Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


Form 10-Q


(Mark One)

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

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2020

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 No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 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

Non-accelerated filer

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

The number of shares of the registrant’s common stock traded under the symbol “HRZN” on the Nasdaq Global Select Market, $0.001 par value per share, outstanding as of April 28, 2020 was 16,855,754.

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

    

Ticker symbol(s)

    

Name of each exchange on which registered

Common Stock, par value $0.001 per share

HRZN

The Nasdaq Stock Market LLC

6.25% Notes due 2022

HTFA

The New York Stock Exchange


Table of Contents

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, 2020 (unaudited) and December 31, 2019

3

Consolidated Statements of Operations for the three months ended March 31, 2020 and 2019 (unaudited)

4

Consolidated Statements of Changes in Net Assets for the three months ended March 31, 2020 and 2019 (unaudited)

5

Consolidated Statements of Cash Flows for the three months ended March 31, 2020 and 2019 (unaudited)

6

Consolidated Schedules of Investments as of March 31, 2020 (unaudited) and December 31, 2019

7

Notes to the Consolidated Financial Statements (unaudited)

18

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

45

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

63

Item 4.

Controls and Procedures

64

PART II

65

Item 1.

Legal Proceedings

65

Item 1A.

Risk Factors

65

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

66

Item 3.

Defaults Upon Senior Securities

66

Item 4.

Mine Safety Disclosures

66

Item 5.

Other Information

66

Item 6.

Exhibits

66

Signatures

68

EX-31.1

EX-31.2

EX-32.1

EX-32.2

2


Table of Contents

PART I: FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Statements of Assets and Liabilities

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

March 31, 

December 31, 

    

2020

    

2019

Assets

 

(Unaudited)

 

  

Non-affiliate investments at fair value (cost of $318,327 and $295,256, respectively)

$

309,587

$

294,304

Non-controlled affiliate investments at fair value (cost of $6,814 and $6,891, respectively) (Note 5)

 

7,975

 

8,597

Controlled affiliate investments at fair value (cost of $17,127 and $16,684, respectively) (Note 5)

 

16,944

 

16,650

Total investments at fair value (cost of $342,268 and $318,831, respectively) (Note 4)

 

334,506

 

319,551

Cash

 

37,989

 

6,465

Investments in money market funds

 

845

 

9,787

Restricted investments in money market funds

 

1,177

 

1,133

Interest receivable

 

6,440

 

5,530

Other assets

 

1,323

 

1,535

Total assets

$

382,280

$

344,001

Liabilities

 

  

 

  

Borrowings (Note 7)

$

180,180

$

152,050

Distributions payable

 

5,898

 

4,669

Base management fee payable (Note 3)

 

540

 

519

Incentive fee payable (Note 3)

 

1,071

 

1,613

Other accrued expenses

 

1,134

 

1,095

Total liabilities

 

188,823

 

159,946

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, 2020 and December 31, 2019

 

 

Common stock, par value $0.001 per share, 100,000,000 shares authorized, 17,020,075 and 15,730,755 shares issued and 16,852,610 and 15,563,290 shares outstanding as of March 31, 2020 and December 31, 2019, respectively

 

17

 

16

Paid-in capital in excess of par

 

242,886

 

226,660

Distributable earnings

 

(49,446)

 

(42,621)

Total net assets

 

193,457

 

184,055

Total liabilities and net assets

$

382,280

$

344,001

Net asset value per common share

$

11.48

$

11.83

See Notes to Consolidated Financial Statements

3


Table of Contents

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, 

    

2020

    

2019

    

Investment income

 

  

 

  

 

Interest income on investments

 

  

 

  

 

Interest income on non-affiliate investments

$

9,394

$

7,434

Interest income on affiliate investments

 

182

 

223

Total interest income on investments

 

9,576

 

7,657

Fee income

 

  

 

  

Fee income on non-affiliate investments

 

105

 

313

Fee income on affiliate investments

 

3

 

5

Total fee income

 

108

 

318

Dividend income

 

  

 

  

Dividend income on controlled affiliate investments

 

430

 

331

Total dividend income

 

430

 

331

Total investment income

 

10,114

 

8,306

Expenses

 

  

 

  

Interest expense

 

2,162

 

2,048

Base management fee (Note 3)

