SuRo Capital Q3 2024 Earnings Call Transcript

Quartr
Provided by Quartr
November 7, 2024

There are 4 speakers on the call.

Operator

and welcome to the SORO Capital's Third Quarter 2024 Earnings Call. My name is Melissa, and I will be your coordinator for today's event. Please note this conference is being recorded and for the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions at the end of the presentation. I'll now turn the call over to Willie Lee.

Operator

Please go ahead.

Speaker 1

Awesome. Thank you. Thank you for joining us on today's call. I'm joined today by the Chairman and Chief Executive Officer of Suro Capital, Mark Klein and Chief Financial Officer, Alison Green. Please note that a slide presentation corresponding to today's prepared remarks by management is available on our website at www.

Speaker 1

Cerocap.com under Investor Relations, Events and Presentations. Today's call is being recorded and broadcast live on our website, www.surocap.com. Replay information is provided in our press release issued today. This call is the property of SORO Capital and the unauthorized reproduction of this call in any form is strictly prohibited. I would also like to call your attention to customary disclosures in today's earnings press release regarding forward looking information.

Speaker 1

Statements made in today's conference call and webcast may constitute forward looking statements, which relate to future events or our future performance or financial condition. These statements are not guarantees of our future performance or future financial condition or results and involve a number of risks, estimates and uncertainties, including the impact of any market volatility that may be detrimental to our business, our portfolio companies, our industry and the global economy that could cause actual results to differ materially from the plans, intentions and expectations reflected in or suggested by the forward looking statements. Actual results may differ materially from those in the forward looking statements as a result of a number of factors, including, but not limited to, those described from time to time in the company's filings with the SEC. Management does not undertake to update such forward looking statements unless required to do so by law. To obtain copies of SIROCAPTIL's latest SEC filings, please visit our website at www.surocap.com or the SEC's website at sec.gov.

Speaker 1

Now, I'd like to turn the call over to Mark Klein.

Speaker 2

Thank you, Willie. Good afternoon and thank you for joining us. We would like to share the results of SORO Capital's Q3 2024. Before discussing the exciting events that have occurred in the past few months, I would like to take a step back and share the Suro Capital vision and discuss a bit about what differentiates our firm from other investment alternatives. Please turn to Slides 3, 45.

Speaker 2

From inception, our goal has been to democratize curated access to venture capital opportunities. Over the last 14 years, we have invested in and exited from investments in companies like Facebook, Twitter, Lyft, Spotify, Dropbox, Coursera and Palantir. We believe our ability to access these opportunities provides our shareholders with access to an asset class that is typically excluded from the average investor. Presently, we are confident that we have redeployed capital into the next wave of exciting private companies with investments in market leading businesses like OpenAI, Horweave, Canva, ServiceTitan, WHOOP and Liquid Debt to name a few. Between our ability to access attractive opportunities, our rigorous analysis and investment process and our continued commitment to shareholder value, we are confident that we are providing unique value in the market that others may not.

Speaker 2

Fostering this differentiation is important given the alternatives investors have. As forwarding to today, the last few months have been among the most exciting for our firm in our history. With the exponential growth of AI, a new crop of some of the world's most valuable companies has emerged. We have identified and invested significant capital in a few of the market's leading players. Just in the second half of twenty twenty four, we've invested approximately $65,000,000 into some of the largest and most sought after private companies globally.

Speaker 2

Of that amount, we've invested approximately $55,000,000 into artificial intelligent companies. AI investments now represent a significant portion of our portfolio, comprising 18% of our gross assets at the quarter's end. Inclusive of the $17,000,000 of investments we have made into AI companies subsequent to quarter's end, including BaaS, the percentage of gross assets allocated to AI is approximately 23% of our portfolio. Outside of our portfolio, AI has attracted tremendous venture capital interest. According to Crunchbase, funding into AI startups made up 31% of the 3rd quarter's total global venture funding.

