Edgar Filing: HERCULES TECHNOLOGY GROWTH CAPITAL INC

Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For The Quarterly Period Ended June 30, 2008

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 814-00702

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

(Exact Name of Registrant as Specified in its Charter)

Maryland

743113410

(State or Jurisdiction of

Incorporation or Organization)

(IRS Employer

Identification No.)


400 Hamilton Ave., Suite 310 Palo Alto, California 94301		94301
(Address of Principal Executive Offices)		(Zip Code)

(650) 289-3060

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods as the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES x NO ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ¨ Accelerated Filer x Non-Accelerated Filer ¨ Smaller Reporting Company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) YES ¨ NO x

On August 6, 2008, there were 32,838,904 shares outstanding of the Registrant’s common stock, $0.001 par value.

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

FORM 10-Q TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION		3

Item 1.	Consolidated Financial Statements	3

	Consolidated Statement of Assets and Liabilities as of June 30, 2008 (unaudited) and December 31, 2007	3

	Consolidated Schedule of Investments as of June 30, 2008 (unaudited)	4

	Consolidated Schedule of Investments as of December 31, 2007	18

	Consolidated Statement of Operations for the three and six-month periods ended June 30, 2008 and 2007 (unaudited)	32

	Consolidated Statement of Changes in Net Assets for the six-month periods ended June 30, 2008 and 2007 (unaudited)	33

	Consolidated Statement of Cash Flows for the six-month periods ended June 30, 2008 and 2007 (unaudited)	34

	Notes to Consolidated Financial Statements (unaudited)	35

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	46

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	58

Item 4.	Controls and Procedures	59

PART II. OTHER INFORMATION		59

Item 1.	Legal Proceedings	59

Item 1a.	Risk Factors	59

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	62

Item 3.	Defaults Upon Senior Securities	62

Item 4.	Submission of Matters to a Vote of Security Holders	62

Item 5.	Other Information	62

Item 6.	Exhibits	63

Signatures		64

PART I: FINANCIAL INFORMATION

In this Quarterly Report, the “Company,” “Hercules,” “we,” “us” and “our” refer to Hercules Technology Growth Capital, Inc. and its wholly owned subsidiaries and its affiliated securitization trusts unless the context otherwise requires.

ITEM 1.

CONSOLIDATED FINANCIAL STATEMENTS

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES

(in thousands, except per share data)


	June 30, 2008 (unaudited)			December 31, 2007
Assets
Investments:
Non-affiliate investments (cost of $589,523 and $513,106)	$	597,849		$	525,725
Affiliate investments (cost of $6,344 and $6,344)		4,247			4,247

Total investments, at value (cost of $595,867 and $519,450 respectively)		602,096			529,972
Deferred loan origination revenue		(7,896	)		(6,593	)
Cash and cash equivalents		13,851			7,856
Interest receivable		7,911			6,387
Other assets		6,604			4,321

Total assets		622,566			541,943

Liabilities
Accounts payable and accrued liabilities		7,534			6,956
Short-term credit facility		118,900			79,200
Long-term SBA Debentures		95,050			55,050

Total liabilities		221,484			141,206

Net assets	$	401,082		$	400,737

Net assets consist of:
Common stock, par value	$	33		$	33
Capital in excess of par value		397,670			393,530
Deferred stock compensation		(2,341	)		(78	)
Unrealized appreciation on investments		5,685			10,129
Accumulated realized gains on investments		5,686			819
Distributions in excess of investment income		(5,651	)		(3,696	)

Total net assets	$	401,082		$	400,737

Shares of common stock outstanding ($0.001 par value, 60,000 authorized)		32,837			32,541

Net asset value per share	$	12.21		$	12.31

See notes to consolidated financial statements (unaudited).

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

June 30, 2008

(unaudited)

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾		Value⁽³⁾
Acceleron Pharmaceuticals, Inc. (0.84%)*⁽⁴⁾	Drug Discovery	Senior Debt Matures June 2009 Interest rate 10.25%	$	2,588	$	2,549	$	2,549
		Preferred Stock Warrants				69		702
		Preferred Stock Warrants				35		127
Acceleron Pharmaceuticals, Inc. (0.45%)		Preferred Stock				1,243		1,805

Total Acceleron Pharmaceuticals, Inc.						3,896		5,183
Aveo Pharmaceuticals, Inc. (1.99%)⁽⁴⁾	Drug Discovery	Senior Debt Matures November 2011 Interest rate 11.13%	$	7,857		7,741		7,741
		Preferred Stock Warrants				144		130
		Preferred Stock Warrants				46		46
		Preferred Stock Warrants				104		53

Total Aveo Pharmaceuticals, Inc.						8,035		7,970
Elixir Pharmaceuticals, Inc. (3.05%)⁽⁴⁾	Drug Discovery	Senior Debt Matures December 2010 Interest rate Prime + 2.45%	$	11,908		11,780		11,780
		Preferred Stock Warrants				217		438

Total Elixir Pharmaceuticals, Inc.						11,997		12,218
EpiCept Corporation (1.02%)⁽⁴⁾	Drug Discovery	Senior Debt Matures April 2009 Interest rate 15.00%	$	3,876		3,573		2,573
		Senior Debt Matures June 2009 Interest rate 15.000%	$	1,000		1,000		1,000
		Common Stock Warrants				423		332
		Common Stock Warrants				161		139
		Common Stock Warrants				40		35

Total EpiCept Corporation						5,197		4,079
Horizon Therapeutics, Inc. (0.91%)⁽⁴⁾	Drug Discovery	Senior Debt Matures May 2011 Interest rate 8.75%	$	1,200		1,059		1,059
		Senior Debt Matures April 2011 Interest rate 6.50%	$	2,400		2,400		2,400
		Preferred Stock Warrants				178		178

Total Horizon Therapeutics, Inc.						3,637		3,637

Inotek Pharmaceuticals Corp. (0.37%)	Drug Discovery	Preferred Stock				1,500		1,500

Total Inotek Pharmaceuticals Corp.						1,500		1,500
Memory Pharmaceticals Corp. (3.39%)⁽⁴⁾	Drug Discovery	Senior Debt Matures December 2010 Interest rate 11.45%	$	14,569		13,422		13,422
		Common Stock Warrants				1,751		156

Total Memory Pharmaceticals Corp.						15,173		13,578
Merrimack Pharmaceuticals, Inc. (0.22%)⁽⁴⁾	Drug Discovery	Convertible Senior Debt Matures October 2008 Interest rate 11.15%	$	342		334		334
		Preferred Stock Warrants				155		549
Merrimack Pharmaceuticals, Inc. (0.69%)		Preferred Stock				2,000		2,787

Total Merrimack Pharmaceuticals, Inc.						2,489		3,670

Neosil, Inc. (0.00%)	Drug Discovery	Preferred Stock Warrants				83		—

Total Neosil, Inc.						83		—

See notes to consolidated financial statements (unaudited)

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

June 30, 2008

(unaudited)

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
Paratek Pharmaceuticals, Inc. (0.12%)⁽⁴⁾	Drug Discovery	Senior Debt Matures June 2008 Interest rate 11.10%	$	378	378	378
		Preferred Stock Warrants			137	122
Paratek Pharmaceuticals, Inc. (0.25%)		Preferred Stock			1,000	1,000

Total Paratek Pharmaceuticals, Inc.					1,515	1,500
Portola Pharmaceuticals, Inc. (3.58%)⁽⁴⁾	Drug Discovery	Senior Debt Matures September 2010 Interest rate Prime + 1.75%	$	14,167	14,080	14,080
		Preferred Stock Warrants			152	291

Total Portola Pharmaceuticals, Inc.					14,232	14,371
Recoly, N.V. (0.74%)⁽⁵⁾	Drug Discovery	Senior Debt Matures May 2012 Interest rate Prime + 4.25%	$	3,000	3,000	3,000

Total Recoly, N.V.					3,000	3,000

Total Drug Discovery (17.62%)					70,754	70,706

Affinity Videonet, Inc. (1.62%)⁽⁴⁾	Communications & Networking	Senior Debt Matures June 2012 Interest rate Prime + 4.50%	$	4,000	3,927	3,927
		Senior Debt Matures June 2012 Interest rate Prime + 5.50%	$	2,000	2,000	2,000
		Revolving Line of Credit Matures June 2012 Interest rate Prime + 3.50%	$	500	500	500
		Preferred Stock Warrants			74	71

Total Affinity Videonet, Inc.					6,501	6,498
E-band Communications, Inc. (0.50%)⁽⁶⁾	Communications & Networking	Preferred Stock			2,000	2,000

Total E-Band Communications, Inc.					2,000	2,000
IKANO Communications, Inc. (4.26%)⁽⁴⁾	Communications & Networking	Senior Debt Matures March 2011 Interest rate 11.00%	$	16,657	16,657	16,657
		Preferred Stock Warrants			46	175
		Preferred Stock Warrants			72	264

Total IKANO Communications, Inc.					16,775	17,096
Kadoink, Inc. (0.06%)	Communications & Networking	Senior Debt Matures April 2011 Interest rate Prime + 2.00%	$	250	178	178
		Preferred Stock Warrants			73	68
Kadoink, Inc. (0.06%)		Preferred Stock			250	250

Total Kadoink, Inc.					501	496
Neonova Holding Company (2.24%)	Communications & Networking	Senior Debt Matures September 2012 Interest rate Prime + 3.25%	$	9,000	8,916	8,916
		Preferred Stock Warrants			94	77
Neonova Holding Company (0.06%)		Preferred Stock			250	250

Total Neonova Holding Company					9,260	9,243

See notes to consolidated financial statements (unaudited)

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

June 30, 2008

(unaudited)

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
Peerless Network, Inc. (0.37%)⁽⁴⁾	Communications & Networking	Senior Debt Matures June 2011 Interest rate Prime + 3.25%	$	1,500	1,415	1,415
		Preferred Stock Warrants			95	75
Peerless Network, Inc. (0.25%)		Preferred Stock			1,000	1,000

