SEC Filing | Horizon Technology Finance Corporation

View:

Download DOC

Download PDF

Download XLS

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 JUNE 30, 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 July 28, 2020 was 17,293,480.

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 June 30, 2020 (unaudited) and December 31, 2019	3
	Consolidated Statements of Operations for the three and six months ended June 30, 2020 and 2019 (unaudited)	4
	Consolidated Statements of Changes in Net Assets for the three and six months ended June 30, 2020 and 2019 (unaudited)	5
	Consolidated Statements of Cash Flows for the six months ended June 30, 2020 and 2019 (unaudited)	6
	Consolidated Schedules of Investments as of June 30, 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	66
Item 4.	Controls and Procedures	67

	PART II	67
Item 1.	Legal Proceedings	67
Item 1A.	Risk Factors	67
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	68
Item 3.	Defaults Upon Senior Securities	69
Item 4.	Mine Safety Disclosures	69
Item 5.	Other Information	69
Item 6.	Exhibits	69
	Signatures	70
EX-31.1
EX-31.2
EX-32.1
EX-32.2

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)


	June 30,		December 31,
	2020		2019
Assets	(Unaudited)
Non-affiliate investments at fair value (cost of $354,879 and $295,256, respectively)	$	348,834	$	294,304
Non-controlled affiliate investments at fair value (cost of $6,819 and $6,891, respectively) (Note 5)		7,046		8,597
Controlled affiliate investments at fair value (cost of $16,684) (Note 5)		—		16,650
Total investments at fair value (cost of $361,698 and $318,831, respectively) (Note 4)		355,880		319,551
Cash		22,837		6,465
Investments in money market funds		14,499		9,787
Restricted investments in money market funds		1,189		1,133
Interest receivable		6,678		5,530
Other assets		2,186		1,535
Total assets	$	403,269	$	344,001

Liabilities
Borrowings (Note 7)	$	193,559	$	152,050
Distributions payable		5,188		4,669
Base management fee payable (Note 3)		567		519
Incentive fee payable (Note 3)		1,676		1,613
Other accrued expenses		1,047		1,095
Total liabilities		202,037		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 June 30, 2020 and December 31, 2019		—		—
Common stock, par value $0.001 per share, 100,000,000 shares authorized, 17,459,235 and 15,730,755 shares issued and 17,291,770 and 15,563,290 shares outstanding as of June 30, 2020 and December 31, 2019, respectively		17		16
Paid-in capital in excess of par		247,924		226,660
Distributable earnings		(46,709)		(42,621)
Total net assets		201,232		184,055
Total liabilities and net assets	$	403,269	$	344,001
Net asset value per common share	$	11.64	$	11.83

See Notes to Consolidated Financial Statements

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				For the Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Investment income
Interest income on investments
Interest income on non-affiliate investments	$	11,918	$	9,018	$	21,312	$	16,452
Interest income on affiliate investments		176		216		357		438
Total interest income on investments		12,094		9,234		21,669		16,890
Fee income
Amendment fee income on non-affiliate investments		1,028		126		1,064		130
Prepayment fee income on non-affiliate investments		711		439		756		734
Fee income on non-affiliate investments		—		235		24		250
Fee income on affiliate investments		3		5		7		10
Total fee income		1,742		805		1,851		1,124
Dividend (expense) income
Dividend (expense) income on controlled affiliate investments		(312)		431		118		761
Total dividend (expense) income		(312)		431		118		761
Total investment income		13,524		10,470		23,638		18,775
Expenses
Interest expense		2,561		2,115		4,723		4,163
Base management fee (Note 3)		1,668		1,365		3,249		2,662
Performance based incentive fee (Note 3)		1,676		1,961		2,747		3,909
Administrative fee (Note 3)		254		208		507		419
Professional fees		346		274		848		765
General and administrative		313		243		575		460
Total expenses		6,818		6,166		12,649		12,378
Performance based incentive fee waived (Note 3)		—		(708)		—		(1,848)
Net expenses		6,818		5,458		12,649		10,530
Net investment income		6,706		5,012		10,989		8,245
Net realized and unrealized gain (loss) on investments
Net realized (loss) gain on non-affiliate investments		(701)		(4,598)		2,778		(3,447)
Net realized loss on controlled affiliate investments		(24)		—		(12)		—
Net realized (loss) gain on investments		(725)		(4,598)		2,766		(3,447)
Net unrealized appreciation (depreciation) on non-affiliate investments		2,985		2,264		(4,806)		749
Net unrealized (depreciation) appreciation on non-controlled affiliate investments		(932)		1,867		(1,475)		2,019
Net unrealized depreciation on controlled affiliate investments		(109)		(7)		(258)		(3)
Net unrealized appreciation (depreciation) on investments		1,944		4,124		(6,539)		2,765
Net realized and unrealized gain (loss) on investments		1,219		(474)		(3,773)		(682)
Net increase in net assets resulting from operations	$	7,925	$	4,538	$	7,216	$	7,563
Net investment income per common share	$	0.40	$	0.37	$	0.65	$	0.65
Net increase in net assets per common share	$	0.47	$	0.34	$	0.43	$	0.60
Distributions declared per share	$	0.30	$	0.30	$	0.65	$	0.60
Weighted average shares outstanding		16,943,155		13,540,657		16,829,821		12,610,593

