Earnings call transcript: SuRo Capital Q1 2025 sees NAV decrease

SuRo Capital Corp reported a slight decrease in its Net Asset Value (NAV) for the first quarter of 2025, with a NAV of $156.8 million or $6.66 per share, down from $6.68 per share at the end of the previous year. The company’s stock experienced a decline of 3.85% in aftermarket trading, closing at $5.00. The earnings call highlighted the company’s strategic focus on AI and AI-adjacent investments, despite broader market volatility impacting valuations.

Key Takeaways

• SuRo Capital’s NAV decreased slightly to $6.66 per share.
• The stock fell 3.85% in aftermarket trading.
• The company maintains a strong focus on AI infrastructure and AI-adjacent investments.
• Significant investment activities include a $5 million investment in Plaid and follow-on investments in WHOOP and Orchard.
• Market volatility remains a concern, with the Nasdaq experiencing its worst quarterly performance since 2022.

Company Performance

SuRo Capital continues to navigate a challenging market environment, marked by volatility in both public and private markets. The company’s strategic focus on AI-related investments, which comprise a significant portion of its portfolio, positions it well for potential growth in this sector. Despite the slight decrease in NAV, the company remains committed to its investment strategy, leveraging opportunities in AI infrastructure and adjacent technologies.

Financial Highlights

• Net Asset Value: $156.8 million or $6.66 per share, down from $6.68 per share at year-end.
• Top 5 positions account for 46% of the investment portfolio.
• Top 10 positions account for 70% of the investment portfolio.

Market Reaction

SuRo Capital’s stock closed at $5.00 in aftermarket trading, reflecting a 3.85% decrease. This movement comes amid broader market volatility, with the Nasdaq and S&P 500 experiencing significant fluctuations. The company’s stock is trading between its 52-week high of $6.834 and a low of $3.52, indicating investor caution amid uncertain market conditions.

Outlook & Guidance

Looking forward, SuRo Capital anticipates the reopening of the IPO window, which could unlock further value in its portfolio. The company projects substantial revenue growth for OpenAI, one of its key investments, with revenues expected to reach $13 billion in 2025 and $174 billion by 2030. This optimistic outlook underscores the company’s strategic focus on AI and its confidence in the sector’s long-term potential.

Executive Commentary

CEO Mark Lyon emphasized the company’s strategic direction, stating, "We are seeing more opportunities now than ever before." He highlighted the immense opportunities in AI and AI-adjacent companies, reinforcing SuRo Capital’s commitment to this investment focus. Lyon also noted, "We don’t view ourselves as holders of public securities," indicating a clear preference for private market investments.

Risks and Challenges

• Market Volatility: Continued fluctuations in public markets could impact private market valuations and SuRo Capital’s portfolio.
• AI Sector Competition: As more companies enter the AI space, competition could intensify, affecting investment returns.
• Economic Uncertainty: Macroeconomic pressures, including potential interest rate changes, could influence investment strategies and valuations.
• Regulatory Changes: Evolving regulations in the tech and financial sectors may pose challenges to SuRo Capital’s investment approach.
• IPO Market Timing: The anticipated reopening of the IPO window is uncertain, which could affect the realization of investment gains.

SuRo Capital remains focused on navigating these challenges while capitalizing on opportunities in the AI sector, aiming to deliver long-term value for its stakeholders.

Full transcript - SuRo Capital Corp (SSSS) Q1 2025:

Melissa, Conference Coordinator: Hello, and welcome to Soro Capital’s First Quarter twenty twenty five 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. This can be done by pressing followed by one on your keypad to register your question.

If you require assistance at any point, please press 0 to be connected to an operator. I’d now like to turn the call over to Evan Schlossman, Principal. Please go ahead.

Evan Schlossman, Principal, Soro Capital: Thank you for joining us on today’s call. I am joined by the Chairman and Chief Executive Officer of Sero Capital, Mark Sline and Chief Financial Officer, Allison Green. Please note that a slide presentation corresponding to today’s prepared remarks by management is available on our website at www.surocap.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 included in our press release issued today.

