Hercules Capital
HERCULES TECHNOLOGY GROWTH CAPITAL INC (Form: 10-Q, Received: 11/07/2013 16:37:03)
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, 2013

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   (IRS Employer
Incorporation or Organization)   Identification No.)

 

400 Hamilton Ave., Suite 310  
Palo Alto, California   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 that 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 (§ 232.405 of this Chapter) 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 4, 2013, there were 61,736,693 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, 2013 (unaudited) and December 31, 2012

     3   
  

Consolidated Statement of Operations for the three and nine month periods ended September  30, 2013 and 2012 (unaudited)

     5   
  

Consolidated Statement of Changes in Net Assets for the nine month periods ended September  30, 2013 and 2012 (unaudited)

     6   
  

Consolidated Statement of Cash Flows for the nine month periods ended September  30, 2013 and 2012 (unaudited)

     7   
  

Consolidated Schedule of Investments as of September 30, 2013 (unaudited)

     8   
  

Consolidated Schedule of Investments as of December 31, 2012

     24   
  

Notes to Consolidated Financial Statements (unaudited)

     39   

Item 2.

  

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

     63   

Item 3.

  

Quantitative and Qualitative Disclosures About Market Risk

     94   

Item 4.

  

Controls and Procedures

     95   

PART II. OTHER INFORMATION

     96   

Item 1.

  

Legal Proceedings

     96   

Item 1A.

  

Risk Factors

     96   

Item 2.

  

Unregistered Sales of Equity Securities and Use of Proceeds

     100   

Item 3.

  

Defaults Upon Senior Securities

     100   

Item 4.

  

Mine Safety Disclosures

     100   

Item 5.

  

Other Information

     100   

Item 6.

  

Exhibits

     100   

SIGNATURES

     101   

 

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

(unaudited)

(dollars in thousands, except per share data)

 

     September 30,
2013
    December 31,
2012
 

Assets

    

Investments:

    

Non-control/Non-affiliate investments (cost of $965,490 and $896,031, respectively)

   $ 970,530      $ 894,428   

Affiliate investments (cost of $17,546 and $18,307, respectively)

     12,897        11,872   
  

 

 

   

 

 

 

Total investments, at value (cost of $983,036 and $914,338, respectively)

     983,427        906,300   

Cash and cash equivalents

     204,993        182,994   

Restricted Cash

     3,632        —     

Interest receivable

     10,275        9,635   

Other assets

     25,186        24,714   
  

 

 

   

 

 

 

Total assets

   $ 1,227,513      $ 1,123,643   
  

 

 

   

 

 

 

Liabilities

    

Accounts payable and accrued liabilities

   $ 14,051      $ 11,575   

Long-term Liabilities (Convertible Senior Notes)

     72,248        71,436   

Asset-Backed Notes

     102,474        129,300   

2019 Notes

     170,364        170,364   

Long-term SBA Debentures

     225,000        225,000   
  

 

 

   

 

 

 

Total liabilities

   $ 584,137      $ 607,675   

Commitments and Contingencies (Note 10)

    

Net assets consist of:

    

Common stock, par value

   $ 62      $ 53   

Capital in excess of par value

     664,650        564,508   

Unrealized appreciation/(depreciation) on investments

     1,091        (7,947

Accumulated realized losses on investments

     (25,607     (36,916

Undistributed net investment income/(Distributions in excess of net investment income)

     3,180        (3,730
  

 

 

   

 

 

 

Total net assets

   $ 643,376      $ 515,968   
  

 

 

   

 

 

 

Total liabilities and net assets

   $ 1,227,513      $ 1,123,643   
  

 

 

   

 

 

 

Shares of common stock outstanding ($0.001 par value, 100,000,000 authorized)

     61,756        52,925   

Net asset value per share

   $ 10.42      $ 9.75   

See notes to consolidated financial statements.

 

3


Table of Contents

The following table presents the assets and liabilities of our consolidated securitization trust for an asset-backed notes (see Note 4), which is a variable interest entity (“VIE”). The assets of our securitization VIE can only be used to settle obligations of our consolidated securitization VIE, these liabilities are only the obligations of our consolidated securitization VIE, and the creditors (or beneficial interest holders) do not have recourse to our general credit. These assets and liabilities are included in the Consolidated Statements of Assets and Liabilities above.

 

(Dollars in thousands)

   September 30,
2013
     December 31,
2012
 

ASSETS

     

Restricted Cash

   $ 3,632       $ —     

Total investments, at value (cost of $189,917 and $226,844, respectively)

     185,244         226,997   
  

 

 

    

 

 

 

Total assets

   $ 188,876       $ 226,997   
  

 

 

    

 

 

 

LIABILITIES

     

Asset-Backed Notes

   $ 102,474       $ 129,300   
  

 

 

    

 

 

 

Total liabilities

   $ 102,474       $ 129,300   
  

 

 

    

 

 

 

See notes to consolidated financial statements.

 

4


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except per share data)

 

     Three Months Ended September 30,     Nine Months Ended September 30,  
           2013             2012             2013             2012      

Investment income:

        

Interest Income

        

Non-Control/Non-Affiliate investments

   $ 35,623      $ 21,512      $ 93,722      $ 62,502   

Affiliate investments

     561        238        1,684        686   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total interest income

     36,184        21,750        95,406        63,188   
  

 

 

   

 

 

   

 

 

   

 

 

 

Fees

        

Non-Control/Non-Affiliate investments

     4,832        2,150        11,088        6,936   

Affiliate investments

     5        1        9        1   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total fees

     4,837        2,151        11,097        6,937   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total investment income

     41,021        23,901        106,503        70,125   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

        

Interest

     7,587        4,908        22,788        13,309   

Loan fees

     1,072        1,169        3,341        2,977   

General and administrative

     2,176        2,445        6,831        6,126   

Employee Compensation:

        

Compensation and benefits

     7,030        2,919        14,992        9,566   

Stock-based compensation

     1,596        1,109        4,349        3,111   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total employee compensation

     8,626        4,028        19,341        12,677   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     19,461        12,550        52,301        35,089   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income

     21,560        11,351        54,202        35,036   

Net realized gain/(loss) on investments

        

Non-Control/Non-Affiliate investments

     7,125        (9,091     11,309        2,049   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total net realized gain/(loss) on investments

     7,125        (9,091     11,309        2,049   

Net unrealized appreciation (depreciation) on investments

        

Non-Control/Non-Affiliate investments

     9,288        2,372        10,506        (12,922

Affiliate investments

     (992     113        (1,468     (2,265
  

 

 

   

 

 

   

 

 

   

 

 

 

Total net unrealized appreciation (depreciation) on investments

     8,296        2,485        9,038        (15,187
  

 

 

   

 

 

   

 

 

   

 

 

 

Total net realized (unrealized) gain (loss)

     15,421        (6,606     20,347        (13,138
  

 

 

   

 

 

   

 

 

   

 

 

 

Net increase in net assets resulting from operations

   $ 36,981      $ 4,745      $ 74,549        21,898   
  

 

 

   

 

 

   

 

 

   

 

 

 

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

        

Basic

   $ 0.35      $ 0.23      $ 0.91      $ 0.71   
  

 

 

   

 

 

   

 

 

   

 

 

 

Change in net assets per common share:

        

Basic

   $ 0.61      $ 0.09      $ 1.26      $ 0.44   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.59      $ 0.09      $ 1.23      $ 0.44   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding

        

Basic

     60,522        48,750        58,206        48,130   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     60,750        48,808        58,396        48,237   
  

 

 

   

 

 

   

 

 

   

 

 

 

See notes to consolidated financial statements.