 

1,582

 

1,297

Performance based incentive fee (Note 3)

 

1,071

 

1,948

Administrative fee (Note 3)

 

253

 

211

Professional fees

 

502

 

491

General and administrative

 

262

 

218

Total expenses

 

5,832

 

6,213

Performance based incentive fee waived (Note 3)

 

 

(1,140)

Net expenses

 

5,832

 

5,073

Net investment income

 

4,282

 

3,233

Net realized and unrealized loss on investments

 

  

 

  

Net realized gain on non-affiliate investments

 

3,479

 

1,151

Net realized gain on controlled affiliate investments

13

Net realized gain on investments

 

3,492

 

1,151

Net unrealized depreciation on non-affiliate investments

 

(7,790)

 

(1,515)

Net unrealized (depreciation) appreciation on non-controlled affiliate investments

 

(543)

 

152

Net unrealized (depreciation) appreciation on controlled affiliate investments

 

(149)

 

4

Net unrealized depreciation on investments

 

(8,482)

 

(1,359)

Net realized and unrealized loss on investments

 

(4,990)

 

(208)

Net (decrease) increase in net assets resulting from operations

$

(708)

$

3,025

Net investment income per common share

$

0.26

$

0.28

Net (decrease) increase in net assets per common share

$

(0.04)

$

0.26

Distributions declared per share

$

0.35

$

0.30

Weighted average shares outstanding

 

16,716,488

 

11,670,196

See Notes to Consolidated Financial Statements

4


Table of Contents

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Statements of Changes in Net Assets (Unaudited)

(Dollars in thousands, except share data)

Paid-In Capital

Common Stock

in Excess of

Distributable

Total Net

    

Shares

    

Amount

    

Par

    

Earnings

    

Assets

Balance at December 31, 2018

 

11,535,129

12

179,616

(45,371)

134,257

Issuance of common stock, net of offering costs

 

2,000,000

 

2

 

23,160

 

 

23,162

Net increase in net assets resulting from operations, net of excise tax:

 

  

 

  

 

  

 

  

 

  

Net investment income, net of excise tax

 

 

 

 

3,233

 

3,233

Net realized gain on investments

 

 

 

 

1,151

 

1,151

Net unrealized depreciation on investments

 

 

 

 

(1,359)

 

(1,359)

Issuance of common stock under dividend reinvestment plan

 

3,352

 

 

42

 

 

42

Distributions declared

 

 

 

 

(4,062)

 

(4,062)

Balance at March 31, 2019

 

13,538,481

14

202,818

(46,408)

156,424

Balance at December 31, 2019

15,563,290

16

226,660

(42,621)

184,055

Issuance of common stock, net of offering costs

 

1,285,410

 

1

 

16,176

 

 

16,177

Net decrease in net assets resulting from operations, net of excise tax:

 

  

 

  

 

  

 

  

 

  

Net investment income, net of excise tax

 

4,282

4,282

Net realized gain on investments

 

 

 

 

3,492

 

3,492

Net unrealized depreciation on investments

 

 

 

 

(8,482)

 

(8,482)

Issuance of common stock under dividend reinvestment plan

 

3,910

 

 

50

 

 

50

Distributions declared

 

 

 

 

(6,117)

 

(6,117)

Balance at March 31, 2020

 

16,852,610

$

17

$

242,886

$

(49,446)

$

193,457

See Notes to Consolidated Financial Statements

5


Table of Contents

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Statements of Cash Flows (Unaudited)

(Dollars in thousands)

For the three months ended March 31, 

    

2020

    

2019

Cash flows from operating activities:

 

  

 

  

Net (decrease) increase in net assets resulting from operations

$

(708)

$

3,025

Adjustments to reconcile net (decrease) increase in net assets resulting from operations to net cash used in operating activities:

 

 

Amortization of debt issuance costs

 

204

 

172

Net realized gain on investments

 

(3,492)

 

(1,151)

Net unrealized depreciation on investments

 

8,482

 

1,359

Purchase of investments

 

(50,646)

 

(38,082)

Principal payments received on investments

 

25,934

 

18,613

Proceeds from sale of investments

5,680

1,768

Distributions from controlled affiliate investment

 

 

233

Dividends from controlled affiliate investment

 

(430)

 

