Hercules Technology Growth Capital Announces Fourth Quarter and Fiscal Year 2012 Financial Results and Raises Quarterly Cash

  Hercules Technology Growth Capital Announces Fourth Quarter and Fiscal Year
  2012 Financial Results and Raises Quarterly Cash Dividend to $0.25 Per
  Share, up $0.01 From Third Quarter 2012, an Increase of Approximately 4.0%

  *Record annual total commitments of approximately$636.6 million
  *Record high total investment assets of approximately $906.3 million up
    38.8% from 2011
  *2012 Net Investment Income, or “NII,” of approximately $48.1 million,
    or$0.96per share, up 21.5% from 2011
  *2012 Distributable Net Operating Income, or “DNOI,” of $52.3 million, or
    $1.07per share, up 22.2% from 2011
  *Q4 2012 NII of approximately$13.1 million, or$0.25per share, up 21.3%
    from Q4 2011
  *Q4 DNOI of $14.2 million, or $0.27per share, up 23.5% from Q4 2011
  *In Q4 completed securitization of $231.0 million and issued $129.0 million
    Asset-Backed Notes that are rated A2 (sf) by Moody’s Investors Service
  *Strong liquidity position with approximately $288.0 million available at
    year end
  *GAAP debt to equity leverage ratio of 115.5%, compared to net leverage
    ratio of 80.1%, after taking into account cash of approximately $183.0
    million for Q4 2012

Business Wire

PALO ALTO, Calif. -- February 28, 2013

Hercules Technology Growth Capital, Inc. (NYSE: HTGC) (“Hercules” or the
“Company”), the leading specialty finance company focused on providing senior
secured loans to venture capital-backed companies in technology-related
markets, including technology, biotechnology, life science and cleantech
industries, at all stages of development, announced today its financial
results for the fourth quarter and year ended December 31, 2012.

Fourth Quarter 2012 Highlights:

  *Originated approximately $259.9 million in total debt and equity
    commitments to new and existing portfolio companies, up 57.2% compared
    tothe fourth quarter of 2011.
  *Funded approximately $200.7 million of debt and equity investments during
    the fourth quarter, an increase of 106.5% compared tothe fourth quarter
    of 2011.

  *Received approximately $80.6 million in principal repayments,
    includingapproximately $54.7 millionof early principal repayments
    andapproximately $25.9 millionin scheduled principal payments.

  *Record high total investment income of approximately $27.4 million, an
    increase of 29.2%, in the fourth quarter of 2012, compared to$21.2
    millionfor the fourth quarter of 2011.
  *Increased NII during the quarter by 21.3% to approximately $13.1 million,
    as compared to $10.8 million in the fourth quarter of 2011. NII per share
    was $0.25 on approximately 51.9 million outstanding shares for the fourth
    quarter of 2012.
  *Increased DNOI by 23.5% to approximately $14.2 million compared to
    $11.5million in the fourth quarter of 2011. DNOI per share was $0.27 on
    approximately 51.9 million outstanding shares for the fourth quarter of
    2012.
  *Record high total investment assets increased 38.8% year over year to
    approximately $906.3 million as of December 31, 2012, compared to $652.9
    million as of December 31, 2011.
  *Increased the quarterly dividend by $0.01, or approximately 4.2%, to$0.25
    per share payable on March 19, 2013, to shareholders of record as of March
    11, 2013; the thirtieth consecutive dividend since inception bringing
    total dividends declared since inception to $7.89 per share.