Speaker 2

Including OpenAI's $6,600,000,000 financing, which closed subsequent to the quarter's end, AI's share of total funding amounted to nearly 40%. According to the same source, to give those figures some context, FinTech accounted for about 20% of all venture funding in 2021, while crypto never reached more than 6% of venture funding even at its peak. During the surge in demand for AI investment, we believe we are highly differentiated on the basis of our AI investment criteria. Unlike many other investors, we have taken a thoroughly intentional approach that prioritizes the industry agnostic picks and shovels infrastructure with proven traction and scale over the industry specific applications with unproven product market fit. Of our AI portfolio companies, our AI portfolio companies are later stage businesses that have multibillion dollar enterprise customers or already have massive consumer adoption.

Speaker 2

Looking at the broader portfolio, we have several portfolio companies that are well positioned to drive shareholder value upon the reopening of the IPO market. We believe our late stage portfolio companies such as ServiceTitan, Canva, WHOOP and Liquid Death among others along with our AI portfolio companies create a balanced portfolio offering our shareholders access to some of the most exciting private technology companies ahead of their potential IPOs. Additionally, many of these portfolio companies have even publicly discussed their IPO plans or have been the subjects of recent reports about their upcoming IPOs. According to Bloomberg, Correv has hired Morgan Stanley, Goldman Sachs and JPMorgan to lead its planned IPO next year. This follows the information's report that Correv is aiming to file confidentially next month.

Speaker 2

Additionally, according to the information, ServiceTitan may go public as soon as next month after generating approximately $360,000,000 of revenue in the first half of this year. Finally, according to the Times, Lime's CEO, Wayne Ting said the company is ready for an IPO under the right market conditions and noted that Lime's bookings grew by 32% to approximately $600,000,000 last year. I would now like to discuss our recent investments in more detail. We are pleased to announce our significant new and follow on investments into some of the largest and most compelling AI companies. During the quarter, we made a $17,500,000 investment in OpenAI, one of the largest developers of generative AI models for consumers and businesses through the Class A interest of ARP Type 1 Deep Ventures Fund LLC, a fund whose sole portfolio asset is the convertible equity of OpenAI.

Speaker 2

During the quarter and subsequent to quarter's end, we increased our position in CoreWeave, a leading AI cloud computing provider via a follow on secondary investments totaling $10,000,000 These follow on investments bring our total capital investment in CoreWeave to $25,000,000 making CoreWeave the single largest initial investment in our firm's history. Lastly, subject to quarter's end, we made a $12,000,000 investment in VAST, a data management solution for AI developers through the membership interest of IH10 LLC, whose sole portfolio asset is an interest in VAST Data's preferred be preferred shares. Together, our investments in OpenAI, CoreWeave and VAST give our investors access to leading AI companies at each point in the AI valuation AI value chain. I will discuss these investments in further detail later in my prepared remarks. Turning to our Q3 results.

Speaker 2

We ended the quarter with net asset value of $157,400,000 or 6.73 dollars per share. Please turn to Slide 6. Cerro's top 5 positions as of September 30 were CORWEA, which includes CW Opportunity 2 LP, the CORWEA SPV and our $5,000,000 follow on secondary investment in Corweave common shares. Lernio, OpenAI through the ARC Type 1 Deep Ventures Fund, Blink Health and Service Type. These positions accounted for approximately 47% of the investment portfolio at fair value.

Speaker 2

Additionally, as of September 30, our top ten positions accounted for approximately 75% of the investment portfolio. As of the quarter's end, our cash available for investment was approximately $32,700,000 representing 14% of our gross assets. Please turn to Slide 7. During the quarter, we made a $17,500,000 investment in OpenAI through our Type 1 deep ventures, a fund whose sole asset was the Class A and Class A interest was the convertible equity of OpenAI. OpenAI is a leading developer of generative AI models using deep learning technology.

Speaker 2

According to Axios, OpenAI's $6,600,000,000 fundraising in which we participated was the largest venture capital deal of all time. The financing made OpenAI one of the most valuable private companies in the world. OpenAI offers its models via free and paid plans that suit the needs of consumers, small teams and large organizations. Its fully released flagship models GPT-four 0 and GPT-four 0 Mini are multimodal, meaning they accept both text and image inputs and output text. According to a company blog post, these models are part of OpenAI's broader chat GPT suite, which is used by over 250,000,000 people every week around the world.

