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 September 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 November 7, 2008, there were 32,862,554 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 September 30, 2008 (unaudited) and December 31, 2007	3

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

	Consolidated Schedule of Investments as of December 31, 2007	18

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

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

	Consolidated Statement of Cash Flows for the nine-month periods ended September 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	48

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	61

Item 4.	Controls and Procedures	61

PART II. OTHER INFORMATION		61

Item 1.	Legal Proceedings	61

Item 1A.	Risk Factors	61

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	66

Item 3.	Defaults Upon Senior Securities	66

Item 4.	Submission of Matters to a Vote of Security Holders	66

Item 5.	Other Information	66

Item 6.	Exhibits	67

SIGNATURES		68

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)


	September 30, 2008 (unaudited)			December 31, 2007
Assets
Investments:
Non-affiliate investments (cost of $621,675 and $513,106)	$	632,500		$	525,725
Affiliate investments (cost of $6,344 and $6,344)		4,247			4,247

Total investments, at value (cost of $628,019 and $519,450 respectively)		636,747			529,972
Deferred loan origination revenue		(7,769	)		(6,593	)
Cash and cash equivalents		20,489			7,856
Interest receivable		7,859			6,387
Other assets		17,677			4,321

Total assets		675,003			541,943
Liabilities
Accounts payable and accrued liabilities		7,213			6,956
Short-term credit facility		127,900			79,200
Long-term credit facility		10,000			—
Long-term SBA debentures		127,200			55,050

Total liabilities		272,313			141,206

Net assets	$	402,690		$	400,737

Net assets consist of:
Common stock, par value	$	33		$	33
Capital in excess of par value		397,990			393,530
Deferred stock compensation		(2,418	)		(78	)
Unrealized appreciation on investments		8,105			10,129
Accumulated realized gains on investments		5,812			819
Distributions in excess of investment income		(6,832	)		(3,696	)

Total net assets	$	402,690		$	400,737

Shares of common stock outstanding ($0.001 par value, 60,000 authorized)		32,863			32,541

Net asset value per share	$	12.25		$	12.31

See notes to consolidated financial statements (unaudited).

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2008

(unaudited)

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾		Value⁽³⁾
Acceleron Pharmaceuticals, Inc. (0.77%)*⁽⁴⁾	Drug Discovery	Senior Debt Matures January 2010 Interest rate 10.25%	$	2,204	$	2,202	$	2,202
		Preferred Stock Warrants				69		731
		Preferred Stock Warrants				35		162
Acceleron Pharmaceuticals, Inc. (0.45%)		Preferred Stock				1,243		1,805

Total Acceleron Pharmaceuticals, Inc.						3,549		4,900
Aveo Pharmaceuticals, Inc. (3.78%)⁽⁴⁾	Drug Discovery	Senior Debt Matures November 2011 Interest rate 11.13%	$	15,000		14,913		14,890
		Preferred Stock Warrants				190		252
		Preferred Stock Warrants				104		68
		Preferred Stock Warrants				24		23

Total Aveo Pharmaceuticals, Inc.						15,231		15,233
Elixir Pharmaceuticals, Inc. (2.8%)⁽⁴⁾	Drug Discovery	Senior Debt Matures December 2010 Interest rate Prime + 4.50%	$	11,000		11,000		11,000
		Preferred Stock Warrants				217		260

Total Elixir Pharmaceuticals, Inc.						11,217		11,260
EpiCept Corporation (0.91%)⁽⁴⁾	Drug Discovery	Senior Debt Matures April 2009 Interest rate 15.00%	$	2,768		2,532		2,897
		Common Stock Warrants				—		—
		Common Stock Warrants				161		610
		Common Stock Warrants				40		154

Total EpiCept Corporation						2,733		3,661
Horizon Therapeutics, Inc. (1.53%)⁽⁴⁾	Drug Discovery	Senior Debt Matures May 2011 Interest rate Prime + 1.50%	$	6,000		5,880		5,880
		Preferred Stock Warrants				178		263

Total Horizon Therapeutics, Inc.						6,058		6,143
Inotek Pharmaceuticals Corp. (0.37%)	Drug Discovery	Preferred Stock				1,500		1,500

Total Inotek Pharmaceuticals Corp.						1,500		1,500
Memory Pharmaceuticals Corp. (3.04%)⁽⁴⁾	Drug Discovery	Senior Debt Matures December 2010 Interest rate 11.45%	$	13,245		12,221		12,221
		Common Stock Warrants				1,751		23

Total Memory Pharmaceuticals Corp.						13,972		12,244
Merrimack Pharmaceuticals, Inc. (0.25%)⁽⁴⁾	Drug Discovery	Convertible Senior Debt Matures October 2008 Interest rate 11.15%	$	85		85		85
		Preferred Stock Warrants				156		914
Merrimack Pharmaceuticals, Inc. (0.69%)		Preferred Stock				2,000		2,787

Total Merrimack Pharmaceuticals, Inc.						2,241		3,786

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

Total Neosil, Inc.						83		—

Paratek Pharmaceuticals, Inc. (0.10%)⁽⁴⁾	Drug Discovery	Preferred Stock Warrants				137		415
Paratek Pharmaceuticals, Inc. (0.25%)		Preferred Stock				1,000		1,000

Total Paratek Pharmaceuticals, Inc.						1,137		1,415

See notes to consolidated financial statements (unaudited)

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2008

(unaudited)

