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 September 30, 2019

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 814-00702

 

HERCULES CAPITAL, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Maryland

 

74-3113410

(State or Jurisdiction of

Incorporation or Organization)

 

(IRS Employer

Identification Number)

 

400 Hamilton Ave., Suite 310

Palo Alto, California

(Address of Principal Executive Offices)

 

94301

(Zip Code)

 

(650) 289-3060

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Shares, par value $0.001 per share

HTGC

New York Stock Exchange

5.25% Notes due 2025

HCXZ

New York Stock Exchange

6.25% Notes due 2033

HCXY

New York Stock Exchange

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this Chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

 

  

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

  

Smaller reporting company

 

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with a new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

On October 25, 2019, there were 104,633,262 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 Statement of Assets and Liabilities as of September 30, 2019 and December 31, 2018 (unaudited)

  

3

 

 

 

Consolidated Statement of Operations for the three and nine months ended September 30, 2019 and 2018 (unaudited)

  

5

 

 

 

Consolidated Statement of Changes in Net Assets for the three and nine months ended September 30, 2019 and 2018 (unaudited)

  

6

 

 

 

Consolidated Statement of Cash Flows for the nine months ended September 30, 2019 and 2018 (unaudited)

  

8

 

 

 

Consolidated Schedule of Investments as of September 30, 2019 (unaudited)

  

10

 

 

 

Consolidated Schedule of Investments as of December 31, 2018 (unaudited)

  

20

 

 

 

Notes to Consolidated Financial Statements (unaudited)

  

36

Item 2.

 

 

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

  

68

Item 3.

 

 

Quantitative and Qualitative Disclosures About Market Risk

  

84

Item 4.

 

 

Controls and Procedures

  

85

 

PART II. OTHER INFORMATION

  

86

 

Item 1.

 

Legal Proceedings

  

86

Item 1A.

 

 

Risk Factors

 

86

Item 2.

 

 

Unregistered Sales of Equity Securities and Use of Proceeds

  

89

Item 3.

 

Defaults Upon Senior Securities

  

89

Item 4.

 

 

Mine Safety Disclosures

  

89

Item 5.

 

 

Other Information

  

89

Item 6.

 

 

Exhibits and Financial Statement Schedules

  

90

 

SIGNATURES

  

93

 

 

 

 

2


 

PART I: FINANCIAL INFORMATION

In this Quarterly Report, the “Company,” “Hercules,” “we,” “us” and “our” refer to Hercules Capital, Inc. and its wholly owned subsidiaries and its affiliated securitization trusts on or after February 25, 2016 and “Hercules Technology Growth Capital, Inc.” and its wholly owned subsidiaries and its affiliated securitization trusts prior to February 25, 2016, unless the context otherwise requires.

 

ITEM 1.

CONSOLIDATED FINANCIAL STATEMENTS

HERCULES CAPITAL, INC.

CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES

(unaudited)

(in thousands, except per share data)

 

 

 

September 30, 2019

 

 

December 31, 2018

 

Assets

 

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

Non-control/Non-affiliate investments (cost of $2,182,777 and $1,830,725, respectively)

 

$

2,167,682

 

 

$

1,801,258

 

Control investments (cost of $65,319 and $64,799, respectively)

 

 

58,560

 

 

 

57,619

 

Affiliate investments (cost of $88,238 and $85,000, respectively)

 

 

20,964

 

 

 

21,496

 

Total investments in securities, at value (cost of $2,336,334 and $1,980,524, respectively)

 

 

2,247,206

 

 

 

1,880,373

 

Cash and cash equivalents

 

 

21,045

 

 

 

34,212

 

Restricted cash

 

 

14,886

 

 

 

11,645

 

Interest receivable

 

 

19,847

 

 

 

16,959

 

Right of use asset (1)

 

 

12,218

 

 

 

 

Other assets

 

 

1,727

 

 

 

2,002

 

Total assets

 

$

2,316,929

 

 

$

1,945,191

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

25,451

 

 

$

25,961

 

Operating lease liability (1)

 

 

11,922

 

 

 

 

SBA Debentures, net (principal of $149,000 and $149,000, respectively) (2)

 

 

148,038

 

 

 

147,655

 

2022 Notes, net (principal of $150,000 and $150,000, respectively) (2)

 

 

148,383

 

 

 

147,990

 

2024 Notes, net (principal of $0 and $83,510, respectively) (2)

 

 

 

 

 

81,852

 

July 2024 Notes, net (principal of $105,000 and $0, respectively) (2)

 

 

103,723

 

 

 

 

2025 Notes, net (principal of $75,000 and $75,000, respectively) (2)

 

 

72,875

 

 

 

72,590

 

2033 Notes, net (principal of $40,000 and $40,000, respectively) (2)

 

 

38,474

 

 

 

38,427

 

2027 Asset-Backed Notes, net (principal of $200,000 and $200,000, respectively) (2)

 

 

197,241

 

 

 

197,265

 

2028 Asset-Backed Notes, net (principal of $250,000 and $0, respectively) (2)

 

 

247,333

 

 

 

 

2022 Convertible Notes, net (principal of $230,000 and $230,000, respectively) (2)

 

 

226,223

 

 

 

225,051

 

Credit Facilities

 

 

11,585

 

 

 

52,956

 

Total liabilities

 

$

1,231,248

 

 

$

989,747

 

 

 

 

 

 

 

 

 

 

Net assets consist of:

 

 

 

 

 

 

 

 

Common stock, par value

 

 

105

 

 

 

96

 

Capital in excess of par value

 

 

1,147,054

 

 

 

1,052,269

 

Total distributable earnings (loss) (3)

 

 

(61,478

)

 

 

(92,859

)

Treasury Stock, at cost, no shares as of September 30, 2019 and 376,466 shares as of December 31, 2018

 

 

 

 

 

(4,062

)

Total net assets

 

$

1,085,681

 

 

$

955,444

 

Total liabilities and net assets

 

$

2,316,929

 

 

$

1,945,191

 

 

 

 

 

 

 

 

 

 

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

 

 

104,636

 

 

 

96,501

 

Net asset value per share

 

$

10.38

 

 

$

9.90

 

 

(1)

See “Note 2 – Summary of Significant Accounting Policies” for a description of Right of use asset and Operating lease liability.

(2)

The Company’s SBA debentures, 2022 Notes, 2024 Notes, July 2024 Notes, 2025 Notes, 2033 Notes, 2027 Asset-Backed Notes, 2028 Asset-Backed Notes, and 2022 Convertible Notes, as each term is defined herein, are presented net of the associated debt issuance costs for each instrument. See “Note 4 – Borrowings”.

(3)

Certain prior year numbers have been adjusted to conform with the SEC final rules on disclosure updates and simplification effective November 5, 2018. See Note 11.

 

See notes to consolidated financial statements

3


 

The following table presents the assets and liabilities of our consolidated securitization trusts for the 2027 Asset-Backed Notes and the 2028 Asset-Backed Notes (see Note 4), which are variable interest entities, or VIEs. The assets of our securitization VIEs can only be used to settle obligations of our consolidated securitization VIEs, these liabilities are only the obligations of our consolidated securitization VIEs, and the creditors (or beneficial interest holders) do not have recourse to our general credit. These assets and liabilities are included in the Consolidated Statement of Assets and Liabilities above.

 

(Dollars in thousands)

 

September 30, 2019

 

 

December 31, 2018

 

Assets

 

 

 

 

 

 

 

 

Restricted Cash

 

$

14,886

 

 

$

11,645

 

2027 Asset-Backed Notes, investments in securities, at value (cost of $296,240 and $279,373, respectively)

 

 

288,524

 

 

 

277,781

 

2028 Asset-Backed Notes, investments in securities, at value (cost of $365,607 and $0, respectively)

 

 

366,033

 

 

 

 

Total assets

 

$

669,443

 

 

$

289,426

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

2027 Asset-Backed Notes, net (principal of $200,000 and $200,000, respectively) (1)

 

$

197,241

 

 

$

197,265

 

2028 Asset-Backed Notes, net (principal of $250,000 and $0, respectively) (1)

 

 

247,333

 

 

 

 

Total liabilities

 

$

444,574

 

 

$

197,265

 

 

(1)

The Company’s 2027 Asset-Backed Notes and the 2028 Asset-Backed Notes are presented net of the associated debt issuance costs. See “Note 4 – Borrowings”.

See notes to consolidated financial statements

4


 

HERCULES CAPITAL, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

(unaudited)

(in thousands, except per share data)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Investment income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-control/Non-affiliate investments

 

$

62,696

 

 

$

47,662

 

 

$

176,568

 

 

$

134,031

 

Control investments

 

 

1,055

 

 

 

921

 

 

 

3,119

 

 

 

2,348

 

Affiliate investments

 

 

493

 

 

 

509

 

 

 

1,740

 

 

 

1,570

 

Total interest income

 

 

64,244

 

 

 

49,092

 

 

 

181,427

 

 

 

137,949

 

Fee income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commitment, facility and loan fee income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-control/Non-affiliate investments

 

 

3,591

 

 

 

1,858

 

 

 

11,069

 

 

 

6,228

 

Control investments

 

 

5

 

 

 

1

 

 

 

13

 

 

 

1

 

Affiliate investments

 

 

26

 

 

 

71

 

 

 

186

 

 

 

263

 

Total commitment, facility and loan fee income

 

 

3,622

 

 

 

1,930

 

 

 

11,268

 

 

 

6,492

 

One-time fee income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-control/Non-affiliate investments

 

 

1,372

 

 

 

1,580

 

 

 

4,602

 

 

 

6,423

 

Total one-time fee income

 

 

1,372

 

 

 

1,580

 

 

 

4,602

 

 

 

6,423

 

Total fee income

 

 

4,994

 

 

 

3,510

 

 

 

15,870

 

 

 

12,915

 

Total investment income

 

 

69,238

 

 

 

52,602

 

 

 

197,297

 

 

 

150,864

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

 

13,857

 

 

 

9,451

 

 

 

39,927

 

 

 

28,715

 

Loan fees

 

 

1,138

 

 

 

1,502

 

 

 

5,793

 

 

 

6,039

 

General and administrative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Legal expenses

 

 

1,586

 

 

 

677

 

 

 

4,212

 

 

 

1,889

 

Tax expenses

 

 

815

 

 

 

117

 

 

 

1,706

 

 

 

689

 

Other expenses

 

 

3,967

 

 

 

2,927

 

 

 

10,398

 

 

 

8,826

 

Total general and administrative

 

 

6,368

 

 

 

3,721

 

 

 

16,316

 

 

 

11,404

 

Employee compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

7,559

 

 

 

5,294

 

 

 

23,372

 

 

 

18,069

 

Stock-based compensation

 

 

1,443

 

 

 

3,332

 

 

 

8,716

 

 

 

8,498

 

Total employee compensation

 

 

9,002

 

 

 

8,626

 

 

 

32,088

 

 

 

26,567

 

Total operating expenses

 

 

30,365

 

 

 

23,300

 

 

 

94,124

 

 

 

72,725

 

Net investment income

 

 

38,873

 

 

 

29,302

 

 

 

103,173

 

 

 

78,139

 

Net realized gain (loss) on investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-control/Non-affiliate investments

 

 

4,807

 

 

 

3,350

 

 

 

13,633

 

 

 

(4,115

)

Control investments

 

 

 

 

 

 

 

 

 

 

 

(4,308

)

Affiliate investments

 

 

 

 

 

 

 

 

 

 

 

(2,058

)

Total net realized gain (loss) on investments

 

 

4,807

 

 

 

3,350

 

 

 

13,633

 

 

 

(10,481

)

Net change in unrealized appreciation (depreciation) on investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-control/Non-affiliate investments

 

 

(26,351

)

 

 

3,967

 

 

 

15,533

 

 

 

22,327

 

Control investments

 

 

2,489

 

 

 

378

 

 

 

421

 

 

 

3,715

 

Affiliate investments

 

 

(547

)

 

 

(1,368

)

 

 

(3,773

)

 

 

(66

)

Total net unrealized appreciation (depreciation) on investments

 

 

(24,409

)

 

 

2,977

 

 

 

12,181

 

 

 

25,976

 

Total net realized and unrealized gain (loss)

 

 

(19,602

)

 

 

6,327

 

 

 

25,814

 

 

 

15,495

 

Net increase (decrease) in net assets resulting from operations

 

$

19,271

 

 

$

35,629

 

 

$

128,987

 

 

$

93,634

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

Basic

 

$

0.37

 

 

$

0.31

 

 

$

1.03

 

 

$

0.87

 

Change in net assets resulting from operations per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.18

 

 

$

0.37

 

 

$

1.29

 

 

$

1.04

 

Diluted

 

$

0.18

 

 

$

0.37

 

 

$

1.29

 

 

$

1.04

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

104,314

 

 

 

95,460

 

 

 

99,615

 

 

 

89,100

 

Diluted

 

 

104,655

 

 

 

95,671

 

 

 

100,043

 

 

 

89,212

 

Distributions paid per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.34

 

 

$

0.31

 

 

$

0.98

 

 

$

0.93

 

 

See notes to consolidated financial statements

5


 

HERCULES CAPITAL, INC.

CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS

(unaudited)

(dollars and shares in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital in

 

 

Distributable

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

excess

 

 

Earnings

 

 

Treasury

 

 

Net

 

For the Three Months Ended September 30, 2019

Shares

 

 

Par Value

 

 

of par value

 

 

(loss) (2)

 

 

Stock

 

 

Assets

 

Balance at June 30, 2019

 

104,282

 

 

$

104

 

 

$

1,149,774

 

 

$

(45,194

)

 

$

 

 

$

1,104,684

 

Net increase (decrease) in net assets resulting from operations

 

 

 

 

 

 

 

 

 

 

19,271

 

 

 

 

 

 

19,271

 

Public offering, net of offering expenses

 

 

 

 

 

 

 

(331

)

 

 

 

 

 

 

 

 

(331

)

Issuance of common stock due to stock option exercises

 

23

 

 

 

 

 

 

300

 

 

 

 

 

 

 

 

 

300

 

Retired shares from net issuance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock under restricted stock plan

 

770

 

 

 

1

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

Retired shares for restricted stock vesting

 

(482

)

 

 

 

 

 

(4,471

)

 

 

 

 

 

 

 

 

(4,471

)

Distributions reinvested in common stock

 

43

 

 

 

 

 

 

544

 

 

 

 

 

 

 

 

 

544

 

Distributions

 

 

 

 

 

 

 

 

 

 

(35,555

)

 

 

 

 

 

(35,555

)

Stock-based compensation (1)

 

 

 

 

 

 

 

1,239

 

 

 

 

 

 

 

 

 

1,239

 

Balance at September 30, 2019

 

104,636

 

 

$

105

 

 

$

1,147,054

 

 

$

(61,478

)

 

$

 

 

$

1,085,681

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2018

 

96,501

 

 

$

96

 

 

$

1,052,269

 

 

$

(92,859

)

 

$

(4,062

)

 

$

955,444

 

Net increase (decrease) in net assets resulting from operations

 

 

 

 

 

 

 

 

 

 

128,987

 

 

 

 

 

 

128,987

 

Public offering, net of offering expenses

 

7,700

 

 

 

8

 

 

 

95,084

 

 

 

 

 

 

 

 

 

95,092

 

Issuance of common stock due to stock option exercises

 

37

 

 

 

 

 

 

461

 

 

 

 

 

 

 

 

 

461

 

Retired shares from net issuance

 

(12

)

 

 

 

 

 

(166

)

 

 

 

 

 

 

 

 

(166

)

Issuance of common stock under restricted stock plan

 

828

 

 

 

1

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

Retirement of common stock under repurchase plan

 

 

 

 

 

 

 

(4,062

)

 

 

 

 

 

4,062

 

 

 

 

Retired shares for restricted stock vesting

 

(550

)

 

 

 

 

 

(5,358

)

 

 

 

 

 

 

 

 

(5,358

)

Distributions reinvested in common stock

 

132

 

 

 

 

 

 

1,733

 

 

 

 

 

 

 

 

 

1,733

 

Distributions

 

 

 

 

 

 

 

 

 

 

(97,606

)

 

 

 

 

 

(97,606

)

Stock-based compensation (1)

 

 

 

 

 

 

 

7,094

 

 

 

 

 

 

 

 

 

7,094

 

Balance at September 30, 2019

 

104,636

 

 

$

105

 

 

$

1,147,054

 

 

$

(61,478

)

 

$

 

 

$

1,085,681

 

 

(1)

Stock-based compensation includes $25 and $56 of restricted stock and option expense related to director compensation for the three and nine months ended September 30, 2019, respectively.

