Q2 2024 SuRo Capital Corp Earnings Call

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Melissa: Hello and welcome to Sutter Rock Capital's second quarter 2024 earnings call. My name is Melissa and I will be your coordinator for today's event.

Melissa: My name is Melissa, and I will be your coordinator for today's events.

Melissa: Please note this conference is being recorded, and for the duration of the call, your lines will be in a listen-only mode. However, you will have the opportunity to ask questions at the end of the presentation. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero, and you will be connected to an operator.

Speaker Change: Please note this conference is being recorded and for the duration of the call your lines will be in a listen-only mode However, you will have the opportunity to ask questions at the end of the presentation

Melissa: This can be done by pressing star 1 on your telephone keypad to register your question. If you require assistance at any point, please press star 0 and you will be connected to an operator. I'll now turn the call over to Evan Schlossman. Please go ahead.

Evan Schlossman: I'll now turn the call over to Evan Schlossman. Please go ahead.

Evan Schlossman: Thank you for joining us on today's call. I am joined today by the Chairman and Chief Executive Officer of Syro Capital, Mark Klein, and Chief Financial Officer, Allison Green. Please note that it is by presentation corresponding to today's prepared remarks by management available on our website as www.syrocap.com under Investor Relations events and presentations. Today's call is being recorded and broadcast live on our website, www.syrocap.com.

Evan Schlossman: Thank you for joining us on today's call. I am joined today by the Chairman and Chief Executive Officer of Sutter Rock Capital, Mark Klein, and Chief Financial Officer, Allison Green.

Speaker Change: 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.surrocap.com. Replay information is included in our press release issued today. This call is the property of Surro Capital and the unauthorized reproduction of this call in any form is strictly prohibited.

Evan Schlossman: Replace information is included in our press release issue today.

Evan Schlossman: This call is the property of Syro Capital, and the unauthorized reproduction of this call in any form is strictly prohibited. I would also like to call your attention to customer exposures 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 conditions. These statements are not guarantees about our future performance or future financial condition or results and involve a number of rates, 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 we call the actual results different materially from the plans and tensions and expectations reflected in it or suggested by the forward-looking statements.

Operator: Press Release regarding forward-looking information. Statements made in today's conference call and webcast may constitute forward-looking statements that 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 risk 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, which could cause actual results to differ materially from the plans, intentions, and expectations reflected in or suggested by the forward-looking statements.

Melissa: I would also like to call your attention to customary disclosures in today's earnings.

Evan Schlossman: Release regarding forward-looking information. Statements made in today's conference call on webcast may constitute forward-looking statements that 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 risk 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, which could cause actual results to differ materially from the plans, intentions, and expectations reflected in or suggested by the forward-looking statements.

Operator: 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 Sutter Capital's latest SEC filings, please visit our website at www.sutterrockcap.com or the SEC's website at sec.gov. Now, I would like to turn the call over to Mark Klein.

Melissa: Press release regarding forward-looking information.

Melissa: 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.

Melissa: These statements are not guarantees of our future performance or future financial condition or results.

Melissa: and involve a number of risk 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.

Evan Schlossman: Actual results made different 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 minds with the SEC.

Evan Schlossman: 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 Surro Capital's latest SEC filings, please visit our website at www.surrocap.com or the SEC's website at sec.gov. Now, I would like to turn the call over to Mark Klein.

Melissa: 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.

Evan Schlossman: Management does not undertake to update this forward-looking statement unless required to use it by law.

Melissa: Management does not undertake to update such forward-looking statements unless required to do so by law. To obtain copies of Sutter Rock Capital's latest SEC filing, please visit our website at www.sutterrockcap.com or the SEC's website at sec.gov.

Evan Schlossman: To obtain copies of Syro Capital related to SEC filing, please visit our website at www.syrocap.com or the SEC's website at www.youtube.com.

Evan Schlossman: Now I would like to turn the call over to my client.

Mark Klein: Thank you, Evan.

Mark Klein: Thank you, Evan. Good afternoon, and thank you for joining us. We would like to share the results of Sutter Capital's second quarter 2024. The second quarter was a broadly positive quarter for the U.S. economy and equity markets as investors became increasingly confident in the prospect of rate cuts later in the year. But as of last week, the market has become volatile, with a VIX spiking to levels not seen since the onset of COVID in March of 2020. A confluence of domestic and global factors led to this short change in investor sentiment. Last Thursday's disappointing data on employment, manufacturing, and construction pushed 10-year Treasury yields below 4% for the first time since February.

Melissa: Now I would like to turn the call over to Mark Klein.

Mark Klein: Good afternoon, and thank you for joining us. We would like to share the results of Syro Capital's second quarter of 2024. The second quarter was a broadly positive quarter of the US economy in equity markets as investors became increasingly confident in the prospect of rate cuts later in the year. But as of last week, the market has become volatile with a big spiking to levels not seen since the onset of COVID in March of 2020. A confluence of domestic and global factors led to the short change in investor settlement. Less Thursday's disappointing data on employment and manufacturing and construction pushed 10-year treasure yields below 4% for the first time since February.

Mark Klein: thank you evan good afternoon and thank you for joining us we would like to share the results of sere capital second quarter in two thousand and twenty- four

Speaker Change: The second quarter was a broadly positive quarter for the U.S. economy and equity markets as investors became increasingly confident in the prospect of rate cuts later in the year.

Mark Klein: But as of last week, the market has become volatile, with a VIX spiking to two levels not seen since the onset of COVID in March of 2020. A confluence of domestic and global factors led to the short change in investor sentiment. Last Thursday's disappointing data on employment, manufacturing, and construction pushed 10-year Treasury yields below 4% for the first time since February. Investor fears were exacerbated on Friday when a weak jobs report showed decelerating U.S. job growth and rising unemployment.

Melissa: But as of last week, the market has become volatile, with a fixed spiking to levels not seen since the onset of COVID in March of 2020.

Mark Klein: A confluence of domestic and global factors led to this sharp change in investor sentiment.

Mark Klein: Last Thursday's disappointing data on employment, manufacturing, and construction pushed 10-year Treasury yields below 4% for the first time since February .

Mark Klein: Investors' fears were exacerbated on Friday when a weak jobs report showed decelerating US job growth and rising unemployment. We also saw some large technology companies issue weaker than expected for guidance, driving investor skepticism on monetization timelines for their investments in AI. Outside of the US, an unexpected rate hike from the Bank of Japan last week fueled investor uncertainty as the ongoing geopolitical conflict in the Middle East. With that said, Q2, private technology companies are increasing interest from investors. According to the pitch book NBCA Q2, 2020 for Venture Monitor, both venture deal count and value reach their highest quarter levels since Q2 of 2022.

Mark Klein: Investor fears were exacerbated on Friday when a weak jobs report showed decelerating U.S. job growth and rising unemployment. We also saw some large-cap technology companies issue weaker-than-expected forward guidance driving investor skepticism on monetization timelines for their investments in AI. Outside of the U.S., an unexpected rate hike from the Bank of Japan last week fueled investor uncertainty as to the ongoing geopolitical conflict in the Middle East. With that said, in Q2, private technology companies saw increasing interest from investors.

Melissa: Investor fears were exacerbated on Friday when a weak jobs report showed decelerating U.S. job growth and rising unemployment.

Mark Klein: We also saw some large-cap technology companies issue weaker-than-expected forward guidance driving investor skepticism on monetization timelines for their investments in AI. With that said, in Q2, private technology companies saw increasing interest from investors. According to the pitch book, NBCA's Q2 2024 Venture Monitor, both venture deal count and value reached their highest quarterly levels since Q2 of 2022, in addition to a $10 million investment in Canva, which continues to integrate AI across its product suite.

Mark Klein: We also saw some large technology companies issue weaker than expected.

Mark Klein: for guidance driving investor skepticism on monetization timelines for their investments in AI.

Mark Klein: Outside of the U.S., an unexpected rate hike from the Bank of Japan last week fueled investor uncertainty as to the ongoing geopolitical conflict in the Middle East.

Mark Klein: With that said, in Q2, private technology companies saw increasing interest from investors.

Mark Klein: According to the pitch book NBCA Q2 2024 Venture Monitor, both venture deal count and value reached their highest quarterly levels since Q2 of 2022. With several multi-billion dollar capital raises, AI continues to see significant investor interest. In fact, according to the same source, XAI's $6 billion Series B financing, along with Coral Weed's $8.6 billion Series C and debt financing, made up over 26% of the second quarter's total dual value. As previously announced, we are pleased to have invested $15 million into the Coral Weave funding round via an SPV, in addition to a $10 million investment in Canva, which continues to integrate AI across its product suite.

Speaker Change: According to the pitch book, NVCA Q2 2024 Venture Monitor, both venture deal count and value reached their highest quarterly levels since Q2 of 2022.

Mark Klein: With several multi-billion dollar capital raises, AI continue to see significant investor interests. In fact, according to the same source, XAI is $6 billion Series B financing, along with Q2, $8.6 billion Series C and debt financing, made up over 26 percent of the second quarter's total deal value. As previously announced, we're pleased to have invested $15 million into the Q2 funding round, BIA, and SPV. In addition to a $10 million investment in Canva, which continues to integrate AI across its product suite. While volatility has increased, we're encouraged that despite the recent technology sector struggling performance of the public markets, we've started to see the public market is broadening with a recent positive performance of municipal cap companies and early indications of potential upcoming IPOs from companies such as Karna, Sheen, Skins, and Chi.

Mark Klein: with several multi-billion dollar capital raises.

Mark Klein: A.I. continue to see significant investor interest. In fact, according to the same source, X.A.I.'s $6 billion Series B financing, along with Coral Wee's $8.6 billion Series C debt financing,

Mark Klein: made up over 26% of the second quarter's total dual value.

Speaker Change: As previously announced, we are pleased to have invested $15 million into the Coral Weave Funding Round via an SPV, in addition to a $10 million investment in Canva, which continues to integrate AI across its product suite.

Mark Klein: While volatility has increased, we're encouraged that despite the recent technology sector struggling performance of the public markets, we've started to see the public market broaden with the recent positive performance of mid and small cap companies and early indications of potential upcoming IPOs from companies such as Klarna, Sheen, Skims, and Shine, signaling increasing investor appetite for more key names.

Mark Klein: While volatility has increased, we are encouraged that despite the recent technology sector struggling performance of the public markets, we have started to see the public markets broaden with the recent positive performance of mid and small cap companies and early indications of potential upcoming IPOs from companies such as Klarna, Sheen, Skims, and Shine, signaling increasing investor appetite for more key names.

Speaker Change: While volatility has increased, we are encouraged that despite the recent technology sector struggling performance of the public markets

Speaker Change: We have started to see the public markets broaden with the recent positive performance of mid and small cap companies and early indications of potential upcoming IPOs from companies such as Klarna, Sheen, Skim and Shine.

