Hercules Capital
HERCULES TECHNOLOGY GROWTH CAPITAL INC (Form: 10-Q, Received: 11/09/2009 17:06:02)
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 September 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 November 6, 2009, there were 35,544,561 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 September 30, 2009 (unaudited) and December 31, 2008    3
   Consolidated Schedule of Investments as of September 30, 2009 (unaudited)    4
   Consolidated Schedule of Investments as of December 31, 2008    15
   Consolidated Statement of Operations for the three and nine-month periods ended September, 2009 and 2008 (unaudited)    29
   Consolidated Statement of Changes in Net Assets for the nine-month periods ended September 30, 2009 and 2008 (unaudited)    30
   Consolidated Statement of Cash Flows for the nine-month periods ended September 30, 2009 and 2008 (unaudited)    31
   Notes to Consolidated Financial Statements (unaudited)    32

    Item 2.

   Management’s Discussion and Analysis of Financial Condition and Results of Operations    45

    Item 3.

   Quantitative and Qualitative Disclosures About Market Risk    60

    Item 4.

   Controls and Procedures    60

PART II. OTHER INFORMATION

   61

    Item 1.

   Legal Proceedings    61

    Item 1A.

   Risk Factors    61

    Item 2.

   Unregistered Sales of Equity Securities and Use of Proceeds    63

    Item 3.

   Defaults Upon Senior Securities    63

    Item 4.

   Submission of Matters to a Vote of Security Holders    63

    Item 5.

   Other Information    63

    Item 6.

   Exhibits    64

SIGNATURES

   65

 

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)

 

    

September 30,
2009
 (unaudited) 

    December 31,
2008
 

Assets

    

Investments:

    

Non-affiliate investments (cost of $431,497 and $583,592)

   $ 410,567      $ 579,079   

Affiliate investments (cost of $3,466 and $8,756)

     4,280        2,222   
                

Total investments, at value (cost of $434,963 and $592,348 respectively)

     414,847        581,301   

Deferred loan origination revenue

     (3,207     (6,871

Cash and cash equivalents

     77,247        17,242   

Interest receivable

     10,382        8,803   

Other assets

     5,851        8,197   
                

Total assets

     505,120        608,672   

Liabilities

    

Accounts payable and accrued liabilities

     5,798        9,432   

Short-term credit facility

     —          89,582   

Long-term SBA Debentures

     130,600        127,200   
                

Total liabilities

     136,398        226,214   
                

Net assets

   $ 368,722      $ 382,458   
                

Net assets consist of:

    

Common stock, par value

   $ 35      $ 33   

Capital in excess of par value

     408,733        395,760   

Unrealized depreciation on investments

     (20,405     (11,297

Accumulated realized gain(loss) on investments

     (15,600     3,906   

Distributions in excess of investment income

     (4,041     (5,944
                

Total net assets

   $ 368,722      $ 382,458   
                

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

     35,546        33,096   
                

Net asset value per share

   $ 10.37      $ 11.56   
                

See Notes to consolidated financial statements (unaudited)

 

3


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2009

(unaudited)

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment (1)

   Principal
Amount
   Cost (2)    Value (4)
Acceleron Pharmaceuticals, Inc.    Drug Discovery    Preferred Stock Warrants       $ 69    $ 909
      Preferred Stock Warrants         35      154
Acceleron Pharmaceuticals, Inc.       Preferred Stock         1,243      2,131
                      
Total Acceleron Pharmaceuticals, Inc.               1,347      3,194
Aveo Pharmaceuticals, Inc.    Drug Discovery   

Senior Debt

Matures May 2012

Interest rate 11.13%

   $ 15,000      14,933      14,933
      Preferred Stock Warrants         190      195
      Preferred Stock Warrants         104      53
      Preferred Stock Warrants         24      19
                      
Total Aveo Pharmaceuticals, Inc.               15,251      15,200
Dicerna Pharmaceuticals, Inc.    Drug Discovery   

Senior Debt

Matures April 2012

Interest rate Prime + 9.20% or

Floor rate of 12.95%

   $ 7,000      6,807      6,807
      Preferred Stock Warrants         206      162
      Preferred Stock Warrants         31      28
                      