(2)

Certain prior year numbers have been adjusted to conform with the SEC final rules on disclosure updates and simplification effective November 5, 2018. See Note 11.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See notes to consolidated financial statements

6


 

HERCULES CAPITAL, INC.

CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS

(unaudited)

(dollars and shares in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital in

 

 

Distributable

 

 

 

 

 

 

 

Common Stock

 

 

excess

 

 

Earnings

 

 

Net

 

For the Three Months Ended September 30, 2018

 

Shares

 

 

Par Value

 

 

of par value

 

 

(loss)(2)

 

 

Assets

 

Balance at June 30, 2018

 

 

94,260

 

 

$

94

 

 

$

1,026,313

 

 

$

(62,710

)

 

$

963,697

 

Net increase (decrease) in net assets resulting from operations

 

 

 

 

 

 

 

 

 

 

 

35,629

 

 

 

35,629

 

Public offering, net of offering expenses

 

 

2,467

 

 

 

2

 

 

 

31,170

 

 

 

 

 

 

31,172

 

Issuance of common stock due to stock option exercises

 

 

25

 

 

 

 

 

 

271

 

 

 

 

 

 

271

 

Retired shares from net issuance

 

 

(21

)

 

 

 

 

 

(271

)

 

 

 

 

 

(271

)

Issuance of common stock under restricted stock plan

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retired shares for restricted stock vesting

 

 

(19

)

 

 

 

 

 

(249

)

 

 

 

 

 

(249

)

Distributions reinvested in common stock

 

 

39

 

 

 

 

 

 

518

 

 

 

 

 

 

518

 

Distributions

 

 

 

 

 

 

 

 

 

 

 

(29,710

)

 

 

(29,710

)

Stock-based compensation (1)

 

 

 

 

 

 

 

 

3,123

 

 

 

 

 

 

3,123

 

Balance at September 30, 2018

 

 

96,751

 

 

$

96

 

 

$

1,060,875

 

 

$

(56,791

)

 

$

1,004,180

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2017

 

 

84,424

 

 

$

85

 

 

$

908,501

 

 

$

(67,619

)

 

$

840,967

 

Net increase (decrease) in net assets resulting from operations

 

 

 

 

 

 

 

 

 

 

 

93,634

 

 

 

93,634

 

Public offering, net of offering expenses

 

 

11,953

 

 

 

11

 

 

 

143,787

 

 

 

 

 

 

143,798

 

Issuance of common stock due to stock option exercises

 

 

63

 

 

 

 

 

 

704

 

 

 

 

 

 

704

 

Retired shares from net issuance

 

 

(57

)

 

 

 

 

 

(718

)

 

 

 

 

 

(718

)

Issuance of common stock under restricted stock plan

 

 

336

 

 

 

 

 

 

 

 

 

 

 

 

 

Retired shares for restricted stock vesting

 

 

(76

)

 

 

 

 

 

(937

)

 

 

 

 

 

(937

)

Distributions reinvested in common stock

 

 

108

 

 

 

 

 

 

1,372

 

 

 

 

 

 

1,372

 

Distributions

 

 

 

 

 

 

 

 

 

 

 

(82,806

)

 

 

(82,806

)

Stock-based compensation (1)

 

 

 

 

 

 

 

 

8,166

 

 

 

 

 

 

8,166

 

Balance at September 30, 2018

 

 

96,751

 

 

$

96

 

 

$

1,060,875

 

 

$

(56,791

)

 

$

1,004,180

 

 

(1)

Stock-based compensation includes $13 and $33 of restricted stock and option expense related to director compensation for the three and nine months ended September 30, 2018, respectively.

(2)

Certain prior year numbers have been adjusted to conform with the SEC final rules on disclosure updates and simplification effective November 5, 2018. See Note 11.

 

 

 

See notes to consolidated financial statements

7


 

HERCULES CAPITAL, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited)

(dollars in thousands)

 

 

For the Nine Months Ended September 30,

 

 

2019

 

 

2018

 

Cash flows from operating activities:

 

 

 

 

 

 

 

Net increase (decrease) in net assets resulting from operations

$

128,987

 

 

$

93,634

 

Adjustments to reconcile net increase in net assets resulting from

operations to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

Purchase of investments

 

(784,858

)

 

 

(706,113

)

Principal and fee payments received on investments

 

424,479

 

 

 

503,971

 

Proceeds from the sale of investments

 

31,664

 

 

 

17,521

 

Net unrealized depreciation (appreciation) on investments

 

(12,181

)

 

 

(25,976

)

Net realized loss (gain) on investments

 

(13,633

)

 

 

10,481

 

Accretion of paid-in-kind principal

 

(6,571

)

 

 

(7,040

)

Accretion of loan discounts

 

(2,435

)

 

 

(2,961

)

Accretion of loan discount on convertible notes

 

504

 

 

 

504

 

Accretion of loan exit fees

 

(17,598

)

 

 

(12,482

)

Change in deferred loan origination revenue

 

13,617

 

 

 

3,472

 

Unearned fees related to unfunded commitments

 

1,896

 

 

 

1,908

 

Amortization of debt fees and issuance costs

 

4,714

 

 

 

5,197

 

Depreciation

 

175

 

 

 

147

 

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

 

7,094

 

 

 

8,166

 

Change in operating assets and liabilities:

 

 

 

 

 

 

 

Interest and fees receivable

 

(2,887

)

 

 

(3,460

)

Prepaid expenses and other assets

 

(12,286

)

 

 

2,141

 

Accounts payable

 

(196

)

 

 

(187

)

Accrued liabilities

 

12,763

 

 

 

(4,282

)

Net cash provided by (used in) operating activities

 

(226,752

)

 

 

(115,359

)

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchases of capital equipment

 

(484

)

 

 

(325

)

Net cash provided by (used in) investing activities

 

(484

)

 

 

(325

)

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

Issuance of common stock, net

 

95,091

 

 

 

143,498

 

Retirement of employee shares

 

(5,063

)

 

 

(651

)

Distributions paid

 

(95,873

)

 

 

(81,434

)

Issuance of July 2024 Notes

 

105,000

 

 

 

 

Issuance of 2025 Notes

 

 

 

 

75,000

 

Issuance of 2033 Notes

 

 

 

 

40,000

 

Issuance of 2028 Asset-Backed Notes

 

250,000

 

 

 

 

Repayments of 2024 Notes

 

(83,510

)

 

 

(100,000

)

Repayments of 2021 Asset-Backed Notes

 

 

 

 

(45,637

)

Repayments of Long-Term SBA Debentures

 

 

 

 

(41,200

)

Borrowings of credit facilities

 

480,834

 

 

 

216,109

 

Repayments of credit facilities

 

(522,205

)

 

 

(135,216

)

Cash paid for debt issuance costs

 

(4,131

)

 

 

(3,978

)

Fees paid for credit facilities and debentures

 

(2,833

)

 

 

(161

)

Net cash provided by (used in) financing activities

 

217,310

 

 

 

66,330

 

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

 

(9,926

)

 

 

(49,354

)

Cash, cash equivalents and restricted cash at beginning of period

 

45,857

 

 

 

94,995

 

Cash, cash equivalents and restricted cash at end of period

$

35,931

 

 

$

45,641

 

 

 

 

 

 

 

 

 

Supplemental non-cash investing and financing activities:

 

 

 

 

 

 

 

Distributions reinvested

 

1,733

 

 

 

1,372

 

 

(1)

Stock-based compensation includes $56 and $33 of restricted stock and option expense related to director compensation for the nine months ended September 30, 2019 and 2018, respectively.


See notes to consolidated financial statements

8


 

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

 

 

For the Nine Months Ended September 30,

 

(Dollars in thousands)

2019

 

 

2018

 

Cash and cash equivalents

$

21,045

 

 

$

43,212

 

Restricted cash

 

14,886

 

 

 

2,429

 

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

$

35,931

 

 

$

45,641

 

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

 

See notes to consolidated financial statements

9


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2019

(unaudited)

(dollars in thousands)

 

 

 

Portfolio Company

Sub-Industry

Type of

Investment (1)

Maturity Date

Interest Rate and Floor (2)

Principal

Amount

 

Cost (3)

 

Value (4)

 

Debt Investments

 

Biotechnology Tools

 

 

 

 

 

 

 

 

 

 

 

 

 

Under 1 Year Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

Exicure, Inc. (11)

Biotechnology Tools

Senior Secured

March 2020

Interest rate PRIME + 6.45% or Floor rate of 9.95%, 5.52% Exit Fee

$

4,999

 

$

5,020

 

$

5,020

 

Subtotal: Under 1 Year Maturity

 

 

 

 

 

 

 

 

5,020

 

 

5,020

 

Subtotal: Biotechnology Tools (0.46%)*

 

 

 

 

 

5,020

 

 

5,020

 

Consumer & Business Products

 

 

 

 

 

 

 

 

 

 

 

 

 

1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

Whoop, Inc. (12)

Consumer & Business Products

Senior Secured

July 2021

Interest rate PRIME + 3.75% or Floor rate of 9.25%, 6.95% Exit Fee

$

6,000

 

 

6,187

 

 

6,184

 

Subtotal: 1-5 Years Maturity

 

 

 

 

 

 

 

 

6,187

 

 

6,184

 

Subtotal: Consumer & Business Products (0.57%)*

 

 

 

 

 

6,187

 

 

6,184

 

Diversified Financial Services

 

 

 

 

 

 

 

 

 

 

 

 

 

1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

Gibraltar Business Capital, LLC (7)

Diversified Financial Services

Unsecured

March 2023

Interest rate FIXED 14.50%

$

15,000

 

 

14,766

 

 

14,805

 

Pico Quantitative Trading LLC (18)

Diversified Financial Services

Senior Secured

June 2024

Interest rate PRIME + 7.60% or Floor rate of 10.80%

$

30,000

 

 

29,537

 

 

29,537

 

Subtotal: 1-5 Years Maturity

 

 

 

 

 

 

 

 

44,303

 

 

44,342

 

Subtotal: Diversified Financial Services (4.08%)*

 

 

 

 

 

44,303

 

 

44,342

 

Drug Delivery

 

 

 

 

 

 

 

 

 

 

 

 

 

1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

Antares Pharma Inc. (10)(11)(15)

Drug Delivery

Senior Secured

July 2022

Interest rate PRIME + 4.50% or Floor rate of 4.50%, 4.14% Exit Fee

$

40,000

 

 

40,514

 

 

40,405

 

Subtotal: 1-5 Years Maturity

 

 

 

 

 

 

 

 

40,514

 

 

40,405

 

Subtotal: Drug Delivery (3.72%)*

 

 

 

 

 

40,514

 

 

40,405

 

Drug Discovery & Development

 

 

 

 

 

 

 

 

 

 

 

 

 

1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

Acacia Pharma Inc. (5)(10)(11)

Drug Discovery & Development

Senior Secured

January 2022

Interest rate PRIME + 4.50% or Floor rate of 9.25%, 3.95% Exit Fee

$

10,000

 

 

10,050

 

 

9,979

 

Aldeyra Therapeutics, Inc

Drug Discovery & Development

Senior Secured

October 2023

Interest rate PRIME + 3.10% or Floor rate of 9.10%, 6.95% Exit Fee

$

15,000

 

 

14,881

 

 

14,881

 

Aveo Pharmaceuticals, Inc. (11)

Drug Discovery & Development

Senior Secured

July 2021

Interest rate PRIME + 4.70% or Floor rate of 9.45%, 5.40% Exit Fee

$

9,247

 

 

9,520

 

 

9,472

 

 

Drug Discovery & Development

Senior Secured

July 2021

Interest rate PRIME + 4.70% or Floor rate of 9.45%, 3.00% Exit Fee

$

9,247

 

 

9,679

 

 

9,679

 

       Total Aveo Pharmaceuticals, Inc.

$

18,494

 

 

19,199

 

 

19,151

 

Axovant Gene Therapies Ltd. (p.k.a. Axovant Sciences Ltd.) (5)(10)(11)

Drug Discovery & Development

Senior Secured

March 2021

Interest rate PRIME + 6.80% or Floor rate of 10.55%

$

35,037

 

 

34,726

 

 

34,621

 

BridgeBio Pharma LLC (13)(16)

Drug Discovery & Development

Senior Secured

January 2023

Interest rate PRIME + 3.85% or Floor rate of 8.85%, 6.35% Exit Fee

$

35,000

 

 

35,536

 

 

35,435

 

 

Drug Discovery & Development

Senior Secured

January 2023

Interest rate PRIME + 2.85% or Floor rate of 8.60%, 5.75% Exit Fee

$

20,000

 

 

20,180

 

 

20,349

 

 

Drug Discovery & Development

Senior Secured

January 2023

Interest rate PRIME + 3.10% or Floor rate of 9.10%, 5.75% Exit Fee

$

20,000

 

 

19,958

 

 

20,121

 

Total BridgeBio Pharma LLC

 

 

 

 

$

75,000

 

 

75,674

 

 

75,905

 

Chemocentryx, Inc. (10)(15)

Drug Discovery & Development

Senior Secured

December 2022

Interest rate PRIME + 3.30% or Floor rate of 8.05%, 6.25% Exit Fee

$

20,000

 

 

20,213

 

 

20,456

 

Codiak Biosciences, Inc (17)

Drug Discovery & Development

Senior Secured

September 2024

Interest rate PRIME + 3.75% or Floor rate of 9.00%, 5.50% Exit Fee

$

10,000

 

 

9,921

 

 

9,921

 

Constellation Pharmaceuticals, Inc. (12)

Drug Discovery & Development

Senior Secured

April 2023

Interest rate PRIME + 2.55% or Floor rate of 8.55%, 6.35% Exit Fee

$

30,000

 

 

29,965

 

 

30,233

 

Dermavant Sciences Ltd. (5)(10)(13)

Drug Discovery & Development

Senior Secured

June 2022

Interest rate PRIME + 4.45% or Floor rate of 9.95%, 6.95% Exit Fee

$

20,000

 

 

19,905

 

 

19,905

 

Genocea Biosciences, Inc. (11)

