Hercules Capital
HERCULES TECHNOLOGY GROWTH CAPITAL INC (Form: 10-Q, Received: 05/07/2010 17:14:08)
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 March 31, 2010

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 May 5, 2010, there were 36,248,195 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 March 31, 2010 (unaudited) and December 31, 2009

   3
   

Consolidated Schedule of Investments as of March 31, 2010 (unaudited)

   4
   

Consolidated Schedule of Investments as of December 31, 2009

   17
   

Consolidated Statement of Operations for the three-month periods ended March 31, 2010 and 2009 (unaudited)

   29
   

Consolidated Statement of Changes in Net Assets for the three-month periods ended
March 31, 2010 and 2009 (unaudited)

   30
   

Consolidated Statement of Cash Flows for the three-month periods ended March 31, 2010 and 2009 (unaudited)

   31
   

Notes to Consolidated Financial Statements (unaudited)

   32
  Item 2.  

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

   49
  Item 3.  

Quantitative and Qualitative Disclosures About Market Risk

   66
  Item 4.  

Controls and Procedures

   67
PART II. OTHER INFORMATION    68
  Item 1.  

Legal Proceedings

   68
  Item 1A.  

Risk Factors

   68
  Item 2.  

Unregistered Sales of Equity Securities and Use of Proceeds

   72
  Item 3.  

Defaults Upon Senior Securities

   72
  Item 4.  

Reserved

   72
  Item 5.  

Other Information

   72
  Item 6.  

Exhibits

   73
SIGNATURES    74

 

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)

 

     March 31,
2010
(unaudited)
    December 31,
2009
 

Assets

    

Investments:

    

Non-Control/Non-Affiliate investments (cost of $342,218 and $353,648, respectively)

   $ 332,728      $ 335,979   

Affiliate investments (cost of $2,880 and $2,880, respectively)

     2,222        2,274   

Control investments (cost of $44,806 and $23,823, respectively)

     45,023        32,184   
                

Total investments, at value (cost of $389,904 and $380,351 respectively)

     379,973        370,437   

Deferred loan origination revenue

     (3,210     (2,425

Cash and cash equivalents

     106,138        124,828   

Interest receivable

     11,369        10,309   

Other assets

     6,687        5,818   
                

Total assets

     500,957        508,967   

Liabilities

    

Accounts payable and accrued liabilities

     3,945        11,852   

Short-term credit facility

     —          —     

Long-term SBA debentures

     130,600        130,600   
                

Total liabilities

     134,545        142,452   
                

Net assets

   $ 366,412      $ 366,515   
                

Net assets consist of:

    

Common stock, par value

   $ 35      $ 35   

Capital in excess of par value

     410,349        409,036   

Unrealized appreciation (depreciation) on investments

     (10,288     (10,028

Accumulated realized gains (losses) on investments

     (27,767     (28,129

Distributions in excess of investment income

     (5,917     (4,399
                

Total net assets

   $ 366,412      $ 366,515   
                

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

     36,248        35,634   
                

Net asset value per share

   $ 10.11      $ 10.29   
                

See Notes to Consolidated Financial Statements (unaudited)

 

3


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

March 31, 2010

(unaudited)

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment

   Principal
Amount
   Cost (2)    Value (3)

Acceleron Pharmaceuticals, Inc.

  

Drug Discovery

  

Preferred Stock Warrants

      $ 69    $ 1,100
     

Preferred Stock Warrants

        35      226
     

Preferred Stock

        1,243      2,464
                      

Total Acceleron Pharmaceuticals, Inc.

              1,347      3,790

Aveo Pharmaceuticals, Inc.

  

Drug Discovery

  

Senior Debt

Matures May 2012

Interest rate 11.13%

   $ 13,232      13,187      13,187
     

Preferred Stock Warrants

        190      279
     

Preferred Stock Warrants

        104      67
     

Preferred Stock Warrants

        24      26
                      

Total Aveo Pharmaceuticals, Inc.

              13,505      13,559

Dicerna Pharmaceuticals, Inc.

  

Drug Discovery

  

Senior Debt

Matures April 2012

Interest rate Prime + 9.20% or

Floor rate of 12.95%

   $ 5,987      5,851      5,851
     

Preferred Stock Warrants

        206      154
     

Preferred Stock Warrants

        31      27
                      

Total Dicerna Pharmaceuticals, Inc.

              6,088      6,032

Elixir Pharmaceuticals, Inc.

  

Drug Discovery

  

Senior Debt

Matures October 2011

Interest rate Prime + 9.25% or

Floor rate of 12.5%

   $ 6,967      6,967      1,967
     

Preferred Stock Warrants

        217      —  
                      

Total Elixir Pharmaceuticals, Inc.

              7,184      1,967

EpiCept Corporation

  

Drug Discovery

  

Common Stock Warrants

        4      22
     

Common Stock Warrants

        40      255
                      

Total EpiCept Corporation

              44      277

Horizon Therapeutics, Inc.

  

Drug Discovery

  

Senior Debt

Matures July 2011

Interest rate Prime + 1.50%

   $ 3,989      3,945      3,945
     

Preferred Stock Warrants

        231      —  
                      

Total Horizon Therapeutics, Inc.

              4,176      3,945

Inotek Pharmaceuticals Corp.

  

Drug Discovery

  

Preferred Stock

        1,500      353
                      

Total Inotek Pharmaceuticals Corp.

              1,500      353

Merrimack Pharmaceuticals, Inc.

  

Drug Discovery

  

Preferred Stock Warrants

        155      64
     

Preferred Stock

        2,000      2,459
                      

Total Merrimack Pharmaceuticals, Inc.

              2,155      2,523

See Notes to Consolidated Financial Statements (unaudited)

 

4


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

March 31, 2010

(unaudited)

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment

   Principal
Amount
   Cost (2)    Value (3)

Paratek Pharmaceuticals, Inc.

   Drug Discovery   

Preferred Stock Warrants

      $ 137    $ 117
     

Preferred Stock

        1,000      1,000
                      

Total Paratek Pharmaceuticals, Inc.

              1,137      1,117

PolyMedix, Inc.

   Drug Discovery   

Senior Debt

Matures September 2013

Interest rate Prime + 7.1%

   $ 10,000      9,679      9,679
     

Preferred Stock Warrants

        321      321
                      

Total PolyMedix, Inc.

              10,000      10,000

Portola Pharmaceuticals, Inc.

   Drug Discovery   

Senior Debt

Matures April 2011

Interest rate Prime + 2.16%

   $ 5,416      5,416      5,416
     

Preferred Stock Warrants

        152      370
                      

Total Portola Pharmaceuticals, Inc.

