Document
TABLE OF CONTENTS

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________
FORM 10-Q
____________________________
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED June 30, 2021
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 814-00852
__________________________
SuRo Capital Corp.
(Exact name of registrant as specified in its charter)
____________________________
Maryland27-4443543
(State of incorporation)(I.R.S. Employer Identification No.)
One Sansome Street, Suite 730, San Francisco, CA94104
(Address of principal executive offices)(Zip Code)
(650) 235-4769
(Registrant’s telephone number, including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Common Stock, par value $0.01 per shareSSSSNasdaq Capital Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods as the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES x NO ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ¨ NO ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer o
Accelerated filer o
Non-accelerated filer x (Do not check if a smaller reporting company)
Smaller reporting company o
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ¨ NO x

The issuer had 26,555,823 shares of common stock, $0.01 par value per share, outstanding as of August 6, 2021.



TABLE OF CONTENTS


SURO CAPITAL CORP.

TABLE OF CONTENTS

PAGE
PART I. FINANCIAL INFORMATION
PART II. OTHER INFORMATION

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PART I

FINANCIAL INFORMATION

Item 1.     Condensed Consolidated Financial Statements

SURO CAPITAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)
June 30, 2021December 31, 2020
ASSETS
Investments at fair value:
Non-controlled/non-affiliate investments (cost of $130,649,196 and $105,339,169, respectively)$259,784,163 $249,804,803 
Non-controlled/affiliate investments (cost of $45,355,713 and $53,865,346, respectively)43,317,863 30,165,773 
Controlled investments (cost of $12,514,227 and $7,161,412, respectively)6,256,374 809,198 
Total Portfolio Investments309,358,400 280,779,774 
Investments in U.S. Treasury bills (cost of $0 and $150,000,000, respectively)— 150,000,000 
Total Investments (cost of $188,519,136 and $316,365,927, respectively)309,358,400 430,779,774 
Cash130,061,049 45,793,724 
Receivable for unsettled trades268,479 — 
Deposits50,000 — 
Escrow proceeds receivable852,433 852,462 
Interest and dividends receivable201,863 166,998 
Deferred financing costs285,814 297,196 
Prepaid expenses and other assets(1)
719,892 985,550 
Total Assets441,797,930 478,875,704 
LIABILITIES
Accounts payable and accrued expenses(1)
2,124,334 762,312 
Accrued interest payable— 453,803 
Dividends payable80,867 4,395,229 
Payable for securities purchased— 134,250,000 
Income tax payable— 35,850 
4.75% Convertible Senior Notes due March 28, 2023(2)
— 37,395,437 
Total Liabilities2,205,201 177,292,631 
Commitments and contingencies (Notes 7 and 10)
Net Assets$439,592,729 $301,583,073 
NET ASSETS
Common stock, par value $0.01 per share (100,000,000 authorized; 26,540,743 and 19,914,023 issued and outstanding, respectively)$265,407 $199,140 
Paid-in capital in excess of par289,932,030 221,802,592 
Accumulated net investment loss(45,071,096)(40,193,778)
Accumulated net realized gain on investments, net of distributions73,627,124 5,361,270 
Accumulated net unrealized appreciation of investments120,839,264 114,413,849 
Net Assets$439,592,729 $301,583,073 
Net Asset Value Per Share$16.56 $15.14 
See accompanying notes to condensed 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 June 30, 2021, the 4.75% Convertible Senior Notes due March 28, 2023 had been fully converted into the Company's common stock or redeemed in cash by the Company. As of December 31, 2020, the 4.75% Convertible Senior Notes due March 28, 2023 (effective interest rate of 5.57%) had a face value $38,215,000. Refer to “Note 10—Debt Capital Activities” for a reconciliation of the carrying value to the face value.
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SURO CAPITAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
INVESTMENT INCOME
Non-controlled/non-affiliate investments:
Interest income$145,851 $61,126 $312,696 $216,211 
Dividend income128,969 — 150,844 50,000 
Non-controlled/affiliate investments:
Interest income/(reversal of accrued interest)— (49,612)— (29,184)
Dividend income— 30,000 102,632 56,250 
Controlled investments:
Dividend income— 200,000 — 200,000 
Total Investment Income274,820 241,514 566,172 493,277 
OPERATING EXPENSES
Compensation expense1,345,892 3,005,524 2,639,202 3,930,440 
Directors’ fees 111,250 111,250 222,500 222,500 
Professional fees529,524 678,472 1,502,683 1,817,838 
Interest expense— 568,627 504,793 1,142,027 
Income tax expense7,598 39,590 9,623 48,255 
Other expenses323,556 505,439 564,689 1,004,158 
Total Operating Expenses2,317,820 4,908,902 5,443,490 8,165,218 
Net Investment Loss(2,043,000)(4,667,388)(4,877,318)(7,671,941)
Realized Gain/(Loss) on Investments:
Non-controlled/non-affiliated investments27,658,812 (23,987)139,811,330 6,954,253 
Net Realized Gain/(Loss) on Investments27,658,812 (23,987)139,811,330 6,954,253 
Change in Unrealized Appreciation/(Depreciation) of Investments:
Non-controlled/non-affiliated investments(12,065,362)24,821,654 (15,330,669)7,276,832 
Non-controlled/affiliate investments19,817,253 1,569,843 21,661,723 (8,505,571)
Controlled investments(10,639)130,698 94,361 85,000 
Net Change in Unrealized Appreciation/(Depreciation) of Investments7,741,252 26,522,195 6,425,415 (1,143,739)
  Net Change in Net Assets Resulting from Operations$33,357,064 $21,830,820 $141,359,427 $(1,861,427)
   Net Change in Net Assets Resulting from Operations per Common Share:
Basic$1.32 $1.33 $6.17 $(0.11)
Diluted(1)
$1.32 $1.10 $5.74 $(0.11)
Weighted-Average Common Shares Outstanding
Basic25,334,482 16,383,188 22,923,943 16,912,091 
Diluted(1)
25,334,482 20,300,980 24,732,256 16,912,091 
See accompanying notes to condensed consolidated financial statements.

