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 SEPTEMBER 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 November 3, 2020 was 18,367,587.
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 |
HORIZON TECHNOLOGY FINANCE CORPORATION
FORM 10-Q
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5 | ||
6 | ||
Consolidated Schedules of Investments as of September 30, 2020 (unaudited) and December 31, 2019 | 7 | |
18 | ||
Management’s Discussion and Analysis of Financial Condition and Results of Operations | 46 | |
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68 | ||
68 | ||
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69 | ||
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72 | ||
EX-31.1 | ||
EX-31.2 | ||
EX-32.1 | ||
EX-32.2 |
2
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)
| | September 30, | | December 31, | ||
|
| 2020 |
| 2019 | ||
Assets |
| (Unaudited) |
| |
| |
Non-affiliate investments at fair value (cost of $321,034 and $295,256, respectively) | | $ | 304,359 | | $ | 294,304 |
Non-controlled affiliate investments at fair value (cost of $6,822 and $6,891, respectively) (Note 5) | |
| 7,391 | |
| 8,597 |
Controlled affiliate investments at fair value (cost of $16,684) (Note 5) | |
| — | |
| 16,650 |
Total investments at fair value (cost of $327,856 and $318,831, respectively) (Note 4) | |
| 311,750 | |
| 319,551 |
Cash | |
| 34,130 | |
| 6,465 |
Investments in money market funds | |
| 22,735 | |
| 9,787 |
Restricted investments in money market funds | |
| 801 | |
| 1,133 |
Interest receivable | |
| 6,229 | |
| 5,530 |
Other assets | |
| 1,913 | |
| 1,535 |
Total assets | | $ | 377,558 | | $ | 344,001 |
| | | | | | |
Liabilities | |
|
| |
|
|
Borrowings (Note 7) | | $ | 163,689 | | $ | 152,050 |
Distributions payable | |
| 5,510 | |
| 4,669 |
Base management fee payable (Note 3) | |
| 510 | |
| 519 |
Incentive fee payable (Note 3) | |
| 1,465 | |
| 1,613 |
Other accrued expenses | |
| 1,213 | |
| 1,095 |
Total liabilities | |
| 172,387 | |
| 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 September 30, 2020 and December 31, 2019 | |
| — | |
| — |
Common stock, par value $0.001 per share, 100,000,000 shares authorized, 18,533,378 and 15,730,755 shares issued and 18,365,913 and 15,563,290 shares outstanding as of September 30, 2020 and December 31, 2019, respectively | |
| 19 | |
| 16 |
Paid-in capital in excess of par | |
| 260,649 | |
| 226,660 |
Distributable earnings | |
| (55,497) | |
| (42,621) |
Total net assets | |
| 205,171 | |
| 184,055 |
Total liabilities and net assets | | $ | 377,558 | | $ | 344,001 |
Net asset value per common share | | $ | 11.17 | | $ | 11.83 |
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, | | ||||||||
|
| 2020 |
| 2019 |
| 2020 |
| 2019 |
| ||||
Investment income |
| |
|
| |
|
| |
|
| |
|
|
Interest income on investments |
| |
|
| |
|
| |
|
| |
|
|
Interest income on non-affiliate investments | | $ | 10,974 | | $ | 8,974 | | $ | 32,286 | | $ | 25,429 | |
Interest income on affiliate investments | |
| 175 | |
| 210 | |
| 532 | |
| 645 | |
Total interest income on investments | |
| 11,149 | |
| 9,184 | |
| 32,818 | |
| 26,074 | |
Fee income | |
|
| |
|
| |
|
| |
|
| |
Prepayment fee income on non-affiliate investments | | | 1,156 | | | 639 | | | 1,911 | | | 1,373 | |
Revenue based payments on non-affiliate investments(1) | | | — | | | 1,050 | | | — | | | 1,080 | |
Fee income on non-affiliate investments | |
| 23 | |
| 37 | |
| 1,112 | |