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
Portola Pharmaceuticals, Inc. (3.28%)⁽⁴⁾	Drug Discovery	Senior Debt Matures September 2011 Interest rate Prime + 2.16%	$	12,917	12,840	12,840
		Preferred Stock Warrants			152	350

Total Portola Pharmaceuticals, Inc.					12,992	13,190
Recoly, N.V. (0.74%)⁽⁶⁾	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 (18.96%)					73,713	76,332

Affinity Videonet, Inc. (1.62%)⁽⁴⁾	Communications & Networking	Senior Debt Matures June 2012 Interest rate Prime + 4.50%	$	4,000	3,935	3,935
		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	72

Total Affinity Videonet, Inc.					6,509	6,507
E-band Communications, Inc. (0.50%)⁽⁷⁾	Communications & Networking	Preferred Stock			2,000	2,000

Total E-Band Communications, Inc.					2,000	2,000
IKANO Communications, Inc. (3.88%)⁽⁴⁾	Communications & Networking	Senior Debt Matures April 2011 Interest rate 11.00%	$	15,196	15,196	15,196
		Preferred Stock Warrants			46	175
		Preferred Stock Warrants			72	266

Total IKANO Communications, Inc.					15,314	15,637
Kadoink, Inc. (0.5%)⁽⁴⁾	Communications & Networking	Senior Debt Matures April 2011 Interest rate Prime + 2.00%	$	2,000	1,952	1,952
		Preferred Stock Warrants			73	72
Kadoink, Inc. (0.06%)		Preferred Stock			250	250

Total Kadoink, Inc.					2,275	2,274
Neonova Holding Company (2.24%)	Communications & Networking	Senior Debt Matures September 2012 Interest rate Prime + 3.25%	$	9,000	8,924	8,924
		Preferred Stock Warrants			94	80
Neonova Holding Company (0.06%)		Preferred Stock			250	250

Total Neonova Holding Company					9,268	9,254

See notes to consolidated financial statements (unaudited)

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2008

(unaudited)

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
Peerless Network, Inc. (0.37%)⁽⁵⁾	Communications & Networking	Senior Debt Matures June 2011 Interest rate Prime + 3.25%	$	1,500	1,428	1,428
		Preferred Stock Warrants			95	75
Peerless Network, Inc. (0.25%)		Preferred Stock			1,000	1,000

Total Peerless Network, Inc.					2,523	2,503
Ping Identity Corporation (0.21%)⁽⁴⁾	Communications & Networking	Senior Debt Matures June 2009 Interest rate 11.50%	$	851	842	842
		Preferred Stock Warrants			51	2

Total Ping Identity Corporation					893	844
Purcell Systems, Inc. (2.47%)	Communications & Networking	Senior Debt Matures June 2010 Interest rate Prime + 3.50%	$	1,807	1,739	1,739
		Revolving Line of Credit Matures July 2009 Interest rate Prime + 2.75%	$	6,000	6,000	6,000
		Senior Debt Matures July 2011 Interest rate Prime + 3.50%	$	1,600	1,600	1,600
		Preferred Stock Warrants			123	613

Total Purcell Systems, Inc.					9,462	9,952
Rivulet Communications, Inc. (0.57%)⁽⁵⁾	Communications & Networking	Senior Debt Matures April 2010 Interest rate 10.50%	$	2,324	2,301	2,301
		Preferred Stock Warrants			51	—
Rivulet Communications, Inc. (0.00%)		Preferred Stock			250	4

Total Rivulet Communications, Inc.					2,602	2,305
Seven Networks, Inc. (2.57%)⁽⁴⁾	Communications & Networking	Senior Debt Matures April 2010 Interest rate Prime + 6.00%	$	6,941	6,859	6,859
		Revolving Line of Credit Matures September 2009 Interest rate Prime + 5.00%	$	3,000	3,000	3,000
		Preferred Stock Warrants			174	500

Total Seven Networks, Inc.					10,033	10,359
Simpler Networks Corp. (0.98%)⁽⁸⁾	Communications & Networking	Senior Debt Matures July 2010 Interest rate 18.25%	$	4,646	4,615	3,966
		Preferred Stock Warrants			160	—
Simpler Networks Corp. (0.00%)		Preferred Stock			500	—

Total Simpler Networks Corp.					5,275	3,966

See notes to consolidated financial statements (unaudited)

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2008

(unaudited)

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
Stoke, Inc. (0.77%)	Communications & Networking	Senior Debt Matures August 2010 Interest rate 10.55%	$	3,028	2,995	2,995
		Preferred Stock Warrants			53	116

Total Stoke, Inc.					3,048	3,111
Tectura Corporation (6.32%)⁽⁴⁾	Communications & Networking	Senior Debt Matures April 2012 Interest rate LIBOR + 6.90%	$	7,753	7,852	7,852
		Revolving Line of Credit Matures April 2009 Interest rate LIBOR + 6.35%	$	12,000	12,000	12,000
		Revolving Line of Credit Matures March 2009 Interest rate LIBOR + 7.50%	$	5,507	5,507	5,507
		Preferred Stock Warrants			51	90

Total Tectura Corporation					25,410	25,449
Teleflip, Inc. (0.16%)	Communications & Networking	Senior Debt Matures June 2010 Interest rate Prime + 2.75%	$	906	907	651
		Preferred Stock Warrants			11	—

Total Teleflip, Inc.					918	651
Wireless Channels, Inc. (3.01%)⁽⁴⁾	Communications & Networking	Senior Debt Matures April 2010 Interest rate Prime + 4.25%	$	11,156	11,461	11,461
		Preferred Stock Warrants			155	641

