- Year-to-date “YTD” closed and pending
total new debt and equity commitments of $724.8 million as of June
8, 2018
- Quarter-to-date “QTD” Q2 2018 closed
total new debt and equity commitments of $313.8 million to 17
companies including 11 new and six (6) existing portfolio companies
as of June 8, 2018
- Pending new commitments of $145.0
million in signed non-binding term sheets as of June 8,
2018(1)
Hercules Capital, Inc. (NYSE: HTGC) (“Hercules” or the
“Company”), the leading and largest specialty finance company
specifically focused on providing growth capital to some of the
most innovative and disruptive venture capital backed growth
companies in the U.S., many of which are pre-IPO and M&A stage
companies backed by some of the leading top tier venture capital
firms, today provided an intra-quarter business update for the
second quarter and year-to-date outlook for 2018.
“We are off to a tremendous start for 2018 and well positioned
to achieve another record year with nearly $580 million in closed
new debt and equity commitments to date,” stated Manuel A.
Henriquez, founder, chairman and chief executive officer of
Hercules. “Our momentum and pace of new loan originations from the
first quarter has both continued and accelerated, as evidenced by
our strong new commitment activities already realized during second
quarter-to-date, and further exemplifies our industry leadership as
well as strong brand, reputation and scale of the Hercules platform
within the venture capital and private equity community. Although
we remain guardedly optimistic, we are nonetheless witnessing
unprecedented loan demand, as evidenced with our closed and pending
commitments of nearly $725 million in just the first five months of
the year, putting us on pace to originate and close over $1.0
billion in new commitments for the full year. To meet this demand,
we are continuing to actively manage our liquidity by
opportunistically accessing both the debt and equity capital
markets to fund this demand and growth. We will also, of course, be
actively monitoring for critical changes in macro-economic
conditions or geopolitical developments, including the
administration’s new fiscal and trade policies and the impact of
the mid-term elections.”
New Debt and Equity Commitments for Q2 2018:
As of June 8, 2018, quarter-to-date, Hercules has
originated approximately $313.8 million of new debt and equity
commitments to 17 new and existing portfolio companies.
17 new commitments to innovative venture growth-stage
companies:
Technology
PortfolioEight (8) New Commitments - $196.6 Million
Life Sciences
PortfolioTwo (2) New Commitments - $58.0 Million
Sustainable and
Renewable Technologies PortfolioOne (1) New Commitment -
$15.0 Million
Existing Portfolio
CompaniesSix (6) New Commitments - $44.2 Million
Unscheduled Early Principal Repayments “Early
Pay-Offs”:
As of June 8, 2018, quarter-to-date, Hercules has received $59.1
million in early pay-offs, of which approximately $39.6
million was received from portfolio companies that previously had
credit ratings of 3-5.
Quarter-to-Date Potential Unrealized/Realized Gains:
As of June 8, 2018, Hercules has the following potential
unrealized/realized gains from certain portfolio companies:
- In April 2018, Hercules’ portfolio
company, DocuSign Inc. (NASDAQ: DOCU), a company that
provides electronic signature technology and digital transaction
management services for facilitating electronic exchanges of
contracts and signed documents, completed its IPO. Hercules
currently holds 385,000 shares of common stock as of March 31,
2018, which represents an unrealized gain of $16.2 million, as of
the closing price of $57.92 for DocuSign on June 8, 2018.
The unrealized gain may increase or decrease as the stock price of
DocuSign moves up or down from its closing price on June 8,
2018, thereby impacting Hercules’ eventual realized gain or
(loss).
- In December 2017, Hercules’ portfolio
company Quanterix Corporation (NASDAQ: QTRX), a company
digitizing biomarker analysis to advance the science of precision
health, completed its IPO. Hercules currently holds 84,778 shares
of common stock and warrants for 66,039 shares of common stock,
respectively, as of March 31, 2018, which represents an unrealized
gain of approximately $0.8 million as of the closing price of
$17.02 for Quanterix on June 8, 2018. The unrealized gain
may increase or decrease as the stock price of Quanterix
moves up or down from its closing price on June 8, 2018, thereby
impacting Hercules’ eventual realized gain or (loss).
- In October 2017, Hercules’ portfolio
company ForeScout Technologies, Inc. (NASDAQ: FSCT), a leading
Internet of Things security company, completed its IPO. Hercules
currently holds 199,842 shares of common stock, as of March 31,
2018. Subsequent to March 31, 2018, Hercules liquidated its entire
position in ForeScout and recognized a net realized gain of
approximately $5.7 million.
Portfolio Company IPO, M&A and Other Activity in Q2
2018:
IPO Activities
As of June 8, 2018, Hercules held warrant and equity positions
in three (3) portfolio companies that had filed registration
statements with the Securities and Exchange Commission in
contemplation of a potential IPO.
- In June 2018, Hercules’ portfolio
company, Tricida, Inc., a privately-held, late-stage
pharmaceutical company focused on the development and
commercialization of its lead product candidate, TRC101, a
non-absorbed, orally-administered polymer drug design to treat
metabolic acidosis in patients with chronic kidney disease, filed a
Form S-1 Registration Statement with the SEC in contemplation of a
potential public offering. Hercules initially committed $25.0
million in venture debt financing in February 2018 and currently
holds 212,765 shares of common stock as of March 31, 2018.
- Two (2) companies filed confidentially
under the JOBS Act
There can be no assurances that companies that have yet to
complete their IPOs will do so.
