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Senior Secured, Maturity Date March 2025, Prime + 4.70%, Floor rate 7.95%, PIK Interest 1.50%, 4.50% Exit Fee2022-12-310001280784htgc:SeptemberTwoThousandTwentySixNotesMember2023-03-310001280784Debt Investments Software and Babel Street, Senior Secured, Maturity Date December 2027, 3-month SOFR + 7.89%, Floor rate 8.89%2023-03-310001280784htgc:MeasurementInputPremiumDiscountMemberhtgc:DebtInvestmentsMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Memberhtgc:ValuationTechniqueMarketComparableCompaniesMemberhtgc:TechnologyMember2022-12-310001280784us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-03-310001280784Debt Investments Drug Discovery & Development and ATAI Life Sciences N.V. Senior Secured, Maturity Date August 2026, Prime + 4.55%, Floor rate 8.55%, 6.95% Exit Fee2022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:CoronadoAestheticsLLCMemberus-gaap:CommonStockMemberhtgc:MedicalDevicesAndEquipmentMemberhtgc:MajorityOwnedControlInvestmentsMember2023-03-310001280784htgc:ElectronicsComputerHardwareMember2022-12-310001280784Debt Investments Drug Discovery & Development and Axsome Therapeutics, Inc. Senior Secured, Maturity Date October 2026, Prime + 5.70%, Floor rate 8.95%, Cap rate 10.70%, 5.31% Exit Fee2022-12-310001280784Equity Investments Surgical Devices and Gynesonics, Inc., Equity, Acquisition Date 2/8/2013, Series Preferred Series D2023-03-310001280784Debt Investments Diversified Financial Services and Gibraltar Business Capital, LLC, Unsecured, Maturity Date September 2026, FIXED 14.50%2022-12-310001280784htgc:TwoThousandThirtyThreeNotesMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2022-12-310001280784Investment Funds & Vehicles Investments (0.26%)2023-03-310001280784Debt Investments Healthcare Services, Other and Better Therapeutics, Inc. Senior Secured, Maturity Date August 2025, Prime + 5.70%, Floor rate 8.95%, 5.95% Exit Fee2023-03-310001280784htgc:LeaseAndLicenseObligationsMember2023-03-310001280784htgc:HerculesAdviserLLCMemberus-gaap:UnsecuredDebtMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:MajorityOwnedControlInvestmentsMember2021-12-310001280784Debt Investments Diversified Financial Services and Gibraltar Business Capital, LLC, Unsecured, Maturity Date September 2026, FIXED 11.50%2022-12-310001280784htgc:MeasurementInputsProbabilityWeightingOfAlternativeOutcomesMemberhtgc:DebtInvestmentsMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMemberhtgc:TechnologyMember2023-03-310001280784Equity Investments Software and Docker, Inc., Equity, Acquisition Date 11/29/2018, Series Common Stock2022-12-310001280784Equity Investments Sustainable and Renewable Technology and Pivot Bio, Inc., Equity, Acquisition Date 6/28/2021, Series Preferred Series D2023-03-310001280784htgc:DiversifiedFinancialServicesMemberhtgc:HerculesAdviserLLCMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:MemberUnitsMemberhtgc:MajorityOwnedControlInvestmentsMember2022-12-310001280784htgc:DebtInvestmentsMemberhtgc:MacroFabIncorporationMember2022-12-310001280784Warrant Investments and Drug Discovery & Development and Evofem Biosciences, Inc., Warrant, Acquisition Date 6/11/2014, Common Stock2022-12-310001280784us-gaap:SalesRevenueNetMemberhtgc:UnsecuredMemberhtgc:CollateralTypeConcentrationRiskMember2022-01-012022-12-310001280784htgc:IndustrySubSectorConcentrationRiskMemberus-gaap:SalesRevenueNetMemberhtgc:MedicalDevicesAndEquipmentMember2023-01-012023-03-310001280784htgc:MeasurementInputPremiumDiscountMemberhtgc:DebtInvestmentsMemberhtgc:LowerMiddleMarketMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Memberhtgc:ValuationTechniqueMarketComparableCompaniesMember2023-03-310001280784htgc:JuneTwoThousandTwentyFiveNotesMember2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:TGTherapeuticsIncMember2022-12-310001280784htgc:DebtInvestmentsMemberhtgc:LowerMiddleMarketMemberus-gaap:FairValueInputsLevel3Memberhtgc:ValuationTechniqueMarketComparableCompaniesMemberhtgc:MeasurementInputHypotheticalMarketYieldMembersrt:WeightedAverageMember2023-03-310001280784Equity Investments Consumer & Business Services and Oportun, Equity, Acquisition Date 6/28/2013, Series Common Stock2023-03-310001280784htgc:SBADebenturesIssuedOnJuneTwentyFiveTwoThousandAndTwentyOneMember2022-12-310001280784Equity Investments Sustainable and Renewable Technology and Fulcrum Bioenergy, Inc., Equity, Acquisition Date 9/13/2012, Series Preferred Series C-12023-03-310001280784Equity Investments Software and HighRoads, Inc., Equity, Acquisition Date 1/18/2013, Series Common Stock2022-12-310001280784Equity Investments Drug Discovery & Development and HilleVax, Inc, Equity, Acquisition Date 5/3/2022, Series Common Stock2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:MobileSolutionsServicesMember2022-12-310001280784us-gaap:SalesRevenueNetMemberhtgc:InvestmentTypeConcentrationRiskMemberhtgc:InvestmentFundsAndVehiclesMember2022-01-012022-12-310001280784Warrant Investments and Medical Devices & Equipment and Flowonix Medical Incorporated, Warrant, Acquisition Date 9/21/2018, Preferred Series BB2022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:OtherControlInvestmentsMember2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:LoftwareIncMember2023-03-310001280784Warrant Investments and Biotechnology Tools and PathAI, Inc., Warrant, Acquisition Date 12/23/2022, Common Stock2022-12-310001280784Equity Investments Drug Discovery & Development and Dare Biosciences, Inc., Equity, Acquisition Date 1/8/2015, Series Common Stock2022-12-310001280784htgc:PharmaceuticalsMemberhtgc:DebtInvestmentsMembersrt:MinimumMemberhtgc:MeasurementInputCollateralRecoverabilityMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Member2023-03-310001280784Debt Investments Drug Discovery & Development and Cellarity, Inc. Senior Secured, Maturity Date June 2026, Prime + 5.70%, Floor rate 8.95%, 3.75% Exit Fee2023-03-310001280784Warrant Investments and Software and Cutover, Inc., Warrant, Acquisition Date 9/21/2022, Common Stock2022-12-310001280784htgc:DebtInvestmentsMemberhtgc:DronedeployIncorporationMember2023-03-310001280784htgc:PIKInterestMember2023-01-012023-03-310001280784htgc:SemiconductorsMember2023-03-310001280784Debt Investments Drug Discovery & Development and Eloxx Pharmaceuticals, Inc. Senior Secured, Maturity Date April 2025, Prime + 6.25%, Floor rate 9.50%, 6.55% Exit Fee2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:PreferredStockMemberhtgc:GibraltarBusinessCapitalLLCMemberhtgc:MajorityOwnedControlInvestmentsMember2022-01-012022-03-310001280784htgc:DiversifiedFinancialServicesMemberhtgc:HerculesAdviserLLCMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:MajorityOwnedControlInvestmentsMember2022-12-310001280784us-gaap:FairValueInputsLevel3Memberhtgc:SeniorSecuredDebtMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:CytracomHoldingsLLCMember2022-12-310001280784Warrant Investments and Software and Esme Learning Solutions, Inc., Warrant, Acquisition Date 1/27/2022, Common Stock2023-03-310001280784htgc:TwoThousandThirtyThreeNotesMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2023-03-310001280784htgc:MarchTwoThousandTwentySixANotesMember2023-01-012023-03-310001280784country:DE2023-03-310001280784htgc:SMBCFacilityMember2023-01-012023-03-310001280784Equity Investments Drug Discovery & Development (1.96%)2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:OmedaHoldingsLlcMember2022-12-310001280784us-gaap:CarryingReportedAmountFairValueDisclosureMemberhtgc:SBADebenturesMember2022-12-310001280784Debt Investments Electronics & Computer Hardware (1.34%)2022-12-310001280784Equity Investments Medical Devices & Equipment and Gelesis, Inc., Equity, Acquisition Date 11/30/2009, Series Common Stock2023-03-310001280784Warrant Investments and Biotechnology Tools and PathAI, Inc., Warrant, Acquisition Date 12/23/2022, Common Stock2023-03-310001280784htgc:SeptemberTwoThousandTwentySixNotesMemberhtgc:UnusedFacilityOtherFeesMember2022-01-012022-03-310001280784us-gaap:FairValueInputsLevel3Memberhtgc:SeniorSecuredDebtMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001280784htgc:SeniorSecuredDebtMember2023-03-310001280784Warrant Investments and Software and VideoAmp, Inc., Warrant, Acquisition Date 1/21/2022, Common Stock2022-12-310001280784htgc:PerformanceDeuMember2023-01-012023-03-310001280784Warrant Investments and Drug Discovery & Development and Provention Bio, Inc., Warrant, Acquisition Date 9/15/2022, Common Stock2023-03-310001280784htgc:March2026BNotesMember2023-03-310001280784htgc:HerculesAdviserLLCMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMember2023-01-012023-03-310001280784us-gaap:FairValueInputsLevel3Memberhtgc:FebruaryTwoThousandTwentyFiveNotesMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310001280784htgc:DiversifiedFinancialServicesMemberhtgc:HerculesAdviserLLCMemberus-gaap:UnsecuredDebtMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:MajorityOwnedControlInvestmentsMember2023-03-310001280784Debt Investments Information Services and Capella Space Corp. Senior Secured, Maturity Date November 2025, Prime + 5.00%, Floor rate 8.25%, PIK Interest 1.10%, 7.00% Exit Fee2023-03-310001280784us-gaap:WarrantMemberus-gaap:FairValueInputsLevel1Member2022-12-310001280784us-gaap:WarrantMemberhtgc:WarrantInvestmentMember2023-03-310001280784htgc:AdviserFundsMember2023-01-012023-03-310001280784Warrant Investments and Software and Cloudian, Inc., Warrant, Acquisition Date 11/6/2018, Common Stock2023-03-310001280784Investment Funds & Vehicles Investments and Software and Liberty Zim Co-Invest L.P., Investment Funds & Vehicles, Acquisition Date 7/21/20222023-03-310001280784us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMembercountry:GB2022-01-012022-12-310001280784htgc:PharmaceuticalsMemberhtgc:MeasurementInputPremiumDiscountMemberhtgc:DebtInvestmentsMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Memberhtgc:ValuationTechniqueMarketComparableCompaniesMember2023-03-310001280784Equity Investments (9.56%)2022-12-310001280784us-gaap:CommonStockMember2023-03-310001280784Equity Investments Drug Delivery and PDS Biotechnology Corporation, Equity, Acquisition Date 4/6/2015, Series Common Stock2022-12-310001280784us-gaap:EquitySecuritiesMemberus-gaap:MeasurementInputRevenueMultipleMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Memberhtgc:MarketComparableCompaniesMember2022-12-310001280784Debt Investments Healthcare Services, Other (13.98%)2022-12-310001280784htgc:DebtInvestmentsMemberus-gaap:FairValueInputsLevel3Memberhtgc:TechnologyMemberus-gaap:MarketApproachValuationTechniqueMember2022-12-310001280784Debt Investments Drug Discovery & Development and Codiak Biosciences, Inc. Senior Secured, Maturity Date October 2025, Prime + 5.00%, Floor rate 8.25%, 5.50% Exit Fee2022-12-310001280784Warrant Investments (2.19%)2022-12-310001280784Investment Funds & Vehicles Investments and Drug Discovery & Development and Forbion Growth Opportunities Fund II C.V., Investment Funds & Vehicles, Acquisition Date 6/23/20222022-12-310001280784htgc:UnusedFacilityOtherFeesMemberhtgc:TwoThousandTwentyTwoNotesMember2022-01-012022-03-310001280784us-gaap:EstimateOfFairValueFairValueDisclosureMemberhtgc:SBADebenturesMember2023-03-310001280784Debt Investments Information Services and Signal Media Limited, Senior Secured, Maturity Date June 2025, Prime + 5.50%, Floor rate 9.00%, Cap rate 12.00%, 3.45% Exit Fee2023-03-310001280784htgc:MUFGBankFacilityMember2022-12-310001280784us-gaap:WarrantMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:CommonStockMemberhtgc:OtherControlInvestmentsMemberhtgc:TecturaCorporationMember2022-12-310001280784Equity Investments Surgical Devices and Gynesonics, Inc., Equity, Acquisition Date 12/18/2018, Series Preferred Series F-12022-12-310001280784Debt Investments Software and Fortified Health Security, Senior Secured, Maturity Date December 2027, 6-month SOFR + 7.79%, Floor rate 8.54%2022-12-310001280784Equity Investments Surgical Devices, Gynesonics, Inc.2022-12-310001280784Debt Investments Drug Discovery & Development and Madrigal Pharmaceutical, Inc. Senior Secured, Maturity Date May 2026, Prime + 2.45%, Floor rate 8.25%, 5.35% Exit Fee2023-03-310001280784Equity Investments Consumer & Business Products and Grove Collaborative, Inc., Equity, Acquisition Date 4/30/2021, Series Common Stock2023-03-310001280784Debt Investments Consumer & Business Services and AppDirect, Inc. Senior Secured, Maturity Date April 2026, Prime + 5.50%, Floor rate 8.75%, 8.29% Exit Fee2022-12-310001280784htgc:February2025NotesMember2020-02-050001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:CommonStockMemberhtgc:GibraltarBusinessCapitalLLCMemberhtgc:MajorityOwnedControlInvestmentsMember2023-01-012023-03-310001280784Warrant Investments (2.22%)2023-03-310001280784Warrant Investments and Consumer & Business Products and The Neat Company, Warrant, Acquisition Date 8/13/2014, Common Stock2023-03-310001280784htgc:July2024NotesMember2023-03-310001280784Debt Investments Software and Cutover, Inc., Senior Secured, Maturity Date October 2025, Prime + 5.20%, Floor rate 9.95%, 4.95% Exit Fee2022-12-310001280784htgc:NotesMember2023-03-310001280784us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001280784htgc:DiversifiedFinancialServicesMemberhtgc:IndustrySubSectorConcentrationRiskMemberus-gaap:SalesRevenueNetMember2022-01-012022-12-310001280784Debt Investments Software and Copper CRM, Inc, Senior Secured, Maturity Date March 2025, Prime + 4.50%, Floor rate 8.25%, Cap rate 10.25%, PIK Interest 1.95%, 4.50% Exit Fee2023-03-310001280784htgc:DebtInvestmentsMemberus-gaap:FairValueInputsLevel3Memberhtgc:DebtMaturingWithinOneYearMember2023-03-310001280784Debt Investments Software and Eigen Technologies Ltd., Senior Secured, Maturity Date April 2025, Prime + 5.10%, Floor rate 8.35%, 2.95% Exit Fee2022-12-310001280784Warrant Investments and Electronics & Computer Hardware and Locus Robotics Corp., Warrant, Acquisition Date 6/21/2022, Common Stock2022-12-310001280784Equity Investments Healthcare Services, Other and 23andMe, Inc., Equity, Acquisition Date 3/11/2019, Series Common Stock2022-12-310001280784htgc:MUFGBankFacilityMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2022-12-310001280784Equity Investments Healthcare Services, Other and Carbon Health Technologies, Inc., Equity, Acquisition Date 3/30/2021, Series Preferred Series C2023-03-310001280784us-gaap:SalesRevenueNetMemberhtgc:CollateralTypeConcentrationRiskMemberhtgc:AllAssetsWithNegativePledgeOnIntellectualPropertyMemberhtgc:SeniorSecuredFirstLienMember2023-01-012023-03-310001280784Warrant Investments and Consumer & Business Services and Veem, Inc., Warrant, Acquisition Date 3/31/2022, Common Stock2023-03-310001280784Debt Investments Software and Constructor.io Corporation, Senior Secured, Maturity Date July 2027, 1-month SOFR + 8.44%, Floor rate 9.44%2022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:PreferredStockMemberhtgc:GibraltarBusinessCapitalLLCMemberhtgc:MajorityOwnedControlInvestmentsMember2022-03-310001280784us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-03-310001280784htgc:MeasurementInputPremiumDiscountMemberhtgc:DebtInvestmentsMemberhtgc:LowerMiddleMarketMemberus-gaap:FairValueInputsLevel3Memberhtgc:ValuationTechniqueMarketComparableCompaniesMembersrt:WeightedAverageMember2023-03-310001280784htgc:AppDirectIncorporationMemberhtgc:DebtInvestmentsMember2023-03-310001280784us-gaap:MeasurementInputDiscountForLackOfMarketabilityMemberus-gaap:EquitySecuritiesMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMemberhtgc:MarketComparableCompaniesMember2022-12-310001280784us-gaap:SalesRevenueNetMemberhtgc:CollateralTypeConcentrationRiskMemberhtgc:AllAssetsIncludingIntellectualPropertyMemberhtgc:SeniorSecuredFirstLienMember2023-01-012023-03-310001280784us-gaap:FairValueInputsLevel3Memberus-gaap:UnsecuredDebtMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310001280784htgc:DebtInvestmentMember2023-01-012023-03-310001280784Debt Investments Drug Discovery & Development and G1 Therapeutics, Inc. Senior Secured, Maturity Date November 2026, Prime + 5.90%, Floor rate 9.15%, 9.86% Exit Fee2022-12-310001280784htgc:SmbcLcFacilityMember2023-01-130001280784us-gaap:CommonStockMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001280784htgc:DiversifiedFinancialServicesMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:CommonStockMemberhtgc:GibraltarBusinessCapitalLLCMemberhtgc:MajorityOwnedControlInvestmentsMember2022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:CommonStockMemberhtgc:ConsumerAndBusinessServicesMemberhtgc:OtherControlInvestmentsMemberhtgc:TecturaCorporationMember2022-12-310001280784Warrant Investments and Consumer & Business Services and Snagajob.com, Inc., Warrant, Acquisition Date 6/30/2016, Preferred Series A2022-12-310001280784Debt Investments Drug Discovery & Development and TG Therapeutics, Inc. Senior Secured, Maturity Date January 2026, Prime + 1.20%, Floor rate 8.95%, PIK Interest 2.25%, 5.69% Exit Fee2023-03-310001280784us-gaap:WarrantMemberus-gaap:MeasurementInputDiscountForLackOfMarketabilityMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMemberhtgc:MarketComparableCompaniesMember2023-03-310001280784us-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310001280784Equity Investments Diversified Financial Services and Gibraltar Business Capital, LLC, Equity, Acquisition Date 3/1/2018, Series Common Stock2022-12-310001280784htgc:IndustrySubSectorConcentrationRiskMemberus-gaap:SalesRevenueNetMemberhtgc:InformationServicesMember2023-01-012023-03-310001280784htgc:HealthcareServicesOtherMember2023-03-310001280784us-gaap:SalesRevenueNetMemberhtgc:CollateralTypeConcentrationRiskMember2023-01-012023-03-310001280784htgc:OmedaHoldingsLlcMemberhtgc:DebtInvestmentsMember2023-03-310001280784us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMembercountry:DE2022-01-012022-12-310001280784Debt Investments Software and Tact.ai Technologies, Inc., Senior Secured, Maturity Date February 2024, Prime + 4.00%, Floor rate 8.75%, PIK Interest 2.00%, 5.50% Exit Fee2023-03-310001280784us-gaap:ValuationTechniqueDiscountedCashFlowMemberus-gaap:EquitySecuritiesMemberus-gaap:FairValueInputsLevel3Member2023-03-310001280784htgc:SeniorSecuredDebtMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001280784htgc:IndustrySubSectorConcentrationRiskMemberus-gaap:SalesRevenueNetMemberhtgc:CommunicationsAndNetworkingMember2022-01-012022-12-310001280784us-gaap:RestrictedStockMemberus-gaap:CommonStockMember2022-01-012022-03-310001280784us-gaap:WarrantMemberus-gaap:MeasurementInputDiscountForLackOfMarketabilityMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMember2022-12-310001280784Warrant Investments and Consumer & Business Services and Worldremit Group Limited, Warrant, Acquisition Date 8/27/2021, Preferred Series E2023-03-310001280784htgc:DividendDeclaredSixMember2022-08-162022-08-160001280784htgc:AdviserFundsMember2022-01-012022-03-310001280784Debt Investments Consumer & Business Services and Carwow LTD Senior Secured, Maturity Date December 2024, Prime + 4.70%, Floor rate 7.95%, PIK Interest 1.45%, 4.95% Exit Fee2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:UnsecuredDebtMemberhtgc:GibraltarBusinessCapitalLLCMemberhtgc:MajorityOwnedControlInvestmentsMember2022-03-310001280784htgc:DiversifiedFinancialServicesMember2023-03-310001280784htgc:DebtInvestmentsMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Memberhtgc:ValuationTechniqueMarketComparableCompaniesMemberhtgc:MeasurementInputHypotheticalMarketYieldMemberhtgc:TechnologyMember2023-03-310001280784htgc:DiversifiedFinancialServicesMemberhtgc:UnsecuredDebtOneMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:GibraltarBusinessCapitalLLCMemberhtgc:MajorityOwnedControlInvestmentsMember2023-01-012023-03-310001280784us-gaap:PreferredStockMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001280784Warrant Investments and Software (0.59%)2022-12-310001280784Equity Investments Sustainable and Renewable Technology and Pineapple Energy LLC, Equity, Acquisition Date 12/10/2020, Series Common Stock2022-12-310001280784us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMembercountry:US2023-01-012023-03-310001280784Warrant Investments and Communications & Networking and Aryaka Networks, Inc., Warrant, Acquisition Date 6/28/2022, Common Stock2022-12-310001280784htgc:PerformanceAwardsMember2022-01-012022-03-310001280784htgc:PineappleEnergyLLCMemberus-gaap-supplement:InvestmentAffiliatedIssuerNoncontrolledMemberhtgc:SeniorSecuredDebtMember2022-03-310001280784htgc:JuneTwoThousandTwentyFiveNotesMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-03-310001280784Warrant Investments and Consumer & Business Services and Worldremit Group Limited, Warrant, Acquisition Date 2/11/2021, Preferred Series D2022-12-310001280784htgc:IncludingCashAndCashEquivalentsMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001280784us-gaap:WarrantMemberus-gaap:MeasurementInputEbitdaMultipleMembersrt:MinimumMemberus-gaap:FairValueInputsLevel3Memberhtgc:MarketComparableCompaniesMember2022-12-310001280784Warrant Investments and Software and Poplicus, Inc., Warrant, Acquisition Date 5/28/2014, Common Stock2023-03-310001280784htgc:UnusedFacilityOtherFeesMemberhtgc:MarchTwoThousandTwentySixANotesMember2022-01-012022-03-310001280784htgc:DebtInvestmentsMemberhtgc:AtaiLifeSciencesNVMember2022-12-310001280784Equity Investments Software and ZeroFox, Inc., Equity, Acquisition Date 5/7/2020, Series Common Stock2023-03-310001280784Debt Investments Software and Kore.ai, Inc., Senior Secured, Maturity Date April 2027, Prime + 1.50%, Floor rate 9.25%, PIK Interest 2.20%, 2.25% Exit Fee2023-03-310001280784Warrant Investments and Software and Aria Systems, Inc., Warrant, Acquisition Date 5/22/2015, Preferred Series G2022-12-310001280784Warrant Investments and Software and Delphix Corp., Warrant, Acquisition Date 10/8/2019, Common Stock2022-12-310001280784Debt Investments Healthcare Services, Other and Better Therapeutics, Inc. Senior Secured, Maturity Date August 2025, Prime + 5.70%, Floor rate 8.95%, 5.95% Exit Fee2022-12-310001280784Debt Investments Drug Discovery & Development and Axsome Therapeutics, Inc. Senior Secured, Maturity Date January 2028 Prime + 2.20%, Floor rate 9.95%, Cap rate 10.70%, 5.93% Exit Fee2023-03-310001280784us-gaap:PreferredStockMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-01-012023-03-310001280784htgc:DebtInvestmentsMemberhtgc:FulfilSolutionsIncMember2023-03-310001280784htgc:DividendDeclaredFourMember2022-01-012022-12-310001280784htgc:IndustrySubSectorConcentrationRiskMemberus-gaap:SalesRevenueNetMemberhtgc:CommunicationsAndNetworkingMember2023-01-012023-03-310001280784Warrant Investments and Consumer & Business Services and Lendio, Inc., Warrant, Acquisition Date 3/29/2019, Preferred Series D2022-12-310001280784Warrant Investments and Software and Brain Corporation, Warrant, Acquisition Date 10/4/2021, Common Stock2022-12-310001280784Equity Investments (8.30%)2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:CarwowLtdMember2023-03-310001280784Equity Investments Consumer & Business Services and Tectura Corporation, Equity, Acquisition Date 6/6/2016, Series Preferred Series BB2023-03-310001280784us-gaap:MeasurementInputDiscountForLackOfMarketabilityMemberus-gaap:EquitySecuritiesMembersrt:MinimumMemberus-gaap:FairValueInputsLevel3Memberhtgc:MarketComparableCompaniesMember2023-03-310001280784us-gaap:RestrictedStockMember2022-01-012022-03-310001280784Debt Investments Manufacturing Technology (2.99%)2022-12-310001280784htgc:SustainableAndRenewableTechnologyMemberhtgc:DebtInvestmentsMemberus-gaap:FairValueInputsLevel3Memberhtgc:ValuationTechniqueMarketComparableCompaniesMemberhtgc:MeasurementInputHypotheticalMarketYieldMember2023-03-310001280784us-gaap:WarrantMemberus-gaap:MeasurementInputEbitdaMultipleMembersrt:MinimumMemberus-gaap:FairValueInputsLevel3Memberhtgc:MarketComparableCompaniesMember2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:ViridianTherapeuticsIncMember2023-03-310001280784us-gaap:IncomeApproachValuationTechniqueMemberhtgc:MeasurementInputsProbabilityWeightingOfAlternativeOutcomesMemberhtgc:DebtInvestmentsMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMemberhtgc:TechnologyMember2023-03-310001280784htgc:DividendDeclaredTwoMember2023-03-092023-03-090001280784us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001280784Equity Investments Software, Druva Holdings, Inc.2022-12-310001280784Debt Investments Drug Discovery & Development and BiomX, INC, Senior Secured, Maturity Date September 2025, Prime + 5.70%, Floor rate 8.95%, 6.55% Exit Fee2023-03-310001280784Warrant Investments and Drug Discovery & Development and Phathom Pharmaceuticals, Inc., Warrant, Acquisition Date 9/17/2021, Common Stock2023-03-310001280784htgc:UnusedFacilityOtherFeesMemberhtgc:MarchTwoThousandTwentySixANotesMember2023-01-012023-03-310001280784htgc:UnusedFacilityOtherFeesMember2022-01-012022-03-310001280784Equity Investments Software and Contentful Global, Inc., Equity, Acquisition Date 12/22/2020, Series Preferred Series C2022-12-310001280784nvestment Funds & Vehicles Investments and Software and Liberty Zim Co-Invest L.P., Investment Funds & Vehicles, Acquisition Date 7/21/20222022-12-310001280784htgc:DebtInvestmentsMemberhtgc:BabelStreetMember2023-03-310001280784Debt Investments Drug Discovery & Development and Aveo Pharmaceuticals, Inc. Senior Secured, Maturity Date September 2024, Prime + 6.40%, Floor rate 9.65%, Cap rate 15.00%, 6.95% Exit Fee2022-12-310001280784Equity Investments Diversified Financial Services and Hercules Adviser LLC, Equity, Acquisition Date 3/26/2021, Series Member Units2022-12-310001280784htgc:OneMonthLIBORMember2023-03-310001280784Warrant Investments and Electronics & Computer Hardware and Skydio, Inc., Warrant, Acquisition Date 11/08/2021, Common Stock2022-12-310001280784Equity Investments Consumer & Business Services and Total Tectura Corporation2023-03-310001280784htgc:MeasurementInputPremiumDiscountMemberhtgc:DebtInvestmentsMembersrt:MinimumMemberus-gaap:FairValueInputsLevel3Memberhtgc:ValuationTechniqueMarketComparableCompaniesMemberhtgc:TechnologyMember2023-03-310001280784us-gaap:UnsecuredDebtMember2022-12-310001280784Equity Investments Software and SingleStore, Inc., Equity, Acquisition Date 11/25/2020, Series Preferred Series E2023-03-310001280784htgc:JanuaryTwoThousandTwentySevenNotesMember2023-03-310001280784htgc:March2026BNotesMember2021-03-040001280784htgc:IndustrySubSectorConcentrationRiskMemberhtgc:DiversifiedFinancialServicesMemberus-gaap:SalesRevenueNetMember2023-01-012023-03-310001280784Debt Investments Consumer & Business Services and SeatGeek, Inc. Senior Secured, Maturity Date May 2026, Prime + 7.00%, Floor rate 10.50%, PIK Interest 0.50%2023-03-310001280784us-gaap:FairValueMeasurementsRecurringMember2023-03-310001280784htgc:SBADebenturesIssuedOnJulyTwentyEightTwoThousandAndTwentyOneMember2023-03-310001280784Debt Investments Software and ThreatConnect, Inc., Senior Secured, Maturity Date May 2026, 6-month LIBOR + 9.00%, Floor rate 10.00%2022-12-310001280784htgc:MeasurementInputsProbabilityWeightingOfAlternativeOutcomesMemberhtgc:DebtInvestmentsMembersrt:MaximumMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Memberhtgc:TechnologyMember2022-12-310001280784Warrant Investments and Drug Discovery & Development and Paratek Pharmaceuticals, Inc., Warrant, Acquisition Date 8/1/2018, Common Stock2022-12-310001280784htgc:SBADebenturesIssuedOnDecemberTwentyTwoThousandAndTwentyOneMember2023-01-012023-03-310001280784htgc:UnrealizedGainLossMember2023-01-012023-03-310001280784htgc:MeasurementInputsProbabilityWeightingOfAlternativeOutcomesMemberhtgc:DebtInvestmentsMembersrt:MinimumMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Memberhtgc:TechnologyMember2022-12-310001280784Equity Investments Drug Discovery & Development and uniQure B.V., Equity, Acquisition Date 1/31/2019, Series Common Stock2023-03-310001280784htgc:HerculesCapitalFourLPMember2022-12-310001280784Warrant Investments and Consumer & Business Services and Rhino Labs, Inc., Warrant, Acquisition Date 3/12/2021, Common Stock2022-12-310001280784htgc:IndustrySubSectorConcentrationRiskMemberus-gaap:SalesRevenueNetMemberhtgc:ElectronicsComputerHardwareMember2022-01-012022-12-310001280784Debt Investments Drug Discovery & Development and Century Therapeutics, Inc. Senior Secured, Maturity Date April 2024, Prime + 6.30%, Floor rate 9.55%, 3.95% Exit Fee2022-12-310001280784us-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberhtgc:SeptemberTwoThousandTwentySixNotesMember2022-12-310001280784htgc:CommunicationsAndNetworkingMember2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:EnmarkSystemsIncorporationMember2022-12-310001280784us-gaap:EquitySecuritiesMemberus-gaap:MeasurementInputRevenueMultipleMembersrt:MaximumMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Member2023-03-310001280784us-gaap-supplement:InvestmentUnaffiliatedIssuerMember2022-01-012022-03-310001280784htgc:June20253YearNotesMember2022-06-230001280784country:IE2023-03-310001280784Debt Investments Drug Discovery & Development and uniQure B.V. Senior Secured, Maturity Date December 2025, Prime + 4.70%, Floor rate 7.95%, 8.03% Exit Fee2023-03-310001280784htgc:SBADebenturesIssuedOnNovemberFifteenTwoThousandAndTwentyOneMember2022-12-310001280784Debt Investments Software and Khoros (p.k.a Lithium Technologies), Senior Secured, Maturity Date January 2024, 3-month SOFR + 8.00%, Floor rate 9.00%2023-03-310001280784Equity Investments Drug Discovery & Development and uniQure B.V., Equity, Acquisition Date 1/31/2019, Series Common Stock2022-12-310001280784Debt Investments Consumer & Business Services and RVShare, LLC, Senior Secured, Maturity Date December 2026, 3-month LIBOR + 5.50%, Floor rate 6.50%, PIK Interest 4.00%2023-03-310001280784Warrant Investments and Information Services and INMOBI Inc., Warrant, Acquisition Date 11/19/2014, Common Stock2022-12-310001280784Warrant Investments and Consumer & Business Services and Provi, Warrant, Acquisition Date 12/22/2022, Common Stock2022-12-310001280784htgc:FebruaryTwoThousandTwentyFiveNotesMember2023-03-310001280784Debt Investments Drug Discovery & Development and enGene, Inc. Senior Secured, Maturity Date July 2025, Prime + 5.00%, Floor rate 8.25%, 6.35% Exit Fee2023-03-310001280784Debt Investments Sustainable and Renewable Technology and Ampion, PBC, Senior Secured, Maturity Date May 2025, Prime + 4.70%, Floor rate 7.95%, PIK Interest 1.45%, 3.95% Exit Fee2022-12-310001280784Debt Investments Drug Discovery & Development and Akero Therapeutics, Inc. Senior Secured, Maturity Date January 2027, Prime + 3.65%, Floor rate 7.65%, 5.85% Exit Fee2023-03-310001280784Debt Investments Biotechnology Tools and PathAI, Inc., Senior Secured, Maturity Date January 2027, Prime + 2.15%, Floor rate 9.15%, 11.21% Exit Fee2023-03-310001280784Warrant Investments and Sustainable and Renewable Technology and Halio, Inc.2022-12-310001280784us-gaap:UnsecuredDebtMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-01-012022-03-310001280784us-gaap:WarrantMembersrt:MinimumMemberus-gaap:FairValueInputsLevel3Memberhtgc:MeasurementInputMarketEquityAdjustmentMemberhtgc:ValuationTechniqueMarketAdjustedOpmBacksolveMember2022-12-310001280784Warrant Investments and Software and Eigen Technologies Ltd., Warrant, Acquisition Date 4/13/2022, Common Stock2022-12-310001280784us-gaap:RestrictedStockMemberhtgc:CapitalInExcessOfParValueMember2022-01-012022-03-310001280784us-gaap:WarrantMemberus-gaap:SalesRevenueNetMemberhtgc:InvestmentTypeConcentrationRiskMemberhtgc:WarrantInvestmentMember2023-01-012023-03-310001280784us-gaap:FairValueInputsLevel2Memberus-gaap:CommonStockMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310001280784Warrant Investments and Software and Cloudian, Inc., Warrant, Acquisition Date 11/6/2018, Common Stock2022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:CommonStockMemberhtgc:GibraltarBusinessCapitalLLCMemberhtgc:MajorityOwnedControlInvestmentsMember2022-03-310001280784htgc:MarchTwoThousandTwentySixANotesMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310001280784us-gaap:EmployeeStockOptionMember2022-01-012022-03-310001280784us-gaap:EquitySecuritiesMemberus-gaap:MeasurementInputRevenueMultipleMembersrt:MinimumMemberus-gaap:FairValueInputsLevel3Memberhtgc:MarketComparableCompaniesMember2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerNoncontrolledMember2022-01-012022-03-310001280784us-gaap:WarrantMemberus-gaap:MeasurementInputEbitdaMultipleMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Memberhtgc:MarketComparableCompaniesMember2022-12-310001280784us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-01-012023-03-310001280784htgc:MUFGBankFacilityMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-03-310001280784Equity Investments Drug Delivery and BioQ Pharma Incorporated, Equity, Acquisition Date 12/8/2015, Series Preferred Series D2022-12-310001280784Warrant Investments and Drug Discovery & Development and X4 Pharmaceuticals, Inc., Warrant, Acquisition Date 3/28/2019, Common Stock2023-03-310001280784Warrant Investments and Manufacturing Technology and Xometry, Inc., Warrant, Acquisition Date 5/9/2018, Common Stock2022-12-310001280784Debt Investments Drug Discovery & Development and Redshift Bioanalytics, Inc. Senior Secured, Maturity Date January 2026, Prime + 4.25%, Floor rate 7.50%, 3.80% Exit Fee2022-12-310001280784htgc:CoronadoAestheticsLLCMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:PreferredStockMemberhtgc:MajorityOwnedControlInvestmentsMember2022-12-310001280784us-gaap:CreditConcentrationRiskMember2022-12-310001280784htgc:DebtInvestmentsMemberhtgc:GritstoneBioIncMember2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:ConsumerAndBusinessServicesMemberhtgc:OtherControlInvestmentsMemberhtgc:PreferredSeriesBBMemberhtgc:TecturaCorporationMember2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:SkydioIncorporationMember2023-03-310001280784Debt Investments Software and Agilence, Inc. Senior Secured, Maturity Date October 2026, 1-month BSBY + 9.00%, Floor rate 10.00%2022-12-310001280784Equity Investments Drug Discovery & Development and X4 Pharmaceuticals, Inc., Equity, Acquisition Date 11/26/2019, Series Common Stock2022-12-310001280784us-gaap:SalesRevenueNetMemberhtgc:UnsecuredMemberhtgc:CollateralTypeConcentrationRiskMember2023-01-012023-03-310001280784htgc:DebtInvestmentsMemberhtgc:DemandbaseIncorporationMember2023-03-310001280784us-gaap:CarryingReportedAmountFairValueDisclosureMemberhtgc:SeptemberTwoThousandTwentySixNotesMember2023-03-310001280784us-gaap:IncomeApproachValuationTechniqueMemberhtgc:MeasurementInputsProbabilityWeightingOfAlternativeOutcomesMemberhtgc:DebtInvestmentsMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Memberhtgc:TechnologyMember2023-03-310001280784Debt Investments Software and Simon Data, Inc., Senior Secured, Maturity Date March 2027, Prime + 1.00%, Floor rate 8.75%, PIK Interest 1.95%, 2.95% Exit Fee2023-03-310001280784htgc:SBADebenturesIssuedOnNovemberFifteenTwoThousandAndTwentyOneMember2023-01-012023-03-310001280784country:DK2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:RivieraPartnersLLCMember2022-12-310001280784us-gaap:PreferredStockMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001280784Warrant Investments and Sustainable and Renewable Technology and Ampion, PBC, Warrant, Acquisition Date 4/15/2022, Common Stock2022-12-310001280784Debt Investments Drug Discovery & Development and Bicycle Therapeutics PLC, Senior Secured, Maturity Date July 2025, Prime + 4.55%, Floor rate 8.05%, Cap rate 9.05%, 5.00% Exit Fee2022-12-310001280784htgc:PharmaceuticalsMemberhtgc:DebtInvestmentsMembersrt:MaximumMemberhtgc:MeasurementInputCollateralRecoverabilityMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Member2023-03-310001280784htgc:IncludingCashAndCashEquivalentsMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310001280784Investments after Cash and Cash Equivalents (209.82%)2023-03-310001280784htgc:OneMonthSofrRateMember2023-03-310001280784Equity Investments and Drug Discovery & Development and Dare Biosciences, Inc., Equity, Acquisition Date 1/8/2015, Series Common Stock2023-03-310001280784Debt Investments Software and Constructor Corporation, Senior Secured, Maturity Date July 2027, 1-month SOFR + 8.44%, Floor rate 9.44%2023-03-310001280784country:IL2023-03-310001280784Equity Investments Drug Delivery and AcelRx Pharmaceuticals, Inc., Equity, Acquisition Date 12/10/2018, Series Common Stock2023-03-310001280784Equity Investments Information Services and Yipit, LLC, Equity, Acquisition Date 12/30/2021, Series Preferred Series E2023-03-310001280784htgc:TwoThousandThirtyThreeNotesMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310001280784htgc:IndustrySubSectorConcentrationRiskMemberus-gaap:SalesRevenueNetMemberhtgc:SemiconductorsMember2023-01-012023-03-310001280784htgc:DepreciationMemberus-gaap:FairValueInputsLevel3Memberhtgc:WarrantInvestmentMember2023-01-012023-03-310001280784Warrant Investments and Consumer & Business Products (0.17%)2022-12-310001280784htgc:DebtInvestmentsMemberhtgc:CerosIncorporationMember2022-12-310001280784htgc:DiversifiedFinancialServicesMemberhtgc:UnsecuredDebtOneMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:GibraltarBusinessCapitalLLCMemberhtgc:MajorityOwnedControlInvestmentsMember2022-01-012022-12-310001280784Warrant Investments and Medical Devices & Equipment and Intuity Medical, Inc., Warrant, Acquisition Date 12/29/2017, Preferred Series B-12023-03-310001280784Debt Investments Consumer & Business Services and SeatGeek, Inc. Senior Secured, Maturity Date June 2023, Prime + 5.00%, Floor rate 10.50%, PIK Interest 0.50%2022-12-310001280784htgc:IndustrySubSectorConcentrationRiskMemberus-gaap:SalesRevenueNetMemberhtgc:InformationServicesMember2022-01-012022-12-310001280784Equity Investments Drug Discovery & Development and Tricida, Inc., Equity, Acquisition Date 2/28/2018, Series Common Stock2023-03-310001280784Warrant Investments and Manufacturing Technology (0.30%)2022-12-310001280784Cash & Cash Equivalents and GS Financial Square Government Fund, Cash & Cash Equivalents2023-03-310001280784htgc:MeasurementInputsProbabilityWeightingOfAlternativeOutcomesMemberhtgc:DebtInvestmentsMemberhtgc:LowerMiddleMarketMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMember2023-03-310001280784Debt Investments Healthcare Services, Other and Equality Health, LLC, Senior Secured, Maturity Date February 2026, Prime + 6.25%, Floor rate 9.50%, PIK Interest 1.55%2023-03-310001280784htgc:HealthcareServicesOtherMemberhtgc:IndustrySubSectorConcentrationRiskMemberus-gaap:SalesRevenueNetMember2022-01-012022-12-310001280784us-gaap:FairValueInputsLevel1Memberus-gaap:CommonStockMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310001280784us-gaap:FairValueInputsLevel1Memberus-gaap:CommonStockMember2022-12-310001280784Warrant Investments and Consumer & Business Services and Thumbtack, Inc., Warrant, Acquisition Date 5/1/2018, Common Stock2023-03-310001280784Debt Investments Drug Discovery & Development and Locus Biosciences, Inc. Senior Secured, Maturity Date July 2025, Prime + 6.10%, Floor rate 9.35%, 4.95% Exit Fee2022-12-310001280784Equity Investments Consumer & Business Services and Total OfferUp, Inc.2023-03-310001280784Equity Investments Drug Discovery & Development and HilleVax, Inc, Equity, Acquisition Date 5/3/2022, Series Common Stock2022-12-310001280784htgc:DividendDeclaredOneMember2022-01-012022-12-310001280784us-gaap:ValuationTechniqueDiscountedCashFlowMemberus-gaap:EquitySecuritiesMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMember2022-12-310001280784us-gaap:UnsecuredDebtMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001280784Equity Investments Drug Delivery and Aytu BioScience, Inc., Equity, Acquisition Date 3/28/2014, Series Common Stock2023-03-310001280784htgc:LeaseAndLicenseObligationsMember2022-12-310001280784us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310001280784Warrant Investments and Consumer & Business Services and Vida Health, Inc., Warrant, Acquisition Date 3/28/2022, Common Stock2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:SeniorSecuredDebtTwoMemberhtgc:ConsumerAndBusinessServicesMemberhtgc:OtherControlInvestmentsMemberhtgc:TecturaCorporationMember2022-12-310001280784us-gaap:CarryingReportedAmountFairValueDisclosureMemberhtgc:JuneTwoThousandTwentyFiveThreeYearNotesMember2023-03-310001280784htgc:SMBCFacilityMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310001280784Warrant Investments and Consumer & Business Services (0.19%)2022-12-310001280784Warrant Investments and Drug Discovery & Development and Valo Health, LLC, Warrant, Acquisition Date 6/15/2020, Common Units2023-03-310001280784htgc:DeferredFeesMember2022-01-012022-12-310001280784Debt Investments Software and Leapwork ApS., Senior Secured, Maturity Date February 2026, Prime + 0.25%, Floor rate 7.25%, PIK Interest 1.95%, 2.70% Exit Fee2023-03-310001280784us-gaap:WarrantMemberus-gaap:MeasurementInputRevenueMultipleMembersrt:MinimumMemberus-gaap:FairValueInputsLevel3Memberhtgc:MarketComparableCompaniesMember2023-03-310001280784Warrant Investments and Drug Discovery & Development and Fresh Tracks Therapeutics, Inc. (p.k.a. Brickell Biotech, Inc.), Warrant, Acquisition Date 2/18/2016, Common Stock2022-12-310001280784htgc:DebtInvestmentsMemberhtgc:CutoverIncMember2023-03-310001280784Warrant Investments and Consumer & Business Services and Snagajob.com, Inc., Warrant, Acquisition Date 6/30/2016, Preferred Series A2023-03-310001280784Investment Funds & Vehicles Investments and Drug Discovery & Development (0.25%)2022-12-310001280784htgc:CommonStockInvestmentMemberus-gaap:FairValueInputsLevel3Memberhtgc:AppreciationMember2022-01-012022-03-310001280784htgc:DebtInvestmentsMemberhtgc:LeapworkApsMember2023-03-310001280784htgc:HerculesAdviserLLCMemberus-gaap:UnsecuredDebtMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:MajorityOwnedControlInvestmentsMember2022-03-310001280784htgc:HerculesAdviserLLCMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMember2022-01-012022-03-310001280784Equity Investments Semiconductors (0.01%)2022-12-310001280784Equity Investments Consumer & Business Products and TechStyle, Inc., Equity, Acquisition Date 4/30/2010, Series Common Stock2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:CommonStockMemberhtgc:OtherControlInvestmentsMemberhtgc:TecturaCorporationMember2022-03-310001280784Debt Investments Drug Discovery & Development and Valo Health, LLC, Senior Secured, Maturity Date May 2024, Prime + 6.45%, Floor rate 9.70%, 3.85% Exit Fee2022-12-310001280784htgc:UnvestedRestrictedStockAwardsMember2023-01-012023-03-310001280784Equity Investments Drug Discovery & Development and Valo Health, LLC, Equity, Acquisition Date 10/31/2022, Series Preferred Series C2023-03-310001280784htgc:June20253YearNotesMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:MajorityOwnedControlInvestmentsMember2022-01-012022-03-310001280784Warrant Investments and Drug Delivery and Aerami Therapeutics Holdings, Inc., Warrant, Acquisition Date 9/30/2015, Common Stock2022-12-310001280784htgc:SMBCFacilityMembersrt:MaximumMember2023-01-012023-03-310001280784us-gaap:WarrantMemberus-gaap:MeasurementInputDiscountForLackOfMarketabilityMembersrt:MinimumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MarketApproachValuationTechniqueMember2023-03-310001280784htgc:February2025NotesMember2023-01-012023-03-310001280784htgc:DebtInvestmentsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:CostApproachValuationTechniqueMember2022-12-310001280784htgc:SixMonthSofrRateMember2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:YipitLLCMember2023-03-310001280784Equity Investments Diversified Financial Services and Gibraltar Business Capital, LLC, Equity, Acquisition Date 3/1/2018, Series Preferred Series A2023-03-310001280784htgc:CommonGrossProceedsMember2022-01-012022-03-310001280784Warrant Investments and Drug Delivery and Aerami Therapeutics Holdings, Inc., Warrant, Acquisition Date 9/30/2015, Common Stock2023-03-310001280784us-gaap:SalesRevenueNetMemberhtgc:InvestmentTypeConcentrationRiskMemberhtgc:InvestmentFundsAndVehiclesMember2023-01-012023-03-310001280784Debt Investments Software and Esme Learning Solutions, Inc., Senior Secured, Maturity Date February 2025, Prime + 5.50%, Floor rate 8.75%, PIK Interest 1.50%, 3.00% Exit Fee2022-12-310001280784us-gaap:WarrantMemberhtgc:WarrantInvestmentMember2022-12-310001280784us-gaap:EquitySecuritiesMemberus-gaap:FairValueInputsLevel3Memberhtgc:MeasurementInputMarketEquityAdjustmentMembersrt:WeightedAverageMemberhtgc:ValuationTechniqueMarketAdjustedOpmBacksolveMember2022-12-310001280784Debt Investments Software and Omeda Holdings, LLC, Senior Secured, Maturity Date July 2027, 3-month SOFR + 8.05%, Floor rate 9.05%2023-03-310001280784Debt Investments Software and Dispatch Technologies, Inc., Senior Secured, Maturity Date April 2028, 3-month SOFR + 8.01%, Floor rate 8.76%2023-03-310001280784Debt Investments Healthcare Services, Other and Carbon Health Technologies, Inc. Senior Secured, Maturity Date March 2025, Prime + 5.60%, Floor rate 8.85%, 4.61% Exit Fee2023-03-310001280784Warrant Investments and Medical Devices & Equipment and Tela Bio, Inc., Warrant, Acquisition Date 3/31/2017, Common Stock2023-03-310001280784us-gaap:MeasurementInputEbitdaMultipleMemberus-gaap:EquitySecuritiesMembersrt:MinimumMemberus-gaap:FairValueInputsLevel3Memberhtgc:MarketComparableCompaniesMember2022-12-310001280784Debt Investments Software and 3GTMS, LLC, Senior Secured, Maturity Date February 2025, 3-month LIBOR + 9.27%, Floor rate 10.27%2023-03-310001280784htgc:MUFGBankFacilityMember2022-12-310001280784Debt Investments Drug Discovery & Development and Alladapt Immunotherapeutics Inc. Senior Secured, Maturity Date September 2026, Prime + 3.65%, Floor rate 8.40%, Cap rate 10.90%, 9.09% Exit Fee2023-03-310001280784Warrant Investments and Software and SignPost, Inc., Warrant, Acquisition Date 1/13/2016, Series Junior 1 Preferred2022-12-310001280784Debt Investments Drug Discovery & Development and Iveric Bio, Inc. Senior Secured, Maturity Date August 2027, Prime + 4.00%, Floor rate 8.75%, Cap rate 10.25%, 4.25% Exit Fee2023-03-310001280784Debt Investments Software and Agilence, Inc. Senior Secured, Maturity Date October 2026, 1-month BSBY + 9.00%, Floor rate 10.00%2023-03-310001280784htgc:ConsumerAndBusinessServicesMember2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:MacroFabIncorporationMember2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:ZimperiumIncMember2022-12-310001280784Debt Investments Consumer & Business Services and Tectura Corporation, Senior Secured, Maturity Date July 2024, FIXED 8.25%2022-12-3100012807842022-03-090001280784Debt Investments Drug Discovery & Development and Nabriva Therapeutics, Senior Secured, Maturity Date June 2023, Prime + 4.30%, Floor rate 9.80%, 9.95% Exit Fee2022-12-310001280784us-gaap:UnsecuredDebtMember2023-03-310001280784htgc:SustainableAndRenewableTechnologyMemberhtgc:DebtInvestmentsMemberus-gaap:FairValueInputsLevel3Memberhtgc:ValuationTechniqueMarketComparableCompaniesMemberhtgc:MeasurementInputHypotheticalMarketYieldMembersrt:WeightedAverageMember2022-12-310001280784Equity Investments Electronics & Computer Hardware and Locus Robotics Corp., Equity, Acquisition Date 11/17/2022, Series Preferred Series F2023-03-310001280784us-gaap:EquitySecuritiesMemberus-gaap:MeasurementInputRevenueMultipleMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMember2022-12-310001280784Warrant Investments and Sustainable and Renewable Technology and Polyera Corporation, Warrant, Acquisition Date 3/24/2015, Preferred Series C2023-03-310001280784htgc:JulyTwoThousandTwentyFourNotesMemberhtgc:UnusedFacilityOtherFeesMember2023-01-012023-03-310001280784htgc:JanuaryTwoThousandTwentySevenNotesMemberhtgc:UnusedFacilityOtherFeesMember2022-01-012022-03-310001280784htgc:DebtInvestmentsMemberhtgc:AlamarBiosciencesIncorporationMember2022-12-310001280784htgc:HerculesAdviserLLCMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:MajorityOwnedControlInvestmentsMemberus-gaap:MemberUnitsMember2022-03-310001280784htgc:SeniorSecuredDebtOneMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:ConsumerAndBusinessServicesMemberhtgc:OtherControlInvestmentsMemberhtgc:TecturaCorporationMember2023-01-012023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:MajorityOwnedControlInvestmentsMember2022-03-310001280784htgc:DebtInvestmentsMemberhtgc:PhathomPharmaceuticalsIncMember2023-03-310001280784Debt Investments Software and VideoAmp, Inc., Senior Secured, Maturity Date February 2025, Prime + 3.70%, Floor rate 6.95%, PIK Interest 1.25%, 5.25% Exit Fee2022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMember2022-12-310001280784Warrant Investments and Manufacturing Technology and Bright Machines, Inc., Warrant, Acquisition Date 3/31/2022, Common Stock2023-03-310001280784us-gaap:SubsequentEventMemberhtgc:SupplementalDividendMember2023-05-230001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:CoronadoAestheticsLLCMemberus-gaap:CommonStockMemberhtgc:MajorityOwnedControlInvestmentsMember2023-03-310001280784htgc:SBADebenturesIssuedOnNovemberThirtyTwoThousandAndTwentyOneMember2023-03-310001280784htgc:PineappleEnergyLLCMemberus-gaap-supplement:InvestmentAffiliatedIssuerNoncontrolledMember2022-03-310001280784htgc:DebtInvestmentsMemberhtgc:KuraOncologyIncMember2023-03-310001280784htgc:SBADebenturesIssuedOnOctoberTwentyOneTwoThousandAndTwentyOneMember2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:CommonStockMemberhtgc:GibraltarBusinessCapitalLLCMemberhtgc:MajorityOwnedControlInvestmentsMember2021-12-310001280784Equity Investments Consumer & Business Services and Total Tectura Corporation2022-12-310001280784Debt Investments Drug Discovery & Development and Viridian Therapeutics, Inc. Senior Secured, Maturity Date October 2026, Prime + 4.20%, Floor rate 7.45%, Cap rate 8.95%, 4.76% Exit Fee2022-12-310001280784htgc:DebtInvestmentsMemberhtgc:HilleVaxIncMember2023-03-310001280784Debt Investments Software and Ceros, Inc., Senior Secured, Maturity Date September 2026, 6-month LIBOR + 8.89%, Floor rate 9.89%2023-03-310001280784Equity Investments Software and Contentful Global, Inc., Equity, Acquisition Date 11/20/2018, Series Preferred Series D2023-03-310001280784us-gaap:MeasurementInputDiscountForLackOfMarketabilityMemberus-gaap:EquitySecuritiesMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMemberhtgc:MarketComparableCompaniesMember2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:SkydioIncorporationMember2022-12-310001280784htgc:PineappleEnergyLLCMemberus-gaap-supplement:InvestmentAffiliatedIssuerNoncontrolledMemberhtgc:SeniorSecuredDebtMember2022-01-012022-03-310001280784Warrant Investments and Manufacturing Technology and Bright Machines, Inc., Warrant, Acquisition Date 3/31/2022, Common Stock2022-12-310001280784Debt Investments Software and Zimperium, Inc., Senior Secured, Maturity Date May 2027, 3-month SOFR + 8.31%, Floor rate 9.31%2022-12-310001280784htgc:DeferredFeesMember2023-01-012023-03-310001280784Warrant Investments and Electronics & Computer Hardware and 908 Devices, Inc., Warrant, Acquisition Date 3/15/2017, Common Stock2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:FlightScheduleProLlcMember2022-12-310001280784Warrant Investments and Software and Demandbase, Inc., Warrant, Acquisition Date 8/2/2021, Common Stock2022-12-310001280784htgc:ControlAndAffiliateInvestmentsMember2022-03-310001280784Warrant Investments and Software and Evernote Corporation, Warrant, Acquisition Date 9/30/2016, Common Stock2022-12-310001280784htgc:HerculesCapitalFourLPMember2020-10-270001280784htgc:StreamlineHealthcareSolutionsMemberhtgc:DebtInvestmentsMember2022-12-310001280784Debt Investments Software and 3GTMS, LLC, Senior Secured, Maturity Date February 2025, 3-month LIBOR + 9.28%, Floor rate 10.28%2022-12-310001280784htgc:SBADebenturesIssuedOnDecemberTwentyTwoThousandAndTwentyOneMember2023-03-310001280784Investments in Securities (208.56%)2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:SeniorSecuredDebtMemberhtgc:OtherControlInvestmentsMemberhtgc:TecturaCorporationMember2022-12-310001280784us-gaap:MeasurementInputDiscountForLackOfMarketabilityMemberus-gaap:EquitySecuritiesMembersrt:MinimumMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Member2022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:MajorityOwnedControlInvestmentsMember2022-12-310001280784Equity Investments Drug Discovery & Development and Tricida, Inc., Equity, Acquisition Date 2/28/2018, Series Common Stock2022-12-310001280784htgc:ForbionGrowthOpportunitiesFundICVMemberhtgc:InvestmentFundsAndVehiclesMember2022-12-310001280784Equity Investments Consumer & Business Services and Tectura Corporation, Acquisition Date 5/23/2018, Series Common Stock2022-12-310001280784htgc:ThreeGTMSLLCMemberhtgc:DebtInvestmentsMember2023-03-310001280784us-gaap:RestrictedStockMemberhtgc:DirectorPlanMember2018-06-280001280784htgc:DebtInvestmentsMemberhtgc:AlchemerLLCMember2023-03-310001280784Warrant Investments and Drug Discovery & Development and Scynexis, Inc., Warrant, Acquisition Date 5/14/2021, Common Stock2022-12-310001280784Debt Investments Consumer & Business Services and Collective Health, Inc.Senior Secured, Maturity Date September 2023, Prime + 4.75%, Floor rate 12.50%2023-03-310001280784Equity Investments Medical Devices & Equipment and Coronado Aesthetics, LLC, Equity, Acquisition Date 10/15/2021, Series Common Units2022-12-310001280784Debt Investments Sustainable and Renewable Technology (0.50%)2022-12-310001280784us-gaap:EstimateOfFairValueFairValueDisclosureMemberhtgc:SBADebenturesMember2022-12-310001280784htgc:DebtInvestmentsMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Memberhtgc:TechnologyMember2022-12-310001280784us-gaap:FairValueInputsLevel3Memberus-gaap:UnsecuredDebtMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001280784Warrant Investments and Drug Discovery & Development and Akero Therapeutics, Inc., Warrant, Acquisition Date 6/15/2022, Common Stock2023-03-310001280784us-gaap:FairValueInputsLevel1Memberus-gaap:CommonStockMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001280784Equity Investments Healthcare Services, Other (0.21%)2022-12-310001280784Warrant Investments and Software and Fulfil Solutions, Inc., Warrant, Acquisition Date 7/29/2022, Common Stock2023-03-310001280784htgc:MUFGBankFacilityMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2023-03-310001280784htgc:SustainableAndRenewableTechnologyMember2023-03-310001280784Debt Investments Software and 3GTMS, LLC, Senior Secured, Maturity Date February 2025, 3-month LIBOR + 6.57%, Floor rate 7.57%2022-12-310001280784htgc:LastOutWithSecurityInterestInAllOfTheAssetsMemberus-gaap:SalesRevenueNetMemberhtgc:CollateralTypeConcentrationRiskMemberhtgc:SeniorSecuredFirstLienMember2022-01-012022-12-310001280784Equity Investments Software and Palantir Technologies, Equity, Acquisition Date 9/23/2020, Series Common Stock2023-03-310001280784Debt Investments Drug Discovery & Development and Aldeyra Therapeutics, Inc. Senior Secured, Maturity Date October 2024, Prime + 3.10%, Floor rate 8.60%, 8.90% Exit Fee2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:CoronadoAestheticsLLCMemberus-gaap:PreferredStockMemberhtgc:MajorityOwnedControlInvestmentsMember2022-03-310001280784Equity Investments Diversified Financial Services (2.49%)2022-12-310001280784Equity Investments Information Services and Zeta Global Corp., Equity, Acquisition Date 11/20/2007, Series Common Stock2022-12-310001280784Equity Investments Software and HighRoads, Inc., Equity, Acquisition Date 1/18/2013, Series Common Stock2023-03-310001280784Debt Investments Drug Discovery & Development and Corium, Inc. Senior Secured, Maturity Date September 2026, Prime + 5.70%, Floor rate 8.95%, 7.75% Exit Fee2022-12-310001280784Warrant Investments and Drug Discovery & Development and enGene, Inc., Warrant, Acquisition Date 12/30/2021, Preferred Series 32023-03-310001280784htgc:LiabilityClassifiedAwardsMember2023-01-012023-03-310001280784Warrant Investments and Drug Delivery (0.00%)2023-03-310001280784us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-03-310001280784us-gaap:CommonStockMember2021-12-310001280784us-gaap:SubsequentEventMemberhtgc:SupplementalDividendMember2022-03-092023-04-270001280784us-gaap:PreferredStockMemberhtgc:EquityInvestmentsMember2022-12-310001280784Equity Investments Diversified Financial Services and Newfront Insurance Holdings, Inc., Equity, Acquisition Date 9/30/2021, Series Preferred Series D-22022-12-310001280784Equity Investments Software and SingleStore, Inc., Equity, Acquisition Date 8/12/2021, Series Preferred Series F2022-12-310001280784Warrant Investments and Software and The Faction Group LLC, Warrant, Acquisition Date 11/3/2014, Preferred Series AA2023-03-310001280784country:IE2022-12-310001280784Debt Investments Software and 3GTMS, LLC2022-12-310001280784htgc:DividendDeclaredThreeMember2022-05-242022-05-240001280784htgc:JuneTwoThousandTwentyFiveNotesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-03-310001280784Debt Investments Sustainable and Renewable Technology and Ampion, PBC, Senior Secured, Maturity Date May 2025, Prime + 4.70%, Floor rate 7.95%, PIK Interest 1.45%, 3.95% Exit Fee2023-03-310001280784Warrant Investments and Software (0.64%)2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:AlladaptImmunotherapeuticsincMember2022-12-310001280784us-gaap:PreferredStockMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310001280784Debt Investments Drug Discovery & Development and Replimune Group, Inc. Senior Secured, Maturity Date October 2027, Prime + 1.75%, Floor rate 7.25%, Cap rate 9.00%, PIK Interest 1.50%, 4.95% Exit Fee2023-03-310001280784htgc:JulyTwoThousandTwentyFourNotesMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2022-12-310001280784htgc:MediaContentInfoMember2023-03-310001280784htgc:SMBCFacilityMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2022-12-310001280784us-gaap:WarrantMemberus-gaap:ValuationTechniqueOptionPricingModelMemberus-gaap:FairValueInputsLevel3Member2022-12-310001280784htgc:MeasurementInputsProbabilityWeightingOfAlternativeOutcomesMemberhtgc:DebtInvestmentsMembersrt:MinimumMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Memberhtgc:TechnologyMember2023-03-310001280784Debt Investments Drug Discovery & Development and Eloxx Pharmaceuticals, Inc. Senior Secured, Maturity Date April 2025, Prime + 6.25%, Floor rate 9.50%, 6.55% Exit Fee2022-12-310001280784htgc:PerformanceVestingAwardsMember2023-01-012023-03-310001280784Warrant Investments and Information Services (0.03%)2023-03-310001280784Debt Investments Information Services and Signal Media Limited, Senior Secured, Maturity Date June 2025, Prime + 5.50%, Floor rate 9.00%, Cap rate 12.00%, 3.45% Exit Fee2022-12-310001280784Equity Investments Drug Discovery & Development and Bicycle Therapeutics PLC, Equity, Acquisition Date 10/5/2020, Series Common Stock2022-12-310001280784htgc:June20253YearNotesMember2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerNoncontrolledMemberhtgc:BlackCrowAIIncMember2022-03-310001280784Equity Investments Medical Devices & Equipment, Coronado Aesthetics, LLC2023-03-310001280784Equity Investments Semiconductors (0.02%)2023-03-310001280784Debt Investments Consumer & Business Services and SeatGeek, Inc. Senior Secured, Maturity Date June 2023, Prime + 5.00%, Floor rate 10.50%, PIK Interest 0.50%2023-03-310001280784Debt Investments Drug Discovery & Development and Geron Corporation, Senior Secured, Maturity Date April 2025, Prime + 5.75%, Floor rate 9.00%, 6.55% Exit Fee2023-03-310001280784Equity Investments Surgical Devices and TransMedics Group, Inc., Equity, Acquisition Date 11/7/2012, Series Common Stock2023-03-310001280784Equity Investments Medical Devices & Equipment (0.04%)2023-03-310001280784htgc:CapitalInExcessOfParValueMember2021-12-310001280784Equity Investments Electronics & Computer Hardware and Skydio, Inc., Equity, Acquisition Date 3/8/2022, Series Preferred Series E2023-03-310001280784Equity Investments Consumer & Business Services and OfferUp, Inc., Equity, Acquisition Date 10/25/2016, Series Preferred Series A-12022-12-310001280784us-gaap:WarrantMemberus-gaap:MeasurementInputEbitdaMultipleMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Memberhtgc:MarketComparableCompaniesMember2023-03-310001280784htgc:SixMonthLIBORMember2022-12-310001280784Debt Investments Healthcare Services, Other and Carbon Health Technologies, Inc. Senior Secured, Maturity Date March 2025, Prime + 5.60%, Floor rate 8.85%, 4.61% Exit Fee2022-12-310001280784Debt Investments Healthcare Services, Other and Blue Sprig Pediatrics, Inc. Senior Secured, Maturity Date November 2026, 3-month LIBOR + 5.00%, Floor rate 6.00%, PIK Interest 4.45%2023-03-310001280784Warrant Investments and Consumer & Business Services and Skyword, Inc., Warrant, Acquisition Date 8/23/2019, Preferred Series B2023-03-310001280784htgc:ConsumerAndBusinessServicesMember2022-12-310001280784htgc:JanuaryTwoThousandTwentySevenNotesMember2023-01-012023-03-310001280784htgc:PineappleEnergyLLCMemberus-gaap-supplement:InvestmentAffiliatedIssuerNoncontrolledMemberus-gaap:CommonStockMember2021-12-310001280784Warrant Investments and Software and Demandbase, Inc., Warrant, Acquisition Date 8/2/2021, Common Stock2023-03-310001280784us-gaap:CarryingReportedAmountFairValueDisclosureMemberhtgc:TwoThousandThirtyOneAssetBackedNotesMember2022-12-310001280784Debt Investments Software (54.28%)2022-12-310001280784htgc:AdviserFundsMember2022-12-310001280784Equity Investments Consumer & Business Services and Tectura Corporation, Equity, Acquisition Date 6/6/2016, Series Preferred Series BB2022-12-310001280784htgc:June20253YearNotesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310001280784Warrant Investments and Consumer & Business Products and TFG Holding, Inc., Warrant, Acquisition Date 6/27/2014, Common Stock2023-03-310001280784us-gaap:FairValueInputsLevel3Memberhtgc:SeniorSecuredDebtMemberus-gaap:FairValueMeasurementsRecurringMember2022-01-012022-03-310001280784us-gaap:CarryingReportedAmountFairValueDisclosureMember2022-12-310001280784htgc:MeasurementInputPremiumDiscountMemberhtgc:DebtInvestmentsMemberhtgc:LowerMiddleMarketMembersrt:MinimumMemberus-gaap:FairValueInputsLevel3Memberhtgc:ValuationTechniqueMarketComparableCompaniesMember2023-03-310001280784htgc:March2026BNotesMember2021-03-042021-03-040001280784Warrant Investments and Medical Devices & Equipment and Flowonix Medical Incorporated2023-03-310001280784us-gaap:WarrantMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-01-012022-03-310001280784htgc:SMBCFacilityMembersrt:MaximumMember2023-03-310001280784Warrant Investments and Software and Bitsight Technologies, Inc., Warrant, Acquisition Date 11/18/2020, Common Stock2023-03-310001280784us-gaap:FairValueInputsLevel2Memberhtgc:TwoThousandThirtyThreeNotesMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-03-310001280784us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-03-310001280784htgc:IndustrySubSectorConcentrationRiskMemberus-gaap:SalesRevenueNetMemberhtgc:ConsumerAndBusinessProductsMember2022-01-012022-12-310001280784us-gaap:ValuationTechniqueDiscountedCashFlowMemberus-gaap:EquitySecuritiesMemberus-gaap:FairValueInputsLevel3Member2022-12-310001280784us-gaap:MeasurementInputEbitdaMultipleMemberus-gaap:EquitySecuritiesMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMemberhtgc:MarketComparableCompaniesMember2023-03-310001280784us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-03-310001280784Equity Investments Drug Discovery & Development and NorthSea Therapeutics, Equity, Acquisition Date 12/15/2021, Series Preferred Series C2022-12-310001280784htgc:DebtInvestmentsMemberhtgc:TipaltiSolutionsLtdMember2023-03-310001280784Debt Investments Diversified Financial Services and Next Insurance, Inc, Senior Secured, Maturity Date February 2028, Prime + -1.50%, Floor rate 4.75%, PIK Interest 5.50%2023-03-310001280784us-gaap:SalesRevenueNetMemberus-gaap:UnsecuredDebtMemberhtgc:InvestmentTypeConcentrationRiskMember2023-01-012023-03-310001280784Equity Investments Software and Contentful Global, Inc., Equity, Acquisition Date 12/22/2020, Series Preferred Series C2023-03-310001280784Equity Investments Drug Discovery & Development and Rocket Pharmaceuticals, Ltd., Equity, Acquisition Date 8/22/2007, Series Common Stock2023-03-310001280784htgc:OtherMember2023-03-310001280784Debt Investments Electronics & Computer Hardware and Locus Robotics Corp. Senior Secured, Maturity Date June 2026, Prime + 4.50%, Floor rate 8.00%, 1.00% Exit Fee2023-03-310001280784us-gaap:WarrantMemberus-gaap:SalesRevenueNetMemberhtgc:InvestmentTypeConcentrationRiskMemberhtgc:WarrantInvestmentMember2022-01-012022-12-310001280784htgc:DebtInvestmentsMemberhtgc:DispatchTechnologiesIncMember2022-12-310001280784us-gaap:EquitySecuritiesMemberus-gaap:FairValueInputsLevel3Memberhtgc:ValuationTechniqueOtherMember2023-03-310001280784Debt Investments Software and ThreatConnect, Inc., Senior Secured, Maturity Date May 2026, 6-month LIBOR + 9.00%, Floor rate 10.00%2023-03-310001280784Equity Investments Information Services and Planet Labs, Inc., Equity, Acquisition Date 6/21/2019, Series Common Stock2022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:CommonStockMemberhtgc:GibraltarBusinessCapitalLLCMemberhtgc:MajorityOwnedControlInvestmentsMember2023-03-310001280784htgc:June2025NotesMember2023-01-012023-03-310001280784htgc:SustainableAndRenewableTechnologyMemberhtgc:DebtInvestmentsMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Memberhtgc:ValuationTechniqueMarketComparableCompaniesMemberhtgc:MeasurementInputHypotheticalMarketYieldMember2022-12-310001280784htgc:SustainableAndRenewableTechnologyMemberhtgc:DebtInvestmentsMembersrt:MinimumMemberus-gaap:FairValueInputsLevel3Memberhtgc:MeasurementInputHypotheticalMarketYieldMemberhtgc:ValuationTechniqueMarketComparableCompaniesMember2022-12-310001280784Warrant Investments and Sustainable and Renewable Technology and Polyera Corporation, Warrant, Acquisition Date 3/24/2015, Preferred Series C2022-12-310001280784us-gaap:FairValueInputsLevel1Memberus-gaap:CommonStockMember2023-03-310001280784htgc:January2027NotesMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310001280784Debt Investments Software and Cybermaxx Intermediate Holdings, Inc.2023-03-310001280784htgc:ExitFeesAmortizationMember2023-01-012023-03-310001280784htgc:MeasurementInputPremiumDiscountMemberhtgc:DebtInvestmentsMemberus-gaap:FairValueInputsLevel3Memberhtgc:ValuationTechniqueMarketComparableCompaniesMembersrt:WeightedAverageMemberhtgc:TechnologyMember2022-12-310001280784Warrant Investments and Information Services and INMOBI Inc., Warrant, Acquisition Date 11/19/2014, Common Stock2023-03-310001280784htgc:MUFGBankFacilityMember2023-01-012023-03-310001280784us-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310001280784htgc:KhorosPKLithiumTechnologiesMemberhtgc:DebtInvestmentsMember2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:SeniorSecuredDebtMemberhtgc:OtherControlInvestmentsMemberhtgc:TecturaCorporationMember2022-01-012022-03-310001280784us-gaap:EquitySecuritiesMemberus-gaap:MeasurementInputRevenueMultipleMembersrt:MinimumMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Member2023-03-310001280784htgc:ControlInvestmentsMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMember2022-01-012022-03-310001280784Warrant Investments and Drug Discovery & Development and Dermavant Sciences Ltd., Warrant, Acquisition Date 5/31/2019, Common Stock2022-12-310001280784htgc:ControlInvestmentsMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMember2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:GibraltarBusinessCapitalLLCMember2023-03-310001280784us-gaap:SalesRevenueNetMemberhtgc:CollateralTypeConcentrationRiskMemberhtgc:AllAssetsWithNegativePledgeOnIntellectualPropertyMemberhtgc:SeniorSecuredFirstLienMember2022-01-012022-12-310001280784htgc:DebtInvestmentsMemberhtgc:AxsomeTherapeuticsIncMember2022-12-310001280784htgc:JuneTwoThousandTwentyFiveThreeYearNotesMember2022-12-310001280784Debt Investments Drug Discovery & Development and Scynexis, Inc. Senior Secured, Maturity Date March 2025, Prime + 5.80%, Floor rate 9.05%, 3.95% Exit Fee2023-03-310001280784Debt Investments Healthcare Services, Other and Oak Street Health, Inc. Senior Secured, Maturity Date October 2027, Prime + 2.45%, Floor rate 7.95%, Cap rate 9.45%, PIK Interest 1.00%, 4.95% Exit Fee2023-03-310001280784Debt Investments Drug Discovery & Development and Finch Therapeutics Group, Inc. Senior Secured, Maturity Date November 2026, Prime + 4.05%, Floor rate 7.55%, Cap rate 8.80%, 5.50% Exit Fee2022-12-310001280784htgc:BiotechnologyToolsMember2023-03-310001280784htgc:SBADebenturesIssuedOnOctoberTwentyOneTwoThousandAndTwentyOneMember2022-12-310001280784Warrant Investments and Manufacturing Technology and Xometry, Inc., Warrant, Acquisition Date 5/9/2018, Common Stock2023-03-310001280784htgc:GeographicLocationMember2023-01-012023-03-310001280784htgc:OtherMember2022-12-310001280784htgc:PerformanceVestingAwardsMember2023-03-310001280784us-gaap:SubsequentEventMemberhtgc:SupplementalDividendMember2023-05-232023-05-230001280784Debt Investments Communications & Networking (7.26%)2022-12-310001280784us-gaap:FairValueInputsLevel3Memberhtgc:FebruaryTwoThousandTwentyFiveNotesMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-03-310001280784Warrant Investments and Manufacturing Technology and MacroFab, Inc., Warrant, Acquisition Date 3/23/2022, Common Stock2023-03-310001280784htgc:DebtInvestmentMember2022-01-012022-03-310001280784Warrant Investments and Software and DroneDeploy, Inc., Warrant, Acquisition Date 6/30/2022, Common Stock2022-12-310001280784htgc:ZappiIncMemberhtgc:DebtInvestmentsMember2023-03-310001280784Debt Investments Drug Discovery & Development and Alladapt Immunotherapeutics Inc. Senior Secured, Maturity Date September 2026, Prime + 3.65%, Floor rate 8.40%, Cap rate 10.90%, 10.60% Exit Fee2022-12-310001280784htgc:June20253YearNotesMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2022-12-310001280784us-gaap:WarrantMemberus-gaap:MeasurementInputRevenueMultipleMembersrt:MaximumMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Member2022-12-310001280784Equity Investments Information Services (0.40%)2023-03-310001280784Warrant Investments and Software and SingleStore, Inc., Warrant, Acquisition Date 4/28/2020, Preferred Series D2022-12-310001280784Debt Investments Software and ShadowDragon, LLC, Senior Secured, Maturity Date December 2026, 3-month LIBOR + 9.00%, Floor rate 10.00%2022-12-310001280784htgc:SeptemberTwoThousandTwentySixNotesMember2022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:ConsumerAndBusinessServicesMemberhtgc:OtherControlInvestmentsMemberhtgc:TecturaCorporationMember2023-03-310001280784htgc:SecurityTypeMember2023-01-012023-03-310001280784htgc:DebtInvestmentsMemberhtgc:LowerMiddleMarketMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MarketApproachValuationTechniqueMember2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:YipitLLCMember2022-12-310001280784us-gaap:FairValueInputsLevel3Memberhtgc:MarchTwoThousandTwentySixANotesMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-03-310001280784Warrant Investments and Software and Mixpanel, Inc., Warrant, Acquisition Date 9/30/2020, Common Stock2022-12-310001280784Equity Investments Diversified Financial Services, Gibraltar Business Capital, LLC2023-03-310001280784us-gaap:CommonStockMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-01-012022-03-310001280784us-gaap:UnsecuredDebtMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310001280784htgc:DebtInvestmentsMemberus-gaap:FairValueInputsLevel3Memberhtgc:DebtInvestmentsImminentPayoffsMember2023-03-310001280784htgc:JulyTwoThousandTwentyFourNotesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-03-310001280784us-gaap:PreferredStockMemberus-gaap-supplement:InvestmentAffiliatedIssuerNoncontrolledMemberhtgc:BlackCrowAIIncMember2022-01-012022-03-310001280784Warrant Investments and Drug Discovery & Development and AmplifyBio, LLC, Warrant, Acquisition Date 12/27/2022, Class A Units2022-12-310001280784Warrant Investments and Drug Discovery & Development and Phathom Pharmaceuticals, Inc., Warrant, Acquisition Date 9/17/2021, Common Stock2022-12-310001280784htgc:SBADebenturesMember2022-01-012022-03-310001280784us-gaap:CommonStockMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001280784htgc:TwoThousandThirtyThreeNotesMember2023-03-310001280784us-gaap:EquitySecuritiesMemberus-gaap:ValuationTechniqueOptionPricingModelMemberus-gaap:FairValueInputsLevel3Memberhtgc:MeasurementInputMarketEquityAdjustmentMembersrt:WeightedAverageMember2023-03-310001280784us-gaap:MeasurementInputEbitdaMultipleMemberus-gaap:EquitySecuritiesMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Memberhtgc:MarketComparableCompaniesMember2022-12-310001280784htgc:JuneTwoThousandTwentyFiveNotesMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310001280784country:IEus-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2023-01-012023-03-310001280784htgc:SBADebenturesIssuedOnJanuaryFourteenTwoThousandAndTwentyTwoMember2022-12-310001280784htgc:DebtInvestmentsMemberhtgc:AkeroTherapeuticsIncMember2022-12-310001280784htgc:AdviserSubsidiaryMember2023-01-012023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:SeniorSecuredDebtMemberhtgc:ConsumerAndBusinessServicesMemberhtgc:OtherControlInvestmentsMemberhtgc:TecturaCorporationMember2023-01-012023-03-310001280784htgc:EscrowReceivableMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001280784htgc:JanuaryTwoThousandTwentySevenNotesMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-03-310001280784Equity Investments Software and SingleStore, Inc., Equity, Acquisition Date 8/12/2021, Series Preferred Series F2023-03-310001280784Debt Investments Drug Discovery & Development and Tarsus Pharmaceuticals, Inc. Senior Secured, Maturity Date February 2027, Prime + 4.45%, Floor rate 8.45%, Cap rate 11.45%, 4.75% Exit Fee2023-03-310001280784Debt Investments Software and Salary.com, LLC, Senior Secured, Maturity Date September 2027, 6-month SOFR + 8.00%, Floor rate 9.00%2022-12-310001280784htgc:PharmaceuticalsMemberhtgc:MeasurementInputPremiumDiscountMemberhtgc:DebtInvestmentsMemberus-gaap:FairValueInputsLevel3Memberhtgc:ValuationTechniqueMarketComparableCompaniesMembersrt:WeightedAverageMember2023-03-310001280784Warrant Investments and Consumer & Business Services and RumbleON, Inc., Warrant, Acquisition Date 4/30/2018, Common Stock2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMember2022-03-310001280784htgc:SBADebenturesIssuedOnJanuaryFourteenTwoThousandAndTwentyTwoMember2023-03-310001280784us-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberhtgc:SBADebenturesMember2022-12-310001280784htgc:DebtInvestmentsMemberhtgc:AryakaNetworksIncMember2022-12-310001280784htgc:TwoThousandThirtyThreeNotesMemberhtgc:UnderwritingMember2023-03-310001280784Equity Investments Software and Lightbend, Inc., Equity, Acquisition Date 12/4/2020, Series Common Stock2022-12-310001280784htgc:FeverLabsIncMemberhtgc:DebtInvestmentsMember2023-03-310001280784Warrant Investments and Software and Delphix Corp., Warrant, Acquisition Date 10/8/2019, Common Stock2023-03-310001280784us-gaap:UnsecuredDebtMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:GibraltarBusinessCapitalLLCMemberhtgc:MajorityOwnedControlInvestmentsMember2022-12-310001280784Warrant Investments and Software and Fulfil Solutions, Inc., Warrant, Acquisition Date 7/29/2022, Common Stock2022-12-310001280784Debt Investments Drug Discovery & Development and Hibercell, Inc. Senior Secured, Maturity Date May 2025, Prime + 5.40%, Floor rate 8.65%, 4.95% Exit Fee2023-03-310001280784Equity Investments Drug Discovery & Development and Dynavax Technologies, Equity, Acquisition Date 7/22/2015, Series Common Stock2022-12-310001280784us-gaap:WarrantMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerNoncontrolledMember2021-12-310001280784Equity Investments Consumer & Business Services and OfferUp, Inc., Equity, Acquisition Date 10/25/2016, Series Preferred Series A-12023-03-310001280784htgc:SeptemberTwoThousandTwentySixNotesMember2022-01-012022-03-310001280784Debt Investments Semiconductors (1.51%)2022-12-310001280784htgc:TarsusPharmaceuticalsIncMemberhtgc:DebtInvestmentsMember2023-03-310001280784Debt Investments Software and Catchpoint Systems, Inc., Senior Secured, Maturity Date June 2026, 3-month SOFR + 8.86%, Floor rate 9.76%2022-12-310001280784htgc:DiversifiedFinancialServicesMember2022-12-310001280784htgc:DiversifiedFinancialServicesMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:CommonStockMemberhtgc:GibraltarBusinessCapitalLLCMemberhtgc:MajorityOwnedControlInvestmentsMember2023-03-310001280784Equity Investments Surgical Devices and Gynesonics, Inc., Equity, Acquisition Date 12/18/2018, Series Preferred Series F-12023-03-310001280784Debt Investments Software and Nextroll, Inc., Senior Secured, Maturity Date July 2023, Prime + 3.75%, Floor rate 7.75%, PIK Interest 2.95%, 1.95% Exit Fee2022-12-310001280784Warrant Investments and Consumer & Business Products and TFG Holding, Inc., Warrant, Acquisition Date 6/27/2014, Common Stock2022-12-310001280784Debt Investments Consumer & Business Services and Houzz, Inc. Convertible Debt, Maturity Date May 2028, PIK Interest 5.50%2022-12-310001280784htgc:DebtInvestmentsMemberhtgc:VidaHealthMember2022-12-310001280784Warrant Investments and Consumer & Business Services and Skyword, Inc., Warrant, Acquisition Date 8/23/2019, Preferred Series B2022-12-3100012807842022-01-012022-12-310001280784us-gaap:MeasurementInputDiscountForLackOfMarketabilityMemberus-gaap:EquitySecuritiesMembersrt:MinimumMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Member2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerMember2022-03-310001280784us-gaap:EquitySecuritiesMemberus-gaap:ValuationTechniqueOptionPricingModelMemberus-gaap:FairValueInputsLevel3Member2022-12-310001280784htgc:DebtInvestmentsMemberhtgc:BrainCorporationMember2022-12-310001280784Debt Investments Drug Discovery & Development and Valo Health, LLC, Senior Secured, Maturity Date May 2024, Prime + 6.45%, Floor rate 9.70%, 3.85% Exit Fee2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMember2022-01-012022-03-310001280784us-gaap:SalesRevenueNetMemberhtgc:CollateralTypeConcentrationRiskMemberhtgc:SeniorSecuredFirstLienMember2022-01-012022-12-310001280784us-gaap:ValuationTechniqueDiscountedCashFlowMemberus-gaap:EquitySecuritiesMembersrt:MinimumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMember2022-12-310001280784Debt Investments Drug Discovery & Development and Unity Biotechnology, Inc. Senior Secured, Maturity Date August 2024, Prime + 6.10%, Floor rate 9.35%, 6.25% Exit Fee2023-03-310001280784us-gaap:RestrictedStockMemberhtgc:CapitalInExcessOfParValueMember2023-01-012023-03-310001280784us-gaap:EquitySecuritiesMembersrt:MaximumMemberus-gaap:ValuationTechniqueOptionPricingModelMemberus-gaap:FairValueInputsLevel3Memberhtgc:MeasurementInputMarketEquityAdjustmentMember2022-12-310001280784Warrant Investments and Drug Discovery & Development and Century Therapeutics, Inc., Warrant, Acquisition Date 9/14/2020, Common Stock2023-03-310001280784Warrant Investments and Medical Devices & Equipment and Flowonix Medical Incorporated2022-12-310001280784us-gaap:CarryingReportedAmountFairValueDisclosureMemberhtgc:SeptemberTwoThousandTwentySixNotesMember2022-12-310001280784htgc:DebtInvestmentsMemberhtgc:FulfilSolutionsIncMember2022-12-310001280784Equity Investments Semiconductors and Achronix Semiconductor Corporation, Equity, Acquisition Date 7/1/2011, Series Preferred Series C2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerMemberhtgc:ControlAndAffiliateInvestmentsMember2022-01-012022-03-310001280784htgc:SBADebenturesIssuedOnAugustTwentyTwoThousandAndTwentyOneMember2023-01-012023-03-310001280784us-gaap:SalesRevenueNetMemberhtgc:InvestmentTypeConcentrationRiskMemberhtgc:EquityInvestmentsMemberus-gaap:CommonStockMember2023-01-012023-03-310001280784Warrant Investments and Software and Convoy, Inc., Warrant, Acquisition Date 3/30/2022, Common Stock2022-12-310001280784htgc:ManufacturingTechnologyMemberhtgc:IndustrySubSectorConcentrationRiskMemberus-gaap:SalesRevenueNetMember2023-01-012023-03-310001280784htgc:SignalMediaLimitedMemberhtgc:DebtInvestmentsMember2023-03-310001280784us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMembercountry:CA2022-01-012022-12-310001280784us-gaap:CommonStockMember2023-01-012023-03-310001280784htgc:DeferredFeesMember2022-12-310001280784htgc:FebruaryTwoThousandTwentyFiveNotesMemberhtgc:UnusedFacilityOtherFeesMember2022-01-012022-03-310001280784Debt Investments Drug Discovery & Development and Bicycle Therapeutics PLC, Senior Secured, Maturity Date July 2025, Prime + 4.55%, Floor rate 8.05%, Cap rate 9.05%, 5.00% Exit Fee2023-03-310001280784us-gaap:CommonStockMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-03-310001280784us-gaap:FairValueInputsLevel2Memberus-gaap:CommonStockMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001280784Equity Investments Drug Discovery & Development, Valo Health LLC2022-12-310001280784Warrant Investments and Media/Content/Info and Fever Labs, Inc., Warrant, Acquisition Date 12/30/2022, Preferred Series E-12022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:CommonStockMemberhtgc:OtherControlInvestmentsMemberhtgc:TecturaCorporationMember2023-01-012023-03-310001280784htgc:IndustrySectorMember2023-01-012023-03-310001280784Equity Investments Drug Discovery & Development and Humanigen, Inc., Equity, Acquisition Date 3/31/2021, Series Common 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Preferred Series 32022-12-310001280784us-gaap:WarrantMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MarketApproachValuationTechniqueMember2023-03-3100012807842022-12-310001280784Debt Investments Software and Cybermaxx Intermediate Holdings, Inc., Senior Secured, Maturity Date August 2026, 6-month SOFR + 8.63%, Floor rate 9.38%2023-03-310001280784Debt Investments Software and Dashlane, Inc., Senior Secured, Maturity Date July 2025, Prime + 3.05%, Floor rate 7.55%, PIK Interest 1.10%, 6.29% Exit Fee2023-03-310001280784htgc:JulyTwoThousandTwentyFourNotesMember2022-01-012022-03-310001280784us-gaap:ValuationTechniqueDiscountedCashFlowMemberus-gaap:EquitySecuritiesMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMember2023-03-310001280784us-gaap:EquitySecuritiesMembersrt:MaximumMemberus-gaap:ValuationTechniqueOptionPricingModelMemberus-gaap:FairValueInputsLevel3Memberhtgc:MeasurementInputMarketEquityAdjustmentMember2023-03-310001280784Warrant Investments and Drug Discovery & Development and Kura Oncology, Inc., Warrant, Acquisition Date 11/2/2022, Common Stock2023-03-310001280784htgc:MUFGBankFacilityMember2022-01-012022-03-310001280784us-gaap:WarrantMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-03-310001280784us-gaap:MeasurementInputDiscountForLackOfMarketabilityMemberus-gaap:EquitySecuritiesMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMember2022-12-310001280784us-gaap:UnsecuredDebtMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001280784us-gaap-supplement:InvestmentUnaffiliatedIssuerMember2023-03-310001280784htgc:IndustrySubSectorConcentrationRiskMemberus-gaap:SalesRevenueNetMemberhtgc:DrugDeliveryMember2022-01-012022-12-310001280784Warrant Investments and Medical Devices & Equipment and Flowonix Medical Incorporated, Warrant, Acquisition Date 9/21/2018, Preferred Series BB2023-03-310001280784us-gaap:FairValueInputsLevel3Memberhtgc:EscrowReceivableMemberus-gaap:FairValueMeasurementsRecurringMember2023-01-012023-03-310001280784Warrant Investments and Software and Reltio, Inc., Warrant, Acquisition Date 6/30/2020, Common Stock2023-03-310001280784Debt Investments Communications & Networking and Aryaka Networks, Inc. Senior Secured, Maturity Date July 2026, Prime + 3.25%, Floor rate 6.75%, PIK Interest 1.05%, 3.55% Exit Fee2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:AlchemerLLCMember2022-12-310001280784htgc:IndustrySubSectorConcentrationRiskMemberus-gaap:SalesRevenueNetMemberhtgc:SurgicalDevicesMember2022-01-012022-12-310001280784Warrant Investments and Medical Devices & Equipment and Aspire Bariatrics, Inc., Warrant, Acquisition Date 1/28/2015, Common Stock2023-03-310001280784Debt Investments Consumer & Business Services and Worldremit Group Limited, Senior Secured, Maturity Date February 2025, 3-month LIBOR + 9.25%, Floor rate 10.25%, 3.20% Exit Fee2023-03-310001280784htgc:DividendDeclaredThreeMember2022-01-012022-12-310001280784htgc:September2026NotesMember2023-01-012023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:SeniorSecuredDebtMemberhtgc:OtherControlInvestmentsMemberhtgc:TecturaCorporationMember2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:LogicSourceMember2022-12-3100012807842023-03-310001280784htgc:SBADebenturesMember2023-01-012023-03-310001280784Warrant Investments and Drug Delivery and BioQ Pharma Incorporated, Warrant, Acquisition Date 10/27/2014, Common Stock2023-03-310001280784htgc:JulyTwoThousandTwentyFourNotesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310001280784Warrant Investments and Software and Couchbase, Inc., Warrant, Acquisition Date 4/25/2019, Common Stock2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:CoronadoAestheticsLLCMemberus-gaap:CommonStockMemberhtgc:MajorityOwnedControlInvestmentsMember2022-03-310001280784us-gaap:WarrantMembersrt:MinimumMemberus-gaap:ValuationTechniqueOptionPricingModelMemberus-gaap:FairValueInputsLevel3Memberhtgc:MeasurementInputMarketEquityAdjustmentMember2023-03-310001280784htgc:DiscountsAmortizationMember2023-01-012023-03-310001280784us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMembercountry:DE2023-01-012023-03-310001280784htgc:JanuaryTwoThousandTwentySevenNotesMember2022-01-012022-03-310001280784htgc:SBADebenturesIssuedOnJanuaryTwentyOneTwoThousandAndTwentyTwoMember2023-01-012023-03-310001280784Debt Investments Information Services and Yipit, LLC, Senior Secured, Maturity Date September 2026, 1-month SOFR + 9.14%, Floor rate 10.04%2023-03-310001280784Debt Investments Drug Discovery & Development and Cellarity, Inc. Senior Secured, Maturity Date June 2026, Prime + 5.70%, Floor rate 8.95%, 3.75% Exit Fee2022-12-310001280784htgc:SBADebenturesIssuedOnDecemberTwentyEightTwoThousandAndTwentyOneMember2023-01-012023-03-310001280784htgc:JuneTwoThousandTwentyFiveThreeYearNotesMemberhtgc:UnusedFacilityOtherFeesMember2023-01-012023-03-310001280784Debt Investments Drug Discovery & Development and Unity Biotechnology, Inc. Senior Secured, Maturity Date August 2024, Prime + 6.10%, Floor rate 9.35%, 6.25% Exit Fee2022-12-310001280784us-gaap:EstimateOfFairValueFairValueDisclosureMemberhtgc:SeptemberTwoThousandTwentySixNotesMember2022-12-310001280784htgc:HerculesCapitalFourLPMember2023-03-310001280784htgc:IndustrySubSectorConcentrationRiskMemberus-gaap:SalesRevenueNetMemberhtgc:ConsumerAndBusinessProductsMember2023-01-012023-03-310001280784Warrant Investments and Biotechnology Tools and Alamar Biosciences, Inc., Warrant, Acquisition Date 6/21/2022, Preferred Series B2022-12-310001280784htgc:September2026NotesMember2023-03-310001280784htgc:DividendDeclaredTwoMember2022-01-012022-12-310001280784Warrant Investments and Drug Discovery & Development and X4 Pharmaceuticals, Inc., Warrant, Acquisition Date 12/9/2022, Common Stock2022-12-310001280784htgc:CoronadoAestheticsLLCMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMember2022-03-310001280784Debt Investments Drug Discovery & Development and Codiak Biosciences, Inc. Senior Secured, Maturity Date October 2025, Prime + 5.00%, Floor rate 8.25%, 5.50% Exit Fee2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:DemandbaseIncorporationMember2022-12-310001280784Warrant Investments and Information Services and NetBase Solutions, Inc., Warrant, Acquisition Date 8/22/2017, Preferred Series 12023-03-310001280784country:IL2022-12-310001280784htgc:InvestmentFundsAndVehiclesMember2022-12-310001280784us-gaap:CommonStockMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310001280784Equity Investments Drug Discovery & Development and Albireo Pharma, Inc., Equity, Acquisition Date 9/14/2020, Series Common Stock2022-12-310001280784htgc:March2026ANotesMember2023-03-310001280784htgc:SumitomoMitsuiBankingCorporationFacilityMember2023-01-012023-03-310001280784Warrant Investments and Software and Leapwork ApS, Warrant, Acquisition Date 1/23/2023, Common Stock2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:OtherControlInvestmentsMember2022-03-310001280784Warrant Investments and Software and Tact.ai Technologies, Inc., Warrant, Acquisition Date 2/13/2020, Common Stock2022-12-310001280784Equity Investments Drug Discovery & Development and NorthSea Therapeutics, Equity, Acquisition Date 12/15/2021, Series Preferred Series C2023-03-310001280784country:GB2023-03-310001280784Warrant Investments and Medical Devices & Equipment and Lucira Health, Inc., Warrant, Acquisition Date 2/4/2022, Common Stock2022-12-310001280784Debt Investments Drug Discovery & Development and Seres Therapeutics, Inc. Senior Secured, Maturity Date October 2024, Prime + 6.40%, Floor rate 9.65%, 4.98% Exit Fee2023-03-310001280784htgc:AdviserSubsidiaryMember2023-03-310001280784htgc:RealizedGainLossMember2023-01-012023-03-310001280784Equity Investments Software and Nextdoor.com, Inc., Equity, Acquisition Date 8/1/2018, Series Common Stock2023-03-310001280784Investment Funds & Vehicles Investments (0.28%)2022-12-310001280784htgc:DebtInvestmentsMembersrt:MinimumMemberus-gaap:FairValueInputsLevel3Memberhtgc:ValuationTechniqueMarketComparableCompaniesMemberhtgc:MeasurementInputHypotheticalMarketYieldMemberhtgc:TechnologyMember2022-12-310001280784Debt Investments Drug Discovery & Development and Geron Corporation, Senior Secured, Maturity Date October 2024, Prime + 5.75%, Floor rate 9.00%, 6.55% Exit Fee2022-12-310001280784Debt Investments Consumer & Business Services and Thumbtack, Inc. Senior Secured, Maturity Date April 2026, Prime + 4.95%, Floor rate 8.20%, PIK Interest 1.50%, 3.95% Exit Fee2022-12-310001280784htgc:MarchTwoThousandTwentySixBNotesMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2022-12-310001280784Debt Investments (199.47%)2022-12-310001280784us-gaap:VariableInterestEntityPrimaryBeneficiaryMember2022-12-310001280784htgc:DiversifiedFinancialServicesMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:GibraltarBusinessCapitalLLCMemberhtgc:MajorityOwnedControlInvestmentsMember2023-03-310001280784Equity Investments Software, SingleStore, Inc.2022-12-310001280784Equity Investments Semiconductors and Achronix Semiconductor Corporation, Equity, Acquisition Date 7/1/2011, Series Preferred Series C2022-12-310001280784Warrant Investments and Consumer & Business Services and Worldremit Group Limited, Warrant, Acquisition Date 8/27/2021, Preferred Series E2022-12-310001280784us-gaap:WarrantMemberus-gaap:MeasurementInputRevenueMultipleMembersrt:MinimumMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Member2022-12-310001280784us-gaap:PreferredStockMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001280784htgc:SBADebenturesMember2022-12-310001280784Debt Investments Software and Riviera Partners LLC, Senior Secured, Maturity Date April 2027, 6-month SOFR + 7.53%, Floor rate 8.53%2023-03-310001280784Warrant Investments and Consumer & Business Services and Skyword, Inc.2022-12-310001280784Equity Investments Drug Discovery & Development and Applied Molecular Transport, Equity, Acquisition Date 4/6/2021, Series Common Stock2022-12-310001280784Warrant Investments and Software and Cutover, Inc., Warrant, Acquisition Date 9/21/2022, Common Stock2023-03-310001280784htgc:HerculesCapitalFourLPMember2023-01-012023-03-310001280784htgc:DeferredFeesMember2023-03-310001280784Warrant Investments and Drug Discovery & Development and ADMA Biologics, Inc., Warrant, Acquisition Date 2/24/2014, Common Stock2023-03-310001280784Debt Investments Diversified Financial Services and Hercules Adviser LLC, Unsecured, Maturity Date June 2025, FIXED 5.00%2022-12-310001280784Debt Investments Drug Discovery & Development and Phathom Pharmaceuticals, Inc. Senior Secured, Maturity Date October 2026, Prime + 2.25%, Floor rate 5.50%, PIK Interest 3.35%, 7.50% Exit Fee2023-03-310001280784country:US2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerNoncontrolledMemberhtgc:AffiliateInvestmentsMember2022-01-012022-03-310001280784Equity Investments Electronics & Computer Hardware and Skydio, Inc., Equity, Acquisition Date 3/8/2022, Series Preferred Series E2022-12-310001280784Warrant Investments and Software and Elation Health, Inc., Warrant, Acquisition Date 9/12/2022, Common Stock2022-12-310001280784htgc:DistributableEarningsLossMember2022-01-012022-03-310001280784Equity Investments Consumer & Business Services and Rhino Labs, Inc., Equity, Acquisition Date 1/24/2022, Series Preferred Series B-22023-03-310001280784us-gaap:IncomeApproachValuationTechniqueMemberhtgc:MeasurementInputsProbabilityWeightingOfAlternativeOutcomesMemberhtgc:DebtInvestmentsMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMemberhtgc:TechnologyMember2022-12-310001280784htgc:DebtInvestmentsMemberhtgc:ElationHealthIncMember2022-12-310001280784us-gaap:EquitySecuritiesMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Member2023-03-310001280784Investment Funds & Vehicles Investments and Drug Discovery & Development and Forbion Growth Opportunities Fund I C.V., Investment Funds & Vehicles, Acquisition Date 11/16/20202023-03-310001280784country:DE2022-12-310001280784Debt Investments Software and Fortified Health Security, Senior Secured, Maturity Date December 2027, 6-month SOFR + 7.79%, Floor rate 8.54%2023-03-310001280784htgc:FebruaryTwoThousandTwentyFiveNotesMemberhtgc:UnusedFacilityOtherFeesMember2023-01-012023-03-310001280784Warrant Investments and Media/Content/Info 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Equity, Acquisition Date 12/8/2015, Series Preferred Series D2023-03-310001280784htgc:AssetBackedNotesMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2022-12-310001280784Equity Investments Software and Druva Holdings, Inc., Equity, Acquisition Date 8/24/2017, Series Preferred Series 32023-03-310001280784Equity Investments Consumer & Business Products and TechStyle, Inc., Equity, Acquisition Date 4/30/2010, Series Common Stock2022-12-310001280784Equity Investments Sustainable and Renewable Technology and Impossible Foods, Inc., Equity, Acquisition Date 5/10/2019, Series Preferred Series E-12023-03-310001280784Warrant Investments and Drug Discovery & Development and Cellarity, Inc., Warrant, Acquisition Date 12/8/2021, Preferred Series B2022-12-310001280784Equity