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Section 1: 8-K (FORM 8-K)

herc20191029b_8k.htm

 


 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 


 

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):

October 30, 2019

 

Hercules Capital, Inc.
(Exact name of registrant as specified in its charter)

 

 

Maryland 

814-00702 

74-3113410 

(State or other jurisdiction

of incorporation)

(Commission File No.)

(I.R.S. Employer

Identification No.)

     

400 Hamilton Ave., Suite 310

Palo Alto, CA

 

94301

(Address of principal executive offices)

 

(Zip Code)

 

Registrant's telephone number, including area code: (650) 289-3060

 

 

Not Applicable

 
 

(Former name or address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

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 Stock, 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

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter)

 

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 any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.             ⃞

 


 

 

 

 

Item 2.02 Results of Operation and Financial Condition

 

On October 30, 2019, Hercules Capital, Inc. (the “Company”) issued a press release announcing its earnings for the quarter ended September 30, 2019 and that it had declared a dividend and a supplemental dividend. The text of the press release is included as an exhibit to this Form 8-K.

 

This information disclosed under this Item 2.02 including Exhibit 99.1 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 and shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933, except as expressly set forth by specific reference in such filing.

 

8.01      Other Events

 

On October 29, 2019, the Company announced that its Board of Directors has declared a quarterly dividend of $0.32 per share and a supplemental dividend of $0.03 per share, payable in such amounts and on such dates to stockholders, as set forth below. The texts of the press releases are included as exhibits to this Form 8-K.

 

Quarterly Dividend Payable in November 2019

Ex-Dividend Date

Record Date

Payment Date

Amount Per Share

November 7, 2019

November 11, 2019

November 18, 2019

$0.32

 

 

Supplemental Dividend Payable in November 2019

Ex-Dividend Date

Record Date

Payment Date

Amount Per Share

November 7, 2019

November 11, 2019

November 18, 2019

$0.03

 

 

 

Item 9.01 Financial Statements and Exhibits 

 

(d)

Exhibits

99.1

Press Release dated October 30, 2019

99.2 Press Release dated October 29, 2019
99.3 Press Release dated October 29, 2019

 

 

 

 

SIGNATURES 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    HERCULES CAPITAL, INC.
       

October 30, 2019

 

By:

/s/ Melanie Grace                        

     

Melanie Grace

General Counsel and Secretary

 

(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

ex_161940.htm

Exhibit 99.1

 

 

 

Hercules Capital Reports Third Quarter 2019 Financial Results

 

 

Achieved Record Net Investment Income of $38.9 Million, or $0.37 per Share, which provides 116% Coverage of Regular Distribution Payout

 

Set Record Q3 New Debt and Equity Commitments and Total Fundings of $241.3 Million and $177.0 Million, Respectively

 

Record Total Debt Investments of $2.10 Billion at Cost, Driven by Debt Investment Portfolio Growth of $24.1 Million

 

Received Reaffirmed Investment Grade Credit and Corporate Ratings of BBB and BBB+ from DBRS and KBRA, respectively

 

Completed an Investment Grade Bond Offering of $105.0 Million of 4.77% Notes due 2024

 

 

Q3 2019 Financial Achievements and Highlights

 

Record Net Investment Income “NII” of $38.9 million, or $0.37 per share, an increase of 32.7% year-over-year

 

Total Investment Income of $69.2 million, an increase of 31.6% year-over-year

Distributable Net Operating Income(1) “DNOI,” a non-GAAP measure, of $40.3 million, or $0.39 per share

Record Q3 New debt and equity commitments of $241.3 million, an increase of 2.6% year-over-year

 

Record Q3 fundings of $177.0 million, an increase of 24.3% year-over-year

Unscheduled early principal repayments or “early loan repayments” of $140.1 million

14.9% Return on Average Equity “ROAE” (NII/Average Equity)

7.5% Return on Average Assets “ROAA” (NII/Average Assets)

GAAP leverage of 111.5% and regulatory leverage of 97.8%(2)

13.4% GAAP Effective Yields and 12.4% Core Yields(3), a non-GAAP measure

 

1

 

 

Year-to-date ending September 30, 2019 Financial Highlights

 

NII of $103.2 million, or $1.03 per share, an increase of 32.0%, compared to $78.1 million for the nine months ending September 30, 2018

 

Total investment income of $197.3 million, an increase of 30.8%, compared to $150.9 million for the nine months ending September 30, 2018

New equity and debt commitments of $1.19 billion, an increase of 23.6%, compared to $963.8 million for the nine months ending September 30, 2018

 

Total fundings of $784.8 million, an increase of 11.2%, compared to $706.1 million for the nine months ending September 30, 2018

Net debt investment portfolio growth of $348.4 million for the nine months ending September 30, 2019

 

Footnotes:

 

(1)

Distributable Net Operating Income, “DNOI” represents net investment income as determined in accordance with GAAP, adjusted for amortization of employee restricted stock awards and stock options.

 

(2)

Regulatory leverage represents debt-to-equity ratio, excluding our Small Business Administration “SBA” debentures

 

(3)

Core Yield excludes early loan repayments and one-time fees, and includes income and fees from expired commitments

 

 

PALO ALTO, Calif., October 30, 2019 - Hercules Capital, Inc. (NYSE: HTGC) (“Hercules” or the “Company”), the largest and leading specialty financing provider to innovative venture, growth and established stage companies backed by some of the leading and top-tier venture capital and select private equity firms, today announced its financial results for the third quarter ended September 30, 2019.

 

“We delivered another solid quarter of originations with record Q3 total fundings of $177 million and remain on pace to achieve another record year on multiple fronts,” stated Scott Bluestein, chief executive officer and chief investment officer of Hercules. “For the first nine months of 2019, our debt investment portfolio grew by more than $348 million to $2.1 billion at cost, which in turn produced record net investment income of nearly $39 million, or $0.37 per share in Q3, resulting in 116% coverage of our base distribution. Our strong growth and prudent deployment of our investment strategy has produced more than a 7% increase in our total distributions compared to the same nine-month period year-over-year.”

