Horizon Technology Finance Corporation
Horizon Technology Finance Corp (Form: 10-Q, Received: 11/01/2016 16:32:53)

 

 

   

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

(Mark One)

 

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2016

 

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)

 

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

 

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 þ 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. See definition of “accelerated filer” and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer ¨   Accelerated filer þ   Non-accelerated filer ¨   Smaller Reporting Company ¨
        (Do not check if a smaller reporting company)    

 

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

 

As of November 1, 2016, the Registrant had 11,553,657 shares of common stock, $0.001 par value, outstanding.

 

 

 

 

 

 

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 September 30, 2016 and December 31, 2015 (unaudited)   3
  Consolidated Statements of Operations for the three and nine months ended September 30, 2016 and 2015 (unaudited)   4
  Consolidated Statements of Changes in Net Assets for the nine months ended September 30, 2016 and 2015 (unaudited)   5
  Consolidated Statements of Cash Flows for the nine months ended September 30, 2016 and 2015 (unaudited)   6
  Consolidated Schedules of Investments as of September 30, 2016 and December 31, 2015 (unaudited)   7
  Notes to the Consolidated Financial Statements (unaudited)   19
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations   40
Item 3. Quantitative and Qualitative Disclosures About Market Risk   54
Item 4. Controls and Procedures   54
       
PART II
Item 1. Legal Proceedings   55
Item 1A.   Risk Factors   55
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds   55
Item 3. Defaults Upon Senior Securities   55
Item 4. Mine Safety Disclosures   55
Item 5. Other Information   55
Item 6. Exhibits   56
  Signatures   57
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)

 

   

September 30,

2016

   

December 31,

2015

 
             
Assets                
Non-affiliate investments at fair value (cost of $228,156 and $255,494, respectively) (Note 4)   $ 208,177     $ 250,267  
Investments in money market funds           285  
Cash     26,170       20,765  
Restricted investments in money market funds           1,091  
Interest receivable     7,781       6,258  
Other assets     2,017       2,230  
Total assets   $ 244,145     $ 280,896  
                 
Liabilities                
Borrowings (Note 6)   $ 95,550     $ 114,954  
Distributions payable     3,985       3,980  
Base management fee payable (Note 3)     363       385  
Incentive fee payable (Note 3)           1,028  
Other accrued expenses     578       798  
Total liabilities     100,476       121,145  
                 
Commitments and Contingencies (Note 7)                
                 
Net assets                
Preferred stock, par value $0.001 per share, 1,000,000 shares authorized, zero shares issued and outstanding as of September 30, 2016 and December 31, 2015            
Common stock, par value $0.001 per share, 100,000,000 shares authorized, 11,666,642 and 11,648,594 shares issued and 11,551,941 and 11,535,212 shares outstanding as of September 30, 2016 and December 31, 2015, respectively     12       12  
Paid-in capital in excess of par     179,902       179,707  
Distributions in excess of net investment income     (674 )     (2,006 )
Net unrealized depreciation on investments     (19,979 )     (5,227 )
Net realized loss on investments     (15,592 )     (12,735 )
Total net assets     143,669       159,751  
Total liabilities and net assets   $ 244,145     $ 280,896  
Net asset value per common share   $ 12.44     $ 13.85  

 

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     For the Nine Months Ended  
    September 30,     September 30,  
    2016     2015     2016     2015  
Investment income                                
Interest income on non-affiliate investments   $ 6,819     $ 7,705     $ 24,610     $ 20,865  
Fee income on non-affiliate investments     789       722       1,387       1,684  
Total investment income     7,608       8,427       25,997       22,549  
Expenses                                
Interest expense     1,420       1,441       4,466       4,291  
Base management fee (Note 3)     1,135       1,279       3,666       3,456  
Performance based incentive fee (Note 3)           1,015       2,126       2,473  
Administrative fee (Note 3)     197       300       753       877  
Professional fees     315       273       1,159       991  
General and administrative     218       218       681       776  
Total expenses     3,285       4,526       12,851       12,864  
Management and performance based incentive fees waived (Note 3)           (140 )           (207 )
Net expenses     3,285       4,386       12,851       12,657  
Net investment income before excise tax     4,323       4,041       13,146       9,892  
Credit for excise tax     (52 )     (20 )     (138 )      
Net investment income     4,375       4,061       13,284       9,892  
Net realized and unrealized loss on investments                                
Net realized gain (loss) on investments     5       (1,463 )     (2,857 )     (1,723 )
Net unrealized (depreciation) appreciation on investments     (10,023 )     940       (14,752 )     958  
Net realized and unrealized loss on investments     (10,018 )     (523 )     (17,609 )     (765 )
Net (decrease) increase in net assets resulting from operations   $ (5,643 )   $ 3,538     $ (4,325 )   $ 9,127  
Net investment income per common share   $ 0.38     $ 0.35     $ 1.15     $ 0.90  
Net (decrease) increase in net assets per common share   $ (0.49 )   $ 0.30     $ (0.37 )   $ 0.83  
Distributions declared per share   $ 0.345     $ 0.345     $ 1.035     $ 1.035  
Weighted average shares outstanding     11,549,508       11,638,925       11,543,995       11,032,992  

 

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, 2014     9,628,124     $ 10     $ 155,240     $ (1,102 )   $ (4,737 )   $ (11,163 )   $ 138,248  
Issuance of common stock, net of offering costs     2,000,000       2       26,504                         26,506  
Net increase in net assets resulting from operations                       9,892       958       (1,723 )     9,127  
Issuance of common stock under dividend reinvestment plan     14,398             181                         181  
Distributions declared                       (11,815 )                 (11,815 )
Reclassification of permanent tax differences (Note 2)                 (971 )     893             78        
Balance at September 30, 2015     11,642,522     $ 12     $ 180,954     $ (2,132 )   $ (3,779 )   $ (12,808 )   $ 162,247  
                                                         
Balance at December 31, 2015     11,535,212     $ 12     $ 179,707     $ (2,006 )   $ (5,227 )   $ (12,735 )   $ 159,751  
Net decrease in net assets resulting from operations                       13,284       (14,752 )     (2,857 )     (4,325 )
Issuance of common stock under dividend reinvestment plan     18,048             211                         211  
Repurchases of common stock     (1,319 )           (16 )                       (16 )
Distributions declared                       (11,952 )                 (11,952 )
Balance at September 30, 2016     11,551,941     $ 12     $ 179,902     $ (674 )   $ (19,979 )   $ (15,592 )   $ 143,669  

 

See Notes to Consolidated Financial Statements

 

  5  

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Statements of Cash Flows (Unaudited)

(Dollars in thousands)

 