____________________________________________________________________________________________________________________________
(1)    For the three months ended June 30, 2021, there were no potentially dilutive securities outstanding. For the three months ended June 30, 2020, no 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. For the six months ended June 30, 2021 and 2020, 0 and 3,917,792, respectively, 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”.
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SURO CAPITAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
Six Months Ended June 30,
20212020
Net Assets at Beginning of Year$301,583,073 $199,917,289 
Change in Net Assets Resulting from Operations
Net investment loss(2,834,318)(3,004,553)
Net realized gains on investments112,152,518 6,978,240 
Net change in unrealized depreciation of investments(1,315,837)(27,665,934)
Net Change in Net Assets Resulting from Operations108,002,363 (23,692,247)
Distributions
Dividends declared(11,032,436)— 
Total Distributions(11,032,436)— 
Change in Net Assets Resulting from Capital Transactions
Issuance of common stock from conversion of 4.75% Convertible Notes due 202337,259,819 — 
Stock-based compensation148,802 — 
Repurchases of common stock— (3,709,244)
Net Change in Net Assets Resulting from Capital Transactions37,408,621 (3,709,244)
Total Change in Net Assets134,378,548 (27,401,491)
Net Assets at March 31$435,961,621 $172,515,798 
Change in Net Assets Resulting from Operations
Net investment loss$(2,043,000)$(4,667,388)
Net realized gain/(loss) on investments27,658,812 (23,987)
Net change in unrealized appreciation of investments7,741,252 26,522,195 
Net Change in Net Assets Resulting from Operations33,357,064 21,830,820 
Distributions
Dividends declared(60,513,038)— 
Total Distributions(60,513,038)— 
Change in Net Assets Resulting from Capital Transactions
Stock-based compensation261,746 1,962,431 
Issuance of common stock from stock dividend30,525,336 — 
Repurchases of common stock— (3,616,608)
Net Change in Net Assets Resulting from Capital Transactions30,787,082 (1,654,177)
Total Change in Net Assets3,631,108 20,176,643 
Net Assets at June 30$439,592,729 $192,692,441 
Capital Share Activity
Shares outstanding at beginning of year19,914,023 17,564,244 
Issuance of common stock under restricted stock plan193,385 — 
Issuance of common stock from conversion of 4.75% Convertible Notes due 20234,097,808 — 
Issuance of common stock from stock dividend2,335,527 — 
Shares repurchased— (1,284,565)
Shares Outstanding at End of Period26,540,743 16,279,679 
See accompanying notes to condensed consolidated financial statements.

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SURO CAPITAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Six Months Ended June 30,
20212020
Cash Flows from Operating Activities
Net change in net assets resulting from operations$141,359,427 $(1,861,427)
Adjustments to reconcile net change in net assets resulting from operations to net cash provided by/(used in) operating activities:
Net realized gain on investments(139,811,330)(6,954,253)
Net change in unrealized (appreciation)/depreciation of investments(6,425,415)1,143,739 
Amortization of discount on 4.75% Convertible Senior Notes due 202376,925 188,022 
Stock-based compensation(1)
410,548 1,962,431 
Adjustments to escrow proceeds receivable2,653 75,840 
Forfeited interest on 4.75% Convertible Senior Notes due 2023102,917 — 
Purchases of investments in:
Portfolio investments(39,362,863)(12,555,520)
U.S. Treasury bills— (150,000,167)
Proceeds from sales or maturity of investments in:
Portfolio investments157,018,332 10,876,621 
U.S. Treasury bills150,000,000 100,000,000 
Change in operating assets and liabilities:
Prepaid expenses and other assets265,658 558,222 
Interest and dividends receivable(34,865)14,356 
Receivable for unsettled trades(268,479)— 
Escrow proceeds receivable29 198,168 
Deposits(50,000)— 
Payable for securities purchased(134,250,000)44,752,951 
Accounts payable and accrued expenses1,362,022 789,296 
Payable to executive officers— (1,369,873)
Income tax payable(35,850)38,965 
Accrued interest payable(453,803)— 
Net Cash Provided by/(Used in) Operating Activities129,905,906 (12,142,629)
Cash Flows from Financing Activities
Repurchases of common stock— (7,325,852)
Cash dividends paid(45,334,391)(2,107,709)
Cash paid for fractional shares(213)— 
Redemption of 4.75% Convertible Senior Notes due 2023(290,000)— 
Deferred offering costs(13,977)— 
Net Cash Used in Financing Activities(45,638,581)(9,433,561)
Total Increase/(Decrease) in Cash Balance84,267,325 (21,576,190)
Cash Balance at Beginning of Year45,793,724 44,861,263 
Cash Balance at End of Period130,061,049 23,285,073 
Supplemental Information:
Interest paid794,206 957,607 
Taxes paid45,473 9,290 
See accompanying notes to condensed consolidated financial statements.

