending the accelerated filer and large accelerated filer definitions in Exchange Act Rule 12b-2. The amendments include a provision under which a BDC will be excluded from the “accelerated filer” and “large accelerated filer” definitions if the BDC has (1) a public float of $75.0 million or more, but less than $700.0 million, and (2) has annual investment income of less than $100.0 million. In addition, BDCs are subject to the same transition provisions for accelerated filer and large accelerated filer status as other issuers, but instead substituting investment income for revenue. The amendments will reduce the number of issuers required to comply with the auditor attestation on the internal control over financial reporting requirement provided under Section 404(b) of the Sarbanes-Oxley Act of 2002. SEC Rule 12b-2 Update applies to annual report filings due on or after April 27, 2020. The adoption of this rule has resulted in the Company no longer being an accelerated filer. The Company is also not required to comply with the auditor attestation on the internal control over financial reporting requirement provided under Section 404(b) of the Sarbanes-Oxley Act of 2002. In May 2020, the SEC adopted rule amendments that will impact 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 amend the definition of “significant subsidiary” in a manner that is intended to more accurately capture those portfolio companies that are more likely to materially impact the financial condition of an investment company. The Final Rules will be effective on January 1, 2021, but voluntary compliance is permitted in advance of the effective date. The Company has elected to comply in advance of the effective date for the year ended December 31, 2020. The adoption of this rule has an impact on the consolidated financial statements in that far fewer subsidiaries require disclosure under the Final Rules as compared to the previous rules. 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. The amendments in Sections B and C are effective for annual periods beginning after December 15, 2020, for public business entities. Early application of the amendments in this Update is permitted for public business entities for any annual or interim period for which financial statements have not been issued. The Company did not early adopt the modified disclosure requirements during the year ended December 31, 2020, but is evaluating the guidance of our adoption upon its effective date. 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 Internalization of Company’s Operating Structure On and effective March 12, 2019 (the "Effective Date"), our Board of Directors approved internalizing our operating structure and we began operating as an internally managed non-diversified closed-end management investment company that has elected to be regulated as a BDC under the 1940 Act. Prior to the Effective Date, we were externally managed by our former investment adviser, GSV Asset Management, pursuant to the Investment Advisory Agreement, and our former administrator, GSV Capital Service Company, provided the administrative services necessary for our operations pursuant to the Administration Agreement. 97 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 The accounting implications and related controls associated with the Internalization were analyzed and updated for fiscal year 2020. Termination of Investment Advisory Agreement On and effective March 12, 2019, the Investment Advisory Agreement was terminated by mutual agreement of GSV Asset Management and us in connection with our Internalization. Prior to our Internalization, GSV Asset Management served as our external investment adviser pursuant to the Investment Advisory Agreement. Pursuant to the terms of the Investment Advisory Agreement, we paid GSV Asset Management a fee for its services consisting of two components - a base management fee and an incentive fee. The base management fee was calculated at an annual rate of 2.00% of our gross assets (our total assets as reflected on our balance sheet with no deduction for liabilities). The incentive fee was determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, as of the termination date), and equaled the lesser of (i) 20% of our realized capital gains during such calendar year, if any, calculated on an investment-by-investment basis, subject to a non-compounded preferred return, or “hurdle” of 8.00% per year, and a “catch-up” feature, and (ii) 20% of our realized capital gains, if any, on a cumulative basis from inception through the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid incentive fees. See “—Investment Advisory Agreement” below. As the Investment Advisory Agreement has been terminated, there will be no base management fees or incentives fees payable to GSV Asset Management going forward. Termination of Administration Agreement On and effective March 12, 2019, the Administration Agreement was terminated by mutual agreement of GSV Capital Service Company and us in connection with our Internalization. Prior to our Internalization, GSV Capital Service Company served as our external administrator and provided administrative services necessary for our operations, including but not limited to, furnishing us with office facilities, equipment and clerical, bookkeeping and record keeping services at such facilities, as well as providing us with certain other administrative services, including, but not limited to, assisting us with determining and publishing our net asset value, overseeing the preparation and filing of our tax returns and the printing and dissemination of reports to our stockholders. Under the Administration Agreement, we did not pay any fees to GSV Capital Service Company but reimbursed GSV Capital Service Company for our allocable portion of overhead and other expenses incurred by GSV Capital Service Company in performing its services under the Administration Agreement, including, but not limited to, fees and expenses associated with performing compliance functions and our allocable portion of rent and compensation of our President, Chief Financial Officer, Chief Compliance Officer and other staff providing administrative services. See “—Administration Agreement” below. As the Administration Agreement has been terminated, there will be no costs incurred by GSV Capital Service Company going forward. Departure of Director and Reduction of Number of Directors On and effective March 12, 2019, Michael T. Moe resigned from our Board of Directors in connection with our Internalization. As a result of Mr. Moe’s resignation, our Board of Directors reduced the number of directors that constitute our full Board of Directors to five directors from six directors in accordance with our bylaws. Mr. Moe continued to provide certain services to us pursuant to the Consulting Agreement (as defined below). See “—Consulting Agreement.” 98 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Consulting Agreement On and effective March 12, 2019, we entered into a Consulting Agreement (the “Consulting Agreement”) with Michael T. Moe, the former Chairman of our Board of Directors and the Chief Executive Officer and Chief Investment Officer of GSV Asset Management, for the purpose of assisting us with certain transition services following the termination of the Investment Advisory Agreement and our Internalization. Pursuant to the Consulting Agreement, Mr. Moe provided certain transition services to us related to our existing portfolio investments for which Mr. Moe previously had oversight in his role as the Chief Executive Officer and Chief Investment Officer of GSV Asset Management. Such transition services included providing information to us regarding such portfolio companies, including as a member of a portfolio company’s board of directors, assisting with the transition of portfolio company board seats as requested by us, making appropriate introductions to representatives of portfolio companies, and providing other similar types of services that we may reasonably request. The term of the Consulting Agreement commenced on March 12, 2019 and continued for eighteen months in accordance with its terms. Pursuant to the Consulting Agreement, we paid Mr. Moe a total amount equal to $1,250,000. On September 12, 2020, the Consulting Agreement expired in accordance with its terms and was not renewed or extended. For the years ended December 31, 2020, 2019, and 2018, the Company incurred $582,438, $667,563, and $0 respectively, of consulting expense related to the Consulting Agreement, as included in "professional fees" on the Consolidated Statements of Operations. As of December 31, 2020 and December 31, 2019, the Company recorded $0 and $332,437, respectively, of prepaid expense related to the Consulting Agreement on the Consolidated Statement of Assets and Liabilities. Amended and Restated Trademark License Agreement On and effective March 12, 2019, we entered into an Amended and Restated Trademark License Agreement (the “Amended and Restated License Agreement”) with GSV Asset Management in connection with termination of the Investment Advisory Agreement. See “—Termination of Investment Advisory Agreement.” GSV Asset Management is the owner of the trade name “GSV”, and other state or unregistered “GSV” marks, including the trading symbol “GSVC” (collectively, the “Licensed Marks”). Pursuant to the Amended and Restated License Agreement, GSV Asset Management granted us a non-transferable, non-sublicensable, and non-exclusive right and license to use the Licensed Marks, solely in connection with the operation of our existing business. The term of the Amended and Restated License Agreement commenced on March 12, 2019 and continued for eighteen months in accordance with its terms. Pursuant to the Amended and Restated License Agreement, we paid GSV Asset Management a total amount equal to $1,250,000. On September 12, 2020, the Amended and Restated License Agreement expired in accordance with its terms and was not renewed or extended. For the years ended December 31, 2020, 2019, and 2018, the Company incurred $582,438, $667,563, and $0 respectively, of licensing expense, as included in "other expenses" on the Consolidated Statements of Operations. As of December 31, 2020 and December 31, 2019, the Company recorded $0 and $332,437, respectively, of prepaid expense related to the Amended and Restated Trademark License Agreement on the Consolidated Statement of Assets and Liabilities. Investment Advisory Agreement On March 12, 2019, in connection with the Company's Internalization, the Investment Advisory Agreement was terminated in accordance with its terms. Prior to our Internalization on March 12, 2019, the Company had entered into the Investment Advisory Agreement with GSV Asset Management. Under the terms of the Investment Advisory Agreement, GSV Asset Management was paid a quarterly management fee and an annual incentive fee. GSV Asset Management is controlled by Michael T. Moe, the former Chairman of the Company’s Board of Directors. Mr. Moe, through his ownership interest in GSV Asset Management, was entitled to a portion of any profits earned by GSV Asset Management in performing its services under the Investment Advisory Agreement. Mr. Moe serves as the principal of GSV Asset Management and manages the business and internal affairs of GSV 99 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Asset Management. Mark Klein, the Company’s Chief Executive Officer, President, and a member of the Company’s Board of Directors, or entities with which he is affiliated, received consulting fees from GSV Asset Management equal to a percentage of each of the base management fee and the incentive fee paid by the Company to GSV Asset Management pursuant to a consulting agreement with GSV Asset Management. As the Investment Advisory Agreement has been terminated, Mr. Klein no longer has a consulting agreement or any other affiliation with GSV Asset Management. Under the Investment Advisory Agreement, there were no restrictions on the right of any manager, partner, officer or employee of GSV Asset Management to engage in any other business or to devote his or her time and attention in part to any other business, whether of a similar or dissimilar nature, or to receive any fees or compensation in connection therewith (including fees for serving as a director of, or providing consulting services to, one or more of the Company’s portfolio companies). GSV Asset Management had, however, adopted an internal policy whereby any fees or compensation received by a manager, partner, officer or employee of GSV Asset Management in exchange for serving as a director of, or providing consulting services to, any of the Company’s portfolio companies would be transferred to the Company, net of any personal taxes incurred, upon such receipt for the benefit of the Company and its stockholders. Management Fees Under the terms of the Investment Advisory Agreement, GSV Asset Management was paid a base management fee of 2.00% of gross assets, which is the Company’s total assets reflected on its Consolidated Statement of Assets and Liabilities (with no deduction for liabilities) reduced by any non-portfolio investments. During the month of January 2018, pursuant to a voluntary waiver by GSV Asset Management, the Company paid GSV Asset Management a base management fee of 1.75%, a 