This call is the property of Sero 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. 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 these forward looking statements unless required to do so by law. To obtain copies of Suro Capital’s latest SEC filings, please visit our website at www.surocap.com or the SEC’s website at sec.gov. Now I would like to turn the call over to Mark Lyon.

Mark Lyon, Chairman and Chief Executive Officer, Soro Capital: Thank you, Evan. Before we dive into our portfolio highlights, I would like to start with a brief overview of the broader market environment. The first quarter of twenty twenty five was a particularly challenging period for the public market. The Nasdaq posted its worst quarterly performance since 2022, and major indices such as the Russell two thousand and the Dow Jones Industrial Average also saw significant declines. Ongoing uncertainty around global trade tensions and new tariffs weighed heavily on investor sentiment.

This environment also had a direct impact on private market valuations. As always, we determine fair value for our investments using a range of inputs, including public market comparables. With the public markets declining, our portfolio company valuations as of March 31 naturally reflected the broader compression. This turbulence intensified in the second quarter. In April, the S and P 500 experienced one of the most volatile stretches in recent memory, despite ending the month down just slightly under 1%.

The index fell as much as 12% at its lowest point before sharply rebounding, including a 9.5% surge on April 9, the largest single day gain since 02/2008, following a temporary pause in the Liberation Day tariffs. Meanwhile, the VIX spiked to above 55, reaching highest level since the onset of COVID. Despite these challenges, we are encouraged by the recent earnings calls for major tech companies, which reaffirm their commitment to capital spending even as micro macro uncertainties persist. We believe our portfolio is well positioned for when the IPO window opens reopens. Our companies continue to execute at a high level, and many are building fundamental momentum that we believe will drive valuation creation over the long term.

With that context in mind, I’d like to begin by highlighting one of our largest investments, OpenAI, which continues to deliver extraordinary growth and market leadership. In March, the company announced a $40,000,000,000 fund funding round at a $300,000,000,000 post money valuation, the largest private capital raise ever by a technology company. This marks a significant step up from its previous $7,000,000,000 round and a $150,000,000,000 post money round announced in October of last year. This achievement reflects the incredible success OpenAI has demonstrated over the past few months. At the time of this financing, OpenAI announced it had 500,000,000 weekly active users.

According to Reuters, that represents an increase from 300,000,000 active weekly active users in December. Additionally, the company shared an astounding statistic. The company’s systems are now used by approximately 10% of the global population or approximately 800,000,000 people. OpenAI’s growth has been driven by a steady cadence of new models, releases, enhanced functionality. Recent launches including the o three and o four minutei models as well as significant improvement to ChatGPT’s user interface memory and search capabilities.

These advances represent a step change in ChatGPT’s capabilities combining the state of art reasoning with seamless tool integration. Furthermore, public reports from the information indicate OpenAI is forecasting revenue to more than triple in 2025 to approximately $13,000,000,000 and is projecting revenue to reach $29,000,000,000 in 2026, ’50 ’4 billion dollars in 2027, ’80 ’6 billion dollars in 2028, a hundred and $25,000,000,000 in 2029, and a hundred and $74,000,000,000 in 02/1930. These forecasts represent an increase from the company’s previous forecast in the fall of last year. Moving on to CoreWeave. On March 28, CoreWeave completed the largest technology company IPO since 02/2021, raising $1,500,000,000 at a valuation of approximately $23,000,000,000.

CoreWeave’s momentum as a leading AI infrastructure provider has continued through its IPO. In March, CoreWeave announced a five year eleven point nine billion dollar contract with OpenAI to supply access to AI infrastructure. According to the information, CoreWeave has entered into advanced discussions to provide NVIDIA’s new Blackwell chips to Google. This potential Google deal underscores CoreWeave’s strategic advantages as a nimble AI first cloud provider with a uniquely close relationship with NVIDIA. Since the IPO at the March, recent positive developments have further support for Cori’s positioning and have helped underscore both the company’s critical role in the AI infrastructure ecosystem and the sustained importance of AI infrastructure as a whole.