2012 Highlights:

  *Originated approximately$636.6 millionin total commitments to new and
    existing portfolio companies.
  *Funded approximately$469.1 millionof debt and equity investments during
    2012.
  *Increased NII by 21.5% toapproximately $48.1 million, as compared to
    $39.6 million for fiscal year 2011. NII per share increased by
    approximately 5.5% to$0.96 on 49.1 million basic shares outstanding, as
    compared to $0.91 per share on 43.0 million shares outstanding for fiscal
    year 2011.
  *Increased DNOI by 22.2% to approximately$52.3 million, as compared to
    $42.8 million for fiscal year 2011. DNOI per share increased by
    approximately 7.0% to $1.07 on 49.1 million basic shares outstanding, as
    compared to $1.00 per share on 43.0 million shares outstanding for fiscal
    year 2011.
  *Finished 2012 in a strong liquidity position with approximately$288.0
    millionin available liquidity, including $183.0 million in cash and
    $105.0 million in bank credit facility availability.
  *Debt to equity leverage ratio at December 31, 2012 of approximately
    115.5%, compared to a net leverage ratio at December 31, 2012 of 80.1%,
    which is calculated as total debt of $596.0 million less approximately
    $183.0 million in cash divided by total equity of approximately $516.0
    million.

“The fourth quarter concluded an exceptional year for Hercules in which we
executed across all areas of our business, delivering record gross commitments
and fundings and growing our total investment assets by approximately 39% year
over year to over $900.0 million, our highest level since inception. We
generated strong growth in total and net investment income for the full year
and achieved twelve liquidity events for our warrant and equity portfolio, in
turn creating value for our shareholders,” said Manuel A. Henriquez, President
and Chief Executive Officer of Hercules.

“Throughout 2012, we strategically diversified our liquidity sources and
positioned our balance sheet and platform to handle the robust demand for
venture debt we saw in the marketplace. In December 2012, we completed our
first Moody's-rated A2 (sf) securitization of approximately $231.0 million
with net proceeds of approximately $129.0 million, achieving another important
milestone and adding investment grade debt to our balance sheet. We enter 2013
with a strong balance sheet from which to grow our investment portfolio of
America’s most innovative and highly disruptive venture capital-backed
companies and deliver increased earnings and dividends to our shareholders.”

Fourth Quarter Review and Operating Results

Investment Portfolio

As of December 31, 2012, over 98.4% of the Company’s debt investments were in
a senior secured first lien position, and 98.5% of the debt investment
portfolio was priced at floating interest rates or floating interest rates
with a Prime or LIBOR based interest rate floor, well positioned to benefit
should market rates move in either direction.

Hercules entered into commitments to provide debt and equity financings of
approximately$259.9 million to new and existing portfolio companies.

The Company funded approximately $200.7millionof debt and equity investments
to new and existing portfolio companies during the fourth quarter.

Hercules received approximately$80.6 millionof principal repayments,
including approximately $54.7 millionof early principal repayments
andapproximately $25.9millionin scheduled principal payments in the fourth
quarter.

Net investment growth on Hercules’ portfolio was approximately $121.5million
on a cost basis for the fourth quarter, which includes approximately $1.4
million of net fee accretion.

Hercules recorded approximately $10.3 million of net unrealized appreciation
from its loans, warrant and equity investments during the fourth quarter.

A break-down of the Company’s total investment portfolio valued at cost and
fair value by category, quarter over quarter, is highlighted below:

                                                                
(in millions)                    Loans       Equity     Warrants     Total
Balances at Cost at 9/30/2012    $ 711.2    $ 47.4    $ 34.2      $ 792.8 
Net activity during Q4 2012*      122.0     1.6      (2.1  )     121.5 
Balances at Cost at 12/31/2012    833.2     49.0     32.1       914.3 
Q/Q Change                         17.2  %     3.6  %     (6.1  %)     15.3  %
                                                                  
Balances at Value at 9/30/2012   $ 693.8    $ 47.8    $ 32.9      $ 774.5 
Net activity during Q4 2012*       122.0       1.7        (2.1  )      121.5
Net unrealized                    11.7      (0.3 )    (1.2  )     10.3  
appreciation/(depreciation)
Balances at Value at 12/31/12     827.5     49.2     29.6       906.3 
Q/Q Change                         19.3  %     2.9  %     (10.3 %)     17.0  %
                                                                     
*Net activity includes fee and OID collections and amortization during the
quarter


Unfunded Commitments

As of December 31, 2012, Hercules had unfunded debt commitments of
approximately $61.9 million. Since these commitments may expire without being
drawn upon, unfunded commitments do not necessarily represent future cash
requirements or future earning assets for Hercules. Approximately $35.6
million of these unfunded commitments are dependent upon the portfolio company
reaching certain milestones before the Hercules debt commitment would become
available.