Drug Discovery & Development

Senior Secured

May 2021

Interest rate PRIME + 2.75% or Floor rate of 7.75%, 10.12% Exit Fee

$

12,922

 

 

13,406

 

 

13,343

 

Mesoblast (5)(10)(11)

Drug Discovery & Development

Senior Secured

March 2022

Interest rate PRIME + 4.95% or Floor rate of 9.45%, 6.95% Exit Fee

$

50,000

 

 

51,193

 

 

51,286

 

Metuchen Pharmaceuticals LLC (14)

Drug Discovery & Development

Senior Secured

October 2020

Interest rate PRIME + 7.25% or Floor rate of 10.75%, PIK Interest 1.35%, 2.25% Exit Fee

$

14,300

 

 

15,196

 

 

15,143

 

Motif BioSciences Inc. (5)(8)(10)(11)

Drug Discovery & Development

Senior Secured

September 2021

Interest rate PRIME + 5.50% or Floor rate of 10.00%, 2.87% Exit Fee

$

6,738

 

 

6,732

 

 

 

Myovant Sciences, Ltd. (5)(10)(11)

Drug Discovery & Development

Senior Secured

November 2021

Interest rate PRIME + 4.00% or Floor rate of 8.25%, 6.55% Exit Fee

$

40,000

 

 

41,137

 

 

41,086

 

Nabriva Therapeutics (5)(10)

Drug Discovery & Development

Senior Secured

June 2023

Interest rate PRIME + 4.30% or Floor rate of 9.80%, 6.95% Exit Fee

$

35,000

 

 

35,072

 

 

35,231

 

See notes to consolidated financial statements

10


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2019

(unaudited)

(dollars in thousands)

 

 

Portfolio Company

Sub-Industry

Type of

Investment (1)

Maturity Date

Interest Rate and Floor (2)

Principal

Amount

 

Cost (3)

 

Value (4)

 

Paratek Pharmaceuticals, Inc. (11)(15)(16)

Drug Discovery & Development

Senior Secured

September 2021

Interest rate PRIME + 2.75% or Floor rate of 8.50%, 4.13% Exit Fee

$

62,700

 

$

61,733

 

$

61,661

 

 

Drug Discovery & Development

Senior Secured

August 2022

Interest rate PRIME + 2.75% or Floor rate of 7.85%, 6.95% Exit Fee

$

7,300

 

 

10,184

 

 

10,168

 

        Total Paratek Pharmaceuticals, Inc.

$

70,000

 

 

71,917

 

 

71,829

 

Replimune Group, Inc. (5)(10)(11)

Drug Discovery & Development

Senior Secured

August 2023

Interest rate PRIME + 2.75% or Floor rate of 8.75%, 4.95% Exit Fee

$

10,000

 

 

9,936

 

 

9,936

 

Stealth Bio Therapeutics Corp. (5)(10)(11)

Drug Discovery & Development

Senior Secured

January 2021

Interest rate PRIME + 5.50% or Floor rate of 9.50%, 6.68% Exit Fee

$

17,220

 

 

18,065

 

 

18,016

 

TG Therapeutics, Inc. (10)(13)

Drug Discovery & Development

Senior Secured

March 2022

Interest rate PRIME + 4.75% or Floor rate of 10.25%, 3.25% Exit Fee

$

30,000

 

 

29,535

 

 

29,601

 

Tricida, Inc. (11)(15)(17)

Drug Discovery & Development

Senior Secured

April 2023

Interest rate PRIME + 2.35% or Floor rate of 8.35%, 14.10% Exit Fee

$

40,000

 

 

40,473

 

 

40,715

 

uniQure B.V. (5)(10)(11)

Drug Discovery & Development

Senior Secured

June 2023

Interest rate PRIME + 3.35% or Floor rate of 8.85%

$

35,000

 

 

35,963

 

 

36,127

 

Urovant Sciences, Ltd. (5)(10)(13)

Drug Discovery & Development

Senior Secured

March 2023

Interest rate PRIME + 4.65% or Floor rate of 10.15%, 4.25% Exit Fee

$

45,000

 

 

44,371

 

 

44,605

 

Verastem, Inc. (11)

Drug Discovery & Development

Senior Secured

December 2022

Interest rate PRIME + 4.25% or Floor rate of 9.75%, 5.25% Exit Fee

$

5,000

 

 

5,004

 

 

5,036

 

 

Drug Discovery & Development

Senior Secured

December 2022

Interest rate PRIME + 4.25% or Floor rate of 9.75%, 5.25% Exit Fee

$

5,000

 

 

5,026

 

 

5,058

 

 

Drug Discovery & Development

Senior Secured

December 2022

Interest rate PRIME + 4.25% or Floor rate of 9.75%, 5.25% Exit Fee

$

5,000

 

 

5,029

 

 

5,047

 

 

Drug Discovery & Development

Senior Secured

December 2022

Interest rate PRIME + 4.25% or Floor rate of 9.75%, 5.25% Exit Fee

$

10,000

 

 

10,018

 

 

10,083

 

 

Drug Discovery & Development

Senior Secured

December 2022

Interest rate PRIME + 4.25% or Floor rate of 9.75%, 5.25% Exit Fee

$

10,000

 

 

9,984

 

 

10,048

 

Total Verastem, Inc.

 

 

 

 

$

35,000

 

 

35,061

 

 

35,272

 

X4 Pharmaceuticals, Inc. (11)(17)

Drug Discovery & Development

Senior Secured

July 2023

Interest rate PRIME + 2.75% or Floor rate of 8.75%, 7.98% Exit Fee

$

20,000

 

 

19,977

 

 

19,953

 

Subtotal: 1-5 Years Maturity

 

 

 

 

 

 

 

 

702,568

 

 

697,195

 

Subtotal: Drug Discovery & Development (64.22%)*

 

 

 

 

 

702,568

 

 

697,195

 

Electronics & Computer Hardware

 

 

 

 

 

 

 

1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

Glo AB (5)(10)(13)(14)

Electronics & Computer Hardware

Senior Secured

February 2021

Interest rate PRIME + 6.20% or Floor rate of 10.45%, PIK Interest 1.75%, 5.03% Exit Fee

$

9,682

 

 

10,045

 

 

7,143

 

Subtotal: 1-5 Years Maturity

 

 

 

 

 

 

 

 

10,045

 

 

7,143

 

Subtotal: Electronics & Computer Hardware (0.66%)*

 

 

 

 

 

10,045

 

 

7,143

 

Healthcare Services, Other

 

 

 

 

 

 

 

 

 

 

 

 

 

Under 1 Year Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

PH Group Holdings (13)

Healthcare Services, Other

Senior Secured

September 2020

Interest rate PRIME + 7.45% or Floor rate of 10.95%

$

20,000

 

 

19,959

 

 

19,959

 

 

Healthcare Services, Other

Senior Secured

September 2020

Interest rate PRIME + 7.45% or Floor rate of 10.95%

$

10,000

 

 

9,977

 

 

9,977

 

Total PH Group Holdings

 

 

 

 

$

30,000

 

 

29,936

 

 

29,936

 

Subtotal: Under 1 Year Maturity

 

 

 

 

 

29,936

 

 

29,936

 

1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

Oak Street Health (11)(16)(17)

Healthcare Services, Other

Senior Secured

June 2022

Interest rate PRIME + 5.00% or Floor rate of 9.75%, 5.95% Exit Fee

$

60,000

 

 

60,969

 

 

60,683

 

The CM Group LLC (17)

Healthcare Services, Other

Senior Secured

June 2024

Interest rate 1-month LIBOR + 8.35% or Floor rate of 9.35%

$

9,453

 

 

9,284

 

 

9,284

 

Subtotal: 1-5 Years Maturity

 

 

 

 

 

 

 

 

70,253

 

 

69,967

 

Subtotal: Healthcare Services, Other (9.20%)*

 

 

 

 

 

100,189

 

 

99,903

 

Information Services

 

 

 

 

 

 

 

 

 

 

 

 

 

1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

MDX Medical, Inc. (14)(15)(19)

Information Services

Senior Secured

June 2021

Interest rate PRIME + 2.75% or Floor rate of 9.50%, PIK Interest 1.70%, 2.80% Exit Fee

$

15,487

 

 

15,479

 

 

15,519

 

Planet Labs, Inc. (11)

Information Services

Senior Secured

June 2022

Interest rate PRIME + 5.50% or Floor rate of 11.00%, 3.00% Exit Fee

$

20,000

 

 

19,434

 

 

19,434

 

YIPIT, LLC (17)(18)

Information Services

Senior Secured

May 2024

Interest rate 3-month LIBOR + 7.99% or Floor rate of 8.99%

$

10,625

 

 

10,405

 

 

10,405

 

Subtotal: 1-5 Years Maturity

 

 

 

 

 

 

 

 

45,318

 

 

45,358

 

Subtotal: Information Services (4.18%)*

 

 

 

 

 

45,318

 

 

45,358

 

Internet Consumer & Business Services

 

 

 

 

 

 

 

Under 1 Year Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

Snagajob.com, Inc. (13)(14)

Internet Consumer & Business Services

Senior Secured

August 2020

Interest rate PRIME + 5.15% or Floor rate of 9.15%, PIK Interest 1.95%, 2.55% Exit Fee

$

42,466

 

 

42,989

 

 

42,989

 

See notes to consolidated financial statements

11


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2019

(unaudited)

(dollars in thousands)

 

 

Portfolio Company

Sub-Industry

Type of

Investment (1)

Maturity Date

Interest Rate and Floor (2)

Principal

Amount

 

Cost (3)

 

Value (4)

 

 

Internet Consumer & Business Services

Senior Secured

August 2020

Interest rate PRIME + 5.65% or Floor rate of 10.65%, PIK Interest 1.95%, 2.55% Exit Fee

$

5,108

 

$

5,038

 

$

5,038

 

         Total Snagajob.com, Inc.

 

 

 

 

$

47,574

 

 

48,027

 

 

48,027

 

Subtotal: Under 1 Year Maturity

 

 

 

 

 

48,027

 

 

48,027

 

1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

AppDirect, Inc. (11)(19)

Internet Consumer & Business Services

Senior Secured

January 2022

Interest rate PRIME + 5.70% or Floor rate of 9.95%, 3.45% Exit Fee

$

20,000

 

 

20,227

 

 

20,245

 

Arctic Wolf Networks, Inc. (13)(19)

Internet Consumer & Business Services

Senior Secured

April 2023

Interest rate 3-month LIBOR + 7.75% or Floor rate of 10.10%, 7.55% Exit Fee

$

30,000

 

 

30,017

 

 

29,951

 

Cloudpay, Inc. (5)(10)(11)

Internet Consumer & Business Services

Senior Secured

April 2022

Interest rate PRIME + 4.05% or Floor rate of 8.55%, 6.95% Exit Fee

$

15,000

 

 

15,200

 

 

15,104

 

Contentful, Inc. (5)(10)(11)(14)

Internet Consumer & Business Services

Senior Secured

July 2022

Interest rate PRIME + 2.95% or Floor rate of 7.95%, PIK Interest 1.25%, 3.55% Exit Fee

$

3,782

 

 

3,766

 

 

3,756

 

Convercent, Inc. (14)(15)

Internet Consumer & Business Services

Senior Secured

July 2022

Interest rate PRIME + 2.55% or Floor rate of 8.05%, PIK Interest 2.95%, 1.00% Exit Fee

$

13,706

 

 

13,611

 

 

13,610

 

EverFi, Inc. (11)(14)(16)

Internet Consumer & Business Services

Senior Secured

May 2022

Interest rate PRIME + 3.90% or Floor rate of 9.15%, PIK Interest 2.30%

$

71,801

 

 

71,470

 

 

71,787

 

First Insight, Inc. (15)

Internet Consumer & Business Services

Senior Secured

November 2021

Interest rate PRIME + 6.25% or Floor rate of 11.25%

$

10,000

 

 

9,877

 

 

9,859

 

Greenphire, Inc. (17)

Internet Consumer & Business Services

Senior Secured

January 2021

Interest rate 3-month LIBOR + 8.00% or Floor rate of 9.00%

$

1,729

 

 

1,729

 

 

1,729

 

Intent (p.k.a. Intent Media, Inc.) (12)

Internet Consumer & Business Services

Senior Secured

September 2021

Interest rate PRIME + 5.13% or Floor rate of 10.13%

$

15,200

 

 

15,117

 

 

14,986

 

Lendio, Inc. (11)(17)(19)

Internet Consumer & Business Services

Senior Secured

April 2023

Interest rate PRIME + 4.45% or Floor rate of 9.95%, 5.25% Exit Fee

$

5,000

 

 

4,956

 

 

4,970

 

Nextroll, Inc (14)(19)

Internet Consumer & Business Services

Senior Secured

June 2022

Interest rate PRIME + 3.85% or Floor rate of 9.35%, PIK Interest 2.95%, 3.50% Exit Fee

$

20,153

 

 

20,036

 

 

20,036

 

Patron Technology (18)

Internet Consumer & Business Services

Senior Secured

June 2024

Interest rate 3-month LIBOR + 8.30% or Floor rate of 9.30%

$

35,750

 

 

34,731

 

 

34,730

 

 

Internet Consumer & Business Services

Senior Secured

June 2024

Interest rate 3-month LIBOR + 8.30% or Floor rate of 9.30%

$

650

 

 

650

 

 

650

 

        Total Patron Technology

 

 

 

 

$

36,400

 

 

35,381

 

 

35,380

 

Postmates, Inc. (19)

Internet Consumer & Business Services

Senior Secured

September 2022

Interest rate PRIME + 3.85% or Floor rate of 8.85%, 8.05% Exit Fee

$

20,000

 

 

20,141

 

 

20,106

 

SeatGeek, Inc. (14)(17)

Internet Consumer & Business Services

Senior Secured

June 2023

Interest rate PRIME + 5.00% or Floor rate of 10.50%, PIK Interest 0.50%

$

23,017

 

 

22,309

 

 

22,309

 

Skyword, Inc (14)

Internet Consumer & Business Services

Senior Secured

September 2023

Interest rate PRIME + 3.88% or Floor rate of 9.38%, PIK Interest 1.25%, 2.75% Exit Fee

$

12,000

 

 

11,797

 

 

11,797

 

Tectura Corporation (7)(8)(9)(14)

Internet Consumer & Business Services

Senior Secured

June 2021

Interest rate FIXED 6.00%, PIK Interest 3.00%

$

21,407

 

 

21,407

 

 

9,605

 

 

Internet Consumer & Business Services

Senior Secured

June 2021

PIK Interest 8.00%

$

10,680

 

 

240

 

 

 

Total Tectura Corporation

 

 

 

 

$

32,087

 

 

21,647

 

 

9,605

 

Wheels Up Partners LLC (11)

Internet Consumer & Business Services

Senior Secured

July 2022

Interest rate 3-month LIBOR + 8.55% or Floor rate of 9.55%

$

17,933

 

 

17,815

 

 

17,815

 

Xometry, Inc. (13)(19)

Internet Consumer & Business Services

Senior Secured

November 2021

Interest rate PRIME + 3.95% or Floor rate of 8.45%, 7.09% Exit Fee

$

11,000

 

 

11,253

 

 

11,317

 

Subtotal: 1-5 Years Maturity

 

 

 

 

 

 

 

 

346,349

 

 

334,362

 

Subtotal: Internet Consumer & Business Services (35.22%)*

 

 

 

 