 

5


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS

(unaudited)

(dollars and shares in thousands)

 

    Common Stock     Capital  in
excess

of par value
    Unrealized
Appreciation

on Investments
    Accumulated
Realized
Gains(Losses)

on Investments
    Distributions
in Excess of
Investment

Income
    Provision for
Income Taxes
on Investment

Gains
    Net
Assets
 
    Shares     Par Value              

Balance at December 31, 2011

    43,853      $ 44      $ 484,244      $ (3,431   $ (43,042   $ (6,432   $ (342   $ 431,041   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase in net assets resulting from operations

    —          —          —          (15,187     2,049        35,036        —          21,898   

Issuance of common stock

    574        1        3,252        —          —          —          —          3,253   

Issuance of common stock under restricted stock plan

    530        1        (1     —          —          —          —          —     

Issuance of common stock as stock dividend

    155        —          1,649        —          —          —          —          1,649   

Retired shares from net issuance

    (327     —          (4,254     —          —          —          —          (4,254

Public Offering

    5,000        5        47,649        —          —          —          —          47,654   

Dividends declared

    —          —          —          —          —          (35,292     —          (35,292

Stock-based compensation

    —          —          3,168        —          —          —          —          3,168   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at September 30, 2012

    49,785      $ 51      $ 535,707      $ (18,618   $ (40,993   $ (6,688   $ (342   $ 469,117   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at December 31, 2012

    52,925      $ 53      $ 564,508      $ (7,947   $ (36,916   $ (3,388   $ (342   $ 515,968   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase in net assets resulting from operations

    —          —          —          9,038        11,309        54,202        —          74,549   

Issuance of common stock

    1,337        1        16,542        —          —          —          —          16,543   

Issuance of common stock under restricted stock plan

    472        1        (1     —          —          —          —          —     

Issuance of common stock as stock dividend

    142        —          1,923        —          —          —          —          1,923   

Retired shares from net issuance

    (1,170     (1     (18,259     —          —          —          —          (18,260

Public Offering

    8,050        8        95,529        —          —          —          —          95,537   

Dividends declared

    —          —          —          —          —          (47,292     —          (47,292

Stock-based compensation

    —          —          4,408        —          —          —          —          4,408   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at September 30, 2013

    61,756      $ 62      $ 664,650      $ 1,091      $ (25,607   $ 3,522      $ (342   $ 643,376   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

See notes to consolidated financial statements.

 

6


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(dollars in thousands)

 

     For the Nine Months Ended
September 30,
 
     2013     2012  

Cash flows from operating activities:

    

Net increase in net assets resulting from operations.

   $ 74,549      $ 21,898   

Adjustments to reconcile net increase in net assets resulting from operations to net cash used in / provided by operating activities:

    

Purchase of investments

     (411,515     (302,662

Principal payments received on investments

     336,438        165,157   

Proceeds from sale of investments

     29,459        21,265   

Net unrealized (appreciation) / depreciation on investments

     (9,038     15,187   

Net realized gain on investments

     (11,309     (2,049

Net unrealized appreciation due to lender

     —          —     

Accretion of paid-in-kind principal

     (2,269     (834

Accretion of loan discounts

     (4,556     (4,221

Accretion of loan discount on Convertible Senior Notes

     812        812   

Accretion of loan exit fees

     (10,031     (2,998

Change in deferred loan origination revenue

     2,540        1,026   

Unearned fees related to unfunded commitments

     (364     (1,865

Amortization of debt fees and issuance costs

     2,918        1,391   

Depreciation

     162        212   

Stock-based compensation and amortization of restricted stock grants

     4,408        3,168   

Common stock issued in lieu of Director compensation

     —          —     

Change in operating assets and liabilities:

    

Interest and fees receivable

     (641     (1,955

Prepaid expenses and other assets

     570        (938

Accounts payable

     (63     99   

Income tax receivable (payable)

     —          —     

Accrued liabilities

     2,588        (1,289
  

 

 

   

 

 

 

Net cash provided by (used in) operating activities

     4,658        (88,596

Cash flows from investing activities:

    

Purchases of capital equipment

     (240     (85

Investment in restricted cash

     (3,632     —     

Other long-term assets

     (30     —     
  

 

 

   

 

 

 

Net cash used in investing activities

     (3,902     (85

Cash flows from financing activities:

    

Proceeds from issuance of common stock, net

     93,443        46,594   

Stock repurchase program

     —          —     

Dividends paid

     (45,368     (33,643

Issuance of Notes Payable

     —          159,490   

Borrowings of credit facilities

     —          39,250   

Repayments of credit facilities

     (26,832     (74,303

Issuance of Class A2 Notes

     —          —     

Cash paid for debt issuance costs

     —          (6,088

Fees paid for credit facilities and debentures

     —          —     
  

 

 

   

 

 

 

Net cash provided by financing activities

     21,243        131,300   
  

 

 

   

 

 

 

Net increase in cash and cash equivalents

     21,999        42,619   

Cash and cash equivalents at beginning of period

     182,994        64,474   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 204,993      $ 107,093   
  

 

 

   

 

 

 

See notes to consolidated financial statements.

 

7


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2013

(unaudited)

(dollars in thousands)

 

Portfolio Company

 

Sub-Industry

     

Type of Investment

 

Maturity Date

 

Interest Rate and Floor

  Principal
Amount
    Cost     Value  

Loan

               

Biotechnology Tools

               

1-5 Years Maturity

               

Cleveland BioLabs, Inc (3)

  Biotechnology Tools     Senior Secured   January 2017   Interest rate PRIME + 6.20% or Floor rate of 10.45%   $ 6,000      $ 5,865      $ 5,865   

Labcyte, Inc. (11)

  Biotechnology Tools     Senior Secured   June 2016   Interest rate PRIME + 6.70% or Floor rate of 9.95%   $ 4,640        4,655        4,628   
             

 

 

   

 

 

 

Subtotal: 1-5 Years Maturity

          10,520        10,493   
             

 

 

   

 

 

 

Subtotal: Biotechnology Tools (1.63%)*

          10,520        10,493   
             

 

 

   

 

 

 

Clean Tech

               

Under 1 Year Maturity

               

Brightsource Energy, Inc.

  Clean Tech     Senior Secured   January 2014   Interest rate PRIME + 8.25% or Floor rate of 11.50%   $ 35,000        35,398        35,398   

Enphase Energy, Inc. (11)

  Clean Tech     Senior Secured   June 2014   Interest rate PRIME + 5.75% or Floor rate of 9.00%   $ 1,947        1,981        1,963   
             

 

 

   

 

 

 

Subtotal: Under 1 Year Maturity

          37,379        37,361   
             

 

 

   

 

 

 

1-5 Years Maturity

               

Agrivida, Inc.

  Clean Tech     Senior Secured   December 2016   Interest rate PRIME + 6.75% or Floor rate of 10.00%   $ 6,000        5,835        5,835   

Alphabet Energy, Inc.

  Clean Tech     Senior Secured   February 2015   Interest rate PRIME + 5.75% or Floor rate of 9.00%   $ 1,340        1,296        1,296   

American Superconductor Corporation (3)(11)

  Clean Tech     Senior Secured   December 2014   Interest rate PRIME + 7.25% or Floor rate of 11.00%   $ 5,769        6,073        6,073   

APTwater, Inc

  Clean Tech     Senior Secured   April 2017   Interest rate PRIME + 6.75% or Floor rate of 10.00%   $ 18,000        17,756        17,756   

BioAmber, Inc. (5)(10)

  Clean Tech     Senior Secured   June 2016   Interest rate PRIME + 6.75% or Floor rate of 10.00%   $ 25,000        24,835        24,835   

Enphase Energy, Inc.

