Q3 2024 SuRo Capital Corp Earnings Call
Hello, and welcome to <unk> Capital's third quarter 'twenty 'twenty four earnings call. My name is Melissa and I will be your coordinator for today's event. Please note. This conference is being recorded and for the duration of the call. Your lines will be on listen only however, you will have the opportunity to ask questions at the end of the presentation.
Speaker Change: This can be done by pressing star followed by one on your keypad to register your question. If you require assistance at any point. Please press star zero to be connected to an operator I'll now turn the call over to William Li. Please go ahead.
William Li: Awesome. Thank you.
William Li: Thank you for joining us on today's call I'm joined today by the Chairman and Chief Executive Officer of Zero capital, Mark Klein and Chief Financial Officer, Alison Greene. Please note that a slide presentation corresponding to todays prepared remarks by management is available on our website at www Dot Cerro cap dot com under Investor Relations.
William Li: Events and presentations.
William Li: <unk> call is being recorded and broadcast live on our website Www Dot <unk> Dot Com replay information is provided in our press release issued today. This call is the property of <unk> capital and unauthorized reproduction of this call in any form is strictly prohibited.
William Li: Also like to call your attention to the customary disclosures in today's earnings press release regarding forward looking information statements made in today's conference call and webcast may constitute forward looking statements, which relate to future events or our future performance or financial condition. These statements are not guarantees.
William Li: <unk> of our future performance or future financial condition or results and involve number of risks estimates and uncertainties, including the impact of any market volatility that may be detrimental to our business our portfolio companies, our industry and the global economy that could cause actual results to differ materially.
William Li: Really from the plans intentions and expectations reflected in or suggested by forward looking statements actual results may differ materially from those in the forward looking statements as a result of a number of factors, including but not limited to those described from time to time in the company's filings with the SEC management does not undertake.
William Li: To update such forward looking statements unless required to do so by law to obtain copies of <unk> Capital's latest SEC filings. Please visit our website at www Dot <unk> dot com or the Sec's website at SEC Gov now I'd like to turn the call over to Mark Klein.
Mark Klein: Thank you Willy.
Mark Klein: Good afternoon, and thank you for joining us so we would like to share the results of serve capitals third quarter 2024.
Mark Klein: Before discussing the exciting events that have occurred in the past few months I would like to take a step back and share their Cerro capital vision and discuss a bit about what differentiates <unk> from other investment alternatives.
Mark Klein: Please turn to slides three four and five.
Mark Klein: From inception, our goal has been to democratize curated access to venture capital opportunities.
Mark Klein: Over the last 14 years, we have invested in and exited from investments in companies like Facebook Twitter lift Spotify, Dropbox, Coursera and talented <unk>.
Mark Klein: We believe our ability to access these opportunities provides our shareholders with access to an asset class that is typically excluded from the average investor.
Mark Klein: Presently we are confident that we have redeployed capital into the next wave of exciting private companies with investments and market leading businesses like open AI core we've canvassed service Titan whoop and liquid debt to name a few.
Mark Klein: Between our ability to access attractive opportunities a rigorous analysis and investment process and our continued commitment to shareholder value. We are confident that we are providing unique value in the market that others may not.
Mark Klein: Clustering this deferred differentiation is important given the alternatives investors have.
Mark Klein: As forwarding to today.
Mark Klein: Last few months have been among the most exciting for our firm in our history.
Mark Klein: With the exponential growth of the AI, a new crop of some of the world's most valuable companies has emerged.
Mark Klein: Yes.
Mark Klein: We have identified and invested significant capital in a few of the market's leading players.
Mark Klein: Just in the second half of 2024, we've invested approximately $65 million in to some of the largest and most sought after private companies globally.
Of that amount, we have invested approximately $55 million into artificial.
Mark Klein: Artificial intelligence companies AI investments now represent a significant portion of our portfolio.
Mark Klein: Comprising 18% of our gross assets at the quarter's end.
Mark Klein: Inclusive of the $17 million of investments, we have made into AI companies subsequent to quarter's end, including best.
Mark Klein: Percentage of gross assets allocated to AI is approximately 23% of our portfolio.
Outside of our portfolio AI has attracted tremendous venture capital interest. According to coach base funding into AI startups made up 31% of the third quarter's total global venture funding.
Mark Klein: Including open AI, six 6 billion dollar financing, which closed subsequent to the quarter's end AI share of total funding.
