Earnings call transcript: SuRo Capital Q4 2024 sees stock rise on AI investments

SuRo Capital Corp (NASDAQ: SSSS) reported its fourth-quarter 2024 earnings, highlighting strategic investments in AI infrastructure and a significant stock price increase post-earnings. The company’s stock rose by 6.32% in aftermarket trading, closing at $5.38, reflecting investor optimism about its portfolio and future IPOs. According to InvestingPro data, the stock has seen a notable 38% gain over the past six months, despite recent volatility. With a market capitalization of $124 million, SuRo Capital maintains an overall Financial Health score of "GOOD" from InvestingPro’s comprehensive analysis system.

Key Takeaways

• SuRo Capital’s stock increased by 6.32% in aftermarket trading.
• AI infrastructure investments constitute 28% of the portfolio.
• The company anticipates several IPOs in 2024-2025, including CoreWeave and Canva.
• Net Asset Value (NAV) decreased by 16% in 2024.

Company Performance

SuRo Capital’s performance in 2024 was marked by strategic investments and financial restructuring. Despite a 16% decline in NAV, the company focused on high-growth sectors such as AI infrastructure, which now makes up a significant portion of its portfolio. The anticipation of upcoming IPOs from companies like CoreWeave and Canva adds a positive outlook for future value creation.

Financial Highlights

• NAV: $157.6 million or $6.68 per share, down 16% year-over-year.
• Liquid assets: $23.6 million, representing 10% of gross assets.
• Unrealized investment depreciation: $0.22 per share.
• Net investment loss: $0.16 per share.
• Realized portfolio gains: $0.39 per share.

Market Reaction

Following the earnings release, SuRo Capital’s stock rose by 6.32% in aftermarket trading. The stock’s movement indicates a positive reception from investors, likely driven by strategic investments in AI and the potential for future IPOs. Trading at $5.27, the stock remains 23% below its 52-week high of $6.83, with analyst price targets ranging from $7.00 to $8.70, according to InvestingPro data. The stock’s beta of 1.35 suggests higher volatility compared to the broader market.

Outlook & Guidance

SuRo Capital’s outlook is buoyed by its focus on AI infrastructure and the expected IPOs of several portfolio companies. The company did not provide specific NAV growth guidance but expressed confidence in its capital structure and investment strategy.

Executive Commentary

"We are excited to see the company’s tremendous success to date and look forward to the company’s imminent IPO," said CEO Mark Klein. He emphasized the importance of AI investments and the promising future IPOs, stating, "We look forward to the CoreWeave IPO and other exciting developments."

Risks and Challenges

• Continued depreciation of unrealized investments could impact NAV.
• Dependence on successful IPOs for value creation.
• Potential volatility in AI and technology markets.
• Economic uncertainties and their impact on investment valuations.

Q&A

During the earnings call, analysts inquired about the company’s NAV growth expectations and capital structure. CEO Mark Klein noted the company’s comfort with its current structure and highlighted the potential IPO pipeline, which includes 5-6 portfolio companies.

Full transcript - SuRo Capital Corp (SSSS) Q4 2024:

Melissa, Conference Coordinator: and welcome to SIRO Capital’s Fourth Quarter and Fiscal Year twenty twenty four 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 Jackson Stone. Please go ahead.

Jackson Stone, Presenter/Legal Disclaimer, Siro Capital: Thank you for joining us on today’s call. I’m joined today by the Chairman and Chief Executive Officer of Siro Capital, Mark Klein 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 @www.cerocap.com under Investor Relations, Events and Presentations. Today’s call is being recorded and broadcast live on our website, www.cerocap.com. Replay information is included in our press release issued today.

This call is the property of Suro 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 such 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.cerocap.com or the SEC’s website at sec.gov. Now, I would like to turn the call over to Mark Klein.

Mark Klein, Chairman and Chief Executive Officer, Siro Capital: Thank you, Jackson. Good afternoon. I would like to thank everyone for joining the call and thank our investors for their continued support. We are excited to share the results of SIRR Capital’s fourth quarter and fiscal year twenty twenty four. We’re especially excited to welcome the many new participants on the call.

With that in mind, we’ll start with a quick history of Cerro before diving into why we believe our portfolio is at a major inflection point. Based on the thesis that companies would stay private longer, we started this firm fourteen years ago with the objective of providing access to market leading private companies before they go public. That thesis has played out. When CERWA was founded, there were fewer than 100 unicorns. Today, there are roughly 1,500 unicorns, 50 decacorns and a handful of centacorns.

