Hercules Capital
HERCULES TECHNOLOGY GROWTH CAPITAL INC (Form: 10-Q, Received: 08/07/2009 16:45:54)
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 10-Q

 

 

(Mark One)

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

For The Quarterly Period Ended June 30, 2009

OR

 

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

Commission File Number: 814-00702

 

 

HERCULES TECHNOLOGY GROWTH

CAPITAL, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

 

Maryland   743113410

(State or Jurisdiction of

Incorporation or Organization)

 

(IRS Employer

Identification No.)

 

400 Hamilton Ave., Suite 310 Palo Alto, California 94301   94301
(Address of Principal Executive Offices)   (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 as the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days    YES   x     NO   ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes   ¨     No   ¨

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

Large Accelerated Filer   ¨     Accelerated Filer   x     Non-Accelerated Filer   ¨     Smaller Reporting Company  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)    YES   ¨     NO   x

On August 6, 2009, there were 35,453,486 shares outstanding of the Registrant’s common stock, $0.001 par value.

 

 

 


Table of Contents

HERCULES TECHNOLOGY GROWTH 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 June 30, 2009 (unaudited) and December 31, 2008    3
  Consolidated Schedule of Investments as of June 30, 2009 (unaudited)    4
  Consolidated Schedule of Investments as of December 31, 2008    14
  Consolidated Statement of Operations for the three and six-month periods ended June 30, 2009 and 2008 (unaudited)    28
  Consolidated Statement of Changes in Net Assets for the six-month periods ended June 30, 2009 and 2008 (unaudited)    29
  Consolidated Statement of Cash Flows for the six-month periods ended June 30, 2009 and 2008 (unaudited)    30
  Notes to Consolidated Financial Statements (unaudited)    31

    Item 2.

  Management’s Discussion and Analysis of Financial Condition and Results of Operations    44

    Item 3.

  Quantitative and Qualitative Disclosures About Market Risk    58

    Item 4.

  Controls and Procedures    58

PART II. OTHER INFORMATION

   58

    Item 1.

  Legal Proceedings    58

    Item 1A.

  Risk Factors    58

    Item 2.

  Unregistered Sales of Equity Securities and Use of Proceeds    61

    Item 3.

  Defaults Upon Senior Securities    61

    Item 4.

  Submission of Matters to a Vote of Security Holders    61

    Item 5.

  Other Information    61

    Item 6.

  Exhibits    62

SIGNATURES

   63

 

2


Table of Contents

PART I: FINANCIAL INFORMATION

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

 

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES

(dollars in thousands, except per share data)

 

    

June 30,

2009

 (unaudited) 

    December 31,
2008
 

Assets

    

Investments:

    

Non-affiliate investments (cost of $486,652 and $583,592)

   $ 451,257      $ 579,079   

Affiliate investments (cost of $3,467 and $8,756)

     1,133        2,222   
                

Total investments, at value (cost of $490,119 and $592,348 respectively)

     452,390        581,301   

Deferred loan origination revenue

     (4,274     (6,871

Cash and cash equivalents

     37,367        17,242   

Interest receivable

     9,327        8,803   

Other assets

     7,085        8,197   
                

Total assets

     501,895        608,672   

Liabilities

    

Accounts payable and accrued liabilities

     6,645        9,432   

Short-term credit facility

     —          89,582   

Long-term credit facility

     417        —     

Long-term SBA Debentures

     130,600        127,200   
                

Total liabilities

     137,662        226,214   
                

Net assets

   $ 364,233      $ 382,458   
                

Net assets consist of:

    

Common stock, par value

   $ 35      $ 33   

Capital in excess of par value

     407,300        395,760   

Unrealized appreciation (depreciation) on investments

     (37,922     (11,297

Accumulated realized gains (losses) on investments

     (1,426     3,906   

Distributions in excess of investment income

     (3,754     (5,944
                

Total net assets

   $ 364,233      $ 382,458   
                

Shares of common stock outstanding ($0.001 par value, 60,000 authorized)

     35,452        33,096   
                

Net asset value per share

   $ 10.27      $ 11.56   
                

See notes to consolidated financial statements (unaudited).

 

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Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

June 30, 2009

(unaudited)

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment (1)

   Principal
Amount
   Cost (2)    Value (3)
Acceleron Pharmaceuticals, Inc.*    Drug Discovery    Preferred Stock Warrants       $ 69    $ 525
      Preferred Stock Warrants         35      76
Acceleron Pharmaceuticals, Inc.       Preferred Stock         1,243      1,450
                      
Total Acceleron Pharmaceuticals, Inc.               1,347      2,051
Aveo Pharmaceuticals, Inc.    Drug Discovery   

Senior Debt

Matures May 2012

Interest rate 11.13%

   $ 15,000      14,923      14,923
      Preferred Stock Warrants         190      291
      Preferred Stock Warrants         104      81
      Preferred Stock Warrants         24      29
                      
Total Aveo Pharmaceuticals, Inc.               15,241      15,324
Dicerna Pharmaceuticals, Inc.    Drug Discovery   

Senior Debt

Matures April 2012

Interest rate Prime + 9.20% or

Floor rate of 12.95%

   $ 5,000      4,799      4,799
      Preferred Stock Warrants         206      179
                      
Total Dicerna Pharmaceuticals, Inc.               5,005      4,978
Elixir Pharmaceuticals, Inc.    Drug Discovery   

Senior Debt

Matures October 2011

Interest rate Prime + 9.25% or

Floor rate of 12.50%

   $ 10,267      10,267      10,267
      Preferred Stock Warrants         217      109
                      
Total Elixir Pharmaceuticals, Inc.               10,484      10,376
EpiCept Corporation    Drug Discovery    Common Stock Warrants         14      88
      Common Stock Warrants         40      253
                      
Total EpiCept Corporation               54      341
Horizon Therapeutics, Inc.    Drug Discovery   

Senior Debt

Matures July 2011

Interest rate Prime + 1.50%

   $ 6,082      5,977      5,977
      Preferred Stock Warrants         231      237
                      
Total Horizon Therapeutics, Inc.               6,208      6,214
Inotek Pharmaceuticals Corp.    Drug Discovery    Preferred Stock         1,500      475
                      
Total Inotek Pharmaceuticals Corp.               1,500      475
Merrimack Pharmaceuticals, Inc.    Drug Discovery    Preferred Stock Warrants         155      338
Merrimack Pharmaceuticals, Inc.       Preferred Stock         2,000      2,787
                      
Total Merrimack Pharmaceuticals, Inc.               2,155      3,125
Paratek Pharmaceuticals, Inc.    Drug Discovery    Preferred Stock Warrants         137      27
Paratek Pharmaceuticals, Inc.       Preferred Stock         1,000      1,000
                      
Total Paratek Pharmaceuticals, Inc.               1,137      1,027
Portola Pharmaceuticals, Inc.    Drug Discovery   

Senior Debt

Matures April 2011

Interest rate Prime + 2.16%

   $ 9,166      9,167      9,167
      Preferred Stock Warrants         152      319
                      
Total Portola Pharmaceuticals, Inc.               9,319      9,486
Recoly, N.V. (5)    Drug Discovery   

Senior Debt

Matures June 2012

Interest rate Prime + 4.25%

   $ 3,000      3,000      3,000
                      
Total Recoly, N.V.               3,000      3,000
                      
Total Drug Discovery (15.48%)               55,450      56,397
                      
Affinity Videonet, Inc. (4)    Communications & Networking   

Senior Debt

Matures June 2012

Interest rate Prime + 8.75%

   $ 2,318      2,281      2,281
     

Senior Debt

Matures June 2012

Interest rate Prime + 4.75%

   $ 2,000      2,032      2,032
     

Revolving Line of Credit

Matures June 2012

Interest rate Prime + 9.75% or

Floor rate of 13.00%

   $ 500      500      500
      Preferred Stock Warrants         102      96
                      
Total Affinity Videonet, Inc.               4,915      4,909

See notes to consolidated financial statements (unaudited).

