UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For The Quarterly Period Ended June 30, 2021
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 814-00702
HERCULES CAPITAL, INC.
(Exact Name of Registrant as Specified in its Charter)
Maryland |
|
74-3113410 |
(State or Jurisdiction of Incorporation or Organization) |
|
(IRS Employer Identification Number) |
400 Hamilton Ave., Suite 310 Palo Alto, California (Address of Principal Executive Offices) |
|
94301 (Zip Code) |
|
(650) 289-3060
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Common Shares, par value $0.001 per share |
HTGC |
New York Stock Exchange |
5.25% Notes due 2025 |
HCXZ |
New York Stock Exchange |
6.25% Notes due 2033 |
HCXY |
New York Stock Exchange |
Indicate by check mark whether the Registrant (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 ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☐ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
|
☒ |
|
Accelerated filer |
|
☐ |
Non-accelerated filer |
|
☐ |
|
Smaller reporting company |
|
☐ |
Emerging growth company |
|
☐ |
|
|
|
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with a new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. |
|
☐ |
||||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
On July 22, 2021, there were 115,840,092 shares outstanding of the Registrant’s common stock, $0.001 par value.
HERCULES CAPITAL, INC.
FORM 10-Q TABLE OF CONTENTS
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3 |
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Item 1. |
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3 |
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3 |
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5 |
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6 |
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Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020 (unaudited) |
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7 |
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Consolidated Schedule of Investments as of June 30, 2021 (unaudited) |
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8 |
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Consolidated Schedule of Investments as of December 31, 2020 |
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18 |
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29 |
Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|
64 |
Item 3. |
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82 |
Item 4. |
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83 |
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84 |
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Item 1. |
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84 |
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Item 1A. |
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84 |
Item 2. |
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85 |
Item 3. |
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85 |
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Item 4. |
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85 |
Item 5. |
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85 |
Item 6. |
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86 |
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89 |