Signed Term Sheets

Hercules finished the fourth quarter of 2012 with approximately $70.0 million
in signed non-binding term sheets with seven new and existing companies. These
non-binding term sheets generally convert to contractual commitments in
approximately 45 to 60 days from signing. Non-binding outstanding term sheets
are subject to completion of Hercules’ due diligence and final approval
process as well as negotiation of definitive documentation with the
prospective portfolio companies. It is important to note that not all
non-binding term sheets are expected to close and do not necessarily represent
future cash requirements. Closed commitments generally fund 70-80% of the
committed amount in aggregate over the life of the commitment.

Portfolio Effective Yield

The effective yield on the Company’s debt portfolio investments during the
fourth quarter was 14.3%. Excluding the effect of fee accelerations that
occurred from early payoffs and one-time events, the adjusted effective yield
for the fourth quarter of 2012 was 13.6%, down approximately 30 basis points
from the adjusted effective yield in the third quarter of 2012 of 13.9%. The
effective yield is derived by dividing total investment income by the weighted
average earning investment portfolio assets outstanding during the quarter
which exclude non-interest earning assets such as warrants and equity
investments.

Existing Warrants Portfolio and Potential Future Gains

Hercules held warrant positions in approximately 116 portfolio companies, with
a fair value of approximately $29.5 million at December 31, 2012.

As ofDecember 31, 2012, two portfolio companies had filed Form S-1
Registration Statements with the SEC in contemplation of a potential IPO:

  *iWatt, Inc.
  *Paratek Pharmaceuticals, Inc

There can be no assurances that these companies will complete their IPOs in a
timely manner or at all.

During the fourth quarter, Glori Energy, Inc. and one company which had
previously filed a Form S-1 Registration confidentially under the JOBS Act
withdrew their Registration Statement for their IPO.

Income Statement

Total investment income in the fourth quarter of 2012 was approximately $27.4
million compared to approximately $21.2 million in the fourth quarter of 2011.

Interest expense and loan fees were approximately $7.5 million during the
fourth quarter of 2012 as compared to $4.6 million in the fourth quarter of
2011.

The Company had a weighted average cost of debt comprised of interest and fees
of approximately 6.29% in the fourth quarter of 2012 versus 6.23% during the
fourth quarter of 2011. The slight increase is due to the $170.4 million 7.0%
Senior Unsecured Notes due 2019 issued in April and September of 2012, offset
by a lower weighted average cost of SBA debentures of 4.3% in the fourth
quarter of 2012 compared to 5.0% in the fourth quarter of 2011.

Total operating expenses, excluding interest expense and loan fees, for the
fourth quarter of 2012 was $6.9 million as compared to $5.8 million for the
fourth quarter of 2011.

During the fourth quarter of 2012, the Company recorded approximately $10.3
million of net unrealized appreciation from its loans, warrant and equity
investments bringing cumulative net depreciation to approximately $8.0
million. Of the $10.3 million of unrealized appreciation, $900,000 of
appreciation was due to market or yield adjustments in fair value
determinations, $2.1 million of depreciation was primarily attributable to
collateral based impairments on investments in three portfolio companies, $9.9
million of appreciation was related to reversals of prior period collateral
based impairments and $1.6 million of appreciation was related to the reversal
of net unrealized depreciation due to loan payoffs and sales of warrant and
equity investments.

