Quarterly report pursuant to Section 13 or 15(d)

Schedule 12-14s - Summary of schedule of investment (Tables)

v3.23.2
Schedule 12-14s - Summary of schedule of investment (Tables)
 6 Months Ended
Jun. 30, 2023
Investments in and Advances to Affiliates [Abstract]  
Schedule of Investments in and Advances to Affiliates

(in thousands)

 

Investment(1)

 

Amount of Interest and Fees Credited to Income(2)

 

 

Realized Gain (Loss)

 

 

Fair Value as of
December 31, 2022

 

 

Gross Additions(3)

 

 

Gross Reductions(4)

 

 

Net Change in Unrealized Appreciation/ (Depreciation)

 

 

Fair Value as of June 30, 2023

 

Portfolio Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Control Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Majority Owned Control Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Coronado Aesthetics, LLC(8)

 

Preferred Stock

 

$

—

 

 

$

—

 

 

$

313

 

 

$

—

 

 

 

—

 

 

$

(21

)

 

$

292

 

 

 

Common Stock

 

 

—

 

 

 

—

 

 

 

6

 

 

 

—

 

 

 

—

 

 

 

(1

)

 

 

5

 

Gibraltar Acquisition LLC (p.k.a. Gibraltar Business Capital, LLC)(5)

 

Unsecured Debt

 

 

1,565

 

 

 

—

 

 

 

21,700

 

 

 

46

 

 

 

—

 

 

 

2,867

 

 

 

24,613

 

 

 

Member Units

 

 

—

 

 

 

—

 

 

 

15,244

 

 

 

1,000

 

 

 

—

 

 

 

3,535

 

 

 

19,779

 

Hercules Adviser LLC(6)

 

Unsecured Debt

 

 

302

 

 

 

—

 

 

 

12,000

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

12,000

 

 

 

Member Units

 

 

—

 

 

 

—

 

 

 

19,153

 

 

 

—

 

 

 

—

 

 

 

8,008

 

 

 

27,161

 

 Total Majority Owned Control Investments

 

 

 

$

1,867

 

 

$

—

 

 

$

68,416

 

 

$

1,046

 

 

$

—

 

 

$

14,388

 

 

$

83,850

 

Other Control Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tectura Corporation(7)

 

Senior Debt

 

$

342

 

 

$

—

 

 

$

8,042

 

 

$

—

 

 

$

—

 

 

$

(969

)

 

$

7,073

 

 

 

Preferred Stock

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

Common Stock

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total Other Control Investments

 

 

 

$

342

 

 

$

—

 

 

$

8,042

 

 

$

—

 

 

$

—

 

 

$

(969

)

 

$

7,073

 

Total Control Investments

 

$

2,209

 

 

$

—

 

 

$

76,458

 

 

$

1,046

 

 

$

—

 

 

$

13,419

 

 

$

90,923

 
(1)
Stock and warrants are generally non-income producing and restricted.
(2)
Represents the total amount of interest, fees, or dividends credited to income for the period an investment was an affiliate or control investment.
(3)
Gross additions include increases in the cost basis of investments resulting from new portfolio investments, paid-in-kind interest or dividends, the amortization of discounts and closing fees and the exchange of one or more existing securities for one or more new securities.
(4)
Gross reductions include decreases in the cost basis of investments resulting from principal repayments or sales and the exchange of one or more existing securities for one or more new securities. Gross reductions also include previously recognized depreciation on investments that become control or affiliate investments during the period.
(5)
As of March 31, 2018, the Company's investment in Gibraltar Acquisition LLC (p.k.a. Gibraltar Business Capital, LLC) became classified as a control investment as a result of obtaining a controlling financial interest. Gibraltar Acquisition LLC is a wholly-owned subsidiary, which is the holding company for their wholly-owned affiliated portfolio companies, Gibraltar Business Capital, LLC and Gibraltar Equipment Finance, LLC. The subsidiary has no significant assets or liabilities, other than their equity and debt investments and equity interest in Gibraltar Business Capital, LLC and Gibraltar Equipment Finance, LLC, respectively.
(6)
Hercules Adviser LLC is a wholly owned subsidiary providing investment management and other services to the Adviser Funds and other External Parties.
(7)
As of March 31, 2017, the Company's investment in Tectura Corporation became classified as a control investment as of result of obtaining more than 50% representation on the portfolio company's board. In May 2018, the Company purchased common shares, thereby obtaining greater than 25% of voting securities of Tectura as of June 30, 2018.
(8)
As of December 31, 2021, the Company's investment in Coronado Aesthetics, LLC became classified as a control investment as a result of obtaining more than 25% of the voting securities of the portfolio company.

