Hercules Capital, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Commitments and Contingencies (Tables)

Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2023

Schedule of Unfunded Contractual Commitments and Unencumbered Unfunded Commitments

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


(in thousands)	Unfunded Commitments (1) as of
Portfolio Company	March 31, 2023		December 31, 2022
Debt Investments:
Phathom Pharmaceuticals, Inc.	$	66,500	$	66,500
Thumbtack, Inc.		40,000		40,000
Automation Anywhere, Inc.		29,400		29,400
HilleVax, Inc.		28,000		28,000
Oak Street Health, Inc.		22,500		33,750
Skydio, Inc.		22,500		22,500
Axsome Therapeutics, Inc.		21,750		21,000
Replimune Group, Inc.		20,700		20,700
G1 Therapeutics, Inc.		19,375		19,375
AppDirect, Inc.		15,000		15,000
ATAI Life Sciences N.V.		14,000		—
Alladapt Immunotherapeutics Inc.		12,500		15,000
Dronedeploy, Inc.		12,500		12,500
Iveric Bio, Inc.		12,375		—
PathAI, Inc.		12,000		12,000
Viridian Therapeutics, Inc.		12,000		12,000
Tipalti Solutions Ltd.		10,500		—
Madrigal Pharmaceutical, Inc.		10,200		34,000
Alamar Biosciences, Inc.		10,000		10,000
Aryaka Networks, Inc.		10,000		20,000
Brain Corporation		10,000		20,700
Next Insurance, Inc.		10,000		—
Nuvolo Technologies Corporation		9,000		5,970
Locus Robotics Corp.		8,775		—
Kura Oncology, Inc.		8,250		8,250
Tarsus Pharmaceuticals, Inc.		8,250		10,313
Vida Health, Inc.		8,178		40,000
Dashlane, Inc.		8,000		10,000
Elation Health, Inc.		7,500		7,500
Gritstone Bio, Inc.		7,500		7,500
TG Therapeutics, Inc.		6,500		—
Carwow LTD		6,467		—
Akero Therapeutics, Inc.		5,000		5,000
Fulfil Solutions, Inc.		5,000		5,000
Modern Life, Inc.		4,250		—
Riviera Partners LLC		3,500		3,500
Leapwork ApS		3,450		—
Babel Street		3,375		3,375


(in thousands)	Unfunded Commitments (1) as of
Portfolio Company	March 31, 2023		December 31, 2022
Debt Investments:
Signal Media Limited	$	3,000	$	5,250
Cutover, Inc.		2,382		1,000
Zappi, Inc.		2,358		2,571
Yipit, LLC		2,250		2,250
Streamline Healthcare Solutions		2,200		—
Khoros (p.k.a Lithium Technologies)		1,812		1,812
Ceros, Inc.		1,707		1,707
ThreatConnect, Inc.		1,600		1,600
RVShare, LLC		1,500		1,500
Loftware, Inc.		1,423		—
Dispatch Technologies, Inc.		1,250		1,250
3GTMS, LLC		1,222		—
LogicSource		1,209		1,209
Zimperium, Inc.		1,088		1,088
Ikon Science Limited		1,050		1,050
Omeda Holdings, LLC		938		938
Fortified Health Security		840		840
Agilence, Inc.		800		800
Flight Schedule Pro, LLC		639		639
Constructor.io Corporation		625		625
Enmark Systems, Inc.		457		457
Alchemer LLC		445		890
Cybermaxx Intermediate Holdings, Inc.		390		390
Annex Cloud		386		386
ShadowDragon, LLC		333		333
Cytracom Holdings LLC		72		225
Provention Bio, Inc.		—		40,000
Fever Labs, Inc.		—		8,333
Demandbase, Inc.		—		3,750
MacroFab, Inc.		—		3,000
Mobile Solutions Services		—		495
Total Unfunded Debt Commitments:		556,771		623,221

Investment Funds & Vehicles:(2)
Forbion Growth Opportunities Fund I C.V.		2,534		2,842
Forbion Growth Opportunities Fund II C.V.		2,811		2,811
Total Unfunded Commitments in Investment Funds & Vehicles:		5,345		5,653

