Hercules Capital, Inc. Quarterly report [Sections 13 or 15(d)]

Quarterly report [Sections 13 or 15(d)]

Commitments and Contingencies

Commitments and Contingencies

9 Months Ended

Sep. 30, 2025

Commitments and Contingencies Disclosure [Abstract]

The Company’s commitments and contingencies consist primarily of unfunded commitments to extend credit in the form of loans to the Company’s portfolio companies. As of September 30, 2025, a portion of these unfunded contractual commitments are dependent upon the portfolio company reaching certain milestones before the debt commitment becomes available. Furthermore, the Company’s credit agreements with its portfolio companies generally contain customary lending provisions which allow the Company relief from funding obligations for previously made unfunded commitments in instances where the underlying portfolio company experiences materially adverse events that affect the financial condition or business outlook for the portfolio company. Since a portion of these commitments may expire without being drawn, unfunded contractual commitments do not necessarily represent future cash requirements. As such, the Company’s disclosure of unfunded contractual commitments includes only those which are available at the request of the portfolio company and unencumbered by future or unachieved milestones.

As of September 30, 2025 and December 31, 2024, the Company had approximately $437.5 million and $448.5 million, respectively, of available unfunded commitments, including undrawn revolving facilities, which were available at the request of the portfolio company and unencumbered by future or unachieved milestones. In order to draw a portion of the Company's available unfunded commitments, a portfolio company must submit to the Company a formal funding request that complies with the applicable advance notice and other operational requirements. The amounts disclosed

exclude unfunded commitments (i) for which, with respect to a portfolio company's agreement, a milestone was achieved after the last day on which the portfolio company could have requested a drawdown funding to be completed within the reporting period; and (ii) related to the portion of portfolio company investments assigned to or directly committed by the Adviser Funds as described in “Note -12 Related Party Transactions”. The fair value of the Company’s unfunded commitments is considered to be immaterial as the yield determined at the time of underwriting is expected to be materially consistent with the yield upon funding, given that interest rates are generally pegged to market indices and given the existence of milestones, conditions and/or obligations embedded in the borrowing agreements.

As of September 30, 2025 and December 31, 2024, the Company’s unfunded contractual commitments available at the request of the portfolio company, including undrawn revolving facilities, and unencumbered by milestones were as follows:


(in thousands)	Unfunded Commitments (1) as of
Portfolio Company	September 30, 2025		December 31, 2024
Debt Investments:
Arcus Biosciences, Inc.	$	37,500	$	37,500
Thumbtack, Inc.	30,000		30,000
Earnix, Inc.	26,250		41,250
Harness, Inc.	25,988		11,550
ChenMed, LLC	25,000		—
Disc Medicine, Inc.	22,500		22,500
Saronic Technologies, Inc.	21,250		—
Pindrop Security, Inc.	19,375		19,375
GoEuro Travel GmbH	18,750		26,250
Mango Technologies, Inc.	16,750		—
Locus Robotics Corp.	16,250		16,250
Weee! Inc.	12,500		—
Alector, Inc.	10,500		10,500
CoreView USA, Inc.	10,000		10,000
DroneDeploy, Inc.	10,000		625
Electric Hydrogen Co.	10,000		—
iSpot.tv, Inc.	9,750		—
Marathon Health, LLC	9,620		24,250
DocPlanner	9,538		—
Loft Orbital Solutions Inc.	7,700		—
Elation Health, Inc.	7,500		—
ZeroEyes, Inc.	6,000		—
Stoke Space Technologies, Inc.	5,625		—
Distributed Creation Inc.	5,000		—
DNSFilter, Inc.	5,000		—
Scylla DB Ltd.	4,886		—
Smartsheet Inc.	4,840		—
AlphaSense, Inc.	4,000		4,000
WellBe Senior Medical, LLC	4,000		12,000
LogRhythm, Inc.	3,143		3,143
Altumint, Inc.	3,000		—
Loftware, Inc.	2,846		2,277
Ennoble Care LLC	2,700		—
Zappi, Inc.	2,571		2,571
Carbyne, Inc.	2,334		—
New Relic, Inc.	2,176		2,176
Behavox Limited	2,100		—
Streamline Healthcare Solutions	2,100		2,200
Akeyless Security Ltd.	2,000		—
Kaseware, Inc.	2,000		—
PayIt, LLC	2,000		8,000
Sumo Logic, Inc.	2,000		2,000


