Quarterly Report on Form 10-Q
Table of Contents

 

 

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 March 31, 2011

OR

 

¨ 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 that 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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this Chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ¨    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 May 9, 2011, there were 43,799,440 shares outstanding of the Registrant’s common stock, $0.001 par value.

 

 

 

Table of Contents

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 March 31, 2011 (unaudited) and December 31, 2010

     3   
  

Consolidated Schedule of Investments as of March 31, 2011 (unaudited)

      4   
  

Consolidated Schedule of Investments as of December 31, 2010

      19   
  

Consolidated Statement of Operations for the three month period ended March 31, 2011 and 2010 (unaudited)

     32   
  

Consolidated Statement of Changes in Net Assets for the three-month periods ended March 31, 2011 and 2010 (unaudited)

      33   
  

Consolidated Statement of Cash Flows for the three-month periods ended March 31, 2011 and 2010 (unaudited)

     34   
  

Notes to Consolidated Financial Statements (unaudited)

      35   

Item 2.

   

Management’s Discussion and Analysis of Financial Condition and Results of Operations

      55   

Item 3.

   

Quantitative and Qualitative Disclosures About Market Risk

      76   

Item 4.

   

Controls and Procedures

      77   
PART II. OTHER INFORMATION      78   

Item 1.

   

Legal Proceedings

      78   

Item 1A.

   

Risk Factors

      78   

Item 2.

   

Unregistered Sales of Equity Securities and Use of Proceeds

      89   

Item 3.

   

Defaults Upon Senior Securities

      89   

Item 4.

   

Reserved

      89   

Item 5.

   

Other Information

      89   

Item 6.

   

Exhibits

      90   
SIGNATURES      91   

 

2

Table of Contents

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

(unaudited)

(dollars in thousands, except per share data)

 

     March 31,
2011
(unaudited)		     December 31,
2010		  

Assets

     

Investments:

     

Non-Control/Non-Affiliate investments (cost of $465,896 and $445,782, respectively)

    $   443,022      $ 428,782   

Affiliate investments (cost of $2,880 and $2,880, respectively)

      2,032        3,069   

Control investments (cost of $0 and $31,743, respectively)

      —          40,181   
                

Total investments, at value (cost of $468,776 and $480,405, respectively)

      445,054        472,032   

Cash and cash equivalents

      114,435        107,014   

Interest receivable

      4,306        4,520   

Other assets

      10,611        7,681   
                

Total assets

    $ 574,406      $ 591,247   
                

Liabilities

     

Accounts payable and accrued liabilities

    $ 7,449      $ 8,716   

Long-term SBA Debentures

      163,750        170,000   
                

Total liabilities

      171,199        178,716   

Net assets:

     

Common stock, par value

      43        43   

Capital in excess of par value

      478,959        477,549   

Unrealized depreciation on investments

      (23,390 )      (8,038 ) 

Accumulated realized losses on investments

      (46,663 )      (51,033 ) 

Distributions in excess of investment income

      (5,742 )      (5,990 ) 
                

Total net assets

      403,207        412,531   
                

Total liabilities and net assets

    $ 574,406      $ 591,247   
                

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

      43,804        43,444   
                

Net asset value per share

    $ 9.20      $ 9.50   
                

See notes to Consolidated Financial Statements (unaudited)

 

3

Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

March 31, 2011

(unaudited)

(dollars in thousands)

 

Portfolio Company

   

Industry

   

Type of Investment (1)

    Principal
Amount		      Cost(2)      Value(3)  

Acceleron Pharmaceuticals, Inc.

    Drug Discovery    Preferred Stock Warrants       $ 69       $ 601   
      Preferred Stock Warrants         35         128   
      Preferred Stock Warrants         39         59   
      Preferred Stock         1,341         1,693   
                          

Total Acceleron Pharmaceuticals, Inc.

               1,484         2,481   

Anthera Pharmaceuticals inc.

    Drug Discovery    Senior Debt         
     

Matures September 2014

Interest rate Prime + 7.3% or

Floor rate of 10.55%

    $ 25,000         23,786         23,786   
      Common Stock Warrants         541         571   

Total Anthera Pharmaceuticals inc.

       Common Stock Warrants         443         467   
                          
              24,770         24,824   

Aveo Pharmaceuticals, Inc.

    Drug Discovery    Senior Debt         
     

Matures September 2013

Interest rate Prime + 7.15% or

Floor rate of 11.9%

    $ 25,000         26,186         26,728   
      Preferred Stock Warrants         190         530   
      Preferred Stock Warrants         104         128   
      Preferred Stock Warrants         24         46   
      Preferred Stock Warrants         288         650   
      Preferred Stock Warrants         236         532   
                          

Total Aveo Pharmaceuticals, Inc.

               27,028         28,614   

Dicerna Pharmaceuticals, Inc.

    Drug Discovery    Senior Debt         
     

Matures July 2012

Interest rate Prime + 9.20% or

Floor rate of 12.95%

    $ 4,020         4,042         4,083   
      Preferred Stock Warrants         206         161   
      Preferred Stock Warrants         31         29   
      Preferred Stock Warrants         28         23   
      Preferred Stock         503         503   
                          

Total Dicerna Pharmaceuticals, Inc.

               4,810         4,799   

EpiCept Corporation

    Drug Discovery    Common Stock Warrants         4         71   
      Common Stock Warrants         40         6   
                          

Total EpiCept Corporation

               44         77   

Horizon Therapeutics, Inc.

    Drug Discovery    Preferred Stock Warrants         231         57   
                          

Total Horizon Therapeutics, Inc.

               231         57   

Inotek Pharmaceuticals Corp.

    Drug Discovery    Preferred Stock         1,500         —     
                          

Total Inotek Pharmaceuticals Corp.

               1,500         —     
Merrimack Pharmaceuticals, Inc.    Drug Discovery    Preferred Stock Warrants         155         139   
      Preferred Stock         2,000         1,497   
                          
Total Merrimack Pharmaceuticals, Inc.               2,155         1,636   
Paratek Pharmaceuticals, Inc.    Drug Discovery    Preferred Stock Warrants         137         94   
      Preferred Stock         1,000         1,000   
                          
Total Paratek Pharmaceuticals, Inc.               1,137         1,094   

See notes to Consolidated Financial Statements (unaudited)

 

4

Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

March 31, 2011

(unaudited)

(dollars in thousands)

 

Portfolio Company

   

Industry

   

Type of Investment (1)

   

Principal
Amount

     

Cost(2)

     

Value(3)

  
PolyMedix, Inc.    Drug Discovery   

Senior Debt

Matures September 2013

Interest rate Prime + 7.1% or

Floor rate of 12.35%

    $ 9,224       $ 8,893       $ 9,170   
      Preferred Stock Warrants         480         167   
                          
Total PolyMedix, Inc.               9,373         9,337   
Portola Pharmaceuticals, Inc.    Drug Discovery   

Senior Debt

Matures April 2011

Interest rate Prime + 2.16%

    $ 416         791         791   
      Preferred Stock Warrants         152         533   
                          
Total Portola Pharmaceuticals, Inc.               943         1,324   
                          
Total Drug Discovery (18.41%)*               73,475         74,243   
                          
Affinity Videonet, Inc    Communications & Networking    Preferred Stock Warrants         102         169   
                          