A break-down of the net unrealized appreciation in the investment portfolio is
highlighted below:

                            
(in millions)                 Three Months Ended December 31, 2012
Q4-12 Unrealized              Loans     Equity    Warrants  Other   Total
Appreciation/(Depreciation)                                    Assets
                                                                        
Collateral based              $ (2.1 )   $ -        $ -        $   -    $ (2.1 )
impairments
Reversals of Prior Period
Collateral based                8.7        0.5        0.7          -      9.9
impairments
                                                                        
Reversals due to Loan
Payoffs & Warrant/Equity        0.4        0.2        1.0          -      1.6
sales
                                                                        
Fair Value Market/Yield
Adjustments*
Level 1 & 2 Assets              -          (0.8 )     (0.2 )       -      (1.0 )
Level 3 Assets                 4.7      (0.2 )    (2.6 )      -     1.9  
Total Fair Value                4.7        (1.0 )     (2.8 )       -      0.9
Market/Yield Adjustments
                                                                    
Total Unrealized              $ 11.7    $ (0.3 )   $ (1.1 )   $   -    $ 10.3 
Appreciation/(Depreciation)
                                                                               

Hercules recognized net realized gains of approximately $1.1 million on its
investment portfolio in the fourth quarter.

Cumulative net realized losses on investments since October 2004 to date total
approximately $47.0 million, on a GAAP basis. When compared to total
commitments of approximately $3.4 billion over the same period, the net
realized loss since inception represents approximately 1.4% of total
commitments or an annualized loss rate of approximately 17 basis points.

NII – Net Investment Income

NII for the fourth quarter of 2012 was approximately $13.1 million, compared
to $10.8million in the fourth quarter of 2011, representing an increase of
approximately 21.3%. NII per share for the fourth quarter of 2012 was $0.25
based on 51.9 million basic weighted shares outstanding, compared to $0.25
based on 43.2 million basic weighted shares outstanding in the fourth quarter
2011.

DNOI - Distributable Net Operating Income

DNOI for the fourth quarter was approximately $14.2 million or $0.27 per
share, as compared to $11.5 million or $0.27 per share in the fourth quarter
of 2011. DNOI measures Hercules’ operating performance exclusive of employee
stock compensation, which represents expense to the Company but does not
require settlement in cash. DNOI does include paid-in-kind, or “PIK”, and
back-end fees that generally are not payable in cash on a regular basis but
rather at investment maturity. Hercules believes disclosing DNOI and the
related per share measures are useful and appropriate supplements and not
alternatives to GAAP measures for net operating income, net income, earnings
per share and cash flows from operating activities.

Dividends

The Board of Directors increased the quarterly dividend by $0.01, or
approximately 4.2%, and has declared a fourth quarter cash dividend
of$0.25per share that will be payable onMarch 19, 2013 to shareholders of
record as ofMarch 11, 2013. This dividend would represent the Company’s
thirtieth consecutive dividend declaration since its initial public offering,
bringing the total cumulative dividend declared to date to $7.89 per share.

The Company intends to distribute approximately $1.5 million, or approximately
$0.03 per share, of spillover earnings from 2012 to its shareholders in 2013.

Share Repurchases

Hercules’ share repurchase program expired in February 2013. During the fourth
quarter of 2012 the Company did not repurchase shares of its common stock
under this program.

Liquidity and Capital Resources

The Company ended the fourth quarter with approximately$288.0 million in
available liquidity, including $183.0 million in cash and $105.0 million in
credit facility availability.

In October 2012, Hercules closed a public offering of 3.1 million shares of
its common stock at a price of $10.85per share, resulting in proceeds of
approximately$33.6 million,excluding other offering expenses.

Also in October 2012, in connection with the public offering of$75.0
millionin aggregate principal amount of 7.00% Senior Notes due 2019 (the
“September 2019 Notes”), the underwriters exercised their over-allotment
option for an additional$10.9 million in aggregate principal amount of the
September 2019 Notes, bringing the total size of the offering to
approximately$85.9 million.

In December 19, 2012, Hercules Capital Funding Trust 2012-1, a newly-formed
wholly owned subsidiary of Hercules, issued approximately $129.0 million in
aggregate principal amount of Asset-Backed Notes (the “Notes”) rated A2 (sf)
by Moody’s Investors Service, Inc. (“Moody's”) backed by approximately $231.0
million of senior secured loans originated by Hercules. The Notes bear
interest at a fixed rate of 3.32%. The Notes have a stated maturity date of
December 16, 2017 and an expected weighted average life of 1.15 years.