Mark Klein: Secondly, investor increasing appetite for more key names. For the last several quarters, we have deployed capital into late-stage technology companies, such as CoreWeed, Canva, and Liquid Debt, at compelling entry prices. We believe that these investments strengthen our already well-positioned existing portfolio for the reopening of the IPO window.

Speaker Change: signaling investor increasing appetite for more key names.

Mark Klein: For the last several quarters, we have deployed capital into late-stage technology companies such as Coral Weed, Canva, and Liquid Debt at compelling entry prices. We believe that these investments strengthen our already well-positioned existing portfolio for the reopening of the IPO window. I would now like to discuss our note repurchase program, approved yesterday by our board of directors. Under the program, we are authorized to repurchase, in the open market, up to $35 million in aggregate principal amount of our 6% notes due 2026. Allison will discuss the note repurchase program during her prepared remarks.

Mark Klein: For the last several quarters, we have deployed capital into late-stage technology companies such as Coral Weed, Canva, and Liquid Debt at compelling entry prices. We believe that these investments strengthen our already well-positioned existing portfolio for the reopening of the IPO window. I would now like to discuss our note repurchase program, approved yesterday by our Board of Directors. Under the program, we are authorized to repurchase in the open market up to $35 million in aggregate principal amount of our 6% notes due in 2026.

Speaker Change: For the last several quarters we have deployed capital into late-stage technology companies

Speaker Change: such as Coral Weed, Canva, and Liquid Debt at compelling entry prices. We believe that these investments strengthen our already well-positioned existing portfolio for the re-opening of the IPO window.

Mark Klein: I would now like to discuss our note repurchase program approved yesterday by our Board of Directors. Under the program, we are authorized to repurchase in the open market of $235 million accurate principal amount of our 6 percent notes due in 2026. I also will discuss the note repurchase program during her pre-pair remarks. I would also like to announce that we have entered into a note purchase agreement with an institutional investor via a private placement, which allows us to issue up to $75 million in aggregate principal amount of 6.5 percent convertible notes due in 2029, with an initial issuance of up to $25 million.

Mark Klein: Allison will discuss the note repurchase program during her prepared remarks. I would also like to announce that we have entered into a note purchase agreement with an institutional investor via a private placement which allows us to issue up to $75 million in aggregate principal amount of 6.5% convertible notes due in 2029. Second, the notes will extend the maturity of a portion of our debt by three years, strengthening our ability to deploy capital. Finally, given prevailing interest rates, we believe the interest rate of 6.5% is highly favorable. Allison will discuss the notes purchase agreement during her prepared remarks.

Speaker Change: I would now like to discuss our note repurchase program approved yesterday by our Board of Directors. Under the program we are authorized to repurchase in the open market up to 35 million dollars aggregate principal amount of our six percent notes due 2026.

Speaker Change: Allison will discuss the note repurchase program during her prepared remarks.

Mark Klein: I would also like to announce that we have entered into a no-purchase agreement with an institutional investor via a private placement which allows us to issue up to $75 million in aggregate principal amount of 6.5% convertible notes due in 2029, with an initial issuance of up to $25 million. We believe that convertible notes position us well for a number of reasons. The notes are initially convertible at $7.75 per share, approximately a 104% premium from today's closing price, signaling significant confidence in our portfolio from our investors.

Speaker Change: I would also like to announce that we have entered into a no-purchase agreement with an institutional investor via a private placement, which allows us to issue up to $75 million in aggregate principal amount of 6.5% convertible notes due in 2029.

Speaker Change: 29, with an initial issuance of up to $25 million.

Mark Klein: We believe the convertible notes position as well for a number of reasons. First, the notes are initially convertible at $7.75 per share, approximately 104 percent premium from today's closing price. Signalling significant confidence in our portfolio from our investor. If it cameverted, this would be a meaningfully accretive transaction to our shareholders. Second, the notes will extend the maturity of a portion of our debt by three years, strengthening our ability to deploy capital. Finally, giving prevailing interest rates, we believe the interest rate of 6.5 percent is highly favorable. Allison will discuss the notes purchased the agreement during her fair remarks.

Speaker Change: We believe that convertible nodes position us well for a number of reasons.

Speaker Change: first the notes are initially convertible and seven dollars in seventy-five as per share approximately one hundred and four percent premium from today's closing price

Speaker Change: signaling significant confidence in our portfolio from our investor.

Mark Klein: If converted, this would be a meaningfully accretive transaction for our shareholders. Second, the notes will extend the maturity of a portion of our debt by three years, strengthening our ability to deploy capital. Finally, given prevailing interest rates, we believe the interest rate of 6.5% is highly favorable. Allison will discuss the notes purchase agreement during her prepared remarks.

Speaker Change: If converted, this would be a meaningfully accretive transaction to our shareholders.

Speaker Change: Second, the notes will extend the maturity of a portion of our debt by three years, strengthening our ability to deploy capital. Finally, given prevailing interest rates, we believe the interest rate of 6.5% is highly favorable.

Speaker Change: Allison will discuss the notes purchase agreement during her prepared remarks.

Mark Klein: Turning to our second quarter results, we ended the quarter with a net asset value of $162.3 million, or $6.94 per share. This net compares to a net asset value of $7.17 per share in Q1 and $7.35 per share in Q2 last year.

Mark Klein: Turning to our second quarter results, we ended the quarter with a net asset value of $162.3 million, or $6.94 per share. This compares to a net asset value of $7.17 per share in Q1 and $7.35 per share in Q2 last year. Please turn the slide forward. Turning to our top five positions, I will first want to highlight our CESP.

Mark Klein: Turning to our second quarter results, we entered the quarter with a net asset value of $162.3 million, or $6.94 per share. This compares to a net asset value of $7.17 per share in Q1 and $7.35 per share in Q2 last year. Coral Reef SPV.

Allison Green: turning to our second quarter results

Allison Green: We ended the quarter with a net asset value of $162.3 million, or $6.94 per share.

Speaker Change: This NAB compares to a net asset value of $7.17 per share in Q1 and $7.35 per share in Q2 last year.

Mark Klein: Please turn this slide forward. Turning to our top five positions, I will first want to highlight our cash position. As of core end, our cash available for investment was approximately $54.4 million, representing 22% of our gross assets. Server of capital's top five positions as June 30th were Learning Out, Blake Health, the Core Weave SPV, Service Titan, and Locust Robotics. These positions accounted for approximately 49% of the investment portfolio at fair value. Additionally, as of June 30th, our top 10 positions accounted for approximately 75% of the investment portfolio.

Speaker Change: Please turn the slide forward. Returning to our top five positions, I will first want to highlight our CAST position.

Mark Klein: As of Quoran, our cash available for investment was approximately $54.4 million, representing 22% of our gross assets. Sutter Rock Capital's top five positions as of June 30th were Lerneo, Blake Health, Coral Reef SPV, Service Titan, and Locus Robotics. These positions accounted for approximately 49% of the investment portfolio at fair value.

Speaker Change: As of quarter-end, our cash available for investment was approximately $54.4 million, representing 22% of our gross assets. Cerro Capital's top five positions as of June 30th were Lernio, Blake Health,

Unknown Speaker: Service Titan, and Locus Robotics. Blake Health's Quicksave and Blake's Rx product lines create a significant value proposition for the entire value chain. These features create an even greater value proposition for WHOOP as consumers continue to find more fitness and sleep wearables to choose from. We remain incredibly excited about WHOOP's success and path to becoming the dominant wearable in the category. Please turn to slide five.

Speaker Change: The Coral Weave SPV

Speaker Change: Service Titan, and Locus Robotics.

Speaker Change: These positions accounted for approximately 49% of the investment portfolio at fair value. Additionally, as of June 30th, our top 10 positions accounted for approximately 75% of the investment portfolio.

Mark Klein: Additionally, as of June 30th, our top 10 positions accounted for approximately 75% of the investment portfolio. I would now like to discuss some of our larger investments in greater detail, starting with Blink Health. Blink Health's Quicksave and Blink's Rx product lines create a significant value proposition for the entire value chain, from pharma manufacturers looking to increase first fill rates all the way to consumers looking to find the best price on their medication.

Mark Klein: BlinkHealth continues to increase its customer base and sign additional partnerships with pharmaceutical manufacturers while maintaining relationships with pharmacies around the U.S. to distribute its quick-save products. We remain excited about Blink Health's positioning in the pharmaceutical SaaS market and believe the company is well positioned to expand significantly in the coming months and years. Next, I would like to discuss our investment in Whoop, one of our ten largest positions. The Wolf Band provides actual insights to users to optimize performance by offering metrics like heart rate volatility and resting heart rate.

Mark Klein: I would now like to discuss some of our larger investments in greater detail, starting with Blake Health. Blake Health's Quick Save and Blake's R&D product lines created a significant value proposition for the entire value chain. From farmer manufacturers looking to increase first fill rates all the way to consumers looking to find the best price for their medications, Blake Health continues to increase their customer base and find additional partnerships with pharmaceutical manufacturers while maintaining relationships with pharmacies around the U.S. to distribute its Quick Save product. We remain excited about Blake Health's positioning with the pharmaceutical SaaS market and with the company's well-positioned to expand significantly in the coming months of years.

Speaker Change: I would now like to discuss some of our larger investments in greater detail, starting with Blink Health.

Speaker Change: Blake Health's Quicksave and Blake's Rx product lines create a significant value proposition for the entire value chain.

Speaker Change: from farmer manufacturer is looking to increase first bill rates all the way to consumers looking to find the best price in their medications

Speaker Change: BlinkHealth continues to increase their customer base and sign additional partnerships with pharmaceutical manufacturers while maintaining relationships with pharmacies around the U.S. to distribute its quick-save product.

Speaker Change: we are remaining excited about blinkkehealth positioning with thepharmaceutical saas market and with the company is well positioned to expand significantly in the coming months of years

Mark Klein: Next, I would like to discuss our investment in Wolf, one of our 10 largest positions. The wolf band provides actual insights to users to optimize performance by offering metrics like heart rate, quality variability, and resting heart rate. The combination of wolf's besting class software and wearable band allows a user to understand how specific lifestyle and training behaviors may affect their recovery and ability to perform on a human day. We'll announce a global partnership with an investment from soccer star Cristiano Ronaldo, according to a press release in May. Ronaldo is one of several of Wolf's internationally recognized ambassador investors including Patrick Holmes, Michael Phelps, Eli Manning, Rory McBeroy, Scotty Sheffler, and more.

Mark Klein: The combination of Whoop's best-in-class software and wearable band allows a user to understand how specific lifestyle and training behaviors may affect their recovery and ability to perform on a given day. Whoop announced a global partnership with an investment from soccer star Cristiano Ronaldo in a press release in May. Ronaldo is one of several of Whoop's internationally recognized ambassador investors, including Patrick Holmes, Michael Phelps, Eli Manning, Rory McIlroy, Scottie Scheffler, and more.