0.25% reduction from the 2.00% base management fee payable under the Investment Advisory Agreement. On February 2, 2018 GSV Asset Management voluntarily agreed to reduce fees payable under the Investment Advisory Agreement (the “Waiver Agreement”). Pursuant to the Waiver Agreement, effective February 1, 2018, the base management fee is reduced to 1.75% of the Company’s gross assets, as further described below. The waiver of a portion of the base management fee is not subject to recourse against or reimbursement by the Company. For the year ended December 31, 2020, the Company did not accrue or waive any management fees due to the termination of the Investment Advisory Agreement, effective March 12, 2019. GSV Asset Management earned $848,723, and $5,199,900 in management fees for the years ended December 31, 2019 and 2018, respectively, and waived $0 and $892,421 in management fees for the years ended December 31, 2019 and 2018, respectively. As the Investment Advisory Agreement has been terminated, there will be no base management fee payable to GSV Asset Management going forward. Incentive Fees Under the terms of the Investment Advisory Agreement, GSV Asset Management was paid an annual incentive fee equal to the lesser of (i) 20% of the Company’s realized capital gains during each calendar year, if any, calculated on an investment-by-investment basis, subject to a non-compounded preferred return, or “hurdle,” and a “catch-up” feature, and (ii) 20% of the Company’s realized capital gains, if any, on a cumulative basis from inception through the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid incentive fees. Effective February 1, 2018, the incentive fee paid by the Company to GSV Asset Management under the Investment Advisory Agreement was modified pursuant to the terms of the Waiver Agreement, as further described below. The Company was required to accrue incentive fees for all periods as if the Company had fully liquidated its entire investment portfolio at the fair value stated on the Consolidated Statements of Assets and Liabilities as of December 31, 2018 or prior to the termination of the Investment Advisory Agreement. The accrual considered both the hypothetical liquidation of the Company’s portfolio described previously, as well as the Company’s actual cumulative realized gains and losses since inception, as well any previously paid incentive fees. 100 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 For the year ended December 31, 2020, the Company did not accrue any incentive fees due to the termination of the Investment Advisory Agreement, effective March 12, 2019. For the year ended December 31, 2019, the Company reversed previously accrued incentive fees of $4,660,472, due to the termination of the Investment Advisory Agreement. As the Investment Advisory Agreement has been terminated, there will be no incentive fee payable to GSV Asset Management going forward. For the year ended December 31, 2018, the Company accrued incentive fees of $382,387. Pursuant to the Waiver Agreement, on February 2, 2018, GSV Asset Management forfeited $5.0 million of the accrued incentive fees. Management and Incentive Fee Waiver Agreement On February 2, 2018, GSV Asset Management voluntarily agreed to reduce the fees payable under the Investment Advisory Agreement pursuant to the Waiver Agreement. The Waiver Agreement was effective beginning February 1, 2018 and changed the fee structure set forth in the Investment Advisory Agreement by: (i) reducing the Company’s base management fee from 2.00% to 1.75%; and (ii) creating certain high-water marks that must be reached before any incentive fee is paid to GSV Asset Management. Pursuant to the Waiver Agreement, in addition to the “hurdle” feature in the incentive fee, GSV Asset Management had agreed to additional conditions on its ability to receive an incentive fee. Specifically, the Waiver Agreement provided that an incentive fee earned by GSV Asset Management under the Investment Advisory Agreement would be payable to GSV Asset Management only if, at the time that such incentive fee becomes payable under the Investment Advisory Agreement, both the Company’s stock price and its last reported net asset value per share were equal to, or greater than, $12.55 (the “High-Water Mark”). The High-Water Mark was based upon the volume weighted average price (VWAP) of all the Company’s equity offerings since its initial public offering, less the dollar amount of all dividends paid by the Company since inception. Upon such time that the High-Water Mark was achieved, and GSV Asset Management was paid an incentive fee, a new High-Water Mark would have been established. Each new High-Water Mark would have been equal to the most recent High-Water Mark, plus 10%. Any High-Water Mark then in effect would have been adjusted to reflect any dividends paid by the Company or any stock split effected by the Company. For the avoidance of doubt, after the effective date of the Waiver Agreement, under no circumstances would the aggregate fees earned by GSV Asset Management in any quarterly period have been higher than those aggregate fees that would have been earned prior to the effectiveness of the Waiver Agreement. As of each of December 31, 2020 and December 31, 2019, there were no receivables owed to the Company by GSV Asset Management. As the Investment Advisory Agreement has been terminated, there will be no receivables owed to the Company by GSV Asset Management going forward. Administration Agreement On March 12, 2019, in connection with the Company's Internalization, the Administration Agreement was terminated in accordance with its terms. Prior to the Internalization, the Company had entered into the Administration Agreement with GSV Capital Service Company to provide administrative services, including furnishing the Company with office facilities, equipment, clerical, bookkeeping, record keeping services, and other administrative services. The Company reimbursed GSV Capital Service Company an allocable portion of overhead and other expenses in performing its obligations under the Administration Agreement, including a portion of the rent and the compensation of the Company’s President, Chief Financial Officer, Chief Compliance Officer and other staff providing administrative services. While there was no limit on the total amount of expenses the Company may have been required to reimburse to GSV Capital Service Company, GSV Capital Service Company would only charge the Company for the actual expenses GSV Capital Service Company incurred on the Company’s behalf, or the Company’s allocable portion thereof, without any profit to GSV Capital Service Company. For the year ended December 31, 2020, the Company did not incur any costs under the Administration Agreement due to the termination of the Investment Advisory Agreement, effective March 12, 2019. For the years ended December 31, 2019 and 2018, the Company incurred $306,084 and $1,702,047 respectively, in such costs incurred under the Administration 101 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Agreement. As the Administration Agreement has been terminated, there will be no costs incurred by GSV Capital Service Company on behalf of the Company going forward. License Agreement On March 12, 2019, in connection with the Company's Internalization, as of the Effective Date, the Company entered into the Amended and Restated Trademark License Agreement to use the trade name “GSV”, and other state or unregistered “GSV” marks, including the trading symbol “GSVC.” for a period of up to eighteen months and a predetermined fee of $1,250,000. Other than with respect to this limited license, the Company has no legal right to the “GSV” name. On September 12, 2020, the Amended and Restated License Agreement expired in accordance with its terms and was not renewed or extended. Prior to the Internalization on March 12, 2019, the Company entered into a license agreement with GSV Asset Management pursuant to which GSV Asset Management had agreed to grant the Company a non-exclusive, royalty-free license to use the name “GSV.” Under this agreement, the Company had the right to use the GSV name for so long as the Investment Advisory Agreement with GSV Asset Management is in effect. Other Arrangements The Company’s executive officers and directors, and the principals of the Company’s former investment adviser, GSV Asset Management, serve or may serve as officers, directors, or managers of entities that operate in a line of business similar to the Company’s, including new entities that may be formed in the future. 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 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. To ensure that the Company does not engage in any prohibited transactions with any persons affiliated with the Company, the Company has implemented certain written policies and procedures whereby the Company’s executive officers screen each of the Company’s transactions for any possible affiliations between the proposed portfolio investment, the Company, companies controlled by the Company, and the Company’s executive officers and directors. NOTE 4—INVESTMENTS AT FAIR VALUE Investment Portfolio Composition The Company’s investments in portfolio companies consist primarily of equity securities (such as common stock, preferred stock and options to purchase common and preferred stock) and to a lesser extent, debt securities, issued by private and publicly traded companies. The Company may also, from time to time, invest in U.S. Treasury securities. Non-portfolio investments represent investments in U.S. Treasury securities. As of December 31, 2020, the Company had 57 positions in 27 portfolio companies. As of December 31, 2019, the Company had 46 positions in 23 portfolio companies. 102 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 The following tables summarize the composition of the Company’s investment portfolio by security type at cost and fair value as of December 31, 2020 and December 31, 2019: December 31, 2020 December 31, 2019 Cost Fair Value Percentage of Net Assets Cost Fair Value Percentage of Net Assets Private Portfolio Companies Preferred Stock $ 89,335,378 $ 141,235,987 46.9 % $ 73,557,331 $ 125,448,358 62.8 % Common Stock 46,802,917 34,190,839 11.3 % 63,425,065 59,209,559 29.6 % Debt Investments 8,587,621 4,845,340 1.6 % 4,838,415 1,644,155 0.8 % Options 8,764,885 5,872,210 1.9 % 8,764,885 5,283,506 2.6 % Private Portfolio Companies 153,490,801 186,144,376 61.7 % 150,585,696 191,585,578 95.8 % Publicly Traded Portfolio Companies Common Stock 12,875,126 94,635,398 31.4 % — — — % Total Portfolio Investments 166,365,927 280,779,774 93.1 % 150,585,696 191,585,578 95.8 % Non-Portfolio Investments U.S. Treasury bill 150,000,000 150,000,000 49.7 % 49,996,667 50,000,000 25.0 % Total Investments $ 316,365,927 $ 430,779,774 142.8 % $ 200,582,363 $ 241,585,578 120.8 % The geographic and industrial compositions of the Company’s portfolio at fair value as of December 31, 2020 and December 31, 2019 were as follows: As of December 31, 2020 As of December 31, 2019 Fair Value Percentage of Portfolio Percentage of Net Assets Fair Value Percentage of Portfolio Percentage of Net Assets Geographic Region West $ 248,633,803 88.5 % 82.4 % $ 176,331,572 92.0 % 88.2 % Northeast 24,324,345 8.7 % 8.1 % 7,847,769 4.1 % 3.9 % Mid-west 7,821,626 2.8 % 2.6 % 7,406,237 3.9 % 3.7 % Total $ 280,779,774 100.0 % 93.1 % $ 191,585,578 100.0 % 95.8 % As of December 31, 2020 As of December 31, 2019 Fair Value Percentage of Portfolio Percentage of Net Assets Fair Value Percentage of Portfolio Percentage of Net Assets Industry Education Technology $ 99,397,589 35.4 % 33.0 % $ 82,578,640 43.1 % 41.3 % Big Data/Cloud 97,186,162 34.6 % 32.1 % 31,582,084 16.5 % 15.8 % Financial Technology 25,614,522 9.1 % 8.5 % 26,754,801 14.0 % 13.4 % Social/Mobile 22,930,589 8.2 % 7.6 % 26,573,046 13.8 % 13.3 % Marketplaces 34,841,714 12.4 % 11.6 % 23,321,809 12.2 % 11.6 % Sustainability 809,198 0.3 % 0.3 % 775,198 0.4 % 0.4 % Total $ 280,779,774 100.0 % 93.1 % $ 191,585,578 100.0 % 95.8 % 103 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 The table below details the composition of the Company’s industrial themes presented in the preceding tables: Industry Theme Industry Education Technology Business Education Computer Software Corporate Education Education Media Platform Education Software E-Transcript Exchange Interactive Learning Online Education Big Data/Cloud Data Analysis Cloud Computing Services Social Cognitive Learning Marketplaces Global Innovation Platform Pharmaceutical Technology Knowledge Networks On-Demand Commerce Subscription Fashion Rental Micromobility On-Demand Transportation Real Estate Platform Peer-to-Peer Pet Services Financial Technology Online Marketplace Finance Financial Services Cannabis REIT Social/Mobile Digital Media Platform Social Networking On-Demand Music Streaming Social Data Platform Sustainability Clean Technology 104 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 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 December 31, 2020 and December 31, 2019 are as follows: As of December 31, 2020 Quoted Prices in Active Markets for Identical Securities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Investments at Fair Value Private Portfolio Companies Preferred Stock $ — $ — $ 141,235,987 $ 141,235,987 Common Stock — — 34,190,839 34,190,839 Debt Investments — — 4,845,340 4,845,340 Options — — 5,872,210 5,872,210 Private Portfolio Companies — — 186,144,376 186,144,376 Publicly Traded Portfolio Companies Common Stock — 94,635,398 — 94,635,398 Total Portfolio Investments — 94,635,398 186,144,376 280,779,774 Non-Portfolio Investments U.S. Treasury bills 150,000,000 — — 150,000,000 Total Investments at Fair Value $ 150,000,000 $ 94,635,398 $ 186,144,376 $ 430,779,774 As of December 31, 2019 Quoted Prices in Active Markets for Identical Securities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Investments at Fair Value Private Portfolio Companies Preferred Stock $ — $ — $ 125,448,358 $ 125,448,358 Common Stock — — 59,209,559 59,209,559 Debt Investments — — 1,644,155 1,644,155 Options — — 5,283,506 5,283,506 Private Portfolio Companies — — 191,585,578 191,585,578 Publicly Traded Portfolio Companies Common Stock — — — — Total Portfolio Investments — — 191,585,578 191,585,578 Non-Portfolio Investments U.S. Treasury bills 50,000,000 — — 50,000,000 Total Investments at Fair Value $ 50,000,000 $ — $ 191,585,578 $ 241,585,578 105 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 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 December 31, 2020 and December 31, 2019. 