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Section 1: 10-Q (10-Q)

htgc-10q_20190331.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For The Quarterly Period Ended March 31, 2019

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 814-00702

 

HERCULES CAPITAL, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Maryland

 

74-3113410

(State or Jurisdiction of

Incorporation or Organization)

 

(IRS Employer

Identification Number)

 

400 Hamilton Ave., Suite 310

Palo Alto, California

(Address of Principal Executive Offices)

 

94301

(Zip Code)

 

(650) 289-3060

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this Chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

 

  

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

  

Smaller reporting company

 

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with a new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Shares, par value $0.001 per share

HTGC

New York Stock Exchange

5.25% Notes due 2025

HCXZ

New York Stock Exchange

6.25% Notes due 2033

HCXY

New York Stock Exchange

On April 29, 2019, there were 97,208,899 shares outstanding of the Registrant’s common stock, $0.001 par value.

 

 


 

HERCULES CAPITAL, INC.

FORM 10-Q TABLE OF CONTENTS

 

PART I. FINANCIAL INFORMATION

  

3

 

Item 1.

 

 

Consolidated Financial Statements

  

3

 

 

 

Consolidated Statement of Assets and Liabilities as of March 31, 2019 and December 31, 2018 (unaudited)

  

3

 

 

 

Consolidated Statement of Operations for the three months ended March 31, 2019 and 2018 (unaudited)

  

5

 

 

 

Consolidated Statement of Changes in Net Assets for the three months ended March 31, 2019 and 2018 (unaudited)

  

6

 

 

 

Consolidated Statement of Cash Flows for the three months ended March 31, 2019 and 2018 (unaudited)

  

7

 

 

 

Consolidated Schedule of Investments as of March 31, 2019 (unaudited)

  

9

 

 

 

Consolidated Schedule of Investments as of December 31, 2018 (unaudited)

  

24

 

 

 

Notes to Consolidated Financial Statements (unaudited)

  

40

Item 2.

 

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

  

74

Item 3.

 

 

Quantitative and Qualitative Disclosures About Market Risk

  

92

Item 4.

 

 

Controls and Procedures

  

93

 

PART II. OTHER INFORMATION

  

94

 

Item 1.

 

Legal Proceedings

  

94

Item 1A.

 

 

Risk Factors

 

94

Item 2.

 

 

Unregistered Sales of Equity Securities and Use of Proceeds

  

96

Item 3.

 

 Defaults Upon Senior Securities

  

96

Item 4.

 

 

Mine Safety Disclosures

  

96

Item 5.

 

 

Other Information

  

96

Item 6.

 

 

Exhibits and Financial Statement Schedules

  

97

 

SIGNATURES

  

100

 

 

 

 

2


 

PART I: FINANCIAL INFORMATION

In this Quarterly Report, the “Company,” “Hercules,” “we,” “us” and “our” refer to Hercules Capital, Inc. and its wholly owned subsidiaries and its affiliated securitization trusts on or after February 25, 2016 and “Hercules Technology Growth Capital, Inc.” and its wholly owned subsidiaries and its affiliated securitization trusts prior to February 25, 2016, unless the context otherwise requires.

 

ITEM 1.

CONSOLIDATED FINANCIAL STATEMENTS

HERCULES CAPITAL, INC.

CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES

(unaudited)

(in thousands, except per share data)

 

 

 

March 31, 2019

 

 

December 31, 2018

 

Assets

 

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

Non-control/Non-affiliate investments (cost of $2,000,508 and $1,830,725, respectively)

 

$

2,003,062

 

 

$

1,801,258

 

Control investments (cost of $64,968 and $64,799, respectively)

 

 

54,913

 

 

 

57,619

 

Affiliate investments (cost of $87,787 and $85,000, respectively)

 

 

23,067

 

 

 

21,496

 

Total investments in securities, at value (cost of $2,153,263 and $1,980,524, respectively)

 

 

2,081,042

 

 

 