Total Dicerna Pharmaceuticals, Inc.               7,044      6,997
Elixir Pharmaceuticals, Inc.    Drug Discovery   

Senior Debt

Matures October 2011

Interest rate Prime + 9.25% or

Floor rate of 12.5%

   $ 9,167      9,167      9,167
      Preferred Stock Warrants         217      61
                      
Total Elixir Pharmaceuticals, Inc.               9,384      9,228
EpiCept Corporation    Drug Discovery    Common Stock Warrants         8      64
      Common Stock Warrants         40      335
Epicept Corporation       Common Stock         —        —  
                      
Total EpiCept Corporation               48      399
Horizon Therapeutics, Inc.    Drug Discovery   

Senior Debt

Matures July 2011

Interest rate Prime + 1.50%

   $ 5,397      5,316      5,316
      Preferred Stock Warrants         230      191
                      
Total Horizon Therapeutics, Inc.               5,546      5,507
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      816
Merrimack Pharmaceuticals, Inc.       Preferred Stock         2,000      3,158
                      
Total Merrimack Pharmaceuticals, Inc.               2,155      3,974
Paratek Pharmaceuticals, Inc.    Drug Discovery    Preferred Stock Warrants         137      68
Paratek Pharmaceuticals, Inc.       Preferred Stock         1,000      1,000
                      
Total Paratek Pharmaceuticals, Inc.               1,137      1,068
Portola Pharmaceuticals, Inc.    Drug Discovery   

Senior Debt

Matures April 2011

Interest rate Prime + 2.16%

   $ 7,916      7,917      7,917
      Preferred Stock Warrants         152      256
                      
Total Portola Pharmaceuticals, Inc.               8,069      8,173
Recoly, N.V. (5)    Drug Discovery   

Senior Debt

Matures June 2012

Interest rate Prime + 4.25%

   $ 2,792      2,792      2,792
                      
Total Recoly, N.V.               2,792      2,792
                      
Total Drug Discovery (15.46%)               54,273      57,007
                      

See notes to consolidated financial statements (unaudited).

 

4


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

September 30, 2009

(unaudited)

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment (1)

   Principal
Amount
   Cost (2)    Value (4)
Affinity Videonet, Inc. (4)    Communications & Networking   

Senior Debt

Matures June 2012

Interest rate Prime + 8.75% or

Floor rate of 12.00%

   $ 2,318    $ 2,308    $ 2,308
      Senior Debt         
     

Matures June 2012

Interest rate Prime + 14.75% or

Floor rate of 18.00%

   $ 2,000      2,041      2,042
      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      143
                      
Total Affinity Videonet, Inc.               4,951      4,993
E-band Communications, Inc. (6)    Communications & Networking    Preferred Stock         2,372      3,300
                      
Total E-Band Communications, Inc.               2,372      3,300
IKANO Communications, Inc.    Communications & Networking   

Senior Debt

Matures August 2011

Interest rate 12.00%

   $ 7,804      7,804      7,804
      Preferred Stock Warrants         45      147
      Preferred Stock Warrants         72      230
                      
Total IKANO Communications, Inc.               7,921      8,181
Neonova Holding Company       Preferred Stock Warrants         94      46
      Preferred Stock         250      247
                      
Total Neonova Holding Company               344      293
Peerless Network, Inc. (6)    Communications & Networking    Preferred Stock Warrants         95      —  
Peerless Network, Inc.       Preferred Stock         1,000      980
                      
Total Peerless Network, Inc.               1,095      980
Ping Identity Corporation    Communications & Networking    Preferred Stock Warrants         52      169
                      
Total Ping Identity Corporation               52      169
Purcell Systems, Inc.    Communications & Networking    Preferred Stock Warrants         123      359
                      
Total Purcell Systems, Inc.               123      359
Rivulet Communications, Inc. (4)    Communications & Networking   

Senior Debt

Matures March 2010

Interest rate Prime + 8.00% or

Floor rate of 12%

   $ 1,469      1,445      1,445
      Preferred Stock Warrants         146      83
Rivulet Communications, Inc.       Preferred Stock         250      58
                      
Total Rivulet Communications, Inc.               1,841      1,586
Seven Networks, Inc.    Communications & Networking    Preferred Stock Warrants         174      17
                      
Total Seven Networks, Inc.               174      17
Stoke, Inc.       Preferred Stock Warrants         53      88
                      
Total Stoke, Inc.               53      88

See notes to consolidated financial statements (unaudited).