 

394,376

 

 

382,389

 

Media/Content/Info

 

 

 

 

 

 

 

 

 

 

 

 

 

1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

Bustle (14)(15)

Media/Content/Info

Senior Secured

June 2021

Interest rate PRIME + 4.10% or Floor rate of 8.35%, PIK Interest 1.95%, 3.12% Exit Fee

$

15,544

 

 

15,608

 

 

15,806

 

Subtotal: 1-5 Years Maturity

 

 

 

 

 

 

 

 

15,608

 

 

15,806

 

Subtotal: Media/Content/Info (1.46%)*

 

 

 

 

 

15,608

 

 

15,806

 

Medical Devices & Equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

Under 1 Year Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

Quanta Fluid Solutions (5)(10)

Medical Devices & Equipment

Senior Secured

April 2020

Interest rate PRIME + 8.05% or Floor rate of 11.55%, 5.00% Exit Fee

$

2,446

 

 

3,049

 

 

3,049

 

Subtotal: Under 1 Year Maturity

 

 

 

 

 

3,049

 

 

3,049

 

1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

Flowonix Medical Incorporated (11)

Medical Devices & Equipment

Senior Secured

October 2021

Interest rate PRIME + 4.00% or Floor rate of 9.00%, 7.95% Exit Fee

$

15,059

 

 

15,308

 

 

15,236

 

See notes to consolidated financial statements

12


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2019

(unaudited)

(dollars in thousands)

 

 

Portfolio Company

Sub-Industry

Type of

Investment (1)

Maturity Date

Interest Rate and Floor (2)

Principal

Amount

 

Cost (3)

 

Value (4)

 

Intuity Medical, Inc. (11)(15)

Medical Devices & Equipment

Senior Secured

June 2021

Interest rate PRIME + 5.00% or Floor rate of 9.25%, 6.95% Exit Fee

$

16,345

 

$

16,892

 

$

16,818

 

Quanterix Corporation (11)

Medical Devices & Equipment

Senior Secured

October 2021

Interest rate PRIME + 2.75% or Floor rate of 8.00%, 0.96% Exit Fee

$

7,688

 

 

7,664

 

 

7,638

 

Rapid Micro Biosystems, Inc. (11)(15)

Medical Devices & Equipment

Senior Secured

April 2022

Interest rate PRIME + 5.15% or Floor rate of 9.65%, 7.25% Exit Fee

$

18,000

 

 

18,479

 

 

18,380

 

Sebacia, Inc. (11)(15)

Medical Devices & Equipment

Senior Secured

January 2021

Interest rate PRIME + 4.35% or Floor rate of 8.85%, 6.05% Exit Fee

$

11,000

 

 

11,426

 

 

11,380

 

Transenterix, Inc. (10)(11)

Medical Devices & Equipment

Senior Secured

June 2022

Interest rate PRIME + 4.55% or Floor rate of 9.55%, 6.95% Exit Fee

$

15,000

 

 

15,344

 

 

15,209

 

Subtotal: 1-5 Years Maturity

 

 

 

 

 

85,113

 

 

84,661

 

Subtotal: Medical Devices & Equipment (8.08%)*

 

 

 

 

 

88,162

 

 

87,710

 

Semiconductors

 

 

 

 

 

 

 

 

 

 

 

 

 

1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

Elenion Technologies Corporation (13)(14)

Semiconductors

Senior Secured

February 2022

Interest rate PRIME + 4.25% or Floor rate of 9.75%, PIK Interest 2.25%, 5.00% Exit Fee

$

10,129

 

 

10,183

 

 

10,226

 

Subtotal: 1-5 Years Maturity

 

 

 

 

 

10,183

 

 

10,226

 

Subtotal: Semiconductors (0.94%)*

 

 

 

 

 

10,183

 

 

10,226

 

Software

 

 

 

 

 

 

 

 

 

 

 

 

 

Under 1 Year Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

Lightbend, Inc. (14)(15)

Software

Senior Secured

December 2019

Interest rate PRIME + 4.25% or Floor rate of 8.50%, PIK Interest 2.00%, 9.95% Exit Fee

$

2,016

 

 

2,149

 

 

2,149

 

Subtotal: Under 1 Year Maturity

 

 

 

 

 

2,149

 

 

2,149

 

1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

Abrigo (18)

Software

Senior Secured

March 2023

Interest rate 3-month LIBOR + 7.88% or Floor rate of 8.88%

$

39,402

 

 

38,702

 

 

39,053

 

 

Software

Senior Secured

March 2023

Interest rate 3-month LIBOR + 5.92% or Floor rate of 6.92%

$

909

 

 

885

 

 

885

 

       Total Abrigo

 

 

 

 

$

40,311

 

 

39,587

 

 

39,938

 

Businessolver.com, Inc. (11)(16)(17)

Software

Senior Secured

May 2023

Interest rate 3-month LIBOR + 7.50% or Floor rate of 8.50%

$

56,483

 

 

55,599

 

 

55,830

 

 

Software

Senior Secured

May 2023

Interest rate 3-month LIBOR + 7.50% or Floor rate of 8.50%

$

1,403

 

 

1,403

 

 

1,403

 

Total Businessolver.com, Inc.

 

 

 

 

$

57,886

 

 

57,002

 

 

57,233

 

Clarabridge, Inc. (12)(14)(17)

Software

Senior Secured

April 2022

Interest rate PRIME + 4.80% or Floor rate of 8.55%, PIK Interest 2.25%

$

48,003

 

 

47,600

 

 

47,899

 

Cloud 9 Software (13)(17)

Software

Senior Secured

April 2024

Interest rate 3-month LIBOR + 8.20% or Floor rate of 9.20%

$

9,500

 

 

9,324

 

 

9,324

 

Cloudian, Inc. (11)

Software

Senior Secured

November 2022

Interest rate PRIME + 3.25% or Floor rate of 8.25%, 9.75% Exit Fee

$

15,000

 

 

15,188

 

 

15,069

 

Couchbase, Inc. (11)(15)(19)

Software

Senior Secured

May 2023

Interest rate PRIME + 5.25% or Floor rate of 10.75%, 3.75% Exit Fee

$

40,000

 

 

39,624

 

 

39,801

 

Dashlane, Inc. (11)(14)(17)(19)

Software

Senior Secured

April 2022

Interest rate PRIME + 4.05% or Floor rate of 8.55%, PIK Interest 1.10%, 8.50% Exit Fee

$

10,152

 

 

10,373

 

 

10,395

 

 

Software

Senior Secured

March 2023

Interest rate PRIME + 4.05% or Floor rate of 8.55%, PIK Interest 1.10%, 4.95% Exit Fee

$

10,053

 

 

9,841

 

 

9,819

 

Total Dashlane, Inc.

 

 

 

 

$

20,205

 

 

20,214

 

 

20,214

 

Evernote Corporation (11)(14)(15)(19)

Software

Senior Secured

October 2020

Interest rate PRIME + 5.45% or Floor rate of 8.95%

$

5,549

 

 

5,461

 

 

5,446

 

 

Software

Senior Secured

July 2021

Interest rate PRIME + 6.00% or Floor rate of 9.50%, PIK Interest 1.25%

$

4,113

 

 

4,021

 

 

4,008

 

 

Software

Senior Secured

July 2022

Interest rate PRIME + 6.00% or Floor rate of 9.50%, PIK Interest 1.25%

$

5,061

 

 

4,987

 

 

5,065

 

Total Evernote Corporation

 

 

 

 

$

14,723

 

 

14,469

 

 

14,519

 

FPX, LLC (13)(17)

Software

Senior Secured

May 2024

Interest rate 1-month LIBOR + 8.65% or Floor rate of 9.65%

$

6,000

 

 

5,888

 

 

5,888

 

Insurance Technologies Corporation (11)(18)

Software

Senior Secured

March 2023

Interest rate 3-month LIBOR + 7.90% or Floor rate of 8.90%

$

13,750

 

 

13,510

 

 

13,507

 

Jolt Software, Inc (14)

Software

Senior Secured

October 2022

Interest rate PRIME + 3.00% or Floor rate of 8.50%, PIK Interest 1.75%, 4.50% Exit Fee

$

5,000

 

 

4,969

 

 

4,969

 

Kazoo, Inc. (p.k.a. YouEarnedIt, Inc.) (11)(18)

Software

Senior Secured

July 2023

Interest rate 1-month LIBOR + 8.66% or Floor rate of 9.66%

$

8,910

 

 

8,701

 

 

8,760

 

Lastline, Inc. (19)

Software

Senior Secured

July 2022

Interest rate PRIME + 5.45% or Floor rate of 10.95%

$

6,000

 

 

5,816

 

 

5,816

 

Lightbend, Inc. (14)(15)

Software

Senior Secured

February 2022

Interest rate PRIME + 4.25% or Floor rate of 8.50%, PIK Interest 2.00%

$

16,426

 

 

16,213

 

 

16,181

 

See notes to consolidated financial statements

13


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2019

(unaudited)

(dollars in thousands)

 

 

Portfolio Company

Sub-Industry

Type of

Investment (1)

Maturity Date

Interest Rate and Floor (2)

Principal

Amount

 

Cost (3)

 

Value (4)

 

Lithium Technologies, Inc. (11)(16)

Software

Senior Secured

October 2022

Interest rate 6-month LIBOR + 8.00% or Floor rate of 9.00%

$

12,000

 

$

11,822

 

$

11,822

 

 

Software

Senior Secured

October 2022

Interest rate 6-month LIBOR + 8.00% or Floor rate of 9.00%

$

43,000

 

 

42,175

 

 

42,158

 

 

Software

Senior Secured

October 2022

Interest rate 6-month LIBOR + 8.00% or Floor rate of 9.00%

$

725

 

 

725

 

 

725

 

         Total Lithium Technologies, Inc.

$

55,725

 

 

54,722

 

 

54,705

 

Nuvolo Technologies Corporation (17)(19)

Software

Senior Secured

April 2022

Interest rate PRIME + 6.25% or Floor rate of 11.75%

$

10,000

 

 

9,853

 

 

9,878

 

OrthoFi, Inc (13)(18)

Software

Senior Secured

April 2024

Interest rate 3-month LIBOR + 8.28% or Floor rate of 9.28%

$

17,853

 

 

17,396

 

 

17,396

 

Pollen, Inc. (15)

Software

Senior Secured

October 2020

Interest rate PRIME + 4.25% or Floor rate of 8.50%, 5.95% Exit Fee

$

7,000

 

 

7,315

 

 

7,250

 

Quid, Inc. (11)(14)(15)

Software

Senior Secured

November 2022

Interest rate PRIME + 4.45% or Floor rate of 9.95%, PIK Interest 2.25%, 3.61% Exit Fee

$

13,175

 

 

13,372

 

 

13,441

 

Regent Education (14)

Software

Senior Secured

January 2022

Interest rate FIXED 10.00%, PIK Interest 2.00%, 7.94% Exit Fee

$

3,139

 

 

3,189

 

 

2,117

 

Salsa Labs, Inc. (11)(17)

Software

Senior Secured

April 2023

Interest rate 3-month LIBOR + 8.15% or Floor rate of 9.15%

$

6,000

 

 

5,909

 

 

5,969

 

 

Software

Senior Secured

April 2023

Interest rate 3-month LIBOR + 8.15% or Floor rate of 9.15%

$

150

 

 

150

 

 

151

 

Total Salsa Labs, Inc.

 

 

 

 

$

6,150

 

 

6,059

 

 

6,120

 

ThreatConnect, Inc. (13)(17)(18)

Software

Senior Secured

May 2024

Interest rate 3-month LIBOR + 8.26% or Floor rate of 9.26%

$

4,500

 

 

4,436

 

 

4,436

 

Varsity Tutors LLC (14)

Software

Senior Secured

August 2023

Interest rate PRIME + 5.25% or Floor rate of 10.75%, PIK Interest 0.55%, 3.00% Exit Fee

$

35,006

 

 

34,683

 

 

34,683

 

Vela Trading Technologies (11)(18)

Software

Senior Secured

July 2022

Interest rate 3-month LIBOR + 10.50% or Floor rate of 11.50%

$

19,500

 

 

19,090

 

 

19,090

 

ZeroFox, Inc.

Software

Senior Secured

January 2023

Interest rate PRIME + 4.75% or Floor rate of 10.25%, 3.00% Exit Fee

$

15,000

 

 

14,878

 

 

14,878

 

ZocDoc (11)(19)

Software

Senior Secured

August 2021

Interest rate PRIME + 6.20% or Floor rate of 10.95%, 2.00% Exit Fee

$

30,000

 

 

30,177

 

 

30,018

 

Subtotal: 1-5 Years Maturity

 

 

 

 

 

513,275

 

 

513,130

 

Greater than 5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

Campaign Monitor Limited (11)(17)(19)

Software

Senior Secured

November 2025

Interest rate 1-month LIBOR + 8.50% or Floor rate of 9.50%

$

29,333

 

 

28,656

 

 

28,656

 

 

Software

Senior Secured

November 2025

Interest rate 1-month LIBOR + 8.50% or Floor rate of 9.50%

$

688

 

 

671

 

 

671

 

        Total Campaign Monitor Limited

 

 

 

 

$

30,021

 

 

29,327

 

 

29,327

 

Imperva, Inc. (19)

Software

Senior Secured

January 2027

Interest rate 3-month LIBOR + 7.75% or Floor rate of 8.75%

$

20,000

 

 

19,801

 

 

19,801

 

Subtotal: Greater than 5 Years Maturity

 

 

 

 

 

49,128

 

 

49,128

 

Subtotal: Software (51.99%)*

 

 

 

 

 

564,552

 

 

564,407

 

Sustainable and Renewable Technology

 

 

 

 

 

 

 

 

 

 

Under 1 Year Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

Solar Spectrum Holdings LLC (p.k.a. Sungevity, Inc.) (6)(8)(14)(19)

Sustainable and Renewable Technology

Senior Secured

October 2019

Interest rate PRIME + 8.70% or Floor rate of 12.95%, 6.67% Exit Fee

$

10,000

 

 

10,775

 

 

10,696

 

 

Sustainable and Renewable Technology

Senior Secured

October 2019

PIK Interest 10.00%

$

683

 

 

683

 

 

679

 

 

Sustainable and Renewable Technology

Senior Secured

October 2019

Interest rate PRIME + 10.70% or Floor rate of 15.70%, PIK Interest 2.00%

$

1,555

 

 

1,555

 

 

1,529

 

        Total Solar Spectrum Holdings LLC (p.k.a. Sungevity, Inc.)

$

12,238

 

 

13,013

 

 

12,904

 

Subtotal: Under 1 Year Maturity

 

 

 

 

 

13,013

 

 

12,904

 

1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

Impossible Foods, Inc. (12)

Sustainable and Renewable Technology

Senior Secured

January 2022

Interest rate PRIME + 3.95% or Floor rate of 8.95%, 9.00% Exit Fee

$

50,000

 

 

51,238

 

 

50,880

 

Proterra, Inc. (11)(14)(19)

Sustainable and Renewable Technology

Senior Secured

May 2021

Interest rate PRIME + 5.05% or Floor rate of 10.55%, PIK Interest 1.75%

$

10,057

 

 

10,008

 

 

10,031

 

Subtotal: 1-5 Years Maturity

 

 

 

 

 

61,246

 

 

60,911

 

Subtotal: Sustainable and Renewable Technology (6.80%)*

 

 

 

 

 

74,259

 

 

73,815

 

Total: Debt Investments (191.58%)*

 

 

 

 

 

 

 

2,101,284

 

 

2,079,903

 

 

 

See notes to consolidated financial statements

14


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2019

(unaudited)

(dollars in thousands)

 

Portfolio Company

 

Sub-Industry

 

Type of

Investment (1)

 

Series

 

Shares

 

 

Cost (3)

 

 

Value (4)

 

Equity Investments

 

Communications & Networking

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Peerless Network Holdings, Inc.