These developments have contributed to an over 35% increase in the stock price based on today’s closing price, significantly outperforming broader market indices. More broadly, recent developments continue to reinforce critical importance of AI infrastructure and compute capacity even amid ongoing economic uncertainty. OpenAI’s recent $40,000,000,000 fundraising further underscores strong investor confidence and sustained demand for AI infrastructure, while hyperscalers remain committed to aggressive investments supporting future AI growth. On recent earnings calls, Alphabet, Microsoft, Amazon, and Meta all highlighted the continued significance of AI compute capacity and robust market demand driving future investments. Notably, Alphabet and Microsoft reaffirmed their board CapEx guidance, while Meta increased its 02/2025 capital expenditure forecast to 64 to $72,000,000,000.

For reference, we marked our CoreWeave investment at $31.52 per share in the first course or first quarter, which is inclusive of a customary discount. Today, the stock closed over $54 per share. We believe that CoreWeave remains underappreciated in the public markets and expect the company’s critical role in the AI infrastructure ecosystem to be better understood by the markets over time. While CoreWeave is building the foundation for AI at the infrastructure layer, one of our other portfolio companies, Canva, continues to innovate at the application layer. Canva recently unveiled its Visual Suite two point o, making advanced AI capabilities more accessible in everyday design.

According to Business Wire and company announcements, Canva’s rapid growth global growth continues to accelerate with more than a 45,000,000 users joining the platform since the launch of Canva’s Canva’s initial visual suite in 02/2022. Today, more than 375 designs are created every second with a total of 36,000,000,000 designs created since Canva’s launch in 02/2013. Canva has gained traction across a 90 countries and by more than 95% of Fortune five hundred. The growing global adoption across the world’s most influential companies has helped propel Canva to more than a $6,000,000,000 in annualized revenue, marking an increase of more than 30% over last year. Transitioning to our recent investment activity, we are pleased to share that the subsequent to quarter’s end, we made a $5,000,000 investment in Plaid through a sole limited partnership interest in seventeen eighty nine Capital Nirvana LP.

Our investment was part of Plaid’s five seventy five million dollars financing led by Franklin Templeton, Fidelity, NEA, Ribbit Capital, and others. According to TechCrunch, the round was completed at $6,100,000,000 post money valuation. According to CNBC, this financing is anticipated to be Plaid’s last private financing before the company lists on the public markets. According to PitchBook, the financing brings the total capital raised to date by Plaid to approximately $1,300,000,000. Plaid is a market leading fintech platform that enables secure and seamless connectivity between financial applications and consumers.

In recent years, has evolved from a business solely focused on bank linking into a broader financial infrastructure provider, offering a suite of data and risk solutions that are are essential to modern financial services. Today, PLAD supports more than 100,000,000 users globally with more than half of The US adults having used PLAD, and it is trusted by over 12,000 financial institutions across 17 countries. Its infrastructure is integrated with more than 8,000 digital finance apps, including many of the top fintech platforms such as Venmo, Robinhood, Kalshi, and corn Coinbase. We are excited about Plaid’s latest suite of features, including signal, which allow businesses to confirm if an account is in good standing before initiating a transfer, and identity verification, which enables secure biometric onboarding. These tools help reduce fraud, failed payments, and friction in financial transactions.

We believe these initiatives position Plaid well for continued growth as one of the premier plays in fintechs. Before turning to our quarterly results, I’d like to briefly highlight another position, Columbia Acquisition Corp. II. In January, Columbia announced a definitive definitive business combination agreement with Metroplex Trading Company LLC, doing business as Grab a Gun, a mobile focused online firearms retailer. In late March, Metroplex announced the nomination of Donald Trump Jr.