| 382 | |
Fee income on affiliate investments | |
| 3 | |
| 4 | |
| 10 | |
| 18 | |
Total fee income | |
| 1,182 | |
| 1,730 | |
| 3,033 | |
| 2,853 | |
Dividend income | |
|
| |
|
| |
|
| |
|
| |
Dividend income on controlled affiliate investments | |
| — | |
| 461 | |
| 118 | |
| 1,223 | |
Total dividend income | |
| — | |
| 461 | |
| 118 | |
| 1,223 | |
Total investment income | |
| 12,331 | |
| 11,375 | |
| 35,969 | |
| 30,150 | |
Expenses | |
|
| |
|
| |
|
| |
|
| |
Interest expense | |
| 2,607 | |
| 2,046 | |
| 7,331 | |
| 6,209 | |
Base management fee (Note 3) | |
| 1,616 | |
| 1,394 | |
| 4,865 | |
| 4,055 | |
Performance based incentive fee (Note 3) | |
| 1,465 | |
| 1,443 | |
| 4,212 | |
| 5,352 | |
Administrative fee (Note 3) | |
| 234 | |
| 212 | |
| 740 | |
| 631 | |
Professional fees | |
| 247 | |
| 279 | |
| 1,095 | |
| 1,045 | |
General and administrative | |
| 302 | |
| 228 | |
| 877 | |
| 688 | |
Total expenses | |
| 6,471 | |
| 5,602 | |
| 19,120 | |
| 17,980 | |
Performance based incentive fee waived (Note 3) | |
| — | |
| — | |
| — | |
| (1,848) | |
Net expenses | |
| 6,471 | |
| 5,602 | |
| 19,120 | |
| 16,132 | |
Net investment income | |
| 5,860 | |
| 5,773 | |
| 16,849 | |
| 14,018 | |
Net realized and unrealized loss on investments | |
|
| |
|
| |
|
| |
|
| |
Net realized gain (loss) on non-affiliate investments | |
| 1,178 | |
| (424) | |
| 3,957 | |
| (3,871) | |
Net realized loss on controlled affiliate investments | | | — | | | — | | | (12) | | | — | |
Net realized gain (loss) on investments | |
| 1,178 | |
| (424) | |
| 3,945 | |
| (3,871) | |
Net unrealized (depreciation) appreciation on non-affiliate investments | |
| (10,629) | |
| (129) | |
| (15,435) | |
| 620 | |
Net unrealized appreciation (depreciation) on non-controlled affiliate investments | |
| 341 | |
| — | |
| (1,134) | |
| 2,019 | |
Net unrealized depreciation on controlled affiliate investments | |
| — | |
| (14) | |
| (258) | |
| (17) | |
Net unrealized (depreciation) appreciation on investments | |
| (10,288) | |
| (143) | |
| (16,827) | |
| 2,622 | |
Net realized and unrealized loss on investments | |
| (9,110) | |
| (567) | |
| (12,882) | |
| (1,249) | |
Net (decrease) increase in net assets resulting from operations | | $ | (3,250) | | $ | 5,206 | | $ | 3,967 | | $ | 12,769 | |
Net investment income per common share | | $ | 0.34 | | $ | 0.42 | | $ | 0.98 | | $ | 1.08 | |
Net (decrease) increase in net assets per common share | | $ | (0.19) | | $ | 0.38 | | $ | 0.23 | | $ | 0.98 | |
Distributions declared per share | | $ | 0.30 | | $ | 0.30 | | $ | 0.95 | | $ | 0.90 | |
Weighted average shares outstanding | |
| 17,245,662 | |
| 13,816,082 | |
| 17,111,359 | |
| 13,016,839 | |
(1) | Revenue Based Payments consist of payments made to the Company by a portfolio company based upon a percentage of such portfolio company’s revenue. Such payments were made in addition to the portfolio company’s regularly scheduled payments of principal and interest. |
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)
| | | | | | | Paid-In Capital | | | | | | | |
| | Common Stock | | in Excess of | | Distributable | | Total Net | ||||||
|
| Shares |
| Amount |
| Par |
| Earnings |
| Assets | ||||
Balance at June 30, 2019 |
| 13,542,873 | | $ | 14 | | $ | 202,855 | | | (45,733) | | $ | 157,136 |
Issuance of common stock, net of offering costs | | 865,728 | | | 1 | | | 10,106 | | | — | | | 10,107 |
Net increase in net assets resulting from operations, net of excise tax: |