 

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Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

June 30, 2009

(unaudited)

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment (1)

   Principal
Amount
   Cost (2)    Value (3)
E-band Communications, Inc. (6)    Communications & Networking    Preferred Stock       $ 2,372    $ 1,003
                      
Total E-Band Communications, Inc.               2,372      1,003
IKANO Communications, Inc.    Communications & Networking   

Senior Debt

Matures August 2011

Interest rate 12.00%

   $ 9,137      9,137      9,137
      Preferred Stock Warrants         45      —  
      Preferred Stock Warrants         72      —  
                      
Total IKANO Communications, Inc.               9,254      9,137
Neonova Holding Company    Communications & Networking   

Senior Debt

Matures September 2012

Interest rate Prime + 3.25% or

Floor rate of 10.50%

   $ 8,135      8,083      8,083
      Preferred Stock Warrants         94      45
Neonova Holding Company       Preferred Stock         250      247
                      
Total Neonova Holding Company               8,427      8,375
Peerless Network, Inc. (4)(6)    Communications & Networking    Preferred Stock Warrants         95      —  
Peerless Network, Inc.       Preferred Stock         1,000      130
                      
Total Peerless Network, Inc.               1,095      130
Ping Identity Corporation    Communications & Networking    Preferred Stock Warrants         52      175
                      
Total Ping Identity Corporation               52      175
Purcell Systems, Inc.    Communications & Networking    Preferred Stock Warrants         123      433
                      
Total Purcell Systems, Inc.               123      433
Rivulet Communications, Inc. (4)    Communications & Networking   

Senior Debt

Matures March 2010

Interest rate Prime + 8.00% or

Floor rate of 12.00%

   $ 1,867      1,808      1,808
      Preferred Stock Warrants         146      97
Rivulet Communications, Inc.       Preferred Stock         250      58
                      
Total Rivulet Communications, Inc.               2,204      1,963
Seven Networks, Inc.    Communications & Networking    Preferred Stock Warrants         174      10
                      
Total Seven Networks, Inc.               174      10
Stoke, Inc.    Communications & Networking   

Senior Debt

Matures August 2010

Interest rate 10.55%

   $ 411      392      392
     

Senior Debt

Matures August 2010

Interest rate 10.05%

   $ 821      821      821
     

Senior Debt

Matures August 2010

Interest rate 7.30%

   $ 675      675      675
      Preferred Stock Warrants         53      76
                      
Total Stoke, Inc.               1,941      1,964
Tectura Corporation    Communications & Networking   

Revolving Line of Credit

Matures July 2011

Interest rate Prime + 10.75% or

Floor rate of 14.00%

   $ 11,908      11,965      11,965
     

Revolving Line of Credit

Matures July 2011

Interest rate Prime + 10.75% or

Floor rate of 14.00%

   $ 5,500      5,526      5,526
      Preferred Stock Warrants         51      38
                      
Total Tectura Corporation               17,542      17,529
Wireless Channels, Inc. (4)(7)    Communications & Networking   

Senior Debt

Matures April 2010

Interest rate Prime + 4.25%

   $ 9,822      10,319      3,319

See notes to consolidated financial statements (unaudited).

 

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Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

June 30, 2009

(unaudited)

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment (1)

   Principal
Amount
   Cost (2)    Value (3)
     

Senior Debt

Matures April 2010

Interest rate Prime + 0.50%%

   $ 426    $ 426    $ 426
      Preferred Stock Warrants         155      —  
               
Total Wireless Channels, Inc.               10,900      3,745
Zayo Bandwidth, Inc.    Communications & Networking   

Senior Debt

Matures November 2013

Interest rate Libor + 5.25%

   $ 24,875      24,875      24,440
               
Total Zayo Bandwith, Inc.               24,875      24,440
               
Total Communications & Networking (20.27%)               83,874      73,813
               
Atrenta, Inc. (4)    Software    Preferred Stock Warrants         102      438
      Preferred Stock Warrants         34      144
      Preferred Stock Warrants         95      216
Atrenta, Inc.       Preferred Stock         250      375
               
Total Atrenta, Inc.               481      1,173
Blurb, Inc.    Software   

Senior Debt

Matures January 2010

Interest rate 9.55%

   $ 780      775      775
     

Senior Debt

Matures June 2011

Interest rate Prime + 3.50% or

Floor rate of 8.50%

   $ 4,345      4,181      4,181
      Preferred Stock Warrants         25      131
      Preferred Stock Warrants         299      81
               
Total Blurb, Inc.               5,280      5,168
Braxton Technologies, LLC. (4)    Software   

Senior Debt

Matures July 2012

Interest rate Prime + 6.00% or

Floor rate of 13.00%

   $ 6,996      7,015      7,015
      Preferred Stock Warrants         188      171
               
Total Braxton Technologies, LLC.               7,203      7,186
Bullhorn, Inc.    Software    Preferred Stock Warrants         43      254
               
Total Bullhorn, Inc.               43      254
Clickfox, Inc.    Software   

Senior Debt

Matures September 2011

Interest rate Prime + 5.00% or

Floor rate of 10.25%

   $ 4,703      4,590      4,590
     

Revolving Line of Credit

Matures July 2009

Interest rate Prime + 4.00% or

Floor rate of 9.25%

   $ 2,000      2,000      2,000
      Preferred Stock Warrants         163      137
               
Total Clickfox, Inc.               6,753      6,727
Forescout Technologies, Inc.    Software    Preferred Stock Warrants         99      125
               
Total Forescout Technologies, Inc.               99      125
GameLogic, Inc.    Software    Preferred Stock Warrants         92      1
               
Total GameLogic, Inc.               92      1
Gomez, Inc.    Software    Preferred Stock Warrants         35      408
               
Total Gomez, Inc.               35      408
HighJump Acquisition, LLC.    Software   

Senior Debt

Matures May 2013

Interest rate Libor + 8.75% or

Floor rate of 12.00%

   $ 15,000      15,000      15,000
               
Total HighJump Acquisition, LLC.               15,000      15,000
HighRoads, Inc.    Software    Preferred Stock Warrants         44      39
               
Total HighRoads, Inc.               44      39
Infologix, Inc. (4)    Software   

Senior Debt

Matures May 2012

Interest rate Prime + 10.75% or

Floor rate of 15.75%

   $ 11,400      11,512      11,512
     

Revolving Line of Credit

Matures January 2010

Interest rate Prime + 9.75% or

Floor rate of 14.25%

   $ 9,000      9,000      9,000

See notes to consolidated financial statements (unaudited).

 

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Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

June 30, 2009

(unaudited)

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment (1)

   Principal
Amount
   Cost (2)    Value (3)
      Common Stock Warrants       $ 36    $ 113
                      
Total Infologix, Inc.               20,548      20,625
Intelliden, Inc.    Software    Preferred Stock Warrants         18      —  
                      
Total Intelliden, Inc.               18      —  
PSS Systems, Inc.    Software    Preferred Stock Warrants         51      101
                      
Total PSS Systems, Inc.               51      101
Rockyou, Inc.    Software   

Senior Debt

Matures May 2011

Interest rate Prime + 2.50% or

Floor rate of 8.50%

   $ 2,235      2,186      2,186
      Preferred Stock Warrants         117      92
                      
Total Rockyou, Inc.               2,303      2,278
Savvion, Inc. (4)    Software   

Senior Debt

Matures February 2011

Interest rate Prime + 7.75% or

Floor rate of 10.75%

   $ 2,950      2,898      2,898
     

Revolving Line of Credit

Matures May 2010

Interest rate Prime + 6.75% or

Floor rate of 9.75%

   $ 1,500      1,500      1,500
      Preferred Stock Warrants         52      162
                      
Total Savvion, Inc.               4,450      4,560
Sportvision, Inc.    Software    Preferred Stock Warrants         39      72
                      
Total Sportvision, Inc.               39      72
WildTangent, Inc.    Software    Preferred Stock Warrants         238      40
                      
Total WildTangent, Inc.               238      40
                      
Total Software (17.50%)               62,677      63,757
                      
Luminus Devices, Inc.    Electronics & Computer Hardware   

Senior Debt

Matures September 2011

Interest rate 12.875%

   $ 11,796      11,810      11,810
      Preferred Stock Warrants         183      —  
      Preferred Stock Warrants         84      1
      Preferred Stock Warrants         334      11
                      
