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SuRo Capital Corp. (SSSS) Q1 2021 Earnings Call Transcript

By Motley Fool Transcribing - May 6, 2021 at 12:31AM

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SSSS earnings call for the period ending March 31, 2021.

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SuRo Capital Corp. (SSSS 0.68%)
Q1 2021 Earnings Call
May 05, 2021, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Operator

Good day, ladies and gentlemen, and thank you for standing by. Welcome to SuRo Capital's first-quarter 2021 earnings call. [Operator instructions] This call is being recorded today, Wednesday, May 5, 2021. I will now turn the conference over to today's speaker, Adam Bates of SuRo Capital.

Please go ahead.

Adam Bates -- Chief Financial Officer

Thank you for joining us on today's call. I am joined today by the chairman and chief executive officer of SuRo Capital, Mark Klein; and chief financial officer, Allison Green. Please note that a slide presentation that corresponds to today's prepared remarks by management is available on our website at www.surocap.com under Investor Relations, Events and Presentations. Today's call is being recorded and broadcast live on our website www.surocap.com.

Replay information is included in our press release issued today. This call is the property of SuRo Capital and the unauthorized reproduction of this call in any form is strictly prohibited. I would also like to call your attention to customary disclosures in today's earnings press release regarding forward-looking information. Statements made in today's conference call and webcast may constitute forward-looking statements, which relate to the future events or future performance or financial condition.

These statements are not guarantees of our future performance or future financial condition or results and involve a number of risks, estimates, and uncertainties, including the impact of COVID-19 and any market volatility that may be detrimental to our business, our portfolio companies, our industry and the global economy that could cause actual results to differ materially from the plans, intentions, and expectations reflected in or suggested by the forward-looking statements. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including, but not limited to, those described from time to time in the company's filings with the SEC. Management does not undertake to update such forward-looking statements unless required to do so by law. To obtain copies of SuRo Capital's latest SEC filings, please visit our website at www.surocap.com or the SEC's website at sec.gov.

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

Mark Klein -- Chairman and Chief Executive Officer

Thank you, Adam. We are pleased to share the results of SuRo Capital's first-quarter 2021. These are obviously unprecedented times we are living through, but we are pleased to see indicators of a post-pandemic recovery throughout the economy. As the number of fully vaccinated individuals increase, we are hopeful that the end of the pandemic is in sight.

Today, I will discuss how our portfolio has fared during the first four months of the year, highlighting how a few of our larger positions have continued to exhibit acceleration in their business. To conclude, I will hand the call over to Allison Green for a brief financial overview. At the conclusion of our remarks, we will open the call for questions. Let's start with Slide 3.

This quarter SuRo Capital reached both our highest absolute and highest dividend-adjusted net asset value per share since inception. At March 31, 2021, net asset value was $18.01 per share, inclusive of dividends declared during the quarter totaling $0.50 per share. This is an increase from $15.14 per share at December 31, 2020. As of March 31, 2021, net assets totaled approximately $436 million, compared to $302 million at year-end.

Consistent with our desire to be shareholder-friendly and our continued practice of distributing realized gains, on May 4, SuRo Capital's board of directors declared a $2.50 per share dividend to shareholders. This dividend will be payable on June 30 to shareholders of record on May 18. Our board is offering shareholders the option to elect to take as much as 100% of their dividend in stock and has kept the aggregate cash dividend to 50% of the total dividends payable. This $2.50 per share dividend follows the $0.25 per share dividend declared on January 26 and paid on February 19, and the $0.25 per share dividend declared on March 8 and paid on April 15.

Later in the call, Allison will walk through the details of this dividend. Looking forward, and subject to ongoing portfolio activity, the board intends to declare at least two more large dividends later this year on a similar cash and stock basis. The president -- the present intention of the board is to declare these dividends in August and November of this year. Please turn to Slides 4 and 5 for a review of notable developments in our investment portfolio during the first quarter and subsequent to quarter's end.

SuRo Capital's top five positions as of March 31 were Coursera, Course Hero, Nextdoor, Ozy Media, and Blink Health. These positions accounted for approximately 72% of the investment portfolio at fair value. As of March 31, our top 10 positions accounted for approximately 87% of the portfolio. First, I want to highlight our investment in Coursera, currently our largest position.