Total Peerless Network, Inc.					2,510	2,490
Ping Identity Corporation (0.28%)⁽⁴⁾	Communications & Networking	Senior Debt Matures June 2009 Interest rate 11.50%	$	1,118	1,105	1,105
		Preferred Stock Warrants			51	6

Total Ping Identity Corporation					1,156	1,111
Purcell Systems, Inc. (2.16%)	Communications & Networking	Senior Debt Matures June 2009 Interest rate Prime + 3.50%	$	1,951	1,872	1,872
		Revolving Line of Credit Matures June 2008 Interest rate Prime + 2.00%	$	6,000	6,000	6,000
		Preferred Stock Warrants			123	781

Total Purcell Systems, Inc.					7,995	8,653
Rivulet Communications, Inc. (0.66%)⁽⁴⁾	Communications & Networking	Senior Debt Matures September 2009 Interest rate 10.60%	$	2,656	2,633	2,633
		Preferred Stock Warrants			51	—
Rivulet Communications, Inc. (0.00%)		Preferred Stock			250	4

Total Rivulet Communications, Inc.					2,934	2,637
Seven Networks, Inc. (1.97%)⁽⁴⁾	Communications & Networking	Senior Debt Matures April 2010 Interest rate Prime + 3.75%	$	7,580	7,483	7,483
		Preferred Stock Warrants			174	413

Total Seven Networks, Inc.					7,657	7,896
Simpler Networks Corp. (1.08%)⁽⁴⁾⁽⁷⁾	Communications & Networking	Senior Debt Matures July 2009 Interest rate 18.25%	$	3,914	4,571	4,321
		Preferred Stock Warrants			160	—
Simpler Networks Corp. (0.00%)		Preferred Stock			500	—

Total Simpler Networks Corp.					5,231	4,321
Stoke, Inc. (0.86%)	Communications & Networking	Senior Debt Matures August 2010 Interest rate 10.55%	$	2,176	2,139	2,139
		Senior Debt Matures August 2010 Interest rate Prime + 2.30%	$	1,208	1,208	1,208
		Preferred Stock Warrants			53	119

Total Stoke, Inc.					3,400	3,466

See notes to consolidated financial statements (unaudited)

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

June 30, 2008

(unaudited)

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
Tectura Corporation (5.57%)⁽⁴⁾	Communications & Networking	Senior Debt Matures March 2012 Interest rate LIBOR + 6.15%	$	8,187	8,250	8,250
		Revolving Line of Credit Matures March 2008 Interest rate LIBOR + 5.15%	$	12,000	12,000	12,000
		Revolving Line of Credit Matures March 2009 Interest rate LIBOR + 7.25%	$	2,000	2,000	2,000
		Preferred Stock Warrants			51	89

Total Tectura Corporation					22,301	22,339
Teleflip, Inc. (0.00%)⁽⁷⁾	Communications & Networking	Senior Debt Matures May 2010 Interest rate Prime + 2.75%	$	906	900	—
		Preferred Stock Warrants			10	—

Total Teleflip, Inc.					910	—
Wireless Channels, Inc. (3.01%)	Communications & Networking	Senior Debt - Second Lien Matures April 2010 Interest rate Prime + 4.25%	$	10,000	10,226	10,226
		Senior Debt - Second Lien Matures April 2010 Interest rate Prime + 4.25%	$	1,365	1,365	1,365
		Preferred Stock Warrants			156	495

Total Wireless Channels, Inc.					11,747	12,086
Zayo Bandwith, Inc. (6.24%)⁽⁴⁾	Communications & Networking	Senior Debt Matures April 2013 Interest rate Prime + 3.50%	$	25,000	25,000	25,000

Total Zayo Bandwith, Inc.					25,000	25,000

Total Communications & Networking (31.25%)					125,878	125,332

Atrenta, Inc. (2.30%)⁽⁴⁾	Software	Senior Debt Matures January 2010 Interest rate 11.50%	$	2,961	2,874	2,874
		Revolving Line of Credit Matures October 2009 Interest rate Prime + 2.00%	$	6,000	6,000	6,000
		Preferred Stock Warrants			102	225
		Preferred Stock Warrants			34	73
		Preferred Stock Warrants			71	53
Atrenta, Inc. (0.05%)		Preferred Stock			250	220

Total Atrenta, Inc.					9,331	9,445
Blurb, Inc. (0.70%)	Software	Senior Debt Matures December 2009 Interest rate 9.55%	$	2,018	2,005	2,005
		Senior Debt Matures June 2011 Interest rate Prime + 3.50%	$	750	750	750
		Preferred Stock Warrants			25	33

Total Blurb, Inc.					2,780	2,788
Braxton Technologies, LLC. (2.49%)	Software	Senior Debt Matures July 2012 Interest rate Libor + 7.25%	$	10,000	9,813	9,813
		Preferred Stock Warrants			189	194

Total Braxton Technologies, LLC.					10,002	10,007

See notes to consolidated financial statements (unaudited)

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

June 30, 2008

(unaudited)

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
Bullhorn, Inc. (0.25%)	Software	Senior Debt Matures March 2010 Interest rate Prime + 3.75%	$	970	938	938
		Preferred Stock Warrants			43	45

Total Bullhorn, Inc.					981	983
Cittio, Inc. (0.26%)	Software	Senior Debt Matures April 2010 Interest rate 11.00%	$	963	940	940
		Preferred Stock Warrants			53	113

Total Cittio, Inc.					993	1,053
Forescout Technologies, Inc. (0.52%)⁽⁴⁾	Software	Senior Debt Matures August 2009 Interest rate 11.15%	$	1,467	1,438	1,438
		Revolving Line of Credit Matures August 2007 Interest rate Prime + 1.49%	$	500	500	500
		Preferred Stock Warrants			99	157

Total Forescout Technologies, Inc.					2,037	2,095
GameLogic, Inc. (0.67%)⁽⁴⁾	Software	Senior Debt Matures December 2009 Interest rate Prime + 4.125%	$	2,734	2,688	2,688
		Preferred Stock Warrants			93	—

Total GameLogic, Inc.					2,781	2,688
Gomez, Inc. (0.12%)⁽⁴⁾	Software	Preferred Stock Warrants			35	484

Total Gomez, Inc.					35	484
HighRoads, Inc. (0.01%)⁽⁴⁾	Software	Preferred Stock Warrants			44	58

Total HighRoads, Inc.					44	58
Infologix, Inc. (4.74%)⁽⁴⁾	Software	Senior Debt Matures May 2012 Interest rate Prime + 4.50%	$	10,000	10,000	10,000
		Revolving Line of Credit Matures November 2009 Interest rate Prime + 2.50%	$	9,000	9,000	9,000

Total Infologix, Inc.					19,000	19,000
Intelliden, Inc. (0.49%)	Software	Senior Debt Matures February 2010 Interest rate 13.20%	$	1,895	1,887	1,887
		Preferred Stock Warrants			18	72

Total Intelliden, Inc.					1,905	1,959
Oatsystems, Inc. (0.00%)⁽⁴⁾	Software	Preferred Stock Warrants			67	—

Total Oatsystems, Inc.					67	—
Proficiency, Inc. (0.37%)⁽⁵⁾⁽⁶⁾	Software	Senior Debt Matures August 2012 Interest rate 8.00%	$	1,500	1,497	1,497
		Preferred Stock Warrants			97	—
Proficiency, Inc. (0.19%)		Preferred Stock			2,750	750

Total Proficiency, Inc.					4,344	2,247
PSS Systems, Inc. (0.82%)⁽⁴⁾	Software	Senior Debt Matures March 2010 Interest rate 10.74%	$	3,239	3,210	3,210
		Preferred Stock Warrants			51	92

Total PSS Systems, Inc.					3,261	3,302

See notes to consolidated financial statements (unaudited)

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

June 30, 2008

(unaudited)

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
Rockyou, Inc. (0.75%)	Software	Senior Debt Matures May 2011 Interest rate Prime + 2.50%	$	3,000	3,000	3,000

Total Rockyou, Inc.					3,000	3,000
Savvion, Inc. (1.51%)⁽⁴⁾	Software	Senior Debt Matures April 2009 Interest rate Prime + 3.45%	$	811	811	811
		Revolving Line of Credit Matures March 2009 Interest rate Prime + 4.45%	$	3,459	3,459	3,459
		Revolving Line of Credit Matures March 2009 Interest rate Prime + 3.00%	$	1,526	1,526	1,526
		Preferred Stock Warrants			52	243

Total Savvion, Inc.					5,848	6,039

Sportvision, Inc. (0.01%)	Software	Preferred Stock Warrants			39	45

Total Sportvision, Inc.					39	45
WildTangent, Inc. (0.51%)	Software	Senior Debt Matures March 2011 Interest rate 9.65%	$	2,000	1,815	1,815
		Preferred Stock Warrants			240	206

Total WildTangent, Inc.					2,055	2,021

Total Software (16.76%)					68,503	67,214

Agami Systems, Inc. (0.93%)⁽⁴⁾	Electronics & Computer Hardware	Senior Debt Matures August 2009 Interest rate 11.00%	$	3,746	3,714	3,714
		Preferred Stock Warrants			85	—

Total Agami Systems, Inc.					3,799	3,714
Luminus Devices, Inc. (3.00%)⁽⁴⁾	Electronics & Computer Hardware	Senior Debt Matures August 2009 Interest rate 12.8750%	$	11,792	11,421	11,421
		Preferred Stock Warrants			183	126
		Preferred Stock Warrants			83	69
		Preferred Stock Warrants			334	399

Total Luminus Devices, Inc.					12,021	12,015
Maxvision Holding, LLC. (3.09%)⁽⁴⁾	Electronics & Computer Hardware	Senior Debt Matures April 2012 Interest rate Prime + 5.50%	$	5,000	5,063	5,063
		Senior Debt Matures April 2012 Interest rate Prime + 2.25%	$	5,417	5,417	5,417
		Revolving Line of Credit Matures September 2012 Interest rate Prime +2.25%	$	1,972	1,898	1,898
Maxvision Holding, LLC. (0.02%)		Preferred Stock			82	82

Total Maxvision Holding, LLC					12,460	12,460
NetEffect, Inc. (0.50%)	Electronics & Computer Hardware	Senior Debt Matures May 2010 Interest rate 11.95%	$	2,058	2,018	2,018
		Preferred Stock Warrants			46	—