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 December 31, 2020 and December 31, 2019. 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 December 31, 2020 Asset Fair Value Valuation Approach/ Technique (1) Unobservable Inputs (2) Range (Weighted Average) (3) Common stock in private companies $34,190,839 Market approach AFFO (4) multiple 27.53x (27.53x) Revenue multiples 2.12x -6.95x (6.39x) Liquidation value N/A Discounted cash flow Discount rate 12.0% (12.0%) Preferred stock in private companies $141,235,987 Market approach Revenue multiples 1.03x - 4.35x (2.66x) Precedent transactions N/A Discounted cash flow Discount rate 12.0% (12.0%) PWERM (5) Revenue multiples 1.28x - 2.27x (2.06x) Precedent transactions N/A Debt investments $4,845,340 Market approach Revenue multiples 2.12x - 4.35x (2.32x) PWERM (5) Revenue multiples N/A Liquidation value N/A Options $5,872,210 Option pricing model Term to expiration (Years) 0.26 - 7.36 (4.51) Volatility 34.9% - 56.3% (36.8%) Discounted cash flow Discount Rate 12.0% (12.0%) ________________________ (1) As of December 31, 2020, 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. By 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; however, the weighting of each in determining the final fair value of a Level 3 investment may change based on recent events or transactions. The hybrid approach may also consider certain risk weightings to account for the uncertainty of future events. Refer to “Note 2—Significant Accounting Policies— Investments at Fair Value ” for more detail. (2) The Company considers all relevant information that can reasonably be obtained when determining the fair value of Level 3 investments. Due to any given portfolio company’s information rights, changes in capital structure, recent events, transactions, or liquidity events, the type and availability of unobservable inputs may change. Increases/(decreases) in revenue multiples, earnings before interest and taxes (“EBIT”) multiples, time to expiration, and stock price/strike price would result in higher (lower) fair 106 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 values all else equal. Decreases (increases) in discount rates, volatility, and annual risk rates, would result in higher (lower) fair values all else equal. 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 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. In general, precedent transactions include recent rounds of financing, recent purchases made by the Company, and tender offers. Refer to “Note 2—Significant Accounting Policies— Investments at Fair Value ” for more detail. (3) The weighted averages are calculated based on the fair market value of each investment. (4) Adjusted Funds From Operations, or "AFFO" (5) Probability-Weighted Expected Return Method, or "PWERM" As of December 31, 2019 Asset Fair Value Valuation Approach/ Technique (1) Unobservable Inputs (2) Range (Weighted Average) (3) Common stock in private companies $59,209,559 Market approach AFFO (4) multiple 16.67x - 37.32 (25.09x) Revenue multiples 1.45x - 3.23x (2.86x) Liquidation value N/A Discounted cash flow Discount rate 12.0% (12.0%) Preferred stock in private companies $125,448,358 Market approach Revenue multiples 1.89x - 5.43x (3.77x) Precedent transactions N/A Discounted cash flow Discount rate 12.0% (12.0%) PWERM (5) Revenue multiples 1.23x - 2.05x (1.83x) Precedent transactions 2.97x - 3.23x (3.10x) Debt investments $1,644,155 Market approach Revenue multiples 1.45x - 1.57x (1.51x) PWERM (5) Revenue multiples N/A Liquidation value N/A Options $5,283,506 Option pricing model Term to expiration (Years) 0.13 - 8.30 (5.35) Volatility 30.0%-48.0% (36.0%) Discounted cash flow Discount Rate 12.0% (12.0%) ________________________ (1) As of December 31, 2019, 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. By 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; however, the weighting of each in determining the final fair value of a Level 3 investment may change based on recent events or transactions. The hybrid approach may also consider certain risk weightings to account for the uncertainty of future events. Refer to “Note 2—Significant Accounting Policies— Investments at Fair Value ” for more detail. (2) The Company considers all relevant information that can reasonably be obtained when determining the fair value of Level 3 investments. Due to any given portfolio company’s information rights, changes in capital structure, recent events, transactions, or liquidity events, the type and availability of unobservable inputs may change. Increases/(decreases) in revenue multiples, earnings before interest and taxes (“EBIT”) multiples, time to expiration, and stock price/strike price would result in higher (lower) fair values all else equal. Decreases (increases) in discount rates, volatility, and annual risk rates, would result in higher (lower) fair values all else equal. The market approach utilizes market value (revenue and EBIT) multiples of publicly traded comparable 107 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 companies and available precedent sales transactions of comparable companies. 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 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. Refer to “Note 2—Significant Accounting Policies— Investments at Fair Value ” for more detail. (3) The weighted averages are calculated based on the fair market value of each investment. (4) Adjusted Funds From Operations, or "AFFO" (5) Probability-Weighted Expected Return Method, or "PWERM" The aggregate values of Level 3 assets and liabilities changed during the year ended December 31, 2020 as follows: Year Ended December 31, 2020 Common Stock Preferred Stock Debt Investments Options Total Assets: Fair Value as of December 31, 2019 $ 59,209,559 $ 125,448,358 $ 1,644,155 $ 5,283,506 $ 191,585,578 Transfers out of Level 3 (1) (57,736,900) — — — (57,736,900) Purchases, capitalized fees, and interest 1,004,190 19,497,839 10,930,996 — 31,433,025 Sales/Maturity of investments (807,953) (10,876,624) (6,899,999) (989,494) (19,574,070) Exercises and conversions (1) — 281,190 (281,190) — — Realized gains (628,452) 6,875,639 (602) 989,494 7,236,079 Net change in unrealized appreciation/(depreciation) included in earnings 33,150,395 9,585 (548,020) 588,704 33,200,664 Fair Value as of December 31, 2020 $ 34,190,839 $ 141,235,987 $ 4,845,340 $ 5,872,210 $ 186,144,376 Net change in unrealized appreciation/ (depreciation) of Level 3 investments still held as of December 31, 2020 $ 6,347,026 $ 10,825,549 $ (508,045) $ 588,704 $ 17,253,234 ________________________ (1) During the year ended December 31, 2020, the Company’s portfolio investments had the following corporate actions which are reflected above: Portfolio Company Conversion from Conversion to Neutron Holdings, Inc. (d/b/a/ Lime) Preferred shares, Series D Junior Preferred shares, Series 1-D Common warrants, Strike price $0.01, Expiration Date 5/11/2027 Aspiration Partners, Inc. Convertible Promissory Note Preferred shares, Series C-3 Palantir Technologies, Inc. Common shares, Class A Public Common shares (Level 2) SharesPost, Inc. Preferred shares, Series B Forge Global Inc. Junior Preferred shares SP Holdings Group, Inc. Preferred shares Series B SharesPost, Inc Common shares Forge Global Inc. Common shares, Class AA Forge Junior Warrants, Strike price $12.42, Expiration Date 11/09/2025 SP Holdings Group, Inc. Common Shares 108 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 The aggregate values of Level 3 assets and liabilities changed during the year ended December 31, 2019 as follows: Year Ended December 31, 2019 Common Stock Preferred Stock Debt Investments Options Total Assets: Fair Value as of December 31, 2018 $ 48,517,824 $ 99,856,159 $ 5,584,994 $ 267,446 $ 154,226,423 Transfers out of Level 3 (1) — (21,947,688) — — (21,947,688) Purchases, capitalized fees, and interest 15,001,530 10,576,421 359,095 16,618 25,953,664 Sales/Maturity of investments — — (51,511) — (51,511) Exercises and conversions (1) (1,000) (6,435,123) (2,102,384) 8,538,507 — Amortization of fixed income security premiums and discounts — — 5,065 — 5,065 Realized losses — (16,002,159) (2,527,865) — (18,530,024) Net change in unrealized appreciation/(depreciation) included in earnings (4,308,795) 59,400,748 376,761 (3,539,065) 51,929,649 Fair Value as of December 31, 2019 $ 59,209,559 $ 125,448,358 $ 1,644,155 $ 5,283,506 $ 191,585,578 Net change in unrealized appreciation/ (depreciation) of Level 3 investments still held as of December 31, 2019 $ (4,309,794) $ 38,560,931 $ (907,009) $ (3,539,066) $ 29,805,062 ________________________ (1) During the year ended December 31, 2019, the Company’s portfolio investments had the following corporate actions which are reflected above: Portfolio Company Conversion from Conversion to Lyft, Inc. Preferred shares, Series D Preferred shares, Series E Public Common Shares (Level 2) Ozy Media, Inc. Convertible Promissory Note Preferred shares, Series C-2 NestGSV, Inc (d/b/a OneValley, Inc.) Common shares Preferred shares, Series A-1 Preferred shares, Series A-2 Preferred shares, Series A-3 Preferred shares, Series A-4 Derivative Security 109 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Schedule of Investments In, and Advances to, Affiliates Transactions during the year ended December 31, 2020 involving the Company’s controlled investments and non-controlled/affiliate investments were as follows: Schedule of Investments In, and Advances to, Affiliate Type/Industry/Portfolio Company/Investment Principal/ Quantity Interest, Fees, or Dividends Credited in Income Fair Value at December 31, 2019 Purchases, Capitalized Fees, Interest and Amortization Realized Gains/(Losses) Unrealized Gains/(Losses) Fair Value at December 31, 2020 Percentage of Net Assets CONTROLLED INVESTMENTS * (2) Preferred Stock Clean Technology SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.)–Preferred shares, Class A*** (4) 14,300,000 $ 450,000 $ 775,198 $ — $ — $ 34,000 $ 809,198 0.27 % Total Preferred Stock 450,000 775,198 — — 34,000 809,198 0.27 % Common Stock Clean Technology SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.)–Common shares 100,000 — — — — — — — % Total Common Stock — — — — — — — % TOTAL CONTROLLED INVESTMENTS* (2) $ 450,000 $ 775,198 $ — $ — $ 34,000 $ 809,198 0.27 % NON-CONTROLLED/AFFILIATE INVESTMENTS * (1) Debt Investments Corporate Education CUX, Inc. (d/b/a CorpU)–Senior Subordinated Convertible Promissory Note 4% Due 2/14/2023 (3) $ 1,251,158 $ — $ 312,789 $ — $ — $ 1 $ 312,790 0.10 % Global Innovation Platform NestGSV, Inc. (d/b/a OneValley, Inc.) –Convertible Promissory Note 8% Due 8/23/2024 (3)(6) $ 1,010,198 (29,184) 1,010,198 — — (505,099) 505,099 0.17 % Total Debt Investments (29,184) 1,322,987 — — (505,098) 817,889 0.27 % Preferred Stock Corporate Education CUX, Inc. (d/b/a CorpU)–Convertible preferred shares, Series D 6% 169,033 — 34,980 — — 38,902 73,882 0.02 % CUX, Inc. (d/b/a CorpU) -Convertible preferred shares, Series C 8% 615,763 — — — — — — — % Total Corporate Education — 34,980 — — 38,902 73,882 0.02 % 110 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Type/Industry/Portfolio Company/Investment Principal/ Quantity Interest, Fees, or Dividends Credited in Income Fair Value at December 31, 2019 Purchases, Capitalized Fees, Interest and Amortization Realized Gains/(Losses) Unrealized Gains/(Losses) Fair Value at December 31, 2020 Percentage of Net Assets Knowledge Networks Maven Research, Inc.–Preferred shares, Series C 318,979 $ — $ — $ — $ — $ — $ — — % Maven Research, Inc.–Preferred shares, Series B 49,505 — — — — — — — % Total Knowledge Networks — — — — — — — % Digital Media Platform OzyMedia, Inc.–Preferred shares, Series C-2 6% 683,482 — 2,970,252 — — (1,104,705) 1,865,547 0.62 % OzyMedia, Inc.–Preferred shares, Series B 6% 922,509 — 5,001,420 — — (1,650,468) 3,350,952 1.11 % OzyMedia, Inc.–Preferred shares, Series A 6% 1,090,909 — 4,528,107 — — (1,703,428) 2,824,679 0.94 % OzyMedia, Inc.