To the board of directors of the publicly traded company that will result from its proposed business combination. Sural Capital is invested in Columbia sponsor two in the sponsor corporate Columbia acquisition two. We believe this transaction, when consummated, will be another testament to the success of our SPAC sponsor strategy established several years ago. Before highlighting additional updates on our portfolio, I’d like to turn to our first quarter results. We ended the quarter with a net asset value of $156,800,000 or $6.66 per share.

This NAV compares to a total net asset value of $6.68 per share at year’s end. Please turn to Slide 10. Thoreau’s top five positions as of March 31 were OpenAI through our investment in ARC type one deep ventures, WOOP, CoreWeave, which includes our $50,000,000 investment in CW opportunity two and our aggregate $10,000,000 follow on secondary investments in CoreWeave, Lerneo and ServiceTitan. These positions accounted for approximately 46% of the investment portfolio at fair value. Additionally, as of March 31, our top 10 positions accounted for approximately 70% of the investment portfolio.

Continuing with our broader portfolio, in January, we executed a $1,000,000 follow on investment in WUOP via SafeNote, bringing our total cost basis to $11,000,000. We made our initial $10,000,000 investment in WHOOP in q two of twenty twenty two via secondary transaction. Since our initial investments, WHOOP has solidified itself as a position as a leader in the wearable fitness and performance tracking space. Last year, WHOOP expanded it into several key international markets, including The Middle East, where it has seen strong consumer adoption and growing brand recognition. Whoop has also continued to distinguish itself as the go to wearable for elite athletes and high performance individuals.

In a testament to its credibility at the highest level of sports, Rory McElroy wore a whoop throughout his winning performance at the masters, showcasing the device’s role in tracking tracking and optimizing real time athletic performance on one of the largest stages in sports. Given the significant valuations of its competitors, most notably Aura, which raised $200,000,000 at a $5,200,000 valuation in December, we believe there’s tremendous upside for WHOOP. We are also encouraged by the recent social media post from WHOOP’s CEO and one of its major athlete sponsors, Cristiano Ronaldo, both which indicated there is a major announcement coming later this week. Before I turn the call over to Allison, I would like to reiterate how excited we are about the positioning of our portfolio. Across AI infrastructure and applications and consumer goods and services, our portfolio is well situated with market leading companies.

Within AI infrastructure, CoreWeave, OpenAI, and vast data represent approximately 20% of our gross assets. Within AI adjacent companies, Canvas, ServiceTitan, WOOP, Link Health, and Locus Robotics representing 30% of our gross assets. Within our consumer vertical, Liquid Death and Lime are two dynamic leading brands with businesses approaching scale to potential IPO. Altogether, these investments give our investors access to some of the most highly anticipated pre IPO names in the private markets. I would also like to provide further context regarding the valuation of our portfolio companies that recently have become public.

Allison will provide additional details in her prepared comments. We value our recently public positions in ServiceTitan and CoralWeave using quarter end trading prices adjusted for a discount rate as these shares were not registered as as of March 31. The results in these position values marked marked below the public market prices at quarter’s end. As previously announced, our position in CoreWeave is marked at $32.52 per share. That mark is meaningfully below CoreWeave’s current trading values.

The stock closed today at over $54 per share. Additionally, we marked ServiceTitan at $88.45 per share at quarter’s end. This stock closed today at approximately hundred $13 per share. Depending on various conditions, ServiceTitan’s lockup is expected to run through early June, and CoreWeave’s lockup is anticipated to run through the August to the September. Finally, in terms of dividends, as we have mentioned before and consistent with all BDCs, we are required to distribute functionally all of our net realized gains.

Consistent with our past practices, we will be transparent and communicative about our dividend strategy. Thank you for your attention. And with that, I will hand it over to Allison Green, our chief financial officer.