As of December 31, 2012, Hercules did not have any outstanding borrowings
under theWells Fargo credit facility. Hercules has a committed credit
facility withWells Fargofor approximately $75.0 millionin initial credit
capacity under a$300.0 millionaccordion credit facility. Additional lenders
may be added to the facility over time to reach up to an aggregate of$300.0
million. We expect to continue discussions with various other potential
lenders to join the Wells facility; however, there can be no assurances that
additional lenders will join the facility.

Pricing atDecember 31, 2012under theWells Fargocredit facility was
LIBOR+3.50% with a floor of 4.25%.

In December, Hercules amended the Union Bank credit facility under which Union
Bank andRBC Capital Marketshad made commitments of$30.0 millionand$25.0
million, respectively. The amended facility removes RBC Capital Markets and
thereby reduces the facility from $55.0 million to $30.0 million. As of
December 31, 2012, Hercules did not have any outstanding borrowings under
theUnion Bank credit facility.

Pricing atDecember 31, 2012under theUnion Bank credit facility is
LIBOR+2.25% with a floor of 4.0%.

AtDecember 31, 2012, Hercules had approximately$225.0 millionin outstanding
debentures under the SBIC program, which is the maximum amount of debentures
allowed under the SBIC program.

Hercules’ debt to equity, or leverage, ratio at December 31, 2012 was
approximately 115.5%. However, if the outstanding cash at December 31, 2012 of
approximately $183.0 million was deducted from total debt of approximately
$596.0 million and divided by total equity of approximately $516.0 million,
then the net leverage ratio would be approximately 80.1%. Hercules has an SEC
exemptive order to exclude all SBA debentures from its regulatory leverage
calculations. Given the SEC exemptive order relief, the Company has the
potential capacity on its balance sheet to leverage an additional $145.0
million, bringing the maximum potential leverage to $741.0 million, or
approximately 143.6%, as of December 31, 2012.

As of December 31, 2012, the Company’s asset coverage ratio under our
regulatory requirements as a business development company was 296.8%,
excluding the SBIC debentures as a result of our exemptive order from the SEC.

Net Asset Value

At December 31, 2012, the Company’s net assets were approximately $516.0
million, an increase of 19.7% as compared to $431.0 million as of December 30,
2011 and $469.1 million as of September 30, 2012.

As of December 31, 2012, net asset value per share was $9.75 on 52.9 million
outstanding shares, compared to $9.83 on 43.9 million outstanding shares and
$9.42 on 49.8 million shares as of December 31, 2011 and September 30, 2012,
respectively.

Portfolio Asset Quality

As of December 31, 2012, grading of the debt portfolio at fair value,
excluding warrants and equity investments, was as follows:

Grade 1    $134.2 million or 16.2% of the total portfolio
Grade 2       $542.9 million or 65.6% of the total portfolio
Grade 3       $127.5 million or 15.4% of the total portfolio
Grade 4       $22.9 million or 2.8% of the total portfolio
Grade 5       $0.0 million or 0.0% of the total portfolio

At December 31, 2012, the weighted average loan grade of the portfolio was
2.06 on a scale of 1 to 5, with 1 being the highest quality, compared with
2.12 as of September 30, 2012 and 2.01 as of December 31, 2011. Hercules’
policy is to generally adjust the grading down on its portfolio companies as
they approach the need for additional equity capital.

Subsequent Events

1. As of February 25, 2013, Hercules has:

a. Closed commitments of approximately $115.6 million to new and existing
portfolio companies, and funded approximately $90.0 million since the close of
the fourth quarter, which includes a $35.0 million renewal of an existing debt
investment, for net new fundings of approximately $55.0 million
quarter-to-date.

b. Pending commitments (signed non-binding term sheets) of approximately
$126.5 million.

The table below summarizes our year-to-date closed and pending commitments as
follows:


Closed Commitments and Pending Commitments (in millions)
Q1-13 Closed Commitments (as of February 25, 2013)  $115.6
Pending Commitments (as of February 25, 2013)^(b)   $126.5
Year-to-date 2013 Closed and Pending Commitments    $242.1

Notes:

a. Closed Commitments may include renewals of existing credit facilities. Not
all Closed Commitments result in future cash requirements. Commitments
generally fund over the two succeeding quarters from close.

b. Not all pending commitments (signed non-binding term sheets) are expected
to close and do not necessarily represent any future cash requirements.