Speaker Change: Next, I would like to discuss our investment in Whoop, one of our ten largest positions.

Speaker Change: The Whoop Band provides actual insights to users to optimize performance by offering metrics like heart rate balance, variability, and resting heart rate.

Speaker Change: The combination of WOOPS testing class software and wearable band allows a user to understand how specific lifestyle and training behaviors may affect their recovery and ability to perform on a given day.

Speaker Change: Whoop announced a global partnership with an investment from soccer star Cristiano Ronaldo according to a press release in May. Ronaldo is one of several of Whoop's internationally recognized ambassador investors.

Speaker Change: including Patrick Holmes, Michael Phelps, Eli Manning, Rory McIlroy, Scotty Scheffler and more.

Mark Klein: Wolf continues to cement itself as a leader in the health and wellness space, most recently announcing the launch of its body composition and weight trends featuring in partnerships with Withings, another leader in connected health. These features create an even greater value proposition for Wolf as consumers continue to find more fitness and sleep wearables to choose from. We remain incredibly excited about Wolf success and path to becoming a dominant wearable to the category. in the second quarter.

Mark Klein: Whoop continues to cement itself as a leader in the health and wellness space, most recently announcing the launch of its Body Composition and Weight Trends feature in partnership with Whippings, another leader in connected health. These features create an even greater value proposition for Whoop as consumers continue to find more fitness and sleep wearables to choose from. We remain incredibly excited about Whoop's success and path to becoming the dominant wearable in the category. Please turn to slide 5.

Speaker Change: Whoop continues to cement itself as a leader in the health and wellness space, most recently announcing the launch of its Body Composition and Weight Trends feature in partnerships with Withings, another leader in connected health.

Speaker Change: These features create an even greater value proposition for Whoop as consumers continue to find more fitness and sleep wearables to choose from. We remain incredibly excited about Whoop's success and path to becoming the dominant wearable in the category.

Mark Klein: Please turn to slide five. As previously discussed during the second quarter, we made a ten million dollar investment in Canva on similar terms as the 40 company tender. According to Bloomberg, the valuation of the tender came as a significant discount to Canva's last primary financing. Canva is an online productivity design software and collaboration platform with a mission to empower everyone in the world to design. Since our initial investment in Canva, the company has made significant strides to further integrate itself into the broader design ecosystem. For example, in May, the company announced a partnership with HP to expand its design-to-print services worldwide through localized printing options.

Unknown Speaker: As previously discussed during the second quarter, we made a $10 million investment in Canva on similar terms as the imported company, Tender. However, according to Bloomberg, the valuation of Tender came at a significant discount to Canva's last primary financial investment. Please turn to slide 6.

Mark Klein: As previously discussed during the second quarter, we made a $10 million investment in Canva on similar terms as the imported company, Tender. According to Bloomberg, the valuation of Tender came at a significant discount to Canva's last primary financing. Canva is an online productivity design software collaboration platform with a mission to empower everyone in the world to design. Since our initial investment in Canva, the company has made significant strides to further integrate itself into the broader design ecosystem.

Speaker Change: Please turn to slide 5.

Speaker Change: As previously discussed during the second quarter, we made a $10 million investment in Canva on similar terms as the reported company, Tender. According to Bloomberg, the valuation of Tender came at a significant discount to Canva's last primary financing.

Mark Klein: For example, in May, the company announced a partnership with HP to expand its design to print services worldwide through localized printing options. In July, the company announced a partnership with Artlist, allowing creators to integrate royalty-free digital assets from Artlist's collection directly into the Canva platform. According to Bloomberg, Canva has surpassed $2.3 billion in annualized revenue, with sales growing at a rate of 50% year over year. According to PitchBook, Canva has raised over $581 million in equity financing from investors including Bessemer Venture Partners, General Catalyst, Iconic, and more.

Speaker Change: Canva is an online productivity design software collaboration platform with a mission to empower everyone in the world to design.

Speaker Change: Since our initial investment in Canva, the company has made significant strides to further integrate itself into the broader design ecosystem. For example, in May, the company announced a partnership with HP to expand its design to print services worldwide through localized printing options.

Mark Klein: In July, the company announced a partnership with our list, allowing creators to integrate royalty-free digital assets from our list collection directly into the Canva platform. According to Bloomberg, Canva has surpassed $2.3 billion in annualized revenue, with sales growing at a rate of 50 percent year over year. According to Pitchboard, Canva has raised over $581 billion in equity financing from investors, including Best Summer Venture Partners, General Catalysts, Iconic, and more. We are excited about Canva's traction and positioning in the market, as it is expected. We are excited to expand its enterprise footprint and further captures of international markets.

Speaker Change: In July , the company announced a partnership with Artlist, allowing creators to integrate royalty-free digital assets from Artlist's collection directly into the Canva platform.

Speaker Change: According to Bloomberg, Canva has surpassed $2.3 billion in annualized revenue, with sales growing at a rate of 50% year over year.

Speaker Change: According to PitchBook, Canva has raised over $581 billion in equity financing from investors including Bessemer Venture Partners, General Catalyst, Iconic and more.

Mark Klein: We are excited about Canva's traction and positioning in the market as it expands its enterprise footprint and further captures the international market. Please turn to slide 6. Additionally, during the second quarter, we made a $15 million investment. CW Opportunity 2LP SPV that is invested in CoreWeave's Series C preferred share. CoreWeave is a specialized cloud provider delivering access to a suite of NVIDIA GPUs coupled with its fast and flexible cloud computing infrastructure.

Speaker Change: We are excited about Canva's traction and positioning in the market as it expands its enterprise footprint and further captures international markets.

Mark Klein: Please turn to slide 6. Additionally, during the second quarter, we made a $15 million investment in CW Opportunity to LP, an SPB that is invested in CoreWeeds Series C-Proverge shares. CoreWeeds is a specialized cloud provider delivering access to a suite of NVIDIA GPUs coupled with its fast and flexible cloud computing infrastructure. CoreWeeds is a critical foundation for AI and machine learning use cases from the initial stages of training a model to ultimately providing cloudless output for end users. To serve the training phase, CoreWeeds offers distributed clusters or connected computers using NVIDIA's groundbreaking quantum NVIDIA fan networking solution.

Speaker Change: Thank you for watching!

Speaker Change: to

Speaker Change: Please turn to slide six.

Speaker Change: Additionally, during the second quarter, we made a $15 million investment in...

Speaker Change: CW Opportunity 2LP and SPV that is invested in Corweave's Series C preferred shares. Corweave is a specialized cloud provider delivering access to a suite of NVIDIA GPUs coupled with its fast and flexible cloud computing infrastructure.

Mark Klein: CoreWeave is a critical foundation for AI and machine learning use cases from the initial stages of training a model to ultimately providing a model's output for end users. To serve the training phase, CoralWeave offers distributed clusters or connected computers using NVIDIA's groundbreaking Quantum InfiniBand networking solution. Additionally, with spin-up times as short as 5 seconds, CoralWeave offers one of the most powerful inference solutions using NVIDIA GPUs. In fact, according to a company blog post, CoreWeed's inference service platform is eight to ten times faster than a major generalized cloud provider.

Speaker Change: CoreWeave is a critical foundation for AI and machine learning use cases from the initial stages of training a model to ultimately providing a model's output for end users.

Speaker Change: To serve the training phase, CoralWeave offers distributed clusters or connected computers using NVIDIA's groundbreaking Quantum InfiniBand networking solution.

Mark Klein: Additionally, with spin-up times as short as 5 seconds, CoreWeeds offers one of the most powerful confirmed solutions using NVIDIA GPUs. In fact, according to a company blog post, CoreWeeds' inference service platforms 8 to 10 times faster than a major generalized cloud provider. Since our investment in early May, CoreWeeds has continued its impressive momentum. Later that month, according to a company press release, CoreWeeds announced agreement for a set by $7.5 billion debt facility, led by funds managed by Blackstone with participation from Agitar and Code 2. This debt financing will be used in further growth CoreWeeds capacity to serve large enterprises at the forefront of AI, both in the US and internationally.

Speaker Change: Additionally, with spin-up times as short as 5 seconds, CoreWeave offers one of the most powerful inference solutions using NVIDIA GPUs.

Unknown Speaker: In fact, according to a company blog post, Coral Weeds' inference service platform is eight to 10 times faster than a major generalized cloud provider. Since our investment in early May, Coral Weave has continued its impressive momentum. Later that month, according to a company press release, Coral Weave announced an agreement for a $7.5 billion debt facility led by funds managed by Blackstone with participation from Magnetar and Code Two. This debt financing will be used to further grow Coral Weave's capacity to serve large enterprises at the forefront of AI, both in the U.S. and internationally. Please turn to page slide 7.

Speaker Change: In fact, according to a company blog post, CoreWeave's inference service platform is 8-10 times faster than a major generalized cloud provider.

Mark Klein: Since our investment in early May, Coral Weave has continued its impressive momentum. Later that month, according to a company press release, Coral Weave announced an agreement for a $7.5 billion debt facility led by funds managed by Blackstone with participation from Magnetar and Code 2. This debt financing will be used to further grow Corweed's capacity to serve large enterprises at the forefront of AI, both in the U.S. and internationally. In early June, according to a company press release, Coralweave announced its plans to invest $2.2 billion to expand and open three new data centers in Norway, Sweden, and Spain by the end of 2025.

Speaker Change: That's our investment in early May.

Speaker Change: Coral Reef has continued its impressive momentum.

Speaker Change: Later that month, according to a company press release, Quality announced an agreement for a $7.5 billion debt facility led by funds managed by Blackstone with participation from Magnetar and Code 2.

Speaker Change: This debt financing will be used to further grow Corweed's capacity to serve large enterprises at the forefront of AI, both in the U.S. and internationally.

Mark Klein: In early June, according to a company press release, CoreWeeds announced its plans to invest $2.2 billion to expand and open three new data sensors in Norway, Sweden, and Spain by the end of 2025. This EU expansion is an addition to their $1.3 billion U.K. expansion announcement. According to pitch for a core, we've raised over $9 billion in debt and equity financing from investors such as Co-To, Fidelity, Magnet, Heart, and others. With its best in cloud, class, cloud difference, we believe core we will continue its expenditure growth and capitalize on accelerated AI adoption.

Speaker Change: in early june according to a ccompany press release co we've announced plans to invest two point two billion dollars to expand and open three new data centensers in norway weeden and spain by the end of two thousand and twenty five

Mark Klein: This EU expansion is in addition to their $1.3 billion U.K. expansion of submissions. According to PitchBook, Coral Reef has raised over $9 billion in debt and equity financing from investors such as Cotu, Fidelity, Magnetar, and others. With its best-in-class cloud inference, we believe Coralweek will continue its exponential growth and capitalize on accelerated AI adoption. Please turn to page slide 7.