Mark Klein: Did to nearly 40%.
Mark Klein: According to the same source to give those figures some context.
Mark Klein: Fintech accounted for about 20% of all venture funding in 2021.
Mark Klein: While crypto never reach more than 6% of venture funding even at its peak.
Mark Klein: During this surge in demand for AI investment. We believe we are highly differentiated on the basis of our AI investment criteria.
Mark Klein: Unlike many other investors we have taken a thoroughly intentional approach that prioritizes the industry agnostic picks and shovels infrastructure with proven track rate traction in scale over the industry specific applications with unproven product market fit.
Mark Klein: Of our AI portfolio companies, our AI portfolio companies are later stage businesses that have multibillion dollar enterprise customers or already have massive consumer adoption.
Mark Klein: Looking at the broader portfolio, we have several portfolio companies that are well positioned to drive shareholder value upon the reopening of the IPO market we.
Mark Klein: We believe our late stage portfolio companies, such as service state Camber, Whoop and liquid debt among others, along with our AI portfolio companies create a balanced portfolio offering our shareholders access to some of the most exciting private technology companies ahead of their potential ipos.
Mark Klein: <unk> many of these portfolio companies have even publicly discussed IPO plans are have been the subject of recent reports about their upcoming ipos.
Mark Klein: According to Bloomberg <unk> has hired Morgan Stanley Goldman Sachs and JP Morgan to lead its planned IPO next year.
Mark Klein: This follows the informations report that core <unk> is aiming to file confidentially next month. Additionally, according to the information service Titan May go public as soon as next month after generating approximately $360 million of revenue in the first half of this year.
Mark Klein: Finally, according to the times Limes CEO Wang Cheng said the company is ready for an IPO under the right market conditions and noted the lines bookings grew by 32% to approximately $600 million last year.
Speaker Change: I would now like to discuss our recent investments in more detail.
Speaker Change: We are pleased to announce our significant new and follow on investments into some of the largest and most compelling AI companies.
Speaker Change: During the quarter, we made a $17 $5 million investment in open AI one of the largest developers of generative AI models for consumers and businesses through the class a interest of our type one deep ventures fund LLC, a fund whose sole portfolio of assets.
Speaker Change: Is the convertible equity of open AI.
Speaker Change: During the quarter and subsequent to quarter's end, we increased our position in <unk>, a leading AI cloud computing provider viewing a follow a follow on secondary investments totaling $10 million. These follow on investments, bringing our total capital investment in <unk> to $25 million, making core.
Speaker Change: The single largest initial investment in our firm's history.
Speaker Change: Lastly, subject to quarter's end, we made a $12 million invest investment invest a data management solution for AI developers through the membership interest of IH 10, LLC, whose sole portfolio asset is an interest and vast data as preferred b preferred shares.
Speaker Change: Together, our investments in open AI core we've adverse give our investors access to leading AI companies at each point in the AI valuation AI value chain.
Speaker Change: We'll discuss these investments in further detail later in my prepared remarks.
Speaker Change: Turning to our third quarter results, we ended the quarter with net asset value of $157 $4 million or $6 73.
Speaker Change: Per share.
Speaker Change: Please turn to slide six.
Speaker Change: <unk> top five positions as of September 30th or <unk>, which includes CW opportunity to LP to core we've SPV and our $5 million follow on secondary investment in <unk> common shares learn ao.
Speaker Change: Open AI through the art type one deep venture spun Blake health and service type.
Speaker Change: These positions accounted for approximately 47% of the investment portfolio at fair value. Additionally, as of September 30, our top 10 positions accounted for approximately 75% of the investment portfolio.
Speaker Change: As of the quarters and our cash available for investment was approximately $32 $7 million representing.
Speaker Change: Representing 14% of our gross assets. Please.
Speaker Change: Please turn to slide seven.
Speaker Change: During the quarter, we made a $17 5 million dollar investment in open AI through our type one debentures of fund whose sole asset was the class eight.
Speaker Change: Class eight inches with the.
Speaker Change: Convertible equity of open AI.
Speaker Change: <unk> is a leading developer of general generative AI models using deep learning technology. According to <unk> open AI six $6 billion fundraising in which we participated was the largest venture capital deals of all time the financing made open AI one of the most valuable private companies in the world.