Speaker 2

Additionally, according to the Wall Street Journal, OpenAI has 11,000,000 paying subscribers approximately 1,000,000 paying business customers. For consumers, Chat GPT can quickly generate text with a human like understanding of the user's input. For example, a user may prompt Chat GPT to write a cover letter based on the user's input and work experience or come up with a workout plan based on the user's input and fitness goals. Within seconds, Chat GPT generates a relevant text response tailored specifically to the user's input. Chat GPT can also summarize more extensive content such as a research paper or a lease agreement, again extracting details specific to the input.

Speaker 2

For small teams, Chat GPT acts as an assistant for tasks such as analyzing data, generating code and writing emails. For example, the finance department of a small business may prompt Chat GPT to summarize financial data based on an inputted Excel spreadsheet. Chat GPT can then visualize the data via chart or graph and generate text that describes trends in data over time. Additionally, the engineering team at a startup may prompt Chat GPT to find a bug in a set of code. Moments later, Chat GPT can identify the bug, explain the mistake and provide an appropriate correction.

Speaker 2

For large organizations, Chat GPT provides advanced data analysis capabilities, customized options and large scale content generation services, all with enterprise grade security. Klarna, a global leader in consumer payments uses ChatGPT to power multilingual customer services. According to OpenAI blog post, Klarna's AI assistants has 2,300,000 conversations representing 2 thirds of Klarna's customer service chats. This AI assistance is more accurate and expedient than Klarner's previous solutions, leading to a 25% decrease in repeat inquiries and resolutions in less than 2 minutes on average compared to 11 minutes on average before. According to PitchBook, OpenAI has raised over $21,900,000,000 in debt and equity financing from investors including CodeTwo, NVIDIA, Microsoft, Thrive Capital, Tiger Global and others.

Speaker 2

We are excited about OpenAI's traction and positioning at the forefront of generative AI development. Please turn to Slide 8. During the Q3, we made a $5,000,000 follow on investment in CoreWeave's common shares via secondary transaction. Subsequent to quarter's end, we made an additional $5,000,000 follow on investment in CoreWeave Series A shares, again via a secondary transaction. These investments add to our previously discussed $50,000,000 investment in CW Opportunity 2 LP, which is investing in Corwee's Series C preferred shares, bringing our total investment in Corweave to $25,000,000 Corweave is a specialized cloud provider, delivering access to NVIDIA GPUs and a fast flexible cloud computing infrastructure tailored for AI and machine learning.

Speaker 2

It supports end to end AI workflows from model training to deployment by offering distributed clusters powered by NVIDIA's quantuminfiniband network solutions. With spin up times as short as 5 seconds, Correv provides 1 of the industry's fastest inference solutions using NVIDIA GPUs. According to the company, its inference service is 8 to 10 times faster than those of leading generalized cloud providers. Core OE's momentum has accelerated in recent months. According to the Financial Times, it now operates more than 45,000 NVIDIA GPUs, making it the largest private operator in North America.

Speaker 2

Additionally, according to Bloomberg, just last month, Cisco invested in CoreWeave as part of a transaction valued at $23,000,000,000 Also last month, CoreWeave announced the close of its 6 $50,000,000 credit facility led by JPMorgan Chase, Goldman Sachs and Morgan Stanley, building on the close of its $7,500,000,000 credit facility led by Blackstone and in late May. Later in the month, Core Scientific, a leader in digital infrastructure for Bitcoin mining announced that CoreWeave exercised its final contract option to deliver approximately 120 megawatts of computing infrastructure to Core Scientific's data centers. According to Core Scientific's press release, this contract exercise expands CoreWeave's contracted infrastructure to approximately 500 Megawatts across 6 Core Scientific Sites. The Information reported that Microsoft plans to invest $10,000,000,000 between 2023 and the end of the decade to use CorWeed's data centers. According to the information, Microsoft's contract will be a key driver of CorWeed's significant revenue growth.