 

 

Schedule 12 – 14

HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS IN AND ADVANCES TO AFFILIATES

For the Six Months Ended June 30, 2022 (unaudited)

 

(in thousands)

 

Investment (1)

 

Amount of Interest and Fees Credited to Income (2)

 

 

Realized Gain (Loss)

 

 

Fair Value as of
December 31, 2021

 

 

Gross Additions (3)

 

 

Gross Reductions (4)

 

 

Net Change in Unrealized Appreciation/ (Depreciation)

 

 

Fair Value as of June 30, 2022

 

Portfolio Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Control Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Majority Owned Control Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Coronado Aesthetics, LLC (10)

 

Preferred Stock

 

$

—

 

 

$

—

 

 

$

500

 

 

$

—

 

 

$

—

 

 

$

(88

)

 

$

412

 

 

 

Common Stock

 

 

—

 

 

 

—

 

 

 

65

 

 

 

—

 

 

 

—

 

 

 

(55

)

 

 

10

 

Gibraltar Business Capital, LLC (5)

 

Unsecured Debt

 

 

1,711

 

 

 

—

 

 

 

23,212

 

 

 

39

 

 

 

—

 

 

 

(576

)

 

 

22,675

 

 

 

Preferred Stock

 

 

—

 

 

 

—

 

 

 

19,393

 

 

 

—

 

 

 

—

 

 

 

(3,978

)

 

 

15,415

 

 

 

Common Stock

 

 

—

 

 

 

—

 

 

 

1,225

 

 

 

—

 

 

 

—

 

 

 

(251

)

 

 

974

 

Hercules Adviser LLC (6)

 

Unsecured Debt

 

 

239

 

 

 

—

 

 

 

8,850

 

 

 

3,150

 

 

 

—

 

 

 

—

 

 

 

12,000

 

 

 

Member Units

 

 

—

 

 

 

—

 

 

 

11,990

 

 

 

—

 

 

 

—

 

 

 

11,191

 

 

 

23,181

 

 Total Majority Owned Control Investments

 

 

 

$

1,950

 

 

$

—

 

 

$

65,235

 

 

$

3,189

 

 

$

—

 

 

$

6,243

 

 

$

74,667

 

Other Control Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tectura Corporation(7)

 

Senior Debt

 

$

342

 

 

$

—

 

 

$

8,269

 

 

$

—

 

 

$

—

 

 

$

(61

)

 

$

8,208

 

 

 

Preferred Stock

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

Common Stock

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total Other Control Investments

 

 

 

$

342

 

 

$

—

 

 

$

8,269

 

 

$

—

 

 

$

—

 

 

$

(61

)

 

$

8,208

 

Total Control Investments

 

$

2,292

 

 

$

—

 

 

$

73,504

 

 

$

3,189

 

 

$

—

 

 

$

6,182

 

 

$

82,875

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Affiliate Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Black Crow AI, Inc. (8)

 

Preferred Stock

 

$

—

 

 

$

3,772

 

 

$

1,120

 

 

$

—

 

 

$

(1,000

)

 

$

(120

)

 

$

—

 

Pineapple Energy LLC (9)

 

Senior Debt

 

 

1,123

 

 

 

—

 

 

 

7,747

 

 

 

78

 

 

 

(4,781

)

 

 

(104

)

 

 

2,940

 

 

 

Common Stock

 

 

—

 

 

 

—

 

 

 

591

 

 

 

400

 

 

 

—

 

 

 

(318

)

 

 

673

 

Total Affiliate Investments

 

$

1,123

 

 

$

3,772

 

 

$

9,458

 

 

$

478

 

 

$

(5,781

)

 

$

(542

)

 

$

3,613

 

Total Control and Affiliate Investments

 

$

3,415

 

 

$

3,772

 

 

$

82,962

 

 

$

3,667

 

 

$

(5,781

)

 

$

5,640

 

 