See Notes to Consolidated Financial Statements

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 March 31, 2019	13,538,481	$	14	$	202,818	$	(46,408)	$	156,424
Issuance of common stock, net of offering costs	—		—		(15)		—		(15)
Net increase in net assets resulting from operations, net of excise tax:
Net investment income, net of excise tax	—		—		—		5,012		5,012
Net realized loss on investments	—		—		—		(4,598)		(4,598)
Net unrealized appreciation on investments	—		—		—		4,124		4,124
Issuance of common stock under dividend reinvestment plan	4,392		—		52		—		52
Distributions declared	—		—		—		(3,863)		(3,863)
Balance at June 30, 2019	13,542,873		14		202,855		(45,733)		157,136

Balance at March 31, 2020	16,852,610		17		242,886		(49,446)		193,457
Issuance of common stock, net of offering costs	432,491		—		4,971		—		4,971
Net increase in net assets resulting from operations, net of excise tax:
Net investment income, net of excise tax	—		—		—		6,706		6,706
Net realized loss on investments	—		—		—		(725)		(725)
Net unrealized appreciation on investments	—		—		—		1,944		1,944
Issuance of common stock under dividend reinvestment plan	6,669		—		67		—		67
Distributions declared	—		—		—		(5,188)		(5,188)
Balance at June 30, 2020	17,291,770	$	17	$	247,924	$	(46,709)	$	201,232


				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		23,145		—		23,147
Net increase in net assets resulting from operations, net of excise tax:
Net investment income, net of excise tax	—		—		—		8,245		8,245
Net realized loss on investments	—		—		—		(3,447)		(3,447)
Net unrealized appreciation on investments	—		—		—		2,765		2,765
Issuance of common stock under dividend reinvestment plan	7,744		—		94		—		94
Distributions declared	—		—		—		(7,925)		(7,925)
Balance at June 30, 2019	13,542,873		14		202,855		(45,733)		157,136

Balance at December 31, 2019	15,563,290		16		226,660		(42,621)		184,055
Issuance of common stock, net of offering costs	1,717,901		1		21,147		—		21,148
Net increase in net assets resulting from operations, net of excise tax:
Net investment income, net of excise tax	—		—		—		10,989		10,989
Net realized gain on investments	—		—		—		2,766		2,766
Net unrealized depreciation on investments	—		—		—		(6,539)		(6,539)
Issuance of common stock under dividend reinvestment plan	10,579		—		117		—		117
Distributions declared	—		—		—		(11,304)		(11,304)
Balance at June 30, 2020	17,291,770	$	17	$	247,924	$	(46,709)	$	201,232

See Notes to Consolidated Financial Statements

Table of Contents

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Statements of Cash Flows (Unaudited)

(Dollars in thousands)


	For the six months ended June 30,
	2020		2019
Cash flows from operating activities:
Net increase in net assets resulting from operations	$	7,216	$	7,563
Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:
Amortization of debt issuance costs		555		344
Net realized (gain) loss on investments		(2,766)		3,447
Net unrealized depreciation (appreciation) on investments		6,539		(2,765)
Purchase of investments		(105,554)		(93,137)
Principal payments received on investments		61,168		65,204
Proceeds from sale of investments		6,256		1,905
Distributions from controlled affiliate investment		—		530
Dividends from controlled affiliate investment		(118)		(761)
Warrants received in settlement of fee income		(978)		—
Changes in assets and liabilities:
Decrease (increase) in interest receivable		250		(533)
Increase in end-of-term payments		(1,398)		(558)
Decrease in unearned income		(876)		(741)
Decrease in other assets		(59)		(383)
(Decrease) increase in other accrued expenses		(48)		133
Increase in base management fee payable		48		37
Increase in incentive fee payable		63		262
Net cash used in operating activities		(29,702)		(19,453)
Cash flows from financing activities:
Proceeds from issuance of common stock, net of offering costs		21,148		23,147
Advances on credit facility		58,250		28,500
Repayment of credit facility		(17,000)		(30,000)
Debt issuance costs		(888)		—
Distributions paid		(10,668)		(7,229)
Net cash provided by financing activities		50,842		14,418
Net increase (decrease) in cash, cash equivalents and restricted cash		21,140		(5,035)
Cash, cash equivalents and restricted cash:
Beginning of period		17,385		12,591
End of period	$	38,525	$	7,556

