10-Q 1 htgc_q1_3.31.2022_10-q.htm 10-Q 10-Q

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

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

For The Quarterly Period Ended March 31, 2022

OR

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

Commission File Number: 814-00702

 

HERCULES CAPITAL, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Maryland

 

74-3113410

(State or Jurisdiction of

Incorporation or Organization)

 

(IRS Employer

 Identification Number)

 

400 Hamilton Ave., Suite 310

Palo Alto, California

(Address of Principal Executive Offices)

 

94301

(Zip Code)

 

(650) 289-3060

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Shares, par value $0.001 per share

HTGC

New York Stock Exchange

6.25% Notes due 2033

HCXY

New York Stock Exchange

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☐ No ☐

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

Large accelerated filer

 

 

Accelerated filer

 

Non-accelerated filer

 

 

Smaller reporting company

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with a new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

On May 2, 2022, there were 123,879,248 shares outstanding of the Registrant’s common stock, $0.001 par value.

 

 


 

HERCULES CAPITAL, INC.

FORM 10-Q TABLE OF CONTENTS

 

PART I. FINANCIAL INFORMATION

 

3

 

Item 1.

 

 

Consolidated Financial Statements

 

3

 

 

 

Consolidated Statements of Assets and Liabilities as of March 31, 2022 (unaudited) and December 31, 2021

 

3

 

 

 

Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021 (unaudited)

 

4

 

 

 

Consolidated Statements of Changes in Net Assets for the three months ended March 31, 2022 and 2021 (unaudited)

 

5

 

 

 

Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021 (unaudited)

 

6

 

 

 

Consolidated Schedule of Investments as of March 31, 2022 (unaudited)

 

7

 

 

 

Consolidated Schedule of Investments as of December 31, 2021

 

18

 

 

Notes to Consolidated Financial Statements (unaudited)

 

29

Item 2.

 

 

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

 

61

Item 3.

 

 

Quantitative and Qualitative Disclosures About Market Risk

 

77

Item 4.

 

 

Controls and Procedures

 

78

 

PART II. OTHER INFORMATION

 

79

 

Item 1.

 

Legal Proceedings

 

79

Item 1A.

 

 

Risk Factors

 

79

Item 2.

 

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

80

Item 3.

 

Defaults Upon Senior Securities

 

80

Item 4.

 

 

Mine Safety Disclosures

 

80

Item 5.

 

 

Other Information

 

80

Item 6.

 

 

Exhibits and Financial Statement Schedules

 

81

 

SIGNATURES

 

86

 

 

 

 


 

PART I: FINANCIAL INFORMATION

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

 

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

HERCULES CAPITAL, INC.

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

 

(in thousands, except per share data)

 

 

 

March 31, 2022

 

 

December 31, 2021

 

 

 

(unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Investments, at fair value:

 

 

 

 

 

 

Non-control/Non-affiliate investments (cost of $2,492,877 and $2,293,398, respectively)

 

$

2,511,227

 

 

$

2,351,560

 

Control investments (cost of $85,358 and $84,039, respectively)

 

 

76,277

 

 

 

73,504

 

Affiliate investments (cost of $8,167 and $13,547, respectively)

 

 

4,830

 

 

 

9,458

 

Total investments, at fair value (cost of $2,586,402 and $2,390,984, respectively)

 

 

2,592,334

 

 

 

2,434,522

 

Cash and cash equivalents

 

 

59,330

 

 

 

133,115

 

Restricted cash

 

 

3,127

 

 

 

3,150

 

Interest receivable

 

 

19,648

 

 

 

17,365

 

Right of use asset

 

 

6,142

 

 

 

6,761

 

Other assets

 

 

10,966

 

 

 

5,100

 

Total assets

 

$

2,691,547

 

 

$

2,600,013

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Debt (net of debt issuance costs - Note 5)

 

$

1,323,995

 

 

$

1,236,303

 

Accounts payable and accrued liabilities

 

 

27,228

 

 

 

47,781

 

Operating lease liability

 

 

6,876

 

 

 

7,382

 

Total liabilities

 

$

1,358,099

 

 

$

1,291,466

 

 

 

 

 

 

 

 

Net assets consist of:

 

 

 

 

 

 

Common stock, par value

 

$

124

 

 

$

117

 

Capital in excess of par value

 

 