Total Wireless Channels, Inc.					11,616	12,102
Zayo Bandwidth, Inc. (6.21%)	Communications & Networking	Senior Debt Matures November 2013 Interest rate Libor + 5.25%	$	25,000	25,000	25,000

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

Total Communications & Networking (32.75%)					132,146	131,914

Atrenta, Inc. (2.30%)⁽⁵⁾	Software	Senior Debt Matures January 2010 Interest rate 11.50%	$	2,961	2,898	2,898
		Revolving Line of Credit Matures October 2009 Interest rate Prime + 2.00%	$	6,000	6,000	6,000
		Preferred Stock Warrants			102	242
		Preferred Stock Warrants			34	79
		Preferred Stock Warrants			71	56
Atrenta, Inc. (0.06%)		Preferred Stock			250	240

Total Atrenta, Inc.					9,355	9,515
Blurb, Inc. (1.67%)	Software	Senior Debt Matures December 2009 Interest rate 9.55%	$	1,720	1,709	1,709
		Senior Debt Matures June 2011 Interest rate Prime + 3.50%	$	5,000	5,000	5,000
		Preferred Stock Warrants			25	33

Total Blurb, Inc.					6,734	6,742

See notes to consolidated financial statements (unaudited)

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2008

(unaudited)

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
Braxton Technologies, LLC. (2.5%)⁽⁵⁾	Software	Senior Debt Matures July 2012 Interest rate Libor + 7.25%	$	10,000	9,863	9,863
		Preferred Stock Warrants			188	202

Total Braxton Technologies, LLC.					10,051	10,065
Bullhorn, Inc. (0.28%)	Software	Senior Debt Matures November 2010 Interest rate Prime + 3.75%	$	877	851	851
		Preferred Stock Warrants			43	261

Total Bullhorn, Inc.					894	1,112
Cittio, Inc. (0.22%)	Software	Senior Debt Matures May 2010 Interest rate 11.00%	$	849	832	832
		Preferred Stock Warrants			53	59

Total Cittio, Inc.					885	891
Clickfox, Inc. (0.62%)	Software	Senior Debt Matures September 2011 Interest rate 10.25%	$	2,500	2,337	2,337
		Preferred Stock Warrants			163	161

Total Clickfox, Inc.					2,500	2,498
Forescout Technologies, Inc. (0.46%)⁽⁴⁾	Software	Senior Debt Matures August 2009 Interest rate 11.15%	$	1,191	1,169	1,169
		Revolving Line of Credit Matures February 2009 Interest rate Prime + 2.25%	$	500	500	500
		Preferred Stock Warrants			99	162

Total Forescout Technologies, Inc.					1,768	1,831
GameLogic, Inc. (0.59%)⁽⁴⁾	Software	Senior Debt Matures September 2010 Interest rate Prime + 4.125%	$	2,461	2,369	2,369
		Preferred Stock Warrants			93	—

Total GameLogic, Inc.					2,462	2,369
Gomez, Inc. (0.13%)⁽⁴⁾	Software	Preferred Stock Warrants			35	526

Total Gomez, Inc.					35	526
HighJump Acquisition, LLC. (2.98%)⁽⁴⁾	Software	Senior Debt Matures May 2013 Interest rate Prime + 7.50%	$	12,000	12,000	12,000

Total HighJump Acquisition, LLC.					12,000	12,000
HighRoads, Inc. (0.01%)⁽⁴⁾	Software	Preferred Stock Warrants			44	57

Total HighRoads, Inc.					44	57
Infologix, Inc. (5.21%)⁽⁴⁾	Software	Senior Debt Matures April 2012 Interest rate Prime + 4.50%	$	12,000	12,000	12,000
		Revolving Line of Credit Matures August 2009 Interest rate Prime + 2.50%	$	9,000	9,000	9,000

Total Infologix, Inc.					21,000	21,000

See notes to consolidated financial statements (unaudited)

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2008

(unaudited)

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
Intelliden, Inc. (0.43%)	Software	Senior Debt Matures February 2010 Interest rate 13.20%	$	1,652	1,645	1,645
		Preferred Stock Warrants			18	72

Total Intelliden, Inc.					1,663	1,717
Oatsystems, Inc. (0.00%)⁽⁴⁾	Software	Preferred Stock Warrants			67	—

Total Oatsystems, Inc.					67	—
Proficiency, Inc. (0.37%)⁽⁶⁾⁽⁷⁾	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. (0.72%)⁽⁴⁾	Software	Senior Debt Matures March 2010 Interest rate 10.74%	$	2,837	2,813	2,813
		Preferred Stock Warrants			51	93

Total PSS Systems, Inc.					2,864	2,906
Rockyou, Inc. (0.74%)⁽⁴⁾	Software	Senior Debt Matures May 2011 Interest rate Prime + 2.50%	$	3,000	2,883	2,883
		Preferred Stock Warrants			117	99

Total Rockyou, Inc.					3,000	2,982
Savvion, Inc. (1.43%)⁽⁴⁾	Software	Senior Debt Matures April 2009 Interest rate Prime + 3.45%	$	574	574	574
		Revolving Line of Credit Matures March 2009 Interest rate Prime + 4.45%	$	2,078	2,078	2,078
		Revolving Line of Credit Matures March 2009 Interest rate Prime + 3.00%	$	2,907	2,855	2,855
		Preferred Stock Warrants			52	264