__________________________________________________________________________________________________________________________
(1)    For the three and six months ended June 30, 2020, $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.

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SURO CAPITAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED)
June 30, 2021
Portfolio Investments*Headquarters/
Industry
Date of Initial InvestmentShares/
Principal
CostFair Value% of Net
Assets
NON-CONTROLLED/NON-AFFILIATE
Coursera, Inc.**
Mountain View, CA
Common shares(3)(13)
Online Education6/9/20132,346,271 $13,525,007 $87,249,372 19.85 %
Course Hero, Inc.Redwood City, CA
Preferred shares, Series A 8%Online Education9/18/20142,145,509 5,000,001 45,055,689 10.25 %
Blink Health, Inc.New York, NY
Preferred shares, Series APharmaceutical Technology10/27/2020238,095 5,000,423 4,999,995 1.14 %
Preferred shares, Series C10/27/2020261,944 10,002,919 9,999,974 2.27 %
Total15,003,342 14,999,969 3.41 %
Nextdoor, Inc.San Francisco, CA
Common sharesSocial Networking9/27/2018580,360 10,002,666 14,443,406 3.29 %
NewLake Capital Partners, Inc. (f/k/a GreenAcreage Real Estate Corp.)New York, NY
Common shares***(16)
Cannabis REIT8/12/2019446,226 9,009,952 11,155,650 2.54 %
Aspiration Partners, Inc.Marina Del Rey, CA
Preferred shares, Series AFinancial Services8/11/2015540,270 1,001,815 10,438,271 2.37 %
Preferred shares, Series C-3 8/12/201924,912 281,190 481,312 0.11 %
Total1,283,005 10,919,583 2.48 %
Enjoy Technology, Inc.Menlo Park, CA
Preferred shares, Series B 6%On-Demand Commerce7/29/20151,681,520 4,000,280 6,543,018 1.49 %
Preferred shares, Series A 6%10/16/2014879,198 1,002,440 3,421,076 0.78 %
Convertible Promissory Note 14% Due 1/30/2024***11/30/2020$521,112 524,057 547,831 0.12 %
Total5,526,777 10,511,925 2.39 %
Trax Ltd.**Singapore, Singapore
Common sharesRetail Technology6/9/202155,591 2,780,580 2,779,550 0.63 %
Preferred shares, Investec series6/9/2021144,409 7,223,125 7,220,450 1.64 %
Total10,003,705 10,000,000 2.27 %
Forge Global, Inc.(12)
San Francisco, CA
Common shares, Class AAOnline Marketplace Finance7/20/2011614,042 123,987 7,624,437 1.73 %
Junior Preferred shares7/19/2011160,534 2,259,716 1,993,319 0.45 %
Junior Preferred warrants, Strike Price $12.42, Expiration Date 11/9/20257/19/201173,695 — 282,251 0.06 %
Total2,383,703 9,900,007 2.24 %
Skillsoft Corp.**Nashua, NH
Common shares(3)(20)
Online Education6/8/20211,000,000 10,000,000 9,259,000 2.11 %
Shogun Enterprises, Inc.Austin, TX
Preferred shares, Series B-1Home Improvement Finance2/26/2021436,844 3,501,657 3,499,994 0.80 %
Preferred shares, Series B-22/26/2021301,750 3,501,661 3,499,998 0.80 %
   Total7,003,318 6,999,992 1.60 %
A Place for Rover Inc. (f/k/a DogVacay, Inc.)Seattle, WA
Common sharesPeer-to-Peer Pet Services11/3/2014707,990 2,506,119 6,109,994 1.39 %
Rent the Runway, Inc.New York, NY
Preferred shares, Series GSubscription Fashion Rental6/17/2020339,191 5,153,945 6,011,253 1.37 %
Neutron Holdings, Inc. (d/b/a/ Lime)San Francisco, CA
Junior Preferred shares, Series 1-DMicromobility1/25/201941,237,113 10,007,322 3,485,014 0.79 %
Junior Preferred Convertible Note 4% Due 5/11/2027***5/11/2020$506,339 506,339 506,339 0.12 %
Common Warrants, Strike Price $0.01, Expiration Date 5/11/20275/11/20202,032,967 — 121,978 0.03 %
Total10,513,661 4,113,331 0.94 %
See accompanying notes to condensed consolidated financial statements.
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SURO CAPITAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED) - continued
June 30, 2021
Portfolio Investments*Headquarters/
Industry
Date of Initial InvestmentShares/
Principal
CostFair Value% of Net
Assets
Residential Homes for Rent, LLC (d/b/a Second Avenue)(6)
Chicago, IL
Preferred shares, Series AReal Estate Platform12/23/2020150,000 $1,500,000 $1,588,500 0.36 %
Term loan 15%, Due 12/23/2023***(14)
12/23/2020$2,500,000 2,500,000 2,500,000 0.57 %
   Total4,000,000 4,088,500 0.93 %
Clever, Inc.San Francisco, CA
Preferred shares, Series B 8%Education Software12/5/20141,799,047 2,000,601 3,013,853 0.69 %
Aventine Property Group, Inc.(11)
Chicago, IL
Common shares***(11)