Investments Consumer & Business Services and Tectura Corporation, Equity, Acquisition Date 5/23/2018, Series Common 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Stock2022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:UnsecuredDebtMemberhtgc:GibraltarBusinessCapitalLLCMemberhtgc:MajorityOwnedControlInvestmentsMember2023-01-012023-03-310001280784us-gaap:WarrantMemberus-gaap:FairValueInputsLevel3Memberhtgc:MeasurementInputMarketEquityAdjustmentMembersrt:WeightedAverageMemberhtgc:ValuationTechniqueMarketAdjustedOpmBacksolveMember2022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:GibraltarBusinessCapitalLLCMember2022-01-012022-03-310001280784Equity Investments Software and Druva Holdings, Inc., Equity, Acquisition Date 10/22/2015, Series Preferred Series 22022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:TecturaCorporationMember2023-01-012023-03-310001280784country:US2022-12-310001280784us-gaap:FairValueInputsLevel3Memberhtgc:MarchTwoThousandTwentySixANotesMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310001280784htgc:MeasurementInputsProbabilityWeightingOfAlternativeOutcomesMemberhtgc:DebtInvestmentsMemberhtgc:LowerMiddleMarketMembersrt:MaximumMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Member2022-12-310001280784us-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberhtgc:SeptemberTwoThousandTwentySixNotesMember2023-03-310001280784htgc:ZappiIncMemberhtgc:DebtInvestmentsMember2022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:UnsecuredDebtMemberhtgc:OtherControlInvestmentsMemberhtgc:GibraltarBusinessCapitalLLCMember2023-01-012023-03-310001280784Warrant Investments and Sustainable and Renewable Technology and Halio, Inc., Warrant, Acquisition Date 4/22/2014, Preferred Series A2022-12-310001280784us-gaap:SalesRevenueNetMemberhtgc:CollateralTypeConcentrationRiskMemberhtgc:SecondLienMember2022-01-012022-12-310001280784htgc:DebtInvestmentsMemberhtgc:LowerMiddleMarketMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Member2023-03-310001280784Debt Investments Software and Campaign Monitor Limited, Senior Secured, Maturity Date November 2025, 6-month SOFR + 8.90%, Floor rate 9.90%2022-12-310001280784htgc:SMBCFacilityMemberus-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310001280784Debt Investments Software and Zappi, Inc., Senior Secured, Maturity Date December 2027, 3-month SOFR + 8.03%, Floor rate 9.03%2023-03-310001280784Equity Investments Medical Devices & Equipment and ViewRay, Inc., Equity, Acquisition Date 12/16/2013, Series Common Stock2023-03-310001280784htgc:JulyTwoThousandTwentyFourNotesMemberhtgc:UnusedFacilityOtherFeesMember2022-01-012022-03-310001280784htgc:TwoThousandTwentyTwoConvertibleNotesMemberhtgc:UnusedFacilityOtherFeesMember2022-01-012022-03-310001280784htgc:DiversifiedFinancialServicesMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:GibraltarBusinessCapitalLLCMemberhtgc:MajorityOwnedControlInvestmentsMember2022-12-310001280784us-gaap:FairValueInputsLevel3Memberhtgc:EscrowReceivableMemberus-gaap:FairValueMeasurementsRecurringMember2022-01-012022-03-310001280784Equity Investments Drug Discovery & Development and Valo Health, LLC, Equity, Acquisition Date 12/11/2020, Series Preferred Series B2022-12-310001280784Warrant Investments and Software and Reltio, Inc., Warrant, Acquisition Date 6/30/2020, Common Stock2022-12-310001280784Debt Investments Software and Esme Learning Solutions, Inc., Senior Secured, Maturity Date February 2025, Prime + 5.50%, Floor rate 8.75%, PIK Interest 1.50%, 3.00% Exit Fee2023-03-310001280784htgc:EquityAndWarrantInvestmentsMember2023-01-012023-03-310001280784Debt Investments Consumer & Business Services and Jobandtalent USA, Inc. Senior Secured, Maturity Date February 2025, 1-month SOFR + 8.86%, Floor rate 9.75%, 3.00% Exit Fee2023-03-310001280784htgc:PharmaceuticalsMemberhtgc:DebtInvestmentsMembersrt:MinimumMemberus-gaap:FairValueInputsLevel3Memberhtgc:MeasurementInputHypotheticalMarketYieldMemberhtgc:ValuationTechniqueMarketComparableCompaniesMember2023-03-310001280784Warrant Investments and Consumer & Business Services and Worldremit Group Limited, Warrant, Acquisition Date 2/11/2021, Preferred Series D2023-03-310001280784Warrant Investments and Software and The Faction Group LLC, Warrant, Acquisition Date 11/3/2014, Preferred Series 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Services, Veem, Inc.2022-12-310001280784Equity Investments Diversified Financial Services and Hercules Adviser LLC, Equity, Acquisition Date 3/26/2021, Series Member Units2023-03-310001280784Debt Investments Consumer & Business Services and Tectura Corporation, Senior Secured, Maturity Date July 2024 One, PIK Interest 5.00%2022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:OtherControlInvestmentsMember2022-01-012022-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:CoronadoAestheticsLLCMemberus-gaap:CommonStockMemberhtgc:MajorityOwnedControlInvestmentsMember2022-12-310001280784htgc:AssetBackedNotesMember2023-03-310001280784us-gaap:EquitySecuritiesMemberus-gaap:MeasurementInputRevenueMultipleMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMember2023-03-310001280784Equity Investments Drug Discovery & Development and Savara, Inc., Equity, Acquisition Date 8/11/2015, Series Common Stock2023-03-310001280784htgc:IndustrySubSectorConcentrationRiskMemberus-gaap:SalesRevenueNetMemberhtgc:MediaContentInfoMember2022-01-012022-12-310001280784htgc:CoronadoAestheticsLLCMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:SeriesAPreferredStockMemberhtgc:MedicalDevicesAndEquipmentMemberhtgc:MajorityOwnedControlInvestmentsMember2023-03-310001280784us-gaap:WarrantMemberus-gaap:MeasurementInputRevenueMultipleMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Memberhtgc:MarketComparableCompaniesMember2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMember2023-03-310001280784htgc:June2025NotesMember2023-03-310001280784htgc:CybermaxxIntermediateHoldingsIncorporationMemberhtgc:DebtInvestmentsMember2023-03-310001280784Equity Investments Consumer & Business Services and Total OfferUp, Inc.2022-12-310001280784Debt Investments Drug Discovery & Development and HilleVax, Inc. Senior Secured, Maturity Date May 2027, Prime + 1.05%, Floor rate 4.55%, Cap rate 6.05%, PIK Interest 2.85%, 7.15% Exit Fee2023-03-310001280784Warrant Investments and Sustainable and Renewable Technology and Ampion, PBC, Warrant, Acquisition Date 4/15/2022, Common Stock2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:CutoverIncMember2022-12-310001280784us-gaap:FairValueInputsLevel3Memberhtgc:EscrowReceivableMemberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001280784htgc:PromissoryNotesMemberhtgc:BlackCrowAIIncMember2022-12-310001280784Warrant Investments and Software and Aria Systems, Inc., Warrant, Acquisition Date 5/22/2015, Preferred Series G2023-03-310001280784Equity Investments Drug Discovery & Development and Humanigen, Inc., Equity, Acquisition Date 3/31/2021, Series Common Stock2023-03-310001280784htgc:TwoThousandTwentyTwoConvertibleNotesMember2022-01-012022-03-310001280784Equity Investments Sustainable and Renewable Technology and NantEnergy, LLC, Equity, Acquisition Date 8/31/2013, Series Common Units2023-03-310001280784htgc:SBADebenturesIssuedOnAugustTwentyTwoThousandAndTwentyOneMember2022-12-310001280784Warrant Investments and Consumer & Business Services and Udacity, Inc., Warrant, Acquisition Date 9/25/2020, Common Stock2023-03-310001280784Equity Investments Diversified Financial Services and Newfront Insurance Holdings, Inc., Equity, Acquisition Date 9/30/2021, Series Preferred Series D-22023-03-310001280784us-gaap:WarrantMembersrt:MaximumMemberus-gaap:MeasurementInputRevenueMultipleMemberus-gaap:FairValueInputsLevel3Memberhtgc:MarketComparableCompaniesMember2022-12-310001280784htgc:DebtInvestmentsMemberhtgc:MadrigalPharmaceuticalIncMember2023-03-310001280784htgc:PharmaceuticalsMemberhtgc:MeasurementInputPremiumDiscountMemberhtgc:DebtInvestmentsMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Memberhtgc:ValuationTechniqueMarketComparableCompaniesMember2022-12-310001280784Equity Investments Sustainable and Renewable Technology and Impossible Foods, Inc., Equity, Acquisition Date 5/10/2019, Series Preferred Series E-12022-12-310001280784Equity Investments Sustainable and Renewable Technology and Pivot Bio, Inc., Equity, Acquisition Date 6/28/2021, Series Preferred Series D2022-12-310001280784Warrant Investments and Software and Dashlane, Inc., Warrant, Acquisition Date 3/11/2019, Common Stock2023-03-310001280784htgc:JuneTwoThousandTwentyFiveNotesMemberhtgc:UnusedFacilityOtherFeesMember2022-01-012022-03-310001280784Warrant Investments and Software and First Insight, Inc., Warrant, Acquisition Date 5/10/2018, Preferred Series B2022-12-310001280784Debt Investments Software and Dashlane, Inc., Senior Secured, Maturity Date July 2025, Prime + 3.05%, Floor rate 7.55%, PIK Interest 1.10%, 4.95% Exit Fee2022-12-310001280784htgc:DebtInvestmentsMemberhtgc:ConstructorIoCorporationMember2022-12-310001280784Debt Investments Sustainable and Renewable Technology and Pineapple Energy LLC, Senior Secured, Maturity Date December 2024, PIK Interest 10.00%2022-12-310001280784htgc:PerformanceDeuMember2022-01-012022-03-310001280784us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMembercountry:GB2023-01-012023-03-310001280784htgc:TwoThousandEighteenMemberus-gaap:RestrictedStockMember2018-06-280001280784Equity Investments Surgical Devices and Gynesonics, Inc., Equity, Acquisition Date 1/18/2007, Series Preferred Series B2022-12-310001280784Debt Investments Manufacturing Technology and Ouster, Inc. Senior Secured, Maturity Date May 2026, Prime + 6.15%, Floor rate 9.40%, 7.45% Exit Fee2022-12-310001280784htgc:ContractualInterestIncomeMember2023-01-012023-03-310001280784htgc:AcceleratedFeeIncomeEarlyRepaymentsMember2022-01-012022-03-310001280784Equity Investments Drug Delivery (0.00%)2023-03-310001280784Warrant Investments and Drug Delivery and PDS Biotechnology Corporation, Warrant, Acquisition Date 8/28/2014, Common Stock2022-12-310001280784htgc:ModernLifeIncMemberhtgc:DebtInvestmentsMember2023-03-310001280784Warrant Investments and Medical Devices & Equipment and Flowonix Medical Incorporated, Warrant, Acquisition Date 11/3/2014, Preferred Series AA2022-12-310001280784htgc:PineappleEnergyLLCMemberus-gaap-supplement:InvestmentAffiliatedIssuerNoncontrolledMemberus-gaap:CommonStockMember2022-03-310001280784us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberhtgc:TwoThousandThirtyOneAssetBackedNotesMember2023-03-310001280784htgc:CommunicationsAndNetworkingMember2022-12-310001280784htgc:IndustrySubSectorConcentrationRiskMemberus-gaap:SalesRevenueNetMemberhtgc:MedicalDevicesAndEquipmentMember2022-01-012022-12-310001280784htgc:SurgicalDevicesMember2022-12-310001280784htgc:IndustrySubSectorConcentrationRiskMemberus-gaap:SalesRevenueNetMember2023-01-012023-03-310001280784Warrant Investments and Information Services and Capella Space Corp., Warrant, Acquisition Date 10/21/2021, Common Stock2023-03-310001280784htgc:SeniorSecuredDebtMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001280784Warrant Investments and Medical Devices & Equipment and Tela Bio, Inc., Warrant, Acquisition Date 3/31/2017, Common Stock2022-12-310001280784Warrant Investments and Sustainable and Renewable Technology and Halio, Inc., Warrant, Acquisition Date 4/7/2015, Preferred Series B2022-12-310001280784Debt Investments Healthcare Services, Other and Equality Health, LLC, Senior Secured, Maturity Date February 2026, Prime + 6.25%, Floor rate 9.50%, PIK Interest 1.55%2022-12-310001280784htgc:SMBCFacilityMemberus-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-03-310001280784htgc:CoronadoAestheticsLLCMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:CommonStockMemberhtgc:MajorityOwnedControlInvestmentsMember2021-12-310001280784htgc:DebtInvestmentsMemberhtgc:ThreatConnectIncMember2022-12-310001280784htgc:SBADebenturesIssuedOnDecemberTwentyEightTwoThousandAndTwentyOneMember2022-12-310001280784us-gaap:EstimateOfFairValueFairValueDisclosureMemberhtgc:TwoThousandThirtyOneAssetBackedNotesMember2022-12-310001280784Equity Investments Electronics & Computer Hardware (0.11%)2022-12-310001280784Debt Investments Consumer & Business Services and Provi, Senior Secured, Maturity Date December 2026, Prime + 4.40%, Floor rate 10.65%, 2.95% Exit Fee2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:PreferredStockMemberhtgc:GibraltarBusinessCapitalLLCMemberhtgc:MajorityOwnedControlInvestmentsMember2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:CommonStockMemberhtgc:OtherControlInvestmentsMemberhtgc:TecturaCorporationMember2023-03-310001280784Warrant Investments and Surgical Devices and TransMedics Group, Inc., Warrant, Acquisition Date 9/11/2015, Common Stock2022-12-310001280784us-gaap:WarrantMemberus-gaap:MeasurementInputRevenueMultipleMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMemberhtgc:MarketComparableCompaniesMember2023-03-310001280784htgc:SustainableAndRenewableTechnologyMemberhtgc:DebtInvestmentsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MarketApproachValuationTechniqueMember2022-12-310001280784htgc:UnusedFacilityOtherFeesMemberhtgc:TwoThousandThirtyThreeNotesMember2023-01-012023-03-310001280784htgc:DrugDeliveryMember2023-03-310001280784us-gaap:WarrantMemberus-gaap:MeasurementInputDiscountForLackOfMarketabilityMembersrt:MaximumMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Member2022-12-310001280784htgc:September2026NotesMember2021-09-162021-09-160001280784us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2023-01-012023-03-310001280784Equity Investments Drug Discovery & Development and Sio Gene Therapies, Inc., Equity, Acquisition Date 2/2/2017, Series Common Stock2023-03-310001280784Debt Investments Communications & Networking and Aryaka Networks, Inc. Senior Secured, Maturity Date July 2026, Prime + 3.25%, Floor rate 6.75%, PIK Interest 1.05%, 3.55% Exit Fee2022-12-310001280784us-gaap:EquitySecuritiesMemberus-gaap:ValuationTechniqueOptionPricingModelMemberus-gaap:FairValueInputsLevel3Member2023-03-310001280784Equity Investments Medical Devices & Equipment and Flowonix Medical Incorporated, Equity, Acquisition Date 11/3/2014, Series Preferred Series AA2022-12-310001280784Debt Investments Drug Discovery & Development and uniQure B.V. Senior Secured, Maturity Date December 2025, Prime + 4.70%, Floor rate 7.95%, 7.28% Exit Fee2022-12-310001280784Warrant Investments and Drug Discovery & Development and Axsome Therapeutics, Inc., Warrant, Acquisition Date 9/25/2020, Common Stock2022-12-310001280784us-gaap:SubsequentEventMemberhtgc:BaseAndSupplementalDividendMember2023-04-272023-04-270001280784htgc:SustainableAndRenewableTechnologyMemberhtgc:IndustrySubSectorConcentrationRiskMemberus-gaap:SalesRevenueNetMember2023-01-012023-03-310001280784htgc:DiversifiedFinancialServicesMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:SeriesAPreferredStockMemberhtgc:GibraltarBusinessCapitalLLCMemberhtgc:MajorityOwnedControlInvestmentsMember2023-03-310001280784Warrant Investments and Drug Delivery and PDS Biotechnology Corporation, Warrant, Acquisition Date 8/28/2014, Common Stock2023-03-310001280784htgc:ServiceVestingAwardsMember2023-01-012023-03-310001280784us-gaap:IncomeApproachValuationTechniqueMemberhtgc:MeasurementInputsProbabilityWeightingOfAlternativeOutcomesMemberhtgc:DebtInvestmentsMembersrt:MinimumMemberus-gaap:FairValueInputsLevel3Memberhtgc:TechnologyMember2022-12-310001280784htgc:SignificantPortfolioInvestmentMember2023-01-012023-03-310001280784Warrant Investments and Medical Devices & Equipment (0.04%)2023-03-310001280784Debt Investments Diversified Financial Services, Gibraltar Business Capital, LLC, Unsecured2022-12-310001280784Debt Investments Drug Discovery & Development and ATAI Life Sciences N.V. Senior Secured, Maturity Date August 2026, Prime + 4.55%, Floor rate 8.55%, 6.95% Exit Fee2023-03-310001280784Warrant Investments and Consumer & Business Products and Whoop, Inc., Warrant, Acquisition Date 6/27/2018, Preferred Series C2022-12-310001280784us-gaap:MeasurementInputDiscountForLackOfMarketabilityMemberus-gaap:EquitySecuritiesMembersrt:MaximumMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Member2022-12-310001280784Warrant Investments and Communications & Networking and Spring Mobile Solutions, Inc., Warrant, Acquisition Date 4/19/2013, Common Stock2022-12-310001280784htgc:SBADebenturesIssuedOnOctoberTwentyOneTwoThousandAndTwentyOneMember2023-01-012023-03-310001280784htgc:July2024NotesMember2023-01-012023-03-310001280784htgc:PharmaceuticalsMemberhtgc:DebtInvestmentsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MarketApproachValuationTechniqueMember2023-03-310001280784Debt Investments Drug Discovery & Development and Corium, Inc. Senior Secured, Maturity Date September 2026, Prime + 5.70%, Floor rate 8.95%, 7.75% Exit Fee2023-03-310001280784htgc:MUFGBankFacilityMember2023-01-012023-03-310001280784Debt Investments Biotechnology Tools and Alamar Biosciences, Inc. Senior Secured, Maturity Date June 2026, Prime + 3.00%, Floor rate 6.50%, PIK Interest 1.00%, 5.95% Exit Fee2023-03-310001280784htgc:IncludedInCostMember2023-03-310001280784Equity Investments Surgical Devices and Gynesonics, Inc., Equity, Acquisition Date 6/16/2010, Series Preferred Series C2022-12-310001280784Debt Investments Consumer & Business Services and SeatGeek, Inc. Senior Secured, Maturity Date May 2026, Prime + 7.00%, Floor rate 10.50%, PIK Interest 0.50%2022-12-310001280784htgc:SMBCFacilityMember2022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerMember2022-01-012022-03-310001280784Warrant Investments and Drug Discovery & Development and Albireo Pharma, Inc., Warrant, Acquisition Date 6/8/2020, Common Stock2022-12-310001280784us-gaap:EquitySecuritiesMembersrt:MaximumMemberus-gaap:MeasurementInputRevenueMultipleMemberus-gaap:FairValueInputsLevel3Memberhtgc:MarketComparableCompaniesMember2023-03-310001280784Debt Investments Software and ShadowDragon, LLC, Senior Secured, Maturity Date December 2026, 1-month LIBOR + 8.97%, Floor rate 9.97%2023-03-310001280784Warrant Investments and Drug Discovery & Development and TG Therapeutics, Inc., Warrant, Acquisition Date 2/28/2019, Common Stock2022-12-310001280784htgc:DebtInvestmentsMemberhtgc:RivieraPartnersLLCMember2023-03-310001280784htgc:ManufacturingTechnologyMember2023-03-310001280784htgc:SurgicalDevicesMember2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:DispatchTechnologiesIncMember2023-03-310001280784htgc:SBADebenturesIssuedOnMarchTwentySixTwoThousandAndTwentyOneMember2022-12-310001280784htgc:IndustrySubSectorConcentrationRiskMemberus-gaap:SalesRevenueNetMemberhtgc:SemiconductorsMember2022-01-012022-12-310001280784htgc:EquityAndWarrantInvestmentsMember2022-01-012022-03-310001280784htgc:IndustrySubSectorConcentrationRiskMemberus-gaap:SalesRevenueNetMemberhtgc:SoftwareMember2023-01-012023-03-310001280784htgc:TwoThousandThirtyThreeNotesMember2022-12-310001280784Warrant Investments and Consumer & Business Products and Whoop, Inc., Warrant, Acquisition Date 6/27/2018, Preferred Series C2023-03-310001280784htgc:MarchTwoThousandTwentySixBNotesMember2022-01-012022-03-310001280784Warrant Investments and Consumer & Business Services and SeatGeek, Inc., Warrant, Acquisition Date 6/12/2019, Common Stock2023-03-310001280784Debt Investments Software and Mobile Solutions Services, Senior Secured, Maturity Date December 2025, 3-month LIBOR + 9.06%, Floor rate 10.06%2023-03-310001280784Equity Investments Drug Discovery & Development and Valo Health, LLC, Equity, Acquisition Date 10/31/2022, Series Preferred Series C2022-12-310001280784htgc:TwoThousandThirtyOneAssetBackedNotesMember2023-03-310001280784htgc:SignalMediaLimitedMemberhtgc:DebtInvestmentsMember2022-12-310001280784Warrant Investments and Software and SingleStore, Inc., Warrant, Acquisition Date 4/28/2020, Preferred Series D2023-03-310001280784Debt Investments Drug Discovery & Development and Replimune Group, Inc. Senior Secured, Maturity Date October 2027, Prime + 1.75%, Floor rate 7.25%, Cap rate 9.00%, PIK Interest 1.50%, 4.95% Exit Fee2022-12-310001280784Equity Investments Drug Discovery & Development and Avalo Therapeutics, Inc., Equity, Acquisition Date 8/19/2014, Series Common Stock2023-03-310001280784Warrant Investments and Software and Nuvolo Technologies Corporation, Warrant, Acquisition Date 3/29/2019, Common Stock2022-12-310001280784Debt Investments Diversified Financial Services and Hercules Adviser LLC, Unsecured, Maturity Date June 2025, FIXED 5.00%2023-03-310001280784Equity Investments Software (2.07%)2022-12-310001280784Equity Investments Drug Discovery & Development and Concert Pharmaceuticals, Inc., Equity, Acquisition Date 2/13/2019, Series Common Stock2022-12-310001280784Debt Investments Drug Discovery & Development and Locus Biosciences, Inc. Senior Secured, Maturity Date July 2025, Prime + 6.10%, Floor rate 9.35%, 4.95% Exit Fee2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:CommonStockMemberhtgc:GibraltarBusinessCapitalLLCMemberhtgc:MajorityOwnedControlInvestmentsMember2022-01-012022-03-310001280784us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMembercountry:CA2023-01-012023-03-310001280784Debt Investments Manufacturing Technology and Bright Machines, Inc. Senior Secured, Maturity Date April 2025, Prime + 4.00%, Floor rate 9.50%, 5.00% Exit Fee2023-03-310001280784us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMembercountry:IL2022-01-012022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:CommonStockMemberhtgc:GibraltarBusinessCapitalLLCMemberhtgc:MajorityOwnedControlInvestmentsMember2022-12-310001280784Debt Investments Drug Discovery & Development and Redshift Bioanalytics, Inc. Senior Secured, Maturity Date January 2026, Prime + 4.25%, Floor rate 7.50%, 3.80% Exit Fee2023-03-310001280784htgc:DebtInvestmentsMembersrt:MinimumMemberus-gaap:FairValueInputsLevel3Memberhtgc:ValuationTechniqueMarketComparableCompaniesMemberhtgc:MeasurementInputHypotheticalMarketYieldMemberhtgc:TechnologyMember2023-03-310001280784htgc:InvestmentFundsAndVehiclesMember2023-03-310001280784Warrant Investments and Drug Discovery & Development and Axsome Therapeutics, Inc., Warrant, Acquisition Date 9/25/2020, Common Stock2023-03-310001280784htgc:AdviserSubsidiaryMember2022-01-012022-03-310001280784Debt Investments Software and Cybermaxx Intermediate Holdings, Inc., Senior Secured, Maturity Date August 2026, 6-month SOFR + 12.36%, Floor rate 13.11%2023-03-310001280784Warrant Investments and Healthcare Services, Other (0.00%)2022-12-3100012807842021-12-310001280784Debt Investments Software and Catchpoint Systems, Inc., Senior Secured, Maturity Date June 2026, 3-month SOFR + 8.86%, Floor rate 9.76%2023-03-310001280784htgc:SeniorSecuredDebtOneMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:ConsumerAndBusinessServicesMemberhtgc:OtherControlInvestmentsMemberhtgc:TecturaCorporationMember2022-01-012022-12-310001280784Equity Investments Surgical Devices, Gynesonics, Inc.2023-03-310001280784Debt Investments Drug Discovery & Development and BridgeBio Pharma, Inc. Senior Secured, Maturity Date November 2026, FIXED 9.00%, 2.00% Exit Fee2022-12-310001280784Equity Investments Medical Devices & Equipment and Flowonix Medical Incorporated, Equity, Acquisition Date 11/3/2014, Series Preferred Series AA2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:ConsumerAndBusinessServicesMemberhtgc:OtherControlInvestmentsMemberhtgc:PreferredSeriesBBMemberhtgc:TecturaCorporationMember2022-12-310001280784htgc:MUFGBankFacilityMemberus-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310001280784htgc:JulyTwoThousandTwentyFourNotesMember2023-03-310001280784Equity Investments Consumer & Business Services (0.57%)2022-12-310001280784htgc:DebtInvestmentsMemberus-gaap:FairValueInputsLevel3Memberhtgc:DebtMaturingWithinOneYearMember2022-12-310001280784Warrant Investments and Sustainable and Renewable Technology and IngredientWerks Holdings, Inc. (p.k.a Agrivida, Inc.), Warrant, Acquisition Date 6/20/2013, Preferred Series D2023-03-310001280784Debt Investments Drug Discovery & Development and Madrigal Pharmaceutical, Inc. Senior Secured, Maturity Date May 2026, Prime + 3.95%, Floor rate 7.45%, 5.35% Exit Fee2022-12-310001280784Warrant Investments and Software and Mixpanel, Inc., Warrant, Acquisition Date 9/30/2020, Common Stock2023-03-310001280784htgc:MeasurementInputPremiumDiscountMemberhtgc:DebtInvestmentsMembersrt:MinimumMemberus-gaap:FairValueInputsLevel3Memberhtgc:ValuationTechniqueMarketComparableCompaniesMemberhtgc:TechnologyMember2022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:ConsumerAndBusinessServicesMemberhtgc:OtherControlInvestmentsMemberhtgc:TecturaCorporationMember2022-12-310001280784Debt Investments Diversified Financial Services (3.10%)2023-03-310001280784htgc:DiversifiedFinancialServicesMemberhtgc:HerculesAdviserLLCMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:UnsecuredDebtMemberhtgc:MajorityOwnedControlInvestmentsMember2023-01-012023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:CommonStockMemberhtgc:OtherControlInvestmentsMemberhtgc:TecturaCorporationMember2021-12-310001280784Warrant Investments and Information Services (0.04%)2022-12-3100012807842023-04-260001280784Warrant Investments and Software and Couchbase, Inc., Warrant, Acquisition Date 4/25/2019, Common Stock2022-12-310001280784htgc:SBADebenturesIssuedOnDecemberTwentyTwoThousandAndTwentyOneMember2022-12-310001280784Debt Investments Software and Annex Cloud, Senior Secured, Maturity Date February 2027, 1-month BSBY + 8.99%, Floor rate 9.99%2023-03-310001280784htgc:PharmaceuticalsMemberhtgc:DebtInvestmentsMemberhtgc:MeasurementInputCollateralRecoverabilityMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMember2023-03-310001280784htgc:MarchTwoThousandTwentySixBNotesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310001280784htgc:CommonOfferingExpensesMember2022-01-012022-03-310001280784htgc:IndustrySubSectorConcentrationRiskMemberus-gaap:SalesRevenueNetMemberhtgc:DrugDiscoveryAndDevelopmentMember2023-01-012023-03-310001280784us-gaap:CreditConcentrationRiskMember2023-03-310001280784Warrant Investments and Consumer & Business Services and Thumbtack, Inc., Warrant, Acquisition Date 5/1/2018, Common Stock2022-12-310001280784htgc:CapitalInExcessOfParValueMember2022-01-012022-03-310001280784Warrant Investments and Consumer & Business Services and Houzz, Inc., Warrant, Acquisition Date 10/29/2019, Common Stock2023-03-310001280784Warrant Investments and Consumer & Business Services and Udacity, Inc., Warrant, Acquisition Date 9/25/2020, Common Stock2022-12-310001280784Debt Investments Drug Discovery & Development and Tarsus Pharmaceuticals, Inc. Senior Secured, Maturity Date February 2027, Prime + 5.20%, Floor rate 8.45%, 4.75% Exit Fee2022-12-310001280784htgc:HerculesAdviserLLCMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:MajorityOwnedControlInvestmentsMemberus-gaap:MemberUnitsMember2022-12-310001280784Warrant Investments and Software and Automation Anywhere, Inc., Warrant, Acquisition Date 9/23/2022, Common Stock2022-12-310001280784htgc:AssetBackedNotesMember2022-06-220001280784Equity Investments Medical Devices & Equipment and Coronado Aesthetics, LLC, Equity, Acquisition Date 10/15/2021, Series Preferred Series A-22023-03-310001280784us-gaap:EmployeeStockOptionMember2022-01-012022-03-310001280784Debt Investments Consumer & Business Services and Tectura Corporation, Senior Secured, Maturity Date July 2024 One, PIK Interest 5.00%2023-03-310001280784htgc:DebtInvestmentsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MarketApproachValuationTechniqueMemberhtgc:TechnologyMember2023-03-310001280784Warrant Investments and Consumer & Business Products and Savage X Holding, LLC, Warrant, Acquisition Date 6/27/2014, Class A Units2022-12-310001280784Warrant Investments and Sustainable and Renewable Technology and IngredientWerks Holdings, Inc. (p.k.a Agrivida, Inc.), Warrant, Acquisition Date 6/20/2013, Preferred Series D2022-12-310001280784us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMembercountry:DK2023-01-012023-03-310001280784Warrant Investments and Software and DroneDeploy, Inc., Warrant, Acquisition Date 6/30/2022, Common Stock2023-03-310001280784Debt Investments Software and LogicSource, Senior Secured, Maturity Date July 2027, 3-month SOFR + 8.93%, Floor rate 9.93%2022-12-310001280784us-gaap:ValuationTechniqueDiscountedCashFlowMemberus-gaap:EquitySecuritiesMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMemberus-gaap:MeasurementInputDiscountRateMember2022-12-310001280784htgc:DebtInvestmentsMember2022-12-310001280784htgc:MUFGBankFacilityMember2023-03-310001280784htgc:SBADebenturesIssuedOnJulyTwentyEightTwoThousandAndTwentyOneMember2022-12-310001280784htgc:SMBCFacilityMemberhtgc:UnusedFacilityOtherFeesMember2023-01-012023-03-310001280784Equity Investments Software, Druva Holdings, Inc.2023-03-310001280784Equity Investments Electronics & Computer Hardware (0.09%)2023-03-310001280784Equity Investments Software (1.66%)2023-03-310001280784Warrant Investments and Consumer & Business Products and Savage X Holding, LLC, Warrant, Acquisition Date 6/27/2014, Class A Units2023-03-310001280784Debt Investments Drug Discovery & Development and Century Therapeutics, Inc. Senior Secured, Maturity Date April 2024, Prime + 6.30%, Floor rate 9.55%, 3.95% Exit Fee2023-03-310001280784Debt Investments Software and Alchemer LLC, Senior Secured, Maturity Date May 2028, 1-month SOFR + 7.89%, Floor rate 8.89%2022-12-310001280784us-gaap:SalesRevenueNetMemberus-gaap:UnsecuredDebtMemberhtgc:InvestmentTypeConcentrationRiskMember2022-01-012022-12-310001280784htgc:HerculesAdviserLLCMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMember2023-03-310001280784us-gaap:UnsecuredDebtMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-01-012023-03-310001280784Equity Investments Consumer & Business Services and Nerdy Inc., Equity, Acquisition Date 9/17/2021, Series Common Stock2023-03-310001280784htgc:IncludedInCostMember2023-01-012023-03-310001280784htgc:AcceleratedFeeIncomeEarlyRepaymentsMember2023-01-012023-03-310001280784htgc:SBADebenturesIssuedOnMarchTwentySixTwoThousandAndTwentyOneMember2023-01-012023-03-310001280784htgc:DebtInvestmentsMemberhtgc:VidaHealthMember2023-03-310001280784Equity Investments Surgical Devices and TransMedics Group, Inc., Equity, Acquisition Date 11/7/2012, Series Common Stock2022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:UnsecuredDebtMemberhtgc:GibraltarBusinessCapitalLLCMemberhtgc:MajorityOwnedControlInvestmentsMember2021-12-310001280784Warrant Investments and Manufacturing Technology and MacroFab, Inc., Warrant, Acquisition Date 3/23/2022, Common Stock2022-12-310001280784Warrant Investments and Electronics & Computer Hardware (0.07%)2023-03-310001280784Equity Investments Drug Delivery and PDS Biotechnology Corporation, Equity, Acquisition Date 4/6/2015, Series Common Stock2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:TipaltiSolutionsLtdMember2022-12-310001280784us-gaap:EmployeeStockOptionMember2023-01-012023-03-310001280784htgc:CoronadoAestheticsLLCMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:CommonStockMemberhtgc:MajorityOwnedControlInvestmentsMember2023-01-012023-03-310001280784us-gaap:EquitySecuritiesMemberus-gaap:MeasurementInputRevenueMultipleMembersrt:MinimumMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Member2022-12-310001280784htgc:TwoThousandTwentyTwoNotesMember2022-01-012022-03-310001280784Debt Investments Media/Content/Info and Fever Labs, Inc. Senior Secured, Maturity Date December 2025, Prime + 3.50%, Floor rate 9.00%, 2.98% Exit Fee2023-03-310001280784Debt Investments Drug Discovery & Development (78.49%)2023-03-310001280784Debt Investments Drug Discovery & Development and Kura Oncology, Inc. Senior Secured, Maturity Date November 2027, Prime + 2.40%, Floor rate 8.65%, 15.13% Exit Fee2023-03-310001280784Debt Investments Software and Ikon Science Limited, Senior Secured, Maturity Date October 2024, 3-month Eurodollar + 9.00%, Floor rate 10.00%2023-03-310001280784Equity Investments Surgical Devices and Gynesonics, Inc., Equity, Acquisition Date 6/16/2010, Series Preferred Series C2023-03-310001280784us-gaap:EmployeeStockOptionMember2023-01-012023-03-310001280784htgc:PharmaceuticalsMemberhtgc:DebtInvestmentsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MarketApproachValuationTechniqueMember2022-12-310001280784Debt Investments Software and Enmark Systems, Inc., Senior Secured, Maturity Date September 2026, 3-month LIBOR + 6.77%, Floor rate 7.77%, PIK Interest 2.16%2022-12-310001280784us-gaap:WarrantMemberus-gaap:MeasurementInputDiscountForLackOfMarketabilityMembersrt:MinimumMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Member2022-12-310001280784Warrant Investments and Consumer & Business Services and Provi, Warrant, Acquisition Date 12/22/2022, Common Stock2023-03-310001280784htgc:MarchTwoThousandTwentySixBNotesMember2023-01-012023-03-310001280784Debt Investments Software and Flight Schedule Pro, LLC, Senior Secured, Maturity Date October 2027, 1-month SOFR + 7.80%, Floor rate 8.70%2023-03-310001280784us-gaap:WarrantMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Memberhtgc:MeasurementInputMarketEquityAdjustmentMemberhtgc:ValuationTechniqueMarketAdjustedOpmBacksolveMember2022-12-310001280784Equity Investments Consumer & Business Services (0.56%)2023-03-310001280784Warrant Investments and Consumer & Business Services and Modern Life, Inc., Warrant, Acquisition Date 3/30/2022, Common Stock2023-03-310001280784htgc:JuneTwoThousandTwentyFiveNotesMember2022-01-012022-03-310001280784htgc:HerculesAdviserLLCMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:MajorityOwnedControlInvestmentsMemberus-gaap:MemberUnitsMember2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:AkeroTherapeuticsIncMember2023-03-310001280784Warrant Investments and Communications & Networking (0.01%)2023-03-310001280784htgc:DebtInvestmentsMemberus-gaap:FairValueInputsLevel3Memberhtgc:MeasurementInputHypotheticalMarketYieldMemberhtgc:ValuationTechniqueMarketComparableCompaniesMembersrt:WeightedAverageMemberhtgc:TechnologyMember2023-03-310001280784htgc:HerculesAdviserLLCMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMember2022-03-310001280784us-gaap:CarryingReportedAmountFairValueDisclosureMember2023-03-310001280784htgc:TwoThousandThirtyOneAssetBackedNotesMember2023-03-310001280784us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001280784Debt Investments Consumer & Business Services, SeatGeek, Inc.2023-03-3100012807842022-01-012022-03-310001280784Equity Investments Drug Discovery & Development and Rocket Pharmaceuticals, Ltd., Equity, Acquisition Date 8/22/2007, Series Common Stock2022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:OtherControlInvestmentsMember2021-12-310001280784htgc:DiversifiedFinancialServicesMemberhtgc:HerculesAdviserLLCMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:MajorityOwnedControlInvestmentsMember2023-03-310001280784Equity Investments Drug Discovery & Development and Hibercell, Inc., Equity, Acquisition Date 5/7/2021, Series Preferred Series B2022-12-310001280784us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMembercountry:DK2022-01-012022-12-310001280784Debt Investments Drug Discovery & Development and Akero Therapeutics, Inc. Senior Secured, Maturity Date January 2027, Prime + 3.65%, Floor rate 7.65%, 5.85% Exit Fee2022-12-310001280784Debt Investments Drug Discovery & Development and Phathom Pharmaceuticals, Inc. Senior Secured, Maturity Date October 2026, Prime + 2.25%, Floor rate 5.50%, PIK Interest 3.35%, 7.50% Exit Fee2022-12-310001280784Debt Investments Consumer & Business Services (30.59%)2022-12-310001280784htgc:DividendDeclaredTwoMember2023-01-012023-03-310001280784Equity Investments Drug Discovery & Development and Axsome Therapeutics, Inc., Equity, Acquisition Date 5/9/2022, Series Common Stock2022-12-310001280784Equity Investments Diversified Financial Services and Gibraltar Business Capital, LLC, Equity, Acquisition Date 3/1/2018, Series Common Stock2023-03-310001280784us-gaap:SubsequentEventMemberhtgc:BaseDividendMember2023-05-162023-05-160001280784us-gaap:WarrantMemberus-gaap:ValuationTechniqueOptionPricingModelMemberus-gaap:FairValueInputsLevel3Member2023-03-310001280784htgc:SustainableAndRenewableTechnologyMemberhtgc:MeasurementInputPremiumDiscountMemberhtgc:DebtInvestmentsMemberus-gaap:FairValueInputsLevel3Memberhtgc:ValuationTechniqueMarketComparableCompaniesMembersrt:WeightedAverageMember2023-03-310001280784htgc:SpilloveramountpershareMember2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:PathaiIncMember2023-03-310001280784htgc:UnusedFacilityOtherFeesMemberhtgc:SBADebenturesMember2023-01-012023-03-310001280784Debt Investments Diversified Financial Services and Gibraltar Business Capital, LLC, Unsecured, Maturity Date September 2026, FIXED 11.50%2023-03-310001280784htgc:DistributableEarningsLossMember2021-12-310001280784htgc:ThreeMonthSOFRMember2023-03-310001280784htgc:MarchTwoThousandTwentySixANotesMember2022-01-012022-03-310001280784htgc:DebtInvestmentsMemberhtgc:TGTherapeuticsIncMember2023-03-310001280784htgc:IndustrySubSectorConcentrationRiskMemberhtgc:ManufacturingTechnologyMemberus-gaap:SalesRevenueNetMember2022-01-012022-12-310001280784htgc:DividendDeclaredOneMember2023-01-012023-03-310001280784Equity Investments Consumer & Business Products and Grove Collaborative, Inc., Equity, Acquisition Date 4/30/2021, Series Common Stock2022-12-310001280784Debt Investments Software and Cybermaxx Intermediate Holdings, Inc., Senior Secured, Maturity Date August 2026, 6-month SOFR + 9.53%, Floor rate 10.28%2022-12-310001280784Debt Investments Drug Discovery & Development and TG Therapeutics, Inc. Senior Secured, Maturity Date January 2026, Prime + 2.15%, Floor rate 5.40%, PIK Interest 3.45%, 5.95% Exit Fee2022-12-310001280784Warrant Investments and Software and SignPost, Inc., Warrant, Acquisition Date 1/13/2016, Series Junior 1 Preferred2023-03-310001280784Debt Investments Media/Content/Info (0.66%)2023-03-310001280784htgc:TwoThousandThirtyOneAssetBackedNotesMember2022-12-310001280784htgc:ConvertibleNoteDiscountsAmortizationMember2022-01-012022-03-310001280784Warrant Investments and Consumer & Business Products and TechStyle, Inc., Warrant, Acquisition Date 7/16/2013, Preferred Series B2022-12-310001280784Warrant Investments and Software and Cloudpay, Inc., Warrant, Acquisition Date 4/10/2018, Preferred Series B2023-03-310001280784htgc:SustainableAndRenewableTechnologyMemberhtgc:MeasurementInputPremiumDiscountMemberhtgc:DebtInvestmentsMemberus-gaap:FairValueInputsLevel3Memberhtgc:ValuationTechniqueMarketComparableCompaniesMembersrt:WeightedAverageMember2022-12-310001280784country:DK2022-12-310001280784htgc:DepreciationMemberus-gaap:FairValueInputsLevel3Memberhtgc:PreferredStockInvestmentMember2023-01-012023-03-310001280784htgc:DebtInvestmentsMemberus-gaap:FairValueInputsLevel3Member2022-12-310001280784htgc:FebruaryTwoThousandTwentyFiveNotesMember2022-01-012022-03-310001280784htgc:SixMonthLIBORMember2023-03-310001280784us-gaap:MeasurementInputDiscountForLackOfMarketabilityMemberus-gaap:EquitySecuritiesMembersrt:MinimumMemberus-gaap:FairValueInputsLevel3Memberhtgc:MarketComparableCompaniesMember2022-12-310001280784us-gaap:CarryingReportedAmountFairValueDisclosureMemberhtgc:TwoThousandThirtyOneAssetBackedNotesMember2023-03-310001280784htgc:DiversifiedFinancialServicesMemberus-gaap:UnsecuredDebtMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:GibraltarBusinessCapitalLLCMemberhtgc:MajorityOwnedControlInvestmentsMember2022-12-310001280784htgc:EscrowReceivableMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310001280784us-gaap:WarrantMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001280784Warrant Investments and Sustainable and Renewable Technology and Halio, Inc., Warrant, Acquisition Date 4/7/2015, Preferred Series B2023-03-310001280784Equity Investments Drug Discovery & Development and Valo Health, LLC, Equity, Acquisition Date 12/11/2020, Series Preferred Series B2023-03-310001280784htgc:HealthcareServicesOtherMemberhtgc:IndustrySubSectorConcentrationRiskMemberus-gaap:SalesRevenueNetMember2023-01-012023-03-310001280784us-gaap:UnsecuredDebtMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001280784Warrant Investments and Sustainable and Renewable Technology and Halio, Inc., Warrant, Acquisition Date 4/22/2014, Preferred Series A2023-03-310001280784htgc:StreamlineHealthcareSolutionsMemberhtgc:DebtInvestmentsMember2023-03-310001280784Equity Investments Consumer & Business Products (0.04%)2022-12-310001280784htgc:SBADebenturesMember2023-03-310001280784htgc:PharmaceuticalsMemberhtgc:DebtInvestmentsMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Member2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:SeniorSecuredDebtTwoMemberhtgc:ConsumerAndBusinessServicesMemberhtgc:OtherControlInvestmentsMemberhtgc:TecturaCorporationMember2022-01-012022-12-310001280784Warrant Investments and Consumer & Business Services and Worldremit Group Limited2022-12-310001280784Warrant Investments and Communications & Networking and Spring Mobile Solutions, Inc., Warrant, Acquisition Date 4/19/2013, Common Stock2023-03-310001280784us-gaap:EquitySecuritiesMemberus-gaap:MeasurementInputRevenueMultipleMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMemberhtgc:MarketComparableCompaniesMember2022-12-310001280784htgc:SustainableAndRenewableTechnologyMemberhtgc:MeasurementInputPremiumDiscountMemberhtgc:DebtInvestmentsMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Memberhtgc:ValuationTechniqueMarketComparableCompaniesMember2022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:OtherControlInvestmentsMember2023-01-012023-03-310001280784Equity Investments Software, Contentful Global, Inc.2023-03-310001280784us-gaap:MeasurementInputDiscountForLackOfMarketabilityMemberus-gaap:EquitySecuritiesMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Memberhtgc:MarketComparableCompaniesMember2023-03-310001280784htgc:SixPointTwoFiveNotesDueTwoThousandThirtyThreeMember2023-01-012023-03-310001280784country:NLus-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2023-01-012023-03-310001280784us-gaap:PreferredStockMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-01-012022-03-310001280784Warrant Investments and Drug Discovery & Development and ADMA Biologics, Inc., Warrant, Acquisition Date 2/24/2014, Common Stock2022-12-310001280784Debt Investments Software and Elation Health, Inc., Senior Secured, Maturity Date March 2026, Prime + 4.25%, Floor rate 9.00%, PIK Interest 1.95%, 3.95% Exit Fee2022-12-310001280784htgc:MarchTwoThousandTwentySixBNotesMember2023-03-310001280784us-gaap:EquitySecuritiesMemberus-gaap:FairValueInputsLevel3Memberhtgc:MeasurementInputTangibleBookValueMultipleMembersrt:WeightedAverageMemberhtgc:MarketComparableCompaniesMember2022-12-310001280784Warrant Investments and Drug Delivery and BioQ Pharma Incorporated, Warrant, Acquisition Date 10/27/2014, Common Stock2022-12-310001280784htgc:CoronadoAestheticsLLCMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMember2023-01-012023-03-310001280784htgc:JanuaryTwoThousandTwentySevenNotesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-03-310001280784htgc:FeverLabsIncMemberhtgc:DebtInvestmentsMember2022-12-310001280784htgc:CapitalInExcessOfParValueMember2023-01-012023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:PreferredStockMemberhtgc:GibraltarBusinessCapitalLLCMemberhtgc:MajorityOwnedControlInvestmentsMember2022-12-310001280784htgc:MediaContentInfoMember2022-12-310001280784Debt Investments Consumer & Business Services and Carwow LTD Senior Secured, Maturity Date December 2024, Prime + 4.70%, Floor rate 7.95%, PIK Interest 1.45%, 4.95% Exit Fee2022-12-310001280784htgc:DebtInvestmentsMemberhtgc:CerosIncorporationMember2023-03-310001280784Investment Funds & Vehicles Investments and Drug Discovery & Development and Forbion Growth Opportunities Fund I C.V., Investment Funds & Vehicles, Acquisition Date 11/16/20202022-12-310001280784Debt Investments Consumer & Business Services and Udacity, Inc. Senior Secured, Maturity Date September 2024, Prime + 4.50%, Floor rate 7.75%, PIK Interest 2.00%, 3.00% Exit Fee2023-03-310001280784Equity Investments Sustainable and Renewable Technology and Fulcrum Bioenergy, Inc., Equity, Acquisition Date 9/13/2012, Series Preferred Series C-12022-12-310001280784Debt Investments Information Services (3.71%)2023-03-310001280784Debt Investments Consumer & Business Services and Skyword, Inc. Senior Secured, Maturity Date November 2026, Prime + 2.75%, Floor rate 9.25%, PIK Interest 1.75%, 3.00% Exit Fee2022-12-310001280784htgc:RoyaltyContractMemberhtgc:PhathomPharmaceuticalsIncMember2022-12-310001280784us-gaap:EquitySecuritiesMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Memberhtgc:MeasurementInputTangibleBookValueMultipleMemberhtgc:MarketComparableCompaniesMember2023-03-310001280784us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001280784Debt Investments Software and Elation Health, Inc., Senior Secured, Maturity Date March 2026, Prime + 4.25%, Floor rate 9.00%, PIK Interest 1.95%, 3.95% Exit Fee2023-03-310001280784Warrant Investments and Medical Devices & Equipment and Flowonix Medical Incorporated, Warrant, Acquisition Date 11/3/2014, Preferred Series AA2023-03-310001280784us-gaap:SalesRevenueNetMemberhtgc:AllAssetsIncludingIntellectualPropertyMemberhtgc:CollateralTypeConcentrationRiskMemberhtgc:SeniorSecuredFirstLienMember2022-01-012022-12-310001280784us-gaap:CarryingReportedAmountFairValueDisclosureMemberhtgc:FebruaryTwoThousandTwentyFiveNotesMember2023-03-310001280784htgc:MeasurementInputPremiumDiscountMemberhtgc:SustainableAndRenewableTechnologyMemberhtgc:DebtInvestmentsMemberus-gaap:FairValueInputsLevel3Memberhtgc:ValuationTechniqueMarketComparableCompaniesMember2023-03-310001280784htgc:UnfundedDebtCommitmentsMember2023-01-012023-03-310001280784htgc:MarchTwoThousandTwentySixBNotesMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310001280784Warrant Investments and Drug Discovery & Development and Kineta, Inc., Warrant, Acquisition Date 12/20/2019, Common Stock2022-12-310001280784Warrant Investments and Consumer & Business Services and Snagajob.com, Inc., Warrant, Acquisition Date 4/20/2020, Common Stock2023-03-310001280784htgc:AdviserSubsidiaryMember2022-03-310001280784htgc:DepreciationMemberus-gaap:FairValueInputsLevel3Memberhtgc:PreferredStockInvestmentMember2022-01-012022-03-310001280784Equity Investments Drug Discovery & Development and Tarsus Pharmaceuticals, Inc., Equity, Acquisition Date 5/5/2022, Series Common Stock2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:CoronadoAestheticsLLCMemberus-gaap:PreferredStockMemberhtgc:MajorityOwnedControlInvestmentsMember2021-12-310001280784htgc:DebtInvestmentsMemberhtgc:ThreatConnectIncMember2023-03-310001280784htgc:SeniorSecuredDebtMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:BabelStreetMember2022-12-310001280784Warrant Investments and Electronics & Computer Hardware and Locus Robotics Corp., Warrant, Acquisition Date 6/21/2022, Common Stock2023-03-310001280784us-gaap:WarrantMemberus-gaap:ValuationTechniqueOptionPricingModelMemberus-gaap:FairValueInputsLevel3Memberhtgc:MeasurementInputMarketEquityAdjustmentMembersrt:WeightedAverageMember2023-03-310001280784Equity Investments Sustainable and Renewable Technology and Modumetal, Inc., Equity, Acquisition Date 6/1/2015, Series Common Stock2023-03-310001280784Debt Investments Consumer & Business Services and Provi, Senior Secured, Maturity Date December 2026, Prime + 4.40%, Floor rate 10.65%, 2.95% Exit Fee2022-12-310001280784htgc:IndustrySubSectorConcentrationRiskMemberus-gaap:SalesRevenueNetMemberhtgc:ConsumerAndBusinessServicesMember2022-01-012022-12-310001280784Warrant Investments and Software and Lightbend, Inc., Warrant, Acquisition Date 2/14/2018, Preferred Series 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Fee2023-03-310001280784us-gaap:MeasurementInputDiscountForLackOfMarketabilityMemberus-gaap:EquitySecuritiesMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Memberhtgc:MarketComparableCompaniesMember2022-12-310001280784us-gaap:WarrantMemberus-gaap:MeasurementInputDiscountForLackOfMarketabilityMembersrt:MinimumMemberus-gaap:FairValueInputsLevel3Memberhtgc:MarketComparableCompaniesMember2022-12-310001280784Equity Investments Surgical Devices and Gynesonics, Inc., Equity, Acquisition Date 7/14/2015, Series Preferred Series E2023-03-310001280784htgc:DiscountsAmortizationMember2022-01-012022-03-310001280784htgc:JanuaryTwoThousandTwentySevenNotesMember2022-12-310001280784htgc:InvestmentFundsAndVehiclesMember2023-03-310001280784Warrant Investments and Consumer & Business Services and Skyword, Inc., Warrant, Acquisition Date 11/14/2022, Common 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Gynesonics, Inc., Equity, Acquisition Date 7/14/2015, Series Preferred Series E2022-12-310001280784htgc:DebtInvestmentsMemberhtgc:LocusRoboticsCorporationMember2022-12-310001280784Debt Investments Semiconductors and Fungible, Inc. Senior Secured, Maturity Date December 2024, Prime + 5.00%, Floor rate 8.25%, 4.95% Exit Fee2022-12-310001280784Equity Investments Software and Druva Holdings, Inc., Equity, Acquisition Date 8/24/2017, Series Preferred Series 32022-12-310001280784Warrant Investments and Information Services and Capella Space Corp., Warrant, Acquisition Date 10/21/2021, Common Stock2022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:CoronadoAestheticsLLCMemberus-gaap:SeriesAPreferredStockMemberhtgc:MedicalDevicesAndEquipmentMemberhtgc:MajorityOwnedControlInvestmentsMember2022-12-310001280784Warrant Investments and Drug Discovery & Development and Madrigal Pharmaceutical, Inc., Warrant, Acquisition Date 5/9/2022, Common Stock2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:MobileSolutionsServicesMember2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:SeniorSecuredDebtMemberhtgc:ConsumerAndBusinessServicesMemberhtgc:OtherControlInvestmentsMemberhtgc:TecturaCorporationMember2023-03-310001280784htgc:NotesMember2018-09-240001280784us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-03-310001280784Debt Investments Consumer & Business Services and Rhino Labs, Inc. Senior Secured, Maturity Date March 2024, Prime + 5.50%, Floor rate 8.75%, PIK Interest 2.25%2022-12-310001280784htgc:IndustrySubSectorConcentrationRiskMemberus-gaap:SalesRevenueNetMemberhtgc:BiotechnologyToolsMember2022-01-012022-12-310001280784Warrant Investments and Information Services and Signal Media Limited, Warrant, Acquisition Date 6/29/2022, Common Stock2022-12-310001280784Equity Investments Software and Druva Holdings, Inc., Equity, Acquisition Date 10/22/2015, Series Preferred Series 22023-03-310001280784Debt Investments Software and Riviera Partners LLC, Senior Secured, Maturity Date April 2027, 6-month SOFR + 7.53%, Floor rate 8.53%2022-12-310001280784us-gaap:FairValueInputsLevel3Memberus-gaap:DebtMemberhtgc:AppreciationMember2022-01-012022-03-310001280784htgc:UnusedFacilityOtherFeesMemberhtgc:TwoThousandThirtyThreeNotesMember2022-01-012022-03-310001280784htgc:TwoThousandThirtyThreeNotesMember2022-01-012022-03-310001280784Debt Investments Healthcare Services, Other and Blue Sprig Pediatrics, Inc. 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Senior Secured, Maturity Date March 2026, Prime + 4.35%, Floor rate 7.60%, PIK Interest 1.25%, 4.50% Exit Fee2022-12-310001280784us-gaap:CommonStockMemberhtgc:EquityInvestmentsMember2023-03-310001280784htgc:AdviserFundsMember2023-03-310001280784Warrant Investments and Drug Discovery & Development and Scynexis, Inc., Warrant, Acquisition Date 5/14/2021, Common Stock2023-03-310001280784htgc:MeasurementInputsProbabilityWeightingOfAlternativeOutcomesMemberhtgc:DebtInvestmentsMemberhtgc:LowerMiddleMarketMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMember2022-12-310001280784Equity Investments Diversified Financial Services (2.75%)2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:ThumbtackIncorporationMember2022-12-310001280784htgc:DebtInvestmentsMemberus-gaap:FairValueInputsLevel3Memberhtgc:ValuationTechniqueMarketComparableCompaniesMemberhtgc:MeasurementInputHypotheticalMarketYieldMembersrt:WeightedAverageMemberhtgc:TechnologyMember2022-12-310001280784us-gaap:EquitySecuritiesMemberhtgc:ValuationTechniqueOtherMemberus-gaap:FairValueInputsLevel3Member2022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:PreferredStockMemberhtgc:OtherControlInvestmentsMemberhtgc:TecturaCorporationMember2023-01-012023-03-310001280784Investments (208.82%)2023-03-310001280784Warrant Investments and Diversified Financial Services (0.01%)2023-03-310001280784htgc:MeasurementInputPremiumDiscountMemberhtgc:DebtInvestmentsMemberus-gaap:FairValueInputsLevel3Memberhtgc:ValuationTechniqueMarketComparableCompaniesMembersrt:WeightedAverageMemberhtgc:TechnologyMember2023-03-310001280784htgc:JulyTwoThousandTwentyFourNotesMember2022-12-310001280784htgc:UnusedFacilityOtherFeesMemberhtgc:MarchTwoThousandTwentySixBNotesMember2023-01-012023-03-310001280784htgc:DebtInvestmentsMemberhtgc:AlladaptImmunotherapeuticsincMember2023-03-310001280784Warrant Investments and Surgical Devices and TransMedics Group, Inc., Warrant, Acquisition Date 9/11/2015, Common Stock2023-03-310001280784htgc:JuneTwoThousandTwentyFiveThreeYearNotesMember2023-03-310001280784htgc:CommonStockParValueZeroPointZeroZeroOnePerShareMember2023-01-012023-03-310001280784Equity Investments Consumer & Business Services and DoorDash, Inc., Equity, Acquisition Date 12/20/2018, Series Common Stock2023-03-310001280784Warrant Investments and Sustainable and Renewable Technology and Fulcrum Bioenergy, Inc., Warrant, Acquisition Date 4/30/2013, Preferred Series C-12022-12-310001280784Equity Investments and Drug Discovery & Development and BridgeBio Pharma, Inc., Equity, Acquisition Date 6/21/2018, Series Common Stock2022-12-310001280784htgc:RecurringFeeIncomeMember2023-01-012023-03-310001280784htgc:SBADebenturesIssuedOnNovemberThirtyTwoThousandAndTwentyOneMember2023-01-012023-03-310001280784htgc:DebtInvestmentsMemberus-gaap:FairValueInputsLevel3Member2023-03-310001280784us-gaap:RevolvingCreditFacilityMember2022-01-012022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerNoncontrolledMember2023-01-012023-03-310001280784htgc:JuneTwoThousandTwentyFiveThreeYearNotesMember2023-01-012023-03-310001280784htgc:OtherInterestIncomeMember2023-01-012023-03-310001280784Warrant Investments and Drug Discovery & Development and Dermavant Sciences Ltd., Warrant, Acquisition Date 5/31/2019, Common Stock2023-03-310001280784Warrant Investments and Electronics & Computer Hardware and Skydio, Inc., Warrant, Acquisition Date 11/08/2021, Common Stock2023-03-310001280784htgc:SoftwareMember2023-03-310001280784Equity Investments Drug Discovery & Development and BridgeBio Pharma, Inc., Equity, Acquisition Date 6/21/2018, Series Common Stock2023-03-310001280784Equity Investments Consumer & Business Services and Nerdy Inc., Equity, Acquisition Date 9/17/2021, Series Common Stock2022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:MajorityOwnedControlInvestmentsMember2021-12-310001280784us-gaap:SubsequentEventMemberhtgc:BaseDividendMember2023-05-230001280784Debt Investments Consumer & Business Services and Modern Life, Inc. Senior Secured, Maturity Date February 2027, Prime + 2.75%, Floor rate 8.75%, 5.00% Exit Fee2023-03-310001280784htgc:BiotechnologyToolsMember2022-12-310001280784us-gaap:WarrantMemberus-gaap:MeasurementInputDiscountForLackOfMarketabilityMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MarketApproachValuationTechniqueMember2023-03-310001280784us-gaap:WarrantMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310001280784htgc:DividendDeclaredEightMember2022-01-012022-12-310001280784htgc:DebtInvestmentsMemberhtgc:ProventionBioIncMember2022-12-310001280784Equity Investments Software and Black Crow AI, Inc. affiliates, Equity, Acquisition Date 3/24/2021, Series Preferred Note2022-12-310001280784Equity Investments Consumer & Business Services and Uber Technologies, Inc., Acquisition Date 12/1/2020, Series Common Stock2022-12-310001280784htgc:MarchTwoThousandTwentySixBNotesMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2023-03-310001280784htgc:UnusedFacilityOtherFeesMemberhtgc:JanuaryTwoThousandTwentySevenNotesMember2023-01-012023-03-310001280784htgc:SBADebenturesIssuedOnJuneTwentyFiveTwoThousandAndTwentyOneMember2023-03-310001280784Equity Investments Drug Delivery and Aytu BioScience, Inc., Equity, Acquisition Date 3/28/2014, Series Common Stock2022-12-310001280784Equity Investments Surgical Devices (0.24%)2023-03-310001280784htgc:CapitalInExcessOfParValueMember2022-03-310001280784htgc:CapitalInExcessOfParValueMember2023-03-310001280784htgc:MeasurementInputPremiumDiscountMemberhtgc:DebtInvestmentsMemberhtgc:LowerMiddleMarketMemberus-gaap:FairValueInputsLevel3Memberhtgc:ValuationTechniqueMarketComparableCompaniesMembersrt:WeightedAverageMember2022-12-310001280784Equity Investments Consumer & Business Services and Lyft, Inc., Equity, Acquisition Date 12/26/2018, Series Common Stock2022-12-310001280784htgc:DebtInvestmentsMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Memberhtgc:TechnologyMember2023-03-310001280784htgc:HerculesAdviserLLCMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:UnsecuredDebtMemberhtgc:MajorityOwnedControlInvestmentsMember2023-03-310001280784us-gaap:SalesRevenueNetMemberhtgc:InvestmentTypeConcentrationRiskMemberhtgc:SeniorSecuredDebtMember2023-01-012023-03-310001280784Warrant Investments and Surgical Devices and Gynesonics, Inc., Warrant, Acquisition Date 1/16/2013, Preferred Series C2022-12-310001280784Warrant Investments and Medical Devices & Equipment (0.07%)2022-12-310001280784us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310001280784htgc:SemiconductorsMember2022-12-310001280784htgc:HealthcareServicesOtherMember2022-12-310001280784Debt Investments Software and Enmark Systems, Inc., Senior Secured, Maturity Date September 2026, 3-month LIBOR + 6.76%, Floor rate 7.76%, PIK Interest 2.15%2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:LowerMiddleMarketMembersrt:MinimumMemberus-gaap:FairValueInputsLevel3Memberhtgc:MeasurementInputHypotheticalMarketYieldMemberhtgc:ValuationTechniqueMarketComparableCompaniesMember2023-03-310001280784htgc:DistributableEarningsLossMember2022-03-310001280784us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMembercountry:IL2023-01-012023-03-310001280784Debt Investments Software and Convoy, Inc., Senior Secured, Maturity Date March 2026, Prime + 3.20%, Floor rate 6.45%, PIK Interest 1.95%, 4.55% Exit Fee2023-03-310001280784htgc:SMBCFacilityMember2023-03-310001280784Equity Investments Drug Discovery & Development and Applied Molecular Transport, Equity, Acquisition Date 4/6/2021, Series Common Stock2023-03-310001280784us-gaap:SalesRevenueNetMemberhtgc:InvestmentTypeConcentrationRiskMember2022-01-012022-12-310001280784Debt Investments Information 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1/18/2007, Series Preferred Series B2023-03-310001280784country:CA2022-12-310001280784us-gaap:CarryingReportedAmountFairValueDisclosureMemberhtgc:JanuaryTwoThousandTwentySevenNotesMember2023-03-310001280784htgc:SustainableAndRenewableTechnologyMember2022-12-310001280784Debt Investments Sustainable and Renewable Technology and Pineapple Energy LLC, Senior Secured, Maturity Date December 2024, PIK Interest 10.00%2023-03-310001280784htgc:TaxableSubsidiaryMember2022-01-012022-12-310001280784htgc:MeasurementInputPremiumDiscountMemberhtgc:DebtInvestmentsMemberhtgc:LowerMiddleMarketMembersrt:MinimumMemberus-gaap:FairValueInputsLevel3Memberhtgc:ValuationTechniqueMarketComparableCompaniesMember2022-12-310001280784Debt Investments Electronics & Computer Hardware (1.27%)2023-03-310001280784Debt Investments Drug Discovery & Development and G1 Therapeutics, Inc. Senior Secured, Maturity Date November 2026, Prime + 5.90%, Floor rate 9.15%, 9.86% Exit Fee2023-03-310001280784htgc:SBADebenturesIssuedOnNovemberFifteenTwoThousandAndTwentyOneMember2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:SeniorSecuredDebtMemberhtgc:OtherControlInvestmentsMemberhtgc:TecturaCorporationMember2021-12-310001280784us-gaap:EquitySecuritiesMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Member2022-12-310001280784htgc:DividendDeclaredSixMember2022-01-012022-12-310001280784Warrant Investments and Drug Discovery & Development and Century Therapeutics, Inc., Warrant, Acquisition Date 9/14/2020, Common Stock2022-12-310001280784Debt Investments Healthcare Services, Other and Oak Street Health, Inc. Senior Secured, Maturity Date October 2027, Prime + 2.45%, Floor rate 7.95%, Cap rate 9.45%, PIK Interest 1.00%, 4.95% Exit Fee2022-12-310001280784Equity Investments Consumer & Business Services and Carwow LTD, Equity, Acquisition Date 12/15/2021, Series Preferred Series D-42023-03-310001280784Warrant Investments and Drug Discovery & Development and Myovant Sciences, Ltd., Warrant, Acquisition Date 10/16/2017, Common Stock2022-12-310001280784Debt Investments Software and Dispatch Technologies, Inc., Senior Secured, Maturity Date April 2028, 3-month SOFR + 8.01%, Floor rate 8.76%2022-12-310001280784Warrant Investments and Semiconductors and Fungible, Inc., Warrant, Acquisition Date 12/16/2021, Common Stock2022-12-310001280784htgc:DebtInvestmentsMemberhtgc:BrainCorporationMember2023-03-310001280784Debt Investments Software and Alchemer LLC, Senior Secured, Maturity Date May 2028, 1-month SOFR + 8.14%, Floor rate 9.14%2023-03-310001280784Debt Investments Consumer & Business Services and Rhino Labs, Inc. Senior Secured, Maturity Date March 2024, Prime + 5.50%, Floor rate 8.75%, PIK Interest 2.25%2023-03-310001280784Debt Investments Drug Discovery & Development and Kura Oncology, Inc. Senior Secured, Maturity Date November 2027, Prime + 2.40%, Floor rate 8.65%, 15.13% Exit Fee2022-12-310001280784Investment Funds & Vehicles Investments and Software (0.02%)2023-03-310001280784Equity Investments Drug Discovery & Development (2.66%)2022-12-310001280784htgc:DividendDeclaredOneMember2023-03-092023-03-090001280784htgc:ModernLifeIncMemberhtgc:DebtInvestmentsMember2022-12-310001280784Warrant Investments and Drug Discovery & Development and Provention Bio, Inc., Warrant, Acquisition Date 9/15/2022, Common Stock2022-12-310001280784Equity Investments Software and ZeroFox, Inc., Equity, Acquisition Date 5/7/2020, Series Common Stock2022-12-310001280784Warrant Investments and Software and DNAnexus, Inc., Warrant, Acquisition Date 3/21/2014, Preferred Series C2022-12-310001280784us-gaap:UnsecuredDebtMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-03-310001280784htgc:CommonOfferingExpensesMember2023-01-012023-03-310001280784htgc:OtherInterestIncomeMember2022-01-012022-03-310001280784htgc:SustainableAndRenewableTechnologyMemberhtgc:IndustrySubSectorConcentrationRiskMemberus-gaap:SalesRevenueNetMember2022-01-012022-12-310001280784Warrant Investments and Electronics & Computer Hardware (0.09%)2022-12-310001280784Debt Investments Software and Babel Street, Senior Secured, Maturity Date December 2027, 3-month SOFR + 7.89%, Floor rate 8.89%2022-12-310001280784Debt Investments Drug Discovery & Development and Viridian Therapeutics, Inc. Senior Secured, Maturity Date October 2026, Prime + 4.20%, Floor rate 7.45%, Cap rate 8.95%, 6.00% Exit Fee2023-03-310001280784Equity Investments Consumer & Business Products (0.03%)2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:ProventionBioIncMember2023-03-310001280784Warrant Investments and Medical Devices & Equipment and Outset Medical, Inc., Warrant, Acquisition Date 9/27/2013, Common Stock2022-12-310001280784htgc:DebtInvestmentsMemberhtgc:NuvoloTechnologiesCorporationMember2023-03-310001280784htgc:MedicalDevicesAndEquipmentMember2023-03-310001280784htgc:LiabilityClassifiedAwardsMember2022-03-310001280784Warrant Investments and Drug Discovery & Development and Tricida, Inc., Warrant, Acquisition Date 3/27/2019, Common Stock2023-03-310001280784Debt Investments Drug Discovery & Development and Provention Bio, Inc. Senior Secured, Maturity Date September 2027, Prime + 2.20%, Floor rate 8.20%, 6.60% Exit Fee2023-03-310001280784Warrant Investments and Drug Discovery & Development and Redshift Bioanalytics, Inc., Warrant, Acquisition Date 3/23/2022, Preferred Series E2022-12-310001280784us-gaap:MeasurementInputEbitdaMultipleMemberus-gaap:EquitySecuritiesMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Memberhtgc:MarketComparableCompaniesMember2023-03-310001280784us-gaap:SalesRevenueNetMemberus-gaap:PreferredStockMemberhtgc:InvestmentTypeConcentrationRiskMemberhtgc:EquityInvestmentsMember2022-01-012022-12-310001280784us-gaap:SalesRevenueNetMemberhtgc:InvestmentTypeConcentrationRiskMemberus-gaap:CommonStockMemberhtgc:EquityInvestmentsMember2022-01-012022-12-310001280784htgc:UnusedFacilityOtherFeesMemberhtgc:SBADebenturesMember2022-01-012022-03-310001280784Warrant Investments and Consumer & Business Products and Gadget Guard, LLC, Warrant, Acquisition Date 6/3/2014, Common Stock2023-03-310001280784us-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-03-310001280784htgc:PerformanceAwardsMember2023-01-012023-03-310001280784htgc:RoyaltyContractMemberhtgc:PhathomPharmaceuticalsIncMember2023-03-310001280784Debt Investments Software and Streamline Healthcare Solutions, Senior Secured, Maturity Date March 2028, 6-month SOFR + 7.25%, Floor rate 8.25%2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:PhathomPharmaceuticalsIncMember2022-12-310001280784us-gaap:FairValueInputsLevel3Memberhtgc:EscrowReceivableMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001280784us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001280784Investment Funds & Vehicles Investments and Software (0.03%)2022-12-310001280784htgc:JulyTwoThousandTwentyFourNotesMember2023-01-012023-03-310001280784Debt Investments Consumer & Business Services, SeatGeek, Inc.2022-12-310001280784us-gaap:EstimateOfFairValueFairValueDisclosureMemberhtgc:SeptemberTwoThousandTwentySixNotesMember2023-03-310001280784Equity Investments Drug Discovery & Development and Savara, Inc., Equity, Acquisition Date 8/11/2015, Series Common Stock2022-12-310001280784Warrant Investments and Drug Discovery & Development (0.70%)2023-03-310001280784Debt Investments Biotechnology Tools and PathAI, Inc., Senior Secured, Maturity Date January 2027, Prime + 2.15%, Floor rate 9.15%, 11.21% Exit Fee2022-12-310001280784htgc:HerculesCapitalFourLPMember2020-10-272020-10-270001280784htgc:InvestmentFundsAndVehiclesMember2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:ShadowDragonLLCMember2023-03-310001280784htgc:SBADebenturesIssuedOnNovemberOneTwoThousandAndTwentyOneMember2023-03-310001280784htgc:IndustrySubSectorConcentrationRiskMemberus-gaap:SalesRevenueNetMemberhtgc:ConsumerAndBusinessServicesMember2023-01-012023-03-310001280784Warrant Investments and Biotechnology Tools (0.03%)2023-03-310001280784Debt Investments Software and Logicworks, Senior Secured, Maturity Date January 2024, Prime + 7.50%, Floor rate 10.75%2022-12-310001280784htgc:PineappleEnergyLLCMemberus-gaap-supplement:InvestmentAffiliatedIssuerNoncontrolledMemberus-gaap:CommonStockMember2022-01-012022-03-310001280784us-gaap:FairValueMeasurementsRecurringMember2022-12-310001280784Debt Investments Software and Nuvolo Technologies Corporation, Senior Secured, Maturity Date July 2025, Prime + 5.25%, Floor rate 8.50%, 2.42% Exit Fee2022-12-310001280784htgc:MUFGBankFacilityMemberhtgc:OneMonthSecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2023-01-012023-03-310001280784us-gaap:PrivateEquityFundsForeignMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001280784Debt Investments Consumer & Business Services and Skyword, Inc. Senior Secured, Maturity Date November 2026, Prime + 2.75%, Floor rate 9.25%, PIK Interest 1.75%, 3.00% Exit Fee2023-03-310001280784Warrant Investments and Consumer & Business Services and Carwow LTD, Warrant, Acquisition Date 12/14/2021, Common Stock2023-03-310001280784Debt Investments Software and Loftware, Inc., Senior Secured, Maturity Date March 2028, 3-month SOFR + 7.88%, Floor rate 8.88%2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:AtaiLifeSciencesNVMember2023-03-310001280784Equity Investments Software, SingleStore, Inc.2023-03-310001280784us-gaap:CommonStockMember2022-01-012022-03-310001280784htgc:SMBCFacilityMembersrt:MinimumMember2023-01-012023-03-310001280784htgc:TwoThousandThirtyOneAssetBackedNotesMember2022-12-310001280784Warrant Investments and Consumer & Business Products (0.14%)2023-03-310001280784Equity Investments Medical Devices & Equipment (0.07%)2022-12-310001280784Debt Investments Software and Imperva, Inc., Senior Secured, Maturity Date January 2027, 3-month LIBOR + 7.75%, Floor rate 8.75%2023-03-310001280784htgc:ThreeMonthLIBORMember2022-12-310001280784htgc:DividendDeclaredOneMember2022-03-162022-03-160001280784Warrant Investments and Drug Discovery & Development and AmplifyBio, LLC, Warrant, Acquisition Date 12/27/2022, Class A Units2023-03-310001280784htgc:PharmaceuticalsMemberhtgc:DebtInvestmentsMemberus-gaap:FairValueInputsLevel3Memberhtgc:ValuationTechniqueMarketComparableCompaniesMemberhtgc:MeasurementInputHypotheticalMarketYieldMembersrt:WeightedAverageMember2022-12-310001280784us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-01-012022-03-310001280784htgc:DebtInvestmentsMemberhtgc:LowerMiddleMarketMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Memberhtgc:MeasurementInputHypotheticalMarketYieldMemberhtgc:ValuationTechniqueMarketComparableCompaniesMember2022-12-310001280784srt:MaximumMemberhtgc:SecuredCreditFacilityWithMUFGBankLtdMUFGMember2023-03-310001280784Equity Investments Drug Discovery & Development and Tarsus Pharmaceuticals, Inc., Equity, Acquisition Date 5/5/2022, Series Common Stock2022-12-310001280784htgc:SmbcLcFacilityMember2023-01-132023-01-130001280784htgc:HerculesAdviserLLCMemberus-gaap:UnsecuredDebtMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:MajorityOwnedControlInvestmentsMember2022-12-310001280784htgc:January2027NotesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310001280784htgc:DividendDeclaredSevenMember2022-11-172022-11-170001280784Debt Investments Drug Discovery & Development and Aldeyra Therapeutics, Inc. Senior Secured, Maturity Date October 2024, Prime + 3.10%, Floor rate 8.60%, 8.90% Exit Fee2022-12-310001280784Warrant Investments and Sustainable and Renewable Technology and Halio, Inc.2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:G1TherapeuticsIncMember2022-12-310001280784htgc:SMBCFacilityMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2023-03-310001280784Equity Investments Software and Palantir Technologies, Equity, Acquisition Date 9/23/2020, Series Common Stock2022-12-310001280784Equity Investments Drug Discovery & Development and X4 Pharmaceuticals, Inc., Equity, Acquisition Date 11/26/2019, Series Common Stock2023-03-310001280784Debt Investments Media/Content/Info and Fever Labs, Inc. Senior Secured, Maturity Date September 2025, Prime + 3.50%, Floor rate 9.00%, 2.67% Exit Fee2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:UnsecuredDebtMemberhtgc:GibraltarBusinessCapitalLLCMemberhtgc:MajorityOwnedControlInvestmentsMember2022-01-012022-03-310001280784Equity Investments Consumer & Business Services and Lyft, Inc., Equity, Acquisition Date 12/26/2018, Series Common Stock2023-03-310001280784htgc:SBADebenturesIssuedOnDecemberTwentyThreeTwoThousandAndTwentyOneMember2023-01-012023-03-310001280784Warrant Investments and Drug Discovery & Development and Acacia Pharma Inc., Warrant, Acquisition Date 6/29/2018, Common Stock2022-12-310001280784htgc:DebtInvestmentsMemberhtgc:OakStreetHealthIncMember2022-12-310001280784us-gaap:EquitySecuritiesMembersrt:MinimumMemberus-gaap:ValuationTechniqueOptionPricingModelMemberus-gaap:FairValueInputsLevel3Memberhtgc:MeasurementInputMarketEquityAdjustmentMember2023-03-310001280784Equity Investments Consumer & Business Services and OfferUp, Inc., Equity, Acquisition Date 10/25/2016, Series Preferred Series A2023-03-310001280784Debt Investments Consumer & Business Services and Thumbtack, Inc. Senior Secured, Maturity Date April 2026, Prime + 4.95%, Floor rate 8.20%, PIK Interest 1.50%, 3.95% Exit Fee2023-03-310001280784Equity Investments Software and CapLinked, Inc., Equity, Acquisition Date 10/26/2012, Series Preferred Series A-32023-03-310001280784htgc:March2026ANotesMember2023-01-012023-03-310001280784us-gaap:EquitySecuritiesMembersrt:MinimumMemberus-gaap:FairValueInputsLevel3Memberhtgc:MeasurementInputTangibleBookValueMultipleMemberhtgc:MarketComparableCompaniesMember2023-03-310001280784htgc:DiversifiedFinancialServicesMemberhtgc:HerculesAdviserLLCMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:MemberUnitsMemberhtgc:MajorityOwnedControlInvestmentsMember2023-03-310001280784htgc:ConsumerAndBusinessProductsMember2022-12-310001280784us-gaap:EquitySecuritiesMembersrt:MinimumMemberus-gaap:ValuationTechniqueOptionPricingModelMemberus-gaap:FairValueInputsLevel3Memberhtgc:MeasurementInputMarketEquityAdjustmentMember2022-12-310001280784htgc:SBADebenturesIssuedOnDecemberTwentyThreeTwoThousandAndTwentyOneMember2022-12-310001280784htgc:DebtInvestmentsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:CostApproachValuationTechniqueMember2023-03-310001280784us-gaap:SubsequentEventMemberhtgc:BaseDividendMember2023-05-232023-05-230001280784htgc:PerformanceVestingAwardsMember2022-01-012022-03-310001280784us-gaap:CommonStockMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001280784Warrant Investments and Consumer & Business Services and Houzz, Inc., Warrant, Acquisition Date 10/29/2019, Common Stock2022-12-310001280784Warrant Investments and Consumer & Business Services and Snagajob.com, Inc., Warrant, Acquisition Date 8/1/2018, Preferred Series B2022-12-310001280784Debt Investments Consumer & Business Services, Tectura Corporation2023-03-310001280784Equity Investments Drug Discovery & Development and Paratek Pharmaceuticals, Inc., Equity, Acquisition Date 2/26/2007, Series Common Stock2022-12-310001280784htgc:DebtInvestmentsMemberhtgc:NextInsuranceIncMember2023-03-310001280784Equity Investments Consumer & Business Services and Oportun, Equity, Acquisition Date 6/28/2013, Series Common Stock2022-12-310001280784Warrant Investments and Diversified Financial Services and Next Insurance, Inc., Warrant, Acquisition Date 2/3/2022, Common Stock2023-03-310001280784Warrant Investments and Media/Content/Info and Fever Labs, Inc., Warrant, Acquisition Date 12/30/2022, Preferred Series E-12023-03-310001280784htgc:SoftwareMember2022-12-310001280784us-gaap:PreferredStockMemberhtgc:EquityInvestmentsMember2023-03-310001280784Debt Investments Drug Discovery & Development and BridgeBio Pharma, Inc. Senior Secured, Maturity Date November 2026, FIXED 9.00%, 2.00% Exit Fee2023-03-310001280784us-gaap:CarryingReportedAmountFairValueDisclosureMemberhtgc:MarchTwoThousandTwentySixANotesMember2022-12-310001280784Equity Investments Drug Discovery & Development and Paratek Pharmaceuticals, Inc., Equity, Acquisition Date 2/26/2007, Series Common Stock2023-03-310001280784Debt Investments Information Services (3.72%)2022-12-310001280784Warrant Investments and Manufacturing Technology (0.21%)2023-03-310001280784htgc:FebruaryTwoThousandTwentyFiveNotesMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-03-310001280784Debt Investments Drug Discovery & Development and Gritstone Bio, Inc. Senior Secured, Maturity Date July 2027, Prime + 3.15%, Floor rate 7.15%, Cap rate 8.65%, PIK Interest 2.00%, 5.75% Exit Fee2022-12-310001280784htgc:MUFGBankFacilityMemberhtgc:UnusedFacilityOtherFeesMember2022-01-012022-03-310001280784us-gaap:EstimateOfFairValueFairValueDisclosureMemberhtgc:TwoThousandThirtyOneAssetBackedNotesMember2023-03-310001280784Warrant Investments and Consumer & Business Services and Snagajob.com, Inc., Warrant, Acquisition Date 8/1/2018, Preferred Series B2023-03-310001280784htgc:JuneTwoThousandTwentyFiveNotesMember2022-12-310001280784htgc:MeasurementInputPremiumDiscountMemberhtgc:DebtInvestmentsMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Memberhtgc:ValuationTechniqueMarketComparableCompaniesMemberhtgc:TechnologyMember2023-03-310001280784Warrant Investments and Semiconductors (0.04%)2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:PreferredStockMemberhtgc:OtherControlInvestmentsMemberhtgc:TecturaCorporationMember2022-03-310001280784us-gaap:WarrantMemberus-gaap:MeasurementInputRevenueMultipleMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMember2022-12-310001280784Equity Investments Software and CapLinked, Inc., Equity, Acquisition Date 10/26/2012, Series Preferred Series A-32022-12-310001280784us-gaap:MeasurementInputEbitdaMultipleMemberus-gaap:EquitySecuritiesMembersrt:MinimumMemberus-gaap:FairValueInputsLevel3Memberhtgc:MarketComparableCompaniesMember2023-03-310001280784Debt Investments Drug Discovery & Development and X4 Pharmaceuticals, Inc. Senior Secured, Maturity Date July 2024, Prime + 3.75%, Floor rate 8.75%, 8.80% Exit Fee2022-12-310001280784Warrant Investments and Consumer & Business Services and Snagajob.com, Inc.2022-12-310001280784Equity Investments Drug Discovery & Development and Axsome Therapeutics, Inc., Equity, Acquisition Date 5/9/2022, Series Common Stock2023-03-310001280784Warrant Investments and Information Services and Signal Media Limited, Warrant, Acquisition Date 6/29/2022, Common Stock2023-03-310001280784htgc:DividendDeclaredFourMember2022-05-242022-05-240001280784Warrant Investments and Software and Elation Health, Inc., Warrant, Acquisition Date 9/12/2022, Common Stock2023-03-310001280784htgc:PharmaceuticalsMemberhtgc:MeasurementInputPremiumDiscountMemberhtgc:DebtInvestmentsMemberus-gaap:FairValueInputsLevel3Memberhtgc:ValuationTechniqueMarketComparableCompaniesMembersrt:WeightedAverageMember2022-12-310001280784us-gaap:EstimateOfFairValueFairValueDisclosureMember2023-03-310001280784Equity Investments Drug Discovery & Development and Akero Therapeutics, Inc., Equity, Acquisition Date 9/19/2022, Series Common Stock2022-12-310001280784us-gaap:FairValueInputsLevel2Memberhtgc:TwoThousandThirtyThreeNotesMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310001280784htgc:HerculesAdviserLLCMemberus-gaap:UnsecuredDebtMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:MajorityOwnedControlInvestmentsMember2023-01-012023-03-310001280784Warrant Investments and Software and Tact.ai Technologies, Inc., Warrant, Acquisition Date 2/13/2020, Common Stock2023-03-310001280784htgc:AnnexCloudMemberhtgc:DebtInvestmentsMember2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:ReplimuneGroupIncMember2023-03-310001280784country:NL2023-03-310001280784Warrant Investments and Consumer & Business Services and Skyword, Inc., Warrant, Acquisition Date 11/14/2022, Common Stock2022-12-310001280784Warrant Investments and Consumer & Business Services and Skyword, Inc.2023-03-310001280784htgc:MarchTwoThousandTwentySixANotesMember2022-12-310001280784htgc:NotesMember2023-01-012023-03-310001280784Warrant Investments and Software and CloudBolt Software, Inc., Warrant, Acquisition Date 9/30/2020, Common Stock2023-03-310001280784Warrant Investments and Drug Discovery & Development and Kura Oncology, Inc., Warrant, Acquisition Date 11/2/2022, Common Stock2022-12-310001280784htgc:CoronadoAestheticsLLCMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:MedicalDevicesAndEquipmentMemberhtgc:MajorityOwnedControlInvestmentsMember2022-12-310001280784Equity Investments Information Services and Yipit, LLC, Equity, Acquisition Date 12/30/2021, Series Preferred Series E2022-12-310001280784Warrant Investments and Media/Content/Info (0.00%)2023-03-310001280784htgc:MUFGBankFacilityMember2023-03-310001280784htgc:MarchTwoThousandTwentySixBNotesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-03-310001280784Warrant Investments and Consumer & Business Services and Snagajob.com, Inc., Warrant, Acquisition Date 4/20/2020, Common Stock2022-12-310001280784Warrant Investments and Surgical Devices (0.04%)2023-03-310001280784us-gaap:WarrantMemberhtgc:ValuationTechniqueOtherMemberus-gaap:FairValueInputsLevel3Member2022-12-310001280784htgc:SBADebenturesIssuedOnJanuaryTwentyOneTwoThousandAndTwentyTwoMember2023-03-310001280784us-gaap:EquitySecuritiesMemberus-gaap:MeasurementInputRevenueMultipleMembersrt:MaximumMemberhtgc:ValuationTechniqueLiquidationMemberus-gaap:FairValueInputsLevel3Member2022-12-310001280784Equity Investments Drug Discovery & Development and Gritstone Bio, Inc., Equity, Acquisition Date 10/26/2022, Series Common Stock2023-03-310001280784htgc:SBADebenturesIssuedOnJanuaryTwentyOneTwoThousandAndTwentyTwoMember2022-12-310001280784us-gaap:WarrantMemberus-gaap:MeasurementInputDiscountForLackOfMarketabilityMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMemberhtgc:MarketComparableCompaniesMember2022-12-310001280784htgc:LiabilityClassifiedAwardsMember2023-03-310001280784Warrant Investments and Drug Discovery & Development and Kineta, Inc., Warrant, Acquisition Date 12/20/2019, Common Stock2023-03-310001280784Debt Investments Software and Tipalti Solutions Ltd., Senior Secured, Maturity Date April 2027, Prime + 0.45%, Floor rate 7.95%, PIK Interest 2.00%, 3.75% Exit Fee2023-03-310001280784Debt Investments Consumer & Business Services and Veem, Inc. Senior Secured, Maturity Date March 2025, Prime + 4.00%, Floor rate 7.25%, PIK Interest 1.25%, 4.50% Exit Fee2022-12-310001280784us-gaap:WarrantMembersrt:MaximumMemberus-gaap:ValuationTechniqueOptionPricingModelMemberus-gaap:FairValueInputsLevel3Memberhtgc:MeasurementInputMarketEquityAdjustmentMember2023-03-310001280784htgc:HerculesAdviserLLCMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:MemberUnitsMemberhtgc:MajorityOwnedControlInvestmentsMember2023-01-012023-03-310001280784Debt Investments Media/Content/Info and Fever Labs, Inc.2023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerNoncontrolledMemberhtgc:AffiliateInvestmentsMember2022-03-310001280784htgc:ThreeMonthLIBORMember2023-03-310001280784htgc:HerculesCapitalFourLPMember2022-01-012022-12-310001280784us-gaap:RevolvingCreditFacilityMember2023-01-012023-03-310001280784Warrant Investments and Biotechnology Tools (0.03%)2022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:PreferredStockMemberhtgc:OtherControlInvestmentsMemberhtgc:TecturaCorporationMember2022-12-310001280784htgc:DiversifiedFinancialServicesMemberhtgc:SeniorSecuredDebtOneMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:GibraltarBusinessCapitalLLCMemberhtgc:MajorityOwnedControlInvestmentsMember2022-12-310001280784htgc:SeptemberTwoThousandTwentySixNotesMemberhtgc:UnusedFacilityOtherFeesMember2023-01-012023-03-310001280784Warrant Investments and Drug Discovery & Development and Akero Therapeutics, Inc., Warrant, Acquisition Date 6/15/2022, Common Stock2022-12-310001280784htgc:DebtInvestmentsMemberhtgc:LocusRoboticsCorporationMember2023-03-310001280784htgc:SMBCFacilityMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:FortifiedHealthSecurityMember2022-12-310001280784htgc:DebtInvestmentsMemberhtgc:ReplimuneGroupIncMember2022-12-310001280784htgc:DebtInvestmentsMemberhtgc:KuraOncologyIncMember2022-12-310001280784Equity Investments Consumer & Business Services and Rhino Labs, Inc., Equity, Acquisition Date 1/24/2022, Series Preferred Series B-22022-12-310001280784htgc:MarchTwoThousandTwentySixANotesMember2023-03-310001280784us-gaap:FairValueInputsLevel3Memberhtgc:JuneTwoThousandTwentyFiveThreeYearNotesMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-03-310001280784htgc:AcceleratedFeeIncomeExpiredCommitmentsMember2022-01-012022-03-310001280784htgc:DiversifiedFinancialServicesMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:SeriesAPreferredStockMemberhtgc:GibraltarBusinessCapitalLLCMemberhtgc:MajorityOwnedControlInvestmentsMember2022-12-310001280784Warrant Investments and Surgical Devices (0.04%)2022-12-310001280784Equity Investments Information Services and Planet Labs, Inc., Equity, Acquisition Date 6/21/2019, Series Common Stock2023-03-310001280784Warrant Investments and Information Services and NetBase Solutions, Inc., Warrant, Acquisition Date 8/22/2017, Preferred Series 12022-12-310001280784Debt Investments Drug Discovery & Development and Iveric Bio, Inc. Senior Secured, Maturity Date August 2027, Prime + 4.00%, Floor rate 8.75%, Cap rate 10.25%, 4.25% Exit Fee2022-12-310001280784Equity Investments Software and 3GTMS, LLC, Equity, Acquisition Date 8/9/2021, Series Common Stock2023-03-310001280784us-gaap:IncomeApproachValuationTechniqueMemberhtgc:MeasurementInputsProbabilityWeightingOfAlternativeOutcomesMemberhtgc:DebtInvestmentsMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Memberhtgc:TechnologyMember2022-12-310001280784htgc:SeniorSecuredDebtOneMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:ConsumerAndBusinessServicesMemberhtgc:OtherControlInvestmentsMemberhtgc:TecturaCorporationMember2022-12-310001280784Debt Investments Drug Discovery & Development and Hibercell, Inc. Senior Secured, Maturity Date May 2025, Prime + 5.40%, Floor rate 8.65%, 4.95% Exit Fee2022-12-310001280784Debt Investments Communications & Networking and Rocket Lab Global Services, LLC Senior Secured, Maturity Date June 2024, Prime + 4.90%, Floor rate 8.15%, PIK Interest 1.25%, 3.25% Exit Fee2022-12-310001280784htgc:DebtInvestmentsMemberhtgc:LowerMiddleMarketMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MarketApproachValuationTechniqueMember2022-12-310001280784htgc:CapitalInExcessOfParValueMember2022-12-310001280784Debt Investments Drug Discovery & Development (78.59%)2022-12-310001280784Equity Investments Consumer & Business Services and Carwow LTD, Equity, Acquisition Date 12/15/2021, Series Preferred Series D-42022-12-310001280784us-gaap:WarrantMemberus-gaap:MeasurementInputRevenueMultipleMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMemberhtgc:MarketComparableCompaniesMember2022-12-310001280784us-gaap:WarrantMemberus-gaap:FairValueInputsLevel1Member2023-03-310001280784htgc:OneMonthLIBORMember2022-12-310001280784Debt Investments Software and Esentire, Inc., Senior Secured, Maturity Date May 2024, 3-month LIBOR + 9.96%, Floor rate 10.96%2022-12-310001280784htgc:MUFGBankFacilityMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310001280784Investments in Securities (211.21%)2022-12-310001280784Debt Investments Drug Discovery & Development and enGene, Inc. 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Convertible Debt, Maturity Date May 2028, PIK Interest 5.50%2023-03-310001280784htgc:CybermaxxIntermediateHoldingsIncorporationMemberhtgc:DebtInvestmentsMember2022-12-310001280784htgc:ControlInvestmentsMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMember2022-03-310001280784htgc:DiversifiedFinancialServicesMemberhtgc:UnsecuredDebtOneMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:GibraltarBusinessCapitalLLCMemberhtgc:MajorityOwnedControlInvestmentsMember2022-12-310001280784country:GB2022-12-310001280784htgc:InvestmentFundsAndVehiclesMember2022-12-310001280784htgc:TwoThousandThirtyThreeNotesMember2022-12-310001280784htgc:HerculesAdviserLLCMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:MemberUnitsMemberhtgc:MajorityOwnedControlInvestmentsMember2021-12-310001280784Debt Investments Consumer & Business Services, Tectura Corporation2022-12-310001280784Equity Investments Consumer & Business Products and TFG Holding, Inc., Equity, Acquisition Date 4/30/2010, Series Common Stock2023-03-310001280784htgc:ControlInvestmentsMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMember2023-01-012023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerNoncontrolledMember2022-03-310001280784Debt Investments Software and Nextroll, Inc., Senior Secured, Maturity Date July 2023, Prime + 3.75%, Floor rate 7.75%, PIK Interest 2.95%, 1.95% Exit Fee2023-03-310001280784Debt Investments Software and VideoAmp, Inc., Senior Secured, Maturity Date February 2025, Prime + 3.70%, Floor rate 6.95%, PIK Interest 1.25%, 5.25% Exit Fee2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:DashlaneIncorporationMember2023-03-310001280784htgc:KhorosPKLithiumTechnologiesMemberhtgc:DebtInvestmentsMember2022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:PreferredStockMemberhtgc:OtherControlInvestmentsMemberhtgc:TecturaCorporationMember2022-01-012022-03-310001280784Warrant Investments and Drug Discovery & Development (0.60%)2022-12-310001280784htgc:ForbionGrowthOpportunitiesFundICVMemberhtgc:InvestmentFundsAndVehiclesMember2023-03-310001280784Debt Investments Healthcare Services, Other and Blue Sprig Pediatrics, Inc. Senior Secured, Maturity Date November 2026, 1-month LIBOR + 5.00%, Floor rate 6.00%, PIK Interest 4.45%2023-03-310001280784Warrant Investments and Consumer & Business Products and Gadget Guard, LLC, Warrant, Acquisition Date 6/3/2014, Common Stock2022-12-310001280784Warrant Investments and Software and Tipalti Solutions Ltd., Warrant, Acquisition Date 3/22/2023, Ordinary Shares2023-03-310001280784us-gaap:FairValueInputsLevel3Memberhtgc:EscrowReceivableMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310001280784Warrant Investments and Medical Devices & Equipment and Aspire Bariatrics, Inc., Warrant, Acquisition Date 1/28/2015, Common Stock2022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:TecturaCorporationMember2022-01-012022-03-310001280784htgc:TwoThousandThirtyThreeNotesMember2023-01-012023-03-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:SeniorSecuredDebtMemberhtgc:ConsumerAndBusinessServicesMemberhtgc:OtherControlInvestmentsMemberhtgc:TecturaCorporationMember2022-01-012022-12-310001280784htgc:SMBCFacilityMember2023-03-310001280784Warrant Investments and Software and Brain Corporation, Warrant, Acquisition Date 10/4/2021, Common Stock2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:FlightScheduleProLlcMember2023-03-310001280784us-gaap-supplement:InvestmentUnaffiliatedIssuerMember2022-12-310001280784htgc:PharmaceuticalsMemberhtgc:MeasurementInputPremiumDiscountMemberhtgc:DebtInvestmentsMembersrt:MinimumMemberus-gaap:FairValueInputsLevel3Memberhtgc:ValuationTechniqueMarketComparableCompaniesMember2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:DronedeployIncorporationMember2022-12-310001280784us-gaap:WarrantMemberus-gaap:MeasurementInputDiscountForLackOfMarketabilityMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Memberhtgc:MarketComparableCompaniesMember2022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:TecturaCorporationMember2023-03-310001280784htgc:DebtInvestmentsMemberhtgc:IkonScienceLimitedMember2023-03-310001280784us-gaap:IncomeApproachValuationTechniqueMemberhtgc:DebtInvestmentsMemberus-gaap:FairValueInputsLevel3Memberhtgc:TechnologyMember2023-03-310001280784Debt Investments Biotechnology Tools and Alamar Biosciences, Inc. Senior Secured, Maturity Date June 2026, Prime + 3.00%, Floor rate 6.50%, PIK Interest 1.00%, 5.95% Exit Fee2022-12-310001280784htgc:IncludedInCostMember2022-01-012022-12-310001280784Debt Investments Software and Omeda Holdings, LLC, Senior Secured, Maturity Date July 2027, 3-month SOFR + 8.05%, Floor rate 9.05%2022-12-310001280784Debt Investments Software and Automation Anywhere, Inc. Senior Secured, Maturity Date September 2027, Prime + 4.25%, Floor rate 9.00%, 2.50% Exit Fee2022-12-310001280784htgc:OakStreetHealthIncMemberhtgc:DebtInvestmentsMember2023-03-310001280784htgc:SBADebenturesIssuedOnDecemberTwentyEightTwoThousandAndTwentyOneMember2023-03-310001280784Debt Investments Communications & Networking and Cytracom Holdings LLC Senior Secured, Maturity Date February 2025, 3-month SOFR + 9.72%, Floor rate 10.62%2023-03-310001280784Debt Investments Software and Brain Corporation, Senior Secured, Maturity Date April 2025, PRIME + 3.70%, Floor rate 6.95%, PIK Interest 1.00%, 3.95% Exit Fee2022-12-310001280784htgc:PharmaceuticalsMemberhtgc:DebtInvestmentsMembersrt:MinimumMemberus-gaap:FairValueInputsLevel3Memberhtgc:MeasurementInputHypotheticalMarketYieldMemberhtgc:ValuationTechniqueMarketComparableCompaniesMember2022-12-310001280784Equity Investments Surgical Devices (0.18%)2022-12-310001280784us-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberhtgc:CoronadoAestheticsLLCMemberus-gaap:CommonStockMemberhtgc:MajorityOwnedControlInvestmentsMember2022-01-012022-03-310001280784htgc:DebtInvestmentsMemberhtgc:MadrigalPharmaceuticalIncMember2022-12-310001280784Debt Investments Media/Content/Info and Fever Labs, Inc. Senior Secured, Maturity Date September 2026, Prime + 3.50%, Floor rate 9.00%, 3.67% Exit Fee2023-03-310001280784Debt Investments Consumer & Business Services and Jobandtalent USA, Inc. Senior Secured, Maturity Date February 2025, 1-month SOFR + 8.86%, Floor rate 9.75%, 3.00% Exit Fee2022-12-310001280784htgc:DiversifiedFinancialServicesMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:UnsecuredDebtMemberhtgc:GibraltarBusinessCapitalLLCMemberhtgc:MajorityOwnedControlInvestmentsMember2022-01-012022-12-310001280784htgc:SMBCFacilityMember2023-03-310001280784htgc:CoronadoAestheticsLLCMemberus-gaap-supplement:InvestmentAffiliatedIssuerControlledMemberus-gaap:CommonStockMemberhtgc:MedicalDevicesAndEquipmentMemberhtgc:MajorityOwnedControlInvestmentsMember2022-12-310001280784htgc:IndustrySubSectorConcentrationRiskMemberus-gaap:SalesRevenueNetMemberhtgc:SurgicalDevicesMember2023-01-012023-03-310001280784Warrant Investments and Software and Dashlane, Inc., Warrant, Acquisition Date 3/11/2019, Common Stock2022-12-310001280784htgc:MUFGBankFacilityMember2023-03-310001280784Equity Investments Consumer & Business Services and Reischling Press, Inc., Acquisition Date 7/31/2020, Series Common Stock2022-12-310001280784htgc:DebtInvestmentsMember2023-03-310001280784Warrant Investments and Consumer & Business Products and TechStyle, Inc., Warrant, Acquisition Date 7/16/2013, Preferred Series B2023-03-310001280784us-gaap:WarrantMemberus-gaap:MeasurementInputRevenueMultipleMembersrt:MinimumMemberus-gaap:FairValueInputsLevel3Memberhtgc:MarketComparableCompaniesMember2022-12-310001280784Warrant Investments and Consumer & Business Services and Veem, Inc., Warrant, Acquisition Date 3/31/2022, Common Stock2022-12-310001280784Debt Investments Biotechnology Tools (2.31%)2022-12-310001280784htgc:IndustrySubSectorConcentrationRiskMemberus-gaap:SalesRevenueNetMemberhtgc:MediaContentInfoMember2023-01-012023-03-310001280784htgc:DistributableEarningsLossMember2023-01-012023-03-310001280784us-gaap:WarrantMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MarketApproachValuationTechniqueMember2022-12-3100012807842023-01-012023-03-310001280784Debt Investments Consumer & Business Services and AppDirect, Inc. Senior Secured, Maturity Date April 2026, Prime + 5.50%, Floor rate 8.75%, 8.29% Exit Fee2023-03-31xbrli:pureiso4217:USDxbrli:sharesxbrli:sharesiso4217:GBPiso4217:USDhtgc:Firm