1,880,373

 

Cash and cash equivalents

 

 

16,465

 

 

 

34,212

 

Restricted cash

 

 

10,149

 

 

 

11,645

 

Interest receivable

 

 

18,366

 

 

 

16,959

 

Right of use asset (1)

 

 

8,856

 

 

 

 

Other assets

 

 

3,753

 

 

 

2,002

 

Total assets

 

$

2,138,631

 

 

$

1,945,191

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

18,256

 

 

$

25,961

 

Operating lease liability (1)

 

 

8,856

 

 

 

 

SBA Debentures, net (principal of $149,000 and $149,000, respectively)

 

 

147,783

 

 

 

147,655

 

2022 Notes, net (principal of $150,000 and $150,000, respectively) (2)

 

 

148,121

 

 

 

147,990

 

2024 Notes, net (principal of $0 and $83,510, respectively) (2)

 

 

 

 

 

81,852

 

2025 Notes, net (principal of $75,000 and $75,000, respectively) (2)

 

 

72,685

 

 

 

72,590

 

2033 Notes, net (principal of $40,000 and $40,000, respectively) (2)

 

 

38,420

 

 

 

38,427

 

2027 Asset-Backed Notes, net (principal of $200,000 and $200,000, respectively) (2)

 

 

197,102

 

 

 

197,265

 

2028 Asset-Backed Notes, net (principal of $250,000 and $0, respectively) (2)

 

 

247,352

 

 

 

 

2022 Convertible Notes, net (principal of $230,000 and $230,000, respectively) (2)

 

 

225,441

 

 

 

225,051

 

Credit Facilities

 

 

44,266

 

 

 

52,956

 

Total liabilities

 

$

1,148,282

 

 

$

989,747

 

 

 

 

 

 

 

 

 

 

Net assets consist of:

 

 

 

 

 

 

 

 

Common stock, par value

 

 

96

 

 

 

96

 

Capital in excess of par value

 

 

1,051,427

 

 

 

1,052,269

 

Total distributable earnings (loss) (3)

 

 

(61,174

)

 

 

(92,859

)

Treasury Stock, at cost, no shares as of March 31, 2019 and 376,466 shares as of December 31, 2018

 

 

 

 

 

(4,062

)

Total net assets

 

$

990,349

 

 

$

955,444

 

Total liabilities and net assets

 

$

2,138,631

 

 

$

1,945,191

 

 

 

 

 

 

 

 

 

 

Shares of common stock outstanding ($0.001 par value and 200,000,000 authorized)

 

 

96,543

 

 

 

96,501

 

Net asset value per share

 

$

10.26

 

 

$

9.90

 

 

(1)

See “Note 2 – Summary of Significant Accounting Policies” for a description of Right of use asset and Operating lease liability.

(2)

The Company’s SBA debentures, 2022 Notes, 2024 Notes, 2025 Notes, 2033 Notes, 2027 Asset-Backed Notes, 2028 Asset-Backed Notes, and 2022 Convertible Notes, as each term is defined herein, are presented net of the associated debt issuance costs for each instrument. See “Note 4 – Borrowings”.

(3)

Certain prior year numbers have been adjusted to conform with the SEC final rules on disclosure updates and simplification effective November 5, 2018. See Note 2.

 

See notes to consolidated financial statements.

3


 

The following table presents the assets and liabilities of our consolidated securitization trusts for the 2027 Asset-Backed Notes and the 2028 Asset-Backed Notes (see Note 4), which are variable interest entities, or VIEs. The assets of our securitization VIEs can only be used to settle obligations of our consolidated securitization VIEs, these liabilities are only the obligations of our consolidated securitization VIEs, and the creditors (or beneficial interest holders) do not have recourse to our general credit. These assets and liabilities are included in the Consolidated Statement of Assets and Liabilities above.