Cannabis REIT1/1/2021312,500 2,580,750 2,100,000 0.48 %
Palantir Lending Trust SPV I **(10)
Palo Alto, CA
Equity Participation in Underlying Collateral(3)
Data Analysis6/19/2020— — 1,561,278 0.36 %
Commercial Streaming Solutions Inc. (d/b/a BettorView)(7)
Las Vegas, NV
Simple Agreement for Future EquityInteractive Media & Services3/26/20211,002,720 1,000,000 0.23 %
Tynker (f/k/a Neuron Fuel, Inc.)Mountain View, CA
Preferred shares, Series A 8%Computer Software8/8/2012534,162 309,310 791,361 0.18 %
Churchill Sponsor VII LLC(18)
New York, NY
Common share unitsSpecial Purpose Acquisition Company2/25/2021292,100 205,820 205,820 0.05 %
Warrant units2/25/2021277,000 94,180 94,180 0.02 %
Total300,000 300,000 0.07 %
Churchill Sponsor VI LLC(17)
New York, NY
Common share unitsSpecial Purpose Acquisition Company2/25/2021195,000 134,297 134,297 0.03 %
Warrant units2/25/2021199,100 65,703 65,703 0.01 %
   Total200,000 200,000 0.04 %
Fullbridge, Inc.Cambridge, MA
Common sharesBusiness Education5/13/2012517,917 6,150,506 — — %
Promissory Note 1.47%, Due 11/9/2021(4)
3/3/2016$2,270,458 2,270,858 — — %
Total8,421,364 — — %
Treehouse Real Estate Investment Trust, Inc.(11)
Chicago, IL
Common sharesCannabis REIT9/11/2019312,500 4,919,250 — — %
Kinetiq Holdings, LLCPhiladelphia, PA
Common shares, Class ASocial Data Platform3/30/2012112,374 — — — %
Total Non-controlled/Non-affiliate$130,649,196 $259,784,163 59.11 %
See accompanying notes to condensed consolidated financial statements.
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SURO CAPITAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED) - continued
June 30, 2021
Portfolio Investments*Headquarters/
Industry
Date of Initial InvestmentShares/
Principal
CostFair Value% of Net
Assets
NON-CONTROLLED/AFFILIATE(1)
Ozy Media, Inc.Mountain View, CA
Preferred shares, Series C-2 6%Digital Media Platform9/11/2019683,482 $2,414,178 $5,324,325 1.21 %
Common Warrants, Strike Price $0.01, Expiration Date 4/9/20284/9/2018295,565 30,647 2,299,496 0.52 %
Preferred shares, Series B 6%10/3/2014922,509 4,999,999 7,186,345 1.63 %
Preferred shares, Series A 6%12/11/20131,090,909 3,000,200 8,498,181 1.93 %
Preferred shares, Series Seed 6%11/2/2012500,000 500,000 3,895,000 0.89 %
Total10,945,024 27,203,347 6.18 %
StormWind, LLC(5)
Scottsdale, AZ
Preferred shares, Series D 8%Interactive Learning11/26/2019329,337 257,267 519,169 0.12 %
Preferred shares, Series C 8%1/7/20142,779,134 4,000,787 5,541,426 1.26 %
Preferred shares, Series B 8%12/16/20113,279,629 2,019,687 3,408,626 0.78 %
Preferred shares, Series A 8%2/25/2014366,666 110,000 175,817 0.04 %
Total6,387,741 9,645,038 2.20 %
CUX, Inc. (d/b/a CorpU)Philadelphia, PA
Senior Subordinated Convertible Promissory Note 4% Due 2/14/2023(4)
Corporate Education11/26/2014$1,251,158 1,256,191 1,337,276 0.30 %
Convertible preferred shares, Series D 6%5/31/2013169,033 778,607 1,157,458 0.26 %
Convertible preferred shares, Series C 8%3/29/2012615,763 2,006,077 1,128,552 0.26 %
Total4,040,875 3,623,286 0.82 %
OneValley, Inc. (f/k/a NestGSV, Inc.)San Mateo, CA
Derivative Security, Expiration Date 8/23/2024(9)
Global Innovation Platform8/23/20198,555,124 2,299,843 0.52 %
Convertible Promissory Note 8% Due 8/23/2024(4)(9)
2/17/2016$1,010,198 1,030,176 505,099 0.11 %
Preferred Warrants Series A-4, Strike Price $1.33, Expiration Date 10/6/202110/6/2014500,000 — 27,500 0.01 %
Preferred Warrants Series A-4, Strike Price $1.33, Expiration Date 7/18/20217/8/2016250,000 74,380 6,250 0.01 %
Preferred Warrants Series B, Strike Price $2.31, Expiration Date 11/29/202111/29/2016100,000 29,275 — — %
Preferred Warrant Series B, Strike Price $2.31, Expiration Date 5/29/20225/29/2017125,000 70,379 — — %
Preferred Warrant Series B, Strike Price $2.31, Expiration Date 12/31/202312/31/2018250,000 5,080 7,500 0.01 %
Total9,764,414 2,846,192 0.66 %
Maven Research, Inc.San Francisco, CA
Preferred shares, Series C 8%Knowledge Networks7/2/2012318,979 2,000,447 — — %
Preferred shares, Series B 5%2/28/201249,505 217,206 — — %
Total2,217,653 — — %
Curious.com, Inc.Menlo Park, CA
Common sharesOnline Education11/22/20131,135,944 12,000,006 — — %
Total Non-controlled/Affiliate$45,355,713 $43,317,863 9.86 %