 

Bluestein concluded, “With our portfolio growth year-to-date, the continued strengthening of our balance sheet and our prudent use of increased leverage, our shareholders have ultimately received significant benefits with strong increases in both return-on-equity and return-on-assets of 14.9% and 7.5% respectively, and increased distributions throughout the year. As we march toward the finish line in 2019, we continue to focus on prudently growing our debt investment portfolio, and delivering strong and sustainable total shareholder returns while maintaining our stringent and proven credit underwriting standards.”

 

2

 

 

Q3 2019 Review and Operating Results

 

Debt Investment Portfolio

 

Hercules delivered new debt and equity commitments totaling $241.3 million and fundings totaling $177.0 million.

 

During the third quarter, Hercules realized early loan repayments of $140.1 million, which along with normal scheduled amortization of $16.7 million, resulted in total debt repayments of $156.8 million.

 

The new debt investment origination and funding activities lead to net debt investment portfolio growth of $24.1 million during the third quarter, on a cost basis.

 

The Company’s total investment portfolio, (at cost and fair value) by category, quarter-over-quarter is highlighted below:

 

Total Investment Portfolio: Q3 2019 to Q2 2019

 

(in millions)

 

Debt

   

Equity

   

Warrants

   

Total Portfolio

 

Balances at Cost at 6/30/19

  $ 2,077.2     $ 203.6     $ 34.9     $ 2,315.7  

New fundings(a)

    176.5             0.5       177.0  

Warrants not related to Q3 2019 fundings

                0.3       0.3  

Early payoffs(b)

    (140.1 )                 (140.1 )

Principal payments received on investments

    (16.7 )                 (16.7 )

Net changes attributed to conversions, liquidations, and fees

    4.4       (2.6 )     (1.6 )     0.2  

Net activity during Q3 2019

    24.1       (2.6 )     (0.8 )     20.7  

Balances at Cost at 9/30/19

  $ 2,101.3     $ 201.0     $ 34.1     $ 2,336.4  
                                 
                                 

Balances at Value at 6/30/19

  $ 2,061.6     $ 164.9     $ 25.5     $ 2,252.0  

Net activity during Q3 2019

    24.1       (2.6 )     (0.8 )     20.7  

Net change in unrealized appreciation (depreciation)

    (5.8 )     (13.9 )     (5.8 )     (25.5 )

Total net activity during Q3 2019

    18.3       (16.5 )     (6.6 )     (4.8 )

Balances at Value at 9/30/19

  $ 2,079.9     $ 148.4     $ 18.9     $ 2,247.2  

 

(a)New fundings amount includes $2.1M fundings associated with revolver loans during Q3 2019.

(b)Early payoffs include $878K in unscheduled paydowns on revolvers during Q3 2019.

 

 

Debt Investment Portfolio Balances by Quarter

 

(in millions)

 

Q3 2019

   

Q2 2019

   

Q1 2019

   

Q4 2018

   

Q3 2018

 
                                         

Ending Balance at Cost

  $ 2,101.3     $ 2,077.2     $ 1,913.4     $ 1,752.9     $ 1,608.0  
                                         

Weighted Average Balance

  $ 2,061.0     $ 1,939.0     $ 1,806.0     $ 1,685.0     $ 1,555.0  

 

As of September 30, 2019, 84.8% of the Company’s debt investments were in a senior secured first lien position.

 

3

 

 

Effective Portfolio Yield and Core Portfolio Yield (“Core Yield”)

 

Effective yields on Hercules’ debt investment portfolio were 13.4% during Q3 2019, as compared to 14.3% for Q2 2019. The Company realized $140.1 million of early loan repayments in Q3 2019 compared to $178.3 million in Q2 2019, or a decrease of 21.4%. Effective yields generally include the effects of fees and income accelerations attributed to early loan repayments, and other one-time events. Effective yields are materially impacted by the elevated or reduced levels of early loan repayments and derived by dividing total investment income by the weighted average earning investment portfolio assets outstanding during the quarter, which excludes non-interest earning assets such as warrants and equity investments.

 

Core yields, a non-GAAP measure, were 12.4% during Q3 2019, within the Company’s 2019 expected range of 12.0% to 13.0%, and decreased compared to 12.7% in Q2 2019. Hercules defines core yield as yields that generally exclude any benefit from income related to early repayments attributed to the acceleration of unamortized income and prepayment fees and includes income from expired commitments.

 

Income Statement 

 

Total investment income increased to $69.2 million for Q3 2019, compared to $52.6 million in Q3 2018, an increase of 31.6% year-over-year. The increase is primarily attributable to a higher average debt investment balance between periods and increased income from acceleration from early loan repayments.

 

Non-interest and fee expenses increased to $15.4 million in Q3 2019 versus $12.3 million for Q3 2018. The increase was primarily due to an increase in general and administrative expenses due to year-over-year growth in the business and legal expenses.

 

Interest expense and fees were $15.0 million in Q3 2019, compared to $11.0 million in Q3 2018. The increase was due to higher weighted-average borrowings as well as increased average borrowing under our credit facilities.

 

The Company had a weighted average cost of borrowings comprised of interest and fees, of 5.1% in Q3 2019, as compared to 5.6% for Q3 2018.

 

NII – Net Investment Income

 

NII for Q3 2019 was $38.9 million, or $0.37 per share, based on 104.3 million basic weighted average shares outstanding, compared to $29.3 million, or $0.31 per share, based on 95.5 million basic weighted average shares outstanding in Q3 2018, an increase of 32.7% year-over-year. The increase is primarily attributable to a higher average debt investment balance between periods and increased income from acceleration from early loan repayments.

 

DNOI - Distributable Net Operating Income

 

DNOI, a non-GAAP measure, for Q3 2019 was $40.3 million, or $0.39 per share, compared to $32.6 million, or $0.34 per share, in Q3 2018.

