Good day ladies and gentlemen and thank you for standing by. Welcome to the SuRo Capital’s Third Quarter 2022 Earnings Conference Call. During today’s presentation, all parties will be in a listen-only mode. Following this presentation, the conference will be open for questions. As a reminder, this call is being recorded today, Tuesday, November 9, 2022. I would like to turn the conference over to Mr. Evan Schlossman of SuRo Capital. Please go ahead, sir.

Thank you for joining us on today’s call. I am joined today by the Chairman and Chief Executive Officer of SuRo 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 at www.surocap.com under Investor Relations, Events & 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 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 the COVID-19 pandemic and 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.surocap.com or the SEC’s website at sec.gov. Now, I would like to turn the call over to Mark Klein.

Thank you, Evan. Good afternoon and thank you for joining us. We are pleased to share the results of SuRo Capital's third quarter 2022. As specifically [ph] mentioned, the first nine months of 2022 were the worst for equity markets in the past two decades. As of the beginning of November, the S&P 500 Index and the NASDAQ stock market composite were down more than 20% and over 30%, respectively year-to-date. For comparison, according to Dealogic, roughly 87% of the companies that went public in the US last year are trading below their offering prices, down almost 50% on average. At the same time, we have seen the continued dramatic slowdown in the IPO market with S&P Global reporting under 40 IPOs in the US in this year and more than 60% of the IPOs year-to-date being withdrawn based on a recent PwC report. Over the first nine months of this year, S&P Global reports that there have been 126 US IPOs totaling almost $18 billion compared to 673 IPOs totaling in excess of $217 billion during the first two quarters of 2021. This represents an 81% decline in the number of IPOs as well as a 92% decrease in capital raised. Additionally, the Federal Reserve has taken aggressive actions in the hopes of curbing elevated inflationary rates that have been hovering near 40-year highs. Year-to-date, the Fed hikes [ph] by 375 basis points with an additional rate hikes expected in the fourth quarter of this year and into 2023. As macroeconomic challenges persist, we expect continued acceleration in the repricing of private securities. We are beginning to see bid-ask spreads starting to narrow as increased discounts are reflected in the asking prices of private securities on the secondary markets. As a result, we believe continued pressure from declining macroeconomic…

Thank you, Mark. I will now provide a more detailed review of our third quarter investment activity as of September 30, including details on the completed modified Dutch Auction Tender offer and our Q3 financial results and liquidity position. I will also address our anticipated dividend distribution for the remainder of the year. First, I will review our investment activity. During the third quarter, we invested a total of $1.5 million in new and follow-on investments. Investments during the third quarter include a $1 million investment in the Xgroup Holdings, 6% convertible note maturing in 12 months through SuRo Capital Sports and a $500,000 follow-on investment in Orchard Technologies Simple Agreement for Future Equity, or SAFE. Additionally, on an effective August 5, 2022, SuRo Capital notified Forge Global of its intent to net exercise via cashless settlement it's 230,144 common warrants in Forge Global into 53,283 shares of Forge public common stock, pursuant to the net exercise formula in the warrant agreement. The exercise was effectuated on September 30, 2022. During the third quarter, we continued to monetize our public common shares in NewLake Capital Partners, Rent The Runway and Rover and began to monetize and have fully exited our public common shares of Enjoy Technology. We sold 15,310 common shares of NewLake Capital Partners for approximately $265,000 of net proceeds, resulting in a net realized loss of approximately $40,000. As of September 30, we have exited 48% of our NLCP position. We sold 60,000 common shares of Rent The Runway for approximately $300,000 of net proceeds, resulting in a net realized loss of approximately $600,000. As of September 30, we have exited 32% of our Rent position. We sold 257,192 common shares of Rover for approximately $1.1 million of net proceeds, resulting in a net realized gain of approximately…

Thank you, ma'am. [Operator Instructions] We will take the first question from Mark Palmer. Your line is open. Please go ahead.

Yes. Thank you. And thanks for taking my question. First, a sense of what you are seeing out in the private markets and how that situation has evolved since the end of the last quarter. And what I'm talking about, in particular, the extent to which funding has become unavailable, the extent to which we're seeing other players in the market that are looking to potentially dispose of some of their positions, things of that nature.

Sure. And Mark thanks again for your efforts and support. We really appreciate it. As we've mentioned in our prepared remarks, we started to see this in Q2 that there is a realization for folks that are trying to liquidate positions that there's a different price point between buying and selling. And that was -- at the beginning of the year that was -- they were pretty wide apart. In Q2, we started seeing sellers realize what was going on in the public markets, and they were starting to -- there was some easing in pricing in the second quarter. Right now, we're seeing significant discounts, not only to prior rounds, but where trades can be effectuated and that is a change. I think that as we move into year-end, the IPO market really hasn't gotten much better and the markets are pretty volatile. There is, more of a sense of urgency from sellers and more of a desire or willingness to take lower valuations. So clearly, in the secondary market, the spread between bid and ask is much less than it had been earlier in the year. I think as far as primary financing, I think it's really challenging right now. There are certainly companies that are doing extraordinarily well, and you read about that there are financings that are done at or above prior rounds. But the vast majority, that we are seeing are extension of last rounds, some sort of unpriced round that will be discounted to the next round or companies that ultimately are going to need financing that are just deciding to pause and hoping that next Q1 or Q2 will be a better financing environment for them. And that -- there lies the challenge for us as we look at where we should be participating in the secondary markets, what is going to happen to those companies as they're looking to raise money and at what valuations, if at all are going to be available to those companies where they're trying to raise capital in the future.

Thank you.

Thank you. And that does conclude today's question-and-answer session. I'd like to turn the conference back over to management for additional or closing remarks.

Thank you. Thank you all for participating. We appreciate your interest in our company. And as always, we're available to answer questions that you may have, either by going through Gugino directly. Thank you very much.

Thank you. That does conclude today's conference. We thank you for your participation, and you may now disconnect.