  Clean Tech     Senior Secured   August 2016   Interest rate PRIME + 8.25% or Floor rate of 11.50%   $ 7,400        7,396        7,281   

Fluidic, Inc.

  Clean Tech     Senior Secured   March 2016   Interest rate PRIME + 8.00% or Floor rate of 11.25%   $ 5,000        4,884        4,884   

Fulcrum Bioenergy, Inc. (11)

  Clean Tech     Senior Secured   November 2016   Interest rate PRIME + 7.75% or Floor rate of 11.00%   $ 10,000        9,907        9,907   

Glori Energy, Inc. (11)

  Clean Tech     Senior Secured   June 2015   Interest rate PRIME + 6.75% or Floor rate of 10.00%   $ 6,222        6,289        6,305   

Polyera Corporation

  Clean Tech     Senior Secured   June 2016   Interest rate PRIME + 6.75% or Floor rate of 10.00%   $ 3,000        3,008        2,925   

SCIEnergy, Inc. (4)

  Clean Tech     Senior Secured   September 2015   Interest rate PRIME + 8.75% or Floor rate of 12.00%   $ 4,805        4,863        4,928   

Scifiniti (pka Integrated Photovoltaics, Inc.)

  Clean Tech     Senior Secured   February 2015   Interest rate PRIME + 7.38% or Floor rate of 10.63%   $ 1,751        1,723        1,702   

Stion Corporation (4)

  Clean Tech     Senior Secured   February 2015   Interest rate PRIME + 6.75% or Floor rate of 10.00%   $ 5,102        5,274        5,168   

 

See notes to consolidated financial statements.

 

8


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

September 30, 2013

(unaudited)

(dollars in thousands)

 

Portfolio Company

 

Sub-Industry

     

Type of Investment

 

Maturity Date

 

Interest Rate and Floor

  Principal
Amount
    Cost     Value  

TAS Energy, Inc.

  Clean Tech     Senior Secured   February 2015   Interest rate PRIME + 6.25% or Floor rate of 9.50%   $ 4,503      $ 4,344      $ 4,306   

TAS Energy, Inc.

  Clean Tech     Senior Secured   February 2015   Interest rate PRIME + 7.75% or Floor rate of 11.00%   $ 15,000        15,028        15,261   
             

 

 

   

 

 

 

Total TAS Energy, Inc.

                19,372        19,567   

TPI Composites, Inc.

  Clean Tech     Senior Secured   June 2016   Interest rate PRIME + 8.00% or Floor rate of 11.25%   $ 15,000        14,771        14,770   
             

 

 

   

 

 

 

Subtotal: 1-5 Years Maturity

          133,282        133,232   
             

 

 

   

 

 

 

Subtotal: Clean Tech (26.52%)*

          170,661        170,593   
             

 

 

   

 

 

 

Communications & Networking

         

1-5 Years Maturity

               

Bridgewave Communications (8)

  Communications & Networking     Senior Secured   March 2016   Interest rate FIXED + 8.00%, PIK Interest 8.00%   $ 7,753        7,433        2,007   

OpenPeak, Inc. (11)

  Communications & Networking     Senior Secured   July 2015   Interest rate PRIME + 8.75% or Floor rate of 12.00%   $ 11,440        11,984        11,984   

PointOne (8)

  Communications & Networking     Senior Secured   January 2017   Interest rate LIBOR + 11.00% or Floor rate of 13.50%   $ 2,128        2,128        —     

PointOne (8)

  Communications & Networking     Senior Secured   April 2015   Interest rate LIBOR + 11.00% or Floor rate of 13.50%   $ —          (100     100   

PointOne (8)

  Communications & Networking     Senior Secured   September 2015   Interest rate LIBOR + 11.00% or Floor rate of 13.50%   $ —          (4     —     
             

 

 

   

 

 

 

Total PointOne

                2,024        100   

Spring Mobile Solutions

  Communications & Networking     Senior Secured   November 2016   Interest rate PRIME + 8.00% or Floor rate of 11.25%   $ 20,000        19,553        19,835   
             

 

 

   

 

 

 

Subtotal: 1-5 Years Maturity

          40,994        33,926   
             

 

 

   

 

 

 

Subtotal: Communications & Networking (5.27%)

          40,994        33,926   
             

 

 

   

 

 

 

Diagnostic

               

1-5 Years Maturity

               

Tethys Bioscience, Inc. (8) (11)

  Diagnostic     Senior Secured   December 2015   Interest rate PRIME + 8.40% or Floor rate of 11.65%   $ 4,032        4,242        1,033   
             

 

 

   

 

 

 

Subtotal: 1-5 Years Maturity

          4,242        1,033   
             

 

 

   

 

 

 

Subtotal: Diagnostic (0.16%)*

              4,242        1,033   
             

 

 

   

 

 

 

Drug Delivery

               

Under 1 Year Maturity

               

Alexza Pharmaceuticals, Inc (3)

  Drug Delivery     Senior Secured   October 2013   Interest rate PRIME + 6.50% or Floor rate of 10.75%   $ 561        1,003        1,003   
             

 

 

   

 

 

 

Subtotal: Under 1 Year Maturity

          1,003        1,003   
             

 

 

   

 

 

 

1-5 Years Maturity

               

AcelRx Pharmaceuticals, Inc. (3)(11)

  Drug Delivery     Senior Secured   December 2014   Interest rate PRIME + 3.25% or Floor rate of 8.50%   $ 5,278        5,327        5,240   

AcelRx Pharmaceuticals, Inc. (3)

  Drug Delivery     Senior Secured   December 2014   Interest rate PRIME + 3.25% or Floor rate of 8.50%   $ 5,278        5,317        5,228   
             

 

 

   

 

 

 

Total AcelRx Pharmaceuticals,
Inc.

                10,644        10,468   

 

See notes to consolidated financial statements.

 

9


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

September 30, 2013

(unaudited)

(dollars in thousands)

 

Portfolio Company

 

Sub-Industry

     

Type of Investment

 

Maturity Date

 

Interest Rate and Floor

  Principal
Amount
    Cost     Value  

BIND Therapeutics, Inc. (3)

  Drug Delivery     Senior Secured   September 2016   Interest rate PRIME + 7.00% or Floor rate of 10.25%   $ 4,500      $ 4,391      $ 4,391   

Intelliject, Inc. (11)

  Drug Delivery     Senior Secured   June 2016   Interest rate PRIME + 5.75% or Floor rate of 11.00%   $ 15,000        15,013        15,269   

NuPathe, Inc. (3)

  Drug Delivery     Senior Secured   May 2016   Interest rate PRIME +3.25% or Floor rate of 9.85%   $ 8,500        8,326        8,293   

Revance Therapeutics, Inc.

  Drug Delivery     Senior Secured   March 2015   Interest rate PRIME + 6.60% or Floor rate of 9.85%   $ 1,161        1,189        1,160   

Revance Therapeutics, Inc.

  Drug Delivery     Senior Secured   March 2015   Interest rate PRIME + 6.60% or Floor rate of 9.85%   $ 11,607        11,785        11,600   
             

 

 

   

 

 

 

Total Revance Therapeutics, Inc.