 

4

 

 

DNOI is a non-GAAP financial measure. The Company believes that DNOI provides useful information to investors and management because it measures Hercules’ operating performance, exclusive of employee stock compensation, which represents expense to the Company, but does not require settlement in cash. DNOI includes income from payment-in-kind, or “PIK”, and back-end fees that are generally not payable in cash on a regular basis, but rather at investment maturity. Hercules believes disclosing DNOI and the related per share measures are useful and appropriate supplements and not alternatives to GAAP measures for net operating income, net income, earnings per share and cash flows from operating activities.

 

Continued Credit Discipline and Strong Credit Performance

 

Hercules’ net cumulative realized gain/(loss) position, since its first origination activities in October 2004 through September 30, 2019, (including net loan, warrant and equity activity) on investments, totaled ($26.5) million, on a GAAP basis, spanning 15 years of investment activities.

 

When compared to total new debt investment commitments during the same period of over $9.7 billion, the total realized gain/(loss) since inception of ($26.5) million represents approximately 27 basis points “bps,” or 0.27%, of cumulative debt commitments, or an effective annualized loss rate of 1.8 bps, or 0.018%.

 

Realized Gains/(Losses)

 

During Q3 2019, Hercules had net realized gains/(losses) of $4.8 million primarily from gross realized gains of $8.3 million from the sale of our public equity holdings, partially offset by the gross realized losses of ($3.5) million primarily from the liquidation or write-off of certain of our debt, equity and warrant positions during the quarter.

 

Unrealized Appreciation/(Depreciation)

 

During Q3 2019, Hercules recorded ($24.4) million of net unrealized depreciation primarily related to the mark-to-market impact of our public equity and warrant investments, as well as our private equity investments.

 

Portfolio Asset Quality

 

As of September 30, 2019, the weighted average grade of the debt investment portfolio slightly improved to 2.17, on a cost basis, compared to 2.18 as of June 30, 2019, based on a scale of 1 to 5, with 1 being the highest quality. Hercules’ policy is to generally adjust the credit grading down on its portfolio companies as they approach their expected need for additional growth equity capital to fund their respective operations for the next 9-14 months.

 

Additionally, Hercules may selectively downgrade portfolio companies, from time to time, if they are not meeting the Company’s financing criteria, underperforming relative to their respective business plans, or approaching an additional round of new equity capital investment. It is expected that venture growth stage companies typically require multiple additional rounds of equity capital, generally every 9-14 months, since they are not generating positive cash flows for their operations. Various companies in the Company’s portfolio will require additional rounds of funding from time to time to maintain their operations.

 

5

 

 

As of September 30, 2019, grading of the debt investment portfolio at fair value, excluding warrants and equity investments, was as follows:

 

Credit Grading at Fair Value, Q3 2019 - Q3 2018 ($ in millions)

                                                 
   

Q3

   

2019

   

Q2

   

2019

   

Q1

   

2019

   

Q4

   

2018

   

Q3

   

2018

 

Grade 1 - High

  $ 237.9       11.4 %   $ 256.2       12.4 %   $ 299.2       15.8 %   $ 311.6       18.0 %   $ 150.2       9.4 %

Grade 2

  $ 1,331.2       64.0 %   $ 1,317.7       63.9 %   $ 1,056.4       55.7 %   $ 885.1       51.1 %   $ 987.5       61.6 %

Grade 3

  $ 479.0       23.1 %   $ 413.0       20.1 %   $ 469.7       24.7 %   $ 474.9       27.3 %   $ 420.2       26.2 %

Grade 4

  $ 29.7       1.4 %   $ 67.8       3.3 %   $ 66.5       3.5 %   $ 60.3       3.5 %   $ 44.5       2.7 %

Grade 5 - Low

  $ 2.1       0.1 %   $ 6.9       0.3 %   $ 5.3       0.3 %   $ 1.6       0.1 %   $ 0.9       0.1 %
                                                                                 

Weighted Avg.

    2.17               2.18               2.19               2.18               2.23          

 

 

Non-Accruals 

 

Non-accruals remained relatively flat as a percentage of the overall investment portfolio in the third quarter of 2019. As of September 30, 2019, the Company had three (3) debt investments on non-accrual with an investment cost and fair value of approximately $9.2 million and $2.2 million, respectively, or 0.4% and 0.1% as a percentage of the Company’s total investment portfolio at cost and value, respectively.

 

Compared to June 30, 2019, the Company had four (4) debt investments on non-accrual with an investment cost and fair value of approximately $8.8 million and $4.8 million, respectively, or 0.4% and 0.2% as a percentage of the total investment portfolio at cost and value, respectively.

 

   

Q3 2019

   

Q2 2019

   

Q1 2019

   

Q4 2018

   

Q3 2018

 
                                         

Total Investments at Cost

  $ 2,336.3     $ 2,315.7     $ 2,153.3     $ 1,980.5     $ 1,813.1  
                                         

Loans on non-accrual as a % of Total Investments at Value

    0.1 %     0.2 %     0.02 %     0.0 %     0.0 %
                                         

Loans on non-accrual as a % of Total Investments at Cost

    0.4 %     0.4 %     0.1 %     0.1 %     0.2 %

 

 

Liquidity and Capital Resources

 

The Company ended Q3 2019 with $284.5 million in available liquidity, including $21.1 million in unrestricted cash and cash equivalents, and $263.4 million in available credit facilities, subject to existing terms and advance rates and regulatory and covenant requirements.

 

On July 16, 2019, the Company entered into a Note Purchase Agreement governing the issuance of $105.0 million in aggregate principal amount of senior unsecured notes (the “July 2024 Notes”) to qualified institutional investors in a private placement. The July 2024 Notes have a fixed interest rate of 4.77% and are due on July 16, 2024, unless redeemed, purchased or prepaid prior to such date by the Company or its affiliates in accordance with their terms.