–Preferred shares, Series Seed 6% 500,000 — 2,002,143 — — (707,498) 1,294,645 0.43 % Total Digital Media Platform — 14,501,922 — — (5,166,099) 9,335,823 3.10 % Interactive Learning StormWind, LLC–Preferred shares, Series D 8% (5) 329,337 — 503,120 — — (62,605) 440,515 0.15 % StormWind, LLC–Preferred shares, Series C 8% (5) 2,779,134 — 5,391,000 — — (586,782) 4,804,218 1.59 % StormWind, LLC–Preferred shares, Series B 8% (5) 3,279,629 — 3,248,804 — — (623,439) 2,625,365 0.87 % StormWind, LLC–Preferred shares, Series A 8% (5) 366,666 — 157,949 — — (69,701) 88,248 0.03 % Total Interactive Learning — 9,300,873 — — (1,342,527) 7,958,346 2.64 % Total Preferred Stock — 23,837,775 — — (6,469,724) 17,368,051 5.76 % Options Digital Media Platform OzyMedia, Inc.–Common Warrants, Strike Price $0.01, Expiration Date 4/9/2028 295,565 — 1,182,260 — — (419,702) 762,558 0.25 % Global Innovation Platform NestGSV, Inc. (d/b/a OneValley, Inc.)–Preferred Warrant Series A-3, Strike Price $1.33, Expiration Date 4/4/2021 187,500 — 20,625 — — (15,938) 4,687 — % NestGSV, Inc. (d/b/a OneValley, Inc.)–Preferred Warrant Series A-4, Strike Price $1.33, Expiration Date 10/6/2021 500,000 — 135,000 — — (70,000) 65,000 0.02 % NestGSV, Inc. (d/b/a OneValley, Inc.)–Preferred Warrant Series A-4, Strike Price $1.33, Expiration Date 7/18/2021 250,000 — 62,500 — — (35,000) 27,500 0.01 % NestGSV, Inc. (d/b/a OneValley, Inc.)–Preferred Warrant Series B, Strike Price $2.31, Expiration Date 11/29/2021 100,000 — — — — — — — % 111 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Type/Industry/Portfolio Company/Investment Principal/ Quantity Interest, Fees, or Dividends Credited in Income Fair Value at December 31, 2019 Purchases, Capitalized Fees, Interest and Amortization Realized Gains/(Losses) Unrealized Gains/(Losses) Fair Value at December 31, 2020 Percentage of Net Assets NestGSV, Inc. (d/b/a OneValley, Inc.)–Preferred Warrant Series B, Strike Price $2.31, Expiration Date 5/29/2022 125,000 $ — $ — $ — $ — $ — $ — — % NestGSV, Inc. (d/b/a OneValley, Inc.)–Preferred Warrant Series B, Strike Price $2.31, Expiration Date 12/31/2023 250,000 — 2,500 — — 6,750 9,250 — % Derivative Security, Expiration Date 8/23/2024 (6) 1 — 3,880,621 — — (1,707,473) 2,173,148 0.72 % Total Global Innovation Platform — 4,101,246 — — (1,821,661) 2,279,585 0.75 % Total Options — 5,283,506 — — (2,241,363) 3,042,143 1.00 % Common Stock Online Education Curious.com, Inc.–Common shares 1,135,944 — — — — — — — % Cannabis REIT GreenAcreage Real Estate Corp. -Common shares*** (7) 422,586 317,617 7,500,000 1,008,103 — 429,587 8,937,690 2.96 % Total Common Stock 317,617 7,500,000 1,008,103 — 429,587 8,937,690 2.96 % TOTAL NON-CONTROLLED/AFFILIATE INVESTMENTS* (1) $ 288,433 $ 37,944,268 $ 1,008,103 $ — $ (8,786,598) $ 30,165,773 10.00 % ____________________ * All portfolio investments are non-income-producing, unless otherwise identified. Equity investments are subject to lock-up restrictions upon their IPO. Preferred dividends are generally only payable when declared and paid by the portfolio company's board of directors. The Company’s directors, officers, employees and staff, as applicable, may serve on the board of directors of the Company’s portfolio investments. (Refer to “Note 3—Related-Party Arrangements”). All portfolio investments are considered Level 3 and valued using significant unobservable inputs, unless otherwise noted. (Refer to “Note 4—Investments at Fair Value”). All portfolio investments are considered Level 3 and valued using unobservable inputs, unless otherwise noted. All of the Company's portfolio investments are restricted as to resale, unless otherwise noted, and were valued at fair value as determined in good faith by the Company’s Board of Directors. (Refer to "Note 2—Significant Accounting Policies—Investments at Fair Value"). ** 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”). Of the Company’s total investments as of December 31, 2020, 22.56% of its total investments are non-qualifying assets. *** Investment is income-producing. (1) “Affiliate Investments” are investments in those companies that are “Affiliated Companies” of SuRo Capital Corp., as defined in the 1940 Act. In general, a company is deemed to be an “Affiliate” of SuRo Capital Corp. if SuRo Capital Corp. owns 5% or more of the voting securities ( i.e. , securities with the right to elect directors) of such company. 112 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 (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 December 31, 2020, the investments noted had been placed on non-accrual status. (4) The SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.) preferred shares held by SuRo Capital Corp. do not entitle SuRo Capital Corp. to a preferred dividend rate. During the year ended December 31, 2020, SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.) declared, and SuRo Capital Corp. received, an aggregate of $450,000 in dividend distributions. SuRo Capital Corp. does not anticipate that SPBRX, INC. will pay distributions on a quarterly or regular basis or become a predictable distributor of distributions. (5) SuRo Capital Corp.’s investments in StormWind, LLC are held through SuRo Capital Corp.'s wholly owned subsidiary, GSVC SW Holdings, Inc. (6) On August 23, 2019, SuRo Capital Corp. amended the structure of its investment in NestGSV, Inc. (d/b/a OneValley, Inc.). As part of the agreement, SuRo Capital Corp.’s equity holdings (warrants notwithstanding) were restructured into a derivative security. NestGSV, Inc. (d/b/a OneValley,Inc.) has the right to call the position at any time over a five year period, while SuRo Capital Corp. can put the shares to NestGSV, Inc. (d/b/a OneValley, Inc.) at the end of the five year period. (7) During the year ended December 31, 2020, GreenAcreage Real Estate Corp. declared an aggregate of $317,617 in dividend distributions. SuRo Capital Corp. does not anticipate that Green Acreage Real Estate Corp. will pay distributions on a recurring or regular basis or become a predictable distributor of distributions. 113 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Schedule of Investments In, and Advances to, Affiliates Transactions during the year ended December 31, 2019 involving the Company’s controlled investments and non-controlled/affiliate investments were as follows: Schedule of Investments In, and Advances to, Affiliate Type/Industry/Portfolio Company/Investment Principal/ Quantity Interest, Fees, or Dividends Credited in Income Fair Value at December 31, 2018 Corporate Action Purchases, Capitalized Fees, Interest and Amortization Realized Gains/(Losses) Unrealized Gains/(Losses) Fair Value at December 31, 2019 Percentage of Net Assets CONTROLLED INVESTMENTS * (2) Preferred Stock Clean Technology SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.)–Preferred shares, Class A*** (3) 14,300,000 $ 400,000 $ 750,198 $ — $ — $ — $ 25,000 $ 775,198 0.39 % Global Innovation Platform NestGSV, Inc. (d/b/a OneValley, Inc.)–Preferred stock Series A-4 (7) — — 4,960,553 (4,904,498) — — (56,055) — — % NestGSV, Inc. (d/b/a OneValley, Inc.)–Preferred stock Series A-3 (7) — — 1,735,134 (2,005,730) — — 270,596 — — % NestGSV, Inc. (d/b/a OneValley, Inc.)–Preferred stock Series A-2 (7) — — 300,000 (605,500) — — 305,500 — — % NestGSV, Inc. (d/b/a OneValley, Inc.)–Preferred stock Series A-1 (7) — — 499,999 (1,021,778) — — 521,779 — — % Total Global Innovation Platform — 7,495,686 (8,537,506) — — 1,041,820 — — % Total Preferred Stock 400,000 8,245,884 (8,537,506) — — 1,066,820 775,198 0.39 % Common Stock Clean Technology SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.)–Common shares 100,000 — — — — — — — — % Global Innovation Platform NestGSV, Inc. (d/b/a OneValley, Inc.)–Common shares (7) — — — (1,000) — — 1,000 — — % Total Common Stock — — (1,000) — — 1,000 — — % TOTAL CONTROLLED INVESTMENTS* (2) $ 400,000 $ 8,245,884 $ (8,538,506) $ — $ — $ 1,067,820 $ 775,198 0.39 % 114 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Type/Industry/Portfolio Company/Investment Principal/ Quantity Interest, Fees, or Dividends Credited in Income Fair Value at December 31, 2018 Corporate Action Purchases, Capitalized Fees, Interest and Amortization Realized Gains/(Losses) Unrealized Gains/(Losses) Fair Value at December 31, 2019 Percentage of Net Assets NON-CONTROLLED/AFFILIATE INVESTMENTS * (1) Debt Investments Corporate Education CUX, Inc. (d/b/a CorpU)–Senior Subordinated Convertible Promissory Note 4% Due 2/14/2023 (5) $ 1,251,158 $ (13,142) $ 1,360,489 $ — $ 3,553 $ (109,331) $ (941,922) $ 312,789 0.16 % Digital Media Platform Ozy Media, Inc.–Convertible Promissory Note 5% Due 12/31/2018*** (6) $ — 72,864 3,153,575 (2,102,384) — — (1,051,191) — — % Social Cognitive Learning Declara, Inc.–Convertible Promissory Note 12% Due 4/30/2018 $ — — — — 680 (2,334,832) 2,334,152 — — % Global Innovation Platform NestGSV, Inc. (d/b/a OneValley, Inc.) –Convertible Promissory Note 8% Due 8/23/2024*** (7) $ 1,010,198 107,611 936,525 — 78,739 — (5,066) 1,010,198 0.50 % Total Global Innovation Platform 107,611 936,525 — 78,739 — (5,066) 1,010,198 0.50 % Total Debt Investments 167,333 5,450,589 (2,102,384) 82,972 (2,444,163) 335,973 1,322,987 0.66 % Preferred Stock Corporate Education CUX, Inc. (d/b/a CorpU)–Convertible preferred shares, Series D 6% 169,033 — 878,005 — — — (843,025) 34,980 0.02 % CUX, Inc. (d/b/a CorpU) -Convertible preferred shares, Series C 8% 615,763 — — — — — — — — % Total Corporate Education — 878,005 — — — (843,025) 34,980 0.02 % Social Cognitive Learning Declara, Inc.–Preferred shares, Series A 8% — — — — — (9,999,999) 9,999,999 — — % Education Media Platform EdSurge, Inc.–Preferred shares, Series A-1 — — 250,000 — — (501,360) 251,360 — — % EdSurge, Inc.–Preferred shares, Series A — — 269,848 — — (500,801) 230,953 — — % Total Education Media Platform — 519,848 — — (1,002,161) 482,313 — — % 115 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Type/Industry/Portfolio Company/Investment Principal/ Quantity Interest, Fees, or Dividends Credited in Income Fair Value at December 31, 2018 Corporate Action Purchases, Capitalized Fees, Interest and Amortization Realized Gains/(Losses) Unrealized Gains/(Losses) Fair Value at December 31, 2019 Percentage of Net Assets Knowledge Networks Maven Research, Inc.–Preferred shares, Series C 318,979 $ — $ — $ — $ — $ — $ — $ — — % Maven Research, Inc.–Preferred shares, Series B 49,505 — — — — — — — — % Total Knowledge Networks — — — — — — — — % Digital Media Platform OzyMedia, Inc.–Preferred shares, Series C-2 6% (6) 683,482 — — 2,102,384 311,794 — 556,074 2,970,252 1.49 % OzyMedia, Inc.–Preferred shares, Series B 6% 922,509 — — — — — 5,001,420 5,001,420 2.50 % OzyMedia, Inc.–Preferred shares, Series A 6% 1,090,909 — — — — — 4,528,107 4,528,107 2.26 % OzyMedia, Inc.–Preferred shares, Series Seed 6% 500,000 — — — — — 2,002,143 2,002,143 1.00 % Total Digital Media Platform — — 2,102,384 311,794 — 12,087,744 14,501,922 7.25 % Global Innovation Platform NestGSV, Inc. (d/b/a OneValley, Inc.)–Preferred stock Series A-4 (7) — — — — — — — — — % NestGSV, Inc. (d/b/a OneValley, Inc.)–Preferred stock Series A-3 (7) — — — — — — — — — % NestGSV, Inc. (d/b/a OneValley, Inc.)–Preferred stock Series A-2 (7) — — — — — — — — — % NestGSV, Inc. (d/b/a OneValley, Inc.)–Preferred stock Series A-1 (7) — — — — — — — — — % Total Global Innovation Platform — — — — — — — — % Interactive Learning StormWind, LLC–Preferred shares, Series D 8% (4)(8) 329,337 — — — 257,267 — 245,853 503,120 0.25 % StormWind, LLC–Preferred shares, Series C 8% (4) 2,779,134 — 7,194,971 — — — (1,803,971) 5,391,000 2.70 % StormWind, LLC–Preferred shares, Series B 8% (4) 3,279,629 — 5,770,328 — — — (2,521,524) 3,248,804 1.62 % StormWind, LLC–Preferred shares, Series A 8% (4) 366,666 — 421,525 — — — (263,576) 157,949 0.08 % Total Interactive Learning — 13,386,824 — 257,267 — (4,343,218) 9,300,873 4.65 % Total Preferred Stock — 14,784,677 2,102,384 569,061 (11,002,160) 17,383,813 23,837,775 11.92 % 116 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Type/Industry/Portfolio Company/Investment Principal/ Quantity Interest, Fees, or Dividends Credited in Income Fair Value at December 31, 2018 Corporate Action Purchases, Capitalized Fees, Interest and Amortization Realized Gains/(Losses) Unrealized Gains/(Losses) Fair Value at December 31, 2019 Percentage of Net Assets Options Corporate Education CUX, Inc. (d/b/a CorpU) –Preferred warrants, Series D, Strike Price $4.59, Expiration Date 2/14/2020 16,903 $ — $ 19,946 $ — $ — $ — $ (19,946) $ — — % Digital Media Platform OzyMedia, Inc.–Common Warrants, Strike Price $0.01, Expiration Date 4/9/2028 295,565 — — — — — 1,182,260 1,182,260 0.59 % Global Innovation Platform NestGSV, Inc. (d/b/a OneValley, Inc.)–Preferred Warrant Series A-3, Strike Price $1.33, Expiration Date 4/4/2021 (7) 187,500 — 26,250 — — — (5,625) 20,625 0.01 % NestGSV, Inc. (d/b/a OneValley, Inc.)–Preferred Warrant Series A-4, Strike Price $1.33, Expiration Date 10/6/2021 (7) 500,000 — 145,000 — — — (10,000) 135,000 0.07 % NestGSV, Inc. (d/b/a OneValley, Inc.)–Preferred Warrant Series A-4, Strike Price $1.33, Expiration Date 7/18/2021 (7) 250,000 — 70,000 — — — (7,500) 62,500 0.03 % NestGSV, Inc. (d/b/a OneValley, Inc.)–Preferred Warrant Series B, Strike Price $2.31, Expiration Date 11/29/2021 (7) 100,000 — 556 — — — (556) — — % NestGSV, Inc. (d/b/a OneValley, Inc.)