 

5


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

September 30, 2009

(unaudited)

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment (1)

   Principal
Amount
   Cost (2)    Value (4)
Tectura Corporation    Communications & Networking   

Senior Debt

Matures September 2010

Interest rate Prime + 10.75% or

Floor rate of 14.00%

   $ 2,500    $ 2,500    $ 2,500
      Revolving Line of Credit         
     

Matures July 2011

Interest rate Prime + 10.75% or

Floor rate of 14.00%

   $ 9,908      10,107      10,107
      Revolving Line of Credit         
     

Matures July 2011

Interest rate Prime + 10.75% or

Floor rate of 14.00%

   $ 5,000      5,092      5,092
      Preferred Stock Warrants         51      42
                      
Total Tectura Corporation               17,750      17,741
Wireless Channels, Inc. (4)(7)    Communications & Networking   

Senior Debt

Matures March 2011

Interest rate 6.72%

   $ 9,647      10,158      —  
     

Senior Debt

Matures April 2010

Interest rate Prime + 3.00%

   $ 343      343      —  
      Preferred Stock Warrants         155      —  
                      
Total Wireless Channels, Inc.               10,656      —  
Zayo Bandwidth, Inc.    Communications & Networking   

Senior Debt

Matures November 2013

Interest rate Libor + 5.25%

   $ 24,812      24,812      24,378
                      
Total Zayo Bandwith, Inc.               24,812      24,378
                      
Total Communications & Networking (16.84%)               72,144      62,085
                      
Atrenta, Inc. (4)    Software    Preferred Stock Warrants         102      266
      Preferred Stock Warrants         34      87
      Preferred Stock Warrants         95      224
Atrenta, Inc.       Preferred Stock         250      375
                      
Total Atrenta, Inc.               481      952
Blurb, Inc.    Software   

Senior Debt

Matures December 2009

Interest rate Prime + 1.30%

   $ 451      449      449
     

Senior Debt

Matures June 2011

Interest rate Prime + 3.50%

or Floor rate of 8.5%

   $ 3,843      3,716      3,716
      Preferred Stock Warrants         25      125
      Preferred Stock Warrants         299      65
                      
Total Blurb, Inc.               4,489      4,355
Braxton Technologies, LLC. (4)    Software   

Senior Debt

Matures July 2012

Interest rate 13.00%

   $ 6,683      6,744      6,744
      Preferred Stock Warrants         189      148
                      
Total Braxton Technologies, LLC.               6,933      6,892
Bullhorn, Inc.    Software    Preferred Stock Warrants         43      255
                      
Total Bullhorn, Inc.               43      255

See notes to consolidated financial statements (unaudited).

 

6


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

September 30, 2009

(unaudited)

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment (1)

   Principal
Amount
   Cost (2)    Value (4)
Clickfox, Inc.    Software   

Senior Debt

Matures September 2011

Interest rate Prime + 5.00% or

Floor rate of 10.25%

   $ 4,235    $ 4,146    $ 4,146
     

Revolving Line of Credit

Matures July 2010

Interest rate Prime + 8.50% or

Floor rate of 13.5%

   $ 2,000      2,000      2,000
      Preferred Stock Warrants         177      219
                      
Total Clickfox, Inc.               6,323      6,365
Forescout Technologies, Inc.    Software    Preferred Stock Warrants         99      106
                      
Total Forescout Technologies, Inc.               99      106
GameLogic, Inc.    Software    Preferred Stock Warrants         92      —  
                      
Total GameLogic, Inc.               92      —  
Gomez, Inc. (8)    Software    Preferred Stock Warrants         35      770
                      
Total Gomez, Inc.               35      770
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      36
                      