(331)

Changes in assets and liabilities:

 

  

 

  

Increase in interest receivable

 

(268)

 

(327)

Increase in end-of-term payments

 

(642)

 

(555)

Decrease in unearned income

 

(483)

 

(120)

Decrease in other assets

 

138

 

21

Increase in other accrued expenses

 

39

 

362

Increase in base management fee payable

 

21

 

25

Decrease in incentive fee payable

 

(542)

 

(183)

Net cash used in operating activities

 

(16,713)

 

(15,171)

Cash flows from financing activities:

 

  

 

  

Proceeds from issuance of common stock, net of offering costs

 

16,177

 

23,162

Advances on credit facility

 

45,000

 

15,000

Repayment of credit facility

 

(17,000)

 

(10,000)

Distributions paid

 

(4,838)

 

(3,419)

Net cash provided by financing activities

 

39,339

 

24,743

Net increase in cash, cash equivalents and restricted cash

 

22,626

 

9,572

Cash, cash equivalents and restricted cash:

 

  

 

  

Beginning of period

 

17,385

 

12,591

End of period

$

40,011

$

22,163

Supplemental disclosure of cash flow information:

 

  

 

  

Cash paid for interest

$

1,911

$

1,785

Supplemental non-cash investing and financing activities:

 

  

 

  

Warrant investments received and recorded as unearned income

$

367

$

714

Distributions payable

$

5,898

$

4,062

End-of-term payments receivable

$

4,542

$

3,570

Non-cash income

$

1,200

$

767

Three months ended March 31, 

    

2020

    

2019

Cash

$

37,989

$

22,163

Investments in money market funds

 

845

 

Restricted investments in money market funds

 

1,177

 

Total cash, cash equivalents and restricted cash

$

40,011

$

22,163

See Notes to Consolidated Financial Statements

6


Table of Contents

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Schedule of Investments (Unaudited)

March 31, 2020

(Dollars in thousands)

    

    

    

Principal

    

Cost of

    

Fair

Portfolio Company (1)(3)

Sector

Type of Investment (4)(7)(9)(10)

    

Amount

    

Investments (6)

    

Value

Non-Affiliate Investments — 160.0% (8)

 

  

 

  

 

  

 

  

 

  

Non-Affiliate Debt Investments — 156.2% (8)

 

  

 

  

 

  

 

  

 

  

Non-Affiliate Debt Investments — Life Science — 70.4% (8)

 

  

 

  

 

  

 

  

Castle Creek Pharmaceuticals Holdings, Inc.(2)(12)

Biotechnology

Term Loan (9.30% cash (Libor + 7.50%; Floor 9.30%), 5.00% ETP, Due 3/1/24)

$

5,000

$

4,869

$

4,869

Term Loan (9.30% cash (Libor + 7.50%; Floor 9.30%), 5.00% ETP, Due 3/1/24)

5,000

4,923

4,923

Term Loan (9.30% cash (Libor + 7.50%; Floor 9.30%), 5.00% ETP, Due 3/1/24)

5,000

4,923

4,923

Term Loan (9.30% cash (Libor + 7.50%; Floor 9.30%), 5.00% ETP, Due 3/1/24)

5,000

4,923

4,923

Celsion Corporation (2)(5)(12)

 

Biotechnology

 

Term Loan (9.63% cash (Libor + 7.63%; Floor 9.63%), 4.00% ETP, Due 7/1/22)

2,500

2,468

2,468

 

 

Term Loan (9.63% cash (Libor + 7.63%; Floor 9.63%), 4.00% ETP, Due 7/1/22)

 

2,500

 

2,468

2,468

Encore Dermatology, Inc. (2)(12)

Biotechnology

Term Loan (10.00% cash (Libor + 7.50%; Floor 10.00%), 3.00% ETP, Due 4/1/23)

5,000

4,934

4,638

Term Loan (10.00% cash (Libor + 7.50%; Floor 10.00%), 3.00% ETP, Due 4/1/23)

5,000

4,934

4,638

Espero BioPharma, Inc. (2)(12)

 

Biotechnology

 

Term Loan (12.00% cash (Libor + 9.25%; Floor 12.00%), 5.10% ETP, Due 3/31/20) (11)

 

5,053

 