–Preferred Warrant Series B, Strike Price $2.31, Expiration Date 5/29/2022 (7) 125,000 — 694 — — — (694) — — % NestGSV, Inc. (d/b/a OneValley, Inc.)–Preferred Warrant Series B, Strike Price $2.31, Expiration Date 12/31/2023 (7) 250,000 — 5,000 — — — (2,500) 2,500 0.00 % Derivative Security, Expiration Date 8/23/2024 (7) 1 — — 8,538,506 16,618 — (4,674,503) 3,880,621 1.94 % Total Global Innovation Platform — 247,500 8,538,506 16,618 — (4,701,378) 4,101,246 2.05 % Total Options — 267,446 8,538,506 16,618 — (3,539,064) 5,283,506 2.64 % Common Stock Online Education Curious.com, Inc.–Common shares 1,135,944 — — — — — — — — % 117 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Type/Industry/Portfolio Company/Investment Principal/ Quantity Interest, Fees, or Dividends Credited in Income Fair Value at December 31, 2018 Corporate Action Purchases, Capitalized Fees, Interest and Amortization Realized Gains/(Losses) Unrealized Gains/(Losses) Fair Value at December 31, 2019 Percentage of Net Assets Cannabis REIT GreenAcreage Real Estate Corp. -Common shares 375,000 $ — $ — $ — $ 7,501,530 $ — $ (1,530) $ 7,500,000 3.75 % Total Common Stock — — — 7,501,530 — (1,530) 7,500,000 3.75 % TOTAL NON-CONTROLLED/AFFILIATE INVESTMENTS* (1) $ 167,333 $ 20,502,712 $ 8,538,506 $ 8,170,181 $ (13,446,323) $ 14,179,192 $ 37,944,268 18.98 % ____________________ * All portfolio investments are non-income-producing, unless otherwise identified. Equity investments are subject to lock-up restrictions upon their IPO. Preferred dividends are generally only payable when declared and paid by the portfolio company's board of directors. Unless otherwise noted, all investments were pledged as collateral under the senior secured revolving Credit Facility with Western Alliance Bank (the "Credit Facility"). The Company’s directors, officers, employees and staff, as applicable, may serve on the board of directors of the Company’s portfolio investments. (Refer to “Note 3—Related-Party Arrangements”). All portfolio investments are considered Level 3 and valued using significant unobservable inputs, unless otherwise noted. (Refer to “Note 4—Investments at Fair Value”). All portfolio investments are considered Level 3 and valued using unobservable inputs, unless otherwise noted. All of the Company's portfolio investments are restricted as to resale, unless otherwise noted, and were valued at fair value as determined in good faith by the Company’s Board of Directors. (Refer to "Note 2—Significant Accounting Policies—Investments at Fair Value"). ** 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”). Of the Company’s total investments as of December 31, 2019, 0.00% of its total investments are non-qualifying assets. *** Investment is income-producing. (1) “Affiliate Investments” are investments in those companies that are “Affiliated Companies” of SuRo Capital Corp., as defined in the 1940 Act. In general, a company is deemed to be an “Affiliate” of SuRo Capital Corp. if SuRo Capital Corp. owns 5% or more of the voting securities ( i.e. , securities with the right to elect directors) of such company. (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) During the year ended December 31, 2019, SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.) declared, and SuRo Capital Corp. received, an aggregate of $400,000 in dividend distributions. (4) SuRo Capital Corp.’s investments in StormWind, LLC are held through SuRo Capital Corp.'s wholly owned subsidiary, GSVC SW Holdings, Inc. (5) On October 24, 2019, CUX, Inc. (d/b/a CorpU) completed a recapitalization, which amended SuRo Capital Corp.'s investment in the Senior Subordinated Convertible Promissory Note. As a result of the recapitalization, the principal amount of SuRo Capital Corp.'s Senior Subordinated Convertible Promissory Note was reduced by $109,331, the interest rate was reduced to 4%, and the maturity was extended to February 14, 2023. 118 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 (6) On September 11, 2019, SuRo Capital Corp. agreed to convert its 5% Convertible Promissory Note due 12/31/2018 to Ozy Media, Inc. and all related accrued interest, into 683,482 shares of Ozy Media, Inc.'s Series C-2 preferred shares. (7) On August 23, 2019, SuRo Capital Corp. amended the structure of its investment in NestGSV, Inc. (d/b/a OneValley, Inc.). As part of the agreement, SuRo Capital Corp.’s equity holdings (warrants notwithstanding) were restructured into a derivative security. NestGSV, Inc. (d/b/a OneValley,Inc.) has the right to call the position at any time over a five year period, while SuRo Capital Corp. can put the shares to NestGSV, Inc. (d/b/a OneValley, Inc.) at the end of the five year period. As part of the agreement, previously accrued interest under SuRo Capital Corp.’s 12% Convertible Promissory Note due 12/31/2019 will be capitalized into the principal of the extended note, and the interest on the note is reduced from 12% to 8%. The Convertible Promissory Note’s maturity was extended to August 23, 2024. Under the amended structure, SuRo Capital Corp.’s fully diluted ownership of voting securities decreased from 50.0% to 8.5%. As such, SuRo Capital Corp.'s investments in NestGSV, Inc. (d/b/a OneValley, Inc.) have been recategorized from controlled investments to non-controlled/affiliated investments. (8) On November 26, 2019, SuRo Capital Corp. invested $250,000 in StormWind, LLC's Series D financing round. As part of the round, SuRo Capital Corp.'s fully diluted ownership of voting securities decreased from 25.6% to 23.4%. As such, SuRo Capital Corp.'s investments in StormWind, LLC have been recategorized from controlled investments to non-controlled/affiliated investments. 119 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 NOTE 5—COMMON STOCK Share Repurchase Program On August 8, 2017, the Company announced a $5.0 million discretionary open-market share repurchase program of shares of the Company’s common stock, $0.01 par value per share, of up to $5.0 million until the earlier of (i) August 6, 2018 or (ii) the repurchase of $5.0 million in aggregate amount of the Company’s common stock (the “Share Repurchase Program”). On November 7, 2017, the Company’s Board of Directors authorized an extension of, and an increase in the amount of shares of the Company’s common stock that may be repurchased under the discretionary Share Repurchase Program until the earlier of (i) November 6, 2018 or (ii) the repurchase of $10.0 million in aggregate amount of the Company’s common stock. On May 3, 2018, the Company’s Board of Directors authorized a $5.0 million increase in the amount of shares of the Company’s common stock that may be repurchased under the discretionary Share Repurchase Program until the earlier of (i) November 6, 2018 or (ii) the repurchase of $15.0 million in aggregate amount of the Company’s common stock. On November 1, 2018, our Board of Directors authorized a $5.0 million increase in the amount of shares of our common stock that may be repurchased under the discretionary Share Repurchase Program until the earlier of (i) October 31, 2019 or (ii) the repurchase of $20.0 million in aggregate amount of our common stock. On August 5, 2019, our Board of Directors authorized a $5.0 million increase in the amount of shares of our common stock that may be repurchased under the discretionary Share Repurchase Program until the earlier of (i) August 4, 2020 or (ii) the repurchase of $25.0 million in aggregate amount of our common stock. On March 9, 2020, our Board of Directors authorized a $5.0 million increase in the amount of shares of our common stock that may be repurchased under the discretionary Share Repurchase Program until the earlier of (i) March 8, 2021 or (ii) the repurchase of $30.0 million in aggregate amount of our common stock. On October 28, 2020, our Board of Directors authorized a $10.0 million increase in the amount of shares of our common stock that may be repurchased under the discretionary Share Repurchase Program until the earlier of (i) October 31, 2021 or (ii) the repurchase of $40.0 million in aggregate amount of our common stock. The timing and number of shares to be repurchased will depend on a number of factors, including market conditions and alternative investment opportunities. The Share Repurchase Program may be suspended, terminated or modified at any time for any reason and does not obligate the Company to acquire any specific number of shares of its common stock. 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 year ended December 31, 2020, the Company repurchased 1,655,848 shares of the Company’s common stock. As of December 31, 2020, the dollar value of shares that remained available to be purchased by the Company under the Share Repurchase Program was approximately $9.6 million. Amended and Restated 2019 Equity Incentive Plan Refer to “Note 11—Stock-Based Compensation” for a description of the Company’s restricted shares of common stock granted to non-employee directors under the Amended & Restated 2019 Equity Incentive Plan (as defined herein). Conversion of 4.75% Convertible Senior Notes due 2023 For the year ended December 31, 2020 the Company issued 174,888 shares 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. Refer to “Note 10—Debt Capital Activities” and "Note 12 — Subsequent Events" for more detail regarding conversion terms. At-the-Market Offering On July 29, 2020, the Company entered into an At-the-Market Sales Agreement, dated July 29, 2020 (the “Initial Sales Agreement”), with BTIG, LLC, JMP Securities LLC and Ladenburg Thalmann & Co., Inc. (collectively, the “Agents”). Under the Initial Sales Agreement, the Company may, but has no obligation to, issue and sell up to $50,000,000 in aggregate amount of shares of its common stock (the “Shares”) from time to time through the Agents or to them as principal for their own account 120 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 (the "ATM Program"). On September 23, 2020, the Company increased the maximum amount of Shares to be sold through the ATM Program to $150,000,000 from $50,000,000. In connection with the upsize of the ATM Program to $150,000,000, the Company entered into Amendment No. 1 to the At-the-Market Sales Agreement, dated September 23, 2020, with the Agents (the “Amendment No. 1 to the Sales Agreement,” and together with the Initial Sales Agreement, the “Sales Agreement”). 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 Capital 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. The Agents will receive a commission from the Company equal to up to 2.0% of the gross sales price of any Shares sold through the Agents under the Sales Agreement and reimbursement of certain expenses. 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 year ended December 31, 2020, the Company issued and sold 3,808,979 Shares under the ATM Program at a weighted-average price of $13.36 per share, for gross proceeds of $50,900,326 and net proceeds of $49,882,319, after deducting commissions to the Agents on Shares sold. As of December 31, 2020, up to approximately $99.1 million in aggregate amount of the Shares remain available for sale under the ATM Program. Modified Dutch Auction Tender Offer On October 21, 2019, the Company commenced a modified “Dutch Auction” tender offer (the “Modified Dutch Auction Tender Offer”) to purchase for cash up to $10.0 million in shares of its common stock from its stockholders at a price per share of not less than $6.00 and not greater than $8.00 in $0.10 increments, using available cash. Upon expiration of the Modified Dutch Auction Tender Offer on November 20, 2019, the Company repurchased 1,449,275 shares, representing 7.6% of its outstanding shares, at a price of $6.90 per share on a pro rata basis, excluding fees and expenses relating to the self-tender offer. The Company has determined that the proration factor for the tender offer was 78.1%. 121 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 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 years ended December 31, 2020, 2019, and 2018. Year Ended December 31, 2020 2019 2018 Earnings per common share–basic: Net change in net assets resulting from operations $ 75,337,438 $ 23,953,697 $ 891,743 Weighted-average common shares–basic 17,910,353 19,328,414 20,617,890 Earnings per common share–basic $ 4.21 $ 1.24 $ 0.04 Earnings per common share–diluted: Net change in net assets resulting from operations $ 75,337,438 $ 23,953,697 $ 891,743 Adjustment for interest and amortization on 4.75% Convertible Senior Notes due 2023 (1) 2,239,210 2,269,124 — Net change in net assets resulting from operations, as adjusted $ 77,576,648 $ 26,222,821 $ 891,743 Adjustment for dilutive effect of 4.75% Convertible Senior Notes due 2023 (1) 3,880,545 3,741,208 — Weighted-average common shares outstanding–diluted 21,790,898 23,069,622 20,617,890 Earnings per common share–diluted $ 3.56 $ 1.14 $ 0.04 ______________________ (1) For the years ended December 31, 2020, 2019, and 2018, 0, 0, and 6,079,068 potentially dilutive common shares, respectively, were excluded from the weighted-average common shares outstanding for diluted net change in net assets resulting from operations per common share because the effect of these shares would have been anti-dilutive. 