Total Affinity Videonet, Inc.               102         169   
E-band Communications, Corp.(6)    Communications & Networking    Preferred Stock         2,880         2,032   
                          
Total E-Band Communications, Corp.               2,880         2,032   
IKANO Communications, Inc.    Communications & Networking    Preferred Stock Warrants         45         —     
      Preferred Stock Warrants         72         —     
                          
Total IKANO Communications, Inc.               117         —     
Intelepeer, Inc.    Communications & Networking   

Senior Debt

Matures May 2013

Interest rate Prime + 8.125%

    $ 7,271         7,137         7,094   
      Preferred Stock Warrants         102         103   
                          
Total Intelepeer, Inc.               7,239         7,197   
Neonova Holding Company    Communications & Networking    Preferred Stock Warrants         94         14   
      Preferred Stock         250         165   
                          
Total Neonova Holding Company               344         179   

See notes to Consolidated Financial Statements (unaudited)

 

5

Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

March 31, 2011

(unaudited)

(dollars in thousands)

 

Portfolio Company

   

Industry

   

Type of Investment (1)

   

Principal
Amount

     

Cost(2)

     

Value(3)

  
Opsource, Inc.               
   Communications & Networking    Preferred Stock Warrants       $ 223       $ 21   
                          
Total Opsource, Inc.               223         21   
Pac-West Telecomm, Inc.    Communications & Networking   

Senior Debt

Matures April 2013

Interest rate Prime + 7.5% or

Floor rate of 11.50%

    $ 4,500         4,175         4,138   
      Preferred Stock Warrants         121         138   
                          
Total Pac-West Telecomm, Inc.               4,296         4,276   
PeerApp, Inc.    Communications & Networking   

Senior Debt

Matures April 2013

Interest rate Prime + 7.5% or

Floor rate of 11.50%

    $ 2,638         2,610         2,582   
      Preferred Stock Warrants         61         61   
                          
Total PeerApp, Inc.               2,671         2,643   
Peerless Network, Inc.    Communications & Networking    Preferred Stock Warrants         95         123   
      Preferred Stock         1,000         1,280   
                          
Total Peerless Network, Inc.               1,095         1,403   
Ping Identity Corporation    Communications & Networking    Preferred Stock Warrants         52         2   
                          
Total Ping Identity Corporation               52         2   
Purcell Systems, Inc.    Communications & Networking    Preferred Stock Warrants         123         301   
                          
Total Purcell Systems, Inc.               123         301   
Seven Networks, Inc.    Communications & Networking    Preferred Stock Warrants         174         —     
                          
Total Seven Networks, Inc.               174         —     
Stoke, Inc(4)    Communications & Networking   

Senior Debt

Matures May 2013

Interest rate Prime + 7.0% or

Floor rate of 10.25%

    $ 3,865         3,770         3,798   
      Preferred Stock Warrants         53         199   
      Preferred Stock Warrants         65         127   
      Preferred Stock         500         500   
                          
Total Stoke, Inc.               4,388         4,624   

See notes to Consolidated Financial Statements (unaudited)

 

6

Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

March 31, 2011

(unaudited)

(dollars in thousands)

 

Portfolio Company

   

Industry

   

Type of Investment (1)

   

Principal
Amount

     

Cost(2)

     

Value(3)

  
Tectura Corporation    Communications
& Networking		   

Senior Debt

Matures December 2012

Interest rate 11%

    $ 5,625       $ 5,668       $ 5,668   
     

Revolving Line of Credit

Matures July 2011

Interest rate 11%

    $ 17,477         18,563         18,563   
      Preferred Stock Warrants         51         1   
                          
Total Tectura Corporation               24,282         24,232   
                          
Total Communications & Networking (11.68%)*               47,986         47,079   
                          
Atrenta, Inc.    Software    Preferred Stock Warrants         102         17   
      Preferred Stock Warrants         34         5   
      Preferred Stock Warrants         95         10   
      Preferred Stock         250         131   
                          
Total Atrenta, Inc.               481         163   
Blurb, Inc.    Software   

Senior Debt

Matures June 2011

Interest rate Prime + 3.50% or

Floor rate of 8.5%

    $ 590         835         835   
      Preferred Stock Warrants         25         347   
      Preferred Stock Warrants         299         215   
                          
Total Blurb, Inc.               1,159         1,397   
Braxton Technologies, LLC.    Software    Preferred Stock Warrants         188         —     
                          
Total Braxton Technologies, LLC.               188         —     
Bullhorn, Inc.    Software    Preferred Stock Warrants         43         232   
                          
Total Bullhorn, Inc.               43         232   
Clickfox, Inc.    Software   

Senior Debt

Matures July 2013

Interest rate Prime + 6.00% or

Floor rate of 11.25%

    $ 5,648         5,484         5,484   
     

Revolving Line of Credit

Matures July 2011

Interest rate Prime + 5.00% or

Floor rate of 12.00%

    $ 2,000         1,999         1,999   
      Preferred Stock Warrants         177         623   
      Preferred Stock Warrants         152         616   
                          
Total Clickfox, Inc.               7,812         8,722   

See notes to Consolidated Financial Statements (unaudited)

 

7

Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

March 31, 2011

(unaudited)

(dollars in thousands)

 

Portfolio Company

   

Industry

   

Type of Investment (1)

   

Principal
Amount

     

Cost(2)

     

Value(3)

  
Forescout Technologies, Inc.    Software    Preferred Stock Warrants       $ 99       $ 4   
                          
Total Forescout Technologies, Inc.               99         4   
GameLogic, Inc.    Software    Preferred Stock Warrants         92         —     
                          
Total GameLogic, Inc.               92         —     

HighJump Acquisition, LLC.

    Software   

Senior Debt

Matures May 2013

Interest rate Libor + 8.75% or

Floor rate of 12.00%

    $ 17,500         17,502         17,201   
                          
Total HighJump Acquisition, LLC.               17,502         17,201   
HighRoads, Inc.    Software    Preferred Stock Warrants         44         77   
                          
Total HighRoads, Inc.               44         77   
Rockyou, Inc.    Software    Preferred Stock Warrants         117         48   
                          
Total Rockyou, Inc.               117         48   
Sportvision, Inc.    Software    Preferred Stock Warrants         39         —     
                          
Total Sportvision, Inc.               39         —     
Unify Corporation    Software   

Senior Debt

Matures June 2015

Interest rate Libor + 8.25% or

Floor rate of 10.25%

    $ 23,700         22,212         22,682   
     

Revolving Line of Credit

Matures June 2015

Interest rate Libor + 7.25% or

Floor rate of 9.25%

    $ 2,950         2,932         2,621   
      Preferred Stock Warrants         1,434         561   
                          
Total Unify Corporation               26,578         25,864   
WildTangent, Inc.    Software    Preferred Stock Warrants         238         6   
                          
Total WildTangent, Inc.               238         6   
                          
Total Software (13.32%)*               54,392         53,714   
                          
Luminus Devices, Inc.    Electronics &
Computer Hardware		    Preferred Stock Warrants         183         —     
      Preferred Stock Warrants         84         —     
      Preferred Stock Warrants         334         —     
                          
Total Luminus Devices, Inc.               601         —     

See notes to Consolidated Financial Statements (unaudited)

 

8

Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

March 31, 2011

(unaudited)

(dollars in thousands)

 

Portfolio Company

   

Industry

   

Type of Investment (1)

    Principal
Amount		      Cost(2)      Value(3)  

Maxvision Holding, LLC.