Speaker Change: But AI offers its models via free and paid plans that suit the needs of consumers small teams and large organizations, it's fully released.
Speaker Change: AG ship models, GPT, four O and GPT for many of our multimodal, meaning they accept both tax and image inputs and outputs texts. According to accompany blog posts. These models are part of <unk> broader Chad GPT suite, which is used by over 250 million people every week around the world. Additionally, accordingly.
Speaker Change: The Wall Street Journal Open AI has 11 million paying subscribers and approximately 1 million paying business customers.
Speaker Change: For consumers Chad GPT can quickly generate tax with a human like understanding of the users input for example, a user may prompt CECI cheap jet GPT to Ray to cover letter based on the user's inputted work experience or come up with a workout plan based on the user's inputted fitness goals within seconds, Chad GPT generates a relevant <unk>.
Speaker Change: Response tailored specifically to the users input Chad GPT can also summarize more extensive content such as a research paper lease agreement again extracting details specific to the input.
Speaker Change: For small teams chat GPT acts as an assistant for tasks such as analyzing data generating code in writing E. Mails. For example, the finance department of the small business May prod chat GPT to summarize financial database on an input at excel spreadsheet.
Speaker Change: Yes, Chad GPT can visualize the data via charter graphic generate tax debt that describes trends and that overtime. Additionally, the engineering team at startup may prompt judge chat GPT to find a bug and instead of coal.
Months later, Chad GPT can identify as a bug explained the mistake and providing appropriate correction.
Speaker Change: For large organizations Chad GPT provides advanced data analysis capabilities customized options and large scale content generation services, all with enterprise grade security partner of global leader in consumer payments users chat GPT to power multi lingual.
Speaker Change: Customer services. According to open AI blog posts foreigners AI assistance has $2 3 million conversations representing two thirds of <unk> customer service chats.
Speaker Change: AI assistance is more accurate and expedient mclarty experienced in Carter's previous solutions, leading to a 25% decrease in repeat inquiries and resolutions in less than two minutes on average compared to 11 minutes on average before.
Speaker Change: According to pitch book open AI has raised over $21 9 billion in debt and equity financing from investors, including code to Nvidia, Microsoft Drive capital Tiger Global and others. We are excited about <unk> traction and positioning at the forefront of generative AI development.
Speaker Change: Please turn to slide eight during the third quarter, we made a $5 million follow on investment in core weeds common shares via a secondary transaction subsequent to quarter's end, we made an additional $5 million follow on investment in core we'd series a shares again via secondary transaction these investments add to our <unk>.
Speaker Change: Previously.
Speaker Change: Discuss the fifth.
Speaker Change: <unk>, Inc.
Speaker Change: CW opportunity to LP, which is invested in core series C preferred shares, bringing our total investment in <unk> to $25 million.
Speaker Change: <unk> is a specialized cloud provider delivering access Nvidia Gpus and fast flexible cloud computing infrastructure tailored for AI and machine learning.
Speaker Change: It supports end to end AI workflows for model training to deployment by offering distributed clusters powered by Nvidia is quantum infinite band network solutions with spin up times. The shortest slides <unk> provides one of the industry's fastest and fluid solutions using Nvidia Gpus. According to the <unk>.
Speaker Change: It's influenced services, 8% to 10 times faster than those of leading generalized providers.
Speaker Change: <unk> momentum has accelerated in recent months according to the financial times and now operates more than 45000, Nvidia Gpus, making it the largest private operator in North America. Additionally, according to Bloomberg just last month.
Speaker Change: Cisco invested in core we've as part of a transaction valued at $23 billion.
Speaker Change: Also last month core we've announced the close of $650 million credit facility led by Jpmorgan Chase Goldman Sachs and Morgan Stanley building on the close of its $7 5 billion credit facility led by Blackstone and magnetometer in late May.
Speaker Change: Later in the month <unk> core scientific a leader in digital infrastructure for Bitcoin mining announced that core we've exercise its final contract option to deliver approximately 120 megawatts of computing infrastructure to core scientific data centers. According to score Scientifics press release.
Speaker Change: This contract exercise expanse core weeds contracted infrastructure to approximately 500 megawatts across the six core scientific sites.
Speaker Change: The information reported that Microsoft plans to invest $10 billion between 2023 and the ended the decade to use <unk> data centers.
Speaker Change: According to the information Microsofts contract will be a key driver of <unk> significant revenue growth.