Speaker 2

According to the information, the estimated revenue for Corweave is $500,000,000 for 2023, dollars 2,000,000,000 for 20 20 $4,000,000,000 for 2025. According to Bloomberg, this scale positions CoreWeed for a major IPO with bankers already hired for 2025 listing. According to PitchBook, CoreWeave has raised over $9,000,000,000 in debt and equity financing from investors such as Coatue, Fidelity, Magnator and more. With its best in class cloud infrastructure, we believe CoreWeave will continue its exponential growth and capitalize on accelerated AI adoptions. Please turn to Slide 9.

Speaker 2

Subsequent to quarter's end, we made a $12,000,000 investment in Fast Data through a membership interest in IH10 LLC, an entity whose sole portfolio asset is interest in Fast Data's Series B preferred shares. VAST Data is a data management solution for leading AI companies. VAST Data has emerged to emerge due to an inability of legacy data management solutions to serve customers building complex AI applications. For several decades, enterprise data solutions was built around the concept of tiers. Tiered storage is the idea that data is segmented based on its importance to daily operations.

Speaker 2

An example of segments could be cold, warm, hot and mission critical. However, AI applications need to access to all data at once, rendering the tiered storage system increasingly obsolete. Fast data collapses the tiered storage model by offering all flash storage. All flash allows all data in a pipeline as opposed to data in a specific tier to be accessed instantly. This is especially valuable for companies that train AI models to produce outputs as these companies require constant movement of data between back end systems.

Speaker 2

As customers scale and face increasingly complex data management needs, VAST data can add nodes to increase connections with a company a customer's data architecture and GPUs to accelerate the production and usage of customer data. Leading companies at the forefront of AI development use VAST Data to accelerate their applications. According to a VAST Data blog post, Pixar, a globally recognized animation studio uses VAST Data for its data intensive media productions. For example, in its 2023 film, Elemental, Pixar used this custom edge animation methods that created several times the data footprint and competent computational demands for data than other previous movies. Even during the film's peak rendering usage, VAST data delivered fast uninterrupted performance.

Speaker 2

Pixar continues to use VAST Data to employ new animation techniques using machine learning models for adopted and improved media production. According to a vast data blog post, Zoom, leader in live video conferencing uses vast data to assist in training its AI models. On top of its video conferencing interface, Zoom offers AI powered features such as speech to text transcription and language translation. To build and refine these features, Zoom required a data management solution that could access and retrieve data instantly. Zoom uses vast data to help process audio efficiently and quickly, even in real time during a video conference.

Speaker 2

VAST Data has quickly cemented itself as a dominant AI infrastructure provider. According to a press release at the end of 2023, VAST Data reached over $200,000,000 in ARR. Additionally, the company has been cash flow positive for the last 3 years. According to PitchBook, VAST Data has raised over $390,000,000 in equity financing from investors such as NEA, General Atlantic, TPG and others. We believe VAST Data is poised for growth as a leading data management provider for the AI universe.

Speaker 2

Over the last few months, we've been deliberately focusing on deploying capital into companies offering critical AI infrastructure solutions. Today, with nearly $55,000,000 invested in AI infrastructure, we believe our portfolio is well positioned for upside given AI tailwinds. Now I would like to highlight recent developments in our portfolio company Canva. As previously discussed, Canva is an online productivity design software and collaboration platform with a mission to empower everyone in the world to design. According to a Forbes article in late as of late October, Canva crossed 200,000,000 active daily users and $2,500,000,000 in annualized revenue.

Speaker 2

Additionally, the company reported having completed several transactions at a $32,000,000,000 valuation, up from the $26,000,000,000 valuation it received in its larger company tender in April. As previously discussed, we made our $10,000,000 investment in CAMBA on similar terms as what was reported in the company tender offer. Finally, Canva continues to gain traction with enterprise companies having added names such as HP and the New York Stock Exchange to its platform. According to PitchBook, Canva has raised over $581,000,000 in equity financing from investors including Bessemer Venture Partners, General Catalyst, Iconic and others. We are excited about the Canva trend about Canva's traction and positioning the market as it expands its enterprise footprint and further captures international markets.