Supplemental disclosure of cash flow information:
Cash paid for interest	$	4,078	$	3,737
Supplemental non-cash investing and financing activities:
Warrant investments received and recorded as unearned income	$	750	$	1,367
Distributions payable	$	5,188	$	4,063
Acquisition of controlled affiliate investment	$	16,498	$	—
End-of-term payments receivable	$	5,298	$	3,573
Non-cash income	$	2,527	$	1,081

	Six months ended June 30,
	2020		2019
Cash	$	22,837	$	7,556
Investments in money market funds		14,499		—
Restricted investments in money market funds		1,189		—
Total cash, cash equivalents and restricted cash	$	38,525	$	7,556

See Notes to Consolidated Financial Statements

Table of Contents

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Schedule of Investments (Unaudited)

June 30, 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 — 173.3% (8)
Non-Affiliate Debt Investments — 167.6% (8)
Non-Affiliate Debt Investments — Life Science — 88.4% (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	$	4,875	$	4,875
		Term Loan (9.30% cash (Libor + 7.50%; Floor 9.30%), 5.00% ETP, Due 3/1/24)		5,000		4,928		4,928
		Term Loan (9.30% cash (Libor + 7.50%; Floor 9.30%), 5.00% ETP, Due 3/1/24)		5,000		4,928		4,928
		Term Loan (9.30% cash (Libor + 7.50%; Floor 9.30%), 5.00% ETP, Due 3/1/24)		5,000		4,928		4,928
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		2,471		2,471
		Term Loan (9.63% cash (Libor + 7.63%; Floor 9.63%), 4.00% ETP, Due 7/1/22)		2,500		2,471		2,471
		Term Loan (9.63% cash (Libor + 7.63%; Floor 9.63%), 4.00% ETP, Due 7/1/22)		2,500		2,521		2,479
		Term Loan (9.63% cash (Libor + 7.63%; Floor 9.63%), 4.00% ETP, Due 7/1/22)		2,500		2,521		2,479
Emalex Biosciences, Inc. (2)(12)	Biotechnology	Term Loan (9.75% cash (Libor + 7.95%; Floor 9.75%), 5.00% ETP, Due 12/1/23)		2,500		2,346		2,346
		Term Loan (9.75% cash (Libor + 7.95%; Floor 9.75%), 5.00% ETP, Due 12/1/23)		2,500		2,450		2,450
Encore Dermatology, Inc. (2)(12)	Biotechnology	Term Loan (10.00% cash (Libor + 7.50%; Floor 10.00%), 4.00% ETP, Due 4/1/23)		5,000		5,031		4,701
		Term Loan (10.00% cash (Libor + 7.50%; Floor 10.00%), 4.00% ETP, Due 4/1/23)		5,000		4,940		4,688
		Term Loan (10.00% cash (Libor + 7.50%; Floor 10.00%), 4.00% ETP, Due 4/1/23)		5,000		4,940		4,688