 

Communications & Networking

 

Equity

 

Preferred Series A

 

 

1,135,000

 

 

$

1,230

 

 

$

3,778

 

Subtotal: Communications & Networking (0.35%)*

 

 

 

1,230

 

 

 

3,778

 

Diversified Financial Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gibraltar Business Capital, LLC (7)

 

Diversified Financial Services

 

Equity

 

Common Stock

 

 

830,000

 

 

 

1,884

 

 

 

2,298

 

 

 

Diversified Financial Services

 

Equity

 

Preferred Series A

 

 

10,602,752

 

 

 

26,122

 

 

 

31,852

 

Total Gibraltar Business Capital, LLC

 

 

 

 

 

 

 

 

11,432,752

 

 

 

28,006

 

 

 

34,150

 

Subtotal: Diversified Financial Services (3.15%)*

 

 

 

 

 

 

28,006

 

 

 

34,150

 

Drug Delivery

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AcelRx Pharmaceuticals, Inc. (4)

 

Drug Delivery

 

Equity

 

Common Stock

 

 

176,730

 

 

 

1,329

 

 

 

389

 

BioQ Pharma Incorporated (15)

 

Drug Delivery

 

Equity

 

Preferred Series D

 

 

165,000

 

 

 

500

 

 

 

720

 

Kaleo, Inc.

 

Drug Delivery

 

Equity

 

Preferred Series B

 

 

82,500

 

 

 

1,007

 

 

 

3,388

 

Neos Therapeutics, Inc. (4)(15)

 

Drug Delivery

 

Equity

 

Common Stock

 

 

125,000

 

 

 

1,500

 

 

 

185

 

PDS Biotechnology Corporation (p.k.a. Edge Therapeutics, Inc.) (4)

 

Drug Delivery

 

Equity

 

Common Stock

 

 

2,498

 

 

 

309

 

 

 

8

 

Subtotal: Drug Delivery (0.43%)*

 

 

 

 

 

 

4,645

 

 

 

4,690

 

Drug Discovery & Development

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aveo Pharmaceuticals, Inc. (4)(15)

 

Drug Discovery & Development

 

Equity

 

Common Stock

 

 

1,901,791

 

 

 

1,715

 

 

 

1,607

 

Axovant Gene Therapies Ltd. (p.k.a. Axovant Sciences Ltd.) (4)(5)(10)

 

Drug Discovery & Development

 

Equity

 

Common Stock

 

 

16,228

 

 

 

1,269

 

 

 

105

 

BridgeBio Pharma LLC (4)(16)

 

Drug Discovery & Development

 

Equity

 

Common Stock

 

 

203,579

 

 

 

2,000

 

 

 

4,371

 

Cerecor, Inc. (4)

 

Drug Discovery & Development

 

Equity

 

Common Stock

 

 

119,087

 

 

 

1,000

 

 

 

392

 

Concert Pharmaceuticals, Inc. (4)(10)

 

Drug Discovery & Development

 

Equity

 

Common Stock

 

 

70,796

 

 

 

1,367

 

 

 

416

 

Dare Biosciences, Inc. (4)

 

Drug Discovery & Development

 

Equity

 

Common Stock

 

 

13,550

 

 

 

1,000

 

 

 

11

 

Dynavax Technologies (4)(10)

 

Drug Discovery & Development

 

Equity

 

Common Stock

 

 

20,000

 

 

 

550

 

 

 

72

 

Eidos Therapeutics, Inc. (4)(10)

 

Drug Discovery & Development

 

Equity

 

Common Stock

 

 

15,000

 

 

 

255

 

 

 

540

 

Genocea Biosciences, Inc. (4)

 

Drug Discovery & Development

 

Equity

 

Common Stock

 

 

27,932

 

 

 

2,000

 

 

 

81

 

Insmed, Incorporated (4)

 

Drug Discovery & Development

 

Equity

 

Common Stock

 

 

50,771

 

 

 

717

 

 

 

896

 

Melinta Therapeutics (4)

 

Drug Discovery & Development

 

Equity

 

Common Stock

 

 

10,364

 

 

 

2,000

 

 

 

39

 

Paratek Pharmaceuticals, Inc. (4)(16)

 

Drug Discovery & Development

 

Equity

 

Common Stock

 

 

76,362

 

 

 

2,744

 

 

 

328

 

Rocket Pharmaceuticals, Ltd. (4)

 

Drug Discovery & Development

 

Equity

 

Common Stock

 

 

944

 

 

 

1,500

 

 

 

11

 

Savara, Inc. (4)(15)

 

Drug Discovery & Development

 

Equity

 

Common Stock

 

 

11,119

 

 

 

203

 

 

 

29

 

uniQure B.V. (4)(5)(10)

 

Drug Discovery & Development

 

Equity

 

Common Stock

 

 

37,175

 

 

 

718

 

 

 

1,463

 

Subtotal: Drug Discovery & Development (0.95%)*

 

 

 

 

 

 

19,038

 

 

 

10,361

 

Healthcare Services, Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23andMe, Inc.

 

Healthcare Services, Other

 

Equity

 

Common Stock

 

 

360,000

 

 

 

5,094

 

 

 

4,508

 

Chromadex Corporation (4)

 

Healthcare Services, Other

 

Equity

 

Common Stock

 

 

44,264

 

 

 

157

 

 

 

174

 

Subtotal: Healthcare Services, Other (0.43%)*

 

 

 

 

 

 

5,251

 

 

 

4,682

 

Information Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DocuSign, Inc. (4)

 

Information Services

 

Equity

 

Common Stock

 

 

251,000

 

 

 

3,871

 

 

 

12,994

 

Subtotal: Information Services (1.20%)*

 

 

 

 

 

 

3,871

 

 

 

12,994

 

Internet Consumer & Business Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Blurb, Inc.

 

Internet Consumer & Business Services

 

Equity

 

Preferred Series B

 

 

220,653

 

 

 

175

 

 

 

50

 

Contentful, Inc. (5)(10)

 

Internet Consumer & Business Services

 

Equity

 

Preferred Series D

 

 

217

 

 

 

500

 

 

 

457

 

Countable Corporation (p.k.a. Brigade Group, Inc.)

 

Internet Consumer & Business Services

 

Equity

 

Common Stock

 

 

9,023

 

 

 

93

 

 

 

 

DoorDash, Inc.

 

Internet Consumer & Business Services

 

Equity

 

Common Stock

 

 

105,000

 

 

 

6,051

 

 

 

14,422

 

Lyft, Inc. (4)

 

Internet Consumer & Business Services

 

Equity

 

Common Stock

 

 

200,738

 

 

 

10,487

 

 

 

8,198

 

Nextdoor.com, Inc.

 

Internet Consumer & Business Services

 

Equity

 

Common Stock

 

 

328,190

 

 

 

4,854

 

 

 

6,692

 

OfferUp, Inc.

 

Internet Consumer & Business Services

 

Equity

 

Preferred Series A

 

 

286,080

 

 

 

1,663

 

 

 

2,054

 

 

 

Internet Consumer & Business Services

 

Equity

 

Preferred Series A-1

 

 

108,710

 

 

 

632

 

 

 

780

 

Total OfferUp, Inc.

 

 

 

 

 

 

 

 

394,790

 

 

 

2,295

 

 

 

2,834

 

Oportun (4)

 

Internet Consumer & Business Services

 

Equity

 

Common Stock

 

 

37,393

 

 

 

500

 

 

 

607

 

Tectura Corporation (7)

 

Internet Consumer & Business Services

 

Equity

 

Common Stock

 

 

414,994,863

 

 

 

900

 

 

 

 

 

 

Internet Consumer & Business Services

 

Equity

 

Preferred Series BB

 

 

1,000,000

 

 

 

 

 

 

 

Total Tectura Corporation

 

 

 

 

 

 

 

 

415,994,863

 

 

 

900

 

 

 

 

Subtotal: Internet Consumer & Business Services (3.06%)*

 

 

 

 

 

 

25,855

 

 

 

33,260

 

Media/Content/Info

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pinterest, Inc. (4)

 

Media/Content/Info

 

Equity

 

Common Stock

 

 

206,666

 

 

 

4,085

 

 

 

5,466

 

Subtotal: Media/Content/Info (0.50%)*

 

 

 

 

 

 

4,085

 

 

 

5,466

 

Medical Devices & Equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Flowonix Medical Incorporated

 

Medical Devices & Equipment

 

Equity

 

Preferred Series AA

 

 

221,893

 

 

 

1,500

 

 

 

 

Gelesis, Inc.

 

Medical Devices & Equipment

 

Equity

 

Common Stock

 

 

199,649

 

 

 

 

 

 

1,007

 

 

 

Medical Devices & Equipment

 

Equity

 

Preferred Series A-1

 

 

191,210

 

 

 

425

 

 

 

1,044

 

 

 

Medical Devices & Equipment

 

Equity

 

Preferred Series A-2

 

 

191,626

 

 

 

500

 

 

 

1,003

 

Total Gelesis, Inc.

 

 

 

 

 

 

 

 

582,485

 

 

 

925

 

 

 

3,054

 

Medrobotics Corporation (15)

 

Medical Devices & Equipment

 

Equity

 

Preferred Series E

 

 

136,798

 

 

 

250

 

 

 

 

See notes to consolidated financial statements

 

15


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2019

(unaudited)

(dollars in thousands)

 

 

Portfolio Company

 

Sub-Industry

 

Type of

Investment (1)

 

Series

 

Shares

 

 

Cost (3)

 

 

Value (4)

 

 

 

Medical Devices & Equipment

 

Equity

 

Preferred Series F

 

 

73,971

 

 

$

155

 

 

$

 

 

 

Medical Devices & Equipment

 

Equity

 

Preferred Series G

 

 

163,934

 

 

 

500

 

 

 

 

Total Medrobotics Corporation

 

 

 

 

 

 

 

 

374,703

 

 

 

905

 

 

 

 

Optiscan Biomedical, Corp. (6)

 

Medical Devices & Equipment

 

Equity

 

Preferred Series B

 

 

61,855

 

 

 

3,000

 

 

 

393

 

 

 

Medical Devices & Equipment

 

Equity

 

Preferred Series C

 

 

19,273

 

 

 

655

 

 

 

111

 

 

 

Medical Devices & Equipment

 

Equity

 

Preferred Series D

 

 

551,038

 

 

 

5,257

 

 

 

3,282

 

 

 

Medical Devices & Equipment

 

Equity

 

Preferred Series E

 

 

507,103

 

 

 

4,239

 

 

 

4,061

 

Total Optiscan Biomedical, Corp.

 

 

 

 

 

 

 

 

1,139,269

 

 

 

13,151

 

 

 

7,847

 

Outset Medical, Inc.

 

Medical Devices & Equipment

 

Equity

 

Preferred Series B

 

 

232,061

 

 

 

527

 

 

 

538

 

Quanterix Corporation (4)

 

Medical Devices & Equipment

 

Equity

 

Common Stock

 

 

45,690

 

 

 

205

 

 

 

1,004

 

ViewRay, Inc. (4)(15)

 

Medical Devices & Equipment

 

Equity

 

Common Stock

 

 

36,457

 

 

 

333

 

 

 

106

 

Subtotal: Medical Devices & Equipment (1.16%)*

 

 

 

 

 

 

17,546

 

 

 

12,549

 

Software

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CapLinked, Inc.

 

Software

 

Equity

 

Preferred Series A-3

 

 

53,614

 

 

 

51

 

 

 

94

 

Docker, Inc.

 

Software

 

Equity

 

Common Stock

 

 

200,000

 

 

 

4,284

 

 

 

3,890

 

Druva Holdings, Inc. (p.k.a. Druva, Inc.)

 

Software

 

Equity

 

Preferred Series 2

 

 

458,841

 

 

 

1,000

 

 

 

1,703

 

 

 

Software

 

Equity

 

Preferred Series 3

 

 

93,620

 

 

 

300

 

 

 

405

 

Total Druva Holdings, Inc. (p.k.a. Druva, Inc.)

 

 

 

 

 

 

 

 

552,461

 

 

 

1,300

 

 

 

2,108

 

HighRoads, Inc.

 

Software

 

Equity

 

Common Stock

 

 

190

 

 

 

307

 

 

 

 

Palantir Technologies

 

Software

 

Equity

 

Preferred Series D

 

 

9,535

 

 

 

47

 

 

 

43

 

 

 

Software

 

Equity

 

Preferred Series E

 

 

1,749,089

 

 

 

10,489

 

 

 

7,958

 

 

 

Software

 

Equity

 

Preferred Series G

 

 

326,797

 

 

 

2,211

 

 

 

1,488

 

Total Palantir Technologies

 

 

 

 

 

 

 

 

2,085,421

 

 

 

12,747

 

 

 

9,489

 

Sprinklr, Inc.

 

Software

 

Equity

 

Common Stock

 

 

700,000

 

 

 

3,749

 

 

 

3,910

 

Subtotal: Software (1.80%)*

 

 

 

 

 

 

22,438

 

 

 

19,491

 

Surgical Devices

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gynesonics, Inc. (15)

 

Surgical Devices

 

Equity

 

Preferred Series B

 

 

219,298

 

 

 

250

 

 

 

9

 

 

 

Surgical Devices

 

Equity

 

Preferred Series C

 

 

656,538

 

 

 

282

 

 

 

26

 

 

 

Surgical Devices

 

Equity

 

Preferred Series D

 

 

1,991,157

 

 

 

712

 

 

 

81

 

 

 

Surgical Devices

 

Equity

 

Preferred Series E

 

 

2,786,367

 

 

 

429

 

 

 

131

 

 

 

Surgical Devices

 

Equity

 

Preferred Series F

 

 

1,523,693

 

 

 

118

 

 

 

139

 

 

 

Surgical Devices

 

Equity

 

Preferred Series F-1

 

 

2,418,125

 

 

 

150

 

 

 

193

 

Total Gynesonics, Inc.

 

 

 

 

 

 

 

 

9,595,178

 

 

 

1,941

 

 

 

579

 

TransMedics Group, Inc. (p.k.a Transmedics, Inc.) (4)

 

Surgical Devices

 

Equity

 

Common Stock

 

 

162,617

 

 

 

2,550

 

 

 

3,861

 

Subtotal: Surgical Devices (0.41%)*

 

 

 

 

 

 

4,491

 

 

 

4,440

 

Sustainable and Renewable Technology

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impossible Foods, Inc.

 

Sustainable and Renewable Technology

 

Equity

 

Preferred Series E-1

 

 

188,611

 

 

 

2,000

 

 

 

2,000

 

Modumetal, Inc.

 

Sustainable and Renewable Technology

 

Equity

 

Preferred Series A-1

 

 

103,584

 

 

 

500

 

 

 

10

 

Proterra, Inc.