|
| |
|
| |
|
| |
|
| |
|
|
Net investment income, net of excise tax |
| — | |
| — | |
| — | |
| 5,773 | |
| 5,773 |
Net realized loss on investments |
| — | |
| — | |
| — | |
| (424) | |
| (424) |
Net unrealized depreciation on investments |
| — | |
| — | |
| — | |
| (143) | |
| (143) |
Issuance of common stock under dividend reinvestment plan |
| 3,874 | |
| — | |
| 46 | |
| — | |
| 46 |
Distributions declared |
| — | |
| — | |
| — | |
| (4,351) | |
| (4,351) |
Balance at September 30, 2019 |
| 14,412,475 | | | 15 | | | 213,007 | | | (44,878) | | | 168,144 |
| | | | | | | | | | | | | | |
Balance at June 30, 2020 | | 17,291,770 | | | 17 | | | 247,924 | | | (46,709) | | | 201,232 |
Issuance of common stock, net of offering costs |
| 1,069,259 | |
| 2 | |
| 12,666 | |
| — | |
| 12,668 |
Net decrease in net assets resulting from operations, net of excise tax: |
|
| |
|
| |
|
| |
|
| |
|
|
Net investment income, net of excise tax |
| — | | | — | | | — | | | 5,860 | | | 5,860 |
Net realized gain on investments |
| — | |
| — | |
| — | |
| 1,178 | |
| 1,178 |
Net unrealized depreciation on investments |
| — | |
| — | |
| — | |
| (10,288) | |
| (10,288) |
Issuance of common stock under dividend reinvestment plan |
| 4,884 | |
| — | |
| 59 | |
| — | |
| 59 |
Distributions declared |
| — | |
| — | |
| — | |
| (5,538) | |
| (5,538) |
Balance at September 30, 2020 |
| 18,365,913 | | $ | 19 | | $ | 260,649 | | $ | (55,497) | | $ | 205,171 |
| | | | | | | 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 |
| 2,865,728 | |
| 3 | |
| 33,251 | |
| — | |
| 33,254 |
Net increase in net assets resulting from operations, net of excise tax: |
|
| |
|
| |
|
| |
|
| |
|
|
Net investment income, net of excise tax |
| — | |
| — | |
| — | |
| 14,018 | |
| 14,018 |
Net realized loss on investments |
| — | |
| — | |
| — | |
| (3,871) | |
| (3,871) |
Net unrealized appreciation on investments |
| — | |
| — | |
| — | |
| 2,622 | |
| 2,622 |
Issuance of common stock under dividend reinvestment plan |
| 11,618 | |
| — | |
| 140 | |
| — | |
| 140 |
Distributions declared |
| — | |
| — | |
| — | |
| (12,276) | |
| (12,276) |
Balance at September 30, 2019 |
| 14,412,475 | | | 15 | | | 213,007 | | | (44,878) | | | 168,144 |
| | | | | | | | | | | | | | |
Balance at December 31, 2019 | | 15,563,290 | | | 16 | | | 226,660 | | | (42,621) | | | 184,055 |
Issuance of common stock, net of offering costs |
| 2,787,160 | |
| 3 | |
| 33,813 | |
| — | |
| 33,816 |
Net increase in net assets resulting from operations, net of excise tax: |
|
| |
|
| |
|
| |
|
| |
|
|
Net investment income, net of excise tax |
| — | | | — | | | — | | | 16,849 | | | 16,849 |
Net realized gain on investments |
| — | |
| — | |
| — | |
| 3,945 | |
| 3,945 |
Net unrealized depreciation on investments |
| — | |
| — | |
| — | |
| (16,827) | |
| (16,827) |
Issuance of common stock under dividend reinvestment plan |
| 15,463 | |
| — | |
| 176 | |
| — | |
| 176 |
Distributions declared |
| — | |
| — | |
| — | |
| (16,843) | |
| (16,843) |
Balance at September 30, 2020 |
| 18,365,913 | | $ | 19 | | $ | 260,649 | | $ | (55,497) | | $ | 205,171 |
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, | ||||
|
| 2020 |
| 2019 | ||
Cash flows from operating activities: |
| |
|
| |
|
Net increase in net assets resulting from operations | | $ | 3,967 | | $ | 12,769 |
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used in) operating activities: | |
| | |
| |