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 March 31, 2023

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

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 April 26, 2023, there were 142,427,079 shares outstanding of the Registrant’s common stock, $0.001 par value.

 


HERCULES CAPITAL, INC.

FORM 10-Q TABLE OF CONTENTS

 

PART I. FINANCIAL INFORMATION

3

Item 1.

Consolidated Financial Statements

3

Consolidated Statements of Assets and Liabilities as of March 31, 2023 (unaudited) and December 31, 2022

3

Consolidated Statements of Operations for the three months ended March 31, 2023 and 2022 (unaudited)

4

Consolidated Statements of Changes in Net Assets for the three months ended March 31, 2023 and 2022 (unaudited)

5

Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2022 (unaudited)

6

Consolidated Schedule of Investments as of March 31, 2023 (unaudited)

7

Consolidated Schedule of Investments as of December 31, 2022

18

 

Notes to Consolidated Financial Statements (unaudited)

29

Item 2.

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

60

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

74

Item 4.

Controls and Procedures

75

PART II. OTHER INFORMATION

76

Item 1.

Legal Proceedings

76

Item 1A.

Risk Factors

 

76

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

78

Item 3.

Defaults Upon Senior Securities

78

Item 4.

Mine Safety Disclosures

78

Item 5.

Other Information

78

Item 6.

Exhibits and Financial Statement Schedules

79

SIGNATURES

84

 

 

 

 


PART I: FINANCIAL INFORMATION

In this Quarterly Report, the “Company,” “Hercules,” “we,” “us” and “our” refer to Hercules Capital, Inc., its wholly owned subsidiaries, and its affiliated securitization trust 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)

 

March 31, 2023

 

 

December 31, 2022

 

 

 

(unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Investments, at fair value:

 

 

 

 

 

 

Non-control/Non-affiliate investments (cost of $3,063,553 and $2,918,425, respectively)

 

$

3,044,852

 

 

$

2,887,497

 

Control investments (cost of $87,293 and $87,271, respectively)

 

 

85,326

 

 

 

76,458

 

 Total investments, at fair value (cost of $3,150,846 and $3,005,696, respectively; fair value amounts related to a VIE $258,876 and $236,585, respectively)

 

 

3,130,178

 

 

 

2,963,955

 

Cash and cash equivalents

 

 

71,129

 

 

 

15,797

 

Restricted cash (amounts related to a VIE $7,819 and $10,079, respectively)

 

 

7,819

 

 

 

10,079

 

Interest receivable

 

 

31,485

 

 

 

31,682

 

Right of use asset

 

 

4,350

 

 

 

4,986

 

Other assets

 

 

6,858

 

 

 

2,356

 

Total assets

 

$

3,251,819

 

 

$

3,028,855

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Debt (net of debt issuance costs - Note 5; amounts related to a VIE $148,104 and $147,957, respectively)

 

$

1,714,479

 

 

$

1,574,351

 

Accounts payable and accrued liabilities

 

 

33,368

 

 

 

47,539

 

Operating lease liability

 

 

4,966

 

 

 

5,506

 

Total liabilities

 

$

1,752,813

 

 

$

1,627,396

 

 

 

 

 

 

 

Net assets consist of:

 

 

 

 

 

 

Common stock, par value

 

$

139

 

 

$

134

 

Capital in excess of par value

 

 

1,409,168

 

 

 

1,341,416

 

Total distributable earnings

 

 

89,699

 

 

 

59,909

 

Total net assets

 

$

1,499,006

 

 

$

1,401,459

 

Total liabilities and net assets

 

$

3,251,819

 

 

$

3,028,855

 

 

 

 

 

 

 

 

Shares of common stock outstanding ($0.001 par value and 200,000 authorized)

 

 

138,596

 

 

 

133,045

 

Net asset value per share

 

$

10.82

 

 

$

10.53

 

 

See notes to consolidated financial statements

3


HERCULES CAPITAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except per share data)

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Investment income:

 

 

 

 

 

 

Interest and dividend income:

 

 

 

 

 

 

Non-control/Non-affiliate investments

 

$

98,781

 

 

$

60,090

 

Control investments

 

 

1,116

 

 

 

1,115

 

Affiliate investments

 

 

 

 

 

1,047

 

Total interest and dividend income

 

 

99,897

 

 

 

62,252

 

Fee income:

 

 

 

 

 

 

Non-control/Non-affiliate investments

 

 

5,174

 

 

 

2,889

 

Control investments

 

 

19

 

 

 

16

 

Total fee income

 

 

5,193

 

 

 

2,905

 

Total investment income

 

 

105,090

 

 

 

65,157

 

Operating expenses:

 

 

 

 

 

 

Interest

 

 

16,625

 

 

 

11,647

 

Loan fees

 

 

2,329

 

 

 

1,842

 

General and administrative

 

 

4,126

 

 

 

3,818

 

Tax expenses

 

 

1,387

 

 

 

712

 

Employee compensation:

 

 

 

 

 

 

Compensation and benefits

 

 

14,617

 

 

 

8,329

 

Stock-based compensation

 

 

3,186

 

 

 

4,424

 

Total employee compensation

 

 

17,803

 

 

 

12,753

 

Total gross operating expenses

 

 

42,270

 

 

 

30,772

 

Expenses allocated to the Adviser Subsidiary

 

 

(2,679

)

 

 

(1,402

)

Total net operating expenses

 

 

39,591

 

 

 

29,370

 

Net investment income

 

 

65,499

 

 

 

35,787

 

Net realized gain (loss) and net change in unrealized appreciation (depreciation):

 

 

 

 

 

 

Net realized gain (loss):

 

 

 

 

 

 

Non-control/Non-affiliate investments

 

 

7,960

 

 

 

(2,467

)

Affiliate investments

 

 

 

 

 

3,772

 

Loss on extinguishment of debt

 

 

 

 

 

(3,686

)

Total net realized gain (loss)

 

 

7,960

 

 

 

(2,381

)

Net change in unrealized appreciation (depreciation):

 

 

 

 

 

 

Non-control/Non-affiliate investments

 

 

12,259

 

 

 

(38,949

)

Control investments

 

 

8,846

 

 

 

1,454

 

Affiliate investments

 

 

 

 

 

753

 

Total net change in unrealized appreciation (depreciation)

 

 

21,105

 

 

 

(36,742

)

Total net realized gain (loss) and net change in unrealized appreciation (depreciation)

 

 

29,065

 

 

 

(39,123

)

Net increase (decrease) in net assets resulting from operations

 

$

94,564

 

 

$

(3,336

)

 

 

 

 

 

 

Net investment income before gains and losses per common share:

 

Basic

 

$

0.48

 

 

$

0.30

 

Change in net assets resulting from operations per common share:

 

 

 

 

 

 

Basic

 

$

0.69

 

 

$

(0.03

)

Diluted

 

$

0.68

 

 

$

(0.03

)

Weighted average shares outstanding:

 

 

 

 

 

 

Basic

 

 

135,252

 

 

 

118,296

 

Diluted

 

 

137,056

 

 

 

118,296

 

Distributions paid per common share:

 

 

 

 

 

 

Basic

 

$

0.47

 

 

$

0.48

 

 

 

See notes to consolidated financial statements

4


HERCULES CAPITAL, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

(unaudited)

(amounts in thousands)

 

 

 

 

 

 

Capital in

 

 

Distributable

 

 

 

 

 

Common Stock

 

 

excess

 

 

Earnings

 

 

Net

 

For the Three Months Ended March 31, 2023

Shares

 

 

Par Value

 

 

of par value

 

 

(loss)

 

 

Assets

 

Balance as of December 31, 2022

 

133,045

 

 

$

134

 

 

$

1,341,416

 

 

$

59,909

 

 

$

1,401,459

 

Net increase (decrease) in net assets resulting from operations

 

 

 

 

 

 

 

 

 

 

94,564

 

 

 

94,564

 

Public offering, net of offering expenses

 

4,659

 

 

 

4

 

 

 

65,338

 

 

 

 

 

 

65,342

 

Issuance of common stock due to stock option exercises

 

10

 

 

 

 

 

 

139

 

 

 

 

 

 

139

 

Retired shares from net issuance of stock options exercises

 

(1

)

 

 

 

 

 

(15

)

 

 

 

 

 

(15

)

Issuance of common stock under restricted stock plan

 

937

 

 

 

1

 

 

 

(1

)

 

 

 

 

 

 

Retired shares for restricted stock vesting

 

(115

)

 

 

 

 

 

(1,502

)

 

 

 

 

 

(1,502

)

Distributions reinvested in common stock

 

61

 

 

 

 

 

 

940

 

 

 

 

 

 

940

 

Distributions

 

 

 

 

 

 

 

 

 

 

(64,774

)

 

 

(64,774

)

Stock-based compensation (1)

 

 

 

 

 

 

 

2,853

 

 

 

 

 

 

2,853

 

Balance as of March 31, 2023

 

138,596

 

 

$

139

 

 

$

1,409,168

 

 

$

89,699

 

 

$

1,499,006

 

(1)
Stock-based compensation includes $20 thousand of restricted stock and option expense related to director compensation for the three months ended March 31, 2023.

(amounts in thousands)

 

 

 

 

 

 

 

Capital in

 

 

Distributable

 

 

 

 

 

 

Common Stock

 

 

excess

 

 

Earnings

 

 

Net

 

For the Three Months Ended March 31, 2022

 

Shares

 

 

Par Value

 

 

of par value

 

 

(loss)

 

 

Assets

 

Balance as of December 31, 2021

 

 

116,619

 

 

$

117

 

 

$

1,091,907

 

 

$

216,523

 

 

$

1,308,547

 

Net increase (decrease) in net assets resulting from operations

 

 

 

 

 

 

 

 

 

 

 

(3,336

)

 

 

(3,336

)

Public offering, net of offering expenses

 

 

4,860

 

 

 

5

 

 

 

85,244

 

 

 

 

 

 

85,249

 

Issuance of common stock due to stock option exercises

 

 

37

 

 

 

 

 

 

454

 

 

 

 

 

 

454

 

Retired shares from net issuance of stock options exercises

 

 

(2

)

 

 

 

 

 

(32

)

 

 

 

 

 

(32

)

Issuance of common stock under restricted stock plan

 

 

765

 

 

 

1

 

 

 

(1

)

 

 

 

 

 

 

Retired shares for restricted stock vesting

 

 

(126

)

 

 

 

 

 

(3,694

)

 

 

 

 

 

(3,694

)

Distributions reinvested in common stock

 

 

60

 

 

 

 

 

 

1,025

 

 

 

 

 

 

1,025

 

Issuance of common stock from conversion of 2022 Convertible Notes

 

 

981

 

 

 

1

 

 

 

(1

)

 

 

 

 

 

 

Distributions

 

 

 

 

 

 

 

 

 

 

 

(57,882

)

 

 

(57,882

)

Stock-based compensation (1)

 

 

 

 

 

 

 

 

3,117

 

 

 

 

 

 

3,117

 

Balance as of March 31, 2022

 

 

123,194

 

 

$

124

 

 

$

1,178,019

 

 

$

155,305

 

 

$

1,333,448

 

(1)
Stock-based compensation includes $40 thousand of restricted stock and option expense related to director compensation for the three months ended March 31, 2022.

See notes to consolidated financial statements

5


HERCULES CAPITAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

For the Three Months Ended March 31,

 

 

2023

 

 

2022

 

Cash flows provided by (used in) operating activities:

 

 

 

 

 

Net increase (decrease) in net assets resulting from operations

$

94,564

 

 

$

(3,336

)

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

 

 

 

Purchases of investments

 

(476,162

)

 

 

(351,601

)

Fundings assigned to Adviser Funds

 

120,846

 

 

 

61,081

 

Principal and fee repayments received on debt investments

 

207,466

 

 

 

96,311

 

Proceeds from the sale of equity investments

 

14,972

 

 

 

8,816

 

Net change in unrealized (appreciation) depreciation

 

(21,105

)

 

 

36,742

 

Net realized (gain) loss

 

(7,960

)

 

 

(1,305

)

Accretion of paid-in-kind principal

 

(5,528

)

 

 

(4,976

)

Accretion of loan discounts

 

(1,636

)

 

 

(972

)

Accretion of loan discount on convertible notes

 

 

 

 

112

 

Accretion of loan exit fees

 

(5,924

)

 

 

(5,709

)

Change in loan income, net of collections

 

5,995

 

 

 

3,535

 

Unearned fees related to unfunded commitments

 

(110

)

 

 

1,037

 

Realized loss on extinguishment of debt

 

 

 

 

3,686

 

Amortization of debt fees and issuance costs

 

1,723

 

 

 

1,371

 

Depreciation and amortization

 

44

 

 

 

54

 

Stock-based compensation and amortization of restricted stock grants (1)

 

2,853

 

 

 

3,117

 

Change in operating assets and liabilities:

 

 

 

 

Interest receivable

 

201

 

 

 

(2,289

)

Other assets

 

3,565

 

 

 

(13,229

)

Accrued liabilities

 

(14,678

)

 

 

(21,067

)

Net cash provided by (used in) operating activities

 

(80,874

)

 

 

(188,622

)

 

 

 

 

 

Cash flows provided by (used in) investing activities:

 

 

 

Purchases of capital equipment

 

(94

)

 

 

(50

)

Net cash provided by (used in) investing activities

 

(94

)

 

 

(50

)

 

 

 

 

 

Cash flows provided by (used in) financing activities:

 

 

 

Issuance of common stock

 

66,172

 

 

 

86,184

 

Offering expenses

 

(830

)

 

 

(935

)

Retirement of employee shares, net

 

(1,378

)

 

 

(3,272

)

Distributions paid

 

(63,834

)

 

 

(56,857

)

Issuance of debt

 

225,000

 

 

 

535,500

 

Repayment of debt

 

(86,000

)

 

 

(441,000

)

Debt issuance costs

 

 

 

 

(4,140

)

Fees paid for credit facilities and debentures

 

(5,090

)

 

 

(616

)

Net cash provided by (used in) financing activities

 

134,040

 

 

 

114,864

 

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

53,072

 

 

 

(73,808

)

Cash, cash equivalents, and restricted cash at beginning of period

 

25,876

 

 

 

136,265

 

Cash, cash equivalents, and restricted cash at end of period

$

78,948

 

 

$

62,457

 

 

 

 

 

 

Supplemental disclosures of cash flow information and non-cash investing and financing activities:

 

Interest paid

$

23,840

 

 

$

19,010

 

Income tax, including excise tax, paid

$

4,763

 

 

$

7,119

 

Distributions reinvested

$

940

 

 

$

1,025

 

(1)
Stock-based compensation includes $20 thousand and $40 thousand of restricted stock and option expense related to director compensation for the three months ended March 31, 2023 and 2022, respectively.

The following table presents a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Statements of Assets and Liabilities that sum to the total of the same such amounts in the Consolidated Statements of Cash Flows:

(in thousands)

For the Three Months Ended March 31,

 

 

2023

 

 

2022

 

Cash and cash equivalents

$

71,129

 

 

$

59,330

 

Restricted cash

 

7,819

 

 

 

3,127

 

Total cash, cash equivalents, and restricted cash presented in the Consolidated Statements of Cash Flows

$

78,948

 

 

$

62,457

 

See “Note 2 – Summary of Significant Accounting Policies” for a description of cash, cash equivalents, and restricted cash.

See notes to consolidated financial statements

6


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

March 31, 2023 (unaudited)

(dollars in thousands)

 

Portfolio Company

 

Type of
Investment

 

Maturity Date

 

Interest Rate and Floor (1)

Principal
Amount

 

Cost (2)

 

Value

 

Footnotes

Debt Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Biotechnology Tools

 

 

 

 

 

 

 

 

 

 

 

 

 

Alamar Biosciences, Inc.

 

Senior Secured

 

June 2026

 

Prime + 3.00%, Floor rate 6.50%, PIK Interest 1.00%, 5.95% Exit Fee

 

$

5,011

 

 

$

4,987

 

 

$

4,987

 

 

(13)(14)(17)

PathAI, Inc.

 

Senior Secured

 

January 2027

 

Prime + 2.15%, Floor rate 9.15%, 11.21% Exit Fee

 

$

28,000

 

 

 

27,540

 

 

 

27,540

 

 

(17)

Subtotal: Biotechnology Tools (2.17%)*

 

 

 

 

 

 

 

32,527

 

 

 

32,527

 

 

 

Communications & Networking

 

 

 

 

 

 

 

 

 

 

 

 

 

Aryaka Networks, Inc.

 

Senior Secured

 

July 2026

 

Prime + 3.25%, Floor rate 6.75%, PIK Interest 1.05%, 3.55% Exit Fee

 

$

15,036

 

 

 

14,842

 

 

 

15,377

 

 

(14)(17)(19)

Cytracom Holdings LLC

 

Senior Secured

 

February 2025

 

3-month SOFR + 9.72%, Floor rate 10.62%

 

$

3,292

 

 

 

3,247

 

 

 

3,256

 

 

(11)(17)(18)

Rocket Lab Global Services, LLC

 

Senior Secured

 

June 2024

 

Prime + 4.90%, Floor rate 8.15%, PIK Interest 1.25%, 3.25% Exit Fee

 

$

84,846

 

 

 

85,982

 

 

 

88,450

 

 

(11)(12)(13)(14)(16)

Subtotal: Communications & Networking (7.14%)*

 

 

 

 

 

 

 

104,071

 

 

 

107,083

 

 

 

Consumer & Business Services

 

 

 

 

 

 

 

 

 

 

 

 

 

AppDirect, Inc.

 

Senior Secured

 

April 2026

 

Prime + 5.50%, Floor rate 8.75%, 8.29% Exit Fee

 

$

40,790

 

 

 

42,034

 

 

 

42,902

 

 

(12)(17)

Carwow LTD

 

Senior Secured

 

December 2024

 

Prime + 4.70%, Floor rate 7.95%, PIK Interest 1.45%, 4.95% Exit Fee

 

£

19,166

 

 

 

26,212

 

 

 

23,888

 

 

(5)(10)(14)(17)

Collective Health, Inc.

 

Senior Secured

 

September 2023

 

Prime + 4.75%, Floor rate 12.50%

 

$

4,000

 

 

 

3,964

 

 

 

3,964

 

 

 

Houzz, Inc.

 

Convertible Debt

 

May 2028

 

PIK Interest 5.50%

 

$

22,154

 

 

 

22,154

 

 

 

21,536

 

 

(9)(14)

Jobandtalent USA, Inc.

 

Senior Secured

 

February 2025

 

1-month SOFR + 8.86%, Floor rate 9.75%, 3.00% Exit Fee

 

$

14,000

 

 

 

13,910

 

 

 

14,002

 

 

(5)(10)

Modern Life, Inc.

 

Senior Secured

 

February 2027

 

Prime + 2.75%, Floor rate 8.75%, 5.00% Exit Fee

 

$

17,000

 

 

 

16,617

 

 

 

16,617

 

 

(17)

Provi

 

Senior Secured

 

December 2026

 

Prime + 4.40%, Floor rate 10.65%, 2.95% Exit Fee

 

$

15,000

 

 

 

14,778

 

 

 

14,778

 

 

(15)

Rhino Labs, Inc.

 

Senior Secured

 

March 2024

 

Prime + 5.50%, Floor rate 8.75%, PIK Interest 2.25%

 

$

16,593

 

 

 

16,475

 

 

 

16,475

 

 

(14)(15)

RVShare, LLC

 

Senior Secured

 

December 2026

 

3-month LIBOR + 5.50%, Floor rate 6.50%, PIK Interest 4.00%

 

$

28,009

 

 

 

27,576

 

 

 

27,657

 

 

(13)(14)(15)(17)

SeatGeek, Inc.

 

Senior Secured

 

June 2023

 

Prime + 5.00%, Floor rate 10.50%, PIK Interest 0.50%

 

$

60,992

 

 

 

60,911

 

 

 

61,072

 

 

(12)(13)(14)(16)

 

Senior Secured

 

May 2026

 

Prime + 7.00%, Floor rate 10.50%, PIK Interest 0.50%

 

$

25,103

 

 

 

24,954

 

 

 

25,885

 

 

(11)(14)(16)

Total SeatGeek, Inc.

 

 

 

 

 

 

 

$

86,095

 

 

 

85,865

 

 

 

86,957

 

 

 

Skyword, Inc.

