UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 10-Q 

 

 

(Mark One)

 

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   
  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2018
   
  OR
   
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

FOR THE TRANSITION PERIOD FROM                TO

 

COMMISSION FILE NUMBER: 814-00802

 

 

 

HORIZON TECHNOLOGY FINANCE CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

DELAWARE   27-2114934
(State or other jurisdiction of incorporation or organization)   (I.R.S. Employer Identification No.)
     
312 Farmington Avenue    
Farmington, CT   06032
(Address of principal executive offices)   (Zip Code)

 

(860) 676-8654
(Registrant’s telephone number, including area code)

 

 

 

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

 

     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨

 

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer   ¨ Accelerated filer x
       
Non-accelerated filer ¨  (Do not check if a smaller reporting company) Smaller reporting company ¨
       
Emerging growth company ¨    

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act   ¨

 

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

 

     The number of shares of the registrant’s common stock, $0.001 par value per share, outstanding as of May 1, 2018 was 11,525,206. 

 

 

 

 

 

 

HORIZON TECHNOLOGY FINANCE CORPORATION

 

FORM 10-Q

TABLE OF CONTENTS

 

      Page
PART I    
Item 1. Consolidated Financial Statements   3
       
  Consolidated Statements of Assets and Liabilities as of March 31, 2018 and December 31, 2017 (unaudited)   3
  Consolidated Statements of Operations for the three months ended March 31, 2018 and 2017 (unaudited)   4
  Consolidated Statements of Changes in Net Assets for the three months ended March 31, 2018 and 2017 (unaudited)   5
  Consolidated Statements of Cash Flows for the three months ended March 31, 2018 and 2017 (unaudited)   6
  Consolidated Schedules of Investments as of March 31, 2018 and December 31, 2017 (unaudited)   7
  Notes to the Consolidated Financial Statements (unaudited)   17
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations   35
Item 3. Quantitative and Qualitative Disclosures About Market Risk   46
Item 4. Controls and Procedures   47
       
PART II    
Item 1. Legal Proceedings   48
Item 1A. Risk Factors   48
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds   48
Item 3. Defaults Upon Senior Securities   48
Item 4. Mine Safety Disclosures   48
Item 5. Other Information   48
Item 6. Exhibits   48
  Signatures   49
EX-31.1      
EX-31.2      
EX-32.1      
EX-32.2      

 

 2 

 

 

PART I: FINANCIAL INFORMATION

 

Item 1. Consolidated Financial Statements

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Statements of Assets and Liabilities (Unaudited)

(Dollars in thousands, except share and per share data)

 

   March 31,
2018
   December 31,
2017
 
         
Assets          
Non-affiliate investments at fair value (cost of $205,970 and $219,303, respectively)  $204,936   $218,600 
Affiliate investments at fair value (cost of $7,371 and $3,774, respectively) (Note 5)   6,969    3,499 
Total investments at fair value (cost of $213,341 and $223,077, respectively) (Note 4)   211,905    222,099 
Cash   16,127    6,594 
Interest receivable   4,224    3,986 
Other assets   1,510    1,467 
Total assets  $233,766   $234,146 
           
Liabilities          
Borrowings (Note 7)  $94,144   $94,075 
Distributions payable   3,457    3,456 
Base management fee payable (Note 3)   384    379 
Incentive fee payable (Note 3)   545    541 
Other accrued expenses   975    620 
Total liabilities   99,505    99,071 
           
Commitments and Contingencies (Note 8)          
           
Net assets          
Preferred stock, par value $0.001 per share, 1,000,000 shares authorized, zero shares issued and outstanding as of March 31, 2018 and December 31, 2017        
Common stock, par value $0.001 per share, 100,000,000 shares authorized, 11,691,416 and 11,687,871 shares issued and 11,523,951 and 11,520,406 shares outstanding as of March 31, 2018 and December 31, 2017, respectively   12    12 
Paid-in capital in excess of par   179,681    179,641 
Distributions in excess of net investment income   (2,145)   (1,898)
Net unrealized depreciation on investments   (1,436)   (978)
Net realized loss on investments   (41,851)   (41,702)
Total net assets   134,261    135,075 
Total liabilities and net assets  $233,766   $234,146 
Net asset value per common share  $11.65   $11.72 

 

See Notes to Consolidated Financial Statements

 

 3 

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Statements of Operations (Unaudited)

(Dollars in thousands, except share and per share data)

 

   For the Three Months Ended 
   March 31, 
   2018   2017 
Investment income          
Interest income on investments          
Interest income on non-affiliate investments  $6,622   $6,279 
Interest income on affiliate investments   131     
Total interest income on investments   6,753    6,279 
Fee income          
Prepayment fee income on non-affiliate investments   285    460 
Fee income on non-affiliate investments   137    223 
Total investment income   7,175    6,962 
Expenses          
Interest expense   1,484    1,316 
Base management fee (Note 3)   1,114    974 
Performance based incentive fee (Note 3)   545    430 
Administrative fee (Note 3)   184    194 
Professional fees   445    506 
General and administrative   193    175 
Total expenses   3,965    3,595 
Net investment income   3,210    3,367 
           
Net realized and unrealized (loss) gain on investments          
Net realized loss on non-affiliate investments   (149)   (10,845)
Net realized loss on investments   (149)   (10,845)
           
Net unrealized (depreciation) appreciation on non-affiliate investments   (332)   11,131 
Net unrealized depreciation on affiliate investments   (126)    
Net unrealized (depreciation) appreciation on investments   (458)   11,131 
Net realized and unrealized (loss) gain on investments   (607)   286 
           
Net increase in net assets resulting from operations  $2,603   $3,653 
Net investment income per common share  $0.28   $0.29 
Net increase in net assets per common share  $0.23   $0.32 
Distributions declared per share  $0.30   $0.30 
Weighted average shares outstanding   11,522,153    11,512,853 

 

See Notes to Consolidated Financial Statements

 

 4 

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Statements of Changes in Net Assets (Unaudited)

(Dollars in thousands, except share data)

 

   Common Stock   Paid-In
Capital in
Excess of
   Distributions
in Excess of
Net
Investment
   Net Unrealized
Depreciation
on
   Net Realized
Loss on
   Total Net 
   Shares   Amount   Par   Income   Investments   Investments   Assets 
Balance at December 31, 2016   11,510,424   $12   $179,551   $(397)  $(19,463)  $(20,511)  $139,192 
Net increase in net assets resulting from operations               3,367    11,131    (10,845)   3,653 
Issuance of common stock under dividend reinvestment plan   4,757        49                49 
Distributions declared               (3,455)           (3,455)
Balance at March 31, 2017   11,515,181   $12   $179,600   $(485)  $(8,332)  $(31,356)  $139,439 
                                    
Balance at December 31, 2017   11,520,406   $12   $179,641   $(1,898)  $(978)  $(41,702)  $135,075 
Net increase in net assets resulting from operations               3,210    (458)   (149)   2,603 
Issuance of common stock under dividend reinvestment plan   3,545        40                40 
Distributions declared               (3,457)           (3,457)
Balance at March 31, 2018   11,523,951   $12   $179,681   $(2,145)  $(1,436)  $(41,851)  $134,261 

 

See Notes to Consolidated Financial Statements

 