Over this time period, we have owned a number of marquee technology companies including Facebook, Twitter, Snap, Spotify, Lyft, Dropbox, Palantir and Coursera just to name a few. We’ve enjoyed many robust market cycles, including mid-twenty twenty to early twenty twenty two when we monetized over $250,000,000 of our portfolio assets and declared and paid a total of approximately $9 in per share in distributions. As 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. Today, we believe we are looking at another one of those highly compelling moments in the market.

The next wave of anticipated IPOs in our portfolio include CoreWeave, Kamba, WHOOP, Liquid Debt, Lime, VAST Data and at some point in time OpenAI. This is as large of a pipeline of pre IPO businesses as we can recall in the Fund’s history. We believe the IPO window is reopening and this is an incredibly exciting time for our portfolio as we approach potential monetizations. We are already seeing the exciting IPO activity built in our portfolio. On March 3, Horweid filed its S-one ahead of what has been widely reported as one of the most highly anticipated IPOs of the year.

According to a Bloomberg report, Horrobeat’s IPO is expected to target a valuation greater than $35,000,000,000 and is seeking to raise approximately $4,000,000,000 Horrobeat’s perspectives indicates the company generated $1,900,000,000 in 2024 revenue over eight times greater than in 2023. According to a report from the information, Coroweave expects that tremendous growth to continue forecasting $8,000,000,000 in 2025 revenue. Subsequent to Corweave’s IPO filing, the company announced that it signed a significant contract with OpenAI. According to a company press release, CorWeave signed a five year contract with OpenAI worth up to $11,900,000,000 a deal that would also give OpenAI a $350,000,000 equity stake in CorWeave. Additionally, the company announced it reached an agreement to acquire Weights and Biases, a leading AI developer platform.

The acquisition extends CoreWeave’s cloud platform by enabling an end to end experience for customers enhancing functionality for the world’s leading AI labs and enterprises to build, tune and deploy AI applications. According to a report from the information, Coralweave is acquiring Weights and Biases at a $1,700,000,000 valuation. As previously announced, during the fourth quarter, we made an additional $5,000,000 follow on investment in CoreWeed Series A shares via secondary transaction. That investment brought our total basis in CoreWeave to $25,000,000 making CoreWeave the single largest investment in our fund’s history. With its best in class cloud infrastructure, we believe CoreWeave will continue its exponential growth and capitalize on accelerated AI adoption.

We are pleased to see the company’s tremendous success to date and look forward to the company’s imminent IPO. This is exactly the type of pre IPO access we seek to provide our shareholders. I will now discuss our other AI infrastructure investments OpenAI and VaaS Data. Starting with OpenAI. As previously announced during the third quarter, we made a $17,500,000 investment in OpenAI through the Class A interest of ARC Type I Deep Ventures Fund.

According to a Wall Street Journal report last month as well as many other news sources, OpenAI is in talks to raise $40,000,000,000 at a $300,000,000,000 valuation. To put this into the context of our portfolio, if a financing were completed at this valuation, we anticipate the value of our OpenAI investment would be approximately double. In addition to this financing, it was announced that OpenAI is a lead partner in the Stargate project. According to the company’s website, the Stargate project intends to invest $500,000,000,000 over the next four years building new AI infrastructure for OpenAI in The United States. Turning to the business itself since our last update.

OpenAI has made significant strides in both its consumer and enterprise offerings. The company recently launched GPT-4.5, an advanced multimodal model that enhances speed, accuracy and reasoning capabilities across text, image and audio inputs. OpenAI’s growth has been remarkable. According to a report from the information, OpenAI expects to more than triple this year revenue to more than triple this year from $3,700,000 to more than $12,500,000 and expects 2026 revenue to reach $28,000,000,000 According to a Reuters report, last month OpenAI had more than 400,000,000 active users. For comparison, according to a report from the information in January 2024, OpenAI had approximately 110,000,000 active users.

According to a Reuters report on the enterprise side, OpenAI has more than 2,000,000 paying business customers, more than double the number of business customers it had in September. As previously announced during the quarter, we made a $12,000,000 investment in VAST data through the membership interests of IH10 LLC and SBV’s sole portfolio asset is in interest in VAST Data’s Series B preferred shares. VAST Data is a data management solution for leading AI companies. VAST has emerged due to an inability of legacy data management solutions to serve customers building complex AI applications. For several decades, enterprise data software was built around the concept of tiers.