 

Senior Secured

 

November 2026

 

Prime + 2.75%, Floor rate 9.25%, PIK Interest 1.75%, 3.00% Exit Fee

 

$

9,047

 

 

 

8,984

 

 

 

9,002

 

 

(13)(14)

Tectura Corporation

 

Senior Secured

 

July 2024

 

PIK Interest 5.00%

 

$

23,703

 

 

 

13,263

 

 

 

 

 

(7)(8)(14)

 

Senior Secured

 

July 2024

 

FIXED 8.25%

 

$

8,250

 

 

 

8,250

 

 

 

7,774

 

 

(7)

Total Tectura Corporation

 

 

 

 

 

 

 

$

31,953

 

 

 

21,513

 

 

 

7,774

 

 

 

Thumbtack, Inc.

 

Senior Secured

 

April 2026

 

Prime + 4.95%, Floor rate 8.20%, PIK Interest 1.50%, 3.95% Exit Fee

 

$

10,141

 

 

 

10,114

 

 

 

10,304

 

 

(12)(14)(17)

Udacity, Inc.

 

Senior Secured

 

September 2024

 

Prime + 4.50%, Floor rate 7.75%, PIK Interest 2.00%, 3.00% Exit Fee

 

$

52,197

 

 

 

52,678

 

 

 

50,982

 

 

(12)(14)

Veem, Inc.

 

Senior Secured

 

March 2025

 

Prime + 4.00%, Floor rate 7.25%, PIK Interest 1.25%, 4.50% Exit Fee

 

$

5,058

 

 

 

5,042

 

 

 

5,108

 

 

(13)(14)

 

Senior Secured

 

March 2025

 

Prime + 4.70%, Floor rate 7.95%, PIK Interest 1.50%, 4.50% Exit Fee

 

$

5,052

 

 

 

5,043

 

 

 

5,185

 

 

(14)

Total Veem, Inc.

 

 

 

 

 

 

 

$

10,110

 

 

 

10,085

 

 

 

10,293

 

 

 

Vida Health, Inc.

 

Senior Secured

 

March 2026

 

Prime + -3.25%, Floor rate 9.20%, Cap rate 10.20%, 4.95% Exit Fee

 

$

11,822

 

 

 

11,683

 

 

 

11,447

 

 

(17)

Worldremit Group Limited

 

Senior Secured

 

February 2025

 

3-month LIBOR + 9.25%, Floor rate 10.25%, 3.20% Exit Fee

 

$

94,500

 

 

 

94,528

 

 

 

94,506

 

 

(5)(10)(11)(12)(16)(19)

Subtotal: Consumer & Business Services (30.89%)*

 

 

 

 

 

 

 

479,170

 

 

 

463,084

 

 

 

Diversified Financial Services

 

 

 

 

 

 

 

 

 

 

 

 

 

Gibraltar Acquisition, LLC (p.k.a. Gibraltar Business Capital, LLC)

 

Unsecured

 

September 2026

 

FIXED 11.50%

 

$

25,000

 

 

 

24,589

 

 

 

24,589

 

 

(7)

Hercules Adviser LLC

 

Unsecured

 

June 2025

 

FIXED 5.00%

 

$

12,000

 

 

 

12,000

 

 

 

12,000

 

 

(7)

Next Insurance, Inc.

 

Senior Secured

 

February 2028

 

Prime + -1.50%, Floor rate 4.75%, PIK Interest 5.50%

 

$

10,040

 

 

 

9,836

 

 

 

9,836

 

 

(14)(17)(19)

Subtotal: Diversified Financial Services (3.10%)*

 

 

 

 

 

 

 

46,425

 

 

 

46,425

 

 

 

 

See notes to consolidated financial statements

7


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

March 31, 2023 (unaudited)

(dollars in thousands)

 

Portfolio Company

 

Type of
Investment

 

Maturity Date

 

Interest Rate and Floor (1)

Principal
Amount

 

Cost (2)

 

Value

 

Footnotes

Drug Discovery & Development

 

 

 

 

 

 

 

 

 

 

 

 

 

Akero Therapeutics, Inc.

 

Senior Secured

 

January 2027

 

Prime + 3.65%, Floor rate 7.65%, 5.85% Exit Fee

 

$

12,500

 

 

$

12,321

 

 

$

12,734

 

 

(10)(13)(17)

Aldeyra Therapeutics, Inc.

 

Senior Secured

 

October 2024

 

Prime + 3.10%, Floor rate 8.60%, 8.90% Exit Fee

 

$

15,000

 

 

 

15,961

 

 

 

16,111

 

 

(11)

Alladapt Immunotherapeutics Inc.

 

Senior Secured

 

September 2026

 

Prime + 3.65%, Floor rate 8.40%, Cap rate 10.90%, 9.09% Exit Fee

 

$

17,500

 

 

 

17,455

 

 

 

17,323

 

 

(13)(17)

AmplifyBio, LLC

 

Senior Secured

 

January 2027

 

Prime + 2.50%, Floor rate 9.50%, Cap rate 10.75%, 5.85% Exit Fee

 

$

24,000

 

 

 

23,771

 

 

 

23,771

 

 

(15)

ATAI Life Sciences N.V.

 

Senior Secured

 

August 2026

 

Prime + 4.55%, Floor rate 8.55%, 6.95% Exit Fee

 

$

10,500

 

 

 

10,559

 

 

 

10,570

 

 

(5)(10)(17)

Axsome Therapeutics, Inc.

 

Senior Secured

 

January 2028

 

Prime + 2.20%, Floor rate 9.95%, Cap rate 10.70%, 5.93% Exit Fee

 

$

121,600

 

 

 

121,143

 

 

 

121,464

 

 

(10)(11)(12)(16)(17)

Bicycle Therapeutics PLC

 

Senior Secured

 

July 2025

 

Prime + 4.55%, Floor rate 8.05%, Cap rate 9.05%, 5.00% Exit Fee

 

$

11,500

 

 

 

11,788

 

 

 

11,519

 

 

(5)(10)(11)(12)

BiomX, INC

 

Senior Secured

 

September 2025

 

Prime + 5.70%, Floor rate 8.95%, 6.55% Exit Fee

 

$

8,749

 

 

 

8,971

 

 

 

8,904

 

 

(5)(10)(11)

BridgeBio Pharma, Inc.

 

Senior Secured

 

November 2026

 

FIXED 9.00%, 2.00% Exit Fee

 

$

37,598

 

 

 

37,380

 

 

 

33,695

 

 

(12)(13)(14)

Cellarity, Inc.

 

Senior Secured

 

June 2026

 

Prime + 5.70%, Floor rate 8.95%, 3.75% Exit Fee

 

$

30,000

 

 

 

29,947

 

 

 

30,380

 

 

(13)(15)

Century Therapeutics, Inc.

 

Senior Secured

 

April 2024

 

Prime + 6.30%, Floor rate 9.55%, 3.95% Exit Fee

 

$

10,000

 

 

 

10,275

 

 

 

10,498

 

 

(11)

Codiak Biosciences, Inc.

 

Senior Secured

 

October 2025

 

Prime + 5.00%, Floor rate 8.25%, 5.50% Exit Fee

 

$

17,500

 

 

 

18,337

 

 

 

16,343

 

 

(11)

Corium, Inc.

 

Senior Secured

 

September 2026

 

Prime + 5.70%, Floor rate 8.95%, 7.75% Exit Fee

 

$

132,675

 

 

 

134,041

 

 

 

136,593

 

 

(13)(16)

Eloxx Pharmaceuticals, Inc.

 

Senior Secured

 

April 2025

 

Prime + 6.25%, Floor rate 9.50%, 6.55% Exit Fee

 

$

5,000

 

 

 

5,621

 

 

 

5,542

 

 

(15)

enGene, Inc.

 

Senior Secured

 

July 2025

 

Prime + 5.00%, Floor rate 8.25%, 6.35% Exit Fee

 

$

11,000

 

 

 

11,150

 

 

 

11,115

 

 

(5)(10)(12)(13)

G1 Therapeutics, Inc.

 

Senior Secured

 

November 2026

 

Prime + 5.90%, Floor rate 9.15%, 9.86% Exit Fee

 

$

58,125

 

 

 

58,872

 

 

 

58,817

 

 

(11)(12)(15)(17)

Geron Corporation

 

Senior Secured

 

April 2025

 

Prime + 5.75%, Floor rate 9.00%, 6.55% Exit Fee

 

$

18,500

 

 

 

19,176

 

 

 

19,379

 

 

(10)(12)(13)

Gritstone Bio, Inc.

 

Senior Secured

 

July 2027

 

Prime + 3.15%, Floor rate 7.15%, Cap rate 8.65%, PIK Interest 2.00%, 5.75% Exit Fee

 

$

22,689

 

 

 

22,693

 

 

 

21,942

 

 

(13)(14)(17)

Hibercell, Inc.

 

Senior Secured

 

May 2025

 

Prime + 5.40%, Floor rate 8.65%, 4.95% Exit Fee

 

$

17,000

 

 

 

17,381

 

 

 

17,369

 

 

(13)(15)

HilleVax, Inc.

 

Senior Secured

 

May 2027

 

Prime + 1.05%, Floor rate 4.55%, Cap rate 6.05%, PIK Interest 2.85%, 7.15% Exit Fee

 

$

12,150

 

 

 

12,167

 

 

 

11,462

 

 

(14)(15)(17)

Iveric Bio, Inc.

 

Senior Secured

 

August 2027

 

Prime + 4.00%, Floor rate 8.75%, Cap rate 10.25%, 4.25% Exit Fee

 

$

49,500

 

 

 

49,211

 

 

 

48,495

 

 

(10)(12)(17)

Kura Oncology, Inc.

 

Senior Secured

 

November 2027

 

Prime + 2.40%, Floor rate 8.65%, 15.13% Exit Fee

 

$

5,500

 

 

 

5,468

 

 

 

5,468

 

 

(10)(15)(17)

Locus Biosciences, Inc.

 

Senior Secured

 

July 2025

 

Prime + 6.10%, Floor rate 9.35%, 4.95% Exit Fee

 

$

7,544

 

 

 

7,699

 

 

 

7,701

 

 

(15)

Madrigal Pharmaceutical, Inc.

 

Senior Secured

 

May 2026

 

Prime + 2.45%, Floor rate 8.25%, 5.35% Exit Fee

 

$

57,800

 

 

 

57,574

 

 

 

57,885

 

 

(10)(17)

Phathom Pharmaceuticals, Inc.

 

Senior Secured

 

October 2026

 

Prime + 2.25%, Floor rate 5.50%, PIK Interest 3.35%, 7.50% Exit Fee

 

$

95,494

 

 

 

96,111

 

 

 

95,310

 

 

(10)(12)(14)(15)(16)(17)(22)

Provention Bio, Inc.

 

Senior Secured

 

September 2027

 

Prime + 2.20%, Floor rate 8.20%, 6.60% Exit Fee

 

$

65,000

 

 

 

64,186

 

 

 

70,594

 

 

 

Redshift Bioanalytics, Inc.

 

Senior Secured

 

January 2026

 

Prime + 4.25%, Floor rate 7.50%, 3.80% Exit Fee

 

$

5,000

 

 

 

4,979

 

 

 

5,001

 

 

(15)

Replimune Group, Inc.

 

Senior Secured

 

October 2027

 

Prime + 1.75%, Floor rate 7.25%, Cap rate 9.00%, PIK Interest 1.50%, 4.95% Exit Fee

 

$

20,832

 

 

 

20,781

 

 

 

20,781

 

 

(10)(14)(17)

Scynexis, Inc.

 

Senior Secured

 

March 2025

 

Prime + 5.80%, Floor rate 9.05%, 3.95% Exit Fee

 

$

18,667

 

 

 

18,758

 

 

 

19,544

 

 

(12)(13)

Seres Therapeutics, Inc.

 

Senior Secured

 

October 2024

 

Prime + 6.40%, Floor rate 9.65%, 4.98% Exit Fee

 

$

37,500

 

 

 

38,768

 

 

 

38,982

 

 

(12)(13)

Tarsus Pharmaceuticals, Inc.

 

Senior Secured

 

February 2027

 

Prime + 4.45%, Floor rate 8.45%, Cap rate 11.45%, 4.75% Exit Fee

 

$

10,313

 

 

 

10,346

 

 

 

10,397

 

 

(10)(13)(17)

TG Therapeutics, Inc.

 

Senior Secured

 

January 2026

 

Prime + 1.20%, Floor rate 8.95%, PIK Interest 2.25%, 5.69% Exit Fee

 

$

64,648

 

 

 

64,368

 

 

 

64,374

 

 

(10)(11)(12)(14)(17)

uniQure B.V.

 

Senior Secured

 

December 2025

 

Prime + 4.70%, Floor rate 7.95%, 8.03% Exit Fee

 

$

70,000

 

 

 

72,628

 

 

 

74,010

 

 

(5)(10)(11)(12)

 

See notes to consolidated financial statements

8


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

March 31, 2023 (unaudited)

(dollars in thousands)

 

Portfolio Company

 

Type of
Investment

 

Maturity Date

 

Interest Rate and Floor (1)

Principal
Amount

 

Cost (2)

 

Value

 

Footnotes

Unity Biotechnology, Inc.

 

Senior Secured

 

August 2024

 

Prime + 6.10%, Floor rate 9.35%, 6.25% Exit Fee

 

$

20,000

 

 

$

21,165

 

 

$

21,136

 

 

(13)

Valo Health, LLC

 

Senior Secured

 

May 2024

 

Prime + 6.45%, Floor rate 9.70%, 3.85% Exit Fee

 

$

6,708

 

 

 

7,021

 

 

 

7,030

 

 

(11)(13)

Viridian Therapeutics, Inc.

 

Senior Secured

 

October 2026

 

Prime + 4.20%, Floor rate 7.45%, Cap rate 8.95%, 6.00% Exit Fee

 

$

2,000

 

 

 

2,019

 

 

 

1,943

 

 

(10)(13)(17)

X4 Pharmaceuticals, Inc.

 

Senior Secured

 

April 2026

 

Prime + 3.15%, Floor rate 10.15%, 6.35% Exit Fee

 

$

32,500

 

 

 

32,445

 

 

 

32,445

 

 

(11)(12)(13)

Subtotal: Drug Discovery & Development (78.49%)*

 

 

 

 

 

 

 

1,172,536

 

 

 

1,176,627

 

 

 

Electronics & Computer Hardware

 

 

 

 

 

 

 

 

 

 

 

 

 

Locus Robotics Corp.

 

Senior Secured

 

June 2026

 

Prime + 4.50%, Floor rate 8.00%, 1.00% Exit Fee

 

$

18,281

 

 

 

18,213

 

 

 

19,081

 

 

(17)(19)

Subtotal: Electronics & Computer Hardware (1.27%)*

 

 

 

 

 

 

 

18,213

 

 

 

19,081

 

 

 

Healthcare Services, Other

 

 

 

 

 

 

 

 

 

 

 

 

 

Better Therapeutics, Inc.

 

Senior Secured

 

August 2025

 

Prime + 5.70%, Floor rate 8.95%, 5.95% Exit Fee

 

$

11,652

 

 

 

11,883

 

 

 

11,615

 

 

(15)

Blue Sprig Pediatrics, Inc.

 

Senior Secured

 

November 2026

 

3-month LIBOR + 5.00%, Floor rate 6.00%, PIK Interest 4.45%

 

$

52,055

 

 

 

51,415

 

 

 

50,547

 

 

(11)(13)(14)

Carbon Health Technologies, Inc.

 

Senior Secured

 

March 2025

 

Prime + 5.60%, Floor rate 8.85%, 4.61% Exit Fee

 

$

46,125

 

 

 

46,702

 

 

 

47,052

 

 

(11)(13)(19)

Equality Health, LLC

 

Senior Secured

 

February 2026

 

Prime + 6.25%, Floor rate 9.50%, PIK Interest 1.55%

 

$

53,795

 

 

 

53,407

 

 

 

53,963

 

 

(11)(12)(14)

Oak Street Health, Inc.

 

Senior Secured

 

October 2027

 

Prime + 2.45%, Floor rate 7.95%, Cap rate 9.45%, PIK Interest 1.00%, 4.95% Exit Fee

 

$

45,143

 

 

 

44,924

 

 

 

48,154

 

 

(10)(14)(17)

Subtotal: Healthcare Services, Other (14.10%)*

 

 

 

 

 

 

 

208,331

 

 

 

211,331

 

 

 

Information Services

 

 

 

 

 

 

 

 

 

 

 

 

 

Capella Space Corp.

 

Senior Secured

 

November 2025

 

Prime + 5.00%, Floor rate 8.25%, PIK Interest 1.10%, 7.00% Exit Fee

 

$

20,305

 

 

 

20,663

 

 

 

20,822

 

 

(14)(15)(19)

Signal Media Limited

 

Senior Secured

 

June 2025

 

Prime + 5.50%, Floor rate 9.00%, Cap rate 12.00%, 3.45% Exit Fee

 

$

3,000

 

 

 

2,956

 

 

 

2,956

 

 

(5)(10)(17)

Yipit, LLC

 

Senior Secured

 

September 2026

 

1-month SOFR + 9.14%, Floor rate 10.04%

 

$

31,875

 

 

 

31,396

 

 

 

31,805

 

 

(17)(18)

Subtotal: Information Services (3.71%)*

 

 

 

 

 

 

 

55,015

 

 

 

55,583

 

 

 

Manufacturing Technology

 

 

 

 

 

 

 

 

 

 

 

 

 

Bright Machines, Inc.

 

Senior Secured

 

April 2025

 

Prime + 4.00%, Floor rate 9.50%, 5.00% Exit Fee

 

$

11,050

 

 

 

10,951

 

 

 

11,045

 

 

(13)

MacroFab, Inc.

 

Senior Secured

 

March 2026

 

Prime + 4.35%, Floor rate 7.60%, PIK Interest 1.25%, 4.50% Exit Fee

 

$

20,191

 

 

 

19,808

 

 

 

20,330

 

 

(14)

Ouster, Inc.

 

Senior Secured

 

May 2026

 

Prime + 6.15%, Floor rate 9.40%, 7.45% Exit Fee

 

$

14,000

 

 

 

14,038

 

 

 

14,509

 

 

(10)(13)

Subtotal: Manufacturing Technology (3.06%)*

 

 

 

 

 

 

 

44,797

 

 

 

45,884

 

 

 

Media/Content/Info

 

 

 

 

 

 

 

 

 

 

 

 

 

Fever Labs, Inc.

 

Senior Secured

 

September 2026

 

Prime + 3.50%, Floor rate 9.00%, 3.67% Exit Fee

 

$

6,667

 

 

 

6,594

 

 

 

6,594

 

 

(19)

 

 

Senior Secured

 

September 2025

 

Prime + 3.50%, Floor rate 9.00%, 2.67% Exit Fee

 

$

1,667

 

 

 

1,652

 

 

 

1,652

 

 

(19)

 

 

Senior Secured

 

December 2025

 

Prime + 3.50%, Floor rate 9.00%, 2.98% Exit Fee

 

$

1,667

 

 

 

1,646

 

 

 

1,646

 

 

(19)

Total Fever Labs, Inc.

 

 

 

 

 

 

 

$

10,001

 

 

 

9,892

 

 

 

9,892

 

 

 

Subtotal: Media/Content/Info (0.66%)*

 

 

 

 

 

 

 

9,892

 

 

 

9,892

 

 

 

Software

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3GTMS, LLC

 

Senior Secured

 

February 2025

 

3-month LIBOR + 9.27%, Floor rate 10.27%

 

$

13,205

 

 

 

13,078

 

 

 

13,140

 

 

(11)(17)(18)

Agilence, Inc.

 

Senior Secured

 

October 2026

 

1-month BSBY + 9.00%, Floor rate 10.00%

 

$

9,283

 

 

 

9,075

 

 

 

8,975

 

 

(12)(17)(18)

Alchemer LLC

 

Senior Secured

 

May 2028

 

1-month SOFR + 8.14%, Floor rate 9.14%

 

$

20,908

 

 

 

20,459

 

 

 

20,975

 

 

(13)(17)(18)

Annex Cloud

 

Senior Secured

 

February 2027

 

1-month BSBY + 8.99%, Floor rate 9.99%

 

$

8,500

 

 

 

8,302

 

 

 

8,270

 

 

(13)(17)

Automation Anywhere, Inc.

 

Senior Secured

 

September 2027

 

Prime + 4.25%, Floor rate 9.00%, 2.50% Exit Fee

 

$

19,600

 

 

 

19,127

 

 

 

19,653

 

 

(11)(17)(19)

Babel Street

 

Senior Secured

 

December 2027

 

3-month SOFR + 7.89%, Floor rate 8.89%

 

$

45,000

 

 

 

43,844

 

 

 

43,844

 

 

(15)(17)(18)

 

 

See notes to consolidated financial statements

9


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

March 31, 2023 (unaudited)

(dollars in thousands)

 

Portfolio Company

 

Type of
Investment

 

Maturity Date

 

Interest Rate and Floor (1)

Principal
Amount

 

Cost (2)

 

Value

 

Footnotes

Brain Corporation

 

Senior Secured

 

April 2025

 

Prime + 3.70%, Floor rate 6.95%, PIK Interest 1.00%, 3.95% Exit Fee

 

$

20,217

 

 

$

20,366

 

 

$

20,399

 

 

(13)(14)(15)(17)

Campaign Monitor Limited

 

Senior Secured

 

November 2025

 

3-month SOFR + 8.90%, Floor rate 9.90%

 

$

33,000

 

 

 

32,608

 

 

 

33,000

 

 

(13)(19)

Catchpoint Systems, Inc.

 

Senior Secured

 

June 2026

 

3-month SOFR + 8.86%, Floor rate 9.76%

 

$

10,149

 

 

 

9,966

 

 

 

10,028

 

 

(18)

Ceros, Inc.

 

Senior Secured

 

September 2026

 

6-month LIBOR + 8.89%, Floor rate 9.89%

 

$

23,026

 

 

 

22,574

 

 

 

23,176

 

 

(17)(18)

Constructor.io Corporation

 

Senior Secured

 

July 2027

 

1-month SOFR + 8.44%, Floor rate 9.44%

 

$

4,688

 

 

 

4,578

 

 

 

4,704

 

 

(17)(18)

Convoy, Inc.

 

Senior Secured

 

March 2026

 

Prime + 3.20%, Floor rate 6.45%, PIK Interest 1.95%, 4.55% Exit Fee

 

$

74,348

 

 

 

73,672

 

 

 

74,294

 

 

(14)(19)

Copper CRM, Inc

 

Senior Secured

 

March 2025

 

Prime + 4.50%, Floor rate 8.25%, Cap rate 10.25%, PIK Interest 1.95%, 4.50% Exit Fee

 

$

9,925

 

 

 

9,971

 

 

 

9,652

 

 

(11)(14)

Cutover, Inc.

 

Senior Secured

 

October 2025

 

Prime + 5.20%, Floor rate 9.95%, 4.95% Exit Fee

 

$

5,500

 

 

 

5,464

 

 

 

5,597

 

 

(5)(10)(12)(17)

Cybermaxx Intermediate Holdings, Inc.

 

Senior Secured

 

August 2026

 

6-month SOFR + 8.63%, Floor rate 9.38%

 

$

7,975

 

 

 

7,821

 

 

 

7,514

 

 

(13)(17)

Cybermaxx Intermediate Holdings, Inc.

 

Senior Secured

 

August 2026

 

6-month SOFR + 12.36%, Floor rate 13.11%

 

$

2,553

 

 

 

2,489

 

 

 

2,487

 

 

(17)

Total Cybermaxx Intermediate Holdings, Inc.

 

 

 

 

 

 

 

$

10,528

 

 

 

10,310

 

 

 

10,001

 

 

 

Dashlane, Inc.

 

Senior Secured

 

July 2025

 

Prime + 3.05%, Floor rate 7.55%, PIK Interest 1.10%, 6.29% Exit Fee

 

$

34,513

 

 

 

34,518

 

 

 

34,413

 

 

(11)(13)(14)(17)(19)

Dispatch Technologies, Inc.

 

Senior Secured

 

April 2028

 

3-month SOFR + 8.01%, Floor rate 8.76%

 

$

7,500

 

 

 

7,302

 

 

 

7,325

 

 

(17)(18)

Eigen Technologies Ltd.

 

Senior Secured

 

April 2025

 

Prime + 5.10%, Floor rate 8.35%, 2.95% Exit Fee

 

$

3,750

 

 

 

3,758

 

 

 

3,742

 

 

(5)(10)

Elation Health, Inc.

 

Senior Secured

 

March 2026

 

Prime + 4.25%, Floor rate 9.00%, PIK Interest 1.95%, 3.95% Exit Fee

 

$

5,046

 

 

 

4,886

 

 

 

5,009

 

 

(14)(17)(19)

Enmark Systems, Inc.

 

Senior Secured

 

September 2026

 

3-month LIBOR + 6.76%, Floor rate 7.76%, PIK Interest 2.15%

 

$

8,268

 

 

 

8,107

 

 

 

8,184

 

 

(11)(14)(17)(18)

Esme Learning Solutions, Inc.

 

Senior Secured

 

February 2025

 

Prime + 5.50%, Floor rate 8.75%, PIK Interest 1.50%, 3.00% Exit Fee

 

$

4,783

 

 

 

4,628

 

 

 

1,193

 

 

(8)(14)

Fortified Health Security

 

Senior Secured

 

December 2027

 

6-month SOFR + 7.79%, Floor rate 8.54%

 

$

7,000

 

 

 

6,830

 

 

 

6,830

 

 

(17)(18)

Flight Schedule Pro, LLC

 

Senior Secured

 

October 2027

 

1-month SOFR + 7.80%, Floor rate 8.70%

 

$

5,948

 

 

 

5,777

 

 

 

5,778

 

 

(17)(18)

Ikon Science Limited

 

Senior Secured

 

October 2024

 

3-month Eurodollar + 9.00%, Floor rate 10.00%

 

$

6,475

 

 

 

6,353

 

 

 

6,394

 

 

(5)(10)(17)(18)

Imperva, Inc.

 

Senior Secured

 

January 2027

 

3-month LIBOR + 7.75%, Floor rate 8.75%

 

$

20,000

 

 

 

19,881

 

 

 

20,200

 

 

(19)

Khoros (p.k.a Lithium Technologies)

 

Senior Secured

 

January 2024

 

3-month SOFR + 8.00%, Floor rate 9.00%

 

$

56,208

 

 

 

56,096

 

 

 

56,096

 

 

(17)

Kore.ai, Inc.

 

Senior Secured

 

April 2027

 

Prime + 1.50%, Floor rate 9.25%, PIK Interest 2.20%, 2.25% Exit Fee

 

$

30,000

 

 

 

29,541

 

 

 

29,541

 

 

 

Leapwork ApS

 

Senior Secured

 

February 2026

 

Prime + 0.25%, Floor rate 7.25%, PIK Interest 1.95%, 2.70% Exit Fee

 

$

3,757

 

 

 

3,723

 

 

 

3,723

 

 

(5)(10)(14)(17)

Loftware, Inc.

 

Senior Secured

 

March 2028

 

3-month SOFR + 7.88%, Floor rate 8.88%

 

$

25,900

 

 

 

25,255

 

 

 

25,255

 

 

(17)(18)

LogicSource

 

Senior Secured

 

July 2027

 

3-month SOFR + 8.93%, Floor rate 9.93%

 

$

13,300

 

 

 

13,039

 

 

 

13,172

 

 

(17)

Mobile Solutions Services

 

Senior Secured

 

December 2025

 

3-month LIBOR + 9.06%, Floor rate 10.06%

 

$

18,366

 

 

 

18,033

 

 

 

17,754

 

 

(18)

 

See notes to consolidated financial statements

10


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

March 31, 2023 (unaudited)

(dollars in thousands)

 

Portfolio Company

 

Type of
Investment

 

Maturity Date

 

Interest Rate and Floor (1)

Principal
Amount

 

Cost (2)

 

Value

 

Footnotes

Nextroll, Inc.

 

Senior Secured

 

July 2023

 

Prime + 3.75%, Floor rate 7.75%, PIK Interest 2.95%, 1.95% Exit Fee

 

$

22,375

 

 

$

22,619

 

 

$

22,619

 

 

(12)(14)

Nuvolo Technologies Corporation

 

Senior Secured

 

July 2025

 

Prime + 5.25%, Floor rate 8.50%, 2.42% Exit Fee

 

$

22,500

 

 

 

22,575

 

 

 

22,929

 

 

(12)(13)(17)(19)

Omeda Holdings, LLC

 

Senior Secured

 

July 2027

 

3-month SOFR + 8.05%, Floor rate 9.05%

 

$

7,500

 

 

 

7,270

 

 

 

7,295

 

 

(17)(18)

Riviera Partners LLC

 

Senior Secured

 

April 2027

 

6-month SOFR + 7.53%, Floor rate 8.53%

 

$

26,053

 

 

 

25,516

 

 

 

25,074

 

 

(17)(18)

Salary.com, LLC

 

Senior Secured

 

September 2027

 

6-month SOFR + 8.25%, Floor rate 9.00%

 

$

17,955

 

 

 

17,622

 

 

 

17,994

 

 

(18)

ShadowDragon, LLC

 

Senior Secured

 

December 2026

 

1-month LIBOR + 8.97%, Floor rate 9.97%

 

$

5,985

 

 

 

5,848

 

 

 

5,780

 

 

(17)(18)

Simon Data, Inc.

 

Senior Secured

 

March 2027

 

Prime + 1.00%, Floor rate 8.75%, PIK Interest 1.95%, 2.95% Exit Fee

 

$

15,000

 

 

 

14,892

 

 

 

14,892

 

 

 

Streamline Healthcare Solutions

 

Senior Secured

 

March 2028

 

6-month SOFR + 7.25%, Floor rate 8.25%

 

$

13,200

 

 

 

12,921

 

 

 

12,921

 

 

(17)(18)

Tact.ai Technologies, Inc.

 

Senior Secured

 

February 2024

 

Prime + 4.00%, Floor rate 8.75%, PIK Interest 2.00%, 5.50% Exit Fee

 

$

3,474

 

 

 

3,448

 

 

 

3,448

 

 

(14)

ThreatConnect, Inc.

 

Senior Secured

 

May 2026

 

6-month LIBOR + 9.00%, Floor rate 10.00%

 

$

11,004

 

 

 

10,765

 

 

 

10,827

 

 

(17)(18)

Tipalti Solutions Ltd.

 

Senior Secured

 

April 2027

 

Prime + 0.45%, Floor rate 7.95%, PIK Interest 2.00%, 3.75% Exit Fee

 

$

10,500

 

 

 

10,349

 

 

 

10,349

 

 

(5)(10)(17)

VideoAmp, Inc.

 

Senior Secured

 

February 2025

 

Prime + 3.70%, Floor rate 6.95%, PIK Interest 1.25%, 5.25% Exit Fee

 

$

63,384

 

 

 

63,224

 

 

 

64,281

 

 

(14)(15)(19)

Zappi, Inc.

 

Senior Secured

 

December 2027

 

3-month SOFR + 8.03%, Floor rate 9.03%

 

$

9,213

 

 

 

9,001

 

 

 

9,001

 

 

(5)(10)(17)(18)

Zimperium, Inc.

 

Senior Secured

 

May 2027

 

3-month SOFR + 8.31%, Floor rate 9.31%

 

$

16,313

 

 

 

16,014

 

 

 

16,251

 

 

(17)(18)

Subtotal: Software (52.97%)*

 

 

 

 

 

 

 

793,185

 

 

 

793,978

 

 

 

Sustainable and Renewable Technology

 

 

 

 

 

 

 

 

 

 

 

 

 

Ampion, PBC

 

Senior Secured

 

May 2025

 

Prime + 4.70%, Floor rate 7.95%, PIK Interest 1.45%, 3.95% Exit Fee

 

$

4,052

 

 

 

4,018

 

 

 

4,048

 

 

(13)(14)

Pineapple Energy LLC

 

Senior Secured

 

December 2024

 

PIK Interest 10.00%

 

$

3,318

 

 

 

3,318

 

 

 

3,108

 

 

(14)

Subtotal: Sustainable and Renewable Technology (0.48%)*

 

 

 

 

 

 

 

7,336

 

 

 

7,156

 

 

 

Total: Debt Investments (198.04%)*

 

 

 

 

 

 

$

2,971,498

 

 

$

2,968,651

 

 

 

 

 

 

Portfolio Company

 

Type of
Investment

Acquisition Date (4)

Series (3)

 

Shares

 

 

Cost (2)

 

 

Value

 

 

Footnotes

Equity Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer & Business Products

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grove Collaborative, Inc.

 

Equity

4/30/2021

Common Stock

 

 

61,300

 

 

$

433

 

 

$

27

 

 

(4)

Savage X Holding, LLC

 

Equity

4/30/2010

Class A Units

 

 

42,137

 

 

 

13

 

 

 

210

 

 

 

TechStyle, Inc.

 

Equity

4/30/2010

Common Stock

 

 

42,989

 

 

 

128

 

 

 

135

 

 

 

TFG Holding, Inc.

 

Equity

4/30/2010

Common Stock

 

 

42,989

 

 

 

89

 

 

 

101

 

 

 

Subtotal: Consumer & Business Products (0.03%)*

 

 

 

 

 

663

 

 

 

473

 

 

 

Consumer & Business Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carwow LTD

 

Equity

12/15/2021

Preferred Series D-4

 

 

199,742

 

 

 

1,151

 

 

 

354

 

 

(5)(10)

DoorDash, Inc.

 

Equity

12/20/2018

Common Stock

 

 

81,996

 

 

 

945

 

 

 

5,211

 

 

(4)

Lyft, Inc.

 

Equity

12/26/2018

Common Stock

 

 

100,738

 

 

 

5,263

 

 

 

934

 

 

(4)

Nerdy Inc.

 

Equity

9/17/2021

Common Stock

 

 

100,000

 

 

 

1,000

 

 

 

418

 

 

(4)

OfferUp, Inc.

 

Equity

10/25/2016

Preferred Series A

 

 

286,080

 

 

 

1,663

 

 

 

383

 

 

 

 

Equity

10/25/2016

Preferred Series A-1

 

 

108,710

 

 

 

632

 

 

 

146

 

 

 

Total OfferUp, Inc.

 

 

 

 

 

 

394,790

 

 

 

2,295

 

 

 

529

 

 

 

Oportun

 

Equity

6/28/2013

Common Stock

 

 

48,365

 

 

 

577

 

 

 

187

 

 

(4)

Reischling Press, Inc.

 

Equity

7/31/2020

Common Stock

 

 

3,095

 

 

 

39

 

 

 

 

 

 

Rhino Labs, Inc.

 

Equity

1/24/2022

Preferred Series B-2

 

 

7,063

 

 

 

1,000

 

 

 

752

 

 

 

Tectura Corporation

 

Equity

5/23/2018

Common Stock

 

 

414,994,863

 

 

 

900

 

 

 

 

 

(7)

 

Equity

6/6/2016

Preferred Series BB

 

 

1,000,000

 

 

 

 

 

 

 

 

(7)

Total Tectura Corporation

 

 

 

 

 

 

415,994,863

 

 

 

900

 

 

 

 

 

 

Subtotal: Consumer & Business Services (0.56%)*

 

 

 

 

 

13,170

 

 

 

8,385

 

 

 

 

 

 

 

See notes to consolidated financial statements

11


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

March 31, 2023 (unaudited)

(dollars in thousands)

Portfolio Company

 

Type of
Investment

Acquisition Date (4)

Series (3)

 

Shares

 

 

Cost (2)

 

 

Value

 

 

Footnotes

Diversified Financial Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gibraltar Acquisition, LLC (p.k.a. Gibraltar Business Capital, LLC)

 

Equity

3/1/2018

Common Stock

 

 

830,000

 

 

$

1,884

 

 

$

1,170

 

 

(7)

 

Equity

3/1/2018

Preferred Series A

 

 

10,602,752

 

 

 

26,122

 

 

 

14,942

 

 

(7)

Total Gibraltar Acquisition, LLC (p.k.a. Gibraltar Business Capital, LLC)

 

 

 

 

 

 

11,432,752

 

 

 

28,006

 

 

 

16,112

 

 

 

Hercules Adviser LLC

 

Equity

3/26/2021

Member Units

 

 

1

 

 

 

35

 

 

 

24,595

 

 

(7)

Newfront Insurance Holdings, Inc.

 

Equity

9/30/2021

Preferred Series D-2

 

 

210,282

 

 

 

403

 

 

 

484

 

 

 

Subtotal: Diversified Financial Services (2.75%)*

 

 

 

 

 

28,444

 

 

 

41,191

 

 

 

Drug Delivery

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AcelRx Pharmaceuticals, Inc.

 

Equity

12/10/2018

Common Stock

 

 

8,836

 

 

 

1,329

 

 

 

6

 

 

(4)

Aytu BioScience, Inc.

 

Equity

3/28/2014

Common Stock

 

 

680

 

 

 

1,500

 

 

 

2

 

 

(4)

BioQ Pharma Incorporated

 

Equity

12/8/2015

Preferred Series D

 

 

165,000

 

 

 

500

 

 

 

 

 

 

PDS Biotechnology Corporation

 

Equity

4/6/2015

Common Stock

 

 

2,498

 

 

 

309

 

 

 

15

 

 

(4)

Subtotal: Drug Delivery (0.00%)*

 

 

 

 

 

3,638

 

 

 

23

 

 

 

Drug Discovery & Development

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Applied Molecular Transport

 

Equity

4/6/2021

Common Stock

 

 

1,000

 

 

 

42

 

 

 

 

 

(4)(10)

Avalo Therapeutics, Inc.

 

Equity

8/19/2014

Common Stock

 

 

9,923

 

 

 

1,000

 

 

 

17

 

 

(4)

Axsome Therapeutics, Inc.

 

Equity

5/9/2022

Common Stock

 

 

127,021

 

 

 

4,165

 

 

 

7,835

 

 

(4)(10)(16)

Bicycle Therapeutics PLC

 

Equity

10/5/2020

Common Stock

 

 

98,100

 

 

 

1,871

 

 

 

2,087

 

 

(4)(5)(10)

BridgeBio Pharma, Inc.

 

Equity

6/21/2018

Common Stock

 

 

231,329

 

 

 

2,255

 

 

 

3,836

 

 

(4)

Dare Biosciences, Inc.

 

Equity

1/8/2015

Common Stock

 

 

13,550

 

 

 

1,000

 

 

 

14

 

 

(4)

Dynavax Technologies

 

Equity

7/22/2015

Common Stock

 

 

20,000

 

 

 

550

 

 

 

196

 

 

(4)(10)

Gritstone Bio, Inc.

 

Equity

10/26/2022

Common Stock

 

 

442,477

 

 

 

1,000

 

 

 

1,230

 

 

(4)

Hibercell, Inc.

 

Equity

5/7/2021

Preferred Series B

 

 

3,466,840

 

 

 

4,250

 

 

 

1,979

 

 

(15)

HilleVax, Inc.

 

Equity

5/3/2022

Common Stock

 

 

235,295

 

 

 

4,000

 

 

 

3,889

 

 

(4)

Humanigen, Inc.

 

Equity

3/31/2021

Common Stock

 

 

43,243

 

 

 

800

 

 

 

6

 

 

(4)(10)

NorthSea Therapeutics

 

Equity

12/15/2021

Preferred Series C

 

 

983

 

 

 

2,000

 

 

 

1,476

 

 

(5)(10)

Paratek Pharmaceuticals, Inc.

 

Equity

2/26/2007

Common Stock

 

 

76,362

 

 

 

2,744

 

 

 

194

 

 

(4)

Rocket Pharmaceuticals, Ltd.

 

Equity

8/22/2007

Common Stock

 

 

944

 

 

 

1,500

 

 

 

16

 

 

(4)

Savara, Inc.

 

Equity

8/11/2015

Common Stock

 

 

11,119

 

 

 

203

 

 

 

22

 

 

(4)

Sio Gene Therapies, Inc.

 

Equity

2/2/2017

Common Stock

 

 

16,228

 

 

 

1,269

 

 

 

7

 

 

(4)

Tarsus Pharmaceuticals, Inc.

 

Equity

5/5/2022

Common Stock

 

 

155,555

 

 

 

2,100

 

 

 

1,955

 

 

(4)(10)

Tricida, Inc.

 

Equity

2/28/2018

Common Stock

 

 

68,816

 

 

 

863

 

 

 

 

 

 

uniQure B.V.

 

Equity

1/31/2019

Common Stock

 

 

17,175

 

 

 

332

 

 

 

346

 

 

(4)(5)(10)

Valo Health, LLC

 

Equity

12/11/2020

Preferred Series B

 

 

510,308

 

 

 

3,000

 

 

 

1,944

 

 

 

 

Equity

10/31/2022

Preferred Series C

 

 

170,102

 

 

 

1,000

 

 

 

985

 

 

 

Total Valo Health, LLC

 

 

 

 

 

 

680,410

 

 

 

4,000

 

 

 

2,929

 

 

 

X4 Pharmaceuticals, Inc.

 

Equity

11/26/2019

Common Stock

 

 

1,566,064

 

 

 

2,945

 

 

 

1,362

 

 

(4)

Subtotal: Drug Discovery & Development (1.96%)*

 

 

 

 

 

38,889

 

 

 

29,396

 

 

 

Electronics & Computer Hardware

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Locus Robotics Corp.

 

Equity

11/17/2022

Preferred Series F

 

 

15,116

 

 

 

650

 

 

 

564

 

 

 

Skydio, Inc.

 

Equity

3/8/2022

Preferred Series E

 

 

248,900

 

 

 

1,500

 

 

 

783

 

 

 

Subtotal: Electronics & Computer Hardware (0.09%)*

 

 

 

 

 

2,150

 

 

 

1,347

 

 

 

Healthcare Services, Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23andMe, Inc.

 

Equity

3/11/2019

Common Stock

 

 

825,732

 

 

 

5,094

 

 

 

1,883

 

 

(4)

Carbon Health Technologies, Inc.

 

Equity

3/30/2021

Preferred Series C

 

 

217,880

 

 

 

1,688

 

 

 

985

 

 

 

Subtotal: Healthcare Services, Other (0.19%)*

 

 

 

 

 

6,782

 

 

 

2,868

 

 

 

Information Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Planet Labs, Inc.

 

Equity

6/21/2019

Common Stock

 

 

547,880

 

 

 

615

 

 

 

2,153

 

 

(4)

Yipit, LLC

 

Equity

12/30/2021

Preferred Series E

 

 

41,021

 

 

 

3,825

 

 

 

3,859

 

 

 

Subtotal: Information Services (0.40%)*

 

 

 

 

 

4,440

 

 

 

6,012

 

 

 

 

See notes to consolidated financial statements

12


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

March 31, 2023 (unaudited)

(dollars in thousands)

Portfolio Company

 

Type of
Investment

Acquisition Date (4)

Series (3)

 

Shares

 

 

Cost (2)

 

 

Value

 

 

Footnotes

Medical Devices & Equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Coronado Aesthetics, LLC

 

Equity

10/15/2021

Common Units

 

 

180,000

 

 

$

 

 

$

3

 

 

(7)

 

Equity

10/15/2021

Preferred Series A-2

 

 

5,000,000

 

 

 

250

 

 

 

253

 

 

(7)

Total Coronado Aesthetics, LLC

 

 

 

 

 

 

5,180,000

 

 

 

250

 

 

 

256

 

 

 

Flowonix Medical Incorporated

 

Equity

11/3/2014

Preferred Series AA

 

 

221,893

 

 

 

1,500

 

 

 

 

 

 

Gelesis, Inc.

 

Equity

11/30/2009

Common Stock

 

 

1,490,700

 

 

 

871

 

 

 

243

 

 

(4)

ViewRay, Inc.

 

Equity

12/16/2013

Common Stock

 

 

36,457

 

 

 

332

 

 

 

126

 

 

(4)

Subtotal: Medical Devices & Equipment (0.04%)*

 

 

 

 

 

2,953

 

 

 

625

 

 

 

Semiconductors

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Achronix Semiconductor Corporation

 

Equity

7/1/2011

Preferred Series C

 

 

277,995

 

 

 

160

 

 

 

296

 

 

 

Subtotal: Semiconductors (0.02%)*

 

 

 

 

 

160

 

 

 

296

 

 

 

Software

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3GTMS, LLC

 

Equity

8/9/2021

Common Stock

 

 

1,000,000

 

 

 

1,000

 

 

 

911

 

 

 

Black Crow AI, Inc. affiliates

 

Equity

3/24/2021

Preferred Note

 

 

3

 

 

 

2,792

 

 

 

2,793

 

 

(21)

CapLinked, Inc.

 

Equity

10/26/2012

Preferred Series A-3

 

 

53,614

 

 

 

51

 

 

 

 

 

 

Contentful Global, Inc.

 

Equity

12/22/2020

Preferred Series C

 

 

41,000

 

 

 

138

 

 

 

233

 

 

(5)(10)

 

Equity

11/20/2018

Preferred Series D

 

 

108,500

 

 

 

500

 

 

 

660

 

 

(5)(10)

Total Contentful Global, Inc.

 

 

 

 

 

 

149,500

 

 

 

638

 

 

 

893

 

 

 

Docker, Inc.

 

Equity

11/29/2018

Common Stock

 

 

20,000

 

 

 

4,284

 

 

 

545

 

 

 

Druva Holdings, Inc.

 

Equity

10/22/2015

Preferred Series 2

 

 

458,841

 

 

 

1,000

 

 

 

1,639

 

 

 

 

Equity

8/24/2017

Preferred Series 3

 

 

93,620

 

 

 

300

 

 

 

365

 

 

 

Total Druva Holdings, Inc.

 

 

 

 

 

 

552,461

 

 

 

1,300

 

 

 

2,004

 

 

 

HighRoads, Inc.

 

Equity

1/18/2013

Common Stock

 

 

190

 

 

 

307

 

 

 

 

 

 

Lightbend, Inc.

 

Equity

12/4/2020

Common Stock

 

 

38,461

 

 

 

265

 

 

 

21

 

 

 

Nextdoor.com, Inc.

 

Equity

8/1/2018

Common Stock

 

 

1,019,255

 

 

 

4,854

 

 

 

2,191

 

 

(4)

Palantir Technologies

 

Equity

9/23/2020

Common Stock

 

 

1,418,337

 

 

 

8,670

 

 

 

11,985

 

 

(4)

SingleStore, Inc.

 

Equity

11/25/2020

Preferred Series E

 

 

580,983

 

 

 

2,000

 

 

 

2,039

 

 

 

 

Equity

8/12/2021

Preferred Series F

 

 

52,956

 

 

 

280

 

 

 

225

 

 

 

Total SingleStore, Inc.

 

 

 

 

 

 

633,939

 

 

 

2,280

 

 

 

2,264

 

 

 

Verana Health, Inc.

 

Equity

7/8/2021

Preferred Series E

 

 

952,562

 

 

 

2,000

 

 

 

808

 

 

 

ZeroFox, Inc.

 

Equity

5/7/2020

Common Stock

 

 

289,992

 

 

 

101

 

 

 

423

 

 

(4)

Subtotal: Software (1.66%)*

 

 

 

 

 

28,542

 

 

 

24,838

 

 

 

Surgical Devices

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gynesonics, Inc.

 

Equity

1/18/2007

Preferred Series B

 

 

219,298

 

 

 

250

 

 

 

 

 

 

 

Equity

6/16/2010

Preferred Series C

 

 

656,538

 

 

 

282

 

 

 

 

 

 

 

Equity

2/8/2013

Preferred Series D

 

 

1,991,157

 

 

 

712

 

 

 

 

 

 

 

Equity

7/14/2015

Preferred Series E

 

 

2,786,367

 

 

 

429

 

 

 

 

 

 

 

Equity

12/18/2018

Preferred Series F

 

 

1,523,693

 

 

 

118

 

 

 

 

 

 

 

Equity

12/18/2018

Preferred Series F-1

 

 

2,418,125

 

 

 

150

 

 

 

 

 

 

Total Gynesonics, Inc.

 

 

 

 

 

 

9,595,178

 

 

 

1,941

 

 

 

 

 

 

TransMedics Group, Inc.

 

Equity

11/7/2012

Common Stock

 

 

50,000

 

 

 

538

 

 

 

3,592

 

 

(4)(20)

Subtotal: Surgical Devices (0.24%)*

 

 

 

 

 

2,479

 

 

 

3,592

 

 

 

Sustainable and Renewable Technology

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fulcrum Bioenergy, Inc.

 

Equity

9/13/2012

Preferred Series C-1

 

 

187,265

 

 

 

711

 

 

 

985

 

 

 

Impossible Foods, Inc.

 

Equity

5/10/2019

Preferred Series E-1

 

 

188,611

 

 

 

2,000

 

 

 

865

 

 

 

Modumetal, Inc.

 

Equity

6/1/2015

Common Stock

 

 

1,035

 

 

 

500

 

 

 

 

 

 

NantEnergy, LLC

 

Equity

8/31/2013

Common Units

 

 

59,665

 

 

 

102

 

 

 

 

 

 

Pineapple Energy LLC

 

Equity

12/10/2020

Common Stock

 

 

304,487

 

 

 

3,153

 

 

 

484

 

 

(4)

Pivot Bio, Inc.

 

Equity

6/28/2021

Preferred Series D

 

 

593,080

 

 

 

4,500

 

 

 

2,341

 

 

 

Proterra, Inc.

 

Equity

5/28/2015

Common Stock

 

 

457,841

 

 

 

542

 

 

 

696

 

 

(4)

Subtotal: Sustainable and Renewable Technology (0.36%)*

 

 

 

 

 

11,508

 

 

 

5,371

 

 

 

Total: Equity Investments (8.30%)*

 

 

 

 

$

143,818

 

 

$

124,417

 

 

 

 

See notes to consolidated financial statements

13


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

March 31, 2023 (unaudited)

(dollars in thousands)

Portfolio Company

 

Type of
Investment

Acquisition Date (4)

Series (3)

 

Shares

 

 

Cost (2)

 

 

Value

 

 

Footnotes

Warrant Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Biotechnology Tools

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Alamar Biosciences, Inc.

 

Warrant

6/21/2022

Preferred Series B

 

 

15,399

 

 

$

24

 

 

$

23

 

 

 

PathAI, Inc.

 

Warrant

12/23/2022

Common Stock

 

 

53,418

 

 

 

461

 

 

 

482

 

 

 

Subtotal: Biotechnology Tools (0.03%)*

 

 

 

 

 

485

 

 

 

505

 

 

 

Communications & Networking

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aryaka Networks, Inc.

 

Warrant

6/28/2022

Common Stock

 

 

229,611

 

 

 

123

 

 

 

118

 

 

 

Spring Mobile Solutions, Inc.

 

Warrant

4/19/2013

Common Stock

 

 

2,834,375

 

 

 

418

 

 

 

 

 

 

Subtotal: Communications & Networking (0.01%)*

 

 

 

 

 

541

 

 

 

118

 

 

 

Consumer & Business Products

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gadget Guard, LLC

 

Warrant

6/3/2014

Common Stock

 

 

1,662,441

 

 

 

228

 

 

 

 

 

 

Savage X Holding, LLC

 

Warrant

6/27/2014

Class A Units

 

 

206,185

 

 

 

 

 

 

1,025

 

 

 

TechStyle, Inc.

 

Warrant

7/16/2013

Preferred Series B

 

 

206,185

 

 

 

1,101

 

 

 

720

 

 

 

TFG Holding, Inc.

 

Warrant

6/27/2014

Common Stock

 

 

206,185

 

 

 

 

 

 

 

 

 

The Neat Company

 

Warrant

8/13/2014

Common Stock

 

 

54,054

 

 

 

365

 

 

 

 

 

 

Whoop, Inc.

 

Warrant

6/27/2018

Preferred Series C

 

 

686,270

 

 

 

18

 

 

 

375

 

 

 

Subtotal: Consumer & Business Products (0.14%)*

 

 

 

 

 

1,712

 

 

 

2,120

 

 

 

Consumer & Business Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carwow LTD

 

Warrant

12/14/2021

Common Stock

 

 

174,163

 

 

 

164

 

 

 

40

 

 

(5)(10)

Houzz, Inc.

 

Warrant

10/29/2019

Common Stock

 

 

529,661

 

 

 

20

 

 

 

 

 

 

Landing Holdings Inc.

 

Warrant

3/12/2021

Common Stock

 

 

11,806

 

 

 

116

 

 

 

201

 

 

(15)

Lendio, Inc.

 

Warrant

3/29/2019

Preferred Series D

 

 

127,032

 

 

 

39

 

 

 

43

 

 

 

Modern Life, Inc.

 

Warrant

3/30/2023

Common Stock

 

 

49,192

 

 

 

214

 

 

 

218

 

 

 

Provi

 

Warrant

12/22/2022

Common Stock

 

 

117,042

 

 

 

166

 

 

 

138

 

 

(15)

Rhino Labs, Inc.

 

Warrant

3/12/2021

Common Stock

 

 

13,106

 

 

 

470

 

 

 

219

 

 

(15)

RumbleON, Inc.

 

Warrant

4/30/2018

Common Stock

 

 

5,139

 

 

 

88

 

 

 

 

 

(4)

SeatGeek, Inc.

 

Warrant

6/12/2019

Common Stock

 

 

1,379,761

 

 

 

842

 

 

 

2,027

 

 

(12)(16)

Skyword, Inc.

 

Warrant

11/14/2022

Common Stock

 

 

1,607,143

 

 

 

57

 

 

 

26

 

 

 

 

Warrant

8/23/2019

Preferred Series B

 

 

444,444

 

 

 

83

 

 

 

1

 

 

 

Total Skyword, Inc.

 

 

 

 

 

 

2,051,587

 

 

 

140

 

 

 

27

 

 

 

Snagajob.com, Inc.

 

Warrant

4/20/2020

Common Stock

 

 

600,000

 

 

 

16

 

 

 

22

 

 

 

 

Warrant

6/30/2016

Preferred Series A

 

 

1,800,000

 

 

 

782

 

 

 

29

 

 

 

 

Warrant

8/1/2018

Preferred Series B

 

 

1,211,537

 

 

 

62

 

 

 

15

 

 

 

Total Snagajob.com, Inc.

 

 

 

 

 

 

3,611,537

 

 

 

860

 

 

 

66

 

 

 

Thumbtack, Inc.

 

Warrant

5/1/2018

Common Stock

 

 

267,225

 

 

 

844

 

 

 

384

 

 

(12)

Udacity, Inc.

 

Warrant

9/25/2020

Common Stock

 

 

486,359

 

 

 

218

 

 

 

 

 

(12)

Veem, Inc.

 

Warrant

3/31/2022

Common Stock

 

 

98,428

 

 

 

126

 

 

 

24

 

 

 

Vida Health, Inc.

 

Warrant

3/28/2022

Common Stock

 

 

130,355

 

 

 

119

 

 

 

14

 

 

 

Worldremit Group Limited

 

Warrant

2/11/2021

Preferred Series D

 

 

77,215

 

 

 

129

 

 

 

13

 

 

(5)(10)(12)(16)

 

Warrant

8/27/2021

Preferred Series E

 

 

1,868

 

 

 

26

 

 

 

 

 

(5)(10)(16)

Total Worldremit Group Limited

 

 

 

 

 

 

79,083

 

 

 

155

 

 

 

13

 

 

 

Subtotal: Consumer & Business Services (0.23%)*

 

 

 

 

 

4,581

 

 

 

3,414

 

 

 

Diversified Financial Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Next Insurance, Inc.

 

Warrant

2/3/2023

Common Stock

 

 

522,930

 

 

 

214

 

 

 

189

 

 

 

Subtotal: Diversified Financial Services (0.01%)*

 

 

 

 

 

214

 

 

 

189

 

 

 

Drug Delivery

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aerami Therapeutics Holdings, Inc.

 

Warrant

9/30/2015

Common Stock

 

 

110,882

 

 

 

74

 

 

 

 

 

 

BioQ Pharma Incorporated

 

Warrant

10/27/2014

Common Stock

 

 

459,183

 

 

 

1

 

 

 

 

 

 

PDS Biotechnology Corporation

 

Warrant

8/28/2014

Common Stock

 

 

3,929

 

 

 

390

 

 

 

 

 

(4)

Subtotal: Drug Delivery (0.00%)*

 

 

 

 

 

465

 

 

 

 

 

 

Drug Discovery & Development

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acacia Pharma Inc.

 

Warrant

6/29/2018

Common Stock

 

 

201,330

 

 

 

304

 

 

 

 

 

(5)(10)

ADMA Biologics, Inc.

 

Warrant

2/24/2014

Common Stock

 

 

58,000

 

 

 

166

 

 

 

4

 

 

(4)

Akero Therapeutics, Inc.

 

Warrant

6/15/2022

Common Stock

 

 

22,949

 

 

 

175

 

 

 

562

 

 

(4)(10)

AmplifyBio, LLC

 

Warrant

12/27/2022

Class A Units

 

 

69,239

 

 

 

237

 

 

 

236

 

 

(15)

Axsome Therapeutics, Inc.

 

Warrant

9/25/2020

Common Stock

 

 

53,971

 

 

 

1,101

 

 

 

1,289

 

 

(4)(10)(12)(16)

 

 

See notes to consolidated financial statements

14


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

March 31, 2023 (unaudited)

(dollars in thousands)

Portfolio Company

 

Type of
Investment

Acquisition Date (4)

Series (3)

 

Shares

 

 

Cost (2)

 

 

Value

 

 

Footnotes

Cellarity, Inc.

 

Warrant

12/8/2021

Preferred Series B

 

 

100,000

 

 

$

287

 

 

$

253

 

 

(15)

Century Therapeutics, Inc.

 

Warrant

9/14/2020

Common Stock

 

 

16,112

 

 

 

37

 

 

 

 

 

(4)

Dermavant Sciences Ltd.

 

Warrant

5/31/2019

Common Stock

 

 

223,642

 

 

 

101

 

 

 

129

 

 

(5)(10)

enGene, Inc.

 

Warrant

12/30/2021

Preferred Series 3

 

 

133,692

 

 

 

72

 

 

 

17

 

 

(5)(10)(12)

Evofem Biosciences, Inc.

 

Warrant

6/11/2014

Common Stock

 

 

520

 

 

 

266

 

 

 

 

 

(4)

Fresh Tracks Therapeutics, Inc. (p.k.a. Brickell Biotech, Inc.)

 

Warrant

2/18/2016

Common Stock

 

 

201

 

 

 

119

 

 

 

 

 

(4)

Kineta, Inc.

 

Warrant

12/20/2019

Common Stock

 

 

2,202

 

 

 

110

 

 

 

 

 

(4)

Kura Oncology, Inc.

 

Warrant

11/2/2022

Common Stock

 

 

14,342

 

 

 

88

 

 

 

52

 

 

(4)(10)(15)

Madrigal Pharmaceutical, Inc.

 

Warrant

5/9/2022

Common Stock

 

 

11,799

 

 

 

425

 

 

 

1,829

 

 

(4)(10)

Paratek Pharmaceuticals, Inc.

 

Warrant

8/1/2018

Common Stock

 

 

426,866

 

 

 

520

 

 

 

113

 

 

(4)

Phathom Pharmaceuticals, Inc.

 

Warrant

9/17/2021

Common Stock

 

 

64,687

 

 

 

848

 

 

 

60

 

 

(4)(10)(12)(15)(16)

Provention Bio, Inc.

 

Warrant

9/15/2022

Common Stock

 

 

205,391

 

 

 

640

 

 

 

3,312

 

 

(4)

Redshift Bioanalytics, Inc.

 

Warrant

3/23/2022

Preferred Series E

 

 

475,510

 

 

 

20

 

 

 

13

 

 

(15)

Scynexis, Inc.

 

Warrant

5/14/2021

Common Stock

 

 

106,035

 

 

 

296

 

 

 

76

 

 

(4)(12)

TG Therapeutics, Inc.

 

Warrant

2/28/2019

Common Stock

 

 

264,226

 

 

 

1,284

 

 

 

2,236

 

 

(4)(10)(12)

Tricida, Inc.

 

Warrant

3/27/2019

Common Stock

 

 

31,352

 

 

 

280

 

 

 

 

 

 

Valo Health, LLC

 

Warrant

6/15/2020

Common Units

 

 

102,216

 

 

 

256

 

 

 

91

 

 

 

X4 Pharmaceuticals, Inc.

 

Warrant

3/18/2019

Common Stock

 

 

1,392,787

 

 

 

510

 

 

 

212

 

 

(4)

Subtotal: Drug Discovery & Development (0.70%)*

 

 

 

 

 

8,142

 

 

 

10,484

 

 

 

Electronics & Computer Hardware

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

908 Devices, Inc.

 

Warrant

3/15/2017

Common Stock

 

 

49,078

 

 

 

101

 

 

 

101

 

 

(4)

Locus Robotics Corp.

 

Warrant

6/21/2022

Common Stock

 

 

8,503

 

 

 

34

 

 

 

195

 

 

 

Skydio, Inc.

 

Warrant

11/8/2021

Common Stock

 

 

622,255

 

 

 

557

 

 

 

752

 

 

 

Subtotal: Electronics & Computer Hardware (0.07%)*

 

 

 

 

 

692

 

 

 

1,048

 

 

 

Information Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capella Space Corp.

 

Warrant

10/21/2021

Common Stock

 

 

176,200

 

 

 

207

 

 

 

106

 

 

(15)

INMOBI Inc.

 

Warrant

11/19/2014

Common Stock

 

 

65,587

 

 

 

82

 

 

 

 

 

(5)(10)

NetBase Solutions, Inc.

 

Warrant

8/22/2017

Preferred Series 1

 

 

60,000

 

 

 

356

 

 

 

318

 

 

 

Signal Media Limited

 

Warrant

6/29/2022

Common Stock

 

 

94,857

 

 

 

35

 

 

 

20

 

 

(5)(10)

Subtotal: Information Services (0.03%)*

 

 

 

 

 

680

 

 

 

444

 

 

 

Manufacturing Technology

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bright Machines, Inc.

 

Warrant

3/31/2022

Common Stock

 

 

392,308

 

 

 

537

 

 

 

1,092

 

 

 

MacroFab, Inc.

 

Warrant

3/23/2022

Common Stock

 

 

1,111,111

 

 

 

528

 

 

 

1,352

 

 

 

Xometry, Inc.

 

Warrant

5/9/2018

Common Stock

 

 

87,784

 

 

 

47

 

 

 

665

 

 

(4)

Subtotal: Manufacturing Technology (0.21%)*

 

 

 

 

 

1,112

 

 

 

3,109

 

 

 

Media/Content/Info

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fever Labs, Inc.

 

Warrant

12/30/2022

Preferred Series E-1

 

 

332,433

 

 

 

54

 

 

 

64

 

 

 

Subtotal: Media/Content/Info (0.00%)*

 

 

 

 

 

54

 

 

 

64

 

 

 

Medical Devices & Equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aspire Bariatrics, Inc.

 

Warrant

1/28/2015

Common Stock

 

 

22,572

 

 

 

455

 

 

 

 

 

 

Flowonix Medical Incorporated

 

Warrant

11/3/2014

Preferred Series AA

 

 

110,946

 

 

 

362

 

 

 

 

 

 

 

Warrant

9/21/2018

Preferred Series BB

 

 

725,806

 

 

 

351

 

 

 

 

 

 

Total Flowonix Medical Incorporated

 

 

 

 

 

 

836,752

 

 

 

713

 

 

 

 

 

 

Intuity Medical, Inc.

 

Warrant

12/29/2017

Preferred Series B-1

 

 

3,076,323

 

 

 

294

 

 

 

 

 

 

Lucira Health, Inc.

 

Warrant

2/4/2022

Common Stock

 

 

59,642

 

 

 

110

 

 

 

4

 

 

(4)

Outset Medical, Inc.

 

Warrant

9/27/2013

Common Stock

 

 

62,794

 

 

 

401

 

 

 

526

 

 

(4)

Tela Bio, Inc.

 

Warrant

3/31/2017

Common Stock

 

 

15,712

 

 

 

61

 

 

 

 

 

(4)

Subtotal: Medical Devices & Equipment (0.04%)*

 

 

 

 

 

2,034

 

 

 

530

 

 

 

 

See notes to consolidated financial statements

15


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

March 31, 2023 (unaudited)

(dollars in thousands)

Portfolio Company

 

Type of
Investment

Acquisition Date (4)

Series (3)

 

Shares

 

 

Cost (2)

 

 

Value

 

 

Footnotes

Semiconductors

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Achronix Semiconductor Corporation

 

Warrant

6/26/2015

Preferred Series D-2

 

 

750,000

 

 

$

99

 

 

$

670

 

 

 

Subtotal: Semiconductors (0.04%)*

 

 

 

 

 

99

 

 

 

670

 

 

 

Software

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aria Systems, Inc.

 

Warrant

5/22/2015

Preferred Series G

 

 

231,535

 

 

 

74

 

 

 

 

 

 

Automation Anywhere, Inc.

 

Warrant

9/23/2022

Common Stock

 

 

254,778

 

 

 

449

 

 

 

525

 

 

 

Bitsight Technologies, Inc.

 

Warrant

11/18/2020

Common Stock

 

 

29,691

 

 

 

284

 

 

 

511

 

 

 

Brain Corporation

 

Warrant

10/4/2021

Common Stock

 

 

194,629

 

 

 

165

 

 

 

97

 

 

(15)

CloudBolt Software, Inc.

 

Warrant

9/30/2020

Common Stock

 

 

211,342

 

 

 

117

 

 

 

8

 

 

 

Cloudian, Inc.

 

Warrant

11/6/2018

Common Stock

 

 

477,454

 

 

 

71

 

 

 

21

 

 

 

Cloudpay, Inc.

 

Warrant

4/10/2018

Preferred Series B

 

 

6,763

 

 

 

54

 

 

 

531

 

 

(5)(10)

Convoy, Inc.

 

Warrant

3/30/2022

Common Stock

 

 

165,456

 

 

 

974

 

 

 

346

 

 

 

Couchbase, Inc.

 

Warrant

4/25/2019

Common Stock

 

 

105,350

 

 

 

462

 

 

 

563

 

 

(4)

Cutover, Inc.

 

Warrant

9/21/2022

Common Stock

 

 

102,898

 

 

 

26

 

 

 

24

 

 

(5)(10)(12)

Dashlane, Inc.

 

Warrant

3/11/2019

Common Stock

 

 

453,641

 

 

 

353

 

 

 

196

 

 

 

Delphix Corp.

 

Warrant

10/8/2019

Common Stock

 

 

718,898

 

 

 

1,594

 

 

 

2,292

 

 

 

Demandbase, Inc.

 

Warrant

8/2/2021

Common Stock

 

 

727,047

 

 

 

545

 

 

 

463

 

 

 

DNAnexus, Inc.

 

Warrant

3/21/2014

Preferred Series C

 

 

909,091

 

 

 

97

 

 

 

188

 

 

 

DroneDeploy, Inc.

 

Warrant

6/30/2022

Common Stock

 

 

95,911

 

 

 

278

 

 

 

353

 

 

 

Eigen Technologies Ltd.

 

Warrant

4/13/2022

Common Stock

 

 

522

 

 

 

8

 

 

 

5

 

 

(5)(10)

Elation Health, Inc.

 

Warrant

9/12/2022

Common Stock

 

 

362,837

 

 

 

584

 

 

 

347

 

 

 

Esme Learning Solutions, Inc.

 

Warrant

1/27/2022

Common Stock

 

 

56,765

 

 

 

198

 

 

 

 

 

 

First Insight, Inc.

 

Warrant

5/10/2018

Preferred Series B

 

 

75,917

 

 

 

96

 

 

 

47

 

 

 

Fulfil Solutions, Inc.

 

Warrant

7/29/2022

Common Stock

 

 

84,995

 

 

 

325

 

 

 

396

 

 

 

Kore.ai, Inc.

 

Warrant

3/31/2023

Preferred Series C

 

 

64,293

 

 

 

208

 

 

 

221

 

 

 

Leapwork ApS

 

Warrant

1/23/2023

Common Stock

 

 

39,948

 

 

 

16

 

 

 

17

 

 

(5)(10)

Lightbend, Inc.

 

Warrant

2/14/2018

Preferred Series D

 

 

89,685

 

 

 

131

 

 

 

3

 

 

 

Mixpanel, Inc.

 

Warrant

9/30/2020

Common Stock

 

 

82,362

 

 

 

252

 

 

 

252

 

 

 

Nuvolo Technologies Corporation

 

Warrant

3/29/2019

Common Stock

 

 

70,000

 

 

 

172

 

 

 

198

 

 

(12)

Poplicus, Inc.

 

Warrant

5/28/2014

Common Stock

 

 

132,168

 

 

 

 

 

 

 

 

 

Reltio, Inc.

 

Warrant

6/30/2020

Common Stock

 

 

69,120

 

 

 

215

 

 

 

346

 

 

 

SignPost, Inc.

 

Warrant

1/13/2016

Series Junior 1 Preferred

 

 

474,019

 

 

 

314

 

 

 

 

 

 

Simon Data, Inc.

 

Warrant

3/22/2023

Common Stock

 

 

77,934

 

 

 

96

 

 

 

100

 

 

 

SingleStore, Inc.

 

Warrant

4/28/2020

Preferred Series D

 

 

312,596

 

 

 

103

 

 

 

533

 

 

 

Tact.ai Technologies, Inc.

 

Warrant

2/13/2020

Common Stock

 

 

1,041,667

 

 

 

206

 

 

 

85

 

 

 

The Faction Group LLC

 

Warrant

11/3/2014

Preferred Series AA

 

 

8,076

 

 

 

234

 

 

 

337

 

 

 

Tipalti Solutions Ltd.

 

Warrant

3/22/2023

Ordinary Shares

 

 

254,877

 

 

 

174

 

 

 

179

 

 

(5)(10)

VideoAmp, Inc.

 

Warrant

1/21/2022

Common Stock

 

 

152,048

 

 

 

1,275

 

 

 

362

 

 

(15)

Subtotal: Software (0.64%)*

 

 

 

 

 

10,150

 

 

 

9,546

 

 

 

Surgical Devices

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TransMedics Group, Inc.

 

Warrant

9/11/2015

Common Stock

 

 

14,440

 

 

 

39

 

 

 

597

 

 

(4)(20)

Subtotal: Surgical Devices (0.04%)*

 

 

 

 

 

39

 

 

 

597

 

 

 

Sustainable and Renewable Technology

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ampion, PBC

 

Warrant

4/15/2022

Common Stock

 

 

18,472

 

 

 

52

 

 

 

37

 

 

 

Fulcrum Bioenergy, Inc.

 

Warrant

4/30/2013

Preferred Series C-1

 

 

93,632

 

 

 

64

 

 

 

272

 

 

 

Halio, Inc.

 

Warrant

4/22/2014

Preferred Series A

 

 

325,000

 

 

 

155

 

 

 

48

 

 

 

 

Warrant

4/7/2015

Preferred Series B

 

 

131,883

 

 

 

63

 

 

 

15

 

 

 

Total Halio, Inc.

 

 

 

 

 

 

456,883

 

 

 

218

 

 

 

63

 

 

 

IngredientWerks Holdings, Inc. (p.k.a Agrivida, Inc.)

 

Warrant

6/20/2013

Preferred Series D

 

 

471,327

 

 

 

120

 

 

 

 

 

 

Polyera Corporation

 

Warrant

3/24/2015

Preferred Series C

 

 

150,036

 

 

 

269

 

 

 

 

 

 

Subtotal: Sustainable and Renewable Technology (0.00%)*

 

 

 

 

 

723

 

 

 

372

 

 

 

Total: Warrant Investments (2.22%)*

 

 

 

 

$

31,723

 

 

$

33,210

 

 

 

Total Investments in Securities (208.56%)*

 

 

 

 

$

3,147,039

 

 

$

3,126,278

 

 

 

Investment Funds & Vehicles Investments

 

 

 

 

 

 

 

 

 

 

 

Drug Discovery & Development

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forbion Growth Opportunities Fund I C.V.

 

Investment Funds & Vehicles

11/16/2020

 

 

 

 

 

$

3,007

 

 

$

3,103

 

 

(5)(10)(17)

Forbion Growth Opportunities Fund II C.V.

 

Investment Funds & Vehicles

6/23/2022

 

 

 

 

 

 

419

 

 

 

447

 

 

(5)(10)(17)

Subtotal: Drug Discovery & Development (0.24%)*

 

 

 

 

 

3,426

 

 

 

3,550

 

 

 

Software

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liberty Zim Co-Invest L.P.

 

Investment Funds & Vehicles

7/21/2022

 

 

 

 

 

 

381

 

 

 

350

 

 

(5)(10)

Subtotal: Software (0.02%)*

 

 

 

 

 

381

 

 

 

350

 

 

 

Total: Investment Funds & Vehicles Investments (0.26%)*

 

 

 

 

$

3,807

 

 

$

3,900

 

 

 

Total Investments (208.82%)*

 

 

 

 

$

3,150,846

 

 

$

3,130,178

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash & Cash Equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GS Financial Square Government Fund

 

Cash & Cash Equivalents

 

FGTXX/38141W273

 

 

 

 

$

15,000

 

 

$

15,000

 

 

 

Total: Investments in Cash & Cash Equivalents (1.00%)*

 

 

 

 

$

15,000

 

 

$

15,000

 

 

 

Total: Investments after Cash and Cash Equivalents (209.82%)*

 

 

 

 

$

3,165,846

 

 

$

3,145,178

 

 

 

 

See notes to consolidated financial statements

16


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

March 31, 2023 (unaudited)

(dollars in thousands)

 

* Value as a percent of net assets. All amounts are stated in U.S. Dollars unless otherwise noted. The Company uses the Standard Industrial Code for classifying the industry grouping of its portfolio companies.