Total Savvion, Inc.					5,559	5,771
Sportvision, Inc. (0.02%)	Software	Preferred Stock Warrants			39	86

Total Sportvision, Inc.					39	86
WildTangent, Inc. (0.53%)	Software	Senior Debt Matures March 2011 Interest rate 9.65%	$	2,000	1,845	1,845
		Preferred Stock Warrants			238	282

Total WildTangent, Inc.					2,083	2,127

Total Software (21.46%)					87,347	86,442

See notes to consolidated financial statements (unaudited)

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2008

(unaudited)

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
Luminus Devices, Inc. (3.07%)⁽⁴⁾	Electronics & Computer Hardware	Senior Debt Matures November 2010 Interest rate 12.875%	$	7,861	11,474	11,474
		Preferred Stock Warrants			183	273
		Preferred Stock Warrants			84	142
		Preferred Stock Warrants			334	481

Total Luminus Devices, Inc.					12,075	12,370
Maxvision Holding, LLC. (2.7%)⁽⁴⁾	Electronics & Computer Hardware	Senior Debt Matures October 2012 Interest rate Prime + 5.50%	$	5,000	5,089	5,089
		Senior Debt Matures April 2012 Interest rate Prime + 2.25%	$	5,292	5,292	5,292
		Revolving Line of Credit Matures April 2012 Interest rate Prime +2.25%	$	472	502	502
Maxvision Holding, LLC. (0.02%)⁽⁴⁾		Preferred Stock			81	82

Total Maxvision Holding, LLC					10,964	10,965
NetEffect, Inc. (0.62%)	Electronics & Computer Hardware	Senior Debt Matures May 2010 Interest rate 16.95%	$	2,552	2,515	2,515
		Preferred Stock Warrants			47	—

Total NetEffect, Inc.					2,562	2,515
Shocking Technologies, Inc. (1.01%)	Electronics & Computer Hardware	Senior Debt Matures December 2010 Interest rate 9.75%	$	4,000	3,959	3,959
		Preferred Stock Warrants			63	89

Total Shocking Technologies, Inc.					4,022	4,048
SiCortex, Inc. (2.08%)	Electronics & Computer Hardware	Senior Debt Matures December 2010 Interest rate 10.95%	$	8,179	8,077	8,077
		Preferred Stock Warrants			164	293

Total SiCortex, Inc.					8,241	8,370
Spatial Photonics, Inc. (0.97%)⁽⁴⁾	Electronics & Computer Hardware	Senior Debt Matures April 2011 Interest rate 10.066%	$	3,410	3,326	3,326
		Senior Debt Mature April 2011 Interest rate 9.217%	$	341	341	341
		Preferred Stock Warrants			130	237
Spatial Photonics, Inc. (0.12%)		Preferred Stock			500	500

Total Spatial Photonics Inc.					4,297	4,404
VeriWave, Inc. (0.96%)	Electronics & Computer Hardware	Senior Debt Matures May 2010 Interest rate 10.75%	$	2,960	2,932	2,932
		Revolving Line of Credit Matures September 30 Interest rate Prime +1.00%	$	922	922	922
		Preferred Stock Warrants			55	5

Total VeriWave, Inc.					3,909	3,859
ViDeOnline Communications, Inc. (0.07%)⁽⁴⁾	Electronics & Computer Hardware	Preferred Stock Warrants			298	287

Total ViDeOnline Communications, Inc.					298	287

Total Electronics & Computer Hardware (11.62%)					46,368	46,818

See notes to consolidated financial statements (unaudited)

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2008

(unaudited)

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
Aegerion Pharmaceuticals, Inc. (1.96%)⁽⁵⁾	Specialty Pharmaceuticals	Senior Debt Matures August 2011 Interest rate 8.00%	$	7,525	7,525	7,525
		Covertible Senior Debt Matures December 2009 Interest rate Prime + 2.50%	$	76	76	76
		Preferred Stock Warrants			70	307
Aegerion Pharmaceuticals, Inc. (0.25%)⁽⁴⁾		Preferred Stock			1,000	1,000

Total Aegerion Pharmaceuticals, Inc.					8,671	8,908
Panacos Pharmaceuticals, Inc. (4.55%)⁽⁴⁾	Specialty Pharmaceuticals	Senior Debt Matures January 2011 Interest rate 11.20%	$	18,839	18,296	18,296
		Common Stock Warrants			876	23
Panacos Pharmaceuticals, Inc. (0.02%)		Common Stock			410	62

Total Panacos Pharmaceuticals, Inc.					19,582	18,381
Quatrx Pharmaceuticals Company (4.99%)⁽⁴⁾	Specialty Pharmaceuticals	Senior Debt Matures October 2011 Interest rate Prime + 4.85%	$	20,000	19,728	19,728
		Preferred Stock Warrants			220	149
		Preferred Stock Warrants			307	219
Quatrx Pharmaceuticals Company (0.19%)		Preferred Stock			750	750

Total Quatrx Pharmaceuticals Company					21,005	20,846

Total Specialty Pharmaceuticals (11.96%)					49,258	48,135

Annie’s, Inc. (1.52%)	Consumer & Business Products	Senior Debt - Second Lien Matures April 2011 Interest rate LIBOR + 6.20%	$	6,000	5,768	5,768
		Preferred Stock Warrants			321	335