On March 31, Coursera executed an initial public offering and began trading on the New York Stock Exchange. Immediately prior to the IPO, Coursera priced at $33 per share, the top of the range, and began trading at $39 per share. Coursera raised $519 million in proceeds and closed the first day of trading and the quarter at $45 per share. SuRo Capital's Coursera shares are broadly restricted until mid- to late August.

Consistent with our past communications and practices, we will evaluate monetization of this investment as these shares become unrestricted. We value our investment in Coursera as of the quarter-end at the closing price of March 31 and imply a discount for lack of marketability due to the lockup restrictions on our holdings as of that date. This is consistent with our valuation methodology that we apply to public shares subject to lockup provisions. As of March 31, and subsequent to Coursera's IPO, we value our Coursera position at $126.7 million, an increase of approximately $74 million since year-end.

As mentioned in Coursera's call yesterday, the CEO highlighted how Coursera's consumer, enterprise, and degree business segments have all accelerated during the pandemic. As the world has shifted toward digital learning and remote work, Jeff noted how working professionals have increasingly turned to Coursera to earn professional certificates for entry roles. Rather than return to a university campus in a traditional four-year structure, which increasingly does not meet the needs of today's working professionals, learners can remotely reskill using Coursera's content. It is Coursera's belief that we are only in the early innings of this long-term structural trend in the $2 trillion higher education market.

More than 5 million new learners signed up for Coursera's consumer business in Q1, bringing the total to 82 million total registered learners on the platform. In addition to offering professional certificates to individuals, Coursera has partnered with a number of enterprises to offer education programs for their employees such as their new collaboration with Microsoft. These programs offer content to address the evolving needs of the workplace, including courses in data science and cloud computing. In Q1, Coursera grew quarterly revenue by 64% year over year to over $88 million.

Coursera's consumer segment grew 61% year over year. Its enterprise segment grew 63% year over year, and its degree segment grew 81% year over year. Coursera anticipates generating between 369 and $381 million of total revenue in 2021. Following the release -- the earnings release, at least 10 Wall Street firms have reaffirmed their buy or outperform recommendations for Coursera with price targets ranging from $54 to $60 per share.

Combined with our exit from Palantir, we are delighted with the performance of these two recent IPOs. As previously announced, our sales of Palantir, in aggregate, generated over $135 million in net proceeds resulting in realized gains of approximately $119 million between September 2020 and March of this year. We are pleased to have delivered this positive outcome for our shareholders. As reported in August -- in an August 2020 TechCrunch article, Course Hero, our second-largest position raised a $70 million tranche of its Series B capital out of $1.1 billion pre-money valuation.

This round brings the total primary capital raise in Course Hero's Series B round to $80 million. According to an EdSurge report, this financing included investments from TPG, Goldman Sachs Asset Management, and others. In October 2020, TechCrunch reported that Course Hero had acquired Symbolab, an artificial intelligence-powered calculator that helps students understand complex math questions. The acquisition aims to further expand Course Hero's set of offerings to students.

Due to the impact of the COVID-19 pandemic and related quarantines and school closures with less in-person student access to teachers or study groups, students have increasingly turned to online learning supplements for their studies, including Course Hero's online document library. Chegg, a key competitor to Course Hero, noted in its May 2021 earnings call that COVID-19 has continued to accelerate its business in a meaningful way. In Q1 2021, Chegg experienced 64% growth in subscribers and a 51% total revenue growth. Similar to the successes demonstrated by Coursera and Chegg, we believe Course Hero continues to capitalize on the same long-term trends on online learning.

Our investments in online learning through our positions in Coursera and Course Hero now represent 58% of our total investment portfolio at quarter's end. From recent media reports, as well as earning reports from public online learning companies such as Chegg, it is evident that the initial spike in online learning generated by the COVID-19 pandemic has continued through the current 2020 to 2021 academic year. We continue to believe the effects of the pandemic have accelerated a long-term structural change in how education is being and will be delivered and consumed with a clear transition toward online learning. We believe our portfolio is well-positioned to continue capturing the benefits of this trend.