Amortization of debt issuance costs | |
| 782 | |
| 522 |
Net realized (gain) loss on investments | |
| (3,945) | |
| 3,871 |
Net unrealized depreciation (appreciation) on investments | |
| 16,827 | |
| (2,622) |
Purchase of investments | |
| (121,648) | |
| (135,284) |
Principal payments received on investments | |
| 111,129 | |
| 101,117 |
Proceeds from sale of investments | | | 8,200 | | | 2,439 |
Investment in controlled affiliate investments | |
| — | |
| (589) |
Distributions from controlled affiliate investment | |
| — | |
| 715 |
Dividends from controlled affiliate investment | |
| (118) | |
| (1,223) |
Warrants received in settlement of fee income | |
| (978) | |
| — |
Changes in assets and liabilities: | |
|
| |
|
|
Decrease (increase) in interest receivable | |
| 519 | |
| (507) |
Increase in end-of-term payments | |
| (1,218) | |
| (493) |
Decrease in unearned income | |
| (1,666) | |
| (1,491) |
Decrease (increase) in other assets | |
| 119 | |
| (516) |
Increase (decrease) in other accrued expenses | |
| 118 | |
| (115) |
(Decrease) increase in base management fee payable | |
| (9) | |
| 48 |
(Decrease) increase in incentive fee payable | |
| (148) | |
| 452 |
Net cash provided by (used in) operating activities | |
| 11,931 | |
| (20,907) |
Cash flows from financing activities: | |
|
| |
|
|
Proceeds from issuance of common stock, net of offering costs | |
| 33,816 | |
| 33,254 |
Proceeds from Asset- Backed Notes | |
| — | |
| 100,000 |
Advances on credit facilities | |
| 58,250 | |
| 49,500 |
Repayment of credit facilities | |
| (47,000) | |
| (125,000) |
Debt issuance costs | | | (890) | | | (1,808) |
Distributions paid | |
| (15,826) | |
| (11,272) |
Net cash provided by financing activities | |
| 28,350 | |
| 44,674 |
Net increase in cash, cash equivalents and restricted cash | |
| 40,281 | |
| 23,767 |
Cash, cash equivalents and restricted cash: | |
|
| |
|
|
Beginning of period | |
| 17,385 | |
| 12,591 |
End of period | | $ | 57,666 | | $ | 36,358 |
| | | | | | |
Supplemental disclosure of cash flow information: |
| |
|
| |
|
Cash paid for interest | | $ | 6,296 | | $ | 5,801 |
Supplemental non-cash investing and financing activities: | |
|
| |
|
|
Warrant investments received and recorded as unearned income | | $ | 893 | | $ | 1,675 |
Distributions payable | | $ | 5,510 | | $ | 4,324 |
Acquisition of controlled affiliate investment | | $ | 16,498 | | $ | — |
End-of-term payments receivable | | $ | 5,118 | | $ | 3,508 |
Non-cash income | | $ | 4,701 | | $ | 2,798 |
Receivable resulting from sale of investment | | $ | — | | $ | 500 |
| | | | | | |
| | Nine months ended September 30, | ||||
|
| 2020 |
| 2019 | ||
Cash | | $ | 34,130 | | $ | 16,958 |
Investments in money market funds | |
| 22,735 | |
| 18,199 |
Restricted investments in money market funds | |
| 801 | |
| 1,201 |
Total cash, cash equivalents and restricted cash | | $ | 57,666 | | $ | 36,358 |
See Notes to Consolidated Financial Statements
6
Horizon Technology Finance Corporation and Subsidiaries
Consolidated Schedule of Investments (Unaudited)
September 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 — 148.4% (8) |
|
|
|
|
| |
|
| |
|
| |
|
Non-Affiliate Debt Investments — 142.9% (8) |
|
|
| |
|
| |
|
| |
| ||
Non-Affiliate Debt Investments — Life Science — 72.0% (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 | | $ | 4,879 | | $ | 4,879 |
| | | | Term Loan (9.30% cash (Libor + 7.50%; Floor 9.30%), 5.00% ETP, Due 3/1/24) | | | 5,000 | | | 4,933 | | | 4,933 |