5,053

3,548

Term Loan (12.00% cash (Libor + 9.25%; Floor 12.00%), 5.10% ETP, Due 3/31/20) (11)

4,802

4,802

3,372

Term Loan (12.00% cash (Libor + 9.25%; Floor 12.00%), Due 3/31/20) (11)

200

200

140

Term Loan (12.00% cash (Libor + 9.25%; Floor 12.00%), Due 3/31/20) (11)

100

100

70

Term Loan (12.00% cash (Libor + 9.25%; Floor 12.00%), Due 3/31/20) (11)

100

100

70

LogicBio, Inc.(2)(5)(12)

Biotechnology

Term Loan (8.75% cash (Libor + 6.25%; Floor 8.75%), 4.50% ETP, Due 6/1/24)

5,000

4,972

4,972

Mustang Bio, Inc. (2)(5)(12)

Biotechnology

Term Loan (9.00% cash (Libor + 6.50%; Floor 9.00%), 5.00% ETP, Due 10/1/22)

5,000

4,834

4,834

Term Loan (9.00% cash (Libor + 6.50%; Floor 9.00%), 5.00% ETP, Due 10/1/22)

5,000

4,931

4,931

vTv Therapeutics Inc. (2)(5)(12)

 

Biotechnology

 

Term Loan (11.58% cash (Libor + 10.00%; Floor 10.50%), 6.00% ETP, Due 5/1/20)

 

521

 

519

 

519

 

 

Term Loan (11.58% cash (Libor + 10.00%; Floor 10.50%), 6.00% ETP, Due 10/1/20)

 

1,094

 

1,085

1,085

Titan Pharmaceuticals, Inc. (2)(5)(12)

 

Drug Delivery

 

Term Loan (9.98% cash (Libor + 8.40%; Floor 9.50%), 5.00% ETP, Due 6/1/22)

 

1,600

 

1,540

 

1,540

Conventus Orthopaedics, Inc. (2)(12)

 

Medical Device

 

Term Loan (9.58% cash (Libor + 8.00%; Floor 9.25%), 8.33% ETP, Due 1/1/24)

 

5,311

 

5,237

 

5,237

 

 

Term Loan (9.58% cash (Libor + 8.00%; Floor 9.25%), 8.33% ETP, Due 1/1/24)

 

5,311

 

5,237

5,237

CSA Medical, Inc. (2)(12)

 

Medical Device

 

Term Loan (10.00% cash (Libor + 8.20%; Floor 10.00%), 5.00% ETP, Due 1/1/24)

 

3,750

 

3,693

 

3,693

Term Loan (10.00% cash (Libor + 8.20%; Floor 10.00%), 5.00% ETP, Due 1/1/24)

250

246

246

Term Loan (10.00% cash (Libor + 8.20%; Floor 10.00%), 5.00% ETP, Due 3/1/24)

4,000

3,945

3,945

CVRx, Inc. (2)(12)

Medical Device

Term Loan (10.00% cash (Libor + 7.80%; Floor 10.00%), 3.50% ETP, Due 10/1/24)

5,000

4,938

4,938

Term Loan (10.00% cash (Libor + 7.80%; Floor 10.00%), 3.50% ETP, Due 10/1/24)

5,000

4,938

4,938

Term Loan (10.00% cash (Libor + 7.80%; Floor 10.00%), 3.50% ETP, Due 10/1/24)

5,000

4,938

4,938

Term Loan (10.00% cash (Libor + 7.80%; Floor 10.00%), 3.50% ETP, Due 10/1/24)

5,000

4,938

4,938

Lantos Technologies, Inc. (2)(12)

 

Medical Device

 

Term Loan (10.01% cash (Libor + 8.43%; Floor 10.00%), 10.00% ETP, Due 9/1/21)

 

3,033

 

2,787

 

2,737

Bardy Diagnostics, Inc. (2)(12)

Medical Device

Term Loan (8.90% cash (Libor + 7.00%; Floor 8.90%), 5.00% ETP, Due 9/1/24)

5,000

4,931

4,931

Term Loan (8.90% cash (Libor + 7.00%; Floor 8.90%), 5.00% ETP, Due 9/1/24)

5,000

4,931

4,931

Term Loan (8.90% cash (Libor + 7.00%; Floor 8.90%), 5.00% ETP, Due 9/1/24)