Speaker Change: This EU expansion is in addition to their $1.3 billion U.K. expansion of submission.

Speaker Change: According to PitchBook, Coralweave has raised over $9 billion in debt and equity financing from investors such as CodeTwo, Fidelity, Magnetar, and others. With its best-in-class cloud inference, we believe Coralweave will continue its exponential growth and capitalize on accelerated AI adoption.

Mark Klein: Please turn to page Slide 7. One additional portfolio company we'd like to highlight again is our investment in all C-sponsored LLC, the sponsor of the SPAC lid by Sam Alvin. As previously discussed during Q2, all C-acquisition shareholders approved the business combination with OFO, a fast-dition, clean power company. While we are always happy with our SPAC spots to complete a business combination, this one is particularly exciting for a few reasons. OFO 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. In late May, according to a company press release, OCO announced its partnership with Wyoming Hyperscale to supply 100 megawatts of clean energy to a state-of-the-art data center campus as part of a 20-year power purchase agreement.

Mark Klein: One additional portfolio company we'd like to highlight again is our investment in AltSea Sponsor LLC, the sponsor of the SPAC led by Sam Altman. As previously discussed, during Q2, Alt-C Acquisition shareholders approved a business combination with Oppo, a fast-vision, clean-power company. While we are always happy when our SPAC sponsors complete a business combination, this one is particularly exciting for a few reasons. 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. In late May, according to a company press release, Oklahoma announced its partnership with Wyoming Hyperscale to supply 100 megawatts of clean energy to a state-of-the-art data center campus as part of a 20-year power purchase agreement.

Unknown Speaker: One additional portfolio company we'd like to highlight again is our investment in Alt-C Sponsor LLC, the sponsor of the SPAC led by Sam Altman. As previously discussed, during Q2, Alt-C Acquisition shareholders approved a business combination with Oklo, a fast-vision, clean-power company... In late May, according to a company press release, Oklahoma announced its partnership with Wyoming Hyperscale to supply 100 megawatts of clean energy to a state-of-the-art data center campus as part of a 20-year power purchase agreement.

Speaker Change: Please turn to page, slide 7.

Unknown Speaker: One additional portfolio company we'd like to highlight again is our investment in AltSea Sponsor LLC, the sponsor of the SPAC led by Sam Altman.

Unknown Speaker: As previously discussed during Q2, Alt-C Acquisition Shareholders approved the business combination with LOBO, a fast vision, clean power company.

Speaker Change: While we are always happy with our SPAC sponsors who complete a business combination, this one is particularly exciting for a few reasons. 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.

Speaker Change: In late May, according to a company press release, Oakville announced its partnership with Wyoming Hyperscale to supply 100 megawatts of clean energy to a state-of-the-art data center campus as part of a 20-year power purchase agreement.

Mark Klein: Last month, according to a company press release, Oklahoma announced the successful demonstration of its advanced fuel recycling process, marking a significant step forward in enhancing fuel cost effectiveness and sustainability. Our investment thesis around AI has been deliberate, first focusing specifically on the infrastructure of AI. Our new investment in Coral Reef, through the CW Opportunity LP, plus the business combination between Alt-C and Oklahoma, now gives us further exposure to the structural foundations of the AI universe.

Mark Klein: Last month, according to a company press release, OCO announced the successful demonstration of its advanced fuel recycling process, marking its significant step forward in enhancing fuel cost, affecting this and sustainability. Our investment thesis around AI has been delivered, delivered, first focusing specifically on the infrastructure of AI. Our new investment in Coralweed to the CW Opportunity LP plus the business combination between all C and OCO now gives us further exposure to the structural foundations of the AI universe.

Speaker Change: Last month, according to a company press release, Oklahoma announced the successful demonstration of its advanced fuel recycling process, marking a significant step forward in enhancing fuel cost effectiveness and sustainability.

Unknown Speaker: Our investment thesis around AI has been delivered.

Unknown Speaker: Deliberate, first focusing specifically on the infrastructure of AI.

Speaker Change: Our new investment in Coral Reef, due to the CW Opportunity LP, plus the business combination between Alt-C and Oklahoma, now gives us further exposure to the structural foundations of the AI universe.

Mark Klein: Transitioning to our public event. As previously stated, it is our objective to sell our public positions when lock-up restrictions expire and there is relative stability in a given public's position trading. In line with this approach, we began to monetize our position in public square holding shares as their lock-up restrictions expired subsequent to quarters ending. I would also like to further reiterate CERDA's commitment to initiatives that enhance shareholder value. Given the discount our stock has traded at compared to net asset value per share, we believe our recent modified Dutch auction tender offer was an efficient and accretive deployment of capital. Allison will discuss the results of the tender offer in her prepared remarks. Given our recent investments and broader portfolio...

Mark Klein: Transitioning to our public investments has previously stated it is our objective to sell our public positions, block up restrictions, expire, and there is relative stability and given public positions trading. In line with this approach, we began to modernize our position in public square holding shares, and there are a lot of restrictions expired, subsequent concourse. I would like to also further reiterate the service commitment to initiatives that enhance shareholder value. Given the discount our stock is traded at, compared to net asset value per share, we believe our recent modified Dutch auction tender offer was an efficient and a creative deployment of capital.

Unknown Speaker: As previously stated, it is our objective to sell our public positions when lockup restrictions expire, and there is relative stability in a given public's position trading. In line with this approach, we began to monetize our position in public square holding shares as their lockup restrictions expire subsequent to the quarter's end.

Unknown Speaker: Transitioning to our public investments.

Unknown Speaker: As previously stated, it is our objective to sell our public positions when lock-up restrictions expire, and there is relative stability in a given public's positions trading.

Unknown Speaker: In line with this approach, we began to monetize our position in public square holding shares as their lock-up restrictions expired subsequent to quarter's end.

Speaker Change: I would like to also further reiterate CSIRO's commitment to initiatives that enhance shareholder value.

Unknown Speaker: Given the discount our stock has traded at compared to net asset value per share, we believe our recent modified Dutch auction tender offer was an efficient and accretive deployment of capital. Allison will discuss the results of the tender offer in her prepared remarks.

Mark Klein: Alison will discuss the results of the tender offer and our prepared remarks. Given our recent investments in broader portfolio, we believe we are well positioned to drive shareholder return.

Unknown Speaker: Given our recent investments and broader portfolio, we believe we are well-positioned to drive shareholders' return.

Allison Green: Thank you for your attention, and with that, I will hand over to Alison, our Chief Financial Officer.

Unknown Speaker: Thank you for your attention and with that I will hand it over to Allison, our Chief Financial Officer.

Allison Green: Thank you, Mark. I would like to follow Mark's update with a more detailed review of our second quarter investment activity and financial results as of June 30th, including the results of the modified Dutch auction tender offer announced during Q1 and executed during Q2. Additionally, I'll provide more detail on the 6.5 note repurchase agreement and board-approved note repurchase program and our current liquidity. Please turn to slide 10.

Allison Green: Thank you, Mark. I would like to follow Mark's update with a more detailed review of our second quarter investment activity and financial results as of June 30th, including the results of the modified Dutch auction tender offer announced during Q1 and executed during Q2. Additionally, I'll provide more detail on the 6.5 note repurchase agreement and board-approved note repurchase program and our current liquidity. Please turn to slide 8.

Allison Green: Thank you, Mark.

Allison Green: I would like to follow Mark's update with a more detailed review of our second quarter investment activity and financial results as of June 30th, including results of the modified Dutch auction tender offer announced during Q1 and executed during Q2. Additionally, I will provide more detail on six and a half note repurchase agreement and waterproof note repurchase program and our current liquidity. Please turn to slide 8. As Mark mentioned, during the second quarter, we completed a ten million dollar investment in Tamba's common shares through a secondary transaction and a fifteen million dollar investment in the Class A entrance to CW Opportunity L.P., an SUV that is invested in core-weeds' Service.

Allison Green: We ended the second quarter of 2024 with an NAV per share of $6.94, which is consistent with our financial reporting. The decrease in NAV per share from $7.17 since Q1 to $6.94 as of June 30 was primarily driven by a $0.30 per share decrease resulting from unrealized depreciation of our portfolio investments during the quarter and a $0.16 per share decrease due to net investment losses. The purchaser will acquire, and we will issue up to $25 million of the initial notes on or about August 14, 2024, and thereafter at such time and date as the purchaser and we mutually agree to purchase and sell any additional notes.

Speaker Change: Thank you, Mark. I would like to follow Mark's update with a more detailed review of our second quarter investment activity and financial results as of June 30th.

Allison Green: Including results of the modified Dutch auction tender offer announced during Q1 and executed during Q2. Additionally, I'll provide more detail on the 6.5 note repurchase agreement and board approved note repurchase program and our current liquidity. Please turn to slide 8.

Allison Green: As Mark mentioned, during the second quarter, we completed a $10 million investment in Canva's common shares through a secondary transaction and a $15 million investment in the Class A entrance of CW Opportunity 2LP, an SPV that is invested in CoreWeave's Series C preferred shares. Additionally, during the second quarter, we redeemed our membership interest in Architect Capital Pageway SPV, resulting in net proceeds of approximately $10 million. We also received a distribution of approximately $233,000 related to our Limited Partner Fund investment in True Global Ventures 4+. Please turn to slide 9.

Allison Green: As Mark mentioned, during the second quarter, we completed a $10 million investment in Canvas common shares through a secondary transaction, and a $15 million investment in the Class A entrance of CW Opportunity 2LP, an SPV that is invested in CoreWeave Series C preferred shares.

Allison Green: During the second quarter, we redeemed our membership interest in Architects Capital PageRite SUV, resulting in the proceeds of approximately $10 million. We also received a distribution of approximately $233,000 related to our limited partner fund investment and True-Wobble Ventures 4 Plus.

Allison Green: During the second quarter, we redeemed our membership interest in Architect Capital PageWay FTB, resulting in net proceeds of approximately $10 million. We also received a distribution of approximately $233,000 related to our Limited Partner Fund investment in True Global Ventures 4+.

Allison Green: Please turn to slide 9. So, to quit the quarter end, we began to sell our public-common shares in Public-square, following their loss of expiration on July 19. To date, we have sold 220,000 shares of Public-Square for approximately $630,000 and $2,000 in net proceeds, resulting in a realized gain of approximately $400,000 to $8,000.

Allison Green: Subsequent to quarter end, we began to sell our public common shares in Public Square following their lockup expiration on July 19. To date, we have sold 220,000 shares of Public Square for approximately $632,000 in net proceeds, resulting in a realized gain of approximately $458,000. Please turn to slide 10.

Allison Green: Please turn to slide 9. Subsequent to Quarter End, we began to sell our public common shares in Public Square following their loss of expiration on July 19th.