 5 

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Statements of Cash Flows (Unaudited)

(Dollars in thousands)

 

   For the Three Months Ended 
   March 31, 
   2018   2017 
Cash flows from operating activities:          
Net increase in net assets resulting from operations  $2,603   $3,653 
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:          
Amortization of debt issuance costs   150    127 
Net realized loss on investments   149    10,845 
Net unrealized depreciation (appreciation) on investments   458    (11,131)
Purchase of investments   (8,562)   (25,916)
Principal payments received on investments   15,540    39,511 
Proceeds from sale of investments   2,715    1,226 
Changes in assets and liabilities:          
Decrease in interest receivable   4    112 
(Increase) decrease in end-of-term payments   (242)   927 
Decrease in unearned income   (106)   (235)
(Increase) decrease in other assets   (124)   385 
Increase in other accrued expenses   355    4 
Increase (decrease) in base management fee payable   5    (25)
Increase in incentive fee payable   4    430 
Net cash provided by operating activities   12,949    19,913 
           
Cash flows from financing activities:          
Advances on credit facility       15,000 
Repayment of credit facility       (25,000)
Distributions paid   (3,416)   (3,404)
Net cash used in financing activities   (3,416)   (13,404)
Net increase in cash   9,533    6,509 
           
Cash:          
Beginning of period   6,594    37,135 
End of period  $16,127   $43,644 
Supplemental disclosure of cash flow information:          
Cash paid for interest  $1,278   $1,257 
Supplemental non-cash investing and financing activities:          
Warrant investments received and recorded as unearned income  $248   $877 
Distributions payable  $3,457   $3,455 
End-of-term payments receivable  $3,178   $3,736 

 

See Notes to Consolidated Financial Statements

 

 6 

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

March 31, 2018

(Dollars in thousands)

 

         Principal   Cost of   Fair 
Portfolio Company (1)(3)  Sector  Type of Investment (4)(7)(9)(10)  Amount   Investments (6)   Value (13) 
Non-Affiliate Investments — 152.5% (8)                  
Non-Affiliate Debt Investments — 139.1% (8)                  
Non-Affiliate Debt Investments — Life Science — 39.2% (8)               
Palatin Technologies, Inc. (2)(5)  Biotechnology  Term Loan (10.17% cash (Libor + 8.50%; Floor  $1,500   $1,485   $1,485 
      9.00%), 5.00% ETP, Due 1/1/19)               
      Term Loan (10.17% cash (Libor + 8.50%; Floor   2,667    2,643    2,643 
      9.00%), 5.00% ETP, Due 8/1/19)               
vTv Therapeutics Inc. (2)(5)  Biotechnology  Term Loan (11.67% cash (Libor + 10.00%; Floor   6,250    6,202    6,170 
      10.50%), 6.00% ETP, Due 5/1/20)               
      Term Loan (11.67% cash (Libor + 10.00%; Floor   3,750    3,705    3,686 
      10.50%), 6.00% ETP, Due 10/1/20)               
Titan Pharmaceuticals, Inc. (2)(5)  Drug Delivery  Term Loan (10.18% cash (Libor + 8.40%; Floor   1,600    1,462    1,462 
      9.50%), 5.00% ETP, Due 6/1/21)               
Aerin Medical, Inc. (2)  Medical Device  Term Loan (9.12% cash (Libor + 7.45%; Floor   4,000    3,880    3,880 
      8.75%), 4.00% ETP, Due 1/1/22)               
      Term Loan (9.12% cash (Libor + 7.45%; Floor   3,000    2,957    2,957 
      8.75%), 4.00% ETP, Due 1/1/22)               
      Term Loan (9.12% cash (Libor + 7.45%; Floor   3,000    2,957    2,957 
      8.75%), 4.00% ETP, Due 1/1/22)               
Conventus Orthopaedics, Inc. (2)  Medical Device  Term Loan (9.67% cash (Libor + 8.00%; Floor   4,000    3,934    3,934 
      9.25%), 6.00% ETP, Due 6/1/21)               
      Term Loan (9.67% cash (Libor + 8.00%; Floor   4,000    3,934    3,934 
      9.25%), 6.00% ETP, Due 6/1/21)               
      Term Loan (9.67% cash (Libor + 8.00%; Floor   4,000    3,934    3,934 
      9.25%), 6.00% ETP, Due 6/1/21)               
Lantos Technologies, Inc. (2)  Medical Device  Term Loan (10.21% cash (Libor + 8.43%; Floor   4,000    3,439    3,439 
      10.00%), 6.00% ETP, Due 9/1/21)               
Mederi Therapeutics, Inc. (2)(11)  Medical Device  Term Loan (13.31% cash (Libor + 11.82%; Floor   173    173    173 
      12.00%), 6.00% ETP, Due 12/1/17)               
      Term Loan (13.31% cash (Libor + 11.82%; Floor   173    173    173 
      12.00%), 6.00% ETP, Due 12/1/17)               
NinePoint Medical, Inc. (2)  Medical Device  Term Loan (10.42% cash (Libor + 8.75%; Floor   2,667    2,650    2,650 
      9.25%), 4.50% ETP, Due 3/1/19)               
      Term Loan (10.42% cash (Libor + 8.75%; Floor   1,333    1,322    1,322 
      9.25%), 4.50% ETP, Due 3/1/19)               
VERO Biotech LLC (2)  Medical Device  Term Loan (9.67% cash (Libor + 8.00%; Floor   4,000    3,918    3,918 
      9.25%), 5.00% ETP, Due 1/1/22)               
      Term Loan (9.67% cash (Libor + 8.00%; Floor   4,000    3,938    3,938 
      9.25%), 5.00% ETP, Due 1/1/22)               
Total Non-Affiliate Debt Investments — Life Science        52,706    52,655 
Non-Affiliate Debt Investments — Technology — 90.8% (8)               
Intelepeer Holdings, Inc.  Communications  Term Loan (11.62% cash (Libor + 9.95%; Floor   4,000    3,892    3,892 
      11.25%), 2.50% ETP, Due 7/1/21)               
      Term Loan (11.62% cash (Libor + 9.95%; Floor   4,000    3,932    3,932 
      11.25%), 2.50% ETP, Due 7/1/21)               
      Term Loan (11.62% cash (Libor + 9.95%; Floor   4,000    3,932    3,932 
      11.25%), 2.50% ETP, Due 7/1/21)               
PebblePost, Inc. (2)  Communications  Term Loan (10.93% cash (Libor + 9.26%; Floor   4,000    3,879    3,879 
      10.25%), 4.00% ETP, Due 7/1/21)               
      Term Loan (10.93% cash (Libor + 9.26%; Floor   4,000    3,937    3,937 
      10.25%), 4.00% ETP, Due 7/1/21)               
SavingStar, Inc. (2)  Consumer-related Technologies  Term Loan (12.07% cash (Libor + 10.40%; Floor   2,067    2,042    2,026 
      10.90%), 4.25% ETP, Due 6/1/20)               
      Term Loan (12.07% cash (Libor + 10.40%; Floor   1,844    1,788    1,774 
      10.90%), 3.80% ETP, Due 11/1/20)               
IgnitionOne, Inc. (2)  Internet and Media  Term Loan (11.90% cash (Libor + 10.23%; Floor   3,000    2,842    2,842 
      10.23%), 2.00% ETP, Due 4/1/22)               
      Term Loan (11.90% cash (Libor + 10.23%; Floor   3,000    2,842    2,842 
      10.23%), 2.00% ETP, Due 4/1/22)               
      Term Loan (11.90% cash (Libor + 10.23%; Floor   3,000    2,842    2,842 
      10.23%), 2.00% ETP, Due 4/1/22)               
      Term Loan (11.90% cash (Libor + 10.23%; Floor   3,000    2,842    2,842 
      10.23%), 2.00% ETP, Due 4/1/22)               