    For the Nine Months Ended  
    September 30,  
    2016     2015  
Cash flows from operating activities:                
Net (decrease) increase in net assets resulting from operations   $ (4,325 )   $ 9,127  
Adjustments to reconcile net (decrease) increase in net assets resulting from operations to net cash provided by (used in) operating activities:                
Amortization of debt issuance costs     434       733  
Net realized loss on investments     2,857       1,723  
Net unrealized depreciation (appreciation) on investments     14,752       (958 )
Purchase of investments     (45,223 )     (104,781 )
Principal payments received on investments     69,266       58,593  
Proceeds from sale of investments     939       1,078  
Changes in assets and liabilities:                
Net decrease (increase) in investments in money market funds     285       (248 )
Net decrease in restricted investments in money market funds     1,091       1,458  
Increase in interest receivable     (1,749 )     (399 )
Decrease (increase) in end-of-term payments     200       (827 )
Decrease in unearned income     (476 )     (56 )
Decrease in other assets     143       773  
Decrease in other accrued expenses     (220 )     (15 )
(Decrease) increase in base management fee payable     (22 )     29  
(Decrease) increase in incentive fee payable     (1,028 )     216  
Net cash provided by (used in) operating activities     36,924       (33,554 )
Cash flows from financing activities:                
Proceeds from issuance of common stock, net of offering costs           26,506  
Repayment of Asset-Backed Notes     (14,546 )     (19,451 )
Advances on credit facility     10,000       42,000  
Repayment of credit facility     (15,000 )      
Distributions paid     (11,736 )     (10,939 )
Repurchase of common stock     (16 )      
Debt issuance costs     (221 )     (420 )
Net cash (used in) provided by financing activities     (31,519 )     37,696  
Net increase in cash     5,405       4,142  
Cash:                
Beginning of period     20,765       8,417  
End of period   $ 26,170     $ 12,559  
Supplemental disclosure of cash flow information:                
Cash paid for interest   $ 4,051     $ 3,474  
Supplemental non-cash investing and financing activities:                
Warrant investments received and recorded as unearned income   $ 446     $ 778  
Distributions payable   $ 3,985     $ 4,017  
End-of-term payments receivable   $ 4,859     $ 4,611  
Receivable resulting from sale of investment   $     $ 499  

 

See Notes to Consolidated Financial Statements

  

  6  

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

September 30, 2016

(Dollars in thousands)

 

            Principal     Cost of     Fair  
Portfolio Company (1)   Sector   Type of Investment (3)(4)(7)(9)(10)   Amount     Investments (6)     Value  
Debt Investments — 140.0% (8)                  
Debt Investments — Life Science — 30.5% (8)                        
Argos Therapeutics, Inc. (2)(5)   Biotechnology   Term Loan (9.27% cash (Libor + 8.75%; Floor 9.25%;   $ 5,000     $ 4,959     $ 4,959  
        Ceiling 10.75%), 5.00% ETP, Due 10/1/18)                        
        Term Loan (9.27% cash (Libor + 8.75%; Floor 9.25%;     5,000       4,965       4,965  
        Ceiling 10.75%), 5.00% ETP, Due 3/1/19)                        
New Haven Pharmaceuticals, Inc. (11)   Biotechnology   Term Loan (11.52% cash (Libor + 11.00%; Floor     1,282       1,275       675  
        11.50%), 11.42% ETP, Due 3/1/19)                        
        Term Loan (11.52% cash (Libor + 11.00%; Floor     427       424       225  
        11.50%), 11.42% ETP, Due 3/1/19)                        
        Term Loan (10.52% cash (Libor + 10.00%; Floor     1,973       1,961       1,040  
        10.50%), 6.10% ETP, Due 3/1/19)                        
        Term Loan (10.02% cash (Libor + 9.50%; Floor     6,185       6,118       3,243  
        10.00%), 4.00% ETP, Due 4/1/19)                        
        Term Loan (10.04% cash (Libor + 9.50%; Floor     409       409       217  
        10.00%), Due 10/31/16)                        
Palatin Technologies, Inc. (2)(5)   Biotechnology   Term Loan (9.02% cash (Libor + 8.50%; Floor     4,500       4,455       4,455  
        9.00%), 5.00% ETP, Due 1/1/19)                        
        Term Loan (9.02% cash (Libor + 8.50%; Floor     5,000       4,951       4,951  
        9.00%), 5.00% ETP, Due 8/1/19)                        
Sample6, Inc. (2)   Biotechnology   Term Loan (9.52% cash (Libor + 9.00%; Floor     1,166       1,163       1,163  
        9.50%; Ceiling 11.00%), 4.00% ETP, Due 4/1/18)                        
        Term Loan (9.52% cash (Libor + 9.00%; Floor     709       705       705  
        9.50%; Ceiling 11.00%), 4.00% ETP, Due 4/1/18)                        
        Term Loan (9.52% cash (Libor + 9.00%; Floor     2,500       2,487       2,487  
        9.50%; Ceiling 11.00%), 4.00% ETP, Due 4/1/18)                        
Lantos Technologies, Inc. (2)   Medical Device   Term Loan (11.50% cash (Libor + 10.50%; Floor     2,479       2,450       2,414  
        11.50%), 5.00% ETP, Due 2/1/18)                        
Mederi Therapeutics, Inc. (2)   Medical Device   Term Loan (12.34% cash (Libor + 11.82%), 4.00% ETP,     1,742       1,729       1,729  
        Due 7/1/17)                        
        Term Loan (12.34% cash (Libor + 11.82%), 4.00% ETP,     1,742       1,729       1,729  
        Due 7/1/17)                        
NinePoint Medical, Inc. (2)   Medical Device   Term Loan (9.27% cash (Libor + 8.75%; Floor     5,000       4,957       4,957  
        9.25%), 4.50% ETP, Due 3/1/19)                        
        Term Loan (9.27% cash (Libor + 8.75%; Floor     2,500       2,473       2,473  
        9.25%), 4.50% ETP, Due 3/1/19)                        
Tryton Medical, Inc. (2)   Medical Device   Term Loan (10.66% cash (Prime + 7.16%), 2.50% ETP,     1,500       1,491       1,491  
        Due 3/1/17)                        
Total Debt Investments — Life Science                     48,701       43,878  
Debt Investments — Technology — 83.9% (8)                        
Ekahau, Inc. (2)   Communications   Term Loan (11.75% cash, 2.50% ETP, Due 2/1/17)     226       226       226  
        Term Loan (11.75% cash, 2.50% ETP, Due 2/1/17)     75       75       75  
Additech, Inc. (2)   Consumer-related Technologies   Term Loan (11.77% cash (Libor + 11.25%; Floor     1,833       1,813       1,813  
        11.75%; Ceiling 13.25%), 4.00% ETP, Due 7/1/18)                        
        Term Loan (11.77% cash (Libor + 11.25%; Floor     2,333       2,306       2,306  
        11.75%; Ceiling 13.25%), 4.00% ETP, Due 1/1/19)                        
Gwynnie Bee, Inc. (2)   Consumer-related Technologies   Term Loan (11.02% cash (Libor + 10.50%; Floor     867       854       854  
        11.00%; Ceiling 12.50%), 2.00% ETP, Due 11/1/17)                        
        Term Loan (11.02% cash (Libor + 10.50%; Floor     533       522       522  
        11.00%; Ceiling 12.50%), 2.00% ETP, Due 2/1/18)                        
        Term Loan (11.02% cash (Libor + 10.50%; Floor     600       591       591  
        11.00%; Ceiling 12.50%), 2.00% ETP, Due 4/1/18)                        
Le Tote, Inc. (2)   Consumer-related Technologies   Term Loan (10.17% cash (Libor + 9.65%; Floor     4,000       3,936       3,936  
        10.15%), 5.00% ETP, Due 3/1/20)                        
        Term Loan (10.19% cash (Libor + 9.65%; Floor     3,000       2,951       2,951  
        10.15%), 5.00% ETP, Due 3/1/20)                        
Rhapsody International, Inc. (2)   Consumer-related Technologies   Term Loan (11.02% cash (Libor + 10.50%; Floor     7,500       7,321       7,321  
        11.00%), 3.00% ETP, Due 10/1/19)                        
SavingStar, Inc. (2)   Consumer-related Technologies   Term Loan (10.92% cash (Libor + 10.40%; Floor     3,000       2,956       2,956  
        10.90%), 3.00% ETP, Due 6/1/19)                        
        Term Loan (10.92% cash (Libor + 10.40%; Floor     2,000       1,963       1,963  
        10.90%), 3.00% ETP, Due 3/1/20)                        
MediaBrix, Inc. (2)   Internet and Media   Term Loan (11.52% cash (Libor + 11.00%; Floor     4,000       3,963       3,963  
        11.50%), 3.00% ETP, Due 1/1/20)                        