              5,568      5,786
                      

Total Drug Discovery (13.47%)*

              52,704      49,349
                      

Affinity Videonet, Inc. (4)

   Communications & Networking   

Senior Debt

Matures June 2012

Interest rate Prime + 8.75% or

Floor rate of 12.00%

   $ 2,117      2,139      2,139
     

Senior Debt

        
     

Matures June 2012

Interest rate Prime + 14.75% or

Floor rate of 18.00%

   $ 2,000      2,063      2,063
     

Revolving Line of Credit

        
     

Matures June 2012

Interest rate Prime + 9.75% or

Floor rate of 13.00%

   $ 500      500      500
     

Preferred Stock Warrants

        101      99
                      

Total Affinity Videonet, Inc.

              4,803      4,801

E-band Communications, Inc. (6)

   Communications & Networking   

Preferred Stock

        2,880      2,222
                      

Total E-Band Communications, Inc.

              2,880      2,222

IKANO Communications, Inc.

   Communications & Networking   

Senior Debt

Matures August 2011

Interest rate 12.00%

   $ 5,156      5,156      5,156
     

Preferred Stock Warrants

        45      —  
     

Preferred Stock Warrants

        72      —  
                      

Total IKANO Communications, Inc.

              5,273      5,156

Neonova Holding Company

   Communications & Networking   

Preferred Stock Warrants

        94      44
     

Preferred Stock

        250      247
                      

Total Neonova Holding Company

              344      291

 

See Notes to Consolidated Financial Statements

 

5


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

March 31, 2010

(unaudited)

(dollars in thousands)

 

Portfolio Company

 

Industry

  

Type of Investment

  Principal
Amount
  Cost (2)   Value (3)

Peerless Network, Inc.

  Communications & Networking   

Preferred Stock Warrants

    $ 95   $ —  
    

Preferred Stock

      1,000     820
                  

Total Peerless Network, Inc.

           1,095     820

Ping Identity Corporation

  Communications & Networking   

Preferred Stock Warrants

      52     199
                  

Total Ping Identity Corporation

           52     199

Purcell Systems, Inc.

  Communications & Networking   

Preferred Stock Warrants

      123     402
                  

Total Purcell Systems, Inc.

           123     402

Seven Networks, Inc.

  Communications & Networking   

Preferred Stock Warrants

      174     2
                  

Total Seven Networks, Inc.

           174     2

Stoke, Inc.

  Communications & Networking   

Preferred Stock Warrants

      53     60
                  

Total Stoke, Inc.

           53     60

Tectura Corporation

  Communications & Networking   

Senior Debt

Matures September 2010

Interest rate Prime + 10.75% or

Floor rate of 14.00%

  $ 1,250     1,250     1,250
    

Revolving Line of Credit

Matures July 2011

Interest rate Prime + 10.75% or

Floor rate of 14.00%

  $ 9,908     10,367     10,367
    

Revolving Line of Credit

Matures July 2011

Interest rate Prime + 10.75% or

Floor rate of 14.00%

  $ 5,000     5,220     5,220
    

Preferred Stock Warrants

      51     —  
                  

Total Tectura Corporation

           16,888     16,837
                  

Total Communications & Networking (8.40%)*

           31,685     30,790
                  

Atrenta, Inc.

 

Software

  

Preferred Stock Warrants

      102     225
    

Preferred Stock Warrants

      34     74
    

Preferred Stock Warrants

      95     174
    

Preferred Stock

      250     375
                  

Total Atrenta, Inc.

           481     848

Blurb, Inc.

 

Software

  

Senior Debt

Matures June 2011

Interest rate Prime + 3.50% or

Floor rate of 8.5%

  $ 2,804     2,737     2,737
    

Preferred Stock Warrants

      25     308
    

Preferred Stock Warrants

      299     190
                  

Total Blurb, Inc.

           3,061     3,235

 

See Notes to Consolidated Financial Statements

 

6


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

March 31, 2010

(unaudited)

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment

   Principal
Amount
   Cost (2)    Value (3)

Braxton Technologies, LLC.

  

Software

  

Preferred Stock Warrants

      $ 188    $ 119
                      

Total Braxton Technologies, LLC.

              188      119

Bullhorn, Inc.

  

Software

  

Preferred Stock Warrants

        43      247
                      

Total Bullhorn, Inc.

              43      247

Clickfox, Inc.

  

Software

  

Senior Debt

        
     

Matures September 2011

Interest rate Prime + 5.00% or

Floor rate of 10.25%

   $ 3,259      3,213      3,213
     

Revolving Line of Credit

        
     

Matures July 2010

Interest rate Prime + 8.50% or

Floor rate of 13.5%

   $ 2,000      1,996      1,996
     

Preferred Stock Warrants

        177      299
                      

Total Clickfox, Inc.

              5,386      5,508

Forescout Technologies, Inc.

  

Software

  

Preferred Stock Warrants

        99      127
                      

Total Forescout Technologies, Inc.

              99      127

GameLogic, Inc.

  

Software

  

Preferred Stock Warrants

        92      2
                      

Total GameLogic, Inc.

              92      2

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      44
                      

Total HighRoads, Inc.

              44      44

Infologix, Inc. (4),(7)

  

Software

  

Senior Debt

        
     

Matures November 2013

Interest rate 12.00%

   $ 5,500      5,500      5,500
     

Convertible Senior Debt

        
     

Matures November 2014

Interest rate 12.00%

   $ 5,000      5,035      9,563
     

Revolving Line of Credit

        
     

Matures May 2011

Interest rate 12.00%

   $ 8,909      8,909      8,909
     

Senior Debt

        
     

Matures December 2010

Interest rate 18.00%

   $ 2,250      2,250      2,250
     

Preferred Stock Warrants

        725      1,073
     

Common Stock

        5,036      5,414
                      

Total Infologix, Inc.

              27,455      32,709

 

See Notes to Consolidated Financial Statements

 

7


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

March 31, 2010

(unaudited)

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment

   Principal
Amount
   Cost (2)    Value (3)

PSS Systems, Inc.

  

Software

  

Preferred Stock Warrants

      $ 51    $ 94
                      

Total PSS Systems, Inc.

              51      94

Rockyou, Inc.

  

Software

  

Preferred Stock Warrants

        117      132
                      

Total Rockyou, Inc.

              117      132

Sportvision, Inc.

  

Software

  

Preferred Stock Warrants

        39      36
                      

Total Sportvision, Inc.

              39      36

WildTangent, Inc.

  

Software

  

Preferred Stock Warrants

        239      46
                      

Total WildTangent, Inc.

              239      46
                      

Total Software (15.87%)*

              52,295      58,147
                      

Luminus Devices, Inc.

  

Electronics &

Computer Hardware

  

Senior Debt

Matures December 2011

Interest rate 11.875%

   $ 1,290      1,290      1,290
     

Preferred Stock Warrants

        183      —  
     

Preferred Stock Warrants

        84      —  
     

Preferred Stock Warrants

        334      —  
                      

Total Luminus Devices, Inc.

              1,891      1,290

Maxvision Holding, LLC.

