Slide 1: Fourth Quarter 2022 Investor Presentation
Fourth Quarter 2022 Investor Presentation FUELING DISRUPTIVE TECHNOLOGIES. REVOLUTIONIZING THE FUTURE.
Slide 2: Forward Looking Statements | Disclaimer
FORWARD LOOKING STATEMENTS | DISCLAIMER Trinity Capital Inc. (the “Company”) cautions that this presentation may contain forward-looking statements that are based on current expectations and assumptions about future events, and which are not based in historical fact. The forward-looking statements i
Slide 3: Company Overview
COMPANY OVERVIEW
Slide 4: Trinity Capital at a glance
Historical information includes information and data related to Trinity Capital's predecessor funds, the first of which was launched in 2008, through December 31, 2022. The predecessor funds were merged with and into Trinity Capital on January 16, 2020, immediately after which Trinity Capital began
Slide 5: Accretive Growth Opportunities
Trinity is permitted to organize, acquire and wholly own a portfolio company that intends to operate as an investment adviser registered with the SEC. This allows Trinity to execute with a unique growth lever to pursue accretive investment opportunities. Registered Investment Adviser ("RIA") On Dece
Slide 6: Why Is Trinity Different
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 patents issued Robust & Scalable Platform Ro
Slide 7: Senior & Subordinated Term Loans
Term Loans Axiom Space is developing the world’s first commercial space station. Investor Syndicate C5 Capital, TQS Advisors, Declaration Partners, Boryung Pharma Use of Loan General corporate purposes Mainspring developed a new category of clean power generation — the linear generator — that delive
Slide 8: Equipment Financing
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 company creating versatile alternative proteins to nouris
Slide 9: Partnership with Top VCs and Technology Banks
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 Relationships with top market share ba
Slide 10: Underwriting Approach and Risk Mitigation
Investor Syndicate Revenue & Gross Margins Business Model Includes historical information of Trinity Capital's predecessor funds, the first of which was launched in 2008, through December 31, 2022. Past performance is not indicative of future results. Investment results may vary significantly over a
Slide 11: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 12: Fourth Quarter 2022 Highlights
All unfunded commitments are conditional, subject to additional lending provisions, and generally dependent upon the portfolio company reaching certain milestones before the debt commitment becomes available. Effective yield is calculated based on the weighted average debt investments at cost on a d
Slide 13: Solid Shareholder Returns
Net Investment Income covered regular dividend by 134.8% in 4Q22 Eight consecutive quarterly dividend increases Supplemental dividends of $0.60 per share in 2022 SOLID SHAREHOLDER RETURNS
Slide 14: Quarterly Operating Results
For the three months ended For the three months ended Nine Months Ended September 30 (In 000’s, except per share amounts) 12/31/2022 09/30/2022 06/30/2022 03/31/2022 12/31/2021 Total Investment Income $41,509 $38,689 $33,458 $31,845 $23,607 Interest expense and other debt financing costs 10,284 9,30
Slide 15: Income Source & Portfolio Yield Trends
INCOME SOURCE & PORTFOLIO YIELD TRENDS Strong Yields Produce Solid Investment Income Effective yield is calculated based on the weighted average debt investments at cost on a daily basis. Core yield excludes fees and accelerated income from prepayments. (1) (2)
Slide 16: NII Returns and Use of Leverage
NII RETURNS AND USE OF LEVERAGE Delivering growing returns through effective use of leverage NII return on average assets (ROAA) is calculated as NII divided by average assets for the quarterly period, annualized. NII return on average equity (ROAA) is calculated as NII divided by average net assets