 

See Notes to Consolidated Financial Statements

 

 7 

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

March 31, 2018

(Dollars in thousands)

 

         Principal   Cost of   Fair 
Portfolio Company (1)(3)  Sector  Type of Investment (4)(7)(9)(10)  Amount   Investments (6)   Value (13) 
Jump Ramp Games, Inc. (2)  Internet and Media  Term Loan (11.40% cash (Libor + 9.73%),   4,000    3,946    3,946 
      3.00% ETP, Due 4/1/21)               
Kixeye, Inc. (2)  Internet and Media  Term Loan (11.27% cash (Libor + 9.60%; Floor   3,000    2,891    2,891 
      10.75%), 2.00% ETP, Due 5/1/21)               
      Term Loan (11.27% cash (Libor + 9.60%; Floor   3,000    2,949    2,949 
      10.75%), 2.00% ETP, Due 5/1/21)               
MediaBrix, Inc. (2)  Internet and Media  Term Loan (12.67% cash (Libor + 11.00%; Floor   3,667    3,647    3,647 
      11.50%), 3.00% ETP, Due 1/1/20)               
Rocket Lawyer Incorporated (2)  Internet and Media  Term Loan (11.07% cash (Libor + 9.40%; Floor   4,000    3,937    3,937 
      10.50%), 3.00% ETP, Due 7/1/21)               
      Term Loan (11.07% cash (Libor + 9.40%; Floor   4,000    3,937    3,937 
      10.50%), 3.00% ETP, Due 7/1/21)               
      Term Loan (11.07% cash (Libor + 9.40%; Floor   2,000    1,966    1,966 
      10.50%), 3.00% ETP, Due 11/1/21)               
Zinio Holdings, LLC (2)  Internet and Media  Term Loan (12.92% cash (Libor + 11.25%; Floor   4,000    3,980    3,980 
      11.75%), 6.00% ETP, Due 2/1/20)               
The NanoSteel Company, Inc. (2)  Materials  Term Loan (11.17% cash (Libor + 9.50%; Floor   4,445    4,379    4,379 
      10.00%), 7.20% ETP, Due 1/1/20)               
      Term Loan (11.17% cash (Libor + 9.50%; Floor   2,223    2,190    2,190 
      10.00%), 6.45% ETP, Due 1/1/20)               
      Term Loan (11.17% cash (Libor + 9.50%; Floor   2,431    2,393    2,393 
      10.00%), 5.85% ETP, Due 3/1/20)               
Powerhouse Dynamics, Inc. (2)  Power Management  Term Loan (12.37% cash (Libor + 10.70%; Floor   1,050    1,023    1,023 
      11.20%), 3.32% ETP, Due 9/1/19)               
Luxtera, Inc.  Semiconductors  Term Loan (11.25% cash (Prime + 6.75%),   2,000    1,913    1,913 
      Due 3/28/20)               
      Term Loan (11.25% cash (Prime + 6.75%),   1,500    1,449    1,449 
      Due 3/28/20)               
Bridge2 Solutions, LLC. (2)  Software  Term Loan (10.92% cash (Libor + 9.25%; Floor   5,000    4,792    4,792 
      10.50%), 2.00% ETP, Due 11/1/21)               
      Term Loan (10.92% cash (Libor + 9.25%; Floor   5,000    4,792    4,792 
      10.50%), 2.00% ETP, Due 11/1/21)               
Education Elements, Inc. (2)  Software  Term Loan (11.67% cash (Libor + 10.00%; Floor   600    592    592 
      10.50%), 4.00% ETP, Due 1/1/19)               
      Term Loan (11.67% cash (Libor + 10.00%; Floor   800    789    789 
      10.50%), 4.00% ETP, Due 8/1/19)               
Metricly, Inc.  Software  Term Loan (13.92% cash (Libor + 12.25%; Floor   158    158    158 
      12.50%), 3.33% ETP, Due 9/1/18)               
ShopKeep.com, Inc. (2)  Software  Term Loan (11.62% cash (Libor + 9.95%; Floor   5,700    5,607    5,607 
      10.45%), 4.08% ETP, Due 10/1/20)               
      Term Loan (11.62% cash (Libor + 9.95%; Floor   4,000    3,930    3,930 
      10.45%), 3.55% ETP, Due 2/1/21)               
SIGNiX, Inc.  Software  Term Loan (12.67% cash (Libor + 11.00%; Floor   2,120    2,025    1,640 
      11.50%), 5.33% ETP, Due 2/1/20)               
SilkRoad Technology, Inc. (2)  Software  Term Loan (12.02% cash (Libor + 10.35%; Floor   6,750    6,664    6,664 
      10.85%; Ceiling 12.85%), 5.00% ETP, Due 6/1/20)               
Weblinc Corporation (2)  Software  Term Loan (11.92% cash (Libor + 10.25%; Floor   3,000    2,954    2,954 
      11.25%), 3.00% ETP, Due 3/1/21)               
xAd, Inc. (2)  Software  Term Loan (10.37% cash (Libor + 8.70%; Floor   5,000    4,902    4,902 
      10.00%), 4.75% ETP, Due 11/1/21)               
      Term Loan (10.37% cash (Libor + 8.70%; Floor   5,000    4,902    4,902 
      10.00%), 4.75% ETP, Due 11/1/21)               
      Term Loan (10.37% cash (Libor + 8.70%; Floor   3,000    2,941    2,941 
      10.00%), 4.75% ETP, Due 11/1/21)               
      Term Loan (10.37% cash (Libor + 8.70%; Floor   2,000    1,961    1,961 
      10.00%), 4.75% ETP, Due 11/1/21)               
Total Non-Affiliate Debt Investments — Technology        122,379    121,964 
Non-Affiliate Debt Investments — Healthcare information and services — 9.1% (8)           
HealthEdge Software, Inc. (2)  Software  Term Loan (9.92% cash (Libor + 8.25%;   5,000    4,860    4,860 
      Floor 9.25%), 3.00% ETP, Due 7/1/22)               
      Term Loan (9.92% cash (Libor + 8.25%;   3,750    3,696    3,696 
      Floor 9.25%), 3.00% ETP, Due 1/1/23)               
      Term Loan (9.99% cash (Libor + 8.25%;   3,750    3,692    3,692 
      Floor 9.25%), 3.00% ETP, Due 4/1/23)               
Total Non-Affiliate Debt Investments — Healthcare information and services       12,248    12,248 
Total Non- Affiliate Debt Investments           187,333    186,867 

 

See Notes to Consolidated Financial Statements

 

 8 

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

March 31, 2018

(Dollars in thousands)

 