 

See Notes to Consolidated Financial Statements

 

  7  

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

September 30, 2016

(Dollars in thousands)

 

            Principal     Cost of     Fair  
Portfolio Company (1)   Sector   Type of Investment (3)(4)(7)(9)(10)   Amount     Investments (6)     Value  
Zinio Holdings, LLC (2)   Internet and Media   Term Loan (11.77% cash (Libor + 11.25%; Floor     4,000       3,964       3,964  
        11.75%), 4.00% ETP, Due 2/1/20)                        
The NanoSteel Company, Inc. (2)   Materials   Term Loan (10.02% cash (Libor + 9.50%; Floor     5,000       4,934       4,934  
        10.00%), 5.00% ETP, Due 7/1/19)                        
        Term Loan (10.02% cash (Libor + 9.50%; Floor     2,500       2,467       2,467  
        10.00%), 5.00% ETP, Due 7/1/19)                        
        Term Loan (10.02% cash (Libor + 9.50%; Floor     2,500       2,460       2,460  
        10.00%), 5.00% ETP, Due 1/1/20)                        
Nanocomp Technologies, Inc. (2)   Networking   Term Loan (11.50% cash, 3.00% ETP, Due 11/1/17)     432       429       429  
        Term Loan (11.52% cash (Libor + 11.00%; Floor     3,000       2,948       2,948  
        11.50%), 3.00% ETP, Due 4/1/20)                        
Powerhouse Dynamics, Inc. (2)   Power Management   Term Loan (11.22% cash (Libor + 10.70%; Floor     2,500       2,466       2,466  
        11.20%), 3.00% ETP, Due 3/1/19)                        
Avalanche Technology, Inc. (2)   Semiconductors   Term Loan (10.00% cash (Libor + 9.25%; Floor 10.00%;     730       729       729  
        Ceiling 11.75%), 2.40% ETP, Due 4/1/17)                        
        Term Loan (10.00% cash (Libor + 9.25%; Floor 10.00%;     1,518       1,513       1,513  
        Ceiling 11.75%), 2.40% ETP, Due 10/1/18)                        
        Term Loan (10.00% cash (Libor + 9.25%; Floor 10.00%;     1,726       1,692       1,692  
        Ceiling 11.75%), 2.00% ETP, Due 2/1/19)                        
InVisage Technologies, Inc. (2)   Semiconductors   Term Loan (12.02% cash (Libor + 11.50%; Floor     1,955       1,934       1,934  
        12.00%; Ceiling 14.00%), 4.71% ETP, Due 12/31/16)                        
        Term Loan (12.02% cash (Libor + 11.50%; Floor     822       816       816  
        12.00%; Ceiling 14.00%), 4.71% ETP, Due 12/31/16)                        
Luxtera, Inc. (2)   Semiconductors   Term Loan (10.27% cash (Libor + 9.75%; Floor 10.25%;     877       866       866  
        Ceiling 12.25%), 13.00% ETP, Due 7/1/17)                        
        Term Loan (10.27% cash (Libor + 9.75%; Floor 10.25%;     490       488       488  
        Ceiling 12.25%), 13.00% ETP, Due 7/1/17)                        
        Term Loan (9.02% cash (Libor + 8.50%; Floor 9.00%),     750       746       746  
        4.50% ETP, Due 12/1/18)                        
        Term Loan (9.02% cash (Libor + 8.50%; Floor 9.00%),     750       745       745  
        4.50% ETP, Due 12/1/18)                        
        Term Loan (9.52% cash (Libor + 9.00%; Floor 9.50%),     2,000       1,990       1,990  
        4.50% ETP, Due 11/1/19)                        
Xtera Communications, Inc. (5)(11)   Semiconductors   Term Loan (12.50% cash, 22.92% ETP, Due 10/1/16)     3,024       3,015       2,207  
        Term Loan (12.50% cash, 22.92% ETP, Due 10/1/16)     840       838       614  
Bridge2 Solutions, Inc.   Software   Term Loan (11.52% cash (Libor + 11.00%; Floor     4,000       3,973       3,973  
        11.50%; Ceiling 14.50%), 2.00% ETP, Due 7/1/19)                        
        Term Loan (11.52% cash (Libor + 11.00%; Floor     1,000       996       996  
        11.50%; Ceiling 14.50%), 2.00% ETP, Due 1/1/20)                        
ControlScan, Inc. (2)   Software   Term Loan (10.77% cash (Libor + 10.25%),     4,500       4,409       4,409  
        3.00% ETP, Due 7/1/20)                        
Crowdstar, Inc. (2)   Software   Term Loan (10.77% cash (Libor + 10.25%; Floor     1,394       1,376       1,376  
        10.75%), 3.00% ETP, Due 9/1/18)                        
Decisyon, Inc.   Software   Term Loan (12.83% cash (Libor + 12.308%; Floor     1,523       1,521       1,500  
        12.50%), 6.50% ETP, Due 6/1/18)                        
        Term Loan (12.83% cash (Libor + 12.308%; Floor     833       714       704  
        12.50%), 6.50% ETP, Due 6/1/18)                        
Digital Signal Corporation   Software   Term Loan (10.77% cash (Libor + 10.25%; Floor     1,500       1,466       1,246  
        10.43%), 5.00% ETP, Due 7/1/19)                        
        Term Loan (10.77% cash (Libor + 10.25%; Floor     1,500       1,466       1,246  
        10.43%), 5.00% ETP, Due 7/1/19)                        
Education Elements, Inc. (2)   Software   Term Loan (10.52% cash (Libor + 10.00%; Floor     1,800       1,776       1,776  
        10.50%), 4.00% ETP, Due 1/1/19)                        
        Term Loan (10.52% cash (Libor + 10.00%; Floor     1,500       1,477       1,477  
        10.50%), 4.00% ETP, Due 8/1/19)                        
Netuitive, Inc.   Software   Term Loan (12.77% cash (Libor + 12.25%; Floor     564       563       563  
        12.50%), 3.33% ETP, Due 9/1/17)                        
Nomi Corporation (11)   Software   Term Loan (10.67% cash (Libor + 10.15%; Floor     2,489       2,454       150  
        10.35%), 2.00% ETP, Due 1/1/20)                        
        Term Loan (10.67% cash (Libor + 10.15%; Floor     2,489       2,454       150  
        10.35%), 2.00% ETP, Due 1/1/20)                        