1,000

986

986

Term Loan (8.90% cash (Libor + 7.00%; Floor 8.90%), 5.00% ETP, Due 9/1/24)

1,000

986

986

Term Loan (8.90% cash (Libor + 7.00%; Floor 8.90%), 5.00% ETP, Due 9/1/24)

1,000

986

986

Term Loan (8.90% cash (Libor + 7.00%; Floor 8.90%), 5.00% ETP, Due 9/1/24)

1,000

986

986

See Notes to Consolidated Financial Statements

7


Table of Contents

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Schedule of Investments (Unaudited)

March 31, 2020

(Dollars in thousands)

    

    

    

Principal

    

Cost of

    

Fair

Portfolio Company (1)(3)

Sector

Type of Investment (4)(7)(9)(10)

    

Amount

Investments (6)

Value

Term Loan (8.90% cash (Libor + 7.00%; Floor 8.90%), 5.00% ETP, Due 9/1/24)

1,000

986

986

MacuLogix, Inc. (2)(12)

 

Medical Device

 

Term Loan (10.08% cash (Libor + 7.68%; Floor 10.08%), 4.00% ETP, Due 10/1/23)

 

7,500

 

7,363

 

7,363

 

 

Term Loan (10.08% cash (Libor + 7.68%; Floor 10.08%), 4.00% ETP, Due 10/1/23)

 

4,050

 

3,996

3,996

Meditrina, Inc. (2)(12)

Medical Device

Term Loan (9.70% cash (Libor + 7.10%; Floor 9.70%), 4.00% ETP, Due 5/1/20)

3,000

2,992

2,992

VERO Biotech LLC (2)(12)

 

Medical Device

 

Term Loan (9.58% cash (Libor + 8.00%; Floor 9.25%), 5.00% ETP, Due 1/1/22)

 

3,667

 

3,638

 

3,638

 

 

Term Loan (9.58% cash (Libor + 8.00%; Floor 9.25%), 5.00% ETP, Due 1/1/22)

 

3,667

 

3,638

3,638

Total Non-Affiliate Debt Investments — Life Science

 

 

  

 

139,894

 

136,197

Non-Affiliate Debt Investments — Technology — 73.9% (8)

Audacy Corporation (2)(12)(15)

 

Communications

 

Term Loan (9.50% cash (Libor + 7.90%; Floor 9.50%), 5.00% ETP, Due 7/1/22)

 

3,663

 

3,603

 

1,549

Term Loan (9.50% cash (Libor + 7.90%; Floor 9.50%), Due 2/1/20)

584

584

251

Betabrand Corporation (2)(12)

Consumer-related Technologies

Term Loan (10.05% cash (Libor + 7.50%; Floor 10.05%), 5.75% ETP, Due 9/1/23)

4,250

4,155

4,155

Term Loan (10.05% cash (Libor + 7.50%; Floor 10.05%), 5.75% ETP, Due 9/1/23)

4,250

4,186

4,186

Term Loan (10.05% cash (Libor + 7.50%; Floor 10.05%), 5.75% ETP, Due 9/1/23)

1,125

1,089

1,089

Mohawk Group Holdings, Inc. (2)(5)(12)

    

Consumer-related Technologies

    

Term Loan (9.90% cash (Libor + 7.40%; Floor 9.90%), 4.00% ETP, Due 1/1/23)

    

5,000

    

4,921

    

4,921

Term Loan (9.90% cash (Libor + 7.40%; Floor 9.90%), 4.00% ETP, Due 1/1/23)

5,000

4,921

4,921

 

 

Term Loan (9.90% cash (Libor + 7.40%; Floor 9.90%), 4.00% ETP, Due 1/1/23)

 

5,000

4,921

4,921

Updater, Inc.(2)(12)

Consumer-related Technologies

Term Loan (11.50% cash (Prime + 5.75%; Floor 11.50%, Ceiling 14.00%),0.56% ETP, Due 12/20/24)

5,000

4,938

4,654

Term Loan (11.50% cash (Prime + 5.75%; Floor 11.50%, Ceiling 14.00%), 0.56% ETP, Due 12/20/24)

5,000

4,938

4,654

Term Loan (11.50% cash (Prime + 5.75%; Floor 11.50%, Ceiling 14.00%), 0.56% ETP, Due 12/20/24)