1,178,019

 

 

 

1,091,907

 

Total distributable earnings

 

 

155,305

 

 

 

216,523

 

Total net assets

 

$

1,333,448

 

 

$

1,308,547

 

Total liabilities and net assets

 

$

2,691,547

 

 

$

2,600,013

 

 

 

 

 

 

 

 

Shares of common stock outstanding ($0.001 par value and 200,000,000 authorized)

 

 

123,194

 

 

 

116,619

 

Net asset value per share

 

$

10.82

 

 

$

11.22

 

 

See notes to consolidated financial statements

 

3


 

HERCULES CAPITAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except per share data)

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

Investment income:

 

 

 

 

 

 

Interest income

 

 

 

 

 

 

Non-control/Non-affiliate investments

 

$

60,090

 

 

$

62,982

 

Control investments

 

 

1,115

 

 

 

799

 

Affiliate investments

 

 

1,047

 

 

 

1

 

Total interest income

 

 

62,252

 

 

 

63,782

 

Fee income

 

 

 

 

 

 

Non-control/Non-affiliate investments

 

 

2,889

 

 

 

4,969

 

Control investments

 

 

16

 

 

 

8

 

Total fee income

 

 

2,905

 

 

 

4,977

 

Total investment income

 

 

65,157

 

 

 

68,759

 

Operating expenses:

 

 

 

 

 

 

Interest

 

 

11,647

 

 

 

14,750

 

Loan fees

 

 

1,842

 

 

 

2,800

 

General and administrative

 

 

3,818

 

 

 

3,596

 

Tax expenses

 

 

712

 

 

 

1,438

 

Employee compensation

 

 

 

 

 

 

Compensation and benefits

 

 

8,329

 

 

 

9,804

 

Stock-based compensation

 

 

4,424

 

 

 

2,744

 

Total employee compensation

 

 

12,753

 

 

 

12,548

 

Total gross operating expenses

 

 

30,772

 

 

 

35,132

 

Expenses allocated to the Adviser Subsidiary

 

 

(1,402

)

 

 

(933

)

Total net operating expenses

 

 

29,370

 

 

 

34,199

 

Net investment income

 

 

35,787

 

 

 

34,560

 

Net realized gain (loss) and net change in unrealized appreciation (depreciation):

 

 

 

 

 

 

Net realized gain (loss)

 

 

 

 

 

 

Non-control/Non-affiliate investments

 

 

(2,467

)

 

 

7,770

 

Affiliate investments

 

 

3,772

 

 

 

 

Loss on debt extinguishment

 

 

(3,686

)

 

 

 

Total net realized gain (loss)

 

 

(2,381

)

 

 

7,770

 

Net change in unrealized appreciation (depreciation)

 

 

 

 

 

 

Non-control/Non-affiliate investments

 

 

(38,949

)

 

 

18,022

 

Control investments

 

 

1,454

 

 

 

1,702

 

Affiliate investments

 

 

753

 

 

 

2,109

 

Total net change in unrealized appreciation (depreciation)

 

 

(36,742

)

 

 

21,833

 

Total net realized gain (loss) and net change in unrealized appreciation (depreciation)

 

 

(39,123

)

 

 

29,603

 

Net increase (decrease) in net assets resulting from operations

 

$

(3,336

)

 

$

64,163

 

 

 

 

 

 

 

 

Net investment income before investment gains and losses per common share:

 

Basic

 

$

0.30

 

 

$

0.30

 

Change in net assets resulting from operations per common share:

 

 

 

 

 

 

Basic

 

$

(0.03

)

 

$

0.56

 

Diluted

 

$

(0.03

)

 

$

0.55

 

Weighted average shares outstanding

 

 

 

 

 

 

Basic

 

 

118,296

 

 

 

114,304

 

Diluted

 

 

118,296

 

 

 

114,803

 

Distributions paid per common share:

 

 

 

 

 

 

Basic

 

$

0.48

 

 

$

0.37

 

 

See notes to consolidated financial statements

 

4


 

HERCULES CAPITAL, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

(unaudited)

(dollars and shares in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital in

 

 

Distributable

 

 

 

 

 

Common Stock

 

 

excess

 

 

Earnings

 

 

Net

 

For the Three Months Ended March 31, 2022

Shares

 

 

Par Value

 