Tiered storage is the idea that data is segmented based on its importance to daily operations. However, AI applications need access to all data at once rendering the tiered storage system increasingly obsolete. BaaS collapses the tiered storage model by offering all flash storage. All flash storage allows all data in a pipeline as opposed to data in a specific tier to be accessed instantly. It’s especially valuable for companies that train AI models to produce outputs.

Since our last update, VAS has continued to expand its presence in the AI infrastructure space through key partnerships and new product innovations. Recently, the NHL selected VAST Data as its data infrastructure partner to support NHL Edge, the league’s advanced analytics platform. The NHL will leverage VAST Data to power real time tracking of players and the puck, generating new insights for teams, broadcasters and fans. Additionally, VAST Data recently announced InsightEngine, a next generation AI powered analytics platform built in collaboration with NVIDIA. InsightEngine enables organizations to analyze large datasets instantly, leveraging accelerating computing power to power real time decision making.

VASTDATA has quickly cemented itself as a dominant AI infrastructure provider. According to a company press release at the end of twenty twenty three, VASTIDA had reached over 200,000,000 in ARR. Additionally, the company had been cash flow positive for the last three years. According to PitchBook, VASTIDA has raised almost $400,000,000 in equity financing from such investors 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.

Before highlighting additional updates in our portfolio, I’d like to turn to our fourth quarter results. We ended the quarter with a net asset value of $157,600,000 or $6.68 per share. Please turn to Slide 10. Cerro Capital’s top five positions as of December 31 were CoreWeave, which includes our $15,000,000 investment in CW Opportunity two LP and our aggregate $10,000,000 follow on secondary investments in CoreWeave, OpenAI through our investment in ARP Type one Deep Ventures Fund, Larnio, Link Health and WHOOP. These positions accounted for approximately 44% of the investment portfolio at fair value.

Additionally, as of December 31, our top 10 positions accounted for approximately 74% of the investment portfolio. As of the as of year end, our liquid assets totaled approximately $23,600,000 representing 10% of our gross assets. Continuing with our broader portfolio, in December ServiceTitan priced its IPO at $71 per share above the anticipated range raising approximately $625,000,000 It closed the first day of trading at $101 per share reflecting a 42% increase. As of today, ServiceTitan stock closed above $50.85 dollars per share well above our cost basis. We are pleased with ServiceTitan’s strong public market debut, which we expect to be the first of several IPOs in our current portfolio.

As is typical, we have a one hundred and eighty day lockup period from the IPO date on our service tightened public shares. Turning to Kamva. As previously discussed, Kamva is an online productivity design software and collaboration platform with a mission to empower everyone in the world to design. According to the company’s website, as of December, CAMBA had more than two twenty million monthly users in over 190 different countries, up from 200,000,000 monthly users in October. According to the same source, Canva hit the milestone of 30,000,000,000 designs created by the Canva community.

That is over 38,500,000 designs now created per day. On the enterprise side, the company announced that more than 95% of the Fortune 500 is using Canva to create, collaborate and communicate. According to a CNBC report, Kamba is now generating approximately $2,500,000,000 in annualized revenue. As previously discussed, the company reported having completed several secondary 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. We made our $10,000,000 investment in CAMBA on similar terms as the reported April company tender.

Moving on to WHOOP. Subsequent to year end, we executed a executed a $1,000,000,000 follow on investment in WHOOP via a safe note, bringing our total cost basis to $11,000,000 We made our initial $10,000,000 investment in WHOOP in Q2 twenty twenty two via the secondary transaction. Since our initial investment, Whoop has solidified its position as a leader in the wearable fitness and performance tracking space. Last year, Whoop expanded into several key international markets, including The Middle East, where it has seen strong consumer adoption and growing brand recognition. WOOF 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, Cristiano Ronaldo became a global brand partner, elevating Whoop’s presence in elite performance training. Additionally, Patrick Mahomes were awooked during the Super Bowl showcasing the device in tracking and optimizing real time athletic performance on the biggest stage in sports. I would now like to provide an update on our portfolio company Liquid Death. Last month Liquid Death aired its first national Super Bowl advertising advertisement, marking a significant milestone in the company’s marketing strategy. In addition to this major marketing initiative, since our investment, Liquid Death has expanded its product line with the introduction of soda inspired sparkling waters.