Conference Call

Hercules has scheduled its 2012 fourth quarter and fiscal year financial
results conference call for February 28, 2013 at 2:00 p.m. PST (5:00 p.m.
EST). To listen to the call, please dial (877) 304-8957 or (408) 427-3709
approximately 10 minutes prior to the start of the call. A taped replay will
be made available approximately three hours after the conclusion of the call
and will remain available for seven days. To access the replay, please dial
(855) 859-2056 or (404) 537-3406 and enter the passcode 93837518.

About Hercules Technology Growth Capital, Inc.:

Hercules Technology Growth Capital, Inc. (NYSE: HTGC) (“Hercules”) is the
leading specialty finance company focused on providing senior secured loans to
venture capital-backed companies in technology-related markets, including
technology, biotechnology, life science and cleantech industries at all stages
of development. Since inception (December 2003), Hercules has committed more
than $3.4 billion to over 220 companies and is the lender of choice for
entrepreneurs and venture capital firms seeking growth capital financing.

Hercules’ common stock trades on the New York Stock Exchange (NYSE) under the
ticker symbol "HTGC."

In addition, Hercules has two outstanding bond issuances of 7.00% Senior Notes
due 2019—the April 2019 Notes and September 2019 Notes—which trade on the NYSE
under the symbols “HTGZ” and “HTGY,” respectively.

Companies interested in learning more about financing opportunities should
contact info@htgc.com, or call 650.289.3060.

Forward-Looking Statements:

The information disclosed in this release is made as of the date hereof and
reflects Hercules most current assessment of its historical financial
performance. Actual financial results filed with the Securities and Exchange
Commission may differ from those contained herein due to timing delays between
the date of this release and confirmation of final audit results. These
forward-looking statements are not guarantees of future performance and are
subject to uncertainties and other factors that could cause actual results to
differ materially from those expressed in the forward-looking statements
including, without limitation, the risks, uncertainties, including the
uncertainties surrounding the current market volatility, and other factors we
identify from time to time in our filings with the Securities and Exchange
Commission. Although we believe that the assumptions on which these
forward-looking statements are based are reasonable, any of those assumptions
could prove to be inaccurate and, as a result, the forward-looking statements
based on those assumptions also could be incorrect. You should not place undue
reliance on these forward-looking statements. The forward-looking statements
contained in this release are made as of the date hereof, and Hercules assumes
no obligation to update the forward-looking statements for subsequent events.

                                                                 
HERCULES TECHNOLOGY GROWTH CAPITAL, INC.
CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES
(dollars in thousands, except per share data)
                                                                   
                                                   December 31,
                                                    2012          2011    
Assets
Investments:
Non-control/Non-affiliate investments (cost of     $ 894,428      $ 651,843
$896,031 and $642,038, respectively)
Affiliate investments (cost of $18,307 and $3,236,   11,872          -
respectively)
Control investments (cost of $0 and $11,266,        -             1,027   
respectively)
Total investments, at value (cost of $914,338 and    906,300         652,870
$656,540, respectively)
Cash and cash equivalents                            182,994         64,474
Interest receivable                                  9,635           5,820
Other assets                                        24,714        24,230  
Total assets                                       $ 1,123,643   $ 747,394 
                                                                   
Liabilities
Accounts payable and accrued liabilities           $ 11,575       $ 10,813
Wells Fargo Loan                                     -              10,187
Long-term Liabilities (Convertible Senior Notes)     71,436         70,353
Asset-Backed Notes                                   129,300         -
2019 Notes                                           170,364         -
Long-term SBA Debentures                            225,000      225,000 
Total liabilities                                  $ 607,675      $ 316,353
Commitments and Contingencies (Note 9)
                                                                   