See accompanying notes to condensed consolidated financial statements.







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SURO CAPITAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED) - continued
June 30, 2021
Portfolio Investments*Headquarters/
Industry
Date of Initial InvestmentShares/
Principal
CostFair Value% of Net
Assets
CONTROLLED(2)
Colombier Sponsor LLC(19)
New York, NY
Class B UnitsSpecial Purpose Acquisition Company4/1/20211,976,033 $1,556,587 $1,554,355 0.35 %
Class W Units4/1/20212,700,000 1,159,150 1,157,488 0.26 %
Total2,715,737 2,711,843 0.61 %
Architect Capital PayJoy SPV, LLC**
San Francisco, CA
Membership Interest in Lending SPV(15)
Mobile Finance Technology3/23/2021$2,630,333 2,637,078 2,630,333 0.60 %
SPBRX, INC. (f/k/a GSV Sustainability Partners, Inc.)Cupertino, CA
Preferred shares, Class A***(8)
Clean Technology4/15/201414,300,000 7,151,412 914,198 0.21 %
Common shares4/15/2014100,000 10,000 — — %
Total7,161,412 914,198 0.21 %
Total Controlled$12,514,227 $6,256,374 1.42 %
Total Portfolio Investments$188,519,136 $309,358,400 70.39 %

See accompanying notes to condensed 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 June 30, 2021, 35.78% 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. Refer to “Note 4—Investments at Fair Value”.

(4)As of June 30, 2021, the investments noted had been placed on non-accrual status.

(5)SuRo Capital Corp.’s investments in StormWind, LLC are held through SuRo Capital Corp.'s wholly owned subsidiary, GSVC SW Holdings, Inc.

(6)SuRo Capital Corp.’s investments in Residential Homes for Rent, LLC (d/b/a Second Avenue) are held through SuRo Capital Corp.'s wholly owned subsidiary, GSVC AV Holdings, Inc.

(7)SuRo Capital Corp.’s investments in Commercial Streaming Solutions Inc. (d/b/a BettorView) are held through SuRo Capital Corp.'s wholly owned subsidiary, SuRo Capital Sports, LLC ("SuRo Sports").

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(8)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. 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.

(9)On August 23, 2019, SuRo Capital Corp. amended the structure of its investment in OneValley, Inc. (f/k/a NestGSV, Inc.). As part of the agreement, SuRo Capital Corp.’s equity holdings (warrants notwithstanding) were restructured into a derivative security. OneValley, Inc. (f/k/a NestGSV, 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 OneValley, Inc. (f/k/a NestGSV, Inc.) at the end of the five year period.

(10)As of June 30, 2021, 612,290 unrestricted Class A common shares remain in Palantir Lending Trust SPV I.

(11)On January 1, 2021, Treehouse Real Estate Investment Trust, Inc. completed its spin off of 34.4% of its assets into Aventine Property Group, Inc. During the six months ended June 30, 2021, Aventine Property Group, Inc. declared an aggregate of $43,750 in dividend distributions. SuRo Capital Corp. does not anticipate that Aventine Property Group, Inc. will pay distributions on a recurring or regular basis or become a predictable distributor of distributions.