 

Sustainable and Renewable Technology

 

Equity

 

Preferred Series 5

 

 

99,280

 

 

 

500

 

 

 

518

 

Solar Spectrum Holdings LLC (p.k.a. Sungevity, Inc.) (6)

 

Sustainable and Renewable Technology

 

Equity

 

Common Stock

 

 

380

 

 

 

61,502

 

 

 

 

Subtotal: Sustainable and Renewable Technology (0.23%)*

 

 

 

 

 

 

64,502

 

 

 

2,528

 

Total: Equity Investments (13.67%)*

 

 

 

 

 

 

 

 

 

 

 

 

200,958

 

 

 

148,389

 

Warrant Investments

 

Communications & Networking

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Peerless Network Holdings, Inc.

 

Communications & Networking

 

Warrant

 

Common Stock

 

 

3,328

 

 

 

 

 

 

7

 

Spring Mobile Solutions, Inc.

 

Communications & Networking

 

Warrant

 

Common Stock

 

 

2,834,375

 

 

 

418

 

 

 

 

Subtotal: Communications & Networking (0.00%)*

 

 

 

 

 

 

418

 

 

 

7

 

Consumer & Business Products

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gadget Guard (15)

 

Consumer & Business Products

 

Warrant

 

Common Stock

 

 

1,662,441

 

 

 

228

 

 

 

 

Intelligent Beauty, Inc.

 

Consumer & Business Products

 

Warrant

 

Preferred Series B

 

 

190,234

 

 

 

230

 

 

 

384

 

The Neat Company

 

Consumer & Business Products

 

Warrant

 

Common Stock

 

 

54,054

 

 

 

365

 

 

 

 

Whoop, Inc.

 

Consumer & Business Products

 

Warrant

 

Preferred Series C

 

 

68,627

 

 

 

18

 

 

 

5

 

Subtotal: Consumer & Business Products (0.04%)*

 

 

 

 

 

 

841

 

 

 

389

 

Drug Delivery

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Agile Therapeutics, Inc. (4)

 

Drug Delivery

 

Warrant

 

Common Stock

 

 

180,274

 

 

 

730

 

 

 

29

 

BioQ Pharma Incorporated

 

Drug Delivery

 

Warrant

 

Common Stock

 

 

459,183

 

 

 

1

 

 

 

885

 

Dance Biopharm, Inc. (15)

 

Drug Delivery

 

Warrant

 

Common Stock

 

 

110,882

 

 

 

74

 

 

 

 

Neos Therapeutics, Inc. (4)(15)

 

Drug Delivery

 

Warrant

 

Common Stock

 

 

70,833

 

 

 

285

 

 

 

 

PDS Biotechnology Corporation (p.k.a. Edge Therapeutics, Inc.) (4)

 

Drug Delivery

 

Warrant

 

Common Stock

 

 

3,929

 

 

 

390

 

 

 

 

Pulmatrix Inc. (4)

 

Drug Delivery

 

Warrant

 

Common Stock

 

 

2,515

 

 

 

116

 

 

 

 

ZP Opco, Inc. (4)

 

Drug Delivery

 

Warrant

 

Common Stock

 

 

3,618

 

 

 

265

 

 

 

 

Subtotal: Drug Delivery (0.08%)*

 

 

 

 

 

 

1,861

 

 

 

914

 

Drug Discovery & Development

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acacia Pharma Inc. (4)(5)(10)

 

Drug Discovery & Development

 

Warrant

 

Common Stock

 

 

201,330

 

 

 

304

 

 

 

75

 

See notes to consolidated financial statements

16


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2019

(unaudited)

(dollars in thousands)

 

 

Portfolio Company

 

Sub-Industry

 

Type of

Investment (1)

 

Series

 

Shares

 

 

Cost (3)

 

 

Value (4)

 

ADMA Biologics, Inc. (4)

 

Drug Discovery & Development

 

Warrant

 

Common Stock

 

 

89,750

 

 

$

295

 

 

$

54

 

Brickell Biotech, Inc. (4)

 

Drug Discovery & Development

 

Warrant

 

Common Stock

 

 

9,005

 

 

 

119

 

 

 

 

Cerecor, Inc. (4)

 

Drug Discovery & Development

 

Warrant

 

Common Stock

 

 

22,328

 

 

 

70

 

 

 

4

 

Concert Pharmaceuticals, Inc. (4)(10)(15)

 

Drug Discovery & Development

 

Warrant

 

Common Stock

 

 

61,273

 

 

 

178

 

 

 

20

 

CTI BioPharma Corp. (4)

 

Drug Discovery & Development

 

Warrant

 

Common Stock

 

 

29,239

 

 

 

165

 

 

 

 

CytRx Corporation (4)(15)

 

Drug Discovery & Development

 

Warrant

 

Common Stock

 

 

105,694

 

 

 

160

 

 

 

 

Dare Biosciences, Inc. (4)

 

Drug Discovery & Development

 

Warrant

 

Common Stock

 

 

17,190

 

 

 

369

 

 

 

 

Dermavant Sciences Ltd. (5)(10)

 

Drug Discovery & Development

 

Warrant

 

Common Stock

 

 

223,642

 

 

 

101

 

 

 

108

 

Dicerna Pharmaceuticals, Inc. (4)

 

Drug Discovery & Development

 

Warrant

 

Common Stock

 

 

200

 

 

 

28

 

 

 

 

Evofem Biosciences, Inc. (4)(15)

 

Drug Discovery & Development

 

Warrant

 

Common Stock

 

 

7,806

 

 

 

266

 

 

 

15

 

Genocea Biosciences, Inc. (4)

 

Drug Discovery & Development

 

Warrant

 

Common Stock

 

 

50,391

 

 

 

431

 

 

 

31

 

Immune Pharmaceuticals (4)

 

Drug Discovery & Development

 

Warrant

 

Common Stock

 

 

10,742

 

 

 

164

 

 

 

 

Melinta Therapeutics (4)

 

Drug Discovery & Development

 

Warrant

 

Common Stock

 

 

8,109

 

 

 

625

 

 

 

 

Motif BioSciences Inc. (4)(5)(10)(15)

 

Drug Discovery & Development

 

Warrant

 

Common Stock

 

 

73,452

 

 

 

282

 

 

 

3

 

Myovant Sciences, Ltd. (4)(5)(10)

 

Drug Discovery & Development

 

Warrant

 

Common Stock

 

 

73,710

 

 

 

460

 

 

 

32

 

Neuralstem, Inc. (4)(15)

 

Drug Discovery & Development

 

Warrant

 

Common Stock

 

 

289

 

 

 

77

 

 

 

 

Ology Bioservices, Inc. (15)

 

Drug Discovery & Development

 

Warrant

 

Common Stock

 

 

171,389

 

 

 

838

 

 

 

 

Paratek Pharmaceuticals, Inc. (4)(15)(16)

 

Drug Discovery & Development

 

Warrant

 

Common Stock

 

 

94,841

 

 

 

204

 

 

 

19

 

Sorrento Therapeutics, Inc. (4)(10)

 

Drug Discovery & Development

 

Warrant

 

Common Stock

 

 

306,748

 

 

 

889

 

 

 

137

 

Stealth Bio Therapeutics Corp. (4)(5)(10)

 

Drug Discovery & Development

 

Warrant

 

American Depositary Shares

 

 

41,667

 

 

 

158

 

 

 

15

 

TG Therapeutics, Inc. (4)(10)

 

Drug Discovery & Development

 

Warrant

 

Common Stock

 

 

147,058

 

 

 

563

 

 

 

377

 

Tricida, Inc. (4)(15)

 

Drug Discovery & Development

 

Warrant

 

Common Stock

 

 

123,637

 

 

 

979

 

 

 

1,965

 

Urovant Sciences, Ltd. (4)(5)(10)

 

Drug Discovery & Development

 

Warrant

 

Common Stock

 

 

99,777

 

 

 

383

 

 

 

363

 

X4 Pharmaceuticals, Inc. (4)

 

Drug Discovery & Development

 

Warrant

 

Common Stock

 

 

25,000

 

 

 

314

 

 

 

86

 

Xoma Corporation (4)(10)(15)

 

Drug Discovery & Development

 

Warrant

 

Common Stock

 

 

9,063

 

 

 

279

 

 

 

2

 

Subtotal: Drug Discovery & Development (0.30%)*

 

 

 

 

 

 

8,701

 

 

 

3,306

 

Electronics & Computer Hardware

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

908 DEVICES INC. (15)

 

Electronics & Computer Hardware

 

Warrant

 

Preferred Series D

 

 

79,856

 

 

 

101

 

 

 

45

 

Subtotal: Electronics & Computer Hardware (0.00%)*

 

 

 

 

 

 

101

 

 

 

45

 

Information Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INMOBI Inc. (5)(10)

 

Information Services

 

Warrant

 

Common Stock

 

 

65,587

 

 

 

82

 

 

 

 

MDX Medical, Inc. (15)

 

Information Services

 

Warrant

 

Common Stock

 

 

2,812,500

 

 

 

283

 

 

 

125

 

Netbase Solutions, Inc.

 

Information Services

 

Warrant

 

Preferred Series 1

 

 

60,000

 

 

 

356

 

 

 

395

 

Planet Labs, Inc.

 

Information Services

 

Warrant

 

Common Stock

 

 

274,160

 

 

 

565

 

 

 

388

 

RichRelevance, Inc.

 

Information Services

 

Warrant

 

Preferred Series E

 

 

112,612

 

 

 

98

 

 

 

 

Subtotal: Information Services (0.08%)*

 

 

 

 

 

 

1,384

 

 

 

908

 

Internet Consumer & Business Services

 

 

 

 

 

 

 

 

 

 

 

 

Aria Systems, Inc.

 

Internet Consumer & Business Services

 

Warrant

 

Preferred Series G

 

 

231,535

 

 

 

73

 

 

 

 

Blurb, Inc. (15)

 

Internet Consumer & Business Services

 

Warrant

 

Preferred Series C

 

 

234,280

 

 

 

636

 

 

 

21

 

Cloudpay, Inc. (5)(10)

 

Internet Consumer & Business Services

 

Warrant

 

Preferred Series B

 

 

6,763

 

 

 

54

 

 

 

14

 

Contentful, Inc. (5)(10)

 

Internet Consumer & Business Services

 

Warrant

 

Preferred Series C

 

 

82

 

 

 

1

 

 

 

25

 

Fastly, Inc. (4)

 

Internet Consumer & Business Services

 

Warrant

 

Common Stock

 

 

76,098

 

 

 

71

 

 

 

836

 

First Insight, Inc. (15)

 

Internet Consumer & Business Services

 

Warrant

 

Preferred Series B

 

 

75,917

 

 

 

96

 

 

 

123

 

Intent (p.k.a. Intent Media, Inc.)

 

Internet Consumer & Business Services

 

Warrant

 

Common Stock

 

 

140,077

 

 

 

168

 

 

 

130

 

Interactions Corporation

 

Internet Consumer & Business Services

 

Warrant

 

Preferred Series G-3

 

 

68,187

 

 

 

204

 

 

 

446

 

Just Fabulous, Inc.

 

Internet Consumer & Business Services

 

Warrant

 

Preferred Series B

 

 

206,184

 

 

 

1,102

 

 

 

2,581

 

Lendio, Inc.

 

Internet Consumer & Business Services

 

Warrant

 

Preferred Series D

 

 

127,032

 

 

 

39

 

 

 

22

 

LogicSource

 

Internet Consumer & Business Services

 

Warrant

 

Preferred Series C

 

 

79,625

 

 

 

30

 

 

 

86

 

Oportun (4)

 

Internet Consumer & Business Services

 

Warrant

 

Common Stock

 

 

23,514

 

 

 

78

 

 

 

147

 

Postmates, Inc.

 

Internet Consumer & Business Services

 

Warrant

 

Common Stock

 

 

189,865

 

 

 

317

 

 

 

155

 

RumbleON, Inc. (4)

 

Internet Consumer & Business Services

 

Warrant

 

Common Stock

 

 

102,768

 

 

 

87

 

 

 

71

 

SeatGeek, Inc.

 

Internet Consumer & Business Services

 

Warrant

 

Common Stock

 

 

137,976

 

 

 

662

 

 

 

632

 

ShareThis, Inc.

 

Internet Consumer & Business Services

 

Warrant

 

Preferred Series C

 

 

493,502

 

 

 

547

 

 

 

 

Skyword, Inc

 

Internet Consumer & Business Services

 

Warrant

 

Preferred Series A

 

 

444,444

 

 

 

83

 

 

 

88

 

Snagajob.com, Inc.

 

Internet Consumer & Business Services

 

Warrant

 

Preferred Series A

 

 

1,800,000

 

 

 

782

 

 

 

66

 

 

 

Internet Consumer & Business Services

 

Warrant

 

Preferred Series B

 

 

1,211,537

 

 

 

62

 

 

 

27

 

TotalSnagajob.com, Inc.

 

 

 

 

 

 

 

 

3,011,537

 

 

 

844

 

 

 

93

 

Tapjoy, Inc.

 

Internet Consumer & Business Services

 

Warrant

 

Preferred Series D

 

 

748,670

 

 

 

316

 

 

 

4

 

The Faction Group LLC

 

Internet Consumer & Business Services

 

Warrant

 

Preferred Series AA

 

 

8,076

 

 

 

234

 

 

 

347

 

Thumbtack, Inc.

 

Internet Consumer & Business Services

 

Warrant

 

Common Stock

 

 

190,953

 

 

 

553

 

 

 

881

 

Xometry, Inc.

 

Internet Consumer & Business Services

 

Warrant

 

Preferred Series B

 

 

87,784

 

 

 

47

 

 

 

159

 

Subtotal: Internet Consumer & Business Services (0.63%)*

 

 

 

 

 

 

6,242

 

 

 

6,861

 

Media/Content/Info

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Machine Zone, Inc.

 

Media/Content/Info

 

Warrant

 

Common Stock

 

 

1,552,710

 

 

 

1,961

 

 

 

493

 

Napster

 

Media/Content/Info

 

Warrant

 

Common Stock

 

 

715,755

 

 

 

383

 

 

 

 

WP Technology, Inc. (Wattpad, Inc.) (5)(10)

 

Media/Content/Info

 

Warrant

 

Common Stock

 

 

255,818

 

 

 

4

 

 

 

 

Zoom Media Group, Inc.

 

Media/Content/Info

 

Warrant

 

Preferred Series A

 

 

1,204

 

 

 

347

 

 

 

 

Subtotal: Media/Content/Info (0.05%)*

 

 

 

 

 

 

2,695

 

 

 

493

 

See notes to consolidated financial statements

17


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2019

(unaudited)

(dollars in thousands)

 

 

Portfolio Company

 

Sub-Industry

 

Type of

Investment (1)

 

Series

 

Shares

 

 

Cost (3)

 

 

Value (4)

 

Medical Devices & Equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aspire Bariatrics, Inc. (15)

 

Medical Devices & Equipment

 

Warrant

 

Preferred Series B-1

 

 

112,858

 

 

$

455

 

 

$

 

Flowonix Medical Incorporated

 

Medical Devices & Equipment

 

Warrant

 

Preferred Series AA

 

 

155,325

 

 

 

362

 

 

 

 

 

 

Medical Devices & Equipment

 

Warrant

 

Preferred Series BB

 

 

725,806

 

 

 

351

 

 

 

 

Total Flowonix Medical Incorporated

 

 

 

 

 

 

 

 

881,131

 

 

 

713

 

 

 

 

Gelesis, Inc.