Net assets consist of:
Common stock, par value                              53              44
Capital in excess of par value                       564,508         484,244
Unrealized depreciation on investments               (7,947    )     (3,431  )
Accumulated realized losses on investments           (36,916   )     (43,042 )
Distributions in excess of investment income        (3,730    )    (6,774  )
Total net assets                                   $ 515,968     $ 431,041 
Total liabilities and net assets                   $ 1,123,643   $ 747,394 
                                                                   
Shares of common stock outstanding ($0.001 par       52,925          43,853
value, 100,000,000 authorized)
Net asset value per share                          $ 9.75         $ 9.83
                                                                             

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
                                                            
                                                                 
                  Three Months Ended December  Twelve Months Ended December
                  31,                           31,
                    2012         2011          2012           2011    
Investment
Income:
Interest Income
Non Control/Non
Affiliate         $  23,561     $  18,515       $  85,258        $  69,552
investments
Affiliate            854           14              2,345            -
investments
Control             -            884           -              794     
investments
Total interest      24,415       19,413        87,603         70,346  
income
Fees
Non Control/Non
Affiliate            2,974         1,781           9,897            9,400
investments
Affiliate            6             -               20               14
investments
Control             -            5             -              95      
investments
Total fees          2,980        1,786         9,917          9,509   
Total investment    27,395       21,199        97,520         79,855  
income
Operating
expenses:
Interest             6,526         3,681           19,835           13,252
Loan fees            940           909             3,917            2,635
General and          1,982         1,778           8,108            7,992
administrative
Employee
Compensation:
Compensation and     3,760         3,372           13,326           13,260
benefits
Stock-based         1,116        628           4,227          3,128   
compensation
Total employee      4,876        4,000         17,553         16,388  
compensation
Total operating     14,324       10,368        49,413         40,267  
expenses
Net investment       13,071        10,831          48,107           39,588
income
                                                                 
Net realized
(losses) gains on
investments
Non Control/Non
Affiliate           1,119        (688    )      3,168          2,741   
investments
Total net
realized (loss)     1,119        (688    )      3,168          2,741   
gain on
investments
                                                                 
Net increase
(decrease) in
unrealized
appreciation on
investments
Non Control/Non
Affiliate         $  4,865      $  5,818        $  (2,448  )     $  (3,976  )
investments
Affiliate            5,806         -               (2,068  )        3,425
investments
Control             -            1,612         -              5,158   
investments
Total net
unrealized
(depreciation)      10,671       7,430         (4,516  )       4,607   
appreciation on
investments
Total net
realized            11,790       6,742         (1,348  )       7,348   
(unrealized) gain
Net increase in
net assets        $  24,861     $  17,573      $  46,759       $  46,936  
resulting from
operations
                                                                 
Net investment
income before
provision for
income taxes and
investment gains
and losses per
common share:
Basic             $  0.25       $  0.25        $  0.96         $  0.91    
                                                                 
Change in net
assets per common
share:
Basic             $  0.47       $  0.41        $  0.93         $  1.08    
Diluted           $  0.47       $  0.40        $  0.93         $  1.07    
                                                                 
Weighted average
shares
outstanding
Basic               51,862       43,190        49,068         42,988  
Diluted             51,895       43,442        49,156         43,299  
                                                                            

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

NON GAAP FINANCIAL MEASURES

(in thousands, except per share data)
                                 Three Months Ended December 31,
                                       2012                   2011     
Reconciliation of Adjusted
NII to Net Investment Income
Net Investment Income             $     13,071               $    10,831
Dividends paid on unvested             (227       )             (143     )
restricted shares (1)
Net investment income, net
of dividends paid on              $     12,844               $    10,688
unvested restricted shares
Net investment income before
investment gains and losses
per common share: (2)
Basic                             $     0.25                $    0.25     
Adjusted net investment
income before investment
gains and losses per common
share: (3)
Basic                             $     0.25                $    0.25     
                                                             
Weighted average shares
outstanding
Basic                                  51,862                  43,190   
                                                             
(1) Unvested restricted shares as of the dividend record date in the fourth
quarter of 2012 and 2011 was approximately 947,500 and 649,000 respectively
(2) Net investment income per share is calculated as the ratio of income and
losses allocated to common shareholders divided by shares outstanding.
(3) Adjusted net income per share is calculated as Net investment income per
share, adding dividends paid on unvested restricted shares to the amounts of
income and losses allocated to common shareholders.


