PHOENIX, March 4, 2021 /PRNewswire/ -- Trinity
Capital Inc. (Nasdaq: TRIN) ("Trinity Capital" or the
"Company"), a leading specialty lending company that provides debt,
including loans and equipment financing, to growth stage companies
backed by technology banks, venture capital and private equity
firms, today announced its financial results for the fourth quarter
and year ended December 31,
2020.
Fourth Quarter 2020 Highlights
- Total investment income of $15.3
million
- Net investment income of $5.3
million, or $0.29 per
share
- Aggregate investment commitments of $116.5 million
- Total gross investments funded of $102.5
million, comprised of $26.2
million across 6 new portfolio companies and $76.3 million across 12 existing portfolio
companies
- Investment portfolio of $493.7
million at fair value
- Net asset value ("NAV") per share increased to $13.03 from $13.01
at September 30, 2020
- Declared a second dividend distribution during the fourth
quarter of $0.27 per share in connection with the results
for such quarter
Full Year 2020 Highlights
- Total investment income of $55.0
million
- Net investment income of $23.4
million or $1.29 per
share
- Aggregate investment commitments of $326.1 million
- Total gross investments funded of $240.0
million
Steven Brown, Chairman and Chief
Executive Officer of Trinity Capital, commented, "During a year of
unprecedented challenges for our society, we thank those who are
steering us through the global pandemic. Our team was resilient in
the face of this adversity evidenced by our ability to raise
capital in 2020 followed by our initial public offering and listing
on the Nasdaq Global Select Market in January 2021. Our portfolio grew to $494 million at fair value following fourth
quarter gross deployments of $102.5
million. As of December 31,
2020, over 99 percent of our portfolio was performing, which
we attribute to our innate and differentiated understanding of how
to underwrite venture debt."
"Importantly, we believe the future is bright. The venture
capital industry had a record year raising an estimated
$74 billion and investing an
estimated $156 billion, and we
believe the industry will carry this momentum into 2021. We have a
strong pipeline of identified opportunities and unfunded
commitments going into 2021 with a healthy balance sheet featuring
$87 million in available liquidity as
of December 31, 2020. In addition, we
raised net proceeds of approximately $105
million in our recently competed IPO that bolsters our
liquidity position for 2021 and will help us continue our planned
growth."
Fourth Quarter 2020 Operating Results
For the three months ended December 31,
2020, total investment income was $15.3 million, which represents an effective
yield of approximately 14.5% on the average debt investments at
cost during the period. This compares to total expenses of
$10.0 million, resulting in net
investment income of approximately $5.3
million, or $0.29 per
share.
During the fourth quarter, the Company realized net losses on
investments of approximately $5.0
million primarily related to a loss on one portfolio
company. Trinity recorded net unrealized appreciation of
$9.0 million during the fourth
quarter, which includes a $4.1
million turnaround impact on realized losses during the
quarter.
During the fourth quarter, the Company generated a net
increase in net assets resulting from operations of $9.7 million, or $0.53 per share.
Net Asset Value
As of December 31, 2020, NAV per
share increased by $0.02 per share to
$13.03, compared to $13.01 for the quarter ended September 30, 2020. The increase in NAV per share
was primarily driven by unrealized appreciation and earnings
partially offset by the two $0.27 per
share dividends declared during the quarter. Total net assets as of
December 31, 2020 were $238.7 million, an increase of $1.4 million as compared to September 30, 2020.
Portfolio and Investment Activity
As of December 31, 2020, Trinity
Capital's investment portfolio had an aggregate fair value of
approximately $493.7 million and was
comprised of approximately $320.7
million in secured loans, $122.5
million in equipment financings, and $50.5 million in equity and equity-related
investments, including warrants across 80 portfolio companies.
During the fourth quarter, the Company originated $116.5 million of total new commitments. Fourth
quarter investments funded totaled approximately $102.5 million, which was comprised
of approximately $26.2 million
of investments in 6 new portfolio companies and approximately
$76.3 million of investments in 12
existing portfolio companies. Proceeds received from repayments of
the Company's investments during the fourth quarter totaled
approximately $42.3 million, which
included $25.9 million from early
repayments. The portfolio increased by $59.0
million on a cost basis, and by $68.2
million at fair value as compared to September 30, 2020.