M&A Activities
- In May 2018, Hercules’ portfolio
company FanDuel, a leading U.S. daily fantasy sports operator,
announced they had entered into a definitive agreement with Paddy
Power Betfair plc (LON: PPB), an international, multi-channel
sports betting and gaming operator, to combine Paddy Power’s U.S.
business (Betfair US) with FanDuel. Under the agreement, Paddy
Power will contribute its existing U.S. assets along with $158.0
million of cash. The cash contribution will be used to pay down
existing FanDuel debt and fund working capital of the combined
business. Hercules initially committed $20.0 million in venture
debt financing, including $1.0 million in convertible debt, in
October 2016, and currently holds warrants for 15,570 shares of
common stock and 4,648 shares of Preferred Series A stock as of
March 31, 2018.
- In May 2018, Hercules’ portfolio
company PerfectServe, Inc., a comprehensive and secure care
team collaboration platform, was acquired by K1 Investment
Management LLC, a private equity firm investing in high-growth
private companies across North America. Terms of the acquisition
were not disclosed. Hercules initially committed $20.0 million in
venture debt financing in November 2017.
- In May 2018, Hercules’ portfolio
company RazorGator Inc., an online ticket reselling platform for
sports, theater and concert tickets, and vacation packages for
sporting events, was acquired by TickPick, an online ticket
marketplace to buy, bid on and sell tickets on sports, concerts and
other live events. Terms of the transaction were not disclosed.
Hercules initially committed $5.0 million in venture debt financing
in January 2005, and currently holds 34,783 shares of Preferred
Series AA stock as of March 31, 2018.
Portfolio Company
Activities
- In May 2018, Hercules’ portfolio
company TransEnterix, Inc. (NYSE: TRXC), a medical device
company that is digitizing the interface between the surgeon and
the patient to improve minimally invasive surgery, announced that
they had received FDA 510(k) clearance for expanded indications of
its Senhance Surgical System. With this clearance, Senhance
System’s total addressable annual procedures in the U.S. has more
than doubled to over three million. Hercules initially committed
$20.0 million in venture debt financing in May 2018.
- In June 2018, Hercules’ portfolio
company Tricida, Inc., a late-stage pharmaceutical company,
announced that its TRCA-301 trial met both its primary and
secondary endpoints in its pivotal Phase 3 double-blind randomized,
placebo-controlled, multi-center Phase 3 clinical trial in 217
chronic kidney disease (CKD) patients with metabolic acidosis.
Accompanying Footnotes:
(1) Signed non-binding term sheets are subject to
satisfactory completion of Hercules’ due diligence and final
investment committee approval process as well as negotiations of
definitive documentation with the prospective portfolio companies.
These non-binding term sheets generally convert to contractual
commitments in approximately 90 days from signing. It is important
to note that not all signed non-binding term sheets are expected to
close and do not necessarily represent future cash requirements or
investments.
About Hercules Capital, Inc.
Hercules Capital, Inc. (NYSE: HTGC) (“Hercules”) is the leading
and largest specialty finance company focused on providing senior
secured venture growth loans to high-growth, innovative venture
capital-backed companies in a broad variety of technology, life
sciences and sustainable and renewable technology industries. Since
inception (December 2003), Hercules has committed more than $7.6
billion to over 420 companies and is the lender of choice for
entrepreneurs and venture capital firms seeking growth capital
financing. Companies interested in learning more about financing
opportunities should contact info@htgc.com, or call
650.289.3060.
Hercules’ common stock trades on the New York Stock Exchange
(NYSE) under the ticker symbol "HTGC." In addition, Hercules has
four outstanding bond issuances of 6.25% Notes due 2024 (NYSE:
HTGX), 4.375% Convertible Notes due 2022, 4.625% Notes due October
2022 and 5.25% Notes due 2025 (NYSE: HCXZ).
Forward-Looking Statements
This press release may contain “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995. You should understand that under Section 27A(b)(2)(B) of
the Securities Act of 1933, as amended, and Section 21E(b)(2)(B) of
the Securities Exchange Act of 1934, as amended, or the Exchange
Act, the “safe harbor” provisions of the Private Securities
Litigation Reform Act of 1995 do not apply to forward-looking
statements made in periodic reports we file under the Exchange
Act.
The information disclosed in this press release is made as of
the date hereof and reflects Hercules most current assessment of
its historical financial performance. Actual financial results
filed with the SEC may differ from those contained herein due to
timing delays between the date of this release and confirmation of
final audit results. These forward-looking statements are not
guarantees of future performance and are subject to uncertainties
and other factors that could cause actual results to differ
materially from those expressed in the forward-looking statements
including, without limitation, the risks, uncertainties, including
the uncertainties surrounding the current market volatility, and
other factors the Company identifies from time to time in its
filings with the SEC. Although Hercules believes that the
assumptions on which these forward-looking statements are based are
reasonable, any of those assumptions could prove to be inaccurate
and, as a result, the forward-looking statements based on those
assumptions also could be incorrect. You should not place undue
reliance on these forward-looking statements. The forward-looking
statements contained in this release are made as of the date
hereof, and Hercules assumes no obligation to update the
forward-looking statements for subsequent events.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180611005368/en/
Hercules Capital, Inc.Michael Hara, 650-433-5578Investor
Relations and Corporate Communicationsmhara@htgc.com
Hercules Capital (NYSE:HTGC)
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