 

During the three months ending September 30, 2019, the Company did not sell any shares of common stock under the equity ATM program. During the nine months ending September 30, 2019, the Company sold approximately 2.0 million shares of common stock, which were issued under the equity ATM program, for total accumulated net proceeds of approximately $25.1 million, including $311,000 of offering expenses. As of October 28, 2019, approximately 10.7 million shares remain available for issuance and sale under the Equity Distribution Agreement.

 

6

 

 

Bank Facilities

 

As of September 30, 2019, Hercules has two committed accordion credit facilities, one with Wells Fargo Capital Finance, part of Wells Fargo & Company (NYSE: WFC) (the “Wells Fargo Facility”), and another with Union Bank (the “Union Bank Facility”) for $75.0 million and $200.0 million, respectively. The Wells Fargo and Union Bank Facilities both include an uncommitted accordion feature that enables the Company to increase the existing facilities to a maximum value of $125.0 million and $300.0 million, respectively, or $425.0 million in aggregate. Pricing at September 30, 2019 under the Wells Fargo Facility and Union Bank Facility were LIBOR+3.00% and LIBOR+2.70%, respectively. There were $11.6 million in outstanding borrowings under the Union Bank Facility and no outstanding borrowings under the Wells Fargo Facility, for a total of $11.6 million at September 30, 2019.

 

Leverage 

 

As of September 30, 2019, Hercules’ GAAP leverage ratio, including its Small Business Administration “SBA” debentures, was 111.5%. Hercules’ regulatory leverage, or debt-to-equity ratio, excluding our SBA debentures, was 97.8% and net regulatory leverage, a non-GAAP measure (excluding cash of approximately $21.1 million), was 95.8%. Hercules’ net leverage ratio, including its SBA debentures, was 109.6%.

 

Available Unfunded Commitments – Representing 7.2% of Total Assets

 

The Company’s unfunded commitments and contingencies consist primarily of unused commitments to extend credit in the form of loans to select portfolio companies. A portion of these unfunded contractual commitments are dependent upon the portfolio company reaching certain milestones in order to gain access to additional funding. Furthermore, our credit agreements contain customary lending provisions that allow us relief from funding obligations for previously made commitments. In addition, since a portion of these commitments may also expire without being drawn, unfunded contractual commitments do not necessarily represent future cash requirements.

 

As of September 30, 2019, the Company had $167.5 million of available unfunded commitments at the request of the portfolio company and unencumbered by any milestones, including undrawn revolving facilities, representing 7.2% of Hercules’ total assets. This decreased from the previous quarter of $177.2 million of available unfunded commitments or 7.7% of Hercules’ total assets.

 

Existing Pipeline and Signed Term Sheets

 

After closing $241.3 million in new debt and equity commitments in Q3 2019, Hercules has pending commitments of $35.8 million in signed non-binding term sheets outstanding as of October 29, 2019. Since the close of Q3 2019 and as of October 29, 2019, Hercules has funded $ 117.6 million of new and existing commitments.

 

Signed non-binding term sheets are subject to satisfactory completion of Hercules’ due diligence and final investment committee approval process as well as negotiations of definitive documentation with the prospective portfolio companies. These non-binding term sheets generally convert to contractual commitments in approximately 90 days from signing. It is important to note that not all signed non-binding term sheets are expected to close and do not necessarily represent future cash requirements or investments.

 

7

 

 

Net Asset Value

 

As of September 30, 2019, the Company’s net assets were $1.09 billion, compared to $1.10 billion at the end of Q2 2019. NAV per share decreased 1.7% to $10.38 on 104.6 million outstanding shares of common stock as of September 30, 2019, compared to $10.59 on 104.3 million outstanding shares of common stock as of June 30, 2019. The decrease in NAV per share was primarily attributed to the net change in unrealized depreciation in our public equity holdings.

 

Interest Rate Sensitivity

 

Hercules has an asset sensitive debt investment portfolio with 97.6% of our debt investment portfolio being priced at floating interest rates as of September 30, 2019, with a Prime or LIBOR-based interest rate floor, combined with 99.0% of our of our outstanding debt borrowings bearing fixed interest rates, leading to higher net investment income sensitivity.

 

Based on Hercules’ Consolidated Statement of Assets and Liabilities as of September 30, 2019, the following table shows the approximate annualized increase/(decrease) in components of net income resulting from operations of hypothetical base rate changes in interest rates, such as Prime Rate, assuming no changes in Hercules’ debt investments and borrowings. These estimates are subject to change due to the impact from active participation in the Company’s equity ATM program and any future equity offerings.

 

(in thousands)

   

Interest

   

Interest

   

Net

   

EPS(2)

 

Basis Point Change

   

Income(1)

   

Expense

   

Income

         
(75)     $ (6,790 )   $ (7 )   $ (6,783 )   $ (0.07 )
(50)     $ (4,867 )   $ (5 )   $ (4,862 )   $ (0.05 )
(25)     $ (2,615 )   $ (2 )   $ (2,613 )   $ (0.03 )
25     $ 3,051     $ 2     $ 3,049     $ 0.03  
50     $ 6,346     $ 5     $ 6,341     $ 0.06  
75     $ 10,896     $ 7     $ 10,889     $ 0.10  
100     $ 15,646     $ 10     $ 15,636     $ 0.15  
200     $ 35,797     $ 19     $ 35,778     $ 0.34  

 

(1)

Source: Hercules Capital Form 10-Q for Q3 2019

(2)

EPS calculated on basic weighted shares outstanding of 104,314. Estimates are subject to change due to impact from active participation in the Company's equity ATM program and any future equity offerings.

 

Existing Equity and Warrant Portfolio – Potential Future Additional Returns to Shareholders

 

Equity Portfolio

 

Hercules held equity positions in 53 portfolio companies with a fair value of $148.4 million and a cost basis of $201.0 million as of September 30, 2019. On a fair value basis, 29.0% or $43.4 million is related to existing public equity positions.