At the end of the fourth quarter, loans to three portfolio
companies were on non-accrual status with a total fair value of
approximately $2.2 million and cost
basis of $3.4 million, or 0.5% and 0.7% of our debt investment
portfolio, respectively.
The following table shows the distribution of our loan and
equipment financing investments on the 1 to 5 investment risk
rating scale at fair value as of December
31, 2020 (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Risk
Rating
Scale
Range
|
|
Designation
|
|
Investments
at
Fair
Value
|
|
Percentage
of
Total
Portfolio
|
4.0 - 5.0
|
|
Very Strong
Performance
|
|
$
|
92,519
|
|
20.9%
|
3.0 - 3.9
|
|
Strong
Performance
|
|
|
212,969
|
|
48.0%
|
2.0 - 2.9
|
|
Performing
|
|
|
116,895
|
|
26.4%
|
1.6 - 1.9
|
|
Watch
|
|
|
19,230
|
|
4.3%
|
1.0 - 1.5
|
|
Default/Workout
|
|
|
1,606
|
|
0.4%
|
Total
|
|
|
|
$
|
443,219
|
|
100.0%
|
As of December 31, 2020, and in
line with the third quarter, our loan and equipment financing
investments had a weighted average risk rating score of 3.2.
Liquidity and Capital Resources
As of December 31, 2020, the
Company had approximately $86.7
million in available liquidity, including $44.7 million in unrestricted cash and cash
equivalents. At the end of the period, the Company had $42.0 million in available borrowing capacity
under its credit facility, subject to existing terms and advance
rates and regulatory and covenant requirements. As of that same
date, the Company had approximately $16.4
million of restricted cash, of which $15.7 million relates to the Company's credit
agreement covenants, and approximately $0.7
million is held in escrow.
Distributions
Beginning with the fourth quarter, the Company's Board of
Directors (the "Board") intends to declare a quarterly distribution
prior to the end of each quarter. As previously announced by the
Company, the Board declared a quarterly distribution of
$0.27 per share with respect to the
fourth quarter and paid the distribution on January 15, 2021 to stockholders of record as of
December 30, 2020.
Trinity Capital's distribution reinvestment plan provides for
the reinvestment of distributions in the form of common stock on
behalf of its stockholders unless a stockholder has elected to
receive distributions in cash.
Portfolio Company M&A Activity YTD 2021
In December 2020, Trinity
Capital's portfolio company AyDeeKay LLC, a semiconductor and
software design company announced that it has entered into a
definitive merger agreement with Thunder Bridge II (NASDAQ: THBR),
a special purpose acquisition company. Trinity Capital initially
committed $12.0 million in debt
financing beginning in 2018 and currently holds warrants for 6,250
shares of Series G preferred stock as of December 31, 2020.
In February 2021, Trinity
Capital's portfolio company Matterport, Inc., a spatial data
company announced that it has entered into a definitive merger
agreement with Gores Holding VI (NASDAQ: GHVI, GHVIU and GHVIW), a
special purpose acquisition company. Trinity Capital initially
committed $10.0 million in debt
financing beginning in 2018 and currently holds warrants for
143,813 shares of common stock as of December 31, 2020.
In February 2021, Trinity
Capital's portfolio company Atieva, Inc., (d/b/a Lucid Motors) a
luxury electric vehicle company announced that it has entered into
a definitive merger agreement with Churchill Capital IV Corp.
(NYSE: CCIV), a special purpose acquisition company. Trinity
Capital initially committed $30.0
million in debt financing beginning in 2017 and currently
holds warrants for 585,024 shares of Series D preferred stock, as
of December 31, 2020.
Conference Call
Trinity Capital will hold a conference call to discuss its
fourth quarter and full year 2020 financial results at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) on Thursday, March 4, 2021. To listen to the call,
please dial (888) 285 0969, or (706) 758 9224 internationally, and
reference Conference ID: 4939607 if asked, 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 800-585-8367 or (404)
537 3406 and enter the passcode 4939607.