$

86,488

 
(1)
Stock and warrants are generally non-income producing and restricted.
(2)
Represents the total amount of interest, fees, or dividends credited to income for the period an investment was an affiliate or control investment.
(3)
Gross additions include increases in the cost basis of investments resulting from new portfolio investments, paid-in-kind interest or dividends, the amortization of discounts and closing fees and the exchange of one or more existing securities for one or more new securities.
(4)
Gross reductions include decreases in the cost basis of investments resulting from principal repayments or sales and the exchange of one or more existing securities for one or more new securities. Gross reductions also include previously recognized depreciation on investments that become control or affiliate investments during the period.
(5)
As of March 31, 2018, the Company's investment in Gibraltar Business Capital, LLC became classified as a control investment as a result of obtaining a controlling financial interest.
(6)
Hercules Adviser LLC is a wholly-owned subsidiary providing investment management and other services to External Parties.
(7)
As of March 31, 2017, the Company's investment in Tectura Corporation became classified as a control investment as of result of obtaining more than 50% representation on the
portfolio company's board. In May 2018, the Company purchased common shares, thereby obtaining greater than 25% of voting securities of Tectura as of June 30, 2018.
(8)
During the six months ended June 30, 2022, the Company sold its investments in Black Crow AI, Inc., as a result it is no longer an affiliate investment.
(9)
As of December 11, 2020, the Company's investment in Pineapple Energy LLC became classified as an affiliate investment as a result of obtaining more than 5% but less than 25% of the voting securities of the portfolio company.
(10)
As of December 31, 2021, the Company's investment in Coronado Aesthetics, LLC became classified as a control investment as a result of obtaining more than 25% of the voting
securities of the portfolio company.

 

Schedule 12 – 14

HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS IN AND ADVANCES TO AFFILIATES

As of June 30, 2023 (unaudited)

 

(in thousands)

 

Industry

 

Type of Investment (1)

 

Maturity Date

 

Interest Rate and Floor

 

Principal or Shares

 

 

Cost

 

 

Value (2)

 

Portfolio Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Control Investments

 

 

 

 

 

 

 

 

 

        Majority Owned Control Investments

 

 

 

 

 

 

 

 

 

Coronado Aesthetics, LLC

 

Medical Devices & Equipment

 

Preferred Series A Equity

 

 

 

 

 

 

5,000,000

 

 

$

250

 

 

$

292

 

 

Medical Devices & Equipment

 

Common Stock

 

 

 

 

 

 

180,000

 

 

 

—

 

 

 

5

 

Total Coronado Aesthetics, LLC

 

 

 

 

$

250

 

 

$

297

 

Gibraltar Acquisition LLC (p.k.a. Gibraltar Business Capital, LLC)(3)

 

Diversified Financial Services

 

Unsecured Debt

 

September 2026

 

Interest rate FIXED 11.50%

 

$

25,000

 

 

 

24,613

 

 

 

24,613

 

 

Diversified Financial Services

 

Member Units

 

 

 

 

 

 

1

 

 

 

29,006

 

 

 

19,779

 

Total Gibraltar Acquisition, LLC

 

 

 

 

$

53,619

 

 

$

44,392

 

Hercules Adviser LLC

 

Diversified Financial Services

 

Unsecured Debt

 

June 2025

 

Interest rate FIXED 5.00%

 

$

12,000

 

 

 

12,000

 

 

 

12,000

 

 

Diversified Financial Services

 

Member Units

 

 

 

 

 

 

1

 

 

 

35

 

 

 

27,161

 

Total Hercules Adviser LLC

 

 

 

 

$

12,035

 

 

$

39,161

 

Total Majority Owned Control Investments (5.29%)*

 

 

 

 

$

65,904

 

 

$

83,850

 

Other Control Investments

 

 

 

 

 

 

 

 

 

Tectura Corporation

 

Consumer & Business Services

 

Senior Secured Debt

 

July 2024

 

PIK Interest 5.00%

 

$

23,703

 

 

$

13,263

 

 

$

—

 

 

Consumer & Business Services

 

Senior Secured Debt

 

July 2024

 

Interest rate FIXED 8.25%

 

$

8,250

 

 

 

8,250

 

 

 

7,073

 

 

Consumer & Business Services

 

Preferred Series BB Equity

 

 

 

 

 

 

1,000,000

 

 

 

—

 

 

 

—

 

 

Consumer & Business Services

 

Common Stock

 

 

 

 

 

 

414,994,863

 

 

 

900

 

 

 

—

 

Total Tectura Corporation

 

 

 

 

$

22,413

 

 

$

7,073

 

Total Other Control Investments (0.44%)*

 

 

 

 

$

22,413

 

 

$

7,073

 

Total Control Investments (5.73%)*

 

 

 

 

$

88,317

 

 

$

90,923

 

* Value as a percent of net assets

(1)
Stock and warrants are generally non-income producing and restricted.
(2)
All of the Company’s control and affiliate investments are Level 3 investments valued using significant unobservable inputs.
(3)
Gibraltar Acquisition LLC is a wholly-owned subsidiary, which is the holding company for their wholly-owned affiliated portfolio companies, Gibraltar Business Capital, LLC and Gibraltar Equipment Finance, LLC. The subsidiary has no significant assets or liabilities, other than their equity and debt investments and equity interest in Gibraltar Business Capital, LLC and Gibraltar Equipment Finance, LLC, respectively.