10,000

9,877

9,308

Canara, Inc. (2)(12)

Data Storage

Term Loan (11.00% cash (Libor + 8.60%; Floor 11.00%), 1.00% ETP, Due 2/1/23)

5,000

4,879

4,879

Term Loan (11.00% cash (Libor + 8.60%; Floor 11.00%), 1.00% ETP, Due 2/1/23)

5,000

4,879

4,879

Kaminario, Inc. (2)(12)

 

Data Storage

 

Term Loan (10.65% cash (Libor + 8.40%; Floor 10.65%), 3.00% ETP, Due 1/1/23)

 

5,000

 

4,943

 

4,943

 

 

Term Loan (10.65% cash (Libor + 8.40%; Floor 10.65%), 3.00% ETP, Due 1/1/23)

 

5,000

 

4,943

4,943

Term Loan (10.65% cash (Libor + 8.40%; Floor 10.65%), 3.00% ETP, Due 7/1/23)

5,000

4,851

4,851

IgnitionOne, Inc. (2)(12)(15)

 

Internet and Media

 

Term Loan (11.81% cash (Libor + 10.23%; Floor 10.23%), 2.00% ETP, Due 4/1/22)

 

1,873

 

1,789

 

1,789

 

 

Term Loan (11.81% cash (Libor + 10.23%; Floor 10.23%), 2.00% ETP, Due 4/1/22)

 

1,873

 

1,789

 

1,789

 

 

Term Loan (11.81% cash (Libor + 10.23%; Floor 10.23%), 2.00% ETP, Due 4/1/22)

 

1,984

 

1,706

 

1,706

 

 

Term Loan (11.81% cash (Libor + 10.23%; Floor 10.23%), 2.00% ETP, Due 4/1/22)

 

1,873

 

1,789

 

1,789

Skillshare, Inc.(2)(12)

Internet and Media

Term Loan (9.50% cash (Libor + 7.50%; Floor 9.50%), 5.00% ETP, Due 1/1/25)

3,000

2,749

2,749

Term Loan (9.50% cash (Libor + 7.50%; Floor 9.50%), 5.00% ETP, Due 1/1/25)

3,000

2,948

2,948

Term Loan (9.50% cash (Libor + 7.50%; Floor 9.50%), 5.00% ETP, Due 1/1/25)

3,000

2,948

2,948

The NanoSteel Company, Inc. (2)(12)

 

Materials

 

Term Loan (11.00% cash (Libor + 8.50%; Floor 11.00%), 9.00% ETP, Due 6/1/22)

 

4,250

 

4,198

 

4,069

 

 

Term Loan (11.00% cash (Libor + 8.50%; Floor 11.00%), 9.00% ETP, Due 6/1/22)

 

4,250

 

4,198

4,069

Kinestral Technologies, Inc.(2)(12)

Power Management

Term Loan (9.95% cash (Libor + 7.75%; Floor 9.95%), 7.00% ETP, Due 12/1/22)

6,000

5,674

5,546

Term Loan (9.95% cash (Libor + 7.75%; Floor 9.95%), 7.00% ETP, Due 12/1/22)

6,000

5,785

5,654

Keypath Education, LLC (2)(12)

Software

Term Loan (10.50% cash (Libor + 8.50%; Floor 10.50%), 2.50% ETP, Due 10/1/24)

3,750

3,570

3,570

Term Loan (10.50% cash (Libor + 8.50%; Floor 10.50%), 2.50% ETP, Due 10/1/24)

3,750

3,673

3,673

See Notes to Consolidated Financial Statements

8


Table of Contents

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Schedule of Investments (Unaudited)

March 31, 2020

(Dollars in thousands)

    

    

    

Principal

    

Cost of

    

Fair

Portfolio Company (1)(3)

Sector

Type of Investment (4)(7)(9)(10)

    

Amount

Investments (6)

Value

Term Loan (10.50% cash (Libor + 8.50%; Floor 10.50%), 2.50% ETP, Due 10/1/24)

2,500

2,449

2,449

New Signature US, Inc. (2)(12)(13)

 

Software

 

Term Loan (10.50% cash (Libor + 8.50%; Floor 10.50%), 3.50% ETP, Due 7/1/22)

