UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
|
☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For The Quarterly Period Ended March 31, 2020
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 April 29, 2020, there were 110,615,986 shares outstanding of the Registrant’s common stock, $0.001 par value.
FORM 10-Q TABLE OF CONTENTS
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3 |
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Item 1. |
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3 |
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3 |
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Consolidated Statements of Operations for the three months ended March 31, 2020 and 2019 (unaudited) |
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5 |
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6 |
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Consolidated Statements of Cash Flows for the three months ended March 31, 2020 and 2019 (unaudited) |
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7 |
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Consolidated Schedule of Investments as of March 31, 2020 (unaudited) |
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9 |
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Consolidated Schedule of Investments as of December 31, 2019 (unaudited) |
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20 |
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30 |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|
64 |
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Item 3. |
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80 |
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Item 4. |
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81 |
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82 |
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Item 1. |
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82 |
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Item 1A. |
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82 |
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Item 2. |
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84 |
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Item 3. |
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84 |
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Item 4. |
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84 |
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Item 5. |
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84 |
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Item 6. |
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85 |
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88 |
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2
In this Quarterly Report, the “Company,” “Hercules,” “we,” “us” and “our” refer to Hercules Capital, Inc. and its wholly owned subsidiaries and its affiliated securitization trusts, unless the context otherwise requires.
HERCULES CAPITAL, INC.
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(unaudited)
(in thousands, except per share data)
|
|
|
March 31, 2020 |
|
|
December 31, 2019 |
|
||
|
Assets |
|
|
|
|
|
|
|
|
|
Investments: |
|
|
|
|
|
|
|
|
|
Non-control/Non-affiliate investments (cost of $2,312,460 and $2,248,524, respectively) |
|
$ |
2,238,479 |
|
|
$ |