  

Electronics &

Computer Hardware

  

Senior Debt

Matures October 2012

Interest rate Prime + 5.50%

   $ 5,000      5,255      5,255
     

Senior Debt

        
     

Matures April 2012

Interest rate Prime + 2.25%

   $ 4,159      4,159      4,159
     

Revolving Line of Credit

        
     

Matures April 2012

Interest rate Prime + 2.25%

   $ 2,500      2,580      2,580
     

Common Stock

        81      170
                      

Total Maxvision Holding, LLC

              12,075      12,164

Shocking Technologies, Inc.

  

Electronics &

Computer Hardware

  

Senior Debt

Matures December 2010

Interest rate Prime + 2.50%

   $ 1,414      1,409      1,409
     

Preferred Stock Warrants

        63      108
                      

Total Shocking Technologies, Inc.

              1,472      1,517

 

See Notes to Consolidated Financial Statements

 

8


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

March 31, 2010

(unaudited)

(dollars in thousands)

 

Portfolio Company

 

Industry

 

Type of Investment

  Principal
Amount
  Cost (2)   Value (3)

Spatial Photonics, Inc.

  Electronics & Computer Hardware  

Senior Debt

     
   

Matures April 2011

Interest rate 10.07%

  $ 1,651   $ 1,635   $ 1,635
   

Senior Debt

     
   

Mature April 2011

Interest rate 9.22%

  $ 164     164     165
   

Preferred Stock Warrants

      130     —  
   

Preferred Stock

      500     129
                 

Total Spatial Photonics Inc.

          2,429     1,929

VeriWave, Inc.

  Electronics & Computer Hardware  

Preferred Stock Warrants

      54     —  
   

Preferred Stock Warrants

      46     —  
                 

Total VeriWave, Inc.

          100     —  
                 

Total Electronics & Computer Hardware (4.61%)*

          17,967     16,900
                 

Aegerion Pharmaceuticals, Inc. (4)

 

Specialty

Pharmaceuticals

 

Senior Debt

Matures September 2011

Interest rate Prime + 2.50% or

Floor rate of 11.00%

  $ 4,763     4,763     4,763
   

Convertible Senior Debt

     
   

Matures December 2010

  $ 340     340     340
   

Preferred Stock Warrants

      69     142
   

Preferred Stock

      1,000     710
                 

Total Aegerion Pharmaceuticals, Inc.

          6,172     5,955

QuatRx Pharmaceuticals Company

 

Specialty

Pharmaceuticals

 

Senior Debt

Matures October 2011

Interest rate Prime + 8.90% or

Floor rate of 12.15%

  $ 14,306     14,212     14,212
   

Convertible Senior Debt

     
   

Matures March 2012

  $ 1,888     1,888     2,861
   

Preferred Stock Warrants

      220     —  
   

Preferred Stock Warrants

      308     —  
   

Preferred Stock

      750     —  
                 

Total Quatrx Pharmaceuticals Company

          17,378     17,073
                 

Total Specialty Pharmaceuticals (6.28%)*

          23,550     23,028
                 

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     6,119     6,119
   

Preferred Stock Warrants

      321     85
                 

Total Annie's, Inc.

          6,440     6,204

 

See Notes to Consolidated Financial Statements

 

9


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

March 31, 2010

(unaudited)

(dollars in thousands)

 

Portfolio Company

 

Industry

 

Type of Investment

  Principal
Amount
  Cost (2)   Value (3)

IPA Holdings, LLC. (4)

  Consumer & Business Products  

Senior Debt

Matures November 2012

Interest rate Prime + 8.25% or

Floor rate of 12.5%

  $ 9,250   $ 9,442   $ 9,442
   

Senior Debt

     
   

Matures May 2013

Interest rate Prime + 11.25%

or Floor rate of 15.5%

  $ 6,500     6,709     6,709
   

Revolving Line of Credit

     
   

Matures November 2012

Interest rate Prime + 7.75% or

Floor rate of 12.00%

  $ 1,356     1,356     1,356
   

Preferred Stock Warrants

      275     —  
   

Common Stock

      500     120
                 

Total IPA Holding, LLC.

          18,282     17,627

Market Force Information, Inc.

  Consumer & Business Products  

Preferred Stock Warrants

      24     42
   

Preferred Stock

      500     500
                 

Total Market Force Information, Inc.

          524     542

OnTech Operations, Inc.

  Consumer & Business Products  

Senior Debt

Matures June 2010

Interest rate 16.00%

  $ 106     106     —  
   

Preferred Stock Warrants

      452     —  
   

Preferred Stock Warrants

      218     —  
   

Preferred Stock

      1,000     —  
                 

Total OnTech Operations, Inc.

          1,776     —  

Velocity Technology Solutions

  Consumer & Business Products  

Senior Debt

Matures February 2015

Interest rate LIBOR + 8%

  $ 16,667     16,667     16,667
   

Senior Debt

     
   

Matures February 2015

Interest rate LIBOR + 8%

  $ 8,333     8,339     8,339
                 

Total Velocity Technology Solutions

          25,006     25,006

Wageworks, Inc.

  Consumer & Business Products  

Preferred Stock Warrants

      252     1,371
   

Preferred Stock

      250     368
                 

Total Wageworks, Inc.

          502     1,739
                 

Total Consumer & Business Products (13.95%)*

          52,530     51,118
                 

Enpirion, Inc.

  Semiconductors  

Senior Debt

     
   

Matures August 2011

Interest rate Prime + 2.00% or

Floor rate of 7.625%

  $ 4,341     4,313     4,313
   

Preferred Stock Warrants

      157     0
                 

Total Enpirion, Inc.

          4,470     4,313

 

See Notes to Consolidated Financial Statements

 

10


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

March 31, 2010

(unaudited)

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment

   Principal
Amount
   Cost (2)    Value (3)

iWatt Inc.

  

Semiconductors

  

Preferred Stock Warrants

      $ 46    $ —  
     

Preferred Stock Warrants

        51      —  
     

Preferred Stock Warrants

        73      —  
     

Preferred Stock Warrants

        458      —  
     

Preferred Stock

        490      950
                      

Total iWatt Inc.

              1,118      950

NEXX Systems, Inc. (4)

  

Semiconductors

  

Revolving Line of Credit

        
     

Matures June 2010

Interest rate Prime + 8.00% or

Floor rate of 13.25%

   $ 3,000      2,923      2,923
     

Revolving Line of Credit

        
     

Matures June 2010

Interest rate Prime + 8.00% or

Floor rate of 17.50%

   $ 2,500      2,500      2,500
     

Preferred Stock Warrants

        297      489
     

Preferred Stock

        277      733
                      

Total NEXX Systems, Inc.

              5,997      6,645

Quartics, Inc.

  

Semiconductors

  

Senior Debt

        
     

Matures May 2010

Interest rate 10.00%

   $ 55      55      55
     

Preferred Stock Warrants

        53      —  
                      

Total Quartics, Inc.