| | | | Term Loan (9.30% cash (Libor + 7.50%; Floor 9.30%), 5.00% ETP, Due 3/1/24) | | | 5,000 | | | 4,933 | | | 4,933 |
| | | | Term Loan (9.30% cash (Libor + 7.50%; Floor 9.30%), 5.00% ETP, Due 3/1/24) | | | 5,000 | | | 4,933 | | | 4,933 |
Celsion Corporation (2)(5)(12) |
| Biotechnology |
| Term Loan (9.63% cash (Libor + 7.63%; Floor 9.63%), 5.50% ETP, Due 4/1/23) | | | 2,500 | |
| 2,474 | | | 2,474 |
|
| |
| Term Loan (9.63% cash (Libor + 7.63%; Floor 9.63%), 5.50% ETP, Due 4/1/23) | |
| 2,500 | | | 2,523 | | | 2,482 |
Emalex Biosciences, Inc. (2)(12) | | Biotechnology | | Term Loan (9.75% cash (Libor + 7.90%; Floor 9.75%), 5.00% ETP, Due 12/1/23) | | | 2,500 | | | 2,350 | | | 2,350 |
| | | | Term Loan (9.75% cash (Libor + 7.90%; Floor 9.75%), 5.00% ETP, Due 12/1/23) | | | 2,500 | | | 2,453 | | | 2,453 |
Encore Dermatology, Inc. (2)(12)(13) | | Biotechnology | | Term Loan (10.00% cash (Libor + 7.50%; Floor 10.00%), 4.00% ETP, Due 4/1/23) | | | 5,078 | | | 5,034 | | | 2,402 |
| | | | Term Loan (10.00% cash (Libor + 7.50%; Floor 10.00%), 4.00% ETP, Due 4/1/23) | | | 5,000 | | | 4,957 | | | 2,403 |
| | | | Term Loan (10.00% cash (Libor + 7.50%; Floor 10.00%), 4.00% ETP, Due 4/1/23) | | | 5,000 | | | 4,943 | | | 2,395 |
Espero BioPharma, Inc. (2)(12)(13) |
| Biotechnology | | Term Loan (12.00% cash (Libor + 9.25%; Floor 12.00%), 5.10% ETP, Due 8/15/20) (11) | |
| 5,053 | |
| 5,053 | | | 2,322 |
| | | | Term Loan (12.00% cash (Libor + 9.25%; Floor 12.00%), 5.10% ETP, Due 8/15/20) (11) | | | 4,914 | | | 4,914 | | | 2,257 |
| | | | Term Loan (12.00% cash (Libor + 9.25%; Floor 12.00%), Due 8/15/20) (11) | | | 200 | | | 200 | | | 91 |
| | | | Term Loan (12.00% cash (Libor + 9.25%; Floor 12.00%), Due 8/15/20) (11) | | | 100 | | | 100 | | | 46 |
| | | | Term Loan (12.00% cash (Libor + 9.25%; Floor 12.00%), Due 8/15/20) (11) | | | 100 | | | 100 | | | 46 |
| | | | Term Loan (12.00% cash (Libor + 9.25%; Floor 12.00%), Due 8/15/20) (11) | | | 100 | | | 100 | | | 46 |
| | | | Term Loan (12.00% cash (Libor + 9.25%; Floor 12.00%), Due 8/15/20) (11) | | | 150 | | | 150 | | | 69 |
| | | | Term Loan (12.00% cash (Libor + 9.25%; Floor 12.00%), Due 8/15/20) (11) | | | 100 | | | 100 | | | 46 |
| | | | Term Loan (12.00% cash (Libor + 9.25%; Floor 12.00%), Due 8/15/20) (11) | | | 50 | | | 50 | | | 22 |
| | | | Term Loan (12.00% cash (Libor + 9.25%; Floor 12.00%), Due 8/15/20) (11) | | | 485 | | | 485 | | | 223 |
| | | | Term Loan (12.00% cash (Libor + 9.25%; Floor 12.00%), Due 10/31/20) | | | 70 | | | 70 | | | 32 |
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 | | | 4,975 | | | 4,975 |
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 | | | 4,757 | | | 4,757 |
| | | | Term Loan (9.50% cash (Libor + 8.50%; Floor 9.50%), 5.50% ETP, Due 12/1/24) | | | 5,000 | | | 4,907 | | | 4,907 |
vTv Therapeutics Inc. (2)(5)(12) |
| Biotechnology |
| Term Loan (10.50% cash (Libor + 10.00%; Floor 10.50%), 10.17% ETP, Due 1/1/21) | |
| 656 | |
| 653 | | | 653 |
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 | |
| 1,554 | |
| 1,400 |
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 | | | 4,939 | | | 4,939 |
| | | | Term Loan (8.90% cash (Libor + 7.00%; Floor 8.90%), 5.00% ETP, Due 9/1/24) | | | 5,000 | | | 4,939 | | | 4,939 |
| | | | Term Loan (8.90% cash (Libor + 7.00%; Floor 8.90%), 5.00% ETP, Due 9/1/24) | | | 1,000 | | | 988 | | | 988 |
| | | | Term Loan (8.90% cash (Libor + 7.00%; Floor 8.90%), 5.00% ETP, Due 9/1/24) | | | 1,000 | | | 988 | | | 988 |