2,232,972 |
|
|
Control investments (cost of $65,213 and $65,333, respectively) |
|
|
51,775 |
|
|
|
59,746 |
|
|
Affiliate investments (cost of $88,584 and $88,175, respectively) |
|
|
12,226 |
|
|
|
21,808 |
|
|
Total investments in securities, at value (cost of $2,466,256 and $2,402,032, respectively) |
|
|
2,302,480 |
|
|
|
2,314,526 |
|
|
Cash and cash equivalents |
|
|
34,282 |
|
|
|
64,393 |
|
|
Restricted cash |
|
|
22,060 |
|
|
|
50,603 |
|
|
Interest receivable |
|
|
19,137 |
|
|
|
20,207 |
|
|
Right of use asset (2) |
|
|
11,078 |
|
|
|
11,659 |
|
|
Other assets |
|
|
7,714 |
|
|
|
580 |
|
|
Total assets |
|
$ |
2,396,751 |
|
|
$ |
2,461,968 |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
22,450 |
|
|
$ |
30,306 |
|
|
Operating lease liability (2) |
|
|
11,144 |
|
|
|
11,538 |
|
|
SBA Debentures, net (principal of $110,250 and $149,000, respectively) (1) |
|
|
109,725 |
|
|
|
148,165 |
|
|
2022 Notes, net (principal of $150,000 and $150,000, respectively) (1) |
|
|
148,645 |
|
|
|
148,514 |
|
|
July 2024 Notes, net (principal of $105,000 and $105,000, respectively) (1) |
|
|
103,721 |
|
|
|
103,685 |
|
|
February 2025 Notes, net (principal of $50,000 and $0, respectively) (1) |
|
|
49,442 |
|
|
|
— |
|
|
2025 Notes, net (principal of $75,000 and $75,000, respectively) (1) |
|
|
73,066 |
|
|
|
72,970 |
|
|
2033 Notes, net (principal of $40,000 and $40,000, respectively) (1) |
|
|
38,528 |
|
|
|
38,501 |
|
|
2027 Asset-Backed Notes, net (principal of $200,000 and $200,000, respectively) (1) |
|
|
197,377 |
|
|
|
197,312 |
|
|
2028 Asset-Backed Notes, net (principal of $250,000 and $250,000, respectively) (1) |
|
|
247,444 |
|
|
|
247,395 |
|
|
2022 Convertible Notes, net (principal of $230,000 and $230,000, respectively) (1) |
|
|
227,004 |
|
|
|
226,614 |
|
|
Credit Facilities |
|
|
71,125 |
|
|
|
103,919 |
|
|
Total liabilities |
|
$ |
1,299,671 |
|
|
$ |
1,328,919 |
|
|
|
|
|
|
|
|
|
|
|
|
Net assets consist of: |
|
|
|
|
|
|
|
|
|
Common stock, par value |
|
|
111 |
|
|
|
108 |
|
|
Capital in excess of par value |
|
|
1,182,080 |
|
|
|
1,145,106 |
|
|
Total distributable earnings (loss) |
|
|
(85,111 |
) |
|
|
(12,165 |
) |
|
Total net assets |
|
$ |
1,097,080 |
|
|
$ |
1,133,049 |
|
|
Total liabilities and net assets |
|
$ |
2,396,751 |
|
|
$ |
2,461,968 |
|
|
|
|
|
|
|
|
|
|
|
|
Shares of common stock outstanding ($0.001 par value and 200,000,000 authorized) |
|
|
110,601 |
|
|
|
107,364 |
|
|
Net asset value per share |
|
$ |
9.92 |
|
|
$ |
10.55 |
|
|
(1) |
The Company’s SBA debentures, 2022 Notes, July 2024 Notes, February 2025 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”. |
|
(2) |
See “Note 2 – Summary of Significant Accounting Policies” for a description of Right of use asset and Operating lease liability. |
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 Statements of Assets and Liabilities above.
|
(Dollars in thousands) |
|
March 31, 2020 |
|
|
December 31, 2019 |
|
||
|
Assets |
|
|
|
|
|
|
|
|
|
Restricted Cash |
|
$ |
22,060 |
|
|
$ |
50,603 |
|
|
2027 Asset-Backed Notes, investments in securities, at value (cost of $297,682 and $283,891, respectively) |
|
|
295,981 |
|
|
|
283,658 |
|
|
2028 Asset-Backed Notes, investments in securities, at value (cost of $365,755 and $347,295, respectively) |
|
|
363,561 |
|
|
|
347,929 |
|
|
Total assets |
|
$ |
681,602 |
|
|
$ |