Total HighRoads, Inc.               44      36
Infologix, Inc. (4)    Software   

Senior Debt

Matures May 2012

Interest rate Prime + 10.75% or Floor rate of 15.75% Revolving Line of Credit

   $ 11,400      11,623      11,623
     

Matures January 2010

Interest rate Prime + 9.75% or Floor rate of 14.25%

   $ 9,000      9,035      9,035
      Preferred Stock Warrants         36      56
                      
Total Infologix, Inc.               20,694      20,714
Intelliden, Inc.    Software    Preferred Stock Warrants         18      —  
                      
Total Intelliden, Inc.               18      —  
PSS Systems, Inc.    Software    Preferred Stock Warrants         52      108
                      
Total PSS Systems, Inc.               52      108
Rockyou, Inc.    Software   

Senior Debt

Matures May 2011

Interest rate Prime + 2.50%

   $ 1,969      1,932      1,932
      Preferred Stock Warrants         117      115
                      
Total Rockyou, Inc.               2,049      2,047
Savvion, Inc. (4)    Software   

Senior Debt

Matures February 2011

Interest rate Prime + 7.75% or Floor rate of 11.00%

   $ 2,539      2,487      2,487
     

Revolving Line of Credit

Matures May 2010

Interest rate Prime + 6.75% or

Floor rate of 10.00%

   $ 1,500      1,500      1,500
      Preferred Stock Warrants         52      169
                      
Total Savvion, Inc.               4,039      4,156

See notes to consolidated financial statements (unaudited).

 

7


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

September 30, 2009

(unaudited)

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment (1)

   Principal
Amount
   Cost (2)    Value (4)
Sportvision, Inc.    Software    Preferred Stock Warrants       $ 39    $ 79
                      
Total Sportvision, Inc.               39      79
WildTangent, Inc.    Software    Preferred Stock Warrants         238      60
                      
Total WildTangent, Inc.               238      60
                      
Total Software (16.79%)               60,668      61,895
                      
Luminus Devices, Inc.    Electronics & Computer Hardware   

Senior Debt

Matures December 2011

Interest rate 12.875%

   $ 11,796      11,796      11,796
      Preferred Stock Warrants         183      —  
      Preferred Stock Warrants         84      1
      Preferred Stock Warrants         334      11
                      
Total Luminus Devices, Inc.               12,397      11,808
Maxvision Holding, LLC.    Electronics & Computer Hardware   

Senior Debt

Matures October 2012

Interest rate Prime + 5.50%

   $ 5,000      5,193      5,193
      Senior Debt Matures April 2012 Interest rate Prime + 2.25%    $ 4,617      4,617      4,617
      Revolving Line of Credit         
     

Matures April 2012

Interest rate Prime + 2.25%

   $ 1,600      1,680      1,680
Maxvision Holding, LLC.       Common Stock         81      284
                      
Total Maxvision Holding, LLC               11,571      11,774
Shocking Technologies, Inc.    Electronics & Computer Hardware   

Senior Debt

Matures December 2010

Interest rate Prime + 2.50%

   $ 146      133      133
     

Senior Debt

Matures December 2010

Interest rate Prime + 2.50%

   $ 2,164      2,164      2,164
      Preferred Stock Warrants         63      50
                      
Total Shocking Technologies, Inc.               2,360      2,347
Spatial Photonics, Inc.    Electronics & Computer Hardware   

Senior Debt

Matures April 2011

Interest rate 10.066%

   $ 2,301      2,268      2,268
     

Senior Debt

Mature April 2011

Interest rate 9.217%

   $ 229      229      229
      Preferred Stock Warrants         130      —  
Spatial Photonics, Inc.       Preferred Stock         500      465
                      
Total Spatial Photonics Inc.               3,127      2,962

See notes to consolidated financial statements (unaudited).