(1)
Interest rate PRIME represents 8.00% as of March 31, 2023. 1-month LIBOR, 3-month LIBOR and 6-month LIBOR represent 4.86%, 5.19%, and 5.31%, respectively, as of March 31, 2023. 1-month SOFR, 3-month SOFR and 6-month SOFR represent 4.63%, 4.51%, and 4.09%, respectively, as of March 31, 2023.
(2)
Gross unrealized appreciation, gross unrealized depreciation, and net unrealized depreciation for federal income tax purposes totaled $87.9 million, $106.6 million and $18.7 million, respectively. The tax cost of investments is $3.1 billion.
(3)
Preferred and common stock, warrants, and equity interest are generally non-income producing.
(4)
Except for warrants in 24 publicly traded companies and common stock in 35 publicly traded companies, all investments are restricted as of March 31, 2023 and were valued at fair value using Level 3 significant unobservable inputs as determined in good faith by the Company’s valuation committee (the “Valuation Committee”) and approved by the board of directors (the “Board”).
(5)
Non-U.S. company or the company’s principal place of business is outside the United States.
(6)
[Reserved]
(7)
Control investment as defined under the 1940 Act in which Hercules owns at least 25% of the company’s voting securities or has greater than 50% representation on its board.
(8)
Debt is on non-accrual status as of March 31, 2023, and is therefore considered non-income producing. Note that as of March 31, 2023, only the PIK, or payment-in-kind, portion is on non-accrual for the Company’s debt investment in Tectura Corporation.
(9)
Denotes that all or a portion of the debt investment is convertible debt.
(10)
Indicates assets that the Company deems not “qualifying assets” under section 55(a) of 1940 Act. Qualifying assets must represent at least 70% of the Company’s total assets at the time of acquisition of any additional non-qualifying assets.
(11)
Denotes that all or a portion of the debt investment is pledged as collateral under the SMBC Facility (as defined in “Note 5 — Debt”).
(12)
Denotes that all or a portion of the investment is pledged as collateral under the MUFG Bank Facility (as defined in “Note 5 — Debt”).
(13)
Denotes that all or a portion of the debt investment secures the 2031 Asset-Backed Notes (as defined in “Note 5 — Debt”).
(14)
Denotes that all or a portion of the debt investment principal includes accumulated PIK interest and is net of repayments.
(15)
Denotes that all or a portion of the investment in this portfolio company is held by Hercules Capital IV, L.P., the Company’s wholly owned small business investment company.
(16)
Denotes that the fair value of the Company’s total investments in this portfolio company represent greater than 5% of the Company’s total net assets as of March 31, 2023.
(17)
Denotes that there is an unfunded contractual commitment available at the request of this portfolio company as of March 31, 2023 (Refer to “Note 11 - Commitments and Contingencies”).
(18)
Denotes unitranche debt with first lien “last-out” senior secured position and security interest in all assets of the portfolio company whereby the “last-out” portion will be subordinated to the “first-out” portion in a liquidation, sale or other disposition.
(19)
Denotes second lien senior secured debt.
(20)
Denotes all or a portion of the public equity or warrant investment was acquired in a transaction exempt from registration under the Securities Act of 1933 (“Securities Act”) and may be deemed to be “restricted securities” under the Securities Act.
(21)
Denotes investment in a non-voting security in the form of a promissory note. The terms of the notes provide the Company with a lien on the issuers' shares of Common Stock for Black Crow AI, Inc., subject to release upon repayment of the outstanding balance of the notes. As of March 31, 2023, the Black Crow AI, Inc. affiliates promissory notes had an outstanding balance of $2.8 million.
(22)
Denotes the security holds rights to royalty fee income associated with certain products of the portfolio company. The approximate cost and fair value of the royalty contract are $4.6 million and $3.3 million, respectively.

See notes to consolidated financial statements

17


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2022

(dollars in thousands)

 

Portfolio Company

 

Type of
Investment

 

Maturity Date

 

Interest Rate and Floor (1)

Principal
Amount

 

Cost (2)

 

Value

 

Footnotes

Debt Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Biotechnology Tools

 

 

 

 

 

 

 

 

 

 

 

 

 

Alamar Biosciences, Inc.

 

Senior Secured

 

June 2026

 

Prime + 3.00%, Floor rate 6.50%, PIK Interest 1.00%, 5.95% Exit Fee

 

$

5,000

 

 

$

4,951

 

 

$

4,951

 

 

(17)

PathAI, Inc.

 

Senior Secured

 

January 2027

 

Prime + 2.15%, Floor rate 9.15%, 11.21% Exit Fee

 

$

28,000

 

 

 

27,388

 

 

 

27,388

 

 

(17)

Subtotal: Biotechnology Tools (2.31%)*

 

 

 

 

 

 

 

32,339

 

 

 

32,339

 

 

 

Communications & Networking

 

 

 

 

 

 

 

 

 

 

 

 

 

Aryaka Networks, Inc.

 

Senior Secured

 

July 2026

 

Prime + 3.25%, Floor rate 6.75%, PIK Interest 1.05%, 3.55% Exit Fee

 

$

5,023

 

 

 

4,969

 

 

 

5,053

 

 

(14)(17)(19)

Cytracom Holdings LLC

 

Senior Secured

 

February 2025

 

3-month LIBOR + 9.31%, Floor rate 10.31%

 

$

8,910

 

 

 

8,768

 

 

 

8,748

 

 

(11)(17)(18)

Rocket Lab Global Services, LLC

 

Senior Secured

 

June 2024

 

Prime + 4.90%, Floor rate 8.15%, PIK Interest 1.25%, 3.25% Exit Fee

 

$

84,581

 

 

 

85,430

 

 

 

87,933

 

 

(11)(12)(13)(14)(16)

Subtotal: Communications & Networking (7.26%)*

 

 

 

 

 

 

 

99,167

 

 

 

101,734

 

 

 

Consumer & Business Services

 

 

 

 

 

 

 

 

 

 

 

 

 

AppDirect, Inc.

 

Senior Secured

 

April 2026

 

Prime + 5.50%, Floor rate 8.75%, 8.29% Exit Fee

 

$

40,790

 

 

 

41,856

 

 

 

42,426

 

 

(12)(17)

Carwow LTD

 

Senior Secured

 

December 2024

 

Prime + 4.70%, Floor rate 7.95%, PIK Interest 1.45%, 4.95% Exit Fee

 

£

18,890

 

 

 

26,024

 

 

 

22,971

 

 

(5)(10)(14)

Houzz, Inc.

 

Convertible Debt

 

May 2028

 

PIK Interest 5.50%

 

$

21,853

 

 

 

21,853

 

 

 

20,356

 

 

(9)(14)

Jobandtalent USA, Inc.

 

Senior Secured

 

February 2025

 

1-month SOFR + 8.86%, Floor rate 9.75%, 3.00% Exit Fee

 

$

14,000

 

 

 

13,853

 

 

 

13,904

 

 

(5)(10)

Provi

 

Senior Secured

 

December 2026

 

Prime + 4.40%, Floor rate 10.65%, 2.95% Exit Fee

 

$

15,000

 

 

 

14,739

 

 

 

14,739

 

 

(15)

Rhino Labs, Inc.

 

Senior Secured

 

March 2024

 

Prime + 5.50%, Floor rate 8.75%, PIK Interest 2.25%

 

$

16,500

 

 

 

16,328

 

 

 

16,496

 

 

(14)(15)

RVShare, LLC

 

Senior Secured

 

December 2026

 

3-month LIBOR + 5.50%, Floor rate 6.50%, PIK Interest 4.00%

 

$

27,730

 

 

 

27,265

 

 

 

27,256

 

 

(13)(14)(15)(17)

SeatGeek, Inc.

 

Senior Secured

 

June 2023

 

Prime + 5.00%, Floor rate 10.50%, PIK Interest 0.50%

 

$

60,915

 

 

 

60,721

 

 

 

60,721

 

 

(12)(13)(14)(16)

 

Senior Secured

 

May 2026

 

Prime + 7.00%, Floor rate 10.50%, PIK Interest 0.50%

 

$

25,071

 

 

 

24,912

 

 

 

25,823

 

 

(11)(14)(16)

Total SeatGeek, Inc.

 

 

 

 

 

 

 

$

85,986

 

 

 

85,633

 

 

 

86,544

 

 

 

Skyword, Inc.

 

Senior Secured

 

November 2026

 

Prime + 2.75%, Floor rate 9.25%, PIK Interest 1.75%, 3.00% Exit Fee

 

$

9,007

 

 

 

8,918

 

 

 

8,870

 

 

(13)(14)

Tectura Corporation

 

Senior Secured

 

July 2024

 

PIK Interest 5.00%

 

$

10,680

 

 

 

240

 

 

 

 

 

(7)(8)(14)

 

Senior Secured

 

July 2024

 

FIXED 8.25%

 

$

8,250

 

 

 

8,250

 

 

 

8,042

 

 

(7)(8)(14)

 

Senior Secured

 

July 2024

 

PIK Interest 5.00%

 

$

13,023

 

 

 

13,023

 

 

 

 

 

(7)(8)(14)

Total Tectura Corporation

 

 

 

 

 

 

 

$

31,953

 

 

 

21,513

 

 

 

8,042

 

 

 

Thumbtack, Inc.

 

Senior Secured

 

April 2026

 

Prime + 4.95%, Floor rate 8.20%, PIK Interest 1.50%, 3.95% Exit Fee

 

$

10,103

 

 

 

10,050

 

 

 

10,167

 

 

(12)(14)(17)

Udacity, Inc.

 

Senior Secured

 

September 2024

 

Prime + 4.50%, Floor rate 7.75%, PIK Interest 2.00%, 3.00% Exit Fee

 

$

51,937

 

 

 

52,265

 

 

 

52,976

 

 

(12)(14)

Veem, Inc.

 

Senior Secured

 

March 2025

 

Prime + 4.00%, Floor rate 7.25%, PIK Interest 1.25%, 4.50% Exit Fee

 

$

5,043

 

 

 

5,000

 

 

 

5,042

 

 

(13)(14)

 

Senior Secured

 

March 2025

 

Prime + 4.70%, Floor rate 7.95%, PIK Interest 1.50%, 4.50% Exit Fee

 

$

5,033

 

 

 

4,988

 

 

 

5,124

 

 

(14)

Total Veem, Inc.

 

 

 

 

 

 

 

$

10,076

 

 

 

9,988

 

 

 

10,166

 

 

 

Worldremit Group Limited

 

Senior Secured

 

February 2025

 

3-month LIBOR + 9.25%, Floor rate 10.25%, 3.00% Exit Fee

 

$

94,500

 

 

 

94,418

 

 

 

93,837

 

 

(5)(10)(11)(12)(16)(19)

Subtotal: Consumer & Business Services (30.59%)*

 

 

 

 

 

 

 

444,703

 

 

 

428,750

 

 

 

Diversified Financial Services

 

 

 

 

 

 

 

 

 

 

 

 

 

Gibraltar Business Capital, LLC

 

Unsecured

 

September 2026

 

FIXED 14.50%

 

$

15,000

 

 

 

14,715

 

 

 

12,802

 

 

(7)

 

Unsecured

 

September 2026

 

FIXED 11.50%

 

$

10,000

 

 

 

9,852

 

 

 

8,898

 

 

(7)

Total Gibraltar Business Capital, LLC

 

 

 

 

 

 

 

$

25,000

 

 

 

24,567

 

 

 

21,700

 

 

 

Hercules Adviser LLC

 

Unsecured

 

June 2025

 

FIXED 5.00%

 

$

12,000

 

 

 

12,000

 

 

 

12,000

 

 

(7)

Subtotal: Diversified Financial Services (2.40%)*

 

 

 

 

 

 

 

36,567

 

 

 

33,700

 

 

 

 

See notes to consolidated financial statements

18


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2022

(dollars in thousands)

 

Portfolio Company

 

Type of
Investment

 

Maturity Date

 

Interest Rate and Floor (1)

Principal
Amount

 

Cost (2)

 

Value

 

Footnotes

Drug Discovery & Development

 

 

 

 

 

 

 

 

 

 

 

 

 

Akero Therapeutics, Inc.

 

Senior Secured

 

January 2027

 

Prime + 3.65%, Floor rate 7.65%, 5.85% Exit Fee

 

$

5,000

 

 

$

4,986

 

 

$

5,039

 

 

(10)(13)(17)

Aldeyra Therapeutics, Inc.

 

Senior Secured

 

October 2024

 

Prime + 3.10%, Floor rate 8.60%, 8.90% Exit Fee

 

$

15,000

 

 

 

15,879

 

 

 

15,974

 

 

(11)

Alladapt Immunotherapeutics Inc.

 

Senior Secured

 

September 2026

 

Prime + 3.65%, Floor rate 8.40%, Cap rate 10.90%, 10.60% Exit Fee

 

$

15,000

 

 

 

14,920

 

 

 

14,920

 

 

(13)(17)

AmplifyBio, LLC

 

Senior Secured

 

January 2027

 

Prime + 2.50%, Floor rate 9.50%, Cap rate 10.75%, 5.85% Exit Fee

 

$

24,000

 

 

 

23,663

 

 

 

23,663

 

 

(15)

ATAI Life Sciences N.V.

 

Senior Secured

 

August 2026

 

Prime + 4.55%, Floor rate 8.55%, 6.95% Exit Fee

 

$

10,500

 

 

 

10,513

 

 

 

10,513

 

 

(5)(10)

Aveo Pharmaceuticals, Inc.

 

Senior Secured

 

September 2024

 

Prime + 6.40%, Floor rate 9.65%, Cap rate 15.00%, 6.95% Exit Fee

 

$

40,000

 

 

 

41,644

 

 

 

43,183

 

 

(11)(15)

Axsome Therapeutics, Inc.

 

Senior Secured

 

October 2026

 

Prime + 5.70%, Floor rate 8.95%, Cap rate 10.70%, 5.31% Exit Fee

 

$

81,725

 

 

 

81,631

 

 

 

78,074

 

 

(10)(11)(12)(16)(17)

Bicycle Therapeutics PLC

 

Senior Secured

 

July 2025

 

Prime + 4.55%, Floor rate 8.05%, Cap rate 9.05%, 5.00% Exit Fee

 

$

11,500

 

 

 

11,757

 

 

 

11,435

 

 

(5)(10)(11)(12)

BiomX, INC

 

Senior Secured

 

September 2025

 

Prime + 5.70%, Floor rate 8.95%, 6.55% Exit Fee

 

$

9,000

 

 

 

9,174

 

 

 

9,052

 

 

(5)(10)(11)

BridgeBio Pharma, Inc.

 

Senior Secured

 

November 2026

 

FIXED 9.00%, 2.00% Exit Fee

 

$

37,312

 

 

 

37,039

 

 

 

33,344

 

 

(12)(13)(14)

Cellarity, Inc.

 

Senior Secured

 

June 2026

 

Prime + 5.70%, Floor rate 8.95%, 3.75% Exit Fee

 

$

30,000

 

 

 

29,841

 

 

 

30,097

 

 

(13)(15)

Century Therapeutics, Inc.

 

Senior Secured

 

April 2024

 

Prime + 6.30%, Floor rate 9.55%, 3.95% Exit Fee

 

$

10,000

 

 

 

10,235

 

 

 

10,292

 

 

(11)

Codiak Biosciences, Inc.

 

Senior Secured

 

October 2025

 

Prime + 5.00%, Floor rate 8.25%, 5.50% Exit Fee

 

$

25,000

 

 

 

25,759

 

 

 

25,177

 

 

(11)

Corium, Inc.

 

Senior Secured

 

September 2026

 

Prime + 5.70%, Floor rate 8.95%, 7.75% Exit Fee

 

$

132,675

 

 

 

133,557

 

 

 

135,619

 

 

(13)(16)

Eloxx Pharmaceuticals, Inc.

 

Senior Secured

 

April 2025

 

Prime + 6.25%, Floor rate 9.50%, 6.55% Exit Fee

 

$

12,500

 

 

 

12,753

 

 

 

12,535

 

 

(15)

enGene, Inc.

 

Senior Secured

 

July 2025

 

Prime + 5.00%, Floor rate 8.25%, 6.35% Exit Fee

 

$

11,000

 

 

 

11,072

 

 

 

11,067

 

 

(5)(10)(12)(13)

Finch Therapeutics Group, Inc.

 

Senior Secured

 

November 2026

 

Prime + 4.05%, Floor rate 7.55%, Cap rate 8.80%, 5.50% Exit Fee

 

$

15,000

 

 

 

15,012

 

 

 

13,940

 

 

 

G1 Therapeutics, Inc.

 

Senior Secured

 

November 2026

 

Prime + 5.90%, Floor rate 9.15%, 9.86% Exit Fee

 

$

58,125

 

 

 

58,674

 

 

 

58,407

 

 

(11)(12)(15)(17)

Geron Corporation

 

Senior Secured

 

October 2024

 

Prime + 5.75%, Floor rate 9.00%, 6.55% Exit Fee

 

$

18,500

 

 

 

19,109

 

 

 

19,174

 

 

(10)(12)(13)

Gritstone Bio, Inc.

 

Senior Secured

 

July 2027

 

Prime + 3.15%, Floor rate 7.15%, Cap rate 8.65%, PIK Interest 2.00%, 5.75% Exit Fee

 

$

15,113

 

 

 

15,109

 

 

 

15,109

 

 

(14)(17)

Hibercell, Inc.

 

Senior Secured

 

May 2025

 

Prime + 5.40%, Floor rate 8.65%, 4.95% Exit Fee

 

$

17,000

 

 

 

17,313

 

 

 

17,265

 

 

(13)(15)

HilleVax, Inc.

 

Senior Secured

 

May 2027

 

Prime + 1.05%, Floor rate 4.55%, Cap rate 6.05%, PIK Interest 2.85%, 7.15% Exit Fee

 

$

12,072

 

 

 

12,043

 

 

 

11,333

 

 

(14)(15)(17)

Iveric Bio, Inc.

 

Senior Secured

 

August 2027

 

Prime + 4.00%, Floor rate 8.75%, Cap rate 10.25%, 4.25% Exit Fee

 

$

49,500

 

 

 

49,090

 

 

 

49,090

 

 

(10)(12)

Kura Oncology, Inc.

 

Senior Secured

 

November 2027

 

Prime + 2.40%, Floor rate 8.65%, 15.13% Exit Fee

 

$

5,500

 

 

 

5,448

 

 

 

5,448

 

 

(10)(15)(17)

Locus Biosciences, Inc.

 

Senior Secured

 

July 2025

 

Prime + 6.10%, Floor rate 9.35%, 4.95% Exit Fee

 

$

8,000

 

 

 

8,120

 

 

 

8,085

 

 

(15)

Madrigal Pharmaceutical, Inc.

 

Senior Secured

 

May 2026

 

Prime + 3.95%, Floor rate 7.45%, 5.35% Exit Fee

 

$

34,000

 

 

 

33,945

 

 

 

33,987

 

 

(10)(17)

Nabriva Therapeutics

 

Senior Secured

 

June 2023

 

Prime + 4.30%, Floor rate 9.80%, 9.95% Exit Fee

 

$

2,079

 

 

 

2,734

 

 

 

2,804

 

 

(5)(10)(13)

Phathom Pharmaceuticals, Inc.

 

Senior Secured

 

October 2026

 

Prime + 2.25%, Floor rate 5.50%, PIK Interest 3.35%, 7.50% Exit Fee

 

$

94,737

 

 

 

95,032

 

 

 

93,916

 

 

(10)(12)(14)(15)(16)(17)(22)

Provention Bio, Inc.

 

Senior Secured

 

September 2027

 

Prime + 2.70%, Floor rate 8.20%, 6.60% Exit Fee

 

$

25,000

 

 

 

24,670

 

 

 

24,670

 

 

(17)

Redshift Bioanalytics, Inc.

 

Senior Secured

 

January 2026

 

Prime + 4.25%, Floor rate 7.50%, 3.80% Exit Fee

 

$

5,000

 

 

 

4,957

 

 

 

4,946

 

 

(15)

Replimune Group, Inc.

 

Senior Secured

 

October 2027

 

Prime + 1.75%, Floor rate 7.25%, Cap rate 9.00%, PIK Interest 1.50%, 4.95% Exit Fee

 

$

20,754

 

 

 

20,656

 

 

 

20,656

 

 

(10)(14)(17)

Scynexis, Inc.

 

Senior Secured

 

March 2025

 

Prime + 5.80%, Floor rate 9.05%, 3.95% Exit Fee

 

$

18,667

 

 

 

18,675

 

 

 

18,698

 

 

(12)(13)

Seres Therapeutics, Inc.

 

Senior Secured

 

October 2024

 

Prime + 6.40%, Floor rate 9.65%, 4.98% Exit Fee

 

$

37,500

 

 

 

38,638

 

 

 

38,816

 

 

(12)(13)

Tarsus Pharmaceuticals, Inc.

 

Senior Secured

 

February 2027

 

Prime + 5.20%, Floor rate 8.45%, 4.75% Exit Fee

 

$

8,250

 

 

 

8,274

 

 

 

8,423

 

 

(10)(13)(17)

TG Therapeutics, Inc.

 

Senior Secured

 

January 2026

 

Prime + 2.15%, Floor rate 5.40%, PIK Interest 3.45%, 5.95% Exit Fee

 

$

47,983

 

 

 

47,889

 

 

 

48,649

 

 

(10)(11)(12)(14)

uniQure B.V.

 

Senior Secured

 

December 2025

 

Prime + 4.70%, Floor rate 7.95%, 7.28% Exit Fee

 

$

70,000

 

 

 

72,329

 

 

 

73,019

 

 

(5)(10)(11)(12)(16)

 

See notes to consolidated financial statements

19


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2022

(dollars in thousands)

 

Portfolio Company

 

Type of
Investment

 

Maturity Date

 

Interest Rate and Floor (1)

Principal
Amount

 

Cost (2)

 

Value

 

Footnotes

Unity Biotechnology, Inc.

 

Senior Secured

 

August 2024

 

Prime + 6.10%, Floor rate 9.35%, 6.25% Exit Fee

 

$

20,000

 

 

$

21,079

 

 

$

20,967

 

 

(13)

Valo Health, LLC

 

Senior Secured

 

May 2024

 

Prime + 6.45%, Floor rate 9.70%, 3.85% Exit Fee

 

$

8,146

 

 

 

8,416

 

 

 

8,410

 

 

(11)(13)

Viridian Therapeutics, Inc.

 

Senior Secured

 

October 2026

 

Prime + 4.20%, Floor rate 7.45%, Cap rate 8.95%, 4.76% Exit Fee

 

$

2,000

 

 

 

2,012

 

 

 

1,934

 

 

(10)(13)(17)

X4 Pharmaceuticals, Inc.

 

Senior Secured

 

July 2024

 

Prime + 3.75%, Floor rate 8.75%, 8.80% Exit Fee

 

$

32,500

 

 

 

33,705

 

 

 

33,700

 

 

(11)(12)(13)

Subtotal: Drug Discovery & Development (78.59%)*

 

 

 

 

 

 

 

1,107,352

 

 

 

1,101,430

 

 

 

Electronics & Computer Hardware

 

 

 

 

 

 

 

 

 

 

 

 

 

Locus Robotics Corp.

 

Senior Secured

 

June 2026

 

Prime + 4.50%, Floor rate 8.00%, 1.00% Exit Fee

 

$

18,281

 

 

 

18,171

 

 

 

18,723

 

 

(19)

Subtotal: Electronics & Computer Hardware (1.34%)*

 

 

 

 

 

 

 

18,171

 

 

 

18,723

 

 

 

Healthcare Services, Other

 

 

 

 

 

 

 

 

 

 

 

 

 

Better Therapeutics, Inc.

 

Senior Secured

 

August 2025

 

Prime + 5.70%, Floor rate 8.95%, 5.95% Exit Fee

 

$

12,000

 

 

 

12,162

 

 

 

12,053

 

 

(15)

Blue Sprig Pediatrics, Inc.

 

Senior Secured

 

November 2026

 

1-month LIBOR + 5.00%, Floor rate 6.00%, PIK Interest 4.45%

 

$

51,480

 

 

 

50,813

 

 

 

49,732

 

 

(11)(13)(14)

Carbon Health Technologies, Inc.

 

Senior Secured

 

March 2025

 

Prime + 5.60%, Floor rate 8.85%, 4.61% Exit Fee

 

$

46,125

 

 

 

46,552

 

 

 

46,548

 

 

(11)(13)(19)

Equality Health, LLC

 

Senior Secured

 

February 2026

 

Prime + 6.25%, Floor rate 9.50%, PIK Interest 1.55%

 

$

53,587

 

 

 

53,164

 

 

 

53,871

 

 

(12)(14)

Oak Street Health, Inc.

 

Senior Secured

 

October 2027

 

Prime + 2.45%, Floor rate 7.95%, Cap rate 9.45%, PIK Interest 1.00%, 4.95% Exit Fee

 

$

33,808

 

 

 

33,651

 

 

 

33,651

 

 

(10)(14)(17)

Subtotal: Healthcare Services, Other (13.98%)*

 

 

 

 

 

 

 

196,342

 

 

 

195,855

 

 

 

Information Services

 

 

 

 

 

 

 

 

 

 

 

 

 

Capella Space Corp.

 

Senior Secured

 

November 2025

 

Prime + 5.00%, Floor rate 8.25%, PIK Interest 1.10%, 7.00% Exit Fee

 

$

20,250

 

 

 

20,506

 

 

 

20,574

 

 

(14)(15)(19)

Signal Media Limited

 

Senior Secured

 

June 2025

 

Prime + 5.50%, Floor rate 9.00%, Cap rate 12.00%, 3.45% Exit Fee

 

$

750

 

 

 

742

 

 

 

738

 

 

(5)(10)(17)

Yipit, LLC

 

Senior Secured

 

September 2026

 

1-month SOFR + 9.08%, Floor rate 10.08%

 

$

31,875

 

 

 

31,371

 

 

 

30,763

 

 

(17)(18)

Subtotal: Information Services (3.72%)*

 

 

 

 

 

 

 

52,619

 

 

 

52,075

 

 

 

Manufacturing Technology

 

 

 

 

 

 

 

 

 

 

 

 

 

Bright Machines, Inc.

 

Senior Secured

 

April 2025

 

Prime + 4.00%, Floor rate 9.50%, 5.00% Exit Fee

 

$

11,050

 

 

 

10,832

 

 

 

10,832

 

 

(13)

MacroFab, Inc.

 

Senior Secured

 

March 2026

 

Prime + 4.35%, Floor rate 7.60%, PIK Interest 1.25%, 4.50% Exit Fee

 

$

17,137

 

 

 

16,766

 

 

 

16,917

 

 

(14)(17)

Ouster, Inc.

 

Senior Secured

 

May 2026

 

Prime + 6.15%, Floor rate 9.40%, 7.45% Exit Fee

 

$

14,000

 

 

 

13,970

 

 

 

14,204

 

 

(10)(13)

Subtotal: Manufacturing Technology (2.99%)*

 

 

 

 

 

 

 

41,568

 

 

 

41,953

 

 

 

Semiconductors

 

 

 

 

 

 

 

 

 

 

 

 

 

Fungible, Inc.

 

Senior Secured

 

December 2024

 

Prime + 5.00%, Floor rate 8.25%, 4.95% Exit Fee

 

$

20,000

 

 

 

19,639

 

 

 

21,192

 

 

(15)(19)

Subtotal: Semiconductors (1.51%)*

 

 

 

 

 

 

 

19,639

 

 

 

21,192

 

 

 

Software

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3GTMS, LLC

 

Senior Secured

 

February 2025

 

3-month LIBOR + 9.28%, Floor rate 10.28%

 

$

10,426

 

 

 

10,291

 

 

 

10,317

 

 

(11)(18)

 

Senior Secured

 

February 2025

 

3-month LIBOR + 6.57%, Floor rate 7.57%

 

$

2,750

 

 

 

2,744

 

 

 

2,681

 

 

(18)

Total 3GTMS, LLC

 

 

 

 

 

 

 

$

13,176

 

 

 

13,035

 

 

 

12,998

 

 

 

Agilence, Inc.

 

Senior Secured

 

October 2026

 

1-month BSBY + 9.00%, Floor rate 10.00%

 

$

9,306

 

 

 

9,088

 

 

 

8,977

 

 

(12)(17)(18)

Alchemer LLC

 

Senior Secured

 

May 2028

 

1-month SOFR + 7.89%, Floor rate 8.89%

 

$

20,463

 

 

 

19,999

 

 

 

20,123

 

 

(17)(18)

Annex Cloud

 

Senior Secured

 

February 2027

 

1-month BSBY + 8.99%, Floor rate 10.00%

 

$

8,500

 

 

 

8,292

 

 

 

8,176

 

 

(13)(17)

Automation Anywhere, Inc.

 

Senior Secured

 

September 2027

 

Prime + 4.25%, Floor rate 9.00%, 2.50% Exit Fee

 

$

19,600

 

 

 

19,059

 

 

 

19,059

 

 

(11)(17)(19)

Babel Street

 

Senior Secured

 

December 2027

 

3-month SOFR + 7.89%, Floor rate 8.89%

 

$

45,000

 

 

 

43,801

 

 

 

43,801

 

 

(15)(17)(18)

 

See notes to consolidated financial statements

20


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2022

(dollars in thousands)

 

Portfolio Company

 

Type of
Investment

 

Maturity Date

 

Interest Rate and Floor (1)

Principal
Amount

 

Cost (2)

 

Value

 

Footnotes

Brain Corporation

 

Senior Secured

 

April 2025

 

Prime + 3.70%, Floor rate 6.95%, PIK Interest 1.00%, 3.95% Exit Fee

 

$

20,166

 

 

$

20,242

 

 

$

20,138

 

 

(13)(14)(15)(17)

Campaign Monitor Limited

 

Senior Secured

 

November 2025

 

6-month SOFR + 8.90%, Floor rate 9.90%

 

$

33,000

 

 

 

32,578

 

 

 

33,000

 

 

(13)(19)

Catchpoint Systems, Inc.

 

Senior Secured

 

June 2026

 

3-month SOFR + 8.86%, Floor rate 9.76%

 

$

10,175

 

 

 

9,980

 

 

 

9,996

 

 

(18)

Ceros, Inc.

 

Senior Secured

 

September 2026

 

6-month LIBOR + 9.67%, Floor rate 10.67%

 

$

21,445

 

 

 

21,003

 

 

 

21,050

 

 

(17)(18)

CloudBolt Software, Inc.

 

Senior Secured

 

October 2024

 

Prime + 6.70%, Floor rate 9.95%, 3.45% Exit Fee

 

$

10,000

 

 

 

10,069

 

 

 

10,498

 

 

(11)(19)

Constructor.io Corporation

 

Senior Secured

 

July 2027

 

1-month SOFR + 8.44%, Floor rate 9.44%

 

$

4,688

 

 

 

4,573

 

 

 

4,573

 

 

(17)(18)

Convoy, Inc.

 

Senior Secured

 

March 2026

 

Prime + 3.20%, Floor rate 6.45%, PIK Interest 1.95%, 4.55% Exit Fee

 

$

73,987

 

 

 

73,060

 

 

 

73,498

 

 

(14)(16)(19)

Copper CRM, Inc

 

Senior Secured

 

March 2025

 

Prime + 4.50%, Floor rate 8.25%, Cap rate 10.25%, PIK Interest 1.95%, 4.50% Exit Fee

 

$

10,144

 

 

 

10,150

 

 

 

9,820

 

 

(11)(14)

Cutover, Inc.

 

Senior Secured

 

October 2025

 

Prime + 5.20%, Floor rate 9.95%, 4.95% Exit Fee

 

$

5,000

 

 

 

4,949

 

 

 

4,949

 

 

(5)(10)(12)(17)

Cybermaxx Intermediate Holdings, Inc.

 

Senior Secured

 

August 2026

 

6-month SOFR + 9.53%, Floor rate 10.28%

 

$

10,528

 

 

 

10,298

 

 

 

10,114

 

 

(13)(17)

Dashlane, Inc.

 

Senior Secured

 

July 2025

 

Prime + 3.05%, Floor rate 7.55%, PIK Interest 1.10%, 4.95% Exit Fee

 

$

31,930

 

 

 

32,346

 

 

 

32,012

 

 

(11)(13)(14)(17)(19)

Demandbase, Inc.

 

Senior Secured

 

August 2025

 

Prime + 2.25%, Floor rate 5.50%, PIK Interest 3.00%, 5.00% Exit Fee

 

$

28,503

 

 

 

28,442

 

 

 

28,664

 

 

(13)(14)(17)(19)

Dispatch Technologies, Inc.

 

Senior Secured

 

April 2028

 

3-month SOFR + 8.01%, Floor rate 8.76%

 

$

7,500

 

 

 

7,295

 

 

 

7,339

 

 

(17)(18)

Eigen Technologies Ltd.

 

Senior Secured

 

April 2025

 

Prime + 5.10%, Floor rate 8.35%, 2.95% Exit Fee

 

$

3,750

 

 

 

3,744

 

 

 

3,746

 

 

(5)(10)

Elation Health, Inc.

 

Senior Secured

 

March 2026

 

Prime + 4.25%, Floor rate 9.00%, PIK Interest 1.95%, 3.95% Exit Fee

 

$

5,021

 

 

 

4,839

 

 

 

4,839

 

 

(14)(17)(19)

Enmark Systems, Inc.

 

Senior Secured

 

September 2026

 

3-month LIBOR + 6.77%, Floor rate 7.77%, PIK Interest 2.16%

 

$

8,223

 

 

 

8,054

 

 

 

8,043

 

 

(11)(14)(17)(18)

Esentire, Inc.

 

Senior Secured

 

May 2024

 

3-month LIBOR + 9.96%, Floor rate 10.96%

 

$

8,436

 

 

 

8,361

 

 

 

8,376

 

 

(5)(10)(11)(18)

Esme Learning Solutions, Inc.

 

Senior Secured

 

February 2025

 

Prime + 5.50%, Floor rate 8.75%, PIK Interest 1.50%, 3.00% Exit Fee

 

$

4,892

 

 

 

4,737

 

 

 

1,671

 

 

(8)(14)

Fortified Health Security

 

Senior Secured

 

December 2027

 

6-month SOFR + 7.79%, Floor rate 8.54%

 

$

7,000

 

 

 

6,824

 

 

 

6,824

 

 

(17)(18)

Flight Schedule Pro, LLC

 

Senior Secured

 

October 2027

 

1-month SOFR + 7.79%, Floor rate 8.70%

 

$

5,948

 

 

 

5,771

 

 

 

5,771

 

 

(17)(18)

Ikon Science Limited

 

Senior Secured

 

October 2024

 

3-month Eurodollar + 9.00%, Floor rate 10.00%

 

$

6,563

 

 

 

6,422

 

 

 

6,484

 

 

(5)(10)(17)(18)

Imperva, Inc.

 

Senior Secured

 

January 2027

 

3-month LIBOR + 7.75%, Floor rate 8.75%

 

$

20,000

 

 

 

19,875

 

 

 

20,200

 

 

(19)

Kazoo, Inc. (p.k.a. YouEarnedIt, Inc.)

 

Senior Secured

 

July 2023

 

3-month SOFR + 10.14%, Floor rate 11.14%

 

$

10,681

 

 

 

10,593

 

 

 

10,593

 

 

(18)

Khoros (p.k.a Lithium Technologies)

 

Senior Secured

 

January 2024

 

3-month SOFR + 8.00%, Floor rate 9.00%

 

$

56,208

 

 

 

56,062

 

 

 

55,520

 

 

(17)

LogicSource

 

Senior Secured

 

July 2027

 

3-month SOFR + 8.93%, Floor rate 9.93%

 

$

13,300

 

 

 

13,028

 

 

 

13,028

 

 

(17)

Logicworks

 

Senior Secured

 

January 2024

 

Prime + 7.50%, Floor rate 10.75%

 

$

14,500

 

 

 

14,398

 

 

 

14,473

 

 

(12)

Mobile Solutions Services

 

Senior Secured

 

December 2025

 

3-month LIBOR + 9.06%, Floor rate 10.06%

 

$

17,915

 

 

 

17,556

 

 

 

17,474

 

 

(17)(18)

 

See notes to consolidated financial statements

21


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2022

(dollars in thousands)

 

Portfolio Company

 

Type of
Investment

 

Maturity Date

 

Interest Rate and Floor (1)

Principal
Amount

 

Cost (2)

 

Value

 

Footnotes

Nextroll, Inc.

 

Senior Secured

 

July 2023

 

Prime + 3.75%, Floor rate 7.75%, PIK Interest 2.95%, 1.95% Exit Fee

 

$

22,211

 

 

$

22,284

 

 

$

22,284

 

 

(12)(14)

Nuvolo Technologies Corporation

 

Senior Secured

 

July 2025

 

Prime + 5.25%, Floor rate 8.50%, 2.42% Exit Fee

 

$

22,500

 

 

 

22,508

 

 

 

22,817

 

 

(12)(13)(17)(19)

Omeda Holdings, LLC

 

Senior Secured

 

July 2027

 

3-month SOFR + 8.05%, Floor rate 9.05%

 

$

7,500

 

 

 

7,261

 

 

 

7,261

 

 

(17)(18)

Riviera Partners LLC

 

Senior Secured

 

April 2027

 

6-month SOFR + 7.53%, Floor rate 8.53%

 

$

26,184

 

 

 

25,622

 

 

 

25,487

 

 

(17)(18)

Salary.com, LLC

 

Senior Secured

 

September 2027

 

6-month SOFR + 8.00%, Floor rate 9.00%

 

$

18,000

 

 

 

17,654

 

 

 

17,654

 

 

(18)

ShadowDragon, LLC

 

Senior Secured

 

December 2026

 

3-month LIBOR + 9.00%, Floor rate 10.00%

 

$

5,985

 

 

 

5,841

 

 

 

5,830

 

 

(17)(18)

Tact.ai Technologies, Inc.

 

Senior Secured

 

February 2024

 

Prime + 4.00%, Floor rate 8.75%, PIK Interest 2.00%, 5.50% Exit Fee

 

$

4,250

 

 

 

4,481

 

 

 

4,446

 

 

(14)

ThreatConnect, Inc.

 

Senior Secured

 

May 2026

 

6-month LIBOR + 9.00%, Floor rate 10.00%

 

$

11,032

 

 

 

10,778

 

 

 

10,793

 

 

(17)(18)

VideoAmp, Inc.

 

Senior Secured

 

February 2025

 

Prime + 3.70%, Floor rate 6.95%, PIK Interest 1.25%, 5.25% Exit Fee

 

$

63,187

 

 

 

62,640

 

 

 

63,429

 

 

(14)(15)(19)

Zappi, Inc.

 

Senior Secured

 

December 2027

 

3-month SOFR + 8.03%, Floor rate 9.03%

 

$

9,000

 

 

 

8,779

 

 

 

8,779

 

 

(5)(10)(17)(18)

Zimperium, Inc.

 

Senior Secured

 

May 2027

 

3-month SOFR + 8.31%, Floor rate 9.31%

 

$

16,313

 

 

 

16,000

 

 

 

16,072

 

 

(17)(18)

Subtotal: Software (54.28%)*

 

 

 

 

 

 

 

762,371

 

 

 

760,679

 

 

 

Sustainable and Renewable Technology

 

 

 

 

 

 

 

 

 

 

 

 

 

Ampion, PBC

 

Senior Secured

 

May 2025

 

Prime + 4.70%, Floor rate 7.95%, PIK Interest 1.45%, 3.95% Exit Fee

 

$

4,037

 

 

 

3,985

 

 

 

4,008

 

 

(13)(14)

Pineapple Energy LLC

 

Senior Secured

 

December 2024

 

PIK Interest 10.00%

 

$

3,237

 

 

 

3,237

 

 

 

3,006

 

 

(14)

Subtotal: Sustainable and Renewable Technology (0.50%)*

 

 

 

 

 

 

 

7,222

 

 

 

7,014

 

 

 

Total: Debt Investments (199.47%)*

 

 

 

 

 

 

$

2,818,060

 

 

$

2,795,444

 

 

 

 

Portfolio Company

 

Type of
Investment

Acquisition Date (4)

Series (3)

 

Shares

 

 

Cost (2)

 

 

Value

 

 

Footnotes

Equity Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer & Business Products

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grove Collaborative, Inc.

 

Equity

4/30/2021

Common Stock

 

 

61,300

 

 

$

433

 

 

$

24

 

 

(4)

Savage X Holding, LLC

 

Equity

4/30/2010

Class A Units

 

 

42,137

 

 

 

13

 

 

 

226

 

 

 

TechStyle, Inc.

 

Equity

4/30/2010

Common Stock

 

 

42,989

 

 

 

128

 

 

 

132

 

 

 

TFG Holding, Inc.

 

Equity

4/30/2010

Common Stock

 

 

42,989

 

 

 

89

 

 

 

116

 

 

 

Subtotal: Consumer & Business Products (0.04%)*

 

 

 

 

 

663

 

 

 

498

 

 

 

Consumer & Business Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carwow LTD

 

Equity

12/15/2021

Preferred Series D-4

 

 

199,742

 

 

 

1,151

 

 

 

257

 

 

(5)(10)

DoorDash, Inc.

 

Equity

12/20/2018

Common Stock

 

 

81,996

 

 

 

945

 

 

 

4,003

 

 

(4)

Lyft, Inc.

 

Equity

12/26/2018

Common Stock

 

 

100,738

 

 

 

5,263

 

 

 

1,110

 

 

(4)

Nerdy Inc.

 

Equity

9/17/2021

Common Stock

 

 

100,000

 

 

 

1,000

 

 

 

225

 

 

(4)

OfferUp, Inc.

 

Equity

10/25/2016

Preferred Series A

 

 

286,080

 

 

 

1,663

 

 

 

372

 

 

 

 

Equity

10/25/2016

Preferred Series A-1

 

 

108,710

 

 

 

632

 

 

 

141

 

 

 

Total OfferUp, Inc.

 

 

 

 

 

 

394,790

 

 

 

2,295

 

 

 

513

 

 

 

Oportun

 

Equity

6/28/2013

Common Stock

 

 

48,365

 

 

 

577

 

 

 

266

 

 

(4)

Reischling Press, Inc.

 

Equity

7/31/2020

Common Stock

 

 

3,095

 

 

 

39

 

 

 

 

 

 

Rhino Labs, Inc.

 

Equity

1/24/2022

Preferred Series B-2

 

 

7,063

 

 

 

1,000

 

 

 

805

 

 

 

Tectura Corporation

 

Equity

5/23/2018

Common Stock

 

 

414,994,863

 

 

 

900

 

 

 

 

 

(7)

 

Equity

6/6/2016

Preferred Series BB

 

 

1,000,000

 

 

 

 

 

 

 

 

(7)

Total Tectura Corporation

 

 

 

 

 

 

415,994,863

 

 

 

900

 

 

 

 

 

 

Uber Technologies, Inc.

 

Equity

12/1/2020

Common Stock

 

 

32,991

 

 

 

318

 

 

 

816

 

 

(4)

Subtotal: Consumer & Business Services (0.57%)*

 

 

 

 

 

13,488

 

 

 

7,995

 

 

 

 

 

 

 

 

 

 

 

 

 

See notes to consolidated financial statements

22


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2022

(dollars in thousands)

Portfolio Company

 

Type of
Investment

Acquisition Date (4)

Series (3)

 

Shares

 

 

Cost (2)

 

 

Value

 

 

Footnotes

Diversified Financial Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gibraltar Business Capital, LLC

 

Equity

3/1/2018

Common Stock

 

 

830,000

 

 

$

1,884

 

 

$

1,107

 

 

(7)

 

Equity

3/1/2018

Preferred Series A

 

 

10,602,752

 

 

 

26,122

 

 

 

14,137

 

 

(7)

Total Gibraltar Business Capital, LLC

 

 

 

 

 

 

11,432,752

 

 

 

28,006

 

 

 

15,244

 

 

 

Hercules Adviser LLC

 

Equity

3/26/2021

Member Units

 

 

1

 

 

 

35

 

 

 

19,153

 

 

(7)

Newfront Insurance Holdings, Inc.

 

Equity

9/30/2021

Preferred Series D-2

 

 

210,282

 

 

 

403

 

 

 

472

 

 

 

Subtotal: Diversified Financial Services (2.49%)*

 

 

 

 

 

28,444

 

 

 

34,869

 

 

 

Drug Delivery

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AcelRx Pharmaceuticals, Inc.

 

Equity

12/10/2018

Common Stock

 

 

8,836

 

 

 

1,329

 

 

 

20

 

 

(4)

Aytu BioScience, Inc.

 

Equity

3/28/2014

Common Stock

 

 

13,600

 

 

 

1,500

 

 

 

3

 

 

(4)

BioQ Pharma Incorporated

 

Equity

12/8/2015

Preferred Series D

 

 

165,000

 

 

 

500

 

 

 

33

 

 

 

PDS Biotechnology Corporation

 

Equity

4/6/2015

Common Stock

 

 

2,498

 

 

 

309

 

 

 

33

 

 

(4)

Subtotal: Drug Delivery (0.01%)*

 

 

 

 

 

3,638

 

 

 

89

 

 

 

Drug Discovery & Development

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Akero Therapeutics, Inc.

 

Equity

9/19/2022

Common Stock

 

 

38,461

 

 

 

1,000

 

 

 

2,108

 

 

(4)(10)

Albireo Pharma, Inc.

 

Equity

9/14/2020

Common Stock

 

 

25,000

 

 

 

1,000

 

 

 

540

 

 

(4)(10)

Applied Molecular Transport

 

Equity

4/6/2021

Common Stock

 

 

1,000

 

 

 

42

 

 

 

 

 

(4)(10)

Avalo Therapeutics, Inc.

 

Equity

8/19/2014

Common Stock

 

 

9,924

 

 

 

1,000

 

 

 

50

 

 

(4)

Aveo Pharmaceuticals, Inc.

 

Equity

7/31/2011

Common Stock

 

 

190,179

 

 

 

1,715

 

 

 

2,843

 

 

(4)

Axsome Therapeutics, Inc.

 

Equity

5/9/2022

Common Stock

 

 

127,021

 

 

 

4,165

 

 

 

9,797

 

 

(4)(10)(16)

Bicycle Therapeutics PLC

 

Equity

10/5/2020

Common Stock

 

 

98,100

 

 

 

1,871

 

 

 

2,904

 

 

(4)(5)(10)

BridgeBio Pharma, Inc.

 

Equity

6/21/2018

Common Stock

 

 

231,329

 

 

 

2,255

 

 

 

1,763

 

 

(4)

Concert Pharmaceuticals, Inc.

 

Equity

2/13/2019

Common Stock

 

 

70,796

 

 

 

1,367

 

 

 

413

 

 

(4)(10)

Dare Biosciences, Inc.

 

Equity

1/8/2015

Common Stock

 

 

13,550

 

 

 

1,000

 

 

 

11

 

 

(4)

Dynavax Technologies

 

Equity

7/22/2015

Common Stock

 

 

20,000

 

 

 

550

 

 

 

213

 

 

(4)(10)

Gritstone Bio, Inc.

 

Equity

10/26/2022

Common Stock

 

 

442,477

 

 

 

1,000

 

 

 

1,527

 

 

(4)

Hibercell, Inc.

 

Equity

5/7/2021

Preferred Series B

 

 

3,466,840

 

 

 

4,250

 

 

 

2,233

 

 

(15)

HilleVax, Inc.

 

Equity

5/3/2022

Common Stock

 

 

235,295

 

 

 

4,000

 

 

 

3,937

 

 

(4)

Humanigen, Inc.

 

Equity

3/31/2021

Common Stock

 

 

43,243

 

 

 

800

 

 

 

5

 

 

(4)(10)

NorthSea Therapeutics

 

Equity

12/15/2021

Preferred Series C

 

 

983

 

 

 

2,000

 

 

 

1,476

 

 

(5)(10)

Paratek Pharmaceuticals, Inc.

 

Equity

2/26/2007

Common Stock

 

 

76,362

 

 

 

2,744

 

 

 

143

 

 

(4)

Rocket Pharmaceuticals, Ltd.

 

Equity

8/22/2007

Common Stock

 

 

944

 

 

 

1,500

 

 

 

18

 

 

(4)

Savara, Inc.

 

Equity

8/11/2015

Common Stock

 

 

11,119

 

 

 

203

 

 

 

17

 

 

(4)

Sio Gene Therapies, Inc.

 

Equity

2/2/2017

Common Stock

 

 

16,228

 

 

 

1,269

 

 

 

7

 

 

(4)

Tarsus Pharmaceuticals, Inc.

 

Equity

5/5/2022

Common Stock

 

 

155,555

 

 

 

2,100

 

 

 

2,280

 

 

(4)(10)

Tricida, Inc.

 

Equity

2/28/2018

Common Stock

 

 

68,816

 

 

 

863

 

 

 

11

 

 

(4)

uniQure B.V.

 

Equity

1/31/2019

Common Stock

 

 

17,175

 

 

 

332

 

 

 

389

 

 

(4)(5)(10)(16)

Valo Health, LLC

 

Equity

12/11/2020

Preferred Series B

 

 

510,308

 

 

 

3,000

 

 

 

2,063

 

 

 

 

Equity

10/31/2022

Preferred Series C

 

 

170,102

 

 

 

1,000

 

 

 

1,012

 

 

 

Total Valo Health, LLC

 

 

 

 

 

 

680,410

 

 

 

4,000

 

 

 

3,075

 

 

 

X4 Pharmaceuticals, Inc.

 

Equity

11/26/2019

Common Stock

 

 

1,566,064

 

 

 

2,945

 

 

 

1,555

 

 

(4)

Subtotal: Drug Discovery & Development (2.66%)*

 

 

 

 

 

43,971

 

 

 

37,315

 

 

 

Electronics & Computer Hardware

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Locus Robotics Corp.

 

Equity

11/17/2022

Preferred Series F

 

 

15,116

 

 

 

650

 

 

 

606

 

 

 

Skydio, Inc.

 

Equity

3/8/2022

Preferred Series E

 

 

248,900

 

 

 

1,500

 

 

 

915

 

 

 

Subtotal: Electronics & Computer Hardware (0.11%)*

 

 

 

 

 

2,150

 

 

 

1,521

 

 

 

Healthcare Services, Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23andMe, Inc.

 

Equity

3/11/2019

Common Stock

 

 

825,732

 

 

 

5,094

 

 

 

1,784

 

 

(4)

Carbon Health Technologies, Inc.

 

Equity

3/30/2021

Preferred Series C

 

 

217,880

 

 

 

1,687

 

 

 

1,110

 

 

 

Subtotal: Healthcare Services, Other (0.21%)*

 

 

 

 

 

6,781

 

 

 

2,894

 

 

 

 

See notes to consolidated financial statements

23


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2022

(dollars in thousands)

 

 

 

 

Portfolio Company

 

Type of
Investment

Acquisition Date (4)

Series (3)

 

Shares

 

 

Cost (2)

 

 

Value

 

 

Footnotes

Information Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Planet Labs, Inc.

 

Equity

6/21/2019

Common Stock

 

 

547,880

 

 

$

615

 

 

$

2,383

 

 

(4)

Yipit, LLC

 

Equity

12/30/2021

Preferred Series E

 

 

41,021

 

 

 

3,825

 

 

 

3,375

 

 

 

Zeta Global Corp.

 

Equity

11/20/2007

Common Stock

 

 

295,861

 

 

 

 

 

 

2,417

 

 

(4)

Subtotal: Information Services (0.58%)*

 

 

 

 

 

4,440

 

 

 

8,175

 

 

 

Medical Devices & Equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Coronado Aesthetics, LLC

 

Equity

10/15/2021

Common Units

 

 

180,000

 

 

 

 

 

 

6

 

 

(7)

 

Equity

10/15/2021

Preferred Series A-2

 

 

5,000,000

 

 

 

250

 

 

 

313

 

 

(7)

Total Coronado Aesthetics, LLC

 

 

 

 

 

 

5,180,000

 

 

 

250

 

 

 

319

 

 

 

Flowonix Medical Incorporated

 

Equity

11/3/2014

Preferred Series AA

 

 

221,893

 

 

 

1,499

 

 

 

 

 

 

Gelesis, Inc.

 

Equity

11/30/2009

Common Stock

 

 

1,490,700

 

 

 

871

 

 

 

433

 

 

(4)

ViewRay, Inc.

 

Equity

12/16/2013

Common Stock

 

 

36,457

 

 

 

333

 

 

 

163

 

 

(4)

Subtotal: Medical Devices & Equipment (0.07%)*

 

 

 

 

 

2,953

 

 

 

915

 

 

 

Semiconductors

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Achronix Semiconductor Corporation

 

Equity

7/1/2011

Preferred Series C

 

 

277,995

 

 

 

160

 

 

 

205

 

 

 

Subtotal: Semiconductors (0.01%)*

 

 

 

 

 

160

 

 

 

205

 

 

 

Software

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3GTMS, LLC

 

Equity

8/9/2021

Common Stock

 

 

1,000,000

 

 

 

1,000

 

 

 

793

 

 

 

Black Crow AI, Inc. affiliates

 

Equity

3/24/2021

Preferred Note

 

 

3

 

 

 

3,000

 

 

 

3,000

 

 

(21)

CapLinked, Inc.

 

Equity

10/26/2012

Preferred Series A-3

 

 

53,614

 

 

 

51

 

 

 

6

 

 

 

Contentful Global, Inc.

 

Equity

12/22/2020

Preferred Series C

 

 

41,000

 

 

 

138

 

 

 

258

 

 

(5)(10)

 

Equity

11/20/2018

Preferred Series D

 

 

108,500

 

 

 

500

 

 

 

732

 

 

(5)(10)

Total Contentful Global, Inc.

 

 

 

 

 

 

149,500

 

 

 

638

 

 

 

990

 

 

 

Docker, Inc.

 

Equity

11/29/2018

Common Stock

 

 

20,000

 

 

 

4,284

 

 

 

503

 

 

 

Druva Holdings, Inc.

 

Equity

10/22/2015

Preferred Series 2

 

 

458,841

 

 

 

1,000

 

 

 

1,764

 

 

 

 

Equity

8/24/2017

Preferred Series 3

 

 

93,620

 

 

 

300

 

 

 

395

 

 

 

Total Druva Holdings, Inc.

 

 

 

 

 

 

552,461

 

 

 

1,300

 

 

 

2,159

 

 

 

HighRoads, Inc.

 

Equity

1/18/2013

Common Stock

 

 

190

 

 

 

307

 

 

 

 

 

 

Lightbend, Inc.

 

Equity

12/4/2020

Common Stock

 

 

38,461

 

 

 

265

 

 

 

24

 

 

 

Nextdoor.com, Inc.

 

Equity

8/1/2018

Common Stock

 

 

1,019,255

 

 

 

4,854

 

 

 

2,100

 

 

(4)

Palantir Technologies

 

Equity

9/23/2020

Common Stock

 

 

1,418,337

 

 

 

8,670

 

 

 

9,106

 

 

(4)

SingleStore, Inc.

 

Equity

11/25/2020

Preferred Series E

 

 

580,983

 

 

 

2,000

 

 

 

1,940

 

 

 

 

Equity

8/12/2021

Preferred Series F

 

 

52,956

 

 

 

280

 

 

 

221

 

 

 

Total SingleStore, Inc.

 

 

 

 

 

 

633,939

 

 

 

2,280

 

 

 

2,161

 

 

 

Sprinklr, Inc.

 

Equity

3/22/2017

Common Stock

 

 

700,000

 

 

 

3,748

 

 

 

5,719

 

 

(4)

Verana Health, Inc.

 

Equity

7/8/2021

Preferred Series E

 

 

952,562

 

 

 

2,000

 

 

 

1,023

 

 

 

ZeroFox, Inc.

 

Equity

5/7/2020

Common Stock

 

 

289,992

 

 

 

101

 

 

 

1,382

 

 

(4)(20)

Subtotal: Software (2.07%)*

 

 

 

 

 

32,498

 

 

 

28,966

 

 

 

Surgical Devices

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gynesonics, Inc.

 

Equity

1/18/2007

Preferred Series B

 

 

219,298

 

 

 

250

 

 

 

 

 

 

 

Equity

6/16/2010

Preferred Series C

 

 

656,538

 

 

 

282

 

 

 

 

 

 

 

Equity

2/8/2013

Preferred Series D

 

 

1,991,157

 

 

 

712

 

 

 

 

 

 

 

Equity

7/14/2015

Preferred Series E

 

 

2,786,367

 

 

 

429

 

 

 

 

 

 

 

Equity

12/18/2018

Preferred Series F

 

 

1,523,693

 

 

 

118

 

 

 

 

 

 

 

Equity

12/18/2018

Preferred Series F-1

 

 

2,418,125

 

 

 

150

 

 

 

 

 

 

Total Gynesonics, Inc.

 

 

 

 

 

 

9,595,178

 

 

 

1,941

 

 

 

 

 

 

TransMedics Group, Inc.

 

Equity

11/7/2012

Common Stock

 

 

50,000

 

 

 

538

 

 

 

2,546

 

 

(4)

Subtotal: Surgical Devices (0.18%)*

 

 

 

 

 

2,479

 

 

 

2,546

 

 

 

Sustainable and Renewable Technology

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fulcrum Bioenergy, Inc.

 

Equity

9/13/2012

Preferred Series C-1

 

 

187,265

 

 

 

711

 

 

 

995

 

 

 

Impossible Foods, Inc.

 

Equity

5/10/2019

Preferred Series E-1

 

 

188,611

 

 

 

2,000

 

 

 

2,173

 

 

 

Modumetal, Inc.

 

Equity

6/1/2015

Common Stock

 

 

1,035

 

 

 

500

 

 

 

 

 

 

NantEnergy, LLC

 

Equity

8/31/2013

Common Units

 

 

59,665

 

 

 

102

 

 

 

 

 

 

Pineapple Energy LLC

 

Equity

12/10/2020

Common Stock

 

 

304,486

 

 

 

3,153

 

 

 

634

 

 

(4)(20)

Pivot Bio, Inc.

 

Equity

6/28/2021

Preferred Series D

 

 

593,080

 

 

 

4,500

 

 

 

2,456

 

 

 

Proterra, Inc.

 

Equity

5/28/2015

Common Stock

 

 

457,841

 

 

 

542

 

 

 

1,726

 

 

(4)

Subtotal: Sustainable and Renewable Technology (0.57%)*

 

 

 

 

 

11,508

 

 

 

7,984

 

 

 

Total: Equity Investments (9.56%)*

 

 

 

 

$

153,173

 

 

$

133,972

 

 

 

 

See notes to consolidated financial statements

24


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2022

(dollars in thousands)

 

 

 

 

 

 

 

 

Portfolio Company

 

Type of
Investment

Acquisition Date (4)

Series (3)

 

Shares

 

 

Cost (2)

 

 

Value

 

 

Footnotes

Warrant Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Biotechnology Tools

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Alamar Biosciences, Inc.

 

Warrant

6/21/2022

Preferred Series B

 

 

15,399

 

 

$

24

 

 

$

23

 

 

 

PathAI, Inc.

 

Warrant

12/23/2022

Common Stock

 

 

53,418

 

 

 

461

 

 

 

463

 

 

 

Subtotal: Biotechnology Tools (0.03%)*

 

 

 

 

 

485

 

 

 

486

 

 

 

Communications & Networking

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aryaka Networks, Inc.

 

Warrant

6/28/2022

Common Stock

 

 

229,611

 

 

 

123

 

 

 

99

 

 

 

Spring Mobile Solutions, Inc.

 

Warrant

4/19/2013

Common Stock

 

 

2,834,375

 

 

 

418

 

 

 

 

 

 

Subtotal: Communications & Networking (0.01%)*

 

 

 

 

 

541

 

 

 

99

 

 

 

Consumer & Business Products

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gadget Guard, LLC

 

Warrant

6/3/2014

Common Stock

 

 

1,662,441

 

 

 

228

 

 

 

 

 

 

Savage X Holding, LLC

 

Warrant

6/27/2014

Class A Units

 

 

206,185

 

 

 

 

 

 

1,103

 

 

 

TechStyle, Inc.

 

Warrant

7/16/2013

Preferred Series B

 

 

206,185

 

 

 

1,101

 

 

 

745

 

 

 

TFG Holding, Inc.

 

Warrant

6/27/2014

Common Stock

 

 

206,185

 

 

 

 

 

 

 

 

 

The Neat Company

 

Warrant

8/13/2014

Common Stock

 

 

54,054

 

 

 

365

 

 

 

 

 

 

Whoop, Inc.

 

Warrant

6/27/2018

Preferred Series C

 

 

686,270

 

 

 

18

 

 

 

475

 

 

 

Subtotal: Consumer & Business Products (0.17%)*

 

 

 

 

 

1,712

 

 

 

2,323

 

 

 

Consumer & Business Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carwow LTD

 

Warrant

12/14/2021

Common Stock

 

 

174,163

 

 

 

164

 

 

 

34

 

 

(5)(10)

Houzz, Inc.

 

Warrant

10/29/2019

Common Stock

 

 

529,661

 

 

 

20

 

 

 

 

 

 

Landing Holdings Inc.

 

Warrant

3/12/2021

Common Stock

 

 

11,806

 

 

 

116

 

 

 

127

 

 

(15)

Lendio, Inc.

 

Warrant

3/29/2019

Preferred Series D

 

 

127,032

 

 

 

39

 

 

 

19

 

 

 

Provi

 

Warrant

12/22/2022

Common Stock

 

 

117,042

 

 

 

166

 

 

 

155

 

 

(15)

Rhino Labs, Inc.

 

Warrant

3/12/2021

Common Stock

 

 

13,106

 

 

 

470

 

 

 

308

 

 

(15)

RumbleON, Inc.

 

Warrant

4/30/2018

Common Stock

 

 

5,139

 

 

 

88

 

 

 

 

 

(4)

SeatGeek, Inc.

 

Warrant

6/12/2019

Common Stock

 

 

1,379,761

 

 

 

842

 

 

 

1,332

 

 

(12)(16)

Skyword, Inc.

 

Warrant

11/14/2022

Common Stock

 

 

1,607,143

 

 

 

57

 

 

 

43

 

 

 

 

Warrant

8/23/2019

Preferred Series B

 

 

444,444

 

 

 

83

 

 

 

 

 

 

Total Skyword, Inc.

 

 

 

 

 

 

2,051,587

 

 

 

140

 

 

 

43

 

 

 

Snagajob.com, Inc.

 

Warrant

4/20/2020

Common Stock

 

 

600,000

 

 

 

16

 

 

 

43

 

 

 

 

Warrant

6/30/2016

Preferred Series A

 

 

1,800,000

 

 

 

782

 

 

 

50

 

 

 

 

Warrant

8/1/2018

Preferred Series B

 

 

1,211,537

 

 

 

62

 

 

 

25

 

 

 

Total Snagajob.com, Inc.

 

 

 

 

 

 

3,611,537

 

 

 

860

 

 

 

118

 

 

 

Thumbtack, Inc.

 

Warrant

5/1/2018

Common Stock

 

 

267,225

 

 

 

844

 

 

 

280

 

 

(12)

Udacity, Inc.

 

Warrant

9/25/2020

Common Stock

 

 

486,359

 

 

 

218

 

 

 

4

 

 

(12)

Veem, Inc.

 

Warrant

3/31/2022

Common Stock

 

 

98,428

 

 

 

126

 

 

 

25

 

 

 

Worldremit Group Limited

 

Warrant

2/11/2021

Preferred Series D

 

 

77,215

 

 

 

129

 

 

 

192

 

 

(5)(10)(12)(16)

 

Warrant

8/27/2021

Preferred Series E

 

 

1,868

 

 

 

26

 

 

 

2

 

 

(5)(10)(16)

Total Worldremit Group Limited

 

 

 

 

 

 

79,083

 

 

 

155

 

 

 

194

 

 

 

Subtotal: Consumer & Business Services (0.19%)*

 

 

 

 

 

4,248

 

 

 

2,639

 

 

 

Drug Delivery

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aerami Therapeutics Holdings, Inc.

 

Warrant

9/30/2015

Common Stock

 

 

110,882

 

 

 

74

 

 

 

 

 

 

BioQ Pharma Incorporated

 

Warrant

10/27/2014

Common Stock

 

 

459,183

 

 

 

1

 

 

 

 

 

 

PDS Biotechnology Corporation

 

Warrant

8/28/2014

Common Stock

 

 

3,929

 

 

 

390

 

 

 

1

 

 

(4)

Subtotal: Drug Delivery (0.00%)*

 

 

 

 

 

465

 

 

 

1

 

 

 

Drug Discovery & Development

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acacia Pharma Inc.

 

Warrant

6/29/2018

Common Stock

 

 

201,330

 

 

 

304

 

 

 

 

 

(5)(10)

ADMA Biologics, Inc.

 

Warrant

2/24/2014

Common Stock

 

 

58,000

 

 

 

166

 

 

 

10

 

 

(4)

Akero Therapeutics, Inc.

 

Warrant

6/15/2022

Common Stock

 

 

18,360

 

 

 

56

 

 

 

674

 

 

(4)(10)

Albireo Pharma, Inc.

 

Warrant

6/8/2020

Common Stock

 

 

5,311

 

 

 

61

 

 

 

31

 

 

(4)(10)

AmplifyBio, LLC

 

Warrant

12/27/2022

Class A Units

 

 

69,239

 

 

 

238

 

 

 

256

 

 

(15)

Axsome Therapeutics, Inc.

 

Warrant

9/25/2020

Common Stock

 

 

40,396

 

 

 

880

 

 

 

1,590

 

 

(4)(10)(12)(16)

Cellarity, Inc.

 

Warrant

12/8/2021

Preferred Series B

 

 

100,000

 

 

 

287

 

 

 

318

 

 

(15)

Century Therapeutics, Inc.

 

Warrant

9/14/2020

Common Stock

 

 

16,112

 

 

 

37

 

 

 

3

 

 

(4)

Dermavant Sciences Ltd.

 

Warrant

5/31/2019

Common Stock

 

 

223,642

 

 

 

101

 

 

 

199

 

 

(5)(10)

 

See notes to consolidated financial statements

25


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2022

(dollars in thousands)

 

Portfolio Company

 

Type of
Investment

Acquisition Date (4)

Series (3)

 

Shares

 

 

Cost (2)

 

 

Value

 

 

Footnotes

enGene, Inc.

 

Warrant

12/30/2021

Preferred Series 3

 

 

133,692

 

 

$

72

 

 

$

28

 

 

(5)(10)(12)

Evofem Biosciences, Inc.

 

Warrant

6/11/2014

Common Stock

 

 

520

 

 

 

266

 

 

 

 

 

(4)

Fresh Tracks Therapeutics, Inc. (p.k.a. Brickell Biotech, Inc.)

 

Warrant

2/18/2016

Common Stock

 

 

200

 

 

 

119

 

 

 

 

 

(4)

Kineta, Inc.

 

Warrant

12/20/2019

Common Stock

 

 

2,202

 

 

 

110

 

 

 

 

 

(4)

Kura Oncology, Inc.

 

Warrant

11/2/2022

Common Stock

 

 

14,342

 

 

 

88

 

 

 

59

 

 

(4)(10)(15)

Madrigal Pharmaceutical, Inc.

 

Warrant

5/9/2022

Common Stock

 

 

10,131

 

 

 

177

 

 

 

1,977

 

 

(4)(10)

Myovant Sciences, Ltd.

 

Warrant

10/16/2017

Common Stock

 

 

73,710

 

 

 

460

 

 

 

958

 

 

(4)(5)(10)

Paratek Pharmaceuticals, Inc.

 

Warrant

8/1/2018

Common Stock

 

 

426,866

 

 

 

520

 

 

 

34

 

 

(4)

Phathom Pharmaceuticals, Inc.

 

Warrant

9/17/2021

Common Stock

 

 

64,687

 

 

 

848

 

 

 

101

 

 

(4)(10)(12)(15)(16)

Provention Bio, Inc.

 

Warrant

9/15/2022

Common Stock

 

 

111,934

 

 

 

281

 

 

 

677

 

 

(4)

Redshift Bioanalytics, Inc.

 

Warrant

3/23/2022

Preferred Series E

 

 

475,510

 

 

 

20

 

 

 

21

 

 

(15)

Scynexis, Inc.

 

Warrant

5/14/2021

Common Stock

 

 

106,035

 

 

 

296

 

 

 

15

 

 

(4)(12)

TG Therapeutics, Inc.

 

Warrant

2/28/2019

Common Stock

 

 

231,613

 

 

 

1,033

 

 

 

1,084

 

 

(4)(10)(12)

Tricida, Inc.

 

Warrant

3/27/2019

Common Stock

 

 

31,352

 

 

 

280

 

 

 

1

 

 

(4)

Valo Health, LLC

 

Warrant

6/15/2020

Common Units

 

 

102,216

 

 

 

256

 

 

 

127

 

 

 

X4 Pharmaceuticals, Inc.

 

Warrant

12/9/2022

Common Stock

 

 

1,392,787

 

 

 

510

 

 

 

281

 

 

(4)

Subtotal: Drug Discovery & Development (0.60%)*

 

 

 

 

 

7,466

 

 

 

8,444

 

 

 

Electronics & Computer Hardware

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

908 Devices, Inc.

 

Warrant

3/15/2017

Common Stock

 

 

49,078

 

 

 

101

 

 

 

86

 

 

(4)

Locus Robotics Corp.

 

Warrant

6/21/2022

Common Stock

 

 

8,511

 

 

 

34

 

 

 

212

 

 

 

Skydio, Inc.

 

Warrant

11/8/2021

Common Stock

 

 

622,255

 

 

 

557

 

 

 

975

 

 

 

Subtotal: Electronics & Computer Hardware (0.09%)*

 

 

 

 

 

692

 

 

 

1,273

 

 

 

Healthcare Services, Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vida Health, Inc.

 

Warrant

3/28/2022

Common Stock

 

 

100,618

 

 

 

114

 

 

 

14

 

 

 

Subtotal: Healthcare Services, Other (0.00%)*

 

 

 

 

 

114

 

 

 

14

 

 

 

Information Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capella Space Corp.

 

Warrant

10/21/2021

Common Stock

 

 

176,200

 

 

 

207

 

 

 

114

 

 

(15)

INMOBI Inc.

 

Warrant

11/19/2014

Common Stock

 

 

65,587

 

 

 

82

 

 

 

 

 

(5)(10)

NetBase Solutions, Inc.

 

Warrant

8/22/2017

Preferred Series 1

 

 

60,000

 

 

 

356

 

 

 

380

 

 

 

Signal Media Limited

 

Warrant

6/29/2022

Common Stock

 

 

94,857

 

 

 

35

 

 

 

15

 

 

(5)(10)

Subtotal: Information Services (0.04%)*

 

 

 

 

 

680

 

 

 

509

 

 

 

Manufacturing Technology

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bright Machines, Inc.

 

Warrant

3/31/2022

Common Stock

 

 

392,308

 

 

 

537

 

 

 

1,154

 

 

 

MacroFab, Inc.

 

Warrant

3/23/2022

Common Stock

 

 

1,111,111

 

 

 

528

 

 

 

1,202

 

 

 

Xometry, Inc.

 

Warrant

5/9/2018

Common Stock

 

 

87,784

 

 

 

47

 

 

 

1,800

 

 

(4)

Subtotal: Manufacturing Technology (0.30%)*

 

 

 

 

 

1,112

 

 

 

4,156

 

 

 

Media/Content/Info

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fever Labs, Inc.

 

Warrant

12/30/2022

Preferred Series E-1

 

 

221,622

 

 

 

35

 

 

 

35

 

 

 

Subtotal: Media/Content/Info (0.00%)*

 

 

 

 

 

35

 

 

 

35

 

 

 

Medical Devices & Equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aspire Bariatrics, Inc.

 

Warrant

1/28/2015

Common Stock

 

 

22,572

 

 

 

455

 

 

 

 

 

 

Flowonix Medical Incorporated

 

Warrant

11/3/2014

Preferred Series AA

 

 

110,946

 

 

 

362

 

 

 

 

 

 

 

Warrant

9/21/2018

Preferred Series BB

 

 

725,806

 

 

 

351

 

 

 

 

 

 

Total Flowonix Medical Incorporated

 

 

 

 

 

 

836,752

 

 

 

713

 

 

 

 

 

 

Intuity Medical, Inc.

 

Warrant

12/29/2017

Preferred Series B-1

 

 

3,076,323

 

 

 

294

 

 

 

54

 

 

 

Lucira Health, Inc.

 

Warrant

2/4/2022

Common Stock

 

 

59,642

 

 

 

110

 

 

 

 

 

(4)

Outset Medical, Inc.

 

Warrant

9/27/2013

Common Stock

 

 

62,794

 

 

 

401

 

 

 

864

 

 

(4)

Tela Bio, Inc.

 

Warrant

3/31/2017

Common Stock

 

 

15,712

 

 

 

61

 

 

 

1

 

 

(4)

Subtotal: Medical Devices & Equipment (0.07%)*

 

 

 

 

 

2,034

 

 

 

919

 

 

 

 

See notes to consolidated financial statements

26


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2022

(dollars in thousands)

 

Portfolio Company

 

Type of
Investment

Acquisition Date (4)

Series (3)

 

Shares

 

 

Cost (2)

 

 

Value

 

 

Footnotes

Semiconductors

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Achronix Semiconductor Corporation

 

Warrant

6/26/2015

Preferred Series D-2

 

 

750,000

 

 

$

99

 

 

$

524

 

 

 

Fungible, Inc.

 

Warrant

12/16/2021

Common Stock

 

 

800,000

 

 

 

751

 

 

 

 

 

(15)

Subtotal: Semiconductors (0.04%)*

 

 

 

 

 

850

 

 

 

524

 

 

 

Software

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aria Systems, Inc.

 

Warrant

5/22/2015

Preferred Series G

 

 

231,535

 

 

 

74

 

 

 

 

 

 

Automation Anywhere, Inc.

 

Warrant

9/23/2022

Common Stock

 

 

254,778

 

 

 

448

 

 

 

365

 

 

 

Bitsight Technologies, Inc.

 

Warrant

11/18/2020

Common Stock

 

 

29,691

 

 

 

284

 

 

 

398

 

 

 

Brain Corporation

 

Warrant

10/4/2021

Common Stock

 

 

194,629

 

 

 

165

 

 

 

61

 

 

(15)

CloudBolt Software, Inc.

 

Warrant

9/30/2020

Common Stock

 

 

211,342

 

 

 

117

 

 

 

1

 

 

 

Cloudian, Inc.

 

Warrant

11/6/2018

Common Stock

 

 

477,454

 

 

 

71

 

 

 

14

 

 

 

Cloudpay, Inc.

 

Warrant

4/10/2018

Preferred Series B

 

 

6,763

 

 

 

54

 

 

 

400

 

 

(5)(10)

Convoy, Inc.

 

Warrant

3/30/2022

Common Stock

 

 

165,456

 

 

 

974

 

 

 

364

 

 

(16)

Couchbase, Inc.

 

Warrant

4/25/2019

Common Stock

 

 

105,350

 

 

 

462

 

 

 

488

 

 

(4)

Cutover, Inc.

 

Warrant

9/21/2022

Common Stock

 

 

102,898

 

 

 

26

 

 

 

19

 

 

(5)(10)(12)

Dashlane, Inc.

 

Warrant

3/11/2019

Common Stock

 

 

453,641

 

 

 

353

 

 

 

168

 

 

 

Delphix Corp.

 

Warrant

10/8/2019

Common Stock

 

 

718,898

 

 

 

1,594

 

 

 

2,657

 

 

 

Demandbase, Inc.

 

Warrant

8/2/2021

Common Stock

 

 

727,047

 

 

 

545

 

 

 

180

 

 

 

DNAnexus, Inc.

 

Warrant

3/21/2014

Preferred Series C

 

 

909,091

 

 

 

97

 

 

 

131

 

 

 

DroneDeploy, Inc.

 

Warrant

6/30/2022

Common Stock

 

 

95,911

 

 

 

278

 

 

 

300

 

 

 

Eigen Technologies Ltd.

 

Warrant

4/13/2022

Common Stock

 

 

522

 

 

 

8

 

 

 

6

 

 

(5)(10)

Elation Health, Inc.

 

Warrant

9/12/2022

Common Stock

 

 

362,837

 

 

 

583

 

 

 

382

 

 

 

Esme Learning Solutions, Inc.

 

Warrant

1/27/2022

Common Stock

 

 

56,765

 

 

 

198

 

 

 

 

 

 

Evernote Corporation

 

Warrant

9/30/2016

Common Stock

 

 

62,500

 

 

 

107

 

 

 

6

 

 

 

First Insight, Inc.