Speaker Change: According to the information.
Speaker Change: Estimated revenue for <unk> is $500 million for 2023 $2 billion for 2024 and $8 billion for 2025.
Speaker Change: According to Bloomberg this scale positions <unk> for major IPO with bankers already hired for 2025 listing.
Speaker Change: According to pitch book <unk> raised over $9 billion debt and equity financing from investors such as co two fidelity magnetometer and more.
Speaker Change: With its best in class cloud infrastructure, we believe core wheat will continue its exponential growth and capitalize on accelerated AI adoptions.
Speaker Change: Yeah.
Speaker Change: Please turn to slide nine.
Speaker Change: Subsequent to quarter's end, we made a $12 million $12 million investment in fast data through a membership interests and IH <unk> LLC and.
Speaker Change: An entity, whose sole portfolio asset is interest and bad debt as series B preferred shares.
Speaker Change: <unk> is a data management solution for late leading AI companies.
Speaker Change: As data has emerged to in.
Speaker Change: To emerge due to an inability of legacy data management solutions to serve customers building complex AI applications for several decades enterprise data solutions was built around the concept of tears tiered storage is the idea of that data is segmented based on its importance Dale.
Speaker Change: <unk> operations, and example of segments could be cold warm hot and mission critical.
Speaker Change: However, AI applications need to access access to all that at once rendering the tiered storage system increasingly obsolete.
Fast added collapses, the tiered storage model by offering all flash storage all flash allows all data in our pipeline as opposed to that in a specific tier to be access instantly.
Speaker Change: This is especially valuable for companies that train AI models to produce output as these companies require constant movement of data between backend systems as customers scale and face increasingly complex data management needs vast data can add nodes to increase connections with a company of customers' data Arca.
Speaker Change: Texture, and Gpus to accelerate production and usage of customer data.
Leading companies at the forefront of the AI development used as data to accelerate through applications. According to invest at a blog posts Pixar a globally recognized animation studio.
Speaker Change: <unk> uses data fluids.
Speaker Change: Data intensive media productions.
Speaker Change: For example in its 2023 film elemental.
Speaker Change: Pixar used this custom edge animation methods that created several times the data footprint and competent.
Speaker Change: The computation with demands for data than other previous movies, even during the film's peak rendering usage. That's data delivered fast uninterrupted performance Pixar continues to use vast added to employ new animation techniques using machine learning models for adopted an improved media.
Speaker Change: Production.
Speaker Change: Okay.
Speaker Change: According to invest at a blog post zoom leader in live video conferencing uses vast added to assisted training. Its AI models on top of its video conferencing interface Zoom offers AI powered features such as speech to text transcription and language Trans at translation to.
Speaker Change: To build a refined these features zoom required a data management solution that could access and retrieve data instantly zoom users vast added to help process audio efficiently and quickly even in real time during a video conference.
Speaker Change: That data as quickly cemented itself as a dominant AI infrastructure provider. According to a press release at the end of 2023 fast data reached over $200 million and <unk>.
Speaker Change: Additionally, the company has been cash flow positive for the last three years. According to pitch pitch book vast data has raised over $390 million in equity financing from investors, such as NBA General Atlantic TPG and others.
Speaker Change: We believe that data is poised for growth as a leading data management provider for the AI universe.
Speaker Change: Over the last few months, we've been deliberately focusing on deploying capital into companies offering critical AI infrastructure solutions today with nearly $55 million invested in AI infrastructure. We believe our portfolio is well positioned for upside given AI tailwind.
Speaker Change: <unk>.
Speaker Change: Now I would like to highlight recent developments in our portfolio company Kampa.
Speaker Change: As previously discussed cafes, and online productivity design software and collaboration platform with a mission to empower everyone in the world to design.
Speaker Change: According to a Forbes article in as of late October camber across $200 million.
Speaker Change: Active daily users and $2 $5 billion in annualized revenue.
Speaker Change: According to the.
Speaker Change: Additionally, the company reported having completed several transactions at a $32 billion valuation up from the $26 billion valuation it received and it's larger company tender in April.
Speaker Change: As previously discussed we made our $10 million investment in Canada on similar terms as what was reported in the company tender offer.
Speaker Change: Finally, Canada continues to gain traction with enterprise companies, having added names such as HP and the New York stock exchange to its platform.