Allison Green: To date, we have sold 220,000 shares of Public Square for approximately $632,000 in net proceeds resulting in a realized gain of approximately $458,000.

Allison Green: Please turn to slide 10. Cypns is by six general investment themes. The top allocation of our investment portfolio at quarter end was to AI Cloud and Big Data, representing approximately 34% of the investment portfolio at fair value. Marketplaces and education technology were the next largest categories, with approximately 22% and 21% of our portfolio, respectively. Approximately 13% of our portfolio was invested in social, mobile, and consumer companies, and the financial technology category accounted for approximately 9% of the fair value of our portfolio. Sustainability and alternative energy accounted for 1% of the fair value of our portfolio at the due of 30S.

Allison Green: Segmented by six general investment themes, the top allocation of our investment portfolio at quarter end was to AI, cloud, and big data, representing approximately 34% of the investment portfolio at fair value. Marketplaces and education technology were the next largest categories, with approximately 22% and 21% of our portfolio, respectively. Approximately 13% of our portfolio was invested in social, mobile, and consumer companies, and the financial technology category accounted for approximately 9% of the fair value of our portfolio. Sustainability and alternative energy accounted for 1% of the fair value of our portfolio as of June 30. Please turn to slide 11.

Allison Green: Please turn to slide 10.

Allison Green: Segmented by six general investment themes, the top allocation of our investment portfolio at Quarter End was to AI, Cloud, and Big Data, representing approximately 34% of the investment portfolio at fair value.

Allison Green: Marketplaces and education technology were the next largest categories with approximately 22% and 21% of our portfolio respectively.

Allison Green: Approximately 13% of our portfolio was invested in social, mobile, and consumer companies. And the financial technology category accounted for approximately 9% of the fair value of our portfolio. Sustainability and alternative energy accounted for 1% of the fair value of our portfolio as of June 30th.

Allison Green: Please turn to slide 11. We ended the second quarter of 2024 with an NAV per share of $6.94, which is consistent with our financial reporting. The decrease in NAV per share from $2.17 to $6.94 as of June 30, which primarily driven by a 30S per share decrease resulting from unrealized appreciation of our portfolio investments during the quarter and a 16S per share decrease due to net investment loss. The decrease in NAV per share was partially offset by a 20S per share increase from the inventory purchase of common stock related to our recent tender offer and a 3S per share increase from the impact of stock-based compensation during the quarter.

Allison Green: We ended the second quarter of 2024 with an NAV per share of $6.94, which is consistent with our financial reporting. The decrease in NAV per share from $7.17 in Q1 to $6.94 at the end of June 30th was primarily driven by a $0.30 per share decrease resulting from unrealized depreciation of our portfolio investments during the quarter and a $0.16 per share decrease due to net investment losses. The decrease in NAV per share was partially offset by a $0.20 per share increase from the repurchase of common stock related to our recent tender offer and a $0.03 per share increase from the impact of stock-based compensation during the quarter.

Speaker Change: Please charge us by 11.

Allison Green: We ended the second quarter of 2024 with an NAV per share of $6.94, which is consistent with our financial reporting.

Allison Green: The decrease in NAV per share from $7.17 in Q1 to $6.94 as of June 30th was primarily driven by a $0.30 per share decrease resulting from unrealized depreciation of our portfolio investments during the quarter and a $0.16 per share decrease due to net investment loss.

Allison Green: the decrease in ity per share was partially offset bya twenty centper share increase from the repurchase of common stock related to our recent tender offer and as the recentset per share increaseed from the impact of stock-bas compensation during the quarter

Allison Green: As mentioned by Mark, Sutter Rock Capital is committed to initiatives that enhance shareholder value. Accordingly, on February 14th, our Board of Directors approved a modified Dutch auction tender offer, which commenced on February 20th, to purchase up to 2 million shares of our common stock at a price per share not less than $4 per share and not greater than $5 per share in Tencent, using available cash. Pursuant to the terms of the tender offer, following the expiration of the tender offer on April 1st, 2024, we repurchased two million shares of our common stock at a price of $4.70 per share, representing 7.9% of the outstanding shares.

Allison Green: As mentioned by Mark, Tomato Capital is committed to initiatives that enhance shareholder value. Accordingly, on February 14, our board of directors approved a modified Dutch auction tender offer, which commenced on February 20, to purchase up to 2 million shares of our common stock at a price per share not less than $4 per share and not greater than $5 per share, and since increments, using available cash. For soon to determine the tender offer, following the expiration of the tender offer on April 1, 2024, we would purchase 2 million shares of our common stock at a price of $4.70 per share, representing 7.9% of outstanding shares.

Allison Green: As mentioned by Mark, Sutter Rock Capital is committed to initiatives that enhance shareholder value.

Allison Green: The per share purchase price of properly tendered shares represented 65.6% of the net asset value per share as of March 31st, 2024. We used available cash to fund the purchase of shares, common stock, and the tender offer, and to pay for all related fees and expenses. I would also like to note that the dollar value of shares that may yet be purchased by Syro Capital under the share of purchase program, which is authorized through October 31st, 2024, is approximately $20.7 million.

Allison Green: Accordingly, on February 14th, our Board of Directors approved a modified Dutch auction tender offer, which commenced on February 20th, to purchase up to 2 million shares of our common stock at a price per share not less than $4 per share and not greater than $5 per share in 10 cent increments.

Allison Green: using available cash.

Allison Green: Pursuant to the terms of the tender offer, following the expiration of the tender offer on April 1, 2024, we repurchased 2 million shares of our common stock at a price of $4.70 per share, representing 7.9% of outstanding shares.

Allison Green: The per share of purchase price of properly tendered shares represent a 65.6% of the net asset value per share as of March 31, 2024. We use available cash to fund the purchase of shares, common stock, and the tender offer, and to pay for all related fees and expenses. I would also like to note that the dollar value of shares that may yet be purchased by Throw Capital under the share of purchase program into approximately $20.7 million. The share of purchase program is authorized through October 31, 2024.

Speaker Change: the per shareof purchase price of properly tenender shares represented sixty-five point six percent of the nth the value per share as it march thirty first two thousand and twenty four we use avil hased on thepurchase of shares common stock in the center offper and to paayper all related season expenses

Allison Green: I would also like to note that the dollar value of shares that may yet be purchased by Sutter Rock Capital under the Share of Purchase Program is approximately $20.7 million. The Share of Purchase Program is authorized through October 31, 2024.

Allison Green: Next step, I'd like to provide more detail on the executed no purchase agreement for 6.5% convertible notes due to 2029. On August 6, 2024, Throw Capital entered into a no purchase agreement, pursuant to which we may issue up to the maximum of $75 million in aggregate principal amount of 6.5% convertible notes due to 2029. Pursuant to no purchase agreement, we initially agreed to issue and sell, and the per share agreed to purchase, up to $25 million in aggregate principal amount of the convertible notes. Thereafter, upon mutual agreement between the purchase program and us, we may issue additional convertible notes for sale and subsequent offering, or issue additional notes with modified pricing terms in the aggregate for both the additional notes and the new note, up to a maximum of $50 million in one or more private offerings.

Allison Green: Next, I'd like to provide more detail on the executed no-purchase agreement for 6.5% convertible notes due 2029. On August 6, 2024, Sutter Rock Capital entered into a no-purchase agreement, pursuant to which we may issue up to a maximum of $75 million in aggregate principal amount of 6.5% convertible notes due 2029. Pursuant to the no-purchase agreement, we initially agreed to issue and sell, and the purchaser agreed to purchase, up to $25 million in aggregate principal amount of the convertible notes.

Speaker Change: that i'd liketo provide more detail on the executed no purchase agreement for six and a half percent the convertible notes due two thousand and twenty nnine on an august six two thousand and twenty four zer capital entered into a no per agreement pursuant to which we make issue up to ximum of seventy five million dollars in agyate principle amt of six and a half percent convertible db due two thousandand twenty nineth

Allison Green: Pursuant to the no-purchase agreement, we initially agreed to issue and sell, and the purchaser agreed to purchase, up to $25 million, an aggregate principal amount of the convertible note.

Allison Green: Thereafter, upon mutual agreement between the purchaser and us, we may issue additional convertible notes for sale in subsequent offerings, 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 million in one or more private offerings. The purchaser will acquire, and we will issue up to $25 million of the initial notes on or about August 14, 2024, and thereafter at such time and date as the purchaser and we mutually agree to purchase and sell any additional notes.

Allison Green: Thereafter, upon mutual agreement between the purchaser and us, we may issue additional convertible notes for sale in subsequent offerings, 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 million in one or more private offerings.

Allison Green: The purchaser will acquire and we will issue up to 25 million of the initial notes on or about August 14, 2024. And thereafter, as such time and date, as purchaser and we mutually agreed to purchase and sell any additional note. Interest on the convertible note will be paid quarterly in arrears on March 30th, June 30th, and September 30th, at a rate of 6.5% per year, beginning September 30th, 2024. The convertible notes will mature on August 14th, 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 6th, 2027, upon the fulfillment of certain conditions.

Allison Green: Interest on the convertible notes will be paid quarterly in arrears on March 30th, June 30th, September 30th, and December 30th at a rate of 6.5% per year beginning September 30th, 2024. The convertible notes will mature on August 14th, 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 6th, 2027 upon the fulfillment of certain conditions. The convertible notes will be convertible into shares of our common stock at a purchaser's sole discretion at an initial conversion price of $7.75 per share, according to a conversion rate of 129.0323 shares of our common stock for 1,000 principal amount of the convertible notes, subject to adjustment as provided in the note purchase agreement.

Allison Green: The purchaser will acquire and we will issue up to $25 million of the initial notes on or about August 14, 2024 and thereafter at such time and date as the purchaser and we mutually agree to purchase and sell any additional notes.

Allison Green: Interest on the convertible notes will be paid quarterly in arrears on March 30th, June 30th, September 30th, and December 30th at a rate of 6.5% per year beginning September 30th, 2024. The convertible notes will mature on August 14th, 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 6th, 2027 upon the fulfillment of certain conditions.

Allison Green: Interest on the convertible note will be paid quarterly in arrears on March 30th, June 30th, September 30th, and December 30th at a rate of 6.5% per year beginning September 30th, 2024.

Allison Green: 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.

Allison Green: The convertible notes will be convertible into shares of our common stock at a purchaser's sole discretion at an initial conversion price of $7.75 for share, according to a conversion rate of 129.0323 shares of our common stock for 1,000 principal amount of the convertible notes, subject to adjustment and provided in the note purchase agreement. The next proceeds from the offering will be used to repay outstanding indebtedness, big 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 coveted by the company.

Allison Green: The convertible notes will be convertible into shares of our common stock at a purchaser's sole discretion at an initial conversion price of $7.75 per share.