Nextdoor, our third largest position is an outstanding platform that serves over 276,000 neighborhoods across 11 countries. In an April 2021 interview with CNBC, Nextdoor's CEO, Sarah Friar, noted that demand for Nextdoor has accelerated during the pandemic. Nextdoor is now used by one in three households in the United States, up from one in four households last year. In addition to adding more users, user engagement on the platform has also increased.

Year over year, daily active users grew 45% and impressions per daily active user grew 20%. When asked the -- asked about Nextdoor's interest in becoming a public company, Ms. Friar said she is focused on making Nextdoor IPO-ready and that Nextdoor has the scale and monetization engine to do so. Ms.

Friar also noted that Nextdoor is open to raising capital and can use funding to invest in areas like machine learning and artificial intelligence. We are excited by the progress Nextdoor has made during the pandemic as its users continue to turn to the neighborhood platform for help navigating school closures, making vaccine appointments, and handling the stresses and confusing -- confusion of the ever-changing and sometimes conflicting local pandemic guidance. We continue to believe Nextdoor has an exceptional opportunity to monetize its growing and more engaged user base in the $161 billion United States local advertising market. As reaching local audiences through digital advertising channels has become one of the most important mobile marketing trends, we believe Nextdoor has reached a critical mass of users that is highly valuable to advertisers.

While online learning and online communicate -- communities are changing the ways we live, SPACs have become a significant driver in the financial markets. As such, we got to see SPAC's input -- impact not only our existing portfolio but the investment opportunities we diligence and some of the investments we are currently making. On April 28, Enjoy, a SuRo Capital portfolio company, announced plans to merge with Marquee Raine Acquisition Corp., a SPAC sponsored by the affiliates of The Raine Group and Marquee Sports holdings. Upon the successful closing of the transaction, the combined entity will trade on the NASDAQ.

The transaction values the combined company at an enterprise value of $1.2 billion and includes an $80 million pipe and is expected to provide approximately $450 million in gross proceeds to the company. The transaction values Enjoy at an enterprise value that is over 3.5 times greater than our current March 31 valuation. Enjoy's mission is to disrupt the physical retail model by bringing a personalized convenient retail experience through the door and into the comfort of a customer's home. Through partnerships with companies like Apple, AT&T, and Rogers Communications, Enjoy has achieved a 100% compound annual growth rate from 2018 to 2020 according to the transaction's press release.

Enjoy expects to achieve more than $1 billion in annual revenue and a 30% adjusted EBITDA margin by 2025. We look forward to the significant potential transaction for Enjoy. On February 11, SuRo Capital portfolio company, Rover, announced plans to merge with Nebula Caravel Acquisition Corp., a SPAC sponsored by True Wind Capital. Upon the successful closing of this transaction, the combined entity would also trade on NASDAQ.

The transaction values the company at an enterprise value of $1.35 billion, includes a $50 million pipe, and is expected to provide approximately $325 million in gross cash proceeds to the company. We are excited by the potential transaction for Rover, which we believe has emerged as a leading online marketplace for pet care. Please turn to Page 6 -- Slide 6. As we previously discussed, we have broadened our focus beyond our core equity strategy into private credit and pre-SPAC merger pipes.

Since the inception of the company, we continue to be driven by our focus to expand and democratize access to asset classes and specific investments generally unavailable to the public. For the past few quarters, we have highlighted that the SPAC asset class was growing by record amounts. Last year there were approximately $81.5 billion of SPACs issuance -- issued, an increase from just $13.5 billion in 2019. According to SPAC Research, over $100 billion have already been issued in 2021 through 312 IPOs.

There were 248 IPOs in all of 2020. According to Cowen research, 108 SPAC deals have already been announced in 2021. Cowen research notes that 28 deals have closed in the same period. Last year, 90 deals were announced and 55 deals of those -- 55 of those deals have closed, an increase from 37 deals announced in 2019 with 25 of those closing.