         Cost of   Fair 
Portfolio Company (1)(3)  Sector  Type of Investment (4)(7)(9)(10)  Investments (6)   Value (13) 
Non-Affiliate Warrant Investments — 6.9% (8)        
Non-Affiliate Warrants — Life Science — 1.8% (8)          
ACT Biotech Corporation  Biotechnology  604,038 Preferred Stock Warrants   60     
Alpine Immune Sciences, Inc. (5)  Biotechnology  4,634 Common Stock Warrants   122     
Argos Therapeutics, Inc. (2)(5)  Biotechnology  3,656 Common Stock Warrants   33     
Celsion Corporation (5)  Biotechnology  408 Common Stock Warrants   15     
Rocket Pharmaceuticals Corporation (5)  Biotechnology  1,763 Common Stock Warrants   17     
Palatin Technologies, Inc. (2)(5)  Biotechnology  608,058 Common Stock Warrants   51    197 
Revance Therapeutics, Inc. (5)  Biotechnology  34,113 Common Stock Warrants   68    564 
Sample6, Inc. (2)  Biotechnology  661,956 Preferred Stock Warrants   53    25 
Strongbridge U.S. Inc. (5)  Biotechnology  160,714 Common Stock Warrants   72    1,056 
Sunesis Pharmaceuticals, Inc. (5)  Biotechnology  2,050 Common Stock Warrants   5     
vTv Therapeutics Inc. (2)(5)  Biotechnology  95,293 Common Stock Warrants   44    12 
Titan Pharmaceuticals, Inc. (2)(5)  Drug Delivery  320,612 Common Stock Warrants   95    19 
AccuVein Inc. (2)  Medical Device  1,174,881 Preferred Stock Warrants   24    28 
Aerin Medical, Inc. (2)  Medical Device  1,818,182 Preferred Stock Warrants   66    68 
Conventus Orthopaedics, Inc. (2)  Medical Device  720,000 Preferred Stock Warrants   95    98 
Lantos Technologies, Inc. (2)  Medical Device  1,715,926 Common Stock Warrants   253    285 
Mederi Therapeutics, Inc. (2)  Medical Device  248,736 Preferred Stock Warrants   26     
Mitralign, Inc. (2)  Medical Device  64,190 Common Stock Warrants   52    1 
NinePoint Medical, Inc. (2)  Medical Device  29,102 Preferred Stock Warrants   33    2 
OraMetrix, Inc. (2)  Medical Device  812,348 Preferred Stock Warrants   78     
ReShape Lifesciences Inc. (5)  Medical Device  134 Common Stock Warrants   347     
Tryton Medical, Inc. (2)  Medical Device  122,362 Preferred Stock Warrants   15    13 
VERO Biotech LLC (2)  Medical Device  800,000 Common Stock Warrants   53    54 
ViOptix, Inc.  Medical Device  375,763 Preferred Stock Warrants   13     
Total Non-Affiliate Warrants — Life Science      1,690    2,422 
Non-Affiliate Warrants — Technology — 4.5% (8)          
Ekahau, Inc. (2)  Communications  978,261 Preferred Stock Warrants   33    24 
Intelepeer Holdings, Inc.  Communications  2,256,549 Preferred Stock Warrants   149    113 
PebblePost, Inc. (2)  Communications  598,850 Preferred Stock Warrants   92    95 
Additech, Inc. (2)  Consumer-related Technologies  150,000 Preferred Stock Warrants   33    32 
Gwynnie Bee, Inc. (2)  Consumer-related Technologies  268,591 Preferred Stock Warrants   68    819 
Le Tote, Inc. (2)  Consumer-related Technologies  202,974 Preferred Stock Warrants   63    368 
Rhapsody International Inc. (2)  Consumer-related Technologies  852,273 Common Stock Warrants   164     
SavingStar, Inc. (2)  Consumer-related Technologies  850,439 Preferred Stock Warrants   104    3 
IgnitionOne, Inc. (2)  Internet and Media  262,910 Preferred Stock Warrants   671    664 
Jump Ramp Games, Inc. (2)  Internet and Media  159,766 Preferred Stock Warrants   32    33 
Kixeye, Inc. (2)  Internet and Media  791,251 Preferred Stock Warrants   75    77 
Rocket Lawyer Incorporated (2)  Internet and Media  261,721 Preferred Stock Warrants   92    95 
The NanoSteel Company, Inc. (2)  Materials  379,360 Preferred Stock Warrants   187    456 
Powerhouse Dynamics, Inc. (2)  Power Management  348,838 Preferred Stock Warrants   33    32 
Avalanche Technology, Inc. (2)  Semiconductors  202,602 Preferred Stock Warrants   101    37 
eASIC Corporation (2)  Semiconductors  40,445 Preferred Stock Warrants   25    29 
Kaminario, Inc.  Semiconductors  1,087,203 Preferred Stock Warrants   59    46 
Luxtera, Inc.(2)  Semiconductors  3,546,553 Preferred Stock Warrants   213    363 
Soraa, Inc. (2)  Semiconductors  203,616 Preferred Stock Warrants   80    446 
Bolt Solutions Inc. (2)  Software  202,892 Preferred Stock Warrants   113    102 
Bridge2 Solutions, Inc. (2)  Software  125,458 Common Stock Warrants   432    763 
Clarabridge, Inc.  Software  53,486 Preferred Stock Warrants   14    105 
Education Elements, Inc. (2)  Software  238,121 Preferred Stock Warrants   28    29 
Lotame Solutions, Inc. (2)  Software  288,115 Preferred Stock Warrants   22    284 
Metricly, Inc.  Software  41,569 Common Stock Warrants   48     
Riv Data Corp. (2)  Software  321,428 Preferred Stock Warrants   12    38 
ShopKeep.com, Inc. (2)  Software  193,962 Preferred Stock Warrants   118    113 
SIGNiX, Inc.  Software  133,560 Preferred Stock Warrants   225    35 
Skyword, Inc.  Software  301,056 Preferred Stock Warrants   48    3 

 

See Notes to Consolidated Financial Statements

 

 9 

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

March 31, 2018

(Dollars in thousands)

 

         Principal   Cost of   Fair 
Portfolio Company (1)(3)  Sector  Type of Investment (4)(7)(9)(10)  Amount   Investments (6)   Value (13) 
SpringCM, Inc. (2)  Software  2,385,686 Preferred Stock Warrants       55    136 
Sys-Tech Solutions, Inc.  Software  375,000 Preferred Stock Warrants        242    428 
Visage Mobile, Inc.  Software  1,692,047 Preferred Stock Warrants        19    2 
Weblinc Corporation (2)  Software  195,122 Preferred Stock Warrants        42    43 
xAd, Inc. (2)  Software  4,343,350 Preferred Stock Warrants        177    289 
Total Non-Affiliate Warrants — Technology           3,869    6,102 
Non-Affiliate Warrants — Cleantech — 0.1% (8)               
Renmatix, Inc.  Alternative Energy  53,022 Preferred Stock Warrants        68     
Tigo Energy, Inc. (2)  Energy Efficiency  804,604 Preferred Stock Warrants        100    119 
Total Non-Affiliate Warrants — Cleantech           168    119 
Non-Affiliate Warrants — Healthcare information and services — 0.5% (8)              
LifePrint Group, Inc. (2)  Diagnostics  49,000 Preferred Stock Warrants        29    2 
ProterixBio, Inc. (2)  Diagnostics  3,156 Common Stock Warrants        54     
Singulex, Inc.  Other Healthcare  294,231 Preferred Stock Warrants        44    45 
Verity Solutions Group, Inc.  Other Healthcare  300,360 Preferred Stock Warrants        100    63 
Watermark Medical, Inc. (2)  Other Healthcare  27,373 Preferred Stock Warrants        74    61 
HealthEdge Software, Inc. (2)  Software  158,063 Preferred Stock Warrants        67    67 
Medsphere Systems Corporation (2)  Software  7,097,792 Preferred Stock Warrants        60    212 
Recondo Technology, Inc. (2)  Software  556,796 Preferred Stock Warrants        95    211 
Total Non-Affiliate Warrants — Healthcare information and services        523    661 
Total Non-Affiliate Warrants           6,250    9,304 
                      