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 December 31, 2020 and December 31, 2019, the Company had $10,000,000 and $0, 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. While the outcome of these legal proceedings cannot be predicted with certainty, the Company does not expect that these proceedings will have a material effect upon its business, financial condition or results of operations. The Company is not currently a party to any material legal proceedings. Operating Leases & Related Deposits The Company currently has one operating lease for office space for which the Company has recorded a right-of-use asset and lease liability for the operating lease obligation. The lease commenced June 3, 2019 and expires July 31, 2024. 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 December 31, 2020 and December 31, 2019, the Company booked a right of use asset and operating lease liability of $633,736 and $787,056, respectively, on the Consolidated Statement of Assets and Liabilities. As of December 31, 2020 and December 31, 2019, the Company recorded a security deposit of $16,574 and $16,574, respectively, on the Consolidated Statement of Assets and Liabilities. For the years ended December 31, 2020 and 2019, the Company incurred $180,254 and $73,059 of operating lease expense, respectively. The amounts reflected on the Consolidated Statement of Assets and Liabilities have been discounted using the rate implicit in the lease. As of December 31, 2020, the remaining lease term was 3.6 years and the discount rate was 3.00%. 122 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 The following table shows future minimum payments under the Company's operating lease as of December 31, 2020: For the Years Ended December 31, Amount 2021 179,800 2022 185,194 2023 190,750 2024 113,604 $ 669,348 123 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 NOTE 8—FINANCIAL HIGHLIGHTS Year Ended December 31, 2020 2019 2018 2017 2016 Per Basic Share Data Net asset value at beginning of the year $ 11.38 $ 9.89 $ 9.64 $ 8.66 $ 12.08 Net investment loss (1) (0.81) (0.49) (0.37) (0.95) (0.06) Net realized gain/(loss) on investments (1) 0.92 0.99 (0.36) 0.04 (0.12) Realized loss on partial repurchase of 5.25% Convertible Senior Notes due 2018 (1) — — (0.02) — — Net change in unrealized appreciation/(depreciation) of investments (1) 3.78 0.69 0.47 1.59 (3.30) Benefit from taxes on unrealized depreciation of investments (1) — 0.05 0.33 0.13 0.10 Dividends declared (0.87) (0.32) — — (0.04) Issuance of common stock from public offering 0.30 — — — — Issuance of common stock from conversion of 4.75% Convertible Notes due 2023 (0.11) — — — — Repurchase of common stock 0.43 0.52 0.20 0.18 — Stock-based compensation (1) 0.12 0.05 — — — Net asset value at end of year $ 15.14 $ 11.38 $ 9.89 $ 9.64 $ 8.66 Per share market value at end of year $ 13.09 $ 6.55 $ 5.22 $ 5.45 $ 5.03 Total return based on market value (2) 99.85 % 31.61 % (4.22) % 8.35 % (23.29) % Total return based on net asset value (2) 33.04 % 15.08 % 2.59 % 11.32 % (27.74) % Shares outstanding at end of year 19,914,023 17,564,244 19,762,647 21,246,345 22,181,003 Ratios/Supplemental Data: Net assets at end of year $301,583,073 $199,917,289 $195,378,159 $204,762,866 $192,128,810 Average net assets $205,430,809 $209,261,190 $208,678,731 $199,457,678 $243,577,514 Ratio of gross operating expenses to average net assets (3) 7.95 % 6.08 % 7.09 % 11.25 % 0.82 % Ratio of incentive fee waiver to average net assets — % — % (2.40) % — % — % Ratio of management fee waiver to average net assets — % — % (0.43) % (0.36) % —% Ratio of income tax provision to average net assets — % (0.42) % (3.22) % (1.38) % (0.87) % Ratio of net operating expenses to average net assets (3) 7.95 % 5.66 % 1.04 % 9.51 % (0.05) % Ratio of net investment loss to average net assets (3) (7.07) % (4.52) % (3.66) % (10.47) % (0.52) % Portfolio Turnover Ratio 14.87 % 12.95 % 5.01 % 0.07 % 4.46 % __________________ (1) Based on weighted-average number of shares outstanding for the relevant period. (2) Total return based on market value is based on the change in market price per share between the opening and ending market values per share in the year. Total return based on net asset value is based upon the change in net asset value per share between the opening and ending net asset values per share. (3) For the year ended December 31, 2020, the Company excluded $1,962,431 of non-recurring expenses. For the year ended December 31, 2019, the Company excluded $1,769,820 of non-recurring expenses. For the year ended December 31, 2018, the Company excluded $352,667 of non-recurring expenses. Because the ratios are calculated for the Company’s common stock taken as a whole, an individual investor’s ratios may vary from these ratios. 124 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 NOTE 9—INCOME TAXES 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. The Company intends to continue to operate so as to qualify to be subject to tax treatment as a RIC under Subchapter M of the Code and, as such, will not be subject to U.S. federal income tax on the portion of taxable income (including gains) distributed as dividends for U.S. federal income tax purposes to stockholders. Taxable income includes the Company’s taxable interest, dividend and fee income, reduced by certain deductions, as well as taxable net realized investment gains. Taxable income generally differs from net income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses, and generally excludes net unrealized appreciation or depreciation, as such gains or losses are not included in taxable income until they are realized. To qualify and be subject to tax as a RIC, the Company is required to meet certain income and asset diversification tests in addition to distributing dividends of an amount generally at least equal to 90% of its investment company taxable income, as defined by the Code and determined without regard to any deduction for distributions paid, to its stockholders. The amount to be paid out as a distribution is determined by the Board of Directors each quarter and is based upon the annual earnings estimated by the management of the Company. 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 year ended December 31, 2020, the Company declared distributions of $0.87 per share. 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 December 31, 2020, 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 2020 distributions to stockholders will be. As a RIC, the Company will be subject to a 4% nondeductible U.S. federal excise tax on certain undistributed income unless the Company makes distributions treated as dividends for U.S. federal income tax purposes in a timely manner to its stockholders in respect of each calendar year of an amount at least equal to the sum of (1) 98% of our ordinary income (taking into account certain deferrals and elections) for each calendar year, (2) 98.2% of our capital gain net income (adjusted for certain ordinary losses) for the 1-year period ending October 31 of each such calendar year and (3) any ordinary income and net capital gains for preceding years, but not distributed during such years and on which the Company paid no U.S. federal income tax. The Company will not be subject to this excise tax on any amount on which the Company incurred U.S. federal corporate income tax (such as the tax imposed on a RIC’s retained net capital gains). Depending on the level of taxable income earned in a taxable year, the Company may choose to carry over taxable income in excess of current taxable year distributions from such taxable income into the next taxable year and incur a 4% excise tax on such taxable income, as required. The maximum amount of excess taxable income that may be carried over for distribution in the next taxable year under the Code is the total amount of distributions paid in the following taxable year, subject to certain declaration and payment guidelines. To the extent the Company chooses to carry over taxable income into the next taxable year, distributions declared and paid by the Company in a taxable year may differ from the Company’s taxable income for that taxable year as such distributions may include the distribution of current taxable year taxable income, the distribution of prior taxable year taxable income carried over into and distributed in the current taxable year, or returns of capital. 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 not consolidated with the Company for income tax purposes and may generate income tax expense, or benefit, and tax assets and liabilities as a 125 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 result of their ownership of certain portfolio investments. Any income generated by these taxable subsidiaries generally would be subject to tax at normal corporate tax rates based on its taxable income. The Company intends to timely distribute to its stockholders substantially all of its annual taxable income for each year, except that it may retain certain net capital gains for reinvestment and, depending upon the level of taxable income earned in a year, may choose to carry forward taxable income for distribution in the following year and pay any applicable U.S. federal excise tax. As of December 31, 2020 and December 31, 2019, the Company recorded a deferred tax liability of approximately $0.0 million and $0.0 million, respectively. The Company is required to include net deferred tax provision/benefit in calculating its total expenses even though these net deferred taxes are not currently payable/receivable. Taxable income generally differs from net income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses, and generally excludes net unrealized appreciation or depreciation, as such gains or losses are not included in taxable income until they are realized. For U.S. federal and state income tax purposes, a portion of the Taxable Subsidiaries’ net operating loss carryforwards and basis differences may be subject to limitations on annual utilization in case of a change in ownership, as defined by federal and state law. The amount of such limitations, if any, has not been determined. Accordingly, the amount of such tax attributes available to offset future profits may be significantly less than the actual amounts of the tax attributes. The Company and the Taxable Subsidiaries identified their major tax jurisdictions as U.S. federal and California and may be subject to the taxing authorities’ examination for the tax years 2017–2020 and 2016–2020, respectively. Further, the Company and the Taxable Subsidiaries accrue all interest and penalties related to uncertain tax positions as incurred. As of December 31, 2020, there were no material interest or penalties incurred related to uncertain tax positions. Permanent differences between ICTI and net investment income for financial reporting purposes are reclassified among capital accounts in the consolidated financial statements to reflect their tax character. Differences in classification may also result from the treatment of short-term gains as ordinary income for tax purposes. During the years ended December 31, 2020 and 2019, the Company reclassified for book purposes amounts arising from permanent book/tax differences related as follows: Year Ended December 31, 2020 2019 Capital in excess of par value $ (14,516,336) $ (14,113,460) Accumulated undistributed net investment loss 13,524,191 14,113,460 Accumulated net realized gains from investments (992,145) — For income tax purposes, distributions paid to stockholders are reported as ordinary income, return of capital, long term capital gains or a combination thereof. The tax character of distributions declared in the years ended December 31, 2020, 2019, and 2018 was as follows: Year Ended December 31, 2020 2019 2018 Ordinary income $ — $ — $ — Long-term capital gain 16,947,370 5,620,558 — Return of capital — — — Distributions on a tax basis — — — For federal income tax purposes, the tax cost of investments owned at December 31, 2020 and 2019, was $309,978,186 and $194,194,622, respectively. The gross unrealized appreciation and gross unrealized depreciation on investments owned at December 31, 2020 was $175,168,002 and $54,366,414, respectively, and on investments owned at December 31, 2019, was $87,999,577 and $40,608,621, respectively. The net unrealized appreciation/(depreciation) on investments owned at December 31, 2020 and 2019, was $120,801,588 and $47,390,956, respectively. 