Beyond our existing portfolio, we believe our proprietary access within the SPAC universe has delivered and will continue to surface unique opportunities to serve capital. While investors have the ability to buy SPAC common shares and warrants in the open market, most investors do not have access to other parts of the SPAC structure such as sponsor equity and warrants for purchase agreements and pipes. It has been broadly reported that sponsor equity and warrants are viewed to be highly valuable and for the most part, only SPAC sponsors have had the opportunity to benefit from them. As we previously mentioned, we equate the pipe issuance in the SPAC business combinations as similar to pre-IPO investments.

According to SPAC Research, 427 SPACs are currently looking for companies to effectuate business combinations, which should translate into hundreds of pipe opportunities over the next couple of years. In an effort to be a leader in this democratization, we continue to have active dialog with sponsors and investment banks to participate in both sponsor economics and pipes. As a result, we are excited to provide shareholders unique access that we believe no other public vehicles presently provide. Recently, the SPAC market, as well as the pipe market have exhibited weakness.

This has been a result of oversaturation of public issuance, unrealistic valuations of announced deals, and regulatory scrutiny, and this has led to a broad reset in the market, including repricing of certain deals and limited new issuance. We believe, the current weakness provides an opportunity for us to selectively deploy capital. To this end, during Q1, we executed two investments in the sponsor share and warrants of Churchill Capital Sponsor VI and Churchill Capital Sponsor VII. And subsequent to quarter's end, we invested in the sponsor economics of a third investment, Colombier Acquisition Corp.

Churchill Capital VI and Churchill Capital VII are special purpose acquisition companies within Churchill Capital Franchise. Churchill has enjoyed success since its inception, beginning with Churchill Capital I's merger with Clarivate and most recently with the announcement of merger between Churchill Capital IV and Lucid Motors. Churchill Capital VI is focused primarily on high-growth technology names and is led by a Churchill operating partner and former President of Y Combinator, Sam Altman. Churchill Capital VII is focused on larger global opportunities.

By investing in sponsor shares and warrants on both of the Churchill vehicles, we anticipate a meaningful return upon the successful completion of merger each in SPAC. In addition to Churchill, we have agreed to participate in Colombier Acquisition Corp.'s sponsor economics. Columbier Acquisition is a special purpose acquisition corp. formed by a sponsor team comprised principles of the boutique investment bank of Farvahar Capital and early stage venture capital fund, Torch Capital.

With this investment, SuRo has obtained board representation. The SPAC will leverage the notoriety of celebrities, tastemakers, and influencers to grow potential target companies' brand, identity, engagement, and customer reach. We have seen firsthand that today's consumer marketplace can be oversaturated with products and brands that lag differentiating -- differentiation since significant consumer engagement and brand loyalty. In today's digital ecosystem, having a good consumer product is not enough.

The brand itself must stand out in order to drive the product to the front of a very crowded shelf. We believe celebrity association and endorsement have the proven power to drive brand awareness and engagement. However, paid endorsements are expensive and often unauthentic. The consumer understands their transactional nature and is less impressed with their influence.

Nevertheless, the brands that utilize tastemakers as -- and influencers as partners are often successful in leveraging the celebrity association for brand building. We believe the respective areas of expertise within our sponsor team are complementary and reinforcing to believe that strategic influencer involvement can differentiate the consumer or technology brand. In addition to Colombier, we continue to have discussions with other sponsor teams to participate in their sponsors shares and warrants. To reiterate, the SPAC market opportunity is broadly compelling.

Furthermore, it is our opinion that we are extremely well-positioned to take advantage of this market opportunity and ultimately deliver to shareholders through this proprietary access. Beyond SPACs, we continue to see a high volume of attractive opportunities across our core investment strategies. A few industries of focus include e-commerce and retail financial technology, food technology, and transportation and logistics. During the quarter, we made new equity investments in Shogun Enterprises and Architect Capital PayJoy SPV, which lends capital to facilitate PayJoy's leasing business.

Additionally, we formed SuRo Capital Sports LLC, otherwise known as SuRo Capital Sports, a $10 million wholly owned SuRo Capital subsidiary focused on investing in the sports betting sector. On March 25, SuRo Capital made its first investment in Commercial Streaming Solutions, otherwise known as BettorView. Please turn to Slide 8. Architect Capital PayJoy SPV is a special purpose vehicle formed to finance smartphone leases originated by PayJoy Inc.