Speaker 2

Transitioning to our public investments. As previously stated, it is our objective to sell our public positions when lockups restrictions expire and there is relative stability in a given public position trading. In line with this approach, we began to monetize our position in Public Square shares as their lockup restrictions expired during the quarter and have continued to do so subsequent to quarter's end. One additional portfolio company we'd like to hire highlight again is Oaklo. Oaklo has been very positively received as a public company with the stock closing in excess of $26.5 today, more than double where the stock initially listed.

Speaker 2

As previously discussed, Oklo is a fast firing clean power company backed by Sam Ullman. Oklo is on the cutting edge of nuclear fuel recycling, which has many uses, including the potential to add clean power to AI related data centers. According to a recent report from the U. S. Department of Energy, nuclear power is one of the lowest life cycle emissions of any major generating energy source providing electricity to the grid with the lowest CO2 emissions per megawatt hour of any currently available technology.

Speaker 2

Oklo is in the forefront of the small modular nuclear reactor space, which has recently received significant commercial interest. According to an Oklo press release in August, Oklo established a preferred supplier agreement with Siemens Energy, a leading manufacturer of steam turbine generated products and services. This partnership exceeds 1300 megawatts in non binding letters of intent, underscoring Oklo's significant market traction. Additionally, in September, Oklo announced the finalization of an agreement with the U. S.

Speaker 2

Department of Energy's Idaho operations office. According to Oklo's press release, this agreement gives Oklo access to conduct site investigations as the only advanced formation company with a DOE site use permit. We're excited about Oklo's positioning as a leader as a leading nuclear energy provider as the company continues to expand its commercialization prospects. Finally, we continue to focus on our shareholder friendly initiatives, including our recently executed note purchase agreement and note repurchase program and the expansion and extension of our share repurchase program. Alison will discuss these initiatives during her prepared remarks in further detail.

Speaker 2

To conclude my remarks, I want to highlight why I believe this is an exceptionally promising time for our portfolio. Over the past 5 years, we have made it a priority to share our perspectives on the evolving market cycles and trends. In the middle of 2020, we stated our belief that there would be a significant increase in IPO activity and we would and we were strategically positioned to take advantage of this potential. Throughout 2021, we monetized over $258,000,000 of our portfolio's assets, including 2 substantial monetizations of Palantir and Coursera, each exceeding $100,000,000 in net proceeds. We also declared a total of $8 per share for over $212,000,000 in distributions to our shareholders.

Speaker 2

In 2022, we conveyed our view that the market was a bit overextended, prompting us to considerably scale back on our new capital investments. In the subsequent year and a half, we had ongoing dialogue with our investors about the disparity between private and public market valuations. And as this year progressed, we have detailed our approach to judiciously deploying our available capital. I am confident that our current positioning is as strong, if not stronger than it was in 2020. We believe that if the market remains robust, the IPO market will reopen.

Speaker 2

As I discussed in earlier my remarks, we've had we have several investments that could materially benefit from a revitalized IPO market. Given our recent investments and broader portfolio, we believe we are well positioned to drive shareholder return. Thank you for your attention. And with that, I will hand it over to Allison Green, our Chief Financial Officer.

Speaker 3

Thank you, Mark. I would like to follow Mark's update with a more detailed review of our financial results as of September 30 and investment activity during the Q3 and subsequent to quarter end. Additionally, I'll provide more detail on the 6.5% convertible note purchase agreement and related issuances during the quarter and subsequent to quarter end and the Board approved 6% notes due 2026 repurchase program. I'll conclude with a brief update on the share repurchase program and our current liquidity. Please turn to Slide 10.