Espero BioPharma, Inc. (2)(12)(14)	Biotechnology	Term Loan (12.00% cash (Libor + 9.25%; Floor 12.00%), 5.10% ETP, Due 8/15/20) (11)		5,053		5,053		2,465
		Term Loan (12.00% cash (Libor + 9.25%; Floor 12.00%), 5.10% ETP, Due 8/15/20) (11)		4,820		4,820		2,344
		Term Loan (12.00% cash (Libor + 9.25%; Floor 12.00%), Due 8/15/20) (11)		200		200		98
		Term Loan (12.00% cash (Libor + 9.25%; Floor 12.00%), Due 8/15/20) (11)		100		100		49
		Term Loan (12.00% cash (Libor + 9.25%; Floor 12.00%), Due 8/15/20) (11)		100		100		49
		Term Loan (12.00% cash (Libor + 9.25%; Floor 12.00%), Due 8/15/20) (11)		100		100		49
		Term Loan (12.00% cash (Libor + 9.25%; Floor 12.00%), Due 8/15/20) (11)		150		150		73
		Term Loan (12.00% cash (Libor + 9.25%; Floor 12.00%), Due 8/15/20) (11)		100		100		49
		Term Loan (12.00% cash (Libor + 9.25%; Floor 12.00%), Due 8/15/20) (11)		50		50		24
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		4,973		4,973
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		4,938		4,938
		Term Loan (9.00% cash (Libor + 6.50%; Floor 9.00%), 5.00% ETP, Due 10/1/22)		5,000		4,938		4,938
		Term Loan (9.00% cash (Libor + 6.50%; Floor 9.00%), 5.00% ETP, Due 10/1/22)		5,000		5,036		4,953
Provivi, Inc. (2)(12)	Biotechnology	Term Loan (9.50% cash (Libor + 8.50%; Floor 9.50%), 5.50% ETP, Due 12/1/24)		5,000		4,752		4,752
		Term Loan (9.50% cash (Libor + 8.50%; Floor 9.50%), 5.50% ETP, Due 12/1/24)		5,000		4,901		4,901
vTv Therapeutics Inc. (2)(5)(12)	Biotechnology	Term Loan (10.50% cash (Libor + 10.00%; Floor 10.50%), 6.00% ETP, Due 8/1/20)		521		520		520
		Term Loan (10.50% cash (Libor + 10.00%; Floor 10.50%), 8.50% ETP, Due 1/1/21)		1,094		1,088		1,088
Titan Pharmaceuticals, Inc. (2)(5)(12)	Drug Delivery	Term Loan (9.50% cash (Libor + 8.40%; Floor 9.50%), 5.00% ETP, Due 6/1/22)		1,600		1,547		1,547
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		4,935		4,935
		Term Loan (8.90% cash (Libor + 7.00%; Floor 8.90%), 5.00% ETP, Due 9/1/24)		5,000		4,935		4,935
		Term Loan (8.90% cash (Libor + 7.00%; Floor 8.90%), 5.00% ETP, Due 9/1/24)		1,000		987		987
		Term Loan (8.90% cash (Libor + 7.00%; Floor 8.90%), 5.00% ETP, Due 9/1/24)		1,000		987		987
		Term Loan (8.90% cash (Libor + 7.00%; Floor 8.90%), 5.00% ETP, Due 9/1/24)		1,000		987		987