PayJoy is a San Francisco-based provider of smartphone locking technology that has raised over $67 million of capital to date according to PitchBook. PayJoy's latest Series B equity capital raise was led by Greylock Partners in May of 2019 with participation from Union Square Ventures, Core Innovation Capital, and others. PayJoy owns a smartphone locking technology that allows users, usually the direct lenders of its smartphone leases, to lock any device where its software is installed. PayJoy has monetized this technology by partnering with phone retailers in emerging countries to offer leases at the point-of-sale.

Consumers who leases SmartJoy with PayJoy Partners, commit a portion of the lease in cash upfront payments and pay for the rest of the smartphone lease in weekly instalments. If a consumer misses a weekly installment, PayJoy's technology automatically locks the phone. The technology unlocks the phone if the consumer resumes making lease payments. The result of this technology is a powerful incentive mechanism that has produced a history of predictable and stable lease payments.

Our $10 million commitment to the Architect SPV will ultimately be used to finance these leases at the point-of-sale and carries a 17.5% interest rate, exclusive of the SPV management fees. The SPV will receive warrants equal to 0.75% of PayJoy's fully diluted equity in PayJoy's next equity financing round. As of the quarter's end and to date, we have invested $500,000 of our $10 million commitment to the SPV. Please turn to Slide 9.

SuRo Capital Sports is a $10 million wholly owned subsidiary of SuRo Capital created to take advantage of the significant tailwinds occurring within the sports betting industry. We are currently sourcing opportunities through this entity and then in the space, including B2B, data solutions, integrity providers, differentiated operators, and consumer engagement platforms. During the first quarter, SuRo Capital made its first investment in BettorView, a software focused on allowing bars, restaurants, arenas, venues, and sportsbooks to take advantage of the growth in sports betting industry through a second screen experience. BettorView is focusing on distributing its technology to both large change and independent venues and it seeks -- as it seeks to expand its footprint.

To date, BettorView has partnered with seven prominent F&B establishments, including Hooters, Bowlero, Capital One Arena, and Wings, etc. We believe there is significant upside in BettorView's ability to execute on its vision to increase online sports with usage through its platform, given the increased legalization of sports betting throughout the United States. Looking forward, we believe our portfolio is well-positioned as ever to drive long-term value to both exits and ongoing strategic investments in compelling industries and opportunities not readily available to public investors. We believe our healthy cash balance puts us in a strong position to deploy capital against this high volume of attractive opportunities.

Thank you for your attention. And with that, I will hand it over to Allison.

Allison Green -- Chief Financial Officer

Thank you, Mark. I would like to follow Mark's update with a more detailed review of our first-quarter investment activity and financial results as of March 31, including results of our redemption notice for the 4.75% convertible senior notes due March 2021, recently declared dividend, our current liquidity position, and details of the upcoming Annual Shareholder Meeting. First, I will review our investment activity. During the first quarter, we invested a total of $9.5 million in new and follow-on investments.

New investments during the quarter include a $200,000 investment in the share units and warrant of Churchill Capital Sponsor VI of the sponsor vehicle for Churchill Capital VI and a $300,000 investment in share units and warrant units of Churchill Sponsor VII of the sponsor vehicle for Churchill Capital VII. A $7 million investment in the Series B1 and Series B2 preferred shares of Shogun Enterprises, the funding of a $500,000 capital call related to our $10 million commitment to Architect Capital PayJoy SPV, and a $1 million investment in a simple agreement for future equity or space in BettorView via our $10 million wholly owned subsidiary SuRo Capital Sports. During the quarter, we also funded a follow-on investment of approximately $500,000 in the common shares of GreenAcreage Real Estate Corp., now known as NewLake Capital Partners. Please turn to Slide 11.