Speaker Change: According to Pittsburgh canvas raised over $581 million in equity financing from investors, including Bessemer venture partners General catalysts iconic and others. We're excited about the canvas trend about canvas traction and positioning in the market as it expands as enterprise footprint.
Speaker Change: Further captures international markets.
Speaker Change: Transitioning to our public investments as previously stated it is our objective to sell our public positions when lockups restrictions expire and there is relative stability in a given public positions trading.
Speaker Change: In line with this approach we began to monetize our position in public square shares as their lockup restrictions expired during the quarter and have continued to do so subsequent to quarter's end.
One additional portfolio company, we'd like to hire highlight again as <unk> <unk> has been very positively positively received as a public company, we'll discuss stock closing in excess of $26 $5 today more than double where the stock initially listed as.
Speaker Change: As previously discussed <unk> is a SaaS firing clean power company backed by Sam Altman will close on the cutting edge of new nuclear fuel recycling, which has many uses including the potential to a clean power to AI related data centers.
Speaker Change: According to a recent report from the U S Department of energy nuclear power is one of the lowest lifecycle emissions of any major.
Speaker Change: Jen of any major generating energy source, providing electricity to the grid with a low cotwo <unk> per megawatt hour of any currently available technology.
Speaker Change: <unk> is in the forefront of the small modular nuclear reactor space, which has recently received significant commercial interests.
Speaker Change: According to an <unk> press release in August <unk> establish a preferred supplier agreement with Siemens energy, a leading manufacturer of steam turbine generator products and services.
Speaker Change: This partnership exceeds 1300 megawatts in.
Speaker Change: A non binding letters of intent underscoring <unk> significant market traction. Additionally, in September <unk> announced the Finalization of an agreement with the U S Department of Energy's, Idaho operations office. According to <unk> Press release. This agreement gives <unk> access to conduct site.
Speaker Change: <unk> is the only advanced formation company with a deal.
Speaker Change: Site use permit we're.
Speaker Change: We're excited about <unk> positioning as a leader as a leading nuclear energy provider as the company continues to expand its commercialization prospects.
Speaker Change: Finally.
Speaker Change: We continue to focus on our shareholder friendly initiatives, including our recently executed note purchase agreement and note purchase program and the expansion and extension of our share repurchase program.
Speaker Change: Alison will discuss these initiatives during her prepared remarks in further detail.
To conclude my remarks, I want to highlight why I believe this is an exceptionally promising time for our portfolio over.
Speaker Change: Over the past five years, we have made it a priority to share our perspective on the evolving market cycles and trends.
Speaker Change: In the Middle of 2020, we stated our belief that there would be a significant increase in IPO activity and we would and we were strategically positioned to take advantage of this potential.
Speaker Change: Throughout 2021, we monetize over $258 million of our portfolio's assets, including two substantial monetization talented and coursera coarser each exceeding $100 million in net proceeds.
Speaker Change: Also declared a total of $8 per share for over $212 million in distributions to our shareholders.
Speaker Change: 2022, we conveyed our view that the market was a bit over extended prompting us to considerably scale back on our new capital investments.
Speaker Change: In the subsequent year and a half we had ongoing dialogue with our investors about the disparity between private and public market valuations.
Speaker Change: And as this year progressed, we've had deep we have detailed our approach to disk to judiciously.
Speaker Change: <unk> deploying our available capital.
Speaker Change: I am confident that our current positioning is as strong if not stronger than it was in 2020.
Speaker Change: We believe that if the market remains robust.
Speaker Change: IPO market will reopen.
Speaker Change: I discussed earlier and earlier in my remarks, we've had we have several investments that could materially benefit from our revitalized IPO market.
Speaker Change: Given our recent investments and broader portfolio. We believe we are well positioned to drive shareholder return.
Speaker Change: Thank you for your attention and with that I will hand, it over to Alison Greene, our Chief Financial Officer.
Alison Greene: Thank you Mark I would like to follow Mark's update with a more detailed review of our financial results as of September 30th investment activity during the third quarter and subsequent to quarter end. Additionally, I'll provide more detail on the six 5% convertible note purchase agreement and related issuances during the quarter and subsequent to quarter end and the board approved 6% notes due 2020, thanks repurchase.
Speaker Change: Ma'am.
Speaker Change: Conclude with a brief update on the share repurchase program and our current liquidity. Please turn to slide 10.