The new flavors Killer Cola, Doctor. Death and Root Beer Wrath offers consumers a unique twist on soda flavors, aligning with the media brand’s edgy strategy. The addition of soda flavored sparkling water adds to the ever growing portfolio of teas, sparkling waters and still waters. These developments reflect Liquid Debt’s commitment to innovative market and product diversification reinforcing its position as a disruptive force in the beverage industry. We are excited about Liquid Debt’s trajectory and remain confident in its potential to further disrupt the beverage market.

The company’s commitment to creating marketing and product innovation reflects its ability to stand out in a competitive market and we look forward to supporting its continued success. Please turn to slide 15. Turning to our SPAC investments. We are excited to report the full exit of our position in Oaklow during the fourth quarter, achieving a significant return of over 20 times our initially invested capital in AltC Sponsor LLC, the sponsor of AltC Acquisition Corp. Additionally, we exited all of our Public Square common shares at a significant profit.

Subsequent to year end, Columbia Acquisition two announced it entered into a definitive business combination agreement. The transaction is expected to close this summer. These examples are all testaments to the success of our SPAC sponsor strategy we established several years ago. Allison will provide additional detail on our public positions and investment monetizations in her remarks. Before I turn the call over to Allison, I would like to reiterate how excited we are about the positions of our portfolio.

Across AI infrastructure and applications and consumer goods and services, our portfolio is packed with market leading companies on the verge of IPOs. Within AI infrastructure, CoreWeave, OpenAI and VAST Data represent a quarter of gross assets and 37 of our net assets. In 2024 alone, we invested nearly $55,000,000 in AI infrastructure. Within AI adjacent companies CAMBA, ServiceTitan, WHOOP, Blink Health and Locus Robotics representing another 29% of our gross assets. Within our consumer vertical, Liquid Death and Lime are two dynamic leading brands with businesses at scale for IPOs.

Altogether, these investments give our investors access to some of the most highly anticipated pre IPO names in the private markets. 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, Siro Capital: Thank you, Mark. I would like to follow Mark’s update with a more detailed review of our fourth quarter and financial results as of December 31, as well as a brief highlight of activities subsequent to year end to date. This will include our investment activity, an update on our current 6% notes due 2026, their repurchase, the 6.5% convertible notes due 2029 and current liquidity. As Mark mentioned, during the fourth quarter, we completed a $12,000,000 investment in the membership interest of IH10 LLC. IH10 LLC is an entity whose sole portfolio asset is interest in VAST Data’s Series B preferred shares through an SPV.

Additionally, during the fourth quarter, we made a $5,000,000 follow on investment in CoreWeave’s Series A preferred shares through a secondary transaction. Aggregated with a $15,000,000 investment in the Class A interest of CW Opportunity two LP, an SVV for which the Class A interest is solely invested in the Series C preferred shares of CoreWeave Inc, and the $5,000,000 follow on investment in CoreWeave’s common shares through a secondary transaction, both made earlier this year. Our current aggregate exposure to CorWeave currently stands at $25,000,000 on a cost basis. Subsequent to year end, we completed a $1,000,000 follow on investment in Whoop via a safe note, bringing our aggregate to date investment in Whoop to approximately $11,000,000 and an aggregate additional $300,000 follow on investment in Orchard Series one senior preferred shares and Safe Note, bringing our aggregate to date investment in Orchard to approximately $12,800,000 In November, we exited our position in Oaklow following the expiration of our lockup restrictions. We received the Oaklow public common stock following their successful merger with AltC Acquisition Corp, in which we invested approximately $250,000 in that Sac sponsor.

Upon the sale, we received proceeds of approximately $5,100,000 resulting in a net realized gain on the investment of approximately $4,800,000 During the fourth quarter, we continued to exit our position in public common shares of Public Square and have fully exited the position as of December 3. We received the Public Square public common stock and public warrants following their successful merger with the First Columbia Saks, in which we invested approximately $2,600,000 in that Saks sponsor. During the fourth quarter, we sold the remaining 1,616,187 Public Square common shares for approximately $5,700,000 net proceeds resulting in a realized gain of approximately $4,000,000 Additionally, during the fourth quarter, we continued to monetize our holdings in the public warrants of Public Square and sold 500,000 Public Square warrants for approximately $539,000 in net proceeds resulting in a realized gain of approximately $324,000 To date, we have sold 1,976,032 public common shares and 903,963 public warrants of Public Square for approximately $7,300,000 in net proceeds and resulting realized gain to date of approximately $5,300,000 Finally, during the quarter, we sold 125,000 public common shares of Forage, resulting in net proceeds of approximately $130,000 and a realized gain of approximately $14,000 and we received a distribution of approximately $143,000 related to our investment in True Global Ventures four plus Please turn to Slide 16.