 

See Notes to Consolidated Financial Statements

 

  8  

 

  

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

September 30, 2016

(Dollars in thousands)

 

            Principal     Cost of     Fair  
Portfolio Company (1)   Sector   Type of Investment (3)(4)(7)(9)(10)   Amount     Investments (6)     Value  
ScoreBig, Inc. (2)(11)   Software   Term Loan (10.52% cash (Libor + 10.00%; Floor     3,403       3,332       1,330  
        10.50%), 4.00% ETP, Due 4/1/19)                        
        Term Loan (10.52% cash (Libor + 10.00%; Floor     3,403       3,360       1,341  
        10.50%), 4.00% ETP, Due 4/1/19)                        
        Term Loan (10.52% cash (Libor + 10.00%; Floor     2,000       1,950       778  
        10.50%), 4.00% ETP, Due 3/1/20)                        
        Term Loan (10.54% cash (Libor + 10.00%; Floor     127       127       51  
        10.50%), 4.00% ETP, Due 10/31/16)                        
ShopKeep.com, Inc. (2)   Software   Term Loan (10.47% cash (Libor + 9.95%; Floor     6,000       5,802       5,802  
        10.45%), 3.00% ETP, Due 4/1/20)                        
SIGNiX, Inc.   Software   Term Loan (11.52% cash (Libor + 11.00%; Floor     2,500       2,356       2,349  
        11.50%), Due 10/1/18)                        
SilkRoad Technology, Inc. (2)   Software   Term Loan (10.87% cash (Libor + 10.35%; Floor     7,500       7,450       7,450  
        10.85%; Ceiling 12.85%), 3.00% ETP, Due 6/1/19)                        
Skyword, Inc.   Software   Term Loan (11.47% cash (Libor + 10.95%; Floor     4,000       3,939       3,849  
        11.45%), 3.00% ETP, Due 8/1/19)                        
Social Intelligence Corp. (2)   Software   Term Loan (11.02% cash (Libor + 10.50%; Floor     404       394       394  
        11.00%; Ceiling 13.00%), 3.50% ETP, Due 12/1/17)                        
Sys-Tech Solutions, Inc. (2)   Software   Term Loan (11.67% cash (Libor + 11.15%; Floor     3,600       3,579       3,579  
        11.65%; Ceiling 12.65%), 4.50% ETP, Due 3/1/18)                        
        Term Loan (11.67% cash (Libor + 11.15%; Floor     3,333       3,311       3,311  
        11.65%; Ceiling 12.65%), 9.00% ETP, Due 5/1/18)                        
VBrick Systems, Inc. (2)   Software   Term Loan (11.52% cash (Libor + 11.00%; Floor     1,000       994       994  
        11.50%; Ceiling 13.50%), 5.00% ETP, Due 7/1/17)                        
Vidsys, Inc. (2)   Software   Term Loan (13.00% cash, 12.58% ETP, Due 12/1/17)     2,610       2,610       2,610  
xTech Holdings, Inc. (2)   Software   Term Loan (11.02% cash (Libor + 10.50%; Floor     1,667       1,643       1,643  
        11.00%), 3.00% ETP, Due 4/1/19)                        
        Term Loan (11.02% cash (Libor + 10.50%; Floor     2,000       1,968       1,968  
        11.00%), 3.00% ETP, Due 3/1/20)                        
Total Debt Investments — Technology                     131,977       120,500  
Debt Investments — Cleantech — 5.9% (8)                    
Rypos, Inc. (2)   Energy Efficiency   Term Loan (12.07% cash (Libor + 11.55%;     1,740       1,728       1,728  
        Floor 11.80%), 4.25% ETP, Due 6/1/17)                        
        Term Loan (12.07% cash (Libor + 11.55%;     777       768       768  
        Floor 11.80%), 4.25% ETP, Due 1/1/18)                        
Lehigh Technologies, Inc. (2)   Waste Recycling   Term Loan (10.24% cash (Libor + 9.72%), 6.75% ETP,     3,000       2,980       2,980  
        Due 8/1/19)                        
        Term Loan (10.24% cash (Libor + 9.72%), 6.75% ETP,     3,000       2,980       2,980  
        Due 8/1/19)                        
Total Debt Investments — Cleantech                     8,456       8,456  
Debt Investments — Healthcare information and services — 19.7% (8)                    
Interleukin Genetics, Inc. (2)(5)   Diagnostics   Term Loan (11.02% cash (Libor + 10.50%;     4,335       4,171       4,171  
        Floor 11.00%), 6.50% ETP, Due 10/1/18)                        
Watermark Medical, Inc. (2)   Other Healthcare   Term Loan (10.02% cash (Libor + 9.50%; Floor 10.00%;     2,771       2,767       2,767  
        Ceiling 11.00%); 4.00% ETP, Due 4/1/18)                        
        Term Loan (10.02% cash (Libor + 9.50%; Floor 10.00%;     2,771       2,767       2,767  
        Ceiling 11.00%); 4.00% ETP, Due 4/1/18)                        
        Term Loan (10.02% cash (Libor + 9.50%; Floor 10.00%;     1,250       1,248       1,248  
        Ceiling 11.00%); 4.00% ETP, Due 4/1/18)                        
MedAvante, Inc. (2)   Software   Term Loan (9.77% cash (Libor + 9.25%; Floor     3,000       2,968       2,968  
        9.75%), 4.00% ETP, Due 1/1/19)                        
        Term Loan (9.77% cash (Libor + 9.25%; Floor     3,000       2,968       2,968  
        9.75%), 4.00% ETP, Due 1/1/19)                        
        Term Loan (9.77% cash (Libor + 9.25%; Floor     4,000       3,948       3,948  
        9.75%), 4.00% ETP, Due 7/1/19)                        
Medsphere Systems Corporation (2)   Software   Term Loan (10.52% cash (Libor + 10.00%; Floor     5,000       4,938       4,938  
        10.50%), 7.00% ETP, Due 7/1/19)                        
        Term Loan (10.52% cash (Libor + 10.00%; Floor     2,500       2,469       2,469  
        10.50%), 7.00% ETP, Due 7/1/19)                        
Total Debt Investments — Healthcare information and services                     28,244       28,244  
Total Debt Investments         217,378       201,078  