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PART I: FINANCIAL INFORMATION
In this Quarterly Report, the “Company,” “Hercules,” “we,” “us” and “our” refer to Hercules Capital, Inc. and its wholly owned subsidiaries and its affiliated securitization trusts, unless the context otherwise requires.
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
HERCULES CAPITAL, INC.
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(in thousands, except per share data)
|
|
June 30, 2021 |
|
|
December 31, 2020 |
|
||
|
|
(unaudited) |
|
|
|
|
||
Assets |
|
|
|
|
|
|
||
Investments, at fair value: |
|
|
|
|
|
|
||
Non-control/Non-affiliate investments (cost of $2,307,766 and $2,175,651, respectively) |
|
$ |
2,444,849 |
|
|
$ |
2,288,338 |
|
Control investments (cost of $77,901 and $65,257, respectively) |
|
|
66,491 |
|
|
|
57,400 |
|
Affiliate investments (cost of $13,307 and $74,450, respectively) |
|
|
9,750 |
|
|
|
8,340 |
|
Total investments, at fair value (cost of $2,398,974 and $2,315,358, respectively) |
|
|
2,521,090 |
|
|
|
2,354,078 |
|
Cash and cash equivalents |
|
|
18,447 |
|
|
|
198,282 |
|
Restricted cash |
|
|
5,766 |
|
|
|
39,340 |
|
Interest receivable |
|
|
19,063 |
|
|
|
19,077 |
|
Right of use asset |
|
|
8,039 |
|
|
|
9,278 |
|
Other assets |
|
|
6,167 |
|
|
|
3,942 |
|
Total assets |
|
$ |
2,578,572 |
|
|
$ |
2,623,997 |
|
|
|
|
|
|
|
|
||
Liabilities |
|
|
|
|
|
|
||
Debt (net of debt issuance costs - Note 5) |
|
$ |
1,177,515 |
|
|
$ |
1,286,638 |
|
Accounts payable and accrued liabilities |
|
|
36,886 |
|
|
|
36,343 |
|
Operating lease liability |
|
|
7,813 |
|
|
|
9,312 |
|
Total liabilities |
|
$ |
1,222,214 |
|
|
$ |
1,332,293 |
|
|
|
|
|
|
|
|
||
Net assets consist of: |
|
|
|
|
|
|
||
Common stock, par value |
|
|
116 |
|
|
|
115 |
|
Capital in excess of par value |
|
|
1,163,910 |
|
|
|
1,158,198 |
|
Total distributable earnings |
|
|
192,332 |
|
|
|
133,391 |
|
Total net assets |
|
$ |
1,356,358 |
|
|
$ |
1,291,704 |
|
Total liabilities and net assets |
|
$ |
2,578,572 |
|
|
$ |
2,623,997 |
|
|
|
|
|
|
|
|
||
Shares of common stock outstanding ($0.001 par value and 200,000,000 authorized) |
|
|
115,867 |
|
|
|
114,726 |
|
Net asset value per share |
|
$ |
11.71 |
|
|
$ |
11.26 |
|
See notes to consolidated financial statements
3
The following table presents the assets and liabilities of our consolidated securitization trusts for the 2027 Asset-Backed Notes and the 2028 Asset-Backed Notes (see “Note 5 – Debt”), which are variable interest entities, or VIEs. The assets of our securitization VIEs can only be used to settle obligations of our consolidated securitization VIEs, these liabilities are only the obligations of our consolidated securitization VIEs, 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.
|
|
June 30, 2021 |
|
|
December 31, 2020 |
|
||
(Dollars in thousands) |
|
(unaudited) |
|
|
|
|
||
Assets |
|
|
|
|
|
|
||
Restricted Cash |
|
$ |
5,766 |
|
|
$ |
39,340 |
|
2027 Asset-Backed Notes, investments in securities, at value (cost of $219,537 and $267,657, respectively) |
|
|
222,212 |
|
|
|
269,551 |
|
2028 Asset-Backed Notes, investments in securities, at value (cost of $321,429 and $355,236, respectively) |
|
|
325,135 |
|
|
|
356,097 |
|
Total assets |
|
$ |