                12,974        12,760   
             

 

 

   

 

 

 

Subtotal: 1-5 Years Maturity

          51,348        51,181   
             

 

 

   

 

 

 

Subtotal: Drug Delivery (8.11%)*

              52,351        52,184   
             

 

 

   

 

 

 

Drug Discovery & Development

               
               

1-5 Years Maturity

               

ADMA Biologics, Inc.

  Drug Discovery &
Development
    Senior Secured   April 2016   Interest rate PRIME +2.75% or Floor rate of 8.50%   $ 5,000        4,921        4,756   

Anacor Pharmaceuticals, Inc. (3)

  Drug Discovery & Development     Senior Secured   July 2017   Interest rate PRIME + 6.40% or Floor rate of 11.65%   $ 15,000        14,498        14,498   

Anacor Pharmaceuticals, Inc. (3)

  Drug Discovery & Development     Senior Secured   July 2017   Interest rate PRIME + 6.40% or Floor rate of 11.65%   $ 15,000        14,498        14,498   
             

 

 

   

 

 

 

Total Anacor Pharmaceuticals, Inc.

                28,996        28,996   

Aveo Pharmaceuticals, Inc. (3)(11)

  Drug Discovery & Development     Senior Secured   September 2015   Interest rate PRIME + 7.15% or Floor rate of 11.90%   $ 10,348        10,348        10,452   

Aveo Pharmaceuticals, Inc. (3)

  Drug Discovery & Development     Senior Secured   September 2015   Interest rate PRIME + 7.15% or Floor rate of 11.90%   $ 11,492        11,492        11,607   
             

 

 

   

 

 

 

Total Aveo Pharmaceuticals, Inc.

                21,840        22,059   

Cell Therapeutics, Inc. (3)(11)

  Drug Discovery & Development     Senior Secured   October 2016   Interest rate PRIME + 9.00% or Floor rate of 12.25%   $ 10,000        9,889        10,091   

Cempra, Inc. (3)(11)

  Drug Discovery & Development     Senior Secured   June 2017   Interest rate PRIME + 6.30% or Floor rate of 9.55%   $ 9,762        9,592        9,456   

Cempra, Inc. (3)

  Drug Discovery & Development     Senior Secured   June 2017   Interest rate PRIME + 6.30% or Floor rate of 9.55%   $ 5,238        5,147        5,075   
             

 

 

   

 

 

 

Total Cempra, Inc.

                14,739        14,531   

Concert Pharmaceuticals, Inc. (4)

  Drug Discovery & Development     Senior Secured   October 2015   Interest rate PRIME + 3.25% or Floor rate of 8.50%   $ 16,967        16,764        16,270   

Coronado Biosciences, Inc. (3)(11)

  Drug Discovery & Development     Senior Secured   March 2016   Interest rate PRIME + 6.00% or Floor rate of 9.25%   $ 15,000        14,993        14,606   

Dicerna Pharmaceuticals, Inc.

  Drug Discovery & Development     Senior Secured   January 2015   Interest rate PRIME + 4.40% or Floor rate of 10.15%   $ 6,101        6,048        5,970   

Insmed, Incorporated (11)

  Drug Discovery & Development     Senior Secured   January 2016   Interest rate PRIME + 4.75% or Floor rate of 9.25%   $ 10,000        9,888        9,782   

 

See notes to consolidated financial statements.

 

10


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

September 30, 2013

(unaudited)

(dollars in thousands)

 

Portfolio Company

 

Sub-Industry

     

Type of Investment

 

Maturity Date

 

Interest Rate and Floor

  Principal
Amount
    Cost     Value  

Insmed, Incorporated

  Drug Discovery & Development     Senior Secured   January 2016   Interest rate PRIME + 4.75% or Floor rate of 9.25%   $ 10,000      $ 9,807      $ 9,701   
             

 

 

   

 

 

 

Total Insmed, Incorporated

                19,695        19,483   

Merrimack Pharmaceuticals, Inc. (3)

  Drug Discovery & Development     Senior Secured   May 2016   Interest rate PRIME + 5.30% or Floor rate of 10.55%   $ 40,000        40,175        39,239   

Neuralstem, Inc. (3)

  Drug Discovery & Development     Senior Secured   June 2016   Interest rate PRIME + 7.75% or Floor rate of 11.00%   $ 8,000        7,800        7,904   

Paratek Pharmaceuticals, Inc. (9)

  Drug Discovery & Development     Senior Secured  

N/A

  Interest rate FIXED + 10.00%   $ 36        36        36   

Paratek Pharmaceuticals, Inc. (9)

  Drug Discovery & Development     Senior Secured   N/A  

N/A

  $ 28        28        28   

Paratek Pharmaceuticals, Inc. (9)

  Drug Discovery & Development     Senior Secured   N/A   Interest rate FIXED + 10.00%   $ 45        45        45   
             

 

 

   

 

 

 

Total Paratek Pharmaceuticals, Inc.

                109        109   

uniQure B.V. (5)(10)

  Drug Discovery & Development     Senior Secured   October 2016   Interest rate PRIME + 8.60% or Floor rate of 11.85%     $10,000        9,660        9,660   
             

 

 

   

 

 

 

Subtotal: 1-5 Years Maturity

          195,629        193,674   
             

 

 

   

 

 

 

Subtotal: Drug Discovery & Development (30.10%)*

        195,629        193,674   
             

 

 

   

 

 

 

Electronics & Computer Hardware

               
               

1-5 Years Maturity

               

Clustrix, Inc.

  Electronics & Computer Hardware     Senior Secured   December 2015   Interest rate PRIME + 6.50% or Floor rate of 9.75%   $ 582        577        577   

Identive (3)(11)

  Electronics & Computer Hardware     Senior Secured   November 2015   Interest rate PRIME + 7.75% or Floor rate of 11.00%   $ 6,621        6,524        6,609   

OCZ Technology Group, Inc.

  Electronics & Computer Hardware     Senior Secured   April 2016   Interest rate PRIME + 8.75% or Floor rate 12.50%, PIK Interest 3.00%   $ 10,121        11,624        11,624   

Plures Technologies, Inc. (3)

  Electronics & Computer Hardware     Senior Secured   October 2016   Interest rate PRIME + 12.75% or Floor rate 16.00%, PIK Interest 4.00%   $ 2,026        1,926        1,926   
             

 

 

   

 

 

 

Subtotal: 1-5 Years Maturity

          20,651        20,736   
             

 

 

   

 

 

 

Subtotal: Electronics & Computer Hardware (3.22%)*

        20,651        20,736   
             

 

 

   

 

 

 

Healthcare Services, Other

               

1-5 Years Maturity

               

InstaMed Communications, LLC

  Healthcare Services, Other     Senior Secured   December 2016   Interest rate PRIME + 7.25% or Floor rate of 10.50%   $ 3,000        2,950        2,950   

MDEverywhere, Inc.

  Healthcare Services, Other     Senior Secured   June 2016   Interest rate LIBOR + 9.50% or Floor rate of 10.75%   $ 2,000        1,871        1,871   

Orion Healthcorp, Inc.

  Healthcare Services, Other     Senior Secured   June 2017   Interest rate LIBOR + 10.50% or Floor rate of 12.00%, PIK Interest 3.00%   $ 6,541        6,410        6,410   

Orion Healthcorp, Inc.

  Healthcare Services, Other     Senior Secured   June 2016   Interest rate LIBOR + 8.25% or Floor rate of 9.50%   $ 2,000        461        461   

Orion Healthcorp, Inc.

  Healthcare Services, Other     Senior Secured   June 2017   Interest rate LIBOR + 9.50% or Floor rate of 11.00%   $ 9,000        8,823        8,823   
             

 

 

   

 

 

 

Total Orion Healthcorp, Inc.