 

8


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

September 30, 2009

(unaudited)

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment (1)

   Principal
Amount
   Cost (2)    Value (4)
VeriWave, Inc.    Electronics & Computer Hardware   

Senior Debt

Matures May 2010

Interest rate Prime + 2.5%

   $ 1,249    $ 1,240    $ 1,240
      Preferred Stock Warrants         55      81
      Preferred Stock Warrants         46      28
                      
Total VeriWave, Inc.               1,341      1,349
                      
Total Electronics & Computer Hardware (8.20%)               30,796      30,240
                      
Aegerion Pharmaceuticals, Inc. (4)    Specialty Pharmaceuticals   

Senior Debt

Matures September 2011

Interest rate Prime + 2.50% or

Floor rate of 11.00%

   $ 6,179      6,179      6,179
      Convertible Senior Debt         
      Matures December 2010    $ 279      279      279
      Preferred Stock Warrants         70      604
Aegerion Pharmaceuticals, Inc. (4)       Preferred Stock         1,000      1,294
                      
Total Aegerion Pharmaceuticals, Inc.               7,528      8,356
QuatRx Pharmaceuticals Company    Specialty Pharmaceuticals   

Senior Debt

Matures October 2011

Interest rate Prime + 8.90% or

Floor rate of 12.15%

   $ 15,972      15,838      15,838
      Convertible Senior Debt         
      Matures March 2010    $ 82      82      155
      Convertible Senior Debt         
      Matures March 2010    $ 1,250      1,250      2,356
      Preferred Stock Warrants         220      —  
      Preferred Stock Warrants         307      —  
Quatrx Pharmaceuticals Company       Preferred Stock         750      —  
                      
Total Quatrx Pharmaceuticals Company               18,447      18,349
                      
Total Specialty Pharmaceuticals (7.24%)               25,975      26,705
                      
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      6,002      6,002
      Preferred Stock Warrants         321      132
                      
Total Annie's, Inc.               6,323      6,134
IPA Holdings, LLC. (4)    Consumer & Business Products   

Senior Debt

Matures November 2012

Interest rate Prime + 8.25% or

Floor rate of 15.5%

   $ 9,750      9,822      9,822
     

Senior Debt

Matures May 2013

Interest rate Prime + 11.25% or

Floor rate of 8.5%

   $ 6,500      6,541      6,541
     

Revolving Line of Credit

Matures November 2012

Interest rate Prime + 7.75% or

Floor rate of 12.00%

   $ 1,556      1,556      1,556
      Common Units Warrants         275      32
IPA Holding, LLC.       Common Units         500      120
                      
Total IPA Holding, LLC.               18,694      18,071
Market Force Information, Inc.    Consumer & Business Products    Preferred Stock Warrants         24      —  
Market Force Information, Inc.       Preferred Stock         500      440
                      
Total Market Force Information, Inc.               524      440

See notes to consolidated financial statements (unaudited).

 

9


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

September 30, 2009

(unaudited)

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment (1)

   Principal
Amount
   Cost (2)    Value (4)
OnTech Operations, Inc.    Consumer & Business Products   

Senior Debt

Matures December 2009

Interest rate 16.00%

   $ 106    $ 106    $ —  
      Preferred Stock Warrants         453      —  
      Preferred Stock Warrants         218      —  
OnTech Operations, Inc.       Preferred Stock         1,000      —  
                      
Total OnTech Operations, Inc.               1,777      —  
Wageworks, Inc.    Consumer & Business Products    Preferred Stock Warrants         252      1,392
Wageworks, Inc.       Preferred Stock         250      368
                      
Total Wageworks, Inc.               502      1,760
                      
Total Consumer & Business Products (7.16%)               27,820      26,405
                      
Custom One Design, Inc.    Semiconductors   

Senior Debt

Matures September 2010

Interest rate 11.50%

   $ 466      461      461
      Common Stock Warrants         18      —  
                      
Total Custom One Design, Inc.               479      461
Enpirion, Inc.    Semiconductors   

Senior Debt

Matures August 2011

Interest rate Prime + 2.00% or

Floor rate of 9.5%

   $ 5,831      5,779      5,779
      Preferred Stock Warrants         157      6
                      
Total Enpirion, Inc.               5,936      5,785
iWatt Inc.    Semiconductors    Preferred Stock Warrants         46      —  
      Preferred Stock Warrants         51      —  
      Preferred Stock Warrants         73      —  
      Preferred Stock Warrants         458      —  
iWatt Inc.       Preferred Stock         490      950
                      
Total iWatt Inc.               1,118      950
NEXX Systems, Inc. (4)    Semiconductors   