(12)On November 9, 2020, SharesPost, Inc. completed its merger with Forge Global, Inc. As part of the merger, SuRo Capital Corp. received $0.7 million in Class AA Common shares and Junior Preferred shares currently being held in escrow. We expect to receive the proceeds held in escrow in 2021.

(13)On March 31, 2021, Coursera, Inc. went public via an initial public offering on the New York Stock Exchange. Under the terms of the initial public offering, as disclosed in Coursera, Inc.'s Amendment No. 1 to Form S-1 Registration Statement, 25% of SuRo Capital Corp.'s common shares in Coursera Inc. became freely tradeable on May 11, 2021 after certain pricing conditions were met, while the remaining 75% were subject to sales restrictions and are not eligible for sale until the earlier of 180 days following the date of Coursera's prospectus, and the third business day following the filing of Coursera, Inc.'s second quarter 2021 Form 10-Q in 2021. As of June 30, 2021, SuRo Capital Corp. holds 2,346,271 public shares of Coursera, Inc. common stock, all of which are subject to certain lock-up restrictions.

(14)As of June 30, 2021, approximately $0.7 million has been received from Residential Homes for Rent, LLC (d/b/a Second Avenue) related to the 15% term loan due December 23, 2023. Of the proceeds received, approximately $0.5 million repaid a portion of the outstanding principal and approximately $0.2 million was attributed to interest.

(15)As of June 30, 2021, $2.6 million of the $10.0 million capital commitment representing our Membership Interest in Architect Capital PayJoy SPV, LLC had been called and funded.

(16)During the six months ended June 30, 2021, NewLake Capital Partners, Inc. (f/k/a GreenAcreage Real Estate Corp.) declared an aggregate of approximately $0.2 million in dividend distributions. SuRo Capital Corp. does not anticipate that NewLake Capital Partners, Inc. (f/k/a GreenAcreage Real Estate Corp.) will pay distributions on a recurring or regular basis or become a predictable distributor of distributions.

(17)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.

(18)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.

(19)Colombier Sponsor LLC is the sponsor of Colombier Acquisition Corp., a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