553,113 |
|
|
$ |
664,988 |
|
|
|
|
|
|
|
|
||
Liabilities |
|
|
|
|
|
|
||
2027 Asset-Backed Notes, net (principal of $117,896 and $180,988, respectively) (1) |
|
$ |
116,571 |
|
|
$ |
178,812 |
|
2028 Asset-Backed Notes, net (principal of $196,485 and $250,000, respectively) (1) |
|
|
194,749 |
|
|
|
247,647 |
|
Total liabilities |
|
$ |
311,320 |
|
|
$ |
426,459 |
|
See notes to consolidated financial statements
4
HERCULES CAPITAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share data)
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
||||
Investment income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-control/Non-affiliate investments |
|
$ |
60,276 |
|
|
$ |
62,667 |
|
|
$ |
123,258 |
|
|
$ |
128,005 |
|
Control investments |
|
|
1,029 |
|
|
|
731 |
|
|
|
1,828 |
|
|
|
1,377 |
|
Affiliate investments |
|
|
1 |
|
|
|
157 |
|
|
|
2 |
|
|
|
377 |
|
Total interest income |
|
|
61,306 |
|
|
|
63,555 |
|
|
|
125,088 |
|
|
|
129,759 |
|
Fee income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commitment, facility and loan fee income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-control/Non-affiliate investments |
|
|
5,263 |
|
|
|
3,511 |
|
|
|
8,666 |
|
|
|
7,707 |
|
Control investments |
|
|
15 |
|
|
|
5 |
|
|
|
23 |
|
|
|
10 |
|
Total commitment, facility and loan fee income |
|
|
5,278 |
|
|
|
3,516 |
|
|
|
8,689 |
|
|
|
7,717 |
|
One-time fee income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-control/Non-affiliate investments |
|
|
2,975 |
|
|
|
897 |
|
|
|
4,541 |
|
|
|
4,111 |
|
Total one-time fee income |
|
|
2,975 |
|
|
|
897 |
|
|
|
4,541 |
|
|
|
4,111 |
|
Total fee income |
|
|
8,253 |
|
|
|
4,413 |
|
|
|
13,230 |
|
|
|
11,828 |
|
Total investment income |
|
|
69,559 |
|
|
|
67,968 |
|
|
|
138,318 |
|
|
|
141,587 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest |
|
|
14,490 |
|
|
|
15,076 |
|
|
|
29,240 |
|
|
|
29,608 |
|
Loan fees |
|
|
2,220 |
|
|
|
1,650 |
|
|
|
5,020 |
|
|
|
3,444 |
|
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Legal expenses |
|
|
526 |
|
|
|
991 |
|
|
|
954 |
|
|
|
1,890 |
|
Tax expenses |
|
|
1,746 |
|
|
|
899 |
|
|
|
3,184 |
|
|
|
2,034 |
|
Other expenses |
|
|
3,542 |
|
|
|
3,973 |
|
|
|
6,710 |
|
|
|
7,998 |
|
Total general and administrative |
|
|
5,814 |
|
|
|
5,863 |
|
|
|
10,848 |
|
|
|
11,922 |
|
Employee compensation |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Compensation and benefits |
|
|
8,349 |
|
|
|
7,180 |
|
|
|
18,153 |
|
|
|
15,394 |
|
Stock-based compensation |
|
|
2,926 |
|
|
|
2,515 |
|
|
|
5,670 |
|
|
|
4,955 |
|
Total employee compensation |
|
|
11,275 |
|
|
|
9,695 |
|
|
|
23,823 |
|
|
|
20,349 |
|
Total gross operating expenses |
|
|
33,799 |
|
|
|
32,284 |
|
|
|
68,931 |
|
|
|
65,323 |
|
Expenses allocated to the Adviser Subsidiary |
|
|
(1,204 |
) |
|
|
— |
|
|
|
(2,137 |
) |
|
|
— |
|
Total net operating expenses |
|
|
32,595 |
|
|
|
32,284 |
|
|
|
66,794 |
|
|
|
65,323 |
|
Net investment income |
|
|
36,964 |
|
|
|
35,684 |
|
|
|
71,524 |
|
|
|
76,264 |
|
Net realized gain (loss) and change in unrealized appreciation (depreciation) on investments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net realized gain (loss) on investments |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-control/Non-affiliate investments |