 

Warrant

5/10/2018

Preferred Series B

 

 

75,917

 

 

 

96

 

 

 

39

 

 

 

Fulfil Solutions, Inc.

 

Warrant

7/29/2022

Common Stock

 

 

84,995

 

 

 

325

 

 

 

314

 

 

 

Lightbend, Inc.

 

Warrant

2/14/2018

Preferred Series D

 

 

89,685

 

 

 

131

 

 

 

1

 

 

 

Mixpanel, Inc.

 

Warrant

9/30/2020

Common Stock

 

 

82,362

 

 

 

252

 

 

 

225

 

 

 

Nuvolo Technologies Corporation

 

Warrant

3/29/2019

Common Stock

 

 

70,000

 

 

 

172

 

 

 

175

 

 

(12)

Poplicus, Inc.

 

Warrant

5/28/2014

Common Stock

 

 

132,168

 

 

 

 

 

 

 

 

 

Reltio, Inc.

 

Warrant

6/30/2020

Common Stock

 

 

69,120

 

 

 

215

 

 

 

298

 

 

 

SignPost, Inc.

 

Warrant

1/13/2016

Series Junior 1 Preferred

 

 

474,019

 

 

 

314

 

 

 

 

 

 

SingleStore, Inc.

 

Warrant

4/28/2020

Preferred Series D

 

 

312,596

 

 

 

103

 

 

 

426

 

 

 

Tact.ai Technologies, Inc.

 

Warrant

2/13/2020

Common Stock

 

 

1,041,667

 

 

 

206

 

 

 

69

 

 

 

The Faction Group LLC

 

Warrant

11/3/2014

Preferred Series AA

 

 

8,076

 

 

 

234

 

 

 

436

 

 

 

VideoAmp, Inc.

 

Warrant

1/21/2022

Common Stock

 

 

152,048

 

 

 

1,275

 

 

 

321

 

 

(15)

Subtotal: Software (0.59%)*

 

 

 

 

 

9,761

 

 

 

8,244

 

 

 

Surgical Devices

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gynesonics, Inc.

 

Warrant

1/16/2013

Preferred Series C

 

 

16,835

 

 

 

7

 

 

 

 

 

 

TransMedics Group, Inc.

 

Warrant

9/11/2015

Common Stock

 

 

14,440

 

 

 

39

 

 

 

492

 

 

(4)

Subtotal: Surgical Devices (0.04%)*

 

 

 

 

 

46

 

 

 

492

 

 

 

Sustainable and Renewable Technology

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ampion, PBC

 

Warrant

4/15/2022

Common Stock

 

 

18,472

 

 

 

52

 

 

 

44

 

 

 

Fulcrum Bioenergy, Inc.

 

Warrant

4/30/2013

Preferred Series C-1

 

 

93,632

 

 

 

64

 

 

 

275

 

 

 

Halio, Inc.

 

Warrant

4/22/2014

Preferred Series A

 

 

325,000

 

 

 

155

 

 

 

126

 

 

 

 

Warrant

4/7/2015

Preferred Series B

 

 

131,883

 

 

 

63

 

 

 

43

 

 

 

Total Halio, Inc.

 

 

 

 

 

 

456,883

 

 

 

218

 

 

 

169

 

 

 

IngredientWerks Holdings, Inc. (p.k.a Agrivida, Inc.)

 

Warrant

6/20/2013

Preferred Series D

 

 

471,327

 

 

 

120

 

 

 

 

 

 

Polyera Corporation

 

Warrant

3/24/2015

Preferred Series C

 

 

150,036

 

 

 

269

 

 

 

 

 

 

Subtotal: Sustainable and Renewable Technology (0.03%)*

 

 

 

 

 

723

 

 

 

488

 

 

 

Total: Warrant Investments (2.19%)*

 

 

 

 

$

30,964

 

 

$

30,646

 

 

 

Total Investments in Securities (211.21%)*

 

 

 

 

$

3,002,197

 

 

$

2,960,062

 

 

 

Investment Funds & Vehicles Investments

 

 

 

 

 

 

 

 

 

 

 

Drug Discovery & Development

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forbion Growth Opportunities Fund I C.V.

 

Investment Funds & Vehicles

11/16/2020

 

 

 

 

 

 

2,699

 

 

 

3,080

 

 

(5)(10)(17)

Forbion Growth Opportunities Fund II C.V.

 

Investment Funds & Vehicles

6/23/2022

 

 

 

 

 

 

419

 

 

 

438

 

 

(5)(10)(17)

Subtotal: Drug Discovery & Development (0.25%)*

 

 

 

 

 

3,118

 

 

 

3,518

 

 

 

Software

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liberty Zim Co-Invest L.P.

 

Investment Funds & Vehicles

7/21/2022

 

 

 

 

 

 

381

 

 

 

375

 

 

(5)(10)

Subtotal: Software (0.03%)*

 

 

 

 

 

381

 

 

 

375

 

 

 

Total: Investment Funds & Vehicles Investments (0.28%)*

 

 

 

 

$

3,499

 

 

$

3,893

 

 

 

Total Investments (211.49%)*

 

 

 

 

$

3,005,696

 

 

$

2,963,955

 

 

 

 

See notes to consolidated financial statements

27


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2022

(dollars in thousands)

 

* Value as a percent of net assets. All amounts are stated in U.S. Dollars unless otherwise noted. The Company uses the Standard Industrial Code for classifying the industry grouping of its portfolio companies.

(1)
Interest rate PRIME represents 7.50% as of December 31, 2022. 1-month LIBOR, 3-month LIBOR, and 6-month LIBOR represent 4.40%, 4.77%, and 5.14%,
respectively, as of December 31, 2022.
(2)
Gross unrealized appreciation, gross unrealized depreciation, and net unrealized depreciation for federal income tax purposes totaled $72.2 million, $112.0
million, and $
39.8 million, respectively. The tax cost of investments is $3.0 billion.
(3)
Preferred and common stock, warrants, and equity interests are generally non-income producing.
(4)
Except for warrants in 27 publicly traded companies and common stock in 43 publicly traded companies, all investments are restricted as of December 31, 2022
and were valued at fair value using Level 3 significant unobservable inputs as determined in good faith by the Company’s valuation committee (the “Valuation
Committee”) and approved by the board of directors (the “Board”).
(5)
Non-U.S. company or the company’s principal place of business is outside the United States.
(6)
[Reserved]
(7)
Control investment as defined under the 1940 Act in which Hercules owns at least 25% of the company’s voting securities or has greater than 50%
representation on its board.
(8)
Debt is on non-accrual status as of December 31, 2022, and is therefore considered non-income producing. Note that as of December 31, 2022, only the PIK, or
payment-in-kind, portion is on non-accrual for the Company’s debt investment in Tectura Corporation.
(9)
Denotes that all or a portion of the debt investment is convertible debt.
(10)
Indicates assets that the Company deems not “qualifying assets” under section 55(a) of 1940 Act. Qualifying assets must represent at least 70% of the
Company’s total assets at the time of acquisition of any additional non-qualifying assets.
(11)
Denotes that all or a portion of the debt investment is pledged as collateral under the SMBC Facility (as defined in “Note 5 — Debt”).
(12)
Denotes that all or a portion of the investment is pledged as collateral under the MUFG Bank Facility (as defined in “Note 5 — Debt”).
(13)
Denotes that all or a portion of the debt investment secures the 2031 Asset-Backed Notes (as defined in “Note 5 — Debt”).
(14)
Denotes that all or a portion of the debt investment principal includes accumulated PIK interest and is net of repayments.
(15)
Denotes that all or a portion of the investment in this portfolio company is held by Hercules Capital IV, L.P., the Company’s wholly owned small business
investment company.
(16)
Denotes that the fair value of the Company’s total investments in this portfolio company represent greater than 5% of the Company’s total net assets as of
December 31, 2022.
(17)
Denotes that there is an unfunded contractual commitment available at the request of this portfolio company as of December 31, 2022 (Refer to “Note 11 —
Commitments and Contingencies”).
(18)
Denotes unitranche debt with first lien “last-out” senior secured position and security interest in all assets of the portfolio company whereby the “last-out”
portion will be subordinated to the “first-out” portion in a liquidation, sale or other disposition.
(19)
Denotes second lien senior secured debt.
(20)
Denotes all or a portion of the public equity or warrant investment was acquired in a transaction exempt from registration under the Securities Act of 1933
(“Securities Act”) and may be deemed to be “restricted securities” under the Securities Act.
(21)
Denotes investment in a non-voting security in the form of a promissory note. The terms of the notes provide the Company with a lien on the issuers' shares of
Common Stock for Black Crow AI, Inc., subject to release upon repayment of the outstanding balance of the notes. As of December 31, 2022, the Black Crow
AI, Inc. affiliates promissory notes had an outstanding balance of $
3.0 million.
(22)
Denotes the security holds rights to royalty fee income associated with certain products of the portfolio company. The approximate cost and fair value of the
royalty contract are $
4.6 million and $3.4 million, respectively.

See notes to consolidated financial statements

28


HERCULES CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

 

1. Description of Business

Hercules Capital, Inc. (the “Company”) is a specialty finance company focused on providing senior secured loans to high-growth, innovative venture capital-backed and institutional-backed companies in a variety of technology, life sciences, and sustainable and renewable technology industries. The Company sources its investments through its principal office located in Palo Alto, CA, as well as through its additional offices in Boston, MA, New York, NY, Bethesda, MD, San Diego, CA, and London, United Kingdom. The Company was incorporated under the General Corporation Law of the State of Maryland in December 2003.

The Company is an internally managed, non-diversified closed-end investment company that has elected to be regulated as a Business Development Company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). From incorporation through December 31, 2005, the Company was subject to tax as a corporation under Subchapter C of the Internal Revenue Code of 1986, as amended (the “Code”). Effective January 1, 2006, the Company elected to be treated for tax purposes as a Regulated Investment Company (“RIC”) under Subchapter M of the Code (see “Note 6 - Income Taxes”).

The Company does not currently use Commodity Futures Trading Commission (“CFTC”) derivatives. However, to the extent that it uses CFTC derivatives in the future, it intends to do so below prescribed levels and will not market itself as a “commodity pool” or a vehicle for trading such instruments. The Company has claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act (“CEA”), pursuant to Rule 4.5 under the CEA. The Company is not, therefore, subject to registration or regulation as a “commodity pool operator” under the CEA.

Hercules Capital IV, L.P. (“HC IV”) is our wholly owned Delaware limited partnership that was formed in December 2010. HC IV received a license to operate as a Small Business Investment Company (“SBIC”) under the authority of the Small Business Administration (“SBA”) on October 27, 2020. SBICs are subject to a variety of regulations concerning, among other things, the size and nature of the companies in which they may invest and the structure of those investments. Hercules Technology SBIC Management, LLC (“HTM”), is a wholly owned limited liability company subsidiary of the Company, which was formed in November 2003 and serves as the general partner of HC IV.

The Company has also established certain wholly owned subsidiaries, all of which are structured as Delaware corporations or Limited Liability Companies (“LLCs”), to hold portfolio companies organized as LLCs (or other forms of pass-through entities). These subsidiaries are consolidated for financial reporting purposes and in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). Certain of the subsidiaries are taxable and not consolidated with Hercules for income tax purposes and may generate income tax expense, or benefit, and tax assets and liabilities as a result of their ownership of certain portfolio investments.

The Company formed Hercules Adviser LLC (the “Adviser Subsidiary”) in 2020 as a wholly owned Delaware limited liability subsidiary to provide investment advisory and related services to investment vehicles (“Adviser Funds”) owned by one or more unrelated third-party investors (“External Parties”). The Adviser Subsidiary receives fee income for the services provided to the Adviser Funds. The Company was granted no-action relief by the staff of the Securities and Exchange Commission (“SEC”) to allow the Adviser Subsidiary to register as a registered investment adviser under the Investment Advisers Act of 1940, as amended (“Advisers Act”).

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated interim financial statements have been prepared in conformity with U.S. GAAP for interim financial information, and pursuant to the requirements for reporting on Form 10-Q and Articles 6, 10 and 12 of Regulation S-X. Accordingly, certain disclosures accompanying annual consolidated financial statements prepared in accordance with U.S. GAAP are omitted. In the opinion of management, all adjustments consisting solely of normal recurring accruals considered necessary for the fair statement of consolidated financial statements for the interim periods have been included. The current period’s results of operations are not necessarily indicative of results that ultimately may be achieved for the full fiscal year. Therefore, the interim unaudited consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2022. The year-end Consolidated Statements of Assets and Liabilities data was derived from audited financial statements but does not include all disclosures required by U.S. GAAP. The Company’s functional currency is U.S. dollars (“USD”) and these consolidated financial statements have been prepared in that currency.

As an investment company, the Company follows accounting and reporting guidance as set forth in Topic 946, Financial Services – Investment Companies (“ASC Topic 946”) of the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification, as amended (“ASC”). As provided under Regulation S-X and ASC Topic 946, the Company will not consolidate its investment in a portfolio company other than an investment company subsidiary or a controlled operating company whose business consists of providing services to the Company. Rather, an investment company’s interest in portfolio companies that

29


are not investment companies should be measured at fair value in accordance with ASC Topic 946. The Adviser Subsidiary is not an investment company as defined in ASC Topic 946 and further, the Adviser Subsidiary provides investment advisory services exclusively to the Adviser Funds which are owned by External Parties. As such pursuant to ASC Topic 946, the Adviser Subsidiary is accounted for as a portfolio investment of the Company held at fair value and is not consolidated.

Financial statements prepared on a U.S. GAAP basis require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of income, expenses, gains and losses during the reported periods. Changes in the economic and regulatory environment, financial markets, the credit worthiness of our portfolio companies, other macro-economic developments (for example, global pandemics, natural disasters, terrorism, international conflicts and war), and any other parameters used in determining these estimates and assumptions could cause actual results to differ from these estimates and assumptions.

Principles of Consolidation

The Consolidated Financial Statements include the accounts of the Company, its consolidated subsidiaries, and all Variable Interest Entities (“VIE”) of which the Company is the primary beneficiary. All intercompany accounts and transactions have been eliminated in consolidation.

A VIE is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (ii) has equity investors who lack the characteristics of a controlling financial interest. The primary beneficiary of a VIE is the party with both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and the obligation to absorb the losses or the right to receive benefits that could be significant to the VIE.

To assess whether the Company has the power to direct the activities of a VIE that most significantly impact its economic performance, the Company considers all the facts and circumstances including its role in establishing the VIE and its ongoing rights and responsibilities. This assessment includes identifying the activities that most significantly impact the VIE’s economic performance and identifying which party, if any, has power over those activities. In general, the party that makes the most significant decisions affecting the VIE is determined to have the power to direct the activities of a VIE. To assess whether the Company has the obligation to absorb the losses or the right to receive benefits that could potentially be significant to the VIE, the Company considers all of its economic interests, including debt and equity interests, servicing rights and fee arrangements, and any other variable interests in the VIE. If the Company determines that it is the party with the power to make the most significant decisions affecting the VIE, and the Company has a potentially significant interest in the VIE, then it consolidates the VIE.

The Company performs periodic reassessments, usually quarterly, of whether it is the primary beneficiary of a VIE. The reassessment process considers whether the Company has acquired or divested the power to direct the activities of the VIE through changes in governing documents or other circumstances. The Company also reconsiders whether entities previously determined not to be VIEs have become VIEs, based on certain events, and therefore are subject to the VIE consolidation framework.

The Company's Consolidated Financial Statements included the accounts of the securitization trust, a VIE, formed in conjunction with the issuance of the 2031 Asset-Backed Notes (as defined in “Note 5 – Debt”). The assets of the Company's securitization VIE are restricted to be used to settle obligations of its consolidated securitization VIE, which are disclosed parenthetically on the Consolidated Statements of Assets and Liabilities. The liabilities are the only obligations of its consolidated securitization VIE, and the creditors (or beneficial interest holders) do not have recourse to the Company's general credit.

Fair Value Measurements

The Company follows guidance in ASC Topic 820, Fair Value Measurement (“ASC Topic 820”), where fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 establishes a framework for measuring the fair value of assets and liabilities and outlines a three-tier hierarchy which maximizes the use of observable market data input and minimizes the use of unobservable inputs to establish a classification of fair value measurements. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, such as the risk inherent in a particular valuation technique used to measure fair value using a pricing model and/or the risk inherent in the inputs for the valuation technique. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability based on the information available. The inputs or methodology used for valuing assets or liabilities may not be an indication of the risks associated with investing in those assets or liabilities. ASC Topic 820 also requires disclosure for fair value measurements based on the level within the hierarchy of the information used in the valuation. ASC Topic 820 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value.

30


The Company categorizes all investments recorded at fair value in accordance with ASC Topic 820 based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels, defined by ASC Topic 820 and directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, are as follows:

Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets at the measurement date. The types of assets carried at Level 1 fair value generally are equities listed in active markets.

Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset in connection with market data at the measurement date and for the extent of the instrument’s anticipated life. Fair valued assets that are generally included in this category are publicly held debt investments and warrants held in a public company.

Level 3—Inputs reflect management’s best estimate of what market participants would use in pricing the asset at the measurement date. It includes prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. Generally, assets carried at fair value and included in this category are the debt investments and warrants and equities held in a private company.

Valuation of Investments

The most significant estimate inherent in the preparation of the Company’s consolidated financial statements is the valuation of investments and the related amounts of unrealized appreciation and depreciation of investments recorded.

As of March 31, 2023, approximately 96.3% of the Company’s total assets represented investments in portfolio companies whose fair value is determined in good faith by the Company's Valuation Committee and approved by the Board. Fair Value, as defined in Section 2(a)(41) of the 1940 Act, is (i) the market price for those securities for which a market quotation is readily available and (ii) for all other securities and assets, fair value is as determined in good faith by the valuation designee of the Board. The Company’s investments are carried at fair value in accordance with the 1940 Act and ASC Topic 946 and measured in accordance with ASC Topic 820. The Company’s debt securities are primarily invested in venture capital-backed and institutional-backed companies in technology-related industries including technology, drug discovery and development, biotechnology, life sciences, healthcare, and sustainable and renewable technology at all stages of development. Given the nature of lending to these types of businesses, substantially all of the Company’s investments in these portfolio companies are considered Level 3 assets under ASC Topic 820 because there generally is no known or accessible market or market indexes for these investment securities to be traded or exchanged. As such, the Company values substantially all of its investments at fair value as determined in good faith pursuant to a consistent valuation policy established by the Board in accordance with the provisions of ASC Topic 820 and the 1940 Act. Due to the inherent uncertainty in determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments determined in good faith by the Company's Valuation Committee and approved by the Board may differ significantly from the value that would have been used had a readily available market existed for such investments, and the differences could be material.

In accordance with procedures established by its Board, the Company values investments on a quarterly basis following a multistep valuation process. Pursuant to the amended SEC Rule 2a-5 of the 1940 Act, the Board has designated the Company’s Valuation Committee as the “valuation designee”. The quarterly Board approved multi-step valuation process is described below:

(1)
The Company’s quarterly valuation process begins with each portfolio company being initially valued by the investment professionals responsible for the portfolio investment;
(2)
Preliminary valuation conclusions and business-based assumptions, along with any applicable fair value marks provided by an independent firm, are reviewed with the Company’s investment committee and certain member(s) of credit group as necessary;
(3)
The Valuation Committee reviews the preliminary valuations recommended by the investment committee and certain member(s) of the credit group of each investment in the portfolio and determines the fair value of each investment in the Company’s portfolio in good faith and recommends the valuation determinations to the Audit Committee of the Board;
(4)
The Audit Committee of the Board provides oversight of the quarterly valuation process in accordance with Rule 2a-5, which includes a review of the quarterly reports prepared by the Valuation Committee, reviews the fair valuation determinations made by the Valuation Committee, and approves such valuations for inclusion in public reporting and disclosures, as appropriate; and
(5)
The Board, upon the recommendation of the Audit Committee, discusses valuations and approves the fair value of each investment in the Company’s portfolio.

Investments purchased within the preceding two calendar quarters before the valuation date and debt investments with remaining maturities within 12 months or less may each be valued at cost with interest accrued or discount accreted/premium amortized to the date of maturity, unless such valuation, in the judgment of the Company, does not represent fair value. In this case such investments shall be valued at fair value as determined in good faith by the Valuation Committee and approved by the Board. Investments that are not publicly traded or whose market quotations are not readily available are valued at fair value as determined in good faith by the Valuation Committee and approved by the Board.

31


As part of the overall process noted above, the Company engages one or more independent valuation firm(s) to provide management with assistance in determining the fair value of selected portfolio investments each quarter. In selecting which portfolio investments to engage an independent valuation firm, the Company considers a number of factors, including, but not limited to, the potential for material fluctuations in valuation results, size, credit quality, and the time lapse since the last valuation of the portfolio investment by an independent valuation firm. The scope of services rendered by the independent valuation firm is at the discretion of the Valuation Committee and subject to approval of the Board, and the Company may engage an independent valuation firm to value all or some of our portfolio investments. In determining the fair value of a portfolio investment in good faith, the Company recognizes these determinations are made using the best available information that is knowable or reasonably knowable. In addition, changes in the market environment, portfolio company performance and other events that may occur over the duration of the investments may cause the gains or losses ultimately realized on these investments to be materially different than the valuations currently assigned. The change in fair value of each individual investment is recorded as an adjustment to the investment's fair value and the change is reflected in unrealized appreciation or depreciation.

Debt Investments

The Company’s debt securities are primarily invested in venture capital-backed and institutional-backed companies in technology-related industries including technology, drug discovery and development, biotechnology, life sciences, healthcare, and sustainable and renewable technology at all stages of development. Given the nature of lending to these types of businesses, substantially all of the Company’s investments in these portfolio companies are considered Level 3 assets under ASC Topic 820 because there generally is no known or accessible market or market indexes for debt instruments for these investment securities to be traded or exchanged. The Company may, from time to time, invest in public debt of companies that meet the Company’s investment objectives, and to the extent market quotations or other pricing indicators (i.e. broker quotes) are available, these investments are considered Level 1 or 2 assets in line with ASC Topic 820.

In making a good faith determination of the value of the Company’s investments, the Company generally starts with the cost basis of the investment, which includes the value attributed to the original issue discount (“OID”), if any, and payment-in-kind (“PIK”) interest or other receivables which have been accrued as earned. The Company then applies the valuation methods as set forth below.

The Company assumes the sale of each debt security in a hypothetical market to a hypothetical market participant where buyers and sellers are willing participants. The hypothetical market does not include scenarios where the underlying security was simply repaid or extinguished, but includes an exit concept. The Company determines the yield at inception for each debt investment. The Company then uses senior secured, leveraged loan yields provided by third party providers to calibrate the change in market yields between inception of the debt investment and the measurement date. Industry specific indices and other relevant market data are used to benchmark and assess market-based movements for reasonableness. As part of determining the fair value, the Company also evaluates the collateral for recoverability of the debt investments. The Company considers each portfolio company’s credit rating, security liens and other characteristics of the investment to adjust the baseline yield to derive a credit adjusted hypothetical yield for each investment as of the measurement date. The anticipated future cash flows from each investment are then discounted at the hypothetical yield to estimate each investment’s fair value as of the measurement date. The Company’s process includes an analysis of, among other things, the underlying investment performance, the current portfolio company’s financial condition and market changing events that impact valuation, estimated remaining life, current market yield and interest rate spreads of similar securities as of the measurement date.

The Company values debt securities that are traded on a public exchange at the prevailing market price as of the valuation date. For syndicated debt investments, for which sufficient market data is available and liquidity, the Company values debt securities using broker quotes and bond indices amongst other factors. If there is a significant deterioration of the credit quality of a debt investment, the Company may consider other factors to estimate fair value, including the proceeds that would be received in a liquidation analysis.

The Company records unrealized depreciation on investments when it believes that an investment has decreased in value, including where collection of a debt investment is doubtful or, if under the in-exchange premise, when the value of a debt investment is less than amortized cost of the investment. Conversely, where appropriate, the Company records unrealized appreciation if it believes that the underlying portfolio company has appreciated in value and, therefore, that its investment has also appreciated in value or, if under the in-exchange premise, the value of a debt investment is greater than amortized cost.

When originating a debt instrument, the Company generally receives warrants or other equity securities from the borrower. The Company determines the cost basis of the warrants or other equity securities received based upon their respective fair values on the date of receipt in proportion to the total fair value of the debt and warrants or other equity securities received. Any resulting discount on the debt investments from recordation of the warrant or other equity instruments is accreted into interest income over the life of the debt investment.

Equity Securities and Warrants

Securities that are traded in the over-the-counter markets or on a stock exchange will be valued at the prevailing bid price at period end. The Company has a limited amount of equity securities in public companies. In accordance with the 1940 Act, unrestricted

32


publicly traded securities for which market quotations are readily available are valued at the closing market quote on the measurement date.

At each reporting date, privately held warrant and equity securities are valued based on an analysis of various factors including, but not limited to, the portfolio company’s operating performance and financial condition, general market conditions, price to enterprise value or price to equity ratios, discounted cash flow, valuation comparisons to comparable public companies or other industry benchmarks. When an external event occurs, such as a purchase transaction, public offering, or subsequent equity sale, the pricing indicated by that external event is utilized to corroborate the Company’s valuation of the warrant and equity securities. The Company periodically reviews the valuation of its portfolio companies that have not been involved in a qualifying external event to determine if the enterprise value of the portfolio company may have increased or decreased since the last valuation measurement date. Absent a qualifying external event, the Company estimates the fair value of warrants using a Black Scholes OPM. For certain privately held equity securities, the income approach is used, in which the Company converts future amounts (for example, cash flows or earnings) to a net present value. The measurement is based on the value indicated by current market expectations about those future amounts. In following these approaches, the types of factors that the Company may take into account include, as relevant: applicable market yields and multiples, the portfolio company’s capital structure, the nature and realizable value of any collateral, the portfolio company’s ability to make payments, its earnings and discounted cash flows, and enterprise value among other factors.

Investment Funds & Vehicles

The Company applies the practical expedient provided by the ASC Topic 820 relating to investments in certain entities that calculate net asset value (“NAV”) per share (or its equivalent). ASC Topic 820 permits an entity holding investments in certain entities that either are investment companies, or have attributes similar to an investment company, and calculate NAV per share or its equivalent for which the fair value is not readily determinable, to measure the fair value of such investments on the basis of that NAV per share, or its equivalent, without adjustment. Investments which are valued using NAV per share as a practical expedient are not categorized within the fair value hierarchy as per ASC Topic 820.

Cash, Cash Equivalents, and Restricted Cash

Cash and cash equivalents consist solely of funds deposited with financial institutions and short-term liquid investments in money market deposit accounts. Cash and cash equivalents are carried at cost, which approximates fair value. As of March 31, 2023, the Company held $1,728 thousand (Cost basis $1,703 thousand) of foreign cash. As of December 31, 2022, the Company held $1,178 thousand (Cost basis $1,168 thousand) of foreign cash. Restricted cash includes amounts that are held as collateral securing certain of the Company’s financing transactions, including amounts held in a securitization trust by trustees related to its 2031 Asset-Backed Notes (refer to “Note 5 – Debt”).

Other Assets

Other assets generally consist of prepaid expenses, debt issuance costs on our Credit Facilities net of accumulated amortization, fixed assets net of accumulated depreciation, deferred revenues and deposits and other assets, including escrow receivables.

Escrow Receivables

Escrow receivables are collected in accordance with the terms and conditions of the escrow agreement. Escrow balances are typically distributed over a period greater than one year and may accrue interest during the escrow period. Escrow balances are measured for collectability on at least a quarterly basis and fair value is determined based on the amount of the estimated recoverable balances and the contractual maturity date.

Leases

The Company determines if an arrangement is a lease at inception. Operating leases are included in right-of-use (“ROU”) assets, and operating lease liability obligations in our Consolidated Statements of Assets and Liabilities. The Company recognizes a ROU asset and an operating lease liability for all leases, with the exception of short-term leases which have a term of 12 months or less. ROU assets represent the right to use an underlying asset for the lease term and operating lease liability obligations represent the obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at lease commencement date based on the present value of lease payments over the lease term. The Company has lease agreements with lease and non-lease components and has separated these components when determining the ROU assets and the related lease liabilities. As most of the Company’s leases do not provide an implicit rate, the Company estimated its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The ROU asset also includes any lease payments made and excludes lease incentives and lease direct costs. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. See “Note 11 – Commitments and Contingencies”.

33


Investment Income Recognition

The Company’s investment portfolio generates interest, fee, and dividend income. The Company records interest income on an accrual basis, recognizing income as earned in accordance with the contractual terms of the loan agreement, to the extent that such amounts are expected to be collected. The Company’s Structured Debt investments may generate OID. The OID received upfront typically represents the value of detachable equity, warrants, or another asset obtained in conjunction with the acquisition of debt securities. The OID is accreted into interest income over the term of the loan as a yield enhancement following the effective interest method. Additionally, certain debt investments in the Company’s portfolio earn PIK interest. The Company records PIK interest in accordance with the contractual terms of the loan agreement, to the extent that such amounts are expected to be collected. Contractual PIK interest represents contractually deferred interest that is added to the loan balance as principal and is generally due at the end of the loan term.

The Company’s loan origination activities generate fee income, which is generally collected in advance and includes loan commitment, facility fees for due diligence and structuring, as well as fees for transaction services and management services rendered by the Company to portfolio companies and other third parties. Loan commitment and facility fees are capitalized and then amortized into income over the contractual life of the loan using the effective interest method. One-off fees for transaction and management services are generally recognized as income in the period when the services are rendered. The Company may also earn loan exit fees, which are contractual fees that are generally received upon the earlier of maturity or prepayment. The Company accretes loan exit fees into interest income following the effective interest method, recognizing income as earned in accordance with the contractual terms of the loan agreement, to the extent that such amounts are expected to be collected.

From time to time, additional fees may be earned by the Company relating to specific loan modifications, prepayments, or other one-off events. These non-recurring fees are either amortized into fee income over the remaining term of the loan commencing in the quarter for loan modifications, or recognized currently as one-time fee income for items such as prepayment penalties, fees related to select covenant default waiver fees, and acceleration of previously deferred loan fees and OID related to early loan pay-off or material modification of the specific debt outstanding.

Debt investments are placed on non-accrual status when it is probable that principal, interest or fees will not be collected according to contractual terms. When a debt investment is placed on non-accrual status, the Company ceases to recognize interest and fee income until the portfolio company has paid all principal and interest due or demonstrated the ability to repay its current and future contractual obligations to the Company. The Company may determine to continue to accrue interest on a loan where the investment has sufficient collateral value to collect all of the contractual amount due and is in the process of collection. Interest collected on non-accrual investments are generally applied to principal.

Realized Gains or Losses

Realized gains or losses are measured by the difference between the net proceeds from the sale or other realization event and the cost basis of the investment using the specific identification method without regard to unrealized appreciation or depreciation previously recognized, and includes investments charged off during the period, net of recoveries.

Secured Borrowings

The Company follows the guidance in ASC Topic 860, Transfers and Servicing (“ASC Topic 860”), when accounting for participation and other partial loan sales. Certain loan sales do not qualify for sale accounting under ASC Topic 860 because these sales do not meet the definition of a “participating interest”, as defined in the guidance, in order for sale accounting treatment to be allowed. Participations or other partial loan sales which do not meet the definition of a participating interest, or which are not eligible for sale accounting treatment remain as an investment on the consolidated balance sheet as required under U.S. GAAP and the proceeds are recorded as a secured borrowing. Secured borrowings are carried at fair value.

Equity Offering Expenses

The Company’s offering expenses are charged against the proceeds from equity offerings when received as a reduction of capital upon completion of an offering of registered securities.

Debt

The debt of the Company is carried at amortized cost which is comprised of the principal amount borrowed net of any unamortized discount and debt issuance costs. Discounts and issuance costs are accreted to interest expense and loan fees, respectively, using the straight-line method, which closely approximates the effective yield method, over the remaining life of the underlying debt obligations (see “Note 5 – Debt”). Accrued but unpaid interest is included within Accounts payable and accrued liabilities on the Consolidated Statements of Assets and Liabilities. In the event that the debt is extinguished, either partially or in full, before maturity, the Company recognizes the gain or loss in the Consolidated Statements of Operations within net realized gains (losses) as a “Loss on extinguishment of debt”.

34


Debt Issuance Costs

Debt issuance costs are fees and other direct incremental costs incurred by the Company in obtaining debt financing and are recognized as prepaid expenses and amortized over the life of the related debt instrument using the effective yield method or the straight-line method, which closely approximates the effective yield method. In accordance with ASC Subtopic 835-30, Interest – Imputation of Interest, debt issuance costs are presented as a reduction to the associated liability balance on the Consolidated Statements of Assets and Liabilities, except for debt issuance costs associated with line-of-credit arrangements.

Stock-Based Compensation

The Company has issued and may, from time to time, issue stock options, restricted stock, and other stock based compensation awards to employees and directors. Management follows the guidance set forth under ASC Topic 718, to account for stock-based compensation awards granted. Under ASC Topic 718, compensation expense associated with stock-based compensation is measured at the grant date based on the fair value of the award and is recognized over the vesting period. Determining the appropriate fair value model and calculating the fair value of stock-based awards at the grant date requires judgment. This includes certain assumptions such as stock price volatility, forfeiture rate, expected outcome probability, and expected option life, as applicable to each award. In accordance with ASC Topic 480, certain stock awards are classified as a liability. The compensation expense associated with these awards is recognized in the same manner as all other stock-based compensation. The award liability is recorded as deferred compensation and included in Accounts payable and accrued liabilities.

Income Taxes

The Company accounts for income taxes in accordance with the provisions of ASC Topic 740 Income Taxes, under which income taxes are provided for amounts currently payable and for amounts deferred based upon the estimated future tax effects of differences between the financial statements and tax basis of assets and liabilities given the provisions of the enacted tax law. Valuation allowances may be used to reduce deferred tax assets to the amount likely to be realized. The Company intends to timely distribute to its stockholders substantially all of its annual taxable income for each year, except that it may retain certain net capital gains for reinvestment and, depending upon the level of taxable income earned in a year, it may choose to carry forward taxable income for distribution in the following year and pay any applicable U.S. federal excise tax.

The Company has elected to be treated as a RIC under Subchapter M of the Code. As such, the Company generally will not be subject to U.S. federal income tax on the portion of taxable income (including gains) distributed as dividends for U.S. federal income tax purposes to stockholders. Taxable income includes the Company’s taxable interest, dividend and fee income, reduced by certain deductions, as well as taxable net realized securities gains.

Because taxable income as determined in accordance with U.S. federal tax regulations differ from U.S. GAAP, taxable income generally differs from net income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses, and generally excludes net unrealized appreciation or depreciation, as such gains or losses are not included in taxable income until they are realized. Permanent differences are reclassified among capital accounts in the financial statements to reflect their appropriate tax character. Permanent differences may also result from the change in the classification of certain items, such as the treatment of short-term gains as ordinary income for tax purposes. Temporary differences arise when certain items of income, expense, gains or losses are recognized at some time in the future for tax or U.S. GAAP purposes.

As a RIC, the Company will be subject to a 4% non-deductible U.S. federal excise tax on certain undistributed income unless the Company makes distributions treated as dividends for U.S. federal income tax purposes in a timely manner to its stockholders in respect of each calendar year of an amount at least equal to the Excise Tax Avoidance Requirement. The Company will not be subject to this excise tax on any amount on which the Company incurred U.S. federal income tax (such as the tax imposed on a RIC’s retained net capital gains).

Depending on the level of taxable income earned in a taxable year, the Company may choose to carry over taxable income in excess of current taxable year distributions treated as dividends for U.S. federal income tax purposes from such taxable income into the next taxable year and incur a 4% excise tax on such taxable income, as required. The maximum amount of excess taxable income that may be carried over for distribution in the next taxable year under the Code is the total amount of distributions treated as dividends for U.S. federal income tax purposes paid in the following taxable year, subject to certain declaration and payment guidelines. To the extent the Company chooses to carry over taxable income into the next taxable year, distributions declared and paid by the Company in a taxable year may differ from the Company’s taxable income for that taxable year as such distributions may include the distribution of current taxable year taxable income, the distribution of prior taxable year taxable income carried over into and distributed in the current taxable year, or return of capital.

35


Earnings Per Share (“EPS”)

Basic EPS is calculated by dividing net earnings applicable to common stockholders by the weighted average number of common shares outstanding. Common shares outstanding includes common stock and restricted stock for which no future service is required as a condition to the delivery of the underlying common stock. Diluted EPS includes the determinants of basic EPS and, in addition, reflects the dilutive effect of the common stock deliverable pursuant to stock options and to restricted stock for which future service is required as a condition to the delivery of the underlying common stock. In accordance with ASC 260-10-45-60A, the Company uses the two-class method in the computation of basic EPS and diluted EPS, if applicable.

Comprehensive Income

The Company reports all changes in comprehensive income in the Consolidated Statements of Operations. The Company did not have other comprehensive income for the three months ended March 31, 2023 or 2022. The Company’s comprehensive income is equal to its net increase in net assets resulting from operations.

Distributions

Distributions to common stockholders are approved by the Board on a quarterly basis and the distribution payable is recorded on the ex-dividend date. The Company maintains an “opt out” dividend reinvestment plan that provides for reinvestment of the Company’s distribution on behalf of the Company’s stockholders, unless a stockholder elects to receive cash. As a result, if the Company declares a distribution, cash distributions will be automatically reinvested in additional shares of its common stock unless the stockholder specifically “opts out” of the dividend reinvestment plan and chooses to receive cash distributions.

Segments

The Company lends to and invests in portfolio companies in various technology-related industries including technology, drug discovery and development, biotechnology, life sciences, healthcare, and sustainable and renewable technology. The Company separately evaluates the performance of each of its lending and investment relationships. However, because each of these loan and investment relationships has similar business and economic characteristics, they have been aggregated into a single reportable segment.

Recent Accounting Pronouncements

In June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820) Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”, which was issued to (1) clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, (2) to amend a related illustrative example, and (3) to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. The new guidance is effective for interim and annual periods beginning after December 15, 2023. The Company does not anticipate the new standard will have a material impact to the consolidated financial statements and related disclosures.

36


3. Fair Value of Financial Instruments

Fair value estimates are made at discrete points in time based on relevant information. These estimates may be subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Investments measured at fair value on a recurring basis are categorized in the tables below based upon the lowest level of significant input to the valuations as of March 31, 2023 and December 31, 2022.

 

(in thousands)

 

Balance as of
March 31,

 

 

Quoted Prices in
Active Markets for
Identical Assets

 

 

Significant
Other Observable
Inputs

 

 

Significant
Unobservable
Inputs

 

Description

 

2023

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

Money Market Fund

 

$

15,000

 

 

$

15,000

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

Other assets

 

 

 

 

 

 

 

 

 

 

 

 

Escrow Receivables

 

$

803

 

 

$

 

 

$

 

 

$

803

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments

 

 

 

 

 

 

 

 

 

 

 

 

Senior Secured Debt

 

$

2,910,526

 

 

$

 

 

$

 

 

$

2,910,526

 

Unsecured Debt

 

 

58,125

 

 

 

 

 

 

 

 

 

58,125

 

Preferred Stock

 

 

40,345

 

 

 

 

 

 

 

 

 

40,345

 

Common Stock

 

 

84,072

 

 

 

49,996

 

 

 

3,592

 

 

 

30,484

 

Warrants

 

 

33,210

 

 

 

 

 

 

12,200

 

 

 

21,010

 

 

 

$

3,126,278

 

 

$

49,996

 

 

$

15,792

 

 

$

3,060,490

 

Investment Funds & Vehicles measured at Net Asset Value (1)

 

 

3,900

 

 

 

 

 

 

 

 

 

Total Investments, at fair value

 

$

3,130,178

 

 

 

 

 

 

 

 

 

 

Total Investments including Cash equivalents

 

$

3,145,178

 

 

 

 

 

 

 

 

 

 

(in thousands)

 

Balance as of
December 31,

 

 

Quoted Prices in
Active Markets for
Identical Assets

 

 

Significant
Other Observable
Inputs

 

 

Significant
Unobservable
Inputs

 

Description

 

2022

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Other assets

 

 

 

 

 

 

 

 

 

 

 

 

Escrow Receivables

 

$

875

 

 

$

 

 

$

 

 

$

875

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments

 

 

 

 

 

 

 

 

 

 

 

 

Senior Secured Debt

 

$

2,741,388

 

 

$

 

 

$

 

 

$

2,741,388

 

Unsecured Debt

 

 

54,056

 

 

 

 

 

 

 

 

 

54,056

 

Preferred Stock

 

 

41,488

 

 

 

 

 

 

 

 

 

41,488

 

Common Stock

 

 

92,484

 

 

 

66,027

 

 

 

1,398

 

 

 

25,059

 

Warrants

 

 

30,646

 

 

 

 

 

 

11,227

 

 

 

19,419

 

 

$

2,960,062

 

 

$

66,027

 

 

$

12,625

 

 

$

2,881,410

 

Investment Funds & Vehicles measured at Net Asset Value (1)

 

 

3,893

 

 

 

 

 

 

 

 

 

Total Investments, at fair value

 

$

2,963,955

 

 

 

 

 

 

 

 

 

 

(1)
In accordance with U.S. GAAP, certain investments are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient and are not categorized within the fair value hierarchy as per ASC 820. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the accompanying Consolidated Statement of Assets and Liabilities.

37


The table below presents a reconciliation of changes for all financial assets and liabilities measured at fair value on a recurring basis, excluding accrued interest components, using significant unobservable inputs (Level 3) for the three months ended March 31, 2023 and 2022.

(in thousands)

Balance as of
January 1, 2023

 

Net Realized
Gains (Losses)
(1)

 

Net Change in
Unrealized
Appreciation
(Depreciation)
(2)

 

Purchases (5)

 

Sales

 

Repayments(6)

 

Gross
Transfers
into
Level 3
(3)

 

Gross
Transfers
out of
Level 3
(3)

 

Balance as of
March 31, 2023

 

Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior Secured Debt

$

2,741,388

 

$

 

$

16,023

 

$

362,781

 

$

 

$

(209,666

)

$

 

$

 

$

2,910,526

 

Unsecured Debt

 

54,056

 

 

 

 

3,746

 

 

323

 

 

 

 

 

 

 

 

 

 

58,125

 

Preferred Stock

 

41,488

 

 

 

 

(1,143

)

 

 

 

 

 

 

 

 

 

 

 

40,345

 

Common Stock

 

25,059

 

 

 

 

5,632

 

 

 

 

(207

)

 

 

 

 

 

 

 

30,484

 

Warrants

 

19,419

 

 

(858

)

 

1,508

 

 

948

 

 

(7

)

 

 

 

 

 

 

 

21,010

 

Other Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Escrow Receivable

 

875

 

 

26

 

 

 

 

 

 

(98

)

 

 

 

 

 

 

 

803

 

Total

$

2,882,285

 

$

(832

)

$

25,766

 

$

364,052

 

$

(312

)

$

(209,666

)

$

 

$

 

$

3,061,293

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

Balance as of
January 1, 2022

 

Net Realized
Gains (Losses)
(1)

 

Net Change in
Unrealized
Appreciation
(Depreciation)
(2)

 

Purchases (5)

 

Sales

 

Repayments(6)

 

Gross
Transfers
into
Level 3
(4)

 

Gross
Transfers
out of
Level 3
(4)

 

Balance as of
March 31, 2022

 

Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior Secured Debt

$

2,156,709

 

$

(2,010

)

$

(8,696

)

$

292,683

 

$

 

$

(97,672

)

$

 

$

(3,504

)

$

2,337,510

 

Unsecured Debt

 

52,890

 

 

 

 

(259

)

 

1,201

 

 

 

 

 

 

 

 

 

 

53,832

 

Preferred Stock

 

69,439

 

 

2,867

 

 

(6,513

)

 

2,903

 

 

(4,772

)

 

 

 

 

 

(6,422

)

 

57,502

 

Common Stock

 

21,968

 

 

 

 

2,241

 

 

 

 

 

 

 

 

207

 

 

(3,942

)

 

20,474

 

Warrants

 

27,477

 

 

19

 

 

114

 

 

3,824

 

 

(1,068

)

 

 

 

 

 

 

 

30,366

 

Other Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Escrow Receivable

 

561

 

 

277

 

 

 

 

167

 

 

(345

)

 

 

 

 

 

 

 

660

 

Total

$

2,329,044

 

$

1,153

 

$

(13,113

)

$

300,778

 

$

(6,185

)

$

(97,672

)

$

207

 

$

(13,868

)

$

2,500,344

 

(1)
Included in net realized gains (losses) in the accompanying Consolidated Statements of Operations.
(2)
Included in net change in unrealized appreciation (depreciation) in the accompanying Consolidated Statements of Operations.
(3)
There were no transfers into or out of Level 3 during the three months ended March 31, 2023.
(4)
Transfers out of Level 3 during the three months ended March 31, 2022, related to the initial public offerings of Gelesis, Inc., Pineapple Energy, LLC, and the conversion of Level 3 debt investments into common stock investments. Transfers into Level 3 during the three months ended March 31, 2022 related to the decline of liquidity of Kaleido Biosciences, Inc. shares.
(5)
Amounts listed above are inclusive of loan origination fees received at the inception of the loan which are deferred and amortized into fee income as well as the accretion of existing loan discounts and fees during the period. Escrow receivable purchases may include additions due to proceeds held in escrow from the liquidation of level 3 investments. Amounts are net of purchases assigned to the Adviser Funds.
(6)
Amounts listed above include the acceleration and payment of loan discounts and loan fees due to early payoffs or restructures along with regularly scheduled amortization.

For the three months ended March 31, 2023, approximately $1.1 million in net unrealized depreciation and $5.6 million in net unrealized appreciation relating to assets still held at the reporting date were recorded for preferred stock and common stock Level 3 investments, respectively. For the same period, approximately $22.6 million and $0.6 million in net unrealized depreciation was recorded for debt and warrant Level 3 investments, respectively, relating to assets still held at the reporting date.

For the three months ended March 31, 2022, approximately $7.3 million in net unrealized depreciation and $2.2 million in net unrealized appreciation relating to assets still held at the reporting date were recorded for preferred stock and common stock Level 3 investments, respectively. For the same period, approximately $8.0 million and $0.3 million in net unrealized depreciation was recorded for debt and warrant Level 3 investments, respectively, relating to assets still held at the reporting date.

 

38


The following tables provide quantitative information about the Company’s Level 3 fair value measurements as of March 31, 2023 and December 31, 2022. In addition to the techniques and inputs noted in the tables below, according to the Company’s valuation policy, the Company may also use other valuation techniques and methodologies when determining the Company’s fair value measurements. The tables below are not intended to be all-inclusive, but rather provide information on the significant Level 3 inputs as they relate to the Company’s fair value measurements. See the accompanying Consolidated Schedule of Investments for the fair value of the Company’s investments. The methodology for the determination of the fair value of the Company’s investments is discussed in “Note 2 – Summary of Significant Accounting Policies”. The significant unobservable input used in the fair value measurement of the Company’s escrow receivables is the amount recoverable at the contractual maturity date of the escrow receivable.

Investment Type - Level 3
Debt Investments

Fair Value as of
March 31, 2023
(in thousands)

 

 

Valuation
Techniques/Methodologies

Unobservable Input (1)

Range

Weighted
Average
(2)

Pharmaceuticals

$

993,806

 

 

Market Comparable Companies

Hypothetical Market Yield

11.61% - 19.51%

14.55%

 

 

 

 

 

Premium/(Discount)

(1.50)% - 3.00%

0.00%

 

 

16,343

 

 

Liquidation

Collateral Recoverability

25.00% - 40.00%

32.95%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Technology

 

911,752

 

 

Market Comparable Companies

Hypothetical Market Yield

12.25% - 20.11%

15.52%

 

 

 

 

 

Premium/(Discount)

(0.75)% - 3.00%

0.30%

 

 

21,536

 

 

Convertible Note Analysis

Probability weighting of alternative outcomes

1.00% - 50.00%

35.24%

 

 

1,193

 

 

Liquidation(3)

Probability weighting of alternative outcomes

10.00% - 90.00%

79.54%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sustainable and Renewable Technology

 

3,108

 

 

Market Comparable Companies

Hypothetical Market Yield

14.69%

14.69%

 

 

 

 

 

Premium/(Discount)

0.75%

0.75%

 

 

 

 

 

 

 

 

Lower Middle Market

 

347,961

 

 

Market Comparable Companies

Hypothetical Market Yield

13.78% - 17.14%

13.87%

 

 

 

 

 

Premium/(Discount)

(2.00)% - 1.00%

(0.44)%

 

 

7,774

 

 

Liquidation(3)

Probability weighting of alternative outcomes

20.00% - 80.00%

80.00%

Debt Investments for which Cost Approximates Fair Value

 

 

 

 

 

332,001

 

 

Debt Investments originated within 6 months

 

 

 

 

235,746

 

 

Imminent Payoffs(4)

 

 

 

 

 

97,431

 

 

Debt Investments Maturing in Less than One Year

 

$

2,968,651

 

 

Total Level 3 Debt Investments

(1)
The significant unobservable inputs used in the fair value measurement of the Company’s debt securities are hypothetical market yields and premiums/(discounts). The hypothetical market yield is defined as the exit price of an investment in a hypothetical market to hypothetical market participants where buyers and sellers are willing participants. The premiums/(discounts) relate to company specific characteristics such as underlying investment performance, security liens, and other characteristics of the investment. Significant increases (decreases) in the inputs in isolation may result in a significantly lower (higher) fair value measurement, depending on the materiality of the investment.

Debt investments in the industries noted in the Company’s Consolidated Schedule of Investments are included in the industries noted above as follows:

Pharmaceuticals, above, is comprised of debt investments in the “Drug Discovery & Development” and “Healthcare Services, Other” industries.
Technology, above, is comprised of debt investments in the “Communications & Networking”, “Information Services”, “Consumer & Business
Services”, “Media/Content/Info” and “Software” industries.
Sustainable and Renewable Technology, above, is comprised of debt investments in the “Sustainable and Renewable Technology” industry.
Lower Middle Market, above, is comprised of debt investments in the “Healthcare Services – Other”, “Consumer & Business Services”, “Diversified
Financial Services”, “Sustainable and Renewable Technology”, and “Software” industries.
(2)
The weighted averages are calculated based on the fair market value of each investment.
(3)
The significant unobservable input used in the fair value measurement of impaired debt securities is the probability weighting of alternative outcomes.
(4)
Imminent payoffs represent debt investments that the Company expects to be fully repaid within the next three months, prior to their scheduled maturity date.

39


Investment Type - Level 3
Debt Investments

Fair Value as of
December 31, 2022
(in thousands)

 

 

Valuation Techniques/Methodologies

Unobservable Input (1)

Range

Weighted
Average
(2)

Pharmaceuticals

$

903,427

 

 

Market Comparable Companies

Hypothetical Market Yield

11.74% - 19.04%

15.17%

 

 

 

 

 

Premium/(Discount)

(0.75)% - 1.75%

0.01%

 

 

 

 

 

 

 

 

Technology

 

967,108

 

 

Market Comparable Companies

Hypothetical Market Yield

12.05% - 18.53%

15.21%

 

 

 

 

 

Premium/(Discount)

(1.00)% - 1.50%

0.20%

 

 

20,356

 

 

Convertible Note Analysis

Probability weighting of alternative outcomes

1.00% - 50.00%

35.79%

 

 

1,671

 

 

Liquidation(3)

Probability weighting of alternative outcomes

5.00% - 80.00%

48.29%

 

 

 

 

 

 

 

 

Sustainable and Renewable Technology

 

3,006

 

 

Market Comparable Companies

Hypothetical Market Yield

14.71% - 14.71%

14.71%

 

 

 

 

 

Premium/(Discount)

0.75% - 0.75%

0.75%

 

 

 

 

 

 

 

 

Lower Middle Market

 

328,393

 

 

Market Comparable Companies

Hypothetical Market Yield

13.68% - 18.49%

14.82%

 

 

 

 

 

Premium/(Discount)

(2.00)% - 0.75%

(0.43)%

 

 

8,042

 

 

Liquidation(3)

Probability weighting of alternative outcomes

20.00% - 80.00%

80.00%

 

 

 

 

 

 

 

 

Debt Investments for which Cost Approximates Fair Value

 

 

 

 

 

392,168

 

 

Debt Investments originated within 6 months

 

 

 

 

77,676

 

 

Imminent Payoffs(4)

 

 

 

 

 

93,597

 

 

Debt Investments Maturing in Less than One Year

 

$

2,795,444

 

 

Total Level 3 Debt Investments

(1)
The significant unobservable inputs used in the fair value measurement of the Company’s debt securities are hypothetical market yields and premiums/(discounts). The hypothetical market yield is defined as the exit price of an investment in a hypothetical market to hypothetical market participants where buyers and sellers are willing participants. The premiums/(discounts) relate to company specific characteristics such as underlying investment performance, security liens, and other characteristics of the investment. Significant increases (decreases) in the inputs in isolation may result in a significantly lower (higher) fair value measurement, depending on the materiality of the investment.

Debt investments in the industries noted in the Company’s Consolidated Schedule of Investments are included in the industries noted above as follows:

Pharmaceuticals, above, is comprised of debt investments in the “Drug Discovery & Development” and “Healthcare Services, Other” industries.
Technology, above, is comprised of debt investments in the “Communications & Networking”, “Information Services”, “Consumer & Business
Services”, “Media/Content/Info” and “Software” industries.
Sustainable and Renewable Technology, above, is comprised of debt investments in the “Sustainable and Renewable Technology” industry.
Lower Middle Market, above, is comprised of debt investments in the “Healthcare Services – Other”, “Consumer & Business Services”, “Diversified
Financial Services”, “Sustainable and Renewable Technology”, and “Software” industries.
(2)
The weighted averages are calculated based on the fair market value of each investment.
(3)
The significant unobservable input used in the fair value measurement of impaired debt securities is the probability weighting of alternative outcomes.
(4)
Imminent payoffs represent debt investments that the Company expects to be fully repaid within the next three months, prior to their scheduled maturity date.

 

40


Investment Type - Level 3 Equity and Warrant Investments

 

Fair Value as of
March 31, 2023
(in thousands)

 

 

Valuation Techniques/
Methodologies

 

Unobservable Input(1)

 

Range

 

Weighted Average(5)

Equity Investments

 

$

30,445

 

 

Market Comparable Companies

 

EBITDA Multiple(2)

 

13.3x - 13.3x

 

13.3x

 

 

 

 

 

 

 

Revenue Multiple(2)

 

0.6x - 20.6x

 

8.6x

 

 

 

 

 

 

 

Tangible Book Value Multiple(2)

 

1.6x - 1.6x

 

1.6x

 

 

 

 

 

 

 

Discount for Lack of Marketability(3)

 

3.32% - 33.66%

 

24.21%

 

 

 

12,467

 

 

Market Adjusted OPM Backsolve

 

Market Equity Adjustment (4)

 

(85.77)% - 12.32%

 

(18.51)%

 

 

 

24,595

 

 

Discounted Cash Flow

 

Discount Rate(7)

 

19.64% - 31.15%

 

25.66%

 

 

 

 

 

Liquidation

 

Revenue Multiple(2)

 

2.2x - 2.2x

 

2.2x

 

 

 

 

 

 

 

Discount for Lack of Marketability(3)

 

86.00% - 86.00%

 

86.00%

 

 

 

3,322

 

 

Other (6)

 

 

 

 

 

 

Warrant Investments

 

 

13,711

 

 

Market Comparable Companies

 

EBITDA Multiple(2)

 

13.3x - 13.3x

 

13.3x

 

 

 

 

 

 

 

Revenue Multiple(2)

 

0.3x - 10.3x

 

3.7x

 

 

 

 

 

 

 

Discount for Lack of Marketability(3)

 

3.32% - 34.08%

 

23.84%

 

 

 

7,299

 

 

Market Adjusted OPM Backsolve

 

Market Equity Adjustment(4)

 

(71.90)% - 44.42%

 

(8.24)%

Total Level 3 Equity and Warrant Investments

 

$

91,839

 

 

 

 

 

 

 

 

 

(1)
The significant unobservable inputs used in the fair value measurement of the Company’s warrant and equity securities are revenue and/or earnings multiples (e.g. EBITDA, EBT, ARR), market equity adjustment factors, and discounts for lack of marketability. Significant increases/(decreases) in the inputs in isolation would result in a significantly higher/(lower) fair value measurement, depending on the materiality of the investment. For some investments, additional consideration may be given to data from the last round of financing or merger/acquisition events near the measurement date. The significant unobservable input used in the fair value measurement of impaired equity securities is the probability weighting of alternative outcomes.
(2)
Represents amounts used when the Company has determined that market participants would use such multiples when pricing the investments.
(3)
Represents amounts used when the Company has determined market participants would take into account these discounts when pricing the investments.
(4)
Represents the range of changes in industry valuations since the portfolio company's last external valuation event.
(5)
Weighted averages are calculated based on the fair market value of each investment.
(6)
The fair market value of these investments is derived based on recent private market and merger and acquisition transaction prices.
(7)
The discount rate used is based on current portfolio yield adjusted for uncertainty of actual performance and timing in capital deployments.

 

41


Investment Type - Level 3 Equity and Warrant Investments

 

Fair Value as of
December 31, 2022
(in thousands)

 

 

Valuation Techniques/
Methodologies

 

Unobservable Input (1)

 

Range

 

Weighted Average(5)

Equity Investments

 

$

30,086

 

 

Market Comparable Companies

 

EBITDA Multiple(2)

 

12.4x - 12.4x

 

12.4x

 

 

 

 

 

 

 

Revenue Multiple(2)

 

0.7x - 16.1x

 

7.4x

 

 

 

 

 

 

 

Tangible Book Value Multiple(2)

 

1.6x - 1.6x

 

1.6x

 

 

 

 

 

 

 

Discount for Lack of Marketability(3)

 

8.11% - 28.90%

 

19.79%

 

 

 

13,795

 

 

Market Adjusted OPM Backsolve

 

Market Equity Adjustment(4)

 

(97.82)% - 16.34%

 

(16.69)%

 

 

 

19,153

 

 

Discounted Cash Flow

 

Discount Rate(7)

 

17.72% - 30.13%

 

24.46%

 

 

 

 

 

Liquidation

 

Revenue Multiple(2)

 

2.1x - 2.1x

 

2.1x

 

 

 

 

 

 

 

Discount for Lack of Marketability(3)

 

85.00% - 85.00%

 

85.00%

 

 

 

3,513

 

 

Other(6)

 

 

 

 

 

 

Warrant Investments

 

 

12,479

 

 

Market Comparable Companies

 

EBITDA Multiple(2)

 

12.4x - 12.4x

 

12.4x

 

 

 

 

 

 

 

Revenue Multiple(2)

 

0.6x - 8.8x

 

3.4x

 

 

 

 

 

 

 

Discount for Lack of Marketability(3)

 

8.11% - 32.70%

 

18.97%

 

 

 

6,934

 

 

Market Adjusted OPM Backsolve

 

Market Equity Adjustment(4)

 

(97.82)% - 66.43%

 

(8.86)%

 

 

 

 

 

Liquidation

 

Revenue Multiple(2)

 

6.2x - 6.2x

 

6.2x

 

 

 

 

 

 

 

Discount for Lack of Marketability(3)

 

90.00% - 90.00%

 

90.00%

 

 

 

6

 

 

Other(6)

 

 

 

 

 

 

Total Level 3 Equity and Warrant Investments

 

$

85,966

 

 

 

 

 

 

 

 

 

(1)
The significant unobservable inputs used in the fair value measurement of the Company’s warrant and equity securities are revenue and/or earnings multiples (e.g. EBITDA, EBT, ARR), market equity adjustment factors, and discounts for lack of marketability. Significant increases/(decreases) in the inputs in isolation would result in a significantly higher/(lower) fair value measurement, depending on the materiality of the investment. For some investments, additional consideration may be given to data from the last round of financing or merger/acquisition events near the measurement date. The significant unobservable input used in the fair value measurement of impaired equity securities is the probability weighting of alternative outcomes.
(2)
Represents amounts used when the Company has determined that market participants would use such multiples when pricing the investments.
(3)
Represents amounts used when the Company has determined market participants would take into account these discounts when pricing the investments.
(4)
Represents the range of changes in industry valuations since the portfolio company's last external valuation event.
(5)
Weighted averages are calculated based on the fair market value of each investment.
(6)
The fair market value of these investments is derived based on recent market transactions.
(7)
The discount rate used is based on current portfolio yield adjusted for uncertainty of actual performance and timing in capital deployments.

The Company believes that the carrying amounts of its financial instruments, other than investments and debt, which consist of cash and cash equivalents, receivables including escrow receivables, accounts payable and accrued liabilities, approximate the fair values of such items due to the short maturity of such instruments. The debt obligations of the Company are recorded at amortized cost and not at fair value on the Consolidated Statements of Assets and Liabilities. The fair value of the Company’s outstanding debt obligations are based on observable market trading prices or quotations and unobservable market rates as applicable for each instrument.

As of March 31, 2023 and December 31, 2022, the 2033 Notes were trading on the New York Stock Exchange (“NYSE”) at $23.96 and $24.59 per unit at par value. The par value at underwriting for the 2033 Notes was $25.00 per unit. Based on market quotations on or around March 31, 2023 and December 31, 2022, the 2031 Asset-Backed Notes were quoted for 0.940 and 0.951. The fair values of the SBA debentures, July 2024 Notes, February 2025 Notes, June 2025 Notes, June 2025 3-Year Notes, March 2026 A Notes, March 2026 B Notes, September 2026, and January 2027 Notes are calculated based on the net present value of payments over the term of the notes using estimated market rates for similar notes and remaining terms. The fair values of the outstanding debt under the MUFG Bank Facility and the SMBC Facility are equal to their outstanding principal balances as of March 31, 2023 and December 31, 2022.

42


The following tables provide additional information about the approximate fair value and level in the fair value hierarchy of the Company’s outstanding borrowings as of March 31, 2023 and December 31, 2022:

(in thousands)

 

March 31, 2023

 

 

 

Carrying

 

 

Approximate

 

 

Identical Assets

 

 

Observable Inputs

 

 

Unobservable Inputs

 

Description

 

Value

 

 

Fair Value

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

SBA Debentures

 

$

169,881

 

 

$

144,551

 

 

$

 

 

$

 

 

$

144,551

 

July 2024 Notes

 

 

104,607

 

 

 

101,978

 

 

 

 

 

 

 

 

 

101,978

 

February 2025 Notes

 

 

49,780

 

 

 

47,202

 

 

 

 

 

 

 

 

 

47,202

 

June 2025 Notes

 

 

69,636

 

 

 

65,963

 

 

 

 

 

 

 

 

 

65,963

 

June 2025 3-Year Notes

 

 

49,655

 

 

 

48,838

 

 

 

 

 

 

 

 

 

48,838

 

March 2026 A Notes

 

 

49,724

 

 

 

45,731

 

 

 

 

 

 

 

 

 

45,731

 

March 2026 B Notes

 

 

49,699

 

 

 

45,797

 

 

 

 

 

 

 

 

 

45,797

 

September 2026 Notes

 

 

321,603

 

 

 

273,775

 

 

 

 

 

 

 

 

 

273,775

 

January 2027 Notes

 

 

344,937

 

 

 

300,474

 

 

 

 

 

 

 

 

 

300,474

 

2031 Asset-Backed Notes

 

 

148,104

 

 

 

141,000

 

 

 

 

 

 

141,000

 

 

 

 

2033 Notes

 

 

38,853

 

 

 

38,336

 

 

 

 

 

 

38,336

 

 

 

 

MUFG Bank Facility(1)

 

 

121,000

 

 

 

121,000

 

 

 

 

 

 

 

 

 

121,000

 

SMBC Facility

 

 

197,000

 

 

 

197,000

 

 

 

 

 

 

 

 

 

197,000

 

Total

 

$

1,714,479

 

 

$

1,571,645

 

 

$

 

 

$

179,336

 

 

$

1,392,309

 

 

(in thousands)

 

December 31, 2022

 

 

 

Carrying

 

 

Approximate

 

 

Identical Assets

 

 

Observable Inputs

 

 

Unobservable Inputs

 

Description

 

Value

 

 

Fair Value

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

SBA Debentures

 

$

169,738

 

 

$

155,257

 

 

$

 

 

$

 

 

$

155,257

 

July 2024 Notes

 

 

104,533

 

 

 

102,019

 

 

 

 

 

 

 

 

 

102,019

 

February 2025 Notes

 

 

49,751

 

 

 

47,044

 

 

 

 

 

 

 

 

 

47,044

 

June 2025 Notes

 

 

69,595

 

 

 

64,198

 

 

 

 

 

 

 

 

 

64,198

 

June 2025 3-Year Notes

 

 

49,616

 

 

 

47,528

 

 

 

 

 

 

 

 

 

47,528

 

March 2026 A Notes

 

 

49,700

 

 

 

45,512

 

 

 

 

 

 

 

 

 

45,512

 

March 2026 B Notes

 

 

49,673

 

 

 

45,588

 

 

 

 

 

 

 

 

 

45,588

 

September 2026 Notes

 

 

321,358

 

 

 

269,509

 

 

 

 

 

 

 

 

 

269,509

 

January 2027 Notes

 

 

344,604

 

 

 

296,826

 

 

 

 

 

 

 

 

 

296,826

 

2031 Asset-Backed Notes

 

 

147,957

 

 

 

142,620

 

 

 

 

 

 

142,620

 

 

 

 

2033 Notes

 

 

38,826

 

 

 

39,344

 

 

 

 

 

 

39,344

 

 

 

 

MUFG Bank Facility(1)

 

 

107,000

 

 

 

107,000

 

 

 

 

 

 

 

 

 

107,000

 

SMBC Facility

 

 

72,000

 

 

 

72,000

 

 

 

 

 

 

 

 

 

72,000

 

Total

 

$

1,574,351

 

 

$

1,434,445

 

 

$

 

 

$

181,964

 

 

$

1,252,481

 

(1)
In June 2022 the MUFG Bank Facility replaced the Union Bank Facility via an amendment which changed the lead lender.

4. Investments

Control and Affiliate Investments

As required by the 1940 Act, the Company classifies its investments by level of control. “Control investments” are defined in the 1940 Act as investments in those companies that the Company is deemed to “control”. Under the 1940 Act, the Company is generally deemed to “control” a company in which it has invested if it owns 25% or more of the voting securities of such company or has greater than 50% representation on its board. “Affiliate investments” are investments in those companies that are “affiliated companies” of the Company, as defined in the 1940 Act, which are not control investments. The Company is deemed to be an “affiliate” of a company in which it has invested if it owns 5% or more, but generally less than 25%, of the voting securities of such company. “Non-control/non-affiliate investments” are investments that are neither control investments nor affiliate investments. For purposes of determining the classification of its investments, the Company has included consideration of any voting securities or board appointment rights held by the Adviser Funds.

43


The following table summarizes the Company’s realized gains and losses and changes in unrealized appreciation and depreciation on control and affiliate investments for the three months ended March 31, 2023 and 2022.

(in thousands)

 

 

 

 

 

 

Three Months Ended March 31, 2023

 

Portfolio Company(1)

 

Type

 

Fair Value as of March 31, 2023

 

 

Interest Income

 

 

Fee Income

 

 

Net Change in Unrealized Appreciation (Depreciation)

 

 

Realized Gain (Loss)

 

Control Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Coronado Aesthetics, LLC

 

Control

 

$

256

 

 

$

 

 

$

 

 

$

(63

)

 

$

 

Gibraltar Acquisition LLC (p.k.a. Gibraltar Business Capital, LLC)

 

Control

 

 

40,701

 

 

 

796

 

 

 

19

 

 

 

3,735

 

 

 

 

Hercules Adviser LLC

 

Control

 

 

36,595

 

 

 

150

 

 

 

 

 

 

5,442

 

 

 

 

Tectura Corporation

 

Control

 

 

7,774

 

 

 

170

 

 

 

 

 

 

(268

)

 

 

 

Total Control Investments

 

$

85,326

 

 

$

1,116

 

 

$

19

 

 

$

8,846

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

 

 

 

 

 

 

Three Months Ended March 31, 2022

 

Portfolio Company(1)

 

Type

 

Fair Value as of March 31, 2022

 

 

Interest Income

 

 

Fee Income

 

 

Net Change in Unrealized Appreciation (Depreciation)

 

 

Realized Gain (Loss)

 

Control Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Coronado Aesthetics, LLC

 

Control

 

$

614

 

 

$

 

 

$

 

 

$

49

 

 

$

 

Gibraltar Business Capital, LLC

 

Control

 

 

42,622

 

 

 

834

 

 

 

16

 

 

 

(1,227

)

 

 

 

Hercules Adviser LLC

 

Control

 

 

24,694

 

 

 

111

 

 

 

 

 

 

2,554

 

 

 

 

Tectura Corporation

 

Control

 

 

8,347

 

 

 

170

 

 

 

 

 

 

78

 

 

 

 

Total Control Investments

 

$

76,277

 

 

$

1,115

 

 

$

16

 

 

$

1,454

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Affiliate Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Black Crow AI, Inc.(2)

 

Affiliate

 

$

 

 

$

 

 

$

 

 

$

(120

)

 

$

3,772

 

Pineapple Energy LLC (2)

 

Affiliate

 

 

4,830

 

 

 

1,047

 

 

 

 

 

 

873

 

 

 

 

Total Affiliate Investments

 

$

4,830

 

 

$

1,047

 

 

$

 

 

$

753

 

 

$

3,772

 

Total Control & Affiliate Investments

 

$

81,107

 

 

$

2,162

 

 

$

16

 

 

$

2,207

 

 

$

3,772

 

(1)
In accordance with Rules 3-09, 4-08(g), and Rule 10-01(b)(1) of Regulation S-X, (“Rule 3-09”, “Rule 4-08(g)”, and “Rule 10-01(b)(1)”, respectively), the Company must determine if its unconsolidated subsidiaries are considered “significant subsidiaries”. As of March 31, 2023 and March 31, 2022, there were no unconsolidated subsidiaries that are considered “significant subsidiaries”.
(2)
As of September 30, 2022, Black Crow AI, Inc. and Pineapple Energy LLC were no longer affiliates as defined under the 1940 Act.

Portfolio Composition

The following table shows the fair value of the Company’s portfolio of investments by asset class as of March 31, 2023 and December 31, 2022:

(in thousands)

March 31, 2023

 

 

December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments at
Fair Value

 

 

Percentage of
Total Portfolio

 

 

Investments at
Fair Value

 

 

Percentage of
Total Portfolio

 

Senior Secured Debt

$

2,910,526

 

 

 

93.0

%

 

$

2,741,388

 

 

 

92.5

%

Unsecured Debt

 

58,125

 

 

 

1.9

%

 

 

54,056

 

 

 

1.8

%

Preferred Stock

 

40,345

 

 

 

1.3

%

 

 

41,488

 

 

 

1.4

%

Common Stock

 

84,072

 

 

 

2.7

%

 

 

92,484

 

 

 

3.1

%

Warrants

 

33,210

 

 

 

1.0

%

 

 

30,646

 

 

 

1.1

%

Investment Funds & Vehicles

 

3,900

 

 

 

0.1

%

 

 

3,893

 

 

 

0.1

%

Total

$

3,130,178

 

 

 

100.0

%

 

$

2,963,955

 

 

 

100.0

%

A summary of the Company’s investment portfolio, at value, by geographic location as of March 31, 2023 and December 31, 2022 is shown as follows:

(in thousands)

March 31, 2023

 

 

December 31, 2022

 

 

Investments at
Fair Value

 

 

Percentage of
Total Portfolio

 

 

Investments at
Fair Value

 

 

Percentage of
Total Portfolio

 

United States

$

2,829,873

 

 

 

90.4

%

 

$

2,670,520

 

 

 

90.1

%

United Kingdom

 

174,678

 

 

 

5.6

%

 

 

171,629

 

 

 

5.8

%

Netherlands

 

89,952

 

 

 

2.9

%

 

 

88,915

 

 

 

3.0

%

Canada

 

11,132

 

 

 

0.4

%

 

 

19,472

 

 

 

0.7

%

Israel

 

19,432

 

 

 

0.6

%

 

 

9,052

 

 

 

0.3

%

Denmark

 

3,739

 

 

 

0.1

%

 

 

 

 

 

0.0

%

Germany

 

893

 

 

 

0.0

%

 

 

990

 

 

 

0.0

%

Other

 

479

 

 

 

0.0

%

 

 

573

 

 

 

0.0

%

Ireland

 

 

 

 

0.0

%

 

 

2,804

 

 

 

0.1

%

Total

$

3,130,178

 

 

 

100.0

%

 

$

2,963,955

 

 

 

100.0

%

 

44


The following table shows the fair value of the Company’s portfolio by industry sector as of March 31, 2023 and December 31, 2022:

(in thousands)

March 31, 2023

 

 

December 31, 2022

 

 

Investments at
Fair Value

 

 

Percentage of
Total Portfolio

 

 

Investments at
Fair Value

 

 

Percentage of
Total Portfolio

 

Drug Discovery & Development

$

1,220,057

 

 

 

39.0

%

 

$

1,150,707

 

 

 

38.8

%

Software

 

828,712

 

 

 

26.5

%

 

 

798,264

 

 

 

26.9

%

Consumer & Business Services

 

474,883

 

 

 

15.2

%

 

 

439,384

 

 

 

14.8

%

Healthcare Services, Other

 

214,199

 

 

 

6.8

%

 

 

198,763

 

 

 

6.7

%

Communications & Networking

 

107,201

 

 

 

3.4

%

 

 

101,833

 

 

 

3.5

%

Diversified Financial Services

 

87,805

 

 

 

2.8

%

 

 

68,569

 

 

 

2.3

%

Information Services

 

62,039

 

 

 

2.0

%

 

 

60,759

 

 

 

2.1

%

Manufacturing Technology

 

48,993

 

 

 

1.6

%

 

 

46,109

 

 

 

1.6

%

Biotechnology Tools

 

33,032

 

 

 

1.1

%

 

 

32,825

 

 

 

1.1

%

Electronics & Computer Hardware

 

21,476

 

 

 

0.7

%

 

 

21,517

 

 

 

0.7

%

Sustainable and Renewable Technology

 

12,899

 

 

 

0.4

%

 

 

15,486

 

 

 

0.5

%

Media/Content/Info

 

9,956

 

 

 

0.3

%

 

 

35

 

 

 

0.0

%

Surgical Devices

 

4,189

 

 

 

0.1

%

 

 

3,038

 

 

 

0.1

%

Consumer & Business Products

 

2,593

 

 

 

0.1

%

 

 

2,821

 

 

 

0.1

%

Medical Devices & Equipment

 

1,155

 

 

 

0.0

%

 

 

1,834

 

 

 

0.1

%

Semiconductors

 

966

 

 

 

0.0

%

 

 

21,921

 

 

 

0.7

%

Drug Delivery

 

23

 

 

 

0.0

%

 

 

90

 

 

 

0.0

%

Total

$

3,130,178

 

 

 

100.0

%

 

$

2,963,955

 

 

 

100.0

%

No single portfolio investment represents more than 10% of the fair value of the Company’s total investments as of March 31, 2023 or December 31, 2022.