(20)On June 11, 2021, the Company executed a private investment in public equity transaction, through Churchill Capital Corp. II, a special purpose acquisition company, in order to acquire shares of Software Luxembourg Holding S.A. alongside the merger of Software Luxembourg Holding S.A. and Churchill Capital Corp. II. Following the merger, Software Luxembourg Holding S.A. changed its name to Skillsoft Corp. Under the terms of Skillsoft Corp.'s Amendment No.1 to Form S-1 Registration Statement, all of SuRo Capital Corp.'s common shares in Skillsoft Corp. will be freely tradeable at the time of share registration.
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SURO CAPITAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2020
Portfolio Investments*Headquarters/
Industry
Date of Initial InvestmentShares/
Principal
CostFair Value% of Net
Assets
NON-CONTROLLED/NON-AFFILIATE
Palantir Technologies, Inc.**
Palo Alto, CA
Common shares, Class A(3)(13)
Data Analysis5/7/20124,618,952 $12,875,126 $94,635,398 31.38 %
Coursera, Inc.Mountain View, CA
Preferred shares, Series F 8%Online Education7/15/2020166,962 2,840,017 2,838,354 0.94 %
Preferred shares, Series B 8%6/9/20132,961,399 14,519,519 50,343,783 16.69 %
Total17,359,536 53,182,137 17.63 %
Course Hero, Inc.Redwood City, CA
Preferred shares, Series A 8%Online Education9/18/20142,145,509 5,000,001 35,079,072 11.63 %
Nextdoor.com, Inc.San Francisco, CA
Common sharesSocial Networking9/27/2018580,360 10,002,666 12,832,208 4.25 %
Blink Health, Inc.New York, NY
Preferred shares, Series APharmaceutical Technology10/27/2020238,095 5,000,423 4,999,995 1.66 %
Preferred shares, Series C10/27/2020130,972 5,002,932 4,999,987 1.66 %
Total10,003,355 9,999,982 3.32 %
Forge Global, Inc.(15)
San Francisco, CA
Common shares, Class AAOnline Marketplace Finance7/20/2011614,042 123,987 7,624,437 2.53 %
Junior Preferred shares7/19/2011160,534 2,259,716 1,993,319 0.66 %
Junior Preferred warrants, Strike Price $12.42, Expiration Date 11/9/20257/19/201173,695 — 279,303 0.09 %
Total2,383,703 9,897,059 3.28 %
Enjoy Technology, Inc.Menlo Park, CA
Preferred shares, Series B 6%On-Demand Commerce7/29/20151,681,520 4,000,280 5,032,724 1.67 %
Preferred shares, Series A 6%10/16/2014879,198 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 %
Total5,526,777 7,090,816 2.35 %
Rent the Runway, Inc.New York, NY
Preferred shares, Series GSubscription Fashion Rental6/17/2020339,191 5,153,945 5,000,001 1.66 %
Residential Homes for Rent, LLC (d/b/a Second Avenue)(16)
Chicago, IL
Preferred shares, Series AReal Estate Platform12/23/2020150,000 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 %
   Total4,500,000 4,500,000 1.49 %
Neutron Holdings, Inc. (d/b/a/ Lime)San Francisco, CA
Junior Preferred shares, Series 1-D(11)
Micromobility1/25/201941,237,113 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)
5/11/20202,032,967 — — — %
Total10,513,661 3,991,353 1.33 %
Aspiration Partners, Inc.Marina Del Rey, CA
Preferred shares, Series AFinancial Services8/11/2015540,270 1,001,815 3,288,548 1.09 %
Preferred shares, Series C-3 (12)
8/12/201924,912 281,190 169,599 0.06 %
Total1,283,005 3,458,147 1.15 %
Treehouse Real Estate Investment Trust, Inc.Chicago, IL
Common shares***(8)
Cannabis REIT9/11/2019312,500 7,500,000 3,321,626 1.10 %
Palantir Lending Trust SPV I **(10)
Palo Alto, CA
Equity Participation in Underlying CollateralData Analysis6/19/2020— — 2,550,764 0.85 %
See accompanying notes to condensed consolidated financial statements.
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SURO CAPITAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS - continued
December 31, 2020
Portfolio Investments*Headquarters/
Industry
Date of Initial InvestmentShares/
Principal
CostFair Value% of Net
Assets
Clever, Inc.San Francisco, CA
Preferred shares, Series B 8%Education Software12/5/20141,799,047 $2,000,601 $2,000,001 0.66 %
A Place for Rover Inc. (f/k/a DogVacay, Inc.)Seattle, WA
Common sharesPeer-to-Peer Pet Services11/3/2014707,991 2,506,119 1,474,878 0.49 %
Tynker (f/k/a Neuron Fuel, Inc.)Mountain View, CA
Preferred shares, Series A 8%Computer Software8/8/2012534,162 309,310 791,361 0.26 %
Fullbridge, Inc.Cambridge, MA
Common sharesBusiness Education5/13/2012517,917 6,150,506 — — %
Promissory Note 1.47%, Due 11/9/2021(4)
3/3/2016$2,270,458 2,270,858 — — %
Total8,421,364 — — %
SP Holdings Group, Inc.(15)
San Francisco, CA
Preferred shares, Series B 6%Online Marketplace Finance7/19/20111,771,653 — — — %
Common shares7/20/2011770,934 — — — %
Total— — — %
Kinetiq Holdings, LLC(14)
Philadelphia, PA
Common shares, Class ASocial Data Platform3/30/2012112,374 — — — %
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 Platform9/11/2019683,482 $2,414,178 $1,865,547 0.62 %
Common Warrants, Strike Price $0.01, Expiration Date 4/9/20284/9/2018295,565 30,647 762,558 0.25 %
Preferred shares, Series B 6%10/3/2014922,509 4,999,999 3,350,952 1.11 %
Preferred shares, Series A 6%12/11/20131,090,909 3,000,200 2,824,679 0.94 %
Preferred shares, Series Seed 6%11/2/2012500,000 500,000 1,294,645 0.43 %
Total10,945,024 10,098,381 3.35 %
GreenAcreage Real Estate Corp.New York, NY
Common shares***(9)
Cannabis REIT8/12/2019422,586 8,509,633 8,937,690 2.96 %
StormWind, LLC(5)
Scottsdale, AZ
Preferred shares, Series D 8%Interactive Learning11/26/2019329,337 257,267 440,515 0.15 %
Preferred shares, Series C 8%1/7/20142,779,134 4,000,787 4,804,218 1.59 %
Preferred shares, Series B 8%12/16/20113,279,629 2,019,687 2,625,365 0.87 %
Preferred shares, Series A 8%2/25/2014366,666 110,000 88,248 0.03 %
Total6,387,741 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 Platform8/23/20198,555,124 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 4/4/20214/4/2014187,500 — 4,687 — %
Preferred Warrants Series A-4, Strike Price $1.33, Expiration Date 10/6/202110/6/2014500,000 — 65,000 0.02 %
Preferred Warrants Series A-4, Strike Price $1.33, Expiration Date 7/18/20217/8/2016250,000 74,380 27,500 0.01 %
Preferred Warrants Series B, Strike Price $2.31, Expiration Date 11/29/202111/29/2016100,000 29,275 — — %
Preferred Warrant Series B, Strike Price $2.31, Expiration Date 5/29/20225/29/2017125,000 70,379 — — %
Preferred Warrant Series B, Strike Price $2.31, Expiration Date 12/31/202312/31/2018250,000 5,080 9,250 0.00 %
Total9,764,414 2,784,684 0.92 %
See accompanying notes to condensed consolidated financial statements.
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SURO CAPITAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS - continued
December 31, 2020
Portfolio Investments*Headquarters/
Industry
Date of Initial InvestmentShares/
Principal
CostFair Value% of Net
Assets
CUX, Inc. (d/b/a CorpU)Philadelphia, PA
Senior Subordinated Convertible Promissory Note 4% Due 2/14/2023(4)
Corporate Education11/26/2014$1,251,158 $1,256,191 $312,790 0.10 %
Convertible preferred shares, Series D 6%5/31/2013169,033 778,607 73,882 0.02 %
Convertible preferred shares, Series C 8%3/29/2012615,763 2,006,077 — — %
Total4,040,875 386,672 0.12 %
Maven Research, Inc.San Francisco, CA
Preferred shares, Series C 8%Knowledge Networks7/2/2012318,979 2,000,447 — — %
Preferred shares, Series B 5%2/28/201249,505 217,206 — — %
Total2,217,653 — — %
Curious.com, Inc.Menlo Park, CA
Common sharesOnline Education11/22/20131,135,944 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 Technology4/15/201414,300,000 $7,151,412 $809,198 0.27 %
Common shares4/15/2014100,000 10,000 — — %
Total7,161,412 809,198 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 condensed 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 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”.
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(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.