Total NetEffect, Inc.					2,064	2,018

See notes to consolidated financial statements (unaudited)

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

June 30, 2008

(unaudited)

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
Shocking Technologies, Inc. (0.07%)	Electronics & Computer Hardware	Senior Debt Matures December 2010 Interest rate 9.75%	$	250	201	201
		Preferred Stock Warrants			63	90

Total Shocking Technologies, Inc.					264	291
SiCortex, Inc. (2.34%)	Electronics & Computer Hardware	Senior Debt Matures December 2010 Interest rate 10.95%	$	8,971	8,856	8,856
		Preferred Stock Warrants			165	525

Total SiCortex, Inc.					9,021	9,381
Spatial Photonics, Inc. (0.97%)⁽⁴⁾	Electronics & Computer Hardware	Senior Debt Matures May 2011 Interest rate 10.75%	$	3,751	3,651	3,651
		Preferred Stock Warrants			130	234
Spatial Photonics, Inc. (0.12%)		Preferred Stock			500	500

Total Spatial Photonics Inc.					4,281	4,385
VeriWave, Inc. (1.06%)	Electronics & Computer Hardware	Senior Debt Matures May 2010 Interest rate 10.75%	$	3,359	3,326	3,326
		Revolving Line of Credit Matures May 2008 Interest rate Prime +1.00%	$	922	922	922
		Preferred Stock Warrants			55	5

Total VeriWave, Inc.					4,303	4,253
ViDeOnline Communications, Inc. (0.07.%)⁽⁴⁾	Electronics & Computer Hardware	Preferred Stock Warrants			298	288

Total ViDeOnline Communications, Inc.					298	288

Total Electronics & Computer Hardware (12.17%)					48,511	48,805

Aegerion Pharmaceuticals, Inc. (2.06%)⁽⁴⁾	Specialty Pharmaceuticals	Senior Debt Matures August 2010 Interest rate Prime + 2.50%	$	8,080	8,038	8,038
		Preferred Stock Warrants			69	232
Aegerion Pharmaceuticals, Inc. (0.25%)		Preferred Stock			1,000	1,000

Total Aegerion Pharmaceuticals, Inc.					9,107	9,270
Panacos Pharmaceuticals, Inc. (4.84%)⁽⁴⁾	Specialty Pharmaceuticals	Senior Debt Matures January 2011 Interest rate 11.20%	$	20,000	19,395	19,395
		Common Stock Warrants			876	37
Panacos Pharmaceuticals, Inc. (0.02%)		Common Stock			410	90

Total Panacos Pharmaceuticals, Inc.					20,681	19,522
Quatrx Pharmaceuticals Company (5.03%)⁽⁴⁾	Specialty Pharmaceuticals	Senior Debt Matures October 2011 Interest rate Prime + 4.85%	$	20,000	19,694	19,694
		Preferred Stock Warrants			220	205
		Preferred Stock Warrants			307	278
Quatrx Pharmaceuticals Company (0.20%)		Preferred Stock			750	750

Total Quatrx Pharmaceuticals Company					20,971	20,927

Total Specialty Pharmaceuticals (12.40%)					50,759	49,719

See notes to consolidated financial statements (unaudited)

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

June 30, 2008

(unaudited)

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
Annie’s, Inc. (1.01%)	Consumer & Business Products	Senior Debt - Second Lien Matures April 2011 Interest rate LIBOR + 6.50%	$	4,000	3,721	3,721
		Preferred Stock Warrants			321	320

Total Annie’s, Inc.					4,042	4,041
BabyUniverse, Inc. (0.01%)⁽⁴⁾	Consumer & Business Products	Common Stock			267	52

Total BabyUniverse, Inc.					267	52
IPA Holdings, LLC. (4.17%)⁽⁴⁾	Consumer & Business Products	Senior Debt Matures November 2012 Interest rate Prime + 3.50%	$	10,000	10,000	10,000
		Senior Debt Matures May 2013 Interest rate Prime + 6.00%	$	6,500	6,507	6,507
		Revolving Line of Credit Matures November 2012 Interest rate Prime + 2.50%	$	200	200	200
IPA Holding, LLC. (0.12%)		Preferred Stock			500	500

Total IPA Holding, LLC.					17,207	17,207
Market Force Information, Inc. (0.01%)⁽⁴⁾	Consumer & Business Products	Preferred Stock Warrants			24	55
Market Force Information, Inc. (0.07%)		Preferred Stock			500	280

Total Market Force Information, Inc.					524	335
OnTech Operations, Inc. (0.83%)	Consumer & Business Products	Senior Debt Matures June 2011 Interest rate Prime + 6.375%	$	3,000	2,330	2,330
		Revolving Line of Credit Matures June 2009 Interest rate Prime +5.625%	$	315	315	315
		Preferred Stock Warrants			452	462
		Preferred Stock Warrants			218	228
OnTech Operations, Inc. (0.25%)		Preferred Stock			1,000	1,000

Total OnTech Operations, Inc.					4,315	4,335
Wageworks, Inc. (0.14%)⁽⁴⁾	Consumer & Business Products	Preferred Stock Warrants			252	555
Wageworks, Inc. (0.05%)		Preferred Stock			250	179

Total Wageworks, Inc.					502	734

Total Consumer & Business Products (6.66%)					26,857	26,704


Custom One Design, Inc. (0.25%)	Semiconductors	Senior Debt Matures September 2010 Interest rate 11.50%	$	969	956	956
		Common Stock Warrants			18	51

Total Custom One Design, Inc.					974	1,007
Enpirion, Inc. (1.25%)	Semiconductors	Senior Debt Matures August 2011 Interest rate Prime + 4.00%	$	5,000	4,897	4,897
		Preferred Stock Warrants			105	107

Total Enpirion, Inc.					5,002	5,004

See notes to consolidated financial statements (unaudited)

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

June 30, 2008

(unaudited)

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
iWatt Inc. (1.31%)⁽⁴⁾	Semiconductors	Senior Debt Matures September 2009 Interest rate Prime + 2.75%	$	2,963	2,908	2,908
		Revolving Line of Credit Matures September 2007 Interest rate Prime + 1.75%	$	1,635	1,635	1,635
		Preferred Stock Warrants			46	107
		Preferred Stock Warrants			51	56
		Preferred Stock Warrants			73	70
		Preferred Stock Warrants			459	462
iWatt Inc. (0.24%)		Preferred Stock			490	949

Total iWatt Inc.					5,662	6,187
NEXX Systems, Inc. (2.25%)⁽⁴⁾	Semiconductors	Senior Debt Matures February 2010 Interest rate Prime + 2.75%	$	3,622	3,530	3,530
		Revolving Line of Credit Matures December 2009 Interest rate Prime + 1.75%	$	5,725	5,000	5,000
		Preferred Stock Warrants			165	510

Total NEXX Systems, Inc.					8,695	9,040
Quartics, Inc. (1.07%)⁽⁴⁾	Semiconductors	Senior Debt Matures August 2010 Interest rate 11.05%	$	281	244	244
		Senior Debt Matures August 2010 Interest rate 8.80%	$	3,928	3,928	3,928
		Preferred Stock Warrants			53	134

Total Quartics, Inc.					4,225	4,306
Solarflare Communications, Inc. (0.19%)⁽⁴⁾	Semiconductors	Senior Debt Matures August 2010 Interest rate 11.75%	$	586	528	528
		Preferred Stock Warrants			83	228
Solarflare Communications, Inc. (0.16%)		Preferred Stock			641	641

Total Solarflare Communications, Inc.					1,252	1,397

Total Semiconductors (6.72%)					25,810	26,941

Labopharm USA, Inc. (3.90%)⁽⁴⁾⁽⁵⁾	Drug Delivery	Senior Debt Matures July 2008 Interest rate 11.95%	$	15,000	14,628	14,628
		Common Stock Warrants			458	997

Total Labopharm USA, Inc.					15,086	15,625
Transcept Pharmaceuticals, Inc. (1.36%)⁽⁴⁾	Drug Delivery	Senior Debt Matures October 2009 Interest rate 10.69%	$	5,223	5,189	5,189
		Preferred Stock Warrants			36	105
		Preferred Stock Warrants			51	146
Transcept Pharmaceuticals, Inc. (0.08%)		Preferred Stock			500	338

Total Transcept Pharmaceuticals, Inc.					5,776	5,778

Total Drug Delivery (5.34%)					20,862	21,403


BARRX Medical, Inc. (0.02%)	Therapeutic	Preferred Stock Warrants			63	67
BARRX Medical, Inc. (0.37%)		Preferred Stock			1,500	1,500

Total BARRX Medical, Inc.					1,563	1,567
EKOS Corporation (1.38%)	Therapeutic	Senior Debt Matures November 2010 Interest rate Prime + 2.00%	$	5,000	4,776	4,776
		Preferred Stock Warrants			175	497
		Preferred Stock Warrants			153	265

Total EKOS Corporation					5,104	5,538

See notes to consolidated financial statements (unaudited)

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

June 30, 2008

(unaudited)

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
Gynesonics, Inc. (0.02%)⁽⁴⁾	Therapeutic	Preferred Stock Warrants			18	97
Gynesonics, Inc. (0.07%)		Preferred Stock			250	270

Total Gynesonics, Inc.					268	367

Light Science Oncology, Inc. (0.04%)	Therapeutic	Preferred Stock Warrants			99	175

Total Light Science Oncology, Inc.					99	175
Novasys Medical, Inc. (1.33%)⁽⁴⁾	Therapeutic	Senior Debt Matures January 2010 Interest rate 9.70%	$	5,142	5,095	5,095
		Preferred Stock Warrants			71	169
		Preferred Stock Warrants			54	55
Novasys Medical, Inc.(0.14%)		Preferred Stock			556	556

Total Novasys Medical, Inc.					5,776	5,875

Power Medical Interventions, Inc. (0.00%)	Therapeutic	Common Stock Warrants			20	1