Segmented by seven general investment themes, the top allocation of our investment portfolio at year end was to artificial intelligence, infrastructure and applications, representing approximately 28% of the investment portfolio at fair value. Software as a Service and Applications and Consumer Goods and Services were the next largest categories with approximately 2414% of our portfolio respectively. Approximately 13% of our portfolio was invested in education technology companies and the logistics and supply chain category accounted for approximately 11% of the fair value of our portfolio. Financial technology and services accounted for 8% of the fair value of our portfolio and Cerro Sports accounted for 2% as of December 31. Please turn to Slide 17.

I’d like to provide more detail on the note repurchase program for the 6% notes due 2026 and the issuances of our 6.5% convertible notes due 2029. On 08/06/2024, Soharo Capital’s Board approved a discretionary note repurchase program, which allows the company to repurchase up to $35,000,000 of our 6% notes due 2026, exclusive of any applicable fees through open market purchases, including block purchases, in such 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 12/31/2024, we repurchased an additional 203,168 of the 6% notes due 2026 under the note repurchase program. As of December 31, we had repurchased 1,213,304 of the 6% notes due 2026 under the note repurchase program. Subsequent to year end through today, we repurchased an additional 199,990 of the 6% notes due to 2026 under the note repurchase program.

To date, $1,616,462 or approximately $35,300,000 in aggregate dollar amount of the 6% notes have been repurchased for approximately $35,000,000 resulting in the total use of the authorized available funds. Now moving on to the 6.5% convertible note issuance. On August 6, Suro Capital entered into a note purchase agreement by and between the company and a private purchaser, 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, also referred to as the initial notes. Under the note purchase agreement, upon mutual agreement between the company and the purchaser, we may issue additional convertible notes with the same terms as the additional notes for sale and subsequent offerings to the purchaser, which we refer to as additional notes or issue additional notes with modified pricing terms, which we refer to as new notes.

In the aggregate for both the additional notes and the new notes up to a maximum of $50,000,000 in one or more private offerings. Interest on the convertible notes will be paid quarterly in arrears on March 30, June ’30, September ’30 and December 30 at a rate of 6.5% per year. The convertible notes will mature on 08/14/2029 and maybe 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 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.

The note purchase agreement includes customary representations, warranties and covenants by the company. On 10/09/2024, pursuant to the note purchase agreement, we issued and sold in the purchaser purchased $5,000,000 in aggregate principal amount of additional notes. Subsequent to year end, pursuant to the note purchase agreement, on January 16, we issued and sold in the purchase or purchased an additional $5,000,000 in aggregate principal amount of the additional notes. The total $10,000,000 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 rank equally with the initial notes.

Upon issuance of the most recent additional notes on 01/16/2025, the outstanding aggregate principal amount of our 6.5% convertible notes to 2029 became $35,000,000 Please turn to Slide 18. We ended the fourth quarter and fiscal year twenty twenty four with an NAV per share of $6.68 which is consistent with our financial reporting. The decrease in NAV per share from $6.73 at the end Q3 was primarily driven by a $0.22 per share decrease from the net change and unrealized depreciation of our investments, a $0.16 per share decrease due to net investment loss and a $0.06 per share decrease from the impact of stock based compensation during the quarter. The decrease in NAV per share was offset by a $0.39 per share increase resulting from net realized gain on our portfolio investments during the quarter. Regarding our liquidity as of year end, we ended the year with approximately $23,600,000 of liquid assets, including approximately $20,000,000 in cash and approximately $3,600,000 in unrestricted public securities.

The $14,000,000 of public securities subject to lock up or other sales restrictions as of year end are not included in this balance. I’d like to conclude with some notes on our share repurchase program. As Mark mentioned earlier, Sohra Capital is committed to initiatives that enhance shareholder value. Accordingly, as previously announced, 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 10/31/2025. 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 2025. At 12/31/2024, there were 23,601,566 shares of the company’s common stock outstanding. Presently, there are 23,551,859 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 to start the Q and A session. Operator?