              108      55

Solarflare Communications, Inc.

  

Semiconductors

  

Senior Debt

        
     

Matures August 2010

Interest rate 11.75%

   $ 125      116      116
     

Preferred Stock Warrants

        83      —  
     

Common Stock

        641      —  
                      

Total Solarflare Communications, Inc.

              840      116
                      

Total Semiconductors (3.30%)*

              12,533      12,079
                      

Labopharm USA, Inc. (5)

  

Drug Delivery

  

Senior Debt

        
     

Matures June 2012

Interest rate 10.95%

   $ 20,000      19,765      19,765
     

Common Stock Warrants

        635      710
                      

Total Labopharm USA, Inc.

              20,400      20,475

Transcept Pharmaceuticals, Inc.

  

Drug Delivery

  

Common Stock Warrants

        36      52
     

Common Stock Warrants

        51      45
     

Common Stock

        500      331
                      

Total Transcept Pharmaceuticals, Inc.

              587      428
                      

Total Drug Delivery (5.70%)*

              20,987      20,903
                      

 

See Notes to Consolidated Financial Statements

 

11


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

March 31, 2010

(unaudited)

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment

   Principal
Amount
   Cost (2)    Value (3)

BARRX Medical, Inc.

  

Therapeutic

  

Senior Debt

        
     

Mature December 2011

Interest rate 11.00%

   $ 4,861    $ 4,855    $ 4,855
     

Revolving Line of Credit

        
     

Matures May 2010

Interest rate 10.00%

   $ 1,000      1,000      1,000
     

Preferred Stock Warrants

        76      86
     

Preferred Stock

        1,500      2,318
                      

Total BARRX Medical, Inc.

              7,431      8,259

EKOS Corporation

  

Therapeutic

  

Senior Debt

        
     

Matures November 2010

Interest rate Prime + 2.00%

   $ 1,959      1,932      1,932
     

Preferred Stock Warrants

        174      —  
     

Preferred Stock Warrants

        153      —  
                      

Total EKOS Corporation

              2,259      1,932

Gelesis, Inc. (8)

  

Therapeutic

  

Senior Debt

        
     

Matures May 2012

Interest rate Prime + 7.5%

or Floor rate of 10.75%

   $ 2,847      2,820      —  
     

Preferred Stock Warrants

        58      —  
                      

Total Gelesis, Inc.

              2,878      —  

Gynesonics, Inc.

  

Therapeutic

  

Convertible Subordinated Debt

        
     

Matures July 2010

Interest rate 8.00%

   $ 51      51      51
     

Preferred Stock Warrants

        17      —  
     

Preferred Stock

        250      250
                      

Total Gynesonics, Inc.

              318      301

Light Science Oncology, Inc.

  

Therapeutic

  

Preferred Stock Warrants

        99      26
                      

Total Light Science Oncology, Inc.

              99      26

Novasys Medical, Inc.

  

Therapeutic

  

Preferred Stock Warrants

        71      —  
     

Preferred Stock Warrants

        54      —  
     

Preferred Stock

        1,000      1,170
                      

Total Novasys Medical, Inc.

              1,125      1,170

Pacific Child & Family Associates, LLC

  

Therapeutic

  

Senior Debt

        
     

Matures January 2015

Interest rate 8.0%

   $ 6,750      6,750      6,750
     

Senior Debt

        
     

Matures January 2015

Interest rate 10.50%

   $ 5,900      5,928      5,928
                      

Total Pacific Child & Family Associates, LLC

              12,678      12,678
                      

Total Therapeutic (6.65%)*

              26,788      24,366
                      

 

See Notes to Consolidated Financial Statements

 

12


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

March 31, 2010

(unaudited)

(dollars in thousands)

 

Portfolio Company

 

Industry

 

Type of Investment

  Principal
Amount
  Cost (2)   Value (3)

Cozi Group, Inc.

  Internet Consumer & Business Services  

Preferred Stock Warrants

    $ 147   $ —  
   

Preferred Stock

      177     7
                 

Total Cozi Group, Inc.

          324     7

Invoke Solutions, Inc.

  Internet Consumer & Business Services  

Preferred Stock Warrants

      56     117
   

Preferred Stock Warrants

      26     26
                 

Total Invoke Solutions, Inc.

          82     143

Prism Education Group Inc.

  Internet Consumer & Business Services  

Senior Debt

Matures December 2010

Interest rate 11.25%

  $ 609     601     601
   

Preferred Stock Warrants

      43     98
                 

Total Prism Education Group Inc.

          644     699

RazorGator Interactive Group, Inc. (4)

  Internet Consumer & Business Services  

Revolving Line of Credit

Matures October 2011

Interest rate Prime + 9.50% or

Floor rate of 14.00%

  $ 6,158     6,158     6,158
   

Preferred Stock Warrants

      13     582
   

Preferred Stock Warrants

      28     45
   

Preferred Stock

      1,000     452
                 

Total RazorGator Interactive Group, Inc.

          7,199     7,237

Spa Chakra Acquisition Corporation (7)

  Internet Consumer & Business Services  

Revolving Line of Credit

Matures April 2011

Interest rate Prime + 9.00% or

Floor rate of 12.50%

  $ 2,314     2,314     2,314
   

Preferred Stock

      15,037     10,000
                 

Total Spa Chakra Acquisition Corporation

          17,351     12,314
                 

Total Internet Consumer & Business Services (5.57%)*

          25,600     20,400
                 

Lilliputian Systems, Inc.

  Energy  

Preferred Stock Warrants

      107     92
   

Common Stock Warrants

      48     —  
                 

Total Lilliputian Systems, Inc.

          155     92
                 

Total Energy (0.03%)*

          155     92
                 

Box.net, Inc.

  Information Services  

Senior Debt

     
   

Matures May 2011

Interest rate Prime + 1.50%

  $ 563     552     552
   

Senior Debt

     
   

Matures September 2011

Interest rate Prime + 0.50%

  $ 248     248     248
    Preferred Stock Warrants       73     195
                 
Total Box.net, Inc.           873     995

 

See Notes to Consolidated Financial Statements

 

13


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

March 31, 2010

(unaudited)

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment

   Principal
Amount
   Cost (2)    Value (3)
Buzznet, Inc.    Information Services    Preferred Stock Warrants       $ 9    $ 1
      Preferred Stock         250      74
                      
Total Buzznet, Inc.               259      75
XL Education Corp.    Information Services    Common Stock         880      880
                      
Total XL Education Corp.               880      880
hi5 Networks, Inc.    Information Services    Senior Debt         
     

Matures December 2010

Interest rate Prime + 2.5%

   $ 1,182      1,182      1,182
      Senior Debt         
     

Matures June 2011

Interest rate Prime + 0.5%

   $ 2,856      2,825      2,825
      Preferred Stock Warrants         212      —  
                      
Total hi5 Networks, Inc.               4,219      4,007
Jab Wireless, Inc.    Information Services    Senior Debt         
     