Concentrations of Credit Risk

The Company’s customers are primarily privately held companies and public companies which are active in the “Drug Discovery & Development", "Software”, “Consumer & Business Services”, “Healthcare Services, Other”, and “Communications & Networking" sectors. These sectors are characterized by high margins, high growth rates, consolidation and product and market extension opportunities. Value for companies in these sectors is often vested in intangible assets and intellectual property.

Industry and sector concentrations vary as new loans are recorded and loans are paid off. Loan revenue, consisting of interest, fees, and recognition of gains on equity and warrant or other equity interests, can fluctuate materially when a loan is paid off or a related warrant or equity interest is sold. Revenue recognition in any given year can be highly concentrated among several portfolio companies.

As of March 31, 2023 and December 31, 2022, the Company’s ten largest portfolio companies represented approximately 29.5% and 29.0% of the total fair value of the Company’s investments in portfolio companies, respectively. As of March 31, 2023 and December 31, 2022, the Company had six and eight portfolio companies, respectively, that represented 5% or more of the Company’s net assets. As of March 31, 2023, the Company had four equity investments representing approximately 48.6% of the total fair value of the Company’s equity investments, and each represented 5% or more of the total fair value of the Company’s equity investments. As of December 31, 2022, the Company had four equity investments which represented approximately 39.8% of the total fair value of the Company’s equity investments, and each represented 5% or more of the total fair value of such investments.

Investment Collateral

In the majority of cases, the Company collateralizes its investments by obtaining a first priority security interest in a portfolio company’s assets, which may include its intellectual property. In other cases, the Company may obtain a negative pledge covering a company’s intellectual property. The Company's investments were collateralized as follows as of March 31, 2023 and December 31, 2022:

 

Percentage of debt investments (at fair value), as of

 

 

March 31, 2023

 

 

December 31, 2022

 

Senior Secured First Lien

 

 

 

 

 

All assets including intellectual property

 

44.4

%

 

 

42.0

%

All assets with negative pledge on intellectual property

 

25.6

%

 

 

26.1

%

“Last-out” with security interest in all of the assets

 

11.5

%

 

 

11.6

%

Total senior secured first lien position

 

81.5

%

 

 

79.7

%

Second lien

 

16.5

%

 

 

18.4

%

Unsecured

 

2.0

%

 

 

1.9

%

Total debt investments at fair value

 

100.0

%

 

 

100.0

%

 

45


Investment Income

The Company’s investment portfolio generates interest, fee, and dividend income. The composition of the Company’s interest income and fee income is as follows:

(in thousands)

Three Months Ended March 31,

 

 

2023

 

 

2022

 

Contractual interest income

$

82,791

 

 

$

49,544

 

Exit fee interest income

 

9,382

 

 

 

6,726

 

PIK interest income

 

5,528

 

 

 

4,975

 

Other interest income (1)

 

2,196

 

 

 

1,007

 

Total interest income

$

99,897

 

 

$

62,252

 

 

(in thousands)

Three Months Ended March 31,

 

 

2023

 

 

2022

 

Recurring fee income

$

2,040

 

 

$

1,779

 

Fee income - expired commitments

 

243

 

 

 

87

 

Accelerated fee income - early repayments

 

2,910

 

 

 

1,039

 

Total fee income

$

5,193

 

 

$

2,905

 

(1)
Other interest income includes OID interest income and interest recorded on other assets.

As of March 31, 2023 and December 31, 2022, unamortized capitalized fee income was recorded as follows:

(in millions)

March 31,

 

 

December 31,

 

 

2023

 

 

2022

 

Offset against debt investment cost

$

44.6

 

 

$

43.1

 

Deferred obligation contingent on funding or other milestone

 

10.9

 

 

 

10.9

 

Total Unamortized Fee Income

$

55.5

 

 

$

54.0

 

As of March 31, 2023 and December 31, 2022, loan exit fees receivable were recorded as follows:

 

 

 

 

 

 

(in millions)

March 31,

 

 

December 31,

 

2023

 

 

2022

 

Included within debt investment cost

$

33.0

 

 

$

32.5

 

Deferred receivable related to expired commitments

 

3.4

 

 

 

5.0

 

Total Exit Fees Receivable

$

36.4

 

 

$

37.5

 

 

5. Debt

As of March 31, 2023 and December 31, 2022, the Company had the following available and outstanding debt:

(in thousands)

March 31, 2023

 

December 31, 2022

 

 

Total Available

 

Principal

 

Carrying Value (1)

 

Total Available

 

Principal

 

Carrying Value (1)

 

SBA Debentures (2)

$

175,000

 

$

175,000

 

$

169,881

 

$

175,000

 

$

175,000

 

$

169,738

 

July 2024 Notes

 

105,000

 

 

105,000

 

 

104,607

 

 

105,000

 

 

105,000

 

 

104,533

 

February 2025 Notes

 

50,000

 

 

50,000

 

 

49,780

 

 

50,000

 

 

50,000

 

 

49,751

 

June 2025 Notes

 

70,000

 

 

70,000

 

 

69,636

 

 

70,000

 

 

70,000

 

 

69,595

 

June 2025 3-Year Notes

 

50,000

 

 

50,000

 

 

49,655

 

 

50,000

 

 

50,000

 

 

49,616

 

March 2026 A Notes

 

50,000

 

 

50,000

 

 

49,724

 

 

50,000

 

 

50,000

 

 

49,700

 

March 2026 B Notes

 

50,000

 

 

50,000

 

 

49,699

 

 

50,000

 

 

50,000

 

 

49,673

 

September 2026 Notes

 

325,000

 

 

325,000

 

 

321,603

 

 

325,000

 

 

325,000

 

 

321,358

 

January 2027 Notes

 

350,000

 

 

350,000

 

 

344,937

 

 

350,000

 

 

350,000

 

 

344,604

 

2031 Asset-Backed Notes

 

150,000

 

 

150,000

 

 

148,104

 

 

150,000

 

 

150,000

 

 

147,957

 

2033 Notes

 

40,000

 

 

40,000

 

 

38,853

 

 

40,000

 

 

40,000

 

 

38,826

 

MUFG Bank Facility (2)(3)

 

400,000

 

 

121,000

 

 

121,000

 

 

545,000

 

 

107,000

 

 

107,000

 

SMBC Facility (2)(4)

 

400,000

 

 

197,000

 

 

197,000

 

 

225,000

 

 

72,000

 

 

72,000

 

Total

$

2,215,000

 

$

1,733,000

 

$

1,714,479

 

$

2,185,000

 

$

1,594,000

 

$

1,574,351

 

 

(1)
Except for the SMBC Facility and MUFG Bank Facility (f.k.a. Union Bank Facility), all carrying values represent the principal amount outstanding less the remaining unamortized debt issuance costs and unaccreted premium or discount, if any, associated with the debt as of the balance sheet date.
(2)
Availability subject to the Company meeting the borrowing base requirements.
(3)
In June 2022 the MUFG Bank Facility replaced the Union Bank Facility via an amendment which changed the lead lender.
(4)
Includes $175.0 million of available commitment through the letter of credit facility.

46


Debt issuance costs, net of accumulated amortization, were as follows as of March 31, 2023 and December 31, 2022:

(in thousands)

 

March 31, 2023

 

 

December 31, 2022

 

SBA Debentures

 

$

5,119

 

 

$

5,262

 

July 2024 Notes

 

 

393

 

 

 

467

 

February 2025 Notes

 

 

220

 

 

 

249

 

June 2025 Notes

 

 

364

 

 

 

405

 

June 2025 3-Year Notes

 

 

345

 

 

 

384

 

March 2026 A Notes

 

 

276

 

 

 

300

 

March 2026 B Notes

 

 

301

 

 

 

327

 

September 2026 Notes

 

 

3,397

 

 

 

3,642

 

January 2027 Notes

 

 

5,063

 

 

 

5,396

 

2031 Asset-Backed Notes

 

 

1,896

 

 

 

2,043

 

2033 Notes

 

 

1,147

 

 

 

1,174

 

MUFG Bank Facility (1)

 

 

4,867

 

 

 

1,292

 

SMBC Facility (1)

 

 

2,315

 

 

 

1,701

 

Total

 

$

25,703

 

 

$

22,642

 

(1)
The MUFG Bank Facility (f.k.a. Union Bank Facility) and SMBC Facility, are line-of-credit arrangements, the debt issuance costs associated with these instruments are included within Other assets on the Consolidated Statements of Assets and Liabilities in accordance with ASC Subtopic 835-30.

For the three months ended March 31, 2023, the components of interest expense, related fees, losses on debt extinguishment and cash paid for interest expense for debt were as follows:

(in thousands)

 

Three Months Ended March 31, 2023

 


Description

 

Interest expense(1)

 

Amortization of debt issuance cost (loan fees)

 

Unused facility and other fees (loan fees)

 

Total interest expense and fees

 

Cash paid for interest expense

 

SBA Debentures

 

$

1,125

 

$

144

 

$

 

$

1,269

 

$

2,262

 

July 2024 Notes

 

 

1,252

 

 

74

 

 

 

 

1,326

 

 

2,504

 

February 2025 Notes

 

 

535

 

 

29

 

 

 

 

564

 

 

1,070

 

June 2025 Notes

 

 

754

 

 

40

 

 

 

 

794

 

 

 

June 2025 3-Year Notes

 

 

750

 

 

39

 

 

 

 

789

 

 

 

March 2026 A Notes

 

 

563

 

 

24

 

 

 

 

587

 

 

1,125

 

March 2026 B Notes

 

 

569

 

 

26

 

 

 

 

595

 

 

1,139

 

September 2026 Notes

 

 

2,174

 

 

204

 

 

 

 

2,378

 

 

4,266

 

January 2027 Notes

 

 

3,079

 

 

207

 

 

 

 

3,286

 

 

5,906

 

2031 Asset-Backed Notes

 

 

1,903

 

 

100

 

 

 

 

2,003

 

 

1,856

 

2033 Notes

 

 

625

 

 

27

 

 

 

 

652

 

 

625

 

MUFG Bank Facility(2)

 

 

1,713

 

 

442

 

 

617

 

 

2,772

 

 

1,837

 

SMBC Facility

 

 

1,583

 

 

153

 

 

203

 

 

1,939

 

 

1,250

 

Total

 

$

16,625

 

$

1,509

 

$

820

 

$

18,954

 

$

23,840

 

(1)
Interest expense includes amortization of original issue discounts for the three months ended March 31, 2023 of $42 thousand, $126 thousand, and $47 thousand related to the September 2026 Notes, January 2027 Notes, and 2031 Asset-Backed Notes, respectively.
(2)
The June 2022 amendment of the MUFG Bank Facility replaced the Union Bank Facility via an amendment which changed the lead lender.

For the three months ended March 31, 2022, the components of interest expense and related fees and cash paid for interest expense for debt were as follows:

(in thousands)

 

Three Months Ended March 31, 2022

 


Description

 

Interest expense(1)

 

Amortization of debt issuance cost (loan fees)

 

Unused facility and other fees (loan fees)

 

Total interest expense and fees

 

Cash paid for interest expense

 

SBA Debentures

 

$

550

 

$

140

 

$

 

$

690

 

$

749

 

2022 Notes(2)

 

 

1,011

 

 

50

 

 

 

 

1,061

 

 

2,293

 

July 2024 Notes

 

 

1,252

 

 

74

 

 

 

 

1,326

 

 

2,504

 

February 2025 Notes

 

 

535

 

 

29

 

 

 

 

564

 

 

1,070

 

June 2025 Notes

 

 

754

 

 

40

 

 

 

 

794

 

 

 

March 2026 A Notes

 

 

563

 

 

24

 

 

 

 

587

 

 

1,125

 

March 2026 B Notes

 

 

569

 

 

26

 

 

 

 

595

 

 

1,138

 

September 2026 Notes

 

 

2,174

 

 

204

 

 

 

 

2,378

 

 

4,266

 

January 2027 Notes

 

 

2,395

 

 

161

 

 

 

 

2,556

 

 

 

2033 Notes

 

 

625

 

 

27

 

 

 

 

652

 

 

625

 

2022 Convertible Notes(2)

 

 

923

 

 

149

 

 

 

 

1,072

 

 

5,004

 

MUFG Bank Facility(3)

 

 

114

 

 

237

 

 

567

 

 

918

 

 

 

SMBC Facility

 

 

182

 

 

49

 

 

65

 

 

296

 

 

236

 

Total

 

$

11,647

 

$

1,210

 

$

632

 

$

13,489

 

$

19,010

 

(1)
Interest expense includes amortization of original issue discounts for the three months ended March 31, 2022 of $23 thousand, $112 thousand, $42 thousand, and $98 thousand, related to the 2022 Notes, 2022 Convertible Notes, September 2026 Notes, and January 2027 Notes, respectively.
(2)
In February 2022, the Company has fully repaid the aggregate outstanding principal balances and retired 2022 Notes and 2022 Convertible Notes.
(3)
The June 2022 amendment of the MUFG Bank Facility replaced the Union Bank Facility via an amendment which changed the lead lender.

As of March 31, 2023 and December 31, 2022, the Company was in compliance with the terms of all borrowing arrangements. There are no sinking fund requirements for any of the Company’s debt.

47


SBA Debentures

The Company held the following SBA debentures outstanding principal balances as of March 31, 2023 and December 31, 2022:

(in thousands)
 
Issuance/Pooling Date

 

Maturity Date

 

Interest Rate (1)

 

March 31, 2023

 

 

December 31, 2022

 

March 26, 2021

 

September 1, 2031

 

1.58%

 

$

37,500

 

 

$

37,500

 

June 25, 2021

 

September 1, 2031

 

1.58%

 

 

16,200

 

 

 

16,200

 

July 28, 2021

 

September 1, 2031

 

1.58%

 

 

5,400

 

 

 

5,400

 

August 20, 2021

 

September 1, 2031

 

1.58%

 

 

5,400

 

 

 

5,400

 

October 21, 2021

 

March 1, 2032

 

3.21%

 

 

14,000

 

 

 

14,000

 

November 1, 2021

 

March 1, 2032

 

3.21%

 

 

21,000

 

 

 

21,000

 

November 15, 2021

 

March 1, 2032

 

3.21%

 

 

5,200

 

 

 

5,200

 

November 30, 2021

 

March 1, 2032

 

3.21%

 

 

20,800

 

 

 

20,800

 

December 20, 2021

 

March 1, 2032

 

3.21%

 

 

10,000

 

 

 

10,000

 

December 23, 2021

 

March 1, 2032

 

3.21%

 

 

10,000

 

 

 

10,000

 

December 28, 2021

 

March 1, 2032

 

3.21%

 

 

5,000

 

 

 

5,000

 

January 14, 2022

 

March 1, 2032

 

3.21%

 

 

4,500

 

 

 

4,500

 

January 21, 2022

 

March 1, 2032

 

3.21%

 

 

20,000

 

 

 

20,000

 

Total SBA Debentures

 

 

 

 

 

$

175,000

 

 

$

175,000

 

(1)
Interest rates are determined initially at issuance and reset to a fixed rate at the debentures pooling date. The rates are inclusive of annual SBA charges.

SBICs are subject to a variety of regulations and oversight by the SBA concerning the size and nature of the companies in which they may invest as well as the structures of those investments. The SBA as part of its oversight periodically examines and audits to determine SBICs compliance with SBA regulations. Our SBIC was in compliance with all SBIC terms, including those pertaining to the SBA Debentures as of March 31, 2023 and December 31, 2022.

HC IV received its license to operate as a SBIC on October 27, 2020. The license has a 10-year term. Through the license, HC IV has access to $175.0 million of capital through the SBA debenture program, that is in addition to the Company’s regulatory capital commitment of $87.5 million to HC IV. As of March 31, 2023 and December 31, 2022, HC IV has issued a total of $175.0 million in SBA guaranteed debentures.

As of March 31, 2023, the Company held investments in HC IV in 19 companies with a fair value of approximately $289.7 million, accounting for approximately 9.3% of the Company’s total investment portfolio. Further, HC IV held approximately $307.7 million in tangible assets which accounted for approximately 9.5% of the Company’s total assets as of March 31, 2023.

As of December 31, 2022, the Company held investments in HC IV in 21 companies with a fair value of approximately $343.7 million, accounting for approximately 11.6% of the Company’s total investment portfolio. Further, HC IV held approximately $348.6 million in tangible assets which accounted for approximately 11.5% of the Company’s total assets as of December 31, 2022.

July 2024 Notes

On July 16, 2019, the Company issued $105.0 million in aggregate principal amount of 4.77% interest-bearing unsecured notes due on July 16, 2024 (the “July 2024 Notes”), unless repurchased in accordance with their terms, to qualified institutional investors in a private placement notes offering. Interest on the July 2024 Notes is due semiannually. The July 2024 Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company.

February 2025 Notes

On February 5, 2020, the Company issued $50.0 million in aggregate principal amount of 4.28% interest-bearing unsecured notes due February 5, 2025 (the “February 2025 Notes”), unless repurchased in accordance with their terms, to qualified institutional investors in a private placement notes offering. Interest on the February 2025 Notes is due semiannually. The February 2025 Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company.

June 2025 Notes

On June 3, 2020, the Company issued $70.0 million in aggregate principal amount of 4.31% interest-bearing unsecured notes due June 3, 2025 (the “June 2025 Notes”), unless repurchased in accordance with their terms, to qualified institutional investors in a private placement notes offering. Interest on the June 2025 Notes is due semiannually. The June 2025 Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company.

June 2025 3-Year Notes

On June 23, 2022, the Company issued $50.0 million in aggregate principal amount of 6.00% interest-bearing unsecured notes due June 23, 2025 (the “June 2025 3-Year Notes”), unless repurchased in accordance with their terms, to qualified institutional

48


investors in a private placement notes offering. Interest on the June 2025 3-Year Notes is due semiannually. The June 2025 3-Year Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company.

March 2026 A Notes

On November 4, 2020, the Company issued $50.0 million in aggregate principal amount of 4.5% interest-bearing unsecured notes due March 4, 2026 (the “March 2026 A Notes”), unless repurchased in accordance with their terms, to qualified institutional investors in a private placement notes offering. Interest on the March 2026 A Notes is due semiannually. The March 2026 A Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company.

March 2026 B Notes

On March 4, 2021, the Company issued $50.0 million in aggregate principal amount of 4.55% interest-bearing unsecured notes due March 4, 2026 (the “March 2026 B Notes”), unless repurchased in accordance with their terms, to qualified institutional investors in a private placement pursuant note offering. The sale of the March 2026 B Notes generated net proceeds of approximately $49.5 million. Aggregate offering expenses in connection with the transaction, including fees and commissions, were approximately $0.5 million. Interest on the March 2026 B Notes is due semiannually. The March 2026 B Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company.

September 2026 Notes

On September 16, 2021, the Company issued $325.0 million in aggregate principal amount of 2.625% interest-bearing unsecured notes due September 16, 2026 (the “September 2026 Notes”), unless repurchased in accordance with the terms of the Seventh Supplemental Indenture, dated September 16, 2021. The issuance of the September 2026 Notes generated net proceeds of approximately $320.1 million. The aggregate offering expenses in connection with the transaction, including the underwriter’s discount and commissions, were approximately $4.1 million of costs and $0.8 million related to the discount. Interest on the September 2026 Notes is payable semi-annually in arrears on March 16 and September 16 of each year, commencing on March 16, 2022. The September 2026 Notes are general unsecured obligations and rank pari passu, or equally in right of payment, with all outstanding and future unsecured unsubordinated indebtedness issued by the Company. The Company may redeem some or all of the September 2026 Notes at any time, or from time to time, at the redemption price set forth under the terms of the September 2026 Notes Indenture.

January 2027 Notes

On January 20, 2022, the Company issued $350.0 million in aggregate principal amount of 3.375% interest-bearing unsecured notes due January 20, 2027 (the “January 2027 Notes”), unless repurchased in accordance with the terms of the Eight Supplemental Indenture, dated January 20, 2022. The issuance of the January 2027 Notes generated net proceeds of approximately $343.4 million. The aggregate offering expenses in connection with the transaction, including the underwriter’s discount and commissions, were approximately $4.1 million of costs and $2.5 million related to the discount. Interest on the January 2027 Notes is payable semi-annually in arrears on January 20 and July 20 of each year, commencing on July 20, 2022. The January 2027 Notes are general unsecured obligations and rank pari passu, or equally in right of payment, with all outstanding and future unsecured unsubordinated indebtedness issued by the Company. The Company may redeem some or all of the January 2027 Notes at any time, or from time to time, at the redemption price set forth under the terms of the January 2027 Notes Indenture.

2031 Asset-Backed Notes

On June 22, 2022, the Company completed a term debt securitization in connection with which an affiliate of the Company issued $150.0 million in aggregate principal amount of 4.95% interest-bearing asset-backed notes due on July 20, 2031 (the “2031 Asset-Backed Notes”). The 2031 Asset-Backed Notes were issued by Hercules Capital Funding Trust 2022-1 LLC (the “2022 Securitization Issuer”) pursuant to a note purchase agreement, dated as of June 22, 2022, by and among the Company, Hercules Capital Funding 2022-1 LLC, as trust depositor, the 2022 Securitization Issuer, and U.S. Bank Trust Company, N. A., as trustee, and are backed by a pool of senior loans made to certain portfolio companies of the Company and secured by certain assets of those portfolio companies and are to be serviced by the Company. Interest on the 2031 Asset-Backed Notes will be paid, to the extent of funds available.

Under the terms of the 2031 Asset-Backed Notes, the Company is required to maintain a reserve cash balance, funded through proceeds from the sale of the 2031 Asset-Backed Notes and through interest and principal collections from the underlying securitized debt portfolio, which may be used to pay monthly interest and principal payments on the 2031 Asset-Backed Notes. The Company has segregated these funds and classified them as restricted cash. As of March 31, 2023 and December 31, 2022, there was approximately $7.8 million and $10.1 million, respectively, of funds segregated as restricted cash related to the 2031 Asset-Backed Notes.

49


2033 Notes

On September 24, 2018, the Company issued $40.0 million in aggregate principal amount of 6.25% interest-bearing unsecured notes due October 30, 2033 (the “2033 Notes”), unless repurchased in accordance with the terms of the Sixth Supplemental Indenture to the Base Indenture, dated September 24, 2018. Interest on the 2033 Notes is payable quarterly in arrears on January 30, April 30, July 30, and October 30 of each year. The 2033 Notes trade on the NYSE under the symbol “HCXY.” The 2033 Notes are general unsecured obligations and rank pari passu, or equally in right of payment, with all outstanding and future unsecured unsubordinated indebtedness issued by the Company. The Company may redeem some or all of the 2033 Notes at any time, or from time to time, at the redemption price set forth under the terms of the 2033 Notes indenture after October 30, 2023.

Credit Facilities

As of March 31, 2023 and December 31, 2022, the Company has two available credit facilities, the MUFG Bank Facility and the SMBC Facility (together, the “Credit Facilities”). For the three months ended March 31, 2023 and year ended December 31, 2022, the weighted average interest rate was 6.96% and 4.51%, respectively, and the average debt outstanding under the Credit Facilities was $189.5 million and $127.7 million, respectively.

MUFG Bank Facility

On January 13, 2023, the Company entered into a third amended credit facility agreement, which amends the agreement dated as of June 10, 2022. The Company, through a special purpose wholly owned subsidiary, Hercules Funding IV LLC (“Hercules Funding IV”), as borrower, entered into the credit facility (the “MUFG Bank Facility”) with MUFG Bank Ltd. (formerly MUFG Union Bank and known as the “Union Bank Facility”) as the arranger and administrative agent, and the lenders party to the MUFG Bank Facility from time to time.

Under the MUFG Bank Facility, the lenders have made commitments of $400.0 million, which may be further increased via an accordion feature up to an aggregate $600.0 million, funded by existing or additional lenders and with the agreement of MUFG Bank and subject to other customary conditions. There can be no assurances that additional lenders will join the MUFG Bank Facility to increase available borrowings. Debt under the MUFG Bank Facility generally bears interest at a rate per annum equal to SOFR plus 2.75% for SOFR loans. The MUFG Bank Facility matures on January 13, 2026, plus a 12-month amortization period, unless sooner terminated in accordance with its terms. The MUFG Bank Facility is secured by all of the assets of Hercules Funding IV. The MUFG Bank Facility requires payment of a non-use fee during the revolving credit availability period.

The MUFG Bank Facility also includes financial and other covenants applicable to the Company and the Company’s subsidiaries, in addition to those applicable to Hercules Funding IV, including covenants relating to certain changes of control of Hercules Funding IV. Among other things, these covenants require the Company to maintain certain financial ratios, including a minimum interest coverage ratio and a minimum tangible net worth with respect to Hercules Funding IV. The MUFG Bank Facility provides for customary events of default, including with respect to payment defaults, breach of representations and covenants, servicer defaults, certain key person provisions, cross default provisions to certain other debt, lien and judgment limitations, and bankruptcy.

SMBC Facility

On June 14, 2022, the Company entered into a second amendment to a revolving credit agreement, which amends the revolving credit agreement, dated as of November 9, 2021, with Sumitomo Mitsui Banking Corporation (the “SMBC Facility”), as administrative agent, and the lenders and issuing banks to the SMBC Facility. As of March 31, 2023, the SMBC Facility provides for borrowings in U.S. dollars and certain agreed upon foreign currencies of up to $225.0 million, from which the Company may access subject to certain conditions. The SMBC Facility contains an accordion feature, in which the Company can increase the credit line up to an aggregate of $500.0 million, funded by existing or additional lenders and with the agreement of SMBC Bank and subject to other customary conditions. Availability under the SMBC Facility will terminate on November 7, 2025, and the outstanding loans under the SMBC Facility will mature on November 9, 2026. Borrowings under the SMBC Facility are subject to compliance with a borrowing base and an aggregate portfolio balance. The Company’s obligations under the SMBC Facility may in the future be guaranteed by certain of the Company’s subsidiaries and primarily secured by a first priority security interest (subject to certain exceptions) in only certain specified property and assets of the Company and the subsidiary guarantors thereunder.

Additionally in January 2023, the Company entered into a Letter of Credit Facility Agreement (the “SMBC LC Facility”) with Sumitomo Mitsui Banking Corporation that provides for a letter of credit facility with a final maturity date ending on January 13, 2026 and a commitment amount of $175.0 million as amended. Further, the SMBC LC Facility includes an accordion provision to increase the commitment up to $400 million, subject to certain conditions. The Company’s obligations under the SMBC LC Facility may in the future be guaranteed by certain of the Company’s subsidiaries and is primarily secured by a first priority security interest (subject to certain exceptions) in only certain specified property and assets of the Company and any subsidiary guarantors thereunder.

Interest under the SMBC Facility is determined by the nature and denomination of the borrowing. Interest rates are determined by the appropriate benchmark rate (SOFR, EURIBOR, Prime, CDOR, or TIBOR) as applicable for the type of borrowing plus an applicable margin adjustment which can range from 0.875% to 2.0% per annum subject to certain conditions. In addition to interest, the SMBC Facility is subject to a non-usage fee of 0.375% per annum (based on the immediately preceding period’s average usage)

50


on the unused portion of the commitment under the SMBC Facility during the revolving period. The Company is required to pay letter of credit participation fees and a fronting fee on the average daily amount of any lender’s exposure with respect to any letters of credit issued under the SMBC Facility.

The SMBC Facility contains customary events of default with customary cure and notice provisions, including, without limitation, nonpayment, misrepresentation of representations and warranties in a material respect, breach of covenant, cross-default and cross-acceleration to other indebtedness and bankruptcy. The SMBC Facility also includes financial and other covenants applicable to the Company and the Company’s subsidiaries, including covenants relating to minimum stockholders' equity, asset coverage ratios, and our status as a RIC.

6. Income Taxes

To qualify as a RIC, the Company is required to meet certain income and asset diversification tests in addition to distributing dividends of an amount generally at least equal to 90% of its investment company taxable income, as defined by the Code and determined without regard to any deduction for distributions paid, to its stockholders. The amount to be paid out as a distribution is determined by the Board each quarter and is based upon the annual earnings estimated by the management of the Company. To the extent that the Company’s earnings fall below the amount of dividend distributions declared, however, a portion of the total amount of the Company’s distributions for the fiscal year may be deemed a return of capital for tax purposes to the Company’s stockholders.

As previously noted, the determination of taxable income pursuant to U.S. federal income tax regulations differs from U.S. GAAP. As a result, permanent differences are reclassified among capital accounts in the financial statements to reflect their appropriate tax character. During the year ended December 31, 2022, the Company reclassified $3.0 million from accumulated net realized gains (losses) to additional paid-in capital for book purposes primarily related to net realized gains from portfolio companies which are held in taxable subsidiaries and are not consolidated with the Company for income tax purposes.

Taxable income for the three months ended March 31, 2023, was approximately $64.1 million or $0.47 per share. Taxable net realized gains for the same period were $7.2 million or approximately $0.05 per share. Taxable income for the three months ended March 31, 2022, was approximately $33.2 million or $0.28 per share. Taxable net realized gains for the same period were $3.7 million or approximately $0.03 per share.

The aggregate gross unrealized appreciation of the Company’s investments over cost for U.S. federal income tax purposes was $87.9 million and $72.2 million, as of March 31, 2023 and December 31, 2022, respectively. The aggregate gross unrealized depreciation of the Company’s investments under cost for U.S. federal income tax purposes was $106.6 million and $112.0 million, as of March 31, 2023 and December 31, 2022, respectively. The net unrealized depreciation over cost for U.S. federal income tax purposes was $18.7 million as of March 31, 2023 and $39.8 million as of December 31, 2022. The aggregate cost of securities for U.S. federal income tax purposes was $3.1 billion and $3.0 billion as of March 31, 2023 and December 31, 2022, respectively.

As a RIC, the Company is subject to a 4% non-deductible U.S. federal excise tax on certain undistributed income unless the Company makes distributions treated as dividends for U.S. federal income tax purposes in a timely manner to its stockholders in respect of each calendar year of an amount at least equal to the sum of (1) 98% of its ordinary income (taking into account certain deferrals and elections) for each calendar year, (2) 98.2% of its capital gain net income (adjusted for certain ordinary losses) for the 1-year period ending October 31 of each such calendar year and (3) any ordinary income and capital gain net income realized, but not distributed, in preceding calendar years (the "Excise Tax Avoidance Requirement"). The Company will not be subject to this excise tax on any amount on which the Company incurred U.S. federal income tax (such as the tax imposed on a RIC’s retained net capital gains).

Depending on the level of taxable income earned in a taxable year, the Company may choose to carry over taxable income in excess of current taxable year distributions from such taxable income into the next taxable year and incur a 4% excise tax on such taxable income, as required. The maximum amount of excess taxable income that may be carried over for distribution in the next taxable year under the Code is the total amount of distributions paid in the following taxable year, subject to certain declaration and payment guidelines. To the extent the Company chooses to carry over taxable income into the next taxable year, distributions declared and paid by the Company in a taxable year may differ from the Company’s taxable income for that taxable year as such distributions may include the distribution of current taxable year taxable income, the distribution of prior taxable year taxable income carried over into and distributed in the current taxable year or returns of capital.

For the three months ended March 31, 2023, the Company paid approximately $4.8 million of income tax, including excise tax, and had $1.8 million of accrued, but unpaid tax expense as of March 31, 2023. For the three months ended March 31, 2022, the Company paid approximately $7.1 million of income tax, including excise tax, and had $0.8 million of accrued, but unpaid tax expense as of March 31, 2022.

Additionally, the Company has taxable subsidiaries which hold certain portfolio investments in an effort to limit potential legal liability and/or comply with source-income type requirements contained in the RIC tax provisions of the Code. These taxable subsidiaries are consolidated for U.S. GAAP and the portfolio investments held by the taxable subsidiaries are included in the Company’s consolidated financial statements and are recorded at fair value. These taxable subsidiaries are not consolidated with the

51


Company for income tax purposes and may generate income tax expense, or benefit, and tax assets and liabilities as a result of their ownership of certain portfolio investments. Any income generated by these taxable subsidiaries generally would be subject to tax at normal U.S. federal tax rates based on its taxable income.

In accordance with ASC 740, the Company evaluates tax positions taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax benefits of positions not deemed to meet the more-likely-than-not threshold, or uncertain tax positions, would be recorded as a tax expense in the current year. It is the Company’s policy to recognize accrued interest and penalties, if any, related to unrecognized tax benefits as a component of provision for income taxes. Based on an analysis of the Company’s tax position, there are no uncertain tax positions that met the recognition or measurement criteria. The Company is currently not undergoing any tax examinations. The Company does not anticipate any significant increase or decrease in unrecognized tax benefits for the next twelve months. The 2019 - 2021 federal tax years for the Company remain subject to examination by the Internal Revenue Service. The 2018 – 2021 state tax years for the Company remain subject to examination by the state taxing authorities.

7. Stockholders’ Equity and Distributions

The Company has issued and outstanding 138,596,438 and 133,044,602 shares of common stock as of March 31, 2023 and December 31, 2022, respectively. The Company may from time-to-time issue and sell shares of its common stock through public or At-The-Market ("ATM") offerings. The Company currently sells shares through its equity distribution agreement with JMP Securities LLC (“JMP”) and Jefferies LLC (“Jeffries”) (the “2022 Equity Distribution Agreement”). The 2022 Equity Distribution Agreement provides that the Company may offer and sell up to 17.5 million shares of its common stock from time to time through JMP or Jeffries, as its sales agents. Sales of the Company’s common stock, if any, may be made in negotiated transactions or transactions that are deemed to be “at the market,” as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), including sales made directly on the NYSE or similar securities exchange or sales made to or through a market maker other than on an exchange, at prices related to the prevailing market prices or at negotiated prices.

The Company issued and sold the following shares of common stock during the three months ended March 31, 2023 and 2022:

(in millions, except per share data)

 

Three Months Ended March 31,

Number of Shares Issued

Gross Proceeds

 

Underwriting Fees/Offering Expenses

 

Net Proceeds

 

Average Price/Share

 

2022

4.9

$

86.1

 

$

0.9

 

$

85.2

 

$

17.54

 

2023

4.7

$

66.2

 

$

0.8

 

$

65.3

 

$

14.03

 

The Company generally uses net proceeds from these offerings to make investments, to repurchase or pay down liabilities and for general corporate purposes. As of March 31, 2023, approximately 3.9 million shares remain available for issuance and sale under the current equity distribution agreement.

The Company currently pays quarterly distributions to its stockholders. The following table summarizes the Company’s distributions declared during the three months ended March 31, 2023 and year ended December 31, 2022:

(in thousands, except per share data)

 

Distribution Type

Declared Date

Record Date

Payment Date

Per Share Amount

 

Total Amount

 

Base

February 16, 2022

March 9, 2022

March 16, 2022

$

0.33

 

$

39,794

 

Supplemental

February 16, 2022

March 9, 2022

March 16, 2022

$

0.15

 

$

18,088

 

Base

April 27, 2022

May 17, 2022

May 24, 2022

$

0.33

 

$

41,245

 

Supplemental

April 27, 2022

May 17, 2022

May 24, 2022

$

0.15

 

$

18,748

 

Base

July 20, 2022

August 9, 2022

August 16, 2022

$

0.35

 

$

44,765

 

Supplemental

July 20, 2022

August 9, 2022

August 16, 2022

$

0.15

 

$

19,185

 

Base

October 13, 2022

November 10, 2022

November 17, 2022

$

0.36

 

$

47,472

 

Supplemental

October 13, 2022

November 10, 2022

November 17, 2022

$

0.15

 

$

19,780

 

Total distributions declared during the year ended December 31, 2022

$

1.97

 

$

249,077

 

Base

February 9, 2023

March 2, 2023

March 9, 2023

$

0.39

 

$

53,749

 

Supplemental

February 9, 2023

March 2, 2023

March 9, 2023

$

0.08

 

$

11,025

 

Total distributions declared during the three months ended March 31, 2023

$

0.47

 

$

64,774

 

During the three months ended March 31, 2023, for income tax purposes, the distributions paid of $0.47 per share were comprised of ordinary income. As of March 31, 2023, the Company estimates that it has generated undistributed taxable earnings “spillover” of $0.96 per share. The undistributed taxable earnings spillover will be carried forward toward distributions to be paid in accordance with RIC requirements.

The Company has a distribution reinvestment plan, whereby the Company may buy shares of its common stock in the open

market or issue new shares in order to satisfy dividend reinvestment requests. When the Company issues new shares in connection

with the dividend reinvestment plan, the issue price is equal to the closing price of its common stock on the dividend record date.

During the three months ended March 31, 2023 and 2022, the Company issued 61,383 and 60,326 shares, respectively, of common stock to stockholders in connection with the dividend reinvestment plan.

52


8. Equity Incentive Plans

The Company grants equity-based awards to employees and non-employee directors for the purpose of attracting and retaining the services of its executive officers, key employees, and members of the Board. The Company’s equity-based awards are granted under the 2018 Equity Incentive Plan (the “2018 Plan”) for employees and 2018 Non-Employee Director Plan (the “Director Plan”) for non-employee directors. The 2018 Plan and the Director Plan were approved by stockholders on June 28, 2018 and, unless earlier terminated by the Board, terminate on May 12, 2028. Subject to certain adjustments and permitted reversions of shares, the maximum aggregate number of shares that may be authorized for issuance under awards granted under the 2018 Plan and Director Plan is 9,261,229 shares and 300,000 shares, respectively. In connection with the issuance of shares under the 2018 Plan and Director Plan, the Company has registered, in aggregate, 18.7 million and 300,000 shares of common stock, respectively. Outstanding awards issued under plans that precede the 2018 Plan and Director Plan remain outstanding, unchanged and subject to the terms of such plans and their respective award agreements, until the vesting, expiration or lapse of such awards in accordance with their terms.

The Company has received exemptive relief from the SEC that permits it to issue restricted stock to non-employee directors under the Director Plan and restricted stock and restricted stock units to certain of its employees, officers, and directors (excluding non-employee directors) under the 2018 Plan. The exemptive order also allows participants in the Director Plan and the 2018 Plan to (i) elect to have the Company withhold shares of its common stock to pay for the exercise price and applicable taxes with respect to an option exercise (“net issuance exercise”) and/or (ii) permit the holders of restricted stock to elect to have the Company withhold shares of its stock to pay the applicable taxes due on restricted stock at the time of vesting. Each individual employee would be able to make a cash payment to satisfy applicable tax withholding at the time of option exercise or vesting on restricted stock.

The Company has granted equity-based awards that have service and performance conditions. Certain of the Company’s equity-based awards are classified as liability awards in accordance with ASC Topic 718, Compensation – Stock Compensation. All of the Company’s equity-based awards require future service, and are expensed over the relevant service period. The Company does not estimate forfeitures, and reverses all unvested costs associated with equity-awards in the period they are forfeited. For the three months ended March 31, 2023, and 2022, the Company recognized $3.2 million and $4.4 million of stock based compensation expense in the Consolidated Statements of Operations, respectively. As of March 31, 2023, and 2022, approximately $27.1 million and $22.2 million of total unrecognized compensation costs expected to be recognized over the next 2.9 and 2.1 years, respectively.

Service-Vesting Awards

The Company grants equity-based awards which have service conditions, which generally begin to vest one-third after one year after the date of grant and ratably over the succeeding 2 years in accordance with the individual award terms. Certain awards have service conditions of longer duration and may begin to vest up to seven years after the date of grant. These equity-based awards which vest upon achievement of service conditions are collectively referred to as the “Service Vesting Awards”. The grant date fair value of Service Vesting Awards granted during the three months ended March 31, 2023, and 2022, were approximately $17.7 million, and $10.4 million, respectively.

The Company has granted restricted stock equity awards in the form of restricted stock awards and restricted stock units. The Company determines the grant date fair values of restricted stock equity awards using the grant date stock close price. The activities for the Company's unvested restricted stock equity awards for each of the three months ended March 31, 2023, and 2022, are summarized below:

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

 

 

Shares

 

Weighted Average Grant Date
Fair Value per Share

 

 

Shares

 

Weighted Average Grant Date
Fair Value per Share

 

Unvested Shares Beginning of Period

 

 

958,985

 

$

16.35

 

 

 

1,037,848

 

$

14.51

 

Granted

 

 

1,277,607

 

$

13.81

 

 

 

593,745

 

$

17.49

 

Vested (1)

 

 

(300,399

)

$

16.42

 

 

 

(331,049

)

$

14.41

 

Forfeited

 

 

(4,427

)

$

17.00

 

 

 

(9,619

)

$

15.93

 

Unvested Shares End of Period

 

 

1,931,766

 

$

14.66

 

 

 

1,290,925

 

$

15.90

 

 

(1) With respect to certain restricted stock equity awards granted prior to January 1, 2019, receipt of the shares of the Company’s common stock underlying vested restricted stock equity awards will be deferred for four years from grant date unless certain conditions are met. Accordingly, such vested restricted stock equity awards will not be issued as common stock upon vesting until the completion of the deferral period.

In addition to the restricted stock equity based awards, the Company has also issued stock options to certain employees. The fair value of options granted during the three months ended March 31, 2023 and 2022, was approximately $8,000 and 10,000, respectively. During the three months ended March 31, 2023 and 2022, approximately $23,000, and $15,000, of share-based cost due to stock option grants was expensed, respectively.

Performance-Vesting Awards

The Company has granted equity-based awards, which have market and performance conditions in addition to a service condition (“Performance Awards”). The value of these awards may increase dependent on increases to the Company’s total stockholder return (“TSR”). The total compensation will be determined by the Company’s TSR relative to specified BDCs during a

53


specified performance period. Depending on the results achieved during the specified performance period, the actual number of shares that a grant recipient receives at the end of the period may range from 0% to 200% of the target shares granted. The Performance Awards typically vest after four years, and generally may not be disposed until one year post vesting. The Company determines the fair values of the Performance Awards at the grant date using a Monte-Carlo simulation multiplied by the target payout level and is recognized over the service period. For certain Performance Awards, distribution equivalent units (“Performance DEUs”) will accrue in the form of additional shares, but will not be paid unless the Performance Awards to which such Performance DEUs relate actually vest.

During the three months ended March 31, 2023 and 2022, no Performance Awards were granted or vested. During the three months ended March 31, 2023, 54,858 shares DEUs were issued and vested immediately with an aggregate fair value of $0.7 million. During the three months ended March 31, 2022, no Performance DEUs were issued. As of March 31, 2023 and 2022, there were no unvested Performance Awards.

Liability Classified Awards

The Company has granted equity-based awards which are subject to both service and performance conditions. These awards are settled either in cash or a fixed dollar value of shares, subject to the terms of each individual award, and therefore classified as liability awards (the “Liability Awards”). The remaining maximum total potential value of the Liability Awards granted is $3.1 million, which assumes all performance conditions are met for each Liability award. If the performance conditions are not met, the total compensation expense related to the Liability Awards may be less than the maximum granted value of the awards. The awards are recorded as deferred compensation within Accounts Payable and Accrued Liabilities included on the Consolidated Statement of Assets and Liabilities.

Certain Liability Awards are structured similar to the Performance Awards, and increase in value with corresponding increases to the Company’s TSR and vest after four years. The Company remeasures the value of these awards each period based on the Company’s TSR achieved to date. Certain other Liability Awards are linked to attainment of investment funding goals. The Company determines the fair value of these Liability Awards based on the expected probability of the performance conditions being met and recognized over the service period. As of March 31, 2023, the Company determined that the weighted average expected probability of the performance conditions being met within each Liability Award was 100%. The expected probability is re-evaluated each period, and may be adjusted to reflect changes in this assumption. These other Liability Awards vest over a three year service term.

As of March 31, 2023, all Liability Awards are unvested and there was approximately $1.6 million of total unrecognized compensation costs expected to be recognized over a weighted average period of 1.1 years. For the three months ended March 31, 2023, there was approximately $0.4 million of compensation expense related to the Liability Awards recognized in the Consolidated Statement of Operations and $1.5 million accrued within Accounts Payable and Accrued Liabilities in the Consolidated Statements of Assets and Liabilities. During the three months ended March 31, 2023 and 2022, no Liability Awards vested.

As of March 31, 2022, all Liability Awards are unvested and there was approximately $3.8 million of total unrecognized compensation costs expected to be recognized over a weighted average period of 2.0 years. For the three months ended March 31, 2022, there was approximately $1.3 million of compensation expense related to the Liability Awards recognized in the Consolidated Statement of Operations and $7.0 million accrued within Accounts Payable and Accrued Liabilities in the Consolidated Statements of Assets and Liabilities.

9. Earnings Per Share

Shares used in the computation of the Company’s basic and diluted earnings per share are as follows:

(in thousands, except per share data)

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Numerator

 

 

 

 

 

 

Net increase (decrease) in net assets resulting from operations

 

$

94,564

 

 

$

(3,336

)

Less: Total distributions declared

 

 

(64,774

)

 

 

(57,882

)

Total Earnings, net of total distributions

 

 

29,790

 

 

 

(61,218

)

 

 

 

 

 

 

 

Earnings, net of distributions attributable to common shares

 

 

29,442

 

 

 

(61,218

)

Add: Distributions declared attributable to common shares

 

 

64,023

 

 

 

57,261

 

Numerator for basic and diluted change in net assets per common share

 

 

93,465

 

 

 

(3,957

)

 

 

 

 

 

 

Denominator

 

 

 

 

 

 

Basic weighted average common shares outstanding

 

 

135,252

 

 

 

118,296

 

Common shares issuable

 

 

1,804

 

 

 

 

Weighted average common shares outstanding assuming dilution

 

 

137,056

 

 

 

118,296

 

 

 

 

 

 

 

Change in net assets per common share:

 

 

 

 

 

 

Basic

 

$

0.69

 

 

$

(0.03

)

Diluted

 

$

0.68

 

 

$

(0.03

)

 

54


In the table above, unvested share-based payment awards that have non-forfeitable rights to distributions or distribution equivalents are treated as participating securities for calculating earnings per share. Unvested common stock options and restricted stock units are also considered for the purpose of calculating diluted earnings per share. For the three months ended March 31, 2022, as the Company had a net loss, the effect of unvested stock options, restricted stock units and awards, and Performance Awards were anti-dilutive, and therefore have been excluded from the calculation of diluted loss per share.

The calculation of change in net assets resulting from operations per common share assuming dilution, excludes all anti-dilutive shares. For the three months ended March 31, 2023, and 2022, the number of anti-dilutive shares, as calculated based on the weighted average closing price of the Company’s common stock for the periods, are as follows:

 

 

Three Months Ended March 31,

 

Anti-dilutive Securities

 

2023

 

 

2022

 

Unvested common stock options

 

 

1,853

 

 

 

31,354

 

Restricted stock units

 

 

7,874

 

 

 

32,697

 

Unvested restricted stock awards

 

 

54,361

 

 

 

 

Performance awards*

 

 

 

 

 

547,626

 

*Included in these amounts are shares related to certain equity-based awards, which are fully-vested but have not been delivered and thus not outstanding for purposes of calculating earnings per share.

As of March 31, 2023 and December 31, 2022, the Company was authorized to issue 200.0 million shares of common stock with a par value of $0.001. Each share of common stock entitles the holder to one vote.

10. Financial Highlights

Following is a schedule of financial highlights for the three months ended March 31, 2023 and 2022:

(in thousands, except per share data and ratios)

Three Months Ended March 31,

 

 

2023

 

 

2022

 

Per share data (1):

 

 

 

 

 

Net asset value at beginning of period

$

10.53

 

 

$

11.22

 

Net investment income

 

0.48

 

 

 

0.30

 

Net realized gain (loss)

 

0.06

 

 

 

(0.02

)

Net unrealized appreciation (depreciation)

 

0.16

 

 

 

(0.31

)

Total from investment operations

 

0.70

 

 

 

(0.03

)

Net increase (decrease) in net assets from capital share transactions (1)

 

0.05

 

 

 

0.08

 

Distributions of net investment income (6)

 

(0.48

)

 

 

(0.48

)

Stock-based compensation expense included in net investment income and other movements(2)

 

0.02

 

 

 

0.03

 

Net asset value at end of period

$

10.82

 

 

$

10.82

 

 

 

 

 

 

Ratios and supplemental data:

 

 

 

 

 

Per share market value at end of period

$

12.89

 

 

$

18.07

 

Total return (3)

 

0.80

%

 

 

11.97

%

Shares outstanding at end of period

 

138,596

 

 

 

123,194

 

Weighted average number of common shares outstanding

 

135,252

 

 

 

118,296

 

Net assets at end of period

$

1,499,006

 

 

$

1,333,448

 

Ratio of total expense to average net assets (4)

 

10.94

%

 

 

8.82

%

Ratio of net investment income before investment gains and losses to average net assets (4)

 

18.10

%

 

 

10.75

%

Portfolio turnover rate (5)

 

6.90

%

 

 

3.81

%

Weighted average debt outstanding

$

1,604,533

 

 

$

1,341,941

 

Weighted average debt per common share

$

11.86

 

 

$

11.34

 

(1)
All per share activity is calculated based on the weighted average shares outstanding for the relevant period, except net increase (decrease) in net assets from capital share transactions, which is based on the common shares outstanding as of the relevant balance sheet date.
(2)
Adjusts for the impact of stock-based compensation expense, which is a non-cash expense and has no net impact to net asset value. Pursuant to ASC Topic 718,
the expense is offset by a corresponding increase in paid-in capital. Additionally, adjusts for other items attributed to the difference between certain per share
data based on the weighted-average basic shares outstanding and those calculated using the shares outstanding as of a period end or transaction date.
(3)
The total return for the three months ended March 31, 2023, and 2022 equals the change in the ending market value over the beginning of the period price per share plus distributions paid per share during the period, divided by the beginning price assuming the distribution is reinvested on the date of the distribution. As such, the total return is not annualized. The total return does not reflect any sales load that must be paid by investors.
(4)
The ratios are calculated based on weighted average net assets for the relevant period and are annualized.
(5)
The portfolio turnover rate for the three months ended March 31, 2023, and 2022 equals the lesser of investment portfolio purchases or sales during the period, divided by the average investment portfolio value during the period. As such, portfolio turnover rate is not annualized.
(6)
Includes distributions on unvested restricted stock awards.

 

55


 

11. Commitments and Contingencies

The Company’s commitments and contingencies consist primarily of unfunded commitments to extend credit in the form of loans to the Company’s portfolio companies. As of March 31, 2023, a portion of these unfunded contractual commitments are dependent upon the portfolio company reaching certain milestones before the debt commitment becomes available. Furthermore, the Company’s credit agreements with its portfolio companies generally contain customary lending provisions which allow the Company relief from funding obligations for previously made unfunded commitments in instances where the underlying portfolio company experiences materially adverse events that affect the financial condition or business outlook for the portfolio company. Since a portion of these commitments may expire without being drawn, unfunded contractual commitments do not necessarily represent future cash requirements. As such, the Company’s disclosure of unfunded contractual commitments includes only those which are available at the request of the portfolio company and unencumbered by future or unachieved milestones.

As of March 31, 2023, and December 31, 2022, the Company had approximately $562.1 million and $628.9 million, respectively, of available unfunded commitments, including undrawn revolving facilities, which were available at the request of the portfolio company and unencumbered by future or unachieved milestones. In order to draw a portion of the Company's available unfunded commitments, a portfolio company must submit to the Company a formal funding request that complies with the applicable advance notice and other operational requirements. The amounts disclosed exclude unfunded commitments (i) for which, with respect to a portfolio company's agreement, a milestone was achieved after the last day on which the portfolio company could have requested a drawdown funding to be completed within the reporting period; and (ii) related to the portion of portfolio company investments assigned to or directly committed by the Adviser Funds as described in “Note -12 Related Party Transactions”. The fair value of the Company’s unfunded commitments is considered to be immaterial as the yield determined at the time of underwriting is expected to be materially consistent with the yield upon funding, given that interest rates are generally pegged to market indices and given the existence of milestones, conditions and/or obligations imbedded in the borrowing agreements.

As of March 31, 2023, and December 31, 2022, the Company’s unfunded contractual commitments available at the request of the portfolio company, including undrawn revolving facilities, and unencumbered by milestones were as follows:

(in thousands)

 

Unfunded Commitments (1) as of

 

Portfolio Company

 

March 31, 2023

 

 

December 31, 2022

 

Debt Investments:

 

 

 

 

 

 

Phathom Pharmaceuticals, Inc.

 

$

66,500

 

 

$

66,500

 

Thumbtack, Inc.

 

 

40,000

 

 

 

40,000

 

Automation Anywhere, Inc.

 

 

29,400

 

 

 

29,400

 

HilleVax, Inc.

 

 

28,000

 

 

 

28,000

 

Oak Street Health, Inc.

 

 

22,500

 

 

 

33,750

 

Skydio, Inc.

 

 

22,500

 

 

 

22,500

 

Axsome Therapeutics, Inc.

 

 

21,750

 

 

 

21,000

 

Replimune Group, Inc.

 

 

20,700

 

 

 

20,700

 

G1 Therapeutics, Inc.

 

 

19,375

 

 

 

19,375

 

AppDirect, Inc.

 

 

15,000

 

 

 

15,000

 

ATAI Life Sciences N.V.

 

 

14,000

 

 

 

 

Alladapt Immunotherapeutics Inc.

 

 

12,500

 

 

 

15,000

 

Dronedeploy, Inc.

 

 

12,500

 

 

 

12,500

 

Iveric Bio, Inc.

 

 

12,375

 

 

 

 

PathAI, Inc.

 

 

12,000

 

 

 

12,000

 

Viridian Therapeutics, Inc.

 

 

12,000

 

 

 

12,000

 

Tipalti Solutions Ltd.

 

 

10,500

 

 

 

 

Madrigal Pharmaceutical, Inc.

 

 

10,200

 

 

 

34,000

 

Alamar Biosciences, Inc.

 

 

10,000

 

 

 

10,000

 

Aryaka Networks, Inc.

 

 

10,000

 

 

 

20,000

 

Brain Corporation

 

 

10,000

 

 

 

20,700

 

Next Insurance, Inc.

 

 

10,000

 

 

 

 

Nuvolo Technologies Corporation

 

 

9,000

 

 

 

5,970

 

Locus Robotics Corp.

 

 

8,775

 

 

 

 

Kura Oncology, Inc.

 

 

8,250

 

 

 

8,250

 

Tarsus Pharmaceuticals, Inc.

 

 

8,250

 

 

 

10,313

 

Vida Health, Inc.

 

 

8,178

 

 

 

40,000

 

Dashlane, Inc.

 

 

8,000

 

 

 

10,000

 

Elation Health, Inc.

 

 

7,500

 

 

 

7,500

 

Gritstone Bio, Inc.

 

 

7,500

 

 

 

7,500

 

TG Therapeutics, Inc.

 

 

6,500

 

 

 

 

Carwow LTD

 

 

6,467

 

 

 

 

Akero Therapeutics, Inc.

 

 

5,000

 

 

 

5,000

 

Fulfil Solutions, Inc.

 

 

5,000

 

 

 

5,000

 

Modern Life, Inc.

 

 

4,250

 

 

 

 

Riviera Partners LLC

 

 

3,500

 

 

 

3,500

 

Leapwork ApS

 

 

3,450

 

 

 

 

Babel Street

 

 

3,375

 

 

 

3,375

 

 

56


(in thousands)

 

Unfunded Commitments (1) as of

 

Portfolio Company

 

March 31, 2023

 

 

December 31, 2022

 

Debt Investments:

 

 

 

 

 

 

Signal Media Limited

 

$

3,000

 

 

$

5,250

 

Cutover, Inc.

 

 

2,382

 

 

 

1,000

 

Zappi, Inc.

 

 

2,358

 

 

 

2,571

 

Yipit, LLC

 

 

2,250

 

 

 

2,250

 

Streamline Healthcare Solutions

 

 

2,200

 

 

 

 

Khoros (p.k.a Lithium Technologies)

 

 

1,812

 

 

 

1,812

 

Ceros, Inc.

 

 

1,707

 

 

 

1,707

 

ThreatConnect, Inc.

 

 

1,600

 

 

 

1,600

 

RVShare, LLC

 

 

1,500

 

 

 

1,500

 

Loftware, Inc.

 

 

1,423

 

 

 

 

Dispatch Technologies, Inc.

 

 

1,250

 

 

 

1,250

 

3GTMS, LLC

 

 

1,222

 

 

 

 

LogicSource

 

 

1,209

 

 

 

1,209

 

Zimperium, Inc.

 

 

1,088

 

 

 

1,088

 

Ikon Science Limited

 

 

1,050

 

 

 

1,050

 

Omeda Holdings, LLC

 

 

938

 

 

 

938

 

Fortified Health Security

 

 

840

 

 

 

840

 

Agilence, Inc.

 

 

800

 

 

 

800

 

Flight Schedule Pro, LLC

 

 

639

 

 

 

639

 

Constructor.io Corporation

 

 

625

 

 

 

625

 

Enmark Systems, Inc.

 

 

457

 

 

 

457

 

Alchemer LLC

 

 

445

 

 

 

890

 

Cybermaxx Intermediate Holdings, Inc.

 

 

390

 

 

 

390

 

Annex Cloud

 

 

386

 

 

 

386

 

ShadowDragon, LLC

 

 

333

 

 

 

333

 

Cytracom Holdings LLC

 

 

72

 

 

 

225

 

Provention Bio, Inc.

 

 

 

 

 

40,000

 

Fever Labs, Inc.

 

 

 

 

 

8,333

 

Demandbase, Inc.

 

 

 

 

 

3,750

 

MacroFab, Inc.

 

 

 

 

 

3,000

 

Mobile Solutions Services

 

 

 

 

 

495

 

Total Unfunded Debt Commitments:

 

 

556,771

 

 

 

623,221

 

 

 

 

 

 

 

Investment Funds & Vehicles:(2)

 

 

 

 

 

 

Forbion Growth Opportunities Fund I C.V.

 

 

2,534

 

 

 

2,842

 

Forbion Growth Opportunities Fund II C.V.

 

 

2,811

 

 

 

2,811

 

Total Unfunded Commitments in Investment Funds & Vehicles:

 

 

5,345

 

 

 

5,653

 

 

 

 

 

 

 

Total Unfunded Commitments

 

$

562,116

 

 

$

628,874

 

(1)
For debt investments, amounts represent unfunded commitments, including undrawn revolving facilities, which are available at the request of the portfolio company. Amount excludes unfunded commitments which are unavailable due to the borrower having not met certain milestones. These amounts also exclude $178.2 million and $173.5 million of unfunded commitments as of March 31, 2023, and December 31, 2022, respectively, to portfolio companies related to loans assigned to or directly committed by the Adviser Funds as described in “Note -12 Related Party Transactions”.
(2)
For investment funds and vehicles, the amount represents uncalled capital commitments in private equity funds.

The following table provides additional information on the Company’s unencumbered unfunded commitments regarding milestones, expirations and type:

(in thousands)

 

March 31, 2023

 

 

December 31, 2022

 

Unfunded Debt Commitments:

 

 

 

 

 

 

Expiring during:

 

 

 

 

 

 

2023

 

$

358,696

 

 

$

461,296

 

2024

 

 

167,468

 

 

 

134,856

 

2025

 

 

1,294

 

 

 

720

 

2026

 

 

9,037

 

 

 

9,038

 

2027

 

 

14,958

 

 

 

15,171

 

2028

 

 

5,318

 

 

 

2,140

 

Total Unfunded Debt Commitments

 

 

556,771

 

 

 

623,221

 

 

 

 

 

 

 

 

Unfunded Commitments in Investment Funds & Vehicles:

 

 

 

 

 

 

Expiring during:

 

 

 

 

 

 

2030

 

 

2,534

 

 

 

2,842

 

2032

 

 

2,811

 

 

 

2,811

 

Total Unfunded Commitments in Investment Funds & Vehicles

 

 

5,345

 

 

 

5,653

 

Total Unfunded Commitments

 

$

562,116

 

 

$

628,874

 

 

57


The following tables provide the Company’s contractual obligations as of March 31, 2023 and December 31, 2022:

As of March 31, 2023:

 

Payments due by period (in thousands)

 

Contractual Obligations (1)

 

Total

 

 

Less than 1 year

 

 

1 - 3 years

 

 

3 - 5 years

 

 

After 5 years

 

Debt (2)(3)

 

$

1,733,000

 

 

$

 

 

$

375,000

 

 

$

993,000

 

 

$

365,000

 

Lease and License Obligations (4)

 

 

8,022

 

 

 

2,142

 

 

 

2,259

 

 

 

2,454

 

 

 

1,167

 

Total

 

$

1,741,022

 

 

$

2,142

 

 

$

377,259

 

 

$

995,454

 

 

$

366,167

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2022:

 

Payments due by period (in thousands)

 

Contractual Obligations (1)

 

Total

 

 

Less than 1 year

 

 

1 - 3 years

 

 

3 - 5 years

 

 

After 5 years

 

Debt (5)(3)

 

$

1,594,000

 

 

$

 

 

$

382,000

 

 

$

847,000

 

 

$

365,000

 

Lease and License Obligations (4)

 

 

8,641

 

 

 

2,723

 

 

 

2,259

 

 

 

2,452

 

 

 

1,207

 

Total

 

$

1,602,641

 

 

$

2,723

 

 

$

384,259

 

 

$

849,452

 

 

$

366,207

 

(1)
Excludes commitments to extend credit to the Company’s portfolio companies and uncalled capital commitments in investment funds.
(2)
Includes $175.0 million in principal outstanding under the SBA Debentures, $105.0 million of the July 2024 Notes, $50.0 million of the February 2025 Notes, $70.0 million of the June 2025 Notes, $50.0 million of the June 2025 3-Year Notes, $50.0 million of the March 2026 A Notes, $50.0 million of the March 2026 B Notes, $150.0 million of the 2031 Asset-Backed Notes, $40.0 million of the 2033 Notes, $325.0 million of the September 2026 Notes and $350.0 million of the January 2027 Notes as of March 31, 2023. There was also $197.0 million outstanding under the SMBC Facility and $121.0 million outstanding under the MUFG Bank Facility as of March 31, 2023.
(3)
Amounts represent future principal repayments and not the carrying value of each liability. See “Note 5 – Debt”.
(4)
Facility leases and licenses including short-term leases.
(5)
Includes $175.0 million in principal outstanding under the SBA Debentures, $105.0 million of the July 2024 Notes, $50.0 million of the February 2025 Notes, $70.0 million of the June 2025 Notes, $50.0 million of the June 2025 3-Year Notes, $50.0 million of the March 2026 A Notes, $50.0 million of the March 2026 B Notes, $150.0 million of the 2031 Asset-Backed Notes, $40.0 million of the 2033 Notes, $325.0 million of the September 2026 Notes and $350.0 million of the January 2027 Notes as of December 31, 2022. There was also $72.0 million outstanding under the SMBC Facility and $107.0 million outstanding under the MUFG Bank Facility as of December 31, 2022.

Certain premises are leased or licensed under agreements which expire at various dates through December 2028. For the three months ended March 31, 2023 and 2022, total rent expense, including short-term leases, amounted to approximately $0.8 million and $0.8 million, respectively. The Company recognizes an operating lease liability and a ROU asset for all leases, with the exception of short-term leases. The lease payments on short-term leases are recognized as rent expense on a straight-line basis. The discount rate applied to measure each ROU asset and lease liability is based on the Company’s incremental weighted average cost of debt. The Company considers the general economic environment and its credit rating and factors in various financing and asset specific adjustments to ensure the discount rate applied is appropriate to the intended use of the underlying lease. While some of the leases contained options to extend and terminate, it is not reasonably certain that either option will be utilized and therefore, only the payments in the initial term of the leases were included in the lease liability and ROU asset.

The following table sets forth information related to the measurement of the Company’s operating lease liabilities and supplemental cash flow information related to operating leases as of March 31, 2023, and 2022:

(in thousands)

 

Three Months Ended March 31, 2023

 

 

Three Months Ended March 31, 2022

 

Total operating lease cost

 

$

698

 

 

$

703

 

Cash paid for amounts included in the measurement of lease liabilities

 

$

609

 

 

$

594

 

 

 

 

As of March 31, 2023

 

 

As of December 31, 2022

 

Weighted-average remaining lease term (in years)

 

 

5.60

 

 

 

5.48

 

Weighted-average discount rate

 

 

5.35

%

 

 

5.37

%

The following table shows future minimum lease payments under the Company’s operating leases and a reconciliation to the operating lease liability as of March 31, 2023:

(in thousands)

 

As of March 31, 2023

 

2023

 

$

1,896

 

2024

 

 

1,110

 

2025

 

 

1,149

 

2026

 

 

1,191

 

Thereafter

 

 

2,544

 

Total lease payments

 

 

7,890

 

Less: imputed interest & other items

 

 

(2,924

)

Total operating lease liability

 

$

4,966

 

The Company may, from time to time, be involved in litigation arising out of its operations in the normal course of business or otherwise. Furthermore, third parties may try to seek to impose liability on the Company in connection with the activities of its portfolio companies. While the outcome of any current legal proceedings cannot at this time be predicted with certainty, the Company does not expect any current matters will materially affect the Company’s financial condition or results of operations; however, there can be no assurance whether any pending legal proceedings will have a material adverse effect on the Company’s financial condition or results of operations in any future reporting period.

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12. Related Party Transactions

As disclosed in “Note 2 – Summary of Significant Accounting Policies”, the Adviser Subsidiary is accounted for as a portfolio investment of the Company held at fair value. Refer to “Note 4 – Investments” for information related to income, gains and losses recognized related to the Company’s investment.

In 2021, the Adviser Subsidiary entered into investment management agreements with its privately-offered Adviser Funds, and it receives management fees based on the assets under management of the Adviser Funds and may receive incentive fees based on the performance of the Adviser Funds. Additionally, the Company entered into a shared services agreement (“Sharing Agreement”) with the Adviser Subsidiary, through which the Adviser Subsidiary will utilize human capital resources (including administrative functions) and other resources and infrastructure (including office space and technology) of the Company. Under the terms of the Sharing Agreement, the Company allocates the related expenses of shared services to the Adviser Subsidiary based on direct time spent, investment activity, and proportion of assets under management depending on the nature of the expense. The Company’s total expenses for the three months ended March 31, 2023 and 2022, are net of expenses allocated to the Adviser Subsidiary of $2.7 million and $1.4 million, respectively. As of March 31, 2023 and December 31, 2022, there was $0.3 million and $0.1 million receivable from the Adviser Subsidiary, respectively.

In addition, the Company may from time-to-time make investments alongside the Adviser Funds or assign a portion of investments to the Adviser Funds in accordance with the Company’s allocation policy. During the three months ended March 31, 2023, $174.7 million of all investment commitments of the Company and the Adviser Subsidiary were assigned to or directly committed by the Adviser Funds. During the three months ended March 31, 2023, fundings of $120.9 million were assigned to, directly originated, or funded by the Adviser Funds. The Company received $5.6 million from the Adviser Funds relating to the assigned investments during the three months ended March 31, 2023.

During the three months ended March 31, 2022, $108.1 million of all investment commitments of the Company and the Adviser Subsidiary were assigned to or directly committed by the Adviser Funds, respectively. During the three months ended March 31, 2022, fundings of $61.1 million were assigned to, directly originated, or funded by the Adviser Funds. The Company received $27.0 million from the Adviser Funds relating to the assigned investments during the three months ended March 31, 2022.

13. Subsequent Events

Dividend Distribution Declaration

On April 27, 2023, the Board declared a cash distribution of $0.39 per share to be paid on May 23, 2023 to stockholders of record as of May 16, 2023. In addition to the cash distribution, and as part of the supplemental cash distribution of $0.32 per share to be paid in four quarterly distributions of $0.08 per share, the Board declared a supplemental cash distribution of $0.08 per share to be paid on May 23, 2023 to stockholders of record as of May 16, 2023. Including the $0.08 per share supplemental cash distributions paid to stockholders of record as of March 9, 2023, the Board has declared a total of $0.16 per share of the $0.32 per share supplemental cash distribution declared on February 9, 2023.

 

59


ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

The matters discussed in this report, as well as in future oral and written statements by management of Hercules Capital, Inc., that are forward-looking statements are based on current management expectations that involve substantial risks and uncertainties which could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements. Forward-looking statements relate to future events or our future financial performance. We generally identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Important assumptions include our ability to originate new investments, achieve certain margins and levels of profitability, the availability of additional capital, and the ability to maintain certain debt to asset ratios. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this report should not be regarded as a representation by us that our plans or objectives will be achieved. The forward-looking statements contained in this report include statements as to:

our current and future management structure;
our future operating results;
our business prospects and the prospects of our prospective portfolio companies;
the impact of investments that we expect to make;
our informal relationships with third parties including in the venture capital industry;
the expected market for venture capital investments and our addressable market;
the dependence of our future success on the general economy and its impact on the industries in which we invest;
our ability to access debt markets and equity markets;
the occurrence and impact of macro-economic developments (for example, global pandemics, natural disasters, terrorism, international conflicts and war) on us and our portfolio companies;
the ability of our portfolio companies to achieve their objectives;
our expected financings and investments;
our regulatory structure and tax status as a RIC;
our ability to operate as a BDC and a SBIC;
the adequacy of our cash resources and working capital;
the timing of cash flows, if any, from the operations of our portfolio companies;
the timing, form and amount of any distributions;
the impact of fluctuations in interest rates on our business;
the valuation of any investments in portfolio companies, particularly those having no liquid trading market; and
our ability to recover unrealized depreciation on investments.

You should not place undue reliance on these forward-looking statements. The forward-looking statements made in this report relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances occurring after the date of this report.

The following discussion should be read in conjunction with our consolidated financial statements and related notes and other financial information appearing elsewhere in this report. In addition to historical information, the following discussion and other parts of this report contain forward-looking information that involves risks and uncertainties. Our actual results could differ materially from those anticipated by such forward-looking information due to the factors discussed under Item 1A— “Risk Factors” of Part II of this quarterly report on Form 10-Q, Item 1A— “Risk Factors” of our annual report on Form 10-K filed with the SEC on February 16, 2023 and under “Forward-Looking Statements” of this Item 2.

Use of Non-GAAP Measures

Throughout this MD&A, we present our financial condition and results of operations in the way we believe will be most meaningful and representative of our business results. Some of the measurements we use are “Non-GAAP financial measures” under SEC rules and regulations. GAAP is the acronym for “generally accepted accounting principles” in the United States. The Non-GAAP financial measures we present may not be comparable to similarly-named measures reported by other companies.

60


Overview

We are a specialty finance company focused on providing senior secured loans to high-growth, innovative venture capital-backed and institutional-backed companies in a variety of technology, life sciences, and sustainable and renewable technology industries. Our goal is to be the leading Structured Debt financing provider for venture capital-backed and institutional-backed companies in a variety of technology-related industries requiring sophisticated and customized financing solutions. We use the term “Structured Debt” to refer to a debt investment that is structured with an equity, warrant, option, or other right to purchase or convert into common or preferred stock. Our strategy is to evaluate and invest in a broad range of technology-related industries including technology, drug discovery and development, biotechnology, life sciences, healthcare, and sustainable and renewable technology and to offer a full suite of growth capital products.

We are structured as an internally managed, non-diversified, closed-end investment company that has elected to be regulated as a BDC under the 1940 Act. As a BDC, we are required to comply with certain regulatory requirements. For instance, we generally have to invest at least 70% of our total assets in “qualifying assets,” which includes securities of private U.S. companies, cash, cash equivalents, and high-quality debt investments that mature in one year or less. Consistent with requirements under the 1940 Act, we invest primarily in United-States based companies and to a lesser extent in foreign companies. We source our investments through our principal office located in Palo Alto, CA, as well as through our additional offices in Boston, MA, New York, NY, Bethesda, MD, San Diego, CA, and London, United Kingdom.

We have elected to be treated for tax purposes as a RIC under the Code and operate in a manner so as to qualify for the tax treatment applicable to RICs. In order to qualify as a RIC, among other requirements, we must maintain certain source-of-income and asset diversification requirements. In addition, we must make timely distributions of at least 90% of annual taxable income to our stockholders. As a RIC, we generally will not be subject to U.S. federal income tax on the income that we distribute (or are deemed to distribute) to our stockholders provided that we maintain our RIC status for a given year.

Our primary business objectives are to increase our net income, net investment income, and NAV by investing in Structured Debt and senior secured debt instruments of venture capital-backed and institutional-backed companies in a variety of technology-related industries at attractive current yields and the potential for equity appreciation and realized gains. Our Structured Debt and senior secured debt investments are typically secured by some or all of the assets of the applicable portfolio company. We also invest in “unitranche” loans, which are loans that combine both senior and mezzanine debt, generally in a first lien position. In addition to our debt investments, we regularly engage in discussions with third parties with respect to various potential transactions to explore alternative investment structures. Through such alternative structures we may acquire an investment, a portfolio of investments, an entire company, or sell portions of our portfolio on an opportunistic basis. Through our investment strategy, we aim to achieve our business objectives by maximizing our portfolio total return from generation of investment income from our debt investments and capital appreciation from our warrant and equity investments.

Our equity ownership in our portfolio companies may exceed 25% of the voting securities of such companies, which represents a controlling interest under the 1940 Act. In some cases, we receive the right to make additional equity investments in our portfolio companies in connection with future equity financing rounds. Capital that we provide is generally used for growth and general working capital purposes as well as in select cases for acquisitions or recapitalizations. We invest primarily in private companies but also have investments in public companies.

We, our subsidiaries or our affiliates, may also agree to manage certain other funds that invest in debt, equity or provide other financing or services to companies in a variety of industries for which we may earn management or other fees for our services. We may also invest in the equity of these funds, along with other third parties, from which we would seek to earn a return and/or future incentive allocations. Some of these transactions could be material to our business. Consummation of any such transaction will be subject to completion of due diligence, finalization of key business and financial terms (including price) and negotiation of final definitive documentation as well as a number of other factors and conditions which may include, depending on the transaction and without limitation, the approval of our Board, required regulatory or third-party consents, and/or the approval of our stockholders. Accordingly, there can be no assurance that any such transaction would be consummated. Any of these transactions or funds may require significant management resources either during the transaction phase or on an ongoing basis depending on the terms of the transaction.

Hercules Adviser LLC, is our wholly owned registered investment adviser subsidiary, which began providing investment advisory and related services to the Adviser Funds in 2021. The Adviser Subsidiary is not consolidated for reporting purposes as noted in “Note 1 Description of Business”. In addition to the Adviser Subsidiary, we have established other wholly owned subsidiaries which are consolidated for reporting. However, certain of these subsidiaries are not consolidated for federal tax purposes and may generate income tax expense or benefit, as well as tax assets and liabilities as a result of their ownership of certain portfolio investments.