 

 

 

 

Schedule 12 – 14

HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS IN AND ADVANCES TO AFFILIATES

As of and for the year ended December 31, 2022

 

(in thousands)

 

Industry

 

Type of Investment (1)

 

Maturity Date

 

Interest Rate and Floor

 

Principal
or Shares

 

 

Cost

 

 

Value (2)

 

Portfolio Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Control Investments

 

 

 

 

 

 

 

 

 

        Majority Owned Control Investments

 

 

 

 

 

 

 

 

 

Coronado Aesthetics, LLC

 

Medical Devices & Equipment

 

Preferred Series A Equity

 

 

 

 

 

 

5,000,000

 

 

$

250

 

 

$

313

 

 

Medical Devices & Equipment

 

Common Stock

 

 

 

 

 

 

180,000

 

 

 

—

 

 

 

6

 

Total Coronado Aesthetics, LLC

 

 

 

 

$

250

 

 

$

319

 

Gibraltar Business Capital, LLC

 

Diversified Financial Services

 

Unsecured Debt

 

September 2026

 

Interest rate FIXED 14.50%

 

$

15,000

 

 

 

14,715

 

 

 

12,802

 

 

Diversified Financial Services

 

Unsecured Debt

 

September 2026

 

Interest rate FIXED 11.50%

 

$

10,000

 

 

 

9,852

 

 

 

8,898

 

 

Diversified Financial Services

 

Preferred Series A Equity

 

 

 

 

 

 

10,602,752

 

 

 

26,122

 

 

 

14,137

 

 

 

Diversified Financial Services

 

Common Stock

 

 

 

 

 

 

830,000

 

 

 

1,884

 

 

 

1,107

 

Total Gibraltar Business Capital, LLC

 

 

 

 

$

52,573

 

 

$

36,944

 

Hercules Adviser LLC

 

Diversified Financial Services

 

Unsecured Debt

 

June 2025

 

Interest rate FIXED 5.00%

 

$

12,000

 

 

 

12,000

 

 

 

12,000

 

 

Diversified Financial Services

 

Member Units

 

 

 

 

 

 

1

 

 

 

35

 

 

 

19,153

 

Total Hercules Adviser LLC

 

 

 

 

$

12,035

 

 

$

31,153

 

Total Majority Owned Control Investments (4.88%)*

 

 

 

 

$

64,858

 

 

$

68,416

 

Other Control Investments

 

 

 

 

 

 

 

 

 

Tectura Corporation

 

Consumer & Business Services

 

Senior Secured Debt

 

July 2024

 

PIK Interest 5.00%

 

$

10,680

 

 

$

240

 

 

$

—

 

 

Consumer & Business Services

 

Senior Secured Debt

 

July 2024

 

Interest rate FIXED 8.25%

 

$

8,250

 

 

 

8,250

 

 

 

8,042

 

 

Consumer & Business Services

 

Senior Secured Debt

 

July 2024

 

PIK Interest 5.00%

 

$

13,023

 

 

 

13,023

 

 

 

—

 

 

Consumer & Business Services

 

Preferred Series BB Equity

 

 

 

 

 

 

1,000,000

 

 

 

—

 

 

 

—

 

 

Consumer & Business Services

 

Common Stock

 

 

 

 

 

 

414,994,863

 

 

 

900

 

 

 

—

 

Total Tectura Corporation

 

 

 

 

$

22,413

 

 

$

8,042

 

Total Other Control Investments (0.58%)*

 

 

 

 

$

22,413

 

 

$

8,042

 

Total Control Investments (5.46%)*

 

 

 

 

$

87,271

 

 

$

76,458

 

* Value as a percent of net assets

(1)
Stock and warrants are generally non-income producing and restricted.
(2)
All of the Company’s control and affiliate investments are Level 3 investments valued using significant unobservable inputs.