    Electronics &
Computer Hardware		   

Senior Debt

Matures October 2012

Interest rate Prime + 7.25% or

Floor rate of 10.75%

    $ 5,000       $ 5,427       $ 291   
     

Senior Debt

Matures April 2012

Interest rate Prime + 5.0% or

Floor rate of 8.5%

    $ 3,159         3,141         1,777   
     

Revolving Line of Credit

Matures April 2012

Interest rate Prime + 5.0% or

Floor rate of 8.5%

    $ 3,100         3,168         3,168   
     

Common Stock

         81         —     
                          

Total Maxvision Holding, LLC

               11,817         5,236   

Shocking Technologies, Inc.

    Electronics &
Computer Hardware		    Preferred Stock Warrants         63         77   
                          

Total Shocking Technologies, Inc.

               63         77   

Spatial Photonics, Inc.

       Preferred Stock Warrants         130         —     
   Electronics &
Computer Hardware		   

Preferred Stock

         767         350   
                          

Total Spatial Photonics Inc.

               897         350   

VeriWave, Inc.

    Electronics &
Computer Hardware		    Preferred Stock Warrants         54         —     
     

Preferred Stock Warrants

         46         4   
                          

Total VeriWave, Inc.

               100         4   
                          

Total Electronics & Computer Hardware (1.41%)*

               13,478         5,667   
                          

Aegerion Pharmaceuticals, Inc.

    Specialty
Pharmaceuticals		   

Senior Debt

Matures September 2014

Interest rate Prime + 5.65% or

Floor rate of 10.40%

    $ 10,000         9,977         9,977   
     

Preferred Stock Warrants

         69         922   
     

Common Stock

         1,475         3,064   
                          

Total Aegerion Pharmaceuticals, Inc.

               11,521         13,963   

Althea Technologies, Inc.

    Specialty
Pharmaceuticals		   

Senior Debt

Matures October 2013

Interest rate Prime + 7.70% or

Floor rate of 10.95%

    $ 12,000         11,779         11,326   
     

Preferred Stock Warrants

         309         —     
                          

Total Althea Technologies, Inc.

               12,088         11,326   

See notes to Consolidated Financial Statements (unaudited)

 

9

Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

March 31, 2011

(unaudited)

(dollars in thousands)

 

Portfolio Company

   

Industry

   

Type of Investment(1)

    Principal
Amount		      Cost(2)      Value(3)  
Chroma Therapeutics, Ltd.(5)    Specialty Pharmaceuticals   

Senior Debt

Matures September 2013

Interest rate Prime + 7.75% or

Floor rate of 12.00%

    $ 10,000       $ 9,900       $ 10,047   
      Preferred Stock Warrants         490         587   
                          
Total Chroma Therapeutics, Ltd.               10,390         10,634   
Pacira Pharmaceuticals, Inc.    Specialty Pharmaceuticals   

Senior Debt

Matures May 2014

Interest rate Prime + 6.25% or

Floor rate of 10.25%

    $ 11,250         11,154         11,154   
     

Senior Debt

Matures May 2014

Interest rate Prime + 8.65% or

Floor rate of 12.65%

    $ 15,000         13,936         13,936   
      Preferred Stock Warrants         1,086         391   
                          
Total Pacira Pharmaceuticals, Inc.               26,176         25,481   
QuatRx Pharmaceuticals Company    Specialty Pharmaceuticals   

Senior Debt

Matures October 2011

Interest rate Prime + 8.90% or

Floor rate of 12.15%

    $ 7,639         7,865         7,865   
      Convertible Senior Debt         
     

Matures March 2012

    $ 1,888         1,888         1,888   
      Preferred Stock Warrants         220         —     
      Preferred Stock Warrants         307         —     
      Preferred Stock         750         116   
                          
Total Quatrx Pharmaceuticals Company               11,030         9,869   
                          
Total Specialty Pharmaceuticals (17.68%)*               71,205         71,273   
                          
Annie’s, Inc.   

Consumer &

Business

Products

    Preferred Stock Warrants         321         45   
                          
Total Annie’s, Inc.               321         45   
IPA Holdings, LLC (4)   

Consumer &

Business

Products

   

Senior Debt

Matures November 2012

Interest rate Prime + 6.75% or

Floor rate of 11.0%

    $ 7,875         8,128         7,849   
     

Senior Debt

Matures May 2013

Interest rate Prime + 9.75% or

Floor rate of 14.0%

    $ 6,500         7,041         6,979   
     

Revolving Line of Credit

Matures November 2012

Interest rate Prime + 6.25% or

Floor rate of 10.50%

    $ 856         842         842   
      Preferred Stock Warrants         275         —     
      Common Stock         500         —     
                          
Total IPA Holding, LLC               16,786         15,670   

See notes to Consolidated Financial Statements (unaudited)

 

10

Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

March 31, 2011

(unaudited)

(dollars in thousands)

 

Portfolio Company

   

Industry

   

Type of Investment(1)

    Principal
Amount		      Cost(2)      Value(3)  
Market Force Information, Inc.      

Preferred Stock Warrants

       $ 24       $ 77   
   Consumer & Business Products   

Preferred Stock

         500         459   
                          
Total Market Force Information, Inc.               524         536   
Wageworks, Inc.      

Preferred Stock Warrants

         252         1,452   
   Consumer & Business Products   

Preferred Stock

         250         287   
                          
Total Wageworks, Inc.               502         1,739   
                          
Total Consumer & Business Products (4.46%)*               18,133         17,990   
                          
Enpirion, Inc.    Semiconductors   

Preferred Stock Warrants

         157         —     
                          
Total Enpirion, Inc.               157         —     
iWatt, Inc.    Semiconductors   

Preferred Stock Warrants

         46         5   
     

Preferred Stock Warrants

         51         25   
     

Preferred Stock Warrants

         73         35   
     

Preferred Stock Warrants

         458         374   
     

Preferred Stock

         490         951   
                          
Total iWatt, Inc.               1,118         1,390   
NEXX Systems, Inc.    Semiconductors   

Preferred Stock Warrants

         297         1,080   
     

Preferred Stock

         277         704   
                          
Total NEXX Systems, Inc.               574         1,784   
Quartics, Inc.    Semiconductors   

Preferred Stock Warrants

         53         —     
                          
Total Quartics, Inc.               53         —     
Solarflare Communications, Inc.    Semiconductors   

Preferred Stock Warrants

         83         —     
     

Common Stock

         641         —     
                          
Total Solarflare Communications, Inc.               724         —     
                          
Total Semiconductors (0.79%)*               2,626         3,174   
                          
Alexza Pharmaceuticals, Inc. (4)    Drug Delivery   

Senior Debt
Matures October 2013
Interest rate Prime + 6.5% or
Floor rate of 10.75%

    $ 14,207         13,877         14,044   
     

Preferred Stock Warrants

         645         290   
                          
Total Alexza Pharmaceuticals, Inc.               14,522         14,334   
BIND Biosciences, Inc.    Drug Delivery   

Preferred Stock Warrants

         53         48   
                          
Total BIND Biosciences, Inc.               53         48   

See notes to Consolidated Financial Statements (unaudited)

 

11

Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

March 31, 2011

(unaudited)

(dollars in thousands)

 

Portfolio Company

   

Industry

   

Type of Investment (1)

    Principal
Amount		      Cost(2)      Value(3)  

Labopharm USA, Inc. (5)

    Drug Delivery    Senior Debt         
     

Matures December 2012

Interest rate 10.95%

    $ 17,766       $ 17,731       $ 17,856   
     

Common Stock Warrants

         635         69   
                          

Total Labopharm USA, Inc.