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SURO CAPITAL CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2021

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 June 30, 2021, 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, except for SuRo Capital Sports, LLC, which is subject to pass-through tax treatment. 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.
SubsidiaryJurisdiction of
Incorporation
Formation
Date
Percentage
Owned
GCLDelawareApril 13, 2012100%
Subsidiaries below are referred to collectively, as the “Taxable Subsidiaries”
GSVC AE Holdings, Inc. (“GAE”)DelawareNovember 28, 2012100%
GSVC AV Holdings, Inc. (“GAV”)DelawareNovember 28, 2012100%
GSVC SW Holdings, Inc. (“GSW”)DelawareNovember 28, 2012100%
GSVC SVDS Holdings, Inc. (“SVDS”)DelawareAugust 13, 2013100%
SuRo Capital Sports, LLC ("SuRo Sports")DelawareMarch 19, 2021100%

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, the Company may invest in private credit and in founders equity, founders warrants, forward purchase agreements, and private investment in public equity transactions of special purpose acquisition companies. 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.

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NOTE 2—SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The interim unaudited condensed 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-Q 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 interim period have been included.

The results of operations for the current interim period are not necessarily indicative of results that ultimately may be achieved for any other interim period or for the year ending December 31, 2021. The interim unaudited condensed consolidated financial statements and notes hereto should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s annual report on Form 10-K for the year ended December 31, 2020.

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 condensed 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 condensed 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 condensed 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 II, Item 1A of this Form 10-Q 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:
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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.

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

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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.

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 quarter 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
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recognized as a realized loss on investments in the Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows. In the event these securities are exercised into common or preferred stock, the cost associated with these securities is reassigned to the cost basis of the new common or preferred stock. These conversions are noted as non-cash operating items on the Condensed 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 Condensed Consolidated Schedules of Investments as of June 30, 2021 and December 31, 2020, 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.

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June 30, 2021
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.

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., Bridge Bank (a subsidiary of 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 Condensed 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 Condensed Consolidated Statement of Assets and Liabilities as escrow proceeds receivable. As of June 30, 2021 and December 31, 2020, the Company had $852,433 and $852,462, 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 June 30, 2021 and December 31, 2020, the Company had deferred financing costs of $285,814 and $297,196, respectively, on the Condensed Consolidated Statement of Assets and Liabilities.
June 30, 2021December 31, 2020
Deferred credit facility costs$— $11,382 
Deferred offering costs285,814 285,814 
Deferred Financing Costs$285,814 $297,196 

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
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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.

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 Condensed Consolidated Statement of Assets and Liabilities as escrow deposits. As of June 30, 2021 and December 31, 2020, 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
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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 condensed consolidated financial statements.

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 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 Company adopted the modified disclosure requirements during the period ended June 30, 2021.

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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.

In May 2020, the SEC adopted rule amendments that impacted the requirement of investment companies, including BDCs, to disclose the financial statements of certain of their portfolio companies or acquired funds (the “Final Rules”). The Final Rules adopted a new definition of “significant subsidiary” set forth in Rule 1-02(w)(2) of Regulation S-X under the Securities Act. Rules 3-09 and 4-08(g) of Regulation S-X require investment companies to include separate financial statements or summary financial information, respectively, in such investment company’s periodic reports for any portfolio company that meets the definition of “significant subsidiary.” The Final Rules amended the definition of “significant subsidiary” in a manner that was intended to more accurately capture those portfolio companies that were more likely to materially impact the financial condition of an investment company.

NOTE 3—RELATED-PARTY ARRANGEMENTS

Internalization of Company’s Operating Structure

On and effective March 12, 2019 (the "Effecti