|
|
47,861 |
|
|
|
141 |
|
|
|
55,631 |
|
|
|
7,108 |
|
Affiliate investments |
|
|
(62,143 |
) |
|
|
— |
|
|
|
(62,143 |
) |
|
|
— |
|
Total net realized gain (loss) on investments |
|
|
(14,282 |
) |
|
|
141 |
|
|
|
(6,512 |
) |
|
|
7,108 |
|
Net change in unrealized appreciation (depreciation) on investments |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-control/Non-affiliate investments |
|
|
3,075 |
|
|
|
23,613 |
|
|
|
21,097 |
|
|
|
(34,816 |
) |
Control investments |
|
|
(5,255 |
) |
|
|
2,642 |
|
|
|
(3,553 |
) |
|
|
(5,209 |
) |
Affiliate investments |
|
|
62,229 |
|
|
|
(315 |
) |
|
|
64,338 |
|
|
|
(10,305 |
) |
Total net change in unrealized appreciation (depreciation) on investments |
|
|
60,049 |
|
|
|
25,940 |
|
|
|
81,882 |
|
|
|
(50,330 |
) |
Total net realized gain (loss) and change in unrealized appreciation (depreciation) on investments: |
|
|
45,767 |
|
|
|
26,081 |
|
|
|
75,370 |
|
|
|
(43,222 |
) |
Net increase (decrease) in net assets resulting from operations |
|
$ |
82,731 |
|
|
$ |
61,765 |
|
|
$ |
146,894 |
|
|
$ |
33,042 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net investment income before investment gains and losses per common share: |
|
|||||||||||||||
Basic |
|
$ |
0.32 |
|
|
$ |
0.32 |
|
|
$ |
0.62 |
|
|
$ |
0.69 |
|
Change in net assets resulting from operations per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
0.71 |
|
|
$ |
0.55 |
|
|
$ |
1.27 |
|
|
$ |
0.29 |
|
Diluted |
|
$ |
0.65 |
|
|
$ |
0.55 |
|
|
$ |
1.21 |
|
|
$ |
0.29 |
|
Weighted average shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
114,654 |
|
|
|
111,558 |
|
|
|
114,480 |
|
|
|
110,256 |
|
Diluted |
|
|
129,572 |
|
|
|
111,729 |
|
|
|
122,188 |
|
|
|
110,504 |
|
Distributions paid per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
0.39 |
|
|
$ |
0.32 |
|
|
$ |
0.76 |
|
|
$ |
0.72 |
|
See notes to consolidated financial statements
5
HERCULES CAPITAL, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)
(dollars and shares in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
Capital in |
|
|
Distributable |
|
|
|
|
|||||
|
Common Stock |
|
|
excess |
|
|
Earnings |
|
|
Net |
|
||||||||
For the Three Months Ended June 30, 2021 |
Shares |
|
|
Par Value |
|
|
of par value |
|
|
(loss) |
|
|
Assets |
|
|||||
Balance as of March 31, 2021 |
|
115,768 |
|
|
$ |
116 |
|
|
$ |
1,160,519 |
|
|
$ |
154,759 |
|
|
$ |
1,315,394 |
|
Net increase (decrease) in net assets resulting from operations |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
82,731 |
|
|
|
82,731 |
|
Public offering, net of offering expenses |
|
— |
|
|
|
— |
|
|
|
(3 |
) |
|
|
— |
|
|
|
(3 |
) |
Issuance of common stock due to stock option exercises |
|
41 |
|
|
|
— |
|
|
|
888 |
|
|
|
— |
|
|
|
888 |
|
Retired shares from net issuance |
|
(12 |
) |
|
|
— |
|
|
|
(486 |
) |
|
|
— |
|
|
|
(486 |
) |
Issuance of common stock under restricted stock plan |
|
36 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Retired shares for restricted stock vesting |
|
(33 |
) |
|
|
— |
|
|
|
(725 |
) |
|
|
— |
|
|
|
(725 |
) |
Distributions reinvested in common stock |
|
67 |
|
|
|
— |
|
|
|
1,070 |
|
|
|
— |
|
|
|
1,070 |
|
Distributions |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(45,158 |
) |
|
|
(45,158 |
) |