 

of par value

 

 

(loss)

 

 

Assets

 

Balance as of December 31, 2021

 

116,619

 

 

$

117

 

 

$

1,091,907

 

 

$

216,523

 

 

$

1,308,547

 

Net increase (decrease) in net assets resulting from operations

 

 

 

 

 

 

 

 

 

 

(3,336

)

 

 

(3,336

)

Public offering, net of offering expenses

 

4,860

 

 

 

5

 

 

 

85,244

 

 

 

 

 

 

85,249

 

Issuance of common stock due to stock option exercises

 

37

 

 

 

 

 

 

454

 

 

 

 

 

 

454

 

Retired shares from net issuance

 

(2

)

 

 

 

 

 

(32

)

 

 

 

 

 

(32

)

Issuance of common stock under restricted stock plan

 

765

 

 

 

1

 

 

 

(1

)

 

 

 

 

 

 

Retired shares for restricted stock vesting

 

(126

)

 

 

 

 

 

(3,694

)

 

 

 

 

 

(3,694

)

Distributions reinvested in common stock

 

60

 

 

 

 

 

 

1,025

 

 

 

 

 

 

1,025

 

Issuance of common stock from conversion of 2022 Convertible Notes

 

981

 

 

 

1

 

 

 

(1

)

 

 

 

 

 

 

Distributions

 

 

 

 

 

 

 

 

 

 

(57,882

)

 

 

(57,882

)

Stock-based compensation (1)

 

 

 

 

 

 

 

3,117

 

 

 

 

 

 

3,117

 

Balance as of March 31, 2022

 

123,194

 

 

$

124

 

 

$

1,178,019

 

 

$

155,305

 

 

$

1,333,448

 

 

(1)
Stock-based compensation includes $40 of restricted stock and option expense related to director compensation for the three months ended March 31, 2022.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital in

 

 

Distributable

 

 

 

 

 

 

Common Stock

 

 

excess

 

 

Earnings

 

 

Net

 

For the Three Months Ended March 31, 2021

 

Shares

 

 

Par Value

 

 

of par value

 

 

(loss)

 

 

Assets

 

Balance as of December 31, 2020

 

 

114,726

 

 

$

115

 

 

$

1,158,198

 

 

$

133,391

 

 

$

1,291,704

 

Net increase (decrease) in net assets resulting from operations

 

 

 

 

 

 

 

 

 

 

 

64,163

 

 

 

64,163

 

Public offering, net of offering expenses

 

 

 

 

 

 

 

 

(195

)

 

 

 

 

 

(195

)

Issuance of common stock due to stock option exercises

 

 

222

 

 

 

 

 

 

2,745

 

 

 

 

 

 

2,745

 

Retired shares from net issuance

 

 

(50

)

 

 

 

 

 

(603

)

 

 

 

 

 

(603

)

Issuance of common stock under restricted stock plan

 

 

924

 

 

 

1

 

 

 

(1

)

 

 

 

 

 

 

Retired shares for restricted stock vesting

 

 

(121

)

 

 

 

 

 

(3,181

)

 

 

 

 

 

(3,181

)

Distributions reinvested in common stock

 

 

67

 

 

 

 

 

 

1,040

 

 

 

 

 

 

1,040

 

Distributions

 

 

 

 

 

 

 

 

 

 

 

(42,795

)

 

 

(42,795

)

Stock-based compensation (1)

 

 

 

 

 

 

 

 

2,516

 

 

 

 

 

 

2,516

 

Balance as of March 31, 2021

 

 

115,768

 

 

$

116

 

 

$

1,160,519

 

 

$

154,759

 

 

$

1,315,394

 

 

(1)
Stock-based compensation includes $25 of restricted stock and option expense related to director compensation for the three months ended March 31, 2021.