                15,694        15,694   

 

See notes to consolidated financial statements.

 

11


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

September 30, 2013

(unaudited)

(dollars in thousands)

 

Portfolio Company

 

Sub-Industry

     

Type of Investment

 

Maturity Date

 

Interest Rate and Floor

  Principal
Amount
    Cost     Value  

Pacific Child & Family Associates

  Healthcare Services, Other     Senior Secured   January 2015   Interest rate LIBOR + 9.00% or Floor rate of 11.50%   $ 2,104      $ 2,159      $ 2,117   

Pacific Child & Family Associates

  Healthcare Services, Other     Senior Secured   January 2015   Interest rate LIBOR + 11.00% or Floor rate 14.00%, PIK Interest 3.75%   $ 6,772        6,790        6,687   
               
             

 

 

   

 

 

 

Total Pacific Child & Family Associates

                8,949        8,804   
             

 

 

   

 

 

 

Subtotal: 1-5 Years Maturity

          29,464        29,320   
             

 

 

   

 

 

 

Subtotal: Healthcare Services, Other (4.56%)*

          29,464        29,320   
             

 

 

   

 

 

 

Information Services

               

1-5 Years Maturity

               

Eccentex Corporation (11)

  Information Services     Senior Secured   May 2015   Interest rate PRIME + 7.00% or Floor rate of 10.25%   $ 763        759        370   

InXpo, Inc.

  Information Services     Senior Secured   April 2016   Interest rate PRIME + 7.50% or Floor rate of 10.75%   $ 2,550        2,467        2,337   

Jab Wireless, Inc.

  Information Services     Senior Secured   November 2017   Interest rate PRIME + 6.75% or Floor rate of 8.00%   $ 2,000        1,996        1,996   

Jab Wireless, Inc.

  Information Services     Senior Secured   November 2017   Interest rate PRIME + 6.75% or Floor rate of 8.00%   $ 7,574        7,526        7,526   

Jab Wireless, Inc.

  Information Services     Senior Secured   November 2017   Interest rate PRIME + 6.75% or Floor rate of 8.00%   $ 22,426        22,286        22,286   
             

 

 

   

 

 

 

Total Jab Wireless, Inc.

                31,808        31,808   

Womensforum.com (11)

  Information Services     Senior Secured   October 2016   Interest rate LIBOR + 6.50% or Floor rate of 9.25%   $ 7,200        7,080        6,772   

Womensforum.com (11)

  Information Services     Senior Secured   October 2016   Interest rate LIBOR + 7.50% or Floor rate of 10.25%, PIK Interest 2.00%   $ 4,592        4,515        4,151   
             

 

 

   

 

 

 

Total Womensforum.com

                11,595        10,923   
             

 

 

   

 

 

 

Subtotal: 1-5 Years Maturity

          46,629        45,437   
             

 

 

   

 

 

 

Subtotal: Information Services (7.06%)*

          46,629        45,437   
             

 

 

   

 

 

 

Internet Consumer & Business Services

               

Under 1 Year Maturity

               

Tectura Corporation

  Internet Consumer & Business Services     Senior Secured   December 2013   Interest rate LIBOR + 10.00% or Floor rate of 13.00%   $ 563        563        563   

Tectura Corporation

  Internet Consumer & Business Services     Senior Secured   December 2013   Interest rate LIBOR + 10.00% or Floor rate of 13.00%   $ 6,468        6,461        6,461   

Tectura Corporation

  Internet Consumer & Business Services     Senior Secured   December 2013   Interest rate LIBOR + 8.00% or Floor rate of 11.00%   $ 18,312        18,276        18,276   

Tectura Corporation

  Internet Consumer & Business Services     Senior Secured   December 2013   Interest rate LIBOR + 10.00% or Floor rate of 13.00%   $ 5,000        6,870        6,870   
             

 

 

   

 

 

 

Total Tectura Corporation

                32,170        32,170   
             

 

 

   

 

 

 

Subtotal: Under 1 Year Maturity

          32,170        32,170   
             

 

 

   

 

 

 

 

See notes to consolidated financial statements.

 

12


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

September 30, 2013

(unaudited)

(dollars in thousands)

 

Portfolio Company

 

Sub-Industry

     

Type of Investment

 

Maturity Date

 

Interest Rate and Floor

  Principal
Amount
    Cost     Value  

1-5 Years Maturity

               

Ahhha, Inc. (8)

  Internet Consumer & Business Services     Senior Secured   January 2015   Interest rate FIXED + 12.00%   $ 350      $ 346      $ —     

Blurb, Inc.

  Internet Consumer & Business Services     Senior Secured   December 2015   Interest rate PRIME + 5.25% or Floor rate of 8.50%   $ 7,069        6,900        6,812   

CashStar, Inc.

 

Internet Consumer & Business

Services

    Senior Secured   June 2016   Interest rate PRIME + 6.25% or Floor rate 10.50%, PIK Interest 1.00%   $ 4,008        3,921        3,921   

Education Dynamics

  Internet Consumer & Business Services     Senior Secured   March 2016   Interest rate FIXED + 12.50%, PIK Interest 1.50%   $ 17,765        17,484        17,025   

Education Dynamics

  Internet Consumer & Business Services     Senior Secured   March 2016   Interest rate FIXED +12.50%, PIK Interest 1.50%   $ 7,822        7,684        7,482   
             

 

 

   

 

 

 

Total Education Dynamics

              25,168        24,507   

Gazelle

 

Internet Consumer & Business

Services

    Senior Secured   April 2016   Interest rate PRIME + 7.00% or Floor rate 10.25%, PIK Interest 2.50%   $ 12,287        12,190        12,433   

Gazelle

 

Internet Consumer & Business

Services

    Senior Secured   October 2014   Interest rate PRIME + 6.50% or Floor rate of 9.75%   $ 754        724        739   
             

 

 

   

 

 

 

Total Gazelle

                12,914        13,172   

Just Fabulous, Inc.

  Internet Consumer & Business Services     Senior Secured   August 2016   Interest rate PRIME + 8.00% or Floor rate of 11.25%   $ 5,000        4,581        4,581   

Just Fabulous, Inc.

  Internet Consumer & Business Services     Senior Secured   February 2017   Interest rate PRIME + 8.25% or Floor rate of 11.50%   $ 5,000        4,806        4,806   
             

 

 

   

 

 

 

Total Just Fabulous, Inc.

              9,387        9,387   

Just.Me, Inc. (8)

  Internet Consumer & Business Services     Senior Secured   June 2015   Interest rate PRIME + 5.00% or Floor rate of 8.25%   $ 662        650        —     

Just.Me, Inc. (8)

  Internet Consumer & Business Services     Senior Secured   June 2015   Interest rate PRIME + 5.25% or Floor rate of 5.75%   $ 661        653        —     
             

 

 

   

 

 

 

Total Just.Me, Inc.

                1,303        —     

NetPlenish (8)

  Internet Consumer & Business Services     Senior Secured   April 2015   Interest rate FIXED + 10.00%   $ 483        475        —     

Reply! Inc.

  Internet Consumer & Business Services     Senior Secured   February 2016   Interest rate PRIME + 7.25% or Floor rate of 10.50%, PIK Interest 2.00%   $ 3,015        3,021        3,111   

Reply! Inc. (11)

  Internet Consumer & Business Services     Senior Secured   September 2015   Interest rate PRIME + 6.88% or Floor rate of 10.13%, PIK Interest 2.00%   $ 10,295        10,095        10,198   

Reply! Inc. (11)

  Internet Consumer & Business Services     Senior Secured   September 2015   Interest rate PRIME + 7.25% or Floor rate of 11.00%, PIK Interest 2.00%   $ 2,010        2,014        2,054   
             

 

 

   

 

 

 

Total Reply! Inc.

