Trinity Capital Inc. · NASDAQ:TRIN
Trinity Capital — Q1 2022 Earnings Presentation
38 slides from Trinity Capital's earnings presentation, May 9, 2022
Slide 1: A National Leader in Growth Stage Lending First Quarter 2022
A National Leader in Growth Stage Lending First Quarter 2022 Investor Presentation
Slide 2: Forward-looking statements
© 2022 Trinity Capital Inc. | 2 Trinity Capital Inc. (the “Company”) cautions that this presentation may contain forward - looking statements that are based on cu rrent expectations and assumptions about future events, and which are not based in historical fact. The forward - looking statements in t
Slide 3: Investor Presentation Agenda
© 2022 Trinity Capital Inc. | 3 Company & Strategic Overview Financial Highlights Portfolio Highlights Venture Capital and Lending Market 4 13 23 30 34 Supplemental Information 36 Analyst Coverage INVESTOR PRESENTATION | AGENDA
Slide 4: Company Overview
COMPANY OVERVIEW
Slide 5: Trinity Capital Overview
© 2022 Trinity Capital Inc. | 5 Market Capitalization 14 Year Track Record (4) Annualized Dividend Yield Portfolio (2) $94.7 Million Available Liquidity Liquidity (2) 70 Companies Warrant Positions 22 Companies Equity Positions $32.2 Billion Opportunities $1.91 Billion Fundings 238 Investments 140 E
Slide 6: Why Is Trinity Different
© 2022 Trinity Capital Inc. | 6 We understand the growth stage world and provide more than money to our portfolio company partners Deep Operating Experience ▪ Highly experienced executive team with startup experience ▪ Decades of in - depth high - tech experience ▪ Numerous U.S. and International pa
Slide 7: Trinity Investment Horizon
© 2022 Trinity Capital Inc. | 7 SEED SEED INVESTMENT PROFITABILITY EARLY GROWTH STAGE LATER TECHNOLOGY PROVEN PRODUCT DEVELOPED SALES DEVELOPMENT & REVENUE REVENUE GROWTH C O M P A N Y V A L U A T I O N COMPANY MILESTONES Trinity Investment Horizon Execution Risk vs. Technology Risk INVESTMENT HORIZ
Slide 8: Term Loans
© 2022 Trinity Capital Inc. | 8 Term Loans Axiom Space is developing the world’s first commercial space station .. ▪ I nvestor Syndicate C5 Capital, TQS Advisors, Declaration Partners ▪ Use of Loan General corporate purposes Petal's aim is to bring financial innovation and opportunity to everyone, u
Slide 9: Equipment Financing
© 2022 Trinity Capital Inc. | 9 Equipment Financing Select Examples EQUIPMENT FINANCING 01 COMPANIES WITH CAPEX REQUIREMENTS Manufacturing Equipment and Hard Assets 02 HARDWARE AS A SERVICE Equipment at Customer Location 03 INDUSTRY AGNOSTIC Nature’s Fynd is a food com pa ny cre at ing ver sa tile a
Slide 10: Current Market Conditions and Opportunities
© 2022 Trinity Capital Inc. | 10 Continued investment in our team and platform ▪ We’ve added to the team over the last year ▪ Robust Pipeline activity – 135% increase in opportunities compared to Q1'21 VC ecosystem deal activity and fundraising ▪ Venture Capital funding in Q1 2022 - $71 Billion (1)
Slide 11: Partnership with Top VCs and Technology Banks
© 2022 Trinity Capital Inc. | 11 Multiple shared portfolio companies with top Venture Capital Firms We have established inter - creditor agreements with the banks Combining with bank debt results in a lower blended cost to our customers We provide equipment financing and incremental debt capital Rel
Slide 12: Business Model and Underwriting Approach
© 2022 Trinity Capital Inc. | 12 Investor Syndicate Revenue & Gross Margins Business Model (1) Includes historical information of Trinity Capital's predecessor funds, the first of which was launched in 2008, through Marc h 3 1, 2022. Past performance is not indicative of future results. Investment r