(in thousands)	Unfunded Commitments (1) as of
Portfolio Company	September 30, 2025		December 31, 2024
Debt Investments:
LogicSource	$	1,209	$	1,209
Zimperium, Inc.	1,087		196
Alchemer LLC	890		—
Main Street Rural, Inc.	874		874
Dispatch Technologies, Inc.	812		563
Annex Cloud	750		—
Omeda Holdings, LLC	497		731
LinenMaster, LLC	338		1,000
ShadowDragon, LLC	333		333
TaxCalc	311		1,166
Armis, Inc.	—		25,000
Coronet Cyber Security Ltd.	—		17,000
Akero Therapeutics, Inc.	—		15,000
Dragos, Inc.	—		13,000
Aryaka Networks, Inc.	—		12,500
Strive Health Holdings, LLC	—		8,299
Heron Therapeutics, Inc.	—		8,000
Suzy, Inc.	—		8,000
Viridian Therapeutics, Inc.	—		8,000
Curana Health Holdings, LLC	—		7,500
ATAI Life Sciences N.V.	—		7,000
Dashlane, Inc.	—		5,000
Babel Street	—		4,367
Saama Technologies, LLC	—		3,875
Allvue Systems, LLC	—		3,590
Ceros, Inc.	—		1,707
3GTMS, LLC	—		886
Fortified Health Security	—		840
Flight Schedule Pro, LLC	—		646





Total Unfunded Debt Commitments:	434,143		444,699

Investment Funds & Vehicles:(2)
Forbion Growth Opportunities Fund I C.V.	1,775		1,757
Forbion Growth Opportunities Fund II C.V.	1,617		2,072
Total Unfunded Commitments in Investment Funds & Vehicles:	3,392		3,829

Total Unfunded Commitments	$	437,535	$	448,528

(1)For debt investments, amounts represent unfunded commitments, including undrawn revolving facilities, which are available at the request of the portfolio company. Amount excludes unfunded commitments which are unavailable due to the borrower having not met certain milestones. These amounts also exclude $99.1 million and $139.7 million of unfunded commitments as of September 30, 2025 and December 31, 2024, respectively, to portfolio companies related to loans assigned to or directly committed by the Adviser Funds as described in “Note 12 - Related Party Transactions”.

(2)For investment funds and vehicles, the amount represents uncalled capital commitments in private equity funds.

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


(in thousands) Unfunded Commitments
	September 30, 2025		December 31, 2024
Expiring during:


2025	$	84,424	$	251,941
2026	250,676		147,840
2027	36,649		10,553
2028	4,547		6,040
2029	19,731		24,149
2030	33,276		4,176
2031	4,840		—
Total Unfunded Debt Commitments	434,143		444,699

Unfunded Commitments in Investment Funds & Vehicles:
Expiring during:
2030	1,775		1,757
2032	1,617		2,072
Total Unfunded Commitments in Investment Funds & Vehicles	3,392		3,829
Total Unfunded Commitments	$	437,535	$	448,528

The following tables provide the Company’s contractual obligations as of September 30, 2025 and December 31, 2024:


As of September 30, 2025:	Payments due by period (in thousands)
Contractual Obligations(1)	Total		Less than 1 year		1 - 3 years		3 - 5 years		After 5 years
Debt(2)(3)	$	2,180,005	$	425,000	$	637,500	$	638,866	$	478,639
Lease and License Obligations(4)	21,408		3,251		6,136		5,677		6,344
Total	$	2,201,413	$	428,251	$	643,636	$	644,543	$	484,983