See notes to consolidated financial statements

 

5


 

HERCULES CAPITAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

 

 

For the Three Months Ended March 31,

 

 

2022

 

 

2021

 

Cash flows used in operating activities:

 

 

 

 

 

Net increase (decrease) in net assets resulting from operations

$

(3,336

)

 

$

64,163

 

Adjustments to reconcile net increase in net assets resulting from
operations to net cash provided by (used in) operating activities:

 

 

 

 

 

Purchases of investments

 

(351,601

)

 

 

(355,333

)

Fundings allocated to Adviser Funds

 

61,081

 

 

 

48,353

 

Principal and fee payments received on investments

 

96,311

 

 

 

209,747

 

Proceeds from the sale of investments

 

8,816

 

 

 

12,973

 

Net unrealized (appreciation) depreciation

 

36,742

 

 

 

(21,833

)

Net realized (gain) loss

 

(1,305

)

 

 

(7,770

)

Accretion of paid-in-kind principal

 

(4,976

)

 

 

(2,475

)

Accretion of loan discounts

 

(972

)

 

 

(1,176

)

Accretion of loan discount on convertible notes

 

112

 

 

 

168

 

Accretion of loan exit fees

 

(5,709

)

 

 

(5,744

)

Change in loan income, net of collections

 

3,535

 

 

 

13,414

 

Unearned fees related to unfunded commitments

 

1,037

 

 

 

(1,505

)

Loss on debt extinguishment

 

3,686

 

 

 

 

Amortization of debt issuance costs

 

1,371

 

 

 

2,156

 

Depreciation and amortization

 

54

 

 

 

94

 

Stock-based compensation and amortization of restricted stock grants (1)

 

3,117

 

 

 

2,516

 

Change in operating assets and liabilities:

 

 

 

 

 

Interest receivable

 

(2,289

)

 

 

(1,520

)

Other assets

 

(13,229

)

 

 

1,849

 

Accrued liabilities

 

(21,067

)

 

 

(8,496

)

Net cash provided by (used in) operating activities

 

(188,622

)

 

 

(50,419

)

 

 

 

 

 

 

Cash flows used in investing activities:

 

 

 

 

 

Purchases of capital equipment

 

(50

)

 

 

(12

)

Net cash used in investing activities

 

(50

)

 

 

(12

)

 

 

 

 

 

 

Cash flows provided by (used in) financing activities:

 

 

 

 

 

Issuance of common stock

 

86,184

 

 

 

 

Offering expenses

 

(935

)

 

 

(195

)

Retirement of employee shares, net

 

(3,272

)

 

 

(1,039

)

Distributions paid

 

(56,857

)

 

 

(41,755

)

Issuance of debt

 

535,500

 

 

 

342,218

 

Repayment of debt

 

(441,000

)

 

 

(397,727

)

Debt issuance costs

 

(4,140

)

 

 

(1,842

)

Fees paid for credit facilities and debentures

 

(616

)

 

 

(35

)

Net cash provided by (used in) financing activities

 

114,864

 

 

 

(100,375

)

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

(73,808

)

 

 

(150,806

)

Cash, cash equivalents, and restricted cash at beginning of period

 

136,265

 

 

 

237,622

 

Cash, cash equivalents, and restricted cash at end of period

$

62,457

 

 

$

86,816

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information and non-cash investing and financing activities:

 

Interest paid

$

19,010

 

 

$

17,359

 

Income tax, including excise tax, paid

$

7,119

 

 

$

3,488

 

Distributions reinvested

$

1,025

 

 

$

1,040

 

 

(1)
Stock-based compensation includes $40 and $25 of restricted stock and option expense related to director compensation for the three months ended March 31, 2022 and 2021, respectively.

 

The following table presents a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Statements of Assets and Liabilities that sum to the total of the same such amounts in the Consolidated Statements of Cash Flows:

 

 

For the Three Months Ended March 31,

 

(Dollars in thousands)

2022

 

 

2021

 

Cash and cash equivalents

$

59,330

 

 

$

74,987

 

Restricted cash

 

3,127

 

 

 

11,829

 

Total cash, cash equivalents, and restricted cash presented in the Consolidated Statements of Cash Flows

$

62,457

 

 

$

86,816

 

See “Note 2 – Summary of Significant Accounting Policies” for a description of restricted cash and cash equivalents.