 

See Notes to Consolidated Financial Statements   

 

  9  

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

September 30, 2016

(Dollars in thousands)

 

 

                    Cost of     Fair  
Portfolio Company (1)   Sector   Type of Investment (3)(4)(7)(9)(10)       Investments (6)     Value  
Warrant Investments — 4.0% (8)            
Warrants — Life Science — 0.3% (8)            
ACT Biotech Corporation   Biotechnology   1,521,820 Preferred Stock Warrants             83        
Argos Therapeutics, Inc. (2)(5)   Biotechnology   33,112 Common Stock Warrants             33       1  
Celsion Corporation (5)   Biotechnology   5,708 Common Stock Warrants             15        
Inotek Pharmaceuticals Corporation (5)   Biotechnology   28,204 Common Stock Warrants             17       96  
New Haven Pharmaceuticals, Inc.   Biotechnology   103,982 Preferred Stock Warrants             88        
Nivalis Therapeutics, Inc. (5)   Biotechnology   18,534 Common Stock Warrants             122        
Ocera Therapeutics, Inc. (2)(5)   Biotechnology   6,491 Common Stock Warrants             6        
Palatin Technologies, Inc. (2)(5)   Biotechnology   608,058 Common Stock Warrants             51       11  
Revance Therapeutics, Inc. (5)   Biotechnology   34,377 Common Stock Warrants             68       101  
Sample6, Inc. (2)   Biotechnology   494,018 Preferred Stock Warrants             45       13  
Sunesis Pharmaceuticals, Inc. (5)   Biotechnology   2,050 Common Stock Warrants             5        
AccuVein Inc. (2)   Medical Device   75,769 Preferred Stock Warrants             24       28  
Direct Flow Medical, Inc.   Medical Device   176,922 Preferred Stock Warrants             144        
EnteroMedics, Inc. (5)   Medical Device   9,402 Common Stock Warrants             347        
IntegenX, Inc. (2)   Medical Device   170,646 Preferred Stock Warrants             34       26  
Lantos Technologies, Inc. (2)   Medical Device   66,665,256 Preferred Stock Warrants             38       40  
Mederi Therapeutics, Inc. (2)   Medical Device   248,736 Preferred Stock Warrants             26       39  
Mitralign, Inc. (2)   Medical Device   641,909 Preferred Stock Warrants             52       36  
NinePoint Medical, Inc. (2)   Medical Device   566,038 Preferred Stock Warrants             33       33  
OraMetrix, Inc. (2)   Medical Device   812,348 Preferred Stock Warrants             78        
Tryton Medical, Inc. (2)   Medical Device   122,362 Preferred Stock Warrants             15       10  
ViOptix, Inc.   Medical Device   375,763 Preferred Stock Warrants             13        
Total Warrants — Life Science                     1,337       434  
Warrants — Technology — 2.7% (8)                        
Ekahau, Inc. (2)   Communications   978,261 Preferred Stock Warrants             33       20  
OpenPeak, Inc.   Communications   18,997 Common Stock Warrants             89        
Additech, Inc. (2)   Consumer-related Technologies   150,000 Preferred Stock Warrants             33       27  
Everyday Health, Inc. (5)   Consumer-related Technologies   43,783 Common Stock Warrants             69       7  
Gwynnie Bee, Inc. (2)   Consumer-related Technologies   268,591 Preferred Stock Warrants             68       691  
If(we), Inc.   Consumer-related Technologies   190,868 Preferred Stock Warrants             27       45  
Le Tote, Inc. (2)   Consumer-related Technologies   202,974 Preferred Stock Warrants             63       63  
Rhapsody International Inc. (2)   Consumer-related Technologies   852,273 Common Stock Warrants             164       132  
SavingStar, Inc. (2)   Consumer-related Technologies   98,860 Preferred Stock Warrants             59       58  
XIOtech, Inc.   Data Storage   2,217,979 Preferred Stock Warrants             22        
SimpleTuition, Inc.   Internet and media   189,573 Preferred Stock Warrants             63       37  
The NanoSteel Company, Inc. (2)   Materials   147,424 Preferred Stock Warrants             93       90  
IntelePeer, Inc.   Networking   141,549 Common Stock Warrants             39       26  
Nanocomp Technologies, Inc. (2)   Networking   681,819 Preferred Stock Warrants             54       49  
Aquion Energy, Inc.   Power Management   115,051 Preferred Stock Warrants             7       60  
Powerhouse Dynamics, Inc. (2)   Power Management   290,698 Preferred Stock Warrants             28       22  
Avalanche Technology, Inc. (2)   Semiconductors   202,602 Preferred Stock Warrants             101       41  
eASIC Corporation (2)   Semiconductors   40,445 Preferred Stock Warrants             25       27  
InVisage Technologies, Inc. (2)   Semiconductors   395,009 Preferred Stock Warrants             48       37  
Kaminario, Inc.   Semiconductors   1,087,203 Preferred Stock Warrants             59       62  
Luxtera, Inc.(2)   Semiconductors   2,508,671 Preferred Stock Warrants             49       195  
Soraa, Inc. (2)   Semiconductors   203,616 Preferred Stock Warrants             80       414  
Xtera Communications, Inc. (5)   Semiconductors   37,831 Common Stock Warrants             206        
Bolt Solutions Inc. (2)   Software   202,892 Preferred Stock Warrants             113       111  
Bridge2 Solutions, Inc.   Software   75,458 Common Stock Warrants             18       335  
Clarabridge, Inc.   Software   53,486 Preferred Stock Warrants             14       81  
ControlScan, Inc. (2)   Software   2,295,918 Preferred Stock Warrants             19       22  
Crowdstar, Inc. (2)   Software   75,428 Preferred Stock Warrants             14       11  
Decisyon, Inc.   Software   82,967 Common Stock Warrants             46        
Digital Signal Corporation   Software   113,744 Common Stock Warrants             32        
Education Elements, Inc. (2)   Software   238,122 Preferred Stock Warrants             28       23  
Lotame Solutions, Inc. (2)   Software   288,115 Preferred Stock Warrants             22       268  
Netuitive, Inc.   Software   41,569 Common Stock Warrants             48        
Nomi Corporation   Software   2,535,864 Preferred Stock Warrants                    
Riv Data Corp. (2)   Software   237,361 Preferred Stock Warrants             12       10  
ScoreBig, Inc. (2)   Software   879,014 Preferred Stock Warrants             88        
ShopKeep.com, Inc. (2)   Software   165,779 Preferred Stock Warrants             98       98  
SIGNiX, Inc.   Software   89,767 Preferred Stock Warrants             168       166  

 

See Notes to Consolidated Financial Statements

 

  10  

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

September 30, 2016

(Dollars in thousands)

 