See Notes to Consolidated Financial Statements

Table of Contents

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Schedule of Investments (Unaudited)

June 30, 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		987		987
		Term Loan (8.90% cash (Libor + 7.00%; Floor 8.90%), 5.00% ETP, Due 9/1/24)		1,000		987		987
Ceribell, Inc. (2)(12)	Medical Device	Term Loan (8.25% cash (Libor + 6.70%; Floor 8.25%), 5.50% ETP, Due 10/1/24)		5,000		4,871		4,871
		Term Loan (8.25% cash (Libor + 6.70%; Floor 8.25%), 5.50% ETP, Due 10/1/24)		5,000		4,935		4,935
Conventus Orthopaedics, Inc. (2)(12)	Medical Device	Term Loan (9.25% cash (Libor + 8.00%; Floor 9.25%), 8.33% ETP, Due 1/1/24)		5,311		5,242		5,242
		Term Loan (9.25% cash (Libor + 8.00%; Floor 9.25%), 8.33% ETP, Due 1/1/24)		5,311		5,242		5,242
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		3,697		3,697
		Term Loan (10.00% cash (Libor + 8.20%; Floor 10.00%), 5.00% ETP, Due 1/1/24)		250		247		247
		Term Loan (10.00% cash (Libor + 8.20%; Floor 10.00%), 5.00% ETP, Due 3/1/24)		4,000		3,948		3,948
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		4,941		4,941
		Term Loan (10.00% cash (Libor + 7.80%; Floor 10.00%), 3.50% ETP, Due 10/1/24)		5,000		4,941		4,941
		Term Loan (10.00% cash (Libor + 7.80%; Floor 10.00%), 3.50% ETP, Due 10/1/24)		5,000		4,941		4,941
		Term Loan (10.00% cash (Libor + 7.80%; Floor 10.00%), 3.50% ETP, Due 10/1/24)		5,000		4,941		4,941
Lantos Technologies, Inc. (2)(12)(14)	Medical Device	Term Loan (10.00% cash (Libor + 8.43%; Floor 10.00%), 10.00% ETP, Due 9/1/21)		3,042		2,823		1,900
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		7,370		7,121
		Term Loan (10.08% cash (Libor + 7.68%; Floor 10.08%), 4.00% ETP, Due 10/1/23)		4,050		4,000		3,865
Magnolia Medical Technologies, Inc. (2)(12)	Medical Device	Term Loan (9.75% cash (Prime + 5.00%; Floor 9.75%), 4.00% ETP, Due 3/1/25)		5,000		4,859		4,859
		Term Loan (9.75% cash (Prime + 5.00%; Floor 9.75%), 4.00% ETP, Due 3/1/25)		5,000		4,930		4,930
VERO Biotech LLC (2)(12)	Medical Device	Term Loan (9.25% cash (Libor + 8.00%; Floor 9.25%), 5.00% ETP, Due 1/1/22)		3,167		3,142		3,142
		Term Loan (9.25% cash (Libor + 8.00%; Floor 9.25%), 5.00% ETP, Due 1/1/22)		3,167		3,142		3,142
Total Non-Affiliate Debt Investments — Life Science						185,733		177,952
Non-Affiliate Debt Investments — Technology — 71.9% (8)
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		4,159		4,159
		Term Loan (10.05% cash (Libor + 7.50%; Floor 10.05%), 5.75% ETP, Due 9/1/23)		4,250		4,191		4,192
		Term Loan (10.05% cash (Libor + 7.50%; Floor 10.05%), 5.75% ETP, Due 9/1/23)		1,125		1,092		1,092
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		4,928		4,928
		Term Loan (9.90% cash (Libor + 7.40%; Floor 9.90%), 4.00% ETP, Due 1/1/23)		5,000		4,928		4,928
		Term Loan (9.90% cash (Libor + 7.40%; Floor 9.90%), 4.00% ETP, Due 1/1/23)		5,000		4,928		4,928
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		4,942		4,672
		Term Loan (11.50% cash (Prime + 5.75%; Floor 11.50%, Ceiling 14.00%), 0.56% ETP, Due 12/20/24)		5,000		4,942		4,672
		Term Loan (11.50% cash (Prime + 5.75%; Floor 11.50%, Ceiling 14.00%), 0.56% ETP, Due 12/20/24)		10,000		9,883		9,345
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		4,891		4,891
		Term Loan (11.00% cash (Libor + 8.60%; Floor 11.00%), 1.00% ETP, Due 2/1/23)		5,000		4,890		4,890
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		4,948		4,948
		Term Loan (10.65% cash (Libor + 8.40%; Floor 10.65%), 3.00% ETP, Due 1/1/23)		5,000		4,948		4,948
		Term Loan (10.65% cash (Libor + 8.40%; Floor 10.65%), 3.00% ETP, Due 7/1/23)		5,000		4,863		4,863
IgnitionOne, Inc. (2)(12)(14)	Internet and Media	Term Loan (10.39% cash (Libor + 10.23%; Floor 10.23%), 2.00% ETP, Due 4/1/22)		1,873		1,789		1,789
		Term Loan (10.39% cash (Libor + 10.23%; Floor 10.23%), 2.00% ETP, Due 4/1/22)		1,873		1,789		1,789

See Notes to Consolidated Financial Statements

Table of Contents

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Schedule of Investments (Unaudited)