 

(Dollars in thousands)

 

March 31, 2019

 

 

December 31, 2018

 

Assets

 

 

 

 

 

 

 

 

Restricted Cash

 

$

10,149

 

 

$

11,645

 

2027 Asset-Backed Notes, investments in securities, at value (cost of $290,242 and $279,373, respectively)

 

 

289,556

 

 

 

277,781

 

2028 Asset-Backed Notes, investments in securities, at value (cost of $356,677 and $0, respectively)

 

 

357,416

 

 

 

 

Total assets

 

$

657,121

 

 

$

289,426

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

2027 Asset-Backed Notes, net (principal of $200,000 and $200,000, respectively) (1)

 

$

197,102

 

 

$

197,265

 

2028 Asset-Backed Notes, net (principal of $250,000 and $0, respectively) (1)

 

 

247,352

 

 

 

 

Total liabilities

 

$

444,454

 

 

$

197,265

 

 

(1)

The Company’s 2027 Asset-Backed Notes and the 2028 Asset-Backed Notes are presented net of the associated debt issuance costs. See “Note 4 – Borrowings”.

See notes to consolidated financial statements.

4


 

HERCULES CAPITAL, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

(unaudited)

(in thousands, except per share data)  

 

 

Three Months Ended March 31,

 

 

2019

 

 

2018

 

Investment income:

 

 

 

 

 

 

 

Interest income

 

 

 

 

 

 

 

Non-control/Non-affiliate investments

$

53,941

 

 

$

41,834

 

Control investments

 

1,024

 

 

 

586

 

Affiliate investments

 

508

 

 

 

561

 

Total interest income

 

55,473

 

 

 

42,981

 

Fee income

 

 

 

 

 

 

 

Commitment, facility and loan fee income:

 

 

 

 

 

 

 

Non-control/Non-affiliate investments

 

2,450

 

 

 

2,440

 

Control investments

 

4

 

 

 

 

Affiliate investments

 

88

 

 

 

108

 

Total commitment, facility and loan fee income

 

2,542

 

 

 

2,548

 

One-time fee income:

 

 

 

 

 

 

 

Non-control/Non-affiliate investments

 

780

 

 

 

3,171

 

Total one-time fee income

 

780

 

 

 

3,171

 

Total fee income

 

3,322

 

 

 

5,719

 

Total investment income

 

58,795

 

 

 

48,700

 

Operating expenses:

 

 

 

 

 

 

 

Interest

 

12,555

 

 

 

9,386

 

Loan fees

 

3,009

 

 

 

1,175

 

General and administrative

 

4,153

 

 

 

4,009

 

Employee compensation:

 

 

 

 

 

 

 

Compensation and benefits

 

6,623

 

 

 

5,758

 

Stock-based compensation

 

3,422

 

 

 

2,309

 

Total employee compensation

 

10,045

 

 

 

8,067

 

Total operating expenses

 

29,762

 

 

 

22,637

 

Net investment income

 

29,033

 

 

 

26,063

 

Net realized gain (loss) on investments

 

 

 

 

 

 

 

Non-control/Non-affiliate investments

 

4,555

 

 

 

(3,512

)

Control investments

 

 

 

 

(1,408

)

Total net realized gain (loss) on investments

 

4,555

 

 

 

(4,920

)

Net change in unrealized appreciation (depreciation) on investments

 

 

 

 

 

 

 

Non-control/Non-affiliate investments

 

32,091

 

 

 

(14,340

)

Control investments

 

(2,875

)

 

 

(620

)

Affiliate investments

 

(1,219

)

 

 

(237

)

Total net unrealized appreciation (depreciation) on investments

 

27,997

 

 

 

(15,197

)

Total net realized and unrealized gain (loss)

 

32,552

 

 

 

(20,117

)

Net increase (decrease) in net assets resulting from operations

$

61,585

 

 

$

5,946

 

 

 

 

 

 

 

 

 

Net investment income before investment gains and losses per common share:

 

 

 

 

 

 

 

Basic

$

0.30

 

 

$

0.31

 

Change in net assets resulting from operations per common share:

 

 

 

 

 

 

 

Basic

$

0.64

 

 

$

0.07

 

Diluted

$

0.64

 

 

$

0.07

 

Weighted average shares outstanding

 

 

 

 

 

 

 

Basic

 

96,218

 

 

 

84,596

 

Diluted

 

96,508

 

 

 

84,666

 

Distributions paid per common share:

 

 

 

 

 

 

 

Basic

$

0.31

 

 

$

0.31

 

 

See notes to consolidated financial statements.