Total Luminus Devices, Inc.               12,411      11,822
Maxvision Holding, LLC.    Electronics & Computer Hardware   

Senior Debt

Matures October 2012

Interest rate Prime + 5.50%

   $ 5,000      5,167      5,167
     

Senior Debt

Matures April 2012

Interest rate Prime + 2.25%

   $ 4,742      4,770      4,770
Maxvision Holding, LLC. (4)       Common Stock         82      283
                      
Total Maxvision Holding, LLC               10,019      10,220
Shocking Technologies, Inc.    Electronics & Computer Hardware   

Senior Debt

Matures December 2010

Interest rate 9.75%

   $ 173      154      154
     

Senior Debt

Matures December 2010

Interest rate 7.50%

   $ 2,571      2,571      2,571
      Preferred Stock Warrants         63      48
                      
Total Shocking Technologies, Inc.               2,788      2,773
SiCortex, Inc. (7)    Electronics & Computer Hardware   

Senior Debt

Matures December 2010

Interest rate Prime + 2.70%

   $ 5,106      5,041      300
      Preferred Stock Warrants         164      —  
                      
Total SiCortex, Inc.               5,205      300
Spatial Photonics, Inc.    Electronics & Computer Hardware   

Senior Debt

Matures April 2011

Interest rate 10.066%

   $ 2,614      2,569      2,569
     

Senior Debt

Mature April 2011

Interest rate 9.217%

   $ 261      261      261

See notes to consolidated financial statements (unaudited).

 

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Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

June 30, 2009

(unaudited)

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment (1)

   Principal
Amount
   Cost (2)    Value (3)
      Preferred Stock Warrants       $ 130    $ —  

Spatial Photonics, Inc.

      Preferred Stock         500      495
                      

Total Spatial Photonics Inc.

              3,460      3,325
VeriWave, Inc.    Electronics & Computer Hardware   

Senior Debt

Matures May 2010

Interest rate 10.75%

   $ 1,694      1,680      1,680
      Preferred Stock Warrants         54      95
      Preferred Stock Warrants         45      34
                      

Total VeriWave, Inc.

              1,779      1,809
                      

Total Electronics & Computer Hardware (8.30%)

              35,662      30,249
                      

Aegerion Pharmaceuticals, Inc. (4)

   Specialty Pharmaceuticals   

Senior Debt

Matures September 2011

Interest rate Prime + 2.50% or

Floor rate of 9.55%

   $ 6,859      6,859      6,859
     

Covertible Senior Debt

Matures December 2009

   $ 178      178      178
      Preferred Stock Warrants         70      142

Aegerion Pharmaceuticals, Inc. (4)

      Preferred Stock         1,000      1,366
                      

Total Aegerion Pharmaceuticals, Inc.

              8,107      8,545
Panacos Pharmaceuticals, Inc.    Specialty Pharmaceuticals    Common Stock Warrants         876      2

Panacos Pharmaceuticals, Inc.

      Common Stock         410      8
                      

Total Panacos Pharmaceuticals, Inc.

              1,286      10
Quatrx Pharmaceuticals Company    Specialty Pharmaceuticals   

Senior Debt

Matures October 2011

Interest rate Prime + 8.90% or

Floor rate of 12.15%

   $ 17,965      17,792      12,792
     

Covertible Senior Debt

Matures March 2010

   $ 82      82      82
     

Covertible Senior Debt

Matures March 2010

   $ 924      924      924
      Preferred Stock Warrants         220      —  
      Preferred Stock Warrants         308      —  

Quatrx Pharmaceuticals Company

      Preferred Stock         750      —  
                      

Total Quatrx Pharmaceuticals Company

              20,076      13,798
                      

Total Specialty Pharmaceuticals (6.14%)

              29,469      22,353
                      

Annie’s, Inc.

   Consumer & Business Products   

Senior Debt - Second Lien

Matures April 2011

Interest rate LIBOR + 6.50% or

Floor rate of 10.00%

   $ 6,000      5,943      5,943
      Preferred Stock Warrants         321      194
                      

Total Annie’s, Inc.

              6,264      6,137

IPA Holdings, LLC. (4)

   Consumer & Business Products   

Senior Debt

Matures November 2012

Interest rate Prime + 8.25% or

Floor rate of 12.50%

   $ 10,000      10,009      10,009
     

Senior Debt

Matures May 2013

Interest rate Prime + 11.25% or

Floor rate of 15.50%

   $ 6,500      6,403      6,403
     

Revolving Line of Credit

Matures November 2012

Interest rate Prime + 7.75% or

Floor rate of 12.00%

   $ 506      506      506
      Preferred Stock Warrants         275      22

IPA Holding, LLC.

      Common Stock         500      120
                      

Total IPA Holding, LLC.

              17,693      17,060
Market Force Information, Inc.    Consumer & Business Products    Preferred Stock Warrants         24      —  

Market Force Information, Inc.

      Preferred Stock         500      500
                      

Total Market Force Information, Inc.

              524      500

See notes to consolidated financial statements (unaudited).

 

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HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

June 30, 2009

(unaudited)

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment (1)

   Principal
Amount
   Cost (2)    Value (3)
OnTech Operations, Inc.    Consumer & Business Products   

Senior Debt

Matures December 2009

Interest rate 16.00%

   $ 106    $ 106    $ —  
      Preferred Stock Warrants         452      —  
      Preferred Stock Warrants         219      —  
OnTech Operations, Inc.       Preferred Stock         1,000      —  
                      
Total OnTech Operations, Inc.               1,777      —  
Wageworks, Inc.    Consumer & Business Products    Preferred Stock Warrants         252      1,470
Wageworks, Inc.       Preferred Stock         250      369
                      
Total Wageworks, Inc.               502      1,839
                      
Total Consumer & Business Products (7.01%)               26,760      25,536
                      
Custom One Design, Inc.    Semiconductors   

Senior Debt

Matures September 2010

Interest rate 11.50%

   $ 551      544      544
      Common Stock Warrants         18      —  
                      
Total Custom One Design, Inc.               562      544
Enpirion, Inc.    Semiconductors   

Senior Debt

Matures August 2011

Interest rate Prime + 2.00% or

Floor rate of 7.625%

   $ 6,554      6,487      6,487
      Preferred Stock Warrants         157      6
                      
Total Enpirion, Inc.               6,644      6,493
iWatt Inc.    Semiconductors    Preferred Stock Warrants         46      2
      Preferred Stock Warrants         51      52
      Preferred Stock Warrants         73      66
      Preferred Stock Warrants         458      448
iWatt Inc.       Preferred Stock         490      950
                      
Total iWatt Inc.               1,118      1,518
NEXX Systems, Inc. (4)    Semiconductors   

Senior Debt

Matures March 2010

Interest rate Prime + 3.50% or

Floor rate of 11.25%

   $ 1,640      1,604      1,604
     

Revolving Line of Credit

Matures December 2009

Interest rate Prime + 3.00% or

Floor rate of 11.25%

   $ 4,150      4,150      4,150
      Preferred Stock Warrants         165      349
                      
Total NEXX Systems, Inc.               5,919      6,103
Quartics, Inc.    Semiconductors   

Senior Debt

Matures May 2010

Interest rate 10.00%

   $ 305      286      286
      Preferred Stock Warrants         53      —  
                      
Total Quartics, Inc.               339      286
Solarflare Communications, Inc. (4)    Semiconductors   

Senior Debt

Matures August 2010

Interest rate 11.75%

   $ 334      304      304
      Preferred Stock Warrants         83      —  
Solarflare Communications, Inc.       Common Stock         641      3
                      
Total Solarflare Communications, Inc.               1,028      307
                      
Total Semiconductors (4.19%)               15,610      15,251
                      
Labopharm USA, Inc. (5)    Drug Delivery   

Senior Debt

Matures June 2012

Interest rate 10.95%

   $ 20,000      19,634      19,634
      Common Stock Warrants         849      1,755
                      
Total Labopharm USA, Inc.               20,483      21,389
Transcept Pharmaceuticals, Inc.    Drug Delivery    Common Stock Warrants         36      25
      Common Stock Warrants         51      19
Transcept Pharmaceuticals, Inc.       Common Stock         500      215
                      
Total Transcept Pharmaceuticals, Inc.               587      259
                      
Total Drug Delivery (5.95%)               21,070      21,648
                      
BARRX Medical, Inc.    Therapeutic   

Senior Debt

Mature December 2011

Interest rate 11.00%

   $ 6,667      6,655      6,655

See notes to consolidated financial statements (unaudited).