Total Unfunded Commitments	$	562,116	$	628,874

(1)

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

(2)

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

Schedule of Contractual Obligations

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


As of March 31, 2023:	Payments due by period (in thousands)
Contractual Obligations (1)	Total		Less than 1 year		1 - 3 years		3 - 5 years		After 5 years
Debt (2)(3)	$	1,733,000	$	—	$	375,000	$	993,000	$	365,000
Lease and License Obligations (4)		8,022		2,142		2,259		2,454		1,167
Total	$	1,741,022	$	2,142	$	377,259	$	995,454	$	366,167

As of December 31, 2022:	Payments due by period (in thousands)
Contractual Obligations (1)	Total		Less than 1 year		1 - 3 years		3 - 5 years		After 5 years
Debt (5)(3)	$	1,594,000	$	—	$	382,000	$	847,000	$	365,000
Lease and License Obligations (4)		8,641		2,723		2,259		2,452		1,207
Total	$	1,602,641	$	2,723	$	384,259	$	849,452	$	366,207

(1)

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

(2)

Includes $175.0 million in principal outstanding under the SBA Debentures, $105.0 million of the July 2024 Notes, $50.0 million of the February 2025 Notes, $70.0 million of the June 2025 Notes, $50.0 million of the June 2025 3-Year Notes, $50.0 million of the March 2026 A Notes, $50.0 million of the March 2026 B Notes, $150.0 million of the 2031 Asset-Backed Notes, $40.0 million of the 2033 Notes, $325.0 million of the September 2026 Notes and $350.0 million of the January 2027 Notes as of March 31, 2023. There was also $197.0 million outstanding under the SMBC Facility and $121.0 million outstanding under the MUFG Bank Facility as of March 31, 2023.

(3)

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

(4)

Facility leases and licenses including short-term leases.

(5)

Includes $175.0 million in principal outstanding under the SBA Debentures, $105.0 million of the July 2024 Notes, $50.0 million of the February 2025 Notes, $70.0 million of the June 2025 Notes, $50.0 million of the June 2025 3-Year Notes, $50.0 million of the March 2026 A Notes, $50.0 million of the March 2026 B Notes, $150.0 million of the 2031 Asset-Backed Notes, $40.0 million of the 2033 Notes, $325.0 million of the September 2026 Notes and $350.0 million of the January 2027 Notes as of December 31, 2022. There was also $72.0 million outstanding under the SMBC Facility and $107.0 million outstanding under the MUFG Bank Facility as of December 31, 2022.

Summary of Information Related to Measurement of Operating Lease Liabilities and Supplemental Cash Flow Information Related to Operating Leases

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


(in thousands)	Three Months Ended March 31, 2023		Three Months Ended March 31, 2022
Total operating lease cost	$	698	$	703
Cash paid for amounts included in the measurement of lease liabilities	$	609	$	594


	As of March 31, 2023			As of December 31, 2022
Weighted-average remaining lease term (in years)		5.60			5.48
Weighted-average discount rate		5.35	%		5.37	%

Schedule of Future Minimum Lease Payments under Operating Leases and Reconciliation to Operating Lease Liability

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


(in thousands)	As of March 31, 2023
2023	$	1,896
2024		1,110
2025		1,149
2026		1,191
Thereafter		2,544
Total lease payments		7,890
Less: imputed interest & other items		(2,924	)
Total operating lease liability	$	4,966

Unfunded Debt Commitments

Other Commitments [Line Items]

Schedule of Unfunded Contractual Commitments and Unencumbered Unfunded Commitments

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


(in thousands)	March 31, 2023		December 31, 2022
Unfunded Debt Commitments:
Expiring during:
2023	$	358,696	$	461,296
2024		167,468		134,856
2025		1,294		720
2026		9,037		9,038
2027		14,958		15,171
2028		5,318		2,140
Total Unfunded Debt Commitments		556,771		623,221

Unfunded Commitments in Investment Funds & Vehicles:
Expiring during:
2030		2,534		2,842
2032		2,811		2,811
Total Unfunded Commitments in Investment Funds & Vehicles		5,345		5,653
Total Unfunded Commitments	$	562,116	$	628,874