Stock-based compensation (1) |
|
— |
|
|
|
— |
|
|
|
2,647 |
|
|
|
— |
|
|
|
2,647 |
|
Balance as of June 30, 2021 |
|
115,867 |
|
|
$ |
116 |
|
|
$ |
1,163,910 |
|
|
$ |
192,332 |
|
|
$ |
1,356,358 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
For the Six Months Ended June 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance as of December 31, 2020 |
|
114,726 |
|
|
$ |
115 |
|
|
$ |
1,158,198 |
|
|
$ |
133,391 |
|
|
$ |
1,291,704 |
|
Net increase (decrease) in net assets resulting from operations |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
146,894 |
|
|
|
146,894 |
|
Public offering, net of offering expenses |
|
— |
|
|
|
— |
|
|
|
(198 |
) |
|
|
— |
|
|
|
(198 |
) |
Issuance of common stock due to stock option exercises |
|
263 |
|
|
|
— |
|
|
|
3,633 |
|
|
|
— |
|
|
|
3,633 |
|
Retired shares from net issuance |
|
(62 |
) |
|
|
— |
|
|
|
(1,089 |
) |
|
|
— |
|
|
|
(1,089 |
) |
Issuance of common stock under restricted stock plan |
|
960 |
|
|
|
1 |
|
|
|
(1 |
) |
|
|
— |
|
|
|
— |
|
Retired shares for restricted stock vesting |
|
(154 |
) |
|
|
— |
|
|
|
(3,906 |
) |
|
|
— |
|
|
|
(3,906 |
) |
Distributions reinvested in common stock |
|
134 |
|
|
|
— |
|
|
|
2,110 |
|
|
|
— |
|
|
|
2,110 |
|
Distributions |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(87,953 |
) |
|
|
(87,953 |
) |
Stock-based compensation (1) |
|
— |
|
|
|
— |
|
|
|
5,163 |
|
|
|
— |
|
|
|
5,163 |
|
Balance as of June 30, 2021 |
|
115,867 |
|
|
$ |
116 |
|
|
$ |
1,163,910 |
|
|
$ |
192,332 |
|
|
$ |
1,356,358 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
Capital in |
|
|
Distributable |
|
|
|
|
|||||
|
|
Common Stock |
|
|
excess |
|
|
Earnings |
|
|
Net |
|
||||||||
For the Three Months Ended June 30, 2020 |
|
Shares |
|
|
Par Value |
|
|
of par value |
|
|
(loss) |
|
|
Assets |
|
|||||
Balance as of March 31, 2020 |
|
|
110,601 |
|
|
$ |
111 |
|
|
$ |
1,182,080 |
|
|
$ |
(85,111 |
) |
|
$ |
1,097,080 |
|
Net increase (decrease) in net assets resulting from operations |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
61,765 |
|
|
|
61,765 |
|
Public offering, net of offering expenses |
|
|
3,525 |
|
|
|
4 |
|
|
|
38,696 |
|
|
|
— |
|
|
|
38,700 |
|
Issuance of common stock under restricted stock plan |
|
|
52 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Retired shares for restricted stock vesting |
|
|
(10 |
) |
|
|
— |
|
|
|
(282 |
) |
|
|
— |
|
|
|
(282 |
) |
Distributions reinvested in common stock |
|
|
62 |
|
|
|
— |
|
|
|
643 |
|
|
|
— |
|
|
|
643 |
|
Distributions |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(36,002 |
) |
|
|
(36,002 |
) |
Stock-based compensation (1) |
|
|
— |
|
|
|
— |
|
|
|
2,126 |
|
|
|
— |
|
|
|
2,126 |
|
Balance as of June 30, 2020 |
|
|
114,230 |
|
|
$ |
115 |
|
|
$ |
1,223,263 |
|
|
$ |
(59,348 |
) |
|
$ |
1,164,030 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
For the Six Months Ended June 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance as of December 31, 2019 |
|
|
107,364 |
|
|
$ |
108 |
|
|
$ |
1,145,106 |
|
|
$ |
(12,165 |
) |
|
$ |
1,133,049 |
|
Net increase (decrease) in net assets resulting from operations |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
33,042 |
|
|
|
33,042 |
|
Public offering, net of offering expenses |
|
|
5,966 |
|
|
|
