Good day, ladies and gentlemen, and thank you for standing by. Welcome to Sutter Rock Capital's Third Quarter 2019 Earnings Conference Call. [Operator Instructions] This call is being recorded today Wednesday, November 6, 2019. I will now turn the conference over to Claire Councill, Sutter Rock Capital. Please go ahead.

Thank you for joining us on today's call. I'm joined today by the Chief Executive Officer of Sutter Rock 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.sutterrock.com under Investor Relations Presentations. Today's call is being recorded and broadcast live on our website www.sutterrock.com. Replay information is included in our press release issued earlier today. This call is a property of Sutter Rock Capital and the unauthorized reproduction of this call in any form is strictly prohibited. I would also like to call your attention to customary disclosures in today's earnings press release, regarding forward-looking information. Statements made in today's conference call and webcast may constitute forward-looking statements, which relate to future events or our future performance or financial condition. These statements are not guarantees of our future performance or future financial condition or results and involve a number of risks, estimates and uncertainties. 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 Rock Capital's latest SEC filings, please visit our website at sutterrock.com or the SEC's website at sec.gov. Now I would like to turn the call over to Mark Klein.

Thank you, Claire. We are pleased to share the results of Sutter Rock's third quarter 2019. First, I will review the recent quarter and provide an update on key initiatives we are executing to enhance shareholder value. Then I will present an overview of recent developments in the portfolio. To conclude, I will hand the call over to Allison Green for a brief financial overview and then we will open the call for questions. Let's start with slide 3. At the end of the third quarter, net asset value was $11.24 per share, an increase from $10.75 per share in the second quarter. Net asset value totaled $214 million compared to $211 million in the second quarter. As we have stated before, we believe the strong growth of our portfolio of companies have been exhibiting will continue to drive NAV and we are as optimistic about the future of our portfolio as we have been in recent memory. Please turn to slides 4 and 5. We continue to take initiatives to drive shareholder value. Today we are pleased to declare a $0.20 per share dividend to shareholders. This dividend is driven by monetizations in Sutter Rock's public and private securities. Based on ongoing portfolio activity and the results of the tender offer, we anticipate declaring an additional de minimis dividend by year-end. Additionally on October 21, we commenced a modified Dutch Auction tender offer to purchase up to $10 million in common stock at a price per share between $6 and $8. This expires on November 20. Furthermore, we have repurchased $20 million of shares since we initiated our share repurchase program. Allison will provide additional details on the tender offer as well as an update on the share repurchase program today. These shareholder initiatives come in addition to our…

Thank you, Mark. I would like to follow Mark's update with a more detailed review of our financial results as of September 30, 2019 including details of our liquidity position. I will also provide an update on our transition to an internally managed BDC and expense reduction initiatives in addition to providing further details on our current shareholder initiative. We ended the third quarter with an NAV per share of $11.24, which is up from $10.75 per share last quarter. A breakdown of the increase in NAV for the third quarter is shown on slide 9 and is consistent with our financial reporting. In sum, the increase in NAV per share during the third quarter was largely driven by approximately $0.42 per share in net unrealized gain on investments, $0.09 per share in net realized gain on investments, and an appreciation of $0.14 per share due to the accretive effects of common stock repurchase during the quarter. These increases to NAV were offset by a net decrease of $0.16 per share of net investment loss and the effect of estimated annual stock-based compensation on paid-in capital. The $0.42 per share increase due to net unrealized gain on investments in the third quarter is largely attributable to the appreciation in value of certain existing portfolio investments most notably Aspiration Coursera and OZY Media. The $0.09 per share increase due to net realized gain on investments in the third quarter is attributable to the gains realized on the sale of our remaining publicly traded Dropbox shares during the quarter. As Mark mentioned subsequent to quarter end, we also liquidated our shares of publicly traded Lyft stock. Next I'd like to review Sutter Rock's liquidity at September 30, 2019. We ended the third quarter with about $57.6 million of liquid assets, including $45.2…

Thank you. At this time, we will open the floor for questions. [Operator Instructions] And we'll take our first question from Bill Hyler with WDH Capital.

Yes, hi. Good afternoon. Thanks for the call today. I was hoping you could review with us the process you are using to calculate the fair value of the private portfolio of companies. I believe you are using a fair value approach with different levels depending on the available data for comparable companies and assets, but do the valuations generally approximate the last funding round for the company?

Bill thanks for the question. And obviously this -- how we do valuation is integral to people's ability to evaluate what our NAV is and how they want to trade the securities. e actually have a very robust process that begins a couple of weeks before the quarter's end and goes straight through numerous iterations both internally and we have an independent valuation firm as well. We have a series of heuristics partially that deals with last rounds may also deal with private transactions that are occurring in marketplaces deals with market comps and we iterate around that and then we come up with our valuation. We have the independent group come up with their valuation. We then compare and contrast and try to level set with one another. We then bring it up to our valuation committee who has comments who push it back down to us with comments as management. Ultimately it goes back up to value -- an audit committee and ultimately our Board of Directors.

Okay. Well, let me just -- a quick follow-up then related. So for example if Palantir was successful in obtaining a valuation of $26 billion, you would take that into consideration but that would not be necessarily enough for you to raise the carrying value alone. Would that be fair?

Obviously. Yeah, yeah, what would be a fair statement is primary rounds are heavily weighted in the quarter, in which they occur. Yeah, but so do -- in the case of Palantir specifically there is a great deal of secondary trading that occurs as well. So we have a longstanding series of heuristics and applications of that to come up with a valuation, right. You should just -- and if they do a round at a valuation that's significantly higher than we carry it then that would impact our valuation that's correct.

Got you. Okay. Appreicate it. Thank you.

Thanks a lot, Bill

[Operator Instructions] And we'll take our next question from Norman Mains [ph].

Hi, Norman.

A couple of questions. Can you hear me okay?

Yeah we can. That's great. Sorry, we had a little bit of a problem. Go ahead.

Yeah. So on the Palantir just to follow-up on the last gentleman's question, the $30.4 million fair value is that a blend between your book value and the latest round? I just want to understand. Or should that be multiplied by 2.33 based on the $28 billion latest round?

A couple of things. Our valuation as we stated in the conference call was at about $12 billion equity value. We haven't overlaid any other subsequent financings in our valuation line.

So the $30.4 million fair value then would just be using the $12 billion, is that fair to say?

That's correct. That's correct.

Okay. And then I guess another obvious question, but I mean I'll ask it because it's obviously -- it's not obvious to me. The $11.25 valuation that you guys are using in the press release, is that also -- I would imagine using that original $12 billion right not the $28 billion?

No, sir. They are -- our $11.24 NAV is -- includes using the Palantir as we reflect it in our presentation at approximately the $12 million equity value -- $12 billion equity value.

Ladies and gentlemen, this concludes today's question-and-answer session. I will now turn it back to speakers for closing remarks.

Thank you all very much for attending the call and thank you for your support. And as always, we're available if you want to have conversations outside of the conference call. Thank you very much.

Ladies and gentlemen, this concludes today's teleconference and you may now disconnect.