Melissa, Conference Coordinator: Thank you very much. And we’ll go ahead and take our first question from Brian McKenna at Citizens Bank. Please go ahead.

Brian McKenna, Analyst, Citizens Bank: Thanks. Hope everyone is doing well. I know there’s a lot to be excited about looking at the portfolio today, specifically related to some of the recent investments you made and then also just the pipeline for some of these IPOs. But NAV did decline 16% in 2024. So what’s the internal base case expectation for NAV growth in 2025?

And then is there a way to think about how much of the legacy portfolio could see some additional markdowns from here?

Mark Klein, Chairman and Chief Executive Officer, Siro Capital: Thanks, Brian. Appreciate it. We don’t typically give guidance on the go forward NAV because that would require us to understand where things will be valued at the end of the year. I think there’s some math you could do anyhow. If you look at where our current portfolio is marked, look at where the core we’ve anticipated range would be and where it ultimately trades given the size of that investment, you can certainly make some assumptions about where that will end.

The same is same with OpenAI as we did and we discussed in our opening remarks. As to the rest of the portfolio, I think that’s really hard to tell. Obviously, recent market volatility probably would make it even harder to sort of sort that. But there is some simple math around a couple of our names that would at least give you an indication of where we think NAV is now. In respect to further markdowns in the portfolio, our largest and we discussed it on this call and discussed it with investors has been Lernio.

And we have marked Lernio broadly all the way down or close to where the preference is in the Lernio capital stack. And that’s been the biggest weight on our portfolio on the downside. Hopefully that’s helpful.

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

Marvin Fong, Analyst, BTIG: Great. Thanks for taking my questions. And your opening remarks are very comprehensive. So I thought I would just kind of ask on the capital structure. So you’ve issued a light amount of 6.5 percent notes as you’ve repurchased the 6% notes.

And now that you’ve repurchased your full authorization of the 6% notes, should you kind of think about your appetite for on the converge structure as basically set now? Or would you consider issuing additional notes on the $6,500,000 to increase your cash on hand and add to your investable assets? Thanks.

Mark Klein, Chairman and Chief Executive Officer, Siro Capital: Thanks, Marvin. As you’ve noted, we have retired thirty five million dollars in Allison’s remarks, dollars 35,000,000 of our 6% notes that come due at the end of next year. We have issued a like kind amount of the convertible notes that carry 6.5% coupon that are convertible at $7.75 which was 104% premium when issued to our stock price at the time. And so our debt number has stayed the same. At the present time, we’re comfortable with that much that kind of leverage on our existing portfolio.

So I would not anticipate at the present time issuing any more convertible securities against our existing portfolio. We’re comfortable with our capitalization as it is right now.

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

Brian McKenna, Analyst, Citizens Bank: Okay, great. Thanks for the follow-up. Mark, I believe you mentioned that the number of pre IPO companies in the portfolio today is the largest it’s ever been. So what’s the total dollar amount of these investments? And then is there any way to think about what percent of this part of the portfolio can make it to the public markets over the next year?

Mark Klein, Chairman and Chief Executive Officer, Siro Capital: Great question. So, well, I’m pretty hopeful that CorWeave makes it to the public markets this month. So that would be a large one. I think some of the names that may come throughout the year are Lyme, which has made it very clear that they want to come public. Kamva may come public by the end of the year.

I think Liquid Death is sometime earlier next year. I think that VAST has been mentioned many times as a public company this year, but they’re pretty quiet about it. So that’s broadly I mean, right now, we can see we clearly have visibility to CoreWeave. I think all else is sort of up to where markets are and how excited people are to actually delve into the private markets. But the names that we listed earlier are the ones that are within sometime between the end of this year, early part of next year that we think of an opportunity to come public.

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

Mark Klein, Chairman and Chief Executive Officer, Siro Capital: Well, thank all of you for joining our call. We really do feel this is an amazingly exciting time despite the extreme volatility in the public markets. We look forward to the CoreWeave IPO. We look forward to some of our other companies and all the exciting developments within them. Thank you again for your ongoing support.

Feel free to reach out to us through the IR portal, if there’s any further questions or any follow ups you might have. Again, thank you everybody very much.

Melissa, Conference Coordinator: Thank you very much. Once again, that does conclude today’s conference. You may now disconnect.

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