Allison Green: According to a conversion rate of 129.0323 shares of our common stock for 1000 principal amount of the convertible notes, subject to adjustment as provided in the note purchase agreement.

Allison Green: The net proceeds from the offering 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.

Allison Green: The net proceeds from the offering will be used to repay outstanding indebtedness, make investments in accordance with our investment objective and investment strategy, and for other general corporate purposes.

Allison Green: The no purchase agreement includes customary representations, warranties, and covenants by the company.

Allison Green: Additionally, I'd like to provide more detail on the note repurchase program. On August 6, 2024, Stone Capital's Board of Directors approved a discretionary note repurchase program that allows us to repurchase up to 46.67% or $35 million in aggregate principal amount of our 6% notes due 2026 through open market transactions, including block purchases, in such a 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.

Allison Green: Additionally, I'd like to provide more detail on the note purchase program. On August 6, 2024, Stone Capital's Fortes Directors approved a discretionary note repurchase program which allows us to repurchase at $46.67 per cent or $35 million in aggregate principal amount of our 6% notes due to 2020 through open market transactions, including block purchases, and such manner as welcome pilot the provisions of the Investment Company Act of 1940, as amended, and the Securities Exchange Act of 1934, as amended. As of August 7, 2024, we had not yet repurchased any of the 6% notes due to 2020 fix under the note or purchase program.

Allison Green: Additionally, I'd like to provide more detail on the Note and Purchase Program.

Speaker Change: On August 6, 2024, Sutter Rock Capital's Board of Directors approved a discretionary note repurchase program which allows us to repurchase up to 46.67% or $35 million in aggregate principal amount of our 6% notes due 2026 through open market transactions.

Speaker Change: including block purchases in such mayoras will comply the provisions of the invest company active thousand forty as amended and a security exchange act thousandnine hundred thirtyfour as amitted i august sevenin two thousand andtwenty four we had not yet repurchase any of the six percent no due two thousandand twenty six under the note reppurchase program

Allison Green: As of August 7, 2024, we had not yet repurchased any of the 6% notes due 2026 under the note repurchase program. Finally, I would like to take a moment to review Stone Capital's liquidity position as of June 30. We ended the quarter with approximately $57.6 million of liquid assets, including approximately $54.4 million in cash and approximately $3.2 million in unrestricted public securities. As of June 30, 2024, and currently, 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 Stone Capital. Now I will turn the call over to the operator for the start of the Q&A session. Operator?

Allison Green: Finally, I would like to take a moment to review through our capital's liquidity position as of June 30th. We ended the quarter with approximately $57.6 million of liquid assets, including approximately $54.4 million in cash and approximately $3.2 million in unrestricted public securities. As June 30th, 2024, and currently, there are 23,378,000 in two shares of the company's common stock outstanding.

Speaker Change: Finally, I would like to take a moment to review Zorro Capital's liquidity position as of June 30th.

Allison Green: We ended the quarter with approximately $57.6 million of liquid assets, including approximately $54.4 million in cash and approximately $3.2 million in unrestricted public securities.

Speaker Change: as june thirty two thousand and twenty four and rently there are twentythree million three hundred seventy eight thousand and two shares of the company's common stock outstandardings that conincludes my conan 'would like to thank you for your interest in supportter sttor capital now i'll turn the call overto the oator from the start of the un session operator

Allison Green: That concludes my comment. We would like to thank you for your interest and support of Stone Capital.

Operator: Now I will turn the call over to the operator for the start of the Q&A session.

Operator: Operator? Thank you very much. As a reminder, if you'd like to ask a question on today's call, you may press star 1 on your telephone keypad to register your question. To withdraw your question for any reason, you may press star 2. We kind of request that you limit yourself to one question, and you will be advised when to ask your question.

Operator: Thank you very much. As a reminder, if you'd like to ask a question on today's call, you may press star 1 on your telephone keypad to register your question. To withdraw your question for any reason, you may press star 2. We kindly request that you limit yourself to one question. We have a question from Mack Sykes of Gabelli Fund. Please go ahead.

Speaker Change: Thank you very much. As a reminder, if you'd like to ask a question on today's call, you may press star 1 on your telephone keypad to register your question. To withdraw your question for any reason, you may press star 2. We kindly request that you limit yourself to one question.

Mack Sykes: We have a question from Mack Sykes of Gabelli Fund. Please go ahead.

Speaker Change: and you will be advised when to ask your question. We have a question from Mack Sykes of Gabelli Fund. Please go ahead.

Macrae Sykes: Oh, I just want to wish you congratulations on the team for rebuilding the portfolio. Certainly some innovative companies in the making.

Mack Sykes: Oh, I just wanted to wish you congratulations on the team for rebuilding the portfolio; certainly, some innovative companies in the mix. Thanks.

Speaker Change: Oh, I just want to wish you congratulations on the team for rebuilding the portfolio. Certainly some innovative companies in the mix.

Macrae Sykes: I know I'm limited to one question, but since it's been a while, I wanted to ask about the IPO cycle. I had three sub-questions from that, so I'll just ask them. First, typically, for an IPO, what is the percentage that you may typically realize kind of on the opening, and then how long is the lockup typical for the balance of that? Realization. And then, assuming a $10 million gain on XYZ Company, what is retained by the company, and what is paid out to investors? And then typically, what's the timing of dividends following some realizations? And then my last question is around, is the company at this point carrying any tax shield to offset potential gains?

Mack Sykes: I know I'm limited to one question, but I wanted you just to, since it's been a while, I wanted to ask about the IPO cycle, and I had three sub-questions from that, so I'll just ask them. First, typically for an IPO, what is the percentage that you may typically realize kind of on the opening, and then how long is the lock-up typical for the balance of that realization, and then assuming a $10 million gain on XYZ company, what is retained by the company and what is paid out to investors, and then typically what's the timing of dividends following some realizations, and then my last question is around, is the company at this point carrying any tax shield to offset potential gains?

Speaker Change: Thank you.

Speaker Change: i actually know im limited to one question but i wanted to just sinceit's been a while i want to ask about the ipoo cycle and i had three subquestions from that so just ask them

Speaker Change: First, typically for an IPO, what is the percentage that you may typically realize kind of on the opening, and then how long is the lockup typical for the balance of that investment? ________________

Unknown Attendee: Realization. And then, assuming a $10 million gain on XYZ company, what is retained by the company and what is paid out to investors? And then typically, what's the timing of dividends following some realizations? And then my last question is around, is the company at this point carrying any tax shield to offset potential gain?

Unknown Attendee: Realization.

Unknown Attendee: Assuming a $10 million gain on XYZ Company, what is retained by the company and what is paid out to investors? Typically, what's the timing of dividends following some realizations? My last question is around, is the company at this point carrying any tax shield to offset potential gains?

Melissa: Court of 2024 earnings call. My name is Melissa and I will be your coordinator for today's events. Please note this conference is being recorded and for the duration of the call your lines will be in a listen only mode.

Mack Sykes: Thanks. That's the best way to ask a long question.

Unknown Speaker: That's the best way to ask one question. So, we don't have liquidity until six months after the IPO occurs, typically, if there's a direct... So those would be distributed. As far as tax shields go, I don't think we actually look at anything as a tax shield, but we carried into this year some amount of capital losses. So the first application of capital gains would be against those capital losses. When those capital losses are exhausted, then we would be in a dividend position, and we would obviously pay out the dividends. We are very communicative about our dividend strategy. We have been in the past, and we will lay it out for our investors as we find ourselves in the position.

Unknown Speaker: Thanks.

Mark Klein: So, first of all, Mack, thanks for the kind words, and thanks for being a supportive shareholder. I think it's kind of pretty well documented in the press right now; the IPO cycle, certainly before last week, was gearing up in the expectations as we entered, sort of exited the summer into the early part of September. You would see the ramp up in the IPO market, which is the thing we're going to see in the Q3 anyhow, so I think that's consistent with broadly without there. Specifically, or what's typical is in any traditional IPO, shares are typically locked up for an additional six months.

Mark Klein: That's the best way to ask one question. So, first of all, thanks for the kind words and thanks for being a supportive shareholder. I think it's kind of pretty well documented in the press right now that the IPO cycle, certainly before last week, was gearing up, and the expectations were that as we entered, you know, sort of exited the summer into the early part of September, you would see the ramp up in the IPO market, which I still think we're going to see in Q3. Anyway, I think that's consistent with what's out there.

Unknown Speaker: That's the best way to ask one question.

Unknown Speaker: um

Melissa: However, you will have the opportunity to ask questions at the end of the presentation. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero and you will be connected to an operator.

Speaker Change: So first of all, thanks for the kind words and thanks for being a supportive shareholder

Speaker Change: I think...

Unknown Speaker: It's kind of pretty well documented in the press right now, the IPO cycle, certainly before last week.

Speaker Change: was gearing up and the expectations as we entered.

Evan Schlossman: I'll now turn the call over to Evan Schlossman. Please go ahead. Thank you for joining us on today's call.

Unknown Speaker: sort of exited the summer into the early part of September, you would see the ramp up in the IPO market, which I still think we're going to see in the end of Q3 anyhow. So I think that's consistent with...

Evan Schlossman: I am joined today by the Chairman and Chief Executive Officer of Syro Capital, Mark Klein, and Chief Financial Officer, Allison Green. Please note that it is by presentation corresponding to today's prepared remarks by management available on our website as www.syrocap.com under investor relations events and presentations. Today's call is being recorded and broadcast live on our website, www.syrocap.com. Replace information is included in our press release issue today. This call is the property of Syro Capital and the unauthorized reproduction of this call in any form is strictly prohibited.

Mark Klein: Specifically, or what's typical, is in any traditional IPO, shares are typically locked up for an additional six months. So, we don't have liquidity until six months after the IPO occurs. Typically, if there's a direct... On direct listings, that's WAVE, but on traditional IPOs, that would be. As far as our distributions are concerned, generally speaking, as a BDC, we're required to distribute, on a capital gains basis, functionally all of the gains. So those would be distributed.

Speaker Change: Broadly what's out there Specifically or what's typical is in any traditional IPO Shares are typically locked up for additional six months

Mark Klein: So we don't have liquidity till six months after the IPO occurs, typically. It is a direct under eyed listings and that's wave, but on traditional IPOs that would be. As far as our distributions are concerned, generally speaking, as a VDC, we're required to distribute on a capital gains basis, functionally all the gains. So those would be distributed. As far as the tax shield, I don't think we actually look at anything as a tax shield, but we carry into this year some amount of capital losses. So the first application of capital gains would be against those capital losses when those capital losses are exhausted.

Unknown Speaker: So, we don't have liquidity until six months after the IPO occurs, typically, if there's a direct...

Wade: On direct listings, that's Wade, but on traditional IPOs, no.