Total Annie’s, Inc.					6,089	6,103
BabyUniverse, Inc. (0.01%)⁽⁴⁾	Consumer & Business Products	Common Stock			267	37

Total BabyUniverse, Inc.					267	37
IPA Holdings, LLC. (4.16%)⁽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	6,549	6,549
		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.					17,249	17,249
Market Force Information, Inc. (0.01%)⁽⁴⁾	Consumer & Business Products	Preferred Stock Warrants			24	52
Market Force Information, Inc. (0.07%)		Preferred Stock			500	298

Total Market Force Information, Inc.					524	350

See notes to consolidated financial statements (unaudited)

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2008

(unaudited)

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
OnTech Operations, Inc. (1.76%)	Consumer & Business Products	Senior Debt Matures June 2011 Interest rate Prime + 6.375%	$	6,000	5,426	5,426
		Revolving Line of Credit Matures June 2009 Interest rate Prime +5.625%	$	806	806	806
		Preferred Stock Warrants			452	556
		Preferred Stock Warrants			218	314
OnTech Operations, Inc. (0.25%)		Preferred Stock			1,000	1,000

Total OnTech Operations, Inc.					7,902	8,102
Wageworks, Inc. (0.25%)⁽⁴⁾	Consumer & Business Products	Preferred Stock Warrants			252	1,018
Wageworks, Inc. (0.07%)		Preferred Stock			250	265

Total Wageworks, Inc.					502	1,283

Total Consumer & Business Products (8.22%)					32,533	33,124

Custom One Design, Inc. (0.22%)	Semiconductors	Senior Debt Matures September 2010 Interest rate 11.50%	$	874	862	862
		Common Stock Warrants			18	5

Total Custom One Design, Inc.					880	867
Enpirion, Inc. (1.87%)	Semiconductors	Senior Debt Matures August 2011 Interest rate Prime + 4.00%	$	7,500	7,372	7,372
		Preferred Stock Warrants			157	161

Total Enpirion, Inc.					7,529	7,533
iWatt Inc. (1.07%)⁽⁴⁾	Semiconductors	Senior Debt Matures September 2009 Interest rate Prime + 2.75%	$	859	857	857
		Senior Debt Matures September 2009 Interest rate 11.00%	$	1,762	1,762	1,762
		Revolving Line of Credit Matures December 2008 Interest rate Prime + 2.00%	$	1,000	1,000	1,000
		Preferred Stock Warrants			47	103
		Preferred Stock Warrants			51	56
		Preferred Stock Warrants			73	69
		Preferred Stock Warrants			458	458
iWatt Inc. (0.24%)		Preferred Stock			490	949

Total iWatt Inc.					4,738	5,254
NEXX Systems, Inc. (2.06%)⁽⁴⁾	Semiconductors	Senior Debt Matures February 2010 Interest rate Prime + 3.50	$	3,146	3,067	3,067
		Revolving Line of Credit Matures December 2009 Interest rate Prime + 3.00%	$	2,546	2,546	2,546
		Revolving Line of Credit Matures December 2009 Interest rate Prime + 5.00%	$	2,454	2,454	2,454
		Preferred Stock Warrants			165	232

Total NEXX Systems, Inc.					8,232	8,299

See notes to consolidated financial statements (unaudited)

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2008

(unaudited)

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
Quartics, Inc. (0.93%)⁽⁴⁾	Semiconductors	Senior Debt Matures August 2010 Interest rate 11.05%	$	252	220	220
		Senior Debt Matures August 2010 Interest rate 8.80%	$	3,513	3,513	3,513
		Preferred Stock Warrants			53	5

Total Quartics, Inc.					3,786	3,738
Solarflare Communications, Inc. (0.17%)⁽⁴⁾	Semiconductors	Senior Debt Matures August 2010 Interest rate 11.75%	$	526	475	475
		Preferred Stock Warrants			83	224
Solarflare Communications, Inc. (0.16%)		Preferred Stock			641	641

Total Solarflare Communications, Inc.					1,199	1,340

Total Semiconductors (6.72%)					26,364	27,031

Labopharm USA, Inc. (3.77%)⁽⁴⁾⁽⁶⁾	Drug Delivery	Senior Debt Matures December 2011 Interest rate 10.95%	$	15,000	14,670	14,670
		Common Stock Warrants			458	507

Total Labopharm USA, Inc.					15,128	15,177
Transcept Pharmaceuticals, Inc. (1.13%)⁽⁵⁾	Drug Delivery	Senior Debt Matures October 2009 Interest rate 10.69%	$	4,301	4,274	4,274
		Preferred Stock Warrants			36	116
		Preferred Stock Warrants			51	168
Transcept Pharmaceuticals, Inc. (0.12%)		Preferred Stock			500	465

Total Transcept Pharmaceuticals, Inc.					4,861	5,023

Total Drug Delivery (5.02%)					19,989	20,200

BARRX Medical, Inc.(0.82%)⁽⁴⁾	Therapeutic	Senior Debt Mature December 2011 Interest rate 11.00%	$	3,333	3,270	3,270
		Preferred Stock Warrants			63	49
BARRX Medical, Inc. (0.37%)		Preferred Stock			1,500	1,500

Total BARRX Medical, Inc.					4,833	4,819
EKOS Corporation (1.33%)	Therapeutic	Senior Debt Matures November 2010 Interest rate Prime + 2.00%	$	5,000	4,806	4,806
		Preferred Stock Warrants			175	347
		Preferred Stock Warrants			152	188

