Hercules Capital Inc
For the period ended Sep 30, 2024. Filed Oct 30, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Oct 30, 2024
Extracted filing text, with the paragraph anchors used by the comparison.
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Item 6. Exhibits and Financial Statement Schedules
ITEM 6. EXHIBITS
| ExhibitNumber | Description |
| 3(a) | Articles of Amendment and Restatement.(1) |
| 3(b) | Articles of Amendment, dated March 6, 2007.(2) |
| 3(c) | Articles of Amendment, dated April 5, 2011.(3) |
| 3(d) | Articles of Amendment, dated April 3, 2015.(4) |
| 3(e) | Articles of Amendment, dated February 23, 2016.(5) |
| 3(f)* | Articles of Amendment, dated October 28, 2024. |
| 3(g) | Amended and Restated Bylaws of Hercules Capital, Inc.(5) |
| 31.1* | Chief Executive Officer Certification Pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 31.2* | Chief Financial Officer Certification Pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 32.1* | Chief Executive Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| 32.2* | Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| 101.INS* | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document. |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. |
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document. |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
| 104 | The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, has been formatted in Inline XBRL |
*Filed herewith.
(1)Previously filed as part of Pre-Effective Amendment No. 1, as filed on May 17, 2005 (File No. 333-122950) to the Registration Statement on Form N-2 of the Company.
(2)Previously filed as part of the Current Report on Form 8-K of the Company, as filed on March 9, 2007.
(3)Previously filed as part of the Current Report on Form 8-K of the Company, as filed on April 11, 2011.
(4)Previously filed as part of the Registration Statement on Form N-2 of the Company, as filed on April 20, 2015 (File No. 333-203511).
(5)Previously filed as part of the Current Report on Form 8-K of the Company, as filed on March 20, 2020.
For the Nine Months Ended September 30, 2024 (unaudited)
| (in thousands) | Investment(1) | Amount of Interest, Dividends, and Fees Credited to Income(2) | Realized Gain (Loss) | Fair Value as of December 31, 2023 | Gross Additions(3) | Gross Reductions(4) | Net Change in Unrealized Appreciation/ (Depreciation) | Fair Value as of September 30, 2024 |
|---|---|---|---|---|---|---|---|---|
| Portfolio Company | ||||||||
| Control Investments | ||||||||
| Majority Owned Control Investments | ||||||||
| Coronado Aesthetics, LLC(8) | Preferred Stock | $— | $— | $260 | $— | $— | $58 | $318 |
| Common Stock | — | — | 2 | — | — | (1) | 1 | |
| Gibraltar Acquisition LLC (p.k.a. Gibraltar Business Capital, LLC)(5) | Unsecured Debt | 4,034 | — | 34,478 | 1,155 | — | — | 35,633 |
| Member Units | — | — | 28,034 | — | — | (6,365) | 21,669 | |
| Hercules Adviser LLC(6) | Unsecured Debt | 5,457 | — | 12,000 | — | — | — | 12,000 |
| Member Units | — | — | 28,713 | — | — | 2,720 | 31,433 | |
| Total Majority Owned Control Investments | $9,491 | $— | $103,487 | $1,155 | $— | $(3,588) | $101,054 | |
| Other Control Investments | ||||||||
| Tectura Corporation(7) | Senior Debt | $518 | $— | $8,250 | $— | $— | $— | $8,250 |
| Preferred Stock | — | — | 3,263 | — | — | 524 | 3,787 | |
| Common Stock | — | — | 4 | — | — | 2 | 6 | |
| Total Other Control Investments | $518 | $— | $11,517 | $— | $— | $526 | $12,043 | |
| Total Control Investments | $10,009 | $— | $115,004 | $1,155 | $— | $(3,062) | $113,097 | |
(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 owned by Hercules Capital Management LLC and presented with Hercules Partner Holdings, LLC which are both wholly owned by the Company. Please refer to “Note 1 - Description of Business” for additional disclosure.
(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
For the Nine Months Ended September 30, 2023 (unaudited)
| (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 September 30, 2023 |
|---|---|---|---|---|---|---|---|---|
| Portfolio Company | ||||||||
| Control Investments | ||||||||
| Majority Owned Control Investments | ||||||||
| Coronado Aesthetics, LLC(8) | Preferred Stock | $— | $— | $313 | $— | $— | $(68) | $245 |
| Common Stock | — | — | 6 | — | — | (4) | 2 | |
| Gibraltar Acquisition, LLC (p.k.a. Gibraltar Business Capital, LLC)(5) | Unsecured Debt | 2,359 | — | 21,700 | 9,872 | — | 2,867 | 34,439 |
| Member Units | — | — | 15,244 | 4,500 | — | 1,809 | 21,553 | |
| Hercules Adviser LLC(6) | Unsecured Debt | 455 | — | 12,000 | — | — | — | 12,000 |
| Member Units | — | — | 19,153 | — | — | 9,515 | 28,668 | |
| Total Majority Owned Control Investments | $2,814 | $— | $68,416 | $14,372 | $— | $14,119 | $96,907 | |
| Other Control Investments | ||||||||
| Tectura Corporation(7) | Senior Debt | $516 | $— | $8,042 | $— | $— | $(1,799) | $6,243 |
| Preferred Stock | — | — | — | — | — | — | — | |
| Common Stock | — | — | — | — | — | — | — | |
| Total Other Control Investments | $516 | $— | $8,042 | $— | $— | $(1,799) | $6,243 | |
| Total Control Investments | $3,330 | $— | $76,458 | $14,372 | $— | $12,320 | $103,150 | |
(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 owned by Hercules Capital Management LLC and presented with Hercules Partner Holdings, LLC which are both wholly owned by the Company. Please refer to "Note 1" for additional disclosure.