                    Cost of     Fair  
Portfolio Company (1)   Sector   Type of Investment (3)(4)(7)(9)(10)       Investments (6)     Value  
Skyword, Inc.   Software   301,056 Preferred Stock Warrants             48       46  
SpringCM, Inc. (2)   Software   2,385,686 Preferred Stock Warrants             55       119  
Sys-Tech Solutions, Inc.   Software   375,000 Preferred Stock Warrants             241       374  
Vidsys, Inc.   Software   85,399 Preferred Stock Warrants             23       10  
Visage Mobile, Inc.   Software   1,692,047 Preferred Stock Warrants             19        
xTech Holdings, Inc. (2)   Software   158,730 Preferred Stock Warrants             43       43  
Total Warrants — Technology                     2,628       3,820  
Warrants — Cleantech — 0.1% (8)                        
Renmatix, Inc.   Alternative Energy   53,022 Preferred Stock Warrants             68        
Semprius, Inc.   Alternative Energy   519,981 Preferred Stock Warrants             25       20  
Rypos, Inc. (2)   Energy Efficiency   5,627 Preferred Stock Warrants             44       21  
Tigo Energy, Inc. (2)   Energy Efficiency   804,604 Preferred Stock Warrants             100       109  
Lehigh Technologies, Inc. (2)   Waste Recycling   272,727 Preferred Stock Warrants             33       33  
Total Warrants — Cleantech                     270       183  
Warrants — Healthcare information and services — 0.9% (8)                        
Accumetrics, Inc.   Diagnostics   100,928 Preferred Stock Warrants             107       63  
Candescent Health, Inc. (2)   Diagnostics   519,991 Preferred Stock Warrants             378        
Helomics Corporation   Diagnostics   13,461 Common Stock Warrants             73        
Interleukin Genetics, Inc. (2)(5)   Diagnostics   7,662,100 Common Stock Warrants             168       632  
LifePrint Group, Inc. (2)   Diagnostics   49,000 Preferred Stock Warrants             29       1  
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       36  
Watermark Medical, Inc. (2)   Other Healthcare   27,373 Preferred Stock Warrants             74       62  
MedAvante, Inc. (2)   Software   114,285 Preferred Stock Warrants             66       65  
Medsphere Systems Corporation (2)   Software   7,097,791 Preferred Stock Warrants             60       196  
Recondo Technology, Inc. (2)   Software   556,796 Preferred Stock Warrants             95       194  
Total Warrants — Healthcare information and services               1,248       1,293  
Total Warrants                     5,483       5,730  
                                 
Other Investments — 0.4% (8)                        
ZetrOZ, Inc.   Medical Device   Royalty Agreement             365       300  
Vette Technology, LLC   Data Storage   Royalty Agreement Due 4/18/2019             4,359       200  
Total Other Investments                     4,724       500  
Equity — 0.6% (8)                                
Insmed Incorporated (5)   Biotechnology   33,208 Common Stock             238       482  
Revance Therapeutics, Inc.(5)   Biotechnology   4,861 Common Stock             73       79  
Sunesis Pharmaceuticals, Inc. (5)   Biotechnology   78,493 Common Stock             83       57  
SnagAJob.com, Inc.   Consumer-related Technologies   82,974 Common Stock             9       83  
Decisyon, Inc.   Software   3,808,584 Common Stock             168       168  
Total Equity                     571       869  
Total Portfolio Investment Assets — 145.0% (8)           $ 228,156     $ 208, 177  

 

 

 

(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 investments are less than 5% ownership of the class and ownership 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. All debt investments are at fixed rates for the term of the debt investment, unless otherwise indicated. Debt investments based on LIBOR are based on one-month LIBOR. For each debt investment, the current interest rate in effect as of September 30, 2016 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.

 

See Notes to Consolidated Financial Statements

 

  11  

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

September 30, 2016

(Dollars in thousands)

 

(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 September 30, 2016. 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 at September 30, 2016.

 

See Notes to Consolidated Financial Statements

 

  12  

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

December 31, 2015

(Dollars in thousands)

 