Total EKOS Corporation					5,133	5,341
Gelesis, Inc. (0.37%)	Therapeutic	Senior Debt Matures May 2012 Interest rate Prime + 5.65%	$	1,500	1,474	1,474
		Preferred Stock Warrants			25	33

Total Gelesis, Inc.					1,499	1,507
Gynesonics, Inc. (0.03%)⁽⁴⁾	Therapeutic	Preferred Stock Warrants			18	105
Gynesonics, Inc. (0.08%)		Preferred Stock			250	322

Total Gynesonics, Inc.					268	427
Light Science Oncology, Inc. (0.03%)	Therapeutic	Preferred Stock Warrants			99	124

Total Light Science Oncology, Inc.					99	124

See notes to consolidated financial statements (unaudited)

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2008

(unaudited)

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
Novasys Medical, Inc. (1.12%)⁽⁴⁾	Therapeutic	Senior Debt Matures January 2010 Interest rate 9.70%	$	4,640	4,351	4,351
		Preferred Stock Warrants			71	114
		Preferred Stock Warrants			54	40
Novasys Medical, Inc. (0.14%)		Preferred Stock			556	556

Total Novasys Medical, Inc.					5,032	5,061

Power Medical Interventions, Inc. (0.00%)	Therapeutic	Common Stock Warrants			21	14

Total Power Medical Interventions, Inc.					21	14

Total Therapeutic (4.29%)					16,885	17,293

Cozi Group, Inc. (0.03%)	Internet Consumer & Business Services	Preferred Stock Warrants			148	122
Cozi Group, Inc. (0.06%)		Preferred Stock			177	251

Total Cozi Group, Inc.					325	373
Invoke Solutions, Inc. (0.35%)⁽⁴⁾	Internet Consumer & Business Services	Senior Debt Matures November 2009 Interest rate Prime + 3.75%	$	1,298	1,296	1,296
		Preferred Stock Warrants			56	80
		Preferred Stock Warrants			26	26

Total Invoke Solutions, Inc.					1,378	1,402
Prism Education Group Inc. (0.44%)	Internet Consumer & Business Services	Senior Debt Matures December 2010 Interest rate 11.25%	$	1,682	1,656	1,656
		Preferred Stock Warrants			42	102

Total Prism Education Group Inc.					1,698	1,758
RazorGator Interactive Group, Inc. (1.55%)⁽⁵⁾	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			14	2,886
		Preferred Stock Warrants			28	352
RazorGator Interactive Group, Inc. (1.19%)		Preferred Stock			1,000	4,791

Total RazorGator Interactive Group, Inc.					4,042	11,029
Serious USA, Inc. (0.35%)	Internet Consumer & Business Services	Senior Debt Matures February 2011 Interest rate Prime + 3.00%	$	2,308	2,247	748
		Revolving Line of Credit Interest rate Prime + 2.00%	$	654	654	654
		Preferred Stock Warrants			94	0

Total Serious USA, Inc.					2,995	1,402
Spa Chakra, Inc. (1.24%)	Internet Consumer & Business Services	Senior Debt Matures June 2010 Interest rate 14.45%%	$	5,000	5,000	5,000

Total Spa Chakra, Inc.					5,000	5,000

Total Internet Consumer & Business Services (5.21%)					15,438	20,964

See notes to consolidated financial statements (unaudited)

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2008

(unaudited)

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
Lilliputian Systems, Inc. (1.28%)⁽⁴⁾	Energy	Senior Debt Matures March 2010 Interest rate 9.75%	$	5,068	5,051	5,051
		Preferred Stock Warrants			49	86

Total Lilliputian Systems, Inc.					5,100	5,137

Total Energy (1.28%)					5,100	5,137

Active Response Group, Inc. (2.34%)⁽⁴⁾	Information Services	Senior Debt Matures March 2012 Interest rate LIBOR + 6.55%	$	9,309	9,215	9,215
		Preferred Stock Warrants			92	115
		Common Stock Warrants			46	84

Total Active Response Group, Inc.					9,353	9,414
Box.net, Inc. (0.08%)	Information Services	Senior Debt Matures June 2011 Interest rate Prime + 1.50%	$	322	262	262
		Preferred Stock Warrants			73	59

Total Box.net, Inc.					335	321
Buzznet, Inc. (0.00%)	Information Services	Preferred Stock Warrants			9	14
Buzznet, Inc. (0.06%)		Preferred Stock			250	250

Total Buzznet, Inc.					259	264
hi5 Networkss, Inc. (2.34%)	Information Services	Senior Debt Matures December 2010 Interest rate Prime + 2.5%	$	3,000	3,000	3,000
		Senior Debt Matures June 2011 Interest rate Prime + 0.5%	$	6,155	6,155	6,155
		Preferred Stock Warrants			212	285

Total hi5 Networks, Inc.					9,367	9,440
Jab Wireless, Inc. (3.56%)⁽⁴⁾	Information Services	Senior Debt Matures January 2012 Interest rate 10.75%	$	2,715	2,715	2,715
		Senior Debt Matures January 2012 Interest rate 10.00%	$	1,793	1,793	1,793
		Senior Debt Matures January 2012 Interest rate 9.50%	$	2,824	2,824	2,824
		Senior Debt Matures January 2012 Interest rate 8.50%	$	6,700	6,700	6,700
		Preferred Stock Warrants			264	323