(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.
As of September 30, 2024 (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 | $318 | ||||||
| Medical Devices & Equipment | Common Stock | 180,000 | — | 1 | |||||||
| Total Coronado Aesthetics, LLC | $250 | $319 | |||||||||
| Gibraltar Acquisition LLC (p.k.a. Gibraltar Business Capital, LLC)(3) | Diversified Financial Services | Unsecured Debt | September 2026 | FIXED 3.45%, PIK Interest 8.05% | $26,033 | 25,774 | 25,774 | ||||
| Diversified Financial Services | Unsecured Debt | September 2026 | FIXED 11.95% | $10,000 | 9,859 | 9,859 | |||||
| Diversified Financial Services | Member Units | 1 | 34,006 | 21,669 | |||||||
| Total Gibraltar Acquisition, LLC | $69,639 | $57,302 | |||||||||
| Hercules Adviser LLC(4) | Diversified Financial Services | Unsecured Debt | June 2025 | FIXED 5.00% | $12,000 | 12,000 | 12,000 | ||||
| Diversified Financial Services | Member Units | 1 | 35 | 31,433 | |||||||
| Total Hercules Adviser LLC | $12,035 | $43,433 | |||||||||
| Total Majority Owned Control Investments (5.46%)* | $81,924 | $101,054 | |||||||||
| Other Control Investments | |||||||||||
| Tectura Corporation | Consumer & Business Services | Senior Secured Debt | January 2027 | FIXED 8.25% | $8,250 | $8,250 | $8,250 | ||||
| Consumer & Business Services | Common Stock | 414,994,863 | 900 | 6 | |||||||
| Consumer & Business Services | Preferred Series BB Equity | 1,000,000 | — | 15 | |||||||
| Consumer & Business Services | Preferred Series C Equity | 3,235,298 | 13,263 | 3,772 | |||||||
| Total Tectura Corporation | $22,413 | $12,043 | |||||||||
| Total Other Control Investments (0.65%)* | $22,413 | $12,043 | |||||||||
| Total Control Investments (6.11%)* | $104,337 | $113,097 | |||||||||
*Value as a percent of net assets
(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.
(4)Hercules Adviser LLC is owned by Hercules Capital Management LLC and presented with Hercules Partner Holdings, LLC which are both wholly owned by the Company. Please refer to “Note 1 - Description of Business” for additional disclosure.
As of and for the year ended December 31, 2023
| (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 | $260 | |||||||
| Medical Devices & Equipment | Common Stock | 180,000 | — | 2 | ||||||||
| Total Coronado Aesthetics, LLC | $250 | $262 | ||||||||||
| 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 | 24,663 | 24,663 | |||||
| Diversified Financial Services | Unsecured Debt | September 2026 | Interest rate FIXED 11.95% | $10,000 | 9,815 | 9,815 | ||||||
| Diversified Financial Services | Member Units | 1 | 34,006 | 28,034 | ||||||||
| Total Gibraltar Acquisition, LLC | $68,484 | $62,512 | ||||||||||
| Hercules Adviser LLC(4) | 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 | 28,713 | ||||||||
| Total Hercules Adviser LLC | $12,035 | $40,713 | ||||||||||
| Total Majority Owned Control Investments (5.74%)* | $80,769 | $103,487 | ||||||||||
| Other Control Investments | ||||||||||||
| Tectura Corporation | Consumer & Business Services | Senior Secured Debt | July 2024 | Interest rate FIXED 8.25% | $8,250 | $8,250 | $8,250 | |||||
| Consumer & Business Services | Common Stock | 414,994,863 | 900 | 4 | ||||||||
| Consumer & Business Services | Preferred Series BB Equity | 1,000,000 | — | 12 | ||||||||
| Consumer & Business Services | Preferred Series C Equity | 3,235,298 | 13,263 | 3,251 | ||||||||
| Total Tectura Corporation | $22,413 | $11,517 | ||||||||||
| Total Other Control Investments (0.64%)* | $22,413 | $11,517 | ||||||||||
| Total Control Investments (6.38%)* | $103,182 | $115,004 | ||||||||||
*Value as a percent of net assets
(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.
(4)Hercules Adviser LLC is owned by Hercules Capital Management LLC and presented with Hercules Partner Holdings, LLC which are both wholly owned by the Company. Please refer to “Note 1 - Description of Business” for additional disclosure.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.