Senior Debt

Matures March 2010

Interest rate Prime + 3.50% or Floor rate of 11.25%

   $ 1,111      1,088      1,088
     

Revolving Line of Credit

Matures June 2010

Interest rate Prime + 8.00% or Floor rate of 13.25%

   $ 3,000      3,000      3,000
     

Revolving Line of Credit

Matures December 2009

Interest rate Prime + 5.00% or Floor rate of 14.00%

   $ 2,000      2,000      2,000
      Preferred Stock Warrants         165      172
                      
Total NEXX Systems, Inc.               6,253      6,260
Quartics, Inc.    Semiconductors   

Senior Debt

Matures May 2010

Interest rate 10.00%

   $ 222      212      212
      Preferred Stock Warrants         53      —  
                      
Total Quartics, Inc.               265      212
Solarflare Communications, Inc.    Semiconductors   

Senior Debt

Matures August 2010

Interest rate 11.75%

   $ 267      244      244
      Preferred Stock Warrants         83      —  
Solarflare Communications, Inc.       Common Stock         641      3
                      
Total Solarflare Communications, Inc.               968      247
                      
Total Semiconductors (3.77%)               15,019      13,915
                      

See notes to consolidated financial statements (unaudited).

 

10


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

September 30, 2009

(unaudited)

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment (1)

   Principal
Amount
   Cost (2)    Value (4)

Labopharm USA, Inc. (5)

   Drug Delivery    Senior Debt         
     

Matures June 2012

Interest rate 10.95%

   $ 20,000    $ 19,680    $ 19,680
      Common Stock Warrants         687      776
                      

Total Labopharm USA, Inc.

              20,367      20,456

Transcept Pharmaceuticals, Inc.

   Drug Delivery    Common Stock Warrants         36      212
      Common Stock Warrants         51      271

Transcept Pharmaceuticals, Inc.

      Common Stock         500      574
                      

Total Transcept Pharmaceuticals, Inc.

              587      1,057
                      

Total Drug Delivery (5.83%)

              20,954      21,513
                      

BARRX Medical, Inc.

   Therapeutic    Senior Debt         
     

Mature December 2011

Interest rate 11.00%

   $ 6,083      6,073      6,073
      Revolving Line of Credit         
     

Matures May 2010

Interest rate 10.00%

   $ 1,000      1,000      1,000
      Preferred Stock Warrants         76      —  

BARRX Medical, Inc.

      Preferred Stock         1,500      1,215
                      

Total BARRX Medical, Inc.

              8,649      8,288

EKOS Corporation

   Therapeutic    Senior Debt         
     

Matures November 2010

Interest rate Prime + 2.00%

   $ 3,385      3,315      3,315
      Preferred Stock Warrants         175      41
      Preferred Stock Warrants         152      20
                      

Total EKOS Corporation

              3,642      3,376

Gelesis, Inc. (7)

   Therapeutic    Senior Debt         
     

Matures May 2012

Interest rate Prime + 5.65% or

Floor rate of 10.75%

   $ 2,849      2,811      —  
      Preferred Stock Warrants         58      —  
                      

Total Gelesis, Inc.

              2,869      —  

Gynesonics, Inc.

   Therapeutic    Preferred Stock Warrants         18      396

Gynesonics, Inc.

      Preferred Stock         250      871
                      

Total Gynesonics, Inc.

              268      1,267

Light Science Oncology, Inc.

   Therapeutic    Preferred Stock Warrants         99      28
                      

Total Light Science Oncology, Inc.

              99      28

Novasys Medical, Inc. (4)

   Therapeutic    Senior Debt         
     

Matures February 2010

Interest rate 9.70%

   $ 1,153      1,151      1,151
      Preferred Stock Warrants         71      5
      Preferred Stock Warrants         54      7

Novasys Medical, Inc.

      Preferred Stock         1,000      1,606
                      

Total Novasys Medical, Inc.

              2,276      2,769
                      

Total Therapeutic (4.27%)

              17,803      15,728
                      

See notes to consolidated financial statements (unaudited).

 

11


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

September 30, 2009

(unaudited)

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment (1)

   Principal
Amount
   Cost (2)    Value (4)

Cozi Group, Inc.