682,190 |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
2027 Asset-Backed Notes, net (principal of $200,000 and $200,000, respectively) (1) |
|
$ |
197,377 |
|
|
$ |
197,312 |
|
|
2028 Asset-Backed Notes, net (principal of $250,000 and $250,000, respectively) (1) |
|
|
247,444 |
|
|
|
247,395 |
|
|
Total liabilities |
|
$ |
444,821 |
|
|
$ |
444,707 |
|
|
(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
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share data)
|
|
|
Three Months Ended March 31, |
|
|||||
|
|
|
2020 |
|
|
2019 |
|
||
|
Investment income: |
|
|
|
|
|
|
|
|
|
Interest income |
|
|
|
|
|
|
|
|
|
Non-control/Non-affiliate investments |
|
$ |
65,338 |
|
|
$ |
53,941 |
|
|
Control investments |
|
|
646 |
|
|
|
1,024 |
|
|
Affiliate investments |
|
|
220 |
|
|
|
508 |
|
|
Total interest income |
|
|
66,204 |
|
|
|
55,473 |
|
|
Fee income |
|
|
|
|
|
|
|
|
|
Commitment, facility and loan fee income |
|
|
|
|
|
|
|
|
|
Non-control/Non-affiliate investments |
|
|
4,196 |
|
|
|
2,450 |
|
|
Control investments |
|
|
5 |
|
|
|
4 |
|
|
Affiliate investments |
|
|
— |
|
|
|
88 |
|
|
Total commitment, facility and loan fee income |
|
|
4,201 |
|
|
|
2,542 |
|
|
One-time fee income |
|
|
|
|
|
|
|
|
|
Non-control/Non-affiliate investments |
|
|
3,214 |
|
|
|
780 |
|
|
Total one-time fee income |
|
|
3,214 |
|
|
|
780 |
|
|
Total fee income |
|
|
7,415 |
|
|
|
3,322 |
|
|
Total investment income |
|
|
73,619 |
|
|
|
58,795 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Interest |
|
|
14,532 |
|
|
|
12,555 |
|
|
Loan fees |
|
|
1,794 |
|
|
|
3,009 |
|
|
General and administrative |
|
|
|
|
|
|
|
|
|
Legal expenses |
|
|
899 |
|
|
|
663 |
|
|
Tax expenses |
|
|
1,135 |
|
|
|
298 |
|
|
Other expenses |
|
|
4,025 |
|
|
|
3,192 |
|
|
Total general and administrative |
|
|
6,059 |
|
|
|
4,153 |
|
|
Employee compensation |
|
|
|
|
|
|
|
|
|
Compensation and benefits |
|
|
8,214 |
|
|
|
6,623 |
|
|
Stock-based compensation |
|
|
2,440 |
|
|
|
3,422 |
|
|
Total employee compensation |
|
|
10,654 |
|
|
|
10,045 |
|
|
Total operating expenses |
|
|
33,039 |
|
|
|
29,762 |
|
|
Net investment income |
|
|
40,580 |
|
|
|
29,033 |
|
|
Net realized gain (loss) on investments |
|
|
|
|
|
|
|
|
|
Non-control/Non-affiliate investments |
|
|
6,967 |
|
|
|
4,555 |
|
|
Total net realized gain (loss) on investments |
|
|
6,967 |
|
|
|
4,555 |
|
|
Net change in unrealized appreciation (depreciation) on investments |
|
|
|
|
|
|
|
|
|
Non-control/Non-affiliate investments |
|
|
(58,430 |
) |
|
|
32,091 |
|
|
Control investments |
|
|
(7,851 |
) |
|
|
(2,875 |
) |
|
Affiliate investments |
|
|
(9,989 |
) |
|
|
(1,219 |
) |
|
Total net unrealized appreciation (depreciation) on investments |
|
|
(76,270 |
) |
|
|
27,997 |
|
|
Total net realized and unrealized gain (loss) |
|
|
(69,303 |
) |
|
|
32,552 |
|
|
Net increase (decrease) in net assets resulting from operations |
|
$ |
(28,723 |
) |
|
$ |
61,585 |
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income before investment gains and losses per common share: |
|
|||||||
|
Basic |
|
$ |
0.37 |
|
|
$ |
0.30 |
|
|
Change in net assets resulting from operations per common share: |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.27 |
) |
|
$ |
0.64 |
|
|
Diluted |
|
$ |
(0.27 |
) |
|
$ |
0.64 |
|
|
Weighted average shares outstanding |
|
|
|
|
|
|
|
|
|
Basic |
|
|
108,955 |
|
|
|