 

2,750

 

2,724

2,724

Term Loan (10.50% cash (Libor + 8.50%; Floor 10.50%), 3.50% ETP, Due 2/1/23)

1,000

988

988

OutboundEngine, Inc. (2)(12)

Software

Term Loan (11.15% cash (Libor + 8.40%; Floor 11.15%), 3.00% ETP, Due 7/1/23)

4,000

3,934

3,934

Term Loan (11.15% cash (Libor + 8.40%; Floor 11.15%), 3.00% ETP, Due 7/1/23)

3,500

3,443

3,443

Revinate, Inc. (2)(12)

Software

Term Loan (9.50% cash (Libor + 7.00%; Floor 9.50%), 4.00% ETP, Due 6/1/23)

1,000

929

929

Term Loan (9.50% cash (Libor + 7.00%; Floor 9.50%), 4.00% ETP, Due 11/1/23)

5,000

4,936

4,936

SIGNiX, Inc. (12)(15)

 

Software

 

Term Loan (12.58% cash (Libor + 11.00%; Floor 11.50%), 8.67% ETP, Due 2/1/20)

 

1,572

 

1,567

 

500

xAd, Inc. (2)(12)

 

Software

 

Term Loan (10.28% cash (Libor + 8.70%; Floor 10.00%), 4.75% ETP, Due 11/1/21)

 

3,958

 

3,915

 

3,915

 

 

Term Loan (10.28% cash (Libor + 8.70%; Floor 10.00%), 4.75% ETP, Due 11/1/21)

 

3,958

 

3,915

3,915

Term Loan (10.28% cash (Libor + 8.70%; Floor 10.00%), 4.75% ETP, Due 11/1/21)

2,375

2,349

2,349

Term Loan (10.28% cash (Libor + 8.70%; Floor 10.00%), 4.75% ETP, Due 11/1/21)

 

1,583

 

1,566

1,566

Total Non-Affiliate Debt Investments — Technology

 

 

 

 

148,159

143,051

Non-Affiliate Debt Investments — Healthcare information and services — 11.9% (8)

 

  

 

  

 

  

Kate Farms, Inc. (2)(12)

 

Other Healthcare

 

Term Loan (9.75% cash (Libor + 7.45%; Floor 9.75%), 5.00% ETP, Due 10/1/23)

 

5,000

 

4,857

 

4,857

 

 

Term Loan (9.75% cash (Libor + 7.45%; Floor 9.75%), 5.00% ETP, Due 10/1/23)

 

5,000

 

4,925

4,925

HealthEdge Software, Inc. (2)(12)

 

Software

 

Term Loan (9.83% cash (Libor + 8.25%; Floor 9.25%), 3.00% ETP, Due 7/1/22)

 

3,333

 

3,299

 

3,299

 

 

Term Loan (9.83% cash (Libor + 8.25%; Floor 9.25%), 3.00% ETP, Due 1/1/23)

 

3,036

 

3,004

3,004

 

 

Term Loan (9.83% cash (Libor + 8.25%; Floor 9.25%), 3.00% ETP, Due 4/1/23)

 

3,304

 

3,269

3,269

 

 

Term Loan (9.83% cash (Libor + 8.25%; Floor 9.25%), 3.00% ETP, Due 1/1/24)

 

3,750

 

3,710

3,710

Total Non-Affiliate Debt Investments — Healthcare information and services

 

  

 

23,064

 

23,064

Total Non- Affiliate Debt Investments

 

 

  

 

311,117

 

302,312

Non-Affiliate Warrant Investments — 3.3% (8)

 

  

 

  

 

  

 

  

 

  

Non-Affiliate Warrants — Life Science — 0.5% (8)

 

  

 

  

 

  

 

  

 

  

Alpine Immune Sciences, Inc. (5)(12)

 

Biotechnology

 

4,632 Common Stock Warrants

 

 

122

 

Castle Creek Pharmaceuticals, Inc. (2)(12)

Biotechnology

2,428 Preferred Stock Warrants

144

144

Celsion Corporation (2)(5)(12)

 

Biotechnology

 

95,057 Common Stock Warrants

 

 

65

 

Corvium, Inc. (2)(12)