During the first quarter, we sold our remaining unrestricted publicly traded Class A common shares of Palantir. On September 30, 2020, Palantir Technologies completed its IPO on the New York Stock Exchange under the ticker PLTR. Upon IPO, 80% of our shares remained restricted until the lockup period expired on February 18, 2021. After selling our initial 20% portion of unrestricted shares in 2020, and once the remaining 80% of our shares became unrestricted in mid-February of this year, we sold the remaining 4,618,952 shares as of March 4, 2021, for a net realized gain in the first quarter of $110.5 million.

In total, since the IPO, we realized approximately $119 million in net gain from our Palantir investment, not including sales made in prior years. During the first quarter, we also received $1.6 million of proceeds related to our June 2020 investment in Palantir Lending Trust SPV. These additional proceeds are attributed directly to the equity participation in the underlying collateral. As of today, $10.3 million has been received from the Palantir Lending Trust SPV and 712,290 shares of underlying collateral through which we retain an equity interest remains to be sold.

As of December 31, 2020, the balance of the loan and all guaranteed interest had been fully repaid. Please turn to Slide 12. Segmented by six general investment themes, the top allocation of our investment portfolio at quarter-end is to education technology, representing approximately 62% of the investment portfolio at fair value. Marketplaces was the second-largest category, representing approximately 14% of the portfolio.

The financial technology and services category accounted for approximately 13% of our investment portfolio and approximately 11% of our portfolio is invested in social mobile companies. Big data, cloud, and sustainability each accounted for less than 1% of the fair value of our portfolio as of March 31. We are pleased to report we ended the first-quarter 2021 with an NAV per share of $18.01. A breakdown of NAV per share as of quarter-end is shown on Slide 13 and is consistent with our financial reporting.

In some, the increase in NAV per share during the first quarter was largely driven by the approximately $4.53 per share attributable to net realized gain on the sale of portfolio investment. This increase to NAV per share was offset by $1.10 per share attributable to the issuance of our common stock upon the conversion of our convertible senior notes in advance to the redemption. $0.50 per share in dividends declared during the quarter, approximately $0.11 per share attributable to net investment loss, and approximately $0.05 per share of net unrealized depreciation of our investment portfolio at quarter-end. On February 19, we caused notices to be issued to the holders of our 4.75% convertible senior notes due 2023 regarding the company's exercise of our option to redeem, in whole, the issued and outstanding notes, pursuant to the Indenture, dated as of March 28, 2018, between the company and U.S.

Bank, as trustee, and Section 15.02 of the First Supplemental Indenture thereto, dated as of March 28, 2018. The company established March 29, 2021, as the date on which all of the notes would be redeemed at 100% of their principal amount or $1,000 per note, plus the accrued and unpaid interest thereon from September 30, 2020, through but excluding the redemption date. Holders of the notes have the option to surrender their notes for conversion into shares of the company's common stock, par value of $0.01 per share, at the then-existing conversion rate, in lieu of receiving cash, at any time prior to the close of business on the business day immediately preceding the redemption date. As of the redemption date, the company redeemed $0.3 million or $290,000 in aggregate principal amount of the notes at a redemption price equal to 100% of their principal amount, plus accrued and unpaid interest, which amounted to approximately $800,000.

As a result of the election of certain holders to surrender their notes for conversion into shares of common stock prior to the redemption date, the company has issued a total of 4,272,696 shares of common stock since the notes were issued. As of March 31, 2021, there are 24,205,216 shares of the company's common stock outstanding. During the first quarter, SuRo Capital declared two dividends for a total of $0.50 per share. On January 26, our board of directors declared a dividend of $0.25 per share paid on February 19 to shareholders of record on February 5, and on March 8, our board of directors declared a dividend of $0.25 per share paid on April 15 to shareholders of record on March 30.

All of 2021 dividends declared to date are expected to be categorized as net long-term capital gains for tax purposes. The related realized gains are attributable to the monetization upon sale or exit of the investments in our portfolio. As Mark mentioned, yesterday, SuRo Capital's board of directors declared a dividend of $2.50 per share payable on June 30, 2021, to the company's common stockholders of record as of the close of business on May 18, 2021. The dividend will be paid in half stock and half cash.