 

8

 

 

Warrant Portfolio

 

Hercules held warrant positions in 118 portfolio companies with a fair value of $18.9 million and a cost basis of $34.1 million as of September 30, 2019. On a fair value basis, 26.0% or $5.0 million is related to existing public warrant positions.

 

Portfolio Company IPO and M&A Activity in Q3 2019

 

IPO Activity

 

As of October 28, 2019, Hercules held warrant and equity positions in six (6) portfolio companies that had either completed their IPOs or filed Registration Statements in contemplation of a potential IPO, including:

 

 

In September 2019, Hercules’ portfolio company Brickell Biotech, Inc. (NASDAQ: BBI), a privately-held clinical-stage medical dermatology company, announced the completion of its merger with Vical Incorporated. Brickell commenced trading on the Nasdaq Capital Market on September 3, 2019. Hercules initially committed $7.5 million in venture debt in February 2016. Hercules currently holds warrants for 9,005 shares of common stock as of September 30, 2019.

 

 

In September 2019, Hercules’ portfolio company Oportun Financial Corporation (NASDAQ: OPRT), a high-growth, mission-driven Community Development Financial Institution providing inclusive, affordable financial services powered by a deep, data-driven understanding of its customers and advanced proprietary technology, completed is IPO offering of 6.3 million shares of common stock at an initial public offering price of $15.00 per share on the Nasdaq Global Market. Hercules committed a total of $8.0 million in venture debt financing beginning in June 2013, and currently holds 23,514 shares of common stock as of September 30, 2019.

 

 

In October 2019, Hercules’ portfolio company TELA Bio, Inc., a regenerative medicine company leading the development of advanced medical devices for soft tissue reconstruction, filed a public registration with the SEC in contemplation of an initial public offering. TELA Bio plans to list on the Nasdaq Capital Market under the symbol “TELA.” Hercules initially committed $5.0 million in venture debt financing in March 2017, and currently holds warrants for 387,930 shares of Preferred Series B stock, as of September 30, 2019.

 

 

Three (3) portfolio companies filed confidentially under the JOBS Act.

 

There can be no assurances that companies that have yet to complete their IPOs will do so.

 

M&A Activity

 

 

In August 2019, Hercules’ portfolio company Avedro Inc. (NASDAQ: AVDR), a leading hybrid ophthalmic pharmaceutical and medical technology company focused on treating corneal disease and disorders, announced they had entered into a definitive agreement with Glaukos Corporation (NYSE: GKOS), an ophthalmic medical technology and pharmaceutical company focused on novel therapies for the treatment of glaucoma, corneal disorders and retinal diseases, under which Glaukos will acquire Avedro in an all-stock transaction. Avedro shareholders will receive an exchange ratio equivalent of 0.365 shares of Glaukos stock. The transaction is subject to customary closing conditions and regulatory approvals. Hercules initially committed $12.5 million in venture debt financing beginning in September 2014.

 

9

 

 

Subsequent Events 

 

 

1.

As of October 29, 2019, Hercules has:

 

 

a.

Funded $117.6 million to new and existing commitments since the close of the third quarter.

 

 

b.

Pending commitments (signed non-binding term sheets) of $35.8 million.

 

The table below summarizes our year-to-date closed and pending commitments as follows:

 

Closed Commitments and Pending Commitments (in millions)

 

January 1 – September 30, 2019 Closed Commitments(a)

  $ 1,191.0  

Q4 2019 Closed Commitments (as of October 29, 2019)(a)

  $ 191.4  

Year-to-Date 2019 Closed Commitments

  $ 1,382.4  

Q4 2019 Pending Commitments (as of October 29, 2019)(b)

  $ 35.8  

Year-to-Date 2019 Closed and Pending Commitments

  $ 1,418.2  

 

Notes: 

 

a.

Closed Commitments may include renewals of existing credit facilities. Not all Closed Commitments result in future cash requirements. Commitments generally fund over the two succeeding quarters from close.

 

 

b.

Not all pending commitments (signed non-binding term sheets) are expected to close and do not necessarily represent any future cash requirements.

 

Conference Call

 

Hercules has scheduled its third quarter 2019 financial results conference call for October 30, 2019 at 2:00 p.m. PT (5:00 p.m. ET). To listen to the call, please dial (877) 304-8957 (or (408) 427-3709 internationally) and reference Conference ID: 5657015 if asked, approximately 10 minutes prior to the start of the call. A taped replay will be made available approximately three hours after the conclusion of the call and will remain available for seven days. To access the replay, please dial (855) 859-2056 or (404) 537-3406 and enter the passcode 5657015.

 

About Hercules Capital, Inc.

 

Hercules Capital, Inc. (NYSE: HTGC) is the leading and largest specialty finance company focused on providing senior secured venture growth loans to high-growth, innovative venture capital-backed companies in a broad variety of technology, life sciences and sustainable and renewable technology industries. Since inception (December 2003), Hercules has committed more than $9.7 billion to over 480 companies and is the lender of choice for entrepreneurs and venture capital firms seeking growth capital financing. Companies interested in learning more about financing opportunities should contact [email protected], or call 650.289.3060.

 

Hercules’ common stock trades on the New York Stock Exchange (NYSE) under the ticker symbol “HTGC.” In addition, Hercules has six outstanding bond issuances of:

 

10

 

 

Institutional Notes PAR $1000.00

 

4.625% Notes due 2022

 

Retail Notes (“Baby Bonds”) PAR $25.00

 

5.25% Notes due 2025 (NYSE: HCXZ)

 

6.25% Notes due 2033 (NYSE: HCXY)

 

Convertible Notes

 

4.375% Convertible Notes due 2022

 

Securitization Notes

 

4.605% Asset-backed Notes due 2027

 

4.703% Asset-backed Notes due 2028

 

Forward-Looking Statements

 

This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You should understand that under Section 27A(b)(2)(B) of the Securities Act of 1933, as amended, and Section 21E(b)(2)(B) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to forward-looking statements made in periodic reports we file under the Exchange Act.