            Principal     Cost of     Fair  
Portfolio Company (1)   Sector   Type of Investment (3)(4)(7)(9)(10)   Amount     Investments (6)     Value  
Debt Investments — 151.6 % (8)                    
Debt Investments — Life Science — 36.6% (8)                    
Argos Therapeutics, Inc. (2)(5)   Biotechnology   Term Loan (9.25% cash (Libor + 8.75%; Floor 9.25%;   $ 5,000     $ 4,944     $ 4,944  
        Ceiling 10.75%), 5.00% ETP, Due 10/1/18)                        
        Term Loan (9.25% cash (Libor + 8.75%; Floor 9.25%;     5,000       4,954       4,954  
        Ceiling 10.75%), 5.00% ETP, Due 3/1/19)                        
New Haven Pharmaceuticals, Inc. (2)   Biotechnology   Term Loan (11.50% cash (Libor + 11.00%; Floor     1,301       1,293       1,293  
        11.50%), 11.42% ETP, Due 3/1/19)                        
        Term Loan (11.50% cash (Libor + 11.00%; Floor     434       431       431  
        11.50%), 11.42% ETP, Due 3/1/19)                        
        Term Loan (10.50% cash (Libor + 10.00%; Floor     2,000       1,987       1,987  
        10.50%), 6.10% ETP, Due 3/1/19)                        
        Term Loan (10.00% cash (Libor + 9.50%; Floor     6,265       6,190       6,190  
        10.00%), 4.00% ETP, Due 4/1/19)                        
Palatin Technologies, Inc. (2)(5)   Biotechnology   Term Loan (9.00% cash (Libor + 8.50%; Floor     5,000       4,939       4,939  
        9.00%), 5.00% ETP, Due 1/1/19)                        
        Term Loan (9.00% cash (Libor + 8.50%; Floor     5,000       4,937       4,937  
        9.00%), 5.00% ETP, Due 8/1/19)                        
Sample6, Inc. (2)   Biotechnology   Term Loan (9.50% cash (Libor + 9.00%; Floor     1,555       1,550       1,550  
        9.50%; Ceiling 11.00%), 4.00% ETP, Due 4/1/18)                        
        Term Loan (9.50% cash (Libor + 9.00%; Floor     945       940       940  
        9.50%; Ceiling 11.00%), 4.00% ETP, Due 4/1/18)                        
        Term Loan (9.50% cash (Libor + 9.00%; Floor     2,500       2,481       2,481  
        9.50%; Ceiling 11.00%), 4.00% ETP, Due 4/1/18)                        
Sunesis Pharmaceuticals, Inc. (2)(5)   Biotechnology   Term Loan (8.95% cash, 4.65% ETP, Due 10/1/16)     545       544       544  
        Term Loan (9.00% cash, 4.65% ETP, Due 10/1/16)     818       815       815  
IntegenX Inc. (2)   Medical Device   Term Loan (10.75% cash (Libor + 10.25%; Floor     3,750       3,703       3,703  
        10.75%; Ceiling 12.75%), 3.50% ETP, Due 7/1/18)                        
Lantos Technologies, Inc. (2)   Medical Device   Term Loan (11.50% cash (Libor + 10.50%; Floor     3,500       3,454       3,333  
        11.50%), 5.00% ETP, Due 2/1/18)                        
Mederi Therapeutics, Inc. (2)   Medical Device   Term Loan (12.06% cash (Libor + 11.82%), 4.00% ETP,     2,850       2,826       2,738  
        Due 7/1/17)                        
        Term Loan (12.06% cash (Libor + 11.82%), 4.00% ETP,     2,850       2,826       2,738  
        Due 7/1/17)                        
NinePoint Medical, Inc. (2)   Medical Device   Term Loan (9.25% cash (Libor + 8.75%; Floor     5,000       4,943       4,943  
        9.25%), 4.50% ETP, Due 3/1/19)                        
        Term Loan (9.25% cash (Libor + 8.75%; Floor     2,500       2,464       2,464  
        9.25%), 4.50% ETP, Due 3/1/19)                        
Tryton Medical, Inc. (2)   Medical Device   Term Loan (10.41% cash (Prime + 7.16%), 2.50% ETP,     2,063       2,053       2,053  
        Due 9/1/16)                        
ZetrOZ, Inc. (2)(11)   Medical Device   Term Loan (11.00% cash (Libor + 10.50%; Floor     1,350       1,330       250  
        11.00%; Ceiling 12.50%), 3.00% ETP, Due 4/1/18)                        
        Term Loan (11.00% cash (Libor + 10.50%; Floor     1,350       1,326       250  
        11.00%; Ceiling 12.50%), 3.00% ETP, Due 4/1/18)                        
Total Debt Investments — Life Science                     60,930       58,477  
Debt Investments — Technology — 80.5% (8)                    
Ekahau, Inc. (2)   Communications   Term Loan (11.75% cash, 2.50% ETP, Due 2/1/17)     704       700       700  
        Term Loan (11.75% cash, 2.50% ETP, Due 2/1/17)     235       233       233  
mBlox, Inc. (2)   Communications   Term Loan (11.50% cash (Libor + 11.00%; Floor     5,000       4,977       4,977  
        11.50%; Ceiling 13.00%), 3.40% ETP, Due 7/1/18)                        
        Term Loan (11.50% cash (Libor + 11.00%; Floor     5,000       4,977       4,977  
        11.50%; Ceiling 13.00%), 3.40% ETP, Due 7/1/18)                        
        Term Loan (12.00% cash, 100.00% ETP, Due 7/1/16)     1,000       1,000       1,000  
        Term Loan (12.00% cash, 100.00% ETP, Due 7/1/16)     500       500       500  
Overture Networks, Inc. (2)   Communications   Term Loan (10.75% cash, (Libor + 10.25%; Floor     4,104       4,089       4,089  
        10.75%), 5.75% ETP, Due 12/1/17)                        
        Term Loan (10.75% cash (Libor + 10.25%; Floor     2,052       2,043       2,043  
        10.75%), 5.75% ETP, Due 12/1/17)                        
        Term Loan (10.75% cash (Libor + 10.25%; Floor     1,000       992       992  
        10.75%), 5.00% ETP, Due 11/1/18)                        
Additech, Inc. (2)   Consumer-related Technologies   Term Loan (11.75% cash (Libor + 11.25%; Floor     2,500       2,470       2,470  
        11.75%; Ceiling 13.25%), 4.00% ETP, Due 7/1/18)                        
        Term Loan (11.75% cash (Libor + 11.25%; Floor     2,500       2,464       2,464  
        11.75%; Ceiling 13.25%), 4.00% ETP, Due 1/1/19)                        

  

See Notes to Consolidated Financial Statements

 

  13  

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

December 31, 2015

(Dollars in thousands)

 

            Principal     Cost of     Fair  
Portfolio Company (1)   Sector   Type of Investment (3)(4)(7)(9)(10)   Amount     Investments (6)     Value  
Gwynnie Bee, Inc. (2)   Consumer-related Technologies   Term Loan (11.00% cash (Libor + 10.50%; Floor     1,467       1,445       1,445  
        11.00%; Ceiling 12.50%), 2.00% ETP, Due 11/1/17)                        
        Term Loan (11.00% cash (Libor + 10.50%; Floor     833       816       816  
        11.00%; Ceiling 12.50%), 2.00% ETP, Due 2/1/18)                        
        Term Loan (11.00% cash (Libor + 10.50%; Floor     900       886       886  
        11.00%; Ceiling 12.50%), 2.00% ETP, Due 4/1/18)                        
Rhapsody International, Inc. (2)   Consumer-related Technologies   Term Loan (11.00% cash (Libor + 10.50%; Floor     7,500       7,276       7,276  
        11.00%), 3.00% ETP, Due 10/1/19)                        
SavingStar, Inc. (2)   Consumer-related Technologies   Term Loan (10.90% cash (Libor + 10.40%; Floor     3,000       2,911       2,911  
        10.90%), 3.00% ETP, Due 6/1/19)                        
The NanoSteel Company, Inc. (2)   Materials   Term Loan (10.00% cash (Libor + 9.50%; Floor     5,000       4,915       4,915  
        10.00%), 5.00% ETP, Due 7/1/19)                        
        Term Loan (10.00% cash (Libor + 9.50%; Floor     2,500       2,458       2,458  
        10.00%), 5.00% ETP, Due 7/1/19)                        
        Term Loan (10.00% cash (Libor + 9.50%; Floor     2,500       2,452       2,452  
        10.00%), 5.00% ETP, Due 1/1/20)                        
Nanocomp Technologies, Inc. (2)   Networking   Term Loan (11.50% cash, 3.00% ETP, Due 11/1/17)     701       693       693  
Powerhouse Dynamics, Inc. (2)   Power Management   Term Loan (11.20% cash (Libor + 10.70%; Floor     2,500       2,456       2,456  
        11.20%), 3.00% ETP, Due 3/1/19)                        
Avalanche Technology, Inc. (2)   Semiconductors   Term Loan (10.00% cash (Libor + 9.25%; Floor 10.00%;     1,565       1,561       1,561  
        Ceiling 11.75%), 2.40% ETP, Due 4/1/17)                        
        Term Loan (10.00% cash (Libor + 9.25%; Floor 10.00%;     2,003       1,997       1,997  
        Ceiling 11.75%), 2.40% ETP, Due 10/1/18)                        
        Term Loan (10.00% cash (Libor + 9.25%; Floor 10.00%;     2,202       2,157       2,157  
        Ceiling 11.75%), 2.00% ETP, Due 2/1/19)                        
InVisage Technologies, Inc. (2)   Semiconductors   Term Loan (12.00% cash (Libor + 11.50%; Floor     2,380       2,345       2,242  
        12.00%; Ceiling 14.00%), 2.00% ETP, Due 4/1/18)                        
        Term Loan (12.00% cash (Libor + 11.50%; Floor     850       835       798  
        12.00%; Ceiling 14.00%), 2.00% ETP, Due 10/1/18)                        
Luxtera, Inc. (2)   Semiconductors   Term Loan (10.25% cash (Libor + 9.75%; Floor 10.25%;     1,646       1,645       1,645  
        Ceiling 12.25%), 13.00% ETP, Due 7/1/17)                        
        Term Loan (10.25% cash (Libor + 9.75%; Floor 10.25%;     951       926       926  
        Ceiling 12.25%), 13.00% ETP, Due 7/1/17)                        
        Term Loan (9.00% cash (Libor + 8.50%; Floor 9.00%),     833       828       828  
        4.50% ETP, Due 12/1/18)                        
        Term Loan (9.00% cash (Libor + 8.50%; Floor 9.00%),     833       827       827  
        4.50% ETP, Due 12/1/18)                        
Xtera Communications, Inc. (2)(5)   Semiconductors   Term Loan (12.50% cash, 15.65% ETP, Due 12/31/16)     4,157       4,114       4,114  
        Term Loan (12.50% cash, 21.75% ETP, Due 12/31/16)     1,155       1,142       1,142  
Bridge2 Solutions, Inc.   Software   Term Loan (11.50% cash (Libor + 11.00%; Floor     4,000       3,966       3,966  
        11.50%; Ceiling 14.50%), 2.00% ETP, Due 7/1/19)                        
        Term Loan (11.50% cash (Libor + 11.00%; Floor     1,000       995       995  
        11.50%; Ceiling 14.50%), 2.00% ETP, Due 1/1/20)                        
Crowdstar, Inc. (2)   Software   Term Loan (10.75% cash (Libor + 10.25%; Floor     1,939       1,915       1,915  
        10.75%), 3.00% ETP, Due 9/1/18)                        
Decisyon, Inc. (2)   Software   Term Loan (12.69% cash (Libor + 12.308%; Floor     1,603       1,599       1,514  
        12.50%), 6.50% ETP, Due 10/1/17)                        
        Term Loan (12.69% cash (Libor + 12.308%; Floor     853       847       802  
        12.50%), 6.50% ETP, Due 1/1/18)                        
Digital Signal Corporation   Software   Term Loan (10.54% cash (Libor + 10.25%; Floor     1,500       1,421       1,421  
        10.43%), 5.00% ETP, Due 7/1/19)                        
        Term Loan (10.54% cash (Libor + 10.25%; Floor     1,500       1,457       1,457  
        10.43%), 5.00% ETP, Due 7/1/19)                        
Education Elements, Inc. (2)   Software   Term Loan (10.50% cash (Libor + 10.00%; Floor     2,000       1,967       1,967  
        10.50%), 4.00% ETP, Due 1/1/19)                        
        Term Loan (10.50% cash (Libor + 10.00%; Floor     1,500       1,470       1,470  
        10.50%), 4.00% ETP, Due 8/1/19)                        
Netuitive, Inc. (2)   Software   Term Loan (12.75% cash, Due 7/1/16)     1,000       998       998  