As described more fully in today's press release, the dividend will be paid in cash or shares of the company's common stock at the election of shareholders. Although the total amount of cash to be distributed to all shareholders will be limited to no more than 50% of the total dividend to be paid to all shareholders. This dividend is being made in accordance with certain applicable treasury regulation and guidance issued by the IRS to allow a publicly traded regulated investment company to satisfy distribution requirement from a distribution paid partly in common stock, provided certain other requirements are satisfied. Each shareholder will have the opportunity to elect to receive the dividend in cash or in shares of the company's common stock.

Shareholders electing to receive the dividend in shares of the company's common stock will receive their entire dividends in the form of shares of the company's common stock, regardless of the elections made by any other shareholders. However, the amount of cash to be distributed to all shareholders electing to receive their dividend in cash will be limited to no more than 50% of the total amount to be distributed to all shareholders. In the event that the amount of cash to be distributed to all shareholders electing to receive the dividend in cash would exceed 50% of the total dividend, each shareholder electing to receive cash will receive a pro rata portion of the total cash to be distributed based on the number of shares held by each such shareholder. The remainder of the dividend in excess of the shareholders' pro-rata share of the total amount of cash to be distributed will be paid in the form of shares of the company's common stock.

The number of shares of our common stock to be issued to shareholders receiving all or a portion of the dividend in shares of our common stock will be based on the volume-weighted average price per share of our common stock on the NASDAQ Capital Market on May 12, May 13, and May 14, 2021, to reflect the declared dividend. The company will cause to be mailed an election form to receive cash or common stock only to registered shareholders promptly after the May 18, 2021 record date. Registered shareholders are those shareholders who own their stock directly and not through a bank, broker, or nominee. The completed election form must be received by SuRo Capital's transfer agent, American Stock Transfer, prior to 5:00 p.m.

Eastern on June 16, 2021. Registered shareholders with questions regarding the dividend may call American Stock Transfer at 800-937-5449. Registered shareholders who do not make an election will be deemed to have elected to receive 100% of their dividend in shares of the company's common stock. Participants in the company's dividend reinvestment plan will also receive an election form.

The investment feature of the dividend reinvestment plan will be suspended for this distribution and will be reinstated after this distribution has been completed. Shareholders who hold their shares through a bank, broker, or nominee will not receive an election form from the company and should contact their bank, broker, or nominee for instructions on how to make an election. Regardless of whether a shareholder receives the dividend in cash, stock, or some combination of cash and stock, the entire amount of this dividend will be fully taxable to shareholders and SuRo Capital Corp. will report the actual tax characteristics of each year's dividends annually to shareholders and the IRS on Form 1099.

The date of declaration and amount of any dividends, including any future dividends, are subject to the sole discretion of SuRo Capital's board of directors. The aggregate amount of dividends declared and paid by SuRo Capital will be fully taxable to shareholders. The tax character of SuRo Capital's dividends cannot be finally determined until the close of SuRo Capital's taxable year. SuRo Capital will report the actual tax characteristics of each year's dividends annually to stockholders and the IRS, subsequent to year-end.

Again, registered stockholders with questions regarding declared dividends may call American Stock Transfer at 800-937-5449. Finally, I would like to review SuRo Capital's current liquidity. We ended the quarter with approximately $292.4 million of liquid assets, including $155.7 million in cash and $126.7 million in public securities subject to certain lockup restrictions as of quarter-end. Our cash balance of $165.7 million as of March 31, 2021, consisted primarily of the monetization of various portfolio positions throughout the 2020 and 2021 to date, in addition to proceeds generated during the third quarter of 2020 via ATM offering.

The $126.7 million of public securities subject to lockup restrictions as of March 31, represent our shares in Coursera, valued at a closing price on March 31 of $45, plus the discount for mark of -- for lack of marketability related to the current lockup provision. Before I turn the call back to the operator, I wanted to note that our 2021 Annual Shareholder Meeting will be held on Wednesday, July 7 in New York City, tending COVID-related guidelines. The record date for the Annual Shareholder Meeting is April 28. And that conclude my comments, we would like to thank you for your interest and support of SuRo Capital.

Now, I will turn the call over to the operator to start the Q&A session. Operator?