Matures November 2012

Interest rate Prime + 3.50% or

Floor rate of 9.5%

   $ 14,375      14,603      14,603
      Revolving Line of Credit         
     

Matures October 2010

Interest rate Prime + 3.50% or

Floor rate of 9.5%

   $ 2,500      2,517      2,517
      Preferred Stock Warrants         265      158
                      
Total Jab Wireless, Inc.               17,385      17,278
Solutionary, Inc.    Information Services    Preferred Stock Warrants         94      —  
      Preferred Stock Warrants         2      —  
      Preferred Stock         250      50
                      
Total Solutionary, Inc.               346      50
Ancestry.com, Inc.    Information Services    Common Stock         452      1,348
                      
Total Ancestry.com               452      1,348
Intelligent Beauty, Inc.       Senior Debt         
     

Matures March 2013

Interest rate Prime + 8.0% or

Floor rate of 11.25%

   $ 6,000      6,000      6,000
                      
Total Intelligent Beauty, Inc.               6,000      6,000
Good Technologies, Inc.    Information Services    Common Stock         603      603
                      
Total Good Technologies, Inc.               603      603

 

See Notes to Consolidated Financial Statements

 

14


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

March 31, 2010

(unaudited)

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment

  Principal
Amount
  Cost (2)   Value (3)
Coveroo, Inc.    Information Services    Preferred Stock Warrants     $ 7   $ —  
                   
Total Coveroo, Inc.             7     —  
Zeta Interactive Corporation    Information Services    Senior Debt      
     

Matures November 2012

Interest rate 10.0%

  $ 4,731     4,378     4,378
      Senior Debt      
     

Matures November 2012

Interest rate 12.0%

  $ 6,025     6,261     6,261
      Preferred Stock Warrants       172     —  
      Preferred Stock       500     310
                   
Total Zeta Interactive Corporation             11,311     10,949
                   
Total Information Services   (11.51%) *             42,335     42,185
                   
Novadaq Technologies, Inc. (5)    Diagnostic    Common Stock       1,474     497
                   
Total Novadaq Technologies, Inc.             1,474     497
Optiscan Biomedical, Corp.    Diagnostic    Senior Debt      
     

Matures June 2011

Interest rate 10.25%

  $ 6,496     6,372     6,372
      Preferred Stock Warrants       761     168
      Preferred Stock       3,000     3,000
                   
Total Optiscan Biomedical, Corp.             10,133     9,540
                   
Total Diagnostic (2.74%) *             11,607     10,037
                   
Kamada, LTD. (5)    Biotechnology Tools    Preferred Stock Warrants       159     310
      Common Stock       752     1,697
                   
Total Kamada, LTD.             911     2,007
Labcyte, Inc.    Biotechnology Tools   

Senior Debt

Matures November 2012

Interest rate Prime + 8.6% or

Floor rate of 11.85%

  $ 3,500     3,347     3,347
      Common Stock Warrants       192     —  
                   

Total Labcyte, Inc.

            3,539     3,347

NuGEN Technologies, Inc.

   Biotechnology Tools    Preferred Stock Warrants       45     298
      Preferred Stock Warrants       33     24
      Preferred Stock       500     517
                   
Total NuGEN Technologies, Inc.             578     839

 

See Notes to Consolidated Financial Statements

 

15


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

March 31, 2010

(unaudited)

(dollars in thousands)

 

Portfolio Company

  

Industry

  

Type of Investment

  Principal
Amount
  Cost (2)   Value (3)
Solace Pharmaceuticals, Inc. (4)    Biotechnology Tools   

Senior Debt

Matures August 2012

Interest rate Prime + 4.25% or

Floor rate of 9.85%

  $ 2,386   $ 2,351   $ 2,351
      Senior Debt      
     

Matures August 2012

Interest rate 8.0%

  $ 250     250     250
      Preferred Stock Warrants       42     —  
      Preferred Stock Warrants       54     —  
                   
Total Solace Pharmaceuticals, Inc.             2,697     2,601
                   
Total Biotechnology Tools (2.40%) *             7,725     8,794
                   
Crux Biomedical, Inc.    Surgical Devices    Preferred Stock Warrants       37     —  
      Preferred Stock       250     26
                   
Total Crux Biomedical, Inc.             287     26
Transmedics, Inc.    Surgical Devices    Senior Debt      
     

Matures February 2014

Interest rate Prime + 9.70% or

Floor rate of 12.95%

  $ 8,375     8,288     8,288
      Preferred Stock Warrants       225     —  
      Preferred Stock       1,100     1,100
                   
Total Transmedics, Inc.             9,613     9,388
                   
Total Surgical Devices (2.57%) *             9,900     9,414
                   
Glam Media, Inc.    Media/Content/Info    Preferred Stock Warrants       483     283
                   
Total Glam Media, Inc.             483     283

Everyday Health (Waterfront Media)

   Media/Content/Info    Preferred Stock Warrants       60     588
      Preferred Stock       1,000     1,500
                   
Total Everyday Health             1,060     2,088
                   
Total Media/Content/Info (0.65%) *             1,543     2,371
                   
Total Investments             389,904     379,973
                   

 

* 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 $14,747, $27,408 and $12,661, respectively. The tax cost of investments is $389,558.
(3) Except for warrants in seven publicly traded companies and common stock in five publicly traded companies, all investments are restricted at March 31, 2010. 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.
(7) Control investment that is defined under the Investment Company Act of 1940 as companies in which HTGC owners as least 25% or more of the voting securities of such company or has greater than 50% representation on its board.
(8) Debt is on non-accrual status at March 31, 2010, and is therefore considered non-income producing.

 

See Notes to Consolidated Financial Statements

 

16


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2009

(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   $ 1,157
    

Preferred Stock Warrants

      35     215
    

Preferred Stock

      1,243     2,508
           

Total Acceleron Pharmaceuticals, Inc.

           1,347     3,880

Aveo Pharmaceuticals, Inc.

  Drug Discovery   

Senior Debt
Matures May 2012
Interest rate 11.13%

  $ 14,564     14,509     14,509
    

Preferred Stock Warrants

      190     725
    

Preferred Stock Warrants

      104     219
    

Preferred Stock Warrants

      24     76
           

Total Aveo Pharmaceuticals, Inc.

           14,827     15,529
          

Dicerna Pharmaceuticals, Inc.

  Drug Discovery   

Senior Debt
Matures April 2012
Interest rate Prime + 9.20% or

Floor rate of 12.95%

  $ 6,603     6,434     6,434
    

Preferred Stock Warrants

      206     128
    

Preferred Stock Warrants

      31     22
           

Total Dicerna Pharmaceuticals, Inc.

           6,671     6,584

Elixir Pharmaceuticals, Inc.