Non-Affiliate Other Investments — 5.7% (8)                  
Espero Pharmaceuticals, Inc.  Biotechnology  Royalty Agreement        5,300    4,700 
ZetrOZ, Inc.  Medical Device  Royalty Agreement        243    700 
Vette Technology, LLC  Data Storage  Royalty Agreement Due 4/18/2019        4,200    100 
Triple Double Holdings, LLC  Software  License Agreement        2,200    2,200 
Total Non-Affiliate Other Investments           11,943    7,700 
                      
Non-Affiliate Equity — 0.8% (8)                  
Insmed Incorporated (5)  Biotechnology  33,208 Common Stock        238    748 
Revance Therapeutics, Inc.(5)  Biotechnology  5,125 Common Stock        73    158 
Sunesis Pharmaceuticals, Inc. (5)  Biotechnology  13,082 Common Stock        83    35 
SnagAJob.com, Inc.  Consumer-related Technologies  82,974 Common Stock        9    83 
TruSignal, Inc.  Software  32,637 Common Stock        41    41 
Total Non-Affiliate Equity              444    1,065 
Total Non-Affiliate Portfolio Investment Assets          $205,970   $204,936 
                      
Affiliate Investments — 5.3% (8)                  
Affiliate Debt Investments — Technology — 4.6% (8)               
Decisyon, Inc.  Software  Term Loan (13.978% cash (Libor + 12.308%; Floor  $1,523   $1,522   $1,462 
      12.50%), 8.00% ETP, Due 4/1/20)               
      Term Loan (13.978% cash (Libor + 12.308%; Floor   833    779    748 
      12.50%), 8.00% ETP, Due 4/1/20)               
      Term Loan (12.02% cash , Due 4/15/19)   250    250    240 
      Term Loan (12.03% cash , Due 4/15/19)   250    250    240 
      Term Loan (12.24% cash , Due 4/15/19)   750    750    721 
StereoVision Imaging, Inc.  Software  Term Loan (8.61% PIK (Libor + 7.03%; Floor   3,200    2,798    2,692 
      8.50%), 8.50% ETP, Due 9/1/21) (12)               
Total Affiliate Debt Investments — Technology        6,349    6,103 
                      
Affiliate Warrants — Technology — 0.0% (8)               
Decisyon, Inc.  Software  82,967 Common Stock Warrants        46     
Total Affiliate Warrants — Technology          46     
                      
Affiliate Equity — Technology — 0.7% (8)                  
Decisyon, Inc.  Software  45,365,936 Common Stock        185    75 
StereoVision Imaging, Inc.  Software  1,943,572 Common Stock        791    791 
Total Affiliate Equity              976    866 
Total Affiliate Portfolio Investment Assets       $7,371   $6,969 
Total Portfolio Investment Assets — 157.8%(8)       $213,341   $211,905 

 

See Notes to Consolidated Financial Statements

 

 10 

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

March 31, 2018

(Dollars in thousands)

 

 

(1)All investments of the Company are in entities which are organized under the laws of the United States and have a principal place of business in the United States.
(2)Has been pledged as collateral under the Key Facility.
(3)All non-affiliate investments are investments in which the Company owns less than 5% ownership of the voting securities of the portfolio company. All affiliate investments are investments in which the Company owns 5% or more of the voting securities of the portfolio company.
(4)All interest is payable in cash due monthly in arrears, unless otherwise indicated, and applies only to the Company’s debt investments. Interest rate is the annual interest rate on the debt investment and does not include end-of-term payments (“ETPs”) and any additional fees related to the investments, such as deferred interest, commitment fees or prepayment fees. Debt investments are at fixed rates for the term of the debt investment, unless otherwise indicated. All debt investments based on LIBOR are based on one-month LIBOR. For each debt investment, the current interest rate in effect as of March 31, 2018 is provided.
(5)Portfolio company is a public company.
(6)For debt investments, represents principal balance less unearned income.
(7)Warrants, Equity and Other Investments are non-income producing.
(8)Value as a percent of net assets.
(9)The Company did not have any non-qualifying assets under Section 55(a) of the Investment Company Act of 1940, as amended (the “1940 Act”), as of March 31, 2018. Under the 1940 Act, the Company may not acquire any non-qualifying assets unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company’s total assets.
(10)ETPs are contractual fixed-interest payments due in cash at the maturity date of the applicable debt investment, including upon any prepayment, and are a fixed percentage of the original principal balance of the debt investments unless otherwise noted. Interest will accrue during the life of the debt investment on each ETP and will be recognized as non-cash income until it is actually paid. Therefore, a portion of the incentive fee the Company may pay its Advisor will be based on income that the Company has not yet received in cash.
(11)Debt investment is on non-accrual status as of March 31, 2018.
(12)Debt investment has a payment-in-kind (“PIK”) feature.
(13)Except for common stock in publicly traded companies, the fair value of the investment was valued using significant unobservable inputs.

 

See Notes to Consolidated Financial Statements

 

 11 

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

December 31, 2017

(Dollars in thousands)

 