| | | | Term Loan (8.90% cash (Libor + 7.00%; Floor 8.90%), 5.00% ETP, Due 9/1/24) | | | 1,000 | | | 988 | | | 988 |
| | | | Term Loan (8.90% cash (Libor + 7.00%; Floor 8.90%), 5.00% ETP, Due 9/1/24) | | | 1,000 | | | 988 | | | 988 |
| | | | Term Loan (8.90% cash (Libor + 7.00%; Floor 8.90%), 5.00% ETP, Due 9/1/24) | | | 1,000 | | | 988 | | | 988 |
See Notes to Consolidated Financial Statements
7
Horizon Technology Finance Corporation and Subsidiaries
Consolidated Schedule of Investments (Unaudited)
September 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 | |||
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 | | | 4,874 | | | 4,874 |
| | | | Term Loan (8.25% cash (Libor + 6.70%; Floor 8.25%), 5.50% ETP, Due 10/1/24) | | | 5,000 | | | 4,939 | | | 4,939 |
Conventus Orthopaedics, Inc. (2)(12) |
| Medical Device |
| Term Loan (9.25% cash (Libor + 8.00%; Floor 9.25%), 9.17% ETP, Due 7/1/25) | |
| 5,198 | |
| 5,134 | |
| 5,134 |
|
| |
| Term Loan (9.25% cash (Libor + 8.00%; Floor 9.25%), 9.17% ETP, Due 7/1/25) | |
| 5,198 | |
| 5,134 | | | 5,134 |
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 | |
| 3,701 | |
| 3,701 |
| | | | 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 | | | 3,952 | | | 3,952 |
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 | | | 4,944 | | | 4,944 |
| | | | Term Loan (10.00% cash (Libor + 7.80%; Floor 10.00%), 3.50% ETP, Due 10/1/24) | | | 5,000 | | | 4,944 | | | 4,944 |
| | | | Term Loan (10.00% cash (Libor + 7.80%; Floor 10.00%), 3.50% ETP, Due 10/1/24) | | | 5,000 | | | 4,944 | | | 4,944 |
| | | | Term Loan (10.00% cash (Libor + 7.80%; Floor 10.00%), 3.50% ETP, Due 10/1/24) | | | 5,000 | | | 4,944 | | | 4,944 |
Lantos Technologies, Inc. (2)(12)(13) |
| Medical Device |
| Term Loan (10.00% cash (Libor + 8.43%; Floor 10.00%), 10.00% ETP, Due 9/30/20) | |
| 1,879 | |
| 1,660 | |
| 475 |
| | | | Term Loan (10.00% cash (Libor + 8.43%; Floor 10.00%), Due 9/30/20) | | | 436 | | | 436 | | | 125 |
MacuLogix, Inc. (2)(12) |
| Medical Device |
| Term Loan (10.08% cash (Libor + 7.68%; Floor 10.08%), 5.50% ETP, Due 10/1/23) | |
| 7,500 | |
| 7,415 | |
| 7,158 |
|
| |
| Term Loan (10.08% cash (Libor + 7.68%; Floor 10.08%), 5.50% ETP, Due 10/1/23) | |
| 4,050 | |
| 3,967 | | | 3,829 |
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 | | | 4,862 | | | 4,862 |
| | | | Term Loan (9.75% cash (Prime + 5.00%; Floor 9.75%), 4.00% ETP, Due 3/1/25) | | | 5,000 | | | 4,934 | | | 4,934 |
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) | |
| 2,667 | |
| 2,646 | |
| 2,646 |
|
| |
| Term Loan (9.25% cash (Libor + 8.00%; Floor 9.25%), 5.00% ETP, Due 1/1/22) | |
| 2,667 | |
| 2,646 | | | 2,646 |
Total Non-Affiliate Debt Investments — Life Science | | | |
|
| |
| 163,721 | |
| 147,779 | ||
Non-Affiliate Debt Investments — Technology — 63.7% (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 | | | 4,164 | | | 4,164 |
| | | | Term Loan (10.05% cash (Libor + 7.50%; Floor 10.05%), 5.75% ETP, Due 9/1/23) | | | 4,250 | | | 4,196 | | | 4,196 |
| | | | Term Loan (10.05% cash (Libor + 7.50%; Floor 10.05%), 5.75% ETP, Due 9/1/23) | | | 1,125 | | | 1,095 | | | 1,095 |
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) |
| | 4,667 |
| | 4,602 |
| | 4,602 |
| | | | Term Loan (9.90% cash (Libor + 7.40%; Floor 9.90%), 4.00% ETP, Due 1/1/23) | | | 4,667 | | | 4,602 | | | 4,602 |
|
| |
| Term Loan (9.90% cash (Libor + 7.40%; Floor 9.90%), 4.00% ETP, Due 1/1/23) |