 

Medical Devices & Equipment

 

Warrant

 

Preferred Series A-1

 

 

74,784

 

 

 

78

 

 

 

253

 

InspireMD, Inc. (4)(5)(10)

 

Medical Devices & Equipment

 

Warrant

 

Common Stock

 

 

1,105

 

 

 

 

 

 

 

Intuity Medical, Inc. (15)

 

Medical Devices & Equipment

 

Warrant

 

Preferred Series 5

 

 

1,819,078

 

 

 

294

 

 

 

302

 

Medrobotics Corporation (15)

 

Medical Devices & Equipment

 

Warrant

 

Preferred Series E

 

 

455,539

 

 

 

370

 

 

 

 

NinePoint Medical, Inc.

 

Medical Devices & Equipment

 

Warrant

 

Preferred Series A-1

 

 

587,840

 

 

 

170

 

 

 

26

 

Optiscan Biomedical, Corp. (6)

 

Medical Devices & Equipment

 

Warrant

 

Preferred Series E

 

 

74,424

 

 

 

572

 

 

 

213

 

Outset Medical, Inc.

 

Medical Devices & Equipment

 

Warrant

 

Preferred Series A

 

 

500,000

 

 

 

402

 

 

 

293

 

Sebacia, Inc.

 

Medical Devices & Equipment

 

Warrant

 

Preferred Series D

 

 

778,301

 

 

 

133

 

 

 

7

 

SonaCare Medical, LLC

 

Medical Devices & Equipment

 

Warrant

 

Preferred Series A

 

 

6,464

 

 

 

188

 

 

 

 

Tela Bio, Inc.

 

Medical Devices & Equipment

 

Warrant

 

Preferred Series B

 

 

387,930

 

 

 

61

 

 

 

25

 

Subtotal: Medical Devices & Equipment (0.10%)*

 

 

 

 

 

 

3,436

 

 

 

1,119

 

Semiconductors

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Achronix Semiconductor Corporation

 

Semiconductors

 

Warrant

 

Preferred Series C

 

 

360,000

 

 

 

160

 

 

 

27

 

 

 

Semiconductors

 

Warrant

 

Preferred Series D-2

 

 

750,000

 

 

 

99

 

 

 

350

 

Total Achronix Semiconductor Corporation

 

 

 

 

 

 

 

 

1,110,000

 

 

 

259

 

 

 

377

 

Elenion Technologies Corporation

 

Semiconductors

 

Warrant

 

Preferred Series C

 

 

225

 

 

 

8

 

 

 

4

 

Subtotal: Semiconductors (0.04%)*

 

 

 

 

 

 

267

 

 

 

381

 

Software

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Actifio, Inc.

 

Software

 

Warrant

 

Common Stock

 

 

73,584

 

 

 

249

 

 

 

62

 

 

 

Software

 

Warrant

 

Preferred Series F

 

 

31,673

 

 

 

343

 

 

 

65

 

Total Actifio, Inc.

 

 

 

 

 

 

 

 

105,257

 

 

 

592

 

 

 

127

 

CareCloud Corporation (15)

 

Software

 

Warrant

 

Common Stock

 

 

13,499

 

 

 

257

 

 

 

 

Clickfox, Inc. (15)

 

Software

 

Warrant

 

Preferred Series B

 

 

492,877

 

 

 

152

 

 

 

 

 

 

Software

 

Warrant

 

Preferred Series C

 

 

592,019

 

 

 

730

 

 

 

 

 

 

Software

 

Warrant

 

Preferred Series C-A

 

 

2,218,214

 

 

 

231

 

 

 

2

 

Total Clickfox, Inc.

 

 

 

 

 

 

 

 

3,303,110

 

 

 

1,113

 

 

 

2

 

Cloudian, Inc.

 

Software

 

Warrant

 

Common Stock

 

 

477,454

 

 

 

72

 

 

 

17

 

Couchbase, Inc.

 

Software

 

Warrant

 

Common Stock

 

 

188,127

 

 

 

344

 

 

 

248

 

Dashlane, Inc.

 

Software

 

Warrant

 

Common Stock

 

 

239,852

 

 

 

219

 

 

 

386

 

DNAnexus, Inc.

 

Software

 

Warrant

 

Preferred Series C

 

 

909,091

 

 

 

97

 

 

 

95

 

Evernote Corporation

 

Software

 

Warrant

 

Common Stock

 

 

62,500

 

 

 

106

 

 

 

64

 

Fuze, Inc. (15)

 

Software

 

Warrant

 

Preferred Series F

 

 

256,158

 

 

 

89

 

 

 

 

Lastline, Inc.

 

Software

 

Warrant

 

Common Stock

 

 

363,636

 

 

 

133

 

 

 

133

 

Lightbend, Inc. (15)

 

Software

 

Warrant

 

Preferred Series C-1

 

 

854,787

 

 

 

130

 

 

 

108

 

Message Systems, Inc. (15)

 

Software

 

Warrant

 

Preferred Series C

 

 

503,718

 

 

 

334

 

 

 

612

 

Nuvolo Technologies Corporation

 

Software

 

Warrant

 

Common Stock

 

 

30,000

 

 

 

43

 

 

 

78

 

OneLogin, Inc. (15)

 

Software

 

Warrant

 

Common Stock

 

 

381,620

 

 

 

305

 

 

 

635

 

Poplicus, Inc.

 

Software

 

Warrant

 

Common Stock

 

 

132,168

 

 

 

 

 

 

 

Quid, Inc. (15)

 

Software

 

Warrant

 

Preferred Series D

 

 

71,576

 

 

 

1

 

 

 

1

 

 

 

Software

 

Warrant

 

Preferred Series E

 

 

40,261

 

 

 

1

 

 

 

 

Total Quid, Inc.

 

 

 

 

 

 

 

 

111,837

 

 

 

2

 

 

 

1

 

RapidMiner, Inc.

 

Software

 

Warrant

 

Preferred Series C-1

 

 

4,982

 

 

 

24

 

 

 

12

 

RedSeal Inc. (15)

 

Software

 

Warrant

 

Preferred Series C-Prime

 

 

640,603

 

 

 

66

 

 

 

16

 

Signpost, Inc.

 

Software

 

Warrant

 

Series Junior 1 Preferred

 

 

474,019

 

 

 

314

 

 

 

 

ZeroFox, Inc.

 

Software

 

Warrant

 

Preferred Series C-1

 

 

486,263

 

 

 

57

 

 

 

77

 

Subtotal: Software (0.24%)*

 

 

 

 

 

 

4,297

 

 

 

2,611

 

Specialty Pharmaceuticals

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Alimera Sciences, Inc. (4)

 

Specialty Pharmaceuticals

 

Warrant

 

Common Stock

 

 

1,717,709

 

 

 

861

 

 

 

25

 

Subtotal: Specialty Pharmaceuticals (0.00%)*

 

 

 

 

 

 

861

 

 

 

25

 

Surgical Devices

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gynesonics, Inc. (15)

 

Surgical Devices

 

Warrant

 

Preferred Series C

 

 

180,480

 

 

 

74

 

 

 

4

 

 

 

Surgical Devices

 

Warrant

 

Preferred Series D

 

 

1,575,965

 

 

 

321

 

 

 

21

 

Total Gynesonics, Inc.

 

 

 

 

 

 

 

 

1,756,445

 

 

 

395

 

 

 

25

 

TransMedics Group, Inc. (p.k.a Transmedics, Inc.) (4)

 

Surgical Devices

 

Warrant

 

Common Stock

 

 

64,441

 

 

 

138

 

 

 

655

 

Subtotal: Surgical Devices (0.06%)*

 

 

 

 

 

 

533

 

 

 

680

 

Sustainable and Renewable Technology

 

 

 

 

 

 

 

 

 

Agrivida, Inc.

 

Sustainable and Renewable Technology

 

Warrant

 

Preferred Series D

 

 

471,327

 

 

 

120

 

 

 

 

Calera, Inc.

 

Sustainable and Renewable Technology

 

Warrant

 

Preferred Series C

 

 

44,529

 

 

 

513

 

 

 

 

Fluidic, Inc.

 

Sustainable and Renewable Technology

 

Warrant

 

Preferred Series D

 

 

61,804

 

 

 

102

 

 

 

 

Fulcrum Bioenergy, Inc.

 

Sustainable and Renewable Technology

 

Warrant

 

Preferred Series C-1

 

 

280,897

 

 

 

275

 

 

 

504

 

GreatPoint Energy, Inc. (15)

 

Sustainable and Renewable Technology

 

Warrant

 

Preferred Series D-1

 

 

393,212

 

 

 

548

 

 

 

 

See notes to consolidated financial statements

18


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2019

(unaudited)

(dollars in thousands)

 

 

Portfolio Company

 

Sub-Industry

 

Type of

Investment (1)

 

Series

 

Shares

 

 

Cost (3)

 

 

Value (4)

 

Kinestral Technologies, Inc.

 

Sustainable and Renewable Technology

 

Warrant

 

Preferred Series A

 

 

325,000

 

 

$

155

 

 

$

150

 

 

 

Sustainable and Renewable Technology

 

Warrant

 

Preferred Series B

 

 

131,883

 

 

 

63

 

 

 

47

 

Total Kinestral Technologies, Inc.

 

 

 

 

 

 

 

 

456,883

 

 

 

218

 

 

 

197

 

Polyera Corporation (15)

 

Sustainable and Renewable Technology

 

Warrant

 

Preferred Series C

 

 

311,609

 

 

 

338

 

 

 

 

Proterra, Inc.

 

Sustainable and Renewable Technology

 

Warrant

 

Common Stock

 

 

36,630

 

 

 

1

 

 

 

12

 

 

 

Sustainable and Renewable Technology

 

Warrant

 

Preferred Series 4

 

 

477,517

 

 

 

41

 

 

 

462

 

Total Proterra, Inc.

 

 

 

 

 

 

 

 

514,147

 

 

 

42

 

 

 

474

 

Solar Spectrum Holdings LLC (p.k.a. Sungevity, Inc.) (6)

 

Sustainable and Renewable Technology

 

Warrant

 

Common Stock

 

 

0.69

 

 

 

 

 

 

 

TAS Energy, Inc.

 

Sustainable and Renewable Technology

 

Warrant

 

Preferred Series AA

 

 

428,571

 

 

 

299

 

 

 

 

Subtotal: Sustainable and Renewable Technology (0.11%)*

 

 

 

 

 

 

2,455

 

 

 

1,175

 

Total: Warrant Investments (1.74%)*

 

 

 

34,092

 

 

 

18,914

 

Total Investments in Securities (206.99%)*

 

 

$

2,336,334

 

 

$

2,247,206

 

 

*

Value as a percent of net assets

(1)

Preferred and common stock, warrants, and equity interests are generally non-income producing.

(2)

Interest rate PRIME represents 5.00% at September 30, 2019. 1-month LIBOR, 3-month LIBOR and 12-month LIBOR represent 2.02%, 2.09% and 2.03%, respectively, at September 30, 2019.

(3)

Gross unrealized appreciation, gross unrealized depreciation, and net unrealized depreciation for federal income tax purposes totaled $64.8 million, $166.2 million and $101.4 million, respectively. The tax cost of investments is $2.3 billion.

(4)

Except for warrants in 35 publicly traded companies and common stock in 26 publicly traded companies, all investments are restricted at September 30, 2019 and were valued at fair value using Level 3 significant unobservable inputs as determined in good faith by the Company’s board of directors (the “Board of Directors”). No unrestricted securities of the same issuer are outstanding. The Company uses the Standard Industrial Code for classifying the industry grouping of its portfolio companies.

(5)

Non-U.S. company or the company’s principal place of business is outside the United States.

(6)

Affiliate investment as defined under the Investment Company Act of 1940, as amended, (the “1940 Act”) in which Hercules owns at least 5% but generally less than 25% of the company’s voting securities.

(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 at September 30, 2019, and is therefore considered non-income producing. Note that at September 30, 2019, only the $10.7 million PIK, or payment-in-kind, loan is on non-accrual for the Company’s debt investment in Tectura Corporation. At September 30, 2019, only the $1.6 million and $683,000 loans are on non-accrual for the Company’s debt investment in Solar Spectrum Holdings LLC (p.k.a. Sungevity, Inc.).

(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 secures the notes offered in the Debt Securitization (as defined in Note 4).

(12)

Denotes that all or a portion of the debt investment is pledged as collateral under the Wells Facility (as defined in Note 4).

(13)

Denotes that all or a portion of the debt investment is pledged as collateral under the Union Bank Facility (as defined in Note 4).

(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 Technology III, L.P., or HT III, the Company’s wholly owned small business investment company, or SBIC, subsidiary.

(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 assets at September 30, 2019.

(17)

Denotes that there is an unfunded contractual commitment available at the request of this portfolio company at September 30, 2019. Refer to Note 10.

(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.

 

 

 

See notes to consolidated financial statements

19


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2018

(unaudited)

(dollars in thousands)

 

Portfolio Company

 

 

Sub-Industry

 

Type of

Investment (1)

 

Maturity Date

 

Interest Rate and Floor (2)

 

Principal Amount

 

 

Cost (3)

 

 

Value (4)

 

Debt Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Biotechnology Tools

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Under 1 Year Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exicure, Inc. (11)

 

 

Biotechnology Tools

 

Senior Secured

 

September 2019

 

Interest rate PRIME + 6.45% or Floor rate of 9.95%, 3.85% Exit Fee

 

$

4,999

 

 

$

5,165

 

 

$

5,165

 

Subtotal: Under 1 Year Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,165

 

 

 

5,165

 

Subtotal: Biotechnology Tools (0.54%)*

 

 

 

 

 

 

 

 

 

 

 

 

5,165

 

 

 

5,165

 

Consumer & Business Products

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WHOOP, INC. (12)

 

 

Consumer & Business Products

 

Senior Secured

 

July 2021

 

Interest rate PRIME + 3.75% or Floor rate of 8.50%, 6.95% Exit Fee

 

$

6,000

 

 

 

6,026

 

 

 

5,983

 

Subtotal: 1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,026

 

 

 

5,983

 

Subtotal: Consumer & Business Products (0.63%)*

 

 

 

 

 

 

 

 

 

 

 

 

6,026

 

 

 

5,983

 

Diversified Financial Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gibraltar Business Capital, LLC. (7)

 

 

Diversified Financial Services

 

Unsecured

 

March 2023

 

Interest rate FIXED 14.50%

 

$

15,000

 

 

 

14,729

 

 

 

14,401

 

Subtotal: 1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14,729

 

 

 

14,401

 

Subtotal: Diversified Financial Services (1.51%)*

 

 

 

14,729

 

 

 

14,401

 

Drug Delivery

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AcelRx Pharmaceuticals, Inc. (11)

 

 

Drug Delivery

 

Senior Secured

 

March 2020

 

Interest rate PRIME + 6.05% or Floor rate of 9.55%, 11.69% Exit Fee

 

$

10,936

 

 

 

11,926

 

 

 

11,842

 

Antares Pharma Inc. (10)(11)(15)

 

 

Drug Delivery

 

Senior Secured

 

July 2022

 

Interest rate PRIME + 4.50% or Floor rate of 9.25%, 4.25% Exit Fee

 

$

25,000

 

 

 

25,313

 

 

 

25,081

 

Subtotal: 1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

37,239

 