A live webcast of the fourth quarter and full year 2020
financial results conference call will also be available on the
investor relations section of the Company's website at
https://trincapinvestment.com/. A replay will be available on the
Company's website for 90 days following the conference call.
About Trinity Capital Inc.
Trinity Capital (Nasdaq: TRIN), an internally managed specialty
lending company that has elected to be regulated as a business
development company under the Investment Company Act of 1940, as
amended, is a leading provider of debt, including loans and
equipment financing, to growth stage companies, including
venture-backed companies and companies with institutional equity
investors. Trinity's investment objective is to generate current
income and, to a lesser extent, capital appreciation through
investments consisting primarily of term loans and equipment
financings and, to a lesser extent, working capital loans, equity
and equity-related investments. Trinity believes it is one of only
a select group of specialty lenders that has the depth of
knowledge, experience, and track record in lending to growth stage
companies.
Forward-Looking Statements
This press release may contain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. Statements other than statements of historical facts
included in this press release may constitute forward-looking
statements and are not guarantees of future performance or results
and involve a number of risks and uncertainties, including the
impact of the COVID 19 pandemic on the economy, financial markets,
our business, our portfolio companies and our industry. Actual
results may differ materially from those in the forward-looking
statements as a result of a number of factors, including those
described from time to time in filings with the Securities and
Exchange Commission ("SEC"). The Company undertakes no duty to
update any forward-looking statement made herein. All
forward-looking statements speak only as of the date of this press
release. More information on risks and other potential factors that
could affect the Company's financial results, including important
factors that could cause actual results to differ materially from
plans, estimates or expectations included herein or on the
webcast/conference call, is included in the Company's filings with
the SEC, including in the "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" sections of the Company's most recently filed annual
report on Form 10-K and subsequent SEC filings.
TRINITY
CAPITAL, INC.
Consolidated Statements of Assets and Liabilities
(In thousands, except share and per share data)
|
|
|
|
December
31,
2020
|
|
|
December 31,
2019
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Investments, at fair
value:
|
|
|
|
|
|
|
|
|
Control investments
(cost of $57,072 and $0, respectively)
|
|
$
|
48,730
|
|
|
$
|
-
|
|
Affiliate investments
(cost of $20,653 and $0, respectively)
|
|
|
27,650
|
|
|
|
-
|
|
Non-control /
Non-affiliate investments (cost of $420,611 and $0,
respectively)
|
|
|
417,271
|
|
|
|
-
|
|
Total
investments (cost of $498,336 and $0, respectively)
|
|
|
493,651
|
|
|
|
-
|
|
Cash and cash
equivalents
|
|
|
44,656
|
|
|
|
-
|
|
Restricted
cash
|
|
|
16,445
|
|
|
|
-
|
|
Interest
receivable
|
|
|
3,468
|
|
|
|
-
|
|
Deferred financing
costs
|
|
|
-
|
|
|
|
3,525
|
|
Deferred offering
costs
|
|
|
-
|
|
|
|
2,677
|
|
Prepaid
expenses
|
|
|
744
|
|
|
|
-
|
|
Other
assets
|
|
|
744
|
|
|
|
-
|
|
Total assets
|
|
$
|
559,708
|
|
|
$
|
6,202
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
Credit facility, net of
$2,107 and $0, respectively, of unamortized
deferred financing
cost
|
|
$
|
132,893
|
|
|
$
|
-
|
|
Notes payable, net of
$4,697, and $0, respectively, of unamortized
deferred financing
costs
|
|
|
120,303
|
|
|
|
-
|
|
Convertible notes payable,
net of $3,448, and $0, respectively, of unamortized
deferred financing costs and
discounts
|
|
|
46,552
|
|
|
|
|
|
Accounts payable and accrued
expenses
|
|
|
7,309
|
|
|
|
5,668
|
|
Due to related
party
|
|
|
-
|
|
|
|
1,058
|
|
Distribution
Payable
|
|
|
4,947
|
|
|
|
|
|
Other liabilities
|
|
|
8,956
|
|
|
|
-
|
|
Total
liabilities
|
|
|
320,960
|
|
|
|
6,726
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
ASSETS
|
|
|
|
|
|
|
|
|
Common stock, $0.001 par value per share (200,000,000
authorized,
18,321,274 and 10 shares issued and outstanding as of December 31,
2020 and
December 31, 2019, respectively)
|
|
|
18
|
|
|
|
-
|
|
Paid-in capital in excess of par
|
|
|
263,366
|
|
|
|
-
|
|
Distributable earnings (accumulated loss)
|
|
|
(24,636)
|
|
|
|
(524)
|
|
Total net
assets
|
|
|
238,748
|
|
|
|
(524)
|
|
Total
liabilities and total net assets
|
|
$
|
559,708
|
|
|
$
|
6,202
|
|
NET ASSET VALUE
PER SHARE
|
|
$
|
13.03
|
|
|
$
|
(52,418.20)
|
|
TRINITY CAPITAL
INC.