Total Power Medical Interventions, Inc.					20	1

Total Therapeutic (3.37%)					12,830	13,523

Cozi Group, Inc. (0.02%)	Internet Consumer & Business Services	Preferred Stock Warrants			147	89
Cozi Group, Inc. (0.06%)		Preferred Stock			177	251

Total Cozi Group, Inc.					324	340
Invoke Solutions, Inc. (0.42%)⁽⁴⁾	Internet Consumer & Business Services	Senior Debt Matures December 2008 Interest rate Prime + 3.75%	$	1,605	1,588	1,588
		Preferred Stock Warrants			56	80
		Preferred Stock Warrants			26	25

Total Invoke Solutions, Inc.					1,670	1,693
Prism Education Group Inc. (0.48%)	Internet Consumer & Business Services	Senior Debt Matures December 2010 Interest rate 11.25%	$	1,843	1,814	1,814
		Preferred Stock Warrants			43	99

Total Prism Education Group Inc.					1,857	1,913
RazorGator Interactive Group, Inc. (1.71%)	Internet Consumer & Business Services	Revolving Line of Credit Matures January 2009 Interest rate Prime + 1.80%	$	3,000	3,000	3,000
		Preferred Stock Warrants			13	3,520
		Preferred Stock Warrants			28	345
RazorGator Interactive Group, Inc. (1.37%)		Preferred Stock			1,000	5,487

Total RazorGator Interactive Group, Inc.					4,041	12,352
Serious USA, Inc. (0.51%)	Internet Consumer & Business Services	Senior Debt Matures Februrary 2011 Interest rate Prime + 3.00%	$	2,450	2,383	1,383
		Revolving Line of Credit Matures July 2008 Interest rate Prime + 2.00%	$	654	654	654
		Preferred Stock Warrants			94	5

Total Serious USA, Inc.					3,131	2,042

See notes to consolidated financial statements (unaudited)

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

June 30, 2008

(unaudited)

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
Spa Chakra, Inc. (0.63%)	Internet Consumer & Business Services	Senior Debt Matures June 2010 Interest rate 14.45%	$	2,500	2,500	2,500

Total Spa Chakra, Inc.					2,500	2,500

Total Internet Consumer & Business Services (5.20%)					13,523	20,840

Lilliputian Systems, Inc. (1.46%)⁽⁴⁾	Energy	Senior Debt Matures March 2010 Interest rate 9.75%	$	5,791	5,772	5,772
		Preferred Stock Warrants			48	91

Total Lilliputian Systems, Inc.					5,820	5,863

Total Energy (1.46%)					5,820	5,863

Active Response Group, Inc. (2.47%)	Information Services	Senior Debt Matures March 2012 Interest rate LIBOR + 6.55%	$	9,795	9,694	9,694
		Preferred Stock Warrants			92	81
		Common Stock Warrants			46	123

Total Active Response Group, Inc.					9,832	9,898
Box.net, Inc. (0.08%)	Information Services	Senior Debt Matures June 2011 Interest rate Prime + 1.50%	$	322	250	250
		Preferred Stock Warrants			73	68

Total Box.net, Inc.					323	318
Buzznet, Inc. (0.19%)	Information Services	Senior Debt Matures March 2010 Interest rate 10.25%	$	737	732	732
		Preferred Stock Warrants			9	14
Buzznet, Inc. (0.06%)		Preferred Stock			250	250

Total Buzznet, Inc.					991	996
hi5 Networks, Inc. (2.02%)	Information Services	Senior Debt Matures January 2011 Interest rate Prime + 2.5%	$	3,000	3,000	3,000
		Senior Debt Matures June 2011 Interest rate Prime + 0.5%	$	2,950	2,950	2,950
		Revolving Line of Credit Matures July 2011 Interest rate 6.50%	$	987	987	987
		Revolving Line of Credit Matures June 2011 Interest rate 7.75%	$	1,000	835	835
		Preferred Stock Warrants			212	331

Total hi5 Networks, Inc.					7,984	8,103
Jab Wireless, Inc. (3.27%)	Information Services	Senior Debt Matures January 2012 Interest rate 10.75%	$	3,097	2,884	2,884
		Senior Debt Matures January 2012 Interest rate 10.00%	$	1,903	1,903	1,903
		Senior Debt Matures January 2012 Interest rate 9.50%	$	3,000	3,000	3,000
		Senior Debt Matures January 2012 Interest rate 8.50%	$	5,000	5,000	5,000
		Preferred Stock Warrants			265	310

Total Jab Wireless, Inc.					13,052	13,097

See notes to consolidated financial statements (unaudited)

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

June 30, 2008

(unaudited)

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
Solutionary, Inc. (1.94%)	Information Services	Senior Debt Matures June 2010 Interest rate LIBOR + 5.50%	$	6,000	6,058	6,058
		Revolving Line of Credit Matures June 2010 Interest rate LIBOR + 5.00%	$	1,500	1,528	1,528
		Preferred Stock Warrants			94	202
		Preferred Stock Warrants			2	6
Solutionary, Inc. (0.06%)		Preferred Stock			250	250

Total Solutionary, Inc.					7,932	8,044
The Generation Networks, Inc. (4.02%)⁽⁴⁾	Information Services	Senior Debt Matures March 2012 Interest rate Prime + 4.50%	$	16,088	16,108	16,108
The Generation Networks, Inc. (0.12%)		Preferred Stock			500	500

Total The Generation Networks, Inc.					16,608	16,608
Wallop Technologies, Inc. (0.04%)	Information Services	Senior Debt Matures March 2010 Interest rate 10.00%	$	180	176	176
		Preferred Stock Warrants			7	—

Total Wallop Technologies, Inc.					183	176
Zeta Interactive Corporation (3.72%) ⁽⁴⁾	Information Services	Senior Debt Matures November 2011 Interest rate Prime +2.00%	$	6,882	6,727	6,727
		Senior Debt Matures November 2011 Interest rate Prime +3.00%	$	8,000	8,000	8,000
		Preferred Stock Warrants			172	203
Zeta Interactive Corporation (0.13%)		Preferred Stock			500	500

Total Zeta Interactive Corporation					15,399	15,430

Total Information Services (18.12%)					72,304	72,670


Novadaq Technologies, Inc. (0.11%)	Diagnostic	Common Stock			1,626	436

Total Novadaq Technologies, Inc.					1,626	436
Optiscan Biomedical, Corp. (2.55%)	Diagnostic	Senior Debt Matures June 2011 Interest rate 10.25%	$	10,000	9,329	9,329
		Preferred Stock Warrants			760	908
Optiscan Biomedical, Corp. (0.63%)		Preferred Stock			3,000	2,515

Total Optiscan Biomedical, Corp.					13,089	12,752

Total Diagnostic (3.29%)					14,715	13,188

Guava Technologies, Inc. (1.29%)⁽⁴⁾	Biotechnology Tools	Senior Debt Matures July 2009 Interest rate Prime + 3.25%	$	2,854	2,796	2,796
		Convertible Debt			250	250
		Revolving Line of Credit Matures December 2007 Interest rate Prime + 2.00%	$	1,875	1,875	1,875
		Preferred Stock Warrants			105	179
		Preferred Stock Warrants			69	66

Total Guava Technologies, Inc.					5,095	5,166
Kamada, LTD. (2.73%)⁽⁵⁾	Biotechnology Tools	Senior Debt Matures November 2011 Interest rate 10.60%	$	11,000	10,640	10,640
		Common Stock Warrants			429	323

Total Kamada, LTD.					11,069	10,963

See notes to consolidated financial statements (unaudited)

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

June 30, 2008

(unaudited)

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾		Value⁽³⁾
NuGEN Technologies, Inc. (0.75%)	Biotechnology Tools	Senior Debt Matures March 2010 Interest rate Prime + 3.45%	$	1,706		1,680		1,680
		Senior Debt Matures November 2010 Interest rate Prime + 1.70%	$	1,000		1,000		1,000
		Preferred Stock Warrants				44		314
		Preferred Stock Warrants				33		29
NuGEN Technologies, Inc. (0.12%)		Preferred Stock				500		500

Total NuGEN Technologies, Inc.						3,257		3,523

Total Biotechnology Tools (4.89%)						19,421		19,652

Crux Biomedical, Inc. (0.38%)	Surgical Devices	Senior Debt Matures October 2010 Interest rate Prime + 1.75%	$	1,500		1,475		1,475
		Preferred Stock Warrants				37		64
Crux Biomedical, Inc. (0.06%)		Preferred Stock				250		250

Total Crux Biomedical, Inc.						1,762		1,789
Diomed Holdings, Inc. (0.00%)⁽⁴⁾	Surgical Devices	Common Stock Warrants				43		—

Total Diomed Holdings, Inc.						43		—
Transmedics, Inc. (1.51%)⁽⁴⁾	Surgical Devices	Senior Debt Matures December 2011 Interest rate Prime + 5.25%	$	6,000		5,868		5,868
		Preferred Stock Warrants				140		170

Total Transmedics, Inc.						6,008		6,038

Total Surgical Devices (1.95%)						7,813		7,827

Glam Media, Inc. (1.23%)	Media/Content/ Info	Revolving Line of Credit Matures April 2009 Interest rate Prime + 1.25%	$	5,000		4,636		4,636
		Preferred Stock Warrants				482		299

Total Glam Media, Inc.						5,118		4,935
Waterfront Media Inc. (1.44%)⁽⁴⁾	Media/Content/ Info	Senior Debt Matures December 2010 Interest rate Prime + 3.00%	$	3,362		3,329		3,329
		Revolving Line of Credit Matures March 2008 Interest rate Prime + 1.25%	$	2,000		2,000		2,000
		Preferred Stock Warrants				60		445
Waterfront Media Inc. (0.25%)		Preferred Stock				1,000		1,000

Total Waterfront Media Inc.						6,389		6,774

Total Media/Content/Info (2.92%)						11,507		11,709

Total Investments (150.12%)					$	595,867	$	602,096

See notes to consolidated financial statements (unaudited)

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

June 30, 2008

(Continued)

*	Value as a percent of net assets

(1)	Preferred and common stock, warrants, and equity interests are generally non-income producing.