| | 4,667 | | | 4,602 | | | 4,602 |
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 | | | 4,945 | | | 4,945 |
| | | | Term Loan (11.50% cash (Prime + 5.75%; Floor 11.50%, Ceiling 14.00%), 0.56% ETP, Due 12/20/24) | | | 5,000 | | | 4,945 | | | 4,945 |
| | | | Term Loan (11.50% cash (Prime + 5.75%; Floor 11.50%, Ceiling 14.00%), 0.56% ETP, Due 12/20/24) | | | 10,000 | | | 9,890 | | | 9,890 |
Canara, Inc. (2)(12) | | Data Storage | | Term Loan (11.00% cash (Libor + 8.60%; Floor 11.00%), 2.00% ETP, Due 8/1/23) | | | 5,000 | | | 4,900 | | | 4,900 |
| | | | Term Loan (11.00% cash (Libor + 8.60%; Floor 11.00%), 2.00% ETP, Due 8/1/23) | | | 5,000 | | | 4,899 | | | 4,899 |
Silk, Inc. (2)(12) |
| Data Storage |
| Term Loan (10.65% cash (Libor + 8.40%; Floor 10.65%), 4.00% ETP, Due 1/1/23) |
| | 4,667 |
| | 4,620 |
| | 4,620 |
|
| |
| Term Loan (10.65% cash (Libor + 8.40%; Floor 10.65%), 4.00% ETP, Due 1/1/23) |
| | 4,667 |
| | 4,620 | | | 4,620 |
| | | | Term Loan (10.65% cash (Libor + 8.40%; Floor 10.65%), 4.00% ETP, Due 7/1/23) | | | 5,000 | | | 4,874 | | | 4,874 |
IgnitionOne, Inc. (2)(12)(13) |
| Internet and Media |
| Term Loan (10.39% cash (Libor + 10.23%; Floor 10.23%), 6.00% ETP, Due 4/1/22) |
| | 1,874 |
| | 1,789 |
| | 1,789 |
|
| |
| Term Loan (10.39% cash (Libor + 10.23%; Floor 10.23%), 6.00% ETP, Due 4/1/22) |
| | 1,874 |
| | 1,789 |
| | 1,789 |
See Notes to Consolidated Financial Statements
8
Horizon Technology Finance Corporation and Subsidiaries
Consolidated Schedule of Investments (Unaudited)
September 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%), 6.00% ETP, Due 4/1/22) |
| | 1,987 |
| | 1,708 |
| | 1,708 |
|
| |
| Term Loan (10.39% cash (Libor + 10.23%; Floor 10.23%), 6.00% ETP, Due 4/1/22) |
| | 1,874 |
| | 1,789 |
| | 1,789 |
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 |
| | 4,210 |
| | 2,500 |
|
| |
| Term Loan (11.00% cash (Libor + 8.50%; Floor 11.00%), 14.88% ETP, Due 6/1/22) |
| | 4,250 |
| | 4,210 | | | 2,500 |
BriteCore Holdings, Inc. (2)(12) | | Software | | Term Loan (10.50% cash (Prime + 7.25%; Floor 10.50%), 4.00% ETP, Due 10/1/24) | | | 2,500 | | | 2,472 | | | 2,472 |
| | | | Term Loan (10.50% cash (Prime + 7.25%; Floor 10.50%), 4.00% ETP, Due 10/1/24) | | | 2,500 | | | 2,472 | | | 2,472 |
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 | | | 3,579 | | | 3,579 |
| | | | Term Loan (10.50% cash (Libor + 8.50%; Floor 10.50%), 2.50% ETP, Due 10/1/24) | | | 3,750 | | | 3,681 | | | 3,681 |
| | | | Term Loan (10.50% cash (Libor + 8.50%; Floor 10.50%), 2.50% ETP, Due 10/1/24) | | | 2,500 | | | 2,454 | | | 2,454 |
OutboundEngine, Inc. (2)(12) | | Software | | Term Loan (11.15% cash (Libor + 8.40%; Floor 11.15%), 3.36% ETP, Due 7/1/23) | | | 4,000 | | | 3,944 | | | 3,944 |
| | | | Term Loan (11.15% cash (Libor + 8.40%; Floor 11.15%), 3.36% ETP, Due 7/1/23) | | | 3,500 | | | 3,451 | | | 3,451 |
| | | | Term Loan (11.15% cash (Libor + 8.40%; Floor 11.15%), 3.36% ETP, Due 7/1/23) | | | 500 | | | 503 | | | 495 |
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 | | | 4,030 | | | 3,813 |
| | | | Term Loan (9.50% cash (Libor + 7.00%; Floor 9.50%), 4.00% ETP, Due 11/1/23) | | | 1,000 | | | 929 | | | 893 |
| | | | Term Loan (9.50% cash (Libor + 7.00%; Floor 9.50%), 4.00% ETP, Due 11/1/23) | | | 5,000 | | | 4,942 | | | 4,751 |
Topia Mobility, Inc. (2)(12) | | Software | | Term Loan (10.00% cash (Prime + 6.75%; Floor 10.00%), 4.00% ETP, Due 9/1/24) | | | 5,000 | | | 4,817 | | | 4,817 |