  Drug Discovery   

Senior Debt

     
    

Matures October 2011
Interest rate Prime + 9.25% or

Floor rate of 12.5%

  $ 8,067     8,067     8,067
    

Preferred Stock Warrants

      217     —  
           

Total Elixir Pharmaceuticals, Inc.

           8,284     8,067
          

EpiCept Corporation

  Drug Discovery   

Common Stock Warrants

      8     38
    

Common Stock Warrants

      40     201
           

Total EpiCept Corporation

           48     239
          

Horizon Therapeutics, Inc.

  Drug Discovery   

Senior Debt

     
    

Matures July 2011
Interest rate Prime + 1.50%

  $ 4,699     4,638     4,638
    

Preferred Stock Warrants

      231     —  
           

Total Horizon Therapeutics, Inc.

           4,869     4,638

Inotek Pharmaceuticals Corp.

  Drug Discovery   

Preferred Stock

      1,500     353
           

Total Inotek Pharmaceuticals Corp.

           1,500     353

Merrimack Pharmaceuticals, Inc.

  Drug Discovery   

Preferred Stock Warrants

      155     269
    

Preferred Stock

      2,000     1,699
           

Total Merrimack Pharmaceuticals, Inc.

           2,155     1,968

Paratek Pharmaceuticals, Inc.

  Drug Discovery   

Preferred Stock Warrants

      137     55
    

Preferred Stock

      1,000     1,000
           

Total Paratek Pharmaceuticals, Inc.

           1,137     1,055

 

See Notes to Consolidated Financial Statements

 

17


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

December 31, 2009

(dollars in thousands)

 

Portfolio Company

 

Industry

  

Type of Investment (1)

  Principal
Amount
  Cost (2)   Value (3)

Portola Pharmaceuticals, Inc.

 

Drug Discovery

  

Senior Debt
Matures April 2011
Interest rate Prime + 2.16%

  $ 6,666   $ 6,667   $ 6,671
    

Preferred Stock Warrants

      152     288
           

Total Portola Pharmaceuticals, Inc.

           6,819     6,959

Recoly, N.V. (5)

  Drug Discovery   

Senior Debt
Matures June 2012
Interest rate Prime + 4.25%

  $ 2,576     2,576     2,576
           

Total Recoly, N.V.

           2,576     2,576
          
           

Total Drug Discovery (14.15%)*

           50,233     51,848
           

Affinity Videonet, Inc. (4)

  Communications
& Networking
  

Senior Debt

Matures June 2012

Interest rate Prime + 8.75% or

Floor rate of 12.00%

  $ 2,318     2,326     2,326
    

Senior Debt

     
    

Matures June 2012

Interest rate Prime + 14.75% or
Floor rate of 18.00%

  $ 2,000     2,052     2,052
    

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     83
           

Total Affinity Videonet, Inc.

           4,980     4,961

E-band Communications, Inc. (6)

  Communications & Networking   

Preferred Stock

      2,880     2,274
           

Total E-Band Communications, Inc.

           2,880     2,274

IKANO Communications, Inc.

  Communications & Networking   

Senior Debt
Matures August 2011
Interest rate 12.00%

  $ 6,472     6,472     6,472
    

Preferred Stock Warrants

      45     —  
    

Preferred Stock Warrants

      72     —  
           

Total IKANO Communications, Inc.

           6,589     6,472

Neonova Holding Company

  Communications & Networking   

Preferred Stock Warrants

      94     42
    

Preferred Stock

      250     247
           

Total Neonova Holding Company

           344     289

Peerless Network, Inc.

  Communications & Networking   

Preferred Stock Warrants

      95     —  
    

Preferred Stock

      1,000     800
           

Total Peerless Network, Inc.

           1,095     800

Ping Identity Corporation

  Communications & Networking   

Preferred Stock Warrants

      52     168
           

Total Ping Identity Corporation

           52     168

 

See Notes to Consolidated Financial Statements

 

18


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

December 31, 2009

(dollars in thousands)

 

Portfolio Company

 

Industry

 

Type of Investment (1)

  Principal
Amount
  Cost (2)   Value (3)

Purcell Systems, Inc.

  Communications & Networking  

Preferred Stock Warrants

    $ 123   $ 386
           

Total Purcell Systems, Inc.

          123     386

Rivulet Communications, Inc. (4)

  Communications & Networking  

Senior Debt
Matures March 2010
Interest rate Prime + 8.00% or
Floor rate of 12%

  $ 1,063     1,060     1,060
   

Preferred Stock Warrants

      146     —  
   

Common Stock

      250     —  
           

Total Rivulet Communications, Inc.

          1,456     1,060

Seven Networks, Inc.

  Communications & Networking  

Preferred Stock Warrants

      174     11
           

Total Seven Networks, Inc.

          174     11

Stoke, Inc.

  Communications & Networking  

Preferred Stock Warrants

      53     81
           

Total Stoke, Inc.

          53     81

Tectura Corporation

  Communications & Networking  

Senior Debt

Matures September 2010

Interest rate Prime + 10.75% or

Floor rate of 14.00%

  $ 1,875     1,875     1,875
   

Revolving Line of Credit
Matures July 2011
Interest rate Prime + 10.75% or
Floor rate of 14.00%

  $ 9,908     10,238     10,238
   

Revolving Line of Credit
Matures July 2011
Interest rate Prime + 10.75% or
Floor rate of 14.00%

  $ 5,000     5,156     5,156
   

Preferred Stock Warrants

      51     —  
           

Total Tectura Corporation

          17,320     17,269

Zayo Bandwidth, Inc.

  Communications & Networking  

Senior Debt
Matures November 2013
Interest rate Libor + 5.25%

  $ 24,750     24,750     24,317
           

Total Zayo Bandwith, Inc.

          24,750     24,317
           

Total Communications & Networking (15.85%)*

          59,816     58,088
           

Atrenta, Inc.

  Software  

Preferred Stock Warrants

      102     99
   

Preferred Stock Warrants

      34     32
   

Preferred Stock Warrants

      95     159
   

Preferred Stock

      250     375
           

Total Atrenta, Inc.

          481     665

 

See Notes to Consolidated Financial Statements

 

19


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

December 31, 2009

(dollars in thousands)

 

Portfolio Company

 

Industry

  

Type of Investment (1)

  Principal
Amount
  Cost (2)   Value (3)

Blurb, Inc.

  Software   

Senior Debt
Matures June 2011
Interest rate Prime + 3.50% or
Floor rate of 8.5%

  $ 3,329   $ 3,234   $ 3,234
    

Preferred Stock Warrants

      25     128
    

Preferred Stock Warrants

      299     69
           

Total Blurb, Inc.

           3,558     3,431

Braxton Technologies, LLC.

  Software   

Preferred Stock Warrants

      188     116
           

Total Braxton Technologies, LLC.

           188     116

Bullhorn, Inc.

  Software   

Preferred Stock Warrants

      43     248
           

Total Bullhorn, Inc.

           43     248

Clickfox, Inc.