See notes to consolidated financial statements

 

6


HERCULES CAPITAL, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

March 31, 2022

(unaudited)

(dollars in thousands)

 

Portfolio Company

 

Type of
Investment

Maturity Date

Interest Rate and Floor (1)

 

Principal
Amount

 

 

Cost (2)

 

 

Value

 

 

Footnotes

Debt Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Communications & Networking

 

 

 

 

 

 

 

 

 

 

 

 

1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cytracom Holdings LLC

 

Senior Secured

February 2025

3-month LIBOR + 9.31% or Floor rate of 10.31%

 

$

8,978

 

 

$

8,793

 

 

$

8,678

 

 

(11)(16)(17)

Rocket Lab Global Services, LLC

 

Senior Secured

June 2024

PRIME + 4.90% or Floor rate of 8.15%, PIK Interest 1.25%, 3.25% Exit Fee

 

$

88,819

 

 

 

88,839

 

 

 

90,873

 

 

(13)(15)

Subtotal: 1-5 Years Maturity

 

 

 

 

 

 

97,632

 

 

 

99,551

 

 

 

Subtotal: Communications & Networking (7.47%)*

 

 

 

 

 

 

97,632

 

 

 

99,551

 

 

 

Consumer & Business Products

 

 

 

 

 

 

 

 

 

 

 

 

1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grove Collaborative, Inc.

 

Senior Secured

April 2025

PRIME + 5.50% or Floor rate of 8.75%, 6.75% Exit Fee

 

$

23,520

 

 

 

23,351

 

 

 

25,813

 

 

(18)

Subtotal: 1-5 Years Maturity

 

 

 

 

 

 

23,351

 

 

 

25,813

 

 

 

Subtotal: Consumer & Business Products (1.94%)*

 

 

 

 

 

 

23,351

 

 

 

25,813

 

 

 

Diversified Financial Services

 

 

 

 

 

 

 

 

 

 

 

 

1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gibraltar Business Capital, LLC

 

Unsecured

September 2026

FIXED 14.50%

 

$

15,000

 

 

 

14,674

 

 

 

13,628

 

 

(7)

 

 

Unsecured

September 2026

FIXED 11.50%

 

$

10,000

 

 

 

9,830

 

 

 

9,329

 

 

(7)

Total Gibraltar Business Capital, LLC

 

 

 

 

 

$

25,000

 

 

 

24,504

 

 

 

22,957

 

 

 

Hercules Adviser LLC

 

Unsecured

May 2023

FIXED 5.00%

 

$

10,150

 

 

 

10,150

 

 

 

10,150

 

 

(7)

Subtotal: 1-5 Years Maturity

 

 

 

 

 

 

34,654

 

 

 

33,107

 

 

 

Subtotal: Diversified Financial Services (2.48%)*

 

 

 

 

 

 

34,654

 

 

 

33,107

 

 

 

Drug Discovery & Development

 

 

 

 

 

 

 

 

 

 

 

 

Under 1 Year Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chemocentryx, Inc.

 

Senior Secured

December 2022

PRIME + 3.30% or Floor rate of 8.05%, 6.25% Exit Fee

 

$

18,951

 

 

 

20,083

 

 

 

20,083

 

 

(10)

Subtotal: Under 1 Year Maturity

 

 

 

 

 

 

20,083

 

 

 

20,083

 

 

 

1-5 Years Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Albireo Pharma, Inc.

 

Senior Secured

July 2024

PRIME + 5.90% or Floor rate of 9.15%, 6.95% Exit Fee

 

$

10,000

 

 

 

10,277

 

 

 

10,325

 

 

(10)(11)

Aldeyra Therapeutics, Inc.

 

Senior Secured

October 2023

PRIME + 3.10% or Floor rate of 8.60%, 6.95% Exit Fee

 

$

15,000

 

 

 

15,697

 

 

 

15,633

 

 

 

Applied Genetic Technologies Corporation

 

Senior Secured

April 2024

PRIME + 6.50% or Floor rate of 9.75%, 6.95% Exit Fee

 

$

20,000

 

 

 

20,564

 

 

 

20,421

 

 

 

Aveo Pharmaceuticals, Inc.

 

Senior Secured

September 2024

PRIME + 6.40% or Floor rate of 9.65%, 6.95% Exit Fee

 

$

40,000

 

 

 

41,037

 

 

 

40,882

 

 

(11)(14)

Axsome Therapeutics, Inc.

 

Senior Secured

October 2026

PRIME + 5.70% or Floor rate of 8.95%, 5.82% Exit Fee

 

$

50,000

 

 

 

49,669

 

 

 

49,204

 

 

(10)(12)

Bicycle Therapeutics PLC

 

Senior Secured

October 2024

PRIME + 5.60% or Floor rate of 8.85%, 5.00% Exit Fee