 

The information disclosed in this press release is made as of the date hereof and reflects Hercules’ most current assessment of its historical financial performance. Actual financial results filed with the SEC may differ from those contained herein due to timing delays between the date of this release and confirmation of final audit results. These forward-looking statements are not guarantees of future performance and are subject to uncertainties and other factors that could cause actual results to differ materially from those expressed in the forward-looking statements including, without limitation, the risks, uncertainties, including the uncertainties surrounding the current market volatility, and other factors the Company identifies from time to time in its filings with the SEC. Although Hercules believes that the assumptions on which these forward-looking    statements are based are reasonable, any of those assumptions could prove to be inaccurate and, as a result, the forward-looking statements based on those assumptions also could be incorrect. You should not place undue reliance on these forward-looking statements. The forward-looking statements contained in this release are made as of the date hereof, and Hercules assumes no obligation to update the forward-looking statements for subsequent events.

 

Contact:

 

Michael Hara

Investor Relations and Corporate Communications

Hercules Capital, Inc.

650-433-5578

[email protected]

 

11

 

 

HERCULES CAPITAL, INC.

CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES

(dollars in thousands, except per share data)

 

   

September 30, 2019

   

December 31, 2018

 

Assets

               

Investments:

               

Non-control/Non-affiliate investments (cost of $2,182,777 and $1,830,725, respectively)

  $ 2,167,882     $ 1,801,258  

Control investments (cost of $65,319 and $64,799, respectively)

    58,560       57,619  

Affiliate investments (cost of $88,238 and $85,000, respectively)

    20,964       21,496  

Total investments in securities, at value (cost of $2,336,334 and $1,980,524, respectively)

    2,247,206       1,880,373  

Cash and cash equivalents

    21,045       34,212  

Restricted cash

    14,886       11,645  

Interest receivable

    19,847       16,959  

Right of use asset

    12,218        

Other assets

    1,727       2,002  

Total assets

  $ 2,316,929     $ 1,945,191  
                 

Liabilities

               

Accounts payable and accrued liabilities

  $ 25,451     $ 25,961  

Operating lease liability

    11,922        

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

    197,241       197,265  

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

    247,333        

2022 Convertible Notes, net (principal of $230,000 and $230,000, respectively)(1)

    226,223       225,051  

2022 Notes, net (principal of $150,000 and $150,000, respectively)(1)

    148,383       147,990  

2024 Notes, net (principal of $0 and $83,510, respectively)(1)

          81,852  

2025 Notes, net (principal of $75,000 and $75,000, respectively)(1)

    72,875       72,590  

2033 Notes, net (principal of $40,000 and $40,000, respectively)(1)

    38,474       38,427  

July 2024 Notes, net (principal of $105,000 and $0, respectively)(1)

    103,723        

SBA Debentures, net (principal of $149,000 and $149,000, respectively)(1)

    148,038       147,655  

Credit Facilities

    11,585       52,956  

Total liabilities

  $ 1,231,248     $ 989,747  
                 

Net assets consist of:

               

Common stock, par value

    105       96  

Capital in excess of par value

    1,147,054       1,052,269  

Total distributable earnings (loss)(2)

    (61,478 )     (92,859 )

Treasury Stock, at cost, no shares as of September 30, 2019 and 376,466 shares as of December 31, 2018

          (4,062 )

Total net assets

  $ 1,085,681     $ 955,444  

Total liabilities and net assets

  $ 2,316,929     $ 1,945,191  
                 

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

    104,636       96,501  

Net asset value per share

  $ 10.38     $ 9.90  

 

(1) The Company’s SBA Debentures, 2033 Notes, 2025 Notes, 2022 Notes, 2024 Notes, 2027 Asset-Backed Notes, 2028 Asset-Backed Notes, 2022 Convertible Notes, and July 2024 Notes, as each term is defined herein, are presented net of the associated debt issuance costs for each instrument. 

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

 

12

 

 

HERCULES CAPITAL, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

(in thousands, except per share data)

 

   

Three Months Ended June 30,

   

Nine Months Ended September 30,

 
   

2019

   

2018

   

2019

   

2018

 

Investment income:

                               

Interest Income

                               

Non-control/Non-affiliate investments

  $ 62,696     $ 47,662     $ 176,568     $ 134,031  

Control investments

    1,055       921       3,119       2,348  

Affiliate investments

    493       209       1,740       1,570  

Total interest income

    64,244       49,092       181,427       137,949  

Fee Income

                               

Commitment, facility and loan fee income

                               

Non-control/Non-affiliate investments

    3,591       1,858       11,069       6,228  

Control investments

    5       1       13       1  

Affiliate investments

    26       71       186       263  

Total Commitment, facility and loan fee income

    3,622       1,930       11,268       6,492  

One-time fee income

                               

Non-control/Non-affiliate investments

    1,372       1,580       4,602       6,423  

Total one-time fee income

    1,372       1,580       4,602       6,423  

Total fee income

    4,994       3,510       15,870       12,915  

Total investment income

    69,238       52,602       197,297       150,864  

Operating expenses:

                               

Interest

    13,857       9,451       39,927       28,715  

Loan fees

    1,138       1,502       5,793       6,039  

General and administrative

                               

Legal expenses

    1,586       677       4,212       1,889  

Tax expenses

    815       117       1,706       689  

Other expenses

    3,967       2,927       10,398       8,826  

Total general and administrative

    6,368       3,721       16,316       11,404  

Employee compensation

                               

Compensation and benefits

    7,559       5,294       23,372       18,069  

Stock-based compensation

    1,443       3,332       8,716       8,498  

Total employee compensation

    9,002       8,626       32,088       26,567  

Total operating expenses

    30,365       23,300       94,124       72,725  

Net investment income

    38,873       29,302       103,173       78,139  

Net realized gain (loss) on investments

                               

Non-control/Non-affiliate investments

    4,807       3,350       13,633       (4,115 )

Control investments

                      (4,308 )

Affiliate investments

                      (2,058 )