 

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Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

June 30, 2009

(unaudited)

(dollars in thousands)

 

 

Portfolio Company

  

Industry

  

Type of Investment (1)

   Principal
Amount
   Cost (2)    Value (3)
     

Revolving Line of Credit

Matures May 2010

Interest rate 10.00% or

Floor rate of 8.75%

   $ 1,000    $ 1,000    $ 1,000
      Preferred Stock Warrants         76      107
BARRX Medical, Inc.       Preferred Stock         1,500      2,130
                      
Total BARRX Medical, Inc.               9,231      9,892
EKOS Corporation    Therapeutic   

Senior Debt

Matures November 2010

Interest rate Prime + 2.00%

   $ 4,083      3,988      3,988
      Preferred Stock Warrants         175      41
      Preferred Stock Warrants         153      20
                      
Total EKOS Corporation               4,316      4,049
Gelesis, Inc.    Therapeutic   

Senior Debt

Matures May 2012

Interest rate Prime + 5.65% or

Floor rate of 10.75%

   $ 3,000      2,955      2,955
      Preferred Stock Warrants         57      33
                      
Total Gelesis, Inc.               3,012      2,988
Gynesonics, Inc.    Therapeutic    Preferred Stock Warrants         17      245
Gynesonics, Inc.       Preferred Stock         250      594
                      
Total Gynesonics, Inc.               267      839
Light Science Oncology, Inc.    Therapeutic    Preferred Stock Warrants         99      18
                      
Total Light Science Oncology, Inc.               99      18
Novasys Medical, Inc. (4)    Therapeutic   

Senior Debt

Matures February 2010

Interest rate 9.70%

   $ 1,991      1,984      1,984
      Preferred Stock Warrants         71      153
      Preferred Stock Warrants         54      51
Novasys Medical, Inc.       Preferred Stock         555      683
                      
Total Novasys Medical, Inc.               2,664      2,871
Power Medical Interventions, Inc.    Therapeutic    Common Stock Warrants         21      2
                      
Total Power Medical Interventions, Inc.               21      2
                      
Total Therapeutic (5.67%)               19,610      20,659
                      
Cozi Group, Inc.    Internet Consumer & Business Services    Preferred Stock Warrants         147      —  
Cozi Group, Inc.       Preferred Stock         177      7
                      
Total Cozi Group, Inc.               324      7
Invoke Solutions, Inc.    Internet Consumer & Business Services   

Senior Debt

Matures November 2009

Interest rate Prime + 3.75%

   $ 334      346      346
      Preferred Stock Warrants         56      14
      Preferred Stock Warrants         26      164
                      
Total Invoke Solutions, Inc.               428      524
Prism Education Group Inc.    Internet Consumer & Business Services   

Senior Debt

Matures December 2010

Interest rate 11.25%

   $ 1,168      1,151      1,151
      Preferred Stock Warrants         43      117
                      
Total Prism Education Group Inc.               1,194      1,268
RazorGator Interactive Group, Inc. (4)    Internet Consumer & Business Services   

Revolving Line of Credit

Matures May 2010

Interest rate Prime + 6.00% or

Floor rate of 12.00%

   $ 3,000      3,000      3,000
      Preferred Stock Warrants         13      999
      Preferred Stock Warrants         28      127
RazorGator Interactive Group, Inc.       Preferred Stock         1,000      2,240
                      
Total RazorGator Interactive Group, Inc.               4,041      6,366
Serious USA, Inc. (7)    Internet Consumer & Business Services   

Senior Debt

Matures Februrary 2011

Interest rate 14.00% or

Floor rate of 14.00%

   $ 2,318      2,278      778
      Preferred Stock Warrants         94      —  
                      
Total Serious USA, Inc .               2,372      778

See notes to consolidated financial statements (unaudited).

 

10


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

June 30, 2009

(unaudited)

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment (1)

   Principal
Amount
   Cost (2)    Value (3)
Spa Chakra, Inc.    Internet Consumer & Business
Services
  

Senior Debt

Matures June 2010

Interest rate 14.45%

   $ 10,000    $ 10,041    $ 10,041
                      
Total Spa Chakra, Inc.               10,041      10,041
                      
Total Internet Consumer & Business Services (5.21%)               18,400      18,984
                      
Lilliputian Systems, Inc.    Energy    Preferred Stock Warrants         106      127
      Common Stock Warrants         49      —  
                      
Total Lilliputian Systems, Inc.               155      127
                      
Total Energy (0.03%)               155      127
                      
Active Response Group, Inc. (7)    Information Services   

Senior Debt

Matures July 2011

Interest rate LIBOR + 12.55%

   $ 6,158      6,131      861
     

Revolving Line of Credit

Matures December 2009

Interest rate Prime + 14.00% or

Floor rate of 18.00%

   $ 3,500      3,500      362
      Common Stock Warrants         92      —  
      Preferred Stock Warrants         46      —  
Active Response Group, Inc.       Common Stock         105      —  
                      
Total Active Response Group, Inc.               9,874      1,223
Box.net, Inc.    Information Services   

Senior Debt

Matures May 2011

Interest rate Prime + 1.50%

   $ 894      862      862
     

Senior Debt

Matures September 2011

Interest rate Prime + 0.50%

   $ 363      363      363
      Preferred Stock Warrants         73      55
                      
Total Box.net, Inc.               1,298      1,280
Buzznet, Inc.    Information Services    Preferred Stock Warrants         9      —  
Buzznet, Inc.       Preferred Stock         250      74
                      
Total Buzznet, Inc.               259      74
hi5 Networkss, Inc.    Information Services   

Senior Debt

Matures December 2010

Interest rate Prime + 2.5%

   $ 2,033      2,033      2,033
     

Senior Debt

Matures June 2011

Interest rate Prime + 0.5%

   $ 4,729      4,653      4,653
      Preferred Stock Warrants         213      —  
                      
Total hi5 Networks, Inc.               6,899      6,686
Jab Wireless, Inc.    Information Services   

Senior Debt

Matures November 2012

Interest rate Prime + 3.50% or

Floor rate of 9.50%

   $ 14,988      14,950      14,950
      Preferred Stock Warrants         265      188
                      
Total Jab Wireless, Inc.               15,215      15,138
Solutionary, Inc.    Information Services   

Senior Debt

Matures June 2010

Interest rate LIBOR + 5.00% or

Floor rate of 12.00%

   $ 3,151      3,389      3,389
     

Revolving Line of Credit

Matures June 2010

Interest rate LIBOR + 5.00% or

Floor rate of 12.00%

   $ 1,500      1,575      1,575
      Preferred Stock Warrants         94      113
      Preferred Stock Warrants         2      3
Solutionary, Inc.       Preferred Stock         250      236
                      
Total Solutionary, Inc.               5,310      5,316
Ancestry.com, Inc.(The Generation Networks, Inc.)    Information Services   

Senior Debt

Matures December 2012

Interest rate 7.42%

   $ 5,221      5,221      5,130
The Generation Networks, Inc.       Common Stock         500      431
                      
Total The Generation Networks, Inc.               5,721      5,561
Good Technologies, Inc. (Visto Corporation)       Common Stock         603      603
                      
Total Visto Corporation               603      603

See notes to consolidated financial statements (unaudited).