| | | | Term Loan (10.00% cash (Prime + 6.75%; Floor 10.00%), 4.00% ETP, Due 9/1/24) | | | 5,000 | | | 4,895 | | | 4,895 |
xAd, Inc. (2)(12) |
| Software |
| Term Loan (10.00% cash (Libor + 8.70%; Floor 10.00%), 5.0% ETP, Due 1/1/22) |
| | 3,333 |
| | 3,296 |
| | 3,296 |
|
| |
| Term Loan (10.00% cash (Libor + 8.70%; Floor 10.00%), 5.0% ETP, Due 1/1/22) |
| | 3,333 |
| | 3,296 | | | 3,296 |
| | | | Term Loan (10.00% cash (Libor + 8.70%; Floor 10.00%), 5.0% ETP, Due 1/1/22) | | | 2,000 | | | 1,978 | | | 1,978 |
| | | | Term Loan (10.00% cash (Libor + 8.70%; Floor 10.00%), 5.0% ETP, Due 1/1/22) |
| | 1,333 |
| | 1,318 | | | 1,318 |
Total Non-Affiliate Debt Investments — Technology |
| |
| | |
| | 134,506 | | | 130,634 | ||
Non-Affiliate Debt Investments — Healthcare information and services — 7.2% (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 |
| | 4,935 |
| | 4,935 |
| | | | Term Loan (9.75% cash (Libor + 7.45%; Floor 9.75%), 5.00% ETP, Due 10/1/23) | | | 5,000 | | | 4,935 | | | 4,935 |
| | | | Term Loan (9.75% cash (Libor + 7.45%; Floor 9.75%), 5.00% ETP, Due 10/1/23) | | | 2,500 | | | 2,463 | | | 2,463 |
|
| |
| Term Loan (9.75% cash (Libor + 7.45%; Floor 9.75%), 5.00% ETP, Due 10/1/23) |
| | 2,500 |
| | 2,463 | | | 2,463 |
Total Non-Affiliate Debt Investments — Healthcare information and services |
| |
|
| | 14,796 |
| | 14,796 | ||||
Total Non- Affiliate Debt Investments |
| | | |
| |
|
| | 313,023 |
| | 293,209 |
Non-Affiliate Warrant Investments — 5.2% (8) |
|
|
| |
|
| |
|
| |
| ||
Non-Affiliate Warrants — Life Science — 1.0% (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 |
| 295,053 Common Stock Warrants |
| | |
| | 65 |
| | 9 |
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 |
| | |
| | 184 |
| | — |
LogicBio, Inc. (2)(5)(12) | | Biotechnology | | 7,843 Common Stock Warrants | | | | | | 8 | | | 3 |
Mustang Bio, Inc. (2)(5)(12) | | Biotechnology | | 252,161 Common Stock Warrants | | | | | | 146 | | | 91 |
Rocket Pharmaceuticals Corporation (5)(12) |
| Biotechnology |
| 7,051 Common Stock Warrants |
| | |
| | 17 |
| | 15 |
Provivi, Inc. (2)(12) | | Biotechnology | | 123,457 Preferred Stock Warrants | | | | | | 147 | | | 336 |
Strongbridge U.S. Inc. (2)(5)(12) |
| Biotechnology |
| 160,714 Common Stock Warrants |
| | |
| | 72 |
| | 23 |
See Notes to Consolidated Financial Statements
9
Horizon Technology Finance Corporation and Subsidiaries
Consolidated Schedule of Investments (Unaudited)
September 30, 2020
(Dollars in thousands)
|
| |
|
| | |
| Cost of |
| Fair | |||
Portfolio Company (1)(3) | | Sector | | Type of Investment (4)(7)(9)(10) |
| | | Investments (6) | | Value | |||
vTv Therapeutics Inc. (2)(5)(12) |
| Biotechnology |
| 95,293 Common Stock Warrants |
| | |
| | 44 |
| | — |
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 |
| | |
| | 21 |
| | 25 |
Aerin Medical, Inc. (2)(12) |
| Medical Device |
| 1,818,183 Preferred Stock Warrants |
| | |
| | 66 |
| | 458 |
Bardy Diagnostics, Inc. (2)(12) | | Medical Device | | 346,154 Preferred Stock Warrants | | | | | | 56 | | | 54 |
Ceribell, Inc. (2)(12) | | Medical Device | | 117,521 Preferred Stock Warrants | | | | | | 50 | | | 50 |
Conventus Orthopaedics, Inc. (2)(12) |
| Medical Device |
| 6,313,826 Preferred Stock Warrants |
| | |
| | 149 |
| | 139 |
CSA Medical, Inc. (2)(12) |
| Medical Device |
| 1,375,727 Preferred Stock Warrants |
| | |
| | 153 |
| | 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 |
| | — |
MacuLogix, Inc. (2)(12) |
| ||||||||||||