June 30, 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 (10.39% cash (Libor + 10.23%; Floor 10.23%), 2.00% ETP, Due 4/1/22)		1,984		1,706		1,706
		Term Loan (10.39% 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		2,752		2,752
		Term Loan (9.50% cash (Libor + 7.50%; Floor 9.50%), 5.00% ETP, Due 1/1/25)		3,000		2,951		2,951
		Term Loan (9.50% cash (Libor + 7.50%; Floor 9.50%), 5.00% ETP, Due 1/1/25)		3,000		2,951		2,951
The NanoSteel Company, Inc. (2)(12)	Materials	Term Loan (11.00% cash (Libor + 8.50%; Floor 11.00%), 14.88% ETP, Due 6/1/22)		4,250		4,203		4,188
		Term Loan (11.00% cash (Libor + 8.50%; Floor 11.00%), 14.88% ETP, Due 6/1/22)		4,250		4,203		4,188
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		3,574		3,574
		Term Loan (10.50% cash (Libor + 8.50%; Floor 10.50%), 2.50% ETP, Due 10/1/24)		3,750		3,677		3,677
		Term Loan (10.50% cash (Libor + 8.50%; Floor 10.50%), 2.50% ETP, Due 10/1/24)		2,500		2,451		2,451
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)		8,250		8,331		8,195
		Term Loan (10.50% cash (Libor + 8.50%; Floor 10.50%), 3.50% ETP, Due 7/1/22)		2,750		2,727		2,727
		Term Loan (10.50% cash (Libor + 8.50%; Floor 10.50%), 3.50% ETP, Due 2/1/23)		3,000		3,024		2,974
		Term Loan (10.50% cash (Libor + 8.50%; Floor 10.50%), 3.50% ETP, Due 2/1/23)		1,000		989		989
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		3,939		3,939
		Term Loan (11.15% cash (Libor + 8.40%; Floor 11.15%), 3.00% ETP, Due 7/1/23)		3,500		3,447		3,447
		Term Loan (11.15% cash (Libor + 8.40%; Floor 11.15%), 3.00% ETP, Due 7/1/23)		500		503		494
Revinate, Inc. (2)(12)	Software	Term Loan (9.50% cash (Libor + 7.00%; Floor 9.50%), 4.00% ETP, Due 11/1/23)		4,000		4,029		3,962
		Term Loan (9.50% cash (Libor + 7.00%; Floor 9.50%), 4.00% ETP, Due 11/1/23)		1,000		929		929
		Term Loan (9.50% cash (Libor + 7.00%; Floor 9.50%), 4.00% ETP, Due 11/1/23)		5,000		4,937		4,937
xAd, Inc. (2)(12)	Software	Term Loan (10.00% cash (Libor + 8.70%; Floor 10.00%), 5.0% ETP, Due 1/1/22)		3,646		3,601		3,601
		Term Loan (10.00% cash (Libor + 8.70%; Floor 10.00%), 5.0% ETP, Due 1/1/22)		3,646		3,601		3,601
		Term Loan (10.00% cash (Libor + 8.70%; Floor 10.00%), 5.0% ETP, Due 1/1/22)		2,188		2,161		2,161
		Term Loan (10.00% cash (Libor + 8.70%; Floor 10.00%), 5.0% ETP, Due 1/1/22)		1,458		1,441		1,441
Total Non-Affiliate Debt Investments — Technology						146,027		144,658
Non-Affiliate Debt Investments — Healthcare information and services — 7.3% (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		4,930		4,930
		Term Loan (9.75% cash (Libor + 7.45%; Floor 9.75%), 5.00% ETP, Due 10/1/23)		5,000		4,930		4,930
		Term Loan (9.75% cash (Libor + 7.45%; Floor 9.75%), 5.00% ETP, Due 10/1/23)		2,500		2,460		2,460
		Term Loan (9.75% cash (Libor + 7.45%; Floor 9.75%), 5.00% ETP, Due 10/1/23)		2,500		2,460		2,460
Total Non-Affiliate Debt Investments — Healthcare information and services						14,780		14,780
Total Non- Affiliate Debt Investments						346,540		337,390
Non-Affiliate Warrant Investments — 5.2% (8)
Non-Affiliate Warrants — Life Science — 0.8% (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		142
Celsion Corporation (2)(5)(12)	Biotechnology	142,568 Common Stock Warrants				65		174
Corvium, Inc. (2)(12)	Biotechnology	661,956 Preferred Stock Warrants				53		19
Emalex Biosciences, Inc. (2)(12)	Biotechnology	73,602 Preferred Stock Warrants				107		107
Encore Dermatology, Inc. (2)(12)	Biotechnology	1,511 Preferred Stock Warrants				113		—
Espero BioPharma, Inc. (2)(12)	Biotechnology	1,507,917 Common Stock Warrants				183		—
LogicBio, Inc. (2)(5)(12)	Biotechnology	7,843 Common Stock Warrants				8		2
Mustang Bio, Inc. (2)(5)(12)	Biotechnology	252,161 Common Stock Warrants				146		95
Rocket Pharmaceuticals Corporation (5)(12)	Biotechnology	7,051 Common Stock Warrants				17		9
Palatin Technologies, Inc. (2)(5)(12)	Biotechnology	274,725 Common Stock Warrants				20		1
Provivi, Inc. (2)(12)	Biotechnology	123,457 Preferred Stock Warrants				147		147
Strongbridge U.S. Inc. (2)(5)(12)	Biotechnology	160,714 Common Stock Warrants				72		220

See Notes to Consolidated Financial Statements

Table of Contents

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Schedule of Investments (Unaudited)

June 30, 2020

(Dollars in thousands)