Total net realized gain (loss) on investments

    4,807       3,350       13,633       (10,481 )

Net change in unrealized appreciation (depreciation) on investments

                               

Non-control/Non-affiliate investments

    (26,351 )     3,967       15,533       22,327  

Control investments

    2,489       378       421       3,715  

Affiliate investments

    (547 )     (1,368 )     (3,773 )     (66 )

Total net unrealized appreciation (depreciation) on investments

    (24,409 )     2,977       12,181       25,976  

Total net realized and unrealized gain(loss)

    (19,602 )     6,327       25,814       15,495  

Net increase(decrease) in net assets resulting from operations

  $ 19,271     $ 35,629     $ 128,987     $ 93,634  
                                 

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

                               

Basic

  $ 0.37     $ 0.31     $ 1.03     $ 0.87  

Change in net assets resulting from operations per common share:

                               

Basic

  $ 0.18     $ 0.37     $ 1.29     $ 1.04  

Diluted

  $ 0.18     $ 0.37     $ 1.29     $ 1.04  

Weighted average shares outstanding:

                               

Basic

    104,314       95,460       99,615       89,100  

Diluted

    104,655       95,671       100,043       89,212  

Distributions paid per common share:

                               

Basic

  $ 0.34     $ 0.31     $ 0.98     $ 0.93  

 

13

 

 

HERCULES CAPITAL, INC.
NON GAAP FINANCIAL MEASURES 
(in thousands, except per share data)

 

   

Three Months Ended September 30,

 

Reconciliation of Net Investment Income to DNOI

 

2019

   

2018

 

Net investment income

  $ 38,873     $ 29,302  

Stock-based compensation

    1,443       3,332  

DNOI

  $ 40,316     $ 32,634  
                 

DNOI per share-weighted average common shares

               

Basic

  $ 0.39     $ 0.34  
                 

Weighted average shares outstanding

               

Basic

    104,314       95,460  

 

Distributable Net Operating Income, “DNOI” represents net investment income as determined in accordance with U.S. generally accepted accounting principles, or GAAP, adjusted for amortization of employee restricted stock awards and stock options. Hercules views DNOI and the related per share measures as useful and appropriate supplements to net operating income, net income, earnings per share and cash flows from operating activities. DNOI is a non-GAAP financial measure. The Company believes that DNOI provides useful information to investors and management because it serves as an additional measure of Hercules’ operating performance exclusive of employee restricted stock amortization, which represents expenses of the Company but does not require settlement in cash. DNOI does include paid-in-kind, or PIK, interest and back end fee income which are generally not payable in cash on a regular basis, but rather at investment maturity or when declared. DNOI should not be considered as an alternative to net operating income, net income, earnings per share and cash flows from operating activities (each computed in accordance with GAAP). Instead, DNOI should be reviewed in connection with net operating income, net income (loss), earnings (loss) per share and cash flows from operating activities in Hercules’ consolidated financial statements, to help analyze how Hercules’ business is performing

 

14

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Section 3: EX-99.2 (EXHIBIT 99.2)

ex_161797.htm

Exhibit 99.2

 

 

 

Hercules Capital Declares Distribution of $0.32

per Share for the Third Quarter of 2019

  

57th Consecutive Quarterly Distribution Bringing Cumulative Distributions to $16.27 per Share since IPO in June 2005

  

PALO ALTO, Calif., October 29, 2019 Hercules Capital, Inc. (NYSE: HTGC) (“Hercules” or the “Company”), the largest and leading specialty finance provider to innovative, venture, growth and established stage companies backed by some of the leading and top-tier venture capital and select private equity firms, is pleased to announce that its Board of Directors has declared a third quarter 2019 cash distribution of $0.32 per share. The following shows the key dates of the third quarter 2019 distribution payment:

 

Record Date          November 11, 2019   

Payment Date       November 18, 2019

 

Hercules' Board of Directors maintains a variable distribution policy with the objective of distributing four quarterly distributions in an amount that approximates 90% to 100% of the Company’s taxable quarterly income or potential annual income for a particular year. In addition, during the year, the Company’s Board of Directors may choose to pay additional supplemental distributions, so that the Company may distribute approximately all its annual taxable income in the year it was earned, or it can elect to maintain the option to spill over the excess taxable income into the coming year for future distribution payments.

 

The determination of the tax attributes of the Company's distributions is made annually as of the end of the Company's fiscal year based upon its taxable income for the full year and distributions paid for the full year. Therefore, a determination made on a quarterly basis may not be representative of the actual tax attributes of its distributions for a full year. Of the distributions declared during the quarter ended September 30, 2019, 100% were distributions derived from the Company’s current and accumulated earnings and profits. There can be no certainty to stockholders that this determination is representative of the tax attributes of the Company’s 2019 full year distributions to stockholders.

 

About Hercules Capital, Inc.

 

Hercules Capital, Inc. (NYSE: HTGC) is the leading and largest specialty finance company focused on providing senior secured venture growth loans to high-growth, innovative venture capital-backed companies in a broad variety of technology, life sciences and sustainable and renewable technology industries. Since inception (December 2003), Hercules has committed more than $9.4 billion to over 480 companies and is the lender of choice for entrepreneurs and venture capital firms seeking growth capital financing. Companies interested in learning more about financing opportunities should contact [email protected], or call 650.289.3060.

 

 

 

 

Hercules’ common stock trades on the New York Stock Exchange (NYSE) under the ticker symbol “HTGC.” In addition, Hercules has six outstanding bond issuances of:

 

Institutional Notes PAR $1000.00

 

4.625% Notes due 2022

 

Retail Notes (“Baby Bonds”) PAR $25.00

 

5.25% Notes due 2025 (NYSE:HCXZ)

 

6.25% Notes due 2033 (NYSE:HCXY)

 

Convertible Notes

 

4.375% Convertible Notes due 2022

 

Securitization Notes

 

4.605% Asset-backed Notes due 2027

 

4.703% Asset-backed Notes due 2028

 

Forward-Looking Statements

 

This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You should understand that under Section 27A(b)(2)(B) of the Securities Act of 1933, as amended, and Section 21E(b)(2)(B) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to forward-looking statements made in periodic reports we file under the Exchange Act.