Adjusted net investment income per basic and diluted share, ”Adjusted NII”
consists of GAAP net investment income, excluding the impact of dividends paid
on unvested restricted common stock divided by the weighted average basic and
fully diluted share outstanding for the period under measurement. For
reporting purposes, Hercules calculates net investment income per share and
change in net assets per share on a basic and fully diluted basis by applying
the two-class method, under GAAP. This GAAP method excludes unvested
restricted shares and the pro rata earnings associated with the shares from
per share calculations.

Hercules believes that providing Adjusted NII affords investors a view of
results that may be more easily compared to other companies and enables
investors to consider the Company’s results on both a GAAP and Adjusted basis.
Adjusted NII should not be considered as an alternative to, as an independent
indicator of the Company’s operating performance, or as a substitute for Net
Investment Income per basic and diluted share (each computed in accordance
with GAAP). Instead, Adjusted NII should be reviewed in connection with
Hercules’ consolidated financial statements, to help analyze how the Company
is performing. Investors should use Non-GAAP measures only in conjunction with
its reported GAAP results.

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

NON GAAP FINANCIAL MEASURES

(in thousands, except per share data)
                                                               
                         Three Months Ended December   Year Ended December 31,
                         31,
Reconciliation of DNOI
to Net investment        2012             2011         2012          2011
income
Net investment income    $   13,071       $  10,831    $  48,107     $  39,588
Stock-based                 1,116          628         4,227        3,195
compensation
DNOI                     $   14,187       $  11,459    $  52,334     $  42,783
                                                                     
DNOI per
share-weighted average
common shares
Basic                    $   0.27         $  0.27      $  1.07       $  1.00
                                                                     
Weighted average
shares outstanding
Basic                       51,862         43,190      49,068       42,988
                                                                        

Distributable Net Operating Income, “DNOI” represents net investment income as
determined in accordance with U.S. generally accepted accounting principles,
or GAAP, adjusted for amortization of employee restricted stock awards and
stock options. Hercules views DNOI and the related per share measures as
useful and appropriate supplements to net operating income, net income,
earnings per share and cash flows from operating activities. These measures
serve as an additional measure of Hercules’ operating performance exclusive of
employee restricted stock amortization, which represents expenses of the
Company but does not require settlement in cash. DNOI does include
paid-in-kind, or PIK, interest and back end fee income which are generally not
payable in cash on a regular basis, but rather at investment maturity or when
declared. DNOI should not be considered as an alternative to net operating
income, net income, earnings per share and cash flows from operating
activities (each computed in accordance with GAAP). Instead, DNOI should be
reviewed in connection with net operating income, net income (loss), earnings
(loss) per share and cash flows from operating activities in Hercules’
consolidated financial statements, to help analyze how Hercules’ business is
performing.


HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

NON GAAP FINANCIAL MEASURES

(in thousands, except per share data)
                                                          
                                                            Three Months Ended
                                                            December 31, 2012
Total Debt                                                  $    596,099
Cash and cash equivalents                                       182,994   
Numerator: net debt (total debt less cash and cash          $    413,105
equivalents)
                                                            
Denominator: Total net assets                               $    515,968
Net Leverage Ratio                                               80.1      %
                                                                           

Net leverage ratio is calculated by deducting the outstanding cash at December
31, 2012 of approximately $183.0 million from total debt of approximately
$596.0 million divided by our total equity of approximately $516.0 million,
resulting in a net leverage ratio of 80.1%. These measures are not intended to
replace financial performance measures determined in accordance with GAAP.
Rather, they are presented as additional information because management
believes they are useful indicators of the current financial performance of
the Company’s core businesses.

Contact:

Hercules Technology Growth Capital, Inc.
Main, 650-289-3060 HT-HN
info@htgc.com
or
Market Street Partners
Linda Wells, 415-445-3236
Linda@marketstreetpartners.com