Total Jab Wireless, Inc.					14,296	14,355
Solutionary, Inc. (1.78%)⁽⁴⁾	Information Services	Senior Debt Matures June 2010 Interest rate LIBOR + 5.50%	$	5,305	5,416	5,416
		Revolving Line of Credit Matures June 2010 Interest rate LIBOR + 5.00%	$	1,500	1,540	1,540
		Preferred Stock Warrants			94	209
		Preferred Stock Warrants			2	6
Solutionary, Inc. (0.06%)		Preferred Stock			250	250

Total Solutionary, Inc.					7,302	7,421

See notes to consolidated financial statements (unaudited)

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2008

(unaudited)

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾	Value⁽³⁾
The Generation Networks, Inc. (1.47%)⁽⁴⁾	Information Services	Senior Debt Matures March 2012 Interest rate Prime + 4.50%	$	6,185	6,012	5,904
The Generation Networks, Inc. (0.13%)		Preferred Stock			500	500

Total The Generation Networks, Inc.					6,512	6,404
Wallop Technologies, Inc. (0.04%)	Information Services	Senior Debt Matures March 2010 Interest rate 10.00%	$	157	153	153
		Preferred Stock Warrants			8	—

Total Wallop Technologies, Inc.					161	153
Zeta Interactive Corporation (3.62%) ⁽⁴⁾	Information Services	Senior Debt Matures November 2011 Interest rate Prime +2.00%	$	6,530	6,385	6,385
		Senior Debt Matures November 2011 Interest rate Prime +3.00%	$	8,000	8,000	8,000
		Preferred Stock Warrants			172	208
Zeta Interactive Corporation (0.13%)		Preferred Stock			500	500

Total Zeta Interactive Corporation					15,057	15,093

Total Information Services (15.61%)					62,642	62,865


Novadaq Technologies, Inc. (0.12%)	Diagnostic	Common Stock			1,626	477

Total Novadaq Technologies, Inc.					1,626	477
Optiscan Biomedical, Corp. (2.41%)⁽⁴⁾	Diagnostic	Senior Debt Matures June 2011 Interest rate 10.25%	$	10,000	9,437	9,437
		Preferred Stock Warrants			760	250
Optiscan Biomedical, Corp. (0.74%)		Preferred Stock			3,000	3,000

Total Optiscan Biomedical, Corp.					13,197	12,687

Total Diagnostic (3.27%)					14,823	13,164

Guava Technologies, Inc. (1.08%)⁽⁴⁾	Biotechnology Tools	Senior Debt Matures July 2009 Interest rate Prime + 3.25%	$	2,219	2,182	2,182
		Convertible Debt			250	250
		Revolving Line of Credit Matures December 2007 Interest rate Prime + 2.00%	$	1,875	1,575	1,575
		Preferred Stock Warrants			105	278
		Preferred Stock Warrants			68	44

Total Guava Technologies, Inc.					4,180	4,329
Kamada, LTD. (3.69%)⁽⁶⁾	Biotechnology Tools	Senior Debt Matures November 2011 Interest rate 10.60%	$	15,000	14,575	14,575
		Common Stock Warrants			531	286

Total Kamada, LTD.					15,106	14,861
NuGEN Technologies, Inc. (0.77%)	Biotechnology Tools	Senior Debt Matures November 2010 Interest rate Prime + 3.45%	$	1,706	1,683	1,683
		Senior Debt Matures November 2010 Interest rate Prime + 1.70%	$	1,000	1,000	1,000
		Preferred Stock Warrants			45	360
		Preferred Stock Warrants			33	43
NuGEN Technologies, Inc. (0.12%)		Preferred Stock			500	500

Total NuGEN Technologies, Inc.					3,261	3,586

Total Biotechnology Tools (5.66%)					22,547	22,776

See notes to consolidated financial statements (unaudited)

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2008

(unaudited)

(dollars in thousands)


Portfolio Company	Industry	Type of Investment⁽¹⁾	Principal Amount		Cost⁽²⁾		Value⁽³⁾
Crux Biomedical, Inc. (0.34%)	Surgical Devices	Senior Debt Matures October 2010 Interest rate Prime + 1.75%	$	1,395		1,376		1,376
		Preferred Stock Warrants				37		—
Crux Biomedical, Inc. (0.06%)		Preferred Stock				250		250

Total Crux Biomedical, Inc.						1,663		1,626

Transmedics, Inc. (1.49%)⁽⁵⁾	Surgical Devices	Senior Debt Matures December 2011 Interest rate Prime + 5.25%	$	6,000		5,884		5,884
		Preferred Stock Warrants				139		122

Total Transmedics, Inc.						6,023		6,006

Total Surgical Devices (1.89%)						7,686		7,632

Glam Media, Inc. (1.55%)	Media/Content/Info	Revolving Line of Credit Matures April 2009 Interest rate Prime + 1.25%	$	5,935		5,681		5,681
		Preferred Stock Warrants				482		552

Total Glam Media, Inc.						6,163		6,233
Waterfront Media Inc. (2.2%)⁽⁵⁾	Media/Content/Info	Senior Debt Matures December 2010 Interest rate Prime + 3.00%	$	2,984		2,956		2,956
		Revolving Line of Credit Matures October 2009 Interest rate Prime + 1.25%	$	5,000		5,000		5,000
		Preferred Stock Warrants				61		903
Waterfront Media Inc. (0.45%)		Preferred Stock				1,000		1,828

Total Waterfront Media Inc.						9,017		10,687

Total Media/Content/Info (4.2%)						15,180		16,920

Total Investments (158.12%)					$	628,019	$	636,747

*	Value as a percent of net assets

(1)	Preferred and common stock, warrants, and equity interests are generally non-income producing. Certain floating rate loans may also have interest rate floors.