Macroeconomic Market Developments

Our investment portfolio continues to be focused on industries and sectors that are generally expected to be more resilient to economic cycles. However, the U.S and global capital markets continue to evolve as a result of the market volatility caused by the

61


ongoing rise of inflation, geopolitical events, the continuing impacts of COVID-19 pandemic, supply chain issues, and disruptions in the banking sector. We are continuing to closely monitor the impact of these macroeconomic market developments on all aspects of our business, including impacts to our portfolio companies, employees, due diligence and underwriting processes, and financial markets. As a result, pressure on liquidity and financial results of certain of our portfolio companies have persisted, and our portfolio companies may draw on most, if not all, of the unfunded portion of any revolving or delayed draw term loans made by us, subject to availability under the terms of such loans. The extent to which the ongoing macroeconomic market events will continue to affect the financial condition and liquidity of our portfolio companies’ results of operations are highly uncertain and cannot be predicted.

The extent of the impact that macroeconomic developments will have on our own operational and financial performance, including our ability to execute our business strategies and initiatives in the expected time frame is uncertain. Inflation historically has not had a significant effect on our results of operations in any of the reporting periods presented herein. However, the impact that these macroeconomic events have on our portfolio companies could have a negative impact on the fair value of our investments in these portfolio companies. Further, an extended period of global supply chain and economic disruption, including inflation, could materially affect our business, results of operations, access to sources of liquidity and financial condition. Given the fluidity of these market events, neither our management nor our Board is able to predict the full impact of the current macroeconomic events on our business, future results of operations, financial position, or cash flows at this time.

Portfolio and Investment Activity

The total fair value of our investment portfolio was approximately $3.1 billion and $3.0 billion as of March 31, 2023 and December 31, 2022, respectively. The fair value of our debt investment portfolio as of March 31, 2023 was approximately $3.0 billion, compared to a fair value of approximately $2.8 billion at December 31, 2022. The fair value of the equity portfolio as of March 31, 2023 was approximately $124.4 million, compared to a fair value of approximately $134.0 million as of December 31, 2022. The fair value of the warrant portfolio as of March 31, 2023 was approximately $33.2 million, compared to a fair value of approximately $30.6 million as of December 31, 2022.

Portfolio Activity

Our investments in portfolio companies take a variety of forms, including unfunded contractual commitments and funded investments. Not all debt commitments represent future cash requirements. Unfunded contractual commitments depend upon a portfolio company reaching certain milestones before the debt commitment is available to the portfolio company, which is expected to affect our funding levels. These commitments are subject to the same underwriting and ongoing portfolio maintenance as the on-balance sheet financial instruments that we hold. Debt commitments generally fund over the two succeeding quarters from close. From time to time, unfunded contractual commitments may expire without being drawn and thus do not represent future cash requirements.

Prior to entering into a contractual commitment, we generally issue a non-binding term sheet to a prospective portfolio company. Non-binding term sheets are subject to completion of our due diligence and final investment committee approval process, as well as the negotiation of definitive documentation with the prospective portfolio companies. These non-binding term sheets generally convert to contractual commitments in approximately 90 days from signing and some portion may be assigned or allocated to or directly originated by the Adviser Funds prior to or after closing. Not all non-binding term sheets are expected to close and do not necessarily represent future cash requirements.

During the three months ended March 31, 2023, Hercules and the Adviser Funds directly committed or originated an aggregate total of $526.0 million of investment commitments. Of the aggregated total directly committed or originated by Hercules and the Adviser Funds, $174.7 million of investment commitments were directly committed or originated by the Adviser Funds. Of the aggregate total direct fundings or originations, $120.9 million of debt, equity, and warrant fundings during the period, were assigned to, directly funded or originated by the Adviser Funds.

During the three months ended March 31, 2022, Hercules and the Adviser Funds directly committed or originated an aggregate total of $615.2 million of investment commitments. Of the aggregated total directly committed or originated by Hercules and the Adviser Funds, $108.1 million of investment commitments were directly committed or originated by the Adviser Funds. Of the aggregate total direct fundings or originations, $61.1 million of debt, equity, and warrant fundings during the period, were assigned to, directly funded or originated by the Adviser Funds.

62


Our portfolio activity for the three months ended March 31, 2023 and March 31, 2022 was comprised of the following:

(in millions)

 

March 31, 2023

 

 

March 31, 2022

 

Gross Debt Commitments Originated by Hercules Capital and the Adviser Funds (1)

 

 

 

 

 

 

New portfolio company

 

$

362.9

 

 

$

448.9

 

Existing portfolio company

 

 

163.1

 

 

 

163.3

 

Sub-total

 

$

526.0

 

 

$

612.2

 

Less: Debt commitments assigned to or directly committed by the Adviser Funds (3)

 

 

(174.7

)

 

 

(107.6

)

Net Total Debt Commitments

 

$

351.3

 

 

$

504.6

 

Gross Debt Fundings by Hercules Capital and the Adviser Funds (2)

 

 

 

 

 

 

New portfolio company

 

$

184.2

 

 

$

245.0

 

Existing portfolio company

 

 

291.7

 

 

 

103.2

 

Sub-total

 

$

475.9

 

 

$

348.2

 

Less: Debt fundings assigned to or directly funded by the Adviser Funds (3)

 

 

(120.9

)

 

 

(60.6

)

Net Total Debt Fundings

 

$

355.0

 

 

$

287.6

 

Equity Investments and Investment Funds and Vehicles Fundings by Hercules Capital and the Adviser Funds

 

 

 

 

 

 

Existing portfolio company

 

 

0.3

 

 

 

3.4

 

Sub-total

 

$

0.3

 

 

$

3.4

 

Less: Equity fundings assigned to or directly funded by the Adviser Funds (3)

 

 

 

 

 

(0.5

)

Net Total Equity and Investment Funds and Vehicle Fundings

 

$

0.3

 

 

$

2.9

 

 

 

 

 

 

 

 

Total Unfunded Contractual Commitments (4)

 

$

562.1

 

 

$

371.3

 

 

 

 

 

 

 

 

Non-Binding Term Sheets

 

 

 

 

 

 

New portfolio company

 

$

95.0

 

 

$

564.8

 

Existing portfolio company

 

 

1.0

 

 

 

80.7

 

Total

 

$

96.0

 

 

$

645.5

 

(1)
Includes restructured loans and renewals in addition to new commitments.
(2)
Funded amounts include borrowings on revolving facilities.
(3)
Commitments and fundings include amounts assigned to, directly committed or originated, funded by the Adviser Funds, as applicable.
(4)
Amount represents unfunded commitments, including undrawn revolving facilities, which are available at the request of the portfolio company. Amount excludes unfunded commitments which are unavailable due to the borrower having not met certain milestones. This excludes $178.2 million and $39.7 million, of unfunded commitments as of March 31, 2023, and 2022, respectively, to portfolio companies related to loans assigned to or directly committed by the Adviser Funds.

We receive principal payments on our debt investment portfolio based on scheduled amortization of the outstanding balances. In addition, we receive principal repayments for some of our loans prior to their scheduled maturity date. The frequency or volume of these early principal repayments may fluctuate significantly from period to period. During the three months ended March 31, 2023, we received approximately $206.6 million in aggregate principal repayments. Approximately $4.2 million of the aggregate principal repayments related to scheduled principal payments and approximately $202.4 million were early principal repayments related to 14 portfolio companies. Further, $74.5 million of the early principal repayments was early repayments due to merger and acquisition transactions related to three portfolio companies.

Total portfolio investment activity (inclusive of unearned income and excluding activity related to taxes payable and escrow receivables) as of and for the three months ended March 31, 2023 and March 31, 2022 was as follows:

(in millions)

March 31, 2023

 

 

March 31, 2022

 

Beginning portfolio

$

2,963.9

 

$

2,434.5

 

New fundings and restructures

 

476.2

 

 

351.6

 

Fundings assigned to or directly funded by the Adviser Funds(1)

 

 

(120.9

)

 

 

(61.1

)

Warrants not related to current period fundings

 

0.1

 

 

 

0.7

 

Principal repayments received on investments

 

 

(5.1

)

 

 

(11.3

)

Early payoffs

 

 

(202.4

)

 

 

(84.9

)

Proceeds from sale of equity investments

 

(15.0

)

 

 

(8.8

)

Accretion of loan discounts and paid-in-kind principal

 

 

13.9

 

 

 

12.8

 

Net acceleration of loan discounts and loan fees due to early payoffs or restructures

 

 

(3.0

)

 

 

(1.5

)

New loan fees

 

(3.8

)

 

 

(3.2

)

Gain (loss) on investments due to sales or write offs

 

 

5.1

 

 

 

1.2

 

Net change in unrealized appreciation (depreciation)

 

 

21.1

 

 

 

(37.7

)

Ending portfolio

$

3,130.1

 

$

2,592.3

 

 

(1)
Funded amounts include $115.3 million and $34.1 million direct fundings of investments made by the Adviser Funds, for the three months ended March 31, 2023 and March 31, 2022, respectively.

Periodically, we may hold investments in debt, warrant, or equity positions of portfolio companies that have filed a registration statement with the SEC in contemplation of a potential initial public offering. There can be no assurance that companies that have yet to complete their initial public offerings will do so in a timely manner or at all.

The following table presents certain selected information regarding our debt investment portfolio as of March 31, 2023 and December 31, 2022:

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March 31, 2023

 

 

December 31, 2022

 

Number of portfolio companies with debt outstanding

 

 

122

 

 

 

120

 

Percentage of debt bearing a floating rate

 

 

95.6

%

 

 

95.3

%

Percentage of debt bearing a fixed rate

 

 

4.4

%

 

 

4.7

%

Weighted average core yield (1)

 

 

14.0

%

 

 

12.3

%

Weighted average effective yield (2)

 

 

15.1

%

 

 

12.7

%

Prime rate at the end of the period

 

 

8.00

%

 

 

7.50

%

(1)
The core yield is a Non-GAAP financial measure. The core yield on our debt investments excludes the effects of fee and income accelerations attributed to early payoffs, restructuring, loan modifications, other one-time events, and includes income from expired commitments. Please refer to the "Portfolio Yield" section below for further discussion of this measure.
(2)
The effective yield on our debt investments includes the effects of fee and income accelerations attributed to early payoffs, restructuring, loan modifications, and other one-time events. The effective yield is derived by dividing total investment income by the weighted average earning investment portfolio assets outstanding during the year, excluding non-interest earning assets such as warrants and equity investments.

Income from Portfolio

We generate revenue in the form of interest income, primarily from our investments in debt securities, and fee income, which is primarily comprised of commitment and facility fees. Interest income is recognized in accordance with the contractual terms of the loan agreement to the extent that such amounts are expected to be collected. Fees generated in connection with our debt investments are recognized over the life of the loan or, in some cases, recognized as earned. In addition, we generate revenue in the form of capital gains, if any, on warrants or other equity securities that we acquire from our portfolio companies. Our investments generally range from $15.0 million to $40.0 million, although we may make investments in amounts above or below that range. As of March 31, 2023, our debt investments generally have a term of between two and five years and typically bear interest at a rate ranging from approximately 6.0% to approximately 17.1%. In addition to the cash yields received on our debt investments, in some instances, our debt investments may also include any of the following: exit fees, balloon payment fees, commitment fees, success fees, PIK provisions or prepayment fees which may be required to be included in income prior to receipt.

Interest on debt securities is generally payable monthly, with amortization of principal typically occurring over the term of the investment. In addition, our loans may include an interest-only period ranging from three to eighteen months or longer. In limited instances in which we choose to defer amortization of the loan for a period of time from the date of the initial investment, the principal amount of the debt securities and any accrued but unpaid interest become due at the maturity date.

Loan origination and commitment fees are generally received in full at the inception of a loan are deferred and amortized into fee income as an enhancement to the related loan’s yield over the contractual life of the loan. We recognize nonrecurring fees amortized over the remaining term of the loan commencing in the quarter relating to specific loan modifications. As of March 31, 2023 and December 31, 2022, unamortized capitalized fee income was recorded as follows:

(in millions)

March 31,

 

 

December 31,

 

 

2023

 

 

2022

 

Offset against debt investment cost

$

44.6

 

 

$

43.1

 

Deferred obligation contingent on funding or other milestone

 

10.9

 

 

 

10.9

 

Total Unamortized Fee Income

$

55.5

 

 

$

54.0

 

Loan exit fees to be paid at the termination of the loan are accreted into interest income over the contractual life of the loan. As of March 31, 2023 and December 31, 2022, loan exit fees receivable were recorded as follows:

(in millions)

March 31,

 

 

December 31,

 

2023

 

 

2022

 

Included within debt investment cost

$

33.0

 

 

$

32.5

 

Deferred receivable related to expired commitments

 

3.4

 

 

 

5.0

 

Total Exit Fees Receivable

$

36.4

 

 

$

37.5

 

Additionally, we have debt investments in our portfolio that earn PIK interest. The PIK interest, computed at the contractual rate specified in each loan agreement, is recorded as interest income and added to the principal balance of the loan on specified capitalization dates. To maintain our status as a RIC, the non-cash PIK income must be distributed to stockholders with other sources of income in the form of dividend distributions even though we have not yet collected any cash from the borrower. Amounts necessary to pay these distributions may come from available cash or the liquidation of certain investments. During the three months ended March 31, 2023 and 2022, we recorded approximately $5.5 million and $5.0 million in PIK income, respectively.

 

64


Portfolio Yield

We report our financial results on a GAAP basis. We monitor the performance of our total investment portfolio and total debt portfolio using both GAAP and Non-GAAP financial measures. In particular, we evaluate performance through monitoring the portfolio yields as we consider them to be effective indicators, for both management and stockholders, of the financial performance of our total investment portfolio and total debt portfolio. The key metrics that we monitor with respect to yields are as described below:

“Total Yield” - The total yield is derived by dividing GAAP basis 'Total investment income' by the weighted average GAAP basis value of investment portfolio assets outstanding during the year, including non-interest earning assets such as warrants and equity investments at amortized cost.
“Effective Yield” on total debt investments - The effective yield is derived by dividing GAAP basis 'Total investment income' by the weighted average GAAP basis value of debt investment portfolio assets at amortized cost outstanding during the year.
“Core Yield” on total debt investments – The core yield is a Non-GAAP financial measure. The core yield is derived by dividing “Core investment income” by the weighted average GAAP basis value of debt investment portfolio assets at amortized cost outstanding during the year. “Core investment income” adjusts GAAP basis 'Total investment income' to exclude fee and other income accelerations attributed to early payoffs, deal restructuring, loan modifications, and other one-time income events, but includes income from expired commitments.

 

 

Three months ended

 

 

 

March 31, 2023

 

 

March 31, 2022

 

Total Yield

 

 

14.1

%

 

 

10.7

%

Effective Yield

 

 

15.1

%

 

 

11.5

%

Core Yield (Non-GAAP)

 

 

14.0

%

 

 

11.1

%

We believe that these measures are useful for our stockholders as it provides the yield of our portfolio to allow a more meaningful comparison with our competitors. As noted above, Core Yield, a Non-GAAP financial measure, is derived by dividing Core investment income, as defined above, by the weighted average GAAP basis value of debt investment portfolio assets at amortized cost outstanding. The reconciliation to calculate “Core investment income” from GAAP basis 'Total investment income' are as follows:

(in thousands)

 

Three months ended

 

 

 

March 31, 2023

 

 

March 31, 2022

 

GAAP Basis:

 

 

 

 

 

 

Total investment income

 

$

105,090

 

 

$

65,157

 

Less: fee and income accelerations attributed to early payoffs, restructuring, loan modifications, and other one-time events except income from expired commitments

 

 

(7,121

)

 

 

(2,248

)

Non-GAAP Basis:

 

 

 

 

 

 

Core investment income

 

$

97,969

 

 

$

62,909

 

We believe the Core Yield is useful for our investors as it provides the yield at which our debt investments are originated and eliminates one-off items that can fluctuate significantly from period to period, thereby allowing for a more meaningful comparison over time.

Although the Core Yield, a Non-GAAP financial measure, is intended to enhance our stockholders’ understanding of our performance, the Core Yield should not be considered in isolation from or as an alternative to the GAAP financial metrics presented. The aforementioned Non-GAAP financial measure may not be comparable to similar Non-GAAP financial measures used by other companies.

Another financial measure that we monitor is the total return for our investors, which was approximately 0.8% and 12.0% during the three months ended March 31, 2023 and 2022, respectively. The total return equals the change in the ending market value over the beginning of the period price per share plus distributions paid per share during the period, divided by the beginning price assuming the distribution is reinvested on the date of the distribution. The total return does not reflect any sales load that may be paid by investors. See “Note 10 – Financial Highlights” included in the notes to our consolidated financial statements appearing elsewhere in this report.

65


Portfolio Composition

Our portfolio companies are primarily privately held companies and public companies which are active in sectors characterized by high margins, high growth rates, consolidation and product and market extension opportunities.

The following table presents the fair value of the Company’s portfolio by industry sector as of March 31, 2023 and December 31, 2022:

March 31, 2023

 

 

December 31, 2022

 

(in thousands)

Investments at
 Fair Value

 

 

Percentage of
 Total Portfolio

 

 

Investments at
 Fair Value

 

 

Percentage of
 Total Portfolio

 

Drug Discovery & Development

$

1,220,057

 

 

 

39.0

%

 

$

1,150,707

 

 

 

38.8

%

Software

 

828,712

 

 

 

26.5

%

 

 

798,264

 

 

 

26.9

%

Consumer & Business Services

 

474,883

 

 

 

15.2

%

 

 

439,384

 

 

 

14.8

%

Healthcare Services, Other

 

214,199

 

 

 

6.8

%

 

 

198,763

 

 

 

6.7

%

All other industries (1)

 

392,327

 

 

 

12.5

%

 

 

376,837

 

 

 

12.8

%

Total

$

3,130,178

 

 

 

100.0

%

 

$

2,963,955

 

 

 

100.0

%

(1)
See “Note 4 – Investments” for complete list of industry sectors and corresponding amounts of investments at fair value as a percentage of the total portfolio. As of March 31, 2023, the fair value as a percentage of total portfolio does not exceed 5.0% for any individual industry sector other than “Drug Discovery & Development”, “Software”, “Consumer & Business Services”, or "Healthcare Services, Other".

Industry and sector concentrations vary as new loans are recorded and loans are paid off. Loan revenue, consisting of interest, fees, and recognition of gains on equity and warrants or other equity interests, can fluctuate materially when a loan is paid off or a warrant or equity interest is sold. Revenue recognition in any given year can be highly concentrated in several portfolio companies.

For the three months ended March 31, 2023 and the year ended December 31, 2022, our ten largest portfolio companies represented approximately 29.5% and 29.0% of the total fair value of our investments in portfolio companies, respectively. As of March 31, 2023 and December 31, 2022, we had six and eight investments that represented 5% or more of our net assets, respectively. As of March 31, 2023 and December 31, 2022, we had four and four equity investments representing approximately 48.6% and 39.8%, respectively, of the total fair value of our equity investments, and each represented 5% or more of the total fair value of our equity investments. No single portfolio investment represented more than 10% of the fair value of our total investments as of March 31, 2023 and December 31, 2022.

As of March 31, 2023 and December 31, 2022, approximately 95.6% and 95.3% of the debt investment portfolio was priced at floating interest rates or floating interest rates with a Prime, LIBOR, SOFR, Eurodollar, or BSBY-based interest rate floor, respectively. Changes in interest rates, including Prime, LIBOR, SOFR, Eurodollar, or BSBY rates, may affect the interest income and the value of our investment portfolio for portfolio investments with floating rates.

Our investments in Structured Debt generally have detachable equity enhancement features in the form of warrants or other equity securities designed to provide us with an opportunity for capital appreciation. These features are treated as OID and are accreted into interest income over the term of the loan as a yield enhancement. Our warrant coverage generally ranges from 3% to 20% of the principal amount invested in a portfolio company, with a strike price generally equal to the most recent equity financing round. As of March 31, 2023, we held warrants in 111 portfolio companies, with a fair value of approximately $33.2 million. The fair value of our warrant portfolio increased by approximately $2.6 million, as compared to a fair value of $30.6 million as of December 31, 2022, primarily related to the increase in fair value of the portfolio companies.

Our existing warrant holdings would require us to invest approximately $74.3 million to exercise such warrants as of March 31, 2023. Warrants may appreciate or depreciate in value depending largely upon the underlying portfolio company’s performance and overall market conditions. As attractive investment opportunities arise, we may exercise certain of our warrants to purchase stock, and could ultimately monetize our investments. Of the warrants that we have monetized since inception, we have realized multiples in the range of approximately 1.02x to 42.71x based on the historical rate of return on our investments. We may also experience losses from our warrant portfolio in the event that warrants are terminated or expire unexercised.

Portfolio Grading

We use an investment grading system, which grades each debt investment on a scale of 1 to 5 to characterize and monitor our expected level of risk on the debt investments in our portfolio with 1 being the highest quality. The following table shows the distribution of our outstanding debt investments on the 1 to 5 investment grading scale at fair value as of March 31, 2023 and December 31, 2022, respectively:

(in thousands)

 

March 31, 2023

 

 

December 31, 2022

 

Investment Grading

 

Number of Companies

 

Debt Investments
at Fair Value

 

 

Percentage of
Total Portfolio

 

 

Number of Companies

 

Debt Investments
at Fair Value

 

 

Percentage of
Total Portfolio

 

1

 

19

 

$

590,366

 

 

 

19.9

%

 

20

 

$

549,135

 

 

 

19.6

%

2

 

55

 

 

1,184,885

 

 

 

39.9

%

 

55

 

 

1,171,632

 

 

 

41.9

%

3

 

42

 

 

1,099,950

 

 

 

37.1

%

 

40

 

 

1,015,199

 

 

 

36.3

%

4

 

5

 

 

92,257

 

 

 

3.1

%

 

4

 

 

57,807

 

 

 

2.1

%

5

 

1

 

 

1,193

 

 

 

0.0

%

 

1

 

 

1,671

 

 

 

0.1

%

 

 

122

 

$

2,968,651

 

 

 

100.0

%

 

120

 

$

2,795,444

 

 

 

100.0

%

 

66


As of March 31, 2023, our debt investments had a weighted average investment grading of 2.26 on a cost basis, as compared to 2.23 as of December 31, 2022. Changes in a portfolio company's investment grading may be a result of changes in portfolio company's performance and/or timing of expected liquidity events. For instance, we may downgrade a portfolio company if it is not meeting our financing criteria or are underperforming relative to their respective business plans. We may also downgrade a portfolio company as it approaches a point in time when it will require additional equity capital to continue operations. Conversely, we may upgrade a portfolio company's investment grading when it is exceeding our financial performance expectations and/or is expected to mature/repay in full due to a liquidity event. The overall downgrade of the portfolio's weighted average investment grading is reflective of the impact of current macroeconomic environment.

As macroeconomic events evolve and cause disruption in the capital markets and to businesses, we are continuing to monitor and work with the management teams and stakeholders of our portfolio companies to navigate the significant market, operational, and economic challenges created by these events. This includes remaining proactive in our assessments of credit performance to manage potential risks across our investment portfolio.

Non-accrual Investments

The following table shows the amortized cost of our performing and non-accrual investments as of March 31, 2023 and December 31, 2022:

(in millions)

 

As of March 31,

 

 

As of December 31,

 

 

 

2023

 

 

2022

 

 

 

Amortized Cost

 

 

Percentage of Total Portfolio at Amortized Cost

 

 

Amortized Cost

 

 

Percentage of Total Portfolio at Amortized Cost

 

Performing

 

$

3,133

 

 

 

99.4

%

 

$

2,988

 

 

 

99.4

%

Non-accrual

 

 

18

 

 

 

0.6

%

 

 

18

 

 

 

0.6

%

Total Investments

 

$

3,151

 

 

 

100.0

%

 

$

3,006

 

 

 

100.0

%

Debt investments are placed on non-accrual status when it is probable that principal, interest, or fees will not be collected according to contractual terms. When a debt investment is placed on non-accrual status, we cease to recognize interest and fee income until the portfolio company has paid all principal and interest due or demonstrated the ability to repay our current and future contractual obligations. We may not apply the non-accrual status to a loan where the investment has sufficient collateral value to collect all of the contractual amount due and is in the process of collection. Interest collected on non-accrual investments are generally applied to principal.

Results of Operations

Our operating results for three months ended March 31, 2023 and 2022, were as follows:

(in thousands, except per share data)

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Total investment income

 

$

105,090

 

 

$

65,157

 

Total expenses

 

 

39,591

 

 

 

29,370

 

Net investment income

 

 

65,499

 

 

 

35,787

 

Net realized gain (loss):

 

 

7,960

 

 

 

(2,381

)

Net change in unrealized appreciation (depreciation):

 

 

21,105

 

 

 

(36,742

)

Net increase (decrease) in net assets resulting from operations

 

$

94,564

 

 

$

(3,336

)

 

 

 

 

 

 

 

Net investment income before gains and losses per common share:

 

 

 

 

 

 

Basic

 

$

0.48

 

 

$

0.30

 

 

 

 

 

 

 

 

Change in net assets resulting from operations per common share:

 

 

 

 

 

 

Basic

 

$

0.69

 

 

$

(0.03

)

Diluted

 

$

0.68

 

 

$

(0.03

)

Our operating results can vary substantially from period to period due to various factors, including changes in the level of investments held, changes in our investment yields, recognition of realized gains and losses, and changes in net unrealized appreciation and depreciation, among other factors. As a result, comparison of the net increase (decrease) in net assets resulting from operations may not be meaningful.

Investment Income

Total investment income for the three months ended March 31, 2023 was approximately $105.1 million as compared to approximately $65.2 million for the three months ended March 31, 2022. Investment income is primarily composed of interest income earned on our debt investments and fee income from commitments, facilities, and other loan related fees.

67


Interest Income

The following table summarizes the components of interest income for the three months ended March 31, 2023 and 2022:

(in thousands)

Three Months Ended March 31,

 

 

2023

 

 

2022

 

Contractual interest income

$

82,791

 

 

$

49,544

 

Exit fee interest income

 

9,382

 

 

 

6,726

 

PIK interest income

 

5,528

 

 

 

4,975

 

Other interest income (1)

 

2,196

 

 

 

1,007

 

Total interest income

$

99,897

 

 

$

62,252

 

 

(1)
Other interest income includes OID interest income and interest recorded on other assets.

Interest income for the three months ended March 31, 2023 totaled approximately $99.9 million as compared to approximately $62.3 million for the three months ended March 31, 2022. The increase in interest income for the three months ended March 31, 2023 as compared to the period ended March 31, 2022 is primarily attributable to an increase in the weighted average principal and an increase in core yield due to increases in the benchmark rates of our debt investment portfolio outstanding between the periods.

Interest income is comprised of recurring interest income from the contractual servicing of loans and non-recurring interest income that is related to the acceleration of income due to early loan repayments and other one-time events during the period. The following table summarizes recurring and non-recurring interest income for the three months ended March 31, 2023 and 2022:

(in thousands)

Three Months Ended March 31,

 

 

2023

 

 

2022

 

Recurring interest income

$

95,685

 

 

$

61,042

 

Non-recurring interest income

 

4,212

 

 

 

1,210

 

Total interest income

$

99,897

 

 

$

62,252

 

The following table shows the PIK-related activity for the three months ended March 31, 2023 and 2022, at cost:

(in thousands)

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Beginning PIK interest receivable balance

 

$

25,713

 

 

$

11,801

 

PIK interest income during the period

 

 

5,528

 

 

 

4,975

 

Payments received from PIK loans

 

 

(545

)

 

 

(2,081

)

Realized gain (loss)

 

 

 

 

 

(367

)

Ending PIK interest receivable balance

 

$

30,696

 

 

$

14,328

 

The increase in PIK interest income during the three months ended March 31, 2023 as compared to the three months ended March 31, 2022 is due to an increase in the weighted average principal outstanding for debt investments which earn PIK interest. Payments on PIK loans are normally received only in the event of payoffs. The PIK receivable for both March 31, 2023 and March 31, 2022, represented approximately 1% of total debt investments.

Fee Income

Fee income from commitment, facility and loan related fees for the three months ended March 31, 2023 totaled approximately $5.2 million, as compared to approximately $2.9 million, for the three months ended March 31, 2022. The increase in fee income for the three months ended March 31, 2023 is primarily due to an increase in the acceleration of unamortized fees, and one-time fees as a result of a higher volume of early repayments on our loan portfolio.

Fee income is comprised or recurring fee income from commitment, facility, and loan related fees, fee income due to expired commitments, and acceleration of fee income due to early loan repayments during the period. The following table summarizes the components of fee income for the three months ended March 31, 2023 and 2022:

(in thousands)

Three Months Ended March 31,

 

 

2023

 

 

2022

 

Recurring fee income

$

2,040

 

 

$

1,779

 

Fee income - expired commitments

 

243

 

 

 

87

 

Accelerated fee income - early repayments

 

2,910

 

 

 

1,039

 

Total fee income

$

5,193

 

 

$

2,905

 

In certain investment transactions, we may earn income from advisory services; however, we had no income from advisory services in the three months ended March 31, 2023 or 2022.

Operating Expenses

Our operating expenses are comprised of interest and fees on our debt borrowings, general and administrative expenses, and employee compensation and benefits. During the three months ended March 31, 2023 and 2022, our net operating expenses totaled approximately $39.6 million and $29.4 million, respectively.

68


Interest and Fees on our Debt

Interest and fees on our debt totaled approximately $19.0 million and $13.5 million for the three months ended March 31, 2023 and 2022, respectively. Interest and fee expense during the three months ended March 31, 2023, as compared to the three months ended March 31, 2022, increased due to higher weighted average borrowing costs and debt outstanding.

We had a weighted average cost of debt of approximately 4.7% and 4.0% for the three months ended March 31, 2023 and 2022, respectively. The weighted average cost of debt includes interest and fees on our debt, but excludes the impact of fee accelerations due to the extinguishment of debt. The increase in the weighted average cost of debt during 2023 as compared to 2022, was attributable to increased usage of our Credit Facilities which have a higher cost of debt.

General and Administrative Expenses and Tax Expenses

General and administrative expenses include legal fees, consulting fees, accounting fees, printer fees, insurance premiums, rent, expenses associated with the workout of underperforming investments, and various other expenses. Our general and administrative expenses increased to $4.1 million from $3.8 million for the three months ended March 31, 2023 and 2022, respectively. The increase in general and administrative expenses for the three months ended March 31, 2023 is primarily attributable to an increase in costs of office and operating supplies and certain professional fees. Tax expenses primarily relate to excise tax accruals. Tax expenses were $1.4 million and $0.7 million during the three months ended March 31, 2023 and 2022, respectively.

Employee Compensation

Employee compensation and benefits totaled approximately $14.6 million for the three months ended March 31, 2023 as compared to approximately $8.3 million for the three months ended March 31, 2022. The increase between the three months ended March 31, 2023 and 2022 was primarily due to an increase in variable compensation.

Employee stock-based compensation totaled approximately $3.2 million for the three months ended March 31, 2023 as compared to approximately $4.4 million for the three months ended March 31, 2022. The decrease between comparative periods was primarily attributable to a decrease in compensation expense related to Performance Awards which vested in 2022.

Expenses allocated to the Adviser Subsidiary

In March 2021, we entered into a shared services agreement with the Adviser Subsidiary (the “Sharing Agreement”), pursuant to which the Adviser Subsidiary utilizes our human capital resources, including deal professional, finance, and administrative functions, as well as other resources including infrastructure assets such as office space and technology. Under the terms of the Sharing Agreement, we allocate the related expenses of shared services to the Adviser Subsidiary. Our total net operating expenses for the three months ended March 31, 2023 and 2022, are net of expenses allocated to the Adviser Subsidiary of $2.7 million and $1.4 million, respectively. The increase in expenses allocated to the Adviser Subsidiary is a result of higher average assets under management and higher allocations to the Adviser Funds. As of March 31, 2023 and December 31, 2022, $0.3 million and $0.1 million, respectively, was due from the Adviser Subsidiary.

Net Realized Gains and Losses and Net Change in Unrealized Appreciation and Depreciation

Realized gains or losses on investments are measured by the difference between the net proceeds from the repayment or sale and the cost basis of an investment without regard to unrealized appreciation or depreciation previously recognized, and includes investments written off during the period, net of recoveries. Realized loss on debt extinguishment relates to additional fees, costs, and accelerated recognition of remaining debt issuance costs, which are recognized in the event debt is extinguished before its stated maturity. The net change in unrealized appreciation or depreciation on investments primarily reflects the change in portfolio investment values during the reporting period, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized.

A summary of net realized gains and losses for the three months ended March 31, 2023 and 2022 is as follows:

(in thousands)

Three Months Ended March 31,

 

 

2023

 

 

2022

 

Realized gains

$

9,614

 

 

$

5,044

 

Realized losses

 

(1,659

)

 

 

(3,739

)

Realized foreign exchange gains (losses)

 

5

 

 

 

 

Realized loss on debt extinguishment

 

 

 

 

(3,686

)

Net realized gains (losses)

$

7,960

 

 

$

(2,381

)

 

69


During the three months ended March 31, 2023, we recognized net realized gains of $7.9 million. The net realized gains were generated from gross realized gains of $9.6 million primarily from the sale of our equity position in Sprinklr, Inc. and Zeta Global Corp. Our gains were offset by gross realized losses of $1.7 million from the write-off of equity and warrant investments in Concert Pharmaceuticals, Inc. and Fungible, Inc. which had no value after the respective portfolio companies were acquired.

During the three months ended March 31, 2022, we recognized net realized losses of $2.4 million. During the three months ended March 31, 2022, we recorded gross realized gains of $5.0 million primarily from the sale of our equity position in Black Crow AI, Inc. Our gains were partially offset by gross realized losses of $3.7 million primarily from the write-off of our investments in Regent Education and Medrobotics Corporation during the period. In addition, as part of the retirement of the 2022 Notes we incurred a $3.7 million loss on debt extinguishment, which was related to fees, accrued interest, and the acceleration of debt issuance costs amortization. The $3.7 million is included as a realized loss within the “Loss on extinguishment of debt” on the Consolidated Statement of Operations for the three months ended March 31, 2022.

The net change in unrealized appreciation and depreciation of our investments is derived from the changes in fair value of each investment determined in good faith by our Valuation Committee and approved by the Board. The following table summarizes the change in net unrealized appreciation or depreciation of investments for the three months ended March 31, 2023 and 2022:

 

 

 

 

 

 

 

For the three months ended March 31

 

(in thousands)

2023

 

 

2022

 

Gross unrealized appreciation on portfolio investments

$

52,577

 

 

$

19,540

 

Gross unrealized depreciation on portfolio investments

 

(24,025

)

 

 

(57,173

)

Reversal of prior period net unrealized appreciation (depreciation) upon a realization event

 

(8,151

)

 

 

1,027

 

Net unrealized appreciation (depreciation) on portfolio investments

 

20,401

 

 

 

(36,606

)

Other net unrealized appreciation (depreciation)

 

704

 

 

 

(136

)

Total net unrealized appreciation (depreciation)

$

21,105

 

 

$

(36,742

)

During the three months ended March 31, 2023 and 2022, we recorded approximately $21.1 million of net unrealized appreciation and $36.7 million of net unrealized depreciation on our debt, equity, warrant, and investment funds, respectively. The following table summarizes the key drivers of change in net unrealized appreciation (depreciation) of investments for the three months ended March 31, 2023 and 2022:

 

For the three months ended March 31,

 

 

2023

 

 

2022

 

(in thousands)

Debt

 

Equity, Warrants
and
Investment Funds

 

Total

 

 

Debt

 

Equity, Warrants
and
Investment Funds

 

Total

 

Valuation appreciation (depreciation)

$

22,013

 

$

6,539

 

$

28,552

 

 

$

(7,963

)

$

(29,670

)

$

(37,633

)

Reversal of prior period net unrealized appreciation (depreciation) upon a realization event

 

(2,833

)

 

(5,318

)

 

(8,151

)

 

 

(150

)

 

1,177

 

 

1,027

 

Other net unrealized appreciation (depreciation)

 

620

 

 

84

 

 

704

 

 

 

22

 

 

(158

)

 

(136

)

Net realized appreciation (depreciation)

$

19,800

 

$

1,305

 

$

21,105

 

 

$

(8,091

)

$

(28,651

)

$

(36,742

)

Income and Excise Taxes

We account for income taxes in accordance with the provisions of ASC Topic 740 Income Taxes, under which income taxes are provided for amounts currently payable and for amounts deferred based upon the estimated future tax effects of differences between the financial statements and tax basis of assets and liabilities given the provisions of the enacted tax law. Valuation allowances may be used to reduce deferred tax assets to the amount likely to be realized. We intend to timely distribute to our stockholders substantially all of our annual taxable income for each year, except that we may retain certain net capital gains for reinvestment and, depending upon the level of taxable income earned in a year, we may choose to carry forward taxable income for distribution in the following year and pay any applicable U.S. federal excise tax.

Because federal income tax regulations differ from U.S. GAAP, distributions in accordance with tax regulations may differ from net investment income and realized gains recognized for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified among capital accounts in the financial statements to reflect their appropriate tax character. Permanent differences may also result from the classification of certain items, such as the treatment of short-term gains as ordinary income for tax purposes. Temporary differences arise when certain items of income, expense, gain or loss are recognized at some time in the future.

Hercules Adviser LLC

The Adviser Subsidiary has entered into investment management agreements (the “IMAs”) with the Adviser Funds. Pursuant to the IMAs, the Adviser Subsidiary provides investment advisory and management services to the Adviser Funds in exchange for an asset-based fee and certain incentive fees. The Adviser Funds are privately offered investment funds exempt from registration under the 1940 Act that invest in debt and equity investments in venture or institutionally backed technology related and life sciences companies.

Hercules Adviser LLC, the Adviser Subsidiary, receives fee income for the services provided to the Adviser Funds. The Adviser Subsidiary’s contribution to our net investment income is derived from dividend income declared by the Adviser Subsidiary and

70


interest income earned on loans to the Adviser Subsidiary. For the three months ended March 31, 2023 and 2022, no dividends were declared by the Adviser Subsidiary.

Financial Condition, Liquidity, Capital Resources and Obligations

Our liquidity and capital resources are derived from our debt borrowings and cash flows from operations, including investment sales and repayments, and income earned. Our primary use of funds from operations includes investments in portfolio companies and payments of fees and other operating expenses we incur. We have used, and expect to continue to use, our debt and the proceeds from the turnover of our portfolio and from public and private offerings of securities to finance our investment objectives. We may also raise additional equity or debt capital through registered offerings off a shelf registration, At-the-Market (“ATM”), and private offerings of securities, by securitizing a portion of our investments, or by borrowing from the SBA through our SBIC subsidiary. This “Financial Condition, Liquidity, Capital Resources and Obligations” section should be read in conjunction with the “Macroeconomic Market Developments” section above.

During the three months ended March 31, 2023, we principally funded our operations from (i) cash receipts from interest, dividend, and fee income from our investment portfolio, (ii) cash proceeds from the realization of portfolio investments through the repayments of debt investments and the sale of debt and equity investments, (iii) debt offerings along with borrowings on our credit facilities, and (iv) equity offerings.

During the three months ended March 31, 2023, our operating activities used $80.9 million of cash and cash equivalents, compared to $188.6 million used during the three months ended March 31, 2022. The $107.7 million decrease in cash used in operating activities was primarily due to a $111.2 million increase in principal, fee repayments, and proceeds received from debt investments, and $6.2 million increase in proceeds received from the sale of equity investments.

During the three months ended March 31, 2023, our investing activities used approximately $94 thousand of cash, compared to $50 thousand used during the three months ended March 31, 2022. The $44 thousand increase in cash used in investing activities was due to an increase in purchases of capital equipment.

During the three months ended March 31, 2023, our financing activities provided $134.0 million of cash, compared to $114.9 million provided by financing activities during the three months ended March 31, 2022. The $19.2 million increase in cash flows from financing activities was primarily due to increased net borrowing activity of $44.5 million, which was offset by decreased equity issued through our ATM program of $19.9 million. During the three months ended March 31, 2023 and 2022, equity issued (net of offering costs) through our ATM program approximated $65.3 million and $85.2 million, respectively. Additionally, dividend distributions increased $7.0 million for a total $63.8 million during the three months ended March 31, 2023, compared to $56.9 million during the three months ended March 31, 2022.

As of March 31, 2023, our net assets totaled $1.5 billion, with a NAV per share of $10.82. We intend to continue to operate in order to generate cash flows from operations, including income earned from investments in our portfolio companies. Our primary use of funds will be investments in portfolio companies and cash distributions to holders of our common stock.

Available liquidity and capital resources as of March 31, 2023

As of March 31, 2023, we had $553.1 million in available liquidity, including $71.1 million in cash and cash equivalents, and approximately $175.0 million available under our SMBC letter of credit facility. Additional liquidity is available through accordion provisions within the terms of our Credit Facilities, through which the available borrowing capacity can be increased by an aggregate $475.0 million, subject to certain conditions. Further, the SMBC letter of credit facility may also be increased by an additional $225.0 million (up to $400 million), subject to certain conditions. As of March 31, 2023, we had available borrowing capacity of $28.0 million under the SMBC Facility and $279.0 million under the MUFG Bank Facility. Total amounts outstanding as of March 31, 2023, were $318.0 million outstanding under our Credit Facilities, which are floating interest rate obligations, and the remaining $1,415.0 million of term debt outstanding, which are all fixed interest rate debt obligations.

Not considered above, as of March 31, 2023, we held $7.8 million of cash classified as restricted cash. Our restricted cash relates to amounts that are held as collateral securing certain of our financing transactions, including collections of interest and principal payments on assets that are securitized related to the 2031 Asset-Backed Notes. Based on current characteristics of the securitized debt investment portfolios, the restricted funds may be used to pay monthly interest and principal on the securitized debt with any excess distributed to us or available for our general operations. Refer to “Note 5 – Debt” included in the notes to our consolidated financial statements appearing elsewhere in this report for additional discussion of our debt obligations.

71


The 1940 Act permits BDCs to incur borrowings, issue debt securities, or issue preferred stock unless immediately after the borrowings or issuance the ratio of total assets (less total liabilities other than indebtedness) to total indebtedness plus preferred stock is less than 200% (or 150% if certain requirements are met). On September 4, 2018 and December 6, 2018, our Board, including a “required majority” (as such term is defined in Section 57(o) of the 1940 Act) and our stockholders, respectively, approved the application to us of the 150% minimum asset coverage ratio set forth in Section 61(a)(2) of the 1940 Act. As of March 31, 2023, our asset coverage ratio under our regulatory requirements as a BDC was 196.0% excluding our SBA debentures. Our exemptive order from the SEC allows us to exclude all SBA leverage from our asset coverage ratio. As a result of the SEC exemptive order, our ratio of total assets on a consolidated basis to outstanding indebtedness may be less than 150%, which while providing increased investment flexibility, also may increase our exposure to risks associated with leverage. Total asset coverage when including our SBA debentures was 186.3% as of March 31, 2023.

As detailed above, our diverse and well-structured balance sheet is designed to provide a long-term focused and sustainable investment platform. Currently, we believe we have ample liquidity to support our near-term capital requirements. As the impact of macro-economic events, including the COVID-19 pandemic, the war in Ukraine, and the related disruption to markets and business continues to impact the economy, we will continue to evaluate our overall liquidity position and take proactive steps to maintain the appropriate liquidity position based upon the current circumstances.

Equity Offerings

We may from time-to-time issue and sell shares of our common stock through public or ATM offerings. We currently sell shares through our equity distribution agreement with JMP Securities LLC (“JMP”) and Jefferies LLC (“Jeffries”) (the “2022 Equity Distribution Agreement”). The 2022 Equity Distribution Agreement provides that we may offer and sell up to 17.5 million shares of our common stock from time to time through JMP or Jeffries, as our sales agents. Sales of our common stock, if any, may be made in negotiated transactions or transactions that are deemed to be “at the market,” as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), including sales made directly on the NYSE or similar securities exchange or sales made to or through a market maker other than on an exchange, at prices related to the prevailing market prices or at negotiated prices.

During the three months ended March 31, 2023, we issued and sold 4.7 million shares of our common stock receiving total accumulated net proceeds of approximately $65.3 million. This is a decrease from the three months ended March 31, 2022, where we issued and sold 4.9 million shares of our common stock receiving total accumulated net proceeds of approximately $85.2 million.

We generally use net proceeds from these offerings to make investments, to repurchase or pay down liabilities and for general corporate purposes. As of March 31, 2023, approximately 3.9 million shares remain available for issuance and sale under the current equity distribution agreement.

Commitments and Obligations

Our significant cash requirements generally relate to our debt obligations. As of March 31, 2023, we had $1,733.0 million of debt outstanding, none of which was due within the next year, $375.0 million within 1 to 3 years, and $1,358.0 million beyond 3 years. In addition to our debt obligations, in the normal course of business, we are party to financial instruments with off-balance sheet risk. These consist primarily of unfunded contractual commitments to extend credit, in the form of loans, to our portfolio companies. Unfunded contractual commitments to provide funds to portfolio companies are not reflected on our balance sheet.

Our unfunded contractual commitments may be significant from time to time. A portion of these unfunded contractual commitments are dependent upon the portfolio company reaching certain milestones before the debt commitment becomes available. Furthermore, our credit agreements contain customary lending provisions which allow us relief from funding obligations for previously made unfunded commitments in instances where the underlying company experiences materially adverse events that affect the financial condition or business outlook for the company. These commitments will be subject to the same underwriting and ongoing portfolio maintenance as are the on-balance sheet financial instruments that we hold. Since these commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. As such, our disclosure of unfunded contractual commitments includes only those which are available at the request of the portfolio company and unencumbered by milestones. Refer to “Note 11 – Commitments and Contingencies” included in the notes to our consolidated financial statements appearing elsewhere in this report for additional discussion of our unfunded commitments.

As of March 31, 2023, we had approximately $562.1 million of available unfunded commitments, including undrawn revolving facilities, which were available at the request of the portfolio company and unencumbered by future or unachieved milestones, as well as uncalled capital commitments to make investments in private equity funds. In order to draw a portion of the Company's available unfunded commitments, a portfolio company must submit to the Company a formal funding request that complies with the applicable advance notice and other operational requirements. The available unfunded commitments excludes unfunded commitments (i) for which, with respect to a portfolio company's agreement, a milestone was achieved after the last day on which the portfolio company could have requested a drawdown funding to be completed within the reporting period; and (ii) $178.2 million of unfunded commitments which represent the portion of portfolio company commitments assigned to or directly committed by the Adviser Funds.

Additionally, we had approximately $96.0 million of non-binding term sheets outstanding to three new companies and one existing company, which generally convert to contractual commitments within approximately 90 days of signing. Non-binding

72


outstanding term sheets are subject to completion of our due diligence and final investment committee approval process, as well as the negotiation of definitive documentation with the prospective portfolio companies. Not all non-binding term sheets are expected to close and do not necessarily represent future cash requirements.

The fair value of our unfunded commitments is considered to be immaterial as the yield determined at the time of underwriting is expected to be materially consistent with the yield upon funding, given that interest rates are generally pegged to market indices and given the existence of milestones, conditions and/or obligations imbedded in the borrowing agreements.

Critical Accounting Policies and Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and revenues and expenses during the period reported. On an ongoing basis, our management evaluates its estimates and assumptions, which are based on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ from those estimates. Changes in our estimates and assumptions could materially impact our results of operations and financial condition.

For a description of our critical accounting policies, refer to “Note 2 – Summary of Significant Accounting Policies” included in the notes to our consolidated financial statements appearing elsewhere in this report. We consider the most significant accounting policies to be those related to our Valuation of Investments, Fair Valuation Measurements, Income Recognition, and Income Taxes. The valuation of investments is our most significant critical estimate. The most significant input to this estimate is the yield interest rate, which includes the hypothetical market yield plus premium or discount adjustment, used in determining the fair value of our debt investments. The following table shows the approximate increase (decrease) to the fair value of our debt investments from hypothetical change to the yield interest rates used for each valuation, assuming no other changes:

(in thousands)

 

Change in unrealized

 

Basis Point Change

 

appreciation (depreciation)

 

(100)

 

$

39,775

 

(50)

 

$

20,082

 

50

 

$

(20,798

)

100

 

$

(41,321

)

For a further discussion and disclosure of key inputs and considerations related to this estimate, refer to “Note 3 – Fair Value of Financial Instruments” included in the notes to our consolidated financial statements appearing elsewhere in this report.

 

73


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are subject to financial market risks, including changes in interest rates. Interest rate risk is defined as the sensitivity of our current and future earnings to interest rate volatility, variability of spread relationships, the difference in re-pricing intervals between our assets and liabilities and the effect that interest rates may have on our cash flows. Changes in interest rates may affect both our cost of funding and our interest income from portfolio investments, cash and cash equivalents and idle fund investments. Our investment income will be affected by changes in various interest rates, including Prime, LIBOR, SOFR, Eurodollar, and BSBY rates, to the extent our debt investments include variable interest rates. As of March 31, 2023, approximately 95.6% of the loans in our portfolio had variable rates based on floating Prime, LIBOR, SOFR, Eurodollar, or BSBY rates with a floor. As of March 31, 2023, approximately 9.3% of our debt investments have variable rates based on LIBOR and 13.5% of our debt investments have variable rates based on SOFR, BSBY or Eurodollar rates. Additionally, all of our LIBOR rate based debt securities have interest rate floors. We are actively considering and discussing the preferred alternative benchmark with our portfolio companies and prioritize the inclusion of LIBOR fallback language in our documentation. The Alternative Reference Rates Committee (“ARRC”) has recommended for US based debt securities to use the SOFR rate as the alternative benchmark. Our debt borrowings under the Credit Facilities bear interest at a floating rate, all other outstanding debt borrowings bear interest at a fixed rate. Changes in interest rates can also affect, among other things, our ability to acquire and originate loans and securities and the value of our investment portfolio.

Based on our Consolidated Statement of Assets and Liabilities as of March 31, 2023, the following table shows the approximate annualized increase (decrease) in components of net assets resulting from operations of hypothetical base rate changes in interest rates, assuming no changes in our investments and debt:

(in thousands)

 

Interest

 

 

Interest

 

 

Net

 

 

 

 

Basis Point Change

 

Income

 

 

Expense

 

 

Income

 

 

EPS

 

(75)

 

$

(19,110

)

 

$

(1,421

)

 

$

(17,689

)

 

$

(0.13

)

(50)

 

$

(12,952

)

 

$

(948

)

 

$

(12,004

)

 

$

(0.09

)

(25)

 

$

(6,768

)

 

$

(474

)

 

$

(6,294

)

 

$

(0.05

)

25

 

$

6,768

 

 

$

474

 

 

$

6,294

 

 

$

0.05

 

50

 

$

13,475

 

 

$

948

 

 

$

12,527

 

 

$

0.09

 

75

 

$

19,879

 

 

$

1,421

 

 

$

18,458

 

 

$

0.14

 

100

 

$

26,283

 

 

$

1,895

 

 

$

24,388

 

 

$

0.18

 

200

 

$

51,897

 

 

$

3,791

 

 

$

48,106

 

 

$

0.36

 

We do not currently engage in any hedging activities. However, we may, in the future, hedge against interest rate fluctuations and foreign currency by using standard hedging instruments such as futures, options, and forward contracts. While hedging activities may insulate us against changes in interest rates and foreign currency, they may also limit our ability to participate in the benefits of lower interest rates with respect to our borrowed funds and higher interest rates with respect to our portfolio of investments. During the three months ended March 31, 2023, we did not engage in interest rate or foreign currency hedging activities.

Although we believe that the foregoing analysis is indicative of our sensitivity to interest rate changes, it does not adjust for potential changes in the credit market, credit quality, size and composition of the assets in our portfolio. It also does not adjust for other business developments, including our debt borrowings and use of our Credit Facilities that could affect the net increase in net assets resulting from operations, or net income. It also does not assume any repayments from our portfolio companies. Accordingly, no assurances can be given that actual results would not differ materially from the statement above.

Because we currently borrow, and plan to borrow in the future, money to make investments, our net investment income is dependent upon the difference between the rate at which we borrow funds and the rate at which we invest the funds borrowed. Accordingly, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income. In periods of rising interest rates, our cost of funds would increase, which could reduce our net investment income if there is not a corresponding increase in interest income generated by variable rate assets in our investment portfolio. For additional information regarding the interest rate associated with each of our debt borrowings, refer to Item 2 “Financial Condition, Liquidity and Capital Resources” in this quarterly report on Form 10-Q and “Note 5 – Debt” included in the notes to our consolidated financial statements appearing elsewhere in this report.

 

 

74


ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company’s chief executive and chief financial officers, under the supervision and with the participation of the Company’s management, conducted an evaluation of the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d- 15(e) under the Exchange Act. As of the end of the period covered by this quarterly report on Form 10-Q, the Company’s chief executive and chief financial officers have concluded that the Company’s disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in reports that the Company files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the Company’s chief executive and chief financial officers, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financing reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act that occurred during our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

75


PART II: OTHER INFORMATION

We may, from time to time, be involved in litigation arising out of our operations in the normal course of business or otherwise. Furthermore, third parties may try to seek to impose liability on us in connection with the activities of our portfolio companies. While the outcome of any current legal proceedings cannot at this time be predicted with certainty, we do not expect any current matters will materially affect our financial condition or results of operations; however, there can be no assurance whether any pending legal proceedings will have a material adverse effect on our financial condition or results of operations in any future reporting period.

ITEM 1A. RISK FACTORS

In addition to the risks discussed below, important risk factors that could cause results or events to differ from current expectations are described in Part I, Item 1A “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 16, 2023 (the “Annual Report”).

Our financial results could be negatively affected if a significant portfolio investment fails to perform as expected.

Our total investment in companies may be significant individually or in the aggregate. As a result, if a significant investment in one or more companies fails to perform as expected, our financial results could be more negatively affected and the magnitude of the loss could be more significant than if we had made smaller investments in more companies. The following table shows the fair value of the totals of investments held in portfolio companies as of March 31, 2023 that represent greater than 5% of our net assets:

(in thousands)

March 31, 2023

 

 

Fair Value

 

 

Percentage of Net Assets

 

Corium, Inc.

$

136,593

 

 

 

9.1

%

Axsome Therapeutics, Inc.

$

130,587

 

 

 

8.7

%

Phathom Pharmaceuticals, Inc.

$

95,370

 

 

 

6.4

%

Worldremit Group Limited

$

94,519

 

 

 

6.3

%

SeatGeek, Inc.

$

88,983

 

 

 

5.9

%

Rocket Lab Global Services, LLC

$

88,450

 

 

 

5.9

%

Corium, Inc. develops, engineers, and manufactures drug delivery products and devices that utilize the skin and mucosa as a primary means of transport.
Axsome Therapeutics, Inc. is a biopharmaceutical company developing novel therapies for the management of central nervous system disorders for which there are limited treatment options.
Phathom Pharmaceuticals, Inc. is a biopharmaceutical company focused on the development and commercialization of novel treatments for gastrointestinal diseases and disorders.
Worldremit Group Limited is a global online money transfer business.
SeatGeek, Inc. is a mobile-focused ticket platform that enables users to buy and sell tickets for live sports, concerts and
theater events.
Rocket Lab Global Services, LLC is a commercial space provider of high-frequency, low-cost launches.

Our financial results could be materially adversely affected if these portfolio companies or any of our other significant portfolio companies encounter financial difficulty and fail to repay their obligations or to perform as expected.

We and our portfolio companies may maintain cash balances at financial institutions that exceed the Federal Deposit Insurance Corporation (“FDIC”) insured limits and we may otherwise be materially affected by adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional counterparties.

Our cash is held in accounts at FDIC regulated U.S. banking institutions and, when appropriate and operationally feasible, is generally swept into overnight money market accounts. Still, cash held by us and by our portfolio companies in non-interest-bearing and interest-bearing operating accounts may at any time exceed the FDIC insurance limits. If such banking institutions were to fail, we or our portfolio companies could lose all or a portion of those amounts held in excess of such insurance limitations.

Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems, which could adversely affect our and our portfolio companies’ business, financial condition, results of operations, or prospects.

Although we assess our and our portfolio companies’ banking relationships as we believe necessary or appropriate, our and our portfolio companies’ access to funding sources and other credit arrangements in amounts adequate to finance or capitalize our respective current and projected future business operations could be significantly impaired by factors that affect us or our portfolio

76


companies, the financial institutions with which we or our portfolio companies have arrangements directly, or the financial services industry or economy in general. These factors could include, among others, events such as liquidity constraints or failures, the ability to perform obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the financial services industry or financial markets, or concerns or negative expectations about the prospects for companies in the financial services industry. These factors could involve financial institutions or financial services industry companies with which we or our portfolio companies have financial or business relationships, but could also include factors involving financial markets or the financial services industry generally.

In addition, investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us or our portfolio companies to acquire financing on acceptable terms or at all.

77


ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Dividend Reinvestment Plan

During the three months ended March 31, 2023, we issued 61,383 shares of common stock to stockholders in connection with the dividend reinvestment plan. These issuances were not subject to the registration requirements of the Securities Act. The aggregate value of the shares of our common stock issued under our dividend reinvestment plan was approximately $0.9 million.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not Applicable

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable

ITEM 5. OTHER INFORMATION

Not Applicable

78


ITEM 6. EXHIBITS

 

Exhibit
Number

Description

3(a)

Amended and Restated Bylaws.(1)

10.1

Letter of Credit Facility Agreement, dated as of January 13, 2023, between Hercules Capital, Inc. and Sumitomo Mitsui Banking Corporation, as issuing bank(2)

10.2

First Omnibus Amendment to Revolving Credit Agreement and Guarantee and Security Agreement, dated as of January 13, 2023, among Hercules Capital, Inc., and the lenders party thereto and Sumitomo Mitsui Banking Corporation, as administrative and collateral agent(2)

10.3

Third Amendment to Loan and Security Agreement, dated as of January 13, 2023, among Hercules Funding IV LLC, as borrower, the lenders from time to time party thereto, and MUFG Bank, Ltd., as agent, a joint lead arranger swingline lender and sole bookrunner(2)

10.4

First Amendment to Sales and Servicing Agreement, dated as of January 13, 2023, among Hercules Funding IV LLC, as borrower, Hercules Capital, Inc., as originator and servicer, and MUFG Bank Ltd., as agent(2)

10.5

Form of Long-Term Restricted Stock Unit Agreement(2)

10.6*

First Amendment to Letter of Credit Facility, dated as of March 21, 2023, among Hercules Capital, Inc. and Sumitomo Mitsui Banking Corporation

31.1*

Chief Executive Officer Certification Pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*

Chief Financial Officer Certification Pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*

Chief Executive Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*

Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*

Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH*

Inline XBRL Taxonomy Extension Schema Document.

101.CAL*

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF*

Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB*

Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE*

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104

The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, has been formatted in Inline XBRL

 

* Filed herewith.

(1) Previously filed as part of the Current Report on Form 8-K of the Company, as filed on March 20, 2020.

(2) Previously filed as part of the Annual Report on Form 10-K of the Company, as filed on February 16, 2023.

 

 

79


Schedule 12 – 14

HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS IN AND ADVANCES TO AFFILIATES

For the Three Months Ended March 31, 2023 (unaudited)

 

(in thousands)

 

Investment(1)

 

Amount of Interest and Fees Credited to Income(2)

 

 

Realized Gain (Loss)

 

 

Fair Value as of
December 31, 2022

 

 

Gross Additions(3)

 

 

Gross Reductions(4)

 

 

Net Change in Unrealized Appreciation/ (Depreciation)

 

 

Fair Value as of March 31, 2023

 

Portfolio Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Control Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Majority Owned Control Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Coronado Aesthetics, LLC(8)

 

Preferred Stock

 

$

 

 

$

 

 

$

313

 

 

$

 

 

 

 

 

$

(60

)

 

$

253

 

 

 

Common Stock

 

 

 

 

 

 

 

 

6

 

 

 

 

 

 

 

 

 

(3

)

 

 

3

 

Gibraltar Acquisition LLC (p.k.a. Gibraltar Business Capital, LLC)(5)

 

Unsecured Debt

 

 

815

 

 

 

 

 

 

21,700

 

 

 

22

 

 

 

 

 

 

2,867

 

 

 

24,589

 

 

 

Preferred Stock

 

 

 

 

 

 

 

 

14,137

 

 

 

 

 

 

 

 

 

805

 

 

 

14,942

 

 

 

Common Stock

 

 

 

 

 

 

 

 

1,107

 

 

 

 

 

 

 

 

 

63

 

 

 

1,170

 

Hercules Adviser LLC(6)

 

Unsecured Debt

 

 

150

 

 

 

 

 

 

12,000

 

 

 

 

 

 

 

 

 

 

 

 

12,000

 

 

 

Member Units

 

 

 

 

 

 

 

 

19,153

 

 

 

 

 

 

 

 

 

5,442

 

 

 

24,595

 

 Total Majority Owned Control Investments

 

 

 

$

965

 

 

$

 

 

$

68,416

 

 

$

22

 

 

$

 

 

$

9,114

 

 

$

77,552

 

Other Control Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tectura Corporation(7)

 

Senior Debt

 

$

170

 

 

$

 

 

$

8,042

 

 

$

 

 

$

 

 

$

(268

)

 

$

7,774

 

 

 

Preferred Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Other Control Investments

 

 

 

$

170

 

 

$

 

 

$

8,042

 

 

$

 

 

$

 

 

$

(268

)

 

$

7,774

 

Total Control Investments

 

$

1,135

 

 

$

 

 

$

76,458

 

 

$

22

 

 

$

 

 

$

8,846

 

 

$

85,326

 

(1)
Stock and warrants are generally non-income producing and restricted.
(2)
Represents the total amount of interest, fees, or dividends credited to income for the period an investment was an affiliate or control investment.
(3)
Gross additions include increases in the cost basis of investments resulting from new portfolio investments, paid-in-kind interest or dividends, the amortization of discounts and closing fees and the exchange of one or more existing securities for one or more new securities.
(4)
Gross reductions include decreases in the cost basis of investments resulting from principal repayments or sales and the exchange of one or more existing securities for one or more new securities. Gross reductions also include previously recognized depreciation on investments that become control or affiliate investments during the period.
(5)
As of March 31, 2018, the Company's investment in Gibraltar Acquisition LLC (p.k.a. Gibraltar Business Capital, LLC) became classified as a control investment as a result of obtaining a controlling financial interest.
(6)
Hercules Adviser LLC is a wholly owned subsidiary providing investment management and other services to the Adviser Funds and other External Parties.
(7)
As of March 31, 2017, the Company's investment in Tectura Corporation became classified as a control investment as of result of obtaining more than 50% representation on the portfolio company's board. In May 2018, the Company purchased common shares, thereby obtaining greater than 25% of voting securities of Tectura as of June 30, 2018.
(8)
As of December 31, 2021, the Company's investment in Coronado Aesthetics, LLC became classified as a control investment as a result of obtaining more than 25% of the voting securities of the portfolio company.

 

 

80


Schedule 12 – 14

HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS IN AND ADVANCES TO AFFILIATES

For the Three Months Ended March 31, 2022 (unaudited)

 

(in thousands)

 

Investment(1)

 

Amount of Interest and Fees Credited to Income(2)

 

 

Realized Gain (Loss)

 

 

Fair Value as of
December 31, 2021

 

 

Gross Additions(3)

 

 

Gross Reductions(4)

 

 

Net Change in Unrealized Appreciation/ (Depreciation)

 

 

Fair Value as of March 31, 2022

 

Portfolio Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Control Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Majority Owned Control Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Coronado Aesthetics, LLC (10)

 

Preferred Stock

 

$

 

 

$

 

 

$

500

 

 

$

 

 

$

 

 

$

86

 

 

$

586

 

 

 

Common Stock

 

 

 

 

 

 

 

 

65

 

 

 

 

 

 

 

 

 

(37

)

 

 

28

 

Gibraltar Business Capital, LLC (5)

 

Unsecured Debt

 

 

850

 

 

 

 

 

 

23,212

 

 

 

19

 

 

 

 

 

 

(274

)

 

 

22,957

 

 

 

Preferred Stock

 

 

 

 

 

 

 

 

19,393

 

 

 

 

 

 

 

 

 

(897

)

 

 

18,496

 

 

 

Common Stock

 

 

 

 

 

 

 

 

1,225

 

 

 

 

 

 

 

 

 

(56

)

 

 

1,169

 

Hercules Adviser LLC(6)

 

Unsecured Debt

 

 

111

 

 

 

 

 

 

8,850

 

 

 

1,300

 

 

 

 

 

 

 

 

 

10,150

 

 

 

Member Units

 

 

 

 

 

 

 

 

11,990

 

 

 

 

 

 

 

 

 

2,554

 

 

 

14,544

 

 Total Majority Owned Control Investments

 

 

 

$

961

 

 

$

 

 

$

65,235

 

 

$

1,319

 

 

$

 

 

$

1,376

 

 

$

67,930

 

Other Control Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tectura Corporation(7)

 

Senior Debt

 

$

170

 

 

$

 

 

$

8,269

 

 

$

 

 

$

 

 

$

78

 

 

$

8,347

 

 

 

Preferred Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Other Control Investments

 

 

 

$

170

 

 

$

 

 

$

8,269

 

 

$

 

 

$

 

 

$

78

 

 

$

8,347

 

Total Control Investments

 

$

1,131

 

 

$

 

 

$

73,504

 

 

$

1,319

 

 

$

 

 

$

1,454

 

 

$

76,277

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Affiliate Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Black Crow AI, Inc.(8)

 

Preferred Stock

 

$

 

 

$

3,772

 

 

$

1,120

 

 

$

 

 

$

(1,000

)

 

$

(120

)

 

$

 

Pineapple Energy LLC (9)

 

Senior Debt

 

 

1,047

 

 

 

 

 

 

7,747

 

 

 

 

 

 

(4,781

)

 

 

20

 

 

 

2,986

 

 

 

Common Stock

 

 

 

 

 

 

 

 

591

 

 

 

400

 

 

 

 

 

 

853

 

 

 

1,844

 

Total Affiliate Investments

 

$

1,047

 

 

$

3,772

 

 

$

9,458

 

 

$

400

 

 

$

(5,781

)

 

$

753

 

 

$

4,830

 

Total Control and Affiliate Investments

 

$

2,178

 

 

$

3,772

 

 

$

82,962

 

 

$

1,719

 

 

$

(5,781

)

 

$

2,207

 

 

$

81,107

 

(1)
Stock and warrants are generally non-income producing and restricted.
(2)
Represents the total amount of interest, fees, or dividends credited to income for the period an investment was an affiliate or control investment.
(3)
Gross additions include increases in the cost basis of investments resulting from new portfolio investments, paid-in-kind interest or dividends, the amortization of discounts and closing fees and the exchange of one or more existing securities for one or more new securities.
(4)
Gross reductions include decreases in the cost basis of investments resulting from principal repayments or sales and the exchange of one or more existing securities for one or more new securities. Gross reductions also include previously recognized depreciation on investments that become control or affiliate investments during the period.
(5)
As of March 31, 2018, the Company's investment in Gibraltar Business Capital, LLC became classified as a control investment as a result of obtaining a controlling financial interest.
(6)
Hercules Adviser LLC is a wholly-owned subsidiary providing investment management and other services to External Parties.
(7)
As of March 31, 2017, the Company's investment in Tectura Corporation became classified as a control investment as of result of obtaining more than 50% representation on the
portfolio company's board. In May 2018, the Company purchased common shares, thereby obtaining greater than 25% of voting securities of Tectura as of June 30, 2018.
(8)
During the three months ended March 31, 2022, the Company sold its investments in Black Crow AI, Inc., as a result it is no longer an affiliate investment as of March 31, 2022.
(9)
As of December 11, 2020, the Company's investment in Pineapple Energy LLC became classified as an affiliate investment as a result of obtaining more than 5% but less than 25% of the
voting securities of the portfolio company.
(10)
As of December 31, 2021, the Company's investment in Coronado Aesthetics, LLC became classified as a control investment as a result of obtaining more than 25% of the voting
securities of the portfolio company.

 

81


Schedule 12 – 14

HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS IN AND ADVANCES TO AFFILIATES

As of March 31, 2023 (unaudited)

 

(in thousands)

 

Industry

 

Type of Investment (1)

 

Maturity Date

 

Interest Rate and Floor

 

Principal or Shares

 

 

Cost

 

 

Value (2)

 

Portfolio Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Control Investments

 

 

 

 

 

 

 

 

 

        Majority Owned Control Investments

 

 

 

 

 

 

 

 

 

Coronado Aesthetics, LLC

 

Medical Devices & Equipment

 

Preferred Series A Equity

 

 

 

 

 

 

5,000,000

 

 

$

250

 

 

$

253

 

 

Medical Devices & Equipment

 

Common Stock

 

 

 

 

 

 

180,000

 

 

 

 

 

 

3

 

Total Coronado Aesthetics, LLC

 

 

 

 

$

250

 

 

$

256

 

Gibraltar Acquisition LLC (p.k.a. Gibraltar Business Capital, LLC)

 

Diversified Financial Services

 

Unsecured Debt

 

September 2026

 

Interest rate FIXED 11.50%

 

$

25,000

 

 

 

24,589

 

 

 

24,589

 

 

Diversified Financial Services

 

Preferred Series A Equity

 

 

 

 

 

 

10,602,752

 

 

 

26,122

 

 

 

14,942

 

 

 

Diversified Financial Services

 

Common Stock

 

 

 

 

 

 

830,000

 

 

 

1,884

 

 

 

1,170

 

Total Gibraltar Acquisition, LLC

 

 

 

 

$

52,595

 

 

$

40,701

 

Hercules Adviser LLC

 

Diversified Financial Services

 

Unsecured Debt

 

June 2025

 

Interest rate FIXED 5.00%

 

$

12,000

 

 

 

12,000

 

 

 

12,000

 

 

Diversified Financial Services

 

Member Units

 

 

 

 

 

 

1

 

 

 

35

 

 

 

24,595

 

Total Hercules Adviser LLC

 

 

 

 

$

12,035

 

 

$

36,595

 

Total Majority Owned Control Investments (5.17%)*

 

 

 

 

$

64,880

 

 

$

77,552

 

Other Control Investments

 

 

 

 

 

 

 

 

 

Tectura Corporation

 

Consumer & Business Services

 

Senior Secured Debt

 

July 2024

 

PIK Interest 5.00%

 

$

23,703

 

 

$

13,263

 

 

$

 

 

Consumer & Business Services

 

Senior Secured Debt

 

July 2024

 

Interest rate FIXED 8.25%

 

$

8,250

 

 

 

8,250

 

 

 

7,774

 

 

Consumer & Business Services

 

Preferred Series BB Equity

 

 

 

 

 

 

1,000,000

 

 

 

 

 

 

 

 

Consumer & Business Services

 

Common Stock

 

 

 

 

 

 

414,994,863

 

 

 

900

 

 

 

 

Total Tectura Corporation

 

 

 

 

$

22,413

 

 

$

7,774

 

Total Other Control Investments (0.52%)*

 

 

 

 

$

22,413

 

 

$

7,774

 

Total Control Investments (5.69%)*

 

 

 

 

$

87,293

 

 

$

85,326

 

* Value as a percent of net assets

(1)
Stock and warrants are generally non-income producing and restricted.
(2)
All of the Company’s control and affiliate investments are Level 3 investments valued using significant unobservable inputs.

 

 

82


(10)

 

 

Schedule 12 – 14

HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS IN AND ADVANCES TO AFFILIATES

As of and for the year ended December 31, 2022

 

(in thousands)

 

Industry

 

Type of Investment (1)

 

Maturity Date

 

Interest Rate and Floor

 

Principal
or Shares

 

 

Cost

 

 

Value (2)

 

Portfolio Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Control Investments

 

 

 

 

 

 

 

 

 

        Majority Owned Control Investments

 

 

 

 

 

 

 

 

 

Coronado Aesthetics, LLC

 

Medical Devices & Equipment

 

Preferred Series A Equity

 

 

 

 

 

 

5,000,000

 

 

$

250

 

 

$

313

 

 

Medical Devices & Equipment

 

Common Stock

 

 

 

 

 

 

180,000

 

 

 

 

 

 

6

 

Total Coronado Aesthetics, LLC

 

 

 

 

$

250

 

 

$

319

 

Gibraltar Business Capital, LLC

 

Diversified Financial Services

 

Unsecured Debt

 

September 2026

 

Interest rate FIXED 14.50%

 

$

15,000

 

 

 

14,715

 

 

 

12,802

 

 

Diversified Financial Services

 

Unsecured Debt

 

September 2026

 

Interest rate FIXED 11.50%

 

$

10,000

 

 

 

9,852

 

 

 

8,898

 

 

Diversified Financial Services

 

Preferred Series A Equity

 

 

 

 

 

 

10,602,752

 

 

 

26,122

 

 

 

14,137

 

 

 

Diversified Financial Services

 

Common Stock

 

 

 

 

 

 

830,000

 

 

 

1,884

 

 

 

1,107

 

Total Gibraltar Business Capital, LLC

 

 

 

 

$

52,573

 

 

$

36,944

 

Hercules Adviser LLC

 

Diversified Financial Services

 

Unsecured Debt

 

June 2025

 

Interest rate FIXED 5.00%

 

$

12,000

 

 

 

12,000

 

 

 

12,000

 

 

Diversified Financial Services

 

Member Units

 

 

 

 

 

 

1

 

 

 

35

 

 

 

19,153

 

Total Hercules Adviser LLC

 

 

 

 

$

12,035

 

 

$

31,153

 

Total Majority Owned Control Investments (4.88%)*

 

 

 

 

$

64,858

 

 

$

68,416

 

Other Control Investments

 

 

 

 

 

 

 

 

 

Tectura Corporation

 

Consumer & Business Services

 

Senior Secured Debt

 

July 2024

 

PIK Interest 5.00%

 

$

10,680

 

 

$

240

 

 

$

 

 

Consumer & Business Services

 

Senior Secured Debt

 

July 2024

 

Interest rate FIXED 8.25%

 

$

8,250

 

 

 

8,250

 

 

 

8,042

 

 

Consumer & Business Services

 

Senior Secured Debt

 

July 2024

 

PIK Interest 5.00%

 

$

13,023

 

 

 

13,023

 

 

 

 

 

Consumer & Business Services

 

Preferred Series BB Equity

 

 

 

 

 

 

1,000,000

 

 

 

 

 

 

 

 

Consumer & Business Services

 

Common Stock

 

 

 

 

 

 

414,994,863

 

 

 

900

 

 

 

 

Total Tectura Corporation

 

 

 

 

$

22,413

 

 

$

8,042

 

Total Other Control Investments (0.58%)*

 

 

 

 

$

22,413

 

 

$

8,042

 

Total Control Investments (5.46%)*

 

 

 

 

$

87,271

 

 

$

76,458

 

     Total Control and Affiliate Investments (5.46%)*

 

 

$

87,271

 

 

$

76,458

 

* Value as a percent of net assets

(1)
Stock and warrants are generally non-income producing and restricted.
(2)
All of the Company’s control and affiliate investments are Level 3 investments valued using significant unobservable inputs.

 

83


SIGNATURES

Pursuant to the requirements of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

HERCULES CAPITAL, INC. (Registrant)

 

 

 

Dated: May 4, 2023

/S/ SCOTT BLUESTEIN

Scott Bluestein

President, Chief Executive Officer, and

Chief Investment Officer

 

 

Dated: May 4, 2023

/S/ SETH H. MEYER

Seth H. Meyer

Chief Financial Officer, and

Chief Accounting Officer

 

84