Consolidated Statements of Operations
(In thousands except share and per share data)
|
|
|
|
|
For
the
Year
Ended
December 31,
2020
|
|
For the
Period
of August 12,
2019
(date of
inception)
to December 31, 2019
|
|
INVESTMENT
INCOME:
|
|
|
|
|
|
|
|
|
|
|
Interest
Income:
|
|
|
|
|
|
|
|
|
|
Control Investments
|
$
|
3,661
|
|
$
|
|
-
|
|
Affiliate Investments
|
|
1,191
|
|
|
|
-
|
|
Non-Control / Non-Affiliate investments
|
|
46,403
|
|
|
|
-
|
|
Total interest income
|
|
51,255
|
|
|
|
-
|
|
Fee
income:
|
|
|
|
|
|
|
-
|
|
Non-Control /
Non-Affiliate investments
|
|
3,709
|
|
|
|
-
|
|
Total fee income
|
|
3,709
|
|
|
|
-
|
|
Total investment
income
|
|
54,964
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
Interest
expense and other debt financing costs
|
|
16,773
|
|
|
|
-
|
|
Compensation and benefits
|
|
10,433
|
|
|
|
-
|
|
Professional fees
|
|
2,283
|
|
|
|
|
|
|
General
and administrative
|
|
2,104
|
|
|
|
524
|
|
Total
expenses
|
|
31,593
|
|
|
|
524
|
|
|
|
|
|
|
|
|
|
|
|
NET INVESTMENT
INCOME
|
|
23,371
|
|
|
|
(524)
|
|
|
|
|
|
|
|
|
|
|
|
NET REALIZED
GAIN/(LOSS) FROM INVESTMENTS:
|
|
|
|
|
|
|
|
|
|
Control Investments
|
|
-
|
|
|
|
-
|
|
Affiliate Investments
|
|
-
|
|
|
|
-
|
|
Non-Control / Non-Affiliate Investments
|
|
(9,403)
|
|
|
|
-
|
|
Net gain/(loss) from
investments
|
|
(9,403)
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
NET CHANGE IN
UNREALIZED APPRECIATION / (DEPRECIATION)
FROM INVESTMENTS:
|
|
|
|
|
|
|
|
|
|
Control
investments
|
|
(8,342)
|
|
|
|
-
|
|
Affiliate
investments
|
|
6,997
|
|
|
|
-
|
|
Non-Control /
Non-Affiliate investments
|
|
(3,621)
|
|
|
|
-
|
|
Net change in
unrealized appreciation/(depreciation) from
investments
|
|
(4,966)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCREASE/(DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS BEFORE FORMATION COSTS
|
|
9,002
|
|
|
|
(524)
|
|
Costs
related to acquisition of Trinity Capital Holdings and Legacy
Funds
|
|
(15,114)
|
|
|
|
-
|
|
NET
INCREASE/(DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS
|
$
|
(6,112)
|
|
$
|
|
(524)
|
|
|
|
|
|
|
|
|
|
|
|
NET INVESTMENT
INCOME PER SHARE – BASIC AND
DILUTED
|
$
|
1.29
|
|
$
|
|
N/M
|
|
|
|
|
|
|
|
|
|
|
|
NET INCREASE
(DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS PER SHARE – BASIC AND DILUTED
|
$
|
(0.34)
|
|
$
|
|
N/M
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding – BASIC AND
DILUTED
|
|
18,092,494
|
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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SOURCE Trinity Capital Inc.