               18,366         17,925   

Transcept Pharmaceuticals, Inc.

    Drug Delivery    Common Stock Warrants         36         74   
     

Common Stock Warrants

         51         33   
     

Common Stock

         500         340   
                          

Total Transcept Pharmaceuticals, Inc.

               587         447   
                          

Total Drug Delivery (8.12%)*

               33,528         32,754   
                          

BARRX Medical, Inc.

    Therapeutic    Senior Debt         
     

Mature December 2011

Interest rate 11.00%

    $ 2,209         2,693         2,693   
     

Preferred Stock Warrants

         76         60   
     

Preferred Stock

         1,500         1,571   
                          

Total BARRX Medical, Inc.

               4,269         4,324   

EKOS Corporation

    Therapeutic    Preferred Stock Warrants         175         —     
     

Preferred Stock Warrants

         153         —     
                          

Total EKOS Corporation

               328         —     

Gelesis, Inc. (7)

    Therapeutic    Senior Debt         
     

Matures May 2012

Interest rate Prime + 7.5% or

Floor rate of 10.75%

    $ 2,771         2,807         —     
                          

Total Gelesis, Inc.

               2,807         —     

Gynesonics, Inc.

    Therapeutic    Senior Debt         
     

Mature October 2013

Interest rate Prime + 8.25% or

Floor rate of 11.50%

    $ 6,500         6,328         6,255   
     

Preferred Stock Warrants

         228         197   
     

Preferred Stock

         532         462   
                          

Total Gynesonics, Inc.

               7,088         6,914   

Light Science Oncology, Inc.

    Therapeutic    Preferred Stock Warrants         99         69   
                          

Total Light Science Oncology, Inc.

               99         69   

Novasys Medical, Inc.

    Therapeutic    Preferred Stock Warrants         71         —     
     

Preferred Stock Warrants

         54         2   
     

Preferred Stock

         1,000         1,001   
                          

Total Novasys Medical, Inc.

               1,125         1,003   

See notes to Consolidated Financial Statements (unaudited)

 

12

Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

March 31, 2011

(unaudited)

(dollars in thousands)

 

Portfolio Company

   

Industry

   

Type of Investment (1)

    Principal
Amount		      Cost(2)      Value(3)  

Pacific Child & Family Associates, LLC

    Therapeutic    Senior Debt         
     

Matures January 2015

Interest rate LIBOR + 8.0% or

Floor rate of 10.50%

    $ 6,254       $ 6,137       $ 5,589   
     

Senior Debt

         
     

Matures January 2015

Interest rate LIBOR + 10.50% or

Floor rate of 13.0%

    $ 5,900         6,067         6,067   
                          

Total Pacific Child & Family Associates, LLC

               12,204         11,656   
                          

Total Therapeutic (5.94%)*

               27,920         23,966   
                          

Cozi Group, Inc.

    Internet Consumer & Business Services    Preferred Stock Warrants         147         139   
     

Preferred Stock

         177         292   
                          

Total Cozi Group, Inc.

               324         431   

Invoke Solutions, Inc.

    Internet Consumer & Business Services    Preferred Stock Warrants         56         —     
     

Preferred Stock Warrants

         26         —     
                          

Total Invoke Solutions, Inc.

               82         —     

InXpo, Inc.

    Internet Consumer & Business Services    Senior Debt         
     

Matures March 2014

Interest rate Prime + 7.5% or

Floor rate of 10.75%

    $ 1,575         1,523         1,523   
     

Preferred Stock Warrants

         98         85   
                          

Total InXpo, Inc.

               1,621         1,608   

Prism Education Group, Inc.

    Internet Consumer & Business Services    Preferred Stock Warrants         43         32   
                          

Total Prism Education Group, Inc.

               43         32   

RazorGator Interactive Group, Inc.

    Internet Consumer & Business Services    Preferred Stock Warrants         13         —     
     

Preferred Stock Warrants

         28         —     
     

Preferred Stock Warrants

         1,183         —     
     

Preferred Stock

         1,000         —     
                          

Total RazorGator Interactive Group, Inc.

               2,224         —     

Reply! Inc. (4)

    Internet Consumer & Business Services    Senior Debt         
     

Matures June 2013

Interest rate Prime + 6.5% or

Floor rate of 9.75%

    $ 4,553         4,318         4,414   
     

Senior Debt

         
     

Matures December 2013

Interest rate Prime + 6.5% or

Floor rate of 9.75%

    $ 700         710         673   
     

Preferred Stock Warrants

         320         480   
                          

Total Reply! Inc.

               5,348         5,567   

See notes to Consolidated Financial Statements (unaudited)

 

13

Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

March 31, 2011

(unaudited)

(dollars in thousands)

 

Portfolio Company

   

Industry

   

Type of Investment (1)

    Principal
Amount		      Cost(2)      Value(3)  

ScriptSave

(Medical Security Card Company, LLC)

    Internet Consumer & Business Services   

Senior Debt

Matures February 2016

Interest rate Prime + 8.75% or

Floor rate of 11.25%

    $ 20,500       $ 20,027       $ 20,027   
                          

Total ScriptSave

               20,027         20,027   
                          

Total Internet Consumer & Business Services (6.86%)

               29,669         27,665   
                          

Lilliputian Systems, Inc.

    Energy    Preferred Stock Warrants         106         1   
     

Common Stock Warrants

         48         —     
                          

Total Lilliputian Systems, Inc.

               154         1   
                          

Total Energy (0.00%)*

               154         1   
                          

Box.net, Inc.

    Information Services   

Senior Debt

Matures May 2011

Interest rate Prime + 1.50% or

Floor rate of 7.50%

    $ 92         144         144   
     

Senior Debt

Matures September 2011

Interest rate Prime + 0.50% or

Floor rate of 6.50%

    $ 86         105         105   
     

Senior Debt

Matures September 2011

Interest rate Prime + 5.25% or

Floor rate of 8.50%

    $ 1,590         1,582         1,582   
     

Preferred Stock Warrants

         73         679   
     

Preferred Stock Warrants

         117         423   
     

Preferred Stock

         500         1,234   
     

Preferred Stock

         500         500   
                          

Total Box.net, Inc.

               3,021         4,667   

Buzznet, Inc.

    Information Services    Preferred Stock Warrants         9         —     
     

Preferred Stock

         250         37   
                          

Total Buzznet, Inc.

               259         37   

XL Education Corp.

    Information Services    Common Stock         880         881   
                          

Total XL Education Corp.

               880         881   

hi5 Networks, Inc.

    Information Services    Preferred Stock Warrants         213         —     
     

Preferred Stock

         250         247   
                          

Total hi5 Networks, Inc.