Allison Green, Chief Financial Officer, Soro Capital: Thank you, Mark. I would like to follow Mark’s update with a more detailed review of our first quarter and financial results as of March 31, as well as a brief highlight of investment activity during and subsequent to quarter end and our current liquidity position. I will also include an update on our current 6% notes due 2026, their repurchase, and a 6.5% convertible notes due 2029. As Mark mentioned, during the first quarter, we made two follow on investments. First, on January 31, we completed an aggregate $300,000 follow on investment in Orchard’s series one senior preferred shares and SafeNote, bringing our total investment in Orchard to approximately $12,800,000.

Second, on February 6, we completed a $1,000,000 follow on investment in WHOOP through a safe note, bringing our aggregate investment in WHOOP to approximately $11,000,000. Subsequent to quarter end, we completed a $5,000,000 investment in Plaid Inc. Class A common shares through seventeen eighty nine Capital Nirvana II LP, an SPV in which SIRW Capital is the sole limited partner. The $5,000,000 does not include a 7% or $350,000 origination fee paid at the time of investment or other capitalized cost of the transaction. Additionally, we will prepay expenses of the SCB on an annual basis.

Regarding our liquidity as of quarter end. We ended the quarter with approximately $18,100,000 of liquid assets, including approximately $16,200,000 in cash and approximately $1,900,000 in unrestricted public securities. Not included in our unrestricted public securities are approximately 20,400,000 of public securities subject to lockup or other sales restrictions as of quarter end. These include our investments in ServiceTitan and our direct ownership in CoreWeave. As of March 31, Sero Capital’s common shares of ServiceTitan were not registered and were therefore subject to certain restrictions on sale or transfer for which we applied discounts to the closing share price as of the reporting date.

We anticipate the shares will be registered and freely tradable by June 2025. As of March 31, Zoro Capital’s Class A common shares of Core Weave were not registered and were therefore subject to certain restrictions on sale or transfer for which we apply a discount to the closing share price as of the reporting date. We anticipate these shares will be registered and freely tradable by September 2025. Similarly, we take the same approach regarding the valuation of our class a membership interest in CW opportunity two l p. CW opportunity two l p is an SPV for which the class a membership interest is solely invested in the Class A common shares of CoreWeave.

Sero Capital has invested in the Class A common shares of CoreWeave through its investment in the Class A membership interest of CW Opportunity two LP. As of March 31, Sero Capital has confirmed the underlying Class A common shares of CoreWeave held by CW Opportunity two LP were not registered and are therefore subject to certain restrictions on sale or transfer for which we apply a discount to the closing share price as of the reporting date to ascertain the valuation of our Class A membership interest at quarter end. Please turn to slide 15. Segmented by seven general investment themes, the top allocation of our investment portfolio at quarter end was to artificial intelligence infrastructure and applications, representing approximately 28% of the investment portfolio at fair value. Software as a service and consumer goods and services were the next two largest categories with approximately 2217% of our portfolio, respectively.

12 of our portfolio was invested in financial technology and services, and education technology companies accounted for approximately 12% of the fair value of our portfolio. The logistics and supply chain category accounted for approximately 8% of the fair value of our portfolio, and service accounts for two percent as of March 31. Please turn to slide 16. I’d like to first provide an update on the note repurchase program for the 6% notes due 2026 and the issuances of our six and a half percent convertible notes due 02/1929. On 08/06/2024, SIR Capital’s board of directors approved a discretionary note repurchase program, which allows the company to repurchase up to $35,000,000 of our 6% notes due 02/1926, exclusive of any applicable fees through open market purchases, including block purchases, in such a manner as will comply with the provisions of the Investment Company Act of 1940 as amended and the Securities Exchange Act of 1934 as amended.

During the quarter ended March 31, we repurchased an additional 199,990 of the 6% notes due 2026 under the note repurchase program. As of March 31, we had repurchased 1,413,294 or $35,300,000 in aggregate principal dollar amount of the 6% notes due 02/1926 under the note repurchase program, resulting in the total use of the authorized available funds. As of March 31, the remaining aggregate principal balance of the 6% notes due 02/1926 was approximately $40,000,000. On 08/06/2024, Searle Capital entered into a note purchase agreement to issue up to a maximum of $75,000,000 in aggregate principal amount of six and a half percent convertible notes due 02/1929. 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.