96,218 |
|
|
Diluted |
|
|
108,955 |
|
|
|
96,508 |
|
|
Distributions paid per common share: |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.40 |
|
|
$ |
0.31 |
|
See notes to consolidated financial statements
5
CONSOLIDATED STATEMENTS 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 March 31, 2020 |
Shares |
|
|
Par Value |
|
|
of par value |
|
|
(loss) |
|
|
Stock |
|
|
Assets |
|
||||||
|
Balance at December 31, 2019 |
|
107,364 |
|
|
$ |
108 |
|
|
$ |
1,145,106 |
|
|
$ |
(12,165 |
) |
|
$ |
— |
|
|
$ |
1,133,049 |
|
|
Net increase (decrease) in net assets resulting from operations |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(28,723 |
) |
|
|
— |
|
|
|
(28,723 |
) |
|
Public offering, net of offering expenses |
|
2,441 |
|
|
|
2 |
|
|
|
34,960 |
|
|
|
— |
|
|
|
— |
|
|
|
34,962 |
|
|
Issuance of common stock due to stock option exercises |
|
29 |
|
|
|
— |
|
|
|
362 |
|
|
|
— |
|
|
|
— |
|
|
|
362 |
|
|
Retired shares from net issuance |
|
(24 |
) |
|
|
— |
|
|
|
(376 |
) |
|
|
— |
|
|
|
— |
|
|
|
(376 |
) |
|
Issuance of common stock under restricted stock plan |
|
749 |
|
|
|
1 |
|
|
|
(1 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Retired shares for restricted stock vesting |
|
(17 |
) |
|
|
— |
|
|
|
(880 |
) |
|
|
— |
|
|
|
— |
|
|
|
(880 |
) |
|
Distributions reinvested in common stock |
|
59 |
|
|
|
— |
|
|
|
827 |
|
|
|
— |
|
|
|
— |
|
|
|
827 |
|
|
Distributions |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(44,223 |
) |
|
|
— |
|
|
|
(44,223 |
) |
|
Stock-based compensation (1) |
|
— |
|
|
|
— |
|
|
|
2,082 |
|
|
|
— |
|
|
|
— |
|
|
|
2,082 |
|
|
Balance at March 31, 2020 |
|
110,601 |
|
|
$ |
111 |
|
|
$ |
1,182,080 |
|
|
$ |
(85,111 |
) |
|
$ |
— |
|
|
$ |
1,097,080 |
|
|
(1) |
Stock-based compensation includes $21 of restricted stock and option expense related to director compensation for the three months ended March 31, 2020. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital in |
|
|
Distributable |
|
|
|
|
|
|
|
|
|
||
|
|
|
Common Stock |
|
|
excess |
|
|
Earnings |
|
|
Treasury |
|
|
Net |
|
|||||||||
|
For the Three Months Ended March 31, 2019 |
|
Shares |
|
|
Par Value |
|
|
of par value |
|
|
(loss)(2) |
|
|
Stock |
|
|
Assets |
|
||||||
|
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 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
61,585 |
|
|
|
— |
|
|
|
61,585 |
|
|
Public offering, net of offering expenses |
|
|
— |
|
|
|
— |
|
|
|
(21 |
) |
|
|
— |
|
|
|
— |
|
|
|
(21 |
) |
|
Issuance of common stock due to stock option exercises |
|
|
13 |
|
|
|
— |
|
|
|
154 |
|
|
|
— |
|
|
|
— |
|
|
|
154 |
|
|
Retired shares from net issuance |
|
|
(11 |
) |
|
|
— |
|
|
|
(159 |
) |
|
|
— |
|
|
|
— |
|
|
|
(159 |
) |
|
Issuance of common stock under restricted stock plan |
|
|
48 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Retirement of common stock under repurchase plan |
|
|
— |
|
|
|
— |
|
|
|
(4,062 |
) |
|
|
— |
|
|
|
4,062 |
|
|
|
— |
|
|
Retired shares for restricted stock vesting |
|
|
(55 |
) |
|
|
— |
|
|
|
(691 |
) |
|
|
— |
|
|
|
— |
|
|
|
(691 |
) |
|
Distributions reinvested in common stock |
|
|
47 |
|
|
|
— |
|
|
|
632 |
|
|
|
— |
|
|
|
— |
|
|
|
632 |
|
|
Distributions |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(29,900 |
) |
|
|
— |
|
|
|
(29,900 |
) |
|
Stock-based compensation (1) |
|
|
— |
|
|
|
— |
|
|
|
3,305 |
|