Speaker 3

As Mark mentioned, during the quarter, we completed a $17,500,000 investment in the convertible equity of OpenAI through the Class A interest of ARC Type 1D Ventures Fund LLC, a fund whose sole portfolio asset for Class A interest holders is the convertible equity of OpenAI. We also made a $5,000,000 investment in CoreWeave's common shares via secondary transaction. Subsequent to quarter end, we made an additional $5,000,000 investment in CoreWeave's Series A preferred shares via secondary transaction and a $12,000,000 investment in VAST Data through our investment in the membership interest of IH10 LLC, an entity whose sole portfolio asset is the Series B preferred shares of VAST data through an SCB. Please turn to Slide 11. During the Q3, we began to sell our public common shares of Public Square following their lockup expiration on July 19.

Speaker 3

We sold 359,845 shares of Public Square for approximately $1,000,000 in net proceeds, resulting in a realized gain of approximately $732,000 Additionally, we sold our entire remaining position in One Valley Inc, formerly known as Nest GSV, resulting in net proceeds of $3,000,000 and a realized loss of approximately $6,600,000 During the quarter, we also exited our position in STBRx, formerly known as GSV Sustainability Partners, upon the dissolution of the business for which we received a final distribution of approximately $375,000 resulting in a realized loss of approximately $6,800,000 Finally, during the Q3, we wrote off our investments in Churchill Sponsor 7 and Uvette Technology doing business with Sand Power upon each of those companies' solutions. Subsequent to quarter end, we continue to sell our public common shares in Public Square. So far in Q4, we have sold 822,305 shares of Public Square for approximately $2,500,000 in net proceeds and a resulting realized gain of approximately $1,800,000 Please turn to Slide 12. I'd like to provide more detail on the note repurchase program for the 6% notes due 2026 and executed note purchase agreement for 6.5% convertible notes due 2029. On August 6, SORO Capital's Board of Directors approved a discretionary note repurchase program, which allows the company to repurchase up to 46.67 percent or $35,000,000 in aggregate principal amount of our 6% notes due 2026 through open market purchases, including block purchases, in such manner as we'll comply with the provisions of the Investment Company Act of 1940 as amended and the Securities Exchange Act of 1934 as amended.

Speaker 3

As of September 30, we had repurchased 1,010,100 and 6 of the 6% notes under the note repurchase program. So as a quick quarter end through today, we repurchased an additional 201,446 of the 6% notes under the note repurchase program. To date, under the note repurchase program, we have repurchased a total of $1,201,582 or approximately $30,300,000 principal amount of the publicly traded 6% notes for approximately $30,000,000 The aggregate principal dollar amount of 6% notes that may yet be repurchased by SORO Capital under the note repurchase program is approximately $4,700,000 Now moving on to the 6.5% convertible note issuance. On August 6, SORO Capital entered into a note purchase agreement by and between the company and a private issuer, pursuant to which we may issue up to a maximum of $75,000,000 in aggregate principal amount of 6.5% convertible notes due 2029. Pursuant to the note purchase agreement, on August 14, we issued and sold and the purchaser purchased $25,000,000 in aggregate principal amount of the convertible notes.

Speaker 3

Under the note purchase agreement, upon mutual agreement between the company and the purchaser, we may issue an additional we may issue additional convertible notes for sale and subsequent offerings to the purchaser or issue additional notes with modified pricing terms in the aggregate for both the additional notes and the new notes up to a maximum of $50,000,000 in 1 or more private offerings. Interest on the 6.5% convertible notes due 20.29 will be paid quarterly in arrears on March 30, June 30, September 30 December 30 at a rate of 6.5% per year beginning September 30 this year. The convertible notes will mature on August 14, 2029 and may be redeemed in whole or in part at any time or from time to time at our option on or after August 6, 2027, upon the fulfillment of certain conditions. The 6.5% convertible notes will be convertible into shares of our common stock at the purchaser's sole discretion at an initial conversion rate of approximately 129 shares of our common stock per $1,000 principal amount of the convertible notes, subject to adjustments and limitations as provided in the note purchase agreement. The net proceeds from the offering of the convertible notes will be used to repay outstanding indebtedness, make investments in accordance with our investment objective and investment strategy and for other general corporate purposes.