126 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 At December 31, 2020 and 2019, the components of distributable earnings on a tax basis detailed below differ from the amounts reflected in the Company’s Consolidated Statements of Assets and Liabilities by temporary and other book/tax differences, primarily relating to the tax treatment of certain investments in partnerships and wholly-owned subsidiary corporations, and organizational expenses, as follows: Year Ended December 31, 2020 2019 Accumulated net realized losses on investments $ (2,116,773) $ (330,522) Unrealized appreciation 120,801,588 47,390,956 Components of distributable earnings at year end $ 118,684,815 $ 47,060,434 NOTE 10—DEBT CAPITAL ACTIVITIES 4.75% Convertible Senior Notes due 2023 On March 28, 2018, the Company issued $40.0 million aggregate principal amount of convertible senior notes, which bear interest at a fixed rate of 4.75% per year, payable semi-annually in arrears on March 31 and September 30 of each year, commencing on September 30, 2018. The 4.75% Convertible Senior Notes mature on March 28, 2023 (the "4.75% Convertible Senior Notes due 2023"), unless previously repurchased or converted in accordance with their terms. The Company does 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 may 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 is 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 has occurred which has 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, has occurred or exists. The initial conversion rate for the 4.75% Convertible Senior Notes due 2023 was 93.2836 shares of the Company’s common stock for each $1,000 principal amount of the 4.75% Convertible Senior Notes due 2023, which represented an initial conversion price of approximately $10.72 per share. As a result of the Company’s Modified Dutch Auction Tender Offer and cash dividends, the conversion rate for the 4.75% Convertible Senior Notes due 2023 changed to 106.1681 shares of the Company’s common stock for each $1,000 principal amount of the 4.75% Convertible Senior Notes due 2023, which represents a conversion price of approximately $9.42 per share as of December 31, 2020. Following certain corporate transactions that occur on or prior to the stated maturity date, the Company will, in certain circumstances, increase the conversion rate for a holder that elects to convert its 4.75% Convertible Senior Notes due 2023 in connection with such a corporate transaction. If a fundamental change, as defined in the indenture governing the 4.75% Convertible Senior Notes due 2023, occurs prior to the stated maturity date, holders may require the Company to purchase for cash all or any portion of their 4.75% Convertible Senior Notes due 2023 at a fundamental change purchase price equal to 100% of the principal amount of the Notes to be purchased, plus accrued and unpaid interest to, but excluding, the fundamental change purchase date. The indenture governing the 4.75% Convertible Senior Notes due 2023 contains customary financial reporting requirements and contains certain restrictions on mergers, consolidations, and asset sales. The indenture also contains certain events of default, the occurrence of which may lead to the 4.75% Convertible Senior Notes due 2023 being due and payable before their maturity or immediately. For the year ended December 31, 2020 the Company issued 174,888 shares 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. Refer to "Note 12 — Subsequent Events" for additional information. 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 Consolidated Statement of Assets and Liabilities. 127 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 December 31, 2020 December 31, 2019 Initial aggregate principal amount of 4.75% Convertible Senior Notes due 2023 $ 40,000,000 $ 40,000,000 Conversion of 4.75% Convertible Senior Notes due 2023 $ (1,785,000) $ — Direct deduction of deferred debt issuance costs $ (819,563) $ (1,196,365) 4.75% Convertible Senior Notes due 2023 Payable $ 37,395,437 $ 38,803,635 As of December 31, 2020 the principal amount of the 4.75% Convertible Senior Notes due 2023 did not exceed the value of the underlying shares multiplied by the per share closing price of the Company’s common stock. If the share price of our common stock exceeds $9.42 per share it may be advantageous for note holders to convert their 4.75% Convertible Senior Notes due 2023 to our common stock. The 4.75% Convertible Senior Notes due 2023 are the Company’s general, unsecured, senior obligations and rank senior in right of payment to any future indebtedness that is 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 is 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 (defined below) 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. In addition, the Credit Facility matured on May 31, 2019. As a result, the company is no longer subject to such requirements. Western Alliance Bank Credit Facility The Credit Facility (defined below) matured on May 31, 2019. There were no borrowings by the Company from the Credit Facility during the year ended December 31, 2020. The Company entered into a Loan and Security Agreement, effective May 31, 2017 and amended on March 22, 2018 (the “Loan Agreement”), with Western Alliance Bank, pursuant to which Western Alliance Bank agreed to provide the Company with a $12.0 million senior secured revolving credit facility (the “Credit Facility”). The Credit Facility, among other things, matured on May 31, 2019 and bore interest at a per annum rate equal to the prime rate plus 3.50%. In addition, a facility fee of $60,000 was charged upon closing of the Credit Facility, and the Loan Agreement required payment of a fee for unused amounts during the revolving period in an amount equal to 0.50% per annum of the average unused portion of the Credit Facility payable quarterly in arrears. Under the Loan Agreement, the Company made certain customary representations and warranties and was required to comply with various affirmative and negative covenants, reporting requirements, and other customary requirements for similar credit facilities, including, without limitation, restrictions on incurring additional indebtedness (with unsecured longer-term indebtedness limited to $70.0 million in the aggregate), compliance with the asset coverage requirements under the 1940 Act, a minimum net asset value requirement of at least the greater of $60.0 million or five times the amount of the Credit Facility, a limitation on the Company’s net asset value being reduced by more than 15% of its net asset value at December 31, 2016, and maintenance of RIC and BDC status. The Loan Agreement included usual and customary events of default for credit facilities of this nature, including, without limitation, nonpayment, misrepresentation of representations and warranties in a material respect, breach of covenant, cross-default to certain other indebtedness, bankruptcy, the cessation of the Investment Advisory Agreement, and the occurrence of a material adverse effect. 128 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 The Credit Facility was secured by substantially all of the Company’s property and assets. As of December 31, 2020 and 2019, the Company had no borrowings outstanding under the Credit Facility, as the Credit Facility matured on May 31, 2019. NOTE 11—STOCK-BASED COMPENSATION 2019 Equity Incentive Plan On June 5, 2019, our Board of Directors adopted, and our stockholders approved, an equity-based incentive plan (the "2019 Equity Incentive Plan”), which authorizes equity awards to be granted for up to 1,976,264 shares of our common stock. Under the 2019 Equity Incentive Plan, the exercise price of awards is set on the grant date and may 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, owns 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 are eligible to receive incentive stock options under the Code (the “10% Shareholders”), the exercise price per share shall 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 shall be the closing price of the shares on the Nasdaq Capital Market 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. These stock options have a vesting period of 3 years with 1/3 vesting immediately on the grant date, 1/3 vesting on July 17, 2020, and the remaining 1/3 vesting on July 17, 2021. Cancellation of Stock Option Awards Under 2019 Equity Incentive Plan On April 28, 2020, all stock option awards granted under the 2019 Equity Incentive Plan were canceled for no payment pursuant to an option cancellation agreement (the "Option Cancellation Agreement"). As a result, there are no stock option awards currently outstanding under the 2019 Equity Incentive Plan. In accordance with FASB ASC 718, Compensation – Stock Compensation ("ASC 718"), all unrecognized compensation cost related to still unvested shares was recognized as of the date of cancellation. For more information, including a description of the Option Cancellation Agreement, please refer to our current report on Form 8-K filed with the SEC on April 29, 2020. Such description of the Option Cancellation Agreement is qualified in its entirety by reference to the text of such Option Cancellation Agreement filed as Exhibit 10.3 to our quarterly report on Form 10-Q for the period ended March 31, 2020 filed with the SEC on May 8, 2020. The Company follows ASC 718 to account for stock options granted. Under ASC 718, compensation expense associated with stock-based compensation is measured at the grant date based on the fair value of the award and is recognized over the vesting period. Determining the appropriate fair value model and calculating the fair value of stock-based awards at the grant date requires judgment, including estimating stock price volatility, forfeiture rate, and expected option life. The time-based options granted on July 17, 2019 were ascribed a weighted-average fair value of $2.57 per share. The fair value of options granted under the 2019 Equity Incentive Plan was based upon a Black Scholes option pricing model using the assumptions in the following table: Input Assumptions As of July 17, 2019 Grant Date Term (years) 5.55 Volatility 39.47% Risk-free rate 1.86% Dividend yield —% 129 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Number of Shares Weighted-Average Exercise Price Weighted-Average Grant Date Fair Value Outstanding as of December 31, 2018 — Granted 1,165,000 $ 6.57 $ 2.57 Exercised — Forfeited (6,667) $ 6.57 $ 2.57 Expired (3,333) $ 6.57 $ 2.57 Outstanding as of December 31, 2019 1,155,000 $ 6.57 $ 2.57 Vested and Exercisable as of December 31, 2019 385,000 $ 6.57 $ 2.57 Cancelled (1,155,000) $ 6.57 $ 2.57 Outstanding as of December 31, 2020 — For the years ended December 31, 2020 and 2019, we recognized stock-based compensation expense of $1,962,431 and $998,355, respectively. The stock-based compensation expense for the year ended December 31, 2020 related to the cancellation of all granted vested and unvested options, and the amount of cash received from the exercise of stock options in 2020 and 2019 was $0 and $0, respectively. As of December 31, 2020, 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 On June 19, 2020, our Board of Directors adopted, and our stockholders approved, an amendment and restatement of the Company’s 2019 Equity Incentive Plan (the “Amended & Restated 2019 Equity Incentive Plan”) under which the Company is authorized to grant equity awards for up to 1,627,967 shares of its common stock. In accordance with the exemptive relief granted to the Company by the SEC on June 16, 2020 with respect to the Amended & Restated 2019 Equity Incentive Plan, the Company is generally authorized to (i) issue restricted shares as part of the compensation package for certain of its employees, officers and all directors, including non-employee directors (collectively, the “Participants”), (ii) issue options to acquire shares of its common stock (“Options”) to certain employees, officers and employee directors as a part of such compensation packages, (iii) withhold shares of the Company’s common stock or purchase shares of common stock from the Participants to satisfy tax withholding obligations relating to the vesting of restricted shares or the exercise of Options granted to the certain Participants pursuant to the Amended & Restated 2019 Equity Incentive Plan, and (iv) permit the Participants to pay the exercise price of Options granted to them with shares of the Company’s common stock. Under the Amended & Restated 2019 Equity Incentive Plan, each non-employee director will receive an annual grant of $50,000 worth of restricted shares of common stock (based on the closing stock price of the common stock on the grant date). Each grant of $50,000 in restricted shares will vest, in full, if the non-employee director is in continuous service as a director of 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). Other than such restricted shares granted to non-employee directors, the Company’s Compensation Committee may determine the time or times at which Options and restricted shares granted to other Participants will vest or become payable or exercisable, as applicable. The exercise price of each Option will not be less than 100% of the fair market value of the Company’s common stock on the date the option is granted. However, any optionee who owns more than 10% of the combined voting power of all classes of the Company’s outstanding common stock (a “10% Stockholder”), will not be eligible for the grant of an incentive stock option unless the exercise price of the incentive stock option is at least 110% of the fair market value of the Company’s common stock on the date of grant. Generally, no Option will be exercisable after the expiration of ten years from the date of grant. 