 

The information disclosed in this press release is made as of the date hereof and reflects Hercules’ most current assessment of its historical financial performance. Actual financial results filed with the SEC may differ from those contained herein due to timing delays between the date of this release and confirmation of final audit results. These forward-looking statements are not guarantees of future performance and are subject to uncertainties and other factors that could cause actual results to differ materially from those expressed in the forward-looking statements including, without limitation, the risks, uncertainties, including the uncertainties surrounding the current market volatility, and other factors the Company identifies from time to time in its filings with the SEC. Although Hercules believes that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate and, as a result, the forward-looking statements based on those assumptions also could be incorrect. You should not place undue reliance on these forward-looking statements. The forward-looking statements contained in this release are made as of the date hereof, and Hercules assumes no obligation to update the forward-looking statements for subsequent events.

 

 

 

 

Contact:

 

Michael Hara                                   

Investor Relations and Corporate Communications          

Hercules Capital, Inc.                

(650) 433-5578                              

[email protected]

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Section 4: EX-99.3 (EXHIBIT 99.3)

ex_161798.htm

Exhibit 99.3

 

 

 

Hercules Capital Announces Supplemental Cash Distribution

of $0.03 per Share for the Third Quarter of 2019

 

Supplemental Cash Distribution of $0.03 per Share is in Addition to the Regular Quarterly Cash Distribution for the Third Quarter of 2019 of $0.32 per Share

 

PALO ALTO, Calif., October 29, 2019 Hercules Capital, Inc. (NYSE: HTGC) (“Hercules” or the “Company”), the largest and leading specialty financing provider to innovative venture, growth and established stage companies backed by some of the leading and top-tier venture capital and select private equity firms, is pleased to announce that its Board of Directors has declared a supplemental cash distribution of $0.03 per share.

 

This supplemental cash distribution will be paid out of Hercules Capital’s undistributed taxable income (taxable income in excess of distributions paid) as of September 30, 2019. The following shows the key dates of the supplemental distribution payment:

 

Record Date          November 11, 2019   

Payment Date       November 18, 2019

 

This supplemental cash distribution is in addition to the previously announced regular quarterly cash distribution that Hercules declared for the third quarter of 2019 of $0.32 per share. Including the regular quarterly and supplemental cash distributions declared to date, The Company will have paid $16.30 per share in cumulative cash distributions since its June 2005 initial public offering.

 

Hercules' Board of Directors maintains a variable distribution policy with the objective of distributing four quarterly distributions in an amount that approximates 90% to 100% of the Company’s taxable quarterly income or potential annual income for a particular year. In addition, during the year, the Company’s Board of Directors may choose to pay additional supplemental distributions, so that the Company may distribute approximately all its annual taxable income in the year it was earned, or it can elect to maintain the option to spill over the excess taxable income into the coming year for future distribution payments.

 

The determination of the tax attributes of the Company's distributions is made annually as of the end of the Company's fiscal year based upon its taxable income for the full year and distributions paid for the full year. Therefore, a determination made on a quarterly basis may not be representative of the actual tax attributes of its distributions for a full year. Of the distributions declared during the quarter ended September 30, 2019, 100% were distributions derived from the Company’s current and accumulated earnings and profits. There can be no certainty to stockholders that this determination is representative of the tax attributes of the Company’s 2019 full year distributions to stockholders.

 

 

 

 

About Hercules Capital, Inc.

 

Hercules Capital, Inc. (NYSE: HTGC) is the leading and largest specialty finance company focused on providing senior secured venture growth loans to high-growth, innovative venture capital-backed companies in a broad variety of technology, life sciences and sustainable and renewable technology industries. Since inception (December 2003), Hercules has committed more than $9.4 billion to over 480 companies and is the lender of choice for entrepreneurs and venture capital firms seeking growth capital financing. Companies interested in learning more about financing opportunities should contact [email protected], or call 650.289.3060.

 

Hercules’ common stock trades on the New York Stock Exchange (NYSE) under the ticker symbol “HTGC.” In addition, Hercules has six outstanding bond issuances of:

 

Institutional Notes PAR $1000.00

 

4.625% Notes due 2022

 

Retail Notes (“Baby Bonds”) PAR $25.00

 

5.25% Notes due 2025 (NYSE: HCXZ)

 

6.25% Notes due 2033 (NYSE: HCXY)

 

Convertible Notes

 

4.375% Convertible Notes due 2022

 

Securitization Notes

 

4.605% Asset-backed Notes due 2027

 

4.703% Asset-backed Notes due 2028

 

Forward-Looking Statements

 

This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You should understand that under Section 27A(b)(2)(B) of the Securities Act of 1933, as amended, and Section 21E(b)(2)(B) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to forward-looking statements made in periodic reports we file under the Exchange Act.

 

The information disclosed in this press release is made as of the date hereof and reflects Hercules’ most current assessment of its historical financial performance. Actual financial results filed with the SEC may differ from those contained herein due to timing delays between the date of this release and confirmation of final audit results. These forward-looking statements are not guarantees of future performance and are subject to uncertainties and other factors that could cause actual results to differ materially from those expressed in the forward-looking statements including, without limitation, the risks, uncertainties, including the uncertainties surrounding the current market volatility, and other factors the Company identifies from time to time in its filings with the SEC. Although Hercules believes that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate and, as a result, the forward-looking statements based on those assumptions also could be incorrect. You should not place undue reliance on these forward-looking statements. The forward-looking statements contained in this release are made as of the date hereof, and Hercules assumes no obligation to update the forward-looking statements for subsequent events.

 

 

 

 

Contact:

 

Michael Hara                                   

Investor Relations and Corporate Communications          

Hercules Capital, Inc.                

(650) 433-5578                              

[email protected]

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