Speaker 3

The note purchase agreement includes customary representations, warranties and covenants by the company. Since the quarter end, pursuant to the note purchase agreement, on October 9, we issued and sold in the purchaser purchase $5,000,000 in aggregate principal amount of additional 6.5% convertible notes. Additional convertible notes are treated as a single series with the initial notes and have the same terms as the initial notes. The additional notes are fungible and ranked equally with the initial notes. Upon issuance of the additional notes, the outstanding aggregate principal amount of the 6.5 percent convertible notes due 20.29 became $30,000,000 Please turn to Slide 13.

Speaker 3

This quarter, we reevaluated the investment names used to categorize the portfolio by industry to more appropriately capture our current portfolio as it has evolved since the themes were initially introduced. As a result, the 6 former investment themes, Education Technology, Big Data Cloud AI, Marketplaces, Financial Technology, Social Mobile and Sustainability were replaced to present a more accurate reflection of our portfolio. The new investment themes are artificial intelligence infrastructure and applications, software as a service, education technology, consumer goods and services, logistics and supply chain, financial technology and services and Cerro Sports. Segmented by 7 general investment themes, the top allocation of our investment portfolio at quarter end was to software as a service, representing approximately 26% of the investment portfolio at fair value. Artificial intelligence infrastructure and applications and Consumer Goods and Services were the next largest categories with approximately 21% 16% of our portfolio, respectively.

Speaker 3

Approximately 15% of our portfolio was invested in education technology companies and the logistics supply chain category accounted for approximately 11% of the fair value of our portfolio. Financial Technology and Services accounted for 9% of the fair value of our portfolio and service sports accounted for 2% as of September 30. Please turn to Slide 14. We ended the Q3 2024 with an NAV per share

Speaker 2

of

Speaker 3

$6.73 which is consistent with our financial reporting. The decrease in NAV per share from $6.94 at Q2 to $6.73 as of September 30 was primarily driven by a $0.59 per share decrease resulting from the net realized loss on our portfolio investments during the quarter, a $0.14 per share decrease due to net investment loss and a $0.01 per share decrease due to realized loss on the partial repurchase of our 6% notes to 2026. The decrease in NAV per share was partially offset by a $0.50 per share increase from the net change in unrealized appreciation of our investments and a $0.03 per share increase from the impact of stock based compensation during the quarter. I'd like to conclude with some notes on our share repurchase program and our liquidity at the quarter end. As Mark mentioned earlier, SOR Capital is committed to initiatives that enhance shareholder value.

Speaker 3

Accordingly, on October 29, our Board of Directors authorized a $4,300,000 expansion to the share repurchase program to $64,300,000 and an extension of the share repurchase program through October 31, 2025. Since the inception of the share repurchase program in August 2017, we have repurchased a total of over 6,000,000 shares of our common stock for a total deployment of approximately $39,300,000 of the $64,300,000 authorized by the Board. Approximately $25,000,000 remains authorized under the share repurchase program that is now set to expire on October 31, 2025. Regarding our liquidity as of quarter end, we ended the quarter with approximately $39,500,000 of liquid assets, including approximately $32,700,000 in cash and approximately $6,700,000 in unrestricted public securities. The $1,400,000 of public securities subject to lock up restrictions as of quarter end was not included in this balance.

Speaker 3

At September 30 and as of today, there are 23,378,002 shares of the company's common stock outstanding. That concludes my comments. We would like to thank you for your interest and support of SORO Capital. Now I will turn the call over to the operator for the start of the Q and A session. Operator?

Operator

Thank you. You. You. As we have no questions in the queue, I would like to turn it back over to your host for any closing remarks.

Speaker 2

Thank you all for attending our Q3 call. We appreciate your interest and support. And if you have any further questions, feel free to reach out directly through our IR portal. Thank you all very much.

Operator

Thank you very much. Once again, that does conclude today's conference. You may now disconnect.

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Earnings Conference Call
SuRo Capital Q3 2024
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