In 02/2024, under the note purchase agreement, SIR Capital issued total of $30,000,000 in aggregate principal initial and additional convertible notes. On 01/16/2025, Sero Capital issued $5,000,000 in additional convertible notes. Upon issuance of the additional notes on January 16 and as of 03/31/2025, the outstanding aggregate principal amount of our convertible notes became $35,000,000. Interest on the convertible notes will be paid quarterly in arrears on March 30, June thirtieth, September thirtieth, and December 30 at a rate of six and a half percent per year. The convertible notes will mature on 08/14/2029, and may be redeemed in whole or in part at any time or from time to time at our option on or after 08/06/2027, upon the fulfillment of certain conditions.

The convertible notes will be convertible into shares of our common stock at the purchaser’s sole discretion at an initial conversion rate of 129.0323 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 additional 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. The note purchase agreement includes customary representations, warranties, and covenants by the company. We ended the first quarter two thousand twenty five with an NAV per share of $6.66, which is consistent with our financial reporting.

The decrease in NAV per share from $6.68 at the February was primarily driven by a 16¢ per share decrease due to net investment loss, offset by a 12¢ per share increase resulting from the net change in unrealized appreciation of investments during the quarter and a $02 per share increase in the impact of stock based compensation during the quarter. Other items had a net immaterial impact. At March 31 and currently, there are 23,551,859 shares of the company’s current stock outstanding. That concludes my comments. We would like to thank you for your interest and support of Sero Capital.

Now I will turn the call over to the operator to start the Q and A. Operator?

Melissa, Conference Coordinator: Thank you. As a reminder, if you would like to ask a question on today’s call, you may press followed by one on your keypad to register your question. To withdraw your question for any reason, you may press 2. We kindly request that you limit yourself to one question. And we’ll go ahead and take our first question from Brian McKenna of Citizens.

Please go ahead.

Brian McKenna, Analyst, Citizens: Thanks. Good evening, everyone. So, we’re not too far off from the six month lockup expiration for ServiceTitan. Can you just remind us what your plan is here with this position? I’m assuming you’ll sell this down in relatively short order as you typically do, assuming no material change in the stock price from here.

And then in terms of redeploying that capital, I mean, where are you seeing the best opportunities to invest right now? Is it still in and around the AI theme? Or are there some other emerging themes that are a little bit more compelling today, similar to the side investment? So any color there would be helpful.

Mark Lyon, Chairman and Chief Executive Officer, Soro Capital: Thanks, Brian. First of all, as we’ve been really consistent about that we don’t view ourselves as holders of public securities. And when a lockup expires, pretty much as you described it, in normalized market conditions, we would exit the position. And from there, where we would deploy it, I’d say we’re seeing a whole host of opportunities, Brian. As you and I have discussed and I’ve discussed on these calls, we are probably seeing more opportunities now than ever before.

Clearly, AI and AI adjacent companies are, an immense opportunity set that we are looking at. We can continue to look in the fintech areas and some of the other and some of the consumer areas. But AI, AI adjacent, which covers a wide swath, is a lot of what we’re seeing right now.

Melissa, Conference Coordinator: Thank you. Our next question is from Marvin Fong with BTIG. Please go ahead.

Marvin Fong, Analyst, BTIG: Great. Good evening. Thanks for taking my questions. Just like a little more color on the discount for the shares that weren’t registered. Just out of from my own edification, is this something that’s kind of standard, the percentage discount, or is this something that, you know, that is subjective and case by case?

I just kind of love to understand that process. And then the second question, we’d just love if you have any thoughts on the nonprofit situation at OpenAI that, you know, the news in, say, the last twenty four hours, it sounds like the nonprofit will continue to be involved in the management and ownership. So any thoughts you’d have there, would love to hear it. Thanks.