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 year ended December 31, 2020, the Company granted 21,760 restricted shares to its non-employee directors pursuant to the Amended & Restated 2019 Equity Incentive Plan. The Company determined that the fair values, based on the 130 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 grant date close price, of such restricted shares granted under the Amended & Restated 2019 Equity Incentive Plan during the year ended December 31, 2020 were approximately $200,000 in the aggregate. As of December 31, 2020, there were approximately $200,000 of total unrecognized compensation costs related to the restricted share grants. These costs related to the annual grants to non-employee directors are expected to be recognized upon vesting, which is approximately one year from the date of grant. The following table summarizes the activities for the Company’s restricted share grants for the year ended December 31, 2020 under the Amended & Restated 2019 Equity Incentive Plan: Number of Restricted Shares Outstanding as of December 31, 2019 — Granted 21,760 Exercised — Forfeited — Expired — Outstanding as of December 31, 2020 21,760 Vested and Exercisable as of December 31, 2020 — 131 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 NOTE 12—SUBSEQUENT EVENTS Portfolio Activity From January 1, 2021 through March 11, 2021, the Company exited or received proceeds from the following investments: Portfolio Company Transaction Date Investment Shares Average Net Share Price (1) Net Proceeds Realized Gain or Income Palantir Technologies, Inc. Various Common shares, Class A 4,618,952 $26.72 $ 123,419,194 $ 110,544,068 Palantir Lending Trust SPV I (2) Various Equity Participation in Underlying Collateral N/A N/A $ 1,363,400 $ 1,363,400 Total $ 124,782,594 $ 111,907,468 __________________ (1) The average net share price is the net share price realized after deducting all commissions and fees on the sales, if applicable. (2) The Palantir Lending Trust SPV I promissory note was initially collateralized with 2,260,000 Class A common shares of Palantir Technologies, Inc. to which SuRo Capital Corp. retains a beneficial equity upside interest. As of March 11, 2021, 812,290 Class A common shares remain in Palantir Lending Trust SPV I, none of which are subject to lock-up restrictions. The realized gain from SuRo Capital Corp.'s investment in Palantir Lending Trust SPV I is generated by the proceeds from the sale of a portion of the shares collateralizing the promissory note to Palantir Lending Trust SPV I and attributable to the Equity Participation in Underlying Collateral. From January 1, 2021 through March 11, 2021, the Company funded investments in an aggregate amount of $7,999,978 (not including capitalized transaction costs) as shown in the following table: Portfolio Company Investment Transaction Date Gross Payments GreenAcreage Real Estate Corp. Common Shares 2/12/2021 $ 499,986 Churchill Sponsor VI LLC (1) Common Shares & Warrants 2/25/2021 $ 200,000 Churchill Sponsor VII LLC (2) Common Shares & Warrants 2/25/2021 $ 300,000 Shogun Enterprises, Inc. (3) Preferred Shares, Series B-1 2/26/2021 $ 3,499,994 Shogun Enterprises, Inc. (3) Preferred Shares, Series B-2 2/26/2021 $ 3,499,998 $ 7,999,978 __________________ (1) Churchill Sponsor VI LLC is the sponsor of Churchill Capital Corp VI, a blank check 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. Our investment in Churchill Sponsor VI LLC constitutes a “remote-affiliate” transaction for purposes of the 1940 Act in light of the fact that Mark Klein, our Chairman, CEO and President, has a non-controlling interest in the entity that controls Churchill Sponsor VI LLC, and is a non-controlling board member of Churchill Capital Corp VI. (2) Churchill Sponsor VII LLC is the sponsor of Churchill Capital Corp VII, a blank check 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. Our investment in Churchill Sponsor VII LLC constitutes a “remote-affiliate” transaction for purposes of the 1940 Act in light of the fact that Mark Klein, our Chairman, CEO and President, has a non-controlling interest in the entity that controls Churchill Sponsor VII LLC, and is a non-controlling board member of Churchill Capital Corp VII. (3) Keri Findley, a senior managing director of the Company, is a non-controlling member of the board of directors of Shogun Enterprises, Inc. and holds a minority equity interest in such company. The Company is frequently in negotiations with various private companies with respect to investments in such companies. Investments in private companies are generally subject to satisfaction of applicable closing conditions. In the case of secondary market transactions, such closing conditions may include approval of the issuer, waiver or failure to exercise rights of first refusal by the issuer and/or its stockholders and termination rights by the seller or the Company. 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. 132 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Dividends On January 26, 2021, the Company’s Board of Directors declared a dividend of $0.25 per share paid, in cash, on February 19, 2021 to stockholders of record as of the close of business on February 5, 2021. On March 8, 2021, the Company's Board of Directors declared a dividend of $0.25 per share payable on April 15, 2021 to stockholders of record as of the close of business on March 30, 2021. The dividend will be paid in cash. Conversion of 4.75% Convertible Senior Notes due 2023 Effective as of February 5, 2021, the conversion price applicable to the 4.75% Convertible Senior Notes due 2023 was adjusted to $9.25 per share (108.0505 shares of the Company’s common stock per $1,000 principal amount of the 4.75% Convertible Senior Notes due 2023) from the most recent conversion price of $9.42 per share (106.1681 shares of the Company’s common stock per $1,000 principal amount of the 4.75% Convertible Senior Notes due 2023), which had been in effect since December 30, 2020. The adjustment to the conversion rate of the 4.75% Convertible Senior Notes due 2023 was made pursuant to the supplemental indenture governing the 4.75% Convertible Senior Notes due 2023 as a result of the Company’s cash dividend of $0.25 per share, paid on February 19, 2021 to stockholders of record as of the close of business on February 5, 2021. Redemption of 4.75% Convertible Senior Notes due 2023 On February 19, 2021, the Company caused notices of redemption to be issued to the holders of its 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 Indenture, dated as of March 28, 2018, between the Company and U.S. Bank National Association, as trustee, and the First Supplemental Indenture, dated as of March 28, 2018, between the Company and U.S. Bank National Association, as trustee. The Company will redeem $38,215,000 in aggregate principal amount of the issued and outstanding 4.75% Convertible Senior Notes due 2023 on March 29, 2021 (the “Redemption Date”). The 4.75% Convertible Senior Notes due 2023 will be redeemed at 100% of their principal amount ($1,000 per note), plus the accrued and unpaid interest thereon from September 30, 2020, through, but excluding, the Redemption Date. Holders of the 4.75% Convertible Senior Notes due 2023 may surrender such notes for conversion into shares of the Company’s common stock in lieu of receiving cash at any time prior to the close of business on the business day immediately preceding the Redemption Date. A copy of the notice of redemption was included as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on February 19, 2021. Please refer to that Current Report on Form 8-K for additional information. COVID-19 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. economy. Subsequent to December 31, 2020, the global outbreak of the COVID-19 pandemic, and the related effect on the U.S. and global economies, may have adverse consequences for the business operations of some of the Company’s portfolio companies and, as a result, may have adverse effects on the Company’s operations. The ultimate economic fallout from the pandemic, and the long-term impact on economies, markets, industries and individual issuers, remain uncertain. The operational and financial performance of the issuers of securities in which the Company invests depends on future developments, including the duration and spread of the outbreak, and such uncertainty may in turn adversely affect the value and liquidity of the Company’s investments and negatively impact the Company’s performance. As of March 11, 2021, there is no indication of a reportable subsequent event impacting the Company’s financial statements for the year ended December 31, 2020. The Company continues to observe and respond to the evolving COVID-19 environment and its potential impact on areas across its business. 133 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 NOTE 13—SELECTED QUARTERLY FINANCIAL DATA Quarter Ended December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Total Investment Income $ 922,743 $ 408,107 $ 241,514 $ 251,763 Total Operating Expenses 5,177,327 2,995,998 4,908,902 3,256,316 Net Investment Gain/(Loss) (4,254,584) (2,587,891) (4,667,388) (3,004,553) Net Realized Gain/(Loss) on Investments 7,108,580 2,378,390 (23,987) 6,978,240 Net Change in Unrealized Appreciation/(Depreciation) of Investments 58,424,928 16,129,442 26,522,195 (27,665,934) Net Increase/(Decrease) in Net Assets Resulting from Operations $ 61,278,924 $ 15,919,941 $ 21,830,820 $ (23,692,247) Net Increase/(Decrease) in Net Assets from Operations per Common Share: Basic $ 3.06 $ 0.89 $ 1.33 $ (1.36) Diluted $ 2.59 $ 0.76 $ 1.10 $ (1.36) Weighted Average Common Shares Outstanding–Basic 19,999,989 17,795,538 16,383,188 17,440,994 Weighted Average Common Shares Outstanding–Diluted 23,884,529 21,598,403 20,300,980 17,440,994 Quarter Ended December 31, 2019 September 30, 2019 June 30, 2019 March 31, 2019 Total Investment Income $ 400,296 $ 380,226 $ 487,952 $ 227,250 Total Operating Expenses 2,963,631 5,082,430 3,293,183 (392,452) Net Investment Gain/(Loss) (2,563,335) (4,702,204) (2,805,231) 619,702 Net Realized Gain/(Loss) on Investments 7,881,839 1,772,961 13,590,233 (4,065,693) Net Change in Unrealized Appreciation/(Depreciation) of Investments (3,110,267) 8,190,695 (12,440,320) 20,699,751 Benefit from/(Provision for) Taxes on Unrealized Depreciation/(Appreciation) of Investments — — 979,713 (94,147) Net Increase/(Decrease) in Net Assets Resulting from Operations $ 2,208,237 $ 5,261,452 $ (675,605) $ 17,159,613 Net Increase/(Decrease) in Net Assets from Operations per Common Share: Basic $ 0.12 $ 0.27 $ (0.03) $ 0.87 Diluted $ 0.12 $ 0.25 $ (0.03) $ 0.75 Weighted Average Common Shares Outstanding–Basic 18,372,212 19,472,785 19,719,706 19,762,647 Weighted Average Common Shares Outstanding–Diluted 18,372,212 23,204,129 19,719,706 23,493,991 134 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Quarter Ended December 31, 2018 September 30, 2018 June 30, 2018 March 31, 2018 Total Investment Income $ 530,076 $ 246,352 $ 592,073 $ 249,335 Total Operating Expenses (1,152,869) 4,556,625 6,344,272 5,396,806 Management Fee Waiver — (402,074) (335,403) (154,944) Incentive Fee Waiver — — — (5,000,000) Net Investment Gain/(Loss) 1,682,945 (3,908,199) (5,416,796) 7,473 Net Realized Gain/(Loss) on Investments 99,544 (10,119,771) 3,363,333 (776,725) Loss on Extinguishment of Debt — — — (397,846) Net Change in Unrealized Appreciation/(Depreciation) of Investments (22,507,314) 14,142,375 9,872,595 8,133,394 Benefit from Taxes on Unrealized Depreciation of Investments 5,491,460 214,404 1,010,871 — Net Increase/(Decrease) in Net Assets Resulting from Operations $ (15,233,365) $ 328,809 $ 8,830,003 $ 6,966,296 Net Increase/(Decrease) in Net Assets from Operations per Common Share: Basic $ (0.77) $ 0.02 $ 0.42 $ 0.33 Diluted $ (0.77) $ 0.02 $ 0.35 $ 0.30 Weighted Average Common Shares Outstanding–Basic 19,904,807 20,462,626 20,968,850 21,150,662 Weighted Average Common Shares Outstanding–Diluted 19,904,807 20,462,626 28,866,674 26,713,656 135 TABLE OF CONTENTS SURO CAPITAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 NOTE 14—SUPPLEMENTAL FINANCIAL DATA Summarized Financial Information of Unconsolidated Subsidiaries In accordance with the SEC’s Regulation S-X and GAAP, the Company is not permitted to consolidate any subsidiary or other entity that is not an investment company, including those in which the Company has a controlling interest; 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. As of December 31, 2020, the Company had investments in at least one portfolio company considered to be a significant subsidiary under SEC Regulation S-X Rule 10-01(b)(1) and Regulation S-X Rule 4-08(g). In May 2020, the SEC adopted rule amendments that will impact 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 amend the definition of “significant subsidiary” in a manner that is intended to more accurately capture those portfolio companies that are more likely to materially impact the financial condition of an investment company. The Final Rules will be effective on January 1, 2021, but voluntary compliance is permitted in advance of the effective date. The Company has elected to comply in advance of the effective date for the year ended December 31, 2020. The adoption of this rule has an impact on the consolidated financial statements in that far fewer subsidiaries require disclosure under the Final Rules as compared to the previous rules. As a result of the new definition of a “significant subsidiary” set forth in Rule 1-02(w)(2) the Company’s only “subsidiary” as of December 31, 2020, SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.) does not meet the definition of a “significant subsidiary” 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 year ended December 31, 2019 as the Company’s significant subsidiaries would not have been considered significant subsidiaries under the Final Rules. 136 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable.