Hercules Capital, Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>Hercules Capital, Inc. has filed its 2023 10-K annual report detailing its financial performance and business operations.</b>

AI Summary

Hercules Capital, Inc. (HCXY) filed a Annual Report (10-K) with the SEC on February 15, 2024. Hercules Capital, Inc. filed its annual report for the fiscal year ending December 31, 2023. The company is incorporated in Maryland (MD) and its fiscal year ends on December 31. The filing is a 10-K, indicating a comprehensive annual report. The SEC file number for Hercules Capital, Inc. is 814-00702. The business and mailing address for the company is 1 North B Street, Suite 2000, San Mateo, CA 94401.

Why It Matters

For investors and stakeholders tracking Hercules Capital, Inc., this filing contains several important signals. This 10-K filing provides a detailed overview of Hercules Capital's financial health, investment strategies, and risk factors for the fiscal year 2023, crucial for investors to assess performance and future outlook. The filing includes information on the company's operations as a Business Development Company (BDC), subject to specific regulations and market dynamics within the venture capital and growth equity sectors.

Risk Assessment

Risk Level: medium — Hercules Capital, Inc. shows moderate risk based on this filing. The company faces significant risks related to its investment portfolio, including potential losses from individual investments, concentration in technology-related industries, and lack of liquidity in its investments, as detailed in the risk factors section.

Analyst Insight

Investors should carefully review the detailed risk factors and financial statements in the 10-K to understand the potential challenges and opportunities for Hercules Capital in the coming fiscal year.

Key Numbers

• 2023-12-31 — Fiscal Year End (Conformed period of report)
• 2024-02-15 — Filing Date (Filed as of date)
• 814-00702 — SEC File Number (SEC file number)

Key Players & Entities

• Hercules Capital, Inc. (company) — Filer name
• Maryland (location) — State of incorporation
• San Mateo (location) — Business address city
• Scott Bluestein (person) — Mentioned as key senior management personnel

FAQ

Risk Factors

• Our Investments In Portfolio Companies Involve Higher Levels Of Risk [high — financial]: Investments in portfolio companies carry a high level of risk, and there is a possibility of losing all or part of the investment.
• We Operate In A Highly Competitive Market For Investment Opportunities [medium — market]: The company operates in a competitive market for investment opportunities, which could impact its ability to secure favorable deals.
• Our Success Depends On Attracting And Retaining Qualified Personnel [medium — operational]: Future success is dependent on the ability to attract and retain qualified personnel in a competitive environment.
• The Lack Of Liquidity In Our Investments May Adversely Affect Our Business [medium — financial]: Illiquidity of investments could negatively impact the company's business operations and financial flexibility.
• Our Financial Results Could Be Negatively Affected If A Significant Portfolio Investment Fails To Perform As Expected [medium — financial]: A significant underperformance by a portfolio company could have a material negative impact on the company's financial results.

Glossary

BDC

Business Development Company (Hercules Capital operates as a BDC, which is subject to specific regulatory requirements and investment strategies.)

10-K

Annual report required by the U.S. Securities and Exchange Commission (SEC). (This filing provides a comprehensive overview of the company's financial condition and results of operations for the fiscal year.)

Key Financial Figures

• $0.001 — ch registered Common Shares, par value $0.001 per share HTGC New York Stock Exchang
• $14.80 — 6 billion based upon a closing price of $14.80 reported for such date on the New York
• $500 thousand — to be immaterial and that do not exceed $500 thousand in the aggregate in any year. We believ
• $19.0 billion — d companies, representing approximately $19.0 billion in commitments from inception to Decemb

Filing Documents

• htgc-20231231.htm (10-K) — 9516KB
• htgc-20231231xexx4m.htm (EX-4.(M)) — 142KB
• htgc-20231231xexx141.htm (EX-14.1) — 75KB
• htgc-20231231xexx142.htm (EX-14.2) — 76KB
• ex-21_1xsubsidiaries.htm (EX-21.1) — 13KB
• ex-23_1xpwcletterofconsent.htm (EX-23.1) — 2KB
• htgc-20231231xexx311.htm (EX-31.1) — 10KB
• htgc-20231231xexx312.htm (EX-31.2) — 10KB
• htgc-20231231xexx321.htm (EX-32.1) — 5KB
• htgc-20231231xexx322.htm (EX-32.2) — 5KB
• htgc-20231231xexx97.htm (EX-97) — 36KB
• htgc-20231231_g1.jpg (GRAPHIC) — 147KB
• htgc-20231231_g2.jpg (GRAPHIC) — 361KB
• image_0.jpg (GRAPHIC) — 14KB
• image_01.jpg (GRAPHIC) — 9KB
• htgc-20231231x10kfinaldraft.pdf (10-K) — 19516KB
• 0001280784-24-000007.txt (&nbsp;) — 65397KB
• htgc-20231231.xsd (EX-101.SCH) — 158KB
• htgc-20231231_cal.xml (EX-101.CAL) — 73KB
• htgc-20231231_def.xml (EX-101.DEF) — 753KB
• htgc-20231231_lab.xml (EX-101.LAB) — 1254KB
• htgc-20231231_pre.xml (EX-101.PRE) — 898KB
• htgc-20231231_htm.xml (XML) — 9212KB

Business

Business 3 Item 1A.

Risk Factors

Risk Factors 26 Item 1B. Unresolved SEC Staff Comments 51 Item 1C. Cybersecurity 51 Item 2.

Properties

Properties 52 Item 3.

Legal Proceedings

Legal Proceedings 52 Item 4. Mine Safety Disclosures 52 Part II. Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 53 Item 6. Reserved 55 Item 7.

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

Management's Discussion and Analysis of Financial Condition and Results of Operations 56 Item 7A. Quantitative and Qualitative Disclosure About Market Risk 71 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 73 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 143 Item 9A.

Controls and Procedures

Controls and Procedures 143 Item 9B. Other Information 143 Item 9C Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 148 Part III. Item 10. Directors, Executive Officers and Corporate Governance 148 Item 11.

Executive Compensation

Executive Compensation 148 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 148 Item 13. Certain Relationships and Related Transactions and Director Independence 148 Item 14. Principal Accountant Fees and Services 148 Part IV. Item 15. Exhibits and Financial Statement Schedules 149 Item 16. Form 10-K Summary 157

Signatures

Signatures 158 Hercules Capital, Inc., our logo and other trademarks of Hercules Capital, Inc. are the property of Hercules Capital, Inc. All other trademarks or trade names referred to in this Annual Report on Form 10-K are the property of their respective owners. 2 Table of Contents In this Annual Report on Form 10-K, or Annual Report, the "Company," "Hercules," "we," "us," and "our" refer to Hercules Capital, Inc., its wholly owned subsidiaries, and its affiliated securitization trust unless the context otherwise requires. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This report contains forward-looking statements that involve substantial risks and uncertainties that are within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). You can identify these statements using forward-looking terminology such as "may," "will," "should," "expect," "anticipate," "project," "target," "estimate," "intend," "continue" or "believe" or the negatives of, or other variations on, these terms or comparable terminology. You should read statements that contain these words carefully because they discuss our plans, strategies, prospects, and expectations concerning our business, operating results, financial condition, and other similar matters. We believe that it is important to communicate our future expectations to our investors. Our forward-looking statements include information in this report regarding general domestic and global economic conditions, our future financing plans, our ability to operate as a business development company ("BDC") and the expected performance of, and the yield on, our portfolio companies. There may be events in the future, however, that we are not able to predict accurately or control. The factors listed under "Risk Factors" in this annual report on Form 10-K, as well as any cautionary language in this re

Business

Item 1. Business GENERAL Hercules Capital, Inc. is a specialty finance company with a focus on and a goal of providing financing solutions to high-growth, innovative venture capital-backed and institutional-backed companies in a variety of technology, life sciences, and sustainable and renewable technology industries. We make investments in companies that are active across a variety of technology industry sub-sectors or are characterized by products or services that require advanced technologies, including, but not limited to, computer software and hardware, networking systems, semiconductors, semiconductor capital equipment, information technology infrastructure or services, consumer and business services, telecommunications, telecommunications equipment, media, life sciences, and renewable or alternative energy. Within the life sciences sub-sector, we generally focus on medical devices, bio-pharmaceutical, drug discovery and development, drug delivery, health care services and information systems companies. Within the sustainable and renewable technology sub-sector, we focus on sustainable and renewable energy technologies and energy efficiency and monitoring technologies. We refer to all of these companies as "technology-related" companies and intend, under normal circumstances, to invest at least 80% of the value of our total assets in such businesses. Our primary business objectives are to increase our net income, net investment income, and net asset value ("NAV") through our investments in primarily Structured Debt or senior secured debt instruments of venture capital-backed and institutional-backed companies across a variety of technology-related industries at attractive yields. We use the term "Structured Debt" to refer to a debt investment that is structured with an equity, warrant, option, or other right to purchase or convert into common or preferred stock. We aim to achieve our business objectives by maximizing our portfolio total return through gener

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View this 10-K filing on SEC EDGAR