Slide 17: Net Investment Income (NII) per Share Bridge
NET INVESTMENT INCOME (NII) PER SHARE BRIDGE
Slide 18: Consolidated Balance Sheet
For the three months ended Nine Months Ended September 30 (In 000’s, except per share amounts) 12/31/2022 09/30/2022 06/30/2022 03/31/2022 12/31/2021 Assets Total investments at fair value $ 1,094,386 $ 1,042,175 $ 1,051,074 $919,348 $873,470 Cash and cash equivalents 10,612 34,141 13,226 28,684 31,
Slide 19: Net Asset Value (NAV) per Share Bridge
Includes the impact of share activity and equity incentive plans. NET ASSET VALUE (NAV) PER SHARE BRIDGE Earnings and Distributions Investment Portfolio Performance Share Impact(1)
Slide 20: Debt Capital Structure
Diversified Borrowings ($ in million) as of December 31, 2022 Funding Source Debt Commitment Outstanding Principal Undrawn Commitment Stated Maturity Interest Rate Notes: 2025 Unsecured Notes (1) $182.5 $182.5 - January 16, 2025 (2) 7.0% Convertible Notes $50.0 $50.0 - December 11, 2025 6.0% August
Slide 21: Portfolio Highlights
PORTFOLIO HIGHLIGHTS
Slide 22: Portfolio Diversification
Geography Diversification(1) PORTFOLIO DIVERSIFICATION At December 31, 2022 International 7.3% 40.3% 11.2% 4.6% 7.2% 1.0% 28.4% Based on fair market value
Slide 23: Portfolio Trends
Based on outstanding principal Based on fair market value Well positioned for rising interest rates Strong asset diversification PORTFOLIO TRENDS
Slide 24: Hypothetical Warrant Upside
HYPOTHETICAL WARRANT UPSIDE Proceeds of $47.0 million (2X) Potential gain of $12.8 million or $0.37 per share Proceeds of $70.4 million (3X) Potential gain of $36.3 million or $1.04 per share Proceeds of $93.9 million (4X) Potential gain of $59.8 million or $1.71 per share 133 Warrant Positions in 8
Slide 25: Disciplined Credit Rating
4Q22 3Q22 2Q22 1Q22 4Q21 Very Strong Performance (4.0 – 5.0) $2,729 0.3% $92,008 9.2% $62,719 6.3% $80,592 9.4% $84,785 11.5% Strong Performance (3.0 – 3.9) $239,872 22.9% $320,087 32.1% $382,593 38.5% $332,019 38.9% $236,466 32.1% Performing (2.0 – 2.9) $756,596 72.1% $537,260 53.9% $529,285 53.2%
Slide 26: Interest Rate Sensitivity
INTEREST RATE SENSITIVITY 67.5% floating rate debt investment portfolio as of December 31, 2022 (1) 69.8% fixed rate debt as of December 31, 2022 (2) Based on outstanding principal of debt investments Based on outstanding principal of borrowings
Slide 27: Diversified Portfolio
Select List of Current & Historical Investments DIVERSIFIED PORTFOLIO
Slide 28: Venture Capital and Lending Market
VENTURE CAPITAL AND LENDING MARKET
Slide 29: Venture Capital Market
US VC Deal Activity VENTURE CAPITAL MARKET * As of December 31, 2022 Source: Pitchbook NVCA Venture Monitor Q4 2022
Slide 30: Venture Capital Fundraising
US VC Fundraising Activity VENTURE CAPITAL FUNDRAISING * As of December 31, 2022 Source: Pitchbook NVCA Venture Monitor Q4 2022
Slide 31: Venture Debt Market
VENTURE DEBT MARKET US Venture Debt Deal Activity * As of December 31, 2022 Source: Pitchbook NVCA Venture Monitor Q4 2022
Slide 32: Analyst Coverage
ANALYST COVERAGE
Slide 33: Extensive Industry Analyst Coverage
EXTENSIVE INDUSTRY ANALYST COVERAGE Followed by seven firms Ryan Lynch (initiated coverage 2/23/21) Finian O’Shea (initiated coverage 2/23/21) Vilas Abraham (initiated coverage 2/23/21) Bryce Rowe (initiated coverage 9/16/22) Casey Alexander (initiated coverage 2/23/21) Christopher Nolan (initiated
Slide 34: Supplemental Information
SUPPLEMENTAL INFORMATION
Slide 35: Regulation & Structure
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 Regulated by the SEC under the In
Slide 36: Thank You
36 THANK YOU We look forward to our growing partnership. TRINITYCAP.COM