6 |
|
|
|
73,656 |
|
|
|
— |
|
|
|
73,662 |
|
Issuance of common stock due to stock option exercises |
|
|
29 |
|
|
|
— |
|
|
|
362 |
|
|
|
— |
|
|
|
362 |
|
Retired shares from net issuance |
|
|
(24 |
) |
|
|
— |
|
|
|
(376 |
) |
|
|
— |
|
|
|
(376 |
) |
Issuance of common stock under restricted stock plan |
|
|
801 |
|
|
|
1 |
|
|
|
(1 |
) |
|
|
— |
|
|
|
— |
|
Retired shares for restricted stock vesting |
|
|
(27 |
) |
|
|
— |
|
|
|
(1,162 |
) |
|
|
— |
|
|
|
(1,162 |
) |
Distributions reinvested in common stock |
|
|
121 |
|
|
|
— |
|
|
|
1,470 |
|
|
|
— |
|
|
|
1,470 |
|
Distributions |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(80,225 |
) |
|
|
(80,225 |
) |
Stock-based compensation (1) |
|
|
— |
|
|
|
— |
|
|
|
4,208 |
|
|
|
— |
|
|
|
4,208 |
|
Balance as of June 30, 2020 |
|
|
114,230 |
|
|
$ |
115 |
|
|
$ |
1,223,263 |
|
|
$ |
(59,348 |
) |
|
$ |
1,164,030 |
|
See notes to consolidated financial statements
6
HERCULES CAPITAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(dollars in thousands)
|
For the Six Months Ended June 30, |
|
|||||
|
2021 |
|
|
2020 |
|
||
Cash flows used in operating activities: |
|
|
|
|
|
||
Net increase in net assets resulting from operations |
$ |
146,894 |
|
|
$ |
33,042 |
|
Adjustments to reconcile net increase in net assets resulting from |
|
|
|
|
|
||
Purchases of investments |
|
(629,146 |
) |
|
|
(365,890 |
) |
Fundings assigned to External Funds |
|
75,286 |
|
|
|
— |
|
Principal and fee payments received on investments |
|
394,801 |
|
|
|
269,234 |
|
Proceeds from the sale of investments |
|
70,596 |
|
|
|
19,802 |
|
Net unrealized (appreciation) depreciation on investments |
|
(81,882 |
) |
|
|
50,330 |
|
Net realized loss (gain) on investments |
|
6,512 |
|
|
|
(7,108 |
) |
Accretion of paid-in-kind principal |
|
(4,990 |
) |
|
|
(4,230 |
) |
Accretion of loan discounts |
|
(1,789 |
) |
|
|
(2,345 |
) |
Accretion of loan discount on convertible notes |
|
336 |
|
|
|
336 |
|
Accretion of loan exit fees |
|
(11,372 |
) |
|
|
(12,692 |
) |
Change in deferred loan origination revenue |
|
14,846 |
|
|
|
3,664 |
|
Unearned fees related to unfunded commitments |
|
(2,503 |
) |
|
|
(688 |
) |
Amortization of debt fees and issuance costs |
|
3,840 |
|
|
|
2,489 |
|
Depreciation |
|
187 |
|
|
|
222 |
|
Stock-based compensation and amortization of restricted stock grants (1) |
|
5,163 |
|
|
|
4,208 |
|
Change in operating assets and liabilities: |
|
|
|
|
|
||
Interest receivable |
|
14 |
|
|
|
749 |
|
Other assets |
|
1,978 |
|
|
|
(1,387 |
) |
Accounts payable |
|
— |
|
|
|
(16 |
) |
Accrued liabilities |
|
(956 |
) |
|
|
(2,488 |
) |
Net cash used in operating activities |
|
(12,185 |
) |
|
|
(12,768 |
) |
|
|
|
|
|
|
||
Cash flows used in investing activities: |
|
|
|
|
|
||
Purchases of capital equipment |
|
(12 |
) |
|
|
(67 |
) |
Net cash used in investing activities |
|
(12 |
) |
|
|
(67 |
) |
|
|
|
|
|
|
||
Cash flows used in financing activities: |
|
|
|
|
|
||
Issuance of common stock |
|
— |
|
|
|
73,856 |
|
Offering expenses |
|
(198 |
) |
|
|
(194 |
) |
Retirement of employee shares |
|
(1,362 |
) |
|
|
(1,178 |
) |
Distributions paid |
|
(85,843 |
) |
|
|
(78,755 |
) |
Issuance of debt |
|
590,495 |
|
|
|
445,288 |
|
Repayments of debt |
|
(700,658 |
) |
|
|
(467,957 |
|