 

 

36,923

 

Subtotal: Drug Delivery (3.86%)*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

37,239

 

 

 

36,923

 

 

See notes to consolidated financial statements

 

20


 

 

HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2018

(unaudited)

(dollars in thousands)

 

Portfolio Company

 

 

Sub-Industry

 

Type of

Investment (1)

 

Maturity Date

 

Interest Rate and Floor (2)

 

Principal Amount

 

 

Cost (3)

 

 

Value (4)

 

Drug Discovery & Development

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Under 1 Year Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Auris Medical Holding, AG (5)(10)

 

 

Drug Discovery & Development

 

Senior Secured

 

February 2019

 

Interest rate PRIME + 6.05% or Floor rate of 9.55%, 5.75% Exit Fee

 

$

757

 

 

$

1,471

 

 

$

1,471

 

Brickell Biotech, Inc. (12)

 

 

Drug Discovery & Development

 

Senior Secured

 

September 2019

 

Interest rate PRIME + 5.70% or Floor rate of 9.20%, 7.82% Exit Fee

 

$

4,808

 

 

 

5,281

 

 

 

5,281

 

Epirus Biopharmaceuticals, Inc. (8)

 

 

Drug Discovery & Development

 

Senior Secured

 

June 2019

 

Interest rate PRIME + 4.70% or Floor rate of 7.95%, 3.00% Exit Fee

 

$

2,203

 

 

 

2,487

 

 

 

 

Subtotal: Under 1 Year Maturity

 

 

 

 

 

 

 

 

 

 

 

 

9,239

 

 

 

6,752

 

1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acacia Pharma Inc. (10)(11)

 

 

Drug Discovery & Development

 

Senior Secured

 

January 2022

 

Interest rate PRIME + 4.50% or Floor rate of 9.25%, 3.95% Exit Fee

 

$

10,000

 

 

 

9,871

 

 

 

9,819

 

Aveo Pharmaceuticals, Inc. (11)

 

 

Drug Discovery & Development

 

Senior Secured

 

July 2021

 

Interest rate PRIME + 4.70% or Floor rate of 9.45%, 5.40% Exit Fee

 

$

10,000

 

 

 

10,111

 

 

 

10,042

 

 

 

 

Drug Discovery & Development

 

Senior Secured

 

July 2021

 

Interest rate PRIME + 4.70% or Floor rate of 9.45%, 3.00% Exit Fee

 

$

10,000

 

 

 

10,220

 

 

 

10,157

 

Total Aveo Pharmaceuticals, Inc.

 

 

 

 

 

 

 

$

20,000

 

 

 

20,331

 

 

 

20,199

 

Axovant Sciences Ltd. (5)(10)(11)(16)

 

 

Drug Discovery & Development

 

Senior Secured

 

March 2021

 

Interest rate PRIME + 6.80% or Floor rate of 10.55%

 

$

50,219

 

 

 

49,485

 

 

 

49,286

 

BridgeBio Pharma LLC (13)(16)

 

 

Drug Discovery & Development

 

Senior Secured

 

July 2022

 

Interest rate PRIME + 4.35% or Floor rate of 9.35%, 6.35% Exit Fee

 

$

35,000

 

 

 

35,054

 

 

 

35,263

 

 

 

 

Drug Discovery & Development

 

Senior Secured

 

July 2022

 

Interest rate PRIME + 3.35% or Floor rate of 9.10%, 5.75% Exit Fee

 

$

20,000

 

 

 

19,904

 

 

 

19,904

 

Total BridgeBio Pharma LLC

 

 

 

 

 

 

 

$

55,000

 

 

 

54,958

 

 

 

55,167

 

Chemocentryx, Inc. (10)(15)

 

 

Drug Discovery & Development

 

Senior Secured

 

December 2022

 

Interest rate PRIME + 3.30% or Floor rate of 8.05%, 6.25% Exit Fee

 

$

20,000

 

 

 

19,957

 

 

 

20,104

 

Genocea Biosciences, Inc. (11)

 

 

Drug Discovery & Development

 

Senior Secured

 

May 2021

 

Interest rate PRIME + 2.75% or Floor rate of 7.75%, 10.12% Exit Fee

 

$

14,000

 

 

 

14,937

 

 

 

14,788

 

Merrimack Pharmaceuticals, Inc. (12)

 

 

Drug Discovery & Development

 

Senior Secured

 

August 2021

 

Interest rate PRIME + 4.00% or Floor rate of 9.25%, 5.55% Exit Fee

 

$

15,000

 

 

 

15,024

 

 

 

15,024

 

Mesoblast (5)(10)(11)

 

 

Drug Discovery & Development

 

Senior Secured

 

March 2022

 

Interest rate PRIME + 4.95% or Floor rate of 9.45%, 6.95% Exit Fee

 

$

35,000

 

 

 

35,346

 

 

 

35,190

 

Metuchen Pharmaceuticals LLC (14)

 

 

Drug Discovery & Development

 

Senior Secured

 

October 2020

 

Interest rate PRIME + 7.25% or Floor rate of 10.75%, PIK Interest 1.35%, 2.25% Exit Fee

 

$

18,569

 

 

 

19,256

 

 

 

19,122

 

Motif BioSciences Inc. (5)(10)(11)(15)

 

 

Drug Discovery & Development

 

Senior Secured

 

September 2021

 

Interest rate PRIME + 5.50% or Floor rate of 10.00%, 2.15% Exit Fee

 

$

15,000

 

 

 

14,907

 

 

 

14,786

 

Myovant Sciences, Ltd. (5)(10)(11)

 

 

Drug Discovery & Development

 

Senior Secured

 

November 2021

 

Interest rate PRIME + 4.00% or Floor rate of 8.25%, 6.55% Exit Fee

 

$

40,000

 

 

 

40,320

 

 

 

40,151

 

 

See notes to consolidated financial statements

21


 

 

HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2018

(unaudited)

(dollars in thousands)

 

Portfolio Company

 

 

Sub-Industry

 

Type of

Investment (1)

 

Maturity Date

 

Interest Rate and Floor (2)

 

Principal Amount

 

 

Cost (3)

 

 

Value (4)

 

Nabriva Therapeutics (5)(10)

 

 

Drug Discovery & Development

 

Senior Secured

 

June 2023

 

Interest rate PRIME + 4.30% or Floor rate of 9.80%, 6.95% Exit Fee

 

$

25,000

 

 

$

24,750

 

 

$

24,750

 

Paratek Pharmaceuticals, Inc. (p.k.a. Transcept Pharmaceuticals, Inc.) (10)(11)(15)(16)

 

 

Drug Discovery & Development

 

Senior Secured

 

September 2020

 

Interest rate PRIME + 2.75% or Floor rate of 8.50%, 4.50% Exit Fee

 

$

40,000

 

 

 

40,882

 

 

 

40,472

 

 

 

 

Drug Discovery & Development

 

Senior Secured

 

September 2021

 

Interest rate PRIME + 2.75% or Floor rate of 8.50%, 4.50% Exit Fee

 

$

10,000

 

 

 

10,240

 

 

 

10,137

 

 

 

 

Drug Discovery & Development

 

Senior Secured

 

September 2021

 

Interest rate PRIME + 2.75% or Floor rate of 8.50%, 2.25% Exit Fee

 

$

10,000

 

 

 

10,084

 

 

 

9,925

 

 

 

 

Drug Discovery & Development

 

Senior Secured

 

August 2022

 

Interest rate PRIME + 2.10% or Floor rate of 7.85%, 6.95% Exit Fee

 

$

10,000

 

 

 

10,014

 

 

 

10,014

 

Total Paratek Pharmaceuticals, Inc. (p.k.a. Transcept Pharmaceuticals, Inc.)

 

$

70,000

 

 

 

71,220

 

 

 

70,548

 

Stealth Bio Therapeutics Corp. (5)(10)(11)

 

 

Drug Discovery & Development

 

Senior Secured

 

January 2021

 

Interest rate PRIME + 5.50% or Floor rate of 9.50%, 6.25% Exit Fee

 

$

19,313

 

 

 

19,740

 

 

 

19,597

 

Tricida, Inc. (11)(15)

 

 

Drug Discovery & Development

 

Senior Secured

 

March 2022

 

Interest rate PRIME + 3.35% or Floor rate of 8.85%, 8.19% Exit Fee

 

$

40,000

 

 

 

39,622

 

 

 

39,794

 

uniQure B.V. (5)(10)(11)

 

 

Drug Discovery & Development

 

Senior Secured

 

June 2023

 

Interest rate PRIME + 3.35% or Floor rate of 8.85%, 7.72% Exit Fee

 

$

35,000

 

 

 

35,538

 

 

 

35,386

 

Verastem, Inc. (11)

 

 

Drug Discovery & Development

 

Senior Secured

 

December 2020

 

Interest rate PRIME + 6.00%

or Floor rate of 10.50%, 4.50% Exit Fee

 

$

5,000

 

 

 

5,058

 

 

 

5,059

 

 

 

 

Drug Discovery & Development

 

Senior Secured

 

December 2020

 

Interest rate PRIME + 6.00%

or Floor rate of 10.50%, 4.50% Exit Fee

 

$

5,000

 

 

 

5,082

 

 

 

5,083

 

 

 

 

Drug Discovery & Development

 

Senior Secured

 

December 2020

 

Interest rate PRIME + 6.00% or Floor rate of 10.50%, 4.50% Exit Fee

 

$

5,000

 

 

 

5,057

 

 

 

5,057

 

 

 

 

Drug Discovery & Development

 

Senior Secured

 

December 2020

 

Interest rate PRIME + 6.00% or Floor rate of 10.50%, 4.50% Exit Fee

 

$

10,000

 

 

 

10,033

 

 

 

9,976

 

Total Verastem, Inc.

 

 

 

 

 

 

 

 

 

 

$

25,000

 

 

 

25,230

 

 

 

25,175

 

X4 Pharmaceuticals Inc.

 

 

Drug Discovery & Development

 

Senior Secured

 

November 2021

 

Interest rate PRIME + 4.25% or Floor rate of 9.50%, 7.95% Exit Fee

 

$

10,000

 

 

 

9,746

 

 

 

9,746

 

Subtotal: 1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

520,238

 

 

 

518,632

 

Subtotal: Drug Discovery & Development (54.99%)*

 

 

 

 

 

 

529,477

 

 

 

525,384

 

 

See notes to consolidated financial statements

22


 

 

HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2018

(unaudited)

(dollars in thousands)

 

Portfolio Company

 

 

Sub-Industry

 

Type of

Investment (1)

 

Maturity Date

 

Interest Rate and Floor (2)

 

Principal

Amount

 

 

Cost (3)

 

 

Value (4)

 

Electronics & Computer Hardware

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

908 DEVICES INC. (15)

 

 

Electronics & Computer Hardware

 

Senior Secured

 

September 2020

 

Interest rate PRIME + 4.00% or Floor rate of 8.25%, 4.25% Exit Fee

 

$

10,000

 

 

$

10,145

 

 

$

10,155

 

Glo AB (5)(10)(13)(14)

 

 

Electronics & Computer Hardware

 

Senior Secured

 

February 2021

 

Interest rate PRIME + 6.20% or Floor rate of 10.45%, PIK Interest 1.75%, 2.95% Exit Fee

 

$

12,192

 

 

 

12,265

 

 

 

5,556

 

Subtotal: 1-5 Years Maturity

 

 

  

 

 

22,410

 

  

15,711

 

Subtotal: Electronics & Computer Hardware (1.64%)*

 

  

 

 

22,410

 

 

15,711

Healthcare Services, Other

 

 

  

 

 

 

 

 

 

 

 

1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oak Street Health (12)

 

 

Healthcare Services, Other

 

Senior Secured

 

September 2021

 

Interest rate PRIME + 5.00% or Floor rate of 9.75%, 5.95% Exit Fee

 

$

30,000

 

 

 

30,486

 

 

 

30,338

 

PH Group Holdings (13)(17)

 

 

Healthcare Services, Other

 

Senior Secured

 

September 2020

 

Interest rate PRIME + 7.45% or Floor rate of 10.95%

 

$

20,000

 

 

 

19,889

 

 

 

19,806

 

 

 

 

Healthcare Services, Other

 

Senior Secured

 

September 2020

 

Interest rate PRIME + 7.45% or Floor rate of 10.95%

 

$

10,000

 

 

 

9,938

 

 

 

9,896

 

Total PH Group Holdings

 

 

 

 

 

 

 

 

 

 

$

30,000

 

 

29,827

 

 

 

29,702

 

Subtotal: 1-5 Years Maturity

 

 

 

 

 

 

60,313

 

 

 

60,040

 

Subtotal: Healthcare Services, Other (6.28%)*

 

 

 

 

 

 

60,313

 

 

 

60,040

 

Information Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MDX Medical, Inc. (14)(15)(19)

 

 

Information Services

 

Senior Secured

 

December 2020

 

Interest rate PRIME + 4.00% or Floor rate of 8.25%, PIK Interest 1.70%

 

$

15,288

 

 

 

15,037

 

 

 

14,987

 

Subtotal: 1-5 Years Maturity

 

 

 

 

 

 

15,037

 

 

14,987

Subtotal: Information Services (1.57%)*

 

 

 

 

 

 

15,037

 

 

14,987

 

See notes to consolidated financial statements

23


 

 

HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2018

(unaudited)

(dollars in thousands)

 

Portfolio Company

 

 

Sub-Industry

 

Type of

Investment (1)

 

Maturity Date

 

Interest Rate and Floor (2)

 

Principal Amount

 

 

Cost (3)

 

 

Value (4)

 

Internet Consumer & Business Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Under 1 Year Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LogicSource

 

 

Internet Consumer & Business Services

 

Senior Secured

 

October 2019

 

Interest rate PRIME + 6.25% or Floor rate of 9.75%, 5.00% Exit Fee

 

$

3,099

 

 

$

3,486

 

 

$

3,486

 

The Faction Group LLC (11)

 

 

Internet Consumer & Business Services

 

Senior Secured

 

January 2019

 

Interest rate PRIME + 4.75% or Floor rate of 8.25%

 

$

2,000

 

 

 

2,000

 

 

 

2,000

 

Subtotal: Under 1 Year Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,486

 

 

 

5,486

 

1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AppDirect, Inc. (11)(19)

 

 

Internet Consumer & Business Services

 

Senior Secured

 

January 2022

 

Interest rate PRIME + 5.70% or Floor rate of 9.95%, 3.45% Exit Fee

 

$

20,000

 

 

 

20,006

 

 

 

19,941

 

Art.com, Inc. (12)(14)(15)

 

 

Internet Consumer & Business Services

 

Senior Secured

 

April 2021

 

Interest rate PRIME + 5.40% or Floor rate of 10.15%, PIK Interest 1.70%, 1.50% Exit Fee

 

$

10,117

 

 

 

10,020

 

 

 

10,028

 

Cloudpay, Inc. (5)(10)

 

 

Internet Consumer & Business Services

 

Senior Secured

 

April 2022

 

Interest rate PRIME + 4.05% or Floor rate of 8.55%, 6.95% Exit Fee

 

$

11,000

 

 

 

11,017

 

 

 

11,020

 

Contentful, Inc. (5)(10)(14)

 

 

Internet Consumer & Business Services

 

Senior Secured

 

July 2022

 

Interest rate PRIME + 2.95% or Floor rate of 7.95%, PIK Interest 1.25%