 

11


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

June 30, 2009

(unaudited)

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment (1)

   Principal
Amount
   Cost (2)    Value (3)
Coveroo, Inc.    Information Services   

Senior Debt

Matures July 2010

Interest rate Prime + 9.75%

   $ 110    $ 108    $ —  
      Preferred Stock Warrants         7      —  
                      
Total Coveroo, Inc.               115      —  
Zeta Interactive Corporation    Information Services   

Senior Debt

Matures November 2012

Interest rate 9.50%

   $ 5,439      5,375      5,375
     

Senior Debt

Matures November 2012

Interest rate 10.50%

   $ 7,396      7,486      7,486
      Preferred Stock Warrants         173      —  
Zeta Interactive Corporation       Preferred Stock         500      405
                      
Total Zeta Interactive Corporation               13,534      13,266
                      
Total Information Services (13.50%)               58,828      49,147
                      
Novadaq Technologies, Inc.    Diagnostic    Common Stock         1,606      564
                      
Total Novadaq Technologies, Inc.               1,606      564
Optiscan Biomedical, Corp.    Diagnostic   

Senior Debt

Matures June 2011

Interest rate 10.25%

   $ 10,000      9,678      9,678
      Preferred Stock Warrants         760      299
Optiscan Biomedical, Corp.       Preferred Stock         3,000      3,000
                      
Total Optiscan Biomedical, Corp.               13,438      12,977
                      
Total Diagnostic (3.72%)               15,044      13,541
                      
Kamada, LTD. (5)    Biotechnology Tools   

Senior Debt

Matures February 2012

Interest rate 10.60%

   $ 19,500      18,991      18,991
      Common Stock Warrants         412      404
Kamada, LTD.       Common Stock         500      674
                      
Total Kamada, LTD.               19,903      20,069
NuGEN Technologies, Inc.    Biotechnology Tools   

Senior Debt

Matures November 2010

Interest rate Prime + 3.45%

   $ 1,178      1,166      1,166
     

Senior Debt

Matures November 2010

Interest rate Prime + 1.70%

   $ 671      671      671
      Preferred Stock Warrants         45      159
      Preferred Stock Warrants         33      13
NuGEN Technologies, Inc.       Preferred Stock         500      239
                      
Total NuGEN Technologies, Inc.               2,415      2,248
Solace Pharmaceuticals, Inc. (4)    Biotechnology Tools   

Senior Debt

Matures August 2012

Interest rate Prime + 4.25% or

Floor rate of 9.85%

   $ 5,000      4,916      4,916
      Preferred Stock Warrants         42      46
      Preferred Stock Warrants         55      50
                      
Total Solace Pharmaceuticals, Inc.               5,013      5,012
                      
Total Biotechnology Tools (7.50%)               27,331      27,329
                      
Crux Biomedical, Inc.    Surgical Devices    Preferred Stock Warrants         37      —  
Crux Biomedical, Inc.       Preferred Stock         250      26
                      
Total Crux Biomedical, Inc.               287      26
Transmedics, Inc. (4)    Surgical Devices   

Senior Debt

Matures December 2011

Interest rate Prime + 5.25%

   $ 9,475      9,344      2,344
      Preferred Stock Warrants         225      —  
                      
Total Transmedics, Inc.               9,569      2,344
                      
Total Surgical Devices (0.65%)               9,856      2,370
                      
Glam Media, Inc.    Media/Content/Info    Preferred Stock Warrants         482      283
                      
Total Glam Media, Inc.               482      283
Waterfront Media Inc. (4)    Media/Content/Info   

Senior Debt

Matures September 2010

Interest rate Prime + 3.00%

   $ 1,795      1,781      1,781

See notes to consolidated financial statements (unaudited).

 

12


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

June 30, 2009

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment (1)

   Principal
Amount
   Cost (2)    Value (3)
     

Revolving Line of Credit

Matures October 2009

Interest rate Prime + 3.75% or

Floor rate of 10.50%

   $ 7,000    $ 7,000    $ 7,000
      Preferred Stock Warrants         60      509
Waterfront Media Inc.       Preferred Stock         1,000      1,656
                      
Total Waterfront Media Inc.               9,841      10,946
                      
Total Media/Content/Info (3.08%)               10,323      11,229
                      
Total Investments (124.20%)               490,119      452,390
                      

 

* Value as a percent of net assets
(1) Preferred and common stock, warrants, and equity interests are generally non-income producing.
(2) Gross unrealized appreciation, gross unrealized depreciation, and net depreciation for federal income tax purposes totaled $12,056, $51,654 and $39,598, respectively. The tax cost of investments is $490,749.
(3) Except for warrants in six publicly traded companies and common stock in four publicly traded companies, all investments are restricted at June 30, 2009 and were valued at fair value as determined in good faith by the Board of Directors. No unrestricted securities of the same issuer are outstanding. The Company uses the Standard Industrial Code for classifying the industry grouping of its portfolio companies.
(4) Debt investments of this portfolio company have been pledged as collateral under the Wells Facility.
(5) Non-U.S. company or the company’s principal place of business is outside the United States.
(6) Affiliate investment that is defined under the Investment Company Act of 1940 as companies in which HTGC owns as least 5% but not more than 25% of the voting securities of the company. All other investments are less than 5% owned.
(7) Debt is on non-accrual status at June 30, 2009, and is therefore considered non-income producing.

See notes to consolidated financial statements (unaudited).

 

13


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2008

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment (1)

   Principal
Amount
   Cost (2)    Value (3)

Acceleron Pharmaceuticals, Inc. (0.64%)* (4)

  

Drug Discovery

  

Senior Debt
Matures January 2010
Interest rate 10.25%

   $ 1,753    $ 1,728    $ 1,728
     

Preferred Stock Warrants

        69      596
     

Preferred Stock Warrants

        35      116

Acceleron Pharmaceuticals, Inc. (0.35%)

      Preferred Stock         1,243      1,354
                      

Total Acceleron Pharmaceuticals, Inc.

              3,075      3,794

Aveo Pharmaceuticals, Inc. (3.99%) (4)

  

Drug Discovery

  

Senior Debt
Matures November 2011
Interest rate 11.13%

   $ 15,000      14,904      14,904
     

Preferred Stock Warrants

        190      257
     

Preferred Stock Warrants

        104      83
     

Preferred Stock Warrants

        24      28
                      

Total Aveo Pharmaceuticals, Inc.

              15,222      15,272

Elixir Pharmaceuticals, Inc. (2.91%) (4)

  

Drug Discovery

  

Senior Debt
Matures December 2010
Interest rate Prime + 4.50%

   $ 11,000      11,000      11,000
     

Preferred Stock Warrants

        217      116
                      

Total Elixir Pharmaceuticals, Inc.

              11,217      11,116

EpiCept Corporation (0.33%) (4)

  

Drug Discovery

  

Senior Debt
Matures April 2009
Interest rate 15.00%

   $ 8      8      8
     

Common Stock Warrants

        161      992
     

Common Stock Warrants

        40      250
                      

Total EpiCept Corporation

              209      1,250

Horizon Therapeutics, Inc. (1.92%) (4)

  

Drug Discovery

  

Senior Debt
Matures July 2011
Interest rate Prime + 1.50%

   $ 7,200      7,042      7,042
     

Preferred Stock Warrants

        231      281
                      

Total Horizon Therapeutics, Inc.

              7,273      7,323

Inotek Pharmaceuticals Corp. (0.30%)

  

Drug Discovery

  

Preferred Stock

        1,500      1,144
                      

Total Inotek Pharmaceuticals Corp.

              1,500      1,144

Memory Pharmaceuticals Corp. (2.87%) (4)

  

Drug Discovery

  

Senior Debt
Matures December 2010
Interest rate 11.45%

   $ 11,879      10,979      10,979
     

Common Stock Warrants

        1,751      —  
                      

Total Memory Pharmaceuticals Corp.

              12,730      10,979

Merrimack Pharmaceuticals, Inc. (0.19%) (4)

  

Drug Discovery

  

Preferred Stock Warrants

        155      743

Merrimack Pharmaceuticals, Inc. (0.68%)

     

Preferred Stock

        2,000      2,610
                      

Total Merrimack Pharmaceuticals, Inc.

              2,155      3,353

Paratek Pharmaceuticals, Inc. (0.04%) (4)

  

Drug Discovery

  

Preferred Stock Warrants

        137      164

Paratek Pharmaceuticals, Inc. (0.24%)

     

Preferred Stock

        1,000      926
                      

Total Paratek Pharmaceuticals, Inc.

              1,137      1,090

Portola Pharmaceuticals, Inc. (3.14%) (4)

  

Drug Discovery

  

Senior Debt
Matures September 2011
Interest rate Prime + 2.16%

   $ 11,668      11,600      11,600
     

Preferred Stock Warrants

        152      399
                      

Total Portola Pharmaceuticals, Inc.