Speaker Change: As Mark mentioned during the quarter, we completed a $17 $5 million investment in the convertible equity at open AI due to pack a interest of arc <unk> Ventures fund Aussie funds installed portfolio asset for Cathay interest holders as the convertible equity of opening.
Speaker Change: We also made a $5 million investment in <unk> common shares the secondary transaction subsequent to quarter end, we made an additional $5 million investment in <unk> series, a preferred shares secondary transaction and a $12 million investment in vast data through our investment in the membership interest of IH 10, LLC, an entity who sell portfolio asset.
Speaker Change: The series B preferred shares back data through an NCD.
Speaker Change: Let's turn to slide 11.
Speaker Change: During the third quarter, we began to fill our public common shares a public square following their lockup expiration on July 19th we saw 359845 shares of public square for approximately $1 million in net proceeds resulting in a realized gain of approximately $733000. Additionally, we sold our entire remaining position in <unk>.
Speaker Change: One Valley, Inc, formerly known as Nash CSB, resulting in net proceeds of $3 million and a realized loss of approximately $6 6 million during the quarter. We also exited our position in <unk>, formerly known as GSV sustainability partners. Upon the installation of the business for which we received a final distribution of approximately $375000.
Speaker Change: Resulting in a realized loss of approximately $6 8 million.
Finally during the third quarter, we wrote off our investment in Churchill sponsor seven and you've got technology doing that as a stand upon each.
Speaker Change: Any destination.
Speaker Change: Subsequent to quarter end, we continue to sell our public common shares in public square. So far in Q4, we installed 822000 and 305 shares at a public square for approximately $2 $5 million in net proceeds and a resulting realized gain of approximately $1 $8 million.
Speaker Change: Please turn to slide 12.
Speaker Change: Thank you provide more detail on the note repurchase program for the 6% notes due 2020.
Speaker Change: And executed note purchase agreement for six 5% convertible notes due 2029 and <unk>.
Speaker Change: August six zero capital as part of directors approved a discretionary note repurchase program, which allows me to repurchase up to $46, six 7% or $35 million in aggregate principal amount of our 6% notes due 2020.
Speaker Change: Through open market purchases, including block purchases and such manner, and we will comply with the provisions of the Macerich company activating 40 as amended and the Securities Exchange Act of 934 as a mandate as of September 30, we have repurchased 1 million 10136, and the 6% notes under the note repurchase program.
Speaker Change: Second quarter and through today, we repurchased an additional 201446.
Speaker Change: The 6% notes under the network participant Gram today under the note repurchase program, we have repurchased a total of 1 million to <unk> 582, or approximately $33 million principal amount at the publicly traded 6% notes for approximately $30 million.
Aggregate principal dollar amount of 6% notes that may yet be repurchased by Sarah capital under the repurchase program is approximately $4 7 million.
Speaker Change: Now moving on to the six 5% convertible note issuance.
Speaker Change: Zero capital entered into a note participate by and between the company and a private issuer pursuant to which we may issue up to an accident and $75 million in aggregate principal amount of six 5% convertible notes due 2029.
Speaker Change: The note purchase agreement on August 14th we issued are installed and the purchase of <unk> $25 million in aggregate principal amount at the convertible notes under the note purchase agreement upon mutual agreement between the company and the purchaser. We may issue an additional you may ask your additional convertible notes for sale and subsequent offerings to the purchaser or issue additional notes with modified pricing trend in the aggregate.
Speaker Change: But the additional notes and the new note up to a maximum of $50 million and one or more private offering.
Speaker Change: Just on the six 5% convertible notes due 2029 will be paid quarterly in arrears on March 30 at June 30 at September 30, and then December 30th.
Speaker Change: Six 5% per year, beginning September 30 of this year. 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.
Speaker Change: 27 upon the fulfillment of certain condition.
5% convertible notes will be convertible into shares of our common stock at a purchase of their sole discretion and initial conversion rate of approximately 129 shares of our common stock per $1000 principal amount of the convertible notes subject to adjustment and limitations as provided in the note purchase agreement.
Speaker Change: Net proceeds from the operating of the convertible notes will be used to repay outstanding indebtedness make amendments in accordance with our investment objective and in market strategy and for other general corporate purposes.
Speaker Change: I know part of the agreement include customary representation warranties and covenant by the company.