  Software   

Senior Debt
Matures September 2011
Interest rate Prime + 5.00% or
Floor rate of 10.25%

  $ 3,754     3,683     3,683
    

Revolving Line of Credit
Matures July 2010
Interest rate Prime + 8.50% or
Floor rate of 13.5%

     
       $ 2,000     2,003     2,003
    

Preferred Stock Warrants

      177     143
           

Total Clickfox, Inc.

           5,863     5,829

Forescout Technologies, Inc.

  Software   

Preferred Stock Warrants

      99     77
           

Total Forescout Technologies, Inc.

           99     77
          

GameLogic, Inc.

  Software   

Preferred Stock Warrants

      92     1
           

Total GameLogic, Inc.

           92     1

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     13
           

Total HighRoads, Inc.

           44     13

Infologix, Inc. (4)(7)

 

Software

  

Senior Debt
Matures November 2013
Interest rate 12.00%

  $ 5,500     5,500     5,500
    

Convertible Senior Debt
Matures November 2014
Interest rate 12.00%

  $ 5,000     5,004     10,060
    

Revolving Line of Credit
Matures May 2011
Interest rate 12.00%

  $ 7,559     7,559     7,559
    

Common Stock Warrants

      760     1,494
    

Common Stock

      5,000     7,571
                  

Total Infologix, Inc.

           23,823     32,184

Intelliden, Inc.

 

Software

  

Preferred Stock Warrants

      18     —  
                  

Total Intelliden, Inc.

           18     —  

PSS Systems, Inc.

 

Software

  

Preferred Stock Warrants

      51     71
                  

Total PSS Systems, Inc.

           51     71

Rockyou, Inc.

 

Software

  

Preferred Stock Warrants

      117     140
                  

Total Rockyou, Inc.

           117     140

 

See Notes to Consolidated Financial Statements

 

20


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

December 31, 2009

(dollars in thousands)

 

Portfolio Company

 

Industry

  

Type of Investment (1)

  Principal
Amount
  Cost (2)   Value (3)

Savvion, Inc. (4)

 

Software

  

Senior Debt
Matures February 2011
Interest rate Prime + 7.75% or
Floor rate of 11.00%

  $ 2,117   $ 2,065   $ 2,065
    

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     183
                  

Total Savvion, Inc.

           3,617     3,748

Sportvision, Inc.

 

Software

  

Preferred Stock Warrants

      39     47
                  

Total Sportvision, Inc.

           39     47

WildTangent, Inc.

 

Software

  

Preferred Stock Warrants

      238     77
                  

Total WildTangent, Inc.

           238     77
                  

Total Software (16.82%)*

           53,272     61,647
                  

Luminus Devices, Inc.

 

Electronics &

Computer Hardware

  

Senior Debt
Matures December 2011
Interest rate 12.875%

  $ 1,062     1,062     1,062
    

Preferred Stock Warrants

      183     —  
    

Preferred Stock Warrants

      84     —  
    

Preferred Stock Warrants

      334     —  
                  

Total Luminus Devices, Inc.

           1,663     1,062

Maxvision Holding, LLC.

 

Electronics &

Computer Hardware

  

Senior Debt
Matures October 2012
Interest rate Prime + 5.50%

  $ 5,000     5,220     5,220
    

Senior Debt
Matures April 2012
Interest rate Prime + 2.25%

  $ 4,409     4,409     4,409
    

Revolving Line of Credit
Matures April 2012
Interest rate Prime + 2.25%

  $ 2,500     2,580     2,580
    

Common Stock

      81     170
                  

Total Maxvision Holding, LLC

           12,290     12,379

Shocking Technologies, Inc.

 

Electronics &

Computer Hardware

  

Senior Debt
Matures December 2010
Interest rate Prime + 2.50%

  $ 1,867     1,858     1,858
    

Preferred Stock Warrants

      63     119
                  

Total Shocking Technologies, Inc.

           1,921     1,977

Spatial Photonics, Inc.

 

Electronics &

Computer Hardware

  

Senior Debt
Matures April 2011
Interest rate 10.066%

  $ 1,980     1,957     1,957
    

Senior Debt
Mature April 2011
Interest rate 9.217%

  $ 197     197     197
    

Preferred Stock Warrants

      129     —  
    

Preferred Stock

      500     129
                  

Total Spatial Photonics Inc.

           2,783     2,283

 

See Notes to Consolidated Financial Statements

 

21


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

December 31, 2009

(dollars in thousands)

 

Portfolio Company

 

Industry

 

Type of Investment (1)

  Principal
Amount
  Cost (2)   Value (3)

VeriWave, Inc.

  Electronics & Computer Hardware  

Preferred Stock Warrants

    $ 54   $ —  
   

Preferred Stock Warrants

      46     —  
                 

Total VeriWave, Inc.

          100     —  
         
                 

Total Electronics & Computer Hardware (4.83%)*

          18,757     17,701
                 

Aegerion Pharmaceuticals, Inc. (4)

  Specialty Pharmaceuticals  

Senior Debt
Matures September 2011
Interest rate Prime + 2.50% or
Floor rate of 11.00%

  $ 5,481     5,482     5,482
   

Convertible Senior Debt
Matures December 2010

  $ 279     279     279
   

Preferred Stock Warrants

      69     253
   

Preferred Stock

      1,000     1,019
                 

Total Aegerion Pharmaceuticals, Inc.

          6,830     7,033

QuatRx Pharmaceuticals Company

  Specialty Pharmaceuticals  

Senior Debt
Matures October 2011
Interest rate Prime + 8.90% or
Floor rate of 12.15%

  $ 15,417     15,299     15,299
   

Convertible Senior Debt
Matures March 2010

  $ 1,888     1,888     2,861
   

Preferred Stock Warrants

      220     —  
   

Preferred Stock Warrants

      307     —  
   

Preferred Stock

      750     —  
                 

Total QuatRx Pharmaceuticals Company

          18,464     18,160
                 

Total Specialty Pharmaceuticals (6.87%)*

          25,294     25,193
                 

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     6,060     6,060
   

Preferred Stock Warrants

      321     113
                 

Total Annie’s, Inc.

          6,381     6,173

IPA Holdings, LLC. (4)

  Consumer & Business Products  

Senior Debt
Matures November 2012
Interest rate Prime + 8.25% or
Floor rate of 12.5%

  $ 9,500     9,633     9,633
   

Senior Debt
Matures May 2013
Interest rate Prime + 11.25% or
Floor rate of 15.5%

     
      $ 6,500     6,625     6,625
   

Revolving Line of Credit
Matures November 2012
Interest rate Prime + 7.75% or
Floor rate of 12.00%

     
      $ 856     856     856
   

Common Stock Warrants

      275     —  
   

Common Stock

      500     120
                 

Total IPA Holding, LLC.