Biotechnology

661,956 Preferred Stock Warrants

53

19

Encore Dermatology, Inc. (2)(12)

Biotechnology

506,626 Preferred Stock Warrants

113

Espero BioPharma, Inc. (2)(5)(12)

 

Biotechnology

 

1,507,917 Common Stock Warrants

 

 

184

 

LogicBio, Inc. (2)(5)(12)

Biotechnology

7,843 Common Stock Warrants

8

Mustang Bio, Inc. (2)(5)(12)

Biotechnology

72,046 Common Stock Warrants

140

38

Rocket Pharmaceuticals Corporation (5)(12)

 

Biotechnology

 

7,051 Common Stock Warrants

 

 

17

 

1

Palatin Technologies, Inc. (2)(5)(12)

 

Biotechnology

 

274,725 Common Stock Warrants

 

 

20

 

Strongbridge U.S. Inc. (2)(5)(12)

 

Biotechnology

 

160,714 Common Stock Warrants

 

 

72

 

10

Sunesis Pharmaceuticals, Inc. (5)(12)

 

Biotechnology

 

2,050 Common Stock Warrants

 

 

5

 

vTv Therapeutics Inc. (2)(5)(12)

 

Biotechnology

 

95,293 Common Stock Warrants

 

 

42

 

Titan Pharmaceuticals, Inc. (2)(5)(12)

 

Drug Delivery

 

373,333 Common Stock Warrants

 

 

95

 

AccuVein Inc. (2)(12)

 

Medical Device

 

1,174,881 Preferred Stock Warrants

 

 

24

 

26

Aerin Medical, Inc. (2)(12)

 

Medical Device

 

1,818,183 Preferred Stock Warrants

 

 

66

 

62

Bardy Diagnostics, Inc. (2)(12)

Medical Device

346,154 Preferred Stock Warrants

56

56

Conventus Orthopaedics, Inc. (2)(12)

 

Medical Device

 

1,145,000 Preferred Stock Warrants

 

 

149

 

66

CSA Medical, Inc. (12)

 

Medical Device

 

1,366,851 Preferred Stock Warrants

 

 

152

 

115

CVRx, Inc.(2)(12)

Medical Device

750,000 Preferred Stock Warrants

76

74

Lantos Technologies, Inc. (2)(12)

 

Medical Device

 

560,832 Preferred Stock Warrants

 

 

253

 

42

MacuLogix, Inc. (2)(12)

 

Medical Device

 

454,460 Preferred Stock Warrants

 

 

238

 

92

Meditrina, Inc. (2)(12)

Medical Device

221,510 Preferred Stock Warrants

83

78

NinePoint Medical, Inc. (2)(12)

 

Medical Device

 

29,102 Preferred Stock Warrants

 

 

33

 

VERO Biotech LLC (2)(12)

    

Medical Device

    

408 Common Stock Warrants

    

    

52

    

52

Total Non-Affiliate Warrants — Life Science

2,262

875

Non-Affiliate Warrants — Technology — 2.3% (8)

Audacy Corporation (2)(12)

 

Communications

 

1,545,575 Preferred Stock Warrants

 

 

194

 

Intelepeer Holdings, Inc. (2)(12)

 

Communications

 

2,134,617 Preferred Stock Warrants

 

 

144

 

70

PebblePost, Inc. (2)(12)

 

Communications

 

598,850 Preferred Stock Warrants

 

 

92

 

144

See Notes to Consolidated Financial Statements

9


Table of Contents

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Schedule of Investments (Unaudited)

March 31, 2020

(Dollars in thousands)

    

    

    

    

Cost of

    

Fair

Portfolio Company (1)(3)

Sector

Type of Investment (4)(7)(9)(10)

    

Investments (6)

Value

Betabrand Corporation (2)(12)

Consumer-related Technologies

248,210 Preferred Stock Warrants

106

98

Caastle, Inc. (2)(12)

Consumer-related Technologies

261,198 Preferred Stock Warrants

68

821

Le Tote, Inc. (2)(12)

 

Consumer-related Technologies

202,974 Preferred Stock Warrants

 

 

63

 

347

Mohawk Group Holdings, Inc. (2)(12)

 

Consumer-related Technologies

76,923 Common Stock Warrants

 

 

195

 

Rhapsody International Inc. (2)(12)