         Principal   Cost of   Fair 
Portfolio Company (1)(3)  Sector  Type of Investment (4)(7)(9)(10)  Amount   Investments (6)   Value (14) 
Non-Affiliate Investments — 161.8% (8)                  
Non-Affiliate Debt Investments — 148.4% (8)                  
Non-Affiliate Debt Investments — Life Science — 43.0% (8)               
Palatin Technologies, Inc. (2)(5)  Biotechnology  Term Loan (9.87% cash (Libor + 8.50%; Floor  $2,000   $1,980   $1,980 
      9.00%), 5.00% ETP, Due 1/1/19)               
      Term Loan (9.87% cash (Libor + 8.50%; Floor   3,167    3,139    3,139 
      9.00%), 5.00% ETP, Due 8/1/19)               
vTv Therapeutics Inc. (2)(5)  Biotechnology  Term Loan (11.37% cash (Libor + 10.00%; Floor   6,250    6,196    6,196 
      10.50%), 6.00% ETP, Due 5/1/20)               
      Term Loan (11.37% cash (Libor + 10.00%; Floor   3,750    3,700    3,700 
      10.50%), 6.00% ETP, Due 10/1/20)               
Titan Pharmaceuticals, Inc. (2)(5)  Drug Delivery  Term Loan (9.77% cash (Libor + 8.40%; Floor   3,500    3,400    3,400 
      9.50%), 5.00% ETP, Due 6/1/21)               
      Term Loan (9.77% cash (Libor + 8.40%; Floor   3,500    3,430    3,430 
      9.50%), 5.00% ETP, Due 6/1/21)               
Aerin Medical, Inc. (2)  Medical Device  Term Loan (8.85% cash (Libor + 7.45%; Floor   4,000    3,876    3,876 
      8.75%), 4.00% ETP, Due 1/1/22)               
      Term Loan (8.85% cash (Libor + 7.45%; Floor   3,000    2,954    2,954 
      8.75%), 4.00% ETP, Due 1/1/22)               
      Term Loan (8.85% cash (Libor + 7.45%; Floor   3,000    2,954    2,954 
      8.75%), 4.00% ETP, Due 1/1/22)               
Conventus Orthopaedics, Inc. (2)  Medical Device  Term Loan (9.49% cash (Libor + 8.00%; Floor   4,000    3,928    3,928 
      9.25%), 6.00% ETP, Due 6/1/21)               
      Term Loan (9.49% cash (Libor + 8.00%; Floor   4,000    3,928    3,928 
      9.25%), 6.00% ETP, Due 6/1/21)               
      Term Loan (9.49% cash (Libor + 8.00%; Floor   4,000    3,928    3,928 
      9.25%), 6.00% ETP, Due 6/1/21)               
Lantos Technologies, Inc. (2)  Medical Device  Term Loan (11.87% PIK (Libor + 10.50%; Floor   2,479    2,466    2,466 
      11.50%), 8.91% ETP, Due 5/1/19) (13)               
Mederi Therapeutics, Inc. (2)  Medical Device  Term Loan (13.01% cash (Libor + 11.82%; Floor   173    173    163 
      12.00%), 6.00% ETP, Due 12/1/17)               
      Term Loan (13.01% cash (Libor + 11.82%; Floor   173    173    163 
      12.00%), 6.00% ETP, Due 12/1/17)               
NinePoint Medical, Inc. (2)  Medical Device  Term Loan (10.12% cash (Libor + 8.75%; Floor   2,667    2,645    2,645 
      9.25%), 4.50% ETP, Due 3/1/19)               
      Term Loan (10.12% cash (Libor + 8.75%; Floor   1,333    1,320    1,320 
      9.25%), 4.50% ETP, Due 3/1/19)               
VERO Biotech LLC (2)  Medical Device  Term Loan (9.33% cash (Libor + 8.00%; Floor   4,000    3,914    3,914 
      9.25%), 5.00% ETP, Due 1/1/22)               
      Term Loan (9.33% cash (Libor + 8.00%; Floor   4,000    3,934    3,934 
      9.25%), 5.00% ETP, Due 1/1/22)               
Total Non-Affiliate Debt Investments — Life Science        58,038    58,018 
Non-Affiliate Debt Investments — Technology — 99.1% (8)               
Intelepeer Holdings, Inc.  Communications  Term Loan (11.39% cash (Libor + 9.95%; Floor   4,000    3,888    3,888 
      11.25%), 2.50% ETP, Due 7/1/21)               
      Term Loan (11.39% cash (Libor + 9.95%; Floor   4,000    3,927    3,927 
      11.25%), 2.50% ETP, Due 7/1/21)               
      Term Loan (11.39% cash (Libor + 9.95%; Floor   4,000    3,927    3,927 
      11.25%), 2.50% ETP, Due 7/1/21)               
PebblePost, Inc. (2)  Communications  Term Loan (10.63% cash (Libor + 9.26%; Floor   4,000    3,874    3,874 
      10.25%), 4.00% ETP, Due 7/1/21)               
      Term Loan (10.63% cash (Libor + 9.26%; Floor   4,000    3,933    3,933 
      10.25%), 4.00% ETP, Due 7/1/21)               
Le Tote, Inc. (2)  Consumer-related Technologies  Term Loan (11.02% cash (Libor + 9.65%; Floor   4,000    3,960    3,960 
      10.15%), 5.00% ETP, Due 3/1/20)               
      Term Loan (11.02% cash (Libor + 9.65%; Floor   3,000    2,969    2,969 
      10.15%), 5.00% ETP, Due 3/1/20)               
SavingStar, Inc. (2)  Consumer-related Technologies  Term Loan (11.77% cash (Libor + 10.40%; Floor   2,167    2,140    2,140 
      10.90%), 4.25% ETP, Due 6/1/20)               
      Term Loan (11.77% cash (Libor + 10.40%; Floor   1,911    1,849    1,849 
      10.90%), 3.80% ETP, Due 11/1/20)               
IgnitionOne, Inc. (2)  Internet and Media  Term Loan (11.60% cash (Libor + 10.23%; Floor   3,000    2,832    2,832 
      10.23%), 2.00% ETP, Due 4/1/22)               

 

See Notes to Consolidated Financial Statements

 

 12 

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

December 31, 2017

(Dollars in thousands)

 