Evan Schlossman: I would also like to call your attention to customer exposures 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 conditions. These statements are not guarantees about our future performance or future financial condition or results and involve a number of rates 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 we call the actual results different materially from the plans and tensions and expectations reflected in it or suggested by the forward-looking statements.

Unknown Speaker: That would be.

Unknown Speaker: As far as our distributions are concerned...

Unknown Speaker: Generally speaking, as a BDC, we're required to distribute, on a capital gains basis, functionally all of the gains.

Mark Klein: As far as the tax shield, I don't think we actually look at anything as a tax shield. But we carried into this year some amount of capital losses, so the first application of capital gains would be against those capital losses.

Unknown Speaker: So those would be distributed as far as

Unknown Speaker: Attack Shield, I don't think we actually look at anything as an Attack Shield.

Unknown Speaker: but we carried into this year some amount of capital losses.

Mark Klein: When those capital losses are exhausted, then we would be in a dividend position, and we would obviously pay out the dividends. We are very communicative about our dividend strategy. We have been in the past. And we will lay it out for our investors as we find ourselves in the position to pay dividends.

Unknown Speaker: So the first application of capital gains would be against those capital losses when those capital losses are exhausted.

Mark Klein: Then we would be in a dividend position, and we would obviously pay out the dividends. We are very communicative about our dividend strategy we have been in the past, and we will lay it out for our investors as we find ourselves in the position to pay dividends. Thank you.

Unknown Speaker: that we would be in a dividend position.

Evan Schlossman: Actual results made different 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 minds with the SEC. Management does not undertake to update this forward-looking statement unless required to use it by law.

Unknown Speaker: and we would obviously pay out the dividends. We are very communicative about our dividend strategy. We have been in the past and we will lay it out for our investors as we find ourselves in the position to pay dividends.

Mack Sykes: Thank you very much.

Operator: Thank you very much. As we have no further questions in the queue, I would like to turn it back over to Mark Klein for any closing remarks.

Operator: Thank you very much. As we have no further questions in the queue, I would like to turn it back over to Mark Klein for any closing remarks.

Evan Schlossman: To obtain copies of Syro Capital related to SEC filing, please visit our website at www.syrocap.com or the SEC's website at www.youtube.com.

Mark Klein: As we have no further questions in the queue, I would like to turn it back over to Mark Klein for any closing remarks.

Mark Klein: Thank you.

Operator: Thank you very much. As we have no further questions in the queue, I would like to turn it back over to Mark Klein for any closing remarks.

Mark Klein: Oh, I want to thank everybody from the Serone team. Thank all of our investors. Thank you for joining the call today. I know the markets have been a big AI, so appreciate that you took the time to listen to us today, hear our story, and be supportive. Thank you very much.

Mark Klein: I want to thank everybody on the CERO team, thank all of our investors, and thank you for joining the call today. I know the markets have been a bit chaotic, so I appreciate that you took the time to listen to us today, hear a story, and be supportive. Thank you very much.

Mark Klein: I want to thank everybody from the CERO team and thank all of our investors.

Evan Schlossman: Now I would like to turn the call over to my client. Thank you, Evan.

Mark Klein: ok

Mark Klein: i want to thank you everybody from the seteam thank all of our vestors thank you for joining the call today i know the markets have been a big chaotic so appreciate that he took the time to listen to us today here a story and this quarter thank you very much

Mark Klein: Good afternoon and thank you for joining us. We would like to share the results of Syro Capital's second quarter of 2024. The second quarter was a broadly positive quarter of the US economy in equity markets as investors became increasingly confident in the prospect of rate cuts later in the year. But as of last week, the market has become volatile with a big spiking to levels not seen since the onset of COVID in March of 2020.

Operator: That concludes today's conference. You may now disconnect. Thank you very much.

Speaker Change: Thank you very much. That concludes today's conference. You may now disconnect.

Mark Klein: A confluence of domestic and global factors led to the short change in investor settlement, less Thursdays disappointing data on employment and manufacturing and construction, pushed 10-year treasure yields below 4% for the first time since February. Investors fears were exacerbated on Friday when a week jobs report showed decelerating US job growth and rising on employment. We also saw some large technology companies issue weaker than expected for guidance driving investor skepticism on monetization timelines for their investments in AI. Outside of the US, an unexpected rate hike from Bank of Japan last week fueled investor uncertainty as the ongoing geopolitical conflict in the Middle East.

Mark Klein: With that said, Q2, private technology companies are increasing interest from investors. According to the pitch book NBCA Q2, 2020 for venture monitor, both venture deal count and value reach their highest quarter levels since Q2 of 2022. With several multi-billion dollar capital raises, AI continue to see significant investor interests. In fact, according to the same source, XAI is $6 billion series B financing, along with Q2, $8.6 billion series C and debt financing, made up over 26 percent of the second quarter's total deal value.

Mark Klein: As previously announced, we're pleased to have invested $15 million into the Q2 funding round, BIA and SPV. In addition to a $10 million investment in Canva, which continues to integrate AI across its product suite. While volatility has increased, we're encouraged that despite the recent technology sector struggling performance of the public markets, we've started to see the public market is broadening with a recent positive performance of municipal cap companies and early indications of potential upcoming IPOs from companies such as Karna, Sheen, Skins and Chi.

Mark Klein: Secondly, investor increasing appetite for more key names. For the last several quarters, we have deployed capital into late-stage technology companies, such as CoreWeed, Canva and Liquid debt and compelling entry prices. We believe that these investments strengthen our already well-positioned existing portfolio for the reopening of the IPO window.

Mark Klein: I would now like to discuss our note repurchase program approved yesterday by our Board of Directors. Under the program, we are authorized to repurchase in the open market of $235 million accurate principal amount of our 6 percent notes due in 2026. I also will discuss the note repurchase program during her pre-pair remarks.

Mark Klein: I would also like to announce that we have entered into a note purchase agreement with an institutional investor via a private placement which allows us to issue up to $75 million in aggregate principal amount of 6.5 percent convertible notes due in 2029, with an initial issuance of up to $25 million. We believe the convertible notes position as well for a number of reasons. First, the notes are initially convertible at $7.75 per share, approximately 104 percent premium from today's closing price.

Mark Klein: Signalling significant confidence in our portfolio from our investor. If it cameverted, this would be a meaningfully accretive transaction to our shareholders. Second, the notes will extend the maturity of a portion of our debt by three years, strengthening our ability to deploy capital. Finally, giving prevailing interest rates, we believe the interest rate of 6.5 percent is highly favorable.

Mark Klein: Allison will discuss the notes purchased the agreement during her fair remarks. Turning to our second quarter results, we ended the quarter with a net asset value of $162.3 million or $6.94 per share. This net compares to a net asset value of $7.17 per share in Q1 and $7.35 per share in Q2 last year.

Mark Klein: Please turn this slide forward. Turning to our top five positions, I will first want to highlight our cash position. As of core end, our cash available for investment was approximately $54.4 million, representing 22% of our gross assets. Server of capital's top five positions as June 30th were learning out, Blake Health, the core weave SPV, Service Titan, and Locust Robotics. These positions accounted for approximately 49% of the investment portfolio at fair value. Additionally, as of June 30th, our top 10 positions accounted for approximately 75% of the investment portfolio.

Mark Klein: I would now like to discuss some of our larger investments in greater detail, starting with Blake Health. Blake Health's quick save and Blake's R&D product lines created a significant value proposition for the entire value chain. From farmer manufacturers looking to increase first fill rates all the way to consumers looking to find the best price for their medications, Blake Health continues to increase their customer base and find additional partnerships with pharmaceutical manufacturers while maintaining relationships with pharmacies around the U.S, to distribute its quick save product.

Mark Klein: We remain excited about Blake Health's positioning with the pharmaceutical SaaS market and with the company's well-positioned to expand significantly in the coming months of years.

Mark Klein: Next, I would like to discuss our investment in wolf, one of our 10 largest positions. The wolf band provides actual insights to users to optimize performance by offering metrics like heart rate quality variability and resting heart rate. The combination of wolf's besting class software and wearable band allows a user to understand how specific lifestyle and training behaviors may affect their recovery and ability to perform on a human day.

Mark Klein: We'll announce a global partnership with an investment from soccer star Cristiano Ronaldo according to a press release in May. Ronaldo is one of several of wolf's internationally recognized ambassador investors including Patrick Holmes, Michael Phelps, Eli Manning, Rory McBeroy, Scotty Sheffler, and more. Wolf continues to cement itself as a leader in the health and wellness space, most recently announcing the launch of its body composition and weight trends featuring in partnerships with withings, another leader in connected health.

Mark Klein: These features create an even greater value proposition for wolf as consumers continue to find more fitness and sleep wearables to choose from. We remain incredibly excited about wolf success and path to becoming a dominant wearable to the category, in the second quarter.

Mark Klein: Please turn to slide five.

Mark Klein: As previously discussed during the second quarter, we made a ten million dollar investment in Canva on similar terms as the 40 company tender. According to Bloomberg, the valuation of the tender came as a significant discount to Canva's last primary financing. Canva is an online productivity design software and collaboration platform with a mission to empower everyone in the world to design. Since our initial investment in Canva, the company has made significant strides to further integrate itself into the broader design ecosystem.

Mark Klein: For example, in May, the company announced a partnership with HP to expand its design to print services worldwide through localized printing options. In July, the company announced a partnership with our list, allowing creators to integrate royalty-free digital assets from our list collection directly into the Canva platform. According to Bloomberg, Canva has surpassed $2.3 billion in annualized revenue with sales growing at a rate of 50 percent year over year. According to Pitchboard, Canva has raised over $581 billion equity financing from investors, including best summer venture partners, general catalysts, iconic, and more. We are excited about Canva's traction and positioning the market, as it is expected. We are excited to expand its enterprise footprint and further captures of international markets.

Mark Klein: Please turn to slide 6.

Mark Klein: Additionally, during the second quarter, we made a $15 million investment in CW Opportunity to LP, an SPB that is invested in CoreWeeds Series C-Proverge Shares. CoreWeeds is a specialized cloud provider delivering access to a suite of NVIDIA GPUs coupled with its fast and flexible cloud computing infrastructure. CoreWeeds is a critical foundation for AI and machine learning use cases from the initial stages of training a model to ultimately providing cloudless output for end users.

Mark Klein: To serve the training phase, CoreWeeds offers distributed clusters or connected computers using NVIDIA's groundbreaking quantum NVIDIA fan networking solution. Additionally, with spin-up times as short as 5 seconds, CoreWeeds offers one of the most powerful confirmed solutions using NVIDIA GPUs. In fact, according to a company blog post, CoreWeeds' inference service platforms 8 to 10 times faster than a major generalized cloud provider. Since our investment in early May, CoreWeeds has continued its impressive momentum.