Slide 13: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 14: First Quarter 2022 Financial Highlights
© 2022 Trinity Capital Inc. | 14 ▪ Total Investment Income of $31.8M ▪ Net Investment Income (“NII”) of $15.6M ▪ Net Interest Margin (“NIM”) of 12.8% ▪ NII per share of $0.57 provides 143% of regular distribution coverage ▪ Increased the first quarter dividend distribution to $0.40 per share, an inc
Slide 15: Quarterly Results Summary
© 2022 Trinity Capital Inc. | 15 For the three months ended (In 000’s, except per share amounts) 03/31/2022 12/31/2021 09/30/2021 06/30/2021 3/31/2021 Total Investment Income $31,845 $23,607 $21,790 $19,476 $17,320 Interest expense and other debt financing costs 6,798 6,241 5,112 4,425 4,616 Compens
Slide 16: Income Source & Portfolio Yield Trends
© 2022 Trinity Capital Inc. | 16 INCOME SOURCE & PORTFOLIO YIELD TRENDS $464 $521 $578 $741 $865 13.7% 13.4% 13.1% 13.2% 12.9% 15.5% 15.9% 15.8% 15.2% 16.3% 10.9% 10.8% 10.8% 10.8% 10.7% 8.0% 9.0% 10.0% 11.0% 12.0% 13.0% 14.0% 15.0% 16.0% 17.0% $200 $300 $400 $500 $600 $700 $800 $900 1Q21 2Q21 3Q21
Slide 17: Net Investment Income per Share Bridge
© 2022 Trinity Capital Inc. | 17 NET INVESTMENT INCOME PER SHARE BRIDGE $0.30
Slide 18: Balance Sheet
© 2022 Trinity Capital Inc. | 18 (In 000’s, except per share amounts) 03/31/2022 12/31/2021 09/30/2021 06/30/2021 3/31/2021 Assets Total investments at fair value $919,348 $873,470 $677,246 $597,696 $535,741 Cash and cash equivalents 28,684 31,685 25,313 19,124 36,026 Restricted cash - 15,057 15,000
Slide 19: Robust Net Asset Value
© 2022 Trinity Capital Inc. | 19 ROBUST NET ASSET VALUE TRIN Trading Price Premium Stock trades at a premium to NAV per Share $361.6 $379.7 $399.0 $446.5 $424.0 $13.69 $14.33 $14.70 $16.40 $15.15 $14.96 $14.48 $16.09 $17.58 $19.31 $0.00 $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00 $16.00 $18.00 $20.
Slide 20: Net Asset Value per Share Bridge
© 2022 Trinity Capital Inc. | 20 NET ASSET VALUE (NAV) PER SHARE BRIDGE $19.00 $18.00 $17.00 $16.00 $15.00 $16.40 $15.15
Slide 21: Diversified Borrowings
© 2022 Trinity Capital Inc. | 21 Diversified Borrowings ($ in million) at 3/31/2022 Funding Source Debt Commitment Outstanding Principal Undrawn Commitment Stated Maturity Interest Rate Notes: 2025 Unsecured Notes $125 $125 - January 16, 2025 (1) 7.0% Convertible Notes $50 $50 - December 11, 2025 6.
Slide 22: Solid Shareholder Returns
© 2022 Trinity Capital Inc. | 22 Distributable Net Income covered regular dividends by 143% in 1Q22 Supplemental Dividend of $0.15 from spillover income Strong Earnings and Dividend Growth SOLID SHAREHOLDER RETURNS $0.49 $0.76 $1.03 $1.31 $1.60 $1.93 $2.29 $2.84 $0.15 $0.22 $0.27 $0.27 $0.28 $0.29 $
Slide 23: Portfolio Highlights
PORTFOLIO HIGHLIGHTS
Slide 24: Portfolio Diversification
(1) Based on Fair Market Value © 2022 Trinity Capital Inc. | 24 Industry Diversification (1) Geography Diversification (1) 23.9% 22.2% 10.0% 7.6% 4.9% 4.3% 4.3% 22.8% Professional, Scientific, and Technical Services Manufacturing Information Healthcare and Social Assistance Real Estate Retail Trade
Slide 25: Portfolio Summary
© 2022 Trinity Capital Inc. | 25 PORTFOLIO SUMMARY (1) Based on Fair Market Value $551,894 $184,074 $100,732 $36,770 Total Portfolio: By Type At Fair Value as of December 31, 2021 In $000 Secured Loan Equipment Financing Equity Warrant $649,491 $204,308 $22,894 $42,655 Total Portfolio: By Type At Fa
Slide 26: Portfolio Trends
© 2022 Trinity Capital Inc. | 26 PORTFOLIO TRENDS (1) Based on outstanding principal (2) Based on Fair Market Value 67.9% 50.7% 40.0% 43.2% 40.4% 32.1% 49.3% 60.0% 56.8% 59.6% 1Q21 2Q21 3Q21 4Q21 1Q22 FIXED VS FLOATING DEBT INVESTMENTS (1) Fixed Floating 62.6% 66.4% 69.2% 63.2% 70.6% 20.2% 16.1% 21.