Mark Lyon, Chairman and Chief Executive Officer, Soro Capital: Thanks Marvin, and thanks for your support. I’ll let Alison answer the discount question and then what I would say in respect to the OpenAI, we’re all reading the news at the same time. I don’t think that the non for profit being involved is gonna impact the value of the company for the public, as it goes to become a for profit organization. I certainly don’t think it was read as particularly negative or particularly impactful. And clearly, we discussed in our prepared remarks, with OpenAI story is unfolding extremely rapidly and very exciting, the traction they get and the ongoing progress that they’re making.

In respect to the discount, I’ll let Alice over the straw.

Allison Green, Chief Financial Officer, Soro Capital: Wonderful. Thanks, Marvin, and thank you for your question. Regarding the discounts that have the the discounts that have been applied to CoreWeave and ServiceTitan, those are specifically rated related to the fact that the shares that we own or that are owned on our behalf are not registered at this time as of March 31. They were not registered upon IPO. At the point when they become registered by the company and the company’s transfer agent, we will remove that discount.

Melissa, Conference Coordinator: Thank you. Our next question is from Alex Paris with Barrington Research. Please go ahead.

Alex Paris, Analyst, Barrington Research: Hi, guys. Thanks for taking my question. I guess I’ll ask my question about rules and process regarding return of capital to shareholders under your corporate structure. Obviously, ServiceTitan and Coraweave and those shares are registered and sold will be sold presumably at a profit. At some point, you’ll need to return that cash to shareholders one way or another in the form of a dividend, cash or stock, things like that.

If you sold those shares in the third or fourth quarters of this year, When would that dividend be approved and paid? Would it be three months later, six months later, that kind of thing?

Mark Lyon, Chairman and Chief Executive Officer, Soro Capital: Terrific. Thanks, Alex. And thank you for your ongoing interest and support in our company. As we’ve done in the past, and you’re well aware, we try to be extremely communicative in respect to our dividend strategy or dividend policy. And as we get clarity to net realized gains, we try to communicate that as expeditiously as possible to the public because it’s important for investors to understand that.

We would if we were in the position to have net realized gains by the end of the year, we would make a distribution by the end of the year. If there was some residual distribution that we’d have to make, we’d make it early in the next in q one. But, you know, as you’ve seen in the past, we usually get way out in front of it for investors and and and tell everybody how we view it and how we plan to distribute that, how and when we plan to distribute those distributions.

Melissa, Conference Coordinator: Thank you. And we do have a follow-up from Brian McKenna of Citizens. Please go ahead.

Brian McKenna, Analyst, Citizens: Okay. Thanks for the follow-up. Apologize if I missed this, but I believe OpenAI’s valuation roughly doubled since you invested in the company. So why is the investment only marked up about 60%? Did 100% of this markup flow through in the quarter?

Are you applying some kind of a discount to the stated valuation post the last round, or is it something else? Just trying to get some more color here.

Mark Lyon, Chairman and Chief Executive Officer, Soro Capital: Yeah. No problem, Bryce. Well, you had a hundred and $57,000,000,000 post money valuation, and and the pre money valuation this round is two sixty. So the headline is approximately a double if you go from pre money to post money, but the actual increase is is, you know, quite a bit less.

Melissa, Conference Coordinator: Thank you very much. I would like to turn the call back over to Mark Klein for any closing remarks.

Mark Lyon, Chairman and Chief Executive Officer, Soro Capital: Well, again, thank you, everyone, for joining the call. We greatly appreciate your interest in the company in our company. To all of you that ask questions, thank you again for your interest and support, and feel free to reach out to us through our investor portal. That would be our pleasure to be communicative with you. Thank you again for all.

Appreciate it.

Melissa, Conference Coordinator: Thank you very much. Once again, that does conclude today’s conference. We do appreciate your participation.

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