As of December 31, 2024:	Payments due by period (in thousands)
Contractual Obligations(1)	Total		Less than 1 year		1 - 3 years		3 - 5 years		After 5 years
Debt(5)(3)	$	1,783,265	$	170,000	$	891,000	$	283,790	$	438,475
Lease and License Obligations(4)	23,976		3,246		6,640		5,589		8,501
Total	$	1,807,241	$	173,246	$	897,640	$	289,379	$	446,976

(1)Excludes commitments to extend credit to the Company’s portfolio companies and uncalled capital commitments in investment funds.

(2)Includes $350.0 million in principal outstanding under the SBA Debentures, $50.0 million of the March 2026 A Notes, $50.0 million of the March 2026 B Notes, $350.0 million of the June 2030 Notes, $88.6 million of the 2031 Asset-Backed Notes, $40.0 million of the 2033 Notes, $325.0 million of the September 2026 Notes, $350.0 million of the January 2027 Notes and $287.5 million of the 2028 Convertible Notes as of September 30, 2025. There was also $222.9 million outstanding under the SMBC Facility and $66.0 million outstanding under the MUFG Bank Facility as of September 30, 2025.

(3)Amounts represent future principal repayments and not the carrying value of each liability. See “Note 5 – Debt”.

(4)Leases and license obligations includes contractual amounts related to short-term leases.

(5)Includes $279.0 million in principal outstanding under the SBA Debentures, $50.0 million of the February 2025 Notes, $70.0 million of the June 2025 Notes, $50.0 million of the June 2025 3-Year Notes, $50.0 million of the March 2026 A Notes, $50.0 million of the March 2026 B Notes, $119.5 million of the 2031 Asset-Backed Notes, $40.0 million of the 2033 Notes, $325.0 million of the September 2026 Notes and $350.0 million of the January 2027 Notes as of December 31, 2024. There was also $283.8 million outstanding under the SMBC Facility and $116.0 million outstanding under the MUFG Bank Facility as of December 31, 2024.

Certain premises are leased or licensed under agreements which expire at various dates through July 2034. During the three months ended September 30, 2025 and 2024, total rent expense, including short-term leases, amounted to approximately $0.8 million and $0.8 million in each period, respectively. During the nine months ended September 30, 2025 and 2024, total rent expense, including short-term leases, amounted to approximately $2.5 million and $2.7 million in each period, respectively. The Company recognizes an operating lease liability and a ROU asset for all leases, with the exception of short-term leases. The lease payments on short-term leases are recognized as rent expense on a straight-line basis. The discount rate applied to measure each ROU asset and lease liability is based on the Company’s incremental weighted average cost of debt. The Company considers the general economic environment and its credit rating and factors in various financing and asset specific adjustments to ensure the discount rate applied is appropriate to the intended use of the underlying lease. While some of the leases contained options to extend and terminate, it is not reasonably certain that either option will be utilized and therefore, only the payments in the initial term of the leases were included in the lease liability and ROU asset.

The following tables set forth information related to the measurement of the Company’s operating lease liabilities and supplemental cash flow information related to operating leases for the three and nine months ended September 30, 2025 and 2024:


(in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Total operating lease cost	$	774	$	762	$	2,322	$	2,091
Cash paid for amounts included in the measurement of lease liabilities	$	599	$	371	$	2,485	$	1,268


	As of September 30, 2025		As of December 31, 2024
Weighted-average remaining lease term (in years)	7.19		7.81
Weighted-average discount rate	6.92	%	6.85	%

The following table shows future minimum lease payments under the Company’s operating leases and a reconciliation to the operating lease liability as of September 30, 2025:


(in thousands)	As of September 30, 2025
2025	$	603
2026	3,179
2027	3,452
2028	2,766
Thereafter	11,324
Total lease payments	21,324
Less: imputed interest & other items	(4,737)
Total operating lease liability	$	16,587

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