Slide 27: Hypothetical Warrant Upside
© 2022 Trinity Capital Inc. | 27 HYPOTHETICAL WARRANT UPSIDE • Investment of $21.7 million (50%) • Proceeds of $43.5 million (2X) • Cost of $31.8 million • Potential gain of $11.7 million or $0.42 per share • Investment of $21.7 million (50%) • Proceeds of $65.2 million (3X) • Cost of $31.8 million
Slide 28: Credit Risk Ratings
© 2022 Trinity Capital Inc. | 28 $380 $381 $443 $464 $518 $578 $736 $854 3.2 3.2 3.2 3.2 3.1 3.1 3.0 3.1 1 1.5 2 2.5 3 3.5 $- $100 $200 $300 $400 $500 $600 $700 $800 $900 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 Total Debt Investments (FV, $ in million) Weighted Investment Credit Rating Q1 2022 Q4 20
Slide 29: Diversified Portfolio
© 2022 Trinity Capital Inc. | 29 Select List of Current & Historical Investments DIVERSIFIED PORTFOLIO
Slide 30: Venture Capital and Lending Market
VENTURE CAPITAL AND LENDING MARKET
Slide 31: US VC Deal Activity
© 2022 Trinity Capital Inc. | 31 US VC Deal Activity VENTURE CAPITAL MARKET Source: Pitchbook NVCA Venture Monitor Q1 2022 $30 $38 $37 $28 $32 $45 $42 $49 $73 $86 $83 $88 $144 $145 $166 $342 $71 3,402 4,401 4,868 4,587 5,567 6,910 8,029 9,514 10,715 11,356 10,251 11,113 11,652 12,540 12,235 16,554 3
Slide 32: US VC Fundraising Activity
© 2022 Trinity Capital Inc. | 32 US VC Fundraising Activity VENTURE CAPITAL FUNDRAISING Source: Pitchbook NVCA Venture Monitor Q1 2022 $34 $30 $18 $17 $25 $23 $22 $38 $43 $51 $44 $72 $70 $85 $132 $74 $- $20 $40 $60 $80 $100 $120 $140 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2
Slide 33: Venture Debt Market
© 2022 Trinity Capital Inc. | 33 VENTURE DEBT MARKET $4 $8 $8 $11 $17 $15 $15 $25 $32 $33 $34 $6 1,075 1,370 1,656 2,033 2,561 2,434 2,660 2,783 3,177 3,075 3,456 555 - 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 $- $5 $10 $15 $20 $25 $30 $35 $40 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2
Slide 34: Analyst Coverage
ANALYST COVERAGE
Slide 35: Followed by Six Firms
© 2022 Trinity Capital Inc. | 35 Followed by Six Firms Trinity Capital is followed by the analysts listed above. Please note that any opinions, estimates or forecasts regarding Tri nit y Capital’s performance made by these analysts are theirs alone and do not represent opinions, forecasts or predict
Slide 36: Supplemental Information
SUPPLEMENTAL INFORMATION
Slide 37: Regulation & Structure
© 2022 Trinity Capital Inc. | 37 BUSINESS DEVELOPMENT COMPANY (BDC) REGULATED INVESTMENT COMPANY (RIC) Trinity Capital Inc. is an Internally Managed BDC under the 1940 Act and has Elected to be treated as a RIC for Federal Income Tax Purposes beginning with its Taxable Year ending December 31, 2020
Slide 38: Thank You
We look forward to our growing partnership. THANK YOU