         Principal   Cost of   Fair 
Portfolio Company (1)(3)  Sector  Type of Investment (4)(7)(9)(10)  Amount   Investments (6)   Value (14) 
      Term Loan (11.60% cash (Libor + 10.23%; Floor   3,000    2,832    2,832 
      10.23%), 2.00% ETP, Due 4/1/22)               
      Term Loan (11.60% cash (Libor + 10.23%; Floor   3,000    2,832    2,832 
      10.23%), 2.00% ETP, Due 4/1/22)               
      Term Loan (11.60% cash (Libor + 10.23%; Floor   3,000    2,832    2,832 
      10.23%), 2.00% ETP, Due 4/1/22)               
Jump Ramp Games, Inc. (2)  Internet and Media  Term Loan (11.10% cash (Libor + 9.73%),   4,000    3,942    3,942 
      3.00% ETP, Due 4/1/21)               
Kixeye, Inc. (2)  Internet and Media  Term Loan (10.97% cash (Libor + 9.60%; Floor   3,000    2,900    2,900 
      10.75%), 2.00% ETP, Due 9/1/21)               
      Term Loan (10.97% cash (Libor + 9.60%; Floor   3,000    2,945    2,945 
      10.75%), 2.00% ETP, Due 9/1/21)               
MediaBrix, Inc. (2)  Internet and Media  Term Loan (12.37% cash (Libor + 11.00%; Floor   4,000    3,977    3,977 
      11.50%), 3.00% ETP, Due 1/1/20)               
Rocket Lawyer Incorporated (2)  Internet and Media  Term Loan (10.77% cash (Libor + 9.40%; Floor   4,000    3,933    3,933 
      10.50%), 3.00% ETP, Due 7/1/21)               
      Term Loan (10.77% cash (Libor + 9.40%; Floor   4,000    3,933    3,933 
      10.50%), 3.00% ETP, Due 7/1/21)               
      Term Loan (10.77% cash (Libor + 9.40%; Floor   2,000    1,963    1,963 
      10.50%), 3.00% ETP, Due 11/1/21)               
Zinio Holdings, LLC (2)  Internet and Media  Term Loan (12.62% cash (Libor + 11.25%; Floor   4,000    3,978    3,978 
      11.75%), 6.00% ETP, Due 2/1/20)               
The NanoSteel Company, Inc. (2)  Materials  Term Loan (10.87% cash (Libor + 9.50%; Floor   4,653    4,578    4,578 
      10.00%), 7.20% ETP, Due 1/1/20)               
      Term Loan (10.87% cash (Libor + 9.50%; Floor   2,327    2,289    2,289 
      10.00%), 6.45% ETP, Due 1/1/20)               
      Term Loan (10.87% cash (Libor + 9.50%; Floor   2,500    2,457    2,457 
      10.00%), 5.85% ETP, Due 3/1/20)               
Powerhouse Dynamics, Inc. (2)  Power Management  Term Loan (12.07% cash (Libor + 10.70%; Floor   1,250    1,234    1,234 
      11.20%), 3.00% ETP, Due 3/1/19)               
Luxtera, Inc.  Semiconductors  Term Loan (11.25% cash (Prime + 6.75%),   2,000    1,902    1,902 
      Due 3/28/20)               
      Term Loan (11.25% cash (Prime + 6.75%),   1,500    1,443    1,443 
      Due 3/28/20)               
Bridge2 Solutions, LLC. (2)  Software  Term Loan (10.62% cash (Libor + 9.25%; Floor   5,000    4,777    4,777 
      10.50%), 2.00% ETP, Due 11/1/21)               
      Term Loan (10.62% cash (Libor + 9.25%; Floor   5,000    4,777    4,777 
      10.50%), 2.00% ETP, Due 11/1/21)               
Digital Signal Corporation (11)(12)  Software  Term Loan (11.62% cash (Libor + 10.25%; Floor   1,290    1,256    1,210 
      10.43%), 5.00% ETP, Due 7/1/19)               
      Term Loan (11.62% cash (Libor + 10.25%; Floor   1,290    1,256    1,210 
      10.43%), 5.00% ETP, Due 7/1/19)               
      Term Loan (10.00% cash, Due 12/31/17)   501    501    483 
Education Elements, Inc. (2)  Software  Term Loan (11.37% cash (Libor + 10.00%; Floor   800    789    789 
      10.50%), 4.00% ETP, Due 1/1/19)               
      Term Loan (11.37% cash (Libor + 10.00%; Floor   950    937    937 
      10.50%), 4.00% ETP, Due 8/1/19)               
Metricly, Inc.  Software  Term Loan (13.62% cash (Libor + 12.25%; Floor   184    184    184 
      12.50%), 3.33% ETP, Due 9/1/18)               
ShopKeep.com, Inc. (2)  Software  Term Loan (11.32% cash (Libor + 9.95%; Floor   6,000    5,897    5,897 
      10.45%), 4.08% ETP, Due 10/1/20)               
      Term Loan (11.32% cash (Libor + 9.95%; Floor   4,000    3,924    3,924 
      10.45%), 3.55% ETP, Due 2/1/21)               
SIGNiX, Inc.  Software  Term Loan (12.37% cash (Libor + 11.00%; Floor   2,180    2,073    1,930 
      11.50%), 5.33% ETP, Due 2/1/20)               
SilkRoad Technology, Inc. (2)  Software  Term Loan (11.72% cash (Libor + 10.35%; Floor   7,000    6,904    6,904 
      10.85%; Ceiling 12.85%), 5.00% ETP, Due 6/1/20)               
Weblinc Corporation (2)  Software  Term Loan (11.62% cash (Libor + 10.25%; Floor   3,000    2,913    2,913 
      11.25%), 3.00% ETP, Due 3/1/21)               
xAd, Inc. (2)  Software  Term Loan (10.07% cash (Libor + 8.70%; Floor   5,000    4,895    4,895 
      10.00%), 4.75% ETP, Due 11/1/21)               
      Term Loan (10.07% cash (Libor + 8.70%; Floor   5,000    4,895    4,895 

 

See Notes to Consolidated Financial Statements

 

 13 

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

December 31, 2017

(Dollars in thousands)

 

          Principal     Cost of   Fair 
Portfolio Company (1)(3)  Sector  Type of Investment (4)(7)(9)(10)   Amount     Investments (6)   Value (14) 
      10.00%), 4.75% ETP, Due 11/1/21)               
      Term Loan (10.07% cash (Libor + 8.70%; Floor   3,000    2,937    2,937 
      10.00%), 4.75% ETP, Due 11/1/21)               
      Term Loan (10.07% cash (Libor + 8.70%; Floor   2,000    1,958    1,958 
      10.00%), 4.75% ETP, Due 11/1/21)               
Total Non-Affiliate Debt Investments — Technology        134,142    133,889 
Non-Affiliate Debt Investments — Healthcare information and services — 6.3% (8)           
HealthEdge Software, Inc. (2)  Software  Term Loan (9.62% cash (Libor + 8.25%;   5,000    4,819    4,819 
      Floor 9.25%), 3.00% ETP, Due 7/1/22)               
      Term Loan (9.68% cash (Libor + 8.25%;   3,750    3,693    3,693 
      Floor 9.25%), 3.00% ETP, Due 1/1/23)               
Total Non-Affiliate Debt Investments — Healthcare information and services       8,512    8,512 
Total Non- Affiliate Debt Investments           200,692    200,419 
                      