              11,752      11,999

See notes to consolidated financial statements.

 

14


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

December 31, 2008

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment (1)

   Principal
Amount
   Cost (2)    Value (3)

Recoly, N.V. (0.79%) (6)

   Drug Discovery   

Senior Debt
Matures May 2012
Interest rate Prime + 4.25%

   $ 3,000    $ 3,000    $ 3,000
                      

Total Recoly, N.V.

              3,000      3,000
                      

Total Drug Discovery (18.39%)

              69,270      70,320
                      

Affinity Videonet, Inc. (1.70%) (4)

   Communications & Networking   

Senior Debt
Matures June 2012
Interest rate Prime + 4.50%

   $ 4,000      3,942      3,942
     

Senior Debt
Matures June 2012
Interest rate Prime + 5.50%

   $ 2,000      2,000      2,000
     

Revolving Line of Credit
Matures June 2012
Interest rate Prime + 3.50%

   $ 500      500      500
     

Preferred Stock Warrants

        75      57
                      

Total Affinity Videonet, Inc.

              6,517      6,499

E-Band Communications, Inc. (0.24%) (7)

   Communications & Networking   

Preferred Stock

        2,000      904
                      

Total E-Band Communications, Inc.

              2,000      904

IKANO Communications, Inc. (3.22%) (4)

   Communications & Networking   

Senior Debt
Matures April 2011
Interest rate 11.00%

   $ 11,946      11,946      11,946
     

Preferred Stock Warrants

        45      147
     

Preferred Stock Warrants

        73      221
                      

Total IKANO Communications, Inc.

              12,064      12,314

Kadoink, Inc. (0.50%) (4)

   Communications & Networking   

Senior Debt
Matures April 2011
Interest rate Prime + 2.00%

   $ 1,879      1,832      1,832
     

Preferred Stock Warrants

        73      72

Kadoink, Inc. (0.07%)

     

Preferred Stock

        250      250
                      

Total Kadoink, Inc.

              2,155      2,154

Neonova Holding Company (2.35%)

   Communications & Networking   

Senior Debt
Matures September 2012
Interest rate Prime + 3.25%

   $ 9,000      8,931      8,931
     

Preferred Stock Warrants

        94      66

Neonova Holding Company (0.06%)

     

Preferred Stock

        250      224
                      

Total Neonova Holding Company

              9,275      9,221

Peerless Network, Inc. (0.34%) (5)(7)

   Communications & Networking   

Senior Debt
Matures June 2011
Interest rate Prime + 3.25%

   $ 1,378      1,318      1,318
     

Preferred Stock Warrants

        95      —  

Peerless Network, Inc. (0.00%)

     

Preferred Stock

        1,000      —  
                      

Total Peerless Network, Inc.

              2,413      1,318

Ping Identity Corporation (0.00%) (4)

   Communications & Networking   

Preferred Stock Warrants

        52      2
                      

Total Ping Identity Corporation

              52      2

See notes to consolidated financial statements.

 

15


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

December 31, 2008

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment (1)

   Principal
Amount
   Cost (2)    Value (3)

Purcell Systems, Inc. (2.55%)

   Communications & Networking   

Senior Debt
Matures June 2010
Interest rate Prime + 3.50%

   $ 1,659    $ 1,601    $ 1,601
     

Revolving Line of Credit
Matures July 2009
Interest rate Prime + 2.75%

   $ 6,000      6,000      6,000
     

Senior Debt
Matures July 2011
Interest rate Prime + 3.50%

   $ 1,600      1,600      1,600
     

Preferred Stock Warrants

        123      538
                      

Total Purcell Systems, Inc.

              9,324      9,739

Rivulet Communications, Inc. (0.51%) (5)

   Communications & Networking   

Senior Debt
Matures April 2010
Interest rate 10.50%

   $ 1,982      1,960      1,960
     

Preferred Stock Warrants

        50      —  

Rivulet Communications, Inc. (0.00%)

     

Preferred Stock

        250      4
                      

Total Rivulet Communications, Inc.

              2,260      1,964

Seven Networks, Inc. (2.64%) (4)

   Communications & Networking   

Senior Debt
Matures April 2010
Interest rate Prime + 6.00%

   $ 6,941      6,875      6,875
     

Revolving Line of Credit
Matures September 2009
Interest rate Prime + 5.00%

   $ 3,000      3,000      3,000
     

Preferred Stock Warrants

        174      208
                      

Total Seven Networks, Inc.

              10,049      10,083

Stoke, Inc. (0.71%)

   Communications & Networking   

Senior Debt
Matures August 2010
Interest rate 10.55%

   $ 574      545      545
     

Senior Debt
Matures August 2010
Interest rate 10.05%

   $ 1,144      1,144      1,144
     

Senior Debt
Matures August 2010
Interest rate 7.30%

   $ 946      946      946
     

Preferred Stock Warrants

        53      91
                      

Total Stoke, Inc.

              2,688      2,726

Tectura Corporation (6.54%) (4)

   Communications & Networking   

Senior Debt
Matures April 2012
Interest rate LIBOR + 6.90%

   $ 7,232      7,439      7,439
     

Revolving Line of Credit
Matures April 2009
Interest rate LIBOR + 6.35%

   $ 12,000      12,000      12,000
     

Revolving Line of Credit
Matures March 2009
Interest rate LIBOR + 7.50%

   $ 5,507      5,507      5,507
     

Preferred Stock Warrants

        51      77
                      

Total Tectura Corporation

              24,997      25,023

See notes to consolidated financial statements.

 

16


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

December 31, 2008

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment (1)

   Principal
Amount
   Cost (2)    Value (3)

Wireless Channels, Inc. (3.04%) (4)

   Communications & Networking   

Senior Debt
Matures April 2010
Interest rate Prime + 4.25%

   $ 10,000    $ 10,384    $ 10,384
     

Senior Debt
Matures August 2010
Interest rate Prime + 0.50%

   $ 895      895      895
     

Preferred Stock Warrants

        155      344
                      

Total Wireless Channels, Inc.

              11,434      11,623

Zayo Bandwidth, Inc. (6.42%)

   Communications & Networking   

Senior Debt
Matures November 2013
Interest rate Libor + 5.25%

   $ 25,000      25,000      24,563
                      

Total Zayo Bandwith, Inc.

              25,000      24,563
                      

Total Communications & Networking (30.89%)

              120,228      118,133
                      

Atrenta, Inc. (2.36%) (5)

   Software   

Senior Debt
Matures January 2010
Interest rate 11.50%

   $ 2,789      2,742      2,742
     

Revolving Line of Credit
Matures October 2009
Interest rate Prime + 2.00%

   $ 6,000      6,000      6,000
     

Preferred Stock Warrants

        103      176
     

Preferred Stock Warrants

        34      58
     

Preferred Stock Warrants

        71      43

Atrenta, Inc. (0.05%)

     

Preferred Stock

        250      197
                      

Total Atrenta, Inc.

              9,200      9,216

Blurb, Inc. (1.76%)

   Software   

Senior Debt
Matures December 2009
Interest rate 9.55%

   $ 1,414      1,405      1,405
     

Senior Debt
Matures June 2011
Interest rate Prime + 3.50%

   $ 5,000      4,701      4,701
     

Preferred Stock Warrants

        25      350
     

Preferred Stock Warrants

        299      276
                      

Total Blurb, Inc.

              6,430      6,732

Braxton Technologies, LLC. (2.64%) (5)

   Software   

Senior Debt
Matures July 2012
Interest rate Libor + 7.25%

   $ 10,000      9,916      9,916
     

Preferred Stock Warrants

        188      172
                      

Total Braxton Technologies, LLC.

              10,104      10,088

Bullhorn, Inc. (0.26%)

   Software   

Senior Debt
Matures November 2010
Interest rate Prime + 3.75%

   $ 782      760      760
     

Preferred Stock Warrants

        43      222
                      

Total Bullhorn, Inc.

              803      982

Cittio, Inc. (0.19%)

   Software   

Senior Debt
Matures May 2010
Interest rate 11.00%

   $ 731      720      720
     

Preferred Stock Warrants

        53      —  
                      

Total Cittio, Inc.