(2)	Gross unrealized appreciation, gross unrealized depreciation, and net appreciation for federal income tax purposes totaled $15,489, $13,138 and $2,351, respectively. The tax cost of investments is $599,745.

(3)

Except for warrants in six publicly traded companies and common stock in three publicly traded companies, all investments are restricted at June 30, 2008 and were valued at fair value as determined in good faith by the Board of Directors. No unrestricted securities of the same issuer are outstanding. The Company uses the Standard Industrial Code for classifying the industry grouping of its portfolio companies.

(4)

Debt and warrant investments of this portfolio company have been pledged as collateral under the Credit Facility. Citigroup has an equity participation right on loans collateralized under the Credit Facility. The value of their participation right on unrealized gains in the related equity investments was approximately $785,000 at June 30, 2008 and is included in accrued liabilities and reduces the unrealized gain recognized by the Company at June 30, 2008.

(5)	Non-U.S. company or the company’s principal place of business is outside the United States.

(6)	Affiliate investment that is defined under the Investment Company Act of 1940 as companies in which HTGC owns as least 5% but not more than 25% of the voting securities of the company. All other investments are less than 5% owned.

(7)	Debt is on non-accrual status at June 30, 2008, and is therefore considered non-income producing.

See notes to consolidated financial statements (unaudited).

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2007

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾		Value⁽³⁾
Acceleron Pharmaceuticals, Inc. (0.94%)*⁽⁴⁾	Drug Discovery	Senior Debt Matures June 2009 Interest rate 10.25%	$	3,237	$	3,184	$	3,184
		Preferred Stock Warrants				69		472
		Preferred Stock Warrants				35		109
Acceleron Pharmaceuticals, Inc. (0.45%)		Preferred Stock				1,243		1,804

Total Acceleron Pharmaceuticals, Inc.						4,531		5,569

Aveo Pharmaceuticals, Inc. (3.06%)⁽⁴⁾	Drug Discovery	Senior Debt Matures September 2009 Interest rate 10.75%	$	12,078		11,984		11,984
		Preferred Stock Warrants				144		204
		Preferred Stock Warrants				46		74

Total Aveo Pharmaceuticals, Inc.						12,174		12,262

Elixir Pharmaceuticals, Inc. (3.58%)⁽⁴⁾	Drug Discovery	Senior Debt Matures June 2010 Interest rate Prime + 2.45%	$	13,997		13,836		13,836
		Preferred Stock Warrants				217		511

Total Elixir Pharmaceuticals, Inc.						14,053		14,347

EpiCept Corporation (1.77%)⁽⁴⁾	Drug Discovery	Senior Debt Matures August 2009 Interest rate 11.70%	$	7,307		6,878		6,878
		Common Stock Warrants				423		214

Total EpiCept Corporation						7,301		7,092

Horizon Therapeutics, Inc. (0.30%)⁽⁴⁾	Drug Discovery	Senior Debt Matures April 2011 Interest rate 8.75%	$	12,000		1,022		1,022
		Preferred Stock Warrants				179		179

Total Horizon Therapeutics, Inc.						1,201		1,201

Inotek Pharmaceuticals Corp. (0.37%)	Drug Discovery	Preferred Stock				1,500		1,500

Total Inotek Pharmaceuticals Corp.						1,500		1,500

Memory Pharmaceticals Corp. (3.48%)⁽⁴⁾	Drug Discovery	Senior Debt Matures February 2011 Interest rate 11.45%	$	15,000		13,608		13,608
		Common Stock Warrants				1,751		341

Total Memory Pharmaceticals Corp.						15,359		13,949

Merrimack Pharmaceuticals, Inc. (0.37%)⁽⁴⁾	Drug Discovery	Convertible Senior Debt Matures October 2008 Interest rate 11.15%	$	1,024		994		994
		Preferred Stock Warrants				155		502
Merrimack Pharmaceuticals, Inc. (0.70%)		Preferred Stock				2,000		2,787

Total Merrimack Pharmaceuticals, Inc.						3,149		4,283

Neosil, Inc. (1.53%)	Drug Discovery	Senior Debt Matures May 2010 Interest rate 10.75%	$	6,000		5,936		5,936
		Preferred Stock Warrants				82		177

Total Neosil, Inc.						6,018		6,113

See notes to consolidated financial statements (unaudited).

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS - (Continued)

December 31, 2007

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
Paratek Pharmaceuticals, Inc. (0.64%)⁽⁴⁾	Drug Discovery	Senior Debt Matures June 2008 Interest rate 11.10%	$	2,587	2,568	2,568
		Preferred Stock Warrants			137	—
Paratek Pharmaceuticals, Inc. (0.14%)		Preferred Stock			550	550

Total Paratek Pharmaceuticals, Inc.					3,255	3,118

Portola Pharmaceuticals, Inc. (3.80%)⁽⁴⁾	Drug Discovery	Senior Debt Matures September 2010 Interest rate Prime + 1.75%	$	15,000	14,894	14,894
		Preferred Stock Warrants			152	350

Total Portola Pharmaceuticals, Inc.					15,046	15,244

Sirtris Pharmaceuticals, Inc. (2.46%)⁽⁴⁾	Drug Discovery	Senior Debt Matures April 2011 Interest rate 10.60%	$	9,079	9,022	9,022
		Common Stock Warrants			89	818
Sirtris Pharmaceuticals, Inc. (0.19%)		Common Stock			500	776

Total Sirtris Pharmaceuticals, Inc.					9,611	10,616

Total Drug Discovery (23.78%)					93,198	95,294

E-band Communications, Inc. (0.50%)⁽⁶⁾	Communications & Networking	Preferred Stock			2,000	2,000

Total E-Band Communications, Inc.					2,000	2,000

IKANO Communications, Inc. (5.09%)⁽⁴⁾	Communications & Networking	Senior Debt Matures March 2011 Interest rate 11.00%	$	19,983	19,983	19,983
		Preferred Stock Warrants			45	163
		Preferred Stock Warrants			72	256

Total IKANO Communications, Inc.					20,100	20,402

Ping Identity Corporation (0.40%)⁽⁴⁾	Communications & Networking	Senior Debt Matures June 2009 Interest rate 11.50%	$	1,630	1,608	1,608
		Preferred Stock Warrants			52	11

Total Ping Identity Corporation					1,660	1,619

Purcell Systems, Inc. (2.33%)	Communications & Networking	Senior Debt Matures June 2009 Interest rate Prime + 3.50%	$	2,224	3,126	3,126
		Revolving Line of Credit Matures June 2008 Interest rate Prime + 2.00%	$	7,000	6,000	6,000
		Preferred Stock Warrants			122	198

Total Purcell Systems, Inc.					9,248	9,324

See notes to consolidated financial statements (unaudited).

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS - (Continued)

December 31, 2007

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
Rivulet Communications, Inc. (0.83%)⁽⁴⁾	Communications & Networking	Senior Debt Matures September 2009 Interest rate 10.60%	$	3,500	3,272	3,272
		Preferred Stock Warrants			50	63
Rivulet Communications, Inc. (0.06%)		Preferred Stock			250	250

Total Rivulet Communications, Inc.					3,572	3,585

Seven Networks, Inc. (2.89%)⁽⁴⁾	Communications & Networking	Senior Debt Matures April 2010 Interest rate Prime + 3.75%	$	9,419	9,291	9,291
		Revolving Line of Credit Matures April 2008 Interest rate Prime + 3.00%	$	2,000	2,000	2,000
		Preferred Stock Warrants			174	295

Total Seven Networks, Inc.					11,465	11,586

Simpler Networks Corp. (1.01%)⁽⁴⁾	Communications & Networking	Senior Debt Matures July 2009 Interest rate 11.75%	$	4,112	4,046	4,046
		Preferred Stock Warrants			160	—
Simpler Networks Corp. (0.00%)		Preferred Stock			500	—

Total Simpler Networks Corp.					4,706	4,046

Stoke, Inc. (0.57%)	Communications & Networking	Senior Debt Matures August 2010 Interest rate 10.55%	$	2,250	2,204	2,204
		Preferred Stock Warrants			53	79

Total Stoke, Inc.					2,257	2,283

Tectura Corporation (5.26%)⁽⁴⁾	Communications & Networking	Senior Debt Matures March 2012 Interest rate LIBOR + 6.15%	$	9,051	9,007	9,007
		Revolving Line of Credit Matures March 2008 Interest rate LIBOR + 5.15%	$	12,000	12,000	12,000
		Preferred Stock Warrants			52	83

Total Tectura Corporation					21,059	21,090

Teleflip, Inc. (0.25%)	Communications & Networking	Senior Debt Matures May 2010 Interest rate Prime + 2.75%	$	1,000	992	992
		Preferred Stock Warrants			10	9

Total Teleflip, Inc.					1,002	1,001

Wireless Channels, Inc. (3.02%)	Communications & Networking	Senior Debt -Second Lien Matures April 2010 Interest rate 9.25%	$	11,949	1,719	1,719
		Senior Debt -Second Lien Matures April 2010 Interest rate Prime + 4.25%	$	10,118	10,118	10,118
		Preferred Stock Warrants			155	241

Total Wireless Channels, Inc.					11,992	12,078

See notes to consolidated financial statements (unaudited).