5


 

HERCULES CAPITAL, INC.

CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS

(unaudited)

(dollars and shares in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital in

 

 

Distributable

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

excess

 

 

Earnings

 

 

Treasury

 

 

Net

 

 

Shares

 

 

Par Value

 

 

of par value

 

 

(loss)(2)

 

 

Stock

 

 

Assets

 

Balance at December 31, 2017

 

84,424

 

 

$

85

 

 

$

908,501

 

 

$

(67,619

)

 

$

 

 

$

840,967

 

Net increase (decrease) in net assets resulting from operations

 

 

 

 

 

 

 

 

 

 

5,946

 

 

 

 

 

 

5,946

 

Public offering, net of offering expenses

 

478

 

 

 

 

 

 

5,952

 

 

 

 

 

 

 

 

 

5,952

 

Issuance of common stock due to stock option exercises

 

38

 

 

 

 

 

 

432

 

 

 

 

 

 

 

 

 

432

 

Retired shares from net issuance

 

(36

)

 

 

 

 

 

(446

)

 

 

 

 

 

 

 

 

(446

)

Issuance of common stock under restricted stock plan

 

336

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retired shares for restricted stock vesting

 

(36

)

 

 

 

 

 

(446

)

 

 

 

 

 

 

 

 

(446

)

Distributions reinvested in common stock

 

35

 

 

 

 

 

 

426

 

 

 

 

 

 

 

 

 

426

 

Distributions

 

 

 

 

 

 

 

 

 

 

(26,419

)

 

 

 

 

 

(26,419

)

Stock-based compensation (1)

 

 

 

 

 

 

 

2,319

 

 

 

 

 

 

 

 

 

2,319

 

Balance at March 31, 2018

 

85,239

 

 

$

85

 

 

$

916,738

 

 

$

(88,092

)

 

$

 

 

$

828,731

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2018

 

96,501

 

 

$

96

 

 

$

1,052,269

 

 

$

(92,859

)

 

$

(4,062

)

 

$

955,444

 

Net increase (decrease) in net assets resulting from operations

 

 

 

 

 

 

 

 

 

 

61,585

 

 

 

 

 

 

61,585

 

Public offering, net of offering expenses

 

 

 

 

 

 

 

(21

)

 

 

 

 

 

 

 

 

(21

)

Issuance of common stock due to stock option exercises

 

13

 

 

 

 

 

 

154

 

 

 

 

 

 

 

 

 

154

 

Retired shares from net issuance

 

(11

)

 

 

 

 

 

(159

)

 

 

 

 

 

 

 

 

(159

)

Issuance of common stock under restricted stock plan

 

48

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retirement of common stock under repurchase plan

 

 

 

 

 

 

 

(4,062

)

 

 

 

 

 

4,062

 

 

 

 

Retired shares for restricted stock vesting

 

(55

)

 

 

 

 

 

(691

)

 

 

 

 

 

 

 

 

(691

)

Distributions reinvested in common stock

 

47

 

 

 

 

 

 

632

 

 

 

 

 

 

 

 

 

632

 

Distributions

 

 

 

 

 

 

 

 

 

 

(29,900

)

 

 

 

 

 

(29,900

)

Stock-based compensation (1)

 

 

 

 

 

 

 

3,305

 

 

 

 

 

 

 

 

 

3,305

 

Balance at March 31, 2019

 

96,543

 

 

$

96

 

 

$

1,051,427

 

 

$

(61,174

)

 

$

 

 

$

990,349

 

 

(1)

Stock-based compensation includes $7 and $10 of restricted stock and option expense related to director compensation for the three months ended March 31, 2019 and 2018, respectively.