Mark Klein: Later that month, according to a company press release, CoreWeeds announced agreement for a set by $7.5 billion debt facility, led by funds managed by Blackstone with participation from Agitar and Code 2. This debt financing will be used in further growth CoreWeeds capacity to serve large enterprises at the forefront of AI, both in the US and internationally.

Mark Klein: In early June, according to a company press release, CoreWeeds announced its plans to invest $2.2 billion to expand and open three new data sensors in Norway, Sweden and Spain by the end of 2025. This EU expansion is an addition to their $1.3 billion U.K, expansion announcement. According to pitch for a core we've raised over $9 billion in debt and equity financing from investors such as co-to, fidelity, magnet, heart and others. With its best in cloud, class, cloud difference, we believe core we will continue its expenditure growth and capitalize on accelerated AI adoption. Please turn to page slide 7.

Mark Klein: One additional portfolio company we'd like to highlight again is our investment in all C-sponsored LLC, the sponsor of the SPAC lid by Sam Alvin. As previously discussed during Q2, all C-acquisition shareholders approved the business combination with OFO, a fast-dition, clean power company. While we are always happy with our SPAC spots to complete a business combination, this one particularly exciting for a few reasons. OFO 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.

Mark Klein: In late May, according to a company press release, OCO announced its partnership with Wyoming Hyperscale to supply 100 megawatts of clean energy to a state-of-the-art data center campus as part of a 20-year power purchase agreement. Last month, according to a company press release, OCO announced the successful demonstration of its advanced fuel recycling process marking its significant step forward in enhancing fuel cost affecting this and sustainability.

Mark Klein: Our investment thesis around AI has been delivered, delivered, first focusing specifically on the infrastructure of AI. Our new investment in Coralweed to the CW Opportunity LP plus the business combination between all C and OCO now gives us further exposure to the structural foundations of the AI universe.

Mark Klein: Transitioning to our public investments has previously stated it is our objective to sell our public positions, block up restrictions, expire, and there is relative stability and given public positions trading. In line with this approach, we began to modernize our position in public square holding shares and there are a lot of restrictions expired, subsequent concourse.

Mark Klein: I would like to also further reiterate the service commitment to initiatives that enhance shareholder value. Given the discount our stock is traded at, compared to net asset value per share, we believe our recent modified Dutch auction tender offer was an efficient and a creative deployment of capital.

Mark Klein: Alison will discuss the results of the tender offer and our prepared remarks. Given our recent investments in broader portfolio, we believe we are well positioned to drive shareholder return.

Allison Green: Thank you for your attention, and with that, I will hand over to Alison, our chief financial officer. Thank you, Mark. I would like to follow Mark's update with a more detailed review of our second quarter investment activity and financial results as of June 30th, including results of the modified Dutch auction tender offer announced during Q1 and executed during Q2. Additionally, I will provide more detail on six and a half note repurchase agreement and waterproof note repurchase program and our current liquidity.

Allison Green: Please turn to slide 8. As Mark mentioned, during the second quarter, we completed a ten million dollar investment in Tamba's common shares through a secondary transaction and a fifteen million dollar investment in the class A entrance to CW Opportunity to L.P., an SUV that is invested in core-weeds' Service. During the second quarter, we redeemed our membership interest in Architects Capital PageRite SUV, resulting in that proceeds of approximately $10 million. We also received a distribution of approximately $233,000 related to our limited partner fund investment and true-wobble ventures 4 plus.

Allison Green: Please turn to slide 9. So, to quit the quarter end, we began to sell our public-common shares in public-square, following their loss of expiration on July 19. To date, we have sold 220,000 shares of public-square for approximately $630,000 and $2,000 in net proceeds, resulting in a realized gain of approximately $400,000 to $8,000. Please turn to slide 10. Cypns is by six general investment themes. The top allocation of our investment portfolio at quarter end was to AI Cloud and Big Data, representing approximately 34% of the investment portfolio at fair value.

Allison Green: Marketplaces and education technology were the next largest categories with approximately 22% and 21% of our portfolio respectively. Approximately 13% of our portfolio was invested in social, mobile and consumer companies, and the financial technology category accounted for approximately 9% of the fair value of our portfolio. Sustainability and alternative energy accounted for 1% of the fair value of our portfolio at the due of 30S. Please turn to slide 11. We ended the second quarter of 2024 with an NAV per share of $6.94, which is consistent with our financial reporting.

Allison Green: The decrease in NAV per share from $2.17 to Q1 to $6.94 as of June 30, which primarily driven by a 30S per share decrease resulting from unrealized appreciation of our portfolio investments during the quarter and a 16S per share decrease due to net investment loss. The decrease in NAV per share was partially offset by a 20S per share increase from the inventory purchase of common stock related to our recent tender offer and a 3S per share increase from the impact of stock based compensation during the quarter.

Allison Green: As mentioned by Mark, tomato capital is committed to initiatives that enhance shareholder value. Accordingly, on February 14, our board of directors approved a modified Dutch auction tender offer, which commenced on February 20, to purchase up to 2 million shares of our common stock at a price per share not less than $4 per share and not greater than $5 per share and since increments, using available cash. For soon to determine the tender offer, following the expiration of the tender offer on April 1, 2024, we would purchase 2 million shares of our common stock at a price of $4.70 per share representing 7.9% of outstanding shares.

Allison Green: The per share of purchase price of properly tendered shares represent a 65.6% of the net asset value per share as of March 31, 2024. We use available cash to fund the purchase of shares, common stock, and the tender offer, and to pay for all related fees and expenses. I would also like to note that the dollar value of shares that may yet be purchased by throw capital under the share of purchase program into approximately $20.7 million. The share of purchase program is authorized through October 31, 2024.

Allison Green: Next step, I'd like to provide more detail on the executed no purchase agreement for 6.5% convertible notes due to 2029. On August 6, 2024, throw capital entered into a no purchase agreement, pursuant to which we may issue up to the maximum of $75 million in aggregate principal amount of 6.5% convertible notes due to 2029. Pursuant to no purchase agreement, we initially agreed to issue and sell, and the per share agreed to purchase, up to $25 million in aggregate principal amount of the convertible notes.

Allison Green: Thereafter, upon mutual agreement between the purchase program and us, we may issue additional convertible notes for sale and subsequent offering, or issue additional notes with modified pricing terms in the aggregate for both the additional notes and the new note, up to a maximum of $50 million in one or more private offering. The purchaser will acquire and we will issue up to 25 million of the initial notes on or about August 14, 2024.

Allison Green: And thereafter, as such time and date, as purchaser and we mutually agreed to purchase and sell any additional note. Interest on the convertible note will be paid quarterly in arrears on March 30th, June 30th, September 30th, at a rate of 6.5% per year, beginning September 30th, 2024.

Allison Green: The convertible notes will mature on August 14th, 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 6th, 2027, upon the fulfillment of certain conditions. The convertible notes will be convertible into shares of our common stock at a purchaser's sole discretion at an initial conversion price of $7.75 for share, according to a conversion rate of 129.0323 shares of our common stock for 1,000 principal amount of the convertible notes, subject to adjustment and provided in the note purchase agreement.

Allison Green: The next proceeds from the offering will be used to repay outstanding indebtedness, big 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 coveted by the company.

Allison Green: Additionally, I'd like to provide more detail on the note purchase program.

Allison Green: On August 6, 2024, Stone Capital's Fortes Directors approved a discretionary note repurchased program which allows us to repurchase at $46.67 per cent or $35 million in aggregate principal amount of our 6% notes due to 2020 through open market transactions, including block purchases, and such manner as welcome pilot the provisions of the investment company active making 40 as amended, and the security exchange active makes in 34 as amended. As of August 7, 2024, we had not yet repurchased any of the 6% notes due to 2020 fix under the note or purchase program.

Allison Green: Finally, I would like to take a moment to review through our capital's liquidity position as of June 30th. We ended the quarter with approximately $57.6 million of liquid assets, including approximately $54.4 million in cash, and approximately $3.2 million in unrestricted public securities. As June 30th, 2024, and currently, there are 23,378,000 in two shares of the company's common stock up standing.

Allison Green: That concludes my comment. We would like to thank you for your interest and support of Stone Capital.

Operator: Now I will turn the call over to the operator for the start of the Q&A session. Operator? Thank you very much. As a reminder, if you'd like to ask a question on today's call, you may press star 1 on your telephone keypad to register your question. To withdraw your question for any reason, you may press star 2.

Operator: We kind of request that you limit yourself to one question, and you will be advised when to ask your question.

Mack Sykes: We have a question from Mack Sykes of Gabelli Fund. Please go ahead.

Mack Sykes: Oh, I just wanted to wish you congratulations on the team for rebuilding the portfolio, certainly some innovative companies in the mix. Thanks.

Mack Sykes: I know I'm limited to one question, but I wanted you just to, since it's been a while, I wanted to ask about the IPO cycle, and I had three sub-questions from that, so I'll just ask them. First, typically for an IPO, what is the percentage that you may typically realize kind of on the opening, and then how long is the lock-up typical for the balance of that realization, and then assuming a $10 million gain on XYZ company, what is retained by the company and what is paid out to investors, and then typically what's the timing of dividends following some realizations, and then my last question is around, is the company at this point carrying any tax shield to offset potential gains? Thanks.

Mark Klein: That's the best way to ask a long question. So, first of all, Mack, thanks for the kind words, and thanks for being a supportive shareholder. I think it's kind of pretty well documented in the press right now, the IPO cycle, certainly before last week, was gearing up in the expectations as we entered, sort of exited the summer into the early part of September. You would see the ramp up in the IPO market, which is the thing we're going to see in the Q3 anyhow, so I think that's consistent with broadly without there.

Mark Klein: Specifically, or what's typical is in any traditional IPO, shares are typically locked up for additional six months. So we don't have liquidity till six months after the IPO occurs, typically. It is a direct under eyed listings and that's wave, but on traditional IPOs that would be. As far as our distributions are concerned, generally speaking as a VDC, we're required to distribute on a capital gains basis functionally all the gains. So those would be distributed.

Mark Klein: As far as the tax shield, I don't think we actually look at anything as a tax shield, but we carry into this year some amount of capital losses. So the first application of capital gains would be against those capital losses when those capital losses are exhausted. Then we would be in a dividend position and we would obviously pay out the dividends. We are very communicative about our dividend strategy we have been in the past, and we will lay it out for our investors as we find ourselves in the position to pay dividends. Thank you.

Operator: Thank you very much.

Mark Klein: As we have no further questions in the queue, I would like to turn it back over to Mark Klein for any closing remarks. Oh, I want to thank everybody from the Serone team. Thank all of our investors. Thank you for joining the call today. I know the markets have been a big AI, so appreciate that you took the time to listen to us today, hear our story, and be supportive. Thank you very much.

Operator: That concludes today's conference. You may now disconnect. Thank you very much.