              773      720

See notes to consolidated financial statements.

 

17


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

December 31, 2008

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment (1)

   Principal
Amount
   Cost (2)    Value (3)

Clickfox, Inc. (0.65%)

   Software   

Senior Debt
Matures September 2011
Interest rate 10.25%

   $ 2,500    $ 2,357    $ 2,357
     

Preferred Stock Warrants

        163      131
                      

Total Clickfox, Inc.

              2,520      2,488

Forescout Technologies, Inc. (0.40%) (4)

   Software   

Senior Debt
Matures August 2009
Interest rate 11.15%

   $ 906      892      892
     

Revolving Line of Credit
Matures March 2009
Interest rate Prime + 2.25%

   $ 500      500      500
     

Preferred Stock Warrants

        99      130
                      

Total Forescout Technologies, Inc.

              1,491      1,522

GameLogic, Inc. (0.00%) (4)

   Software   

Preferred Stock Warrants

        92      3
                      

Total GameLogic, Inc.

              92      3

Gomez, Inc. (0.22%) (4)

   Software   

Preferred Stock Warrants

        35      833
                      

Total Gomez, Inc.

              35      833

HighJump Acquisition, LLC. (3.92%) (4)

   Software   

Senior Debt
Matures May 2013
Interest rate Prime + 7.50%

   $ 15,000      15,000      15,000
                      

Total HighJump Acquisition, LLC.

              15,000      15,000

HighRoads, Inc. (0.02%) (4)

   Software   

Preferred Stock Warrants

        44      59
                      

Total HighRoads, Inc.

              44      59

Infologix, Inc. (5.49%) (4)

   Software   

Senior Debt
Matures May 2012
Interest rate Prime + 8.75%

   $ 12,000      12,007      12,007
     

Revolving Line of Credit
Matures November 2009
Interest rate Prime + 6.75%

   $ 9,000      9,000      9,000
                      

Total Infologix, Inc.

              21,007      21,007

Intelliden, Inc. (0.37%)

   Software   

Senior Debt
Matures February 2010
Interest rate 13.20%

   $ 1,399      1,394      1,394
     

Preferred Stock Warrants

        18      38
                      

Total Intelliden, Inc.

              1,412      1,432

Oatsystems, Inc. (0.00%) (4)

   Software   

Preferred Stock Warrants

        67      —  
                      

Total Oatsystems, Inc.

              67      —  

Proficiency, Inc. (0.00%) (6)(7)(8)

   Software   

Senior Debt
Matures August 2012
Interest rate 8.00%

   $ 1,500      1,497      —  
     

Preferred Stock Warrants

        97      —  

Proficiency, Inc. (0.00%)

     

Preferred Stock

        2,750      —  
                      

Total Proficiency, Inc.

              4,344      —  

See notes to consolidated financial statements.

 

18


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

December 31, 2008

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment (1)

   Principal
Amount
   Cost (2)    Value (3)

PSS Systems, Inc. (0.65%) (4)

  

Software

  

Senior Debt
Matures May 2010
Interest rate 11.48%

   $ 2,423    $ 2,403    $ 2,403
     

Preferred Stock Warrants

        51      96
                      

Total PSS Systems, Inc.

              2,454      2,499

Rockyou, Inc. (0.72%) (4)

  

Software

  

Senior Debt
Matures May 2011
Interest rate Prime + 2.50%

   $ 2,750      2,674      2,674
     

Preferred Stock Warrants

        117      66
                      

Total Rockyou, Inc.

              2,791      2,740

Savvion, Inc. (1.42%) (4)

  

Software

  

Senior Debt
Matures April 2009
Interest rate Prime + 3.45%

   $ 331      279      279
     

Revolving Line of Credit
Matures March 2009
Interest rate Prime + 4.45%

   $ 3,366      3,366      3,366
     

Revolving Line of Credit
Matures March 2009
Interest rate Prime + 3.00%

   $ 1,619      1,619      1,619
     

Preferred Stock Warrants

        53      168
                      

Total Savvion, Inc.

              5,317      5,432

Sportvision, Inc. (0.02%) (4)

  

Software

  

Preferred Stock Warrants

        39      91
                      

Total Sportvision, Inc.

              39      91

WildTangent, Inc. (0.01%)

  

Software

  

Preferred Stock Warrants

        238      41
                      

Total WildTangent, Inc.

              238      41
                      

Total Software (21.15%)

              84,161      80,885
                      

Luminus Devices, Inc. (3.08%) (4)

  

Electronics &

Computer

Hardware

  

Senior Debt
Matures December 2010
Interest rate 12.875%

   $ 11,792      11,514      11,514
     

Preferred Stock Warrants

        183      50
     

Preferred Stock Warrants

        84      25
     

Preferred Stock Warrants

        334      189
                      

Total Luminus Devices, Inc.

              12,115      11,778

Maxvision Holding, LLC. (2.71%) (4)

  

Electronics &

Computer

Hardware

  

Senior Debt
Matures October 2012
Interest rate Prime + 5.50%

   $ 5,000      5,000      5,000
     

Senior Debt
Matures April 2012
Interest rate Prime + 2.25%

   $ 5,167      5,363      5,363

Maxvision Holding, LLC. (0.07%) (4)

     

Common Stock

        81      268
                      

Total Maxvision Holding, LLC

              10,444      10,631

Shocking Technologies, Inc. (0.94%)

  

Electronics &

Computer

Hardware

  

Senior Debt
Matures December 2010
Interest rate 9.75%

   $ 225      192      192
     

Senior Debt
Matures December 2010
Interest rate 7.50%

   $ 3,365      3,365      3,365
     

Preferred Stock Warrants

        63      55
                      

Total Shocking Technologies, Inc.

              3,620      3,612

See notes to consolidated financial statements.

 

19


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

December 31, 2008

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment (1)

   Principal
Amount
   Cost (2)    Value (3)

SiCortex, Inc. (1.83%)

  

Electronics &

Computer

Hardware

  

Senior Debt
Matures December 2010
Interest rate 10.95%

   $ 7,364    $ 7,274    $ 6,774
     

Preferred Stock Warrants

        164      216
                      

Total SiCortex, Inc.

              7,438      6,990

Spatial Photonics, Inc. (0.97%) (4)

  

Electronics &

Computer

Hardware

  

Senior Debt
Matures April 2011
Interest rate 10.066%

   $ 3,216      3,146      3,146
     

Senior Debt
Mature April 2011
Interest rate 9.217%

   $ 321      321      321
     

Preferred Stock Warrants

        131      251

Spatial Photonics, Inc. (0.13%)

     

Preferred Stock

        500      500
                      

Total Spatial Photonics Inc.

              4,098      4,218

VeriWave, Inc. (0.85%)

  

Electronics &

Computer

Hardware

  

Senior Debt
Matures May 2010
Interest rate 10.75%

   $ 2,549      2,507      2,507
     

Revolving Line of Credit
Matures September 2009
Interest rate Prime + 4.50%

   $ 630      630      630
     

Preferred Stock Warrants

        54      76
     

Preferred Stock Warrants

        46      38
                      

Total VeriWave, Inc.

              3,237      3,251
                      

Total Electronics & Computer Hardware (10.58%)

           40,952      40,480
                      

Aegerion Pharmaceuticals, Inc. (2.08%) (5)

  

Specialty

Pharmaceuticals

  

Senior Debt
Matures September 2011
Interest rate Prime + 2.50%

   $ 7,525      7,525      7,525
     

Covertible Senior Debt Matures December 2009 Interest
rate Prime + 2.50%

   $ 178      178      178
     

Preferred Stock Warrants

        69      272

Aegerion Pharmaceuticals, Inc. (0.26%) (4)

     

Preferred Stock

        1,000      1,000
                      

Total Aegerion Pharmaceuticals, Inc.

              8,772      8,975

Panacos Pharmaceuticals, Inc. (0.00%) (4)

  

Specialty

Pharmaceuticals

  

Common Stock Warrants

        877      11

Panacos Pharmaceuticals, Inc. (0.01%)

     

Common Stock

        410      28
                      

Total Panacos Pharmaceuticals, Inc.