(2)

Certain prior year numbers have been adjusted to conform with the SEC final rules on disclosure updates and simplification effective November 5, 2018. See Note 2.

 

See notes to consolidated financial statements.

6


 

HERCULES CAPITAL, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited)

(dollars in thousands)

 

 

For the Three Months Ended March 31,

 

 

2019

 

 

2018

 

Cash flows from operating activities:

 

 

 

 

 

 

 

Net increase (decrease) in net assets resulting from operations

$

61,585

 

 

$

5,946

 

Adjustments to reconcile net increase in net assets resulting from

operations to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

Purchase of investments

 

(239,702

)

 

 

(236,285

)

Principal and fee payments received on investments

 

65,845

 

 

 

280,181

 

Proceeds from the sale of investments

 

9,830

 

 

 

1,582

 

Net unrealized depreciation (appreciation) on investments

 

(27,997

)

 

 

15,197

 

Net realized loss (gain) on investments

 

(4,555

)

 

 

4,920

 

Accretion of paid-in-kind principal

 

(2,099

)

 

 

(2,507

)

Accretion of loan discounts

 

(737

)

 

 

(763

)

Accretion of loan discount on convertible notes

 

168

 

 

 

168

 

Accretion of loan exit fees

 

(5,199

)

 

 

(4,407

)

Change in deferred loan origination revenue

 

3,754

 

 

 

631

 

Unearned fees related to unfunded commitments

 

992

 

 

 

321

 

Amortization of debt fees and issuance costs

 

2,653

 

 

 

840

 

Depreciation

 

51

 

 

 

46

 

Stock-based compensation and amortization of restricted stock grants (1)

 

3,305

 

 

 

2,319

 

Change in operating assets and liabilities:

 

 

 

 

 

 

 

Interest and fees receivable

 

(1,407

)

 

 

1,175

 

Prepaid expenses and other assets

 

(9,272

)

 

 

1,870

 

Accounts payable

 

(198

)

 

 

(194

)

Accrued liabilities

 

1,417

 

 

 

(8,025

)

Net cash provided by (used in) operating activities

 

(141,566

)

 

 

63,015

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchases of capital equipment

 

(83

)

 

 

(72

)

Net cash provided by (used in) investing activities

 

(83

)

 

 

(72

)

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

Issuance of common stock, net

 

(43

)

 

 

5,952

 

Retirement of employee shares

 

(676

)

 

 

(460

)

Distributions paid

 

(29,268

)

 

 

(25,993

)

Issuance of 2028 Asset-Backed Notes

 

250,000

 

 

 

 

Repayments of 2024 Notes

 

(83,510

)

 

 

 

Repayments of 2021 Asset-Backed Notes

 

 

 

 

(15,577

)

Borrowings of credit facilities

 

110,834

 

 

 

 

Repayments of credit facilities

 

(119,523

)

 

 

 

Cash paid for debt issuance costs

 

(2,965

)

 

 

 

Fees paid for credit facilities and debentures

 

(2,443

)

 

 

 

Net cash provided by (used in) financing activities

 

122,406

 

 

 

(36,078

)

Net increase (decrease) in cash, cash equivalents and restricted cash

 

(19,243

)

 

 

26,865

 

Cash, cash equivalents and restricted cash at beginning of period

 

45,857

 

 

 

94,995

 

Cash, cash equivalents and restricted cash at end of period

$

26,614

 

 

$

121,860

 

 

 

 

 

 

 

 

 

Supplemental non-cash investing and financing activities:

 

 

 

 

 

 

 

Distributions reinvested

 

632

 

 

 

426

 

 

(1)

Stock-based compensation includes $7 and $10 of restricted stock and option expense related to director compensation for the three months ended March 31, 2019 and 2018, respectively.