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS - (Continued)

December 31, 2007

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
Zayo Bandwith, Inc. (6.24%)⁽⁴⁾	Communications & Networking	Senior Debt -Second Lien Matures April 2013 Interest rate Prime + 3.50%	$	25,000	25,000	25,000
					—	—

Total Zayo Bandwith, Inc.					25,000	25,000

Total Communications & Networking (28.45%)					114,061	114,014

Atrenta, Inc. (0.98%)⁽⁴⁾	Software	Senior Debt Matures June 2009 Interest rate 11.50%	$	3,680	3,638	3,638
		Preferred Stock Warrants			102	220
		Preferred Stock Warrants			34	73
Atrenta, Inc. (0.06%)		Preferred Stock			250	250

Total Atrenta, Inc.					4,024	4,181

Blurb, Inc. (0.63%)	Software	Senior Debt Matures December 2009 Interest rate 9.55%	$	2,500	2,482	2,482
		Preferred Stock Warrants			25	44

Total Blurb, Inc.					2,507	2,526

Bullhorn, Inc. (0.25%)⁽⁴⁾	Software	Senior Debt Matures March 2010 Interest rate Prime + 3.75%	$	1,000	959	959
		Preferred Stock Warrants			43	41

Total Bullhorn, Inc.					1,002	1,000

Cittio, Inc. (0.25%)	Software	Senior Debt Matures April 2010 Interest rate 11.00%	$	1,000	1,000	1,000

Total Cittio, Inc.					1,000	1,000

Compete, Inc. (0.63%)⁽⁴⁾	Software	Senior Debt Matures March 2009 Interest rate Prime + 3.50%	$	2,409	2,384	2,384
		Preferred Stock Warrants			62	136

Total Compete, Inc.					2,446	2,520

Forescout Technologies, Inc. (0.64%)⁽⁴⁾	Software	Senior Debt Matures August 2009 Interest rate 11.15%	$	1,998	1,970	1,970
		Revolving Line of Credit Matures August 2007 Interest rate Prime + 1.49%	$	500	500	500
		Preferred Stock Warrants			58	76

Total Forescout Technologies, Inc.					2,528	2,546

GameLogic, Inc. (0.74%)⁽⁴⁾	Software	Senior Debt Matures December 2009 Interest rate Prime + 4.125%	$	3,000	2,887	2,887
		Preferred Stock Warrants			93	91

Total GameLogic, Inc.					2,980	2,978

See notes to consolidated financial statements (unaudited).

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS - (Continued)

December 31, 2007

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
Gomez, Inc. (0.15%)⁽⁴⁾	Software	Senior Debt Matures December 2007 Interest rate 12.25%	$	98	98	98
		Preferred Stock Warrants			35	513

Total Gomez, Inc.					133	611

HighRoads, Inc. (0.01%)⁽⁴⁾	Software	Preferred Stock Warrants			44	58

Total HighRoads, Inc.					44	58

Intelliden, Inc. (0.60%)	Software	Senior Debt Matures February 2010 Interest rate 13.20%	$	2,360	2,349	2,349
		Preferred Stock Warrants			18	60

Total Intelliden, Inc.					2,367	2,409

Oatsystems, Inc. (1.08%)⁽⁴⁾	Software	Senior Debt Matures September 2009 Interest rate 11.00%	$	4,374	4,336	4,336
		Preferred Stock Warrants			67	4

Total Oatsystems, Inc.					4,403	4,340

Proficiency, Inc. (0.38%)⁽⁴⁾⁽⁶⁾	Software	Senior Debt Matures July 2008 Interest rate 12.00%	$	1,500	1,497	1,497
		Preferred Stock Warrants			96	—
Proficiency, Inc. (0.19%)		Preferred Stock			2,750	750

Total Proficiency, Inc.					4,343	2,247

PSS Systems, Inc. (0.89%)⁽⁴⁾	Software	Senior Debt Matures March 2010 Interest rate 10.74%	$	3,500	3,463	3,463
		Preferred Stock Warrants			51	86

Total PSS Systems, Inc.					3,514	3,549

Savvion, Inc. (1.62%)⁽⁴⁾	Software	Senior Debt Matures March 2009 Interest rate Prime + 3.45%	$	1,268	1,268	1,268
		Revolving Line of Credit Matures March 2008 Interest rate Prime + 2.00%	$	3,000	3,000	3,000
		Revolving Line of Credit Matures March 2008 Interest rate Prime + 3.45%	$	1,985	1,985	1,985
		Preferred Stock Warrants			52	243


Total Savvion, Inc.					6,305	6,496

Sportvision, Inc. (0.01%)	Software	Preferred Stock Warrants			39	50

Total Sportvision, Inc.					39	50

See notes to consolidated financial statements (unaudited).

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS - (Continued)

December 31, 2007

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
Talisma Corp. (0.11%)⁽⁴⁾	Software	Preferred Stock Warrants			49	448

Total Talisma Corp.					49	448

WildTangent, Inc. (0.50%)⁽⁴⁾	Software	Senior Debt Matures March 2011 Interest rate 9.65%	$	2,000	1,766	1,766
		Preferred Stock Warrants			238	238

Total WildTangent, Inc.					2,004	2,004

Total Software (9.72%)					39,688	38,963

Agami Systems, Inc. (1.30%)⁽⁴⁾	Electronics & Computer Hardware	Senior Debt Matures August 2009 Interest rate 11.00%	$	5,103	5,056	5,056
		Preferred Stock Warrants			85	137

Total Agami Systems, Inc.					5,141	5,193

Luminus Devices, Inc. (2.95%)⁽⁴⁾	Electronics & Computer Hardware	Senior Debt Matures August 2009 Interest rate 12.50%	$	15,115	11,318	11,318
		Preferred Stock Warrants			183	113
		Preferred Stock Warrants			84	61
		Preferred Stock Warrants			334	334

Total Luminus Devices, Inc.					11,919	11,826

Maxvision Holding, LLC. (2.87%)⁽⁴⁾	Electronics & Computer Hardware	Senior Debt Matures May 2012 Interest rate Prime + 5.50%	$	5,012	5,012	5,012
		Senior Debt Matures May 2012 Interest rate Prime + 2.25%	$	5,500	5,000	5,000
		Revolving Line of Credit Matures September 2012 Interest rate Prime +2.25%	$	972	1,472	1,472

Total Maxvision Holding, LLC					11,484	11,484

NetEffect, Inc. (0.61%)	Electronics & Computer Hardware	Senior Debt Matures May 2010 Interest rate 11.95%	$	2,431	2,396	2,396
		Preferred Stock Warrants			44	50

Total NetEffect, Inc.					2,440	2,446

Shocking Technologies, Inc. (0.02%)	Electronics & Computer Hardware	Preferred Stock Warrants			63	63

Total Shocking Technologies, Inc.					63	63

See notes to consolidated financial statements (unaudited).

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS - (Continued)

December 31, 2007

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
SiCortex, Inc. (2.52%)	Electronics & Computer Hardware	Senior Debt Matures December 2010 Interest rate 10.95%	$	10,000	9,861	9,861
		Preferred Stock Warrants			164	230

Total SiCortex, Inc.					10,025	10,091

Spatial Photonics, Inc. (0.93%)⁽⁴⁾	Electronics & Computer Hardware	Senior Debt Matures May 2011 Interest rate 10.75%	$	3,751	3,623	3,623
		Preferred Stock Warrants			130	126
Spatial Photonics, Inc. (0.12%)		Preferred Stock			500	500

Total Spatial Photonics Inc.					4,253	4,249

VeriWave, Inc. (1.35%)	Electronics & Computer Hardware	Senior Debt Matures May 2010 Interest rate 10.75%	$	4,250	5,340	5,340
		Preferred Stock Warrants			54	85

Total VeriWave, Inc.					5,394	5,425

ViDeOnline Communications, Inc. (0.04%)⁽⁴⁾	Electronics & Computer Hardware	Preferred Stock Warrants			298	176

Total ViDeOnline Communications, Inc.					298	176

Total Electronics & Computer Hardware (12.71%)					51,017	50,953

Aegerion Pharmaceuticals, Inc. (2.48%)⁽⁴⁾	Specialty Pharmaceuticals	Senior Debt Matures August 2010 Interest rate Prime + 2.50%	$	9,735	9,682	9,682
		Preferred Stock Warrants			70	243
Aegerion Pharmaceuticals, Inc. (0.25%)		Preferred Stock			1,000	1,000

Total Aegerion Pharmaceuticals, Inc.					10,752	10,925

Panacos Pharmaceuticals, Inc. (4.84%)⁽⁴⁾	Specialty Pharmaceuticals	Senior Debt Matures January 2011 Interest rate 11.20%	$	20,000	19,270	19,270
		Common Stock Warrants			876	137
Panacos Pharmaceuticals, Inc. (0.04%)		Common Stock			410	157

Total Panacos Pharmaceuticals, Inc.					20,556	19,564

Quatrx Pharmaceuticals Company (3.60%)⁽⁴⁾	Specialty Pharmaceuticals	Senior Debt Matures January 2010 Interest rate Prime + 3.00%	$	14,324	14,214	14,214
		Preferred Stock Warrants			220	193
Quatrx Pharmaceuticals Company (0.19%)		Preferred Stock			750	750

Total Quatrx Pharmaceuticals Company					15,184	15,157

Total Specialty Pharmaceuticals (11.40%)					46,492	45,646

See notes to consolidated financial statements (unaudited).

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS - (Continued)

December 31, 2007

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
BabyUniverse, Inc. (0.05%)⁽⁴⁾	Consumer & Business Products	Common Stock			267	219

Total BabyUniverse, Inc.					267	219

Market Force Information, Inc. (0.34%)⁽⁴⁾	Consumer & Business Products	Senior Debt Matures May 2009 Interest rate 10.45%	$	1,294	1,284	1,284
		Preferred Stock Warrants			23	92
Market Force Information, Inc. (0.12%)		Preferred Stock			500	500

Total Market Force Information, Inc.					1,807	1,876

Wageworks, Inc. (0.12%)⁽⁴⁾	Consumer & Business Products	Preferred Stock Warrants			252	513
Wageworks, Inc. (0.05%)		Preferred Stock			250	209

Total Wageworks, Inc.					502	722

Total Consumer & Business Products (0.70%)					2,576	2,817


Ageia Technologies, Inc. (1.25%)⁽⁴⁾	Semiconductors	Senior Debt Matures August 2008 Interest rate 10.25%	$	5,047	4,904	4,904
		Convertible Debt			124	124
		Preferred Stock Warrants			99	—
Ageia Technologies, Inc. (0.00%)		Preferred Stock			500	—

Total Ageia Technologies					5,627	5,028

Custom One Design, Inc. (0.26%)	Semiconductors	Senior Debt Matures September 2010 Interest rate 11.50%	$	1,000	984	984
		Common Stock Warrants			18	43

Total Custom One Design, Inc.					1,002	1,027

iWatt Inc. (1.19%)⁽⁴⁾	Semiconductors	Senior Debt Matures September 2009 Interest rate Prime + 2.75%	$	1,457	1,382	1,382
		Revolving Line of Credit Matures September 2007 Interest rate Prime + 1.75%	$	3,235	3,235	3,235
		Preferred Stock Warrants			46	101
		Preferred Stock Warrants			51	51

Total iWatt Inc.					4,714	4,769

See notes to consolidated financial statements (unaudited).