|
|
— |
|
|
|
— |
|
|
|
3,305 |
|
|
Balance at March 31, 2019 |
|
|
96,543 |
|
|
$ |
96 |
|
|
$ |
1,051,427 |
|
|
$ |
(61,174 |
) |
|
$ |
— |
|
|
$ |
990,349 |
|
|
(1) |
Stock-based compensation includes $7 of restricted stock and option expense related to director compensation for the three months ended March 31, 2019. |
|
(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
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(dollars in thousands)
|
|
For the Three Months Ended March 31, |
|
|||||
|
|
2020 |
|
|
2019 |
|
||
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets resulting from operations |
$ |
(28,723 |
) |
|
$ |
61,585 |
|
|
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
Purchase of investments |
|
(233,612 |
) |
|
|
(239,702 |
) |
|
Principal and fee payments received on investments |
|
167,511 |
|
|
|
65,845 |
|
|
Proceeds from the sale of investments |
|
17,076 |
|
|
|
9,830 |
|
|
Net unrealized depreciation (appreciation) on investments |
|
76,270 |
|
|
|
(27,997 |
) |
|
Net realized loss (gain) on investments |
|
(6,967 |
) |
|
|
(4,555 |
) |
|
Accretion of paid-in-kind principal |
|
(2,130 |
) |
|
|
(2,099 |
) |
|
Accretion of loan discounts |
|
(1,147 |
) |
|
|
(737 |
) |
|
Accretion of loan discount on convertible notes |
|
168 |
|
|
|
168 |
|
|
Accretion of loan exit fees |
|
(6,265 |
) |
|
|
(5,199 |
) |
|
Change in deferred loan origination revenue |
|
1,319 |
|
|
|
3,754 |
|
|
Unearned fees related to unfunded commitments |
|
(463 |
) |
|
|
992 |
|
|
Amortization of debt fees and issuance costs |
|
1,332 |
|
|
|
2,653 |
|
|
Depreciation |
|
126 |
|
|
|
51 |
|
|
Stock-based compensation and amortization of restricted stock grants (1) |
|
2,082 |
|
|
|
3,305 |
|
|
Change in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Interest and fees receivable |
|
1,070 |
|
|
|
(1,407 |
) |
|
Prepaid expenses and other assets |
|
(4,100 |
) |
|
|
(9,272 |
) |
|
Accounts payable |
|
(16 |
) |
|
|
(198 |
) |
|
Accrued liabilities |
|
(8,233 |
) |
|
|
1,417 |
|
|
Net cash provided by (used in) operating activities |
|
(24,702 |
) |
|
|
(141,566 |
) |
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Purchases of capital equipment |
|
(29 |
) |
|
|
(83 |
) |
|
Net cash provided by (used in) investing activities |
|
(29 |
) |
|
|
(83 |
) |
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Issuance of common stock, net |
|
34,963 |
|
|
|
(43 |
) |
|
Retirement of employee shares |
|
(896 |
) |
|
|
(676 |
) |
|
Distributions paid |
|
(43,396 |
) |
|
|
(29,268 |
) |
|
Issuance of 2028 Asset-Backed Notes |
|
— |
|
|
|
250,000 |
|
|
Issuance of February 2025 Notes |
|
50,000 |
|
|
|
— |
|
|
Repayments of 2024 Notes |
|
— |
|
|
|
(83,510 |
) |
|
Repayments of Long-Term SBA Debentures |
|
(38,750 |
) |
|
|
— |
|
|
Borrowings of credit facilities |
|
242,026 |
|
|
|
110,834 |
|
|
Repayments of credit facilities |
|
(274,819 |
) |
|
|
(119,523 |
) |
|
Cash paid for debt issuance costs |
|
(618 |
) |
|
|
(2,965 |
) |
|
Fees paid for credit facilities and debentures |
|
(2,433 |
) |
|
|
(2,443 |
) |
|
Net cash provided by (used in) financing activities |
|
(33,923 |
) |
|
|
122,406 |
|
|
Net increase (decrease) in cash, cash equivalents, and restricted cash |
|
(58,654 |
) |
|
|
(19,243 |
) |
|
Cash, cash equivalents, and restricted cash at beginning of period |
|
114,996 |
|
|
|
45,857 |
|
|