               463         247   

See notes to Consolidated Financial Statements (unaudited)

 

14

Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

March 31, 2011

(unaudited)

(dollars in thousands)

 

Portfolio Company

   

Industry

   

Type of Investment (1)

    Principal
Amount		      Cost(2)      Value(3)  

Jab Wireless, Inc.

    Information Services    Preferred Stock Warrants       $ 265       $ 91   
                          

Total Jab Wireless, Inc.

               265         91   

Solutionary, Inc.

    Information Services    Preferred Stock Warrants         94         —     
      Preferred Stock Warrants         2         —     
      Preferred Stock         250         77   
                          

Total Solutionary, Inc.

               346         77   

Intelligent Beauty, Inc.

    Information Services   

Senior Debt

Matures March 2013

Interest rate Prime + 8.0% or

Floor rate of 11.25%

    $ 5,236         5,099         5,138   
     

Senior Debt

Matures October 2013

Interest rate Prime + 8.0% or

Floor rate of 11.25%

    $ 1,895         1,849         1,849   
      Preferred Stock Warrants         230         27   
                          

Total Intelligent Beauty, Inc.

               7,178         7,014   

Good Technologies, Inc.

    Information Services    Common Stock         603         150   
                          

Total Good Technologies, Inc.

               603         150   

Coveroo, Inc.

    Information Services    Preferred Stock Warrants         7         —     
                          

Total Coveroo, Inc.

               7         —     

Zeta Interactive Corporation

    Information Services    Preferred Stock Warrants         172         4   
      Preferred Stock         500         231   
                          

Total Zeta Interactive Corporation

               672         235   
                          

Total Information Services (3.32%)

               13,694         13,399   
                          

Novadaq Technologies, Inc.(5)

    Diagnostic    Common Stock         1,415         603   
                          

Total Novadaq Technologies, Inc.

               1,415         603   

Optiscan Biomedical, Corp.

    Diagnostic   

Senior Debt

Matures June 2011

Interest rate 10.25%

    $ 10,750         10,534         10,403   
      Preferred Stock Warrants         1,069         718   
      Preferred Stock         3,655         2,202   
                          

Total Optiscan Biomedical, Corp.

               15,258         13,323   
                          

Total Diagnostic (3.45%)*

               16,673         13,926   
                          

See notes to Consolidated Financial Statements (unaudited)

 

15

Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

March 31, 2011

(unaudited)

(dollars in thousands)

 

Portfolio Company

   

Industry

   

Type of Investment (1)

    Principal
Amount		      Cost(2)      Value(3)  

Kamada, LTD.

    Biotechnology Tools    Common Stock       $ 427       $ 651   
                          

Total Kamada, LTD.

               427         651   

Labcyte, Inc.

    Biotechnology Tools   

Senior Debt

Matures May 2013

Interest rate Prime + 8.6% or

Floor rate of 11.85%

    $ 3,532         3,451         3,522   
      Common Stock Warrants         192         170   
                          

Total Labcyte, Inc.

               3,643         3,692   

NuGEN Technologies, Inc.

    Biotechnology Tools    Preferred Stock Warrants         45         289   
      Preferred Stock Warrants         33         15   
      Preferred Stock         500         500   
                          

Total NuGEN Technologies, Inc.

               578         804   
                          

Total Biotechnology Tools (1.28%)*

               4,648         5,147   
                          

Crux Biomedical, Inc.

    Surgical Devices    Preferred Stock Warrants         37         —     
      Preferred Stock         250         —     
                          

Total Crux Biomedical, Inc.

               287         —     

Transmedics, Inc. (4)

    Surgical Devices   

Senior Debt

Matures February 2014

Interest rate Prime + 9.70% or

Floor rate of 12.95%

    $ 8,375         8,994         4,520   
      Preferred Stock Warrants         225         —     
      Preferred Stock         1,100         —     
                          

Total Transmedics, Inc.

               10,319         4,520   
                          

Total Surgical Devices (1.12%)*

               10,606         4,520   
                          

Glam Media, Inc.

    Media/Content/ Info    Preferred Stock Warrants         482         307   
                          

Total Glam Media, Inc.

               482         307   

Waterfront Media, Inc. (Everyday Health)

       Preferred Stock Warrants         60         630   
      Preferred Stock         1,000         1,310   
                          

Total Everyday Health

               1,060         1,940   
                          

Total Media/Content/Info (0.56%)*

               1,542         2,247   
                          

See notes to Consolidated Financial Statements (unaudited)

 

16

Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

March 31, 2011

(unaudited)

(dollars in thousands)

 

Portfolio Company

   

Industry

   

Type of Investment (1)

    Principal
Amount		      Cost(2)      Value(3)  

BrightSource Energy, Inc.

    Clean Tech   

Senior Debt

Matures December 2011

Interest rate Prime + 7.75% or

Floor rate of 11.0%

    $ 11,250       $ 10,945       $ 10,945   
     

Senior Debt

Matures June 2012

Interest rate Prime + 9.55% or

Floor rate of 12.80%

    $ 13,750         13,369         13,369   
     

Preferred Stock Warrants

         675         583   
                          

Total BrightSource Energy, Inc.

               24,989         24,897   

Calera, Inc.

    Clean Tech   

Senior Debt

Matures July 2013

Interest rate Prime + 7.0% or

Floor rate of 10.25%

    $ 3,409         3,043         3,043   
     

Preferred Stock Warrants

         513         432   
                          

Total Calera, Inc.

               3,556         3,475   

EcoMotors, Inc.

    Clean Tech   

Senior Debt

Matures February 2014

Interest rate Prime + 6.1% or

Floor rate of 9.35%

    $ 971         950         950   
     

Preferred Stock Warrants

         154         155   
     

Common Stock Warrants

         154         155   
                          

Total EcoMotors, Inc.

               1,258         1,260   

GreatPoint Energy, Inc.

    Clean Tech   

Senior Debt

Matures October 2013

Interest rate Prime + 8.2% or

Floor rate of 11.45%

    $ 5,000         4,466         4,423   
     

Preferred Stock Warrants

         548         384   
                          

Total GreatPoint Energy, Inc.

               5,014         4,807   

Propel Biofuels, Inc.

    Clean Tech   

Senior Debt

Matures September 2013

Interest rate 11.0%

    $ 1,925         1,773         1,621   
     

Preferred Stock Warrants

         211         57   
                          

Total Propel Biofuels, Inc.

               1,984         1,678   

See notes to Consolidated Financial Statements (unaudited)

 

17

Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

March 31, 2011

(unaudited)

(dollars in thousands)

 

Portfolio Company

   

Industry

     

Type of Investment (1)

   

Principal
Amount

     

Cost(2)

     

Value(3)

  

Solexel, Inc.

      Clean Tech      

Senior Debt

Matures June 2013

Interest rate Prime + 8.25% or

Floor rate of 11.50%

    $ 1,005       $ 976       $ 976   
     

Senior Debt

Matures June 2013

Interest rate Prime + 7.25% or

Floor rate of 10.50%

    $ 11,062         10,514         10,514   
      Preferred Stock Warrants         335         293   
      Preferred Stock Warrants         259         222   
                          

Total Solexel, Inc.

               12,084         12,005   

Trilliant, Inc.