(2)	Gross unrealized appreciation, gross unrealized depreciation, and net appreciation for federal income tax purposes totaled $17,275, $12,659 and $4,616, respectively. The tax cost of investments is $632,130.

(3)

Except for warrants in seven publicly traded companies and common stock in three publicly traded companies, all investments are restricted at September 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 $896,000 at September 30, 2008 and is included in accrued liabilities and reduces the unrealized gain recognized by the Company at September 30, 2008.

(5)	Debt investments of this portfolio company have been pledged as collateral under the Wells Facility.

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

(7)	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.

(8)	Debt is on non-accrual status at September 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 September 30,					Nine Months Ended September 30,
	2008		2007			2008			2007
Investment income:
Interest	$	17,348	$	13,569		$	47,669		$	34,396
Fees		1,900		1,572			6,202			3,698

Total investment income		19,248		15,141			53,871			38,094

Operating expenses:
Interest		3,929		553			8,694			3,003
Loan fees		618		419			1,564			935
General and administrative		1,937		1,420			5,307			4,442
Employee Compensation:
Compensation and benefits		2,544		2,404			8,198			6,358
Stock-based compensation		228		300			1,144			847

Total employee compensation		2,772		2,704			9,342			7,205

Total operating expenses		9,256		5,096			24,907			15,585

Net investment income		9,992		10,044			28,964			22,509
Net realized gain on investments		126		49			4,993			3
Net increase (decrease) in unrealized appreciation on investments		2,420		(2,915	)		(2,024	)		(733	)

Net realized and unrealized gain (loss)		2,546		(2,866	)		2,969			(730	)

Net increase in net assets resulting from operations	$	12,538	$	7,178		$	31,933		$	21,779

Net investment income before investment gains and losses per common share:
Basic	$	0.31	$	0.31		$	0.89		$	0.84

Diluted	$	0.31	$	0.31		$	0.89		$	0.83

Change in net assets per common share:
Basic	$	0.38	$	0.22		$	0.98		$	0.81

Diluted	$	0.38	$	0.22		$	0.98		$	0.81

Weighted average shares outstanding
Basic		32,634		32,427			32,600			26,864

Diluted		32,634		32,526			32,600			26,992

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		($	1,972	)	($	2,733	)	$	—		$	255,413
Net increase net assets resulting from operations	—		—		—		—			(733	)		3			22,509			—			21,779
Issuance of common stock	25		—		349		—			—			—			—			—			349
Issuance of common stock in public offering overallotment exercise	10,040		10		128,405		—			—			—			—			—			128,415
Issuance of common stock from warrant exercises	291		—		3,071		—			—			—			—			—			3,071
Issuance of common stock under dividend reinvestment plan	250		—		3,304		—			—			—			—			—			3,304
Issuance of common stock under restricted stock plan	7		—		90		(90	)		—			—			—			—			—
Dividends declared	—		—		—		—			—			—			(23,551	)		—			(23,551	)
Stock-based compensation	—		—		842		5			—			—			—			—			847

Balance at September 30, 2007	32,540	$	32	$	393,296	($	85	)	$	2,128		($	1,969	)	($	3,775	)	$	—		$	389,627

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	—		—		—		—			(2,024	)		4,993			28,964			—			31,933
Issuance of common stock	6		—		43		—			—			—			—			—			43
Issuance of common stock from exercise of warrants	88		—		933		—			—			—			—			—			933
Issuance of common stock under restricted stock plan	228		—		2,743		(2,743	)		—			—			—			—			—
Dividends declared	—		—		—		—			—			—			(32,100	)		—			(32,100	)
Stock-based compensation	—		—		741		403			—			—			—			—			1,144

Balance at September 30, 2008	32,863	$	33	$	397,990	($	2,418	)	$	8,105		$	5,812		($	6,693	)	($	139	)	$	402,690

See notes to consolidated financial statements (unaudited).

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited)

(in thousands)


	Nine Months Ended September 30,
	2008			2007
Cash flows from operating activities:
Net increase in net assets resulting from operations	$	31,933		$	21,779
Adjustments to reconcile net increase in net assets resulting from operations to net cash used in and provided by operating activities:
Purchase of investments		(290,550	)		(219,307	)
Principal payments received on investments		184,780			86,617
Proceeds from sale of investments		7,313			1,646
Net unrealized appreciation (depreciation) on investments		2,024			520
Net unrealized appreciation on investments due to lender		(247	)		214
Net realized gain on investments		(4,993	)		(3	)
Warrant values for loans not funded		—			—
Accretion of paid-in-kind principal		(664	)		—
Accretion of loan discounts		(4,353	)		(1,744	)
Accretion of loan exit fees		(1,149	)		(1,127	)
Depreciation		218			152
Stock-based compensation		741			842
Amortization of restricted stock		403			—
Common stock issued in lieu of Director compensation		54			349
Amortization of deferred loan origination revenue		(3,758	)		(2,139	)
Change in operating assets and liabilities:
Interest receivable		(338	)		(1,578	)
Prepaid expenses and other assets		(8,718	)		1,769
Income tax receivable		—			29
Accounts payable		598			(249	)
Income tax payable		(105	)		—
Accrued liabilities		(534	)		(274	)
Deferred loan origination revenue		4,934			3,761

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