 

See Notes to Consolidated Financial Statements

 

  14  

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

December 31, 2015

(Dollars in thousands)

 

            Principal     Cost of     Fair  
Portfolio Company (1)   Sector   Type of Investment (3)(4)(7)(9)(10)   Amount     Investments (6)     Value  
ScoreBig, Inc. (2)   Software   Term Loan (10.50% cash (Libor + 10.00%; Floor     3,500       3,449       3,449  
        10.50%), 4.00% ETP, Due 4/1/19)                        
        Term Loan (10.50% cash (Libor + 10.00%; Floor     3,500       3,449       3,449  
        10.50%), 4.00% ETP, Due 4/1/19)                        
SIGNiX, Inc. (2)   Software   Term Loan (11.50% cash (Libor + 11.00%; Floor     3,000       2,953       2,953  
        11.50%), Due 7/1/18)                        
SilkRoad Technology, Inc. (2)   Software   Term Loan (10.85% cash (Libor + 10.35%; Floor     7,500       7,436       7,436  
        10.85%; Ceiling 12.85%), 3.00% ETP, Due 6/1/19)                        
Skyword, Inc.   Software   Term Loan (11.45% cash (Libor + 10.95%; Floor     4,000       3,900       3,900  
        11.45%), 3.00% ETP, Due 8/1/19)                        
Social Intelligence Corp. (2)   Software   Term Loan (11.00% cash (Libor + 10.50%; Floor     1,091       1,076       1,067  
        11.00%; Ceiling 13.00%), 3.50% ETP, Due 12/1/17)                        
SpringCM, Inc. (2)   Software   Term Loan (11.50% cash (Libor + 11.00%; Floor     4,500       4,450       4,450  
        11.50%; Ceiling 13.00%), 2.00% ETP, Due 1/1/18)                        
Sys-Tech Solutions, Inc. (2)   Software   Term Loan (11.65% cash (Libor + 11.15%; Floor     5,200       5,168       5,168  
        11.65%; Ceiling 12.65%), 4.50% ETP, Due 3/1/18)                        
        Term Loan (11.65% cash (Libor + 11.15%; Floor     4,667       4,633       4,633  
        11.65%; Ceiling 12.65%), 9.00% ETP, Due 5/1/18)                        
VBrick Systems, Inc. (2)   Software   Term Loan (11.50% cash (Libor + 11.00%; Floor     1,900       1,887       1,887  
        11.50%; Ceiling 13.50%), 5.00% ETP, Due 7/1/17)                        
Vidsys, Inc. (2)   Software   Term Loan (13.00% cash, 7.58% ETP, Due 12/1/17)     2,810       2,810       2,810  
xTech Holdings, Inc. (2)   Software   Term Loan (11.00% cash (Libor + 10.50%; Floor     2,000       1,957       1,957  
        11.00%), 3.00% ETP, Due 4/1/19)                        
Total Debt Investments — Technology                     128,933       128,654  
Debt Investments — Cleantech — 7.5% (8)                    
Renmatix, Inc. (2)   Alternative Energy   Term Loan (10.25% cash, 3.00% ETP, Due 2/1/16)     173       173       173  
        Term Loan (10.25% cash, 3.00% ETP, Due 2/1/16)     173       173       173  
        Term Loan (10.25% cash, Due 10/1/16)     1,667       1,663       1,663  
Semprius, Inc. (2)   Alternative Energy   Term Loan (10.25% cash, 5.00% ETP, Due 6/1/16)     860       840       840  
Rypos, Inc. (2)   Energy Efficiency   Term Loan (11.80% cash, 4.25% ETP, Due 6/1/17)     2,430       2,314       2,314  
        Term Loan (11.80% cash, 4.25% ETP, Due 1/1/18)     947       913       913  
Lehigh Technologies, Inc. (2)   Waste Recycling   Term Loan (9.96% cash (Libor + 9.72%), 6.75% ETP,     3,000       2,961       2,961  
        Due 8/1/19)                        
        Term Loan (9.96% cash (Libor + 9.72%), 6.75% ETP,     3,000       2,975       2,975  
        Due 8/1/19)