      Clean Tech       Preferred Stock Warrants         89         92   
      Preferred Stock Warrants         73         75   
                          

Total Trilliant, Inc.

               162         167   
                          

Total Clean Tech (11.98%)*

               49,047         48,289   
                          

Total Investments

             $ 468,776       $ 445,054   
                          

 

* 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 depreciation for federal income tax purposes totaled and $13,537, $38,755 and $25,218 respectively. The tax cost of investments is $469,678.
(3) Except for warrants in ten publicly traded companies and common stock in four publicly traded companies, all investments are restricted at March 31, 2011. 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 investments of this portfolio company have been pledged as collateral under the Wells Facility.
(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.
(7) Debt is on non-accrual status at March 31, 2011, and is therefore considered non-income producing.

See notes to Consolidated Financial Statements (unaudited)

 

18

Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2010

(dollars in thousands)

 

Portfolio Company

   Industry  

Type of Investment(1)

   Principal
Amount		     Cost(2)     Value(3)  
         

Acceleron Pharmaceuticals, Inc.

   Drug Discovery   Preferred Stock Warrants     $ 69      $ 922   
   

Preferred Stock Warrants

       35        189   
   

Preferred Stock Warrants

       39        99   
   

Preferred Stock

       1,341        2,316   
                     

Total Acceleron Pharmaceuticals, Inc.

  

     1,484        3,526   

Aveo Pharmaceuticals, Inc.

   Drug Discovery  

Senior Debt
Matures September 2013
Interest rate Prime + 7.15% or
Floor rate of 11.9%

   $ 25,000        26,108        26,108   
   

Preferred Stock Warrants

       190        686   
   

Preferred Stock Warrants

       104        165   
   

Preferred Stock Warrants

       24        58   
   

Preferred Stock Warrants

       288        770   
   

Preferred Stock Warrants

       236        630   
                     

Total Aveo Pharmaceuticals, Inc.

  

     26,950        28,417   

Dicerna Pharmaceuticals, Inc.

   Drug Discovery  

Senior Debt
Matures July 2012
Interest rate Prime + 9.20% or
Floor rate of 12.95%

   $ 4,699        4,678        4,706   
   

Preferred Stock Warrants

       205        182   
   

Preferred Stock Warrants

       30        33   
   

Preferred Stock Warrants

       28        25   
   

Preferred Stock

       503        503   
                     

Total Dicerna Pharmaceuticals, Inc.

  

     5,444        5,449   

EpiCept Corporation

   Drug Discovery   Common Stock Warrants       4        112   
   

Common Stock Warrants

       40        10   
                     

Total EpiCept Corporation

  

     44        122   

Horizon Therapeutics, Inc.

   Drug Discovery   Preferred Stock Warrants       231        —     
                     

Total Horizon Therapeutics, Inc.

  

     231        —     

Inotek Pharmaceuticals Corp.

   Drug Discovery   Preferred Stock       1,500        —     
                     

Total Inotek Pharmaceuticals Corp.

  

     1,500        —     

Merrimack Pharmaceuticals, Inc.

   Drug Discovery   Preferred Stock Warrants       155        170   
   

Preferred Stock

       2,000        1,547   
                     

Total Merrimack Pharmaceuticals, Inc.

  

     2,155        1,717   
         

Paratek Pharmaceuticals, Inc.

   Drug Discovery   Preferred Stock Warrants       137        155   
   

Preferred Stock

       1,000        999   
                     

Total Paratek Pharmaceuticals, Inc.

  

     1,137        1,154   

PolyMedix, Inc.

   Drug Discovery  

Senior Debt
Matures September 2013
Interest rate Prime + 7.1% or
Floor rate of 12.35%

   $ 10,000        9,605        9,605   
   

Preferred Stock Warrants

       480        248   
                     

Total PolyMedix, Inc.

  

     10,085        9,853   

 

See notes to consolidated financial statements.

 

19

Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

December 31, 2010

(dollars in thousands)

 

Portfolio Company

   Industry  

Type of Investment(1)

   Principal
Amount		     Cost(2)     Value(3)  

Portola Pharmaceuticals, Inc.

   Drug Discovery  

Senior Debt
Matures April 2011
Interest rate Prime + 2.16%

   $ 1,666      $ 2,033      $ 2,033   
   

Preferred Stock Warrants

       152        506   
                     

Total Portola Pharmaceuticals, Inc.

  

     2,185        2,539   
                     

Total Drug Discovery (12.79%)*

  

     51,215        52,777   
                     

Affinity Videonet, Inc.

   Communications &
Networking		   Preferred Stock Warrants       102        180   
                     

Total Affinity Videonet, Inc.

  

     102        180   

E-band Communications, Corp.(6)

   Communications &
Networking		   Preferred Stock       2,880        3,069   
                     

Total E-Band Communications, Corp.

  

     2,880        3,069   

IKANO Communications, Inc.

   Communications &
Networking		  

Senior Debt
Matures August 2011
Interest rate 12.00%

   $ 1,654        1,953        1,953   
   

Preferred Stock Warrants

       45        —     
   

Preferred Stock Warrants

       72        —     
                     

Total IKANO Communications, Inc.

  

     2,070        1,953   

Intelepeer, Inc.

   Communications &
Networking		  

Senior Debt
Matures May 2013
Interest rate Prime + 8.125%

   $ 7,624        7,468        7,459   
   

Preferred Stock Warrants

       102        111   
                     

Total Intelepeer, Inc.

  

     7,570        7,570   

Neonova Holding Company

   Communications &
Networking		   Preferred Stock Warrants       94        12   
   

Preferred Stock

       250        140   
                     

Total Neonova Holding Company

  

     344        152   

Opsource, Inc.(4)

   Communications &
Networking		  

Senior Debt
Matures June 2013
Interest rate Prime + 7.75% or
Floor rate of 11.00%

   $ 5,000        4,888        4,888   
   

Senior Debt
Matures October 2013
Interest rate Prime + 7.25% or
Floor rate of 10.50%

   $ 2,000        1,944        1,905   
   

Revolving Line of Credit
Matures June 2011
Interest rate Prime + 5.25% or
Floor rate of 8.50%

   $ 1,500        1,458        1,458   
   

Preferred Stock Warrants

       223        105   
                     

Total Opsource, Inc.

  

     8,513        8,356   

 

See notes to consolidated financial statements.

 

20

Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

December 31, 2010

(dollars in thousands)

 

Portfolio Company

   Industry  

Type of Investment(1)

   Principal
Amount		     Cost(2)     Value(3)  

Pac-West Telecomm, Inc.

   Communications
& Networking		  

Senior Debt
Matures April 2014
Interest rate Prime + 7.5% or
Floor rate of 12.0%

   $ 10,000      $ 9,634      $ 9,634   
   

Preferred Stock Warrants

       121        147   
                     

Total Pac-West Telecomm, Inc.

  

     9,755        9,781   

PeerApp, Inc.

   Communications
& Networking		  

Senior Debt
Matures April 2013
Interest rate Prime + 7.5% or
Floor rate of 11.50%

   $ 2,911        2,855        2,792   
   

Preferred Stock Warrants

       61        65   
                     

Total PeerApp, Inc.

  

     2,916        2,857   

Peerless Network, Inc.