          17,889     17,234

 

See Notes to Consolidated Financial Statements

 

22


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

December 31, 2009

(dollars in thousands)

 

Portfolio Company

 

Industry

 

Type of Investment (1)

  Principal
Amount
  Cost (2)   Value (3)

Market Force Information, Inc.

  Consumer & Business Products  

Preferred Stock Warrants

    $ 24   $ —  
   

Preferred Stock

      500     267
                 

Total Market Force Information, Inc.

          524     267

OnTech Operations, Inc. (8)

  Consumer & Business Products  

Senior Debt
Matures June 2010
Interest rate 16.00%

  $ 106     106     —  
   

Preferred Stock Warrants

      452     —  
   

Preferred Stock Warrants

      218     —  
   

Preferred Stock

      1,000     —  
                 

Total OnTech Operations, Inc.

          1,776     —  

Wageworks, Inc.

  Consumer & Business Products  

Preferred Stock Warrants

      252     1,425
   

Preferred Stock

      250     368
                 

Total Wageworks, Inc.

          502     1,793
            —  
                 

Total Consumer & Business Products (6.95%)*

          27,072     25,467
                 

Custom One Design, Inc. (8)

 

Semiconductors

 

Senior Debt
Matures September 2010
Interest rate 11.50%

  $ 426     422     122
   

Common Stock Warrants

      18     —  
                 

Total Custom One Design, Inc.

          440     122

Enpirion, Inc.

 

Semiconductors

 

Senior Debt
Matures August 2011
Interest rate Prime + 2.00% or
Floor rate of 7.625%

  $ 5,094     5,055     5,053
   

Preferred Stock Warrants

      157     2
                 

Total Enpirion, Inc.

          5,212     5,055

iWatt Inc.

 

Semiconductors

 

Preferred Stock Warrants

      628     —  
   

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%

  $ 565     423     423
   

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 June 2010
Interest rate Prime + 8.00% or
Floor rate of 14.00%

  $ 500     500  

 

 

 

500

   

Preferred Stock Warrants

      562     784
   

Preferred Stock

      6     332
                 

Total NEXX Systems, Inc.

          4,491     5,039

 

See Notes to Consolidated Financial Statements

 

23


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

December 31, 2009

(dollars in thousands)

 

Portfolio Company

 

Industry

  

Type of Investment (1)

  Principal
Amount
  Cost (2)   Value (3)

Quartics, Inc.

 

Semiconductors

  

Senior Debt
Matures May 2010
Interest rate 10.00%

  $ 139   $ 134   $ 134
    

Preferred Stock Warrants

      53     —  
                  

Total Quartics, Inc.

           187     134

Solarflare Communications, Inc.

 

Semiconductors

  

Senior Debt
Matures August 2010
Interest rate 11.75%

  $ 197     181     181
    

Preferred Stock Warrants

      83     —  
    

Common Stock

      641     —  
                  

Total Solarflare Communications, Inc.

           905     181
                  

Total Semiconductors (3.13%)*

           12,353     11,481
                  

Labopharm USA, Inc. (5)

 

Drug Delivery

  

Senior Debt
Matures June 2012
Interest rate 10.95%

  $ 20,000     19,718     19,718
    

Common Stock Warrants

      687     1,307
                  

Total Labopharm USA, Inc.

           20,405     21,025

Transcept Pharmaceuticals, Inc.

 

Drug Delivery

  

Common Stock Warrants

      36     94
    

Common Stock Warrants

      51     91
    

Common Stock

      500     283
                  

Total Transcept Pharmaceuticals, Inc.

           587     468
                  

Total Drug Delivery (5.86%)*

           20,992     21,493
                  

BARRX Medical, Inc.

 

Therapeutic

  

Senior Debt
Mature December 2011
Interest rate 11.00%

  $ 5,481     5,473     5,473
    

Revolving Line of Credit

Matures May 2010

Interest rate 10.00%

  $ 1,000     1,000     1,000
    

Preferred Stock Warrants

      76     111
    

Preferred Stock

      1,500     2,303
                  

Total BARRX Medical, Inc.

           8,050     8,887

EKOS Corporation

 

Therapeutic

  

Senior Debt

Matures November 2010

Interest rate Prime + 2.00%

  $ 2,677     2,629     2,630
    

Preferred Stock Warrants

      175     —  
    

Preferred Stock Warrants

      153     —  
                  

Total EKOS Corporation

           2,957     2,630

Gelesis, Inc. (8)

 

Therapeutic

  

Senior Debt

Matures May 2012

Interest rate Prime + 7.5% or

Floor rate of 10.75%

  $ 2,847     2,814     —  
    

Preferred Stock Warrants

      58     —  
                  

Total Gelesis, Inc.

           2,872     —  

Gynesonics, Inc.

 

Therapeutic

  

Preferred Stock Warrants

      18     5
    

Preferred Stock

      250     627
                  

Total Gynesonics, Inc.

           268     632

 

See Notes to Consolidated Financial Statements

 

24


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

December 31, 2009

(dollars in thousands)

 

Portfolio Company

 

Industry

 

Type of Investment (1)

  Principal
Amount
  Cost (2)   Value (3)

Light Science Oncology, Inc.

 

Therapeutic

 

Preferred Stock Warrants

    $ 99   $ 26
                 

Total Light Science Oncology, Inc.

          99     26

Novasys Medical, Inc. (4)

 

Therapeutic

 

Senior Debt

     
   

Matures January 2010

Interest rate 9.70%

  $ 295     295     295
   

Preferred Stock Warrants

      71     —  
   

Preferred Stock Warrants

      54     —  
   

Preferred Stock

      1,000     1,000
                 

Total Novasys Medical, Inc.

          1,420     1,295
                 

Total Therapeutic (3.68%)*

          15,665     13,470
                 

Cozi Group, Inc.

  Internet Consumer & Business Services  

Preferred Stock Warrants

      148     —  
   

Preferred Stock

      177     7
                 

Total Cozi Group, Inc.

          325     7

Invoke Solutions, Inc.

  Internet Consumer & Business Services  

Preferred Stock Warrants

    56     129
   

Preferred Stock Warrants

      26     29
                 

Total Invoke Solutions, Inc.

          82     158

Prism Education Group Inc.

  Internet Consumer & Business Services  

Senior Debt

Matures December 2010

Interest rate 11.25%

  $ 801     789     790
   

Preferred Stock Warrants

      43     104
                 

Total Prism Education Group Inc.

          832     894

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%

  $ 10,000     10,000     10,000
   

Preferred Stock Warrants

      14     223
   

Preferred Stock Warrants

      28     33
   

Preferred Stock

      1,000     1,037
                 

Total RazorGator Interactive Group, Inc.

          11,042     11,293

Spa Chakra, Inc. (8)

  Internet Consumer & Business Services  

Senior Debt

Matures from December 2009 to October 2011

Interest rate from 16.45% to 17%

  $ 12,482     12,778     8,000
   

Preferred Stock Warrants

      1     —  
  &