Speaker Change: It's a good quarter and pursuant to the note purchase agreement on October nine we issued and filed in the participant purchased $5 million in aggregate principal amount of additional six 5% convertible notes. The additional convertible notes are treated as a single period with the initial note and have the same terms as the initial note. The additional nodes are fungible and rank equally with the initial note.
Speaker Change: All lines have been addressed.
Speaker Change: You will note the outstanding aggregate.
Speaker Change: Principal amount at six 5% convertible notes due 2029 became $30 million. Please.
Speaker Change: Please turn to slide 13.
Speaker Change: This quarter, we reevaluated the investment being used to categorize that portfolio by industry to more appropriately capture our current portfolio as it has evolved since the same store initially introduced as a result, the sixth former investment themes education technology Big data cloud AI marketplaces financial technology led.
Speaker Change: <unk> and sustainability, we're a place to present, a more accurate reflection of our portfolio. The new investment themes are artificial intelligence infrastructure and application software as a service education.
Speaker Change: Consumer goods and services logistics and supply chain financial technology and services and <unk>.
Speaker Change: You mentioned by seven in general investment themes, the top allocation of our investment portfolio at quarter end with to software as a service representing approximately 26% of the investment portfolio at fair value.
Speaker Change: Artificial intelligence infrastructure and applications and consumer goods and services were the next largest categories of approximately 21% and 16% of our portfolio respectively. Approximately 15% of our portfolio was invested in education technology companies and the logistics and supply chain category accounted for approximately 11% of the fair value of our portfolio.
Speaker Change: Technology and services accounted for 9% of the fair value of our portfolio and thorough sports accounted for 2% ended September 30th Please turn to slide 14.
Speaker Change: We ended the third quarter 2024, with an NAV per share of $6 73, which is consistent with our financial reporting.
Speaker Change: Decrease in NAV per share from $6 94 at Q2 to $6 73 as of September 30, and was primarily driven by <unk> 59 per share decrease resulting from the net realized loss on our portfolio investments during the quarter, our 14th <unk> per share decrease did a net investment loss and a one cent per share decrease due to a realized loss on the partial repurchase of our 6% notes due two.
Speaker Change: 'twenty two.
Speaker Change: The decrease in NAV per share was partially offset by a 50 cent per share increase from the net change in unrealized depreciation of our investments and a three <unk> per share increase from the impact of stock based compensation during the quarter I'd like to conclude with some notes on our share repurchase program and our liquidity as of quarter end.
Speaker Change: As Mark mentioned earlier zero capital committed to initiatives that enhance shareholder value. Accordingly on October 29, our board of directors authorized a $4 $3 million expansion to the share repurchase program to $64 3 million.
Speaker Change: And an extension of the share repurchase program through October 31, 2025, since the inception of the share repurchase program. In August 2017, we have repurchased a total of over 6 million shares of our common stock for a total deployment of approximately $39 $3 million of the $64 3 million authorized by the board.
Speaker Change: $25 million remains authorized under the share repurchase program that is now set to expire on October 31 2025.
Speaker Change: Regarding our liquidity as of quarter end.
Speaker Change: We ended the quarter with approximately $39 $5 million of liquid opex, including approximately $32 $7 million in cash and approximately $6 7 million in unrestricted public securities the $1 $4 million of public securities subject to lockup restrictions at the quarter end was not included in the balance.
Speaker Change: At September 30, and as of today. There are 23 million 338002 shares of the company's common stock outstanding that.
Speaker Change: That concludes my comments, we would like to thank you for your interest and support of Star capital now I will turn the call over to the operator to start the Q&A session operator.
Speaker Change: Thank you as a reminder.
Speaker Change: A question. Please press star followed by one on your Keypad to register your question.
Speaker Change: Withdraw your question for any reason you May press star two.
Speaker Change: Kindly request you limit yourself to one question.
Speaker Change: You will be advised to ask your question.
Speaker Change: We have no questions in queue.
Speaker Change: I'll turn it back over to your host for any closing remarks.
Speaker Change: Thank you all for attending our Q3 call. We appreciate.
Speaker Change: Your interest and support and if you have any further questions feel free to reach out directly to our IR portal. Thank you all very much.
Speaker Change: Okay.
Speaker Change: Thank you for IMAX once again that does conclude today's conference you may now disconnect.
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Speaker Change: [music].
Speaker Change: Sure.
Speaker Change: [music].