   Communications
& Networking		   Preferred Stock Warrants       95        138   
   

Preferred Stock

       1,000        1,930   
                     

Total Peerless Network, Inc.

  

     1,095        2,068   

Ping Identity Corporation

   Communications
& Networking		   Preferred Stock Warrants       52        6   
                     

Total Ping Identity Corporation

  

     52        6   

Purcell Systems, Inc.

   Communications
& Networking		   Preferred Stock Warrants       123        330   
                     

Total Purcell Systems, Inc.

  

     123        330   

Seven Networks, Inc.

   Communications
& Networking		   Preferred Stock Warrants       174        40   
                     

Total Seven Networks, Inc.

  

     174        40   

Stoke, Inc.(4)

   Communications
& Networking		  

Senior Debt
Matures May 2013
Interest rate Prime + 7.0% or
Floor rate of 10.25%

   $ 4,000        3,883        3,883   
   

Preferred Stock Warrants

       53        210   
   

Preferred Stock Warrants

       65        133   
   

Preferred Stock

       500        500   
                     

Total Stoke, Inc.

  

     4,501        4,726   

Tectura Corporation

   Communications
& Networking		  

Senior Debt
Matures December 2012
Interest rate 11%

   $ 5,625        5,512        5,512   
   

Revolving Line of Credit
Matures July 2011
Interest rate 11%

   $ 17,477        18,488        18,488   
   

Preferred Stock Warrants

       50        10   
                     

Total Tectura Corporation

  

     24,050        24,010   
                     

Total Communications & Networking (15.78%)*

  

     64,145        65,098   
                     

 

See notes to consolidated financial statements.

 

21

Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

December 31, 2010

(dollars in thousands)

 

Portfolio Company

   Industry  

Type of Investment(1)

   Principal
Amount		     Cost(2)     Value(3)  

Atrenta, Inc.

   Software   Preferred Stock Warrants     $ 102      $ 46   
   

Preferred Stock Warrants

       34        15   
   

Preferred Stock Warrants

       95        22   
   

Preferred Stock

       250        143   
                     

Total Atrenta, Inc.

  

     481        226   

Blurb, Inc.

   Software  

Senior Debt
Matures June 2011
Interest rate Prime + 3.50% or
Floor rate of 8.5%

   $ 1,162        1,392        1,392   
   

Preferred Stock Warrants

       25        349   
   

Preferred Stock Warrants

       299        228   
                     

Total Blurb, Inc.

  

     1,716        1,969   

Braxton Technologies, LLC.

   Software   Preferred Stock Warrants       188        —     
                     

Total Braxton Technologies, LLC.

  

     188        —     

Bullhorn, Inc.

   Software   Preferred Stock Warrants       43        234   
                     

Total Bullhorn, Inc.

  

     43        234   

Clickfox, Inc.

   Software  

Senior Debt
Matures July 2013
Interest rate Prime + 6.00% or
Floor rate of 11.25%

   $ 6,000        5,801        5,801   
   

Revolving Line of Credit
Matures July 2011
Interest rate Prime + 5.00% or
Floor rate of 12.00%

   $ 2,000        1,997        1,996   
   

Preferred Stock Warrants

       177        643   
   

Preferred Stock Warrants

       152        643   
                     

Total Clickfox, Inc.

  

     8,127        9,083   

Forescout Technologies, Inc.

   Software   Preferred Stock Warrants       99        14   
                     

Total Forescout Technologies, Inc.

  

     99        14   

GameLogic, Inc.

   Software   Preferred Stock Warrants       92        —     
                     

Total GameLogic, Inc.

  

     92        —     

HighJump Acquisition, LLC.

   Software  

Senior Debt
Matures May 2013
Interest rate Libor + 9.25% or
Floor rate of 12.50%

   $ 17,500        17,386        17,386   
                     

Total HighJump Acquisition, LLC.

  

     17,386        17,386   

HighRoads, Inc.

   Software   Preferred Stock Warrants       44        65   
                     

Total HighRoads, Inc.

  

     44        65   

 

See notes to consolidated financial statements.

 

22

Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

December 31, 2010

(dollars in thousands)

 

Portfolio Company

  

Industry

   

Type of Investment(1)

   Principal
Amount		     Cost(2)     Value(3)  

Infologix, Inc. (7)

  

Software

   

Senior Debt
Matures November 2013
Interest rate 18.00%

   $ 5,500      $ 5,162      $ 5,162   
    

Convertible Senior
Debt Matures November 2014
Interest rate 12.00%

       1,111        1,127   
    

Revolving Line of Credit
Matures May 2011
Interest rate 12.00%

     $12,317        12,317        12,317   
    

Senior Debt
Matures December 2010
Interest rate 18.00%

     $2,178        2,178        2,178   
    

Senior Debt
Matures April 2013
Interest rate 8.00%

     $1,350        1,350        1,350   
    

Senior Debt
Matures September 2011
Interest rate 10.00%

     $500        509        509   
    

Preferred Stock Warrants

       725        1,394   
    

Common Stock

       5,000        9,620   
    

Common Stock

       36        69   
    

Common Stock

       3,355        6,455   
                      

Total Infologix, Inc.

       31,743        40,181   

PSS Systems, Inc.

   Software   

Preferred Stock Warrants

       51        17   
                      

Total PSS Systems, Inc.

       51        17   

Rockyou, Inc.

   Software   

Preferred Stock Warrants

       117        186   
                      

Total Rockyou, Inc.

       117        186   

Sportvision, Inc.

   Software   

Preferred Stock Warrants

       39        —     
                      

Total Sportvision, Inc.

       39        —     

Unify Corporation

   Software   

Senior Debt
Matures June 2015
Interest rate Libor + 8.50% or
Floor rate of 10.50%

   $ 24,000        22,248        22,968   
    

Revolving Line of Credit
Matures June 2015
Interest rate Libor + 7.50% or
Floor rate of 9.50%

     $3,750        3,731        3,476   
    

Preferred Stock Warrants

       1,434        693   
                      

Total Unify Corporation

  

     27,413        27,137   

WildTangent, Inc.

   Software   

Preferred Stock Warrants

       238        10   
                      

Total WildTangent, Inc.

  

     238        10   
                      

Total Software (23.39%)*

  

     87,777        96,508   
                      

Luminus Devices, Inc.

   Electronics & Computer Hardware   

Senior Debt
Matures December 2011
Interest rate 11.875%

   $ 540        540        540   
    

Preferred Stock Warrants

       183        —     
    

Preferred Stock Warrants

       84        —     
    

Preferred Stock Warrants

       334        —     
                      

Total Luminus Devices, Inc.

  

     1,141        540   

 

See notes to consolidated financial statements.

 

23

Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

December 31, 2010

(dollars in thousands)

 

Portfolio Company

  

Industry

   

Type of Investment(1)

   Principal
Amount		     Cost(2)     Value(3)  

Maxvision Holding, LLC.

   Electronics & Computer Hardware   

Senior Debt
Matures October 2012
Interest rate Prime + 7.25% or
Floor rate of 10.75%

   $ 5,000      $ 5,377      $ 377   
    

Senior Debt
Matures April 2012
Interest rate Prime + 5.0% or
Floor rate of 8.5%

   $ 3,409        3,382        3,382   
    

Revolving Line of Credit
Matures April 2012
Interest rate Prime + 5.0% or
Floor rate of 8.5%

   $ 3,100        3,163        3,163   
    

Common Stock

       81        —     
                      

Total Maxvision Holding, LLC.