                15,130        15,363   

ShareThis, Inc.

  Internet Consumer & Business Services     Senior Secured   June 2016   Interest rate PRIME + 7.50% or Floor rate of 10.75%   $ 15,000        14,503        14,575   

 

See notes to consolidated financial statements.

 

13


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

September 30, 2013

(unaudited)

(dollars in thousands)

 

Portfolio Company

 

Sub-Industry

     

Type of Investment

 

Maturity Date

 

Interest Rate and Floor

  Principal
Amount
    Cost     Value  

Trulia, Inc. (3)(11)

  Internet Consumer & Business Services     Senior Secured   September 2015   Interest rate PRIME + 5.50% or Floor rate of 8.75%   $ 4,090      $ 4,047      $ 3,898   

Trulia, Inc. (3)(11)

  Internet Consumer & Business Services     Senior Secured   September 2015   Interest rate PRIME + 2.75% or Floor rate of 6.00%   $ 4,062        4,020        3,973   
             

 

 

   

 

 

 

Total Trulia, Inc.

                8,067        7,871   

Vaultlogix

  Internet Consumer & Business Services     Senior Secured   September 2016   Interest rate LIBOR + 8.50% or Floor rate 10.00%, PIK Interest 2.50%   $ 7,932        7,869        7,390   

Vaultlogix

  Internet Consumer & Business Services     Senior Secured   September 2015   Interest rate LIBOR + 7.00% or Floor rate of 8.50%   $ 8,242        8,230        7,797   
             

 

 

   

 

 

 

Total Vaultlogix

                16,099        15,187   

WaveMarket, Inc. (11)

  Internet Consumer & Business Services     Senior Secured   September 2015   Interest rate PRIME + 5.75% or Floor rate of 9.50%   $ 10,000        9,914        9,754   
             

 

 

   

 

 

 

Subtotal: 1-5 Years Maturity

          124,127        120,549   
             

 

 

   

 

 

 

Subtotal: Internet Consumer & Business Services (23.74%)*

        156,297        152,719   
             

 

 

   

 

 

 

Media/Content/Info

               

1-5 Years Maturity

               

Westwood One

  Media/Content/Info     Senior Secured   October 2016   Interest rate LIBOR + 6.50% or Floor rate of 8.00%   $ 5,113        4,824        4,824   

Westwood One

  Media/Content/Info     Senior Secured   October 2016   Interest rate LIBOR + 6.50% or Floor rate of 8.00%   $ 12,782        11,951        11,951   
             

 

 

   

 

 

 

Total Westwood One

                16,775        16,775   

Zoom Media and Marketing

  Media/Content/Info     Senior Secured   December 2014   Interest rate PRIME + 5.25% or Floor rate of 8.50%   $ 4,000        3,820        3,727   

Zoom Media and Marketing

  Media/Content/Info     Senior Secured   December 2015   Interest rate PRIME + 7.25% or Floor rate 10.50%, PIK Interest 3.75%   $ 4,695        4,488        4,423   
             

 

 

   

 

 

 

Total Zoom Media and Marketing

                8,308        8,150   
             

 

 

   

 

 

 

Subtotal: 1-5 Years Maturity

          25,083        24,925   
             

 

 

   

 

 

 

Subtotal: Media/Content/Info (3.87%)

          25,083        24,925   
             

 

 

   

 

 

 

Medical Devices & Equipment

             

Under 1 Year Maturity

             

Novasys Medical, Inc (9)

 

Medical Devices &

Equipment

    Senior Secured   June 2013  

Interest rate FIXED of +

8.00%

  $ 35        34        34   

Optiscan Biomedical, Corp (6)

  Medical Devices & Equipment     Senior Secured   December 2013   Interest rate PRIME + 8.20% or Floor rate of 11.45%   $ 8,260        9,704        9,704   

Oraya Therapeutics, Inc. (9)

  Medical Devices & Equipment     Senior Secured   December 2013   Interest rate FIXED + 7.00%   $ 500        500        500   
             

 

 

   

 

 

 

Subtotal: Under 1 Year Maturity

          10,238        10,238   
             

 

 

   

 

 

 

1-5 Years Maturity

               

Home Dialysis Plus

  Medical Devices & Equipment     Senior Secured   April 2017   Interest rate PRIME + 6.35% or Floor rate of 9.60%   $ 10,000        9,661        9,661   

Lanx, Inc.

  Medical Devices & Equipment     Senior Secured   October 2015   Interest rate (PRIME -5.25%) + 9.60% or Floor rate of 10.25%   $ 5,500        5,280        5,138   

Lanx, Inc.

  Medical Devices & Equipment     Senior Secured   October 2016   Interest rate PRIME + 8.50% or Floor rate of 11.75%, PIK Interest 2.00%   $ 13,184        12,835        13,092   
             

 

 

   

 

 

 

Total Lanx, Inc.

                18,115        18,230   

 

See notes to consolidated financial statements.

 

14


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

September 30, 2013

(unaudited)

(dollars in thousands)

 

Portfolio Company

 

Sub-Industry

     

Type of Investment

 

Maturity Date

 

Interest Rate and Floor

  Principal
Amount
    Cost     Value  

Medrobotics Corporation

  Medical Devices & Equipment     Senior Secured   March 2016   Interest rate PRIME + 7.85% or Floor rate of 11.10%   $ 5,000      $ 4,877      $ 4,898   

NinePoint Medical, Inc.

 

Medical Devices &

Equipment

    Senior Secured   January 2016   Interest rate PRIME + 5.85% or Floor rate of 9.10%   $ 6,585        6,499        6,367   

Oraya Therapeutics, Inc. (11)

  Medical Devices & Equipment     Senior Secured   September 2015   Interest rate PRIME + 5.50% or Floor rate of 10.25%   $ 7,971        7,862        8,001   

SonaCare Medical

  Medical Devices & Equipment     Senior Secured   April 2016   Interest rate PRIME + 7.75% or Floor rate of 11.00%   $ 4,000        3,930        3,785   

SonaCare Medical (11)

  Medical Devices & Equipment     Senior Secured   April 2016   Interest rate PRIME + 7.75% or Floor rate of 11.00%   $ 6,000        6,031        5,805   
             

 

 

   

 

 

 

Total SonaCare Medical

                9,961        9,590   

United Orthopedic Group, Inc.

  Medical Devices & Equipment     Senior Secured   July 2016   Interest rate PRIME + 8.60% or Floor rate of 11.85%   $ 25,000        24,401        25,151   
             

 

 

   

 

 

 

Subtotal: 1-5 Years Maturity

          81,375        81,898   
             

 

 

   

 

 

 

Subtotal: Medical Devices & Equipment (14.32%)*

          91,613        92,136   
             

 

 

   

 

 

 

Semiconductors

               

1-5 Years Maturity

               

Achronix Semiconductor Corporation

  Semiconductors     Senior Secured   January 2015   Interest rate PRIME + 10.60% or Floor rate of 13.85%   $ 1,247        1,232        1,207   

SiTime Corporation

  Semiconductors     Senior Secured   September 2016   Interest rate PRIME + 6.50% or Floor rate of 9.75%   $ 3,500        3,442        3,442   
             

 

 

   

 

 

 

Subtotal: 1-5 Years Maturity

          4,674        4,649   
             

 

 

   

 

 

 

Subtotal: Semiconductors (0.72%)*

              4,674        4,649   
             

 

 

   

 

 

 

Software

               

Under 1 Year Maturity

               

Clickfox, Inc.