   Internet Consumer & Business Services    Preferred Stock Warrants       $ 148    $ —  

Cozi Group, Inc.

      Preferred Stock         177      7
                      

Total Cozi Group, Inc.

              325      7

Invoke Solutions, Inc.

      Preferred Stock Warrants         56      153
      Preferred Stock Warrants         26      34
                      

Total Invoke Solutions, Inc.

              82      187

Prism Education Group Inc.

   Internet Consumer & Business Services    Senior Debt         
     

Matures December 2010

Interest rate 11.25%

   $ 987      973      973
      Preferred Stock Warrants         43      115
                      

Total Prism Education Group Inc.

              1,016      1,088

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      194
      Preferred Stock Warrants         28      30

RazorGator Interactive Group, Inc.

      Preferred Stock         1,000      1,033
                      

Total RazorGator Interactive Group, Inc.

              4,041      4,257

Serious USA, Inc. (7)

   Internet Consumer & Business Services    Senior Debt         
     

Matures February 2011

Interest rate 14%

   $ 2,212      2,179      —  
      Preferred Stock Warrants         93      —  
                      

Total Serious USA, Inc .

              2,272      —  

Spa Chakra, Inc.

   Internet Consumer & Business Services    Senior Debt         
     

Matures October 2011

Interest rate 16.45%

   $ 10,000      10,234      10,234
      Senior Debt         
     

Matures April 2010

Interest rate 16.45%

   $ 850      850      850
      Preferred Stock Warrants         1      1
              
                      

Total Spa Chakra, Inc.

              11,085      11,085
                      

Total Internet Consumer & Business Services (4.51%)

              18,821      16,624
                      

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
                      

Box.net, Inc.

   Information Services    Senior Debt         
     

Matures May 2011

Interest rate Prime + 1.50%

   $ 786      762      762
      Senior Debt         
     

Matures September 2011

Interest rate Prime + 0.50%

   $ 325      325      325
      Preferred Stock Warrants         73      46
                      

Total Box.net, Inc.

              1,160      1,133

See notes to consolidated financial statements (unaudited).

 

12


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

September 30, 2009

(unaudited)

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment (1)

   Principal
Amount
   Cost (2)    Value (4)

Buzznet, Inc.

   Information Services    Preferred Stock Warrants       $ 9    $ —  

Buzznet, Inc.

      Preferred Stock         250      74
                      

Total Buzznet, Inc.

              259      74

Caivis Acquisition, Inc.

   Information Services    Common Stock         880      880
                      

Total Caivis Acquisition, Inc.

              880      880

hi5 Networkss, Inc.

   Information Services    Senior Debt         
     

Matures December 2010

Interest rate Prime + 2.5%

   $ 1,698      1,698      1,698
      Senior Debt         
     

Matures June 2011

Interest rate Prime + 0.5%

   $ 4,170      4,112      4,112
      Preferred Stock Warrants         213      47
                      

Total hi5 Networks, Inc.

              6,023      5,857

Jab Wireless, Inc.

   Information Services    Senior Debt         
     

Matures November 2012

Interest rate Prime + 3.50% or

Floor rate of 9.5%

   $ 15,000      15,052      15,052
      Preferred Stock Warrants         265      188
                      

Total Jab Wireless, Inc.

              15,317      15,240

Solutionary, Inc.

      Preferred Stock Warrants         94      100
      Preferred Stock Warrants         2      3

Solutionary, Inc.

      Preferred Stock         250      236
                      

Total Solutionary, Inc.

              346      339

Ancestry.com, Inc.(The Generation Networks, Inc.)

      Common Stock         500      937
                      

Total The Generation Networks, Inc.

              500      937

Good Technologies, Inc. (Visto Corporation)

      Common Stock         603      603
                      

Total Visto Corporation

              603      603

Coveroo, Inc.

      Preferred Stock Warrants         7      —  
                      

Total Coveroo, Inc.