              1,287      39

Quatrx Pharmaceuticals Company (5.26%) (4)

  

Specialty

Pharmaceuticals

  

Senior Debt
Matures October 2011
Interest rate Prime +4.85%

   $ 20,000      19,761      19,761
     

Covertible Senior Debt Matures May 2009 Interest rate
Prime + 2.50%

   $ 82      82      82
     

Preferred Stock Warrants

        220      143
     

Preferred Stock Warrants

        308      120

Quatrx Pharmaceuticals Company (0.20%)

     

Preferred Stock

        750      750
                      

Total Quatrx Pharmaceuticals Company

              21,121      20,856
                      

Total Specialty Pharmaceuticals (7.81%)

              31,180      29,870
                      

See notes to consolidated financial statements.

 

20


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

December 31, 2008

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment (1)

   Principal
Amount
   Cost (2)    Value (3)

Annie’s, Inc. (1.59%)

  

Consumer &

Business

Products

  

Senior Debt - Second Lien
Matures April 2011
Interest rate LIBOR + 6.50%

   $ 6,000    $ 5,824    $ 5,824
     

Preferred Stock Warrants

        321      273
                      

Total Annie’s, Inc.

              6,145      6,097

IPA Holdings, LLC. (4.50%) (4)

  

Consumer &

Business

Products

  

Senior Debt
Matures November 2012
Interest rate Prime + 3.50%

   $ 10,000      10,000      10,000
     

Senior Debt
Matures May 2013
Interest rate Prime + 6.00%

   $ 6,500      6,590      6,590
     

Revolving Line of Credit
Matures November 2012
Interest rate Prime + 2.50%

   $ 600      600      600

IPA Holding, LLC.(0.12%)

     

Common Stock

        500      447
                      

Total IPA Holding, LLC.

              17,690      17,637

Market Force Information, Inc. (0.01%) (4)

  

Consumer &

Business

Products

  

Preferred Stock Warrants

        24      40

Market Force Information, Inc. (0.07%)

     

Preferred Stock

        500      274
                      

Total Market Force Information, Inc.

              524      314

OnTech Operations, Inc. (0.01%) (8)

  

Consumer &

Business

Products

  

Revolving Line of Credit
Matures June 2009
Interest rate Prime + 5.625%

   $ 54      54      54
     

Preferred Stock Warrants

        453      —  
     

Preferred Stock Warrants

        218      —  

OnTech Operations, Inc. (0.00%)

     

Preferred Stock

        1,000      —  
                      

Total OnTech Operations, Inc.

              1,725      54

Wageworks, Inc. (0.23%) (4)

  

Consumer &

Business

Products

  

Preferred Stock Warrants

        252      881

Wageworks, Inc. (0.07%)

     

Preferred Stock

        250      266
                      

Total Wageworks, Inc.

              502      1,147
                      

Total Consumer & Business Products (6.60%)

              26,586      25,249
                      

Custom One Design, Inc. (0.14%) (8)

   Semiconductors   

Senior Debt
Matures September 2010
Interest rate 11.50%

   $ 775      765      523
     

Common Stock Warrants

        18      —  
                      

Total Custom One Design, Inc.

              783      523

Enpirion, Inc. (1.97%)

   Semiconductors   

Senior Debt
Matures August 2011
Interest rate Prime + 4.00%

   $ 7,500      7,389      7,389
     

Preferred Stock Warrants

        157      136
                      

Total Enpirion, Inc.

              7,546      7,525

iWatt Inc. (0.07%) (4)

   Semiconductors   

Preferred Stock Warrants

        46      28
     

Preferred Stock Warrants

        51      13
     

Preferred Stock Warrants

        73      13
     

Preferred Stock Warrants

        458      222

iWatt Inc. (0.25%)

     

Preferred Stock

        490      961
                      

Total iWatt Inc.

              1,118      1,237

See notes to consolidated financial statements.

 

21


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

December 31, 2008

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment (1)

   Principal
Amount
   Cost (2)    Value (3)
NEXX Systems, Inc. (2.03%) (4)    Semiconductors   

Senior Debt
Matures March 2010
Interest rate Prime + 3.50%

   $ 2,659    $ 2,593    $ 2,593
     

Revolving Line of Credit
Matures December 2009
Interest rate Prime + 3.00%

   $ 4,605      4,605      4,605
     

Revolving Line of Credit
Matures December 2009
Interest rate Prime + 5.00%

   $ 395      395      395
     

Preferred Stock Warrants

        165      182
                      
Total NEXX Systems, Inc.               7,758      7,775
Quartics, Inc. (0.08%) (4)(8)    Semiconductors   

Senior Debt
Matures August 2010
Interest rate 8.80%

   $ 629      601      286
     

Preferred Stock Warrants

        53      —  
                      
Total Quartics, Inc.               654      286
Solarflare Communications, Inc. (0.11%) (4)    Semiconductors   

Senior Debt
Matures August 2010
Interest rate 11.75%

   $ 464      420      420
     

Preferred Stock Warrants

        83      —  
Solarflare Communications, Inc. (0.00%)      

Preferred Stock

        641      —  
                      
Total Solarflare Communications, Inc.               1,144      420
                      
Total Semiconductors (4.65%)               19,003      17,766
                      
Labopharm, Inc. (5.55%) (4)(6)    Drug Delivery   

Senior Debt
Matures December 2011
Interest rate 10.95%

   $ 20,000      19,582      19,582
     

Common Stock Warrants

        458      1,206
     

Common Stock Warrants

        143      422
                      
Total Labopharm USA, Inc.               20,183      21,210
Transcept Pharmaceuticals, Inc. (0.90%) (5)    Drug Delivery   

Senior Debt
Matures October 2009
Interest rate 10.69%

   $ 3,353      3,334      3,334
     

Preferred Stock Warrants

        35      46
     

Preferred Stock Warrants

        51      75
Transcept Pharmaceuticals, Inc. (0.07%) (4)      

Preferred Stock

        500      287
                      
Total Transcept Pharmaceuticals, Inc.               3,920      3,742
                      
Total Drug Delivery (6.52%)               24,103      24,952
                      
BARRX Medical, Inc.(0.86%) (4)    Therapeutic   

Senior Debt
Mature December 2011
Interest rate 11.00%

   $ 3,333      3,270      3,270
     

Preferred Stock Warrants

        63      41
BARRX Medical, Inc. (0.36%)      

Preferred Stock

        1,500      1,388
                      
Total BARRX Medical, Inc.               4,833      4,699

See notes to consolidated financial statements.

 

22


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

December 31, 2008

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment (1)

   Principal
Amount
   Cost (2)    Value (3)

EKOS Corporation (1.29%)

   Therapeutic   

Senior Debt
Matures November 2010
Interest rate Prime + 2.00%

   $ 5,000    $ 4,846    $ 4,846
     

Preferred Stock Warrants

        175      51
     

Preferred Stock Warrants

        153      25
                      

Total EKOS Corporation

              5,174      4,922

Gelesis, Inc. (0.39%)

   Therapeutic   

Senior Debt
Matures May 2012
Interest rate Prime + 5.65%

   $ 1,500      1,477      1,477
     

Preferred Stock Warrants

        27      27
                      

Total Gelesis, Inc.

              1,504      1,504

Gynesonics, Inc. (0.02%) (4)

   Therapeutic   

Preferred Stock Warrants

        18      92

Gynesonics, Inc. (0.08%)

     

Preferred Stock

        250      304
                      

Total Gynesonics, Inc.

              268      396

Light Science Oncology, Inc. (0.01%)

   Therapeutic   

Preferred Stock Warrants

        98      26
                      

Total Light Science Oncology, Inc.

              98      26

Novasys Medical, Inc. (0.96%) (4)

   Therapeutic   

Senior Debt
Matures February 2010
Interest rate 9.70%

   $ 3,607      3,588      3,588
     

Preferred Stock Warrants

        71      56
     

Preferred Stock Warrants

        54      25

Novasys Medical, Inc.(0.12%)

     

Preferred Stock

        555      444
                      

Total Novasys Medical, Inc.

              4,268      4,113

Power Medical Interventions, Inc. (0.00%)