  Software     Senior Secured   September 2014   Interest rate PRIME + 6.75% or Floor rate of 10.00%   $ 2,000        1,972        1,972   

Tada Innovations, Inc. (8)

  Software     Senior Secured   October 2013  

Interest rate FIXED +

8.00%

  $ 100        100        —     
             

 

 

   

 

 

 

Subtotal: Under 1 Year Maturity

          2,072        1,972   
             

 

 

   

 

 

 

1-5 Years Maturity

               

Clickfox, Inc.

  Software     Senior Secured   November 2015   Interest rate PRIME + 8.25% or Floor rate of 11.50%   $ 6,511        6,120        6,120   

EndPlay, Inc.

  Software     Senior Secured   August 2015   Interest rate PRIME + 7.35% or Floor rate of 10.60%   $ 1,802        1,720        1,623   

Hillcrest Laboratories, Inc.

  Software     Senior Secured   July 2015   Interest rate PRIME + 7.50% or Floor rate of 10.75%   $ 3,039        3,000        3,006   

KXEN, Inc. (4)

  Software     Senior Secured   January 2015   Interest rate PRIME + 5.08% or Floor rate of 8.33%   $ 1,545        1,622        1,622   

Mobile Posse, Inc.

  Software     Senior Secured   December 2016   Interest rate PRIME + 7.50% or Floor rate of 10.75%   $ 4,000        3,845        3,845   

Neos Geosolutions, Inc.

  Software     Senior Secured   May 2016   Interest rate PRIME + 5.75% or Floor rate of 10.50%   $  4,000        4,010        3,895   

StartApp

  Software     Senior Secured   March 2017   Interest rate PRIME + 7.75% or Floor rate of 11.00%   $ 2,500        2,488        2,488   

 

See notes to consolidated financial statements.

 

15


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

September 30, 2013

(unaudited)

(dollars in thousands)

 

Portfolio Company

 

Sub-Industry

 

Type of Investment

 

Maturity Date

 

Interest Rate and Floor

  Principal
Amount
    Cost     Value  

Touchcommerce, Inc.

  Software   Senior Secured   June 2017   Interest rate PRIME + 6.00% or Floor rate of 10.25%   $ 5,000      $ 4,686      $ 4,686   

Touchcommerce, Inc.

  Software   Senior Secured   December 2014   Interest rate PRIME + 2.25% or Floor rate of 6.50%   $ 3,111        3,060        3,060   
           

 

 

   

 

 

 

Total Touchcommerce, Inc.

              7,746        7,746   
           

 

 

   

 

 

 

Subtotal: 1-5 Years Maturity

          30,551        30,345   
           

 

 

   

 

 

 

Subtotal: Software (5.02%)*

              32,623        32,317   
           

 

 

   

 

 

 

Specialty Pharmaceuticals

             

Under 1 Year Maturity

             

QuatRx Pharmaceuticals Company (9)

  Specialty Pharmaceuticals   Senior Secured   March 2014   Interest rate FIXED + 8.00%   $ 82        82        267   

QuatRx Pharmaceuticals Company (9)

  Specialty Pharmaceuticals   Senior Secured   March 2014   Interest rate FIXED + 8.00%   $ 556        556        920   

QuatRx Pharmaceuticals Company (9)

  Specialty Pharmaceuticals   Senior Secured   March 2014   Interest rate FIXED + 8.00%   $ 1,250        1,250        2,071   
           

 

 

   

 

 

 

Total QuatRx Pharmaceuticals Company

              1,888        3,258   
           

 

 

   

 

 

 

Subtotal: Under 1 Year Maturity

          1,888        3,258   
           

 

 

   

 

 

 

1-5 Years Maturity

             

Rockwell Medical, Inc.

  Specialty Pharmaceuticals   Senior Secured   December 2016   Interest rate PRIME + 9.25% or Floor rate of 12.50%   $ 20,000        19,919        19,919   
           

 

 

   

 

 

 

Subtotal: 1-5 Years Maturity

          19,919        19,919   
           

 

 

   

 

 

 

Subtotal: Specialty Pharmaceuticals (3.60%)*

          21,807        23,177   
           

 

 

   

 

 

 

Surgical Devices

             

1-5 Years Maturity

             

Transmedics, Inc. (11)

  Surgical Devices   Senior Secured   November 2015   Interest rate FIXED + 12.95%   $ 7,250        7,174        7,174   
           

 

 

   

 

 

 

Subtotal: 1-5 Years Maturity

          7,174        7,174   
           

 

 

   

 

 

 

Subtotal: Surgical Devices (1.12%)*

  

    7,174        7,174   
           

 

 

   

 

 

 

Total Debt (139.03%)*

              910,412        894,493   
           

 

 

   

 

 

 

 

See notes to consolidated financial statements.

 

16


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

September 30, 2013

(unaudited)

(dollars in thousands)

 

Portfolio Company

 

Sub-Industry

 

Type of Investment

 

Series

   Shares      Cost      Value  

Equity

              

Biotechnology Tools

              

NuGEN Technologies, Inc.

  Biotechnology Tools   Equity   Preferred Series C      189,394       $ 500       $ 691   
           

 

 

    

 

 

 

Subtotal: Biotechnology Tools (0.11%)*

          500         691   
           

 

 

    

 

 

 

Communications & Networking

              

GlowPoint, Inc. (3)

  Communications & Networking   Equity   Common Stock      114,192         102         153   

Peerless Network, Inc.

  Communications & Networking   Equity   Preferred Series A      1,000,000         1,000         3,046   

Stoke, Inc.

  Communications & Networking   Equity   Preferred Series E      152,905         500         685   
           

 

 

    

 

 

 

Subtotal: Communications & Networking (0.60%)*

          1,602         3,884   
           

 

 

    

 

 

 

Consumer & Business Products

              

Caivis Acquistion Corporation

  Consumer & Business Products   Equity   Common Stock      295,861         819         598   

IPA Holdings, LLC

  Consumer & Business Products   Equity   LLC Interest      500,000         500         564   

Market Force Information, Inc.

  Consumer & Business Products   Equity   Preferred Series B      187,970         500         403   
           

 

 

    

 

 

 

Subtotal: Consumer & Business Products (0.24%)*

          1,819         1,565   
           

 

 

    

 

 

 

Drug Delivery

              

AcelRx Pharmaceuticals, Inc. (3)

  Drug Delivery   Equity   Common Stock      89,243         178         858   

Merrion Pharm (3)(5)(10)

  Drug Delivery   Equity   Common Stock      20,000         9         —     

NuPathe, Inc. (3)

  Drug Delivery   Equity   Common Stock      50,000         146         120   

Transcept Pharmaceuticals, Inc. (3)

  Drug Delivery   Equity   Common Stock      41,570         500         132   
           

 

 

    

 

 

 

Subtotal: Drug Delivery (0.17%)*

          833         1,110   
           

 

 

    

 

 

 

Drug Discovery & Development

              

Acceleron Pharma, Inc. (3)

  Drug Discovery & Development   Equity   Common Stock      235,872         1471         4260   

Aveo Pharmaceuticals, Inc. (3)

  Drug Discovery & Development   Equity   Common Stock      167,864         842         346   

Dicerna Pharmaceuticals, Inc.

  Drug Discovery & Development   Equity   Preferred Series B      20,107         503         202   

Dicerna Pharmaceuticals, Inc.