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS - (Continued)

December 31, 2007

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
NEXX Systems, Inc. (3.26%)⁽⁴⁾	Semiconductors	Senior Debt Matures February 2010 Interest rate Prime + 2.75%	$	4,557	4,438	4,438
		Revolving Line of Credit Matures December 2009 Interest rate Prime + 1.75%	$	5,000	5,000	5,000
		Revolving Line of Credit Matures December 2009 Interest rate Prime + 3.75%	$	3,000	3,000	3,000
		Preferred Stock Warrants			165	623

Total NEXX Systems, Inc.					12,603	13,061

Quartics, Inc. (0.09%)⁽⁴⁾	Semiconductors	Senior Debt Matures August 2010 Interest rate 11.05%	$	300	254	254
		Preferred Stock Warrants			53	115

Total Quartics, Inc.					307	369

Solarflare Communications, Inc. (0.19%)	Semiconductors	Senior Debt Matures August 2010 Interest rate 11.75%	$	625	553	553
		Preferred Stock Warrants			84	194
Solarflare Communications, Inc. (0.12%)		Preferred Stock			500	500

Total Solarflare Communications, Inc.					1,137	1,247

Total Semiconductors (6.36%)					25,390	25,501


Labopharm USA, Inc. (3.74%)⁽⁴⁾⁽⁵⁾	Drug Delivery	Senior Debt Matures July 2008 Interest rate 11.95%	$	15,000	14,547	14,547
		Preferred Stock Warrants			459	454

Total Labopharm USA, Inc.					15,006	15,001

Transcept Pharmaceuticals, Inc. (1.80%)⁽⁴⁾	Drug Delivery	Senior Debt Matures October 2009 Interest rate 10.69%	$	6,993	6,944	6,944
		Preferred Stock Warrants			36	107
		Preferred Stock Warrants			50	173
Transcept Pharmaceuticals, Inc. (0.13%)		Preferred Stock			500	500

Total Transcept Pharmaceuticals, Inc.					7,530	7,724

Total Drug Delivery (5.67%)					22,536	22,725


BARRX Medical, Inc. (0.19%)	Therapeutic	Preferred Stock			1,500	758

Total BARRX Medical, Inc.					1,500	758

See notes to consolidated financial statements (unaudited).

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS - (Continued)

December 31, 2007

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
EKOS Corporation (1.28%)	Therapeutic	Senior Debt Matures November 2010 Interest rate Prime + 2.00%	$	5,000	4,707	4,707
		Preferred Stock Warrants			174	281
		Preferred Stock Warrants			153	150

Total EKOS Corporation					5,035	5,138

Gynesonics, Inc. (0.01%)⁽⁴⁾	Therapeutic	Preferred Stock Warrants			18	40
Gynesonics, Inc. (0.06%)		Preferred Stock			250	250

Total Gynesonics, Inc.					268	290

Novasys Medical, Inc. (1.65%)⁽⁴⁾	Therapeutic	Senior Debt Matures January 2010 Interest rate 9.70%	$	6,609	6,609	6,609

Total Novasys Medical, Inc.					6,609	6,609

Power Medical Interventions, Inc. (0.02%)	Therapeutic	Common Stock Warrants			21	58

Total Power Medical Interventions, Inc.					21	58

Total Therapeutic (3.21%)					13,432	12,853


Invoke Solutions, Inc. (0.56%)⁽⁴⁾	Internet Consumer & Business	Senior Debt Matures December 2008 Interest rate 11.25%	$	2,187	2,155	2,155
	Services	Preferred Stock Warrants			56	74
		Preferred Stock Warrants			11	10

Total Invoke Solutions, Inc.					2,222	2,239

Prism Education Group Inc. (0.51%)	Internet Consumer & Business	Senior Debt Matures December 2010 Interest rate 11.25%	$	2,000	1,964	1,964
	Services	Preferred Stock Warrants			44	67

Total Prism Education Group Inc.					2,008	2,031

RazorGator Interactive Group, Inc. (1.17%)⁽⁴⁾	Internet Consumer & Business	Senior Debt Matures January 2008 Interest rate 9.95%	$	1,134	1,119	1,119
	Services	Preferred Stock Warrants			13	3,203
		Preferred Stock Warrants			28	362
RazorGator Interactive Group, Inc. (1.23%)		Preferred Stock			1,000	4,935

Total RazorGator Interactive Group, Inc.					2,160	9,619

See notes to consolidated financial statements (unaudited).

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS - (Continued)

December 31, 2007

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
Serious USA, Inc. (0.75%)	Internet Consumer & Business Services	Senior Debt Matures February 2011 Interest rate Prime + 3.00%	$	2,450	2,370	2,370
		Revolving Line of Credit Matures July 2008 Interest rate Prime + 2.00%	$	654	654	654
		Preferred Stock Warrants			93	5

Total Serious USA, Inc.					3,117	3,029

Total Internet Consumer & Business Services (4.22%)					9,507	16,918


Lilliputian Systems, Inc. (1.75%)⁽⁴⁾	Energy	Senior Debt Matures March 2010 Interest rate 9.75%	$	6,956	6,931	6,931
		Preferred Stock Warrants			48	85

Total Lilliputian Systems, Inc.					6,979	7,016

Total Energy (1.75%)					6,979	7,016


Active Response Group, Inc. (2.50%)	Information Services	Senior Debt Matures March 2012 Interest rate LIBOR + 6.55%	$	10,000	9,885	9,885
		Preferred Stock Warrants			92	83
		Common Stock Warrants			46	60

Total Active Response Group, Inc.					10,023	10,028

Buzznet, Inc. (0.25%)	Information Services	Senior Debt Matures March 2010 Interest rate 10.25%	$	914	908	908
		Preferred Stock Warrants			9	86
Buzznet, Inc. (0.06%)		Preferred Stock			250	250

Total Buzznet, Inc.					1,167	1,244

hi5 Networks, Inc. (1.00%)	Information Services	Senior Debt Matures March 2011 Interest rate Prime + 2.5%	$	3,000	2,789	2,789
		Revolving Line of Credit Matures June 2011 Interest rate 7.75%			1,000	1,000
		Preferred Stock Warrants			213	214

Total hi5 Networks, Inc.					4,002	4,003

Jab Wireless, Inc. (0.78%)	Information Services	Senior Debt Matures March 2012
		Interest rate 10.75%	$	3,097	2,834	2,834
		Preferred Stock Warrants			264	265

Total Jab Wireless, Inc.					3,098	3,099

See notes to consolidated financial statements (unaudited).

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS - (Continued)

December 31, 2007

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
Solutionary, Inc. (1.78%)	Information Services	Senior Debt Matures June 2010 Interest rate LIBOR + 5.50%	$	5,528	5,454	5,454
		Revolving Line of Credit Matures June 2010 Interest rate LIBOR + 5.00%	$	1,505	1,505	1,505
		Preferred Stock Warrants			94	150
		Preferred Stock Warrants			2	5
Solutionary, Inc. (0.06%)		Preferred Stock			250	250

Total Solutionary, Inc.					7,305	7,364

The Generation Networks, Inc. (4.12%)	Information Services	Senior Debt Matures March 2012 Interest rate Prime + 4.50%	$	16,500	16,500	16,500
The Generation Networks, Inc. (0.12%)		Preferred Stock			500	500

Total The Generation Networks, Inc.					17,000	17,000

Wallop Technologies, Inc. (0.06%)	Information Services	Senior Debt Matures March 2010 Interest rate 10.00%	$	223	218	218
		Preferred Stock Warrants			7	9

Total Wallop Technologies, Inc.					225	227

Zeta Interactive Corporation (3.74%)⁽⁴⁾	Information Services	Senior Debt Matures November 2011 Interest rate Prime +2.00%	$	15,000	6,828	6,828
		Senior Debt Matures November 2011 Interest rate Prime +3.00%			8,000	8,000
		Preferred Stock Warrants			172	171
Zeta Interactive Corporation (0.12%)		Preferred Stock			500	500

Total Zeta Interactive Corporation					15,500	15,499

Total Information Services (14.59%)					58,320	58,464


Novadaq Technologies, Inc. (0.32%)	Diagnostic	Common Stock			1,626	1,284

Total Novadaq Technologies, Inc.					1,626	1,284

Optiscan Biomedical, Corp. (0.08%)⁽⁴⁾	Diagnostic	Senior Debt Matures March 2008 Interest rate 15.00%	$	271	263	263
		Preferred Stock Warrants			80	47
Optiscan Biomedical, Corp. (0.18%)		Preferred Stock			1,000	722

Total Optiscan Biomedical, Corp.					1,343	1,032

Total Diagnostic (0.58%)					2,969	2,316

See notes to consolidated financial statements (unaudited).

