Hercules Capital, Inc.
Securities Class Action

On February 27, 2026, Hunterbrook Media published a short report entitled “The Myth of Hercules Capital.” The report alleged that, “according to a former Hercules analyst who worked on deal sourcing” the Company’s process for deal sourcing essentially amounted to “[g]o[ing] on the website for Google Ventures and just see what they invest in and just copy it.” The report stated, according to a former employee, deal sourcing managers “don’t want anything else,” and essentially just rely on other investors to have done due diligence, instead of doing their own. The report continued, revealing that, “once Hercules makes the loans, the valuation process itself may warrant scrutiny,” as “[a] former member of Hercules’ finance team described a small, overstretched team with few checks in place.” This second former employee revealed the valuations team “consisted of just four people in a single reporting line responsible for dozens of companies,” with “few checks or cross-team review.” The former employee noted this was contrary to how things were done at other public companies where, in contrast “[t]here is a strong push to do things the right way, to reinvent, to make sure that we’re double-checking, triple-checking.” The report stated the former employee found this was not the case at Hercules. The report also alleged that Hercules Capital underrepresents its significant software debt exposure. The report stated the Company does this, in part, by “assign[ing] certain businesses that describe themselves as software companies to categories outside of software.” The report also cast doubt on to the Company’s book value, which marks its software debt “at 100 cents on the dollar” despite “billions worth of [software] debt across the industry falling into distressed territory.” Following publication of the Hunterbrook report, Hercules’s stock price fell $1.22 per share, or 7.91%, to close at $14.21 per share on February 27, 2026.