  Drug Discovery & Development   Equity   Preferred Series C      142,858         1,000         991   
        

 

 

    

 

 

    

 

 

 

Total Dicerna Pharmaceuticals, Inc.

           162,965         1,503         1,193   

Inotek Pharmaceuticals Corporation

  Drug Discovery & Development   Equity   Common Stock      15,334         1,500         —     

Merrimack Pharmaceuticals, Inc. (3)

  Drug Discovery & Development   Equity   Common Stock      546,448         2,000         2,071   

Paratek Pharmaceuticals, Inc.

  Drug Discovery & Development   Equity   Common Stock      85,450         5         —     

Paratek Pharmaceuticals, Inc.

  Drug Discovery & Development   Equity   Preferred Series H      244,158         1000         —     
        

 

 

    

 

 

    

 

 

 

Total Paratek Pharmaceuticals, Inc.

           329,608         1,005         —     
           

 

 

    

 

 

 

Subtotal: Drug Discovery & Development (1.22%)*

          8,321         7,870   
           

 

 

    

 

 

 

 

See notes to consolidated financial statements.

 

17


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

September 30, 2013

(unaudited)

(dollars in thousands)

 

Portfolio Company

 

Sub-Industry

 

Type of Investment

 

Series

  Shares      Cost     Value  

Electronics & Computer Hardware

            

Virident Systems, Inc.

  Electronics & Computer Hardware   Equity   Preferred Series D     6,546,217       $ 5,000      $ 12,235   
          

 

 

   

 

 

 

Subtotal: Electronics & Computer Hardware (1.90%)*

         5,000        12,235   
          

 

 

   

 

 

 

Information Services

            

Buzznet, Inc.

  Information Services   Equity   Preferred Series C     263,158         250        —     

Good Technologies, Inc. (pka Visto Corporation)

  Information Services   Equity   Common Stock     500,000         603        —     
          

 

 

   

 

 

 

Subtotal: Information Services (0.00%)*

         853        —     
          

 

 

   

 

 

 

Internet Consumer & Business Services

            

Philotic, Inc.

  Internet Consumer & Business Services   Equity   Common Stock     8,121         93        —     

Progress Financial

  Internet Consumer & Business Services   Equity   Preferred Series G     218,351         250        250   

Trulia, Inc. (3)

  Internet Consumer & Business Services   Equity   Common Stock     29,340         141        1,697   
          

 

 

   

 

 

 

Subtotal: Internet Consumer & Business Services (0.30%)*

         484        1,947   
          

 

 

   

 

 

 

Media/Content/Info

            

Everyday Health, Inc. (pka Waterfront Media, Inc.)

  Media/Content/Info   Equity   Preferred Series D     145,590         1,000        544   
          

 

 

   

 

 

 

Subtotal: Media/Content/Info (0.08%)*

         1,000        544   
          

 

 

   

 

 

 

Medical Devices & Equipment

            

Gelesis, Inc. (6)

  Medical Devices & Equipment   Equity   LLC Interest     2,024,092         925        513   

Lanx, Inc.

  Medical Devices & Equipment   Equity   Preferred Series C     1,203,369         1,000        2,000   

Medrobotics Corporation

  Medical Devices & Equipment   Equity   Preferred Series E     136,798         250        270   

Novasys Medical, Inc.

  Medical Devices & Equipment   Equity   Preferred Series D-1     4,118,444         1,000        —     

Optiscan Biomedical, Corp. (6)

  Medical Devices & Equipment   Equity   Preferred Series B     6,185,567         3,000        390   

Optiscan Biomedical, Corp. (6)

  Medical Devices & Equipment   Equity   Preferred Series C     1,927,309         655        132   

Optiscan Biomedical, Corp. (6)

  Medical Devices & Equipment   Equity   Preferred Series D     20,251,220         1932        1859   
       

 

 

    

 

 

   

 

 

 

Total Optiscan Biomedical, Corp.

          28,364,096         5,587        2,381   
          

 

 

   

 

 

 

Subtotal: Medical Devices & Equipment (0.80%)*

         8,762        5,164   
          

 

 

   

 

 

 

Software

            

Atrenta, Inc.

  Software   Equity   Preferred Series C     1,196,845         986        1,780   

Atrenta, Inc.

  Software   Equity   Preferred Series D     635,513         508        1126   
       

 

 

    

 

 

   

 

 

 

Total Atrenta, Inc.

          1,832,358         1,494        2,906   

Box, Inc.

  Software   Equity   Preferred Series C     390,625         500        5,352   

Box, Inc.

  Software   Equity   Preferred Series D     158,133         500        2,166   

Box, Inc.

  Software   Equity   Preferred Series D-1     124,511         1,000        1,706   

Box, Inc.

  Software   Equity   Preferred Series D-2     220,751         2,001        3,024   

Box, Inc.

  Software   Equity   Preferred Series E     38,183         500        523   
       

 

 

    

 

 

   

 

 

 

Total Box, Inc.

          932,203         4,501        12,771   

CapLinked, Inc.

  Software   Equity   Preferred Series A-3     53,614         50        71   

ForeScout Technologies, Inc.

  Software   Equity   Preferred Series D     319,099         398        1,401   

HighRoads, Inc.

  Software   Equity   Preferred Series B     190,170         307        302   
          

 

 

   

 

 

 

Subtotal: Software (2.71%)*

         6,750        17,451   
          

 

 

   

 

 

 

Specialty Pharmaceuticals

            

QuatRx Pharmaceuticals Company

  Specialty Pharmaceuticals   Equity   Preferred Series E     166,419         750        —     
          

 

 

   

 

 

 

Subtotal: Specialty Pharmaceuticals (0.00%)*

         750        —     
          

 

 

   

 

 

 

 

See notes to consolidated financial statements.

 

18


Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

September 30, 2013

(unaudited)

(dollars in thousands)

 

Portfolio Company

 

Sub-Industry

 

Type of Investment

 

Series

   Shares     Cost     Value  

Surgical Devices

            

Gynesonics, Inc.

  Surgical Devices   Equity   Preferred Series B      219,298      $ 250      $ 60   

Gynesonics, Inc.

  Surgical Devices   Equity   Preferred Series C      656,538        282        109   

Gynesonics, Inc.

  Surgical Devices   Equity   Preferred Series D      1,621,553        580        675   
        

 

 

   

 

 

   

 

 

 

Total Gynesonics, Inc.

           2,497,389        1,112        844   

Transmedics, Inc.

  Surgical Devices   Equity   Preferred Series B      88,961        1,100        300   

Transmedics, Inc.

  Surgical Devices   Equity   Preferred Series C      119,999        300        219   

Transmedics, Inc.

  Surgical Devices   Equity   Preferred Series D      260,000        650        875   
        

 

 

   

 

 

   

 

 

 

Total Transmedics, Inc.

           468,960        2,050        1,394   
          

 

 

   

 

 

 

Subtotal: Surgical Devices (0.35%)*

         3,162        2,238   
          

 

 

   

 

 

 
          

 

 

   

 

 

 

Subtotal: Equity (8.50%)*

         39,836        54,699   
          

 

 

   

 

 

 

Warrant

            

Biotechnology Tools

            

Cleveland BioLabs, Inc (3)

  Biotechnology Tools   Warrant   Common Stock      156,250        105        105   

Labcyte, Inc.

  Biotechnology Tools   Warrant   Preferred Series C      1,127,624        323        75   

NuGEN Technologies, Inc.

  Biotechnology Tools   Warrant   Preferred Series B      204,545        45        249   

NuGEN Technologies, Inc.