Quarterly report pursuant to Section 13 or 15(d)

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

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CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Investment income:        
Total interest and dividend income $ 108,986 $ 68,731 $ 208,883 $ 130,983
Fee Income 7,245 3,384 12,438 6,289
Gross Investment Income, Operating, Total 116,231 72,115 221,321 137,272
Operating expenses:        
Interest 17,184 [1] 12,698 [2] 33,809 [1] 24,345 [2]
Loan fees 2,464 1,492 4,793 3,334
General and administrative 5,151 4,322 9,277 8,140
Investment Income, Operating, Tax Expense (Benefit) 1,980 1,821 3,367 2,533
Total gross operating expenses 42,945 35,054 85,215 65,826
Expenses allocated to the Adviser Subsidiary (2,414) (3,070) (5,093) (4,472)
Employee compensation:        
Compensation and benefits 12,841 11,060 27,458 19,389
Employee benefits and share-based compensation 3,325 3,661 6,511 8,085
Employee compensation 16,166 14,721 33,969 27,474
Total net operating expenses 40,531 31,984 80,122 61,354
Net investment income 75,700 40,131 141,199 75,918
Net realized gain (loss):        
Loss on debt extinguishment of debt 0 0 0 (3,686)
Total net realized gain (loss) 217 (2,133) 8,177 (4,514)
Net change in unrealized appreciation (depreciation):        
Total net change in unrealized appreciation (depreciation) 18,858 (48,316) 39,963 (85,058)
Total net realized gain (loss) and net change in unrealized appreciation (depreciation) 19,075 (50,449) 48,140 (89,572)
Net Income $ 94,775 $ (10,318) $ 189,339 $ (13,654)
Net investment income before investment gains and losses per common share:        
Net investment income before investment gains and losses per common share: Basic $ 0.53 $ 0.32 $ 1.01 $ 0.62
Change in net assets resulting from operations per common share:        
Basic 0.66 (0.09) 1.35 (0.12)
Diluted $ 0.66 $ (0.09) $ 1.34 $ (0.12)
Weighted average shares outstanding        
Basic 141,390 124,255 138,338 121,292
Diluted 142,084 124,255 139,587 121,292
Distributions paid per common share:        
Basic $ 0.47 $ 0.48 $ 0.94 $ 0.96
Investment, Affiliated Issuer [Member]        
Investment income:        
Total interest and dividend income $ 0 $ 76 $ 0 $ 1,123
Gross Investment Income, Operating, Total [3]       3,415
Net realized gain (loss):        
Total net realized gain (loss)       3,772
Net change in unrealized appreciation (depreciation):        
Total net change in unrealized appreciation (depreciation)       5,640
Investment, Unaffiliated Issuer [Member]        
Investment income:        
Fee Income 7,226 3,367 12,400 6,256
Net realized gain (loss):        
Total net realized gain (loss) 217 (2,133) 8,177 (4,600)
Net change in unrealized appreciation (depreciation):        
Total net change in unrealized appreciation (depreciation) 14,285 (51,749) 26,544 (90,698)
Investment, Affiliated Issuer, Controlled [Member]        
Investment income:        
Total interest and dividend income [4] 1,055 1,144 2,171 2,259
Fee Income [4] 19 17 38 33
Gross Investment Income, Operating, Total     2,209 [5] 2,292 [3]
Net realized gain (loss):        
Total net realized gain (loss) [4] 0 0 0 0
Net change in unrealized appreciation (depreciation):        
Total net change in unrealized appreciation (depreciation) [4] 4,573 4,728 13,419 6,182
Investment, Affiliated Issuer, Noncontrolled [Member]        
Investment income:        
Total interest and dividend income 107,931 67,511 206,712 127,601
Gross Investment Income, Operating, Total [3]       1,123
Net realized gain (loss):        
Total net realized gain (loss) 0 0 0 3,772
Net change in unrealized appreciation (depreciation):        
Total net change in unrealized appreciation (depreciation) $ 0 $ (1,295) $ 0 $ (542)
[1] Interest expense includes amortization of original issue discounts for the three months ended June 30, 2023 of $42 thousand, $126 thousand, and $47 thousand related to the September 2026 Notes, January 2027 Notes, and 2031 Asset-Backed Notes, respectively. For the six months ended June 30, 2023, $83 thousand, $251 thousand, and $94 thousand, related to the September 2026 Notes, January 2027 Notes, and 2031 Asset-Backed Notes, respectively.
[2] Interest expense includes amortization of original issue discounts for the three months ended June 30, 2022 of $42 thousand, $126 thousand, and $4 thousand related to the September 2026 Notes, January 2027 Notes, and 2031 Asset-Backed Notes, respectively. For the six months ended June 30, 2022, $23 thousand, $112 thousand, $84 thousand, $223 thousand, and $4 thousand, related to the 2022 Notes, 2022 Convertible Notes, September 2026 Notes, January 2027 Notes, and 2031 Asset-Backed Notes, respectively.
[3] Represents the total amount of interest, fees, or dividends credited to income for the period an investment was an affiliate or control investment.
[4] In accordance with Rules 3-09, 4-08(g), and Rule 10-01(b)(1) of Regulation S-X, (“Rule 3-09”, “Rule 4-08(g)”, and “Rule 10-01(b)(1)”, respectively), the Company must determine if its unconsolidated subsidiaries are considered “significant subsidiaries”. As of June 30, 2023, there were no unconsolidated subsidiaries that are considered “significant subsidiaries”. As of June 30, 2022, the Hercules Adviser, LLC qualified as a significant subsidiary pursuant to Rule 10-01(b)(1). The total revenue, operating income, and net income were $3.5 million, $(1.9) million, and $(1.8) million for the six months ended June 30, 2022.
[5] Represents the total amount of interest, fees, or dividends credited to income for the period an investment was an affiliate or control investment.