Slide 1: Second Quarter 2023 Investor Presentation
Second Quarter 2023 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 March 31, 2023. The predecessor funds were merged with and into Trinity Capital on January 16, 2020, immediately after which Trinity Capital began ope
Slide 5: The Trinity Platform
THE TRINITY PLATFORM i40, LLC (the “JV”) invests in loans and equipment financings originated by Trinity, with an initial equity capital commitment of up to $171 million. The JV credit facility with KeyBank was closed in Q2 2023. The JV’s total investment portfolio at fair value as of 6/30/2023 was
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: Entrenched Industry Relationships
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 8: 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 June 30, 2023. Past performance is not indicative of future results. Investment results may vary significantly over any g
Slide 9: Secured Term Loans: Select Examples
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 10: Equipment Financing: Select Examples
Equipment Financing Select Examples EQUIPMENT FINANCINGS 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 nouri
Slide 11: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 12: Second Quarter 2023 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 includes fees and accelerated income from prepayments but excludes fees ear
Slide 13: Solid Shareholder Returns
Net Investment Income covered regular dividend by 127.1% in 2Q23 Ten consecutive regular quarterly dividend increases 14.5% annualized regular dividend yield(1) SOLID SHAREHOLDER RETURNS Annualized based on the $0.48 dividend declared for Q2 2023 and a closing stock price of $13.26 on June 30, 2023.
Slide 14: Quarterly Results of Operations
For the three months ended For the three months ended Nine Months Ended September 30 (In thousands, except per share amounts) 06/30/2023 03/31/2023 12/31/2022 09/30/2022 06/30/2022 Total Investment Income $46,045 $41,538 $41,509 $38,689 $33,458 Interest expense and other debt financing costs 11,985
Slide 15: Income Source & Portfolio Yield Trends
INCOME SOURCE & PORTFOLIO YIELD TRENDS Strong Yields Produce Solid Investment Income Includes fees earned from the JV. Effective yield includes fees and accelerated income from prepayments but excludes fees earned from the JV, and is calculated based on the weighted average debt investments at cost
Slide 16: NII Returns and Use of Leverage
NII RETURNS AND USE OF LEVERAGE Delivering strong 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 (ROAE) is calculated as NII divided by average net assets
Slide 17: Net Investment Income per Share Bridge
NET INVESTMENT INCOME (NII) PER SHARE BRIDGE
Slide 18: Quarterly Balance Sheet
For the three months ended Nine Months Ended September 30 (In thousands, except per share amounts) 06/30/2023 03/31/2023 12/31/2022 09/30/2022 06/30/2022 Assets Total investments at fair value $ 1,148,018 $ 1,091,531 $ 1,094,386 $ 1,042,175 $ 1,051,074 Cash and cash equivalents 12,268 8,344 10,612 3
Slide 19: Net Asset Value 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 millions) as of June 30, 2023 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) 7.00% Convertible Notes $50.0 $50.0 - December 11, 2025 6.00% August 202
Slide 21: Portfolio Highlights
PORTFOLIO HIGHLIGHTS
Slide 22: Portfolio Diversification
PORTFOLIO DIVERSIFICATION Diversified across investment type, transaction size, industry and geography Based on fair market value as of June 30, 2023. Includes debt investments only. Consists of the fair value of our investment in the JV as of June 30, 2023. The portfolio companies held within the J
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 $50.2 million (2X) Potential gain of $13.3 million or $0.36 per share Proceeds of $75.3 million (3X) Potential gain of $38.4 million or $1.05 per share Proceeds of $100.4 million (4X) Potential gain of $63.5 million or $1.73 per share 136 Warrant Positions in
Slide 25: Disciplined Credit Rating
2Q23 1Q23 4Q22 3Q22 2Q22 Very Strong Performance (4.0 – 5.0) $8,758 0.8% $2,513 0.2% $2,729 0.3% $92,008 9.2% $62,719 6.3% Strong Performance (3.0 – 3.9) $272,933 25.0% $285,484 27.4% $239,872 22.9% $320,087 32.1% $382,593 38.5% Performing (2.0 – 2.9) $762,695 69.7% $719,752 69.0% $756,596 72.1% $53
Slide 26: Interest Rate Sensitivity
INTEREST RATE SENSITIVITY 72.1% floating rate debt investment portfolio as of June 30, 2023(1) 34.9% floating rate borrowings as of June 30, 2023(2) Based on outstanding principal of debt investments Based on outstanding principal of borrowings
Slide 27: Diversified Portfolio: Select Investments
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(1) VENTURE CAPITAL MARKET As of June 30, 2023, per Pitchbook NVCA Venture Monitor Q2 2023.
Slide 30: Venture Capital Fundraising
US VC Fundraising Activity(1) VENTURE CAPITAL FUNDRAISING As of June 30, 2023, per Pitchbook NVCA Venture Monitor Q2 2023.
Slide 31: Venture Debt Market
VENTURE DEBT MARKET US Venture Debt Deal Activity(1) As of June 30, 2023, per Pitchbook NVCA Venture Monitor Q2 2023.
Slide 32: Analyst Coverage
ANALYST COVERAGE
Slide 33: Extensive Industry Analyst Coverage
EXTENSIVE INDUSTRY ANALYST COVERAGE Followed by eight firms Ryan Lynch (initiated coverage 2/23/2021) Finian O’Shea (initiated coverage 2/23/2021) Vilas Abraham (initiated coverage 2/23/2021) Bryce Rowe (initiated coverage 9/16/2022) Casey Alexander (initiated coverage 2/23/2021) Christopher Nolan (
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