  

     12,003        6,922   

Shocking Technologies, Inc.

   Electronics & Computer Hardware   

Preferred Stock Warrants

       63        90   
                      

Total Shocking Technologies, Inc.

  

     63        90   

Spatial Photonics, Inc.

   Electronics & Computer Hardware   

Preferred Stock Warrants

       129        —     
    

Preferred Stock

       767        267   
                      

Total Spatial Photonics, Inc.

  

     896        267   

VeriWave, Inc.

   Electronics & Computer Hardware   

Preferred Stock Warrants

       54        —     
    

Preferred Stock Warrants

       46        —     
                      

Total VeriWave, Inc.

  

     100        —     
                      

Total Electronics & Computer Hardware (1.90%)*

  

     14,203        7,819   
                      

Aegerion Pharmaceuticals, Inc.

   Specialty Pharmaceuticals   

Preferred Stock Warrants

       69        761   
    

Preferred Stock

       1,475        2,206   
                      

Total Aegerion Pharmaceuticals, Inc.

  

     1,544        2,967   

Althea Technologies, Inc.

   Specialty Pharmaceuticals   

Senior Debt
Matures October 2013
Interest rate Prime + 7.70% or
Floor rate of 10.95%

   $ 12,000        11,661        11,661   
    

Preferred Stock Warrants

       309        276   
                      

Total Althea Technologies, Inc.

  

     11,970        11,937   

Chroma Therapeutics, Ltd.(5)

   Specialty Pharmaceuticals   

Senior Debt
Matures September 2013
Interest rate Prime + 7.75% or
Floor rate of 12.00%

   $ 10,000        9,797        10,021   
    

Preferred Stock Warrants

       490        632   
                      

Total Chroma Therapeutics, Ltd.

  

     10,287        10,653   

 

See notes to consolidated financial statements.

 

24

Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

December 31, 2010

(dollars in thousands)

 

Portfolio Company

   Industry  

Type of Investment(1)

   Principal
Amount		     Cost(2)     Value(3)  

Pacira Pharmaceuticals, Inc. (4)

   Specialty
Pharmaceuticals		  

Senior Debt
Matures May 2014
Interest rate Prime + 6.25% or
Floor rate of 10.25%

   $ 11,250      $ 11,105      $ 11,105   
   

Senior Debt
Matures May 2014
Interest rate Prime + 8.65% or
Floor rate of 12.65%

   $ 15,000        13,749        13,749   
   

Preferred Stock Warrants

       1,086        1,255   
                     

Total Pacira Pharmaceuticals, Inc.

  

     25,940        26,109   

QuatRx Pharmaceuticals Company

   Specialty
Pharmaceuticals		  

Senior Debt
Matures October 2011
Interest rate Prime + 8.90% or
Floor rate of 12.15%

   $ 9,306        9,474        9,474   
   

Convertible Senior Debt
Interest Rate of 8.0%
Matures March 2012

   $ 1,888        1,888        2,467   
   

Preferred Stock Warrants

       220        —     
   

Preferred Stock Warrants

       307        —     
   

Preferred Stock

       751        —     
                     

Total QuatRx Pharmaceuticals Company

  

     12,640        11,941   
                     

Total Specialty Pharmaceuticals (15.42%)*

  

     62,381        63,607   
                     

Annie’s, Inc.

   Consumer &
Business Products		   Preferred Stock Warrants       321        75   
                     

Total Annie’s, Inc.

  

     321        75   

IPA Holdings, LLC. (4)

   Consumer &
Business Products		  

Senior Debt
Matures November 2012
Interest rate Prime + 6.75% or
Floor rate of 11.0%

   $ 8,250        8,505        8,160   
   

Senior Debt
Matures May 2013
Interest rate Prime + 9.75% or
Floor rate of 14.0%

   $ 6,500        7,019        6,995   
   

Revolving Line of Credit
Matures November 2012
Interest rate Prime + 6.25% or
Floor rate of 10.50%

   $ 856        761        761   
   

Preferred Stock Warrants

       275        —     
   

Common Stock

       500        —     
                     

Total IPA Holdings, LLC.

  

     17,060        15,916   

Market Force Information, Inc.

   Consumer &
Business Products		   Preferred Stock Warrants       24        60   
   

Preferred Stock

       500        439   
                     

Total Market Force Information, Inc.

  

     524        499   

Trading Machines, Inc. (8)

   Consumer &
Business Products		  

Senior Debt
Matures January 2014
Interest rate Prime + 10.25% or
Floor rate of 13.50%

   $ 9,812        8,644        4,000   
   

Preferred Stock Warrants

       878        —     
   

Preferred Stock

       50        —     
                     

Total Trading Machines, Inc.

  

     9,572        4,000   

 

See notes to consolidated financial statements.

 

25

Table of Contents

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

December 31, 2010

(dollars in thousands)

 

Portfolio Company

   Industry  

Type of Investment(1)

   Principal
Amount		     Cost(2)     Value(3)  

Velocity Technology Solutions, Inc.

   Consumer &
Business Products		  

Senior Debt
Matures February 2015
Interest rate LIBOR + 8% or
Floor rate of 11.00%

   $ 15,417      $ 15,072      $ 14,574   
   

Senior Debt
Matures February 2015
Interest rate LIBOR + 10% or
Floor rate of 13.00%

   $ 8,333        8,317        8,526   
                     

Total Velocity Technology Solutions, Inc.

  

     23,389        23,100   

Wageworks, Inc.

   Consumer &
Business Products		   Preferred Stock Warrants       253        1,443   
   

Preferred Stock

       250        283   
                     

Total Wageworks, Inc.

  

     503        1,726   
                     

Total Consumer & Business Products (10.98%)*

  

     51,369        45,316   
                     

Enpirion, Inc.

   Semiconductors   Preferred Stock Warrants       157        1   
                     

Total Enpirion, Inc.

  

     157        1   

iWatt, Inc.

   Semiconductors   Preferred Stock Warrants       46        1   
   

Preferred Stock Warrants

       51        33   
   

Preferred Stock Warrants

       73        44   
   

Preferred Stock Warrants

       458        391   
   

Preferred Stock

       490        940   
                     

Total iWatt, Inc.

  

     1,118        1,409   

NEXX Systems, Inc.

   Semiconductors   Preferred Stock Warrants       297        1,113   
   

Preferred Stock

       277        704   
                     

Total NEXX Systems, Inc.

  

     574        1,817   

Quartics, Inc.

   Semiconductors   Preferred Stock Warrants       53        —     
                     

Total Quartics, Inc.

  

     53        —     

Solarflare Communications, Inc.

   Semiconductors   Preferred Stock Warrants       83        —     
   

Common Stock

       642        —     
                     

Total Solarflare Communications, Inc.

  

     725        —     
                     

Total Semiconductors (0.78%)*

  

     2,627        3,227   
                     

Alexza Pharmaceuticals, Inc. (4)

   Drug Delivery  

Senior Debt
Matures October 2013
Interest rate Prime + 6.5% or
Floor rate of 10.75%

   $ 15,000        14,526        14,472   
   

Preferred Stock Warrants

       645