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS - (Continued)

December 31, 2007

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
Guava Technologies, Inc. (1.77%)⁽⁴⁾	Biotechnology Tools	Senior Debt Matures July 2009 Interest rate Prime + 3.25%	$	4,076	4,790	4,790
		Convertible Debt			250	250
		Revolving Line of Credit Matures December 2007 Interest rate Prime + 2.00%	$	2,598	1,778	1,778
		Preferred Stock Warrants			105	200
		Preferred Stock Warrants			69	93

Total Guava Technologies, Inc.					6,992	7,111

NuGEN Technologies, Inc. (0.53%)	Biotechnology Tools	Senior Debt Matures March 2010 Interest rate 11.70%	$	1,884	1,819	1,819
		Preferred Stock Warrants			45	252
		Preferred Stock Warrants			32	32
NuGEN Technologies, Inc. (0.12%)		Preferred Stock			500	500

Total NuGEN Technologies, Inc.					2,396	2,603

Total Biotechnology Tools (2.42%)					9,388	9,714


Rubicon Technology Inc. (0.69%)⁽⁴⁾	Advanced Specialty Materials & Chemicals	Preferred Stock Warrants			82	2,764

Total Rubicon Technology Inc.					82	2,764

Total Advanced Specialty Materials & Chemicals (0.69%)					82	2,764


Crux Biomedical, Inc. (0.15%)	Surgical Devices	Senior Debt Matures December 2010 Interest rate Prime + 3.375%	$	600	565	565
		Preferred Stock Warrants			37	36
Crux Biomedical, Inc. (0.06%)		Preferred Stock			250	250

Total Crux Biomedical, Inc.					852	851

Diomed Holdings, Inc. (1.49%)⁽⁴⁾	Surgical Devices	Senior Debt Matures July 2010 Interest rate Prime + 3.00%	$	6,000	5,962	5,962
		Common Stock Warrants			43	8

Total Diomed Holdings, Inc.					6,005	5,970

Light Science Oncology, Inc. (2.50%)	Surgical Devices	Senior Debt Matures July 2011 Interest rate 11.20%	$	10,000	9,605	9,605
		Preferred Stock Warrants			395	395

Total Light Science Oncology, Inc.					10,000	10,000

Total Surgical Devices (4.20%)					16,857	16,821

See notes to consolidated financial statements (unaudited).

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS - (Continued)

December 31, 2007

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾		Value⁽³⁾
Waterfront Media Inc. (1.54%)⁽⁴⁾	Media/Content/ Info	Senior Debt Matures December 2010 Interest rate Prime + 3.00%	$	3,941		3,898		3,898
		Revolving Line of Credit Matures March 2008 Interest rate Prime + 1.25%	$	2,000		2,000		2,000
		Preferred Stock Warrants				60		295
Waterfront Media Inc. (0.25%)		Preferred Stock				1,000		1,000

Total Waterfront Media Inc.						6,958		7,193

Total Media/Content/Info (1.79%)						6,958		7,193

Total Investments (132.24%)					$	519,450	$	529,972

*	Value as a percent of net assets

(1)	Preferred and common stock, warrants, and equity interests are generally non-income producing.

(2)	Gross unrealized appreciation, gross unrealized depreciation, and net appreciation for federal income tax purposes totaled $16,430, $9,009 and $7,421, respectively. The tax cost of investments is $522,551.

(3)

Except for warrants in ten publicly traded companies and common stock in four publicly traded companies, all investments are restricted at December 31, 2007 and were valued at fair value as determined in good faith by the Board of Directors. No unrestricted securities of the same issuer are outstanding. The Company uses the Standard Industrial Code for classifying the industry grouping of its portfolio companies.

(4)

Debt and warrant investments of this portfolio company have been pledged as collateral under the Credit Facility. Citigroup has an equity participation right on loans collateralized under the Credit Facility. The value of their participation right on unrealized gains in the related equity investments was approximately $690,000 at December 31, 2007 and is included in accrued liabilities and reduces the unrealized gain recognized by the Company at December 31, 2007.

(5)	Non-U.S. company or the company’s principal place of business is outside the United States.

(6)	Affiliate investment that is defined under the Investment Company Act of 1940 as companies in which HTGC owns as least 5% but not more than 25% of the voting securities of the company. All other investments are less than 5% owned.

See notes to consolidated financial statements (unaudited).

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

(unaudited)

(In thousands, except per share data)


	Three Months Ended June 30,						Six Months Ended June 30,
	2008			2007			2008			2007
Investment income:
Interest	$	16,081		$	11,792		$	30,320		$	20,828
Fees		2,941			1,483			4,302			2,126

Total investment income		19,022			13,275			34,622			22,954

Operating expenses:
Interest		2,914			1,763			4,765			2,449
Loan fees		564			250			946			517
General and administrative		2,211			1,714			3,385			3,022
Employee Compensation:
Compensation and benefits		2,854			2,015			5,653			3,955
Stock-based compensation		507			293			901			546

Total employee compensation		3,361			2,308			6,554			4,501

Total operating expenses		9,050			6,035			15,650			10,489

Net investment income		9,972			7,240			18,972			12,465
Net realized gain (loss) on investments		1,909			(336	)		4,867			(46	)
Net (decrease) increase in unrealized appreciation on investments		(3,523	)		1,366			(4,444	)		2,182

Net realized and unrealized gain (loss)		(1,614	)		1,030			423			2,136

Net increase in net assets resulting from operations	$	8,358		$	8,270		$	19,395		$	14,601


Net investment income before investment gains and losses per common share:
Basic	$	0.30		$	0.29		$	0.58		$	0.52

Diluted	$	0.30		$	0.29		$	0.58		$	0.51


Change in net assets per common share:
Basic	$	0.25		$	0.33		$	0.59		$	0.61

Diluted	$	0.25		$	0.33		$	0.59		$	0.60


Weighted average shares outstanding
Basic		32,832			25,190			32,731			24,037

Diluted		32,832			25,401			32,731			24,248

See notes to consolidated financial statements (unaudited).

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS

(unaudited)

(in thousands)


	Common Stock			Capital in excess of par value		Deferred Stock Compensation			Unrealized Appreciation on Investments			Accumulated Realized Gains (Losses) on Investments			Distributions in Excess of Investment Income			Provision for Income Taxes on Investment Gains			Net Assets
	Shares	Par Value		Capital in excess of par value		Deferred Stock Compensation			Unrealized Appreciation on Investments			Accumulated Realized Gains (Losses) on Investments			Distributions in Excess of Investment Income			Provision for Income Taxes on Investment Gains			Net Assets
Balance at December 31, 2006	21,927	$	22	$	257,235	$	—		$	2,861		$	(1972	)	$	(2733	)	$	—		$	255,413
Net increase net assets resulting from operations	—		—		—		—			2,182			(46	)		12,465			—			14,601
Issuance of common stock	23		—		326		—			—			—			—			—			326
Issuance of common stock in public offering overallotment exercise	10,040		10		128,469		—			—			—			—			—			128,479
Issuance of common stock from warrant exercises	256		—		2,707		—			—			—			—			—			2,707
Issuance of common stock under dividend reinvestment plan	125		—		1,778		—			—			—			—			—			1,778
Dividends declared	—		—		—		—			—			—			(13,826	)		—			(13,826	)
Conversion to a regulated investment company and other tax items	—		—		—		—			—			—			—			—			—
Stock-based compensation	—		—		546		—			—			—			—			—			546

Balance at June 30, 2007	32,371	$	32	$	391,061	$	—		$	5,043		$	(2,018	)	$	(4,094	)	$	—		$	390,024

Balance at December 31, 2007	32,541	$	33	$	393,530	$	(78	)	$	10,129		$	819		$	(3,557	)	$	(139	)	$	400,737
Net increase in net assets resulting from operations	—		—		—		—			(4,444	)		4,867			18,972			—			19,395
Issuance of common stock	3		—		28		—			—			—			—			—			28
Issuance of common stock from exercise of warrants	88		—		933		—			—			—			—			—			933
Issuance of common stock under restricted stock plan	205		—		2,495		(2,495	)		—			—			—			—			—
Dividends declared	—		—		—		—			—			—			(20,927	)		—			(20,927	)
Stock-based compensation	—		—		684		232			—			—			—			—			916

Balance at June 30, 2008	32,837	$	33	$	397,670	$	(2,341	)	$	5,685		$	5,686		$	(5,512	)	$	(139	)	$	401,082

See notes to consolidated financial statements (unaudited).

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited)

(in thousands)


	Six Months Ended June 30,
	2008			2007
Cash flows from operating activities:
Net increase in net assets resulting from operations	$	19,395		$	14,601
Adjustments to reconcile net increase in net assets resulting from operations to net cash used in and provided by operating activities:
Purchase of investments		(197,722	)		(180,686	)
Principal payments received on investments		123,087			49,989
Proceeds from sale of investments		6,445			873
Net unrealized appreciation (depreciation) on investments		4,444			(2,407	)
Net unrealized appreciation on investments due to lender		(247	)		225
Net realized gain on investments		(4,867	)		46
Warrant values for loans not funded		—			(164	)
Accretion of paid-in-kind principal		(387	)		—
Accretion of loan discounts		(2,782	)		(1,107	)
Accretion of loan exit fees		(275	)		(676	)
Depreciation		131			100
Stock-based compensation		684			546
Amortization of restricted stock		232			—
Common stock issued in lieu of Director compensation		28			326
Amortization of deferred loan origination revenue		(2,579	)		(1,483	)
Change in operating assets and liabilities:
Interest receivable		(1,249	)		(1,352	)
Prepaid expenses and other assets		544			(622	)
Income tax receivable		—			29
Accounts payable		685			(5	)
Income tax payable		(121	)		—
Accrued liabilities		(80	)		(952	)
Deferred loan origination revenue		3,882			2,971

Net cash used in operating activities		(50,730	)		(119,748	)
Cash flows from investing activities:
Purchases of capital equipment		(506	)		(131	)
Other long-term assets		(134	)		269

Net cash provided by (used in) investing activities		(640	)		138
Cash flows from financing activities:
Proceeds from issuance of common stock, net		933			131,186
Dividends paid		(20,927	)		(12,048	)
Borrowings of credit facilities		173,700			124,000
Repayments of credit facilities		(94,000	)		(131,300	)
Fees paid for credit facilities and debentures		(2,319	)		(1,166	)

Net cash provided by financing activities		57,387			110,672

Net increase in cash		5,995			(8,938	)
Cash and cash equivalents at beginning of period		7,856			16,404

Cash and cash equivalents at end of period	$	13,851		$	7,466

See notes to consolidated financial statements (unaudited).

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Description of Business and Unaudited Interim Consolidated Financial Statements Basis of Presentation

Hercules Technology Growth Capital, Inc. (the “Company”) is a specialty finance company that provides debt and equity growth capital to technology-related and life-science companies at all stages of development from seed and emerging growth to expansion and established stages of development, including expanding into select publicly listed companies and lower middle market companies. The Company sources its investments through its principal office located in Silicon Valley, as well as through its additional offices in the Boston, Massachusetts, Boulder, Colorado, Chicago, Illinois and San Diego, California areas. The Company was incorporated under the General Corporation Law of the State of Maryla

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