See notes to consolidated financial statements.

7


 

The following table presents a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Statement of Assets and Liabilities that sum to the total of the same such amounts in the Consolidated Statement of Cash Flows:

 

 

For the Three Months Ended March 31,

 

(Dollars in thousands)

2019

 

 

2018

 

Cash and cash equivalents

$

16,465

 

 

$

118,228

 

Restricted cash

 

10,149

 

 

 

3,632

 

Total cash, cash equivalents and restricted cash presented in the Consolidated Statements of Cash Flows

$

26,614

 

 

$

121,860

 

See “Note 2 – Summary of Significant Accounting Policies” for a description of restricted cash and cash equivalents.

See notes to consolidated financial statements.

8


 

HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

March 31, 2019

(unaudited)

(dollars in thousands)

 

Portfolio Company

 

Sub-Industry

 

Type of

Investment (1)

 

Maturity Date

 

Interest Rate and Floor (2)

 

Principal Amount

 

 

Cost (3)

 

 

Value (4)

 

Debt Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Biotechnology Tools

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Under 1 Year Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exicure, Inc. (11)

 

Biotechnology Tools

 

Senior Secured

 

March 2020

 

Interest rate PRIME + 6.45% or Floor rate of 9.95%, 5.52% Exit Fee

 

$

4,999

 

 

$

5,146

 

 

$

5,146

 

Subtotal: Under 1 Year Maturity

 

 

 

 

 

5,146

 

 

 

5,146

 

Subtotal: Biotechnology Tools (0.52%)*

 

 

 

 

 

5,146

 

 

 

5,146

 

Consumer & Business Products

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WHOOP, INC. (12)

 

Consumer & Business Products

 

Senior Secured

 

July 2021

 

Interest rate PRIME + 3.75% or Floor rate of 8.50%, 6.95% Exit Fee

 

$

6,000

 

 

 

6,083

 

 

 

6,097

 

Subtotal: 1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,083

 

 

 

6,097

 

Subtotal: Consumer & Business Products (0.62%)*

 

 

 

 

 

 

6,083

 

 

 

6,097

 

Diversified Financial Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gibraltar Business Capital, LLC (7)

 

Diversified Financial Services

 

Unsecured

 

March 2023

 

Interest rate FIXED 14.50%

 

$

15,000

 

 

 

14,741

 

 

 

14,903

 

Subtotal: 1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14,741

 

 

 

14,903

 

Subtotal: Diversified Financial Services (1.50%)*

 

 

 

 

 

14,741

 

 

 

14,903

 

Drug Delivery

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Under 1 Year Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AcelRx Pharmaceuticals, Inc. (11)

 

Drug Delivery

 

Senior Secured

 

March 2020

 

Interest rate PRIME + 6.05% or Floor rate of 9.55%, 11.69% Exit Fee

 

$

8,872

 

 

 

9,982

 

 

 

9,982

 

Subtotal: Under 1 Year Maturity

 

 

 

 

 

 

9,982

 

 

 

9,982

 

1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Antares Pharma Inc. (10)(11)(15)

 

Drug Delivery

 

Senior Secured

 

July 2022

 

Interest rate PRIME + 4.50% or Floor rate of 9.50%, 4.25% Exit Fee

 

$

25,000

 

 

 

25,393

 

 

 

25,390

 

Subtotal: 1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

25,393

 

 

 

25,390

 

Subtotal: Drug Delivery (3.57%)*

 

 

 

 

 

 

35,375

 

 

 

35,372

 

 

 

See notes to consolidated financial statements.

9


 

HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

March 31, 2019

(unaudited)

(dollars in thousands) 

Portfolio Company

 

Sub-Industry

 

Type of

Investment (1)

 

Maturity Date

 

Interest Rate and Floor (2)

 

Principal Amount

 

 

Cost (3)

 

 

Value (4)

 

Drug Discovery & Development

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Under 1 Year Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

&