              7      —  

Zeta Interactive Corporation

   Information Services    Senior Debt         
     

Matures November 2012

Interest rate 9.50%

   $ 5,090      5,059      5,059
      Senior Debt         —        —  
     

Matures November 2012

Interest rate 10.50%

   $ 6,946      7,111      7,111
      Preferred Stock Warrants         172      —  

Zeta Interactive Corporation

      Preferred Stock         500      405
                      

Total Zeta Interactive Corporation

              12,842      12,575
                      

Total Information Services (10.21%)

              37,937      37,638
                      

Novadaq Technologies, Inc.

   Diagnostic    Common Stock         1,605      422
                      

Total Novadaq Technologies, Inc.

              1,605      422

Optiscan Biomedical, Corp.

   Diagnostic    Senior Debt         
     

Matures June 2011

Interest rate 10.25%

   $ 8,864      8,618      8,618
      Preferred Stock Warrants         760      365

Optiscan Biomedical, Corp.

      Preferred Stock         3,000      3,000
                      

Total Optiscan Biomedical, Corp.

              12,378      11,983
                      

Total Diagnostic (3.36%)

              13,983      12,405
                      

See notes to consolidated financial statements (unaudited).

 

13


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

September 30, 2009

(unaudited)

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment (1)

   Principal
Amount
   Cost (2)    Value (4)

Kamada, LTD. (5)

   Biotechnology Tools    Senior Debt         
     

Matures February 2012

Interest rate 10.60%

   $ 19,500    $ 19,115    $ 19,115
      Common Stock Warrants         159      278

Kamada, LTD.

      Common Stock         794      1,586
                      

Total Kamada, LTD.

              20,068      20,979

NuGEN Technologies, Inc.

   Biotechnology Tools    Senior Debt         
     

Matures November 2010

Interest rate Prime + 3.45%

   $ 984      976      976
      Senior Debt         
     

Matures November 2010

Interest rate Prime + 1.70%

   $ 558      558      558
      Preferred Stock Warrants         45      —  
      Preferred Stock Warrants         33      —  

NuGEN Technologies, Inc.

      Preferred Stock         500      500
                      

Total NuGEN Technologies, Inc.

              2,112      2,034

Solace Pharmaceuticals, Inc. (4)

   Biotechnology Tools    Senior Debt         
     

Matures August 2012

Interest rate Prime + 4.25% or

Floor rate of 9.85%

   $ 5,000      4,923      4,923
      Preferred Stock Warrants         42      41
      Preferred Stock Warrants         54      43
                      

Total Solace Pharmaceuticals, Inc.

              5,019      5,007
                      

Total Biotechnology Tools (7.60%)

              27,199      28,020
                      

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) (7)

   Surgical Devices    Senior Debt         
     

Matures December 2011

Interest rate Prime + 5.25%

   $ 9,475      9,362      2,362
      Preferred Stock Warrants         225      —  
                      

Total Transmedics, Inc.

              9,587      2,362
                      

Total Surgical Devices (0.65%)

              9,874      2,388
                      

Glam Media, Inc.

   Media/Content/ Info    Preferred Stock Warrants         482      283
                      

Total Glam Media, Inc.

              482      283

Waterfront Media Inc.

      Preferred Stock Warrants         60      369
      Preferred Stock         1,000      1,500
                      

Total Waterfront Media Inc.

              1,060      1,869
                      

Total Media/Content/Info (0.58%)

              1,542      2,152
                      

Total Investments (112.51%)

            $ 434,963    $ 414,847
                      

 

* 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 $12,932, $35,436 and $22,504, respectively. The tax cost of investments is $435,171.
(3) Except for warrants in five publicly traded companies and common stock in three publicly traded companies, all investments are restricted at September 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 September 30, 2009, and is therefore considered non-income producing.
(8) On October 7, 2009 Compuware Corporation (NASDAQ: CPWR) announced the signing of a definitive agreement to acquire privately-held Gomez, Inc. The $295.0 million cash acquisition is expected to close in the fourth quarter of 2009. The Company’s financial statements do not reflect any potential unrealized gains related to the transaction as of September 30, 2009.

See notes to consolidated financial statements (unaudited).

 

14


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.

 

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)

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.

 

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)

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.

 

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)

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.

 

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)

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.

 

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)

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.

 

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)

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.

 

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)

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.

 

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)
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.