Non-Affiliate Warrant Investments — 6.7% (8)               
Non-Affiliate Warrants — Life Science — 1.6% (8)               
ACT Biotech Corporation  Biotechnology  604,038 Preferred Stock Warrants        60     
Alpine Immune Sciences, Inc. (5)  Biotechnology  4,634 Common Stock Warrants        122     
Argos Therapeutics, Inc. (2)(5)  Biotechnology  73,112 Common Stock Warrants        33     
Celsion Corporation (5)  Biotechnology  408 Common Stock Warrants        15     
Rocket Pharmaceuticals Corporation (5)  Biotechnology  7,051 Common Stock Warrants        17     
Palatin Technologies, Inc. (2)(5)  Biotechnology  608,058 Common Stock Warrants        51    82 
Revance Therapeutics, Inc. (5)  Biotechnology  34,113 Common Stock Warrants        68    729 
Sample6, Inc. (2)  Biotechnology  661,956 Preferred Stock Warrants        53    25 
Strongbridge U.S. Inc. (5)  Biotechnology  160,714 Common Stock Warrants        72    794 
Sunesis Pharmaceuticals, Inc. (5)  Biotechnology  2,050 Common Stock Warrants        5     
vTv Therapeutics Inc. (2)(5)  Biotechnology  95,293 Common Stock Warrants        44    82 
Titan Pharmaceuticals, Inc. (2)(5)  Drug Delivery  280,612 Common Stock Warrants        88    30 
AccuVein Inc. (2)  Medical Device  75,769 Preferred Stock Warrants        24    27 
Aerin Medical, Inc. (2)  Medical Device  1,818,182 Preferred Stock Warrants        66    66 
Conventus Orthopaedics, Inc. (2)  Medical Device  720,000 Preferred Stock Warrants        95    95 
IntegenX, Inc. (2)  Medical Device  170,646 Preferred Stock Warrants        35    32 
Lantos Technologies, Inc. (2)  Medical Device  471,979 Common Stock Warrants        39    145 
Mederi Therapeutics, Inc. (2)  Medical Device  248,736 Preferred Stock Warrants        26     
Mitralign, Inc. (2)  Medical Device  64,190 Common Stock Warrants        52    1 
NinePoint Medical, Inc. (2)  Medical Device  29,102 Preferred Stock Warrants        33    2 
OraMetrix, Inc. (2)  Medical Device  812,348 Preferred Stock Warrants        78     
ReShape Lifesciences Inc. (5)  Medical Device  134 Common Stock Warrants        347     
Tryton Medical, Inc. (2)  Medical Device  122,362 Preferred Stock Warrants        15    12 
VERO Biotech LLC (2)  Medical Device  800,000 Common Stock Warrants        53    53 
ViOptix, Inc.  Medical Device  375,763 Preferred Stock Warrants        13     
Total Non-Affiliate Warrants — Life Science          1,504    2,175 
Non-Affiliate Warrants — Technology — 4.6% (8)               
Ekahau, Inc. (2)  Communications  978,261 Preferred Stock Warrants        32    22 
Intelepeer Holdings, Inc.  Communications  2,256,549 Preferred Stock Warrants        149    110 
PebblePost, Inc. (2)  Communications  598,850 Preferred Stock Warrants        92    92 
Additech, Inc. (2)  Consumer-related Technologies  150,000 Preferred Stock Warrants        33    31 
Gwynnie Bee, Inc. (2)  Consumer-related Technologies  268,591 Preferred Stock Warrants        68    816 
Le Tote, Inc. (2)  Consumer-related Technologies  202,974 Preferred Stock Warrants        63    363 
Rhapsody International Inc. (2)  Consumer-related Technologies  852,273 Common Stock Warrants        164     
SavingStar, Inc. (2)  Consumer-related Technologies  850,439 Preferred Stock Warrants        104    103 
IgnitionOne, Inc. (2)  Internet and Media  262,910 Preferred Stock Warrants        672    668 
Jump Ramp Games, Inc. (2)  Internet and Media  159,766 Preferred Stock Warrants        31    31 
Kixeye, Inc. (2)  Internet and Media  791,251 Preferred Stock Warrants        75    74 
Rocket Lawyer Incorporated (2)  Internet and Media  261,721 Preferred Stock Warrants        91    91 
The NanoSteel Company, Inc. (2)  Materials  379,360 Preferred Stock Warrants        187    448 
Nanocomp Technologies, Inc. (2)  Networking  1,440,489 Preferred Stock Warrants        67     
Powerhouse Dynamics, Inc. (2)  Power Management  290,698 Preferred Stock Warrants        28    26 
Avalanche Technology, Inc. (2)  Semiconductors  202,602 Preferred Stock Warrants        101    40 
eASIC Corporation (2)  Semiconductors  40,445 Preferred Stock Warrants        25    28 
Kaminario, Inc.  Semiconductors  1,087,203 Preferred Stock Warrants        59    44 
Luxtera, Inc.(2)  Semiconductors  3,546,553 Preferred Stock Warrants        213    361 

  

See Notes to Consolidated Financial Statements

 

 14 

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

December 31, 2017

(Dollars in thousands)

 

         Principal   Cost of   Fair 
Portfolio Company (1)(3)  Sector  Type of Investment (4)(7)(9)(10)  Amount   Investments (6)   Value (14) 
Soraa, Inc. (2)  Semiconductors  203,616 Preferred Stock Warrants        80    438 
Bolt Solutions Inc. (2)  Software  202,892 Preferred Stock Warrants        113    99 
Bridge2 Solutions, Inc. (2)  Software  125,458 Common Stock Warrants        433    760 
Clarabridge, Inc.  Software  53,486 Preferred Stock Warrants        14    82 
Digital Signal Corporation  Software  125,116 Common Stock Warrants        32     
Education Elements, Inc. (2)  Software  238,121 Preferred Stock Warrants        28    28 
Lotame Solutions, Inc. (2)  Software  288,115 Preferred Stock Warrants        22    281 
Metricly, Inc.  Software  41,569 Common Stock Warrants        48     
Riv Data Corp. (2)  Software  321,428 Preferred Stock Warrants        12    38 
ShopKeep.com, Inc. (2)  Software  193,962 Preferred Stock Warrants        118    138 
SIGNiX, Inc.  Software  133,560 Preferred Stock Warrants        225    109 
Skyword, Inc.  Software  301,056 Preferred Stock Warrants        48    32 
SpringCM, Inc. (2)  Software  2,385,686 Preferred Stock Warrants        55    132 
Sys-Tech Solutions, Inc.  Software  375,000 Preferred Stock Warrants        242    464 
Visage Mobile, Inc.  Software  1,692,047 Preferred Stock Warrants        19    2 
Weblinc Corporation (2)  Software  195,122 Preferred Stock Warrants        42    42 
xAd, Inc. (2)  Software  4,343,350 Preferred Stock Warrants        177    177 
Total Non-Affiliate Warrants — Technology          3,962    6,170 
Non-Affiliate Warrants — Cleantech — 0.1% (8)               
Renmatix, Inc.  Alternative Energy  53,022 Preferred Stock Warrants        68     
Tigo Energy, Inc. (2)  Energy Efficiency  804,604 Preferred Stock Warrants        100    117 
Total Non-Affiliate Warrants — Cleantech           168    117 
Non-Affiliate Warrants — Healthcare information and services — 0.4% (8)               
LifePrint Group, Inc. (2)  Diagnostics  49,000 Preferred Stock Warrants        29    2 
ProterixBio, Inc. (2)  Diagnostics  3,156 Common Stock Warrants        54     
Singulex, Inc.  Other Healthcare  294,231 Preferred Stock Warrants        44    44 
Verity Solutions Group, Inc.  Other Healthcare  300,360 Preferred Stock Warrants        100    62 
Watermark Medical, Inc. (2)  Other Healthcare  27,373 Preferred Stock Warrants        74    59 
HealthEdge Software, Inc. (2)  Software  110,644 Preferred Stock Warrants        46    46 
Medsphere Systems Corporation (2)  Software  7,097,792 Preferred Stock Warrants        60    208 
Recondo Technology, Inc. (2)  Software  556,796 Preferred Stock Warrants        95    207 
Total Non-Affiliate Warrants — Healthcare information and services        502    628 
Total Non-Affiliate Warrants           6,136    9,090 
                      
Non-Affiliate Other Investments — 5.7% (8)                  
Espero Pharmaceuticals, Inc.  Biotechnology  Royalty Agreement        5,300    4,700 
ZetrOZ, Inc.  Medical Device  Royalty Agreement        305    700 
Vette Technology, LLC  Data Storage  Royalty Agreement Due 4/18/2019        4,226    100 
Triple Double Holdings, LLC  Software  License Agreement        2,200    2,200 
Total Non-Affiliate Other Investments           12,031    7,700 
                      
Non-Affiliate Equity — 1.0% (8)                  
Insmed Incorporated (5)  Biotechnology  33,208 Common Stock        238    1,035 
Revance Therapeutics, Inc.(5)  Biotechnology  5,125 Common Stock        73    183 
Sunesis Pharmaceuticals, Inc. (5)  Biotechnology  13,082 Common Stock        83    49 
SnagAJob.com, Inc.  Consumer-related Technologies  82,974 Common Stock        9    83 
TruSignal, Inc.  Software  32,637 Common Stock        41    41 
Total Non-Affiliate Equity              444