Questions & Answers:


Operator

Thank you. [Operator instructions] And we'll go first to Devin Ryan of JMP Securities.

Kevin Fultz -- JMP Securities -- Analyst

Hi. This is Kevin Fultz on for Devin Ryan. Looking at SuRo Capital Sports, the vehicle has $10 million of committed capital and has invested $1 million to date, can you just talk about expectations around the investment cadence there and if you view the $10 million of capital as an initial investment with expectations for further -- sorry, for future growth beyond that? Thanks.

Mark Klein -- Chairman and Chief Executive Officer

Thanks. That's a great question. We're obviously very excited about -- and it's not a unique view of the direction of sports betting and the adoption of sports betting throughout the country and looking for opportunities to capitalize on that. We have looked at probably a couple of dozen companies to date, and we will -- we see them on a very regular basis.

I think this is an initial investment of $10 million over several companies with the anticipation that those companies would continue to raise money and then we will continue to participate in that. The sports betting industry is largely fragmented, there are obviously very large players in the space than a lot of smaller ones, and we are spending our time to try to identify them and participate. In the case of BettorView, not only are we an investor, but we are also -- were able to garner board membership as well. So thank you for the question.

Operator

And now we will take a question from Howard Kaminsky of Kaminsky Family LLC.

Howard Kaminsky -- Kaminsky Family LLC -- Analyst

Hi. Thank you for the call. I'll limit this to one question, but I have a couple of them. On Page 4 of the presentation, you noted the valuation of Course Hero at $32.5 million, that's $2.5 million less than what was disclosed in the 10-K, given all of the positive attributes and news concerning Coursera, as well as the online education space in general, why did you take the markdown in value?

Mark Klein -- Chairman and Chief Executive Officer

Great question and thank you for that. We have a very stringent set of heuristics that we apply against our evaluations, which start with transactions in secondary -- either primary transactions, primary capital raises, and over time, we had tried that as part of our valuation mechanism and either move to where there are secondary trades and/or public comps that influence that. In the case of Course Hero, there were those secondary transactions that were occurring, that greatly influenced the valuation for this quarter. So that's why you ended up with a modest writedown in Course Hero.

I think it is counter-intuitive giving -- given the success of the Coursera IPO, as well as names like Chegg and their success. But -- we are very stringent about our valuation, consistent with it, we have an independent valuation firm in Anderson, and our auditors, Marcum also point our valuation, as well as the valuation committee within the board. Thank you for your question.

Operator

And now, we will go to Jon Hickman of Ladenburg.

Jon Hickman -- Ladenburg Thalmann -- Analyst

Hi. I guess my question is mostly for Allison. The last page of the presentation, where you walk through the NAV, I'm a little confused, I don't see where the gain from Coursera -- the unrealized gain from Coursera factors into your calculations. Can you walk me through that?

Allison Green -- Chief Financial Officer

Let me just pull out my pen, OK, so I can help you a little bit more here. I believe, the unrealized -- because the -- with Palantir leading unrealized, since we realized Palantir during the first quarter, that kind of created a nice little vacuum out of the unrealized gain that kind of covered the increase in gain from Coursera. So that can kind of covered it and made the net unrealized gain for the quarter about 1.3 and then you'll see the major Palantir gain reflected in the realized gains.

Operator

And that was all the questions that we had. I would like to turn the call back to our speakers for any additional or closing comments.

Mark Klein -- Chairman and Chief Executive Officer

Well, as always, we like -- we would like to thank all of you for taking the time to listen to this call, for being investors, and for supporting SuRo Capital. If any of you have additional questions, feel free to reach out to Allison or myself and we're happy to have a conversation. Again, thank you very much for your time and effort, we really appreciate it. Thank you.

Bye.

Operator

[Operator signoff]

Duration: 51 minutes

Call participants:

Adam Bates -- Chief Financial Officer

Mark Klein -- Chairman and Chief Executive Officer

Allison Green -- Chief Financial Officer

Kevin Fultz -- JMP Securities -- Analyst

Howard Kaminsky -- Kaminsky Family LLC -- Analyst

Jon Hickman -- Ladenburg Thalmann -- Analyst

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