Cash, cash equivalents, and restricted cash at end of period |
$ |
56,342 |
|
|
$ |
26,614 |
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosures of cash flow information and non-cash investing and financing activities: |
|
||||||
|
Distributions reinvested |
|
827 |
|
|
|
632 |
|
|
(1) |
Stock-based compensation includes $21 and $7 of restricted stock and option expense related to director compensation for the three months ended March 31, 2020 and 2019, respectively. |
See notes to consolidated financial statements
7
The following table presents a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Statements of Assets and Liabilities that sum to the total of the same such amounts in the Consolidated Statements of Cash Flows:
|
|
For the Three Months Ended March 31, |
|
|||||
|
(Dollars in thousands) |
2020 |
|
|
2019 |
|
||
|
Cash and cash equivalents |
$ |
34,282 |
|
|
$ |
16,465 |
|
|
Restricted cash |
|
22,060 |
|
|
|
10,149 |
|
|
Total cash, cash equivalents, and restricted cash presented in the Consolidated Statements of Cash Flows |
$ |
56,342 |
|
|
$ |
26,614 |
|
See “Note 2 – Summary of Significant Accounting Policies” for a description of restricted cash and cash equivalents.
See notes to consolidated financial statements
8
HERCULES CAPITAL, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
March 31, 2020
(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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Communications & Networking |
|
|
|
|
|
|
|
|
|
|
|||
|
1-5 Years Maturity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cytracom Holdings LLC (18) |
Communications & Networking |
Senior Secured |
February 2025 |
Interest rate 3-month LIBOR + 9.25% or Floor rate of 10.25% |
$ |
7,000 |
|
$ |
6,793 |
|
$ |
6,793 |
|
|
Subtotal: 1-5 Years Maturity |
|
|
|
|
|
|
|
|
6,793 |
|
|
6,793 |
|
|
Subtotal: Communications & Networking (0.62%)* |
|
|
|
|
6,793 |
|
|
6,793 |
|
||||
|
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 |
|
|
14,794 |
|
|
14,794 |
|
|
Subtotal: 1-5 Years Maturity |
|
|
|
|
|
|
|
|
14,794 |
|
|
14,794 |
|
|
Subtotal: Diversified Financial Services (1.35%)* |
|
|
|
|
|
|
14,794 |
|
|
14,794 |
|
||
|
Drug Delivery |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-5 Years Maturity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Antares Pharma Inc. (10)(11)(15)(17) |
Drug Delivery |
Senior Secured |
July 2022 |
Interest rate PRIME + 4.50% or Floor rate of 8.50%, 4.14% Exit Fee |
$ |
40,000 |
|
|
40,741 |
|
|
39,890 |
|
|
Subtotal: 1-5 Years Maturity |
|
|
|
|
|
|
|
|
40,741 |
|
|
39,890 |
|
|
Subtotal: Drug Delivery (3.64%)* |
|
|
|
|
40,741 |
|
|
39,890 |
|
||||
|
Drug Discovery & Development |
|
|
|
|
|
|
|
|
|
||||
|
Under 1 Year Maturity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 11.55% |
$ |
15,731 |
|
|
15,640 |
|
|
15,640 |
|
|
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 |
$ |
11,192 |
|
|
12,200 |
|
|
12,065 |
|
|
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 |
$ |
14,797 |
|
|
15,928 |
|
|
15,928 |
|
|
Subtotal: Under 1 Year Maturity |
|
|
|
|
43,768 |
|
|
43,633 |
|
||||
|
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 |
$ |
8,902 |
|
|
9,077 |
|
|
9,011 |
|
|
Aldeyra Therapeutics, Inc. (11) |
Drug Discovery & Development |
Senior Secured |
October 2023 |
Interest rate PRIME + 3.10% or Floor rate of 9.10%, 6.95% Exit Fee |
$ |
||||||||